Thursday, February 4, 2016

Amway Island?

Imagine an a city or island with 100 adult residents. One guy gets sponsored into Amway from a cousin in another area off the island. Well, the island residents are a pretty tight knit group so the one IBO immediately sponsors his six best friends and eventually, all 100 island residents. They are all dead serious about the Amway business so they all work hard, but because everyone is an IBO, they can only self consume 100 PV each. Thus the 100 IBOs move 10,000 PV each month. The group as a whole generates about 30,000 BV and the group receives $7500 in bonus money from Amway. Of course, the first IBO sponsored is now a platinum receiving most of that money with the rest of the group receiving smaller bonuses.

Being serious IBOs, they all get standing order, books of the month, and travel by air to functions. They pay on average about $250 a month for their Amway training/tools. Thus the group pays about $25,000 a month for the training that will one day allow them to retire and quit their jobs. The island community is losing a net of $17,500 ($25,0000 in expenses minus the $7500 in income generated from Amway) from their local economy each month. However, there is one resident IBO who is making a nice income urging everyone one. Let's evaluate the group.

The platinum IBO is making a nice income and will also receive a $20,000 bonus at the end of the year. His 6 downline friends make just about enough to break even (approximately 1000 PV) or lose a little. The rest of the residents have lost collectively, over $200,000 ($17,500 a month). The guy who owned the local grocery store went out of business and all the entertainment related business closed up because the residents had no disposable income to spend money on anything except for Amway related activities. Eventually they all quit, including the platinum because once his group quit, he too, began to lose money.

Now Amway defenders will cry that this could never happen, but it shows that even if you could get everyone in the US to join, this scenario is what would more than likely, happen. I believe the Amway name and reputation is for the most part, saturated in the US. Nearly everyone will have heard the Amway name and/or will know someone who had a brush with Amway. Because of the tool peddlers such as WWDB, BWW, or Network 21, there are likely millions of people in the US who ended up with a bad experience, perhaps tricked into attending a meeting, or lied to about something related to Amway.

While this story is fictional, it is what I believe would happen if there was a city/island where everyone joined the business. It is what happens today. Few people benefit at the expense of their downline. And as usual, it is the tools that drive people to lose money - on Amway island, or anywhere else.

9 comments:

Mike Bronstein said...

Nice story Joe,

This reminds me of when I was in college and we were trying to figure out what to do with overpopulation in the world. We were shown a graph of how human beings are multiplying geometrically while the food supply is only increasing arithmetically. (In laments terms human beings are growing faster than food supply). Needless to say the predictions are not looking good for the survival of human beings.

Unfortunately, we are far too concerned with natural rights or political correctness and we will ultimately be brought to a huge population crash or die-off. I think as you stated in your story the same thing is happening with Amway. America has finally become too saturated, and the people that are still in the game are in for a very rude awakening.

Joecool said...

The only thing that keeps Amway running is the fact the new babies are born daily and a new crop of adults turn 18 each year. Without that, I believe Amway would have died (or be very close) in US by now.

Anonymous said...

What did P.T. Barnum say? "There's a sucker born every minute."

Nevertheless, in the USA the vast majority of persons have access to computers, and can search the internet for information. This fact is sounding the death knell of Amway in North America. Even those new-born suckers are going to hear about the utter scam that Amway is.

This is why, in my opinion, Amway does well in areas like Asia and South America where fewer people have access to computers, and who therefore don't quickly learn about what a fraud and a rip-off Amway is. They get sucked in by the hype and the bullshit.

Even that is only temporary.

Joecool said...

Yes, Amway's biggest markets are in foreign countries where they don't know about the Amway scam yet. LOL

Anonymous said...

When my cousin tried to get me into Amway in 1971, I brought up the question of over-saturation of a marketplace. He answered "The North American city where Amway is most active is Montreal. There are scores of Amway distributors in Montreal. And despite this, Amway accounts for only 5% of the soap and cleanser sales in that city!"

He said this with a note of triumph in his voice, as if he had utterly disproven my suggestion that over-saturation of the market was a danger.

It only occurred to me much later that, if the most active Amway-penetrated city was Montreal, and yet only 5% of the city was buying Amway products, then the stuff was being consumed primarily by all those Montreal Amway distributors, and not the general public! Like all MLMs, Amway was essentially a closed system of in-house selling.

But I was very young then, and this simple observable fact took a while to sink in.

Joecool said...

Good point and the only reason Amway hasn't collapsed in my opinion is because new people are born each day and more people turn 18 each day. A sucker in born every minute.

Anonymous said...

In the amway ecosystem, only those at the top of the food chain gets the largest cut.

Anonymous said...

If someone comes up to you and tells you that he wants to discuss "a business opportunity" or "a marketing plan" or "a way to earn extra cash," immediately ask him this: "IS IT AMWAY?"

If he gives you an evasive answer (like "What have you heard about Amway?" or "We handle some Amway products" or "This is a totally new opportunity") just turn around and walk away from him without saying another word.

It's important NOT TO EVEN LISTEN to the Amway pitch. And we have to spread the word that Amway is a corrupt, deceitful, lying corporation that will cheat you without hesitation.

Every post on this blog is another nail in Amway's coffin.

Anonymous said...

Same thing applies to other smaller mlm entities. Just flee and run.