Monday, May 24, 2010

Amway - Years Later.........No Success?

When I was a young IBO, I saw the plan and thought it was realistic to go direct and to find six (6) downlines who could do the same thing. I didn't know the realistic chances of doing this, but the presentation made sense so I went with it. I basically built my group on excitement and it seemed like the system could work. Sadly, as I climbed the ranks, my bottom line did not change. I did not "net" $200 at the 1000 PV level, and I did not "net" $1000 a month at 4000 PV as my upline taught. I had the parameters they taught, but the reality was my leaders taught everyone to pump what little profits we earned into buying more tools.

My leaders also taught people to get out of debt, which was good advice on the surface, but at the same time, any disposable income left over was to be channeled into tools, and for those who did not escape debt, they were told it was okay to go deeper in debt, but only if it was to "invest" in their businesses by purchasing more tools. Thus it certainly appears that upline's advice was purely self serving and had nothing to do with an IBO's individual success.

I was in WWDB and they (upline) said that WWDB was breaking the most new diamonds and that WWDB diamonds were the most profitable. So here it is a dozen years later, where are all these new diamonds? Aside from from foreign diamonds, there are (I believe) less than 4 new diamonds from WWDB in the US from the time I left the business. Now I may be wrong, but even it was a few more than 4 new diamonds, that is a miserable success rate given the amount of cash spent by downline on tools and the claims made my upline about the tools.

We have also seen some WWDB diamonds end up in home foreclosures. Where is the integrity and financial acumen these leaders boasted about? Where is the success and long term financial security available to everyone that was touted? I believe more diamonds and emeralds fell out of qualification than new pins emerged. The business was promoted as one that would stand the test of time. Sadly, I believe WWDB and the Amway opportunity as promoted by WWDB has been a miserable failure.
There is little success to speak of, just he same old tired diamonds showing off a lifestyle that some of them apparently can no longer afford. Where is the success?

It is years later and we are still waiting.......


Anonymous said...

you chose not to post my last comment/question about your profits from the blog, which is quite interesting. It would make sense I guess if you were being paid to publish prolifically although I dont see how it would benefit other MLMs unless the sell would then be that they didnt require the purchase of tools and had a better compensation plan. I can provide my email if you want to address this offline, but you appear to be avoiding it at all costs and the readership is quite intrigued.

Joecool said...

You chose not to answer my question about how upline leaders make money when so few IBOs sell Amway products. If you won't answer my question, then neither will I answer yours.

Anonymous said...

I have no idea. I am not in Amway nor am I a proponent. I was an IBO about 8 yrs ago for a brief period of time and have friends still doing it. I assume the tools income is their main passive income.

Joecool said...

If you won't answer my question, then neither will I answer yours.

Anonymous said...

so, because I have no way to answer your question as I have no contact with the business, you wont answer my question. You are a strange man. I was a proponent of this site but you are really acting strange.

Joecool said...

Your question is unrelated to Amway. My question is the crux of the entire issue of the Amway opportunity. Why should I answer a question unrelated to Amway if you won't answer my VERY relevent Amway question?

Anonymous said...

I have no way to answer the question as I have no inside information. I think it is quite obvious that the only way upline make money is by the passive tools income. As long as new IBOs come in as fast as they go out, the upline is happy and they never have to share their riches with the people doing all the work to try and build their businesses from lower levels. That is the closest I can come to answering your question. I have no problems with anything you have said on this site about the Amway opportunity. I just wondered what compelled a grown man to devote so much time to something in his distant past. If you hadnt bragged about the income from the site the question would have never popped into my head and this weird exchange would have never begun. I would have kept checking your site to see the rediculous comments from the Anonymous Amway supporter with terrible grammar and enjoyed my life. Anyway, if you just dont want to answer, that is fine. Just say so and I will find other ways to occupy my free time.

Joecool said...

Excuse me. Where in the world did I "brag" about making income from this blog? Do you not recognize sarcasm when you see it? That is my "canned" reply to many IBOs who fly by bragging about income from Amway.

Joecool said...

By the way Anonymous, to address your question why I do this.

I spend maybe 30 minutes a day to update this blog and to check comments. I do it because my former uplines lied and they to some degree are still lying to profit from unsuspecting people. I feel my time is welll spent if it will prevent some people from falling for a scam. These upline leaders have never been made accountable for their lies and fraudulent behavior.

Anonymous said...

Ok. I have answered your question now, so do I get an answer? I understand you were being sarcastic, but you have made multiple references to income from the site when there clearly arent any traditional revenue-generating items on this page. Also, you appear to keep two different blogs that cover the same topic. Is there a reason for that? I support your mission to inform people about the potential downsides of this opportunity. Like I said, this all began with a curiosity about comments related to income from the site. If there is none, fine, if there is some, I just wondered how. I experienced many of the same things as you during my brief time in the business and have never looked back after 'quitting'. I await the day when our good friends will awaken to the years they have lost trying to achieve something that is near impossible. They are good people that have done everything right. They were promised a diamond lifestyle after 5 years of work. 8 years later they are no where near that to no fault of their own.

Joecool said...

I could probably generate income from this website because I get a lot of hits, but I choose not to in order to maintain my anonymity. So in short, I do not earn money for blogging. I make the comment normally in response to IBOs who drive by claiming they make thousands a month from Amway doing nothing. I run a seperate blog similar but with a slightly different theme.

Too many good people lose money in what I consider a fraudulent scheme, thus my willingness to donate my time to inform prospects and information seekers.

Anonymous said...

Even though you don't make money from this blog, there are a lot of other readers who can "make money" by reading this blog.

They make money by saving the money that they would have otherwise wasted on the business tools. I had been in the business for about 5 years and I estimate that I lost minimum 15,000$ a year.

$100/week on CDs = 100x50weeks = 5000$
$500/function (including baby sitting cost) = 2000$ a year
$100/month on extra fuel money = 1200$
$6/week on local meetings = 6x50 = 300$
$1500 flight costs (long-distance travel minimum once a year for spouse and me)

This is a very conservative estimate of the costs. In our line of sponsorship, uplines would often pressurize pumping the volume to help other uplines qualify for special leaderships. I don't blame them - I was naive to let myself be taken advantage of. This cost would run about 5000$ a year - buying products I don't need to help others reach their goals.

Since the time I have stopped building the business, I see an extra 15,000-20,000$ of savings each year and its been over 2 years now. I know if I had continued to pursue the business and not read the various blogs out there on the realty of the business, it would have taken me another 5 or so years to get to Q12 before I broke even. I had already lost 15000x5=75000 and I would have lost another 15000x5=75000 in the next 5 years.

Now, I have come to my senses and I have started investing these savings. Even though the market has taken a wild ride, I am young and I have a long horizon. Conservatively, over the next 20 years this money can be compounded at 7% per year. This is in a diversified global portfolio. I am assuming very conservative figures - corporate profits of companies worldwide will be 5% per year averaged over the next 20 years + 2% dividend payout.

So, people who have been in the business for 5 years and still have their heads in the sand and will continue on for the next 5 are losing the opportunity of investing 15000$ per year of pursuing this business. I am pretty sure that in 10 years most people realize the insanity of pursuing this business and quit. But, they have lost 10 years of compounding. So, if someone started at 25 and quit at 35, they lost an extra 600,000$ (put the numbers in excel sheet Y1-Y10:15,000 of savings Y11-Y25: 0$ savings, rate of return 7% per year) that they could have had at 55. That is the real opportunity cost of pursuing this business.

So if you ask me, reading this blog is worth 600,000$ for your readers. I imagine if you have 4 people who visit your site every month and decide to do what I have done, its going to an extra 2.4 million dollars that can be put to productive use in our communities in the next 20 years. That 600K is right now being diverted to the greedy diamonds who are making unwise use of your resources - fancy cars, homes, jewelry etc. You could have used this money for an ivy league education for your kids and your retirement. All this without doing anything extra!! Its not free money - it is the reward of being disciplined and saving your hard earned resources.

I say you putting 30 minutes to do what you is worth it!! If you get a 100 naysayers and only 4 people who see the light like I did, it is worth it. Not to you, but to them. Like they say in business, its a numbers game!! Keep on going Joecool.

Anonymous said...

Ok. So you say that they claim to make thousands by doing nothing? I find that hard to believe. Just like you did, I could also brag that I make thousands a month from my job doing nothing. Also, you are not anonymous on the internet. People can track you down.

Joecool said...

People can track me down? Track me down for what? For voicing my opinion on a blog? Yeah, I'm shaking in my boots.

Anonymous said...

Unfortunately you did not read my post very carefully. I did not say that I can make thousands by doing nothing. I said you can do so by doing nothing "extra" than what you are already doing.

Its very simple. Just divert the money you are spending on business tools to a new bank account and have the discipline not to spend on anything frivolous.

In my case, this amount was 15000$ a year (I never said in a month like you claim in your post).

You are right. You should be very skeptical about anything you read on the internet, specially by an anonymous.

You don't have to believe anything I said. But keep an open mind and consider my recommendation: Start a new bank account. Use this account for any expenditure on tools, functions, business travel, baby sitting costs when you are out building the business, extra fuel costs proportional to your business driving for the months June-Dec (6 months). At the end of Dec, check what this total amount is. Now, if you decide to stop doing these activities in the business, continue to divert the same money from your paycheck to this bank account and decide not to touch it you get extra money. Its called saving !!

I recommend that you supplement your book of the month with reading books like the 'Little book of common sense investing' by John Bogle. You will learn to compound your savings over the next 20 or so years. You are not going to very wealthy doing so, but I know that you won't be poor. If you start at 25 and save 15,000$ a year until 35, not touch the money until 55, compounding at 7% gives you 600,000$. You can put these numbers in an excel sheet, if you don't believe me.

I hope you are open minded about what I am saying. You said its hard to believe, but I don't understand what is hard to believe.

Maybe in your case, you don't spend 15000$ a year on all the activities in the business. I did and I know everyone in my uplines and crosslines also did, because we were all doing the same things - buying the same number of tools, going to the same events. So, even if you are not spending 15,000$. You are spending some amount. Think about the number of years you need to put to get to solid Q12. Only if you are solid Q12 can you cover these costs. In my case, it was another 5 years. I decided that investing 15,000$ for another 5 wasn't worth it. If it is worth while to do so, please continue. The skeptical person that you are, I recommend you use this skepticism to evaluate your opportunity cost and make a conscious decision to continue to after making these calculations.

I wish to stay anonymous for privacy reasons. If you can track me down and want to ask me questions on phone or in person, I would be happy to answer any questions. I have nothing to hide - everything I said is very general and applicable to anybody who is disciplined about setting aside some money every month.

Anonymous said...

nothing wrong with that concept, but why do it with amway?