Tuesday, March 16, 2010

Amway - Unfair To New IBOs?

One ofthe bogus things my upline taught us was that the Amway opportunity was fair. That it was a completely level playing field. On the surface, that sounds right because "everyone starts at zero". While everyone does start at zero, the compensation plan is poor and in my opinion, should be revamped so lower level IBOs make more money. It would probably help with IBO retention and maybe, some higher level leaders wouldn't have to work so hard to keep replacing people who quit.

If you are a new IBO, then you might not be really familiar with the Amway compensation plan. Amway pays out about 30+ percent of their gross as bonuses. Thus if you move 100 PV in goods, or about $300 in sales, then Amway pays out about $100 in bonuses. You as a new 100 PV IBO, would receive about $10 and your uplines, some of whom don't even know you exist, will split up the remaining $90 in bonuses. It truly is not a case of doing the work and gettung paid.

And something significant to think about. In what other sales profession are you compensated so low (3%)? I can only think of real estate, but in real estate, your sales are likely in the hundreds of thousands of dollars. In just about any other sales related profession, you get a much higher cut than 3%. Yes, your bonus or comission can be higher if you move more volume, but then you are likely receiving more money because you are now exploiting people doing 100 PV who get only $10 back.

And then even after you consider the unfair compensation, you must factor in the cost of tools. Most uplines promote tools (cds, voicemail, functions) as vital to an IBO's success. Some uplines push the tools harder than others. But the tools purchases will often be the primary cause of IBO financial losses because the cost of tools will normally exceed an IBO's bonus. It is very common in the US for monthly tool purchases to exceed $200 a month on average, and very very few IBOs will ever reach a high enough level in the Amway compensation plan to earn enough just to break even. Also, the tools apparently do not work. There is no unbiased evidence to suggest that tools have any causal relationship to IBO success.

With Amway's reputation and the unfair comepnsation plan, IBO retention is very poor. About 2/3 of IBOs don't last even one year, and very very few will ever last more than another year or two after that. What happens is IBOs begin to figure out that recruiting downline is next to impossible and therefore, generating more volume is nearly impossible, even for individuals with skills. If you are a new IBO or a prospect, I encourage you to sit down and really look at the math and factor in the cost of tools. There are many ways to earn a dollar, I just don't feel that Amway is a good way to do that.

9 comments:

Anonymous said...

JoeCool you are on bitter loser. What's unfair is you continuing to steal people's dreams and take away their amibitions. Why don't you go and blog about other things? Leave the IBO's alone and let them fulfill their dreams! Sooner or later you will face judgement from God and you will be sorry. Oh wait, you are already sorry!

Ashley said...

Anonymous- If you don't like his blog then don't read it. In my experiences with IBO's I have found JoeCool to be a breath of fresh air. It feels good to know someone else sees what I see in scamway. Im still waiting for IBO's that I know to fulfill their dreams.. so far it hasn't happened... All I see is them continuing to destroy relationships and it is pretty sad.

Joecool said...

Thanks for the kind comment Ashley! What you say is true. My blog sits here in cyberspace. Nobody is forced to read my articles, but I'm glad that many people do read them and some of them have expressed a deal of gratitude for giving them information that helped them make an informed decision.

Anonymous said...

um, anon, there's this thing called free speech. oops, did i say that?????????

Will said...

Good thing I found this blog. It annoys me that people are/were falling for this crap. A few days, I was at this Amway "cult meeting" at a friend's house. My friend wasn't very explanatory when she said I could make an extra 2-3K a month and simply told me to come to the meeting. My first reaction was it was Amway/Quixtar b/c I dealt with these people a couple years back through another friend but I saw the writings on the wall pretty quick. Unfortunately, my friend didn't see it and lost money plus a year of his life. Fast forward to a new nights ago, I was at this cult meeting again simply b/c my friend was very persistent that I go. At the meeting, these guys didn't bother saying the company name. They just kept saying "we" or "us" and only kept talking about getting new people instead of how you actually make money. When he said something about "business gatherings" in Virginia, it was a confirmation these brainwashed idiots were Amway. A comment that really made me laugh however was when a "upper percentile, platinum level IBO" (LOL!!!) said the most skeptical person in the room is the brokest person in the room. LOL!!! I don't have any financial burdens AND I was the only one at the meeting with a job while the rest of the people were students about to graduate probably with loans to pay off. I have to go but I'll comeback very soon to share some more.

Anonymous said...

Will, you must be rich, you must be making millions at your job, can you teach us how you did it? It seems that your plan is better so we would like to find out more.

Ivy said...

hahaha theres the amway watchdog getting defensive and using lazy interpretations.any plan is better than amway. having a full time job w/o financial burdens sounds pretty good to me. the only things that sound better are residual income, more time with my family and justifying another person's place in life hahaha

Joecool said...

I did a series last year, showing how working at McDonald's part time, delivering newspapers, or even panhandling is probably more lucrative than being an IBO. LOL

Anonymous said...

thanks a lot Joecool for sharing such "good" info abt scmway....many ppl will be helped by this blog!