Wednesday, October 15, 2014

People Quitting Amway?

I often see commentary about people quitting Amway and Amway loyalists are quick to call them broke, losers, lazy, lacking guts. Ironically, these same lazy and loser types of people were "sharp" and motivated prospects before they signed up for the Amway opportunity. Someone recently left a comment on my blog about how AMOs should conduct exit interviews with departing IBOs to get to the root of the problems. The root of the problem in my opinion is that Amway products are priced too high and the business opportunity is a poor one. It really is that simple.

However, based on my years of blogging and Amway experiences, I can honestly say I believe that people quit Amway primarily for one reason. The money isn't there. Amway's own numbers show that the averahe IBO earns just over $100 a month and that is before taxes and expenses. Business building IBOs earn most of the bonuses, but business building IBOs generally have the most expenses, often participating in the system of standing orders and functions.

When I was an IBO, I did as upline advised and I achieved a fairly significant level (4000 PV), but due to the expenses associated with tools and helping downline, I didn't earn net profit. This is confirmed by a study done by the Wisconsin attroney general who examined the tax returns of platinume and found that they averaged a net loss of about $1000 a year. While the study was a bit dated, I would suggest it is still very valid as platinums today, have more tools (business building materials) that they are expected to buy from upline. If I made nothing at 4000 PV, anyone with half a brain can conclude that IBOs below 4000 PV and fully participating on the system would end up with a net loss because their expenses would be similar to mine, but with less bonus money.

The bottom line is that people are very likely quitting because they aren't profitable. If people made a few hundred a month with 8-15 hours of work per week, they would continue to run their businesses. But those who work and make nothing or lose money have no reason or motivation to continue. Thus they simply make a wise business decision and quit. What seemed like a good idea during the presentation simply did not pan out when reality set in. It's also reasonable to conclude that the products are not that great either because if they were, those who quit would become loyal customers, thus even if the sales force turned over, sales would consistently rise as former IBOs would become customers. It's apparent that most former IBOs do not become loyal Amway customers. In fact, for those who later discover they were lied to or deceived about the Amway opportunity, become critical of Amway instead.

Why do people quit Amway? I think the answer is crystal clear.

8 comments:

Anonymous said...

So true with the quitting because Amway isn't very profitable. People said you got to spend 300.00 to get 10.00 commission. After i quit amway I dabble with another Mlm. Signed only two people but this company paid 15% first level 45% second and way less a few levels after. So I was getting 15.00 level one and 45.00 level two and both people spent a hundred each. I was spending 100.00 on product a month and getting 60.00 back. I stayed with this mlm for a year. Before the company folded but there are Mlm with similar structures. When the loss is minimal it's more bearable and that company didn't have pricey tools.

Joecool said...

If people made money, they wold stay in MLM and MLM wouldn't be associated with scam. But that's not the case ost of the time.

Anonymous said...

With mlm they are structured so many would lose. But I can't believe its gotten so bad where people are losing 300.00 a month on overpriced products. That's not even including the tools/functions. When my friends and I lost less than a 100.00 a month on another Mlm. Nobody felt bitter or ripped off.

Joecool said...

I believe as the internet freely gave information, less people joined and the diamonds started to kill the golden goose. Advising people to hyper consume the tools. I read some accounts of IBOs advised to attend multiple functions. The hints are there. Diamonds quitting, losing their homes, etc. The diamond "lifestyle" is a fa├žade.

Anonymous said...

My friend had the same upline as I did. But like you said he baught tons more product and extra dream night tickets(5 extra). I was involved before the internet came along. The diamond was actually nice and not very pushy when I was involved. But he couldn't hold his group together. Don't think many can hold their groups together buying so much products and tools.

Joecool said...

I was involved before the internet was common. We were told lies that nobody profits from tools, etc. But I believe the internet has likely saved many people from the scam. I often receive emails saying they were glad to have the information from this blog.

Anonymous said...

Before the internet came along. I reserved a book called cult of free enterprise. There wasn't any otherbnegative info out there about Amway. In my case I felt embarrassed cause products where so costly. Couldn't bring myself to sell it to my friends. Plus that book described it as to cultish

Joecool said...

Yes, Amway has some cultlike features. Worship the diamonds, blame yourself for failure are good examples.