Wednesday, October 20, 2010

Beware Of The IBO Expenses!

Many uplines will use slightly deceptive recruitment tactics when getting new people to see or register into the Amway business. One of the common things was how joining Amway has very little risk, no or very little overhead. This is true, if an IBO is not involved in any of th system related training. However, it is the goal of many if not most uplines to get as many IBOs involved in the system as possible. This is probably because selling standing orders, voicemails and seminars has a higher profit margin for some uplines than the actual movement of Amway volume. So some newbies might join thinking Amway won't cost them much, only to find out that 100 PV might run them more than $300. They may not be aware that standing orders and functions never end and can add an additional cost of up to several hundreds of dollars more. Uplines will then justify the expense by saying the IBO is investing in his/her business.

New IBOs, and especially IBOs who are single should seriously think about the cost of being a business building IBO before joining. Many or most prospects don't know that building an Amway business using system tools and "coaching" can cost them up to$500 or more each month. A single person more than likely cannot possibly consume 100 PV worth or products on a monthly basis unless they almost exclusively consume XS drinks and Nutrilite vitamins. And secondly, how many singles or prospects were consuming cases of energy drinks and vitamins ($300 monthly) before being presented with the Amway business? How many people were willing to fork out hundreds of dollars for a weekend function that may require airfare and hotel stay? I don't think too many people like this exist. But I believe they do so because they have been sold a dream of financial freedom, of early retirement and not having to work a job anymore. But the evidence would suggest that once the dream disappears or reality sets in, how many (former) IBOs continue to purchase Amway products and attend seminars?

I know of many former IBOs and I don't know of any who purchase Amway products on a regular basis and I don't know of ANYONE who has ever forked out money to attend an Amway/AMO function after they stopped being an IBO. Amway's numbers bear out this claim as there is very little sales to people who are not IBOs. The IBO salesforce is responsible for consuming the lion's share of Amway's products and services. I myself have purchased an Amway product or two since I left the business. But I did so only to humor friends who were still in the business. They have all since quit. It is very reasonable to conclude that once the desire to build the business stops, the desire to purchase Amway products also stops.

Most eager young and motivated people who sign up often do not realize that these IBO expenses exist. While Amway acknowledges that these tools and systems expenses are optional, the uplines who promote the tools may suggest that it is insanity to attempt to build an Amway business without the tools or strongly encourage new IBOs to partake. A common statement was that we "needed" to be at the next function no matter what. Missing it would set your business back six months. New IBOs and prospects don't know better so they will often conform. Sadly, there is ZERO unbiased evidence that the tools and seminars do anything to increase IBO volume and/or the sponsorship rate. In my informed and experienced opinion, the tools are ineffective and the vast majority if IBOs would be better off handing their upline a monthly check for $100 and not building the business or buying any products.

IBOs and information seekers should be awar of these potential IBO expenses and determine if the expenses would be worth your while. Keep in mind that someone upline profits handsomely from the tools, even if you do not make a cent from your Amway business. You should have your best interest at heart, no matter what your upline tells you.

5 comments:

Anonymous said...

probably your best blog yet, joe!

Chris G said...

I think this post sums it up perfectly. Be aware of what your spending your money on and track expenses and profits. The basics of Amway is Sell and Sponsor. Now having a "system" can help keep things together and provide a profit for the Platinums and Above.

Anonymous said...

As an IBO it is unfortunate that most of your expenses will be wasted on the "system" and its collection of tools meant to keep you brain washed and in the "system". Your remaining expense will be Amway product that is priced higher than comparable product you can buy at the store, you will be forced to buy $300 worth of product a month (100pv) to be CORE. The diamonds want you to be "plugged in" so that they can keep you brainwashed and in the cult so that they can line their pockets with your money.

Anonymous said...

Hey Joe thanks a lot !!
Can you please tell me what were the parameters to be "Eagle" when you joined?
I just joined this "business" a week back and after attending a FED, I was all excited hoping to learn some marketing and selling skills and overall personality in general. But when I came across the requirements to become an "Eagle", I realized that it is not worth investing anything in it.

Some speaker had said that "It is an educational business", damn right it is. I strongly believe it is about making money by selling CD's, books and conferences to mor and more downlines.
Your blogs cleared any small doubts that I had about doing well in this "business" :). It is hard for me to figure out how many of them cheat others into it and how many have cheated themselves into it.

Thanks again and continue the good work.

Joecool said...

HI, I don't think the eagle parameters have changed since I left. That's also what's funny. Those who defend Amway keep harping on critics being outdated but nothing seems to have changed.