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.

16 comments:

Abhi said...

If anyone ever asks you to justify your claim on this post, you can use what I have to say. I am a former Q12 platinum who quit the system a couple of years ago after losing 80% of my group during the early stages of the recession. After about 3 months of that phase of losing my group, I could not take the false edification that we were a Q12 platinum when we were doing 2500 PV. And also I did not like continuing in the business because majority of my income was from the sale of tools and I could not look at someone in the eye and tell them that you could make royalty income.
I have not quit the Amway business entirely but have walked away from the system. There are several products that have worked for me and my family. We continue to be prosumers buying whatever products we need, whenever we need it instead of being forced into doing 300PV on the first of the month.
We still do recommend products once in a while to people who need them. i made some money, but can tell you for sure that probably the only people who make royalty income are those who make the CDs those who have a solid structure like maybe Bill Britt or Paul Miller or Kumar to name some.
I feel good today that I don't have to lie about the opportunity to a person and next moment put him on tools. yes internal development is necessary but you can read books of authors like John Maxwell, Joel Osteen etc any time and from any place and learn from them.
I wouldn't say it is a bad opportunity. I believe Amway is a great opportunity as long as you just look at the opportunity as building a shopping network rather than as building a network to give you royalty income. Just as we say "if i can do it, so can you.. If I can drop from making $55,000/yr to making $500/mo in 6 months, you can too. Make an educated decision and if you are spending money on tools, functions etc, set yourself a target time of making your $$.. Beyond that it becomes an expensive hobby. Make a business decision not an emotional decision.

Anonymous said...

Abhi, it is good to hear you broke free from "the system". Thanks for taking time to sahre this. But just to comment on your comments: The problem is, I can make an extra $500 way more easily (and at less expense) with a part-time job, or extra effort in my (non-Amway) business. So while yes, Amway is an opportunity, it is certainly not a "great" opportunity, even as just a "shopping network." It is, in fact, an extremely poor opportunity, as has been demonstrated time and again on this blog and by others.

---Daniel
P.S. While no one is arguing that "internal development" is not important, the "development" fostered by the "tools" or in books written by John Maxwell or Joel Osteen is not the kind of development to be desired.

Abhi said...

AnonymousJune 7, 2012 9:28 PM: It looks like you did not understand what I said. Long story short, we said the same thing. When I said "If I can drop from making $55,000/yr to making $500/mo in 6 months, you can too", that didn't mean that I can make $500 easily. What i meant was if I can get to that level and drop to making $500 a month, it means that you cannot really get residual income.
About internal development, don't know about you, but I am in Management Consulting as a profession and I used to read John Maxwell books even before I got into the system. Authors like John Maxwell, Zig Ziglar etc are not part of the sysetm as such. Their books are just recommended in the system and a share of the profits are given to them.

Anonymous said...

I was in this business 25 years ago and got to direct in 6 months and then quit. at that time there was little emphasis on tapes/tools; I think I spent 50 euros in total on these; I probably broke even overall as I refused to spend more than I was earning.
I dont share the horror stories I hear; I see it as follows; In life only a small % are successful and a large % are not in all fields; Same as in Amway; It hard to get to Diamond and the quality needed is leadership which few have and even fewer can develop. I think to build the business you need to do what the long lasting Diamonds do; With full belief and relenthless approach they just kept going till they met enough similar types of people to build and sustain the organisation. This is what all people who 'make it' in all walks of life do.With Amway I feel the products are not relevant ; They are no better or worse than competition; The Diamonds could build the business with any product line. As for myself I built a successful career elsewhere, retired last year and now started another small business for myself ( and used some of the learnings from Amway a long the way).
Nevertheless I feel sorry for people who ar elied to , or spend money in Amway or ellsewhere hoping it will deliver fruits. My advise to anyone thinking about this business is 1. to think if they relly have the leadership skills to go out there and build an organisation of several thousand people or not and 2 do not put much money on the table in expenses unless they can afford it.

Anonymous said...

lol 2008 company did 9.8 billion
2011 company did 11.9 billion
im pretty sure this thing does not works... i mean common sense right?.... -.- *sarcasm*

Anonymous said...

Money hungry cult ...... every time I turned around where selling tickets to something

Anonymous said...

+1

Anonymous said...

I am a former IBO who did benefit from the 6 weeks I was on the system. I found I couldn't afford the system and made the decision to leave. I still recommend the products particularly SA8 with Gelzyme as I know dirst-hand how effective it was dealing with the reactions to chemotherapy. ES

Anonymous said...

your argument is so lame anything that you dont maintain eventually falls apart start not caring about what you eat and stop exercising will you be out of shape? yes!!! if you dont continue to produce for any business your business will eventually decline its a universal law! I have made money in my amway business for the past 10 years month after month after month because I am consistent just as I am with going to the gym thats why I am not fat and out of shape like some others. The whole concept of freedom through residual income is that you dont need to baby sit the distributors you bring on board as they are self motivated vs a regular business involves constant baby sitting of employees who are just there for a paycheck... now this also depends on the type of people you bring on your team if your just throwing mud against the wall and hoping something sticks thats a pretty poor foundation for your business! and more than likely your going to have a revolving door of ibos that are in and out of your business thats why really interviewing your prospects and deciding who you want to invest your energy in is key.

Joecool said...

A real business with an established customer base will need management but the income and expenses are fairly predictable. An Amway business is never that predictable. People come and go regularly and finding self motivated downline is chasing an impossible goal. It is why diamond fall apart as well. There is no residual income in Amway unless you own the corporation.

Anonymous said...

Interesting, roughly 10 B to 12 B in 3 years. Static growth was 20%, static per year was 6 2/3% growth. COMPOUNDED interest growth was a bit over 5%.

Not bad, but DEFINITELY not setting any serious growth trends either. Pretty typical for a mature business. Nothing special as far as company growth.

Anonymous said...

I only have 2 questions to ask you people. What did you do while in the business and who were you working with?

Anonymous said...

Honestly, this business takes dedication. Most people dedicate 40+ hours to their job. You get a consistent paycheck. Congrats. If you remained consistent in the Amway business then you too would see growth. But it seems like you just treated it as a hobby. Hobbies come and go. Owning your own business is a whole other issue. It takes commitment. If you waiver, so does it. Give up and it gives up on you. So be consistent. Fight for yourself and your family. Stay core. And earn the life you want. Not what you feel you deserve because you "tried." If you want to make something and just quit, go get a job. Here's your "Participation ribbon." Good for you. If you want to grow and make a genuine life for yourself and your family then fight for it. Listen to your mentors. Become something great and live your dreams. Don't give up. Stay core. Believe.

Joecool said...

That's a myth that if you remain consistent in Amway you will see growth. You can do everything right in Amway and see no growth. Most people do nothing and even those who work, most will end up quitting within a year. It's hard to gain traction with those kinds of conditions.

Anonymous said...

True True and that is why you keep working and looking for people who actually let them self get guided and do the thing make them self and you successful because you cant just do it by yourself! this opportunity is a group work so all the downlines and uplines can grow and people who quit must have some bad mentors tbh just saying.

Vikash Kumar said...
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