Wednesday, March 14, 2012

The Amway 6-4-2 Plan?

Let’s break down the 6-4-2 plan (Re-print)

Basically, it’s a plan to go direct (platinum) and all you need to do is sponsor 6 of these direct groups and you’re a diamond and will retire early and life in luxury right?

Assumptions: 1PV = 2.5BV. 1PV costs about $2.70.

The 6-4-2 plan has the premise that you do 100 PV, and you sponsor 6 frontline who do 100 PV. Your six frontline in turn sponsor 4 (24 IBOs) each who do 100 PV. And each of these 4 IBOs sponsor two IBOs (48 IBOs).

So your direct empire looks like this:

1 platinum Sponsored 6 who sponsored 4 who sponsored 2 6 1300 PV groups Sponsored 4 who sponsored 2 24 300 PV groups Sponsored 2 48 100 PV IBOs

Total 7900 PV. 7900 PV = (1 PV = 2.5 BV) 19750 BV. 19,750 BV @25% = $4937.50 per month. Annualized = $59,250. Add Q12 bonus 69,250 (platinum group yearly income, not counting retail sales profit. Cost of product (approximate) $21,300 per month or $255,960 per year to maintain 7900 PV.

The platinum must pay his 6 1300 PV groups. 6 frontline 1300 PV = 3250 BV = $390 per month, or $4680 per year. $4680 x 6 = 28,080.

The Platinum keeps 69,250 – 28,080 = 41,170 (net, but not including operating and system expenses, but this includes the Q 12 bonus)

Now, the 6 frontline must pay their 4 IBOs who sponsored two. 300 PV = 750 BV = $45 Per month, or $540 per year. Thus the 6 frontline earn $4680 per year but pay out $2160 downline for a net of $2520 per year, or $210 per month.

Ok, and then each of the IBOs who earn $45 per month or $540 per year must pay their downline (2 each) $7.50 per month, or $90 per year x 2 = $15 month or 180 per year. Thus the 300 PV IBO earns $30 per month or $360 per year.

Let’s review:

1 platinum earns $3430 per month, or $41,170 per year 6 1300 PV IBOs earn $210 per month, or $2520 per year 24 300 PV IBOs earn $30 per month, or $360 per year 48 100 PV IBOs earn $7.50 per month, or $90 per year This is before taxes and expenses, but also does not include retail profits, but hey, we teach buy from yourself right?

OK, let’s look at tools expenses. Let’s say only the platinum, the 6 frontline and the 4 each who sponsored others are on tools (Fair assessment?) That would be 31 IBOs out of a group of 79 IBOs on tools or 39% of the group, and remember that all of these IBOs do 100 PV every month.

Tools cost: KATE, Website, standing order, book of the month, open meetings, monthly functions, major functions (some IBOs have to fly to functions), gas, incidentals, babysitters. Let’s estimate these tools and other expenses to be $160 per month (Very conservative IMO). $160 per month = $1920 per year.

Now let’s review the group NET income.

1 platinum $3430 - $160 = $3270 per month, or $39,240 per year 6 frontline (1300 PV) $210 -$160 = $50 per month, or $600 per year 24 (300 PV) $30 - $160 = <$130> per month loss of $1560 per year 48 IBOs earn $7.50 per month or $90 per year.

Group income = $69,250. Group Tools expenses = (31 x $160 = $4960 per month, or $59,520 per year) Group profit = $9,730 for the year.

79 IBOs putting in 10 hours per week = 790 hours per week or 9480 hours per year.

These IBOs on average made a whopping $1.02 per hour for the year collectively. Or………

The Platinum made $78.48 per hour

6 frontline IBOs made $1.15 per hour

24 – 300 PV IBOs lost $3 per hour

48 100 PV IBOs made 17 cents per hour.

10 comments:

ConnieF said...

Wow, thanks for breaking it down so clearly and in accordance with how Net Profit (NP) is ACTUALLY calculated-Gross revenue minus ALL expenses = NP. What Amway pays an IBO is not only NOT net profit, it's gross revenue and all expenses must be deducted from it to calculate actual profit. The profit per hour? I'd rather work at McDonalds-I'd make more money! Oh, wait, that's a J.O.B that ambots laugh at. Well, I'd make more money than you so let ME laugh at you-all the way to the bank.

Lucifer said...

You sure have amazing mathematics skills!

Anonymous said...

duh?

malbuff said...

That's why you gotta retail to make money in this business.

If you consume your 100PV and also sell 200PV (300 PV total), you will make money. Not a lot, but some. Then you are duplicating a profitable business and the money starts to add up. Not enough to get rich, but a nice cash flow.

This presumes all core products. To make retail work, it's best to focus on one or two product lines, no more. IMO laundry products are the best of breed. Cleaners are very good. Cosmetics are good. Vitamins are just way overpriced.

Duplicating a unprofitable business is IMO unethical. You should be making money, even just a little bit at 300PV, before sponsoring anyone.

This "just buy from yourself" nonsense, coupled with the tools scam, has IMO irreparably wrecked a nice little business model which, if executed properly, could provide a steady second income.

It would be cool if you would redo your model adding in 200PV retail, including markup. I suppose I could do it myself, just haven't the time right now.

Joecool said...

Sounds great, except it's hard to sell $80 vitamins or $50 cases of water.

Anonymous said...

Difficulty scale: develop platinumship with some customer retail profit per person which recurs every month once they become steady customers<grind platinumship w/out retail profit (retarded btw, easier to create cust base one time than to constantly tell 78 broke people to keep believing)<work at McDonald's for forty years bc you assume like most people that rich people of any business didn't need to at least overcome their initial fear of selling whatever they sell in their particular businesses. Fear is everything. McDonald's is replacing their staff with computerized robots the instant it becomes profitable to do so. Many office employees are glorified administrative assisstants to the business owners they work for, and they're laid off the instant it's profitable to do so. Many get an MBA for the A and not the B. Only sales agents are paid what their worth. Owners are paid what their businesses are worth, not on a per hr basis like an individual wage slave. Business owners rent people out 50 years per lifetime, 50 weeks per year, 50hrs per week; they own their own time and they own the world simply bc they've made their way into position to be able to use up everybody else's time, day in and day out.

Anonymous said...

I want to do amway business but for my personal use of productz only for d time being. Can i still earn money like this? If so how much per product? I m in india. Kindly guide

Govind mahajan said...

you can earn on u r person use too. 10% cash and 10% is ecs to bak. if u buy 10,000 rs product. u can get 26% discount. if u like this bussiness send email me at sendmeit@rediffmail.com

Joe Real said...

Only if you had the right mindset my cousin is a million are thru this business opportunity your just a blogger with a broke mindset.

Joecool said...

What is a broke mindset? LOL