What Amway Prospects Don't Know?

One thing that I was unaware of as an IBO was that our uplines were massively profiting from our tools purchases. I was in WWDB at the time and I was told very clearly that nobody made money from the tools and in fact, I was also told that WWDB was a non profit organization. Both of these statements were bold lies told by WWDB leaders and they have never been held accountable. We were told that upline cared about us and our success, thus they spent their own money to fly to functions to teach us how to succeed. Turns out they were all lies.

Eventually, the internet amd other media made it impossible to cover up these lies and uplines finally admitted that they profitted from tools. However, it looks like they downplayed the magnitude of the tools profits. I believe some upline may have made most of their income from tools, especially leaders who may have fallen out of qualification. Now days, the upline admits they make some profits from tools, but there is still a great deal of secrecy in the tools business. What makes the whole thing ironic is that the uplines allegeldy are not supposed to entice Amway prospects into joining by using the tools money as a draw, but at the same time, they are told that tools are vital to their success. Uplines also show off trappings and lifestyles to attract recruits, but I believe that these trappings were likely obtained with tool income. Tool income has a higher profit margin than Amway products and fewer people in the pay plan so it makes perfect sense.

I wonder how many prospects or IBOs would be fired up about buying tools if they knew that their uplines might not currently be qualified at the level they claim to be, and knowing that the uplines will make a ton of money whether or not you make a cent as an IBO? Also, some uplines are shameless in pushing the tools on downline. Sure they might cut the newest guy a break and loan them some cds, but once that IBO decides to start building downline, they are likely to be told that a real business owner buys their own tools, or that a business owner needs to be a leader and purchase extra tools for their downline.

How would you feel uf your upline is touting themselves as a financial genious but in the background, their homes are foreclosed or they have financial difficulties? What if your upline touts their morals and you find out they are divorced or getting a divorce? What if your upline said Amway saves marriages? Your upline certainly won't say they are perfect, but conversely, they should be held to the highest standards if they are using their status to be able to sell tools and make large profits.

Amway Business Mentality?

One of the things IBOs "think" they possess is a "business mentality", but in reality they are far from it. It is not necessarily the fault of the IBOs. Many are sponsored into Amway by trusted friends or family lacking business experience. They will "submit" to upline as they are advised and will try to learn about the Amway business. The problem is that many upline leaders teach self serving business practices such as hard core dedication to their tools system, from which they often handsomely profit. Sadly, these leaders will try to teach their downline faulty, but self serving advice. Let's examine some of the questionable practices.

"Buy from yourself". If you have a business owner mentality, you only buy from yourself if it's beneficial to your business. Many IBOs talk about ridiculous things like a McDonald's owner would never eat at Burger King. That's totally false. Just because I own a McDonald's doesn't mean I am eating Big Macs the rest of my life. You cannot spend yourself to prosperity. If I sold pens for $1.00 and my cost was .50, and my competitor had a special on the same pens at 3 for $1.00, I'm buying them from my competition. It only makes sense when you do the math. Also, buying from yourself makes you a customer, not a business owner.

"Ignore facts if you have a dream". This is probably the biggest heap of bull crap taught by some upline. I have seen this spouted in particular by IBOs downline from WWDB and BWW leaders. A business owner studies the facts, not ignores them. Any REAL business owner wants to know how much he is bringing in and how much is going out. That's how you detect the heartbeat of your business. A site visitor named Gina on this site, posted a profit/loss statement from her real business. Naturally, IBOs were at a loss to discuss it because it was foreign material to them. If you join this business where there is low overhead and expenses, you should be profiting every month, not taking losses because of the training materials that your upline sells.

"Submit to upline" Another load of hogwash. Why should someone submit to upline simply because they "sponsored me" or whatever? A real business owner would think independently and make business decisions based on facts and numbers, not on the advice of someone upline who hasn't taken the time to assess each IBO on a personal level to be able to give advice on an IBO's "Indepdendent Business", or worse, advice on their personal lives".

"Dedication to the system". Silly advice as well. What dedication does the system have for an IBO? If an IBO succeeds (which is very rare), the system takes credit, but for the more than 99% of people who never make a significant income, it is their own fault if they don't make it. Amway apologists will defend this by saying that many may not have signed up wanting a significant income. While that may be partially true, tell me where people show "plans" designed for the guy who wants an extra $100 a month? The plans shown are always (AFAIK) to go platinum or diamond.

IBOs and information seekers, does any of this sound familiar? Is this a part of your experience? If so, I encourage you to ask questions here and get more information before proceeding with any more "business" activity.

The Amway Wealth Illusion?

One of the things my upline taught us ad nauseum was that we needed to have faith in our business and in our upline. That we needed to believe that we were going to be successful. IBOs are told that they should act successful even if they are still working their way up the ranks in the business. It is why they ask (require) IBOs to wear suits and business attire to all meetings and functions. This is one of the weird quirks about the business in my opinion. I live in Hawaii and I remember a function they held in the middle of July in a high school auditorium and there was no air conditioning. I think my suit needed special cleaning because it was completely saturated with persiration.

Anyway, with this part of the year, soon there will be tens of thousands of IBOs shuffling off to a function called summer conference (AKA family reunion), or whatever it's called now. The tickets are about $250 to $300 and includes hotel and some meals. What IBOs are often unaware of is that many venues will allow you to run these conferences for $200 or less per person. The rest of that ticket prices goes directly into your upline's pockets. Anyway, the function will feature slide shows of mansions, yachts, jet skis, sports cars, fabulous vacations and other trappings of wealth. There may be some inspirational speeches and testimonies, but in the end, it's just a seminar that takes you away from your business.

What many IBOs don't realize is that this display of wealth is just that. There is no bonafide evidence to indicate that these diamonds actually own all of those toys and goodies. The diamonds probably won't verbally confirm it either, because these toys and goodies may not really be owned by them. It could be rented, or maybe some upline crown ambassador may own the mansion, but IBOs will assume that these trappings of wealth are common once you reach diamond. As an IBO, I never actually knew how much a diamond really earned. I just assumed it was a lot because we were shown all of these goodies and just assumed all diamonds had these kinds of lifestyles.

If I posted a picture of a mansion and a jet and said I owe it all to my earnings as a blogger, people would cry foul, that I am lying or making things up. And they would be right. Well, I would guess that many diamonds are doing the very same thing if they appear on stage and implying that they have jets and mansions. As I said, someone may own a mansion and a jet, but to imply that this is a part of the typical diamond lifestyle is a stretch. The evidence is there. Some diamonds have lost their homes to foreclosure. My old LOS diamonds (WWDB) taught us that diamonds pay cash for everything, including homes. Now confirmed as a blatant lie. Who knows what else they may have misrepresented?

I ask IBOs and prospects who may be attending these functions, to watch with a critical eye. What is being implied with the display of wealth? Analyze if those goodies can be purchased with a diamond income ($150,000 gross plus some tool income). Ask yourself if this lifestyle is truly sustainable? Ask yourself if you can live with yourself if deception is a part of earning your diamond lifestyle?

Buy Amway From Yourself?

One of the biggest shams taught by some upline is the nearly exclusive "buy from yourself" philosophy. I'm not saying that supporting your business is a bad idea, but are you really supporting yout own business? If your upline teaches this, you are being mislead and I will explain why.

When you think you are buying from yourself, you are really buying from Amway. Amway makes the profit from the sales. If you buy enough, they toss you a small rebate. An IBO is in reality, a distributor or a middleman. Also, if you are a new IBO at the 100 PV level, you will receive 3% in the form of a bonus while your uplines and sponsor will split up approximately 29% to 30% in bonuses off your efforts, thus you get about $10 while your uplines will enjoy a share of about $90. Also, your upline might say that the "profit" you make from buying from yourself is the same as if you shopped at Costco. But wait a minute, if you shop at Costco, you get to keep the savings. If you earn a profit in Amway, you'll likely be expected to use that profit to spend on tools and functions.

Think of it this way. If your spouse was in the business of making and selling cookies, would you make money by eating all of the cookies? Even if you received a small rebate for cookie making materials, you would not profit by eating all the cookies yourself. You would have to sell the cookies to customers to have cash in your pockets. I truly do not understand how IBOs get duped into thinking they can be successful and earn money buy purchasing and consuming Amway products without selling much. Amway's own numbers suggest that IBOs do not sell much, except to their own downline and to themselves.

And upline who sell tools that teach this method are more than likely selling you a flawed system that nearly guarantees you will lose money. A rare few IBOs will emerge now and then who can overcome overwhelming odds and barriers and reach higher levels in the business, but I would have to say that more than 99%+ of IBOs who sign up will never even get close to emerald or diamond. Sadly, the buy from yourself system will only profit the higher level distributors, as well as your purchase of tools, which rewards upline for teaching a flawed system.

Failing In Amway? Sponsor More People!

After years of studying Amway and blogging, I've noticed some things taught by IBO leaders that simply do not make any sense. It doesn't make sense business wise and it just doesn't add up. I know that sometimes, you need to think outside of the box and go against the grain to succeed, but some of the IBO practices are simply insane and it's no wonder that so many IBOs fail in their pursuit of their Amway "dream". These same leaders may encourage you to disregard facts and just follow them. Blind loyalty like that can end up costing you a lot of money.

Most IBOs never sponsor a a single downline and relatively few products are sold to non IBOs. These are the reasons why most IBOs do not turn a profit but for some reason, many IBOs still seem to think that training materials are worth the money they pay for them. The training might motivate you but in the big picture, are ineffective in generating more sales and getting IBOs to sponsor more people. If these methods worked, Amway sales would far greater than the approximate 10.8 billion they did last year, which was a drop from the previous year.

Also, "buy from yourself:, a fairly common practice, is a bad idea. It is okay to support your business, but if you are the primary or only customer, you won't make money. Any profit you might turn is coming out of your own pockets. I don't know of any successful stores where the primary customers are the owner and the store employees. Yet some IBOs think this is how they will succeed. Also, for this reason, IBOs are always recruiting because they need downline to try to generate more sales volume.

Sponsor others. So you are struggling as an IBO. But the key to success is to try to open other stores by sponsoring. As a famous Amway apologist likes to claim, you do not get paid (directly) for sponsoring others. So why is this the emphasis for so many IBOs? Why would you think that opening more stores will make you successful? Yes, it is a way to possibly generate more volume, but your "success" will only come by having a bunch of struggling businesses under you. Is that how you wish to succeed? Also, the quest to sponsor others is probably how Amway got a bad reputation when IBOs tricked people into attending recruitment meetings and/or being deceptive when invitig someone to see the plan.

Folks, you need customers to succeed. I live in Hawaii and when tourism is slow, our local economy suffers. It's a very similar concept to your Amway business. Without customers circulating money through your business, you will eventually go out of business.

How Long Does It Take To Profit In Amway?

One of the things I heard as an IBO and I believe is still said in some Amway meetings is that conventional businesses do not profit for up to five years. I don't know how true or untrue that is, but whether they do or not, how long does it take for an Amway business to profit? I believe Amway leaders say this because their IBOs are losing money and they want them to believe that most people will lose money for five years. During that time, the Amway leaders can profit by selling these folks cds and function tickets, which prevents IBOs from making a profit.

Despite the small start up costs and the little to no overhead costs, most IBOs never turn a profit. I will acknowledge that many IBOs probably never do a single thing once they sign up. I believe there is an underlying story behind this as well, but at the same time, people who do nothing end up getting what they deserve. Out of the more serious IBOs who make an effort to build a business, most of them will never make a net profit if they are using tools. The tools are ineffective in helping IBOs build a business and are usually the reason for business losses suffered by the vast majority of IBOs who use tools.

Factoring the cost of the website, the voicemail, standing orders, books and functions and cds, IBOs simply get drained of their money a couple hundred of bucks a month, sometimes more if an IBO is highly dedicated to consuming tools. Earning profits on product purchases is not something that IBOs typically do because you can only sell so much product when it's not priced to compete with retailers. In the end, sympathetic family and friends become the target customers of many IBOs.

Toss in other challenges such as a spotty reputation from IBO behavior such as tricking people into meetings or outright lies and you have an opportunity with nearly insurmountable handicaps. Yes, a few rare and usually charismatic people can overcome these odds, but only one or two out of tens of thousands are able to do so. And even those whe reach the pinnacle of diamond, may not be able to maintain qualification. There are many stories of former diamonds or diamonds who quit. So much for that residual income myth.

So I don't know the detailed statistics about how long it takes for a conventional business to turn a profit. It may take up to five years. But based on my experiences and some number crunching, I'd have to say that the vast majorty of Amway Business Owners NEVER TURN A PROFIT - EVER.

Is Your Amway Upline Credible?

I recently read a comment about Amway on another blog. The person mentions that someone's credentials must be considered when looking at information that is presented. I will comment that showing me a sports car or a fancy suit is not proof of financial success. Amway leaders appear to be credible and some talk about how they buy things in cash, and may even show you pictures of sports cars and mansions. Imagine this, go to the bank and try to procure a loan. When asked for collateral, show the loan officer pictures of a sports car and a mansion. See how far that gets you. Yet Amway diamonds use this very tactic as a means of showing off their "lifestyle" and for all we know, they are sowing rented cars and houses they don't own.

I find this subject ironic because not one single upline leader, as far as I know, has ever supplied bonafide financial credentials about themselves. The audience assumes that the person on stage has certain credentials, but do they really? I will say that certainly, if someone is wearing a diamond pin for example, that this person has at least achieved the diamond level as recognized by Amway, but the level may not be current, and the level doesn't indicate the kind of income this person earns from Amway. (Joecool is criticized for being outdated even though I was at 4000 PV at one point in my Amway career)

What many people assume is that the diamonds buy homes and cars in cash because they say so. They may also say that they wake up at noon every day and participate in leisure activities all day while the cash rolls in. I have heard from some new IBOs, that their upline makes more money taking a crap in the morning than a critic makes in a whole year at a job. That IBO became quiet when some critics offered to take that bet.

But the truth of the matter is that as far as I know, only former diamonds have come clean about their Amway income. They are the only ones who spoke freely of credentials and accomplishments. Even critics of Amway will often openly speak about their experiences and achieved levels in the business. In the REAL business world, showing business tax returns and credentials are a normal part of doing business. It appears that only in the world of Amway is the supply of credentials and financial statements a big secret. Now I am not suggesting that IBOs or upline leaders should disclose their financials to the entire world, but certainly prospects and some downline should be able to see what their upline is doing financially, especially if that is the basis for purchasing their standing orders and function tickets. And I refer to business (Amway and Tools) income and expenses only, not from other personal sources. If you are told that tools are the key to success, you have the right to ask what success are they referring to. A picture of someone's check doesn't tell the true story. The picture of a mansion doesn't do much either. A schedule C tax return would show someone's business income as well as their business expenses. That's the real indicator of what's going on. A lack of transparency should be a red flag for you.

I believe that IBOs and upline leaders do not disclose that information because it would not be beneficial to them. If it were, they would likely publish it freely, just as they flash around copies of checks. IBOs and prospects should take this to heart and ask upline the tough questions. And a lack of answers to your questions should get you running the opposite way.

Is Amway A Disaster From The Start?

I was thinking about how propsects are invited to see the plan. In many cases, there will have been a bit of deception or half truths told in order for an IBO to get a prospect in front of the plan. But then I thought about the plan and how much deception was used in the plan itself by the speaker.

Thus, IBOs and new prospects are deceived right from the beginning. The speaker might make some small talk, and get the prospect to agree on certain issues, such as income tax and insurance eating away at your paycheck, etc. When a prospect hears this, it will make sense and they will agree and trust the spaker somewhat. Afterall, the speaker has been built up to be a financial whiz and all.

Then the deception begins.............

The speaker might talk about IBOs saving 30% on products righ from the start, which is false. Here's some information debunking that age old myth:
http://www.amquix.info/Save30_myth.html

Then the speaker might talk about 98% of people being dead or broke by age 65, which is not true. The speaker might talk about 90% or more of small businesses failing in the first year. These little factoids (which are untrue) are apparently used to make other opportunities seem flawed in comparison with the Amway opportunity.

The speaker might then talk about how the Amway opportunity is cheap to get started, and has little or no overhead. But the problem is that many dedicated IBOs will get hosed as their upline will begin to teach them that they need to invest in their business in the form of voicemail, book of the month, standing order and attending all meetings. These expenses nearly guarantee that an IBO will end up with a net loss of income. What's more, upline may teach that this is success! Appalling!

So a question for IBOs and prospects. Is it a good opportunity when you have been lied to or deceived right from the outset?

Join Amway And Build Someone Else's Dreams?

One of the issues I have with the Amway plan is that the newest IBO, possibly the one who does the most "Work", receives the smallest compensation. Amway pays about 30%+ of their revenue back in the form of bonuses. An IBO who does 100 PV receives a 3% bonus and somewhere, uplines and sponsors receive the rest. Some of the upline may not have even met the IBO who actually did the work. Is that really fair and is that a level playing field? What do some of these uplines do to deserve the lion's share of the bonus you worked to get? Yes, the upline diamond may show the plan in an open meeting, which may help you, but then again, you pay for entrance into that meeting. If you have no guests to bring, you paid and received no benefit at all.

Many uplines will talk about dreams and fulfilling your dreams. But if an IBO would stop and think for a moment, you can easily see that you are building the dreams of the Amway owners and your upline, but not your own. You receive a tiny portion of the bonus for the volume that you move, and then in addition, if you are on the system, then you are also paying upline in the form of tool and function purchases for the priviledge of giving them bonuses with your product purchases. Dreams are being fulfilled, but not yours.

It is why your upline diamonds can parade around on stage with designer suits and show you their fancy cars and mansions and other toys. It is because they are cashing in on your efforts and your tool and function purchases. You are making their dreams come true. Your dedication to moving volume and purchasing standing orders are fulfilling dreams. The upline dreams. Yes, someday you can hope to have your own group of downline to exploit for your own benefit, but unless you are adding members to your group regularly, you will never achieve the kinds of dreams that uplines talk about. In the meantime though, you are definitely helping someone upline achieve their dreams with every function you attend. Ironically, the upline leaders will tell you to never quit, even if they don't know your personal circumstances. They don't want you to quit because their income is affected. Sometimes in business, quitting is a wise business decision that must be made unless you want to bleed money longer and longer. Quitting Amway doesn't mean you can't try something else to fulfill your dreams and goals. More than likely, any option you choose will be better than losing money in Amway.

Here's a challenge for IBOs and/or prospects who are being recruited into the Amway business. 100 PV will cost around $300 a month and dedication to the tools system will cost you around $200 a month or more on average. Would you not be better off simply writing a check to your upline for $100 and not even joining? Would you not be better off staying home and watching television instead of joining? If you read all of the information available on this blog and still decide to join, goo d luck to you, but remember this: Whose dreams are being fulfilled by your participation? Yours or your upline?

Amway And College?

Many IBOs justify their involvement in the system of cds, tapes, books and seminars by comparing it to college. They claim they need this education and that it is much cheaper when compared to a college or university. Of course this is the upline propaganda that IBOs are fed, much like the concept that a job is a bad idea. Some unethical uplines will advise young students to forego college to pursue an Amway business. If that happens, run away fast!

In college, it is true that not everyone graduates, but approximately half of those who start college end up graduating. Those who do not graduate still benefit from their education on a year to year and course by course basis. When you are job seeking, a college degree will give you more options than those who don't educate. This claim cannot be made by Amway IBOs. The education an IBO receives by seminars and cds do not even equate to success in Amway, much less in other venues in life. Only a small fraction of IBOs ever reach platinum, which supposedly is the break even point. So as an IBO, you have less than one half of a one percent chance to break even as compared to approximately a 50% chance of graduating college.

Also, once you graduate and receive your degree/diploma, it is complete. In Amway, there are many many many examples of people who reached levels as high as diamond or above who could not maintain the level. There are also many examlpes of diamonds who quit Amway. If there were such a thing as "residual" income, why would anyone quit when they could sit back and watch the cash roll in. I think the answer is quite obvious.

There is also no evidence (as far as I know) that your Amway related education of cds and seminars actually work. The tiny fraction of 1% of successful IBOs is not a good case for arguing the success of the system. Colleges on the other hand, have accreditation standards, which is nothing like the ineffective Amway accreditation of groups such as BWW, WWDB or Network 21. It is well documented that college grads earn more than non college grads and we know that the average income of Amway IBOs is about $202 a month gross income. Bottom line there really is no comparison.

The fact that IBOs even dare to compare a college education to their teaching in Amway is a joke. Try telling a prospective employer about your Amway education and see what that gets you. LOL

Amway Customers?

One of the apparently common practices among major IBO groups is still the concept of "buy from yourself". I believe IBO leaders teach this because most people are not good at or not comfortable selling goods and services. And this is not uncommon. In general, people do not enjoy selling and the Amway presentation is usually careful to avoid making the impression that you need sales. Instead, you might hear terms like self consumption or being a prosumer.

Therefore, to teach buy from yourself makes the business an easier sell. In reality, an Amway IBO is simply a comissioned salesperson with no benefits. But presenting the opportunity that way is unlikely to yield results either, thus the buy from yourself has become a common practice. It makes it sound easy to just buy your own goods (or change your shopping habits) to reach 100 PV and qualify yourself for a bonus. Then you just get others to copy what you are doing. Easy right?

However, buying from youself makes you a customer and not a business owner. Buying from yourself doesn't generate your business a profit. Would you open a car dealership to buy a car? Now I am not suggesting that supporting your own business is a bad idea. What I am suggesting is if you are the primary or exclusive customer of your Amway business, then you aren't really running a business. You are simply a glorified customer. And technically, without sales, you don't actually qualify for a bonus.

What an IBO is really doing is paying his upline's bonuses. Amway overcharges more than 30% of the cost of their product. They have to do this in order to be able to pay IBO bonuses. Since most IBOs are at 100 PV or less, the lion's share of the bonuses earned are channeled upline when a purchase is made. It is not a level playing field as some IBO leaders might suggest. Yes, you might be able to surpass your sponsor but you will never surpass a tenured diamond no matter how hard you work because that diamond has a lot of influence over your business.

What compounds the situation and makes it worse is when an IBO pays for standing order or attends functions where some of these IBO leaders may teach this bad business practice. You as an IBO already pverpay for products for which upline gets most of the bonus, but then the problem is compounded by IBOs paying to receive this bad advice. When I was an IBO, I heard speakers talk about skipping rent or mortgage payments to attend more functions, or having your family skip a meal so you can buy standing orders. Buying from yourself is just another example of bad advice given from upline to downline. What makes it worse is that the uplines profit by giving bad advice.

Are you buying from yourself almost exclusively? Can you think of any truly successful business where the owner is the main or possibly the only customer? I can't think of any.

Are Amway Diamonds Really "Free"?

When I was an IBO, I often saw my upline diamond driving around town dressed in a business suit. I used to think why does he keep working if he can walk away and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios, the diamond is working to help his downline out of a genuine concern, or is it possible he is working because he has to? The only difference now is that the diamond works the nite and/or graveyard shift, because many IBOs are building the business after the complete their day jobs, thus a diamond ends up working nights?

Now Amway has stated that the average diamond (non Q12) earns about $150,000 a year. That is a decent income, but after taxes and paying for basic monthly expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts. Is that freedom?

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining his group than if the diamond simply worked a 9-5 job. For one thing, a diamond needs to maintain personal group volume to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but I believe he has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin. But up and coming pins shine and drop out regularly like so many other IBOs. The diamond's effort must be endless.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle and to attend out of town functions.

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nites and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next. Is that what you consider "freedom"?

Amway Success?

Many people consider the platinum level in Amway as a significant achievement in Amway. While it may be nice to achieve that level and gain recognition from the Amway corporation, I will point out that there was a study done in Wisconsin where the attorney general analyzed and found that the top 1% of Amway distributors (Includes platinums) on average, lost money. The study is somewhat dated, but I will also point out that today, there are MORE expenses associated with running an Amway business than before. (Voicemail, books, functions, standing orders, shipping). I would guess that it's possible that platinums lose more today than when the Wisconsin study was done.

A typical platinum group often has 100 or more downline IBOs. Thus a logical conclusion is that less than 1% of IBOs can reach that level. It is also, apparently rare to maintain that level. Factoring in people who quit, one can conclude that only a fraction of 1% ever reach platinum. My former upline diamond had 7 frontline platinums in his heyday. Actually, 6 of them were ruby level. None of them hold the platinum level today. So you have a less than 1% chance of reaching platinum and then you are unlikely to be able to maintain that level. I also know of platinums who are not even in the Amway business anymore.

What serious prospective business owner would even consider opening a business where you have such a tiny chance of success? Even those who achieve platinum are likely to lose that level. If platinums cannot maintain their level, then it's easy to see why there are many former diamonds as well. It seems that people are willing to take a chance on an Amway business because the start up cost is low. But what is the point of doing all of that when the chance of making money is negligible and unsustainable?

To compound the problem, many IBOs spend a lot of time and money building an Amway business that is unlikely to give them any return on their investment. I'd guess that the average serious IBO would spend $250 a month or more on tools. That money invested over a number of years in mutual funds would give you a much better chance of achieving some dreams. Even putting the money in the bank would make you better off than the vast majority of IBOs. A serious business owner would want to know their realistic chance of making money. For some strange reason, prospects and IBOs seem to ignore this reality. They dream of only the best case scenario or what is possible. They seem to ignore what is likely.

It is because uplines are in the business of selling tools and distributorships. They are not truly interested in your long term sustainable success. If you don't believe me, try to stop purchasing standing orders and function tickets and see how much longer you are edified and given help from upline. Seriously, would a real business owner be interested in a less than 1% chance of success?

Amway Complaints?

Over the years, I have seen literally hundreds (if not more) blogs and testimonials about Amway. Most of them decry the pitfalls of being an Amway IBO. Most of the complaints cite the fact that Amway in general has higher prices than comparable retailers and the fact that the system consisting of voicemail, books, cds and seminars ate up any profits the IBO may have made and resulted in net losses for most. One particular Amway apologist bemoans the fact that the internet is full of bad testomonials about Amway. The reason why there are so many negative testimonials about Amway is because over the years, thousands, possibly millions either had a bad experience for the reasons I cited above, or personally know of someone who had a bad experience.

Amway defenders will often cite the fact that many IBOs sign up and "do nothing" as their defense to this. But I will easily point out that I haven't seen anyone say they signed up, failed to do anything or order products, quit and started blogging about a bad experience in Amway. These defenders will also compare Amway to the gym where people sign up and "do nothing". Whether true or not, I also do not see people who sign up and "do nothing" complain about not receiving health benefits by simply signing up. It is a very weak defense. Conversely, I have seen numerous accounts of folks like myself who did put in effort, some for many years, who did what upline advised and did not see the financial rewards that is promoted in "the plan".

Amway defenders will then try to justify themselves, saying that the better business bureau (BBB) receives few formal complaints about Amway. I will agree with this. Many IBOs never bother to file formal complaints to the BBB or to Amway because in many, probably most cases, the person who quits and may have had a bad experience, was sponsored into the business. The sponsor was often a friend or family member of the IBO who left the business. Many will simply leave and forget the episode and chalk it up to a learning experience in life. Some will complain, but really have to ne venue to voice their remorse about joining. Some of us have found the interent to be quite effective in sharing our experiences and our opinions on why the business did not work. This is what one Amway defender calls the "internet war". What I have pointed out is that critics most often simply point out what the IBOs themselves have done. In many cases, the IBO is his own worst enemy. Afterall, critics didn't deny Amway and Quixtar had a connection, nor did critics make up claims about perfect water, etc.

It would appear that most of the problems has a root in the AMO systems, such as WWDB, BWW, LTD, or N21. Now, not all upline leaders are unethical, but it appears that many are, and new IBOs have no way to identify the good from the bad. It also appears that some of these upline leaders will issue bad avice. Advice that is detrimental to the IBOs, but financially beneficial to themselves, such as telling IBOs to never miss a function, or to buy more cds. In many cases, these unethical uplines do not care about IBO success, their goal is just to move as many support materials as possible, so they can fund their "diamond" lifestyle. Sadly, it is also apparent that the diamond lifestyle may be a facade in some cases. An illusion of wealth portrayed as a recruiting tool.

If you recognize some of these warning signs, ask tough questions of your potential sponsor and visit this or some of the blogs linked to this one for more information.

Amway Upline Lies?

One of the things my upline used to say in meetings was that they (upline) don't make any money until you (downline) do. Sometimes they would say they make pennies when you make dollars. Of course we know that is a full blown lie in most cases because once you register (many groups have a starter kit including products), upline makes some money. Once you purchase a cd, a book, or pay to attend a function, upline has also made some money off of you. It is important for IBOs and prospects to know that upline makes more profit from tools than from the products. Think about it, the tools have a higher profit margin than the Amway products and there are fewer people sharing in the tool profits.

It would appear that most uplines will try to lure prospects into Amway by showing them the best case scenario of going diamond or higher, and all the alleged trappings available at the diamond level such as mansions and fancy cars. Once they get a prospect excited about the possibility of not working while cash rolls in, they then pitch their "foolproof" system of voicemail, cds, tapes, books and seminars. Although it is VERY RARE for any IBO to reach a level where they can net a profit, much less buy mansions, the upline will convince you that these goals are only attainable through the system teaching. Sadly, it the expense of the teaching system that leads most IBOs to suffer net losses.

The sad reality is the upline makes money if you succeed, fail or do nothing, as long as you continue to purchase tools from them. However, you may be edified as being a committed IBO. It is why they may tell you that the most important person to get to the function or meeting is yourself. In an open meeting, there really is no point in attending if you have no prospects as your business cannot grow as a result of your attendance, but your attendence costs you time and money. My sponsor would say it was important to attend to show support to those who brought guests. But that's BS. Your success in business depends on your income and expenses. Why take on expenses that won't benefit your business? It just makes sense, despite what your sponsor or upline might tell you.

If you as an IBO or a prospect really observes carefully, you will find many activities that will cost you time and money and will not result in your business volume growing. For example, reading a book might be good for you, but it is a non income producing activity. Attending an open meeting without prospects is another good example. Listening to standing order is another example. With all of these activities, an IBO is expending resources and not getting a return. Frankly the worst investment is attending an out of town function where your expenses are great while your business is left unattended to at home with no growth in downline or in product volume. A smart business owner needs to determine what makes him money versus what costs him money and make decisions based on that.

Don't buy the lies. Your upline makes money from you when you buy tools, whether you do a lot, a little, or nothing.

Building Your Amway Business?

Back when I was an IBO, many people would talk about "building a business". But many folks who spoke about building a business didn't know what that meant. I believe it is because they were taught that building a business meant listening to tapes and attending functions. Or building a business might mean sponsoring others. In my segment of the Amway world, building a business pretty much meant recruiting and showing the plan. Apparently I was mislead and many others were as well.

Building a business, generally speaking means building a customer base. A business moves products and services for a profit. In groups that focus on buying from yourself or prosumer nonsense, generally will struggle because the revenue they generate in their business is coming from their own pockets. Or their jobs are actually supplying the money for their own bonuses. In this model, the only way to profit is to sponsor many downline so the pyramidal compensation plan can work in your favor. Those who manage to sponsor people who buy products can leverage their volume to make some money. Those who fail to sponsor usually don't stay in the business for very long.

Many IBOs compare themselves to a franchise. Can you imagine a true franchise where your long term success depended on your ability to open other franchises? What if you as the owner and your family accounted for the majority of the product purchases? Could this franchise survive? More than likely not. Yet this is exactly what many Amway IBOs do and they mistakenly think they will be successful. The only reason why Amway IBOs are able to play out this model longer than a traditional franchise owner is because they do not have to rent office space or hire employees. If they did, they would lose more money and/or be out of business much faster.

If an Amway IBO ran their business like a traditional business, the lack of retail sales to non IBO customers would be immediately apparent when the first month's electric bill or lease payment arrived. After all, how much do you make if you buy a product from yourself?

Building a business entails many things. These things may include advertising, marketing of products, and do not necessarily include any training. In its simplest form, the Amway business is about selling and using products, and getting others to do the same as you do. Why do IBOs think such extensive training (standing order and functions) is needed? I challenge IBOs to write up an actual business plan for their Amway business, including projected sales and expenses and see what you come up with. If you think I am just being negative, write up your Amway presentation and show it to a loan officer at a bank. See what they have to say. Seriously.