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.

1 comment:

Texas Finance Professional said...

good post on the whole pyramid thing. "residual income" in this sense is of course a myth. my only difference with it is that "residual income", done correctly, is not a myth. i will characterize it from an investment perspective. Though stocks and bonds are indeed very risky, time and capitalism have proven that an investor can invest in a company and receive the growth of the stock price and/or dividends on the stock owned as "residual income". However, this may not even be a proper term. Even the term "passive income" may not be proper because a wise investor will continually monitor their investment actively. At any rate, Joecool, I completely agree with you, except that if the term "residual income" is applied to investing, whether it be stocks, bonds, or real estate, it is quite possible. Though of course, investors do not use this term at all I do not believe. Finally, even very low interest rates on savings account could be characterized as "residual income", or "investment income". Thus, I apologize for splitting hairs here, for you are most definitely right in terms of the pyramid schemes. I only wish to encourage those who may read by making the distinction between fraudulent pyramid schemes claiming "residual income" and real-life, smart investing, which can result in a return on investment, and thus additional cash income. Keep up the great work informing people about these scams!