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.


Anonymous said...

If the statement "If the system works if you apply it", is true then it should work for atleast the supposedly big pins like diamonds. How many diamonds have been repeatedly telling "show the plan 3-5 times a week and you will be a diamond in 2-5 years"- How many of these diamonds who teach such things have broken diamonds in 2 -5 years? How many of these diamonds requalify as diamonds every year or have gone founders diamonds?

Is it because they could not follow what they themselves teach or are all the teachings are nothing but exaggerations and blatant lies?

Joecool said...

I used to be in WWDB and they have fewer diamonds now than they did when I was an IBO 12 years ago. What does that tell you?