Monday, May 3, 2010

Amway - IBOs Drowning In Debt?

One of the pitches used to attract people to the Amway business was to earn enough just to get out of debt. Afterall, many Americans these days have credit cards maxed out and racking up more and more consumer debt. But the tough question is whether joining Amway will help the situation or only make it worse? Afterall, in general, Amway products have higher prices than retailers such as WalMart or Costco. Anyone who denies this is either being deceptive or is truly misguided. You can try to argue about Amway's quality of products. Some products are good, but overall, consumers simply don't find enough value in them. Seems that IBOs don't even buy Amway products unless they are pursuing their dreams of going diamond. Once that dream ends, so does their loyalty to Amway products.

Sadly, for most business building IBOs, the business opportunity and its connected teaching system such as WWDB, BWW, or N21 simply creates more debt for IBOs. Think about it, an IBO will already be spending about $300 a month to earn their defacto 100 PV requirement. If that IBO subscribes to voicemail and no other tools, that IBO will already have a net loss for the month. Factor in ongoing expenditures such as standing orders, functions, open meetings, regional functions, books and other miscellaneous expenses and you have an IBO heading towards tens of thousands of dollars deeper into the debt hole. Most IBOs don't see what's happening because the debt is incurred a few hundred dollars a month, but most IBOs think it's okay because they are convinced that they will recoup the losses and earn a huge surplus in the long run. Unfortunately, only a tiny fraction of 1% of IBOs will ever earn a decent profit from the Amway opportunity. Most will realize they are making their finances worse and end up quitting.

In the few cases where a diamond's financial were exposed, these diamonds were in hock. Even a prominent triple diamond was not earning enough to sustain the lifestyle he and others promoted on stage. It is my guess that these diamonds in financial difficulty is more likely the norm than the exception. Do the math. If a triple diamond earns about a million dollars from Amway and the tools profits, can that income sustain a jetset lifestyle portrayed in functions like dream nite? I mean it is a great income, but everything is relative. Someone earning say $70,000 a year can live a comfortable lifestyle without debt. But diamonds portray a lifestyle of excess and almost arrogance. It's no wonder some of them have financial problems.

In the end, IBOs are drowning in debt as a whole. The system nearly ensures that the group of IBOs collectively will end up with a net loss with one or two at the top earning a profit. One's dedication to tools determines how much an IBO will lose. The more dedication, the bigger the losses. If your upline teaches you to get out of debt, that's good. but if they teach you to get out of debt, except for functions and standing orders, take that as a huge red flag.


Anonymous said...

i'm glad i did.

Shaun said...

"Seems that IBOs don't even buy Amway products unless they are pursuing their dreams of going diamond. Once that dream ends, so does their loyalty to Amway products"

Not 100% true, I have two former IBO's (not sure why never asked) that are buying products from me. They said they loved the products before and just didn't know any IBO's of which they could purchase off of

Anonymous said...

Hi Shaun,

How many former IBO's of urs are not purchasing products? Care to share that info??

The IBOs that are buying products from u- how much volume are they doing month after month- care to share that info???

I am a former IBO and i dont buy 300+ PV any more. I buy only what i need and when i need.

Amway statistics shows that IBos who are not active buy like 30PV/month. Feel free to correct me if these numbers have changed drastically.

Anonymous said...

Hi Shaun. While there may be *some* IBOs who buy products after they stop building the business, the vast majority of IBOs do not continue to purchase them. If not, Amway sales would be climbing each year but in the US and Canada, Amway sales are shrinking.

A BWW IBO said...

Hei Joecool, Nice post.

Amway sucks the money out of your bank account (and possibly credit cards) very fast.

I and my wife used to make close to $140K/yr gross. We lived a very conservative life style. Our expenses out side Amway was about $3000/month, including mortgage, car payments, etc., That should have left us close to $60K/yr in savings... But we could save only $18K-$20K/yr after all the Amway/BWW expenses and the paltry Amway bonus checks for 12% to 21%.

In BWW open meetings, they used to tell

"So you go to Walmart and buy products. Why do you go there?"

Some IBO/prospect says, "Because you can buy cheaper and save money."

Then the speaker would say "Hah! you save money! Ok, let me ask you a question. How long have u been shopping at walmrt?"

The prospect would say, "10 years.';

The speaker would ask, "So how much money have you saved in your savings account?" and everyone would laugh.

But the sad truth is if you buy Amway products and the system tools, you would have much less money.

After quitting Amway/BWW, our savings has gone up considerably and we are able to travel the world in style. (Incidentally we will be in your island, Oahu, for a 1-week vacation in July :-).)

Imagine, going to a vacation without any of your uplines and downlines - wow! that's a true dream come true! Hahaha...

Had we been in Amway, all that money would have gone for products/tools/functions, etc.,

Anonymous said...

hey my name is andrew and i wanna tell all you negative pepole in amway you become a millionare dont be talkin stuff cause amway is to rich for u poor people

Joecool said...

Maybe with all the money you make, you can buy "hooked on phonics"?