Sunday, March 6, 2011

Amway - I'm Free?

When I was an IBO, I often saw my upline diamond driving around town dressed in a business suit. I used to wonder why he keeps working if he can "walk away" and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios, the diamond is working to help his downline out of a genuine concern for them, or possibly he is working because he has to! The only difference now is that the diamond works the nite and/or graveyard shift, because many IBOs are building the business after the complete their day jobs. This is probably why diamonds sleep until the "crack of noon", because they are working all night!

Now Amway has stated that the average diamond earns about $147,000 a year. That is a decent income, but after yaxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining his group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle, and stays in 5 star hotels. It is probably why diamonds need free transportation to and from the airport and why they stay with friends when traveling as much as possible.

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle to upper middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nites and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next. It is very expensive and time consuming to travel from city to city showing off your freedom and diamond lifestyle.

Is this the freedom you are seeking?

6 comments:

John said...

Joe, I think the tools income may well more than double a diamond's income. Don Lorencz said he made 80% of his income from tools. Regardless, you are absolutely right. The bigger your "group" becomes, the harder you have to work to maintain it, and the more you get involved in the tools business, the harder you have to work to sustain that. If you consider travel time and planning time (such as preparing speeches, planning meetings, etc), I would wager diamonds work more than 40 hours a week and likely 60-80 hours per week.

As much as some people (i.e. Tex) would like for us to believe that the AMO's are totally to blame and that Amway corporate is spotless, it is Amway corporate who advertises on prime time TV with these "I'm free" ads. Who exactly is free here?

Anonymous said...

147,000? Hmm.......we were told 250,000. Think of Double Diamond, Greg Duncan, (or is he triple, now?).

We got in in '95. He was a diamond at that time but quickly jumped to double. That was 15 years ago. He was working his bus. furiously in the southwest and other diamonds were supposedly jealous of his success down there. Except, that's were I live and guess what? He never did get it off the ground here.

Hubby would pick him up at the airport (that was a HUGE honor then) and take him to his hotel. We were supposed to swoon b/c it was our chance to have some of his OZ wisdom drip off of him and it just might fall on us, the sorry people.

He was a decent enough fellow, but even he, the great and powerful Oz, could not force his will down here.

Funny how all the talk of 'owning' the southwest dried up after that. We lost our Emerald open here as well. We were constantly threatened with that possibility if we didn't get the numbers up.

Get your own 'freaking' numbers up. I'm going home to bed.

Joecool said...

John, Don Lorenze made most of his money from tools, because he only qualified for diamond once and never qualified again, but got to remain on the speaking tourm, and continued to get tool income. I believe his Amway income was about equal to a platinum.

In Greg Duncan's somewhat recent bankruptcy proceedings, it indicated that Greg made about $500K from Amway and another $500K from tools. A nice income for sure, but even that is nowhere near enough to own 5 mansions, a jet, and a fleet of sports cars. A diamond lifestyle more than likely costs much more than diamond earnings.

John said...

Joe, indeed a million gross is not enough for the "diamond lifestyle". Who is the couple that was captured on the Quixtar Dateline expose who was boasting "we've got 32 cars and 4 homes...what do we buy now? why don't we just buy a country?!?"

Joecool said...

I think the couple on dateline was Bill Britt or Dexter Yager.

As an IBO, I remember a Britt speech where he said he was on his way to a "billion". As more and more diamonds collapse, we get more glimpses into what a diamond's financials are like.

John said...

It was a younger couple. Looked early 40's.