I believe that Amway IBOs have approximately a 50% attrition rate for the first year alone. If you look at a 5 year window, I believe the attrition rate is something like 95%. So what we're saying is that out of 100 IBOs, only 5 will be around in 5 years, or out of 1000 IBOs, 50 will remain after 5 years. This is extremely significant because if you are a business builder, you will need to replace half of your IBOs every single year. For this reason, I am very doubtful that there are IBOs who "built the business right and built it once", who no longer do Amway related work, but still collect significant residual income. I would guess that significant income could be defined as being enough to live a lifestyle in the top tax bracket (for the US) without having to report to a J-O-B.
Now I understand that some IBOs take it personally when I bring up subjects like this. It is because they have been deceived by some upline diamond or big pin who has sold them on a dream of financial prosperity for life if they will only work hard for 2-5 years. I once thought so too, but realized that there isn't a single diamond that I know of who built the business right and walked away to enjoy the beaches of the world while truckloads of money rolls in. Kinda makes you wonder why you see Crowns still working, and diamonds actually quitting or resigning. I have asked the question many times and it has never been answered. Can anyone name a few people who built their business right and built it once who is currently enjoying these lifelong residuals? Also, if that were a benefit, why doesn't Amway say so?
Instead, you have a constant and endless flow of motivation being sold to IBOs. This motivation comes in the form of cds, books, meetings, functions and other things like voicemail messages. It's sad that IBOs have to continue to pay through the nose for motivation and "teaching" about the Amway business when there are cheaper and more efficient means of communication. For example, why would you need an expensive voicemail when a facebook group account can disseminate messages to your group in seconds at no cost? It is because the uplines want to extract every possible sent from their downline. Because of the internet, I believe people are starting to figure things out and avoid the systems altogether. I hope Joecool's blog contributes to this.
All the motivation IBOs truly need is to see a net profit at the end of the month. If IBOs actually earned an extra $200 a month, or $50 a month, or $600 a month as advertised, there would be no need for motivational speeches. The IBOs would simply look at the growth in their finances and they would keep going. The poor retention rate is easy to explain. IBOs are losing money because of the system expenses and they lose their motivation to continue. If you are an IBO or a prospect, stop and think for a minute. If you are making an extra $200 a month with minimal effort, would you need functions and other materials to motivate you? Or would you have intrinsic motivation from the profit? All the motivation you will ever need is a net profit. Take that to the bank
62 comments:
I think the only ones who can make any money on this without actively working the hustle are the ones that got in real early. Like Van Scamdel, De Loss, Dexter and Birdbrain, etc. Now and then we hear about some members breaking off to start their own pyramid scam. That probably happens after they start thinking why should they funnel all that money upline to the top when they can create their own place at the top of their own MLM. Other than having a Ph D in bull droppings and using that to sell the "tools" I don't really see how it's feasible to expect to start making any real money soon selling such overpriced products at such low commission.
I met the A FC( founding crown ) last month in Las Vegas . She shown me picture , document that one diamon or EDC from her market (Malasiya) who DEAH 20 years ago , getting increasing payment over years to her children , total up 300millon USD. She preset this to public around the world in conference everytime and so I don't think she is laying. So I believes it and join .
Did she get any bounce from me or anyone she is presenting to? maybe very few, as she is presenting to a group of IBO have no connection to her at all.
I asked the founder crown ambassador who recruit me face to face , why they still working ? I got the answer that I believes is true as you ask most people making more than 1 million a year , they are not working for money. Well it very true a diamon make 500k a year(based on amway publish you can sue them if it isn't true) , after 2-5 year, I believe anyone can be done of working as long as you manager your saving correctly.
It is true that "Seeing is believing" I wasn't really decide to join the business until I meet the founder crown face to face and talked about 2 hours with them , asked a few question.
The only helpful suggestion is , don't join amway unless you meet a diamon face to face , feel you trust them , and they can answer your tough questions. Also if you start get into the business, one of your up line must be a platinum or higher and who you can reach face to face on weekly to teach you the business for at least 6 months.
How many of IBO can get a up line as I said ? I meet my diamond up line at least twice a week face to face and get free class almost everyday if I want to attend.
It is so hard to believe people fall for the cult/scam/pyramid scheme. It's so simple: If you work hard in sales, you get a commission, credit, opportunity - in the real world. I worked for 27 yes in sales, did well and retired from it in my 50's. The Amway method is so bassackwards, the people who work hard, sell hard end up quitting because they get screwed bigtime from their upline leechres who take the bigger commission, brainwash them into books, tapes, conferences they make money off of. If you're a good salesperson, who needs tapes, CD's, books or brainwashing expensive conferences? It is a set-up for failure from the start.
I've always maintained that people who actually make $$$ are motivated enough. Amway is phony motivation with feel good stories and false hopes and dreams. Sell a product and make money, which is hard to do when Amway grossly overcharges for their products.
well I guess you should call it WWDB or whatever scram. In our group my up lines never sell anything to me , although they ask me to attend meeting or class, it cost about 3-6 dollar each time , but also provide free class. We don't spend much until we start to make money or we can afford it.
Most of time we meet we are learning about the product. I don't believe amway is overcharged for their product in large. Yes , they are in the higher end but not overcharged. It comes , as it should , with great services and quality. People complain about the high shipping and handling , which is true , misunderstand the point. Customer or entry level IBOs should never pay for this, because it is you upline platinum's job to deliver the product to you so they can maintain the contact with you. It is your job to deliver product to your customer, in most of the case, and teach them how to use the product correctly. I believed most IBOs and customer did not experience like this.
Did you ? I totally agree that people who makes money is motivated , however how many people get into sells job make money in their first years? Ask a car dealer, insurance or broker.
By the way , our upline to us, the attrition rate is about 90% in first year(depend on definition) , but it get down quite a bit for the following years. But still looking a overall of 90% .
Amway pays 33% or so in bonus money. Thus they must charge 33% more in order to make a profit themselves. That is why Amway must overcharge for their products.
How can you build a network of IBOs when more than 90% quit? How can you ever have "residual income" when more than 90% quit?
What? I feel I am speaking with someone don't even understand business 101. How much Walmart spend on maintain their store and pay the workers? 33% bonus is what pay for its sales channel. It is similar that Walmart have to pay salesperson in salary and other cost. That number itself tell you nothing about overpricing . Also why shouldn't IBO get pay like any salesperson ? Why shouldn't Amway make profit as all other company ?
Do the math. Let's say you try to approach 200 people this year , 10% of them get into the business and doing what you doing. So second year you and this 2 , approach 200 each , total of 600 , plus 3, so it is 603, 10% stay, that's 6 people, keep going , and tell me why not ?
I met a IBO last week , who had a ok full time job,making about 55K a year, it took him 8 years to reach platinum as a part time. He has about 50-60 active members in his group , most of them are just customers buying products. A platinum making about 3000-5000 each month, not very much, but as a part time income , do you like it? What's the cost to get to there, at the most 30 dollar per month. Do you want this type of income ? It still growing.
Most IBO I met has a full time job and doing it as part time base. Many of them decide to go full in Amway after they reach platinum . The average time I ask around is around 5 years. After you reach platinum and stay there for a couple months, you might consider turn full time , try to reach higher pin. The road after platinum is much easier , you will learn so.
we never push people , never tell you can work just 5 years then enjoy a rich life for the rest. But if you work correctly in Amway business , for 10 years, you would be much better than just working at most company.
Your theory is flawed. Even if you somehow could find 200 people to approach and maybe 10% join, that would be 20. All will quit but 1 or 2. Next year you and your 1 or 2 downline try to find 200 people each. You are making the case for market saturation. The US has about 300 million people. The only thing preventing complete saturation is the fact that new people turn 18 each year.
Walmart buys direct from the manufacturer and squeezes out the lowest price and adds their markup and sells to the consumer.
Amway makes or buys their product. Adds their markup and then adds another 33% or so markup to pay the IBO bonuses. Then the product is sold to consumers.
For that reason, there is no way Amway can compete with Walmart or other big retailers. It is you who does not understand how the business works.
I don't understand what you mean by saying market saturation. approaching 200 people is very reasonable each year. If you talk about market saturation, I don't worry about it , because at the point you reach it , you are so successes . Also, no one say you can't approch a people more than once.
Population is growing , after U.S. You can do in Canada, you can do it anywhere in the world.
you are ingoring the point that Walmart has to pay much much more at cost and then add their profit. Viewing the 33% bonus as additional add on is flawed. It just a different form of paying your sales channel. Amway has a lot of product can beat Walmart or other retailers.
Let's do the number again. Approaching 200 people a year, which is less than one per day, is it very hard ? Ask how many sales people have to call or knock on people's door everywoker day, how many they have to approch a day? I mean just approch to sell a product. Only 1% people insterst on doing the business , so I get two. In 4 year my team get to round 50 to 60 people , you are a q12 platinum. Also rember you can approach one person more than onetime.
Well I understand not everyone is that active , but even you only do 50 a year, as long as you keep doing it , you will be good .
Your numbers work well on paper but the reality paints a much different picture. You have to work really hard to find 200 people and you would be lucky if you could find 200 people in a year to show the plan.
Not to mention many will quit when they realize they aren't making money and paying for training, even if it's not super expensive.
WalMart has something like 500 billlion in annual sales. Amway is a tiny drop in the bucket in comparison. The consumers know where to get a good deal. It's at WalMart,
Are you seriously tryiing to claim that Amway is a better deal? No chance.
WalMart = Save money, live better.
Amway = Now you know
Amway had about 300,000 IBOs in 1970. If they all contacted 200 people until now, do the math. It's ridiculous.
Yes , salesman job is a very hard job . Ask any commission base salesperson , how hard it is. I never claim it is easy to do so, as a full time job. That's why I said only one out of 200 might fit the Job .
You are asking "How can you build a network of IBOs when more than 90% quit? How can you ever have "residual income" when more than 90% quit?"
I am using the math to prove it is possible. If you start from 1, and take a look at the first 10 years, it is very very reasonable. Of course, I am using a very rough module as a example. The rate might be 1%, might be 0.1% , it might slow down when it is reaching market saturation (Some of our platinum start extent their business to LA area drove down their once a week of two days almost every week) or whatever. However, no matter what number or rate you input, it is a self growing model. It is very true the network grows itself as long as someone working among it and successfully attract people.
First we are talking about the 33% bonus that paying to IBOs. You claim that "Walmart buys direct from the manufacturer and squeezes out the lowest price and adds their markup and sells to the consumer. ", but missed a big part.
"Walmart buys direct from the manufacturer and squeezes out the lowest price", right, then beside adds "their markup and sells to the consumer", they also have to add the operational cost, like including the salary pay to sales personal and non sales personal, cost of running the store so and so on. If you have time, go to read Walmart's annually report to find out what % those added to the final sales price. It is clear that Amway don't run any retail store, so they don't have to pay all the cost of it, they also don't have to pay salary to sales and non sales people. You can argue that Amway has higher price, but IBO bonus method should not be the reason.
A company might sell their good at different price and manufacture their product at different cost. Lower price don't always means a better deal.You can check out the information about anti-Walmart, those people also have very very good point and most people making those argument has nothing to do with Amway.
Tell me what cleaning product you find inside Walmart can make this claim: "(XXX product name)...proudly participates in the U.S.Environmental Protection Agency’s (EPA) Design for the Environment (DfE) program,which recognizes products with more positive health and environmental characteristics than conventional cleaners."
Of course, you can say it still cost too much, that's your opinion, I accept that you won't buy it. But you should also agree that people who want to pay for it has their very good reason. People pay more money for a lot reason, even just like the sale person can be a good one.
And Amway adds their markup and then 33% more because they need to pay IBO bonuses. There is just no comparing Walmart prices to Amway.
It is very rare that anyone can build and sustain a business where 90% or more quit. It is possible and some have done it but you don't see many new diamonds. Seems like the same old tired diamonds are around. In the US, too many people know about AMway and have a sour opinion of it. People simply don't make money in Amway, that's why they end up quitting.
Right, so one half of one percent might succeed in Amway. That sounds a bit high but I'll accept that.
Well you don't have to guess. At the end of year 2013 , 0.31% if total IBOs in NA make q12 platinum ( but not sapphire or higher) made avg. 57636 a year.
0.09% made founder emerald but less than founder diamond+ , avg. founder emerald make 135,826 dollar a year. Please notice diamon also included with this percentage, which made much higher but not count in the average income.
0.03% of IBOs made founde diamond or higher. Avg income for founder diamond only is 565,108.
Total this up, easily we see only 0.43 % . However, we have to adjust it a little. First it is base on total IBOs . Only 46% of all IBOs were active. So this number should adjust a little up to 1% base on this . Then, since the definition of active is very loose(if you get a bonus, or just come to one meeting , you are active) , so We would adjust a little more and pump the number up to around 2-3 % or so .
This number is not secret , it is on the amway website , most importantly in the hand out of Amway business overview, which IBOs use it to present to new comers.
See , amway is not laying , it tolds you before you join. It is whoever tell you that you can make easy, quick and big money with it is laying!
But it is also true if you operate correctly, you can make 200-1000 a month easily by just doing it for part time.
The success you are proudly announce are all tiny fractions of 1%.
Do you think it's wise to spend time and money on a business where a fraction of 1% reach successful levels?
For me? The 1% is a good warning sign to warn the people who want to drop their job or school. The 1% is just the overall rate.
When you look at a business opportunity , you look at how it fets you and make your jugement . What chance you can achieve the same success by working a job? look back into the number again you find that 30% of the platinum make to next level, double their income and another 30% of them move upto a next level or higher. Does 30% of people how a good job , making 55k a year can double their income in their live time by doing the same job ?
That's the number I am looking for. I will make to platinum most likely in two. I am experience business man so I know how to do it.
What the 1% really tell you, it is a common knowledge that most people just a working class, nothing wrong about it. A very small percent of people should be business owners. When I approch people , I am mostly approch for selling priduct first , not ask them to do the business as I do. But if I meet one that I believe might success in the business I would present the chance and let them decide .
So you think a less than 1% success rate is a good investment? If you believe that then I would say go for it.
You are still better off working a job or investing in another business other than Amway.
No for me it is almost 100% chance successful rate it just a matter of time. Each one make their own decision. The problem is too many people do it in wrong way then blame amway others for things they are not good at , without knowing how hard it could be to for this business.'
1 in 400 reach platinum but you think your chance is 100%? Do your mentors advise you that the facts don't matter? If people do wrong things, isn't that bad teaching from the upline who get paid to teach?
It has nothing to do with my mentors. I do my research and study before I meet my mentor. I first agree on Amway product and their business method, then I start to find someone to learn more about it. Finally I find my mentor via some connection, who happen to Founder crown couple. I ask them few question and get the answered (like if Amway really paying the bonus they promise to pay) and if I join the business, what kind of help I can get from their group.
I can't speak for others, but we are doing in the right way and receiving the right training. of course, a lot has to be improved. But at least, we get the fundamental right, we are not selling tools for profit. We are teaching sells skills, we are selling product, we are teaching you experience from successful IBOs how they actually get customer and so on. I am quite educated that has a AACSB business collage, as the very least I can tell those are the right thing to teach. We don't brainwash people into business because it won't last long. 70% of time we are selling the product and 20% time is talking about how to sell product. Then, we have 10% of time to talk about motivation.
Last, I have to point out that Amway wasn't so success (well, still making fair sells and money for a business stand point) in the U.S and that's true. How can we learn from their worldwide successful ? Because IBOs are doing quite different in other market (Amway use the same system worldwide). so now the U.S leader should learn and change.
So can I ask what kind of volume you're moving and how many downline you have?
Not much, but making a little over 5000 dollars sells at my second month. No downline who selling product . We sugGest all customer become IBOs so they can save money on product. About 10-15 regular customer purchase monthly and get new customer weekly
Why would you want your customers to become IBOs to get a product discount? That sounds like bad advice. As customers, you would get the retail profit PLUS the PV volume.
Of course, when Amway products are OVERPRICED, then it makes sense to have them sign up to get a discount.
Because it provide loyalty to the business. You pay a membership fee every year to shop at costco or Sam's club (my choice). Membership come alone with great benefit not just for Amway product.
More important, it create a relationship between you and your customer, Also,when they really like the product and referring to their friends, they can make a little money from it. Of course, it is optional, we don't push anyone to sign up.
I think the fundamental is, we approach someone by selling them product, not telling them a dream or business opportunity. Found what they need and start from there. I recall about few years ago some one approached me for Amway, I was working on my college degree, and some Amway person came to our school and try to tell me how to make large money or so. It end up, quite interesting, I love the Xs sample they provide to me (Red bull sucks for me) . So I end up buying it regularly. It cost similar to Red bull. I can't recall what they talk about the business, but remember the product that I like.
Of course, that just my approach of Amway. You can argue about the product price and quality, we fully standard behind of it. Do a fair research, Amway product, although might be a little higher in price, they are also in better quality. Things change Joecool. Amway invested billions of dollar in product research, it must be good for something.
Can you show us a link showing that Amway spent billions in research?
It makes no business sense to sign people up as distributors. As your customer, you get the retail profit plus the PV points volume.. As your downline, you get no retail profit.
XS costs similar to red bull except that red bull gives you about double the amount of product for that similar price.
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=160040
http://www.prnewswire.com/news-releases/amway-parent-company-ranks-14th-in-the-patent-board-consumer-products-scorecard-206627701.html
Might be you don't know , amway was the leader of wireless charging tech at time too. https://en.m.wikipedia.org/wiki/ECoupled .
A 12oz XS is 3 dollars , 8oz is 2 dollars. Red bull cost similar . XS contain 4900% DV of B12 , how much does red bull has ? XS has 10 plus flavor years back, red bull just start to have different flavor recently.
Do the research , don't be blind . Amway invest huge in R&D and still doing so. espring is no doubt one of the best water treament system at home. Well you can argue their supplement is pricy but you must agree that they do come from organic farms.
Amway IBOs like to use that term "organic" but can never show that organic products are better for you than non organic products.
Your links do not support your claim that Amway spends billions in R&D.
"It makes no business sense to sign people up as distributors. As your customer, you get the retail profit plus the PV points volume.. As your downline, you get no retail profit."
And this is why so few make money in Amway. Because the vast majority of an "IBO"'s sales are to themselves since the extremely high cost of Amway is a huge deterrent to finding real customers. So then it all comes down to recruit, recruit, recruit to find others to self-consume. And it doesn't take long before one finds that they are losing money doing that since even with Amways "IBO discount", they are STILL paying far more for their consumable products than they would be going to a real store.
There is nothing to prove that Amway spent "billions" on research. If so, provide a legit link, not an email from an upline spouting bullshit pulling "facts" out of his ass.
Another one that makes me laugh is saying "if Amway is a scam then how come the company makes billions of dollars?" Because of all the self-consuming IBO's with "dreams of being rich" running up their credit cards and emptying their bank account. Yes, those at the top of Amway make a lot of money. But at the expense of the 99% in the recruitment pyramid who LOSE money. That's where it comes from. There are not many non-IBO consumers to make the company that kind of profit due to the high cost. Only those brainwashed at seminars and with "motivational" CD's buy the stuff. But keep dreaming. Most wake up one day to see they've been fleeced. Hope you aren't too deep in the hole at that point.
Your comments hit the nail on the head! . I believe the Amway IBOs are primarily self consuming because the products are so expensive that your few "retail" customers are probably friends and family who feel sorry for you. Look at Amway's flagship vitamin - double x. It costs around $80 for a one month supply. IBOs are then quick to point out that Amway has a much cheaper multi vitamin. Then the shut up when you ask them which vitamin your upline advises you to take. Obviously they tell you to take double x because the PV is higher,
It boils down to recruiting. Even though there's no direct payment for recruiting, you are dead in the water unless you can recruit and sign up new IBOs. With the attrition rate, you can easily see why residual income is just a myth. How can you get residual income when so many people quit?
Well , is organic product better then non organic product for you? I don't know, I do know they price differently in anywhere, looks at the price in whole food or so. I am not sure if it is better for you personally compare to non organic , but I am sure it is better for the earth. I mean it is your choose as consumer to chose. As least , we all agree, organic product cost much more to make so it should sell at higher price, it sells to who can and wish afford it , nothing wrong .
As far as I know, there's no bonafide studies showing that organic is actually significantly better for you than non organic. It does cost more but why pay more if there's nothing to gain from it?
It is up to you do decide. People still buy organic product everyday. Whole food doing business and people buy from it . At the very least , the organic product grow in a environmental better way, which help to save the earth.
Yes , there is people out saying they don't care about GMO, fine that's your choice, I am not against it. But in return , they shouldn't question people want to pay a higher price to get organic product too.
My point is clear on this , amway product price is higher but it do has a well accepted reason. They are not pricing same product for higher price .
You're right. Whole Foods is big business and people have the impression that "natural" or "organic" foods are better for you. But there's no scientific porrf that it makes any significant difference in your diet. In that regard, Amway has fooled people into thinking "phytonutrients" are God's gift when in reality, you can get phytonutrients by eating the skins on your fruit and vegetables.
All company advertising their product to be good product. I am just stating the fact that Amway's phytonutrients are from their own organic farms and being product with much higher cost that justify the higher price. You pay for what you get, consumer choice. A lot of consumer willing to pay additional price, not because the utility of the product itself, but for the process of manufacture in whole. They consider labor condition, environmental so and so for. In the matter of fact, when I can afford it, I also trend to consider other factors beside the utility of products, and might willing to pay additional for it.
Who's willing to pay the additional price? Seems it's only IBOs who are still dreaming of residual income and not many others. Phto nutrients are not needed if you east a healthy diet.
How many Americans eat a healthy diet ? 10% at the most. How many Americans need weight management product ? Yes, all supplements are optional, however, people eat a healthy diet everyday is also tiny amount. Quick example
http://www.cdc.gov/nchs/fastats/obesity-overweight.htm
When you eat a healthy diet you won't be obesity .
Amway r&d is on their website. If you said the ranking means nothiing then visit Amway r&d center and see it.
If you eat an unhealthy diet, vitamins and phyto nutrients isn't magic pixie dust that will make you healthy.
Agree, and no one claims to be so. It just does its job as it suppose to be. It provide the nutrition that you won't able to get from your diet, which certainly will help you. A healthy life style is a great thing to achieve, most supplement is optional, take as you need depend on your diet and accessibility to your diet. For example, I take additional supplement when I have to travel, because I know that I won't able to eat a same healthy diet as I do at home.
There's no unbiased evidence that Amway vitamins are any better than the cheaper vitamins at Walmart or GNC.
What do you consider unbiased evidence? Do you have such thing for product sell in whole food compare to cheaper food in Walmart? If not , do you apply the same standard and start a blog call "whole food scheme" ?
Unbiased evidence would not come from your upline or from Amway. It would come from a neutral third party.
Well you can pay for consumer report and read it. Loc has third party test supports their claim . It is a highly competitive market , so call unbiased evident does not existed for most product. As I said find it for whole food, or find it for Mac vs PC.
Here you go:
http://energyfanatics.com/2007/09/17/nutrilite-double-x-multivitamin-review/
Sorry , how can you tell it is unbiased and quality review? A web reveiw dated 8 years and using the wrong price factor, also put a link with online store of other similar product . That call a good source?
You should buy the 500 dollars reports or read from consumer reports. Only consumer paid reviews are really unbiased. I can't publish the details but certainly it in a reasonable high rank (not first) .
I saw a consumer reports piece on Amway. Amway had average products with high prices.
Are you sure you read the consumer report ? Not A consumer report but The consumer report ? Are they using IBO price or retail price ?
Here you go . Consumer reports rates Amway laundry soap the most expensive.
http://www.amquix.info/sa8-2007_consumer_reports.html
I agree sa8 cost a little higher (of course you have to see what price their using and the full report) . I do agree sa8 is in the higher price end. But, does any other competitive product in the list in the EPA program? Are they biodegradable ? It's not just about the price per load, there is more thing to compare , and you have to read the full report.
For most consumers, the price is the deciding factor. Did you care about the EPA before you joined Amway?
Yes I do. I support Eco-friendly business many years back. Price is important but others also matter. Consumer make their chose.
Well, sorry but most people want the cheapest option these days. Many other cheaper brands are environmentally safe also.
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