Wednesday, September 9, 2009

Amway - Business Owner or Not?

Join Amway and own your own business! It sounds like a pretty cool concept. I know it sounded cool to me and was part of why I joined. But as an Amway IBO, are you really a business owner? Yes, you technically own a business where you pay taxes and whatnot, but it is not really different than a self employed salesman who works on commission or under contract.

Thins about this for a moment. If you are a business owner of a real business, you sell a product or service and you get to keep the profit. You keep all the profit. Amway pays roughly 30% of product sales for bonuses. But unless you have enough donwline and/or volume, you get only 3% or 6% of that 30% and the layers of middlemen/upline get the rest of the bonus for your work. When you sponsor someone and increase your volume, your upline gets more action fro your downline than you do. Isn't that almost exactly like being an employee where the company owner makes money off your efforts? You as an IBO only start to get a bigger piece of that bonus if you are able to sponsor enough downline and/or move enough volume to reach the higher levels of the business. I would guess you need to reach approximately the 18% bonus bracket or higher before you can cover your IBO expenses which may include functions and standing order.

Did I mention that sponsoring people is a difficult task? Most IBOs are not able to sponsor a single downline. Many IBOs cannot even find people who are interested in seeing the Amway sales and marketing plan. Did I mention that all of yuor efforts in finding people to sponsor also benefits your upline more than yourself, until you find enough people to help move your volume to about the 18% level. So although an IBO and his sponsor/upline do not have an employee - employer relationship, an IBO is basically a commssioned employee UNLESS that IBO is able to sponsor enough downline who will move volume, or unless that IBO is a very rare IBO who sells a lot of products/

So IBOs, are you fooling yourself into thinking you are an independent business owner when you are actually operating as a commisioned employee?


Anonymous said...

You sound like a cry-baby.

Joecool said...

Anonymous from Canada, you sound like a loser. So what?

mrmaximum said...

At the last business meeting I was involved in, I did hear our GM telling us not to be 'cry babies'. His boss had told him that too, really, he did!

I'm sure we will hear that term more and more in Forbes as time goes on.