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.


Anna said...

Any IBO who claims Amway owns the stadium in Orlando is an outright liar. But then that's a prerequisite for being an Amway distributor. The city of Orlando owns the stadium and puts up for bid to have a business name put on the building. Amway won the bid a few years ago for $1.5 million. When the new stadium was being built Amway was given right of first refusal to have their name on the new stadium which they purchased a 10 year contract for $40 million.



Joecool said...

Thanks for the clarification. I know the Amway owner owns the Orlando magic. Thanks for the update on the Arena.

Joecool said...

Many business builders eanr $10 a month while spending $300 on Amway products and $250 on business building tools. Does that sound like a great deal?

Anonymous said...

amway works if you work it but is it worth it

Anonymous said...