Monday, July 27, 2015

The Real Amway Business?

I have been reading some ongoing debates about whether the system income for higher pins is more than their Amway bonuses. I believe the systems such as BWW, WWDB, N21 or LTD, does generate more profit for upline than the sale of Amway products. How the system income is divided though, is still a mystery as it doesn't appear that there are bonafide written contracts explaining how tools income is split up among the higher pins. There is also the debate of whether diamonds themselves or their "corporations" receive the profit, which is laughable as a defense.

But it's very easy to determine that more income is made from the system than from Amway. If you move $100 worth of Amway products, Amway will pay about $33 back in the form of bonuses. These bonuses will be split among the Amway IBOs (middlemen), depending on your level. On the other hand, if your group bought say 20 cds at $5.00each, the system will profit about $90 as cds cost about 50 cents each to produce in bulk. Some Amway apologists will cite the fact that some groups sell cds for $2.50 or $3.00. While this is true, there is a "member's fee" which must be paid. And when you add in the member's fee, the profit for the system is the same or possibly higher! Even when you factor in the system employees, you can easily see the math and determine where the real money is made.

If you buy a major function ticket for $125, the cost of that function might be in the neighborhood of $25 to $30 per attendee, so the system may generate $100 profit on a $125 sale. I believe the smaller functions such as open meetings, books and voicemail have smaller profit margins, but still overall, it's easy to conclude that the profit from the system is greater than profits generated by moving Amway products. I might add that the sales on these functions are often made in cash, thus who knows if the diamonds are even paying the IRS taxes on these sales.

The only question is how much each individual earns. I have "heard" that platinums get a discount on the sale of standing orders and cds, but I have never heard of a platinum sharing any profit for functions, voicemail, or any of the other materials. This is puzzling to me as I believe the platinums do the most work in the system, helping downlines.

So for the lower level IBOs, if you move $300 in Amway sales (Approximately 100 PV), you will receive about $10 or 3% while upline enjoys the rest of the $90+ in bonuses from Amway. And then when you purchase and move tools volume, you receive nothing and some of your uplines enjoy all of the profit. While I don't see any problem in upline making a profit for selling training materials, I see a problem in the fact that the tools don't work. So few IBOs progress to levels where an actual profit is earned that the use of tools cannot be justified. Amway supporters will point out the new platinums emerging each year, but do not mention the platinums who do not re-qualify.

Based on my observations, I can only conclude (quite easily) that there is substantially more profit from the sale of support materials for upline to enjoy, and I can also conclude that the support materials are ineffective in training downline IBOs so they can progress to higher levels of the business. But as PT Barnum once said, a sucker is born every minute.

14 comments:

Qiunan Tang said...

You are right on this , if your number is true , then you should call it a WWDB , BBW, N21 , LTD or whatever it is scheme, not a amway scheme.
it is totally wrong for your upline selling tools for profit or even at it is own cost, or ask for a membership fees(not saying the amway membership fee, but any other than that) or whatever similar cost at all. As you said they already get paid by amway, so all this should be free for you. Well I do accept a small fee for meeting as it cost quite a lot to hold.

Good to know that and understand better why amway felt in USA but very successful in other place. People here just do it wrong .

Joecool said...

Amway and WWDB or BWW are symbiotic. Amway needs the WWDB and BWW to promote product loyalty and 100 PV defacto quotas and WWDB and BWW need Amway as a way to legitimize their tool scam.

Qiunan Tang said...

Amway does not need wwdb or bww. look around the world where Amway really successes. There is no wwdb nor bww there. There are no tool scam , no 100 pv de facto quotas in those place. The most successful market is in Asia , check out how hard those guys working on selling products. 90% of Amway sales come from market outside NA. I believe the wwdb or bww method is wrong. I don't know who is those guys in the CDs but I am being train by platinum , q12 platinum , diamond in person every week. I learn how to do the business , I pay almost nothing. At the beginning of my business I don't know about the product very well , I just bring my customer , others make the sale and all profit still goes to me when they get the bonus, it sounds fare and good.

Qiunan Tang said...

Again , all the problem is your up line get about 15 dollar for each 100 dollars you sell and still trying to charge you for training ? Thats totally wrong , the tainting is already been pay as bonus , you shouldn't be charged again for it. Simple and problem solved. There should be only one way to make profit , you either sell product to customer , or train and help your down line to sell product to do so. Nothing else should bring sinificant income. All the income are the Amway bonus check. That's what I been told and most of us are doing.

Joecool said...

What you say is true but in the US, the downline is the business. The upline sells an endless stream of materials. Books, voicemails, brochures, seminars, cds. IBOs with the biggest losses normally claim losses are due to tools.

Joecool said...

Yes, Amway does need WWDB and BWW. These groups do the recruiting of IBOs and they teach them product loyalty and the 100 PV defacto quota. In turn, these groups sell them tools and rake in profits.

Qiunan Tang said...

well , the game is start to change then. Now I understand why Amway is slow in U.S. They get it wrong and we will overcome them very soon. As we successes worldwide. It is not Amway's problem but tools saling company's problem. Wrong way won't bring you to success , sorry for those who loss a lot with it .

Joecool said...

Amway is slower in the US because too many people know about Amway and the tool scam. You claim your group is different but WWDB, BWW, N21 and some others are constantly running functions for a profit regardless of whether or not the IBOs make any profit.

Qiunan Tang said...

Thanks for you blog so I now understand and know how to respond when people ask me related question. That's why I am typing here. We are not here to change or blame what others doing. We are here to teach and help people to success . As we are the world largest and most succeed Amway distrubotor group so far (in tearm of worldwide sells, highest pin in our group , number of founder crown ambassador we have and many other things) , although we are not leading in the U.S.Market yet ,but we were, we are and we will continue to bring success to people.

Joecool said...

Truth be told, anyone with the ability to succeed in Amway can succeed and make more money in many other better ways instead of Amway.

Qiunan Tang said...

It is not fair for you to make this statement . It is true that anyone with the ability to succeed in one business also likely able to succee in many other business but how would you say it which one is better for others? Ability is not the only thing you need to success in business world. People with such ability decide what business is better and do it, not you. Many IBO in our group are business owners so do myself. I don't label amway is the best way or only way to make money, it would be dump to say so. But , I well consider amway it is a good business and worth to invest.

Joecool said...

It's fair because Amway's stats back me up. According to Amway.com, only .26 IBOs reach platinum. That's about 1 in 400. And platinums can lose money if they are sold out to the tools.

Joecool said...

For your return on investment, Amway is a poor choice. Most people make nothing or lose money. Plus they lose time.

Qiunan Tang said...

I am confused again you are claim is "Truth be told, anyone with the ability to succeed in Amway can succeed and make more money in many other better ways instead of Amway."
Then you claim that amway stats back you because only .26 reach platinum. What is the relation between this two? I don't see it.

I asked successful amway person they told me they feel great with their investment . Yes , most people , I might be end up to be one too, would find it might not be the true during along the way and decide to change. Well , people change jobs here in U.S. In a higher rate. Right?

Is you do a ROI research for who in Amway business who reach platinum or better , then diamond , then we can compare. Do you know any successful platinum or diamond or higher? .