Saturday, June 30, 2012

IBOs Are Glorified Salesmen?

IBO = Independent business owner. I thought it was cool, but looking back at the bottom line, IBOs are just salesmen for Amway with no fringe benefits and no guranteed salary. Or, a comission only salesman. Salesmen earn their income by selling goods and services, and earn a commission. Sadly, many IBOs sell very few items because they have been taught that you make your money by purchasing items from yourself.

On the surface, buying from yourself sounds sensible but you don't truly make a profit by purchasing your own goods, you simply empty your checking account. Any profit you think you have earned has actually come out of your own pockets. In any business, you must have a base of customers in order to have a steady income. If you are purchasing the majority of your goods, you are only making a profit for Amway the corporation, who makes, or in the case of partner stores, distributes the goods. The ones who actually produce the goods are the ones who profit. An IBO is just someone who sells the goods and who distributes them for a commission.

For most "real" business owners, building their business might mean advertising, creating special sales, and increasing the number of customers or by increasing the volume purchased by existing customers. An IBO who is "building the business" is rarely ever trying to attain more customers. In factm some of Amway's regulations make it difficult to attain a mass of customers such as restictions on advertising. Therefore, most IBOs who are "building" are simply seeking to add downline who will hopefully buy their PV and also attain more downline. In this manner, IBOs are increasing volume, and therefore their commissions by adding people to their downline. Ultimately, the upline is making their money by the efforts of their downline and often, from the jobs of their downline because there are usually not enough customers to sustain any significant level of sales.

In this day of social networking and power advertising, Amway apparently remains a dinosaur. While they do advertise some of their product line on TV, the salesmen or IBOs have little ability to market their products on a large scale. Instead it is word of mouth, individual to individual. It is highly ineffective. Do you know why it costs hundreds of thousands of dollars for a 30 second commercial in the superbowl? It's because tens of millions of people are watching. What do you think is more effective on increasing sales, a superbowl commercial or word of mouth advertising. Keep in mind that zany IBO behavior has already damaged the Amway name, thus giving you a disadvantage over other opportunities.

In the end, or the bottom line is that an IBO is just a salesman who receives no fringe benefits, and a relatively small commission. It's a great deal for Amway, but is it a great deal for an IBO?

Thursday, June 28, 2012

Fake It Till You Make It?

One of the things I distinctly remember being taught at a function was to fake it till you make it. This was to give the impression of being successful. It was said that you are going to be successful so you may as well act the part. I believe this is taught today as well. IBOs like to make an impression on prospects so they want to appear successful. It is also a part of why IBOs wear suits. They want everyone to be under the impression that they are in a multi million dollar business. Guess what? WalMart is a multi billion dollar business but their employees don't wear suits!

What I find really interesting about this is that I honestly believe the biggest fakers are probably the diamonds. Next month, all over the country, there will be functions called Summer Conference or Family Reunion (WWDB) . A function with a host (family) of diamonds and other Amway heroes who might show off slide shows of mansions, jets sports cars, golf club memberships, fabulous vacations, and shopping sprees. I honestly believe that many of the diamonds are the biggest fakers out there. A diamond income, which seems big, and supplemented with tools income, most likely cannot sustain the lifestyles portrayed in these functions. Simple math bears it out.

A diamond income, even with tool income might be $250 or $300K. While that mey seem huge compared to a working stiff who earns $40K or $50K per year, keep in mind that a diamond business has many expenses. How much do you think it would cost a (diamond) family of four (4) to travel to say 5 or 6 functions, first class? How much of that income goes to taxes? I challenge IBOs to sit down and figure this out. After taxes, medical insurance and business expenses are taken into consideration, I would guess that a diamond lives a middle class lifestyle. Amway advocates will argue that this is sans a 9-5 job but an Amway business needs constant attention as IBOs up and quit every day. Some who do sign up never do a thing. Replacing IBOs is a never ending task. It is why you do not see or hear of any diamonds who "walked away" to collect residual income forever and ever.

Here's another take on fake it till you make it. Isn't this simply lying and hoping you will one day succeed? A site visitor recently forwarded an email string he had with a current WWDB IBO: http://expeditionoftruths.com/2012/06/26/fake-it-until-you-make-it/ This IBO claims that he doesn’t waste any money, and doesn’t just sign anyone up (As if IBOs can afford to turn business away). This IBO also believes that his WWDB leaders are loaded with integrity. It might be easier for me to believe that except that I was in the same line of sponsorship (WWDB) and what “Shaun” doesn’t know is that he is being taught almost the same material I was taught as an IBO in the 1990’s, and by many of the same leaders. These are the same leaders who told bold lies and were deceptive about the secret tools business until the internet exposed them. What Shaun also doesn’t know is that things have not changed. I wish him well, I think he’s a good guy who been duped and misled.

Wednesday, June 27, 2012

Winners Join Amway?

One of the things that my upline taught, and I believe is still taught today in various groups is that winners join Amway and losers do not. Or that you were a winner because you were doing something to better your financial future and those who didn't were losers. or broke minded. Of course the upline who said this had no knowledge about those who were not in Amway. Some of them may already have been financially sound or may have been doing something to better their financial future. I'm not sure why these uplines, who promote "positive", had to resort to calling people losers simpy because they did not agree that Amway was the greatest thing since sliced bread.

In many games or sporting events, there will be someone or a team that wins the game and someone or a team that loses the game. Losing a game doesn't make you a loser and certainly, a team that wins the game would not say the losing team were losers. Can you imagine a pro football team's coach taking the podium after a game and saying his team won because the other team was a bunch or broke minded gutless losers? That would never happen, yet we see that frequently in the Amway/IBO world. The owner of Amway, Rich DeVos had once said in a recorded message that just because people do not agree with you (paraphrased) about Amway, does not make them losers and that IBOs should not call people losers.

In all of this, people's jobs are also criticized. That a job stand for "just over broke" or "jackass of the boss" and other blurbs. Many IBO's goals and dreams consist of ditching their job so they can sleep all day and live a life of luxury. Ironically, it is most IBO's jobs that continue to produce income so they can pay their bills and feed their family. It is also an IBO's job that funds their Amway and AMO expenses such as product purchases and functions and voicemail, etc. Without having a job, most people could not even join Amway or pay for any tools. Sadly, most IBOs won't make any money in Amway either, and will have to continue to work at their jobs. I do not believe that someone earning an honest living working a job is a loser. Ironically, the folks calling people losers are often not even netting a profit from their Amway business!

Yes, in this business or the sports world, there will be winners and there will be losers. The question is whether you are the one who is allowed to be the judge of who is and who isn't. I would also suggest that IBOs are completely shutting down potential future business by their behavior. What if I went to a store to purchase something but the item was not available on that particular day, so I don't purchase anything and leave. As I leave, the store owner says I am a loser for not buying something there. Will I go back? Very unlikely. If an IBO truly sees themselves as a store owner, all prospects should be seen as potential business, whether future or present. If your upline tells you that people not interested are losers, you should hand him a mirror.

Tuesday, June 26, 2012

Amway And Robert Kiyosaki?

Based on my experience in Amway, my blogging experience, and observation of other people who give financial advice such as real estate gurus who teach you to buy property with no money down, or others such as Robert Kiyosaki for that matter, all show testimonials of sucessful people. Obviously they do not show you the vast majority of people who try their systems and fail. I believe failure is the norm for people using these system, although they will show off the rare successes and pass them off as the norm.

It is my informed opinion that whether it is Amway, WWDB, BWW, N21, real estate or the cashflow business, the vast majority of people who try these systems do not make any kind of significant income. Sure, some do, and those are shown as the possibilities. But if you watch infomercials, you will see in small print on the bottom of the screen, "unique experience", you results may vary. I believe that a similar message used to be at the end of Amway diamond recordings as well. If success is a unique experience, then what is the typical experience? The typical experience is probably a loss.

These systems in general do not work for various reasons. Many people simply do not have the acumen to work the system. Or the system has too many variables for the system to work, or the system calls for things beyond your control. For example, success in Amway generally requires you to sponsor others, something that is beyond the control of most people. Add in the lazy and people who are hoping for a quick score and it is understandable that most will fail. But these systems are often set up where the majority simply cannot all succeed. Nowhere is that more true than the Amway business where the pyramidal compensation plan nearly guarantees failure for the lower level IBOs. In multi level marketing, many comp plans are set up just that way. You need the lower levels to work and eat losses so you can profit. It's shown quite apparently when you the plan, such as Amway's 6-4-2 plan.

So what can someone do? Well, it may no be as sexy or attractive but a part time job and investing and saving might be something to think about. Even a part time business where you focus on selling products for a profit might work. It just seems prudent to avoid these "systems" as the primary beneficiary of these "systems" are the ones who directly profit from them.

Friday, June 22, 2012

What Is Your Amway Business Worth?

Many many people see the Amway plan, sign up in the hopes that Amway income will help them fulfill their dreams and that they will walk away from their jobs and collect lifelong residual income while walking the beaches of the world. Sadly, most IBOs will never even sponsor a single downline. These IBOs may continue in the business for a while but will eventually quit when they see the writing on the wall. The fact that many people sign up and do little or nothing is a problem that seems to go ignored by many.

But wait, you're an "independent business owner". So instead of quitting, why not sell your Amway business? I wonder if any IBOs actually think about what their business is worth. I mean a diamond could sell their business and live large happily ever after right? Here's some food for thought. Why are there instance of diamonds quitting or resigning from Amway? Why would they just quit when they could either walk away and collect an income "forever" or sell the business? What would an Amway business be worth? You don't really own equipment or a building. You probably don't have employees. Your Amway business likely has little or no equity. You don't own your downline, although their volume passes through your business. But if they do nothing, you get nothing, which is why people cannot just "walk away" and collect income forever.

I believe diamonds quit and resign because their business is worth very little or nothing. And most Amway businesses do not even generate a net profit. For IBOs who are seriously pondering on this very important message, try looking up this topic in Amway's rules. There are very complicated steps to be taken when selling your AMway business as each person upline must be offered ownership (To the best of my understanding). This process can go on for a long time and the attrition of your business could render it worthless before you can find a buyer, if you have a buyer at all. Also, if you quit, the downline in your group would be surrendered to the immediate upline anyway. So why would your upline want to buy your business? Why not just do nothing and let the downline be defaulted to you?

So IBOs, I ask you. What is your business worth? Food for thought....

Wednesday, June 20, 2012

Yous "Real" Friends Aren't Amway IBOs?

You hang out with friends, generally people you like and have similar interests. You have good and bad times, but your true friends are there for you when you need them. You move residences, your friends are there to help you move. They may play a round of golf with you, or watch some sporting events, dinners, backyard barbeques, etc. These are folks you will likely end up retiring with and enjoying your golden years.

But suddenly, you get enticed to join Amway. You see the "chance" to get rich, with a shortcut (not get rich quick, but a "shortcut"). You sign up and your sponsor is your new "best" friend. Most of the people you enjoyed being with think Amway is a questionable venture to get involved in. Suddenly, because of what you have been told or taught, you view these same nice people as "broke" or "losers", simply because they do not share the same ambition of untold wealth working 12-15 hours a weeek. Suddenly, you friends become prospects, or people you want to sponsor so you start recruiting them. Some may join, but most won't. Suddenly you are immersed in recruitment meetings, functions, and avoiding "negative", which is people and events that do not support your Amway business.

Now you are missing birthday parties, barbeques, and other social events. Your social events are now recruitment meetings, seminars and Amway business related events. You are taught that these events can be put off and your gratification delayed. You can do whatever you want when you go diamond. (Even though there me be only one (1) diamond out of every ten or twenty thousand IBOs) Your dedication will pay off right? Sadly, for most people, even very dedicated people, all they will see is losses on their yearly tax returns, mainly due to the purchase of cds, books, voicemail and function tickets. But these are your "friends" right?

Here's my take on it. Try missing a few meetings or functions. Stop buying cds and see how many "friends" remain from the business. It is likely that your upline will claim that you walked away from the friendship by slowing down on the "system". If that happens, then you have conditional friends, or fairweather friends. They are your "friends" while you are pursuing the same cause. They are your friends when you are attending functions. Are they there for you in bad times?

A short while after I attended my last function (I was still an IBO, just not a business builder), my dad passed away. Not a single one of my IBO "friends" bothered to attend the memorial service. Not a single one of my IBO friends called or dropped by the home to pay their respects. All of my "real" friends, who saw through the AMO smoke and mirrors called to talk to me and/or attended the memorial service. Are your IBO friends conditional friends? Mine were.

Tuesday, June 19, 2012

The Amway "Losers"?

One of the things that my upline taught, and I believe is still taught today in various groups is that winners join Amway and losers do not. Or that you were a winner because you were doing something to better your financial future and those who didn't were losers. or broke minded. Of course the upline who said this had no knowledge about those who were not in Amway. Some of them may already have been financially sound or may have been doing something to better their financial future. I'm not sure why these uplines, who promote "positive", had to resort to calling people losers simpy because they did not agree that Amway was the greatest thing since sliced bread.

In many games or sporting events, there will be someone or a team that wins the game and someone or a team that loses the game. Losing a game doesn't make you a loser and certainly, a team that wins the game would not say the losing team were losers. Can you imagine a pro football team's coach taking the podium after a game and saying his team won because the other team was a bunch or broke minded gutless losers? That would never happen, yet we see that frequently in the Amway/IBO world. The owner of Amway, Rich DeVos had once said in a recorded message that just because people do not agree with you (paraphrased) about Amway, does not make them losers and that IBOs should not call people losers.

In all of this, people's jobs are also criticized. That a job stand for "just over broke" or "jackass of the boss" and other blurbs. Many IBO's goals and dreams consist of ditching their job so they can sleep all day and live a life of luxury. Ironically, it is most IBO's jobs that continue to produce income so they can pay their bills and feed their family. It is also an IBO's job that funds their Amway and AMO expenses such as product purchases and functions and voicemail, etc. Without having a job, most people could not even join Amway or pay for any tools. Sadly, most IBOs won't make any money in Amway either, and will have to continue to work at their jobs. I do not believe that someone earning an honest living working a job is a loser. Ironically, the folks calling people losers are often not even netting a profit from their Amway business!

Yes, in this business or the sports world, there will be winners and there will be losers. The question is whether you are the one who is allowed to be the judge of who is and who isn't. I would also suggest that IBOs are completely shutting down potential future business by their behavior. What if I went to a store to purchase something but the item was not available on that particular day, so I don't purchase anything and leave. As I leave, the store owner says I am a loser for not buying something there. Will I go back? Very unlikely. If an IBO truly sees themselves as a store owner, all prospects should be seen as potential business, whether future or present. If your upline tells you that people not interested are losers, you should hand him a mirror.

Sunday, June 17, 2012

Amway's Road To RIches?

When I saw the Amway plan, it was presented sort of as a road to riches. Yes, the presenter was careful not to say it was "get rich quick", but 2-5 years is relatively quick when compared with working 40 hours a week for 40 years as the business plan was shown to us. And while some exceptional people do achieve diamond, there is a trail of IBOs who suffer losses, some of them staggering. In our own group, I know of at least one couple who lost their home following upline advice, and another couple to ended up filing for chapter 7 bankruptcy. I must state that the bad advice leading to bankruptcy and foreclosure most likely came from upline leaders. I also know of a gal who quit her job to attend a function, faithfully following upline advice from WWDB. It took her a while to recover from that bad advice.

So what is the experience of many CORE IBOs? I'm not talking about those who "do nothing", but IBOs who actually make an effort. Well, if they do their 100 PV, then they are spending about $300 a month and dedicated IBOs will typically spend about $200 a month on average for tools. This is for a single person. A couple or family would be expected to do more, thus spend more. So for these 100 PV IBOs, they will expend about $500 a month and get back maybe $10. Of course if they were not in Amway, they would still have some expenses for household goods, but not anywhere near $500 a month.

Over the course of a few years, these expenses add up and can become staggering losses. Hard core IBOs might expend even more. The only way a rank and file IBO can gain relief is to sell products (which is difficult given the prices and the Amway name reputation) or to sponsor downline who wil then suffer some of the losses for you. It would be my estimate that an IBO might break even at about the 4000 PV level. However, at 4000 PV, you might have significant expenses associated with running a group, such as showing distance plans for your group.

Over the years, I would suspect that millions of IBOs have come and gone through the Amway opportunity, and probably lost billions of dollars. But many of those who lose money think they are successful, because many upline will edify those who buy tools, regardless of IBO results. After a few months, if your group and PV are not growing consistently, it is highly unlikely that you are headed for success.

IBOs and newbies, are you on the road to riches or financial disaster? Keep in mind that a net loss is not success, despite what you upline mentor may tell you.

Friday, June 15, 2012

Amway Teaching Systems - The Real Scam?

Amway has been around for a long time. When the company first began, it wasn't uncommon for people to go door to door, perhaps with products in a radio flyer to sell them as a way to make some extra money. There were no extensive training program that I know of and certainly, there wasn't the stigma that the company has now. But in today's world, when people refer to Amway as being a scam, what they usually refering to the motivational leaders and the associated systems. I believe that the systems were first invented as a genuine way to train distance groups, but the income and power of systems seduced some upline leaders into becoming conmen. Thus I believe that many if not most systems are corrupted. I witnessed personally and still hear of stories where IBOs are encouraged to go into debt or sacrifice basic family needs in order to purchase more system materials. Amway's involvement in this is knowing that these abuses occured and not taking any substantial action.

But what are the merits of the program when broken down? Many Amway defenders are quick to point out that many IBOs "do nothing", which may be true, but for the sake of argument, let's not even consider the ones who do nothing. Take the 6-4-2 plan that many use in recruiting. It involves 1 IBO with 78 downline, all of whom do 100 PV. This plan also generally assumes that IBOs will be a part of the system apparently, because non system IBOs generally do not have the dedication to keep moving and selling products. This is because many systems teach IBOs that they are successful when they lose money! In 6-4-2. you have one platinum, allegedly the break even point for system IBOs, and 78 non platinums, spending money on products,and winding up with a net loss, if they are dedicated to the system.

Of course, system expenses vary, depending on which system you are a part of. I have heard IBOs mention that their system expenses may be as low as $75 a month, to over $1000 month for hard core fully dedicated IBOs. I have issued a challenge, which noone has ever undertaken, to shows an actualy platinum group where the collective group made a net profit after system expenses were accounted for. Noone has ever come forward to disprove this point. I believe a retailing group could show a net profit, but I do not believe that a group of prosumers or buy from yourselfers could ever collectively net a profit.

So for Amway IBOs and prospects, please keep in mind that it is the system that is often the downfall of many IBOs. A dedication to any system is very likely to nearly guarantee that you will end up with a net loss as an IBO. Can someone still succeed? Sure, but your chances are similar to that of someone hitting a big jackpot in the lottery.

Thursday, June 14, 2012

The Amway Lady

Great post from another blog:

http://corruptionincortez.blogspot.com/2012/06/june-4-2009-amway-lady.html

"As I stood next to my hot cab on a warm summer afternoon a nice lady came over and talked with me for a bit. She was probably in her late 50’s, and was quite pleasant. It was quite slow so I spoke with her about the “island” and engaged in general small talk. She mentioned that she liked the drivers in Cortez and would periodically take a cab home to her place in La Mesa. Since we had a good rapport I passed along my business card and told her to drop me a line if she ever needed a lift home.

A few weeks later she called me, but not for a ride. She had a business proposition that she wanted to discuss with me. I obliged, looking for a way to supplement my income. We met at a Starbucks where we went over the business model as well as what was expected from me and what was possible to achieve. It sounded too good to be true – it was… I was skeptical, but I gave her the benefit of the doubt. What made me immediately suspicious was that she seemed to be overly upbeat and didn’t mention the company name. The conversation was centered around commodities – things that we will buy throughout our lifetime (food, toothpaste, toilet paper, paper towels, etc…). She invited me to a second meeting and informed me that she would follow up with the details shortly. She was persistent. I had free time that Wednesday evening, I left a spot open.

When she called to explain where the meeting would be I realized things were becoming even stranger. The gathering was to take place at a house in a cul-de-sac in La Mesa. There would be fellow entrepreneurs there. Or so it would seem…

When I arrived I was in denial. An older couple, presumably in their 70’s served up cookies and smiles and told me to grab a seat on their couch. Then the clean cut guy with the suit came into the room, complete with a slick haircut and a cool demeanor. He talked of massive profits with minimal effort, while scribbling fractions and graphs on the whiteboard in front of him. And then came the kicker. He was selling Amway. My night had been a total waste. I didn’t want to be rude and walk out, everyone was so thrilled to have the company. They were serving up shit sandwiches and I was forced to take a big bite. For those of you who don’t know, Amway is a pyramid scheme. Basically the people at the top of the pyramid (the recruiters) make money off of the people they recruit by keeping a percentage of the sales that you (the recruit) sell. Any people that you recruit that happen to sell anything, well you would get a portion of that, as well as the person who recruited you. The person at the top gets a portion of everything. It can be profitable, if you are willing to harass your friends and family relentlessly by peddling your crappy Amway products. You have to be willing to act shamelessly. In retrospect, it would likely be a good position for many of the other drivers… Eerily, the other drones that attended the meeting were surprisingly gung-ho about the whole thing. They drank the Kool-Aid, right down to the last drop.

I told Alice (the Amway lady) that I would have to consider it. She was quite pushy. This was her time to seal the deal, to have me become further invested in their enterprise. A few days later she called me again and I told her that I would not be attending any more meetings. I was polite – something that she was not. She just threw a fit and acted like a child, by explaining how I was making a big mistake and missing out on a once in a lifetime opportunity. I wished her the best and reassured her that she would find people who much more eager to become filthy rich selling junk from Amway."

Posted by Henry Krinkle at 11:19 PM

Upline Secrets?

One thing that I was unaware of as an IBO was that our uplines were profiting from our tools purchases. I was in WWDB at the time and I was told very clearly that nobody made money from the tools and in fact, I was also told that WWDB was a non profit organization. Both of these statements were bold lies told by WWDB leaders and they have never been held accountable. We were told that upline cared about us and our success, thus they spent their own money to fly to functions to teach us how to succeed.

Eventually, the internet amd other media made it impossible to cover up these lies and uplines funally admitted that they profitted from tools. However, it looks like they downplayed the magnitude of the tools profits. I believe some upline may have made most of their income fro tools, especially leaders who may have fallen out of qualification. Now the upline admits they make some profits from tools, but there is still a great deal of secrecy in the tools business. What makes the whole thing ironic is that the uplines allegeldy are not supposed to entice Amway prospects into joining by using the tools money as a draw, but at the same time, they are told that tools are vital to their success.

I wonder how many prospects or IBOs would be fired up about buying tools if they knew that their uplines might not currently be qualified at the level they claim to be, and knowing that the uplines will make a ton of money whether or not you make a cent as an IBO? Also, some uplines are shameless in pushing the tools on downline. Sure they might cut the newest guy a break and loan them some cds, but once that IBO decides to start building downline, they are likely to be told that a real business owner buys their own tools, or that a business owner needs to be a leader and purchase extra tools for their downline. It's a cycle that just keeps going because the people who could make a difference do not.

How would you feel uf your upline is touting themselves as a financial genious but in the background, their homes are foreclosed or they have financial difficulties? What if your upline touts their morals and you find out they are divorced or getting a divorce? What if your upline said Amway saves marriages? Your upline certainly won't say they are perfect, but conversely, they should be held to the highest standards if they are using their status to be able to sell tools and make large profits.

Many prospects and IBOs don't know this, but I hope they take it to heart.

Tuesday, June 12, 2012

Amway WWDB Eagle Program?

Reprint of a popular article:

Eagle Parameters: Signed Counsel Sheet to Upline Diamond 300 PV personal use/retail for couples, 200 PV personal use/retail for singles 6-5-3 (PB/SO/MF) - Explained below 6 legs at 100 PV or higher 5 legs on standing order 3 legs attending major functions



Being An Eagle Is Profitable?

I have listed the parameters for the eagle program above. I will provide an analysis and some comments about the WWDB Eagle program. In my opinion, the Eagle program is basically just a program where upline assures themselves of a certain amount of tools sales. The IBO with the eagle parameters is likely losing a ton of money.

First of all, an Eagle with minimum parameters/legs would be at about 1000 PV. That would equate to about $200 to $300 a month in PV bonus from Amway, with differences based on width, total number of legs moving volume, etc. For this example, I will asume the Eagle receives $300 in PV bonus.

200 PV for singles, 300 PV for couples. That’s $600 to $900 in personal use and retail sales. While IBOs may attempt to sell products, we know that many IBOs sell little or nothing. Even if an IBO manages to sell 50 PV to customers, that IBO would still be spending $450 to $750 a month on personal use, and perhaps earning $100 a month for selling 50 PV.

6 legs at 100 PV or higher. That is approximately $1800 a month in personal consumption and retail for these downlines. Assuming they each qualify at 3%, they would get about $10 in PV bonus each month. The $10 does not factor in business expenses.

5 legs on standing order. Depending on whether an IBO is on the premier club, their cost might be about $60 to $75 a month (or more) for standing order, and may vary if extra cds are purchased.

3 legs attending major functions. Major functions generally cost about $125 per person, per event. And the expenses does not include transportation which may include round trip airfare during peak travel months, rental cars, hotels, etc etc.



Let’s look at a single IBO with eagle parameters. And I will use “best case” scenario. Income might be $400 with the 1000 PV bonus plus the retail profit for selling 50 PV. $400 sounds like a nice tidy sum, especially for a single person. But looking deeper, we see that this person also had to consume $450 worth of goods for him or herself ($450 = approximate cost of 150 PV). Yes, he or she received products, but seriously, how many single people actually spend $450 a month on laundry soap, shampoo and other consumables when simply “changing your shopping habits?

Additionally, an “Eagle” would have to be a leader. More than likely, simply buying standing order is not sufficient. A leader should be consuming more cds as you cannot listen to the same cd every day. Factor in the books, monthly open meetings, average out the cost of major functions, gas money, and other business expenses. I would say it is safe to say that an “Eagle” would easily spend $300 a month (or more) on tools and other business related expenses (Tools = Books, cds, standing order, meetings, functions, voicemail workshops). If this Eagle has to fly to major functions, then that cost may be significantly higher on average.

So let’s summarize. In a “best case” scenario, an Eagle IBO would spend about $750 a month on products and tools. I understand that products are not a business expense, but if a single person is expected to consume/sell twice as much PV, I would say half of that expense is a business expense as it would be unlikely that a single person would ever use 150 or 200 PV worth of goods in a month. So lets use that case and say that an Eagle has $475 in expenses per month ($175 for PV and $300 for tools). The Eagle receives $400 a month in bonuses and retail income (best case scenario) with the IBO selling 50 PV worth of goods (which is not common).

In a best case scenario, an Eagle loses money! And what’s more, all of his or her downline, if they are also using tools, will also lose money! The only ones profiting from the Eagle program is Amway in the form of product sales, and the upline in the form of PV bonuses and the profit from the sale of tools!

Do you still want to be an Eagle?

Friday, June 8, 2012

Buying From Yourself?

One of the apparently common practices among major IBO groups is still the concept of "buy from yourself". I believe IBO leaders teach this because most people are not familiar or not comfortable selling goods and services. Therefore, to teach buy from yourself makes the business an easier sell. In reality, an Amway IBO is simply a commissioned salesperson with no benefits. But presenting the opportunity that way is unlikely to yield results either, thus the buy from yourself has become a common practice. It sounds like something that most people can do, rather than emphasizing the need to sell to people you don't know.

Buying from youself makes you a customer and not a business owner. Buying from yourself doesn't generate your business a profit. Would you open a car dealership to buy a car? Now I am not suggesting that supporting your own business is a bad idea. What I am suggesting is if you are the primary or exclusive customer of your Amway business, then you aren't really running a business. You are simply a glorified customer. I believe some or many IBOs fall into this category because they are simply unable to move products to non IBOs.

What an IBO is really doing is paying his upline's bonuses. Amway overcharges more than 30% of the cost of their product. They have to do this in order to be able to pay IBO bonuses. Since most IBOs are at 100 PV or less, the lion's share of the bonuses earned are channeled upline when a purchase is made. It is not a level playing field as some IBO leaders might suggest. Also, some of your uplines who don't even know you might benefit from your efforts. Now that's residual income right?

What compounds the situation and makes it worse is when an IBO pays for standing order or attends functions where some of these IBO leaders may teach this bad business practice. You as an IBO already pverpay for products for which upline gets most of the bonus, but then the problem is made worse by IBOs paying to receive this bad advice. When I was an IBO, I heard speakers talk about skipping rent or mortgage payments to attend more functions, or having your family skip a meal so you can buy standing orders. Buying from yourself is just another example of bad advice given from upline to downline. What makes it worse is that some uplines profit by giving bad advice.

Are you buying from yourself almost exclusively? Can you think of any truly successful business where the owner is the main or possibly the only customer? I can't think of any.

Wednesday, June 6, 2012

Why Do Amway Defenders Avoid Opposing Opinions?

One of the things I find curious and humorous at the same time is how people who defend Amway often will not allow opposing viewpoints on their Amway propaganda blogs and forums. They will post an article and allow no comments or will not allow comments unless their are positive and paint a rosy picture about Amway. Amway's biggest defender IBOFightback, banned me from his truth about amway blog/forum for no reason. In fact I posted only two comments there in years and both were respectful and truthful, yet he felt my presence needed to be excluded from his blog perhaps because the truth itself is negative about Amway. I suppose though, that David Steadson's (IBOFB) lack of credibility (in my book) makes the banning a minor issue. His website is filled with pro Amway folks who back up Amway, even bad practices at times. I guess when you see the world through rose colored glasses. you don't see the reality.

I also had an exchange not too long ago with an IBO via email. He also runs a pro Amway blog but hasn't been active recently. He doesn't allow comments on his blog unless they praise Amway. I just don't understand why the need to put spin on the truth. It is a fact that the average Amway IBO earns very little and that most IBOs make little or nothing. Many who participate in the training sessions end up losing money. Those are tidbits that match up with my experience. It is usually former IBOs who can verify this claim. Seems that current IBOs do not admit they are losing money. As an IBO, I was taught "fake it till you make it". That suggests that you appear successful until you actually go diamond or whatever. In the end, a pig with lipstick on it is still a pig.

Joecool allows opposing views on this blog. Even some comments that are critical of me are allowed. I even had some (I presume) IBOs who left threats on this blog. I suspect that one or some of them also sent me threats via email. Still, I allow most comments on here. I do not allow racist or extremely hateful comments, or comments with spam. I have nothing to hide when it comes to my views on Amway. So what do Amway apologists and IBOs have to hide? Would it be damaging to have the truth on your blog or forum? Is the internet already inundated with negative Amway information and comments?

I believe Amway is partly to blame. The AMOs (Amway Motivational Organiztions) such as Network 21, WWDB or BWW are the ones who say and do unethical things. Amway is the only entity who can take action against these groups but it appears that substantial action is lacking and therefore, these groups continue to teach bad business practices which filter down to many IBOs and contributes to Amway having a bad reputation. I guess Amway is sleeping in the bed they made. Until some bad practices are stopped or corrected, there will continue to be people who had a bad experience in Amway. It is what it is.

Tuesday, June 5, 2012

How Likely Are You To Succeed In Amway?

Many people consider the platinum level in Amway as a significant achievement in Amway. While it may be nice to achieve that level and gain recognition from the Amway corporation, I will point out that there was a study done in Wisconsin where the attorney general analyzed and found that platinums on average, lost money. The study is somewhat dated, but I will also point out that today, there are MORE expenses associated with running an Amway business than before. (Voicemail, books, functions, standing orders, shipping). I would guess that it's possible that platinums lose more today than when the Wisconsin study was done.

A typical platinum group often has 100 ore more downline IBOs. Thus a logical conclusion is that less than 1% of IBOs can reach that level. It is also, apparently rare to maintain that level. My former upline diamond had 7 frontline platinums in his heyday. Actually, 6 of them were ruby level. None of them hold the platinum level today. So you have a less than 1% chance of reaching platinum and then you are unlikely to be able to maintain that level.

What serious prospective business owner would even consider opening a business where you have such a tiny chance of success? Even those who achieve platinum are likely to lose that level. If platinums cannot maintain their level, then it's easy to see why there are former diamonds as well. It seems that people are willing to take a chance on an Amway business because the start up cost is low. But what is the point of doing all of that when the chance of making money is negligible?

To compound the problem, many IBOs spend a lot of time and money building an Amway business that is unlikely to give them any return on their investment. I'd guess that the average serious IBO would spend $250 a month of more on tools. That money invested over a number of years in mutual funds would give you a much better chance of achieving some dreams. Even putting the money in the bank would make you better off than the vast majority of IBOs. A serious business owner would want to know their realistic chance of making money. For some strange reason, prospects and IBOs seem to ignore this reality.

It is because uplines are in the business of selling tools and distributorships. They are not truly interested in your long term sustainable success. If you don't believe me, try to stop purchasing standing orders and function tickets and see how much longer you are edified and given help from upline. Seriously, would a real business owner be interested in a less than 1% chance of success?

Saturday, June 2, 2012

Retiring On Amway Residual Income?

One of the things that many IBOs mistakenly believe is that they will build their Amway business and then they will have the ability to "walk away" from the business while the income continues to flow in. I believe if there was such an incredible benefit such as lifelong residual income that could be achieved from Amway, I'm fairly certain that Amway would advertise this as a benefit of being an IBO. But Amway does not. It is very likely that your LOS such as WWDB or one of the others will promote this benefit while telling you that your bext chance to achieve it is by subscribing to their "system".

One thing that goes unnnoticed all too often is that there seems to be nobody who is actually retired and living off the efforts of having built a big Amway business once upon a time. Seems that even the crown ambassadors still have busy lifestyles running from function to function and participating in other business related activities. While many of these leaders may claim they love their downlines or some other bunk, it is my belief that these leaders keep working their Amway businesses for one reason only. That is they need to keep working in order to keep the income flowing in.

The diamond lifestyle that is often portrayed may seem like a great goal or dream to achieve, but the fact of the matter is that a "diamond lifestyle" cannot be sustained on diamond income. The average diamond, according to Amway, earns about $150,000 a year. While that may seem like a great amount of income, it's not nearly enough to sustain the kind of lifestyle portrayed by diamonds. Even if that income is supplemented by income from the sale of tools, you can't fly your family around the country first class to do all kinds of functions and still end up with much leftover to own fancy homes and cars.

If I deposited $1000 in the bank and never touch the money, the bank would pay me a certain amount of interest each year, guaranteed. That is residual income. In Amway, you can basically earn income in two ways. You can sell products for a profit, but there are problems with this. First off, Amway products in general are more expensive than local retailers. It is why you hear so many justifications about quality and concentration, because you are hard pressed to argue cost. Secondly, you are severely restricted from advertising, thus selling can be difficult. The other way to generate more income is to build a downline in hopes that the downline will help you to leverage your volume. But then your downline will have the same problem that you had in moving products. That being said, even if you achieve some level such as emerald or diamond, your business will immediately begin to fall apart once you stop working because attrition will take its toll. It is why there are hoards of "former" platinums. If platinums are not sustainable, then neither is any other level.

There are many many instances of diamonds quitting, resigning, or falling out of qualification. People come and go in this business every day. Do you really think you can bank on retirement and residual income under these circumstances? If you believe that, I have some swamp land in Florida to sell you.