Friday, May 28, 2010

Amway - The Tools Don't Work And Have Little Value?

One of the things my upline always pushed on us was the tools system. While the tools are optional, they are not promoted that way. They were promoted as vital, necessary, almost as if you were insane to try and build an Amway business without tools. Basically the tools were a defacto requirement. My upline always claimed that nobody ever "made it" without tools. Some Amway defenders like IBOFightback insist that the tools work, and that IBOs who were on the system proved it with higher levels of success and product volume.

IBOs participating in the system (voicemail, book of the month, standing orders, functions, etc) do more PV. I believe this is true, but it is true, only because once the upline can convince you to participate in the system, then that same IBO is also convinced that they should or must do 100 PV as part of the deal. People who aren't convinced that the system is vital, subsequently do not purchase or sell as much PV because they have not been convinced that moving PV will make them successful.

Critics and Amway supporters have debated this issue for years, but clearly, the evidence supports my position. Why? Because if there was a true demand for Amway products because of their quality and/or value, then there wouldn't be such a steep dropoff in movement of volume when an IBO becomes a former IBO. Many, probably most former IBOs never buy a single Amway product once they leave the business. If the products had true quality and value as Amway supporters claim, why don't people continue to purchase 100 PV per month when they quit? Because they never wanted or needed all of that product in the first place?

If someone is convinced that Amway will be their financial savior and that by using tools and moving 100 PV will result in longterm financial security and residual income as claimed by upline, then that is what they will do in hopes of achieving the end goal. When that goal or dream doesn't materialize, the former IBOs realize that the tools and products no longer have the value they once thought thet had. How many former IBOs will buy standing order or attend functions? If these materials really made you nicer, or saved marriages, why don't any former IBOs keep buying them? Why do they resort to selling them for pennies on the dollar on Ebay or Craigslist?

Bottom line is that the tools don't work. They only work for the uplines who directly profit from the sale of tools, plus the artificial demand in product sales created by those IBOs who are convinced that Amway wil make them rich. Once the reality sets in that Amway will not make them rich, and that the tools are simply draining their resources, then the demand or tools and Amway products disappears almost instantly. There is no unbiased evidence that I know of to suggest that these tools work, and basically, the miserable amount of new diamonds emerging in the US seems to confirm this fact.

I urge IBOs and information seekers to take this message to heart.

Thursday, May 27, 2010

Amway - Eagle Parameters Are Great For Losing Money!

Eagle Parameters:
Signed Counsel Sheet to Upline Diamond
300 PV personal use/retail for couples, 200 PV personal use/retail for singles
6-5-3 (PB/SO/MF) - Explained below
6 legs at 100 PV or higher
5 legs on standing order
3 legs attending major functions

Being An Eagle Is Profitable? I think not!

I have listed the parameters for the eagle program above. I will provide an analysis and some comments about the WWDB Eagle program. In my opinion, the Eagle program is basically just a program where upline assures themselves of a certain amount of tools sales. The IBO with the eagle parameters is likely losing a ton of money.

First of all, an Eagle with minimum parameters/legs would be at about 1000 PV. That would equate to about $200 to $300 a month in PV bonus from Amway, with differences based on width, total number of legs moving volume, etc. For this example, I will asume the Eagle receives $300 in PV bonus.

200 PV for singles, 300 PV for couples. That’s $600 to $900 in personal use and retail sales. While IBOs may attempt to sell products, we know that many IBOs sell little or nothing. Even if an IBO manages to sell 50 PV to customers, that IBO would still be spending $450 to $750 a month on personal use, and perhaps earning $100 a month for selling 50 PV.

6 legs at 100 PV or higher. That is approximately $1800 a month in personal consumption and retail for these downlines. Assuming they each qualify at 3%, they would get about $10 in PV bonus each month. The $10 does not factor in business expenses.

5 legs on standing order. Depending on whether an IBO is on the premier club, their cost might be about $60 to $75 a month (or more) for standing order, and may vary if extra cds are purchased.

3 legs attending major functions. Major functions generally cost about $125 per person, per event. And the expenses does not include transportation which may include round trip airfare during peak travel months, rental cars, hotels, etc etc.

Let’s look at a single IBO with eagle parameters. And I will use “best case” scenario. Income might be $400 with the 1000 PV bonus plus the retail profit for selling 50 PV. $400 sounds like a nice tidy sum, especially for a single person. But looking deeper, we see that this person also had to consume $450 worth of goods for him or herself ($450 = approximate cost of 150 PV). Yes, he or she received products, but seriously, how many single people actually spend $450 a month on laundry soap, shampoo and other consumables when simply “changing your shopping habits?

Additionally, an “Eagle” would have to be a leader. More than likely, simply buying standing order is not sufficient. A leader should be consuming more cds as you cannot listen to the same cd every day. Factor in the books, monthly open meetings, average out the cost of major functions, gas money, and other business expenses. I would say it is safe to say that an “Eagle” would easily spend $300 a month (or more) on tools and other business related expenses (Tools = Books, cds, standing order, meetings, functions, voicemail workshops). If this Eagle has to fly to major functions, then that cost may be significantly higher on average.

So let’s summarize. In a “best case” scenario, an Eagle IBO would spend about $750 a month on products and tools. I understand that products are not a business expense, but if a single person is expected to consume/sell twice as much PV, I would say half of that expense is a business expense as it would be unlikely that a single person would ever use 150 or 200 PV worth of goods in a month. So lets use that case and say that an Eagle has $475 in expenses per month ($175 for PV and $300 for tools). The Eagle receives $400 a month in bonuses and retail income (best case scenario) with the IBO selling 50 PV worth of goods (which is not common).

In a best case scenario, an Eagle loses money! And what’s more, all of his or her downline, if they are also using tools, will also lose money! The only ones profiting from the Eagle program is Amway in the form of product sales, and the upline in the form of PV bonuses and the profit from the sale of tools!

Do you still want to be an Eagle?

Amway - What's So Great About It?

Over the years I have been debating with Amway supporters, I cannot see what is so great about the Amway opportunity. Are some of these Amway defenders that stupid or dense that they truly believe that a business where one out of a few hundred people might make a profit and most of the remaining IBOs will lose money is a good opportunity? I'm not talking about people who sign up and "do nothing". Many IBOs sign up and put in a great deal of time, effort and money, only to find out that the system simply does not work (especially in the US) and they make a business decision to quit and/or to do something else.

Of course there are some people who make money in Amway. If nobody made money, then the opportunity would cease to exist. But it is basically exploitation of the downline that accounts for upline success. Amway's admission that sales to non IBOs are low, confirms this. Thus certain upline make their income from their downline's PV volume, and on tool purchases. I mean even a lottery has winners. Even ponzi schemes and other questionable opportunties have some winners. This is not to suggest that Amway in not legal. Amway is perfectly legal, but the way the opportunity is set up, those who profit, primarily do so at the expense of their trusted downline.

There are no groups that I know of where all the IBOs can win and earn a profit. I would guess that there might be a few rogue groups who only focus on retail sales, and while these groups can be profitable as a group, they are few and far between. This is because most IBOs fall under an LOS such as WWDB, BWW, LTD or N21, and these groups all seemingly focus on recruiting of new IBOs. Yes, they may sprinkle in some suggeestions about selling goods, but generally speaking, their "training" materials consist of motivation speeches, feel good stories (whether true or not), and the theme of never quitting while continuing to purchase more tools.

Some upline have the nerve to start teaching downline that their Amway business is not about making money, but to save your marriage, make you a nicer person, or some other diversion to make you forget that you are losing money month after month after month. Some groups even mix in religion and politics into their functions and meetings. As far as I can see, the typical business buildiing IBO signs up, gets some of the tools and attends a few functions, and finds that the products are hard to sell because they are not priced competetively with other retailers, and that a damaged reputation is nearly impossible to overcome. These IBOs realize they are not going anywhere, and they walk away, chalking up the losses as a life lesson. But apparently, many uplines who lied and deceived in the past are continuing to do so today, often just revising history for their benefit (i.e. lying about making any profit on tools).

Many IBOs, prospects, information seekers and critics read this blog. My question is very simple. What is so great about the Amway opportunity? For most, it is just a bad use of time and money. While some may exist, I don't know of a single person who "did the work once" and sat back collecting barrels of Amway money while sipping Mai Tais on the beaches of Jamaica. I see crown ambassadors working as hard today as they did many years ago. Diamonds losing homes to forclosures, a prominent diamond in bankruptcy proceedings, and a hoard of WWDB diamonds apparently selling off mansions that they allegedly paid for in cash. (It os quite possible that their lifestyles are simply not sustainable).

Where is the benefit in the business for the typical IBO? Just as there are some diamonds, there are lottery winners. Displaying a lottery winner doesn't make it prudent to spend your money on lottery tickets. Displaying a diamond's lifestyle doesn't make Amway a good opportunity. While Amway is a business and not a game of chance, the results of either, sadly are eerily similar - that is a few winners and millions of non winners.

What is so great about the Amway opportunity? I don't see it.

Wednesday, May 26, 2010

Amway - What is Your Goal?

One of the things that you may be taught as an IBO is to have a goal. While having a goal in a good thing, I believe the contect in which it is taught by Amway leaders is misleading. They want to motivate you to "go diamond" or perhaps some other achievement in the Amway business, but there is no specific means to achieve these goals and frankly, I do not believe that many IBOs or prospects understand what they are pursuing.

For example, one way that diamond leaders try to motive their downline is to show displays of wealth. They may show fancy cars, or talk about the mansion they own and paid for in cash, or they may show you a fancy vacation or jewelry. All the while, these diamonds may be up to their ears in debt. Has a diamond ever showed anyone a copy of their bank account balances or a business tax return? While IBOs may claim that this is noone's business, I beg to differ. In the REAL world of business, these are not uncommon practices. A close friend of mine who recently sold a franchise business not only gave copies on his bank statements, but three years worth of tax returns to the eventual buyer of his business. It was to verify his claim that his business was worth buying.

So for IBOs and prospects, what is your business goal. If it's to make $500 a month, has your "mentor" actually sat down to discuss this and to map out how this can be accomplished? What about setbacks? In the Amway business, the Amway reputation is damaged, thus achieving certain tasks may be much more difficult to conquer than you are led to believe? Is your upline actually helping your individual cause or are they simply leading you to purchase more tools? If your goal is not diamond, are you receiving the same help as others in the group?

The big question though, is are you progressing towards your stated goal and are you on schedule to accomplish the goal and reap the rewards, or have you fallen into a trap of attending meetings and listening to standing order and accomplishing nothing? If you have stated goals, there should be tangible and measurable ways to assess your progress (i.e. profits). If your upline starts to feed to rubbish about being a nicer person or that Amway saves marriages, then your upline may be leading you astray.

Tuesday, May 25, 2010

Amway - Where Does Upline Profit Come From?

One of the things that many IBOs do not understand is where the upline profits actually come from. They think they will obtain passive residual income but most do not understand how it works or where the money comes from. What most people see instead, is a photocopy of an upline's check, or they may see upline driving a nice car or something like that. They do not understand how the business works and the fact that there are two businesses at work. The Amway opportunity and the tools business. Frankly, most IBOs would be much better off giving their upline a check for $50 each month and never getting involved in the Amway opportunity.

Upline earns some income from the movement of products. Amway returns about 32% of their gross in the form of bonuses. Most (active business building) IBOs earn 3% while uplines split up the remaining 29% of the bonus. Not such a great deal when you think about it. Also, most IBOs overspend on Amway products. They are not simply replacing what they normally buy. If they did, then there would be tons of former IBOs continuing to move 100 PV or more. Instead, when an IBO quits, they either buy nothing from Amway anymore, or they may use a few products here and there. The opportunity and the way it is promoted simply creates an artificial need for Amway products. If the products were so great, why then after 50 years of business, that IBOs sell less than 5% of their goods to non IBOs, making IBOs the primary and possibly the only consumer of Amway products?

Then you have the tools business where IBOs don't even get a measly 3% of the profits. Uplines keep all of the tool profits. While this may seem acceptable on the surface, keep in mind that the tools do not work. There is no unbiased evidence that I know of that suggests that the tools create a natural progression of IBOs. I cannot name more than a few new diamonds in the US since I left the business in 1997 or 1998. And even if there were some new diamonds, I believe there were even more who quit or left Amway for other reasons. One might wonder why a diamond would quit in the first place if there really was residual passive income involved.

So where does upline profits come from? Simple, it comes directly out of the pockets of downline. If IBOs actually sold products, then some profits would come from sales and customers. Instead, most Amway sales are simply made from upline to downline. And vritually ALL sales in the tools business comes from upline to downline. Thus many IBOs spend $500 to $600 a month on products and get back $10 if they reach 100 PV. Then you factor in the $150 to $250 monthly that IBOs typically spend on tools. Suddenly that cheap or no risk oppportunity doesn't sound so cheap. And try working it for several years and IBOs can easily rack up tens of thousands of dollars of expenses.

That where upline profits come from folks. Do the math, most IBOs truly would be better off giving upline a check for $50 a month and doing nothing else.

Monday, May 24, 2010

Amway - Years Later.........No Success?

When I was a young IBO, I saw the plan and thought it was realistic to go direct and to find six (6) downlines who could do the same thing. I didn't know the realistic chances of doing this, but the presentation made sense so I went with it. I basically built my group on excitement and it seemed like the system could work. Sadly, as I climbed the ranks, my bottom line did not change. I did not "net" $200 at the 1000 PV level, and I did not "net" $1000 a month at 4000 PV as my upline taught. I had the parameters they taught, but the reality was my leaders taught everyone to pump what little profits we earned into buying more tools.

My leaders also taught people to get out of debt, which was good advice on the surface, but at the same time, any disposable income left over was to be channeled into tools, and for those who did not escape debt, they were told it was okay to go deeper in debt, but only if it was to "invest" in their businesses by purchasing more tools. Thus it certainly appears that upline's advice was purely self serving and had nothing to do with an IBO's individual success.

I was in WWDB and they (upline) said that WWDB was breaking the most new diamonds and that WWDB diamonds were the most profitable. So here it is a dozen years later, where are all these new diamonds? Aside from from foreign diamonds, there are (I believe) less than 4 new diamonds from WWDB in the US from the time I left the business. Now I may be wrong, but even it was a few more than 4 new diamonds, that is a miserable success rate given the amount of cash spent by downline on tools and the claims made my upline about the tools.

We have also seen some WWDB diamonds end up in home foreclosures. Where is the integrity and financial acumen these leaders boasted about? Where is the success and long term financial security available to everyone that was touted? I believe more diamonds and emeralds fell out of qualification than new pins emerged. The business was promoted as one that would stand the test of time. Sadly, I believe WWDB and the Amway opportunity as promoted by WWDB has been a miserable failure.
There is little success to speak of, just he same old tired diamonds showing off a lifestyle that some of them apparently can no longer afford. Where is the success?

It is years later and we are still waiting.......

Monday, May 17, 2010

Amway - Where Are They?

One of the things that is used to entice prospects into joining Amway is the lure of passive residual income that will continue to roll in after someone stops working. Or as some IBOs put it, you do the work once and it pays you for the rest of your life. It sounds like a great theory, but does it actually work? Why aren't there people who retired as am Amway IBO simply walking the beaches and cashing bonus checks? Why are crown ambassadors and double diamonds still working the functions with no signs of slowing down?

When there is debate about this alleged income from Amway raging on, why aren't any of these retired Amway folks stepping forward to confirm that they did the work and stepped away? Where are they? Do they exist? I mean some people believe in UFOs and Sasquatch (bigfoot) and while these theories are well known, there has never been bonafide evidence that a UFO exists, and a Sasquatch body has never been recovered. I believe that UFOs or bigfoot might be possible, but there is simply no proof. There were many hoaxes that were uncovered regarding these issues, but no bonafide proof.

Seems like it's basically the same with Amway residual income. There are many stories and statements made about lifelong passive residual income coming from Amway, but all of the evidence I have seen suggests otherwise. When 2/3 of IBOs never even last a year, and more than 95% of IBOs never last 5 years, and given that many IBOs do little or nothing, what case can you make that the Amway opportunity can provide you with lifelong residual income? Evne those who have attained levels where you can allegedly walk away and collect income don't do so. Why is that? Is it because they just love traveling across the country all year long to work functions, or is it the more likely possibility that they keep working - because they have to.

Diamonds show off a very excessive lifestyle. Lifestyles that probably cannot be sustained on the incomes reported by Amway. So is lifelong passive residual income from Amway a myth or reality? I believe it is a lie told by AMOs (The systems) because if this were true, you would hear it from Amway themselves. If people are truly walking away from their Amway businesses and living in luxury, then where are they?

Thursday, May 13, 2010

What Is The Value Of Your Amway Business?

Many 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 while living in the lap of luxury. Sadly, most IBOs will never make a profit or 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. Unfortunately, many IBOs suffer a financial loss before they realize what's happening and walk away.

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 either walk away and collect income, or sell their business and live happily ever after right? Here's some food for thought. Why are there any instances 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? Maybe there is no residual income. Afterall, when two thirds of IBOs never even last a year, it's hard to keep that volume moving month after month.

I believe diamonds quit and resign because their business is worth very little or nothing. And 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?

Also, as an Amway business owner, what do you own? You don't own your downline, although their volume runs through your business. You don't have staffing and you probably don't have equipment or a rental property or any bonafide assests. You may or may not have some inventory but you are not required to hold any.

So IBOs, I ask you. What is your business worth? What is the value of your business? Little to nothing?

Wednesday, May 12, 2010

Amway - IBOs Fake It But Don't Make It?

One of the things I was taught as an IBO was "fake it till you make it". My understanding was that you were to act successful, even if you had not yet achieved your desired level. By faking success, I suppose you had a better opportunity to prospect other potential IBOs than by showing the reality. Broken down to its purest form, this is deception. To attract others to an opportunity where you are deceptive is less than honest, which I suppose describes my former WWDB upline leaders. What is also sad though, is that I believe this may still be taught.

I guess this should not surprise people who know about the Amway business because I believe that diamonds also embellish success as well. WWDB used to have, and still runs a major function called "Dream Nite". This is a function where the diamonds will parade on stage while showing a slide show of all the lifestyle you can achieve at the diamond level. Do what they do and you can have what they have, is what they teach. But can you really?

For one thing, new diamonds in the US or WWDB for that matter probably earn in the range of $200K to $250K a year when you factor in the Amway income and the income from tools. While that seems like a great income, factoring in taxes and medical and dental insurance and the kind of life style that diamonds portray with fleets of cars and mansions and gaudy jewelry and clothing, and you can easily see that diamonds are very likely playing a game of "fake it" as well. It is why I believe many diamonds are actually in debt and/or living month to month financially, just like the working stiffs they criticize in functions. I have heard testimonies and read comments about how IBOs saw their diamonds actually living in very average homes and at times, renting fancy cars and things to show off because their income likely cannot sustain the lifestyles they portray. A prominent WWDB triple diamond was fairly recently in apparent bankruptcy proceedings and another had their home foreclosed. It is all adding up to what I suspect. That diamonds at best live middle to upper middle class lifetyles. Not that this is bad, but it is a far cry from how the diamond lifestyle is dishonestly portrayed. Take away the tools income and the picture would not be pretty, in my opinion.

So IBOs and diamonds can fake it, but I suspect that many of them NEVER "make it".
And if I may add, teaching this and doing this "fake it" is less than honest.

Tuesday, May 11, 2010

Amway - IBOs Are In Denial?

One thing that appears to be common amongst IBOs is how IBOs are in denial. They truly believe that their uplines are working in their best interest and that upline wants their success. I don't believe that to be true. If uplines were truly making a fortune from Amway, why would an downline IBO have to pay for practically every bit of help they get from upline leaders?

To show the plan, you would need to pay to attend an open meeting, and pay for your guests, even if they do not register as a result of the presentation. You pay for voicemail to communikate with your upline and downlines. You pay for standing orders and you may end up paying twice if you were in attendance at the function when the standing order was recorded. You pay for books and other materials as well.

What's more, many IBOs turn their heads when ugly facts rear their heads. For example, some IBOs deny that a prominent triple diamond was involved in bankruptcy proceedings. They continue to edify and pay for financial advice from someone who could not even manage his own finances. They believe that Amway saves marriages even when the leaders who speak this may be getting divorced. It's like upline simply revises history and downlines buy it without question. Many IBOs do not even see it as a problem that some upline boldy lied and said there were no profits from tools in the past. I find this odd because tool profits are still shrouded in secrecy and downline simply believe that they will eventually get a cut, even without a written compensation plan and agreement.

I believe too many IBOs are simply in denial. They give upline their trust and upline abuses it. IBOs are told they are successful for attending a function even when they might be losing money month after month. They may be told that the Amway business is not about money but about making friends. They may be told that they are nicer people because of their participation in Amway. What too many IBOs do not see is that they are in denial about their business. Most IBOs are losing money, a little at a time, perhaps $100 or $150 a month. For the hardcore, maybe more. But they are taught to ignore these simple facts and deny that there is a problem.

It is my hope that exposure of some of these tactics will be beneficial to information seekers and perhaps new IBOs who have not yet been fully indoctrinated. I encourage people to ask tough questions, demand answers and use due diligence when checking out this oppportunity. The fact is that very few people every make a profit and people should know this before getting involved. Don't deny the obvious.

Monday, May 10, 2010

Amway - Bad Upline?

A recemt comment left on this blog stated that perhaps I had a bad upline, which may have led to my bad experience in Amway. While this may be true, I have to ask how anyone can possibly know who might be a good ro a bad upline? As far as I know, all of the LOS sell tools which consists of books, cds, functions, meetings and voicemail. They all earn profits from the sale of these materials, thus they all promote these materials. I have heard that many uplines make more from selling tools than they do from Amway.

It makes perfect sense that some upline would make more money on tools than from Amway because the tools have a larger profit margin than Amway products and because to promote these tools, the uplines must travel from city to city to run functions, thus taking time away from running their Amway businesses. And while they may say verbally that tools are an optional expense, many groups promote them as a defacto requirement. For example, I heard that tools were optional but so was success. Or that nobody ever succeeded without tools but I could be the first to try. My sponsor also told me that Greg Duncan was a multi millionaire and he thought that tools were vital but if I thought I knew better, I could try it on my own. What is a new IBO to think? It sure sounds like only a fool would try to build the business without tools.

What's also amusing in some ways, is to debate with Amway supporters or defenders who tell me that I simply had a bad upline, and then to find out that they have the same upline that I had! It amazes me because I was in WWDB and basically, the same leaders are on stage today. The same leaders who were on stage when I was an IBO. These leaders at one time told bold lies, such as nobody made a cent of profit on tools, or that WWDB was a non profit organization. For some reason, IBOs don't seem concerned that upline leaders told these lies. They also mistakenly believe that everything upline tells them now is the truth.

IBOs even deny things that are of public record such as Greg Duncan's apparent bankruptcy proceedings, or Brad Wolgamott's apparent seperation. It seems that uplines just revise history and downlines believe it and do not ask questions or hold upline leaders accountable for their actions. I believe that these leaders should be held accountable and to a higher standard because they have profited handsoomely over the years from the sale of tools. But another concern is the utter lack of success from the proven system. Where are the new diamonds? I cannot even name 5 new WWDB (My former LOS) diamonds from the US since I left the business in 1998 or so.

So I ask the question again. How would an IBO or a prospect know what a bad upline is? Most find out when they finally see the light or when they notice the losses mounting month after month. I hope this blog helps information seekers.

Thursday, May 6, 2010

Amway - By The Numbers

One of the things Amway IBOs are taught is to ignore facts, or to ignore numbers. I believe this is because the numbers are not pretty when you take a business like approach to the math behind the Amway business, for most IBOs. It is why upline teaching often "evolves" into things such as Amway saves marriages, or Amway makes you a nicer person, or that Amway is not about money, it is about friendships. That is a load of garbage. Business is about making a profit. If you hear some of these lines from your upline, it should be a red flag. Upline may also feed you other deceptive lines such as an IBO being successful because they showed up at a function, or because they just signed up for standing order. These are all just false lines to encourage an IBO who is not making money.

When you take a good look at the Amway presentation, the majority of IBOs are at the 100 PV level. At that level, they are spending about $300 monthly to reach 100 PV and for their efforts, they receive approximately a $10 check from Amway. Most IBOs will be encouraged to participate in some kind of system, often consisting of voicemail, websites, cds, books, seminars and other meetings. MOST IBOs will not recoup enough cash to cover any of these expenses, let alone all of them. At a glance, the system expenses may appear nominal such as $6 for a cd, $6 for an open meeting, $100 to $125 for a major function, $12 for a book. It is how upline gets you involved, and then after a while, an IBO starts to notice the negative cashflow and then a tough decision needs to be made. Either quit and cut the losses, or press on hoping that the system will eventually deliver on its promises.

What most IBOs don't notice, is that less than one half of one percent ever reach platinum. A fraction of one percent! And in many cases, platinums might break even or even suffer losses! So why would IBOs want to work so hard to reach platinum? They have less than a 1% chance of reaching that level. They have a tiny chance of maintaining that level, and they are still unlikely to earn any significant income at that level. A stody done by an attorney general in Wisconsin (Bruce Craig) revealed that platinum level IBOs averaged a net loss of about $900 annually. While Amway defenders will decry that the study is a bit dated, I will say this: The basics of the Amway business has not changed since that study was done, AND there are actually more system expenses today than there were back then, thus platinums may actually be losing more money annually than before. While not all platinums will lose money, I believe hard core dedicated platinums would stand to lose money.

As an IBO, I hope you are tracking your expenses versus your income. Most IBOs will see a negative cashflow month after month. Even though the Amway business is often promoted as low or no overhead, the system expenses (overhead) eventually begin to add up. Beware and please follow the numbers.

Wednesday, May 5, 2010

Amway - Broken Dreams?

One of the things Amway promoters use to entice prospects into joining is to get them to think about financial dreams and goals that they would like to accomplish. After all, who wouldn't want to be retired at age 35 and walking on the exotic beaches of the world? Or who wouldn't want to live a life of leisure and excitement with unlimited barrels of cash rolling in to finance all of the fun and frivolity?
Of course most people get excited by this.

Sadly, the things that people get excited by, or the things that people join for, often become less accessible because of people's involvement in Amway. Not due to Amway itself, but because of the leach organizations that attach themselves to the Amway business. These organization will promote their materials as the key to success in Amway, but in reality, these organizations reap handsome profits while basically bankrupting the downline IBOs. What is also sad is that the system does not deliver the success that is touted. Less than one half of one percent even reach the platinum level, which is allegedly the level where you break even or make a small profit.

During my tenure in the business, uplines taught us to buy all the materials. Books, standing order tapes/cds, functions, and other materials. In fact, in addition to standing order, upline wanted IBOs to purchase an additional 5-7 tapes or cds each week. Afterall, you should be listening to new material right? In fact, upline wanted people to "invest" or spend all of their income on these materials. In an open meeting setting, a diamond said that your famioly could skip a meal to get another tape/cd because the information was so valuable that you might hear the one thing that propels you to diamond. Almost as if buying a tape/cd was like some lottery ticket.

And sadly, some IBOs did go "all in". They bought tools like there was no tomorrow. In my crossline, there was a couple who went bankrupt and a couple whose home was foreclosed. Now was this financial difficulty all due to their involvement in Amway? I don't know, but certainly, buying hundreds of dollars of materials on a monthly basis cas certainly contribute to someone's financial problems. And these IBOs did this on upline's advice. Thus upline advised this even when they likely knew that these IBOs were in financial difficulty. If they would tell you to starve your kids, then surely they will not be concerned about your other issues. I also sat in a function where a diamond taught about how long you can put off paying a mortgage before foreclosure would occur. Probably so people could go in hock to attend a major function.

It is a sad thing indeed when uplines will try to sell you dreams. What's worse is when they are actually selling you broken dreams.

Monday, May 3, 2010

Amway - IBOs Drowning In Debt?

One of the pitches used to attract people to the Amway business was to earn enough just to get out of debt. Afterall, many Americans these days have credit cards maxed out and racking up more and more consumer debt. But the tough question is whether joining Amway will help the situation or only make it worse? Afterall, in general, Amway products have higher prices than retailers such as WalMart or Costco. Anyone who denies this is either being deceptive or is truly misguided. You can try to argue about Amway's quality of products. Some products are good, but overall, consumers simply don't find enough value in them. Seems that IBOs don't even buy Amway products unless they are pursuing their dreams of going diamond. Once that dream ends, so does their loyalty to Amway products.

Sadly, for most business building IBOs, the business opportunity and its connected teaching system such as WWDB, BWW, or N21 simply creates more debt for IBOs. Think about it, an IBO will already be spending about $300 a month to earn their defacto 100 PV requirement. If that IBO subscribes to voicemail and no other tools, that IBO will already have a net loss for the month. Factor in ongoing expenditures such as standing orders, functions, open meetings, regional functions, books and other miscellaneous expenses and you have an IBO heading towards tens of thousands of dollars deeper into the debt hole. Most IBOs don't see what's happening because the debt is incurred a few hundred dollars a month, but most IBOs think it's okay because they are convinced that they will recoup the losses and earn a huge surplus in the long run. Unfortunately, only a tiny fraction of 1% of IBOs will ever earn a decent profit from the Amway opportunity. Most will realize they are making their finances worse and end up quitting.

In the few cases where a diamond's financial were exposed, these diamonds were in hock. Even a prominent triple diamond was not earning enough to sustain the lifestyle he and others promoted on stage. It is my guess that these diamonds in financial difficulty is more likely the norm than the exception. Do the math. If a triple diamond earns about a million dollars from Amway and the tools profits, can that income sustain a jetset lifestyle portrayed in functions like dream nite? I mean it is a great income, but everything is relative. Someone earning say $70,000 a year can live a comfortable lifestyle without debt. But diamonds portray a lifestyle of excess and almost arrogance. It's no wonder some of them have financial problems.

In the end, IBOs are drowning in debt as a whole. The system nearly ensures that the group of IBOs collectively will end up with a net loss with one or two at the top earning a profit. One's dedication to tools determines how much an IBO will lose. The more dedication, the bigger the losses. If your upline teaches you to get out of debt, that's good. but if they teach you to get out of debt, except for functions and standing orders, take that as a huge red flag.

Saturday, May 1, 2010

Amway - Upline Leaders Want My Money, Not My Success?

One of the things my upline leaders used to always talk about was how they wanted everyone to succeed. Looking back, I believe they were lying and simply wanted the faithful downline to keep spending money on tools whether they succeeded or not. Now I am not claiming that every single upline leader does this, but primarily the ones who run "systems", such as WWDB, N21, BWW, LTD and some others.

When I stopped and really thought about it, pretty much every piece of advice I received, I had to pay for. Voicemails, standing orders, functions, open meetings. I know these are supposedly optional, but in reality, they are a defacto requirement. Anyone with a "dream" is going to buy the tools because the leaders will tell you that you cannot succeed without tools. Ironically, the same leaders will blame individuals and cite personal responsibility for the failure of downline IBOs, even the ones who did everything they were told.

The leaders are edified and touted as having great business and financial acumen, thus not following their advice would seem foolish. Yet Amway defenders will try to claim that IBOs should discern the good and the bad and operate independently. It's a redundancy that many people do not see. Sure, a downline should not jump off a cliff because upline said they would pad their fall with a pile of cash, but many IBOs put in an earnest effort in Amway, only to fail because of the handicaps and reputation issues that Amway has. These IBOs are told they were lazy or quit too soon, or did not try hard enough. Yet the very few who manage to break thru are edified along with the system while ignoring the multitudes who do not make it.

The bottom line for IBOs and prospects to know, is that I believe most IBO leaders do not know you or care about you and your success. They are more interested in selling you websites, voicemail, standing orders and functions. They know that people will come and go and they are perfectly happy replacing quitters with new people, as long as the system tools keep flowing. I believe some of the US diamonds are now hurting as Amway is apparently shrinking in the US. I read recently of Amway downsizing some of their operations, seemingly confirming that US sales are down. Also to note, Upline leaders would have to share tool profits with new emeralds and diamonds, which is why I believe they do not want new success.

I believe that Amway, other MLM businesses, Kiyosaki, or real estate gurus all have very limited or rare success with their financial systems. Informercials usually have a disclaimer that success is a "UNIQUE" experience. Amway is no different. But I believe in all of these cases, more money is generated in selling the system than by actually running the system. If not, success stories would be rampant and people would line up to sign up instead of having to be deceived into even hearing the pitch.