Tuesday, May 31, 2011

This Oughta Be Very Interesting!

A friend of mine has just registered to become an IBO in Amway. He is going to be a member of WWDB. I politely declined his invitation to see the plan but he said he is willing to keep me posted on his progress because he is hoping that by demonstrating success, he can get me interested in Amway. He doesn't know that I am "Joecool".

Now I'm not going to try to convince him to quit or discourage him from building a business. I am just going to observe his progress and see where this goes. I guess I will get a close look at whether or not things have actually changed in WWDB or not. I suspect that everything is exactly the same as the old days, except for the online ordering aspect of the business. Standing orders and functions apparently remain the same, along with most of the teachings such as "never quit" and never miss a function".

I'm looking forward to some very interesting blog posts in the near future. Stay tuned..........

**Update: I already received a message about a 3 acre mansion his upline diamond bought in Hawaii and "paid for in cash".

Amway After A Few Months?

I send this message to inform IBOs tha they should be aware of their circumstances in business. What I mean is when you are a new IBO, it is common for you to buy/sell your 100 PV, and perhaps listen to some cds. If you basically did what your sponsor or upline advised, you made your 100 PV bonus level and you will receive a bonus from Amway for about $10. If you did as advised by your upline/sponsor, then you likely made a namelist and started contacting some potential business partners aka prospects. You're probably a bit excited because things are going as you expected. You did your part and a bonus is on it's way to your doorstep. Heck, you may have even sponsored a friend or relative because of your newly found excitement and enthusiasm.

But what happens after a few months? If you are still doing 100 PV and have no downline, then what are the chances that you will ever achieve anything? Your excitement is wearing off and now the Amway opportunity is becoming "work". You are also starting to notice that it is starting to get expensive to continue to purchase products, many of which you never purchased before. For example, were you buying cases of energy drinks and "high end" vitamins before Amway? Did you buy $50 cases of bottled water before Amway? Supposedly their laundry soap and other cleaners are highly concentrated, therefore your consumables are the nutrition/vitamin products.

Even if you managed to find some downline, are they duplicating what you do? Are they also moving volume and sponsoring downline? If not, what are your chances of fulfilling the 6-4-2 plan or some similar version of it. When I saw the plan, I thought it was reasonable and I was on my way to platinum. What I discovered though, is that as you progress, upline has greater expectations of you and that includes more tool purchases. (I was in WWDB). In the end, my recommended tool purchases ate up any profits I had and at the 4000 level, I was just about breaking even, which means I was at a loss when factoring in my time spent and other miscellaneous expenses such as gas money.

Where are you at? If you're been in for more than a year, are you on schedule to become platinum or are you at 200 PV with one downline? Maybe you have a small group with 600 PV? You still aren't close to a net profit. For the vast majority of people, success is not right around the corner. What's around the corner for most is more time lost, more money expended, and no progress. If your group is now growing each and every month, you are sliding backwards. If you don't constantly have new IBOs coming into the group, you are probably stagnant. With about half of IBOs dropping out each year, keeping a group together is a tremendous task.

IBOs, where are you at after a few months? Where are you at after a year? If you haven't gone platinum, it is nearly a certainty that it will never happen, despite what your upline might say. The facts are there, it's a matter of whether you want to believe it or not.

Friday, May 27, 2011

The "Proven" System?

Many uplines and IBOs will talk about their system. More often than not, the various systems such as WWDB or Network 21 will tout themselves as the best, fastest growing, proven, and most profitable. I know that was promoted when I was an IBO and I believe it is still promoted this way. There are many comments on the internet from IBOs and recently former IBOs that indicate that this is true. But let's take a look at these claims.

How does one determine the best? You really can't. The best is an opinion unless there are established criteria on what constitutes the best. Of course, every upline will think their group is the best, but what can factually be derived from that claim? If you are an IBO or prospect of Amway, try asking that question. Based on what do you make the claim of being the "best" group or system?

Fastest growing can be proven or disproved. But for the most part, we know that Amway isn't growing by leaps and bounds in North America. During the Quixtar tenure, it appeared that Amway sales in NA either stagnated or even shrank. Amway supporters cite overall Amway sales going up, but it's reasonable to conclude that the increase in sales is primarily in foreign countries. For some odd reason, Amway no longer reports North American sales, but simply lumps everyhing into a global sales figure.

As for any system to be making claims of proven, all these systems have basically done is proven that they are dismal failures. Based on Amway's own figures, we can deduce that less than half of one percent of IBOs ever reach the platinum level. The platinum level is approximately where you might see a small profit if that platinum is CORE. There is some documentation indicating that platinums might lose money at that level. While the study is dated, the expenses associated with being a platinum have gone up significantly since that study (Wisconsin Attorney General) so it can be very possible that platinums continue to see a net loss these days. It's also very visible that there are fewer diamonds in north America today than a dozen years ago. Diamonds have quit and some were terminated. It appears that most new diamonds come from foreign countries where Amway has not ye suffered reputation issues.

Makng claims of fastest growing is also one that can be proven. However, try asking your sponsor or upline for evidence of this claim. Also, is the growth occuring in your area? Are you from the US or Canada? Citing growth in Korea for example, is unlikely to mean anything for the vast majority of IBOs. And even if there is some growth, how does that translate as leverage or an advantage for you? Aks these questions and see what answer you receive, if any.

The system is proven for sure. But it's proven to be a failure. The numbers supplied by Amway clearly back up this claim.

Wednesday, May 25, 2011

Success Speaks Louder Than Words!

I heard a great comment from a commentator on a related Amway blog. Basically, he said if IBOs were so successful, people would just naturally be attracted. And that's true! Where I live, the local electric company is an attractive place to work with a good salary and benefits package. When there's a handful of openings, you might get as many as 6,000 people applying for these positions. When the federal government hires for the post office, you get thousands of applicants for a handful of jobs as well.

But IBOs have to justify their positions. The common ones are how Amway products are concentrated, or they have magical ingredients in their vitamins. It is my position that if these products were so good and the opportunity actually produced successful IBOs, there would be no need to be deceptive about the products or opportunity. The products could easily me marketed. In fact, cutsomers would be seeking IBOs to find the products and there would be lines of people waiting to see the opportunity.

Instead, IBOs themselves are the primary consumers of Amway products. Many IBOs are deceptive when inviting people to see the Amway plan. Some prospects are outright lied to when recruited for the Amway opprtunity. The curiosity approach is still used by many, because mentioning "Amway" is more likely to get you funny looks than interest. If what I am writing is not true, why do IBOs need to deceive people? Why don't some IBOs open their books and display the financial success they claim to have? Why so secretive? Why aren't there hoards of new diamonds and emeralds each month? Instead, you mainly hear of the Amway growth in foreign countries. Most likely because the Amway name and reputation has not yet been soiled as it has in the US and Canada.

In the US, I see primarily the same old diamonds who were in control of the functions and systems from more than 12 years ago. In fact, factoring in diamonds who quit or dropped out, I believe there are fewer diamonds now than when I was an IBO. Some of these diamonds also had some apparent financial difficulties. The opportunity is far from how it's promoted. Success spakes louder than words, and where North American Amway success is concerned, the silence is deafening!

Tuesday, May 24, 2011

Amway And The World Series Of Poker?

Every year at about this time of year, Binion's Horseshoe Casino in Las Vegas organizes the "World Series of Poker". Thousands of people fly to Las Vegas, pony up $10,000 and play in the main event. Most people expect to lose their money but they think of it as an experience. Some people hope to win, but ultimately, there can be only one champion. There will be a small group of people who actually take home more than their $10,000 entry fee, but the vast majority will lose money. Most people are aware of the tremendous odds against them winning at the final table, but they press on anyway.

The Amway opportunity, as promoted by the Amway Motivational Organizations (AMOs), operate in a similar manner. The main difference is that most prospective IBOs go into the venture expecting to win, and there is no assurance of there being a champion (new diamond). In the Amway opportunity, there is the real possibility of all the IBOs losing money. Sadly, as I said earlier, most participants go in expecting to win. Most participants do not realize the tremendous and overwhelming odds against them making a net profit, let alone achieving the legendary "diamond" status.

In both scenarios, the vast majority of participants lose money in order for a few to win. The difference is that poker players generally understand that they are likely to lose, whereas Amway participants are often mislead into thinking they are likely to succeed. Most Amway participants figure this out and quit. The difference here is that poker players generally do not quit playing poker. Most Amway participants want nothing to do with Amway or its products when they quit.

This can be confirmed by the fact that former IBOs generally do not continue to purchase Amway goods once they are out of the business. If they did, then Amway sales would continually increase even if their IBO force were to shrink. But that isn't the case. I recently read some Amway supporters bragging about an increase in IBO retention, but even if true, it doesn't appear to be translating into better sales or an increase in the number of new diamonds emerging from the systems.

If I'm not mistaken, I believe there were far more World Series of Poker Champions in the last ten years than new diamonds and emeralds in North America. (The World Series also has smaller events, thus there are many many more champions than new diamonds and emeralds)

Can An IBO "Choose" To Succeed?

Many IBOs seem to think that success in business or in other aspects of life is simply a choice. They mistakenly believe that you can actually choose to succeed or not. They apparently believe that persistence and choosing to win will eventually land them a premiere spot at diamond club. If that were truly the case, wouldn't we see hoards of new diamonds each and every year? Instead, we see one here and one there, and while there are a few new diamonds in the US every so often, we see others quitting, dropping out or leaving Amway for greener pastures. Make you wonder if the prize is worth pursuing in the first place.

But IBOs and information seekers should understand quite clearly. You cannot simply "choose" to win or succeed. In a football game, both sides can believe and choose to win, but still, only one can be the victor. In Amway, it is common for a platinum to have 100 to 200 downline. Thus to be a platinum, you need to be in the top one half of one percent of IBOs. To be a diamond, you will need to be in the top 600 to 1200 IBOs, not counting the masses of IBOs who register and do nothing or register and do a little and quit. Only one in about ten to twenty thousand will ever reach diamond in North America.

Sure, IBOs may cite some touching story like "Rudy". Basically a nobody who dreamed of playing for Notre Dame. He busted his butt and did whatever it took to make the team and the movie ends with him getting in a game, making a sack and being carried off the field by his teammates in a blaze of glory. A great and inspiring movie. But what you don't see is the possible tens of thousands of young men who had the same dream, may have worked every bit as hard but circumstances and situations prevented them from achieving the same limited success. Uplines want you to think these kinds of stories can happen to everyone, but the fact is that there is only a little room at the top. If stories like Rudy were common, then there would have been nothing special about it. An elite athlete like a Michael Jordan or a Tiger Woods only comes along once or twice in a lifetime. It is like achieving diamond. It happens but it is a rare occasion, especially in North America where Amway appears to be shrinking instead of growing.

In the Amway business, many prospects and IBOs are motivated and driven to succeed. Many of them are fine young men and women who want more in life. But the vast majority of those who try will not achieve their dreams via the Amway opportunity no matter how hard they work and no matter how badly they want it. The reason is because there are too many variables that are not in direct control of the IBO. The Amway reputation in North America is spotty at best so sponsoring downline is nearly impossible. And when you can sponsor, chances are your downline will do little or nothing. Many new IBOs will work hard, but quit because they are faced with the challenges I just mentioned. And even if you can overcome the overwhelming odds, you still need to keeping working hard constantly to maintain the business, all for an unstable average diamond income of $146,995, which doesn't consider taxes, medical insurance and other perks you may receive at a job. All told, I believe the diamond income is not all it's cracked up to be when you consider the charade you must play to display the diamond lifestyle. Do the math and you will be able to see for yourself.

In the end, it seems as though the prize isn't as great as it seems, and the trail to success is one that most cannot endure. And even if you achieve diamond, you can lose it quite easily as others have discovered. The bottom line is that you cannot simply choose to succeed in Amway or any other endeavor. Good luck if you decide to attempt it anyway.

Monday, May 23, 2011

False Prophets = False Profits?

There are parallels in this story to the way Amway leaders promote success and wealth.


It's hard to feel bad for someone whose doomsday predictions caused so much anxiety, but 89-year-old Harold Camping's recent admission that he's "flabbergasted" the world didn't end last weekend sounds somewhat pitiful.

"It has been a really tough weekend," Camping said Sunday, after emerging from his Alameda, California home for the first time to talk to a reporter from the San Francisco Chronicle. "I'm looking for answers ... But now I have nothing else to say," he said, adding that he would make a full statement today.

Camping's PR aide, Tom Evans, told the L.A. Times that the group is "disappointed" that 200 million true believers weren't lifted up to heaven on Saturday while everyone else suffered and eventually died as a series of earthquakes and famine destroyed the Earth. "You can imagine we're pretty disappointed, but the word of God is still true," Evans said. "We obviously went too far, and that's something we need to learn from." The group posted 2,000 billboards around the country warning of the rapture, while Camping--an uncertified fundamentalist minister--spread the word on his radio show.

Camping's Family Radio, which airs on 66 U.S. stations, has apparently rebranded itself quickly. Business Insider notes that the station's website has scrubbed all mentions of the Judgment Day. The site previously featured a countdown clock to the May 21 rapture on its homepage.

But the false prediction might not be so easily effaced from the lives of Camping's followers. The L.A. Times writes that Keith Bauer, a 38-year-old tractor trailer driver, took a road trip with his family to see the Grand Canyon before the world ended.

"With maxed-out credit cards and a growing mountain of bills, he said, the rapture would have been a relief," the paper writes.

But Bauer is not angry at Camping for his false prediction. "Worst-case scenario for me, I got to see the country," he told the paper. "If I should be angry at anybody, it should be me."

Robert Fitzpatrick, who spent $140,000 of his life savings to advertise the rapture in New York, said he was dumbfounded when life went on as usual Saturday. (Just like people who are CORE but do not succeed in Amway)

"I do not understand why ...," he told Reuters while awaiting the event in Times Square. "I do not understand why nothing has happened."

An NPR reporter talked to two Camping followers on Sunday. "One man, his voice quavering, said he was still holding out hope that they were one day off. Another believer asserted that their prayers worked: God delayed judgment so that more people could be saved, but the end is 'imminent,'" she reported.

Evans, Camping's PR aide, told NPR he hopes Family Radio will reimburse followers who spent their savings in anticipation of the rapture, but that he can't guarantee it.

Protesters gathered outside Camping's radio headquarters to mock the false prophecy over the weekend. Some of them set aloft a toy cow with balloons to lampoon the idea that a select elite would ascend to heaven. Meanwhile, other religious groups tried to recruit disappointed Camping followers.

Thursday, May 19, 2011

The Hidden Costs Of The Amway Business?

One of the things upline leaders apparently do is to disparage people with jobs. Oh, they would say we needed people to wait on our tables and clean our toilets, but in general, jobs were put down and basically the group was told that Amway is their best chance at achieving financial freedom, giving them the ability to flush their jobs. Ironically, IBO's jobs are what funds their Amway businesses. Most IBOs would be out of business within weeks if not for their job income funding their Amway businesses.

The key selling point appears to be the 2-5 years of part time work rather than working a job for 30 - 40 years and then retiring on social security which may or may not be there when you retire. This plants a fear in people about the future and then the Amway opportunity is presented in a positive light because the Amway opportunity comes with a low start up cost. What uplines do not mention is how the opportunity can become a money pit as the monthly defacto 100 PV quota starts to add up. It is my guess that if people only bought items they truly needed, these IBOs would likely move 100 PV every three months, unless they are actively selling goods to non IBO customers.

When an IBO finally agrees to register, it is then that the hidden costs are revealed. Many uplines will introduce standing orders and functions and present these tools as vital to IBO success. Most new IBOs don't know better and feel subtle pressure to conform and give it a try. Some upline may loan some tools to downline in the beginning but evemtually, the IBO will be encouraged to be a "serious" business owner who should be purchasing their own tools to loan to their downline and the cycle goes on.

If you examine some version of the Amway recruitment plan, you will see that most IBOs are at the 100 PV level, which will reward you with a monthly bonus of about $10or so. If that same IBO subscribes to the tools system, than IBO will likely be losing over $100 a month not including the product purchases. And because many IBOs have been convinced that working a job is so horrible, that they can be convinced that this condition of losing money is temporary and that untold wealth is right around the corner. Sadly, for most, this condition is the norm and even the sponsorship of a few downline, the losses continue to mount. Yet many are convinced that this is better than a job.

Ironically, a job allows people to pay their monthly bills, feed their families and many people enjoy their work and co workers. While upline leaders may convince you otherwise, it is this very same excuse upline leaders use when asked why they are still working instead of walking the beaches of the world collecting massive amounts of residual income. I would encourage IBOs to truly analyze their efforts in Amway and determine if it is beneficial to your finances. In most cases, your Amway efforts ONLY benefits your upline's finances. For most who get involved, the Amway opportunity is not better than a job.

Wednesday, May 18, 2011

The 2-5 Year Hoax?

One of the things I heard, and is still promoted is the concept of a 2-5 year plan to financial freedom. As a prospect, 2-5 years of hard work in your spare time sounds resonable. Afterall, anyone can work an extra 12 hours a week for a couple of years with that kind of reward awaiting you at the end. The sad reality is that you are likely to suffer 2-5 years of financial losses without getting any closer to financial freedom.

When Amway morphed into Quixtar, a very relevent question was how many diamonds were "quixtar only", meaning they signed up in 1999 when quixtar was implemented and then became diamonds in the advertised 2-5 years. As far as I know, there were very few (if any) new diamonds. The new diamonds that were named all seemingly came from other countries, not the US or Canada. Even now, my former LOS (WWDB) is touting "double eagle rubies" which is not a recognized achievement by Amway (as far as I know), and there is no assurance that achieving such a level makes an IBO profitable.

Even today, I do not see a stead stream of new diamonds emerging from Amway. If the 2-5 year plan actually worked, there would be new diamonds constantly emerging. Instead, my former LOS (WWDB), actually has fewer diamonds now than back in my IBO days. And of those diamonds who remain, some of them had home foreclosed and it also appears that at least a few of them ran into some financial difficulties. Make me wonder what a diamond's finances actually look like. I suspect many of them live in debt, especially if they flaunt the "diamond lifestyle", which is probably not sustainable on diamond income as reported by Amway.

So while it might be possible to achieve diamond in 2-5 years (some have done it), but tens of millions have tried. It is much more likely that you will win the lottery (provided you have a ticket) than it is likely that you will join Amway and go diamond. It is also unlikely that people in the US and Canada who join will go diamond in the advertised 2-5 years. The 2-5 year plan is not promoted by Amway, but by the LOS leaders. I believe it is a hoax and the numbers back up my claim. You are much more likely to be better off working part time for 2-5 years and saving and investing for your future. If not, you will end up with 2-5 years of losing money on functions and standing orders.

As many Amway leaders will state: Look at the fruit on the tree. In the US and Canada, the trees are bare.

Submission To Upline?

Looking back at my IBO days, I can now laugh at some of the weird stuff we did and believe it or not, I have reason to believe that my old LOS, WWDB still teaches some of this and some other major groups also teach it. I believe some of these practices were the reason why some people refer to the Amway business as cult or having cult like qualities. If you recognize some of these practices, you might be in an unethical group and you should ask your upline the tough questions and possibly reconsider or reprioritize your involvement in the business.

Submission to upline was one of the things we were told. Our group was told that upline would never purposely lead us astray so we should trust them and never try anything without checking upline. Afterall, upline had experience and probably had all the answers. Some of this checking upline included asking permission to get married, buy a car or a home, or even something as small as purchasing a camera. The upline said maybe someone upline might have advice on how to get a good deal on a camera so no harm in checking upline before making a purchase. It is my guess that upline didn't want your disposable income being spent on anything other than standing orders and functions.

Late meetings. Our upline was into late meetings, many occuring after midnight. I suppose it was a show of loyalty and dedication to the upline and the system. In reality, it made most people angry at their jobs because they had to wake up early to go to work. For me it made me mad at our upline because the meetings taught us nothing of substance and it just made us tired. Our upline used to talk about time being important but it was never important enough to make him show up on time for his own late night meetings. Another cult like factor - sleep deprivation.

Secrets. Anytime we asked about how much income uplines may have been earning, we were either told it's none of our business or shown a photocopy of a 5 year old bonus check that someone upline may have received. Our proof that the business worked was upline showing off pictures of sports cars and mansions. Of course we now find that some WWDB diamonds had homes foreclosed, and one prominent triple diamond had some dealings in bankruptcy court. Looking back, I suspect that many diamonds have mortgages, which would be nor problem except that these leaders scoffed at the sutpidity of having a loan. That diamonds pay cash for everything, including homes. My former sponsor still lives in a run down rented home beause he won't purchase a home unless he's got the cash. My former sponsor is a physician so I find his position on buying a home preposterous. His oldest child, a son probably grew up deprived of his parents because of dedication to the system and the functions.

Losing money is success. Many times, our group was told that losing money was a sign of success. It was success because we were investing in our futures. That the business really is not about money but about friendships. I suppose upline taught this because everyone was losing money so it was nice to hear that success was around the corner, and that we were all nicer people and on our way to success if we just attended more functions and bought more standing orders. People who sold off some of their personal property were edified if they did so to attend a function. Obviously these folks were not advised to run their business within their means. Upline even said that going into debt was okay, but only if the debt was to invest in the business or to buy extra function tickets.

While some of these practices seem bizarre, I believe it is because the upline advice was self serving and meant to channel their downline's dollars into tool purchases. It is the only conclusion I can make. What's your conclusion?

Monday, May 16, 2011

What Has Your Upline Accomplished?

I recently read a comment from an Amway zealot on another blog. She mentions that someone's credentials must be considered when looking at information that is presented. I will comment that showing me a sports car or a fancy suit is not proof of financial success. Telling the audience that you buy homes in cash is not proof either. In fact, some of these diamonds were found to have their homes foreclosed and some had financial difficulty, even though they at times had shown off pictures of their lifestyles. I believe that many diamonds are likely to be more like the general US population - in debt. In debt trying to portray a lifestyle that is unsustainable with their Amway and Amway related income.

I find this subject ironic because not one single upline leader, as far as I know, has ever supplied bonafide credentials about themselves. The audience assumes that the person on stage has certain credentials, but do they really? I will say that certainly, if someone is wearing a diamond pin for example, that this person has at least achieved the diamond level as recognized by Amway, but the level may not be current, and the level doesn't indicate the kind of income this person earns from Amway. (Joecool is criticized for being outdated even though I was at 4000 PV at one point in my Amway career)

What many people assume is that the diamonds buy homes and cars in cash, that they wake up at noon every day and participate in leisure activities all day while the cash rolls in. I have heard from some new IBOs, that their upline makes more money taking a crap in the morning than a critic makes in a whole year at a job. That IBO became quiet when some critics offered to take that bet.

But the truth of the matter is that as far as I know, only former diamonds have come clean about their Amway income. They are the only ones who spoke of credentials and accomplishments. Even critics of Amway will often openly speak about their experiences and achieved levels in the business. In the REAL business world, showing business tax returns and credentials are a normal part of doing business. It appears that only in the world of Amway is the supply of credentials and financial statements a big secret. Now I am not suggesting that IBOs or upline leaders should disclose their financials to the entire world, but certainly prospects and some downline should be able to see what their upline is doing financially, especially if that is the basis for purchasing their standing orders and function tickets. And I refer to business (Amway and Tools) income and expenses only, not from other personal sources.

I believe that IBOs and upline leaders do not disclose that information because it would not be beneficial to them. If it were, they would likely publish it freely, just as they flash around copies of checks. IBOs and prospects should take this to heart and ask upline the tough questions

Friday, May 13, 2011

Do IBOs Have A Clue About Business?


Roger S. Campbell, et ux. v. Commissioner, TC Memo 2011-42

There were a couple of issues in this case around substatntiation, but the main thing was a hobby loss question on Amway activities. I remember going to some Amway presentations and it is really shocking to me that people can actually lose money on something that sounds like such a good deal.

Petitioners did not conduct the Amway activity in a businesslike manner. Although they maintained a separate bank account for the activity and maintained records for certain aspects of it, petitioners never used these records as an analytical tool for improving profitability. Mrs. Campbell testified that she did not know whether the Amway activity was profitable in any given year until she completed petitioners' tax return for that year which, for 2 of the taxable years in issue, did not occur until almost 2 years later. It is a fair inference that petitioners' recordkeeping was directed more towards substantiating deductions on a tax return than assessing the profitability of the Amway activity.

Considering all the facts and circumstances, including especially the confusing state of petitioners' Amway records, we conclude that a substantial portion of the costs of goods sold respondent disallowed for 1998 and 1999 represents Amway purchases that petitioners withdrew from inventory for personal use or use in their other businesses. This commingling of the Amway merchandise, resulting in substantial inaccuracies in reported costs of good sold, is further evidence that petitioners' Amway activity was not conducted in a businesslike fashion. It also resulted in petitioners' claiming business deductions for personal expenditures.

Although petitioners have prior entrepreneurial experience and both operated other businesses concurrently, they had no experience with operating a direct marketing distributorship before they were recruited as Amway distributors. Petitioners obtained advice only from their upline distributors and other interested Amway individuals, persons who had a direct financial interest in the maximization of petitioners' sales volume, without regard to petitioners' profitability.

In view of the foregoing, petitioners have failed to prove that they carried on their Amway activity with the requisite objective of making a profit. Consequently, their deductions arising from the Amway activity are limited by section 183.

In the presentations it was always about you recruiting people who recruit people and so on. It always seemed that somebody somewhere had to be selling an awful lot of soap for the thing to work.

Thursday, May 12, 2011

IBOs Fail Because Their Amway Business Isn't Sustainable

One of the selling points of the Amway business is for people to do the work once and then reap financial benefits for life. But that simply does not happen for the vast majority of IBOs. The reason why most IBOs do not have a sustainable business is because their business is not based on sales to genuine customers with a genuine need. Most IBOs themselves will not buy Amway products once their affiliation to Amway is over.

If you are an IBO doing your 100 PV monthly, then your only way to increase volume is to sponsor downline in hopes that they will also do their 100 PV as shown in the plan. And even if you are somehow able to accomplish this and sponsor a bunch of people as shown in the plan, chances are that many IBOs will "do nothing" and of the remaining, some will move 100 PV, but they will likely quit in one year or less.

In many or possible most cases, IBOs are only selling the Amway opportunity and not Amway products. They sell the possibility or hope that they will build a business, walk away and collect untold wealth for the rest of their lives. It isn't going to happen. Say for example, you sold 100 PV monthly on a consistent basis to customers. These customers will automatically go online and make purchases when they run out of their products. If you are lucky, they will also refer friends to make purchases. But most IBOs do not sell products, they are selling the opportunity.

That brings up the next point about why an Amway business is not sustainable for most. The products cost more than most other retailers. That will limit the potential for customers and referals. Amway defenders like to cite quality issues, but most customers who shop online aren't familiar with Amway products and have no way to know whether Amway has quality products or not. That leaves them to decide based on prices. And Amway in general, costs much more than Walmart for the same or similar products. A tough sell indeed.

Monday, May 2, 2011

Joecool Is Headed To Japan

I'll be gone for the next ten days or so. I'm heading to Japan to do some missionary relief work. I, and a group of 11 other men will be headed to Japan to help do some repair work and to bring several thousands of dollars of supplies. This is in response to the tsunami that happened back in March. The citizens in Japan are still struggling as there are hundreds of thousands of people still living in temporary shelters.

While my contribution might be limited to what I can do in ten days and the resources that I have collected, I am hoping that it will make a difference in someone's life. I'll be boarding a plane later today with my team.

I know many Amway IBOs feel they are making a differnce for the better in people's lives. I know I was taught that by my upline. But looking back, I used to wonder how signing someone up for Amway or shoping them the plan was helping them. In most cases, these nice people were probably worse off financially if they attended functions and/or participated in other things that required a cash payment, such as voicemail, or standing order.

My former upline diamond once had six (6) ruby legs back in the late 1990's. Not a single one of them is even a platinum today, and most of them have quit. That speaks volumes to me.

Anyway, I wish everyone well and I hope that our relief mission blesses the lives of some of the Japanese people. Joecool out.