Friday, April 10, 2015

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.

No comments: