Friday, July 29, 2011

Why Not Have A J-O-B?

One of the ways that upline diamonds would put down jobs was to toss in the phrase that a job was simply trading hours for dollars. As if it were demeaning to have a job where you got paid for your time. I believe it's all relative. Being that many IBos are young and maybe working in more entry level types of jobs, then yeah, your hours wage might not be that great. If you earn say $10 an hour, then you might be struggling financially and it may take time before your skills and knowledge increase to a point where your experience is worth more money. What if you had a job paying $1000 an hour and earned $160,000 a month? Is that a lousy deal trading hours for dollars? I think not!

Conversely, having a business can be good or bad also. If you have an Amway business earnning less than $100 a month and you spend $200 on functions, standing orders and other training and motivational materials, then you are losing money. You would be better off working for free. That is still a better alternative than working a business where you are losing money. I think most people agree that a platinum group typically has a 100 or more IBOs. Thus a platinum is in the top 1% of all IBOs. I have heard that the platinum level is where you start to break even or make a little profit, depending on your level of tool consumption. If platinums are barely making a profit, then the other 99+% of IBOs are likely losing money. How much is that worth per hour?

I think uplines cleverly trick IBOs into thinking that a job is bad. Trading hours for dollars, afterall, sounds like some kind of indentured servant of sorts. But in the ned, what matters is your bottom line. If you are an IBO with little or no downline, and/or not much in terms of sales to non IBOs/customers, then you are losing money each and every month if you are attending functions and buying standing orders. Your 10-12 hours a week of Amway work is costing you money! But if you spend 10-12 hours a week, even at minimum wage, then you might be making about 300 to 350 a month groww income. After taxes, you make about 250 to 300. At least trading hours for dollars gets you a guaranteed net gain at the end of the month.

Uplines trick you into a "business mentality" where you think that working for a net loss is just a part of business. IBOs should realize that a business promoted as low risk and no overhead should be one where you can profir right away. Instead, IBos are taught to delay gratification, or to reinvest any profit back into their business in the form of tools and functions, which results in a net loss. If that's the case I would choose trading hours for dollars.

Remember, trading hours for dollars is not a bad deal if you are making enough dollars per hour. And even those who make less, are better off that those who "run a business" but end up with a net loss. It's all relative and hopefully, this message will help new or prospective IBOs who are being enticed to join the Amway business opportunity. Good luck to those with jobs and those with businesses. You can be successful either way. Remember that!

Thursday, July 28, 2011

Drag Racing And Amway - Fun, Not Profit

Good blog post by Peter J. Reilly

Somebody Somewhere Has To Be Buying Some Soap

There was also an Amway case. Amway is a major corporation that sells a variety of household products. Originally it was mainly soap. Their story is that their stuff is more expensive, but since it is more concentrated you don’t have to use as much of it. What they are better known for is their “multi-level” marketing system. If an Amway distributor invites you to a party to discuss something, he will not try to sell you soap. He will want to recruit you as a distributor. He will focus not so much on you selling the soap (I’m using the term as a shorthand for the broad range of Amway household products). He will focus on the opportunity you have to recruit other people who will become your “downline”. At one step removed, they are also part of his downline. In Amway terms, you are an “Independent Business Owner”. Somewhere in the chain above you (“upline”) there will be someone who has achieved Diamond status, which is your ultimate goal. Then you can just sit back and see how the money rolls in.

My short mention of the Amway case was picked up by another blog. This revealed to me that there is actually a small section of the blogosphere dedicated to criticizing the Amway system. My favorite is Married to An Ambot by a lady who is telling her story of what it is like to be married to an “Amway cult follower”. I was inspired to do a comprehensive study of how Amway IBO’s have fared in “hobby loss” cases. I found 23 cases going back as far as 1986 (There were some appeals, but I only counted the original case). It’s not an enormous number but it is enough for a Tax Court judge to have observed:

The Amway distributorship system is well known to respondent (i.e. IRS)and this Court

A brief summary of what the critics have to say about Amway is that very few people make money at it. Those that do may well exagerate their earnings to impress and motivate their “downline”. The relationship between the upline and downline has elements of cult like behavior. Most of the “soap” is bought by the IBO’s themselves. Those in the upline who are making a lot of money are making most of it from selling “tools” (motivational tapes and the like) to the downline. I don’t know whether this is all true or not, but the Amway hobby loss cases tend to support it. They almost all lost. Probably the most pervasive theme was that the IBO’s never seemed to try to control expenses and that they only sought advice from their upline, who were of course not going to give disinterested advice. I was able to draw a pretty clear lesson from the material.

If you would like to start a small home business so that you can deduct a lot of money that you would spend anyway, don’t do it. I didn’t need to study the cases to tell you that, of course. The study of the cases tells me that if you are going to not follow that good advice and are going to start a business so you can deduct a lot of personal expenses, the last thing you want to pick is becoming an Amway IBO.


The most ironic thing to me about hobby loss cases is that the Tax Court ends up sounding like a good managing partner bringing some business discipline into a public accounting firm. Most of us like the work and like our clients and staff and need somebody to remind us to keep money coming in the door.

Just for reference here are the factors:

(1) The manner in which the taxpayer carries on the activity;

(2) the expertise of the taxpayer in carrying on the activity;

(3) the time and effort expended by the taxpayer in carrying on the activity;

(4) the expectation that assets used in the activity may appreciate in value;

(5) the success of the taxpayer in carrying on other similar or dissimilar activities;

(6) the taxpayer’s history of income or loss with respect to the activity;

(7) the amount of occasional profits, if any, which are earned by the taxpayer;

(8) the financial status of the taxpayer;

(9) elements of personal pleasure or recreation.

Wednesday, July 27, 2011

The "Good" Amway?

I've been recently engaged on another forum discussing the merits (or lack of) of the Amway business. Of course that discussion draws IBOFB to the forum like flies on a frsh pile. So as I see it, IBOFB thinks that downline abuse and the tools scam is a tiny problem and the most of Amway is actually a uptopia where IBOs prosper and upline actually live in wealth and only work because they love their downlines. It makes me think IBOFB aka Icerat aka Insider is completely deluded or is completely jaded in favor of Amway.

There are many tool companies that provide tools for Amway IBOs. They are independent of Amway and they are all (as far as I know) for profit companies that sell cds, seminars and other materials that are allegedly designed to help IBOs succeed in Amway. Because upline leaders have a lot of influence, most of these same leaders use that influence to encourage (coerce?) their faithful downline to purchase tools. It is easy to discern and there is documentation that some of these same leaders make most of their income from the sale of tools rather than from Amway. It's a bait and switch scam in my opinion. Show off a jet set lifestyle. Tell the audience that it's all available by working the Amway business, and then sell them foolproof tools that will help them accomplish this. Whether the tools work or not (there is no unbiased evidence that tools work), the uplines are laughing all the way to the bank as they drive their fancy cars.

While there may be pockets of groups where some leaders are more ethical, it's pretty evident that these are very very rare and that most uplines teach the same things. Dedication to the Amway products and dedication to the system. Both of these practices are beneficial to uplines who profit from tools, but usually becomes the reason why business building IBOs end up with a net loss. Sometimes an IBO become uber dedicated to upline and the tools and these IBOs often suffer massive losses, sometimes in tens of thousands of dollars. And their fault was selling out and doing exactly what was advised by their upline. IBOFB aka Icerat believes that the majority of Amway is the good Amway, where everyone makes money and is content. Sadly, that "good" Amway, doesn't appear to exist.

Does anyone know of this "good" Amway? Where is there a faction of IBOs who all profit? Is there a group where uplines don't promote and profit from tools? Is there a group where people don't quit and if they do, continue to buy Amway products consistently? Are we chasing the end of a rainbow here?

Monday, July 25, 2011

An Observation About Amway?

It's refreshing to see so many good people on this forum telling the truth about Amway. It looks like the pro-Amway shills here and on other sites are becoming increasingly outnumbered and desperate. I've read through this entire thread and think it is hilarious how many times the shill has to move the goal-posts or play word games to make Amway look like an amazing business opportunity.

I was originally introduced to Amway many years ago in my late teens by an uncle of mine. I attended a few of their seminars, and was impressed at first. But the whole thing started to seem ridiculous and unrealistic and so I didn't get involved any further. Also, I'm not that materialistic, so Amway's message doesn't appeal to me. I wish my uncle had been more skeptical.

My uncle was very devoted to Amway for a few years. He bought all their products(especially the tapes and books), tried to get others to buy them, and also tried to recruit all his family and friends into his new religion. He eventually lost money and friends and alienated himself from much of his family.

Already heavily in debt, he eventually fell for another, even bigger get-rich-quick scam shortly after quitting Amway(to Amway's credit, they don't threaten to kill anyone for leaving Amway). This one robbed him of his entire life savings. The scammers got away with it because they knew how to play him right(he met one of them through Amway). His wife divorced him soon after.

As if this wasn't enough, after making a modest financial recovery with his business over the course of several years, he loses it all to yet another scam. He had to borrow heavily from the few friends he had left since no bank would ever give him a loan, and almost no one in the family has anything to do with him anymore. I haven't seen him for 15 years.

One thing I wonder about my uncle is if all those seminars and inspirational tapes and books softened him up to fall for all those other scams he fell for after quitting Amway(he didn't have a reputation for being gullible before joining Amway, though he was never that bright to begin with). If I remember correctly, he tended to blame himself for failing at Amway, and may have never understood that it was a big scam or at least not a good business opportunity.

I still remember those crazy seminars and how they told everyone that joining the Amway cult will likely lead to yachts, exotic vacations surrounded by hot bikini babes, and shiny expensive cars, among other symbols of wealth. Everyone is told at the seminars and in the "tools" that they have all this unfulfilled potential, but to realize this potential we must avoid those small-minded "dream killers"(skeptical family members and friends).

The story about my stupid uncle is true. There are many other people out there just like him who have fallen for Amway and others MLMs. The few people I've met who claimed they were very successful at Amway usually seemed sleazy or I would find out years later they were up to their eyeballs in debt.

The person who said before that the people who regularly attend these seminars are mostly fools and misfits was spot on.

Saturday, July 23, 2011

Signs That You Are Becoming An "Ambot"

Sometimes it happens to the nicest of people and it oftens happens slowly and subtly. These are the signs that you are becoming indocrinated and you are likely annoying your loved ones at this point. I hope this helps:

*You're driven to recruit everyone you know. You may even resort to deception or outright lies to get people to meetings. Before you know it, your family and friends avoid you like the plague.

*You're encouraged to develop an unreasonable, irrational zeal for the products. Even so far as to justify the quality of toilet paper or to call the products prestigious. You may even argue the quality of energy drinks or about phytonutrients, something you may not even know about.

*A whole bunch of demands, promises, subtle threats of failure if you don't try hard enough are made in the promotional material and motivational seminars. i.e. If you quit, you are a loser destined to die broke and unhappy.

*Because the system is touted as the way you're going to make yourself fantastically rich, you're under pressure to drop any conflicting or competing interests such as your bowling league or golf club. Nothing else in life has importance except for the quest of financial freedom. All activities in your life must enhance your Amway business and have an affect on your financial future.

*Your upline soon becomes your most trusted friend. Your thoughts and feelings are shaped in part by the cds, meetings and functions.

Do you recognize these behaviors? Hopefully you aren't displaying these behaviors.

Analysis Of CORE?

Breakdown of CORE and why it doesn’t work. Here are the CORE steps. Some groups may have variations of CORE, but this is generally what many groups use:

1 - Show the Plan (10-15 per month)
2 - Retail the Products (10 customers @10 PV each)
3 – Tapes/cds
4 - Books
5- Functions (attend all)
6 - Accountability
7 - Counsel with Upline (Be teachable!)
8 - Buy 100% of your own products
9 – Communikate

Many upline will tell you that your success is nearly 100% guaranteed if you follow these steps for 2-5 years. Some Amway enthusiasts will tell you that 6 months of this activity will nearly assure you of a platinum level business. Certain steps are within the IBO’s control, such as reading every day and listening to cds, and attending functions. It is also easy enough to be accountable, counsel with upline, buy your own products, and use KATE (voicemail).

Here’s where an IBO’s efforts will break down. Showing the plan and retailing products. And remember, if you cannot do these steps then you are not considered “CORE” and your upline will likely tell you that it is your own fault and that you simply haven’t been CORE, therefore you did not achieve success. There is some truth in this but let me expose the system in a different angle.

Amway has a spotty reputation in the US. I don’t think anyone can dispute this fact. Therefore, for the vast majority of people, being able to show the plan 10-15 times per month is a nearly impossible task. If you are able to do this, you are a really good salesman or a good liar. In this scenario, the IBO is already successful, but not because of CORE, but simply because the IBO has the gift of being able to convince people into seeing the plan. But for many IBOs, they may contact hundreds of people and not be able to get anyone to see the plan. Even IBOs who follow upline advice on how to contact will probably not be able to show 10-15 plans per month. Thus this IBO, who is doing the work, will not be able to succeed. The system will blame the IBO, but the reality is that the IBO has too big of a disadvantage to overcome.

Secondly, with high prices (on average) and with a spotty reputation, most IBOs are unable to retail products. Amway itself has admitted that less than 4% of Amway products are sold to customers (non IBOs). Thus most IBOs are unable to sell products, therefore they are not CORE, therefore upline will blame the IBO for failure..

What if an IBO contacts 1000 people and cannot get 10 people to see the plan? Upline will claim that IBO is not CORE and therefore it is personal failure of the IBO. IMO, the only reason why upline can claim that CORE works is because in order to do the CORE steps consistently, you have to already be at a certain level of success. The vast majority of IBOs cannot and will never be able to reach that level.

That is the myth and the deception that many uplines will use to attract recruits. That each IBO can do the CORE steps. When only a fraction of 1% ever reach the level of platinum or higher, the numbers strongly support what is written here. Apologists are welcome to try and prove me wrong, but they can't.

Friday, July 22, 2011

Is Amway An IceBerg And Not A Pyramid?

I was in discussion on another forum and a comment was made about Amway being an iceberg, because you see the shiny clean ice on the top but you do not see the majority of the iceberg. Or in other words, the diamonds show you the fancy suits, jewelry, care, mansions, jets and what you don't see is the financial carnage that takes place in their downlines at times. My former upline would tell audiences that they could skip meals to buy more standing orders because you might hear the one thing that could make your business explode.

Sure, on standing orders, you won't hear too much of the unethical and "wrong" teaching, because some of this is monitored by Amway, but it's the night owls and smaller group meetings where the real teaching is disseminated. This is where you are told to practically sell your soul to achieve in Amway. This is where the teaching comes in where you should be purchasing excessive amounts of tools in order to succeed. This is where you are told to never miss a function unless it's for your own funeral. A newbie or casual observer won't see these things but if you ever commit to becoming a business builder, this is likely to become your world.

You don't see the backstage at functions and meetings. Former rubies and platinums have made commentary about the diamonds literall laughing about how gullible the downline are. You don't see the where the cash collected at the meetings and functions go. There had been some past comments about literally, suitcases of cash leaving the premises. If your upline has a mansion and a fleet of nice cars, it's likely that your tools money played a significant part in your diamond obtaining it.

It's a simple conclusion. The tools have a higher markup than Amway products and have fewer beneficiaries to split up the bonus. A $7.00 Amway product might cost $3.00 or so to make and the rest will be bonus money split up by the layers of IBOs. Whereas a $7.00 cd might take 50 cents to produce and only platinums and higher receive any compensation from this srouce of income. But rank and file IBOs rarely ever see a true and transparent picture of this business. It is shrouded in secrecy, just like the underside of an iceberg. I challenge IBOs to be real businessmen and women and ask upline the tough questions about where the money is made. Do not accpet rhetoric and anecdotal stories. In real business, schedule C business tax returns are the normal way for verification of business income. If you are going to "invest" your hard earned money into the system to the benfit of upline, you should demand this information.

Would any of you purchase a conventional business from someone without proof that it is profitable? Why would an Amway business be any different?

Thursday, July 21, 2011

Annoying Amway Reps?

By Kerry Kobashi

Last week I was at Frys looking for a netbook and along comes this engineer who came off as friendly person. We talked for a good 15 minutes and had an enjoyable talk. So he asks for my business card which I didn't have on me. He then asks for my name and email address (BIG MISTAKE). Emails me a few days later and wants to meet for Starbucks coffee because he finds me interesting.

So today I go over to Starbucks and this guy tries to warm me up. Says he has an idea he wants to run by me. He pulls out a crumpled dark marketing advertiser out of his pocket. It was then sirens went off in my head screaming "what the hell did you just get into".

So he starts his pitch by feeling me out asking some questions hinting that I had no life. The ole "What do you truly want to do in your life" kind of crap. By then, I was offended that a fellow Engineer would even stoop down to insult me with a stupid sales pitch. I had gone into this meeting thinking this guy had a technology idea and was going to be a good friend. But instead, I unfortunately found myself being dragged into Starbucks on a 100 degree day (seriously it was that hot) to hear a sales pitch.

Before he even gets 5 minutes into it, I cut him off. I started grilling him and point blankly tell him "Lets cut to the chase". I ask him what does he sell? He wouldn't answer. I asked him is this some pyramid scheme and he tries to say that everything in life that he knows that is a pyramid scheme is legal. Then I tell him, you know, this sounds like Amway. He fidgeted in his chair.

So he goes on blabbering and tries to get me back on his sales pitch by pointing at his script (the marketing brochure) - but I wasn't about to let him. He starts talking about the Internet, sales distribution and things that sound techy but in reality the basics are he is just trying to round up people to work for him.

I interrupt him saying "I know about this stuff. This is nothing new to me". By then he was getting irritated. I asked him 2 times, Is this Amway? And he would sidestep the issue. I then tell him, "you aren't answering my question". At that point I really wanted to play the guy.

He then shows me more of his sales lit and before I even let him speak my eyes caught wind of a multi-tiered chart with payouts on each level. I chuckled because it was obvious to me this was a pyramid marketing scheme. The sales literature was intentionally created to show levels in blocks not arranged in a pyramid structure. I then quickly change the subject and ask him how long has this company been in existence. He said the Internet site has been up since 1995.

So I thought to myself. Hmmm. A website that has been online for nearly 20 years and this guy is trying to get me interested in the company? I then ask him, "So where are you on this chart? What level?" And he sidesteps the issue saying it doesn't matter. At that point I noticed a change in his voice - he was getting upset. To truly piss him off I said out loud "Sure it matters! This is a business model that uses a pyramid structure!".

By then he was getting even more irritated because he knew I was onto him. Just to piss him off one more time I ask "Is this Amway? And he says "For the third time I already answered you!" and starts getting emotional waving his hands and animated even more than before.

Thats when I told him he's wasting my time and got up to leave. As I headed out of the parking lot, I noticed the look on his face. He was upset. I rolled down the window to my Mercedes and told him "Good luck with your pyramid scheme!".

I returned home and remembered I left his business card on my desk. It so happens he belongs to an organization called Team INA. If you go to that website, it clearly does not look professional. Its just a site with a password. Looking more at his business card it says he is President and it turns out he is an affiliate of Team INA.

Digging a little bit on the Internet I drag up some information and lo and behold the same exact sales literature. The same charts, the same quotes, the same spiel that I saw in Starbucks.

On the bottom, it says "Duplication Prohibited". The page is littered with quotes from famous people to make it seem as if those people are in the organization. Everyone from Ray Kroc, Sam Walton, Michael Dell, Jeff Bezos, and Robert Kiyosaki I seriously doubt these people belong to Team INA and that it was there to give the illusion that they were.

And then something that was made me laugh out loud. Towards the bottom of this literature is a chart showing Team INA being associated with Quixtar is Amway Global! So this is the reason why this guy didn't want to let me know his Team INA was associated with Amway. He was hiding that he was a middleman.

Wednesday, July 20, 2011

Why Sell Amway?

Why sell Amway? It's a valid question. It's no secret that Amway products, in general are overpriced. It's overpriced because the IBO bonuses are a part of the cost. In a recent conversation with IBOFB, he admits that a $2.45 product might cost $7.00 with $4.55 being IBO bonus. Thus a retailer like Walmart can add their 10% - 20% margin and sell the same product to you for less than $3.00. If you are so talented in making sales with these disadvantages, I would suggest you go and sell something else, you could make a lot more money than in Amway.

Such a talented sales person could sell ice to Eskimos, or you could sell cars or real estate and make a fortune. Why limit your talents to selling products that people can get cheaper elsewhere? Additionally, Amway had a reputation issue because of past IBOs who may have tricked people into attending meetings or did other unethical things in the name of getting sales or getting recruits. If you have the drive and talent to reach the diamond level, I would guess that you can do just about anything and be successful.

Conversely, if you don't have the drive and talent to succeed in Amway, it's likely that you still have the skills to succeed elsewhere. It would appear to me that many IBOs are young and eager to make an impression in the world, but often get caught up in what appears to be a shortcut to wealth and riches. These young and ambitious people suddenly get lazy and think they will work part time for a few years and create enough wealth to retire at the age of 33. It just doesn't happen. It doesn't happen in Amway and basically doesn't happen anywhere else.

Whether you sell Amway or not, matters not in the big picture of things. But at least if you do something else, you don't get caught up in the "tool scam". Many Amway (AMO) leaders want to convince you that Amway is the only way to succeed and then turn around and tell you that the only way to succeed is to subscribe to their teaching systems consisting of books, voicemail, cds, and seminars. These systems have no evidence of being effective and they are the reason why many hard working IBOs end up with a net loss of income at the end of the day.

If you can sell $3.00 products for $7.00, you can make a ton of money without Amway. Try it and see.

Tuesday, July 19, 2011

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. Sadly, most IBOs will never 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. Sopmeone mentioned on another forum that people who want to work 2-5 years and do nothing thereafter are probably lazy and therefore, are not capable of achieving in anything, much less in Amway.

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 sell their business and live large happily ever after right? Here's some food for thought. Why are there instance 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? I mean do IBOs ever stop and think about this? It is an honest and serious question that should get some consideration.

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?

So IBOs, I ask you. What is your business worth? You don't own your downline. They are independent owners like yourself. You should not have inventory, employees or some warehouse storage complex. Aside from the ability to add downline volume to your own, your Amway business likely has very little value in the real world. So IBOs and prospects, think about it for a minute. What is the value of your Amway business?

Monday, July 18, 2011

The Facts About Amway?

Amway supporters keep claiming that Amway has changed and that things are different today. But I keep seeing posts like the one I will attach and you gotta wonder. This was posted on July 14, 2011:

Tim on July 14th, 2011
I think that some facts that are in support of Amway should be recognised:

* They are one of the largest debt free companies in the world.

* They have made more millionaires than almost any other company.

* The books provide are all written by established business owners and entrepreneurs, most of who have made their money in traditional businesses, why wouldn’t read a book about success written by a successful person? It’s like reading a book about law, written by a lawyer?

* The company has been audited and analysed thousands of times because good for nothing people who just want to sit around and complain rather than get off their fat arses and do something with their lives try and knock a perfectly legitimate business model because they don’t have what it takes to succeed, and the company is still one of the largest in the world.

* Amway has been around for more than 50 years? How long do scams last, honestly?

So take these facts into account before you try and criticize a way of making money that has helped millions of people achieve their goals,.


Joe's commentary: It sure looks like the same old same old that upline leaders have been teaching for years now. This sounds like something you might have heard 15 years ago. Those who claim things are different must just see the world through rose colored glasses or something.

Something For Nothing?

In my opinion, Amway is a pyramid. They are not illegal, but still a pyramid. The reason why they remain legal, apparently is because they do not pay anyone for recruiting downline. But most everyone has been, or knows someone who was recruited by a zealous Amway IBO. The emphasis of most active IBOs is on recruiting and much of the teaching by upline is on techniques to recruit and/or how to talk to people without tipping their hat to reveal the Amway name. Most IBOs are not very good at this and they stick out like sore thumbs in many cases. It's also comical when uplines teachh crazy antics, like how some IBOs use to deny that Amway and Quixtar were even remotely connected.

One of the reasons IBOs use to justify their involvement in the pyramid is that they can earn more than their sponsor. While that is true, it is only because everyone below the emerald or diamond level is basically expendable, or a slave in the pyramid. There are many many IBOs who achieve fairly high levels who quit, or had upline wreck their businesses. Thus even platinums are expendable to upline. In fact an upline might make more money by removing the platinum. For new IBOs or recruits, do you really believe that you are going to ever surpass your current upline diamond or higher? If you believe that, you are sadly mistaken.

And for those who dream of achieving diamond and walking the beaches of the world. How do you think you can ever achieve that? You don't get something for nothing unless someone gets nothing for something. In order for you to receive income for little or no efforts, your downline IBOs must keep purchasing products and replacing IBOs who quit. If your downlines cannot keep up with the attrition rate, your business will collapse in a hurry. Come to think of it, if a diamond can walk away and collect a large income forever, why hasn't anyone done it? I mean we still see crown ambassadors still busy working functions and I don't know of any who walked away to spend their lives jet setting on the beaches of the world.

The sad reality is that you see new faces at meetings and functions, just as often as you see familiar faces disappear. With that kind of attrition rate, you may have to work even harder at the higher levels just to keep your business status quo. In Egypt, the slaves built the pyramids. Do you have enough slaves? What many Egypologists find amazing is how the Egyptians were able to motivate the slaves to keep on going, doing backbreaking work all of their lives. The same can be said of a diamond level business (or higher)

Friday, July 15, 2011

University Of Amway?

One of the really dumb things that some Amway defenders do is to compare the teaching of WWDB or Network 21 (for example) to a real and legitimate college education. Some people even go as far as to encourage young people to skip or drop out of college so they can focus on Amway. That makes me really upset to know that these upline leaders so so greedy for a dollar that they would encourage a motivated young student to basically risk their future to build a business where you have a fraction of 1% of making any real money and possibly less than that percentage of keeping and maintaining it.

There is plenty of documentation available to show that college grads earn more than non college grads. I believe the difference on average was about $1000 a month more in favor of college graduates. While not all college students graduate, the rate is about 50%. College grads also earn about an average of $50,000 or so. According to Amway, the average IBO earns $115 a month or less than $1500 a year. The Amway earnings are gross, thus IBOs on the system (functions, standing orders) are probably ending up with a net loss. Try feeding your family with zero dollars.

While there may be some value in some of the material provided from upline to downline, it doesn't seem to translate into net pofits. Thus an intangible benefits an IBO might receive from his/her Amway education can likely be found elsewhere, without having to run a losing business. Imagine a scenario where two people apply for a job. One candidate has on their resume, a degree from the University of Washington. The other one says they have four years of education from Worldwide Dream Builders. Which candidate is more likely to get a serious look? Do IBOs believe that the stuff they learn at functions is substantial enough to compete with a real and accreditated college? If so, then they are likely to get laughed out of the room if the need to compete for a job.

Or how about using the 6-4-2 plan to get a business loan from a bank? What do IBOs learn that can be applied to something outside of the rose colored world of Amway? I find that uplines who get young people to funnel their education dollars towards WWDB or some other system instead of finishing college is a crime. I hope that information seekers find this information before they get persuaded into believing some of the lies told by some upline leaders. I find it ironic though, that many of these same leaders send their kids to college. Hypocrites?

Thursday, July 14, 2011

Amway Island

Imagine an island with 100 adult residents. One guy gets sponsored into Amway from a cousin in another area off the island. Well, the island residents are a pretty tigh knit group so the one IBO immediately sponsors his six best friends and eventually, all 100 island residents. They are all dead serious about the Amway business so they all work hard, but because everyone is an IBO, they can only self consume 100 PV each. Thus the 100 IBOs move 10,000 PV each month. The group as a whole generates about 30,000 BV and the group receives $7500 in bonus money from Amway. Of course, the first IBO sponsored is now a platinum receiving most of that money with the rest of the group receiving smaller bonuses.

Being serious IBOs, they all get standing order, books of the month, and travel by air to functions. They pay on average about $250 a month for their Amway training/tools. Thus the group pays about $25,000 a month for the training that will one day allow them to retire and quit their jobs. The island community is losing a net of $17,500 from their local economy each month. However, there is one resident IBO who is making a nice income urging everyone one. Let's evaluate the group.

The platinum IBO is making a nice income and will receive a $20,000 bonus at the end of the year. His 6 downline friends make just about enough to break even (approximately 1000 PV) or lose a little. The rest of the residents have lost over $200,000 ($17,500 a month). The guy who owned the local grocery store went out of business and all the entertainment related business went down because the residents had no disposable income to spend money on anything except for Amway related activities. Eventually they all quit, including the platinum because once his group quit, he too, began to lose money.

Now Amway defenders will cry that this could never happen, but it shows that even if you could get everyone in the US to join, this scenario is what would happen. I believe the Amway name and reputation is for the most part, saturated in the US. Nearly everyone will have heard the Amway name and/or will know someone who had a brush with Amway. Because of the tool peddlers such as WWDB, BWW, or Network 21, there are likely millions of people in the US who ended up with a bad experience, perhaps tricked into attending a meeting, or lied to about something related to Amway.

While this story is fictional, it is what would happen if there was a city where everyone joined the business. It is what happens today. Few people benefit at the expense of their downline. And as usual, it is the tools that drive people to lose money - on Amway island, or anywhere else.

Wednesday, July 13, 2011

System Profits?

When I was an IBO in WWDB, I was told outright lies from speakers on stage about the system and the system profits. I was first told that WWDB was a non profit organization, which was false. I also mentioned to my sponsor that non profit organizations still generate income in some cases, and can still pay their CEOs a whopping salary. This falsehood/lie was quickly withdrawn and the story later became WWDB was a for profit company, but nobody made profits. They claimed that any surplus was reinvested into WWDB to make future events cheaper. We also know today that this is a lie.
Researching the costs associated with functions and meetings leads me to the conclusion that millions are made each year from this venue alone. While some Amwayers will claim that some meetings/functions lose money, I can give you a gold star guarantee that there would be no functions if the diamonds consistently lost money by running them.

Another lie told by WWDB leaders was that nobody made profits from tools. This was eventually exposed in the information/internet age. IBOs these days simply "forgot" about these issues and nobody was ever made to explain or account for the lies and everything was basically swept under the rug. To this day, despite accreditation, I do not believe there is transparency about the tools. If there were, it probably would have been exposed by an IBO or a former IBO. It was also discovered that some diamonds and bigger pins made most of their money from selling tools. And it makes sense because these folks are traveling the country without the ability to work their business, at least locally and thus it would make perfect sense that their groups may become broken.

In my opinion, the telltale sign however, was the recent flat growth or even decline of Amway sales in North America. Less sales likely means less IBOs and less IBOs means less IBOs buying tools and attending functions. It also means less energy drinks consumed. The possible resulting fallout? A prominent WWDB diamond was in bankruptcy proceedings. While Amway defenders cite that is was flipping houses that caused the problem, but it is quite possible that in the past, the tools income may have been enough to cover failed ventures. We also see diamonds selling off homes/mansions. Sure to a degree it may simply be downsizing or liquidating of assets, but the real estate market is down right now so selling is a tough venture right now and makes it appear that some of these diamonds are eager to unload homes that can no longer comfortably afford.

While the lid has not yet been completely blown off the pot, it appears that the tool sales are down and that it certainly would appear that tool sales are a vital and yet declining part of a diamond's income. I guess the system works well for those who sell and profit from the system, but sales are down and it appears that diamonds are being forced to tighten their belts. I'm shedding crocodile tears for them as we speak. :-)

Tuesday, July 12, 2011

I Want To Believe In Amway?

Many IBOs cannot be convinced that Amway is not the best opportunity in the world, because they want to believe the lies/deception that is often used when they are recruited. They want to believe that 2-5 years of part time effort will result in lifelong residual income and that they will be traveling to the beaches of the world while cash keeps rolling in. They want to believe that they can ditch their (often) less than adequate jobs. They want to believe that a part time soap business will make all of this possible. The people (upline) who claim to have everyone's best interest at heart will sell them a proven system of success and all they need to do is follow the steps to success.

Many people sign up for Amway and do abosultely nothing. They may not ever order or try products. But these folks do not complain about Amway and the expenses they may incur are minimal. Most do not even bother to seek a refund on their starter kit. It makes me wonder why these folks even bother to sign up. Although, there are stories of people being pestered into registering. Anyway, the part where this business gets dicey is when people register and do put in an earnest effort, only to end up with financial losses. Sometimes the losses are in the tens of thousands of dollars. You get squeezed for a couple of hundreds of dollars a month and after a few years of effort, you can find yourself drowning in debt, even after doing everything your upline advised. The fact that uplines don't disclose their busienss financials speaks volumes. Former uplines who have come forward have shown that most of their income was from hawking standing orders and seminars, and not from Amway sales as they would imply.

I bought into the hype at one time. I believed the lies. I believed my upline that no profit was made from tools. At the time I was an IBO, I too, wanted to believe that I could work part time for 2-5 years and ditch my job. That I would retire at the age of 35 and live in luxury forever. I wanted to believe that. But having reached the 4000 PV level, the precipice of platinum, I also realized that I had no profit. I sat down and did the math and realized that they would be little profit at platinum. I cam to the realization that a second job would have suited me better. I finally quit when I realized this, along with my upline wanting total control of my life. But I hung in as long as I did because I wanted to believe that Amway would be the vehicle that delivered my financial freedom.

Having dropped out of Amway, my life quickly got back to normal. Friends that I had avoided returned to my life. My disposable income increased and my cashflow was positive once again, now that I was no longer obligated to purchase tools. I also noticed years later, that the same old leaders on stage were still working as hard as ever, and none of them had taken the option to retire and walk the beaches of the world. Perhaps these leaders also want to - or have to believe in Amway because they have already invested too much time and effort to call it quits and start something else. I wanted to believe, but the fact is that people were not succeeding. People were not getting free. What I saw was home foreclosures, bankruptcies and financial struggles made worse for people because of Amway and the tool systems. And apparently, these same issues apply to the diamonds. Do your research and you will likely find the same conclusion that I did. That Amway is a nearly impossible dream.

Monday, July 11, 2011

Only Winners Join Amway?

One of the things that my upline taught, and I believe is still taught today in various groups is that winners join Amway and losers do not. Or that you were a winner because you were doing something to better your financial future and those who didn't were losers. or broke minded. Of course the upline who said this had no knowledge about those who were not in Amway. Some of them may already have been financially sound or may have been doing something to better their financial future. I'm not sure why these uplines, who promote "positive", had to resort to calling people losers simply because they did not agree that Amway was the greatest thing since sliced bread.

In many games or sporting events, there will be someone or a team that wins the game and someone or a team that loses the game. Losing a game doesn't make you a loser and certainly, a team that wins the game would not say the losing team were losers. Can you imagine a pro football team's coach taking the podium after a game and saying his team won because the other team was a bunch or broke minded gutless losers? That would never happen, yet we see that frequently in the Amway/IBO world. The owner of Amway, Rich DeVos had once said in a recorded message that just because people do not agree with you (paraphrased) about Amway, does not make them losers and that IBOs should not call people losers.

In all of this, people's jobs are also criticized. That a job stands for "just over broke" or "jackass of the boss" and other blurbs. Many IBO's goals and dreams consist of ditching their job so they can sleep all day and live a life of luxury. Ironically, it is most IBO's jobs that continue to produce income so they can pay their bills and feed their family. It is also an IBO's job that funds their Amway and AMO expenses such as product purchases and functions and voicemail, etc. Without having a job, most people could not even join Amway or pay for any tools. Sadly, most IBOs won't make any money in Amway either, and will have to continue to work at their jobs. I do not believe that someone earning an honest living working a job is a loser. Ironically, the folks calling people losers are often not even netting a profit from their Amway business!

Yes, in this business or the sports world, there will be winners and there will be losers. The question is whether you are the one who is allowed to be the judge of who is and who isn't. I would also suggest that IBOs are completely shutting down potential future business by their behavior. What if I went to a store to purchase something but the item was not available on that particular day, so I don't purchase anything and leave. As I leave, the store owner says I am a loser for not buying something there. Will I go back? Very unlikely. If an IBO truly sees themselves as a store owner, all prospects should be seen as potential business, whether future or present. If your upline tells you that people not interested are losers, you should hand him a mirror.

If only winners joins Amway, why aren't the IBOs "Winning"? If winning is defined as a net profit, then the vast majority of IBOs could be coined as "losers".

Friday, July 8, 2011

You Can Make More Than Your Sponsor?

One of the silly defenses that Amway supporters use to defend their business is that it must be a pyramid or it must be legitimate because you have the opportunity to earn more than your sponsor. While many downlines in fact do earn more than their sponsors, it's likely because about half of all IBOs don't stay for even a year and factoring the business expenses for those who are on tools, the reality of suffering business losses also causes people to exit the business. It's not that hard to eran more than people who quit. But even at that, someone who quits is often better off than IBOs who continue.

An IBO at the 100 PV level will earn about $10 in bonus income from Amway. If they are attending functions, buying standing orders and voicemail, they will operate at a loss. Thus, unless their business grows each month (highly unlikely, even if they do as upline advises) then they will suffer losses each month and those who quit will be better off. It is why I have stated that doing nothing or staying home and watching television can honestly be better options than joining Amway and the systems such as WWDB, N21 or BWW. It is why reasonable people can conclude that working for minimum wage, even a few hours a week makes you better off than joining Amway and the systems.

The defense that someone can outearn their upline is silly. The true benkmark of this statement would be for a new guy to start a business, and in 2-5 years, outearn someone like Bill Britt. It will never happen because upline has direct influence over the fortunes of their downline, even at the diamond level. It is why you have seen diamonds quit, or split from their upline to start their own training systems. They cannot affects change from downline, without upline consent, thus the breaking away from their "mentors" or leaders. At times there have even been lawsuits over the tools income. Do people really sue their mentors? Don't diamonds teach you that suing people is wrong? That you don't get something for nothing?

You can surely outearn your sponsor. All it takes is for your sponsor to quit. However, your sponsor quitting might mean you don't outearn your sponsor. See my example above. Taking losses is not outearning someone. Keep in mind that everyone in Amway is equal. You are all unpaid commissioned Amway salespeople, bound to Amway's terms and agreements. You don't own your downline. You don't really own much as an independent business owner. You can ourearn your sponsor, but that means squidly diddly when your sponsor makes nothing or takes a loss. Come back and chirp when you outearn your upline diamond. Do I hear crickets shirping now? :-)

Thursday, July 7, 2011

My Upline Loves Me?

Some big companies and some private entrepreneurs have been accused of being "sweat shop owners". This is when they exploit their workers. Often in foreign countries, big companies may hire workers for a very small wage and poor working conditions. For example, a foreign operation may have a warehouse full of women and children working all day under poor conditions for a few bucks a day. The owners of these operations can rake in the dough as they save a ton of money in labor costs.

Some uplines operate just like sweat shop owners, but in many cases, they are worse then sweat shop owners because even exploited workers earn something, even if it's not a lot. At the end of the month, they have a net gain, even if it might be small. In the case of many Amway IBOs, they spend money on Amway products, and uplines take the lion's share of the rebate/bonus that is generated by those sales, and then in turn, these same uplines try to get many of their downline to also become customers of their system of cds, books, voicemail and seminars or functions. In many, probably most cases, uplines will make just as much if not more income from the system, than from Amway. And for the downlines who may earn some bonus, upline will advise them to reinvest that bonus and more back into buying more system materials.

These same upline will also teach firece loyalty to the system. Never miss a function. Make sacrifices to buy more books or cds, and make sure you are always looking for people to sponsor to add to the system. Joining the system almost guarantees that you will suffer a net loss in the Amway business. It is why I continue to write about what IBOs and prospects should look for when they are being recruited or indoctrinated into these systems. It is why there are so many defenders of Amway, most of whom are losing money, but think they are still successful because it is what upline teaches. I have heard many times about the "proven system", but all the system has proven is that it can nearly guarantee that downline IBOs will lose monet, almost exclusively due to the system expenses.

I know most IBOs won't believe this, but I will say it anyway. IBOs on the system are probably worse off than sweat shop employees because they are paying their upline to do their work. At least sweat shop employees get a salary. Upline will teach you that it is an honor to drive them around, or to do tasks for them. Many platinums works as free doormen and ushers at meetings and functions. Upline benefits by maximizing profits from functions. It is pure downline exploitation and I hope eventually that more and more IBOs will recognize this. It's all cleverly planned to make it seem as if a downline IBO benefits by "associating" with upline. But you are not associating, you are simply doing unpaid labor. Stop and think for a minute, for all your time and expense, what tangible gain did your business realize?

Many uplines exploit their downline and at the same time, teach their downline that this is beneficial to them. Don't believe it!

Wednesday, July 6, 2011

Join Amway And Work For Free!

What happens to many unsuspecting people is they join Amway thinking they will attain wealth and riches by "owning their own business", but in reality, they have basically become unpaid commissioned employees of Amway. You don't get health insurance, vacation, or any fringe benefits. You get to work unlimited hours and you get commission by moving products. You can leverage your commissions by increasing this unpaid sales force by sponsoring others into your downline.

Some people do succeed employing this method, but you will need to be an elite recruiter in order to get people to sell Amway products for no salary. You are also handicapped right from the start because past IBO behavior has soiled Amway's reputation in the US and Canada. This point is supported by the fact that Amway's sales appear to be growing the most in foreign countries and not in North America. Seems that everyone I know has been at one time, involved with Amway (and had a bad experience) or knows of someone who had a bad experience (i.e. tricked into attending a meeting, or deceived in some way about the opportunity or the products).
Even if you are a great recruiter, your likelihood of attaining Amway success (emerald or higher) is a tiny fraction of 1%. And for those who attain Amway success, they have great difficulty in sustanining that level. It is why there are hoards of "former" emeralds, diamonds and platinums.

You may hear about how Amway was found "legal" by the FTC or that Amway is #1 in online health and beauty sales. All of this may be true, but it doesn't change the fact that an IBO is basically an unpaid commissioned Amway salesperson. You absorb all the business expenses, pay for your own training, and you get to share your commission with layers of upine (more middlemen), some of whom do not help your business, and some who don't even know you exist. It's a great deal for Amway but not for IBOs. You move their products and aborb the expenses and in doing so and they pay out a commission. As for any awards or credits Amway receives, it's great for Amway, but you are an IBO - an independent business owner. You are not Amway.

Bottom line - if you can get people to work for free, you can find numerous opportunities to get rich that are much better and more lucrative than Amway. :-)

Tuesday, July 5, 2011

WWDB Tapespeak?

A very recent comment left on my blog. Joecool's commentary below:

Anonymous wrote: "I am an IBO with Amway and WWDB. Until you are an IBO yourself then I would stop judging those of us working with this amazing company. Our company is about yes us succeeding, but also helping others succeed as well. I am not going to lie of course the money plays a big role, however the teachings and information that is given to us is helping all of us to become better buisness people but also helping us become better people all around. Many of the people and couples who are involved with WWDB and Amway have had their lives completely changed for the better by building their buisness and being around the wonderful people involved. I was just like you before I became and IBO and when I first heard the plan thought there was a very slim chance that I would make any real money from this. I learned through my amazing upline team that through hard work and dedication you can become as successful as you want! The CORE is a great set of guidelines that keeps you focused on the goals and helps all of us build the best and most successful organization we can. Please stop judging because clearly you have a glass half empty mentality, and with the attitude you have yes you wouldn't make a dime."


Joe's commentary: I find it humorous how people claim that WWDB has changed and that they are not anything like the experience I had as an IBO back in the late 1990s. Yet I continue to see and hear current IBOs claiming to be from WWDB who say the same stuff I was taught. That diamonds pay cash for everything, even homes and other big ticket items. That WWDB IBOs have a 2% divorce rate. That WWDB makes you a better business person and a better person overall. I wonder how they determine that WWDB makes you a better business person when it is likely that over 99% of their business building IBOs suffer losses due to system expenses.

Hard work is not related to financial success in WWDB and Amway, despite what the "amazing upline" says. There is NO documented evidence that WWDB does anything except drain IBO's bank accounts. If you truly examine CORE, you will see that it is designed to keep money flowing upline via tool purchases. Any help you receive from your upline diamonds is always paid for by the downline in some manner or another.

While it's good to be positive, that also doesn't equate to long term sustainable success. I can be upbeat and positive and still be a miserable failure in Amway, which is the experience most "serious" IBOs live through. You cannot "choose" to succeed in Amway anymore than you can choose to win the lottery.

Friday, July 1, 2011

IBOs Have Employee Mentality?

One of the really funny things that is taught to IBOs is how they need to ditch the employee mentality and convert to a business owner mentality. Those who truly have a business mentality are unlikely to join Amway the systems because the return on investment wouldn't be worth it. When you also consider that only a small fraction of 1% make any significant money in Amway, it's hard to imagine that any reasonable and logical person would want to divert time, money and effort into a venture where your likelihood of succeeding and making money is so small.

When you really stop and think about it, many IBOs have an employee mentality but they think they are thinking like business owners because upline tells them so. The relationship between upline and downline is often just like that of a supervisor and employee. The upline tells you what to do and the downline, who is usually less experienced, simply listens and follows their instructions. If an IBO were to do things on their own, it would be considered as de-edifying to upline who has already blazed the trail for you. They have what many refer to as the "system" consisting of cds, books, voicemail and functions. Many refer to the system as "CORE" steps.

Basically, the CCRE steps is the "job" of the IBO. They need to immerse themselves in the system, and then they need to show the plan to others and get others to follow them. The really sad thing is that many IBOs do exactly as they are told or advised, and never see a cent of profit, and more often than not, end up losing money despite their efforts and expenses. It's like going to work, and giving your boss $300 so you can get a $10 paycheck at the end of the month. While Amway loyalists will disagree, this scenario is the most common and most likely. All you have to do is take a look at the 6-4-2 or whatever plan they show you. The lowest level IBOs will spend about $300 to purchase their 100 PV and then they get back about $10 at the end of the month. Most IBOs never sponsor downline so their volume never grows unless they consume more themselves. Most IBOs, even dedicated ones, can never sell enough products to cover their expenses. Faced with these obvious facts, anyone can see why you are almost guaranteed failure in Amway with the system.

If IBOs truly had a business mentality, they would be focused on selling products and not desperately trying to sponsor downline. They would also focus on minimizing expenses. But most business building IBOs are selling the opportunity and a dream, which is why some critics claim that the Amway opportunity, lacking a focus on retail sales, is criss crossing into legal parameters of the law. Those who focus on "buy from yourself" without outsaide sales are the worst offenders in my opinion. If you have an employee mentality, then it's likely you will listen to what your upline says and do your "CORE" duties. What kind of menatlity do you have?