Monday, January 11, 2016

The Amway Sweat Shop?

Some big companies and some private entrepreneurs have been accused of being "sweat shop owners". This is when they exploit their workers, often in foreign countries by having them work for a very small wage. For example, a foreign operation may have a warehouse full of women and children working all day under poor conditions for a few bucks a day. The owners of these operations can rake in the dough as they save a ton of money in labor costs. There are some big American corporations that have been accused of this.

Some uplines operate just like sweat shop owners, but in many cases, they are worse then sweat shop owners because even exploited workers earn something. At the end of the month, they have a net gain, even if it might be small. In the case of many Amway IBOs, they spend money on Amway products, and uplines take the lion's share of the rebate/bonus that is generated by those sales, and then in turn, these same uplines try to get many of their downline to also become customers of their system of cds, books, voicemail and seminars or functions. In many, probably most cases, uplines will make just as much if not more income from the system, than from Amway. Most downline IBOs would be far more profitable if they simply worked a part time minimum wage job instead of building an Amway Empire.

These same upline will also teach fierce loyalty to the system. Never miss a function. Make sacrifices to buy more books or cds, and make sure you are always looking for people to sponsor to add to the system. Joining the system almost guarantees that you will suffer a net loss in the Amway business. It is why I continue to write about what IBOs and prospects should look for when they are being recruited or indoctrinated into these systems. It is why there are so many defenders of Amway, most of whom are losing money, but think they are still successful because it is what upline teaches. If only the IBOs and prospects could just step back and look at things objectively instead of blindly believing what their upline teaches them.

I know most IBOs won't believe this, but I will say it anyway. IBOs on the system are probably worse off than sweat shop employees because they are paying their upline to do their work. At least sweat shop employees get a small salary. Upline will teach you that it is an honor to drive them around, or to do tasks for them. I saw this firsthand and have no doubt that some or all of it exists today. Many platinums work as free doormen and ushers at meetings and functions. Upline benefits by maximizing profits from functions. It is pure downline exploitation and I hope eventually that more and more IBOs will recognize this. It is clear for those who are willing to look at it objectively.

For most, a part time minimum wage is a better proposition than Amway.


Anonymous said...

Joe, this new post of yours got me thinking. Why are so many IBOs blind to the obvious truth about Amway, and the way in which it bleeds members dry? After just a few months in Amway, anyone with simple arithmetic skills can see that it is a money-losing proposition.

I think the real reason behind the fierce loyalty that you describe is the ingrained American need NOT TO HAVE A BOSS. Sure, you would make more money as a part-time minimum-wage employee than you would at Amway -- but you'd have to answer to "a Boss." This is why Amway is so contemptuous of and venomous against the hated "J.O.B." And it's why Amway has invented that absurd title "Independent Business Owner." If you cling to that silly title, you can deceive yourself into the belief that you are really "boss-free," and making all your own decisions.

Ironically, being in Amway means you are less independent than ever. You are lorded over by your greedy up-line, and you are pretty much compelled to buy products and tools (despite all the pious bullshit that Amway puts out about how it's all "optional.") You slowly lose your economic freedom through endless expenses that never result in a real profit, and there is no true freedom or independence without economic independence. You become an Amway serf, tied to this bloated corporation the way medieval serfs were tied to the land. The Amway IBO wanted so much to be free, but instead he finds himself a slave.

The title "Independent Business Owner" doesn't mean a damned thing. It's like the sign reading "Miss Fletcher's Academy for Young Ladies" hanging in the window of your local whorehouse.

Joecool said...

The upline use clever psychology to suck people in. They become relatable and trustworthy in the eyes of IBOs and prospects by making small talk that the IBOs and prospects can agree upon. For example, taxes are too high, insurance and other things make it hard to make ends meet. Wouldn't your life be changed with an extra $200 a month, etc?

Then they tell you that the answer is Amway and they can easily help you achieve these things and more. All you need is some coaching which you can get by plugging into cds books and functions. If you subscribe to the system, you will achieve your financial goals, big or small.

That's the bait and it sounds credible coming from allegedly a millionaire who could have been elsewhere instead of at the meeting. Of course the prospect doesn't know that the diamond "needs" to be there so his business won't fall apart.

Anonymous said...

The reasons on why many people wanted to join any mlm like amway is that they believe that by joining these cult-like mlm, they will earn lots of money quickly and in a short amount of time, they believe they will be able to attain their so-called bucketlist of dreams. The "bait" are the trappings of wealth with the taglines:

- Are you interested in earning more money?
- Do you want to retire young?
- Are you tired with working dead-end jobs with minimum wage?
- Do you want to work on your own hours?

A better name would be a Puppet Business Owner or (simply PBO) since the reality is that everything you do is governed by your upline. You have to be obedient to them. You have to ask your upline permission on everything (like buying something or even visiting a family). You are trained to think of upline as a coach or a mentor. You are to submit to your upline's orders.

Work on your own hours? You have to work on the hours imposed by your upline such as marching to meetings at 8pm.

In other words, you have no free will of your own. You are just a puppet to your upline's commands. To call yourself "independent" is plain absurd.

Anonymous said...

This is interesting. Because I joined this Amway thing 2 months back but I am yet to experience what you are saying!

I was requested to get standing order but I said I won't do it till I get more than 3 legs (have just 4 guys in downlines, 1 leg). They accepted it. I still use upline's credits. None of my downlines has it either. I made total profit of around $200 through retail. Hardly any products for personal use (tried some from kit, but sold most of those items too ;) ). spending around $20 per month on meetings. I had no car for one entire month and my upline was giving me ride all the time!

It also depends on where you set your profit line and your break even. I already got my investment back (registration and meetings) and now I am making tiny profit. And I am OK with that. I am not a guy who wants to go millionaire in couple years. This is just an extra income source which is helping me to pay some bills that it.

I still consider myself a new kid on the block but as of now I am making some money and definitely not losing some. Will update you if something different happens.

Anonymous said...

With the vast majority of new IBOs quitting after less than a year in Amway, a Diamond can't afford to sit back and relax. His income from his down-line would shrivel up in a few months if he wasn't constantly on the lookout for new prospects.

Joecool said...

Sure, your upline drives you around and loans you cds and such. What do you think will happen when you sponsor 1 or 2 downline? You'll be in your upline's position. You'll be buying cds for your downline and driving them around to meetings. At that point, you'll be losing money because of business expenses.

You said you made $200 in retail. I'd like to know what products you sold and whether you sold them to family and friends.

Joecool said...

I believe you're right. There's no freedom at diamond. You're probably working harder than ever trying to help your six platinum legs to re-qualify or you will lose your diamond bonus.

Joecool said...

IBOs deny this but your upline and upline diamond can do much to damage your business if they think you're not loyal or some kind of rebel in the business.

Anonymous said...

Yup... mostly Nutrilite and Artistry. Selling to people I know of course. Friends, neighbors and contacts from social networking sites (through web page). Not forcing the products on them though. They are buying out of curiosity right now. Surprisingly I could sell that Perfect Pack thing too. I didn't expected it to sell because it's too costly for me (Apparently not for rich or fitness freak guys ;) ). I am using just 2 Artistry products and some Bodykey series products from kit that came with registration.

About buying CDs... as of now they are not forcing me to buy any material. I just gave my CDs to my downlines. And ya I drove my downlines to their first meetings as I was going anyway. And when I had no car for few days (almost a month) my upline did that for us.

And it's not profit just from product retails... there is this rewards program for new IBOs where I got bonus for reaching 150PV. So as of now I am seeing money coming in for me. Reached my break even this month and started getting some money in my pocket.

As I said, the moment I see situation reversal I will hop off the wagon. :)

The key to any business is to know when to let go. ;)

Joecool said...

Well, if you're able to sell products and make some profit, more power to you. But I think you should realize that selling tools and functions are a significant portion of a diamond's income and if you are able to actually profit without their tools and you promote that style downline, you won't be very popular with your uplines.

Unknown said...

I don't understand why there is a problem if the diamond have to work harder. Did your boss work harder than you ? Should it? I run a business , I usually work much harder than my employee , what's wrong with that ? Why should a diamond able to sit there doing nothing?

Joecool said...

The problem is that the diamonds lie and pretend they have "freedom" to do what they want, and when they want. But the reality is they are working harder that people with jobs because they will lose their business volume if they ever let up.

Unknown said...

Well, as an IBO you usually have much more freedom compare to work around the clocks. However, I never hear a diamond in my system told me they can or they want retire and sit back. Of course I know some of them might do so as they have two or three diamond downline already.

Joecool said...

How come nobody can name one of these diamonds who retired and are doing nothing while the money comes in?

Anonymous said...

There is no freedom when you have to submit to the demands made by your upline.

If the rate of downline quitting is greater than the downline recruited, then a diamond's income would decline at a significant rate.

It is for the very reason that diamonds would do everything to keep their "babies" inside the crib such as "brainwashing" these baby downlines not to "question their upline", "ask permission" from upline on anything even to the smallest decision, "not to quit" because success is around the corner and force these babies "buy tools" and to attend "all functions." The downlines on the other hand, are treated as "slaves", by their uplines, who are desperate to maintain their bonus level.

Ask your upline for a salary and see if your upline will pay you for your dedication.

Spot on!! Joe.

Joecool said...

Thanks and your comment hits the nail on the head!

Unknown said...

We all welcome you come and check out what you want to confirm. Well, I hardly known a diamond that quite, but I known and we all can name a diamond pass away years back and still have income going into his kids. Well , it is not in the US but since the business plan is almost the same so it certainly can happen here too.
Most diamond won't quite because once you made to diamond , work become much easier and you are shooting to make more. interestingly you won't talk what about if you get a 300k jobs and you lose but keep talking about how a diamond can drop off. It is much easier to lose a 300k job than drop to 0 in next day than dropping out of diamond but still able to collect quite well income for years unknown.

If a downline don't make money, the upline don't get money too. Simple enough.

Anonymous said...

"If a downline don't make money, the upline don't get money too."

Then that is the reason that diamonds cannot "walk away" from their "business" and that they have to work harder. Work won't be easier for diamond, they have to work like crazy to keep their bonus.

Joecool said...

Yes, up lines have to work hard to get IBOs indoctrinated so they keep buying Amway crap and not quitting. They must also work very hard to replace the 50% or more of people who quit each year.