Wednesday, July 31, 2013

Walking Away From Amway And Other Myths?

I was watching a show on Discovery channel the other night about Sasquatch. It was followed by a show about evidence of UFOs. It made me start to think about these phenomena. It seems like everyone has heard about or knows something about Sasquatch (Big foot) and/or UFOs. There are many documentaries showing pictures and evidence of both, but to date, there is no bonafide evidence that these things exist. You'd think that a body or bones of a Sasquatch would turn up somewhere, sooner or later, or we would find compelling evidence of a spaceship from another galaxy.

It sounds just like stories of people who built a diamondship, then "walked away" from their businesses, retired in the lap of luxury and did nothing while the money kept rolling in. I heard numerous scenarios about this happening, but looking back, all the diamonds kept working and since Joecool left the business, the diamond either kept working, or quit or got terminated. But I never heard anyone name some higher up Amway pin who built a business, and then walked away from it to travel the beaches of the world while hundreds of thousands of dollars kept rolling in. Many have heard about it but nobody seems to be able to name any of these folks. I mean after over 50 years in existence, you'd think some of these folks would exist, especially when it seems to be a selling point of the business for many AMOs.

It is my opinion that Sasquatch, UFOs and retired Amways diamonds (with significant Amway income) are non existent. If these folks existed, there should be at least some shred of evidence of it. The lack of evidence indicates to me that it is either non existent or so rare that nobody can display bonafide proof. I mean there aren't any T-Rexs roaming the earth anymore but fossil evidence proves that they existed at one time.

Keeping in mind that the Amway business has a high attrition rate, coupled with low sales to non IBOs and you can easily conclude that residual and significant income is nearly impossible. An Amway business that is left alone will deteriorate like a sandcastle does as the waves wash it away. You (in theory) could possible walk away from an Amway business for a while and collect some income, but you won't be collecting enough income to live the "diamond lifestyle" as portrayed by diamonds in their functions and open meetings. I'm not even sure that active diamonds can comfortably afford that lifestyle even when building their businesses. There is ample evidence to support my claim. Diamonds losing homes to foreclosure, former diamonds revealing secrets about their income. If you really believe you can walk away from your Amway business and collect untold wealth, I have a bridge in Brooklyn to sell you. :-)


Anonymous said...

Diamonds dont make that much money when in the business ( and most fall back to lower levels). So obviously if they walk away, the will not make any money. Its the only job you cant retire from.

Joecool said...

I believe you are right. Diamonds never retire. I wonder why?

Anonymous said...

Because they are all broke due trying to live a lifestyle they cant afford. If these guys had money in the bank or bought anything for cash other than the daily newspaper they would be spashing proof all over the place.

Joecool said...

Right. I suspect many diamonds are broke living check to check like people with low paying jobs. Think about the lifestyles they show off. You can't have that even on a 6 figure income. At least not in cash. I suppose you can finance yourself to the hilt to show off a diamond lifestyle.

Dave Wills said...

Hi JoeCool,

I curiously read your blogs amongst a few others and always look at others viewpoints/experiences. I'm from Alberta, Canada and in the Whalen Organization with WWDB. I'd be happy to share experiences with you objectively and answer any questions you have. The Whalens just became new DIamonds and I see a whole new wave of IBO's following that path in Western Canada. One thing I've never understood while reading blogs is the Tools negativity? I pay monthly for Premier Membership, Communikate and Digital Delivery along with the occasional Information System to sell to a new IBO and am ok with that. Was there a former way of IBO's being forced to buy tools?

Joecool said...

Hi Dave, nobody is "forced" to buy tools. But upline will use strong encouragement like "nobody has ever succeeded without tools." It's like a defacto requirement. And in my days, the WWDB upline stood on stage and lied that nobody made money off the tools. Also the tools do not work. You have these new diamonds but where are many of the old ones?

What do you get for premier membership? Why in the world do you need voicemail these days? It's just a moneymaker for your upline. With text messaging and social networking websites, voicemail is lame.

Just about any help you get from your diamonds costs you money. Are you even making a net profit? It sounds like you aren't.

Did you know that Greg Duncan was bankrupt a few years ago?

Dave Wills said...

Hi Joe,
I'll answer best I can here. For Premier Membership I get a Website Blueprint store, Free Guest tickets for Major Functions, discounts of Books especially which I've priced against Barnes & Noble etc. There's more which are pretty trivial. I get what you're saying in regards to the voicemail system, however I do have a growing organization and really don't have the time to respond to every single text. That would get way out of control and why not send out one message to a group rather than several. As for social media, WWDB launched 'Community' which is working out well for Business owners to share experiences, pics etc.

As for profitability I'll open the books here. I've been in Business approximately 19 months and 2500PV (18% performance). I have 4 IBO's in width who each have 2/3 IBO's in their teams. In total there are 10 IBO's in my organization running between 150-300 PV every month. I usually run between 300-400 PV First Circle monthly. My average performance bonus monthly is anywhere between $500-650 monthly. My wholesale to retail is usually around $250 a month. My overhead on a non major function month is approx $150-$200. I worked out my expenses for the first year in business for overhead and 3 Major Functions in the US. The total was just under $3000. As a sole proprietor in business I file my business taxes with my personal job income taxes. My refund was $2385 in the first year of business. As you can see these numbers are pretty good for a first year business owner who hasn't gone into debt.

I see on your profile that you were a 4000PV Eagle and not profitable. How can this be? Did all your volume run through one leg? I can see that you wouldn't be profitable if that we're the case. I've been taught from day one that the key to a profitable business is balance between width and depth.

I really don't know what Diamonds, Emeralds etc. make from speaking at functions, regionals, opens etc. However, why wouldn't they get paid to speak? Dean Whalen has actually shown me numerous cheques received from Amway and its a lot of money.

Yes I did see that Greg Duncan was in financial trouble however long ago. I also heard an audio from his brother Brad saying how he had always told Greg to stop making silly financial decisions. I guess nobody is quite perfect. I work as a Certified General Accountant in Alberta and have made numerous mistakes in my career.

Joecool said...

Hi Dave, thanks for your candid answer. Can you say what your average monthly expenses are. including premiere membership? That was the reason why I did not profit. I did everything upline advised (Greg and Brad included) and any profit I made as a 4000 eagle just went back into tools so I made no net profit. BTW, I had excellent width and some depth. But as I said, upline advised us to reinvest our profit into the system. At the time, upline like Greg and Brad swore that nobody made money on tools. They lied. They are still telling some tall tales. They have never been made accountable. If I knew they made 50% or more of their income on tools,, I would have been less enthusiastic about buying them,

Dave Wills said...

Hi Joe,

My average monthly expenses are as follows: Premier Membership $50; Digital Delivery $25; Communikate $37 equaling $112 Canadian. On top of this I usually spend approx. $20 if a World Wide Diamond or Emerald comes to town for an Open/Regional/ Org Meeting. Coffee meetings I might spend about $30 monthly, I'm usually guilty of buying drinks at Starbucks etc while doing meetings. All in all my expenses are approximately $200 to be on the safe side.

My Wholesale cheque back more than covers my monthly overhead then the profits I make off Personal and Differential Bonuses go into my business account. That account sits there and accumulates over the year except when travelling to Spokane and Portland for a Major Function. That's usually a $500 weekend. Also forgot to mention above that I run about $400 retail to my parents and 2 friends. I'll be honest I charge wholesale to friends and family.

Upline (Looking forward to them not referring to it as upline in the future) has never advised me to invest my profits into the system, that would make absolutely no sense. I'm on the ball with numbers and would never advise this to my team also. What I would invest into are Information Systems for new business owners which I would then sell to them at their Business launch and gameplan. Rarely do I buy CD's in this day and age, it's always MP3s. I buy books at discount as a part of my Premier Membership. E.g. Rich Dad Poor Dad is cheaper on PM than buying in book stores.

I don't really buy a lot of tools, there is no need. However my costs to World Wide of $112 monthly I have no idea who makes money of those fees. I know that once somebody becomes a Diamond they then are part of World Wide Group management team. I can only assume that Diamond would then make a cut of World Wide profits. Also I believe Diamonds and Emeralds make money of door receipts wherever they speak. I think once an IBO becomes an Emerald naturally you would incorporate your business and run it like a corporation.

Joecool said...

So your costs are about $112 a month not including the big functions. Thus you need to be at 9% or 12% just to break even. And your tool costs are much less than a fully dedicated IBO. Normally as you progress, the expectations of you go up (Upline wants you to buy more tools). In a bankruptcy filing, it was shown that Greg Duncan made 50% of his income from tools. That in itself is not a problem. The problem is that the tools don't work. There was fewer WWDB diamonds today than when I was an IBO in the late 1990's. And the tools were the reason why many dedicated IBO's lost money. Seriously, you spend $37 a month on voicemail? Good luck to you.

Anonymous said...

I know this comment is coming a little late. I'm in Alberta and I was recently prospected by a couple who are downline from the Whalens (not sure how many levels away--lots of middle people). I find it interesting that they aren't taught how to do accounting, even though they are supposedly taught how to get out of debt. For example, my friends didn't realize that expenses include things like travel expenses (gas, wear and tear, etc.), until I mentioned it to them, and some of those meetings were a non-trivial distance away within the city (or just outside city limits). They also declined to say how much they were "reinvesting" into the business from what they saved due to debt counselling.

What's interesting to note is that although Dave says he is not spending a lot of money on tools, he acknowledges paying $25/month on Digital Delivery--this is standing order, i.e., "mandatory" automatic tools purchase.

This has some detail about the costs in the Whalen organization, as I was curious to know how different it was from others in the WWDB family. However, there still really isn't enough information to know if it's profitable or not, such as how much of the tax refund is attributable to the Amway business. One would need all the expenses (not just regular overhead, not just big functions, but how much extra product (after rebate cheques) is bought versus before the IBO joined, because I sure don't spend a few hundred dollars on cleaning products and vitamins every month), and all the income, including the tax refund due to Amway, and then you can see what net profit or loss there is. I'm somewhat surprised that as a CGA, Dave didn't realize how to calculate this or hasn't kept track more carefully.

Some other expenses to note are that you're supposed to pay a license to operate a business in the city, even if it's a home-based business. I'm not sure if this is something that's taught. I was given a black box (that I gave back) which I priced out to be about $27. It had a book (Prosumer Power--worst book I've ever read, and unfortunately I read it AFTER I gave a speech about how I've always been able to learn from every book I've ever read--this would be an exception) and CDs and other marketing materials. I assume this black box would be given out for keeps if the prospect joined, but if not, then the new prospect would be required to get that material for themself and for their new prospects.

If the uplines were so interested in their downline's success, then they would lend out a copy of a CD or book to their downline and have it passed around the organization, rather than have everyone spend so much money on the same tool. And there is no need for such an expensive voicemail system. People usually already have voicemail from their regular phone service provider (either for free or maybe at about $7/mo--we are in Canada after all, where the telco's get away with this), and text and email can be sent out to an entire group at once. That would knock off $62/mo right there.

Something interesting to note as well: IBO's seem to misuse English words, such as "edify" and "parameter". "Edify" is to teach in a moral or religious context, something that uplines should be doing with downlines (if they're mentoring properly); it's not something that downlines should have to do to uplines, unless you're using the archaic definition of building or establishing. When you say something like "Eagle parameters", it should probably be "Eagle criteria". Unfortunately, Amway IBO's believe that they can use words differently from everyone else and this is part of the cult mentality.

Anonymous said...

If you hadn't of quit Joecool think of where you could have been. I'm sorry to hear you quit. Good luck in the future wherever your path leads you and please try not to lead all your viewpoints negatively. When I read your posts that's the feeling I get which makes it seem even if you found something positive you may not share it. The Amway corportation and WWDB have done incredible things for a lot of people through out the entire world. I wish there were more organizations out there like them. The world would definitely be a better place.

Joecool said...

What does WWDB do good for people? They sell cds, tools and functions to Amway IBOs for a profit, regardless of whether or not an IBO makes a profit or not. What's amazing about that?

Anonymous said...

Hey Joecool,
I'm not sure how things were done when you were involved but it's sad to hear your experience was so frustrating. We take people through a comprehensive interview process over 4-5 weeks before extending people an offer into business partnership. They are fully informed as to the yearly costs of running this type of business as well as their tax benefits and projected earnings depending on how they build. We are transparent about all of that, there are no hidden or surprise costs. As someone with previous entrepreneurial experience in small business I'm incredibly grateful for the professionalism and honesty of the people I've had the privilege of working with over the past 6 years. I see the benefit of WWDB as a system and monthly overhead costs are nothing compared to small business costs. We help people get on budgets and learn how to manage their money wisely and how to get out of debt. My team alone has paid off over one million dollars of debt. I don't know anyone personally who keeps running at a loss beyond the first year or two - or a perceived loss when you start factoring in tax write-offs you never had access to before such as percentages of car expenses etc. You can run at a recorded loss and receive more back in tax rebates. Most people's tax returns once in business cover their yearly overhead. Greg Duncan speaks openly about his bankruptcy on CD. And we are all informed that when you go Diamond you have ownership in WWDB and therefore extra profit. That's not hidden. And it makes good business sense. It has been a very profitable experience for me and my team and we have built amazing, thriving relationships with one another. It's too bad you didn't have a similar experience. I hope you're enjoying whatever it is you're doing now :)

Joecool said...

You take prospects through a 4-5 week interview process? That's news to me. I have never heard of WWDB taking that approach. I am in contact with another WWDB IBO and that's not how he operates.

If you were truly showing them everything so they can join fully informed, then only very un-business like people would sign up knowing that only about 1 in 400 reaches the level of platinum (Amway's numbers).

Also, seeing the prices would make most people think twice knowing that 100 PV would cost about $300.

Unknown said...

My son has been sucked into this group. He is young and naive, just like they like them. They have advised him to cut ties with his family and not talk to anyone who has a negative opinion. This has caused our 1st major rift. I have been in a legitimate business for 15 yrs and he has turned me off. This is a cult and I would love to sue these people! Snake oil salesmen.