Tuesday, December 30, 2014

Amway Residual Income?

One of the things that many IBOs mistakenly believe is that they will build their Amway business and then they will have the ability to "walk away" from the business while the income continues to flow in. I believe if there was such an incredible benefit such as lifelong residual income that could be achieved from Amway, I'm fairly certain that Amway would advertise this as a benefit of being an IBO. But Amway does not. It is very likely that your LOS such as WWDB or one of the others will promote this benefit while telling you that your bext chance to achieve it is by subscribing to their "system".

One thing that goes unnnoticed all too often is that there seems to be nobody who is actually retired and living off the efforts of having built a big Amway business once upon a time. Seems that even the crown ambassadors still have busy lifestyles running from function to function and participating in other business related activities. While many of these leaders may claim they love their downlines or some other bunk, it is my belief that these leaders keep working their Amway businesses for one reason only. That is they need to keep working in order to keep the income flowing in.

The diamond lifestyle that is often portrayed may seem like a great goal or dream to achieve, but the fact of the matter is that a "diamond lifestyle" cannot be sustained on diamond income. The average diamond, according to Amway, earns about $150,000 a year. While that may seem like a great amount of income, it's not nearly enough to sustain the kind of lifestyle portrayed by diamonds. Even if that income is supplemented by income from the sale of tools, you can't fly your family around the country first class to do all kinds of functions and still end up with much leftover to own fancy homes and cars.

If I deposited $1000 in the bank and never touch the money, the bank would pay me a certain amount of interest each year, guaranteed. That is residual income. In Amway, you can basically earn income in two ways. You can sell products for a profit, but there are problems with this. First off, Amway products in general are more expensive than local retailers. It is why you hear so many justifications about quality and concentration, because you are hard pressed to argue cost. Secondly, you are severely restricted from advertising, thus selling can be difficult. The other way to generate more income is to build a downline in hopes that the downline will help you to leverage your volume. But then your downline will have the same problem that you had in moving products. That being said, even if you achieve some level such as emerald or diamond, your business will immediately begin to fall apart once you stop working because attrition will take its toll. It is why there are hoards of "former" platinums. If platinums are not sustainable, then neither is any other level.

There are many many instances of diamonds quitting, resigning, or falling out of qualification. People come and go in this business every day. Do you really think you can bank on retirement and residual income under these circumstances? If you believe that, I have some swamp land in Florida to sell you.


Anonymous said...

The diamond income doesn't look all that impressive. But even at crown ambassador level. One of the highest earners dexter yager. I'm noticing none of his sons or daughter in laws work. Even a few of dex grandchildren are living off Dex amway income. If it was just a couple with a crown ambassador income then its plenty. Family of 10+ members with health insurance and expensive lifestyle. I just can't see much money being left over.

Joecool said...

Dexter makes a good income off the backs of his downline. If you don't mind scamming all those people, then have at it.

Anonymous said...

After just two months in the business, one of my family members sent me an email that referred me to your site. She said that learning more about Amway would be beneficial, and so, I decided to read some of your posts. I read through this post, and I disagree with you on a few of the key points that you make. First, with the first few opening paragraphs. My uplines which who are both based in the Midwest, definitely have been able to walk away from their jobs. Their best month (30 day period) is a little over 150k. Now, that did not come through selling product (of course not). It came through bonuses that Amway chose to give them for the performance that they had shown. That's how it works, right? If you sell a certain amount over a certain level for twelve months in a row, then Amway will give you a bonus. I think the important thing to see here is that there are very few people who only work through Amway. The platinums that I have seen have other jobs that supplement their income. Yet, they still make a significant amount of money through Amway (on the side). For example, a platinum that I know has been on an annual totally paid Amway trip for over 10 years. I mean, Amway really takes care of the people that drive business to their partner companies. My uplines that I mentioned earlier have not had a job for over 10 years. More importantly, they have the experience to show that they did it without claiming that they could "get rich quick." So, in short, you're wrong to say that a diamond's actual income on a yearly basis is just about around 150k. I don't know the breakdown because I don't really know the math behind it, but I digress.

In response to the your statement that people don't actually retire from the Amway business. Well, I think that if someone found a system that was successful in generating money, they would want to tell people about it, right? I mean, if they hated it, or if it wasn't successful, then why would they want to do it? The relationships that my uplines have with their uplines seems to be better than you say it is. It seems to be an environment that nurtures trust instead of scamming people into believing that they can get rich quick. How would your business fail if you stopped working? If you teach people to work the business, and their successful in it, then wouldn't you stop teaching them and go on to other people instead? The Diamonds that I know have not resigned or quit. The Platinums that I also know have not given up. They come back to the info sessions in order to help people build their own businesses.

I think that it's very rare for people to work exclusively in Amway; that they have other jobs that are giving them added income. To say, however, that they are not successful because they only make as much as a middle class family is not accurate. You may call me an Amway robot or someone who's not very learned in the world, but I have looked at the business, and there's a lot to show that it's a very good business. People need to look at it to see if it's for them.

Joecool said...

Thank you for your comments, but you only confirm what I wrote in another article. These super wealthy types who can allegedly stop working - nobody ever identifies them. It's like people who claim to have seen sasquatch but nobody has ever proven they exist. Now I know some people do make good money in Amway, but seeing a $150K check means nothing. You don't know what kinds of expenses these folks have. If they are truly flying to functions with their families first class and staying in 5 star hotels, $150K doesn't go that far. Also, a lot of the income earned is off the backs of the lower tier IBOs who are losing money. When you factor in the tools and functions, some IBOs are losing a lot of money. And while some diamonds might make decent money, I highly doubt that many are buying mansions in cash and other big ticket items in cash.

Also, something you might not know is that diamonds receive a lot of their income in the form of annual bonuses and therefore their monthly incomes might be quite small.

The truth is you don't really know who is successful in Amway unless they have opened up their financial records for your review (unlikely). There's a good chance that many diamonds appear wealthy when in reality they are living in debt and hoping for their next check to arrive.

Do the math. A funder's diamond makes around 600K but most diamonds are not founders. A regular diamond might make $150K to $200K from Amway and maybe another $100K from tools. Take out taxes and medical insurance, business expenses (remember those first class plane fares) such as fancy clothes, etc and maybe one of these diamonds nets 75K to 100K annually. Decent money but that makes them middle to upper middle class and that kind of money doesn't allow you a lifestyle of mansions paid for in cash and a fleet of sports cars.

Not to mention a few bad breaks and your business can fall apart quickly. For that reason, I believe that walking away and collecting residual income is a myth.

Anonymous said...

No, they are not still in the business out of the goodness of the heart. They are still in it because they have to if they want to continue to make any money. Remember, got to keep on building your width. What proof do you have that your upline has made a $150K in a month anyway? Think about how much Amway product has to move through the LOS. The 2-5 year is nothing more then a lie to sucker you in. Amway will consume you, your family time, your money, and your entire life until you stopped being brainwashed.

Joecool said...

Approximately half of IBOs quit each year. If you stop building Amway, those people quitting will eventually lead someone to not qualify for bonuses if they stop building Amway. Even if an upline made $150K in a month, it might be an annual bonus. A diamond makes most of their income from an annual bonus and their actual monthly bonuses are relatively small. Thus a diamond most budget their money. I doubt that most can afford to fly first class to all functions all over the country and buy everything in cash as they claim.

Triple diamond Greg Duncan filed bankruptcy and in the public records, it showed he owed hundreds of thousands in back taxes, he had credit card debt and he could not pay the mortgages on his properties. He had an income of about $50K per month from Amway but even that could not sustain the diamond lifestyle he was trying to portray.