Monday, April 30, 2012

Amway IBOs Need A Business Mentality?

One of the catch phrases that IBOs spout quite often is that you need a "business mentality". Those of us who have an "employee mentality" simply cannot cut the mustard in Amway. I find this ironic since the vast majority of Amway IBOs have a job. A job that they NEED in order to pay for their Amway business. A job that pays for their voicemail, cds, functions and books, in addition to the cost of the Amway products. A job that feeds their family and pays their bills.

Apparently, a business mentality is one that doesn't expect quick profits, despite upline's claim that the Amway business has low risk and low overhead. That is also despite claims that you can profit right away unlike a traditional business. A business mentality is also one where you reinvest any or all profits back into buying support materials. A business owner doesn't expect to make a profit for 5 years. Many of these claims are taught by unethical uplines and unfortunately, many IBOs accept the teaching and buy into it.

Now it is true that a business owner might have to think and view things differently than an employee. For example, an employee might do a great job from 9-5 but after 5, that employee may be headed home to care for his or her family, or to participate in some exercise or recreation. The business owner might be inclined to stay after hours to finish a job because he or she may have invested much, and will want to make sure that the business succeeds. An employee might not have that same vested interest.

It is my suspicion that uplines want their downline IBOs to adopt a business owner mentality, not because they want downline to succeed, but because it instills a dedication to the tools purchases and it also takes an IBO's focus off profits for a few years. Thus IBOs think they are successful (without profit) if they are listening to standing order, attending all the functions and showing the plan. It is a gimmick used to retain IBOs who are not profitable. If IBOs were actually making money, there would be little need to continue to motivate them with an endless supply of cds and functions. But because most IBOs lose money or make little, the average IBO must be taught that a "business owner" commonly loses money for a number of years, or that they must continue to reinvest their profits in order to succeed.

In posting this, I say to IBOs, just make a profit. That is all the motivation you need. Keep track of your bottom line and look at the return on your investment of time and money. That is the action of a real business owner.

Friday, April 27, 2012

The Fruit On The Tree?

I had a good chuckle recently when some Amway apologists spoke about looking at the "fruit on the tree" as a way to confirm that various diamonds were successful. One commentator said his parents were broke and he looked to his diamond since the diamond apparently had fruit on the tree. I thought about this concept and I agree, that perhaps we should look at fruit on the tree. First of all, what is fruit? Is it pictures of lavish things or is it looking and bonafide and verified financial statements? How would you know if your diamond was wealthy just because he owns a porsche? What if that same diamond was carrying credit card debt and was just creating an illusion of success? Impossible you say? There are verified accounts of diamonds having their homes foreclosed and other issues.

IBOs and Amway prospects, please ask your upline platinum or diamond to show you the fruit on their tree. Ask them to see their (business) financial statements. This is actually a common practice in real business. When a friend of mine sold his business a few years back, he made three year's worth of income tax returns to show prospective buyers. He showed his business and personal tax returns. If someone is asking you to do business with them which will require your investment of time and money, you have every right to ask for information/evidence.

As far as I know, not one single bigger pin has ever shown their business financials except for those who had their finances revealed in public documments such as a bankruptcy. In fact, if it made certain bigger pins look good, why wouldn't they want to "show their fruit". They certainly don't mind showing off diamond rings, fancy clothes, sports cars and the like. What many IBOs don't understand is that fancy cars and other toys is no evidence of fruit on the tree. For all you know the cars are rented and the diamond might be drowning in debt.

It has been discussed that some diamonds may rent cars or fancy homes and try to imply that they own these items. Some diamonds, possibly many diamonds in the past have lied or embellished the truth about paying for everything in cash, including their homes and cars. They also at times, have given the audience the impression that these luxuries are all purchased with Amway income, and we know that many diamonds have probably had supplemental income from the systems, or other business ventures outside of Amway.

We also know that some diamonds are in debt, but simply try to portray an excessive lifestyle. (See Ruth Carter's Book: Amway Motivational Organizations, Behind the Smoke and Mirrors). Some diamonds may have a substantial income, but it doesn't mean they are financially free and able to live a jetset lifestyle that many portray. It is an illusion, possibly to be able to attract new prospects into the business.

So yes, let us actually see the fruit on the tree. Is there any fruit?

Thursday, April 26, 2012

Most Amway IBOs Fail

Most IBOs fail. That is not a wild guess. That is a fact. Failure would mean doing nothing or trying hard and not making a net profit equal to minimum wage for the hours expended. Amway supporters will argue that many IBOs do little or nothing, and while that might be true, even the remaining IBOs who work hard, still find little or no success. The system is set up that way. If you see a diamond "walking the beaches" as the cash rolls in, that means someone is putting forth the effort to make that happen. It is the downline IBOs who purchase Amway products and tools that allow these diamonds to enjoy what they portray as success. By the way, does anyone actually know one of these diamonds who are retired and doing nothing while cash rolls in?

We also know that some diamonds overhype their success. There has been evidence that the diamond lifestyle is often not what people think it is. If you could truly earn residual income by the bucketload, why do diamonds quit, resign, lose homes in foreclosure proceedings, and even wind up in bankruptcy court? One could argue that some diamonds are failures. The diamond lifestyle is an illusion created by upline leaders as a means to entice recruits. I would venture a guess that many diamonds are living in debt or struggling to make ends meet.

Many Amway zealots and apologists try to make ridiculous claims comparing a company owner to a diamond. The big difference is that a company owner has employees who get a regular paycheck. These employees generally wanted the job and probably applied for the work. And if and when an employee leaves, there are other applicants who are willing to step in and do the work. Thus the business continues to meet their demands and continues to profit.

In the Amway opportunity, the IBOs spend money purchasing products, and then upline leaders expect these same folks to spend even more money to learn how to be motivated to do the Amway business. But in reality, if IBOs made profits, that would likely be sufficient motivation to run their businesses. Because it is hard to find enough (suckers) prospects to join the business and fork out cash while they lose money, other IBOs have resorted to trickery, deception and outright lying at times, in order to attract potential downlines. This has damaged Amway's reputation.

The 6-4-2 system ensures that the majority of business builders must "do the work" to uphold their platinum, who (probably) barely earns a net profit. And then you need 3 or 6 groups of IBOs losing money in order to maintain an emerald or diamond. Amway has revealed that less than 4% of product moves to non IBOs. The absence of non IBO customers nearly guarantees that most IBO groups will lose money or make very little. Most IBOs are destined to fail. And it is not necessarily the IBO's fault. The system itself comes with many flaws which most IBOs cannot overcome, even for those who put forth much effort. It is why most IBOs fail. It is why I hope prospects will find and read this information before making a final decision to sign up or not.

Wednesday, April 25, 2012

Amway Broke Losers?

One thing I will applaud Amway for is their customer service. Whenever I called the corp as an IBO to order or for other things, their staff was always courteous and friendly. But IBOs, on the other hand, do not seem to value potential customers that way. What I mean is when prospects are called stupid, or broke losers just because they do not wish to become an IBO. What you have done basically, is ensure that the prospect will never be a customer of yours, and possibly Amway. Some uplines teach that people not in Amway are broke or losers and/or if you quit the ranks of being an IBO, you become a broke loser.

Imagine walking into a retail store, and realizing that maybe you didn't have enough cash in your pocket, or that the store did not have the item you were looking for, so you leave. As you leave, the stores employees said what a fool. What a broke loser he is not buying anything from us or wanting to open a similar store. While this may be an extreme example, I believe it is a perfectly valid one. If you value your customers and treat them with courtesy and respect, you have a good chance of retaining them. Calling someone a loser is almost a sure way to fail in Amway or any other business. Why some leaders choose to label people as such is a mystery to me.

I believe that this comes from two things. Number one is that IBOs are not very interested in selling products. They are mostly interested in sponsoring. And that is the number two reason. IBOs are mainly focused on building their group, because that is the key to moving up the ranks, in terms of a pin. Some groups simply teach IBOs to self consume and then focus on sponsoring. It leads to the opportunity being borderline in terms of whether the opportunity is a pyramid where there are no sales to non participants (pay to play).

This division between potential customers and potential IBOs is what causes Amway to have a bad reputation with the general public. It is evident here on my blog, where IBOs criticize me, without even supporting their arguments. This is not the only reason, but a contributing factor to Amway's bad reputation in the US.

IBOs, if you take a hard look at what I have written, it is not negative, it is a perfectly valid reason why so many do not succeed. You need to treat your potential customers and downline with respect, regardless of whether they choose to join or buy products from you right away.

Tuesday, April 24, 2012

Amway Works - If You Work It?

The Amway business works if you work it! That's what many Amway enthusiasts will claim. I do not believe that is true and I will further explain in this post. Many IBOs who claim that the business works are usually new and are unable to show any evidence that the business works, except perhaps to show a photocopied check from an upline diamond or the like. To date, no IBO who posts on this blog as shown evidence that Amway works. And there is no evidence that hard work results in Amway success.

Let me make a disclaimer that some people might be able to make significant money from Amway, but most of those folks are usually tenured diamonds who are almost in an exclusive club. There is only a short list of new diamonds that I know of in the US, and I have heard that even these new diamonds may have had legs in other countries. It would seem that Amway is not growing much in the US and Canada. Also of note, Amway does not release figures that are seperate between Amway North America and the rest of their overseas operations.

Ok, so Amway enthusiasts claim that the business works if you work it. Business in its simplest form is selling a product or service for a profit. Yet many many IBOs spend so much of their time doing other things, as advised by their upline "mentors" who sell them training materials that take up much of their valuable time. Listening to tapes/cds, attending functions, reading books, and other training activities not only costs the IBO money, but takes up valuable time in non income producing activities. Nobody makes sales reading books or attending seminars. Inviting people to see "the plan" may be a way to help generate volume but with Amway's reputation, even this is a hit and (mostly) miss activity.

Many IBOs spend almost all of their time doing these activities (the work) when they could be better off not getting the training and focusing on selling the Amway products and services. Even that comes with a handicap as Amway products as a whole, costs a lot more than purchasing similar or the same products as a big retailer such as Costco or WalMart. It is why most IBOs eventually get discouraged and quit far before the promoted 2-5 year plan.

Few people will even bother to see the plan once you mention "Amway" and for those who are open minded and motivated to register end up having to deadl with a hard to sell opportunity along with high priced common commodities such as soap, vitamins and energy drinks. It's pretty easy to see that the business does not work, even for most of those who actually work it. There are simply too many issues with the business that hanidcaps those brave enough to try. It seems even the fiercest defenders of Amway are unable to provide a shred of evidence that they have actually made a profit from this opportunity.

Monday, April 23, 2012

Comment About An Amway Defender?

Comments about Amway's most prolific and shameless defender: Guest on April 23rd, 2012 8:32 am anonymous:

I would strongly urge you to reconsider any involvement with ibofightback. Read his comments here and elsewhere. He will twist and contort any argument to somehow justify Amway or discredit opposing opinions or anti-Amway views. I am just a reader and not part of his years-long feuds with other posters, but I think the guy’s bizarre (no offense, ibo). It’s entertaining to watch how he skillfully (sometimes) bends over backwards to defend Amway in any and all instances. I think he is a master manipulator with some unknown agenda.

Again, no offense to ibofightback, but I think he is a weirdo. He spends (and has spent) tremendous amounts of time and energy battling to defend the reputation of a for-profit company, allegedly with no payment from the company and no serious financial stake as an IBO. Why does he do that? Does McDonald’s have a near-full-time unpaid advocate building blogs and battling for their honor across the Internet for no pay?

As long as he’s going to campaign for no pay, why doesn’t he put this energy into campaigning against child hunger, say, or for human rights? Why is a sleazy for-profit company his charity? IMHO, I suspect either he IS somehow receiving compensation, directly or indirectly, for all his efforts OR he’s just a weirdo who has chosen to devote all his free time, passion and energy to defending the reputation of a for-profit, cultlike ponzi scheme. If true, the former option may be deceptive and possibly illegal, but at least sane and understandable. The latter option, if true, smacks of mental illness or at least dysfunction.

ibofightback is NOT your only option. There are many trained professionals who deal with all kinds of addictive behavior, You don’t need someone trained in Amway. You need someone trained in addictive behavior.

Going to ibofightback for help separating from Amway is like asking a bartender for help with an alcoholic because of his experience with alcohol. Asking ibofightback for advice on separating from Amway is like asking a drug dealer for help getting a crack addict.

Asking ibofightback for advice on separating from Amway is like asking a pro-life activist for abortion information.

Consulting ibofightback about getting away from Amway is like a couple asking a priest for advice on spicing things up in the bedroom.

[Nothing personal, ibofightback. I think you are masterful at semantic gymnastics and debate. And some of my best friends are weirdos. Just stay away from people who are already victims of Amway before you do further damage.]

Making A Living Off Amway?

I've been blogging for many nears now and one of the conclusions I have made is that there really is no defense for debating the merits of an Amway business when the IBO is participating in a system such as WWDB or Network 21. I have no issues with IBOs who sign up and sell actual products to non IBO customers, but these sales oriented IBOs are very rare. Most IBOs who are entrenched in a system are often focused on sponsoring downline because that is the only way an IBO can achieve certain levels such as emerald or diamond. The emerald or diamond level is the goal of many because it is allegedly the level where an IBI can "walk away" and enjoy barrels of cash rolling in for the rest of their lives. I find it ironic that even crown ambassadors keep busy schedules and have not walked away into a quite life of retirement and uncountable amounts of money.

In general, it would take about 100 IBOs or so to make up a platinum level business. That's 1% at best and even less when you factor in IBOs who do nothing or IBOs who start and quit. In my estimation, a very dedicated hard core IBO would only begin to break even or make a little bit of income at the 4000 PV or platinum level. Of course, your business structure would be a factor in determining how much you can earn. Sponsoring width gives you more profit and sponsoring depth allegedly gives you some stability. Thus you could reasonably argue that about a fraction of 1% of IBOs break even or make a little bit of income. What real businessman would even consider opening a business where your chance of making a profit is less than 1%? Yes, you can argue that Amway is a business and not a game of chance, but a prudent decision also factors in your chances of success.

Other factors that would make Amway unattractive is that the products are priced higher (in general) than comparable or the same products that are available at people's local retailers. Yes, Amway folks will argue quality and concentration factors but those arguments are simply justification for the higher prices. The vast majority of people are satisfied getting cheaper prices at Walmart. Also, IBOs are restricted from advertising their goods, thus are relegated to person to person advertising, which is probably the least effective methos of getting the word out. Higher prices and unfamiliar products results in what many groups have - IBOs who "buy from themselves" in order to earn their bonuses. Also, any bonus that is earned by most IBOs is just a partial refund on having overpaid for a product. Not to mention unless you are at a higher level in the business, your upline(s) get most of the bonus, whether they helped you or not.

Yes, it is possible for some people to make some money in Amway. Yes, some people do make some good money from Amway. It is not possible for all IBOs to make money unless they are selling products to non IBOs and we know that most IBOs don't sell anything or sell just a few items to others. We also know that the tools systems generally eat away any small bonuses IBOs earn and leave them with a net loss. For the truly dedicated IBOs, the losses can mount into thousands of dollars and more.

Can someone make a living with Amway? The answer is that it's possible but not likely. But as to whether the Amway business and associated tools is a good idea? For thet there is no defense.

Thursday, April 19, 2012

Joecool's View On Amway

I thought I would post my opinion about Amway in this article. I see that IBOfightback is writing some summaries about Amway critics and I did not want him miserepresenting my position and taking editorial liberties in his usual less than honest manner. What exactly is Joecool's take on Amway?

When I was an IBO, there were some products that I liked. That being said, I also thought most of their products were overpriced and I did not like any of the products so much that I continued to purchase them after my IBO days were over. I also don't know of any former IBOs who are still loyal to Amway products one they quit. Later, I began to see how ridiculous some product claims were. Perfect water is one of them and I also think double x is a poor buy. I believe IBOs only purchase double x because of the high PV count and not for much else. Contrary to IBOfightback's assertion that many people sign up just to get a discount on Amway products, I believe these are simply IBOs who just can't sponsor someone. My position is easily defensible as Amway products are not name brand, despite their more than 50 years of existence. I believe that IBOs primarily purchasing their own goods without selling to non IBOs puts Amway on the borderline of legality because without sales to non IBOs, the only other way to profit is to recruit downline. While there is no immediate reward for sponsoring, IBOs recruit in the hopes that their downline will also buy from themselves and recruit even more downline. Sadly, most IBOs do not sponsor anyone. Amway in the US is a tough sell because of the name reputation. Past and present IBOs trickery (Lies and tricking people into attending meetings)has eroded the Amway name.

I believe the tool business might be an illegal pyramid. Tools are sold almost exclusively to IBOs and the only way to make money is to reach a certain level and then to sell tools to your downline. In 1983, Amway owner Rich DeVos acknowledged that he thought the tools business was a pyramid. Since then, there are no truly visible and hardline actions taken by the corporation to curb tool abuse. Accreditation was done, but the AMOs have still been able to bend the rules. Even IBOFightback wrote an article about the joke that accreditation was. I believe a political speaker was brought to speak at a function where an AMO was awarded accreditation. A joke indeed. And the tools are not effective. Despite the AMO claim that tools are vital, there is no unbiased evidence to suggest anything other than the fact that tools are more often than not the reason why business building IBOs lose money. In several court cases and from my own personal experience, the tools are the reason why even platinums can suffer a net loss. AMOs vary but some of them teach a fierce loyalty to the system. There are stories of people losing tens of thousands of dollars chasing a dream thinking tools will get them there. Think about it, at big conventions, the upline might make a blanket statement about tools being the key to success, but we know that this cannot apply to everyone there. Sponsoring IBOs should be coaching their downline free of charge. It is well documented that some diamonds and other pins may well earn most of their income from tools and not from Amway.

I believe that residual income is a myth. While a big pin might be able to walk away and collect some income for a while, I do not believe diamonds and even double or triple diamonds can do this. Their business would fall apart very quickly. It is why nobody can seem to name any retired Amway diamonds who have barrels of cash rolling in while they sit on a beach. If diamonds were making so much money, why are they still working the functions? It i my guess that these diamonds and others are working functions because they need the income. You stop appearing at functions, your honorariums disappear. We also know that some diamonds may portray a jetset lifestyle but may be living a lie. Some diamonds have had homes foreclosed, a prominent tripe diamond was involved in chapter 7 bankruptcy. While not all diamonds may be like this, I would guess more than not, the diamonds might struggle because they have an image and lifestyle to portray in order to attract new recruits into the business.

The Amway business for most, will not render a profit. The exact number of failures might not be known, but we know that a platinum IBO is already in the fraction of 1% of IBOs. A platinum fully sold out on the system might be running small profits or possible a loss. As you progress to diamond, your income may jump up, but so will your expenses. It is my guess that non Q12 diamonds live very middle class lives away from the functions. Some of the bigger pins or those with other outside businesses might be able to afford more luxuries, but I believe that the diamond lifestyle for the most part, is an illusion.

That's a summary of Joecool's take in Amway and the tool scam.

Wednesday, April 18, 2012

Who's Responsible For Downline Failure?

One of the disturbing things I have noticed about Amway IBOs and IBO leaders is how they wlll tell downline to trust them. To trust them as they have already blazed a trail. No need to re-invent the wheel. Just ride the coattails of your upline to success. The system is proven. Many IBOs take this to heart and put forth tremendous effort. Then when they fail, upline will shun them and tell them that the failure is their own. That they are personally responsible for failure.

Now I am not talking about IBOs who sign up and do nothing, or never place an order. I do believe that the fact that many IBOs sign up and do nothing brings concerns about how these IBOs were recruited, but I do not recall ever seeing an IBO do nothing and then complain that Amway was a scam or anything like that.

I have found, however, that many people who are critical of Amway and the systems, put forth much effort, did everything they were told, and did not find the success that upline promoted, or in some cases, guaranteed. My former sponsor was still active, last I heard and has been in Amway for over 15 years. I do not believe he has ever gone beyond platinum, and I know that he was never a Q12 platinum. Some Amway apologists might see being a platinum as a bonus, but when you are hard core sold out to the systems, platinum is a break even or make a small profit business. Factor in that time spent by husband and wife and these folks are breaking even or making a fraction of minumum wage. Is this the dream that will allow you to buy mansions with a cash payment?

What is also disturbing is how people will tout the system as responsible for any success, but hide the vast majority that the system doesn't help. Sure, some will succeed in Amway, but for every success, there are hundreds if not thousands who fail. And if you consider diamond as the benchmark of success, the failures could be in the millions. As I said, some succeed, but very very few in relation to the number who try. Going diamond is probably less common in the US than winning the lottery.

Succeed and the systems and upline take credit, but fail or quit and it is your own responsibility. Are these the kinds of leaders or mentors you want advice from? I will pass.

Monday, April 16, 2012

How To Invite An Amway Prospect WWDB Style?

I came across this invite sheet that a WWDB IBO showed me. The tapespeak is interesting.

Invite for a New Person

For detailed information, please log into your For IBO use only website with your training login, or contact your upline.

When someone is ready to get started, it is important to help them get started quickly. Teach them to use a simple invite:

Option One: 1. “I’ve run into some people who are on the front end of an Internet concept.” 1. “They’ve been working on it for 6-½ years and they’ve got it perfected.” 2. “They’re growing like crazy and are looking for help.” 3. “I need to get you in front of a computer for 10 minutes.” 4. “I need to sit down with you for 10 minutes.”

Option Two: “Are you near a computer? I need to show you a website.” If they are not near a computer, schedule a time as soon as possible to call them. If they are, continue. As they are getting their browser up, interject some of the following points into your conversation: “I met some people who are on the front end of an Internet concept.” “They have been perfecting it for the last 6-½ years.” “It’s ready for prime time.” “They are growing like crazy and are looking for help.” “It’s going to blow your mind!” “It’s a concept like Amazon only we get ownership.”

There is only one question the new person will ask at this point: “What is this about or what are they doing?”

Your answer should be, “Have you heard of Amazon? They’ve got a concept similar to Amazon.”

If they encounter a question: “What is this about?” Answer: “Have you heard of Amazon? They’ve got a concept similar to Amazon.” Encourage them to share the Web Tour:

Get the new person access to the Web Tour (online, offline, or a paper copy). At the end of the Web Tour: “That’s as far as I can take you.” or “That’s all I’m authorized to show you.” “I need to get you in front of these people (either live or on the phone).”


The Amway Compensation Plan?

One of the major reasons why I think Amway is not such a good opportunity is because of the unfair multi tiered compensation plan. I have heard that Amway pays out about 32-33% to their IBOs, but I find it unfair in that you get rewarded for sponsoring people who move volume more than you do for actually selling products. I believe this is why so many IBOs are desperately trying to sponsor people and in some cases, deception and trickery is used in recruiting, which contributes to Amway's bad reputation.

This multi tiered compensation plan also rewards a few people at the expense of the masses. If an IBO works really hard and sold 100 PV worth of goods, that IBO would get $9 or $10 in a bonus from Amway and layers of upline would split up about $90. I fail to see how that is fair, especially when IBOs seemingly say "do the work and get paid". In this case, you do the work and your uplines get paid.

I think Amway would be more efficient by giving all IBO's 20-25% back as a bonus, with the remaining 8-13% in bonus (33 - 20 or 25) going to certain levels os achievers. I believe that this would truly allow someone to change their buying habits and gain some value. It would also be good for retention of IBOs because a 100 PV would get you a monthly bonus of about $60. If you sold 100 PV to customers, you would get the retail profit plus the bonus. I believe there would be less of an emphasis on sponsoring and more of an emphasis on selling. It would put less pressure on IBO's to recruit and sponsor, and I believe that Amway's reputation could be repaired in this manner. While you would have less emphasis on "going diamond", those who did achieve it could still get handsome bonuses.

I believe implementation of this type of compensation would also eliminate the endless need for cds and seminars. Sure, product expos and some teaching on salesmanship might help, but I believe that compensating the "majority" of IBOs would keep them interested in doing business and would lessen the need for tools. I believe this is a win-win for the majority of those in the business.

I'm sure some Amway apologists will find fault in my line of reasoning, but I believe this is a long term sustainable solution for Amway. Comments are welcome.

Friday, April 13, 2012

Amway And Tool Money?

I have been reading some ongoing debates about whether the system income for higher pins is more than their Amway bonuses. I believe the systems such as BWW, WWDB, N21 or LTD, does generate more profit for upline than the sale of Amway products. How the system income is divided though, is still a mystery as it doesn't appear that there are bonafide written contracts explaining how tools income is split up among the higher pins.

But it's very easy to determine that more income is made from the system than from Amway. If you move $100 worth of Amway products, Amway will pay about $33 back in the form of bonuses. These bonuses will be split among the Amway IBOs (middlemen), depending on your level. On the other hand, if your group bought say 20 cds at $5.00each, the system will profit about $90 as cds cost about 50 cents each to produce in bulk. Some Amway apologists will cite the fact that some groups sell cds for $2.50 or $3.00. While this is true, there is a "member's fee" which must be paid. And when you add in the member's fee, the profit for the system is the same or possibly higher!

If you buy a major function ticket for $100, the cost of that function might be in the neighborhood of $25 to $30 per attendee, so the system may generate $70 profit on a $100 sale. I believe the smaller functions such as open meetings, books and voicemail have smaller profit margins, but still overall, it's easy to conclue that the profit from the system is greater than profits generated by moving Amway products.

The only question is how much each individual earns. I have "heard" that platinums get a discount on the sale of standing orders and cds, but I have never heard of a platinum sharing any profit for functions, voicemail, or any of the other materials. This is puzzling to me as I believe the platinums do the most work in the system.

So for the lower level IBOs, if you move $300 in Amway sales (Approximately 100 PV), you will receive about $10 or 3% while upline enjoys the rest of the $90+ in bonuses from Amway. And then when you purchase and move tools volume, you receive nothing and some of your uplines enjoy all of the profit. While I don't see any problem in upline making a profit for selling training materials, I see a problem in the fact that the tools don't work. So few IBOs progress to levels where an actual profit is earned. Amway supporters will point out the new platinums emerging each year, but do not mention the platinums who do not re-qualify.

Based on my observations, I can only conclude (quite easily) that there is substantially more profit from the sale of support materials for upline to enjoy, and I can also conclude that the support materials are ineffective in training downline IBOs so they can progress to higher levels of the business. I welcome opposing views on this issue.

Wednesday, April 11, 2012

Are You Ashamed Of Amway?

To this day, I still see people who like to hide the Amway name when recruiting others. I believe this tactic has been a major factor in why Amway has a bad reputation in North America. When I was recruited, I was lied to as well. I was invited to a "beer bust" only to find out it was an Amway meeting. I went home that night thinking WTF was that? They lie to us and then expect us to join the business. And to this day, I believe this practice continues.

Over the years, IBOs have tried all kinds of ways to disguise the Amway opportunity. It was network marketing, e-commerce, online shopping mall and the corporation even changed Amway in North America to "Quixtar". Sadly, the name change to quixtar did not work, probably because the same tactics were used when recruiting new IBOs into Quixtar. Amway eventually changed the name back to Amway. I believe this bad reputation in North America is why Amway seems to be enjoying the mos business growth overseas where people either do not know the Amway name, and likely because there haven't been enough former Amway/AMO victims to soil the name in other countries.

So IBOs, how can you expect someone to trust you and do business with you if you are deceitful or outright lie about the Amway opportunity? Are you ashamed of the Amway name? If you are ashamed or scared to drop the "A bomb" on people, how will you ever be able to show any plans, let alone sponsoring anyone into the business? My former sponsor used to tell our group that the biggest challenge is overcoming the name Amway. To be fair, Amway the corporation is not the reason for the bad reputation. It is the unethical and bad behavior of IBOs that lead to a bad reputation buy on the other hand, it's not the like Amway police have been cracking down and visibly taking action against the violators so Amway is also guilty to some degree.

Conversely, people who come right out and talk about Amway are unlikely to net any decent results either because of the past reputation. It's an almost no-win situation for IBOs and prospects. For these reasons, I believe it to be nearly impossible to build and maintain a group, especially if your goal is to reach diamond. It seems as if more diamonds have left Amway in recent years than there have been new diamonds. I believe this to be spot on for WWDB, my former LOS. So IBOs, are you ashamed of Amway? If not, why are there still so many IBOs using trickery and deception in recruiting prospects?

Tuesday, April 10, 2012

What Do Amway IBOs Actually Earn?

I think it's a perfectly fair question to ask an Amway IBO what they earn if they are prospecting you as a potential downline for their business. Sadly, it's probably a question that will never be answered, or will be answered in some vague manner, or you may be shown the check of someone upline who got a sizable bonus. I know that some IBOs make money in Amway and I'm sure that some IBOs make decent money, but what do rank and file IBOs earn? It would be my informed opinion that rank and file IBOs make very little, and in fact they lose money if they are participating in the system consisting of cds, books and seminars (functions).

An examination of the common 6-4-2 plan or some other version would quickly reveal that you likely need a hundred or more downline IBOs in order to reach the platinum level. While there are some nice bonuses for that level, it is very likely that a platinum makes very little when factoring in business expenses such as standing orders, books and functions. In many cases, a platinum would be better off working a part time job instead of spending all that time building a business that yields the equivalent of part time wages. A study done in Wisconsin, while dated, revealed that platinums on average lost about $900 a year after expenses. While Amway apologists like to cite the age of the study, I will note that the fundamentals of the Amway business has not changed, and in fact there are even more tools today than back when the study was conducted, therefore dedicated system platinums might actually lose more money than back when the Wisconsin study was conducted.

In my opinion, the only way an IBO can make any money is to sell products to people who are not IBOs, and avoid participating in standing orders, books and functions. That would possibly allow someone to earn a few dollars and perhaps earn a bonus from Amway. but it certainly won't make you wealthy, nor will this income roll in forever as some uplines like to imply. But earning $25 a month doesn't sound that attractive, which is why some groups like to recruit by showing a diamond lifestyle that may include yachts, mansions and sports cars because showing someone $25 might not get them pumped up enough. What is often not mentioned, or glossed over, is that some, or possibly most diamonds get these sports cars and yachts by selling standing orders, books and functions, and not so much by moving Amway products. Sure, the upline might mention that some income is made from tools, but likely won't disclose exactly how you qualify and how much you get when you qualify.

If prospects really knew what Amway IBOs were earning, there would be very few people willing to see the plan. It is why the recruiters imply that diamonds earn millions and have mansions and other trappings. The reality is a stark contrast, which would be apparent to those who carefully evaluate the business plan and do some research on average incomes as reported by Amway. To the information seekers and casual observers, I encourage you to read more and to get as much information as possible. Good luck!

Monday, April 9, 2012

The Amway Illusion?

One of the things my upline taught us ad nauseum was that we needed to have faith in our business and in our upline. That we needed to believe that we were going to be successful. IBOs are told that they should act successful even if they are still working their way up the ranks in the business. It is why they ask (require) IBOs to wear suits and business attire to all meetings and functions. This is one of the weird quirks about the business in my opinion. I live in Hawaii and I remember a function they held in the middle of July in a high school auditorium and there was no air conditioning. I think my suit needed special cleaning because it was completely saturated with persiration.

Anyway, with this part of the year, soon there will be thousands of IBOs shuffling off to a function called dream night, or in some cases, winter conference. The tickets are about $60 to $80 and includes a dinner. What IBOs are often unaware of is that many venues will allow you to run these conferences for $20 to $25 per person. The rest of that ticket prices goes directly into your upline's pockets. Anyway, the dream night function will feature slide shows of mansions, yachts, jet skis, sports cars, fabulous vacations and other trappings of wealth.

What many IBOs don't realize is that this display of wealth is just that. There is no bonafide evidence to indicate that these diamonds actually own all of those toys and goodies. The diamonds probably won't verbally confirm it either, because these toys and goodies may not really be owned by them. It could be rented, or maybe some upline corwn ambassador may own the mansion, but IBOs will assume that these trappings of wealth are common once you reach diamond. As an IBO, I never actually knew how much a diamond really earned. I just assumed it was a lot because we were shown all of these goodies and just assumed all diamonds had these kinds of lifestyles.

If I posted a picture of a mansion and a jet and said I owe it all to my earnings as a blogger, people would cry foul, that I am lying or making things up. And they would be right. Well, I would guess that many diamonds are doing the very same thing if they appear on stage and implying that they have jets and mansions. As I said, someone may own a mansion and a jet, but to imply that this is a part of the typical diamond lifestyle is a stretch. The evidence is there. Some diamonds have lost their homes to foreclosure. My old LOS diamonds (WWDB) taught us that diamonds pay cash for everything, including homes. Now confirmed as a blatant lie. Who knows what else they may have misrepresented?

I ask IBOs and prospects who may be attending dream night, to watch with a critical eye. What is being implied with the display of wealth? Analyze if those goodies can be purchased with a diamond income ($150,000 plus some tool income). Ask yourself if this lifestyle is truly sustainable? Ask yourself if you can live with yourself if deception is a part of earning your diamond lifestyle?

Thursday, April 5, 2012

Amway Freedom?

When I was an IBO, I often saw my upline diamond driving around town in his used Mercedes dressed in a business suit. I used to think why does he keep working if he can walk away and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios. The diamond is working to help his downline out of a genuine concern, or possibly he is working because he has to? The only difference now is that the diamond works the nite and/or graveyard shift. Because many IBOs are building the business after they complete their day jobs, a diamond has to work nights and weekends. Some freedom. **We should also note that my former upline diamond dropped down to the emerald level around 2005 and has since re-established his diamond level a few years later. Who knows where he's at today?

Now Amway has stated that the average diamond earns about $150,000 a year. That is a decent income, but after taxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts. There is no large barrels of cash rolling in with no work.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining their group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin. We had "play days" and had the opportunity to "earn time" with the diamond.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle. Sometimes I wonder if diamonds can actually afford to fly first class to all functions?

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nites and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next.

I believe that diamonds may actually be busier at the diamond level than an average Joe who has a 9-5 J-O-B. The difference is that the diamond works the night shift. Is this the freedom you are seeking?

Wednesday, April 4, 2012

The Problem With Amway And MLM?

Interesting article I came across:

1. The Products and Services Do Not Add Value

The meeting I went to for the first opportunity was held in a large movie cinema. There was a flashy movie presentation, and then a procession of people gave us their MLM success stories. After this meeting for newcomers, there was a training session for existing marketers. Since my friend was staying for this meeting and I wanted to better understand this opportunity, I stuck around. It was an eye-opener.

In this training meeting, I came to understand that the opportunity basically involved reselling the services of a telecommunications company. It became obvious that it offered little to no value to the potential customer, as the service was in no way cheaper that simply having a contract with the telecommunications company. The trainers encouraged marketers to divert queries regarding the benefits of the service with phrases such as “you will be doing me a favor by doing this” or “you will be helping my dream of working for myself come true”.

In regards to Amway, I’m sure there is nothing wrong with their products. But is anyone actually buying Amway products because they are the best quality and/ or value? It seems to me that most people purchasing the products are doing so because they are wrapped up in Amway or feel pressured to by someone (yes, I’m sure there are some exceptions). This leads me onto my second problem with MLM.

2. MLM Strains Relationships

Now from what I observed, MLM in many ways has a cult-like following as people get heavily wrapped up in the idea of making “passive residual income”. The income model closely resembles a pyramid, and for this reason success with MLM is heavily dependent on recruiting further people to join. In this sense, everyone you know – friends, family and work colleagues – become potential recruits and sources of income.

As I’m sure you can imagine, someone who becomes too wrapped up in MLM is going to be extremely annoying. In this way, MLM can strain, and can even permanently damage, relationships with the people closest to you. And remember, in many cases it is going to be questionable whether MLM products and services do actually add any value.

Final Thoughts

As should be obvious from this article, these are my opinions only. I am only familiar with the MLM opportunities mentioned, and I happily admit that I did not get involved with them past the first presentation. I am very open-minded, and I’m sure many people have good experiences with MLM. MLM is often linked to personal growth, and I’m sure many people gain confidence and learn valuable networking lessons getting involved. That said, if you are involved in MLM or are presented with an opportunity please consider my points above, try to cut past all the hype that is likely to be associated with the presented opportunity, and use your own mind to decide the value of the opportunity.

Tuesday, April 3, 2012

Amway IBOs Talk A Good Game?

Having blogged for a number of years now, I have observed that IBOs talk a good game about retailing, sponsoring and doing Amway business activities. They will tell you to set yourself up with 20 customers, sponsor 6 frontline, show a number of plans and set up certain follow ups with contacts, and doing other activities supposedly to build an Amway business. I find if humorous when these same IBOs start throwing insults or diverting the discussion when someone asks if they are actually making money. Of course it would be understandable if a new IBO would admit they had not made a fortune as of yet but it seems that even that response is not forthcoming from IBOs.

It seems that the Amway business is simple enough. Buy some products, sell products and try to sponsor some downline in order to leverage your volume with your downlines. IBOs mistakenly believe that you can build it once correctly and that the income will flow into future generations. What goes unnoticed is that IBOs come and go with such a high frequency, that a business generating residual income would be like a sandcastle on the beach. You might build it nice and big but the waves of attrition would quickly turn that sandcastle into nothing. The same would be true of an Amway business. The IBOs dropping out would wipe out your business unless you are constantly replacing the people who quit. IBOs like to talk about Amway sales and how the company is growing in sales, but the Amway sales have no relationship with making IBOs more profitable.

IBOs may also toss in comments about how they are nicer people or how they are improving their marriage because of the Amway business. I often wonder how that can be when functions and meetings take you away from your family and spouse. I suppose it could be because the uplines talk about people being nicer or tossing out lies about Amway and the AMOs saving marriages. I remember a WWDB diamond talking about how WWDB members had a 2% divorce rate while the rest of society has a 60% divorce rate. Ironically, that diamond's marriage ended in divorce. I believe this crap is still taught as a WWDB IBO who blogs, had mentioned this tidbit on his blog last year. I don't believe Amwayers or anyone else has a higher or lower rate of divorce than society but it becomes an issue when uplines teach it and their downlines repeat it.

So it would seem that IBOs talk a good game. They know what to say and how to act, but they're like poker players who are bluffing. If you call them on it, they are likely to fold in their hands because they don't have the goods. It is why many Amway discussions turn into a insult contest, when the IBO suddenly gets confronted with facts that are contrary to upline teaching. It's usually quite funny but I wonder if these folks question their upline or go on their merry way repeating uplines lies? It becomes apparent to everyone but the IBO when they are repeating crazy stuff taught by their upline. Good luck to anyone who tries to build this business against nearly insurmountable odds.

Monday, April 2, 2012

Is Your Upline Strange?

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?