Thursday, May 10, 2012

Amway's Compensation Is "Fair"?

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.


Lisa said...

Amway is a great company no doubt about it otherwise they wouldn't be as big as they are but to be honest if you are going to have to put in all the hard work and do what it takes to succeed in Network Marketing you may as well be with one another respected Global Company who pays out the most commissions and that's Nu Skin. They pay 6 levels deep all at 5% plus other bonus's which are considerably higher than Amway. The bulk of their commissions are paid out on the back end but man if you make it, you get very well looked after. Majority of top earners bringing in averages of $60,000 to $100,000 per month PLUS!

Anonymous said...

Nu Skin: Same shit, different pile. Yet another MLM money-losing pyramid scheme.

When one says a company must be great otherwise they wouldn't be as big as they are is foolish as it doesn't take into consideration HOW they got all their money. Scamming in new distributors to brainwash and self-consume and fall into debt may make that company a whole lot of money, but it sure doesn't help the 99% of folks in these types of MLM's who LOSE money.

Anonymous said...

My husband is an Ibo and and all he thinks talks about it AMWAY its like having a Stepford Husband from Amway! He states the CDS and learning. System speak about sacrifice and dedication to achieve diamond status. Those CDs brain wash you not mention the Leaders and there weekly. Meetings imagine a FATHER saying to his son or daughter they "can't go to there High School GRADUATION " Because he has to be at his metting because he must show leadership " tell me what happened to Family and being there for the people who matter most? Maybe that should be the next CD AMWAY brings out

Anonymous said...

so sad...