Friday, July 30, 2010

Amway - Winners and Losers?

One of the things that my upline taught, and I believe is still taught today in various groups is that winners join Amway and losers do not. Or that you were a winner because you were doing something to better your financial future and those who didn't were losers. or broke minded. Of course the upline who said this had no knowledge about those who were not in Amway. Some of them may already have been financially sound or may have been doing something to better their financial future. I'm not sure why these uplines, who promote "positive", had to resort to calling people losers simpy because they did not agree that Amway was the greatest thing since sliced bread.

In many games or sporting events, there will be someone or a team that wins the game and someone or a team that loses the game. Losing a game doesn't make you a loser and certainly, a team that wins the game would not say the losing team were losers. Can you imagine a pro football team's coach taking the podium after a game and saying his team won because the other team was a bunch or broke minded gutless losers? That would never happen, yet we see that frequently in the Amway/IBO world. The owner of Amway, Rich DeVos had once said in a recorded message that just because people do not agree with you (paraphrased) about Amway, does not make them losers and that IBOs should not call people losers.

In all of this, people's jobs are also criticized. That a job stand for "just over broke" or "jackass of the boss" and other blurbs. Many IBO's goals and dreams consist of ditching their job so they can sleep all day and live a life of luxury. Ironically, it is most IBO's jobs that continue to produce income so they can pay their bills and feed their family. It is also an IBO's job that funds their Amway and AMO expenses such as product purchases and functions and voicemail, etc. Without having a job, most people could not even join Amway or pay for any tools. Sadly, most IBOs won't make any money in Amway either, and will have to continue to work at their jobs. I do not believe that someone earning an honest living working a job is a loser. Ironically, the folks calling people losers are often not even netting a profit from their Amway business!

Yes, in this business or the sports world, there will be winners and there will be losers. The question is whether you are the one who is allowed to be the judge of who is and who isn't. I would also suggest that IBOs are completely shutting down potential future business by their behavior. What if I went to a store to purchase something but the item was not available on that particular day, so I don't purchase anything and leave. As I leave, the store owner says I am a loser for not buying something there. Will I go back? Very unlikely. If an IBO truly sees themselves as a store owner, all prospects should be seen as potential business, whether future or present. If your upline tells you that people not interested are losers, you should hand him a mirror.

Thursday, July 29, 2010

Amway - The System Works - If You Are Selling The System

When I was an IBO in WWDB, I was told outright lies from speakers on stage about the system and the system profits. I was first told that WWDB was a non profit organization, which was false. I also mentioned to my sponsor that non profit organizations still generate income in some cases, and can still pay their CEOs a whopping salary. This falsehood/lie was quickly withdrawn and the story later became WWDB was a for profit company, but nobody made profits. They claimed that any surplus was reinvested into WWDB to make future events cheaper. We also know today that this is a lie.

Another lie told by WWDB leaders was that nobody made profits from tools. This was eventually exposed in the information/internet age. IBOs these days simply "forgot" about these issues and nobody was ever made to explain or account for the lies and everything was basically swept under the rug. To this day, despite accreditation, I do not believe there is transparency about the tools. If there were, it probably would have been exposed by an IBO or a former IBO. It was also discovered that some diamonds and bigger pins made most of their money from selling tools. And it makes sense because these folks are traveling the country without the ability to work their business, at least locally and thus it would make perfect sense that their groups may become broken.

In my opinion, the telltale sign however, was the recent flat growth or even decline of Amway sales in North America. Less sales likely means less IBOs and less IBOs means less IBOs buying tools and attending functions. It also means less energy drinks consumed. The possible resulting fallout? A prominent WWDB diamond in bankruptcy proceedings. While Amway defenders cite that is was flipping houses that caused the problem, but it is quite possible that in the past, the tools income may have been enough to cover failed ventures. We also see diamonds selling off homes/mansions. Sure to a degree it may simply be downsizing, but the real estate market is down right now so selling is a tough venture right now.

While the lid has not yet been completely blown off the pot, it appears that the tool sales are down and that it certainly would appear that tool sales are a vital and yet declining part of a diamond's income. I guess the system works well for those who sell and profit from the system, but sales are down and it appears that diamonds are being forced to tighten their belts. I'm shedding crocodile tears for them as we speak.

Wednesday, July 28, 2010

Amway - IBOs Are Sharp People!

One of the things taught to our group by upline was to recruit "sharp" people. And in general, I agree that many/most IBOs were sharp people. Most of them nice, motivated and wanting more in life. Certain Amway defenders wrongly claim that I am against Amway and IBOs to a degree where I am maniacal against them. I am not. I recall that most of my group and my crossline were mostly educated and had decent jobs. We all hoped to achieve the dream of walking away from our jobs and living in luxury. We got the idea that is was very reasonable and achievable if only we did as upline advised and immersed ourselves in the "system", which in my case, was WWDB. We were told that WWDB had much fruit on its tree and at the time I was an IBO, that appeared to be true.

However, we did not know that some WWDB leaders made significant income from selling us tools. You see, we were lied to and speakers at major functions told the audience that nobody made a cent from tools and that upline makes pennies only after you earn dollars. We know know that this is not true and that these speakers were lying. What's more, these leaders were never made accountable for their lies. They just revised history and acted like nothing happened. Sadly, many downline IBOs simply accepted the explanation and continued to buy tools. Currently, the WWDB tree is getting barren, with little "fruit". There are very few new diamonds from WWDB in the US, and some of their more apparently dynamic leaders have left WWDB to start their own systems. Thus it looks like WWDB is left with the same old tired speakers today, as the ones who were around prior to my involvement with Amway.

But what's puzzling, or maybe not, is why aren't there more successes if many, possibly most IBOs are "sharp" people? Surely large groups of smart and motivated people can accomplish much, but for whatever reason, they are unable to accomplish much in Amway and WWDB. In fact, many of these shapr people cannot sponsor a single downline and have difficulty in selling Amway products. After many years of blogging and analyzing the Amway opportunity, my conclusion is that Amway products are priced too highly and cannot compete with similar products on the open market. Sure, Amway defenders will cite quality or concentration as reasons why Amway is competitive, and in some cases, Amway is competitive, but the general public doesn't care, they just want cheap stuff and Walmart fulfills that need better than Amway. It leaves the majority of Amway sales being made to active business building IBOs. Apparently the artificial need to buy Amway goods disappears when the diamond dream disappears.

Also, the zany and sometimes deceptive behavior of past and some present IBOs gives the Amway name a bad reputation, making it difficult to get anyone to see the plan, and sponsoring becomes nearly impossible. It is for this reason, I believe Amway is growing in foreign countries and not in North America, where saturation has occured. When you factor in all of these variables, it is easy to conclude that large groups of sharp people fai is not because they are not capable, it is because the Amway opportunity comes with so many handicaps that even sharp people cannot overcome them. It is why so many former IBOs, including myself, ahve done quite well for themselves after leaving Amway. Did I learn some things about business while in Amway? yes, I did learn some things of value, but I also learned that I was lied to and deceived by WWDB leaders and for that reason, my blog continues......

Tuesday, July 27, 2010

Amway - The Residual Income Myth?

Do the work once and reap the rewards for life. Lifelong willable passive/residual income. These are some of the things that attracted me to the Amway opportunity. That I could do the work, and have the option of sitting back, enjoying a fabulous lifestyle of riches and never have to work again. I could wake up at noon if I chose to, and/or I could stay out late hanging out with my "free" Amway buddies.
It sounds great on the surface, however, when you analyze a diamond's income and look at things carefully, you can see where this lifestyle is just not possible. Even if a diamond earned $250,000 a year from Amway and the tools income, after considering taxes, business expenses and other necessities such as medical insurance and retirement savings, you don't have enough left to live what is often portrayed as a "diamond" lifestyle. Also, keep in mind that a lot of a diamond's income is received in the form of an annual bonus so a diamond's monthly income might be relatively small.

One could also wonder why there aren't any diamonds (that I know of) who have actually walked away from their businesses and continue to collect any significant income from Amway. With more than half of all IBOs not staying in business for a year and about 95% of the rest of the IBOs being gone several years later, it would be an insurmountable task to keep your income rolling in with that poor retention rate. As far as I know, an IBO also need to have a minimal amount of side volume in order to qualify for certain significant payments/bonuses. That is a lot of volume to move when IBOs are quitting the business daily, and these days, it seems as though there are fewer IBOs getting involved, at least in the US and Canada.

It is for that reason, I believe these crown ambassadors and higher level pins are still working. Once you stop, it is very likely that there is no tool income, and once your downline starts to suffer attrition, then you Amway income and bonuses will eventually dry up as well. I believe there is no true residual income in Amway. Sure, build a big business and walk away. You may continue to receive some income for a while, but eventually, it will disappear. It is like building a sandcastle on the beach. The bigger you build it, the longer it will last, but it is for certain that the tide will eventually wash the sand away, just as time and attrition will eat away your Amway business. If you are popular and charismatic enough to attract a large downine, once you leave, so will your downline.

As far as I am concerned, I believe the residual income claims from Amway is just a long running myth used to attract recruits. I don't know of anyone who built a large Amway business and then walked away, and is still collecting a significant income. Do you?

Monday, July 26, 2010

Amway - What Is Your Amway Business Worth?

Many people see the Amway plan, sign up in the hopes that Amway income will help them fulfill their dreams and that they will walk away from their jobs and collect lifelong residual income while walking the beaches of the world. Sadly, most IBOs will never even sponsor a single downline. These IBOs may continue in the business for a while but will eventually quit when they see the writing on the wall. Many IBOs will do nothing. Some won't even order Amway products. But even IBOs who do put in an effort and apply the knowledge they learn from tools ususlly end up suffering financial losses because the tools. I would guess that many IBOs will never even make enough Amway money to cover the monthly cost of their voicemail, never mind the other materials that IBOs are often sold.

But wait, you're an "independent business owner". So instead of quitting, why not sell your Amway business? I wonder if any IBOs actually think about what their business is worth? I mean a diamond could sell their business and live large happily ever after right? Here's some food for thought. Why are there instance of diamonds quitting or resigning from Amway? Why would they just quit when they could either walk away and collect an income "forever" or sell the business?

I believe some diamonds quit and resign because their business is worth very little or nothing. I mean what do you own? You don't own your downline and you probably would not have much inventory to dispose of. All you basically own is the rights to combine downline volume with yours, provided your downline moves any volume at all. Most Amway businesses do not even generate a net profit. For IBOs who are seriously pondering on this very important message, try looking up this topic in Amway's rules. There are very complicated steps to be taken when selling your Amway business as each person upline must be offered ownership (To the best of my understanding). This process can go on for a long time and the attrition of your business could render it worthless before you can find a buyer, if you have a buyer at all. Also, if you quit, the downline in your group would be surrendered to the immediate upline anyway. So why would your upline want to buy your business?

So IBOs, I ask you. What is your business worth?

Thursday, July 22, 2010

Amway - An Internet War Against Amway?

I was reading an article written by a well known Amway defender who was whining about how there seems to be an internet war against Amway, a war that they seem to be losing. He decries how a google search will turn up more hits on critical sites than positive ones. He hopes that eventually, Amway and/or the IBOAI leadership would read his article and take action. But why would they and who would they take action against? Microsoft and WalMart have many critics, but the braintrust of these companies don't spend time strategizing against their critics, nor do their employees set up blogs defending themselves or attacking their critics.

A very vital question that should be asked is what is the criticism against Amway and is it valid criticism? For example, a common thought is that Amway is a pyramid. Well, it would appear that in most groups, Amway works as a legal pyramid because the compensation structure works in a manner where the upline make much of their profit right out of the pockets of the downline. It is especially prevalent in groups that teach the "buy from yourself" method of doing business. Also, a new IBO gets a measly 3% bonus for reaching the minimum 100 PV level and layers of upline get the lion's share of the bonus, some of them for doing nothing. Sounds like a valid criticism to me. In the case of the tools system, it is also true that uplines make their money almost exclusively from their downline, save for a few guests who may attend functions or purchase other materials.

Another common criticism is that people had bad experiences or knew someone who had a bad experience in Amway. Well, since many IBOs don't make a cent, and the ones who participate in the system usually generate financial losses, it is easy to conclude that many would see that as a negative, especially if they were led to believe that Amway was simple/easy and would lead them to untold wealth with early retirement and lifelong residual income. Some IBOs in the past, myself included were outright lied to about the upline earning significant income from the tools. After quitting and discovering the lies, it left a bad taste in my mouth. Toss in uplines who want control of your life, such as teaching that you should ask permission to have children and you have more scarred former IBOs.

How many people have heard stories of being tricked into attending an Amway meeting? Or how many people were outright lied to to deceived in the recruitment process? Or how many people made up rosy stories about the Amway business to attract prospects? What about other made up fables used to attract and retain IBOs? I still see IBOs claiming that Amway or their LOS saves their marriage, or that they will be retiring their wife next month or buying homes in cash. All nice goals, but generally a pipedream and IBOs who experience this will probbaly sour on the whole experience when they quit.

But the apparent source of the criticism comes from the IBOs themselves. Thus it is the behavior of IBOs and those who adviuse the IBOs who are responsible for what some see as an internet war against Amway. It isn't the critics, it is the IBOs who are carrying out unethical behavior, much of it apprently taught to them by upline, that is responsible for the criticism of Amway. The infamoous IBOFightback thinks Amway should take action. Well, maybe Amway can start by monitoring their LOS leaders and by addressing valid criticism. If people weren't tricked into meetings or told that perfact water can cure cancer and save their marriages, some criticism would vanish into thin air along with the critics.

Wednesday, July 21, 2010

Amway - The Real Purpose Of Having Tools?

As an IBO, I was told that I "needed" to attend all functions. Attending all functions meant "all" is what I was told. Brad Duncan once had a tape in the true north series where he said that downline should not cancel standing orders even when IBOs quit, because there would then be an urgency to replace that person. I was in WWDB and while not everyone in WWDB may have taught this, our group was told that we should purchase 5-7additional tapes/cds in addition to standing order because we needed to listen to new material daily and because we should be passing out these materials as they will sponsor new people. To date, I do not know of anyone who passed out a tape or cd and had someone decide to join the Amway business as a result of listening to that tape or cd.

When I was in the business (In WWDB), our group was told that WWDB was a non profit organization. That was quickly retracted, but still, the WWDB leaders stood on stage in front of tens of thousands of IBOs and said nobody made a profit from tools. We now know that it was a lie. We also know that many of these leaders are still teaching, and as far as I know, not a single WWDB leader has ever been accountable for these lies. Some of these lies may have caused untold financial damage to downline. I'm certain I would have been less dedicated to tools if I had known that some uplines made most of their income from tools and that their advice was a conflict of interest. Some Amway defenders are currently talking about how some negative misinformation about Amway is hurting their business, but ironically, it would appear that most damage to Amway has been done by IBOs themselves, such as tricking people to meetings. As far as I know, not a single person has ever been held liable for the financial damages to downlines and former IBOs who lost money by being told lies about Amway.

Now I also would like to emphasize that I do not believe the tools work and do not produce any results. While Amway defenders will claim that most if not all new emeralds and diamonds are on the system, they fail to mention that there are also tens or hundreds of thousands of people who work the system without results. As far as I know, there is no bonafide unbiased evidence that suggests that the system produces any results. It is why IBOs end up later talking about being a nicer person of how their marriage was strenghthened by joining the system. While these are nice side benefits (if true), these reasons are not why you started a business. A business exists to make a profit, yet uplines make all kinds of excuses as to why IBOs did not profit, even placing the blame on the IBOs who trusted them.

It brings me to the real purpose of having tools. The REAL purpose of tools is to make profits for your upline. I believe the tools were invented as a way to motivate and train new and distance IBOs, but apparently, GREED eventually set in and many uplines started emphasizing tools, not because they wanted downline success, but because their tool businesses were wildly successful with thousands of captive downline dedicated to the system. I believe it is why I saw many IBOs who worked hard, never missed a meeting or function, did nto sponsor any downline, but were still told they needed more and more tools.

I believe the real purpose of having tools is so your upline's tools business can be profitable.

Tuesday, July 20, 2010

Amway - How Upline Leaders Suck IBOs Into The System?

When I was an IBO, my upline told us a story about how you put a frog in a pot and make the water warm. It relaxes the frog and you keep slowly raising the heat and then when it's too late, you boil the frog. My upline was refering to your job. You work and invest some years working a job and eventually, you end up broke, is what we were taught. What my upline never mentioned is that 401Ks, saving, and other investments can still pay off with a job. It is how many people with jobs are able to accumulate a nest egg for their golden years.

I would guess that an upline speaking to prospects and new IBOs is a better analogy for boiling a frog in a pot. The upline will warm the water and relax the prospects and newbies by talking about how they were once broke and downtrodden, and how they somehow discovered Amway and after some work, they are now the pinnacle of success and you can do it if you will only listen to their advice and follow the system (sound familiar?).

Your sponsor or upline may talk about the "optional" tools and may even loan you some cds or they may pay for you to attend some meetings. (The water's getting warmer) Pretty soon you are excited and fired up about Amway because you are shown nice cars, and you hear about how so and so's wife doesn't work anymore, or you see someone's mansion. You may even be told that the mansion was paid for in cash, along with many other trappings that you dream of. You start to believe that everyone in the audience will have these luxuries. (The water is getting hot now)

Then at some point, you are told that a real or a serious business owner needs to start buying their own tools. You get your own standing order, pay for your own functions. But you look at your bottom line and you are still losing money. What is happening? Your leaders then start to teach you that Amway makes you a better person, or that Amway or your AMO (i.e. WWDB, BWW, N21) helps save marriages, or that the business is more than money. It is lifelong friendships.

At this point, you have invested some time and money into the venture. Some people wake up and escape the pot before the water boils. Some folks believe they have too much invested and that success is right around the corner. Afterall, you don't want to quit when you could be on the brink of "making it". So many IBOs push on and they get boiled, just like the frog in the pot.

Monday, July 19, 2010

Amway - It Is IBOs Who Are "Losers"?

Over my years as a blogger, many - an - IBO has called me a loser. I decided to look at for a defintion and here's what I found:

los·er (lōō'zər)

One that fails to win: the losers of the game.
One who takes loss in a specified way: a graceful loser; a poor loser.
One that fails consistently, especially a person with bad luck or poor skills: "losers at home seeking wealth and glory in undeveloped countries" (Arthur M. Schlesinger, Jr.)
One that is bad in quality: That book is a real loser

And: an inept person; an undesirable or annoying person; a social failure. : Those guys are all losers. They'll never amount to anything.

The owner of Amway, Rich DeVos made a speech sometime ago, stating that IBOs should not refer to people not interested in Amway, as losers. And it is not the Amway corporation or Amway employees that call others "losers". It is some IBOs in some LOSs that coined the phrase. But when I took a closer look at the definition, I could see that truly, it is IBOs who fit the definition better than the rest of the population. Amway's biggest defender, IBOFB, is the one who said many times that "most" IBOs don't do anything, not even place an order. Wouldn't that lready make these IBOs "losers"? What about those who try very hard but never make profits? Wouldn't that make them "losers"?

The average IBO earns $115 a month (Amway's figures) which is well below the US poverty line. Does that make the average IBO a "loser"?

Diamond is the pinnacle of Amway success, if you have ever seen an Amway 6-4-2 or 9-4-2 "plan". But only 1 in 10,000 or 20,000 ever reach diamond. (Those figures may be lower) Are the rest of the IBOs "losers"? Those functions must be filled with losers?

If IBOs and AMO leaders wish to continue to use the term "loser", perhaps they should learn the definition and look in the mirror before using the term?


Thursday, July 15, 2010

Amway - Amway & IBO Accountability?

Over on the Amway Talk forum, the raging debate is how some of the former TEAM members who became Quixtar/Amway critics are being unmasked and how accountable they should be held for statements that may have been false or misleading and possibly damaging to the Amway opportunity/Amway corporation. I agree with this to the extent that the statements were made as facts which were not true and not as opinions or valid experiences. The Amway supporters are decrying these former TEAM critics and claiming they should be held liable for possible loss of business or income that might have been attributable to these possibly false or misleading statements.

And as I said, I generally agree. But I also have another viewpoint on this subject. When has Amway or Amway LOS leaders ever been made fiscally accountable for people who may have suffered financial losses or in some cases, financial ruin as a result of misleading or false statements made that are positive about the Amway opportunity? I'm sure some people, if they were fully informed that some leaders might make up to 90% of their income from the sale of voicemail, books, functions and standing orders, would think twice if that leader is telling you to second mortgage your home or skip a mortgage payment because you "need" to be at the next function. Or if that leader suggests your family skip a meal so you can buy another cd. Who has ever been held accountable for this?

There are certain blatantly false statements made by Amway representatives such as lifelong residual income, willable to heirs, used as a means to entice people to join. I've also heard that the Amway opportunity is a franchise when it is not. I've seen many IBOs lie about their level of income earned thru the Amway opportunity, I suppose as a means to entice prospects to join. Even the profiles of success booklet that the LOSs produce are misleading at times as the alleged wealth depicted may or may not have been a result of income attained thru the Amway opportunity. We even have some supporters making false claims to promote various products such as the perfect water fiasco, or an Amway supporter claimg just last month that Asafa Powell (sponsored by Amway/Nutrilte) was the current world record holder in the 100 meter race, which is completely false. The record holder for the last several years has been Usain Bolt from Jamaica.

Yes, I agree that false and misleading statements against Amway are not right. But one could ask what Amway has done to the possibly millions of people who were enticed to join Amway or purchase Amway goods because of false and misleading statements made by Amway representatives and AMO leaders? I believe that Amway simply pushes the responsibility away by saying they cannot control what their "independent representatives" say and do. But if you cannot control and monitor your sales force, independent or not, then aren't some of these folks "out of control"? If it's out of control, maybe "someone" has to reign control back in?

Maybe it's time for the FTC to review this opportunity again. 1979 was a long time ago and as Amway supporters say, times have changed. (But maybe not for the better?)

Wednesday, July 14, 2010

Amway - IBOs, Who Do You Think You Are Fooling?

I get a kick out of IBOs who make outlandish claims and then mumble and stumble to back up their claims, or to offer at least a verbal explanation of their claims. I believe many IBOs, newbies in particular are loaded with enthusiasm, but lacking in actual Amway business knowledge. Certain groups have a certain philosophy, which sometimes comes out in a conversation. But I believe in most cases, the philosophy is one of talk and not action. Amway's own numbers seem to back up many of the claims made by critics, such as the low amount of sales to people who are not IBOs.

I recently saw a blog post by a WWDB IBO who says he got a nice tax refund from the government, mainly because of his business deductions. He also claims that his Amway business is booming and that he is making money. Now I'm not a tax genious, but if you are writing off losses on your business, you would get a refund, and if you were actually making money, then you would actually be paying more taxes because you taxable income would then be higher. It's amazing how some IBOs will try to fake success in ways that clearly show they are putting up a facade.

Other obvious ways are IBOs who say they are brand new in Amway but are making over $5000 a month. Not I do believe that it can be "possible" to make some money in Amway, and obviously some people do make a nice income from Amway, but generally, these will be tenured higher pins. The vast majority of IBOs do not make any significant money from Amway and if these same IBOs were participating in the teaching systems such as Network 21, WWDB, or BWW, then they are likely ending up with a net loss because the monthly expenditures for voicemail, functions, books and standing orders exceed (by far) the monthly income for most IBOs.

Even diamonds who want to flash fancy cars and gadgets. I believe many of these diamonds are not making as much as they want you to believe and in fact, if you just get a calculator and figure out what a flashy lifestyle costs, you will see that it will simply not be sustainable on Amway income, even when you factor in the tools income. Some diamonds whose incomes were exposed when they quit or had legal proceedings indicate that while a diamond (or higher) income may be nice, it will not sustain the kinds of lifestyles they speak about at Dream Nite functions, or other functions where great wealth is displayed.

They may be fooling (some) new prospects, but they do not fool me and I hope they do not fool you.

Tuesday, July 13, 2010

Amway - No Crosslining? Information Control By Upline?

No crosslining was something that I was taught as a WWDB IBO and apparently, it is still being taught as a general practice in most, if not all LOSs. But this concept of not crosslining is just a mind control technique used by upline to control information. Uplines don't want their downline to talk to each other and have them accidently realize that they are losing money, primarily because of tool expenditues. Or they don't want them to give each other revelations about how certain practices are bad ideas. For this very reason, IBOs should be able to speak to other "Independent Business Owners". If one truly owns their own business, then it is of no business to the upline who an independent business owner speaks to.

To back up my claim, why would any IBO attend a function, open meeting, or listen to a standing order that was not in their immediate upline or further upline? If that concept is a bad idea, why is it okay for IBOs to attend these meetings, especially when there is usually a cost associated? Why in the past, was it okay for me as an IBO to attend a function with Bill Britt speaking when I was in WWDB? What good would it do listen to a standing order of Paul Miller or some other high level IBO when they are crossline?

Then your upline gives you the line that you can listen but just take what you need from it and dump the rest. Couldn't you make the same argument for speaking to crossline IBOs at a function? Afterall, who would be better to relate to a new IBO than another fairly new IBO. Does Bill Britt even know how to use a computer? But here he will give speeches on how to run a web based business, but fellow IBOs are not supposed to speak to other crossline IBOs because they may or may not be affecetd by what is said. I believe it is for this very reason that many IBOs are discouraged from reading the newspaper and/or from watching the news on television. It would appear that uplines want their groups to become apathetic and only intake positive Amway information. It is for these very reasons that some groups receive the tag of "cult" I would be wary if my church pastor told me I could not visit and listen to another pastor.

It would be odd if I owned a business, attended a business owner convention but was told not to talk business with other business owners. But that is exactly what IBOs are being told when an upline tells them not to crossline with other IBOs. It would appear that upline has something to hide or doesn't want downline to discover any information about the truth of what's going on.

If your group discourages crosslining, you should ask why the rule is in place. As an INDEPENDENT business owner, you have the right to speak to anyone you want to at an Amway convention. Amway has no rules against this. It is the groups such as WWDB or Network 21 that make up these kinds of rules, probably because they are seeking to control your intake of information. The question to upline should be "why".

Monday, July 12, 2010

Amway - Warning Signs?

Having been involved in Amway/Quixtar discusssion for some time now. I recognize the many warning signs of a bad upline or a bad LOS. While not all uplines are the same, I do not believe that any LOS is free of bad teaching, regardless of what you hear. Some of these points are simply clues that you could be in a bad LOS, you still need to think as an independent business owner and watch out for your own best interest.

When you were prospected or recruited, was your sponsor upfront about the Amway opportunity or were you told about some new ecommerce opportunity or the like? Were you told that selling products was important or were you told that buying from yourself is the way to succeed? Did you know that some some uplines make most of their income from selling business support materials and not from Amway? Were you told that functions and other tools were vital to your success?

Were you told that a college education was not important to your success in Amway? Were you told that buying from yourself can result in a profit? Did someone say that the Amway opportunity helps save marriages or makes you a better person? Was the Amway opportunity used to preach religion or politics to you? Did anyone tell you to ignore facts if you have a dream? Were you told to submit to upline? Or were you told to check your ego at the door? Did you get the impression that your upline was a divine being? Did you give the speaker a standing ovation without knowing why?

Were you told that you save money on Amway products only to realize that they are not generally cheaper than other retailers. Were you told that you have joined the best or the fastest growing LOS? Were you shown fancy cars or other luxuries and told that you can also achieve these lifestyles if you follow the system? Did your upline or sponsor tell you and verify how they are performing in the Amway opportunity or were you simply shown a photocopy of some check from an upline? Did you hear that you should always avoid "negative", or that people who are not in Amway are broke or losers?

These are some warning signs that you could be in a questionable LOS. In many cases, an LOS's priority is simply to sell you tools. Tools that are supposed to help you succeed in Amway, but more often than not, they help the person selling the tools to profit, regardless of whether you make a cent in Amway or not. It is important to look at facts, to track your progress and to keep track of expenses. If you are not progressing as the plan was shown, you may want to take a look and make sure that you are not overspending on tools thar aren't helping you. Or if you are unable to sponsor downline, you may have to ask if this business is for you.

The business has warning signs. It is up to you to see them or to ignore them.

Friday, July 9, 2010

Amway - The System Works If You Apply It?

One of the things I have heard over and over by Amway supporters is that their system work if you apply it. But is that really true or not? I contend that it is not true because many of the things recommended by the system comes with baggage that most IBOs cannot carry, or is not within the control of an IBO. For example, an IBO can be sure to listen to cds and read books every day, but being able to show a plan means you have to find someone who's willing to see it. Or selling a product means you need to find someone who's willing to buy it. While on the surface, that sounds reasonable, but in practice, many IBOs find it impossible.

There are reasons why the two biggest challenges facing most IBOs is finding prospects and being able to sell products. The challenge comes from the higher prices in general that Amway charges their IBOs. An IBO will often try to justify the price by citing quality, or concentration. But these factors are subjective and the vast majority of consumers will simply see a similar (or same) product at WalMart with a lower price tag and buy it there. For probably most consumers, the price tag is the bottom line and it is why the WalMarts of the world are wildly successful. Another hurdle many IBOs cannot overcome is the problem of finding people to show the plan to. Because of past IBO behavior such as tricking people into Amway meetings, or being deceptive about the purpose of the meeting, or outright lying, many people in the north American market think there is something shady about Amway IBOs. In some cases, it is unfounded, but still, the stigma follows because too many people have or know someone who had a bad experience in Amway, and many people in the past who did work the system, ended up losing money because of the system. These factors make business building in the US nearly impossible, and explains why Amway is stagnant in north America, and why groups are shrinking rather than growing. Amway recently did some PR things, including some commercials, but still I do not think it was done in time to fix the reputation issues.

Aside from sponsoring/showing the plan, and selling products, nearly or all of the system activities are non income producing activities for downline and in fact, many activities such as voicemail or standing orders are major profit centers for certain upline. Thus it would make sense for upline to promote these activities to downline, because they profit from it. It may or may not help the IBOs. But there is no unbiased evidence that the system works if applied. Sure, Amway supporters will point out that all the new platinums and above were on the system, but don't mention that for every "success" story, there may be hundreds, thousands or tens of thousands of failures. To call that a success would be a tough sell in my book.

So does the system work if you apply it? Based on the evidence and my informed opinions, I would have to say "no". But IBOs must make their own decisions. Are you experiencing a net profit? If the answer is no, ask yourself why not? Is the system the reason you have a net loss? If the answer is yes, ask yourself if you should continue. If you are told that the system saves your marriage or makes you nicer, ask yourself if you own a business or are you participating in a self improvement class. Ask the tough questions. As a business owner, you owe it to yourself and your business.

Thursday, July 8, 2010

Amway - The System Is Optional?

"Tools are optional, but so is success" One of the things that seems to be the common reason for IBOs losing money in Amway is the tools system. While IBOs may say that the system is optional, it certainly is not promoted that way. In my opinion, it is a defacto requirement. Especially when you may be told that nobody succeeds without the system, but you can be the first to try. Or that your upline double diamond accomplished that level with dedication to the system, but if you think you know better, you can try it on your own.

For most new IBOs, there really is not much of a choice is there? If you're lucky, maybe your upline will loan you some cds or books, but eventually, if you are to be a "serious" business owner, you will have to buy your own. Some uplines may compare these tools to a carpenter who needs a hammer and nails, or it might be compared to a college student who needs books to complete their coursework. But a carpenter certainly doesn't need 100 hammers and a student would not need multiple copies of the same book.

Basically, the system never ends for IBOs, unless they quit the business. What is also scary, is if you have a pushy upline who may encourage you to hyperconsume tools. We were advised to purchase additional tapes/cds every week because they would help you grow and because you were to pass them out to prospects. We were told that you should not cancel standing orders if your downline quits because it was too much trouble to call upline to cancel the standing order. We were encouraged to buy extra function tickets because you don't want to sponsor someone just before the function only to have the function sold out.

What was also scary was how some diamonds would talk about how long someone could skip mortgage payments before a foreclosure would occur. I am guessing because IBOs could then skip a payment in order to attend a function. IBOs were told to go in debt if it was to invest in their Amway business (Meaning it was okay to go in debt to buy tools). IBOs were edified if they made it to functions at any cost. I recall a man dying of cancer being edified because he left his (real) family to attend a major function while he was basically dying (literally).

Amway implemented their accreditation program to try and curb some of these abuses, but I believe at least some, and possibly many of these abuses still occur, under Amway's radar. My hope is that someone seeking information might recognize the warning signs I have posted and can decide for themselves if their upline is leading them astray.

Wednesday, July 7, 2010

Amway - Success Is About Sales

One of the things IBOs like to tout is how Amway had over 8 billion dollars in sales. That's great for Amway. The Amway corporation surely made a good profit from those sales. I'm pretty sure that the DeVos and Van Andel families would use Amway products. But I'm also sure that their purchases are an insignificant portion of the Amway Global sales. Most of their sales are to IBOs and to customers of IBOs. After paying operational costs and their eomployees, Amway makes a nice profit, which is why the families who own Amway are (last I heard) registered as billionaires.

IBOs, regardless of level, make up the sales force for Amway. But IBOs do not work for Amway. They are "Independent Business Owners". They are supplied products from Amway and receive their bonuses from Amway for the amount of volume they move. They can also sponsor downline which helps them to move more volume since downline's volume is also credited upline.

Many IBOs however, in the past and even today, hold the philosophy of "buy from youself and get others to do the same". I believe this method of running an Amway business was created because many people do not like the prospect of selling products, especially when the business often requires a "personal touch". Thus many IBOs simply buy from their own business and hope to sponsor a lot of downline. Sadly, most IBOs cannot sponsor anyone and cannot or do not sell Amway products.

Many IBOs are taught to move at least 100 PV, which is equal to about $300 in sales. However, if an IBO fails to sell any products, then effectively, the $300 in sales belongs to Amway and the IBO had nothing, rendering the IBO as a customer.
If the IBO sells a few items and consumes the majority of their 100 PV, then Amway still gets most of the sales and the IBO gets the rest.

The point it this. If your consumption dollars exceed your sales dollars, then whatever income you receive, is simply comiong out of your own pocket. It would be like clipping coupons and then when you use them at the store, you count the coupon value as profit. Ridiculous right? But sadly, it is what many IBOs have done, and continue to do today. What makes things worse is when an IBO spends their hard earned money to purchase standing order, voicemail, and seminar tickets where they teach this garbage. It's like paying your upline and Amway for the priviledge of consuming and sellling Amway products. Everyone makes a buck except the lower level IBOs.

Amway had over 8 billion dollars in sales last year. How much net profit do you think they would have if the DeVos and VanAndel families consumed most of that volume? Right, they would have massive losses. What makes IBOs think they are any different?

Tuesday, July 6, 2010

Amway - Can Your Business Stand On Its Own Merits?

So many IBOs like to point out that Amway has a satisfactory rating from the better business bureau, or that Amway owns the Amway arena where the NBA's Orlando Magic plays. But what so many IBOs fail to remember is that they are not Amway. Amway has over 8 billion dollars in sales but IBOs are not Amway. And IBO stands for "Independent Business Owner". Amway supplies you with products and bonuses based on movement of volume, and Amway also sets the rules by which you can advertise and market your goods. Amway also sets the rules by which disputes are settled.

A big part of being an IBO, is to recruit other IBOs. This is an important focus for many because an individual cannot generate enough volume to reach the higher levels of the business where significant bonuses kick in, along with the recognition and the ability to speak at functions and other types of meetings. When some IBOs reach this level, it is apparently expected that the IBO, who may now be an "emerald or "diamond" will show off the fruits of success, or may show a copy of some bonus check. IBOs like to use these things to entice others to join. The entire process is ridiculous. Can you imagine being enticed to work for a company by seeing the paycheck of the company CEO? If you saw the CEO's home or car, would that entice you to work for a company? Of course not because the CEO's salary has nothing to do with you as an employee, just as a diamond's success is no assurance of a new IBO being able to achieve diamond.

But why do IBOs use these methods to attract others? Is it because their Amway business cannot stand on it's own merit? I believe that to be true. I believe that even the platinum level IBOs mostly lose money. The State of Wisconsin attorney general did a study of all platinum (direct distributor) IBOs in their State and found that they lost $900 a year on average. While the study is a bit dated, I would suggest that nothing has changed. In fact it is very likely that platinums lose even more today because there are more tools and functions that platinums must attend.

It would be very easy for a platinum or a higher level IBO to simply open their books and reveal their schedule C (business tax return) which is common among REAL business owners. But I suspect that most platinums lose money and therefore can't do this, and I also suspect that the higher level pin winners do not make as much income from Amway as they like downline to believe, and do not want to reveal how much they earn from the sales of business support materials (such as voicemail or functions). In a few cases where a diamond's income was revealed, there was less earnings than expected and in some cases, debt where there should have been none.

Can your Amway business stand on it's own merits? Do you use the curiosity approach and leave the Amway name out of your pitch? Are you upfront with prospects when they ask you about what you earn? If not, then your business does not stand on its own merits.

Friday, July 2, 2010

Amway - Why The "Biz" Is Not Sustainable?

Over the years I have seen many debates about the legality of retail sales in Amway. At one time, an Amway corporate employee stated on a blog that about 3.4% of Amway products are sold to non IBOs or customers. Some Amway apologists like to justify the legality of the Amway opportunity by saying that sales to downline IBOs are considered sales, at least for satsifying Amway's retail sales rule. While I personally disagree that this fulfills the "spirit" of the rule, I want to instead speak about sales strictly to non IBOs.

Sales to non IBOs gives an IBO an immediate profit, and hopefully with enough volume combined with downline volume, an IBO can make a profit. But oddly, many IBOs are simply taught to buy from themselves, I presume because most people do not like selling good, so the AMOs just teach the buy from yourself mantra. While buying your own goods might seem like sage advice, it makes you a customer and not a business owner. What is also amazing is that some IBOs, possibly many IBOs do not sell a single product to anyone but themselves.

Not selling products to customers is building a house of cards. It may work for a while but it is not a structure that can sustain itself unless you continue to recruit and replace those who quit. The buy from yourself system also creates an artificial demand for Amway products and the only way to sustain volume is to keep replacing IBOs who quit. And IBO retention, being poor, makes this method of business building, unsustainable except for a very few exceptional IBOs who can recruit new IBOs to join the "treadmill".

A true customer base, one where customers truly enjoy and purchase the products, is the way to go in the long run, because you will have more predictable sales volume and immediate profits. You would be far better off with a hundred customers each buying 10 PV from you than you would having 10 downline all moving 100 PV.

Sadly, most IBOs have little or no customers and little or no downline. All they have that is predictable is a steady expense for voicemail, functions, books and standing orders. Over the course of a year or a few years, these expenses can extrat tens of thousands of dollars from an IBO, not counting the inflated prices of Amway and partner store products. It is why without real customers, the money in the Amway opportunity is simply transfered from the downline to the upline rather than from outside sources. Much like how a State like Hawaii is reliant on tourists to visit and spend money here. When tourism slows, so does the economy. Very similar to the Amway system with little or no customers.

Without non IBO customers, your business will not be sustainable. Where are you at?

Thursday, July 1, 2010

Amway - Most IBOs Makes Excuses, But Don't Make Money?

Not counting IBOs who sign up and never do a thing with the Amway business, I would guess that a typical business building IBO spends several months at 100 PV, earning $10 a month, and spending some money on functions and other support materials, thus ending up with a net loss in running their business. What I have also observed is that these new IBOs are often the most fierce defenders of the Amway opportunity. What is amusing is their defense of Amway, because they aren't knowledgeable enough about the business and cannot back up claims of being profitable.

A common defense is to attack someone's job. Oftentimes, I will hear that my job is a pyramid, or that the social security system is a ponzi scheme. What they fail to understand is that people with jobs have a net gain of income at the end of the month, unlike a typical IBO. Also, even if my job was a pyramid, that doesn't have any relevence as to whether the Amway opportunity is also a (legal) pyramid. And the same goes for social security. But although I find some faults with the social secuiry system, they have not yet failed to pay benefits to anyone who has paid in, as far as I know.

One of my favorite conversations is when an IBO, probably in frustration with facing the facts, will state that they have been in Amway for a month and they are already earning in excess of $5000 a month. Sure it's possible I suppose, just as it's possible for lightning to strike the same spot three times in a row. These IBOs are often the "drive by" commentors who never show up again. I recently had a conversation with an IBO who swore that he was earning $1000 a month in Amway, but refused to discuss what level he was at, or whether he made any actual sales, or had downline. He later asked for my email address and when finally supplied with it, he ended up blocking me from further contacting him.

I just wonder why upline leaders would teach such nonsense to downline, or whether downline simply want tp deceive others about their status in Amway? I mean it's really no big deal is a newbie IBO isn't making a lot of money. In fact that is expected when you are new. But I believe IBOs to some degree, might still be taught the old "fake it till you make it" theory that existed back when I was still an IBO 12 years ago. The concept was to fake success as a means to entice prospects until you actually made some progress in the business. Sadly, most IBOs never ever sponsor a downline, get discouraged and quit. I can't blame them when most IBOs who build the business suffer a financial loss, ironically it is usually from purchasing training materials that may have been promoted as the key to your success.

The sad result of all this is that "most" IBOs make more excuses than dollars.