When I was an IBO, I often found myself buying more goods than I needed because a single person simply has no use for 100 PV worth of Amway goods on a consistent month to month basis, save for eating double x for breakfast or something. In general, Amway's prices are higher than many retailers, because the cost of the IBO bonus is built into the price of their goods. Probably more than 30% additional markup is needed for Amway to cover all of the IBO bonuses paid to layers upon layers of upline and downline.
Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make an income. There's some documentation that Amway sells only about 4% of their goods IBOs(Http://mlmtheamericandreammadenightmare.blogspot.com/2012/03/chairman-and-ceo-of-amway-have.html). This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more. You basically can't build a sustainable and profitable Amway business without downline.
But sponsoring is a big problem. Most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many many others have left comments on blogs expressing the same experiences. Other were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard ti find someone in the US who has not experienced, or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.
You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.
I presume the self consume approach is designed to cover the inability to sell products to non iboS. Asking ibo to buy 100 pv (well beyond their needs) creates a fictive business growth. As this dupicates to new recruits pin levels increase. Hence the importance of sponsoring. So what we have now is 3 million distributors buying products they dont need. This generates sufficient bonus levels to keep enough people motivated to go out and recruit more. So its a neatly oiled machine where most people contribute to the well being of a few. I dont know the usa growth rate but in the new,poorer and large markets like east europe and asia there is enormous potential. Also i expect with changes in north africa and the general development of the african continent, there is again 50 years of growth for amway.
ReplyDeleteI'm married to one, unfortunately. Guess there was a time that I too thought we had a future in Amway, but it's so clear now that it's just about impossible. Wish my sig. other would see the light and let this thing go.... *sigh*
ReplyDeleteI think ibos should charge something like 1000 dollars to new recruits. This would prevent the thousands of people who sign up but have no real intention to work the business
ReplyDeleteI read the list of amway wiki diamonds. The vast majority qualified many years ago/and or have no downline with. Am i right in thinking therefore these diamonds are not currently qualified and presumably have little income from amway. The only usa group with recent diamonds seems to be tim foley and a couple others.
ReplyDeleteIt's possible. Once you achieve diamond, Amway recognizes the diamond pin forever. I believe some people achieved diamond and never qualified again. The scary thing is that some of these folks continue to make money speaking and selling tools.
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