Monday, March 7, 2011

Amway Motivational Organizations (AMOs) - Behind The Smoke And Mirrors?

This is a repost of an eye opening thread:

There is a book called "Amway Motivational Organization - Behind the Smoke and Mirrors", written by Ruth Carter in 1999. Ruth Carter was an IBO and also worked as an employee of a diamond. Her close and personal insight into the life and finances of a diamond is quite horrifying when you see the details. Based on my observations and years of blogging experience, I believe that this diamond as described in this book, is more typical than not. I believe this because this diamond had a nice income. but was living in debt. Basically the diamond in the book (not identified) lived a lifestyle to portray wealth, but behind the illusion of wealth was a pile of debt.

This diamond operated in the mid 1990's, the heyday of the AMO abuse. While Amway pundits will make claims such as the story is a bit dated, I still say the story is quite valid because not much has changed in the business. Yes, online shipping replaced the call in and pick up method of delivering goods, and for some groups, the voicemail system changed, but the diamonds in the business still portray vast amounts of wealth. My old LOS, WWDB, still has a function called Dream Night, where the diamonds parade around and show off mansions, sports cars, jet skis and other luxuries. The diamonds still make claims of buying bit ticket items in cash, and they apparently still have the nerve to teach that the Amway opportunity can save your marriage.

The diamond in the book had a nice home, a couple of fancy cars and a nice income. The diamond in the book had a gross income of just over 3 million dollars. But after business expenses, this diamond had a net of $323,000, with only $96,000 of the income coming from Amway. For the Amway defenders who like to cite religion and call Amway a God pleasing business, I will note that this diamond only had $10,000 of their income given to charity. This diamond had the fancy suits, a couple of nice cars and a nice home. This diamond also had a mortgage with little equity. The diamond had not paid their income taxes for several years and this diamond also had credit card debts in the hundreds of thousands.

How can someone who has achieved the Amway pinnacle of success be in debt? Simple, by portraying a illusion of wealth that cannot be sustained on the income generated by Amway volume and tools sales. An income of $323,000 is certainly nice, and more than most people will ever earn, but the lifestyle they live might require a multi million dollar a year income or more. Amway reports that the average diamond earns about $147,0000 a year. I might add that a diamond's monthly income may not be that great as much of the income of a diamond comes from annual bonuses.

So why do diamonds live a lifestyle that they cannot sustain? It is my guess that diamonds need to keep recruiting new IBOs in order to maintain what they have. Thus they portray an easy lifestyle with no job and tons of luxuries. Some diamonds show off more than others. But in order to entice prospects, you need to show things that most people cannot attain with a job. I believe it is why there have been other signs of financial trouble in diamond land. Other diamonds have had homes foreclosed. A prominent triple diamond was in bankruptcy (chapter 7) proceedings, and a host of diamonds were selling off mansions in a bad real estate market. The signs are there. You can believe your own eyes or continue to deny what appears to be the norm in this business.

Amway Motivational Organizations and their diamonds are creating illusions of wealth, behind the smoke and mirrors, I suspect many of them are in financial difficulty, living month to month and bordering on massive debts. The evidence is there. The question is whether or not you believe it. I recommend you purchase this book, which is filled with insight most people do not have about Amway. You can find it on Amazon.com.

4 comments:

Anonymous said...

But the facts don't matter if your dream is big enough, right?

Look around you. Massive forclosure stats. Unemployment, Inflation.

Pretty tough to go to dream night, family reunion, leadership, and free enterprise day when you can barely feed your family.

Joecool said...

I read that somewhere in Canada, some diamonds held more than one dream night so their downline could be exploited more than once!

John said...

Joe, I heard this report from more than one IBO. They said there was pressure to attend more than one to show that you were "core".

Joecool said...

John, I believe that IBO ranks in the US and Canada are down, thus the upline will now schedule multiple functions and get their downline to attend more than once. It's killing the golden goose, so to speak.