Amway - Lies, Damn Lies And Statistics - IBOFB Spinning Average Income Stats Again

IBOFightback recently posted an article on his blog about Amway's average income.
Amway reports that the average income on an active IBO is $115 a month. But Amway disregards "inactive" IBOs in determining the average income.

Amway defines an active IBO as follows:

"An “active” IBO is one who attempted to make a retail sale, or presented the Amway Global IBO Compensation Plan, or received bonus money, or attended a company or IBO meeting during the year."

So IBOFightback (David Steadson) says on his blog: "That’s it. If you ask your brother, once, in a whole year, if he wants to buy a can of XS … and he says no! … you’re active! $115/mth is a pretty good income for that, isn’t it? Or how about if you and your spouse are both in to health and each buy Nutrilite Double X and Omega 3 …. you’ll have bought more than 100 points of products, and qualify for a 3% rebate! Congratulations, you’re now “active”. Amway critics think it’s scandolous that you only earn $115/mth for doing your shopping!

Of course, that’s not what’s going on at all is it?

Lies, damn lies, and statistics." (Quote IBOFightback)

Of course, it's just complete propaganda and I will disprove IBOFB (yet again) by using basic math and the common 6-4-2 plan. The 6-4-2 plan assumes that there is a group where there are 79 IBOs, all doing 100 PV. So the group PV is 7900. If BV is about a 3:1 ratio, then 7900 PV is equal to 23,700 BV.

For a platinum group, Amway will pay 25% as their bonus. 25% of 23,700 is $5,925. $5,925 divided by 79 IBOs is $75. And that is the "average". We know that the platinum will get the lion's share of the bonus and "most" IBOs will in fact earn $9 or $10 each. And these figures are gross income and do not include business expenses such as standing order, functions, taxes, and other business expenses.
If you factor in Amway's one time platinum bonus of $10,000 (which only the platinum receives), then the average for these 79 IBOs goes up to about $85 a month, which is still short of the $115 a month average.

So we can conclude logically that Amway's average income is probably inflated by including Crown Ambassadors or at least higher up pins in their count, which drives up the average.

So there you have it folks, the "average" income for a completely active group is about $75 to $85 a month, before taxes and expenses. Add in all the IBOs who do little or nothing, which IBOFightback claims is "most" and the average income for all these IBOs would be significantly less than $75 or $85 a month. Factor in taxes and tools expenses and it is easy to see how "most" IBOs can indeed suffer losses. Notice ho IBOFB doesn't use real life examples in his article? Only anecdotal stories.

So IBOFighback is right when he says "Lies, damn lies, and statistics", except he doesn't talk about how he is spinning the statistics.


It might be interesting and amusing to note that I recently discovered a website, linked on my other blog showing that a "David Steadson" from Australia, recently qualified at 100 PV for the first time in 2008. :-)