Tomorrow is Superbowl 46. In recent superbowls, the games have been somewhat close. In close games, a critical mistake made will cost your team the game. A good example of this would be the reason why San Fransisco is watching the superbowl on TV instead of playing it it. A critical mistake.
In my opinion one of the most critical mistakes that many IBOs make is to ignore the bottom line when analyzing their Amway businesses. I recall, in my experience, business building IBOs, sadly, taught by their uplines to ignore losses, or to view losses as investments into their businesses, or that money is really not important, because you keep building the business and the "money will be there", which is not true. Some uplines may teach that the business is more about making friends or being a nicer person. All of these things may be nice side benefits of reading personal development books, etc., but when running a business, the most important goal should be to turn a profit.
For many IBOs, their businesses consist of listening to standing orders, attending functions and meetings, but not focused on selling products and earning a net profit. And for most IBOs, nobody can blame them as upline may give them bad advice and because the Amway business is person to person selling, it is so inefficient that many groups end up teaching IBOs to simply buy their own volume and get others to join the business. For groups who operate primarily in this manner, you are probably running an illegal business because new and existing IBOs can profit only by continuing to add more downline IBOs in the hope that they too, will buy their own volume and sponsor others.
When you look carefully at the business plan, whether it is 6-4-2, 9-4-2 or some other variation, the majority of these business building IBOs will have low volume and likely to earn only about $10 a month. But to earn that $10 a month, you are likely to have to spend $300 on products, and if you are on standing order, voicemail and functions, then you likely spend anywhere from $150 to $250 monthly (or more) to participate in the teaching system. Thus these IBO's bottom line is a net loss! It is only when you are able to sponsor many downline that your losses will get smaller and you will only profit when you have a sizable downline. That means your bottom line is a loss. And while Amway defenders will argue that Walmart doesn't even give you $10 a month, you can certainly get more products from Walmart for $300 than you can get from Amway for the same price. Walmart will match any advertised price on a product that they and a competitor may carry. Also, Walmart's advertising reaching millions of people, which is much more effective than person to person. While Amway runs some ads now days, they do not directly drive customers to IBOs. The vast majority of IBO business is still to themselves and their downline, and not to non IBO customers.
I challenge IBOs to look objectively at their bottom lines. It is likely a new loss. If it is, ask your upline how long this is expected to last. Set hard goals and if you are doing what is advised by upline and results to not improve, you may have to ask yourself what willl change to make your business profitable. Basically, if you aren't adding active downlines and customers regularly, you aren't gooing anywhere and are likely to be running your business at a loss month after month after month. It won't take long before you realize that you have lost thousands if not tens of thousands of dollars.
As a former IBO with a 4000 PV business with eagle parameters, I was not making a net profit. I saw my bottom line and although doing and achieving what my upline advised, there was no money. I decided the effort, time and money invested wasn't worth it. Plus my upline started to interfere in my personal life. I saw my bottom line and wasn't satisfied, and I left Amway. I later discovered the lies my upline had fed me to keep me in the business and to keep me buying tools. It is why I started blogging. For now, my bottom line is to get the truth out about the tools scam run by upline. That is Joecool's bottom line.
4 comments:
The net profit issue is why Amway IBO's tend to lose in Tax Court when they argue they have a business rather than a hobby.
Agreed. And attending functions and buying cds might not be deductible expenses as it doesn't result in in increased sales.
Hi Joe. It's former IBO from NY, Jose. I went to one function and I did learn things from it I was able to apply to my business, when I was in it anyway. However, I opted not to go to another one simply because it costs too much and to go to one every 4 months considering I was only able to sell $300 worth of customer retail orders a month made me operate at a net loss. Thus, I quit because I did things the right way and not the Amway way. I paid attention to the red and lost $400 last month, despite the 15 customers I had. But since I didn't believe in buying tapes, cd's, going to conventions, and when confronting my upline about it was given nothing but BS answers and was actually told, and I quote, "This is why it's important to keep people plugged into the system", it was at that point I told myself Amway is not technically a scam but is so much more difficult than running a real business, I quit.
Good for you Jose. You did an honest assessment of your business activity and you made a business decision. Your upline fed you BS and you saw through it. I'm glad by blog was able to provide you some valuable information. Thanks for the comment!
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