Thursday, September 30, 2010

Amway - Retail Sales Or Charitable Contributions?

I know Amway defenders will talk about some of the sales they make, and that's fine and good, but when I look at the kinds of sales they make, it is usually insignificant. I recently read some comments that sort of made me laugh. A prospect apparently was invited to an Amway recruitment meeting by a friend, and out of courtesy, sat through the presentation (which nobody else attended) and politely declined to register. The commenter went on to say that after the meeting, he felt sorry for his friend and purchased something off of his friend's IBO website, and it felt like making a charitable contribution. Makes me wonder since Amway's products are mostly consumed by IBOs themselves and I believe less than 5% of Amway good actually made it into the hands of a non IBO customer.

But now I wonder out of the tiny amount of IBO retail sales, how many of those sales are basically charitable contributions made to IBOs by family and friends who simply feel sorry for their acquainted IBO? When I first declined to join Amway under my eventual sponsor, they did ask me to buy some of their goods. But being a single male, my age group demographic didn't really match me with the products they were pushing. If I remember correctly, I ended up buying the liquid Amway car wax. While the car wax worked as well as the other leading brands, I recall that I paid about $12 for it back in 1995 or so. I can currently get a jumbo sized bottle od Nu-Finish or Astroshield liquid car wax for $7.99 at Target or other local retailers, and at times, the store puts them on special sales for $5.99. So basically, I am getting about twice as much car wax for the price if I purchase my car wax on a store special. I know Amway zealots will want to compare the price with an online sourcem but as I said, I make my purchase in person and wait for store soecials which occurs every couple of months.

I know at times, I have seen other family and friends involved in MLM. And while I was once there, I now see their attempts as somewhat pathetic, especially when they are basically walking the same path I did about 12 years ago as an IBO. I do not discourage them, but simply decline to see their plan or register as a downline. I have at times, also made charitable contributions to some friends who had become involved in MLM. If nothing else, just to be supportive of a friend. Ultimately, these MLM friends eventually figured things out on their own and quit as I did. Some of them follow my blog and some just quietly faded into the sunset. They do not run an informative blog as I do, but not everyone can or will. (Sound familar?)

However, after reading the comments about the polite friend who bought an Amway product from a friend, I have to wonder whether IBOs are making true retail sales or merely receiving charitable contributions from friends and family in the form of Amway product purchases?

Wednesday, September 29, 2010

Amway - Pigs Don't Know Pigs Stink

I recently came across some comments on a blog indicating that they had recently heard comments about "Pigs don't know pigs stink". This stems from a tape recorded by a diamond named Dave Severn. The slogan was quite popular when I was an IBO and I'm sure that some IBOs still toss around the phrase. It was basically used to describe people who wren't in Amway. THey worked hard at their jobs but they were "broke" and weren't getting anywhere. At least the IBOs (who were also broke) were doing something about their financial situation (Amway!). So the ignorant rest of the population didn't know any better, thus the term pigs don't know pigs stink.

Having been out of the business and having done a great deal of research about Amway and the Amway groups such as WWDB and BWW, I can say the exact same thing about IBOs. IBOs don't know IBOs stink. Of course I don't mean that literally, but business building IBOs order their products each month. The pay for their standing orders and attend all the functions. They try to recruit new prospects and they use all the catchy phrases taught by their upline or off a cd. They are very likely losing money each and every month, all the while thinking they are becoming successful and better or nicer people. At the end of the year, they sometimes suffer massive losses in the thousands because purchasing all of the tools and training materials add up to a tidy sum of cash after a while.

At the functions, they smile and act positive, even when they are losing their shirts. Upline will edify their dedication and teach them two very important, but self serving advice. They will teach IBOs to never quit, and that if IBOs quit or fail, it is always their own fault, even if they did everything upline taught them. In this manner, upline removes any responsibility for the IBO's failure. Ironically, upline is quick to accept responsbility for any success (even if there is little). All the while, IBOs are attending all the meetings, doing all the steps they have been taught. They act alike and in many cases, look alike. Most of them also share a common result. They are losing money, and many are losing lots of it. They are simply taught to ignore the losses and to remain positive. Most people eventually figure it out and walk away from Amway. Most will never mention their involvement again and because many are sponsored by friends and family, will never file any formal complaint or dicuss their displeasure.

The IBOs continue to associate with their positive and active fellow IBOs, all the while their bank accounts are shrinking and transfering funds to upline. Pigs don't know pigs stink indeed.

Tuesday, September 28, 2010

Amway - Tools Are "Needed"?

Buy products, sell products, sponsor others. That is the Amway business in a nutshell. If you have bought and sold Amway products, you already possess the main skills needed to run an Amway business. If you have also sponsored downline, you probably have all the skills needed to build an Amway business. So the question is how much training and tools are needed? Is the investment in tools worth the price for what you get in return? In my informed opinion, I would have to resoundingly say "no".

For many IBOs, the tools are the reason why they are unable to profit. Voicemail for example, is an outdated tool that costs more than most IBO's bonuses. With the ability for IBOs to use email, twitter, or facebook, voicemail is an outdated and frankly, less efficient manner for an upline to communicate with their groups. Standing orders, while some training and advice may be helpful to IBOs, a weekly subcription quickly becomes an expense that an IBO can do without. My upline swore that tapes/cds were vital in sponsoring other, but I had never sponsored, or knew of other crossline who used a tape/cd to sponsor someone. As I said, if you already sold a product and sponsored downline, you probably already possess the skills needed to build an Amway business.

Functions, especially the ones that require airline travel are the most costly and gives the least return on investment. You leave your home and business to attend a function somewhere. You incur a lot of cost and while you are gone, your business is closed. For most IBOs, they will never recoup the expense of one of these functions, let alone having multiple functions througout the year. Also, the functions appear to be more of a social event than an actual business seminar. Sure, the bright lights and touching speeches may inspire you, but how does that translate into business growth? I never observed appreciable growth in my group or crossline as a result of a big function. Sure, there may be exceptions, but overall, the functions were just a drain on IBO resources.

It is my observation that when uplines talk about tools being "needed", they are saying it because upline needs you to buy tools. For many uplines, the tools business is their primary business with Amway being secondary. Some uplines earn far more from the tools sales than from Amway. For that reason, the tools sales are "needed". If you are new or seeking information, try asking upline or your sponsor, what tangible benefit can be received by attending a big function. My sponsor told me that he could not describe the event, that I simply "needed" to attend it in person and see for myself. After my first major function, I did not see what the big deal was. I had to use time off from work, incur some fairly large expenses for travel and it did not result in business growth.

So are tools needed? It is my opinion that some tools may be helpful to an IBO, but if the tools do not directly teach you to sell Amway products or result in you being able to sponsor downline, the tools purchases can be questionable as it won't help your bottom line. However, your continued tool purchases greatly benefits your upline diamond's bottom line. Beware.

Monday, September 27, 2010

Amway - What Residual Income?

One of the things that got me interested in the Amway business was the talk about residucal income. Residual income is something that keeps coming in even if you don't do anything. For example, if you put $100 in the bank, you would earn interest every month. The problem is that $100 would only get you a few cents each month and it would not be enough for you to retire and enjoy the trappings of wealth. But what is a reality is that you will very likely be unable to achieve this in the Amway business.

The IBO retention rate is less than 50% of IBOs last even a year and only about 5% of IBOs last more than a few years. Thus any hopes of "residual income" is unlikely. You cannot get repeat customers and downline when they are quitting faster than you can recruit them. And certainly, you can conclude that you cannot receive residual income when you cannot retain IBOs. In fact, I don't know of any IBOs who have ever "walked away" from their Amway business to enjoy residual income. Have you even wondered why diamonds and crown ambassadors are still working and none of them have quietly retired? I would guess that they don't retire because they cannot. Once you stop, more than likely your income stops. A diamond lifestyle would take a lot of income to maintain. Thus how can someone walk away and expect to sustain their lifestyle? The answer is obvious to me. You can;t walk away a retire. It is probably why even crowns and all the diamonds continue to work busy schedules. I highly doubt they are working because they "love" their downline.

It's no secret that diamonds earn income from the sale of standing orders, voicemail and functions. But once you stop appearing at functions, I do not believe you would continue to share in tool profits. Also, Amway has a requirement of "side volume" in order for an IBO to receive certain bonuses. How can you maintain a level of side volume without being active and recruiting IBOs? My upline said your downline will do what you do. If you "walk away", so will your downline. The only way for your Amway business to survive is to keep working. Sometimes I wonder if the diamonds even have a plan and enough savings and investments to actually retire someday?

Breaking down a diamond's income is basic math. Even a $250,000 annual income isn't that much when you break down all of the expenses associated with a diamond lifestyle. The diamond lifestyle is an illusion of wealth. One that looks flashy, but I am not convinced that these diamonds are living large behind the scenes. Many professional athletes end up broke within years after their playing careers are over. These athletes earn much more than Amway diamonds. The difference is that diamonds can keep working while pro athletes cannot. But the common denominator in my opinion is living a lifestyle that your income cannot sustain. I hope you see the similarities. To me it is crystal clear.

Thursday, September 23, 2010

Amway - Are Your Results Typical?

Many IBOs join Amway thinking they will go diamond and their lives will be easy after that. No more job, no more boss, and living in the lap of luxury. Afterall, uplines parade themselves on stage showing you slide shows and picture of jets, mansion, sports cars, etc. I suppose they don't aloways tell the audience that the trappings may not actually be owned by them. But still, it draws a great deal of excitement from the audience and the speaker may tell everyone to dream about having the same luxuries - if only you will listen to their advice and follow their system.

Oddly, most IBOs don't do a thing. Many who sign up don't even bother to place an order and most who sign up won't renew their business after one year. But these folks who basically do nothing aren't the victims of deception. These folks who "do nothing" got what they put into the business. It is the IBOs who do put in an effort and purchase what is often promoted as "foolproof" tools that fall victim to the promoters of the system. Many new and ongoing IBOs who are determined to succeed are often told that they "need" the system, that they cannot possibly succeed without tools, just as a carpenter cannot build homes without a hammer and nails. So many IBOs, wanting a better life, will make the investment in the tools, thinking their success is assured with that investment and and some elbow grease tossed in.

Sadly, the system does not work. Of course there are some new diamonds emerging every now and then but they are the exception and not the rule. My former LOS, WWDB seems to be going backwards. I believe there are fewer diamonds today than when I was active some years ago. Furthermore, some WWDB diamonds were embroiled in home foreclosures, bankruptcy, and some actually walked away from WWDB altogether.

There is ZERO, I repeat, ZERO unbiased evidence that any of these system tools help someone to build an Amway business. Showing a new diamond on stage as evidence of system success proves nothing. The diamonds don't show the hundreds of thousands of people who may have made the same effort only to fail. It's like showinng off the winners of the lottery. Sure there are winners but the reality and the typical result will be multitudes of losers contributing their money in order for one big winner to emerge. While the Amway business is not a game of chance, the ultimate outcome and results are just like a lottery.

Amway diamonds and promoters like to show people "what is possible", but they neglect to discuss with prospects "what is likely". If you are researching a business opportunity, you should be wanting to know "what is likely" or what are the typical results. If people only search for best case scenario results and ignore what is likely to happen, they are almost assured of failure. For most IBOs, the typical result is to spend $300 a month on products, many of which you never used before, and another $200 to $300 for training that doesn't work. That is typical and likely for many IBOs who work the business. Their return on their investment of time and money is about $10 in monthly income. Sure, there are some diamonds who earn over $100,000 a year from Amway, but that experience is unusual, not the likely result of joining the Amway business.

Someone researching a franchise opportunity such as McDonald's for example, will want to know what the average owner/operator earns. Knowing only the best case scenario doesn't help and while a real business owner may be interested in the best case situation, that same owner is likely to be more interested in the likely results. Why should Amway IBOs be different?

Wednesday, September 22, 2010

Amway - Why Motivation Is Needed

I read on another blog, written by an IBO, that he needs motivation. That getting around other motivated people is what keeps his interest flowing and basically gives him the will to keep building the business. He says he's got no motivation to do the same at his job. Oddly, it is his job that is paying his bills and giving him seed money to run his Amway business. But it seems that all diamond leaders in Amway run motivation businesses. In many cases, the motivation business is the primary business of these diamonds, as there is more income in selling motivation than there is in selling Amway products. The question is why is so much motivation needed in the Amway business. The answer is quite simple.

A lot of motivation is needed in the Amway business because most IBOs don't make any money. In fact, most IBOs participating in functions and other training are losing money. Because so many IBOs are losing money, a lot of motivation is required to keep them interested. Also, upline leaders must take the focus off an IBO's financial losses by telling them that their involvement in Amway has made them nicer people, or that they are better fathers or husbands as a result of Amway. Some leaders might tell you that money isn't important, but the friendships you build in the Amway business. Ironically, many IBOs who miss a few meetings or quit Amway will find that many of their Amway friends only have a superficial relationship with them. Or "fair weather" friends, if you will.

If IBOs actually earned what they expected as shown in "the plan", there would be very little motivation needed. The ongoing monthly income would be enough to keep someone motivated enough to keep working the business. For that same reason, people keep going to work, even when the conditions might not be ideal, because we need to earn a living. If I had earned a decent net profit in Amway as I was promised, I would probably still be in business today. But IBOs do not earn net profits. The vast majority of IBOs lose money, because of the expenses associated with receiving motivation. It's ironic that the motivation, which helps retain IBOs, is the very reason why most of them will end up with a net loss, and in some cases financial ruin. Some IBOs in my IBO days were so dedicated that they went bankrupt trying to build the business. More than one couple ended up losing their homes because they probably listened to the advice of upline who had the idea that you should attend "all" functions. All meant all, regardless of the cost or whether or not it would benefit the IBO's business. I recall a special 1000 pin and up meeting where the speaker told the audience about how long you could skip your mortgage and not have your home foreclosed. I suppose it was to imply that attending a function was more important than meeting your financial obligations.

That's right folks, a lot of motivation is needed in Amway because most IBOs are making nothing or losing money. Look at your bottom line. Is it a net profit or a net loss after you subtract expenses? I bet for most it is a loss. It is why so much motivation is needed. IBOs actually making an income would not need to be motivated by standing orders and functions.

Tuesday, September 21, 2010

Amway - Upline Mentors Or Cut Throat Businessmen?

Based on my observations of diamond's behaviors over the years, I have come to the conclusion that many of these men in nice suits and flashy smiles are in reality, cut throat ruthless businessmen. I would not be surprised if some of them would literally steal candy from a baby. During my tenure in Amway, I heard many instances of "never miss a meeting" and "do whatever it takes". These kinds of thins were said to downline IBOss without regard to the IBOs likelihood of success in Amway. One diamond even suggested that a family could skip a meal because something heard on a tape could turn your (Amway) business around for the better.

Sadly, the result of this was incredible IBO turnover, bankruptcies, home foreclosures, and IBOs overspending to meet upline goals, regardless of an IBO's profitability. It is my guess that these IBOs have all quit since my time in the business. I would also guess that even the most abused IBOs never bothered to file complaints because the group was taught that failure was IBO responsibility, no matter how much effort was put in.

The wonderful diamonds will parade around on stage, showing off displays of wealth such as mansions, jets, sports cars and fabulous vacations. All of this was supposedly attainable by the rank and file IBOs if they will only do what the upline diamonds advise them to do. It is all a lie. Since I left Amway and WWDB, I believe more diamonds have quit or moved onto other ventures than new diamonds have emerged. What's more, seems there are countless numbers of lawsuits pitting diamonds versus diamonds. I believe these lawsuits are born out of greed over tool money. Tools income is still a dark secret to many. While some leaders may speak about platinums earning a share of some tool income, how much and the qualifications appear to be shrouded in secrecy. Something that Amway accreditation was to fix. But it looks like the AMOs have skirted the parameters of the spirit of accreditation. Sad, but not surprising.

What is really hard to swallow is knowing that many IBOs, young, motivated and eager to achieve, are often needing and/or wanting more income. Thus they are open to the possibility that the Amway opportunity afford them that "break" that they needed. Upline will use this as a means to suck them into the system, telling them that the tools (voicemail, books, standing order, functions) will nearly guarantee their success when the opposite is true. The tools nearly guarantee failure for the vast majority of IBOs. The tools only guarantee profit for those who sell the tools. What is troubling is that these uplines do this while trying to pass on the impression that they are mentors to their downline. What the unsuspecting downline doesn't know is that some of these upline mentors would steal the shirt off their backs, literally. If you are new, your upline may loan you or even give you some tools to appear sincere. But once you sponsor someone or decide to build a business, the bar will be raised and you will be expected to be a leader and buy your own tools.

Beware, many diamond leaders are simply cut throat businessmen wearing a nice suit and a nice smile. Don't be fooled.

Monday, September 20, 2010

Amway - What's Better Than Amway?

One of the silly comments I often receive on this site is that Joecool should offer suggestions about what might be better than Amway since I make comments against the Amway opportunity. First of all, I would like to make clear that most of my point of contention is against the tools companies and not Amway itself. Having said that, I believe Amway can and should have done more to prevent IBO abuse by upline and tool selling companies. But I believe Amway has not because the uplines are the ones who recruit new IBOs and teach (defacto) 100 PV quotas to new IBOs, thus keeping Amway sales consistent. Uplines also teach product loyalty.

But what can be better than Amway? Well, since most IBOs earn less than $25 a month, there are many things better than Amway. Working part time for a wage would be more benefioial to most people who get involved in Amway. Buying and selling items for a profit on Ebay is likely to get you more income than selling Amway products. Heck, a lemonade stand on the roadside is likely to get you more income than an Amway business.

What makes the Amway business financially dangerous to many, is not Amway and Amway products, but the involvement in Amway training such as voicemail, standing orders, functions and other materials. This training is promoted as the key to Amway success, but as far as I know, there is ZERO unbiased documented evidence that any of this materials work. In my old LOS, Worldwide Dream Builders, or WWDB, the same leaders I saw 12 years ago are still there and there are no new diamonds that I know of. I would guess that there were "some" new diamonds, but there are also many diamonds who are no longer in business. Kind of makes me wonder why diamonds would quit or resign from Amway if they could "walk away" and continue to collect "residual income". Perhaps this residual income is a myth prepetuated by your LOS. Afterall, Amway doesn't mention anything about residual income and income from your business would come from Amway.

What is really discouraging is that so many eager and motivated people get caught up thinking their financial dreams and goals will be achieved by their involvement with the Amway opportunity. Sadly, most will end up losing money because of the very training that was supposed to bring them success! Even the fiercest of Amway defenders have no documented proof of success. It appears that Amway success is elusive even to the most dedicated of IBOs.

So what's better than the Amway opportunity? Seems just about anything. In fact if you are involved in the training system, donating $100 a month to charity and doing nothing else would make you better off financially than particpating in Amway and the related training. Doing nothing would make you better off. Watching football games would also likely make you better off financially than Amway and the training systems. My recommendation (but you must make your own decision) is to simply find part time work and invest your extra income wisely. It isn't quick or flashy, but you are likely to benefit long term. Of course, your mileage may vary. Good luck on whatever you choose to do.

Thursday, September 16, 2010

Amway - IBOs, Keep Dreaming But Don't Quit Your Day Jobs

So many IBOs have grandiose dreams of untold wealth, financial freedom. They think they will "build it once' and sit back on the beaches of the world sipping exotic drinks while the 6 figure checks keep coming in the mail. Sure it's a nice thought, but not a single IBO I have encountered can name a single IBO who achieved diamond, and walked away from the business to enjoy freedom while the money pours into their bank accounts. It is very likely that nobody like this exists. I suppose someone could go diamond and walk away from the business and still earn some bonuses, but very quickly, that business would likely fall out of qualification and the bonuses would shrink to nothing very quickly. Also, to earn bonuses, I believe an IBO needs to have side volume exceeding 2500 PV, which is roughly $7500 monthly in personal group volume. With normal attrition, it's easy to see how a diamond business can fall apart faster than a cheap suit without maintenance.

I also see and hear many IBOs popping off about how someone in their upline earning $60,000 a year. While it may seem like a nice income to someone who has a low paying or entry level job, that income is gross and may not leave much left after taxes and associated business expenses. Even a diamond with an average income of $150,000 in a year likely has a very low monthly income from Amway as much of that income comes in the form of an annual bonus. As a former emerald once told me, you needed to budget out that annual bonus or you could be in financial trouble later in the year, if Amway is your sole source of income.

Also, you may have seen diamond showing off sports cars and other displays of wealth. My former LOS, WWDB has a function called "Dream nite" where they show off lavish displays of wealth. Well, it is my informed guess that most diamonds cannot afford the lifestyles and toys that they show off in these functions. If you do the math, you can see that after taxes and other expenses, a diamond lifestyle is likely to be quite ordinary. Normally, nobody would care about this but since diamonds use this display of wealth to recruit IBOs and to sell tools, it is significant for IBOs to know.

While it is great for someone to have dreams and goals, it is also important to have achievable goals. It is simply impossible for a room of IBOs to go diamond and to earn the kind of income that is shown in "the plan". Amway recruiters will show you "what's possible", but not "what's likely". To put perspective on that, it's "possible" that you can start a software company that puts microsoft out of business, but it's not likely. It's possible for you to win the lottery, but not likely. My advice to IBOs is not to quit your day jobs - ever. Your dreams and goals can be accomplished in many ways, but it is unlikely to be achieved with an Amway business.

Wednesday, September 15, 2010

Amway - No Tools = No Help From Upline?

One of the things that continues today, that should not is uplines refusing to help downline IBOs who are not dedicated to purchasing tools. It makes perfect sense that uplines would shun downline IBOs who no longer buy tools because the upline now has no profit center from an IBO who has shown less than 100% dedication to the system. One of the ways upline promotes the system is to love bomb their downline. I heard and have reason to believe uplines will discuss being friends for life with downline, yet that same downline, once they miss a few meetings, would be shunned and labeled as a quitter or a loser or both.

One example of this was when I was still an IBO and I had stopped attending meetings. About a month after I went inactive, I had a death in my family. Not a single one of my "friends for life" bothered to call me or attend the memorial service. I suppose it's friends for life as long as you continue to build the business. I remember some WWDB leaders saying that the relationship is fractured because of the person who quit the business. As if the only thread keeping that relationship alive was the business. Fortunately, I was able to rebuild friendships with my pre-Amway friends as I had missed many birthday parties and other social events as a result of my dedication to the business.

For those being prospected into Amway, something to observe and think about would be whether you have a genuine relationship with your sponsor and/or upline or a superficial relationship based primarily upon your dedication to the Amway business. If you are an ongoing IBO, what have you observed about your sponsor or upline? Do they know your kid's names? Are they interested in you as a person or only as a customer of their standing orders and functions? Only you know the answer but remember this. Upline's defacto demand that you attend all meetings, means you are putting your upline and the Amway business as top priority in your life, making family and other interests in your life secondary or less. Some upline even go so far as to discourage young people from college because Amway will give you a better life. Sadly, less than one half of one percent ever make any real money in Amway. The masses end up losing, ironically because of tool purchases. Ongoing IBOs can do the math and the result is conclusive. That tools eat up all or most of an IBO's profits. In fact when examining a group of tool consuming IBOs, it is very likely that expenses will exceed income, because of the tools.

Ask yourself if your upline is helping you because they want your success or if they want your dedication as a tools customer. I think you can only make one conclusion if you view this neutrally. Your upline is more interested in selling you tools than helping you succeed.

Monday, September 13, 2010

Amway - IBOs Are Fraud Victims?

I've heard over the years, many IBOs who failed in the Amway opportunity who blamed themselves for not putting in enough effort, not trying hard enough or not working the system. While I don't doubt that some IBOs don't work hard enough, I cannot fathom that so many motivated and eager prospects simply failed because they didn't work hard enough. I believe IBOs are taught to accept failure as their own.

Uplines will tell new IBOs to trust them and that these new IBOs will succeed if only they will follow the advice of the allegedly successful diamond because they have already blazed the trail for you. Ironically, after many IBOs fail, upline will never take responsibility for the advice they issued that led to downline failures. They then turn the tables on their donwline and say that their advice is like a buffet. You pick and choose the advice you need and disregard the rest. That is such a bunch of crap that I cannot fathom downline IBOs buying what they are shoveling. A new IBO places their trust in the diamonds because they have achieved the pinnacle of success but a new IBO is supposed to pick and chooe which advice to follow? And then failure is the fault of the downline?

Ironically and sadly, thse downline, when they ultimately fail, often end up blaming themselves and just disappear unless someone recruits them again. They are often sponsored by friends and family so you won't see them filing complaints against Amway or the uplines who led them astray. Uplines nearly assured their success if only these new IBOs would buy the training materials and attend all of the functions. But many IBOs work hard and do everything outlined by upline only to fail. It is likely because the system doesn't work. Many financial systems are for sale out there and most of them have very little success. Amway is no different, except that uplines promote their systems as sure fire.

It is however, my belief that many or possibly most IBOs are the victims of fraud in that they are given possibly false positive information about the Amway opportunity. They get involved and find out that the system doesn't work, and then they end up quitting with a loss and them blaming themselves. Brilliant for the uplines who profit but in my opinion, it makes IBOs the victims of fraud by upline. Upline profits whether or not their downline makes a cent. Some upline strongly encourage downline to buy more and more tools, even when they know that those downline have no chance of making money in the Amway opportunity. It makes the IBOs victims and it makes the uplines a bunch of crooks.

Friday, September 10, 2010

Amway - IBOs Know Nothing About Business?

One of the reasons why I believe that people get duped into joining Amway and then quitting or maybe doing nothing is because of the way the business is presented and they way it is actually done. There are many redundant issues that occur and uplines who show the plan will downplay the problems. These problems then surface when an IBO actually tries to build the business and uplines smooth it over by saying things like someone should never quit or get detail-itis or some other bogus thing to get the focus off the problem.

A big problem is that many prospects join Amway because it is promoted as a way to make quick money. I know many people think they can sell some stuff and make a few quick bucks. That's what I thought at one time also. Many prospects are also told that an Amway business has zero or little overhead, unlike a conventional business. However, many IBOs find that starting an Amway business carries a defacto 100 PV minimum requirement. They might be told that you just change yout shopping habits but many individuals and families cannot possibly consume 100 PV unless they are duped into consuming Amway vitamins which they may never have taken before. An artificial demand is what is created when this happens.

IBOs who may be somewhat serious about business will also be encouraged to get on standing order and to attend functions. While upline will claim these are optional, they are defacto requirements for those who are interested in building a business with downline. The standing orders and functions can cost a significant about of money depnding on an IBO's level of commitment. I would estimate that a somewhat "serious" IBO would probably expend between $150 to $300 a month on these "tools". Amounts vary and can be more or less depending on factors such as whether you are single or a couple, and your level of commitment.

So now a new IBO, who is wanting to make a few extra dollars, might be spending between $450 to $600 a month for products and tools, if they are building a business and trying to sponsor downline. Their reward for this will be about $10 a month in the form of a rebate (bonus) from Amway. That is the typical and likely result for the vast majority of new IBOs. Sure, new IBOs have athe zeal and excitement to recruit new downline, but that is an overwhelming challenge in North America when Amway's prices are generally not competitive with big retailers and the Amway name carries a stigma in North America. It is not uncommon for someone to be ridiculed just for mentioning Amway in a conversation, at least in my experience and observations.

The bigger problem is that many IBOs know little or nothing about business, thus they trust their upline, whose advice is often to buy more tools, make family sacrifices to attend more functions and to do whatever it takes to obtain more tools. All the while, some uplines are laughing all the way to the bank with tool profits. Whether an IBO succeeds or not is irrelevant to many uplines, as long as tool purchasing IBOs are replaced.

As the US currently has a depressed economy, some tools kingpins are feeling the effects. We have seen home foreclosures, bankruptcy and some bigshot diamonds selling off their homes. Maybe just maybe they weren't as wealthy as they portrayed? Maybe they are reaping what they were sowing? Maybe this is the fruit on their tree? Maybe these uplines didn't know much about business afterall? :-)

Thursday, September 9, 2010

Amway - Most IBOs Do Nothing?

I saw some recent discussion and some people were debating the average income of Amway IBOs and how $115 a month as reported by Amway is a lot considering most IBOs do little or nothing. Well, that $115 a month average income survey is 9 years old. Somewhat laughable when Amway defenders like Bridgett Baron likes to hang their hats on the possibility that Amway critics claims are outdated. Maybe Bridgett should complain that Amway's own information is old and outdated. I wonder what updated numbers would reveal? And even smaller average income?

Also, what many people are not aware of is that the average income figure as published by Amway, excluded IBOs who did nothing. It only counted "active" IBOs, although Amway's definition of active can leave you scratching your head. Amway describes active as someone who attended a meeting or attempted to sell products. However, we know that unless you actually sell something, you won't make anything and certainly attending a meeting takes money away from you, and is not a way to earn money in Amway. Let me also add that Amway diamonds are also a part of the average income so the "average" is very likely inflated by the six figure income of the diamonds.

To me, the biggest question is why do so many IBOs get interested enough to sign up and then do nothing? It is my informed opinion that there are several reasons why this happens. I believe that some IBOs are such pests, that their prospects sign up just to get their IBO sponsor to leave them alone. While it mae not be common, I believe it happens. Also, I believe some IBOs go into shock when they see the prices of some products. This will cause newbies to realize that the business is nearly impossible before they even get started. Or, an new IBO will go and talk to family and friends about Amway and will get shot down because in North America, just about everyone seemingly had, or knows someone who's had a bad experience in Amway. Sadly, the experience may not be a result of Amway the corporation, but of unethical IBOs who may lie, cheat or trick people into attending meetings. Some IBOs actually get started but soon realize that that Amway opportuniy along with the systems such as N21, WWDB or BWW, simply becomes a money pit with the tools and system expenses exceed the monthly Amway income. A few IBOs will bite hard and stay dedicated for a few years or more. Many of these IBOs end up reporting losses that may exceed tens of thousands of dollars.

Sadly, many IBOs and prospects are recruited by family and friends. Thus even if they quit or have a very bad experience, they just quit and disappear. Folks generally will not file complaints with Amway or the Better Business Bureau (BBB). So IBOs, even if you did little or nothing in Amway, if you got ripped off or treated unethically, you may want to consider filing a formal complaint with Amway or with the BBB. So why do so many IBOs do little or nothing? I believe the answer is crystal clear. Most IBOs do little or nothing because it's not worth the effort for most as very few IBOs will ever attain any kind of significant income. In fact, doing nothing is likely to get you a more favorable result than someone who attends the functions or who subscribes to standing order.

Wednesday, September 8, 2010

Amway - Why The Amway Opportunity Is Like Gambling?

Let me make a disclaimer right off the top so Amway defenders don't try to discredit the post without reading it. The Amway opportunity is not a game of chance. But I will go on to explain how and why the opportunity can be compared to gambling and why the diamonds can be seen as a casino or the "house".

In the Amway opportunity, the odds against someone going diamond are astronomical. Literally millions of people have attempted to build an Amway business in North America over the years and diamond club for North Anerican diamonds a few years back had 160 diamond-ships represented. Certainly some north american diamonds may have turned down a free trip to Hawaii but I'm guessing that's not a big number.

The odds are also stacked in favor of the diamonds. Casinos are not built by winners, but by the hoards of losers. Just as a diamond business is not built by having a foundation of winners, but layers and layers of IBOs who are losing. The Amway opportunity is simply set up that way. Look at your common 6-4-2 plan or whatever version your group uses. The newest or biggest layer of IBOs make very little and when you factor in expenses such as functions or standing orders, the losses can be staggering.

A diamond, like a casino will attract many young dreamers who think they can conquer the world and will get rich. They use bright lights and profile former winners just as Diamonds show off fancy cars and testimonies to lure in recruits. The newness of the opportunity gets you excited, just as someone walking into a casino might feel the excitement with the sounds of the casino. All you need is some effort and little luck right? Sadly, that excitement is all too often replaced with the harsh reality that most must lose in order for there to be a few winners, both in casinos and the Amway business.

Like casinos and diamond uplines, there is much caring for active IBOs and for players who are spending their money in casinos. But once you walk out of the casino, there is no special treatment, just as an IBO who stops building a business or stops being core quickly becomes forgotten. In Amway, people who said they were lifelong friends were never heard from again once an IBO missed a few meetings. If you re-emerge, you will find the love again, just as you will get free drinks when you start gambling again.

And yes, there are some exceptional people who can scratch out a nice living by gambling but they are few and far between, just as there are diamonds, but diamonds also have thousands of people who wanted diamond but could not achieve it. Those who can finally make it usually have an exceptional blend of skill and a bit of luck. Some even cheat/lie in order to gain a bigger edge, both in gambling and in Amway.

Like a gambling "system", the Amway opportunity has "systems". In either opportunity, the system doesn't work for the masses. There are an exceptional few who can make it work. Except in gambling, most people understand that the odds are stacked against them. In Amway, many new IBOs are told that anyone and everyone can succeed when it simply is not true.

Can you fulfill your dreams by gambling or with the Amway opportunity? The answer is yes, but the reailty is that few will ever do so. Like casinos and Amway diamond-ships, both are built on the backs of those who lose, not on those who win.

Tuesday, September 7, 2010

Amway - Why IBOs Struggle To Move Products?

There's been much debate recently over the issue of IBOs selling products. Now of course in the IBO world, there are going to be some IBOs who are exceptional at selling products and possibly in foreign countries where Amway has not spoiled their reputation as it apparently has in North America, it might be possible to sell some products. But the experince of a typical IBO probably cannot be one where products flow to customers regularly. A blog post by an Amway corporate blogger as linked on the Quixtar Blog Forum revealed that only about 4% of Amway products were sold to non IBOs. Now I do not wish to debate the merits of whether or not downline are considered customers as that is an endless and pointless debate because the bottom line would be that uplines are making their income on the backs of their downline, thus confirming the appearance of a product pyramid.

But why do rank and file IBOs struggle to sell Amway products? Surely Amway has some decent and some good products. But in North America, Amway's goods are generic in nature but sell at premium prices. So unless you are convinced that their quality is that great for the price, the average Joe is simply going to buy a similar product at WalMart or a Costco. Also, when you must justify and explain to potential customers that you actually provide a better value due to concentration and/or cost per use, it not only becomes labor intensive, but confusing for the average consumer. Add in the past reputation of the Amway name being associated with a scam or a pyramid and you have an extremely tough sell.

Partner stores are often used by IBOs to bring name credibility but I wonder how many of these products are actually sold to customers? I susoect that very few products are sold because the price is not that competetive and because many consumers, like myself prefer to touch and feel certain products before making a decision to buy. Even with a money back guaranteee, customers don't want to be bothered wuth returning something via the mail. Also, the term partner store seems odd because Amway IBOs sell partner store goods, but "partner" stores don't sell Amway products. The relationship is not a two way street, in other words.

Aslo, while Amway recently started to market their opportunity and goods with national advertising, I believe the advertising is more of a retention issue. IBOs can say "see, we're on TV, we must be credible". I believe it may be too late in North America. In the past. IBOs would say they had greater bonuses because Amway saved money on advertising. Thus IBOs engaged in the most inefficient manner of moving products. They did it person to person and in the past, door to door. The reason why superbowl commercials are so expensive is because they can read tens or hundreds of millions of people worldwide. But basically, Amway IBOs to sell the products and the opportunity, must do it one person at a time, and they must also overcome the many negative opinions that North Americans have about Amway. I believe/suspect that the Amway sales have been stagnant, if not decliding in North America, but it cannot be confirmed since Amway did not release sales for North America seperate from Global sales.

But it is for these reasons that IBOs probably cannot move many products except to some family and friends. In what REAL business can you make a sustainable living, much less fabulous wealth by selling some goods to family and friends? I can't think of any, and you are seriously mislead if you think you can do this with Amway products.

Sunday, September 5, 2010

Amway - How Does A Diamond Make Their Money?

I remember seeing my diamond drive to functions in a Mercedes Benz and seeing various functions where incredible displays of wealth were shown. WWDB has a function called Dream Nite where diamonds parade around in fancy suits and clothes, show off slide shows of fabulous vacations, mansions, sports cars, jets golf memberships and other luxuries. They would say "do what we do and you can have what we have". They would also tell the audience to hurry up and join them.

At the time I was an IBO and had no idea how much income a diamond made or how much money it took to run an Amway business. I was just excited and determined to become one of the guys on stage urging on the new kids on the block. However, as I progressed in pin levels, I never did see the profits that upline spoke of. All I saw was my hard earned profits being invested into more and more tools. As I got more volume, my tool expenses seemed to get higher and my upline expected more and more commitment from me. I never thought about how a diamond made their money in Amway.

After I left Amway and eventually began blogging, I learned about the tolls income. As I IBO, I was told that the tools had no profits. Profits were simply reinvested to pay for functions. I know that Amway reported that the average diamond earns about $150,000 s year from Amway. Of course business structure and the number of months a diamond qualifies is a factor. A founder's pin can earn significantly more than a non founder's pin. However, I also know that a founder's diamond or above is the exception and not the rule. Thus a diamond will earn Amway bonuses and volume from downline.

The reason why a diamond apparently seemingly never quits is because they need to keep working and replacing downline who quit. Seems that about 2/3 of IBOs never renea after a year and 95% og IBOs are gone in less than 5 years. With that kind of attrition, you basically can never walk away from Amway and sit on the beaches while the cash rolls in. What I didn't know as an IBO was my upline was earning income from tools. I'm sure they are earning several dollars a month from the standing orders, voicemail and some others tools. I believe the bulk of tool income is from the functions where there is a huge potential to earn significant cash. Nobody can pinpoint exactly how much someone earns from tools because you would have to know the breakdown of profit from each tool, and you would need to know how many diamonds and other pin levels get a share of the income. It is my informed opinion that a diamond would make about two thirds of their income from tools sales and the rest from Amway bonuses.

I base that opinion on the concept that the tools have a much larger profit center than the Amway products. Amway's bonus is about 33% or so but is split up in layers. The tools can have several 100% profit with fewer people getting a share. For example, a major function might cost $35 to $40 per person while the uplines charge $125 an up. A cd might cost 50 cents to make but upline charges $7.50 or $2.50 if you pay a monthly membership fee of $50. Based on some former diamonds statements, it is fair to conclude that a diamond might make only a thrid of their income from diamonds.

Does that seem fair when diamonds push tools on their downline?

Friday, September 3, 2010

Amway - IBOs Fail Because They Aren't Taught Business Principles

So many IBOs quit and fail, I think the Amway corporation might need a calculator to keep track. And of the IBOs who work and try hard, most of those IBOs also end up in failure and losing money. After years of blogging about Amway, I believe it is because the uplines and the tools they sell to help IBOs are ineffective. When I was an IBO, I don't recall many tools that contained information teaching me how to run a business or how to run an Amway business. There was no talk about tracking income and expenses. In fact, our group was advised to ignore the facts. The scary thing about this is that it is evident that some groups are still teaching this.

Many IBOs and prospects are lured into the business by displays of wealth and not because of bonafide and verified business credentials. A friend of mine sold his franchise business a few years ago and part of what he provided to the prospective buyer was the last three years of his tax returns, personal and business returns. But try asking an upline to even see a business profit loss statement or a schedule C business tax return and you are likely to be told it is none of your business. Instead, upline may show off a photocopy of a bonus check which may be an annual or a once in a lifetime bonus. Or upline may show off a sports car as evidence that they are successful. Sadly, some of these uplines might be broke, they may owe back taxes to the IRS and/or they may even be in debt but simply showing off wealth.

Some uplines have the nerve to discourage young people from furthering their education because they would rather they channel their money into Amway and tools. Some people are told to make family sacrifices to attend more functions or to buy more standing orders. I will grant that not all uplines do this but based on my experience, I would say more uplines do this than not. They will apply subtle pressure on new IBOs and the newbies probably don't know much about Amway or business so they basically have to choice but to trust a diamond who has allegedly achieved the pinnavle of success in Amway. Then uplines will often betray their disciples by saying that failure is the personal responsibility of teh IBO. That advice needs to be discerned by the new IBO and bad advice should be discarded, as if a new IBO would know what is good or bad advice.

I aso see experienced IBOs who don't seem to know how taxes work. I see IBOs who were given the impression that Amway is easy and that they will work once and enjoy the fruits of their labor forever. Oddly, I don't know of a single IBO who did the work once and sat back collecting residual income forever. I find it odd that even tenured crown ambassadors continue to keep busy work schedules. I suppose they could just enjoy this lifestyle but still I find it odd that nobody I know of could specifically name an IBO who achieved diamond and higher and sat back collecting income while enjoying the beaches of the world.

Seems that IBO turnover and failure is more common than not in the AMO world. It also appears that incoming IBOs are like fuel to a fire. Without continuous recruitment and replacement of IBOs who quit, the organization would eventually fall apart along with the bonuses that the higher ups enjoy. It is my informed opinion that many IBOs fail because they aren't taught sound business principles. Despite the constant flow of cds, voice messages and functions and meetings, it doesn't seem as if any practical information is passed from upline to downline. Only messages of never quitting and continuing to dedicate themselves to the system. The result is inevitable and the expected result is failure.

Thursday, September 2, 2010

Amway - IBOs Cheat On Taxes?

One of the telltale signs that some IBOs expose about their business is a big lie about making profits from Amway and all the while getting a huge tax refund, thus making their tool purchases "free". First of all, IBOs do not get a dollar for dollar write off on business expenses. They get to subtract expenses from their taxable income. Usually that taxable income is an IBO's job income, because most IBOs earn very little from Amway. If you receive a nice tax refund because of Amway related expenses, it is likely that your Amway business suffered a nice loss, thus you are simply getting a refund on the income tax that was withheld from your job income.

IBOs also seem misunderstand what a legitimate tax writeoff is. For example, a standing order of a diamond rally might not be an IRS allowed tax deduction if it teaches you nothing about selling Amway products or increasing business volume. A function where it is mostly socializing and hearing motivational speeches may not be a legitimate tax writeoff for the same reason. In fact, if you belong to a group that teaches the "buy from yourself" philosophy, you may not have any legitimate tax deductions, just as you wouldn't be able to write off your expenses for taking a trip to Costco. Tax deductions are allowed for business owners who have legitimate business exepnses to increase their sales. For example, a function where you are taugh how to display and sell products would likely be an allowable deductions. But one where you are taught to buy from youself and to never quit, might not be allowable.

I do not believe IBOs are purposely cheating on taxes, but I believe they are misled about what legitimate deductions are. I would advise an IBO to check with the IRS or to consult a CPS or tax specialist. In the past, I have read about IBOs who were denied tax deductions on Amway business related expenses because their Amway business was run like a hobby or like a social club. Expenses are allowed when you are able to increase sales as a result of your expenditure. Imagine how devastating it would be to get audited by the IRS and to have your deductions disallowed? Seems cruel but it has happened to IBOs.

As I said, I don't think IBOs do this purposely, but as an IBO, my upline basically told us that as business owners, all of our expenses were deductible, period. There was no mention of the intent to profit and increase sales. I suppose it is possible that millions or billions of deductions were allowed or unnoticed by the IRS over the years and taxpayers also footed the bill for materials that some uplines profited from. I only decided to write this article so that current IBOs and information seekers can seek guidance and advice from credible sources who know the tax laws and can give an IBO sound advice before they can get into hot water with the IRS.

Wednesday, September 1, 2010

Amway - Joecool Quits Blogging?

One of ths things I have heard many times from Amway supporters is how can Joecool keep on blogging for years and years after having left Amway? Some Amway supporters try to quickly dismiss my claims by saying my experience is dated. To that, I will say that I haven;t burned my hand on a stove for over 30 years but I still know it's a bad idea to put my hand on a hot stove. There are many things I haven't recently experienced that I still have much knowledge about. Amway's AMO tactics is something that really hasn't changed much over the last 15 years. If anything, all the AMO leaders did was add tools that bring them more profit, such as the addition of KATE. When I was an IBO, we used Amvox, which at least gave an IBO PV and BV.

I left Amway in 1998. I got back into my normal routine and re-established relationships with my friends who I had neglected somewhat because of my time spent building Amway. But I remember reading a Newsweek (?) article that explained how the Amway kingpins had made most of their money on tapes and functions. I was ticked off, I realized my upline and sponsor had outright lied to us about the profit from tools. We were told that WWDB was a non profit organization (which was later retracted), but we were also told that nobody made a cent from the tools, a lie that was never retracted. I never thought about filing a formal complaint and life went on.

In 2003 or so, I started finding all kinds of Amway information on the internet. I later found the Quixtar Blog Forum and became a member. There I first encountered insider aka ibofightback aka David Steadson. He and I had many debates there and I frustrated him immensely. So much that he is unable to debate with me anymore and stays in the friendly confines of his own blog where he can take editorial liberties and has the support of other sold out Amway-ites. Despite the back and forth bantering, Joecool never resorted to name calling or below the belt tactics. It was IBOfightback who wanted to start a smear campaign and was apparently refered to as a cyber bully by an Amway corporate blogger. IBOfightback also thinks that Joecool secretly runs every anti Amway blog and forum on the net, but it is not true. I dare him to offer proof when he and Bridgett Baron make these claims and not one iota of proof has been displayed, ever. Bridgett Baron also told lies about Joecool. That I was anti everything Amway. That is not true. In previous posts here and on other forums, I said as an IBO, I received great service from Amway and that Amway was a good employer that took care of their employees. I also acknowledged that Amway does good for their community. My concern is for people whose finances may have been ruined by leaders who lie and influence new IBOs and prospects into buying system tools that they profit from, and with apparently little success.

It's been relatively quiet in the world of Amway lately. I think it's because there is so much information that anyone with half a brain can google Amway and find enough information where most people would think twice nefore signing up. For this reason I believe that Amway is shrinking in North America. I have thought about walking away from the blogging worl before and with new challenges set before me in my life I thought about it again recently. But as usual, I made contact offline with an active WWDB IBO, and also discovered the blog of an active WWDB IBO and it appears that many of the same upline are still teaching the same garbage as 12 years ago.

They apparenty still teach the buy homes in cash concept. They still have a function called dream night where they display wealth. Whether they own all of these goodies or whether they paid for them with Amway income is still questionable. They still talk about residual ongoing income and walking the beaches of the world. Apparently some of these leaders has suffered setbacks financially in recent years, perhaps due to the economy. While I do not wish harm upon anyone, I do wish to see some of the injustices made right. It is why Joecool is not retiring from blogging at this time.