Amway IBOs look Down On People?

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 simply because they did not agree that Amway was the greatest thing since sliced bread. It's only positive if it's Amway related and anything non Amway is negative. Anyone see a problem with this? I wondered why Amway IBOs looked down on people just because they did not join Amway.

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 Superbowl winning 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. I believe this has been crafted by upline to apply pressure to downline IBOs to "never quit'.

In all of this, people's jobs are also criticized. That a job stands for "just over broke" or "jackass of the boss" and other insults. Many IBO's goals and dreams consist of ditching their job so they can sleep until "the crack of noon" 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, many of the folks calling people losers and broke are 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. Or inform your upline that when you point a finger at someone, there are even more fingers pointing back at you.

Work Hard And Succeed in Amway?

One of the things that many Amway defenders will cite is that the people who don't succeed didn't work hard enough or didn't put in enough effort. While I agree that one must work hard to succeed in many endeavors, I will also state my informed opinion that working hard and success in Amway may not be related. I say this because I have seen so many testimonies of people who worked the Amway business hard and achieved little or no results. My former sponsor was a workhorse and now, about 20 years later, he has not gone beyond the level of Gold Direct. In fact, last I heard, his business has basically fallen into disrepair.

Part of the problem is that many uplines emphasize recruiting as their focus, even though there is no direct compensation for doing so. In fact, recruiting downline often comes with much expenses such as gas, babysitters, and the false belief that an IBO needs standing orders and seminars to learn this. Also, Amway has a spotty reputation in the US, thus making recruiting potential downline a very diffcult task. Most IBOs never sponsor a single downline.

An important part of any business is to find customers to buy your goods. Because IBOs already spend much of their time recruiting and not selling, they are already at a disadvantage over many other businesses. Add in the seemingly uncompetetive prices of Amway and Amway partner store products and you give IBOs yet another disadvantage over most other businesses. If there were better value in these goods and services, then IBOs who sell instead of recruit would be much more common. Also, the Amway compensation plan often rewards uplines rather than the IBOs who actually do the work of moving the volume.

I also believe that the Amway business is so outdated and inefficient. While you may have a website to sell your goods, you have restrictions that severely limit the ability of an IBO to drive traffic to their website. The person to person touch may sound nice and flowery, but it is the most inefficient way to make sales. It is why people pay millions to advertise during the Superbowl, because you may have a hundred million people watching the adervtisement and can drive up your name recognition and sales.

While working hard is definitely important to succeeding in any venture, I don't believe there is any bonafide correlation that working hard equates success in the Amway business for the reasons I have outlined in this post.

Believing The Amway Illusion?

One of the things my upline taught us ad nauseum was that we needed to have faith in our business and in our upline. That we needed to believe that we were going to be successful. IBOs are told that they should act successful even if they are still working their way up the ranks in the business. It is why they ask (require) IBOs to wear suits and business attire to all meetings and functions. This is one of the weird quirks about the business in my opinion. I live in Hawaii and I remember a function they held in the middle of July in a high school auditorium and there was no air conditioning. I think my suit needed special cleaning because it was completely saturated with perspiration.

Anyway, with this part of the year, soon there will be thousands of IBOs shuffling off to a function called leadership, or in some cases, spring conference. The tickets are about $150 or so and might require travel plus hotels and rental cars depending on where you live. What IBOs are often unaware of is that many venues will allow you to run these conferences for $25 to $50 per person. The rest of that ticket prices goes directly into your upline's pockets. Anyway, the function will feature slide shows of mansions, yachts, jet skis, sports cars, fabulous vacations and other trappings of wealth. The speakers will generally be new platinums and/or emeralds.

What many IBOs don't realize is that this display of wealth is just that. There is no bonafide evidence to indicate that these diamonds actually own all of those toys and goodies. The diamonds probably won't verbally confirm it either, because these toys and goodies may not really be owned by them. It could be rented, or maybe some upline crown ambassador may own the mansion, but IBOs will assume that these trappings of wealth are common once you reach diamond. As an IBO, I never actually knew how much a diamond really earned. I just assumed it was a lot because we were shown all of these luxuries and just assumed all diamonds had these kinds of lifestyles. It was certainly implied that all diamonds were "free" with fabulous lifestyles.

If I posted a picture of a mansion and a jet and said I owe it all to my earnings as a blogger, people would cry foul, that I am lying or making things up. And they would be right. Well, I would guess that many diamonds are doing the very same thing if they appear on stage and implying that they have jets and mansions. As I said, someone may own a mansion and a jet, but to imply that this is a part of the typical diamond lifestyle is a stretch. The evidence is there. Some diamonds have lost their homes to foreclosure. My old LOS diamonds (WWDB) taught us that diamonds pay cash for everything, including homes. Now confirmed as a blatant lie. Who knows what else they may have misrepresented?

I ask IBOs and prospects who may be attending any big and hyped function, to watch with a critical eye. What is being implied with the display of wealth? Analyze if those luxuries can be purchased with a diamond income ($150,000 plus some tool income). Ask yourself if this lifestyle is truly sustainable? Ask yourself if you can live with yourself if deception is a part of earning your diamond lifestyle?

Are Amway IBOs Honest?

I cannot even count the number of Amway pitches I have seen on the internet. Because many of them sound the same, or at least very similar, you can probably guess that many of these IBO recruiters were taught by the same LOS such as WWDB or BWW. That is one the major problems I see with the Amway opportunity, that large groups of people are being taught lies or unethical methods of running their business or recruiting. Amway defenders like to cite the fact that 10,000 or even 100,000 IBOs is small in the overall world of Amway and Amway has about 3 million IBOs worldwide. What many Amway defenders won't say is that apparently, most LOSs teach the same basic theories, thus IBO abuse is very significant.

I do not believe that a person can build a large Amway business based on honest recruitment and retention methods. In the past and even now, many IBOs do not know much about the tools business and how you actually get a cut. In the past, some groups lied and claimed they made no profits on tools. Some even went so far as to say their tools company was a non profit company. Eventually, downline IBOs discovered the real deal about the tools and then uplines started to admit that they profited from tools, and started to tell their downline a little about the system. However, these same uplines, many of whom are still active today, have never been held accountable for their past lies and deception. They simply wrote revisionist history where diamonds who got divorced or did something embarrassing were not mentioned or simply disappeared. And IBOs took the bait.

But can you build an Amway business based on pure honesty? I suppose it's possible, but in the US, it would be nearly impossible. Just the mention of the name Amway will turn the stomachs of many potential recruits. It is why some uplines invented the curiosity approach and why some IBOs resort to pure lies to get people to see the plan. Even when I was first prospected over 20 years ago, I was invited to a college "beer bust", only to arrive and see people in suits at a home with the white board. It is why I saw people walk about of board plans once the name "Amway" was mentioned.

So if you are an IBO or simply an information seeker, I think this is a very fair and appropriate question. Can you build a sustainable Amway business based on honesty? What have you seen or experienced thus far? If what I have said is reasonable and true, then is it going to be worth your time and money to build this business? That is something your conscience will have to determine.

Upline Credentials?

I recently read a comment from an Amway zealot on another blog. She mentions that someone's credentials must be considered when looking at information that is presented. I will comment that showing me a sports car or a fancy suit is not proof of financial success.

I find this subject ironic because not one single upline leader, as far as I know, has ever supplied bonafide credentials about themselves. The audience assumes that the person on stage has certain credentials, but do they really? I will say that certainly, if someone is wearing a diamond pin for example, that this person has at least achieved the diamond level as recognized by Amway, but the level may not be current. Once you achieve the diamond level, Amway recognizes that level forever. Also, the level doesn't indicate the kind of income this person earns from Amway. (Joecool is criticized for being outdated even though I was at 4000 PV at one point in my Amway career)

What many people assume is that the diamonds buy homes and cars in cash, that they wake up at noon every day and participate in leisure activities all day while the cash rolls in. I have heard from some new IBOs, that their upline makes more money taking a crap in the morning than a critic makes in a whole year at a job. That IBO became quiet when some critics offered to take that bet. I'd probably still take that bet anytime.

But the truth of the matter is that as far as I know, only former diamonds have come clean about their Amway income. They are the only ones who spoke of credentials and accomplishments. Even critics of Amway will often openly speak about their experiences and achieved levels in the business. In the REAL business world, showing business tax returns and credentials are a normal part of doing business. It appears that only in the world of Amway is the supply of credentials and financial statements a big secret. Now I am not suggesting that IBOs or upline leaders should disclose their financials to the entire world, but certainly prospects and some downline should be able to see what their upline is doing financially, especially if that is the basis for purchasing their standing orders and function tickets. And I refer to business (Amway and Tools) income and expenses only, not from other personal sources.

I believe that IBOs and upline leaders do not disclose that information because it would not be beneficial to them. If it were, they would likely publish it freely, just as they flash around copies of checks. IBOs and prospects should take this to heart and ask upline the tough questions.

Amway Works - If You Work It?

The business works if you work it! That's what many Amway enthusiats will claim. I do not believe that is true and I will further explain in this post. Many IBOs who claim that the business works are usually new and are unable to show any evidence that the business actually works, except perhaps to show a photocopied check from an upline diamond or the like. Some IBOs are taught to fake success and are outright lying.

Let me make a disclaimer that some people do make significant money from Amway, but most of those folks are tenured diamonds who are almost in an exclusive club. There is only a short list of new diamonds that I know of in the US, and I have heard that even these new diamonds may have had legs in other countries. It would seem that Amway is not growing by leaps and bounds in the US. Also of note, Amway did not release figures that are seperate between Amway North America and the rest of their overseas operations. Amway recently reported sales of 11.3 billion worldwide, and claims they had growth in all of their territories, including the US. While 400 million is a lot of money, that doesn't add up to exceptional growth in all of their markets.

Ok, so Amway enthusiasts claim that the business works if you work it. Business in its simplest form is selling a product or service for a profit. Yet many many IBOs spend so much of their time doing other things, as advised by their upline "mentors" who sell them training materials that take up much of their valuable time. Listening to tapes/cds, attending functions, reading books, and other training activities not only costs the IBO money, but takes up valuable time in non -income producing activities. Nobody makes sales reading books or attending seminars. Furthermore, these books and seminars do not necessarily result in IBOs being able to move more product as a result.
Inviting people to see "the plan" may be a way to help generate volume but with Amway's reputation, even this is a hit and (mostly) miss activity.

Yet IBOs spend almost all of their time doing these activities (the work) when they could be better off not getting the training and focusing on selling the Amway products and services. Even that comes with a handicap as Amway products as a whole, costs a lot more than purchasing similar or the same products at a big retailer such as Costco or WalMart. It is why most IBOs eventually get discouraged and quit far before the promoted 2-5 year plan.

Few people will even bother to see the plan once you mention "Amway" and for those who are open minded and motivated to register end up having to deal with a hard to sell opportunity along with high priced common commodities such as soap, vitamins and energy drinks. It's pretty easy to see that the business does not work, even for most of those who actually work it. There are simply too many issues with the business that hanidcaps those brave enough to try. It seems even the fiercest defenders of Amway are unable to provide a shred of evidence that they have actually made a profit from this opportunity. I believe Amway doesn't work even if you work it.

An Amway Business Or A Bad Joke?

I hear Amway supporters often mention that you will have a real business if you treat it like one. It is my observation that most IBOs do not treat their businesses like a real one. It is also my opinion that the Amway business itself is flawed and many IBOs, in their zeal to sponsor downline, do crazy things at times, such as tricking people into meetings. Many IBOs never sell a product and never sponsor anyone. How can anyone build a business under those conditions. Yet that is the most common experience for newbies.

Many IBOs do not bother to qualify their prospects. They will sponsor anyone who is breathing. It could be due to uplines making the business seem easy. For example, I have heard that going platinum is so easy that someone's dog can go platinum. Another mistake IBOs make is they do not look at the likelihood of an IBO succeeding. They will sponsor anyone, anywhere. Like real stores, opening a new one creates competition and I don't know of any IBOs who take this into consideration before recruiting a new prospect. The solution to a faltering business is apparently to attempt to open more "Amway stores" despite a lack of sales.

New recruits are also encouraged to partake in the teaching system, regardless of their expectations and business goals. This participation in the system is what often leads to IBO failure. They spend more on tools than what they generate in income. This heavily contributes to the poor retention rate among IBOs. Even IBOs who can progress and make some money will be simply channeling their profits to upline by their tools consumption. It is my informed guess that an IBO must reach the 4000 to platinum level before they start to break even. And If I might add, probably less than 1% of IBOs reach the platinum level so you are already facing overwhelming odds just to reach the break even point in Amway.

Here's the real test for an IBO. Walk into a bank. Speak to a loan officer and show the loan officer the 6-4-2 or 9-4-2 plan, whichever plan your group uses. And see if the loan officer will grant you a loan based on that plan. It is more likely that you be laughed out of the bank. Seriously, the plan only makes sense, apparently to people who are unable to properly evaluate a business plan. That's because the presentation is more about selling dreams and hopes than about business.

Do you have a real business or a joke? You decide.

An Amway Testimonial

Found this testimony on an Amway forum (Well Trained Mind). Scary!

A very large number of folks in my church sell Amway. Really nice, sincere people. One was a good friend in high school (and her parents are millionaires, in part from Amway, in part from several other business ventures). My parents finally decided to join Amway when I was in college. My dad already had his own business (based in sales) that was successful but wanted to build another business for us kids. He worked very hard at Amway, did all they asked, made my mom start buying all their products. He started leaving his other business with others so he could go to the Amaway rallies in neighboring states because that is what was expected.

At one rally he went to pay his hotel bill and was told he had to pay the posted rate. When he made reservations he asked for a business discount based on his original business - a rate half of what he was being charged when he checked out. The hotel refused saying that since he was there for Amway, the Amway person in charge refused to allow people there for the conference to have a discount. When my dad pressed further, he learned from my friend (the daughter of this leader) that the person in charge of this rally actually received a kickback of sorts from the hotel for having the rally there-it was written in his contract iwith the hotel when he scheduled the event there. The only way to pay less was to stay a hotel not hosting the event. Needless to say, my parents were livid and felt cheated. The leaders son in law later told my dad that the leader made much of his empire by getting a percentage from the hotels, selling tapes and books, and the like. My dad had known this leader for over 10 years thru church and confronted him about the high room rates and what he was told by the hotel and others. The leader had no remorse and even encouraged my dad to keep building his lines so he could do the same someday.

Needless to say, my parents left Amway and have never looked back.

Amway Complaints?

Over the years, I have seen literally hundreds (if not more) blogs and testimonials about Amway. Most of them decry the pitfalls of being an Amway IBO. Most of the complaints cite the fact that Amway in general has higher prices than comparable retailers and the fact that the system consisting of voicemail, books, cds and seminars ate up any profits the IBO may have made and resulted in net losses for most. One particular Amway apologist bemoans the fact that the internet is full of bad testomonials about Amway. The reason why there are so many negative testimonials about Amway is because over the years, thousands, possibly millions either had a bad experience for the reasons I cited above, or personally know of someone who had a bad experience in Amway.

Amway defenders will often cite the fact that many IBOs sign up and "do nothing" as their defense to this. But I will easily point out that I haven't seen anyone say they signed up, failed to do anything or order products, quit and started blogging about a bad experience in Amway. These defenders will also compare Amway to the gym where people sign up and "do nothing". Whether true or not, I also do not see people who sign up and "do nothing" complain about not receiving health benefits by simply signing up for the gym. It is a very weak defense. Conversely, I have seen numerous accounts of folks like myself who did put in effort, some for many years, who did what upline advised and did not see the financial rewards that is promoted in "the plan".

Amway defenders will then try to justify themselves, saying that the better business bureau (BBB) receives few formal complaints about Amway. I will agree with this. Many IBOs never bother to file formal complaints to the BBB or to Amway because in many, probably most cases. The person who quits and may have had a bad experience, was sponsored into the business like by a friend or family member of the IBO. Many will simply leave and forget the episode and chalk it up to a learning experience in life. Some will complain, but really have to no venue to voice their remorse about joining. Some of us have found the internet to be quite effective in sharing our experiences and our opinions on why the business did not work. This is what one Amway defender calls the "internet war". What I have pointed out is that critics most often simply point out what the IBOs themselves have done. In many cases, the IBO is his own worst enemy. Afterall, critics didn't deny Amway and Quixtar had a connection, nor did critics make up claims about perfect water, etc. In most cases. bad IBO behavior contributes to bad Amway experiences.

It would appear that most of the problems has a root in the AMO systems, such as WWDB, BWW, LTD, or N21. Now, not all upline leaders are unethical, but it appears that many are, and new IBOs have no way to identify the good from the bad. It also appears that some of these upline leaders will issue bad avice. Advice that is detrimental to the IBOs, but financially beneficial to themselves, such as telling IBOs to never miss a function, or to buy more cds, regardless of any IBO's profitability. In many cases, these unethical uplines do not care about IBO success. Their goal is just to move as many support materials as possible, so they can fund their "diamond" lifestyle. Sadly, it is also apparent that the diamond lifestyle may be a facade in many cases. An illusion of wealth portrayed as a recruiting tool.

If you recognize some of these warning signs, ask tough questions of your potential sponsor and visit this or some of the blogs linked to this one for more information.

Follow Upline Advice And Fail?

One of the disturbing things I have noticed about Amway IBOs and IBO leaders is how they wlll tell downline to trust them. To trust them as they have already blazed a trail. No need to re-invent the wheel. Just ride the coattails of your upline to success. The system is proven. Many IBOs take this to heart and put forth tremendous effort. Then when they fail, upline will shun them and tell them that the failure is their own. That they are personally responsible for failure.

Now I am not talking about IBOs who sign up and do nothing, or never place an order. I do believe that the fact that many IBOs sign up and do nothing brings concerns about how these IBOs were recruited, but I did not recall ever seeing an IBO do nothing and then complain that Amway was a scam or anything like that.

I have found, however, that many people who are critical of Amway and the systems, put forth much effort and may have spent a lot of money, did everything they were told, and did not find the success that upline promoted, or in some cases, guaranteed. My former sponsor was still active, last I heard and has been in Amway for over 18 years. I do not believe he has ever gone beyond platinum, and I know that he was never a Q12 platinum. Some Amway apologists might see being a platinum as a bonus, but when you are hard core sold out to the systems, platinum is possibly break even or make a small profit or even losses. Factor in that time spent by husband and wife and these folks are breaking even or making a fraction of minumum wage. Is this the dream that will allow you to buy mansions with a cash payment?

What is also disturbing is how people will tout the system as responsible for any success, but hide the vast majority that the system doesn't help. Sure, some will succeed in Amway, but for every success, there are hundreds if not thousands who fail. And if you consider diamond as the benchmark of success, the failures could be in the millions. As I said, some succeed, but very very few in relation to the number who try. Going diamond is probably less common in the US than winning the lottery.

Succeed and the systems and upline take credit, but fail or quit and it is your own responsibility, even if you invested blood sweat and tears. Are these the kinds of leaders or mentors you want advice from?
I will pass.

Why "CORE" Doesn't Work?

Breakdown of CORE and why it doesn’t work. Here are the CORE steps. Some groups may have variations of CORE, but this is generally what many groups use:

1 - Show the Plan (10-15 per month)
2 - Retail the Products (10 customers @10 PV each)
3 – Tapes/cds
4 - Books
5- Functions (attend all)
6 - Accountability
7 - Counsel with Upline (Be teachable!)
8 - Buy 100% of your own products
9 – Communikate

Many upline will tell you that your success is nearly 100% guaranteed if you follow these steps for 2-5 years. Some Amway enthusiasts will tell you that 6 months of this activity will nearly assure you of a platinum level business. Certain steps are within the IBO’s control, such as reading every day and listening to cds, and attending functions. It is also easy enough to be accountable, counsel with upline, buy your own products, and use KATE (voicemail).

Here’s where an IBO’s efforts will break down. Showing the plan and retailing products. And remember, if you cannot do these steps then you are not considered “CORE” and your upline will likely tell you that it is your own fault and that you simply haven’t been CORE, therefore you did not achieve success. There is some truth in this but let me expose the system in a different angle.

Amway has a spotty reputation in the US. I don’t think anyone can dispute this fact. Therefore, for the vast majority of people, being able to show the plan 10-15 times per month is a nearly impossible task. If you are able to do this, you are a really good salesman or a good liar. In this scenario, the IBO is already successful, but not because of CORE, but simply because the IBO has the gift of being able to convince people into seeing the plan. But for many IBOs, they may contact hundreds of people and not be able to get anyone to see the plan. Even IBOs who follow upline advice on how to contact will probably not be able to show 10-15 plans per month. Thus this IBO, who is doing the work, will not be able to succeed. The system will blame the IBO, but the reality is that the IBO has too big of a disadvantage to overcome.

Secondly, with high prices (on average) and with a spotty reputation, most IBOs are unable to retail products. Amway itself has admitted that less than 4% of Amway products are sold to customers (non IBOs). Thus most IBOs are unable to sell products, therefore they are not CORE, therefore upline will blame the IBO for failure..

What if an IBO contacts 1000 people and cannot get 10 people to see the plan? Upline will claim that IBO is not CORE and therefore it is personal failure of the IBO. IMO, the only reason why upline can claim that CORE works is because in order to do the CORE steps consistently, you have to already be at a certain level of success. The vast majority of IBOs cannot and will never be able to reach that level.

That is the myth and the deception that many uplines will use to attract recruits. That each IBO can do the CORE steps. When only a fraction of 1% ever reach the level of platinum or higher, the numbers strongly support what is written here. Apologists are welcome to try and prove me wrong, but they can't.

Your Amway Business And Taxes?

One of the things that I have observed is how IBOs are so misguided by their upline, that they think that their business losses, which result in a tax refund is somewhat like a profit, or that they are getting a free pass with the government footing the bill for their standing orders and functions. In the past, IBOs have been audited and had many business deductions disallowed because the tax department ruled that they were not truly running a business, but participating in a hobby called Amway.

I know that most IBOs are deducting the cost of their training materials on their taxes, but the issue at hand is whether the training materials are resulting in increased sales for your business. If you are running a "buy from yourself" business, then there is a strong possibility that your expenses may not be valid deductions come tax time. If you are not selling products to customers for a profit, then there is a chance that your expenses are not valid deductions. It would be sad indeed to be audited at tax time a few years after you have been an Amway business owner, only to find out that your expenses are not valid and that you may owe tens of thousands of dollars in back taxes.

Another apparently common mistake of IBOs is to think that their business expenses are basically free from the government because they may end up with a tax return. Your expenses are deductible from your taxable income. Thus if you had $10,000 in business expenses, your return would depend on your tax bracket. If you are in the 15% tax bracket, then $10,000 in expenses would get your about a $1,500 tax return, depending on other deductions you may have. But IBOs get duped into thinking they made a score and now get back $1,500 when they may not have had a refund in the past. Obviously in this case, the IBO would have been better off saving the $10,000 and never getting involved in Amway. Some IBOs proudly proclaim their refunds as basically a windfall, almost like it is a profit. That is truly scary.

Folks, there is no free ride. If you are spending money on legitimate business expenses with an intent to make a profit, then there is nothing wrong with that. But if you are traveling to conventions hoping to learn the secret of sponsoring more downline, you could be walking on thin ice should the IRS ever decide to audit your business. There have been many cases in the past where not only did IBOs lose their shirts due to the business support materials they purchaed, but they got double whammied later when the IRS disallowed tax deductions, leaving them in financial ruin. I truly hope you aren't on that path.

Check out this link:
http://www.apollowebworks.com/amway/irs.html

"TRAVEL AND ENTERTAINMENT have always been areas of abuse. Sections 162, 262, and 274 are always applicable and sometimes Section 183. Since most of the travel is primarily to attend social gatherings for entertainment and motivational purposes, any real business purpose is suspect. Unless the taxpayer can show that attending seminars, meetings, etc., meets the requirement of Section 162, the travel should be disallowed. Amway people have been unable to show that attending these meetinqs increased their sales. The agendas of these meetings appear to be primarily for entertainment, socializing, and listening to motivational speeches. The meetings have nothing to do with promoting the sale of Amway products to the general public. In fact, Amway distributors are specifically warned aqainst mentioning either Amway or selling when recruitinq potential downline people. Since it is not likely that the taxpayer will increase his sales by attending these functions, then there is not a reasonable business purpose for the trips"

Amway IBOs Are In Denial?

One thing that appears to be common amongst IBOs is how IBOs are in denial. They truly believe that their uplines are working in their best interest and that upline wants their success. I don't believe that to be true. If uplines were truly making a fortune from Amway, why would an downline IBO have to pay for practically every bit of help they get from upline leaders? Why would IBOs be advised to spend more on tools than they take in from sales or bonuses? Why would they need more tools when sales are not increasing? Why is this advice being given to IBOs?

To show the plan, you would need to pay to attend an open meeting, and pay for your guests, even if they do not register as a result of the presentation. You pay for voicemail to communikate with your upline and downlines. You pay for standing orders and you may end up paying twice if you were in attendance at the function when the standing order was recorded. You pay for books and other materials as well. These tools, along with your personal use products can add up to a nice amount of money at the end of the month.

What's more, many IBOs turn their heads when ugly facts rear their heads. For example, some IBOs deny that a prominent triple diamond was involved in bankruptcy proceedings. They continue to edify and pay for financial advice from someone who could not even manage his own finances. They believe that Amway saves marriages even when the leaders who speak this may be getting divorced. It's like upline simply revises history and downlines buy it without question. Many IBOs do not even see it as a problem that some upline boldy lied and said there were no profits from tools in the past. I find this odd because tool profits are still shrouded in secrecy and downline simply believe that they will eventually get a cut, even without a written compensation plan and agreement.

I believe too many IBOs are simply in denial. They give upline their trust and upline abuses it. IBOs are told they are successful for attending a function even when they might be losing money month after month. They may be told that the Amway business is not about money but about making friends. They may be told that they are nicer people because of their participation in Amway. What too many IBOs do not see is that they are in denial about their business. Most IBOs are losing money, a little at a time, perhaps $100 or $150 a month. For the hardcore, maybe more. But they are taught to ignore these simple facts and deny that there is a problem.

It is my hope that exposure of some of these tactics will be beneficial to information seekers and perhaps new IBOs who have not yet been fully indoctrinated. I encourage people to ask tough questions, demand answers and use due diligence when checking out this oppportunity. The fact is that very few people every make a profit and people should know this before getting involved. Don't deny the obvious.

The Amway Business Is "Fair"?

One of the bogus things my upline taught us was that the Amway opportunity was fair. That it was a completely level playing field. On the surface, that sounds right because "everyone starts at zero". While everyone does start at zero, the compensation plan is unfair and in my opinion, should be revamped so lower level IBOs make more money. It would probably help with IBO retention and maybe, some higher level leaders wouldn't have to work so hard to keep replacing people who quit. If more IBOs were profitable, it makes sense that more IBOs would stay in the business instead of quitting.

If you are a new IBO, then you might not be really familiar with the Amway compensation plan. Amway pays out about 30+ percent of their gross as bonuses. Thus if you move 100 PV in goods, or about $300 in sales, then Amway pays out about $100 in bonuses. You as a new 100 PV IBO, would receive about $10 and your uplines, some of whom don't even know you exist, will split up the remaining $90 in bonuses. It truly is not a case of doing the work and gettung paid. Of course, an IBO doesn't have to share any retail sales profits with upline, but still, the Amway bonus might be paid out to many people who may not have helped generate the volume at all.

Something significant to think about. In what other sales profession are you compensated so low (3%)? I can only think of real estate, but in real estate, your sales are likely in the hundreds of thousands of dollars. In just about any other sales related profession, you get a much higher cut than 3%. Yes, your bonus or comission can be higher if you move more volume, but then you are likely receiving more money because you are now exploiting people doing 100 PV who get only $10 back.

And then even after you consider the unfair compensation, you must factor in the cost of tools. Most uplines promote tools (cds, voicemail, functions) as vital to an IBO's success. Some uplines push the tools harder than others. But the tools purchases will often be the primary cause of IBO financial losses because the cost of tools will normally exceed an IBO's bonus. It is very common in the US for monthly tool purchases to exceed $200 a month on average, and very very few IBOs will ever reach a high enough level in the Amway compensation plan to earn enough just to break even. Also, the tools apparently do not work. There is no unbiased evidence to suggest that tools have any causal relationship to IBO success.

With Amway's reputation and the unfair comepnsation plan, IBO retention is very poor. About 1/2 of IBOs don't last even one year, and very very few will ever last more than another year or two after that. What happens is IBOs begin to figure out that recruiting downline is next to impossible and therefore, generating more volume is nearly impossible, even for individuals with skills. If you are a new IBO or a prospect, I encourage you to sit down and really look at the math and factor in the cost of tools. There are many ways to earn a dollar. In my informed opinion, the Amway opportunity is not a good way to do that.

You Didn't Work Hard Enough?

One of the things that many Amway defenders will cite is that the people who don't succeed didn't work hard enough or didn't put in enough effort. While I agree that one must work hard to succeed in many endeavors, I will also state my informed opinion that working hard and success in Amway may not be related. I say this because I have seen so many testimonies of people who worked the Amway business hard and achieved little or no results. Even those who took the time to learn everything upline taught and put in the hours did not succeed in Amway.

Psrt of the problem is that many uplines emphasize recruiting as their focus, even though there is no direct compensation for doing so. In fact, recruiting downline often comes with much expenses such as gas, babysitters, and the false belief that an IBO needs standing orders and seminars to learn this. Also, Amway has a spotty reputation in the US, thus making recruiting potential downline a very diffcult task. Even IBOs who sponsor people will find out that many recruits will quit or do little to nothing.

An important part of any business is to find customers to buy your goods. Because IBOs already spend much of their time recruiting and not selling, they are already at a disadvantage over many other businesses. Add in the seemingly uncompetetive prices of Amway and Amway partner store products and you give IBOs yet another disadvantage over most other businesses. If there were better value in these goods and services, then IBOs who sell instead of recruit would be much more common. Also, the Amway compensation plan often rewards uplines rather than the IBOs who actually do the work of moving the volume.

I also believe that the Amway business is so outdated and inefficient. While you may have a website to sell your goods, you have restrictions that severely limit the ability of an IBO to drive traffic to their website. The person to person touch may sound nice and flowery, but it is the most inefficient way to make sales. It is why people pay millions to advertise during the Superbowl, because you may have a hundred million people watching the adervtisement and can drive up your name recognition and sales.

While working hard is definitely important to succeeding in any venture, I don't believe there is any bonafide correlation that working hard equates success in the Amway business for the reasons I have outlined in this post.

Amway Will Make Me Rich?

I was told that Amway can make you rich. Many IBOs say they were told that Amway was not "get rich quick". But obviously, someone must have given them the impression that Amway would eventually make them rich, otherwise, why would anyone join? Why would anyone want to work that hard and embarrass themselves in front to friends and family to promote a business that will more likely get you funny looks than money. But can Amway actually make you rich? While certainly, some people have accumulated wealth because of Amway, but what is the likelihood that you will do so? I've heard the justification that you can make more than your sponsor. Big deal, it is most likely to happen because your sponsor quits. And certainly, those who think they will earn more than the established diamonds are fooling themselves.

Well, yeah, Amway can make you rich if you are a diamond selling voicemail services, books, standing orders and function tickets. Amway can make you rich if you own Amway and sell to millions of IBOs who "buy from themselves". Amway can make you rich if you write a book that millions of IBOs purchase. Amway can make you rich if you can get enough loyal downline to keep purchasing products so that you can get the bonuses. But aside from these few people who I just described, the Amway opportunity is more likely to make you broke, or at least lighter in the pockets.

Most IBOs do not even earn enough to cover their monthly voicemail expenditures, much less the other support materials that are pushed on the downline in groups such as WWDB or BWW, or N21. These materials are touted as the "key to success" in Amway when in reality, it is the key to success for the uplines who share in the profits from these materials. The real kicker is despite claims that these materials are key to success, the uplines get their followers to blame themselves if the system doesn't work for them. Kind of like tossing a coin and saying "heads I win, tails you lose". Upline wins as long as you buy support materials from them, and your results are of no consequence to them. In fact they probably don't want new diamonds as they would then have to share the tool money. Upline's goals looks pretty apparent. Get you to buy tools and replace you if you quit. Or to sucker you into becoming a loyal tool/function customer.

So can Amway make you rich? I would guess it is possible, but it is also possible for you to win the powerball lottery. It is possible for your to inherit wealth from a long lost uncle. It's possible. Amway folks only show best case scenario and not the most likely one. It takes normally, over 100 downline IBOs to create a platinumship. And a platinumship occurs less than once in 200 IBOs. And at that level, you likely make little profit or break even. Do you want to defy odds and reach the top 1-2% of Amway IBOs only to break even? Do the math. Ask tough questions. Face reality. Good luck.

Only 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.

Who Is Accountable For Amway Failure?

Part of what Joecool perceives as the problem with the Amway opportunity is the utter lack of accountability of some upline leaders. They may tell you to trust them, to submit to them and simply copy or duplicate what they have done, and they imply that you will get the same results. Possibly millions of downlines over the years have put in blood sweat and tears into the business only to suffer massive losses following the system. Upline will take credit for meager success, but place the blame on the downline when success is not there. Upline will claim that they either did not try hard enough, were not teachable enough, or they didn't put in enough time and effort. Despite a shockingly low success rate of system IBOs, nobody seems to fault the system as being flawed. And nobody seems to question whether upline is at fault. I believe it's obvious that the system and the upline advice is severely flawed.

In my observations, I would say that many financial systems are similar. Whether it be BWW, N21, WWDB, real estate gurus or other systems, the success rate is extremely low. Many systems that advertise on television will have a disclaimer that a success testimony is a rare or unique experience. I believe it is similar to the systems in Amway. Dedication or continued spending on the system is not the problem. The problem is often the system itself. It can work for some exceptional people. These people were likely to succeed in other venues anyway. The problem is that is does not work for the majority of people. People who succeed in Amway likely succeed in spite of the system and not because of it.

The bigger problem, is that for many many years, some uplines have lived high on the hog off of the dedicated tool purchases of their downline. All the while, quesitonable or bad advice was given to the faithful downline. Advice such as quitting a job to attend a function, skipping financial obligations such as the rent or electric bills to buy more tools. One upline even said your family can skip a meal because the standing order may contain the one thing you needed to hear to make your business grow. I have personally seen couples lose their homes and go bankrupt because they followed upline advice. Upline to "has their best interest at heart". Granted, the couple has some culpability in these decisions, but uplines who give this advice seem to get a pass.

Where is the accountability? Some of these uplines who give and gave bad advice, are still active today, and some are still giving bad advice to their downlines. Advice that profits upline and drains downline. Even with valid complaints, it appears that many uplines avoid any accountability. For some, perhaps there is poetic justice, such as diamonds having their homes foreclosed. But as many uplines have nobody to hold them accountable, do you really want to do business with these folks? Would you invest your retirement money with a broker who could not be held accountable? Would you have your car repaired by a shop whose mechanics could not be held accountable? I believe the answer is not to these questions, yet many people are asked to trust and follow the advice of an upline who is not held accountable for their advice.

The system is credited for the few successes that are visible, but the individual is held accountable for any shortcomings or failures. IBOs, I encourage you to hold your upline leaders accountable for the advice they give you. If they won't answer tough questions or take responsibility, then one should wonder why the upline should be given your trust.