Friday, January 22, 2010

Amway - More Money Made On Tools?

I have been reading some ongoing debates about whether the system income for higher pins is more than their Amway bonuses. I believe the systems such as BWW, WWDB, N21 or LTD, does generate more profit for upline than the sale of Amway products. How the system income is divided though, is still a mystery as it doesn't appear that there are bonafide written contracts explaining how tools income is split up among the higher pins.

But it's very easy to determine that more income is made from the system than from Amway. If you move $100 worth of Amway products, Amway will pay about $33 back in the form of bonuses. These bonuses will be split among the Amway IBOs (middlemen), depending on your level. On the other hand, if your group bought say 20 cds at $5.00each, the system will profit about $90 as cds cost about 50 cents each to produce in bulk. Some Amway apologists will cite the fact that some groups sell cds for $2.50 or $3.00. While this is true, there is a "member's fee" which must be paid. And when you add in the member's fee, the profit for the system is the same or possibly higher!

If you buy a major function ticket for $100, the cost of that function might be in the neighborhood of $25 to $30 per attendee, so the system may generate $70 profit on a $100 sale. I believe the smaller functions such as open meetings, books and voicemail have smaller profit margins, but still overall, it's easy to conclue that the profit from the system is greater than profits generated by moving Amway products.

The only question is how much each individual earns. I have "heard" that platinums get a discount on the sale of standing orders and cds, but I have never heard of a platinum sharing any profit for functions, voicemail, or any of the other materials. This is puzzling to me as I believe the platinums do the most work in the system.

So for the lower level IBOs, if you move $300 in Amway sales (Approximately 100 PV), you will receive about $10 or 3% while upline enjoys the rest of the $90+ in bonuses from Amway. And then when you purchase and move tools volume, you receive nothing and some of your uplines enjoy all of the profit. While I don't see any problem in upline making a profit for selling training materials, I see a problem in the fact that the tools don't work. So few IBOs progress to levels where an actual profit is earned. Amway supporters will point out the new platinums emerging each year, but do not mention the platinums who do not re-qualify.

Based on my observations, I can only conclude (quite easily) that there is substantially more profit from the sale of support materials for upline to enjoy, and I can also conclude that the support materials are ineffective in training downline IBOs so they can progress to higher levels of the business. I welcome opposing views on this issue.

33 comments:

Anonymous said...

So what JoeCool? So what? Money is made from tools? Blah blah blah. Who cares?

bdjack said...

lol this guy kills me.

well, they're not getting any more of MY money!

Anonymous said...

Good for you bdjack! Why don't you say the same about the college/university classroom materials you're told to buy to succeed in their courses?

Joecool said...

Yes but more than a fraction of 1% of college students pass their courses and graduate, unlike the number of Amway IBOs who even reach platinum, where they may not make any money.

Anon UK said...

Also, a college course is finite, wheras the purchasing of tools, isn't.

Anonymous said...

You don't make any sense JoeCool, just as usual, that's the daily norm for you.

rocket said...

Ha! Looks who makes sense. Let's review, shall we?

Joecool: Looks at the situation critically and uses logic, common sense, as well as a bit of discernment. He is able to reasonably conclude an opinion based on a combination of facts & experiences.

Anonymous: My upline said I'd be rich if I do this. It HAS to work!

Anon, were you told DURING the plan that many leaders make MORE from tools than through the movement of Amway products?

If not, that was lie #1.

I've paid for university textbooks. Useful? Meh.

I've paid for Amway tools. Not Useful. Even when I was in the business.

My opinion based on my experience, and you're welcome to yours!

You just won't succeed in Amway. I've seen people like you come and go over the past 7 years or so. You're not the first person whose upline has told them they "get it", or they're "special" or that they "just see something in you that they don't see in others".

Thanks for the laughs though!

Ex said...

i was made to buy 3 CDs per week @ $8.25/CD. that's $1287/yr.

and strong messages in kate conferences from upline emerald literally forcing to buy more tools every week thru tool order. the count supposedly for a healthy organization is 3 times standing order i.e. if you had 3 ppl on standing order, your extra tool should be 6 additional CDs per week. i had 5 standing orders, so you can imagine the pressure!!!

if u show serious commitment, be willing to spend at least $1500/yr for CDs and books.

Anonymous said...

It's been shown statistically that college graduates make more on average than non-college graduates, to the tune of approximately $46,000/year (http://www.simplyhired.com/a/salary/search/q-college+graduate). The average IBO makes $115/month ($1380/yr). I'd say the college text books are a MUCH better investment.

Anonymous said...

You know what people, those who talk bad about Amway, GO-FUCK-YOURSELVES-AND-SHUT-THE-FUCK-UP! I apologize to everyone else for the language but to be honest, I think that this time you've REALLY crossed the boundary with your logic, analysis and motives. I'm fed up and I'm going to do the very same things that you say don't work. OK? NOW HAVE A NICE DAY!

Joecool said...

Anonymous from Canada, are you drinking when you post? I didn't say one bad thing about Amway in this post. The messsage is quite clearly that uplines more than likely make a lot more money selling tools to their downline than they make from their Amway volume.

Anonymous said...

Nothing wrong with making money selling tools. Business was, is and will forever be business. If you can't get your head around that, get a 9 to 5 job.

Joecool said...

Yes, nothing wrong with making money on tools, except if you are deceptive when selling them or ruining people finances doing it.

rocket said...

Not to mention the rather obvious conflict of interest. It's like a doctor owning a pharmacy and prescribing medication because it has a higher profit margin, not because you need it.

Anonymous said...

rocket, your example makes as much sense as JoeCool does. You wouldn't go to a pharmacy if you don't need medication to begin with! The comparison is poorly chosen and meaningless. There's no conflict of interest whatsoever. It amazes me how little common sense most if not all of the Amway critics have.

rabb said...

whats wrong anonymous I thought the lessons that the IBOs teach is to be positive. that's some pretty vulgar language and a lot of anger you are using. you should listen more to your cds otherwise you're wasting your time and money. isnt that part of the motto of the so-called, "napkin plan?"

rocket said...

LOL The fact that you don't/won't get it shows just how unintelligent you are.

You wouldn't go to a pharmacy if you don't need medication?

Yet the tools you don't need are the ones that are essential for your success.

Which your diamond profits (massively) from. Moreso than actual Amway products, in a lot of cases, which Amway admits.

Anon UK said...

Well anonymous' post dated January 23, 2010 3:09pm has conviced me.

Anyone know where I can sign up?

Anonymous said...

rabb, if you don't see what's wrong, welcome to join JoeCool and the Family!

Anonymous said...

They made me buy CD's, ha ha ha. You all sound like a bunch of little children. If you're going to run a business run a business. Don't bitch about it for 20 years after you quit. No one ever quits and goes and tears something else up. Quitters are quitters in all walks of life. JoeCool, what a waste you are. Spreading gossip and lies about your experience in 90's in Amway. You make us all laugh.
P.S 8.6 billion and growing quitter.

Joecool said...

LOL - spreading lies? You mean like how Amway did 8.6 billion in sales? Care to back up that claim with proof? Of course not because you are lying.

Anonymous said...

JOE, YOU HAVE ENABLED 'COPY AND PASTE' ON YOUR BLOG, AT LAST!!! THEREFORE, I CAN NOW POST THE PROOF THAT YOU SAY I DON'T HAVE! So, here we go...

You mean like how Amway did 8.6 billion in sales?

http://www.mlive.com/business/west-michigan/index.ssf/2009/02/russia_china_india_lead_the_wa.html

http://www.freelegaladvicehelp.com/business-lawyer/franchising/Facts-About-Private-Franchising.html

Private franchising is the process of starting a business and after you get some income out of it you help others set up the same kind of business that you are running and it is called duplication. The name will be yours as you created it, your ideas will be followed and your products will be sold. So, you are actually creating an income that will last for generations to come. However, private franchising is very much misunderstood.

http://en.wikipedia.org/wiki/Franchising#For_franchisees_2

Franchising is the practice of using another person's business model. The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee. Franchising has been around for many centuries...

Additionally, the franchisor may choose to leverage the franchisee to build a distribution network.

Franchisors can maximize their profits on the gross sales of the franchisees.

Joecool said...

Your first link:

"The direct-selling company reported 2008 sales of $8.2 billion"

Were you wrong or lying (again)

Your second link:

"Private franchising is the process of starting a business and after you get some income out of it you help others set up the same kind of business that you are running and it is called duplication. The name will be yours as you created it, your ideas will be followed and your products will be sold. So, you are actually creating an income that will last for generations to come. However, private franchising is very much misunderstood."

Nowhere did it say Amway was a private franchise. Were you lying or making something up again?

And I never did enable or disable cut and paste on my blog. I simply do not publish unusual links because they are usually spam.

Thanks for proving yourself wrong. Makes my job easier!

Joecool said...

BTW, your wikipedia link wasn't even worth commenting on - and it didn't mention Amway as a private franchise.

Anonymous said...

Joecool, you are a waste of time even after providing the proof that you were asking for. I rest my case, believe whatever you want to believe, you won't stop those who are determined to be free.

Joecool said...

Anonymous from Canada, all you did was proved that you were wrong! LOL

Anon UK said...

Hmmm. the old "reporting Alticor's numbers as Amway's numbers" trick rears it's ugly head again.

I note the second link also states,

"Private franchising is the process of starting a business and after you get some income out of it you help others set up the same kind of business that you are running and it is called duplication."

When I was involved, you were told to start sponsoring as many people as possible as soon as possible, as opposed to after you have made some income out of it.

Anonymous said...

wow.. You guys love going back and forth. I'm sorry but i'll have to agree to disagree. If you are a true entrepreneur you can do anything you set your mind to. As for whoever the person was that said being a college grad will make an average of 46,000 more a year. Well I hate to tell you but that is false, i'm a high school grad and I make 196k a year. I have a friend that graduated from Oxford with his masters and is starting a job making 40k a year less then I am. Business is exactly that. You have to start somewhere. I'm sure some of you guys tried it and it didn't work but like everything else in life you keep trying and eventually it pays off. I don't work with or affiliated with Amway in any way shape or form but I am looking into private franchising. Everything is what you make of it. If someone told you that its a get rich quick then they sadly mis-informed you and you should have done your homework. NO one "made" you buy the books or cd's, just like no one "made" you do anything against your will. If you were unable to suceed then that is your fault not the company. My suggestion is if your not willing to take loses with gains then being in business is not for you and you should go back working a 9-5 or whatever it is you will succeed at. Like any business venture. "DO YOUR HOMEWORK 1ST" failure is no ones fault but your own so own up to it, grow from it and suck it up.

Anonymous said...

amway is not the typical MLM venture. you should know that!

Anonymous said...

The amway has lied already 5 years about the adding themself to Estonia commercial register.
So I cant trust company which products have not gone trough Examination in my Country.
But the main problem is that even though they should not sell their products in my country,
THEY ARE STILL SOLD.
----------------------------------------
So let me ask you ,why is your good amway selling products illegally?
----------------------------------------
And one easy question :

In what countrys are Amway Products made?
(Names)

Anonymous said...

let's see: mars, neptune, saturn, doodle dee doo, dumpsters, the pits, hades, hell....i'm sorry, you wanted to know which countries they're made in?

Anonymous said...

wow all these anonymouses im confused whos sayin what are you for or against amway???

Anonymous said...

just read and study the replies! but to clear up any confusion, anon @2:25 (that's me) is COMPLETELY against amway. =)