Tuesday, March 8, 2016

Amway Sales Down 12% for 2015?

Amway recently reported that their sales for 2015 was down 12%, to 9.5 billion. At their peak, Amway sales got close to 12 billion. Link: http://www.worldofdirectselling.com/amways-2015/ The global economy has been a bit shaky as of late but what accounts for the huge downturn in sales? Retail giant WalMart, while their growth slowed a bit, their sales for 2015 was still up 2%, which is about (ironically) 9.5 billion. Link: http://corporate.walmart.com/_news_/news-archive/investors/2015/02/19/walmart-announces-q4-underlying-eps-of-161-and-additional-strategic-investments-in-people-e-commerce-walmart-us-comp-sales-increased-15-percent

In my opinion, Walmart sales is still steady because they have a predictable set of customers and repeat customers who make regular purchases. Thus even in a global economic slowdown, they continue to increase their sales. In fact, one could argue that Walmart sales would go up in a bad economy because you can find great deals and save money. Walmart has a policy that they will match any printed advertised price if you can find a price cheaper than WalMart. That is a great deal.

So what accounts for Amway's downturn in sales? In my opinion, it's very very simple. Amway does not have a stable and repeat customer base like Walmart has. Instead, they churn through approximately 50% of their sales force each year. Thus Amway's downturn in sales is very likely a result of Amway IBOs simply not replacing IBOs who quit fast enough to keep up with the attrition rate. Thus the sharp decline in sales. Add in a tough economy and who would want to pay premium prices for average quality soap or other household goods? I believe the market has spoken loudly and clearly.

I believe that in order for Amway to grow, their only hope is to continue to expand to new and foreign markets because you can find virgin ground where the name reputation of Amway is less known and not necessarily associated with "scam". In the US and seemingly older markets, Amway sales have been somewhat stable, which means they are likely able to recruit enough prospects to replace those who are quitting. Lucky for Amway that new people turn 18 each day because without adding to the potential IBO market, I believe Amway would be dead in the water in the US.

While this article only reflects my opinion, I believe it to be the truth. MLM and Amway apologists will come up with justifications as to why they think I am wrong, but I cannot see it any other way. People in general, do not like selling, thus a common approach taught by upline is to "buy from yourself" and be your own best customer. Thus it makes perfect sense that the downturn in sales is simply less people in Amway who are "buying from themselves".

34 comments:

Anonymous said...

A drop of 12% in sales revenue is an earthquake for any company. The fact that Amway actually announced it probably means that the drop is much bigger, and that Amway is trying to soften the blow to its image.

And you're basically correct in your analysis. Amway does not have a steady and loyal customer base, and its high prices put it at a disadvantage in an economic downturn. When you make a policy decision that you will concentrate sales effort in your own in-house market (Amway IBOs), then you MUST recruit new IBOs steadily. This isn't happening at a replacement level. Hence the drop in sales.

Joecool said...

Ironically, Amway uplines used to say that even in hard times, people still need soap and other household products. But those kinds of products can be purchased at Walmart for a fraction of the price compared to Amway products. So in a tough market, Walmart still had increased sales and Amway sales have tanked.

Anonymous said...

I think the advancement of the internet has added the fuel in the attrition rate. That is because as the information becomes accessible, Former IBO's are able to recall the harrowing experiences they had such as lies and abuses perpetrated by their upline for newcomers to avoid the same fate as them.

Newbies who are skeptical about the business can simply google amway and what a newbie can see are former IBO's past experiences and how they were treated when they were in the "business".

The advent of internet is one of the causes for a significant drop in sales.

Joecool said...

I started this blog because I happened to google about Amway and discovered all the lies and BS that I had been fed about the tools. My hope was that my experiences and insight could help prospects to uncover what I already know about the business so they can either avoid it or join with full disclosure.

Anonymous said...

Amway (in common with many corporations) is a force behind the impulse to place governmental control and oversight on the Internet. For all its fake patriotism, Amway is in a seething rage about free speech, and how free speech on the Internet has crimped the company's profits.

Joecool said...

Yes, I believe the internet exposed many of the secrets that upline didn't want to have exposed. It shined a light on the tool scam.

Mrmaximum said...

Not going to lie, I'm actually very glad to see this. The best days for Amway are now behind them and all they can look forward too is watching their precious Downlines fritter away. At least this means that the amount of people hurt by this business is decreasing, and will continue to do so. That's the best part of this news

Joecool said...

Good to see you around. Hopefully this trend continues, but there is a new suck born each minute so who knows if there will be a revival later on?

Anonymous said...

One of Amway's problems is that it really doesn't know how to answer criticism. All the company's representatives can do is repeat the same old jargon and mantras and slogans, and that only makes them look ridiculous, especially in an Internet debate with articulate opponents.

Amway is in a real pickle. They've painted themselves into a corner, intellectually speaking. They refuse to deal with anything "negative," they are trained to reject what they call "stinking thinking," and they are ordered "never to question up-line." Well, if that's your childish intellectual framework, you'll NEVER be able answer serious criticism. You'll just be a robot repeating a recorded tape. And persons watching the debate will laugh at your rigidity and ignorance.

Amway tried to fight back by hiring that schmuck "IBO Fart-Back," but all he could do, really, was nitpick and snipe at anti-Amway bloggers without addressing the major issues that they raised about the company's failings. He never acknowledged the weight of anecdotal horror stories that just got heavier and heavier as the anti-Amway blogs continued. All IBO Fart-Back could do was try to pester the opposition with minor statistical quibbles and semantic tricks to confuse the question. That's why he had to give up in defeat eventually.

I've read a few intelligent Amway defenders who appear now and again on-line. Some seem honest, sincere, and convinced of the company's value. But they always go out of their way to admit, openly and without hesitation, that a lot of the general criticism of Amway's operation is valid and correct.

But what happens then? You never hear from these guys again. They make their statements once, and then they are gone. My opinion is that once they actually sat down at a keyboard to type up their defense, this broke the emotional dam for them. They could finally admit to themselves that Amway was a BIG MISTAKE. And so, most likely, they simply quit.

Joecool said...

IBOFightback likes to cherry pick certain tidbits to defend Amway. For example, some report in the UK, praised Amway. In Norway, sales were up 5%, in some unknown European magazine, it said Amway's make up was good, etc etc.

And his biggest defense of Amway is because the FTC rule that there must be real sales to customers, he will claim that the IBOs themselves can be considered retail customers.

What I hope is the FTC will force Herbalife to require 51% of their sales to non distributors. The FTC did this to Vemma and Vemma sales have dried up.

Mrmaximum said...

Yes we will have to see, my best friend who would never touch Amway with a 10 foot pole over 10 years ago is now looking at a financial MLM run by Orrin Woodward so anything is indeed possible. I can't see Amway just going out without a fight. Saw the earlier comments in regards to them going after more college students. Seems saturation is really making the pickings slim.

Joecool said...

Beware, all the stuff I read about Woodward was not good. He was last in Mona Vie and still running a major tools scam on his downline.

Amway relies on young naive kids or they catch someone who has "needs" so they can hook them into joining.

Mrmaximum said...

Oh yes, I did indeed warn him of that. He did say he was going to check it out and he hasn't mentioned anything since.

Anonymous said...

Orrin Woodward is just another scamming dirtbag selling "motivational tools" and fake dreams. He makes his money by convincing YOU that YOU should be in a MLM scheme.

Joecool said...

With all the information available, you'd wonder how Woodward could possibly fly below the radar. Hopefully your friend self discovers what we already know.

Joecool said...

For a while his team was in limbo after leaving Amway but somehow he convinced a bunch of them to follow him to another MLM.

Anonymous said...

I doubt if you explanati├┤ for sales drop is correct. This is the second year of reduction. Broadly the reductions come from the strength of the us $ which lean sales in foreign curreencies are worth less. The second major reason is the china is suffering and this market is big, 5 times bigger than the us. The chine problem is ibo s jumping ship to new mlms many of whom are local who jump on the mlm bandagon. It seems us sales grew in 2015 which is surprising

Joecool said...

How come when Amway sales were up (when the dollar was weak), there was no talk about Amway sales being up in foreign countries such as China due to the strength of the Yuan? Why is it only a discussion point now?

Mrmaximum said...

This is what I'm hoping too. He's actually into digital security and recently enjoyed a HUGE upswing in his business. I can see that he's thinking about the long term future of his family. I'm going to keep an eye on him and give whatever input to keep him away from Orrin.

Just like Anon said just after your comment, I read about what he was like which is why I told him straight away. He's a good family man and I can see that he's just trying to cement that position.

@Anon March 10, 2016 at 12:21 PM...You know...if Amway was as strong as you think it was...then Joe's question to you would be easily answered.

Joecool said...

Good luck MrMaximum. And good to hear from you again. Please don't be a stranger!

Anonymous said...

I think it was evident rhat during the period of the dollar strengthening the sales growth in foreign markets was influenced by this fact. At least for those who can interpret a little of what is published. Dont know what amway actually said then. Currently de vos says he is not concerned by the past 2 years reductions. As he said he takes the good with bad and in his view the long term propects are for continued expansion

Joecool said...

Back then the apologists just kept harping about how Amway sales were up. Now that it's down they desparately need to find some justification so they can feel better.

Anonymous said...

Don't be fooled by the poppycock emitted from Ada, Michigan.

De Vos is scared shitless of the Internet, and how its unfettered criticism of Amway is impacting his sales volume.

It won't affect him personally, because he is a millionaire many times over. But his pride will be stung badly if Amway really begins to go down the tubes. After all, this Frankenstein monster was his baby.

Joecool said...

Yes, the actual truth is detrimental to Amway. Go figure that.

Anonymous said...

Anon 8 38. I doubt if de vos is worried. He know the model can grow significantly. In the next 50 years about 2 billion people will become over 18 year olds. He only needs a few million of those to sign up and he is laughing. Or his next generation family is.

Joecool said...

That's what has kept Amway going. New suckers born everyday.

PRINCE MIGLANI said...

Man i really dont know what you guys are talking about at all .. i ahve just one question for you guys.. when you buy ur clothes from where do you buy ? Is it from the Footpath where people give a shirt of rs 300 or from malls or branded ones where a hrt cost is rs 1000 ?

If you guys are so high about the prices please my friends understand the standard of amway . Amways products are way better then provided in so called wallmart . I am using the soap . and many other products .. Even if its a high price . its a standard i dont know yours but its my standard . it makes me halthy . Money still comes.. So you guys are the real suckers . who are thinkig about money when it comes to amway . I dare you to take products if you have ur standard . Man you wont go without noticing the results . and Last but not the least amway is not only for money , its also at the top for its products. Amway is a company with 1100 patents .not any single company in entire world . the company u work in is not a half of it.

Qiunan Tang said...

Well, business go up and down. The amway sales in China down about 5B in usd while the second larger direct sales company in China up about 30% . The business overall is fine.

Joecool said...

I don't agree. I don't think Amway products are all that good myself. You pay high prices in Amway because Amway adds middlemen who get commissions on the sales.

Anonymous said...

Thats interesting if the other mlm s in china are doing well while amway is not. Seems to confirm amway has a structiral problem in that market and its hurtiibg badly

Anonymous said...

Well to answer your question most people buy where they deel they get calue for money. Of courSe you and eceryone can have your standard. Fact is practically no one wants to buy amway products because they are too expensive. Thats why people give it up. Of course they could play the auto consumption game which is the key part of the business model. But again very few people want a business model vases on persuading otgers to buy products that are too costly. Some do want this as a business but not many.

Anonymous said...

"Prince" Migliani?

What are you the "Prince" of? Idiots?

Your post is barely readable, with its misspellings, its bad grammar, and its unfinished sentences and tangled syntax. As a result, it's impossible to understand what the bloody hell you are saying!

Are you defending the quality of Amway's products? On what basis? Your personal preference? Big deal.

Are you saying that Amway is a great company? On what basis? Your mere assertion of that claim? Well, whoop-de-doo.

Before you come here to tangle with us, you'd better take a refresher course in English composition, and basic logic.

Joecool said...

Bottom line. Amway products are average but come with a premium price. Not a good combination but it's why IBOs end up buying the products themseves with little sales.

Joecool said...

Amway has to keep expanding because peope figure out the scam after they've been around for a while.