Thursday, September 6, 2012

The Residual Income Fairy Tale?

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 BWW, WWDB or one of the others will promote this benefit while telling you that your best 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. If people are retired from Amway residual income, where are they?

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, including emerald or diamond.

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.

11 comments:

amwayscam said...

It is really amusing when positive boasting becomes a garbage lie! My up line used to talk about our LOS diamond buy crores of Rupees land and building. Honestly speaking, masses never see the realities. Joecool, once an IBO who was cross-line to me met our LOS diamond and he was found contacting in a busy shopping mall! Explanation was simple -'at the diamond level he is still doing the basic, so humble, he could have left all these things to live wherever he wants'. We believed all those words being cults, but after I read 'Merchants of Deception' and 'Amway Business reference guide' (available on my blog for a quick ref) I realised how systematic lies are portrayed as positive benefits. Joecool, when you see people 10 years in the business only to see platinum income either they quit or they hang on (because they do not have even guts to quit) but no retirement based on Amway income.

Anonymous said...

I suppose there are a few people who have a number of diamond legs. Presumably they could sit back and enjoy income flow. Even then its a nice income but certainly not mega bucks

Anonymous said...

Here in France i buy amway products from a distributor who has 450 customers. He seems to organise his business as follows. You order on line ,minimum 20$,delivery in 3 days by a delivery service , 3 $ if order is less than 75$ He has a small amway store open certain days of week where customers can shop. He shows plans i believe only to people who respond to the opportunity ad on his site. Not sure what level he is at , not direct i believe , but he says he makes some extra income and enjoys the environment. I dont think he is into tools and seems to act as a retailer and coach anyone who wants t have a go at this

Joecool said...

I too saw my upline diamond driving around town, contacting in the malls and coffee shops, etc. My sponsor said he did it to help others but now I believe he did it because he needed to keep his group solvent.

Joecool said...

Even with diamond legs, there are some parameters needed in order for someone to earn bonuses.

Anonymous said...

Joecool. Is that upline diamond still diamond

Joecool said...

I believe he is still a diamond, but oddly enough, someone who loved Hawaii, loved the ocean and loved eating local reef fish, he moved his family to the state of Washington.

Anonymous said...

Thanks. Guess he must be doing something right if he is maintaining diamond level. Of course he is unlikely to be at freedom level unless he is deep or wide or both

Joecool said...

He did fall out of qualification for a while but I guess he managed to re-qualify. It is pretty good evidence however, that residual income is unlikely. Once you stop maintaining your group, your downline will drop and your continued qualification is unlikely.

amwayscam said...

It might work there in France! But for example in India direct selling companies are not regulated to be sold in shops by IBOs or retail distributors. Making PV is nearly impossible with imploding prices to often.

Anonymous said...

have you tried to build amway business ever ? if yes then what was your level and how many years did you try to make it ?