Friday, December 13, 2013

Amway Is A Fundraiser?

A recent comment left on my blog inspired this article. The comment was that basically, IBO's are "donating" to their upline on a monthly basis. You start by donating upline in the form of monthly purchases. Your 100 PV is roughly equal to $300 and most of the bonus generated by that volume goes somewhere upline. This will go on forever until you either quit and stop buying, or unless you somehow manage to sponsor enough downline who will then "donate" to you.

If you attend those open meetings, you are again donating to the upline's coffers. As an IBO, I was strongly encouraged to attend these meetings even if I had no new prospects to bring. And of course, there was an entrance fee at the door. I don't think this was a major profit center but still, a room with perhaps 1000 attendees = $6000 collected and a room with chairs and a speaker doesn't cost that much for an evening.

If you purchase standing orders, you are not donating to your upline on a weekly basis. If the upline can reproduce cds for 50 cents a piece, this is a very healthy profit center. Also, most upline recommend that you listen to a cd each day, thus you need to purchase some additional cds in addition to the standing orders.

Voicemail and book of the month are also monthly donations. Who in the world needs voicemail these days? But uplines still recommend it as they make some serious coin from it. The book of the month might have some value but the uplines are still making profits from these. Think about it, these diamonds claim they want your success but they make you pay for just about any help you receive, regardless of whether that help is beneficial to your business or not.

The regional and major functions are like the monthly fund raisers for the diamonds. Major functions can have thousand or tens of thousands of people in attendance. If they pay $100 (or more) each, it is a serious money maker for upline. A convention center or arena has costs in running events but those costs (while they vary) might be $10 to $25 per person. The rest is pure profit for the diamonds.

All in all, the profit margin is much higher for these tools and functions than from Amway products. Thus it's perfectly reasonable to think that the diamonds can make much more money from selling tools than from Amway itself. For groups where current qualifications are not required for a cut of the tools, these diamonds might make nearly all of their money from tools and functions. It's more like a diamond fundraiser than a function to help IBO's. Afterall, who gets the biggest financial benefit from the tools and functions? The diamonds or the IBO's?


Anonymous said...

The uplines also get the biggest benefit from the selfshoping of the ibo. Lets say 20% of bonus on the purchese go upline while the ibo could have bought equivalent products significantly cheaper in the local store. Im not sure people seeing the plan grasp the 'hidden' part of the model.

Joecool said...

Yes, MLM is just a bad deal all around.