Monday, April 16, 2012

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.

1 comment:

Anonymous said...

I am not sure this would change anything, not saying it is good or bad; The system today seems very successful, Sales have grown to over 10 billion in 50 years and 3 million IBo's. So its working despite what anyone might say;It may not be honest and in particular the tools is a rip off; and only are very small few will make money; But there will always be those few who will drive it; I think the reality is that very few people are successful in life and thats the way it is in this; Its easy to enter so there will always be many joining and then dropping out.
I think to be successful you need to go out there show the plan constantly and keep going till you hit enough people who are able to do exactly the same thing; People like Dexter , Britt and others just have that capability to build and motivate; Thats how they geot to Crown etc and managed to have proably over 100 Diamonds in their group or more; I think these guys could do it irrespective of the product , the price or the compensation plan; And there are more like them. That they make money on tools and innocent naive people who join , spend money and dont do anything irritates me; But thats how it is and anyone who wants to get to Diamond and above needs to be like that; There will always be those who will do it and hence this system and the many other MLM systems will continue to grow. There will always be many people attracted by 'easy' money as its sold to them and hence recruitment will be ongoing;