Monday, April 25, 2016

Amway Teaching And Debt?

One of the pitches used to attract people to the Amway business was to earn enough just to get out of debt. Afterall, many Americans these days have credit cards maxed out and racking up more and more consumer debt. But the tough question is whether joining Amway will help the situation or only make it worse? Afterall, in general, Amway products have higher prices than retailers such as WalMart or Costco. Anyone who denies this is either being deceptive or is truly misguided. You can try to argue about Amway's quality of products. Some products are good, but overall, consumers simply don't find enough value in them. Seems that IBOs don't even buy Amway products unless they are pursuing their dreams of going diamond. Once that dream ends, so does their loyalty to Amway products.

Sadly, for most business building IBOs, the business opportunity and its connected teaching system such as WWDB, BWW, or N21 simply creates more debt for IBOs. Think about it, an IBO will already be spending about $300 a month to earn their defacto 100 PV requirement. If that IBO subscribes to voicemail and no other tools, that IBO will already have a net loss for the month. Factor in ongoing expenditures such as standing orders, functions, open meetings, regional functions, books and other miscellaneous expenses and you have an IBO heading towards tens of thousands of dollars deeper into the debt hole. Most IBOs don't see what's happening because the debt is incurred a few hundred dollars a month, but most IBOs think it's okay because they are convinced that they will recoup the losses and earn a huge surplus in the long run. Unfortunately, only a tiny fraction of 1% of IBOs will ever earn a decent profit from the Amway opportunity. Most will realize they are making their finances worse and end up quitting.

In the few cases where a diamond's financial were exposed, these diamonds were in hock. Even a prominent triple diamond was not earning enough to sustain the lifestyle he and others promoted on stage. It is my guess that these diamonds in financial difficulty is more likely the norm than the exception. Do the math. If a triple diamond earns about a million dollars from Amway and the tools profits, can that income sustain a jetset lifestyle portrayed in functions like dream nite? I mean it is a great income, but everything is relative. Someone earning say $70,000 a year can live a comfortable lifestyle without debt. But diamonds portray a lifestyle of excess and almost arrogance. It's no wonder some of them have financial problems.

In the end, IBOs are drowning in debt as a whole. The system nearly ensures that the group of IBOs collectively will end up with a net loss with one or two at the top earning a profit. One's dedication to tools determines how much an IBO will lose. The more dedication, the bigger the losses. If your upline teaches you to get out of debt, that's good. but if they teach you to get out of debt, except for functions and standing orders, take that as a huge red flag.

26 comments:

Kumar said...

Were you ever deceptive, Joecool, when you were trying to recruit prospects? Do you regret it?

Joecool said...

If anyone asked me if it was Amway, I said yes and tried to disarm their objections. But I may have used the curiosity approach to gain people's interest. Once I began to realize the scam, I gathered my group and told them what I discovered and we all quit together except one or two who were completely indoctrinated and could not be convinced. Yes, I wish I hadn't signed up all those people. They lost money because of the tools scam.

Kumar said...

Thank you, Joecool. Did you tell them it wasn't a pyramid? Did you tell them it was a 100% reliable method to achieving complete financial freedom? Thank you.

Joecool said...

Nobody ever asked me if Amway was a pyramid and I never said anything about achieving financial freedom. Any talk about that came from the diamonds.

Kumar said...

Thank you, Joecool. I mistakenly thought all Amway people made the same pitch about it being a 100% reliable path to full financial freedom in 2-5 years and that it was not a pyramid. Thank you again.

Anonymous said...

Were those group members angry at you after you told them that everything was a lie?

Joecool said...

The diamonds often tried to imply that Amway was a "shortcut" to financial freedom instead of working a job for 30-40 years for a pension.

Joecool said...

No, they were glad I told them the truth and they left and went on with their lives.

Anonymous said...

Kumar, you must understand that Joe Cool was exceptional. He did not wish to lie to his down-line, and he wasn't sucked in by the mindless hype and enthusiasm of the Amway racket. He just wanted the opportunity to make some money.

The vast majority of Amway IBOs and their sponsors are driven by sheer greed, and this makes them prone to deceptive practices. Those who are honest and decent and sensible get out of Amway pretty quickly.

Joecool said...

Thank you. Yes I was basically in to make money. I wasn't out to become a multi millionaire via Amway but I figured I could sponsor enough people to make a profit. My goal was to go direct but at 4000 PV and not making much money, I did the math and figured that platinum (direct) wouldn't make much difference.

Understand that platinums are expected to fly to show plans for distance dowlines and basically accept all the product returns and show the plan for all downline legs. I was very busy at 4000 and was going to be busier at the next level, plus at 4000 I wasn't making the moey that upline had "assured" me of.

It became an easy decision to quit when my upline also told me to dump my now wife of 20 years to build Amway as a single.

Kumar said...

Thank you, Anonymous. I see that now. But Joecool, I also wanted to ask you, when your sponsor pitched you, was he deceptive? Manipulative? Did he say or do anything that raised red flags with you before you signed up or right after? If so, what was your response? And why didn't you research Amway and WWDB online before you joined? Thank you for all your answers. I only ask so we can learn from your experience. Thank you again for this blog.

Kumar said...

Wow, that's some serious evil right there, asking you to dump your wife. But it was a blessing in disguise I guess, to make the decision easy for you. She truly saved you. Thank you for these details about your experience, Joecool. Valuable lessons.

Joecool said...

My sponsor was a good childhood friend so my skepticism and "shields" were down. He wasn't deceptive except that he refused to disclose any information about his earnings. He did say the goal was residual income. I didn't research Amway online because back when I joined, the internet was fairly new and not easily accessible like it is today. I joined in late 1996 or early 1997.

Kumar said...

Thank you so much, Joecool. I guess the internet is truly making a huge difference, at least in North America for now. I think it's critical for prospects to demand to know the earnings and expenses of the person trying to sponsor them and their uplines WITH PROOF via tax returns. If anyone came to me pitching a partnership in a small business, I would ask to see the profit and loss statements or tax returns. I wouldn't just take their word for it just because they're in a suit and driving a nice car. Con artists wear expensive stuff and smiles to scam you.

Anonymous said...

That's the problem -- being recruited by family or close friends. We naturally trust such people, and we give them the benefit of the doubt.

I'm sure thousands of bankrupted IBOs in Amway were lured into the trap by someone close to them. It's extremely difficult to convince a stranger to even listen to "The Plan."

Joecool said...

Yes, and because most people are sponsored by family and friends, they don't end up filing complaints after they end up quitting.

Joecool said...

Yes, IBOs like to say that taxes are personal but we're not asking for their personal taxes, just the business portion. Why would you jump blindly into a business without knowing what kinds of income and expenses to expect?

The diamonds imply wealth with pictures of mansions and sports cars but who knows if the diamonds even own this stuff or not? They could be renting or they could be deep in debt even if they have some cool toys.

Anonymous said...

Despite the amway. Will you help to discover another company called "Jeunesse global"?

Ben Dover said...

You should watch the Dateline video on Quixtar/Amway/Alticor. On top of it being enlightening, they have an interview with a man by the name of Bo Short. Bo is a career MLMer and takes a hard stand against the corruption he saw at Amway. With that being said, you have to wonder what his motive is to throw certain people in the organization under the bus. It turns out, he was beginning to launch his own business Jeunesse Global, which you can see on their page.

Jeunesse Global is not original, the products are a sham, the leaders have been influenced and learned from the Amway system. The whole thing is a steaming pile excrement.

Joecool said...

The Dateline video though, shows a real life depiction from an actual function they had in a large venue, and clearly showed deceptive information given out by a high level distributor.

Jerry D. said...

Jeunesse sais pas. Thanks, Ben, for the review. The vast majority of MLMs are abusive scams. Now, imagine you went to attend an expo with all MLMs under one roof. That's what this funny short film depicts:
https://www.youtube.com/watch?v=3X49_87ElR8

Joecool said...

Thanks for posting the link. I'll check it out a bit later!

Ben Dover said...

Jerry,

That link was hilarious. I especially enjoyed the fat guy and his quote "I am a recovering anorexic". For the person who was interested in learning more about Jeunesse, there is a website called lazymanandmoney.com. He does a wonderful job of dissecting many badly formed MLM companies, and Jeunesse is one that he has exposed in great detail. I believe you will find all the answers to the questions you have and more.

Joecool said...

Yeah, I read that lazyman blog. Good stuff.

Anonymous said...

It was easy to refuse when the one sponsoring you is just an acquaintance....

Joecool said...

Yes, harder to reject family and friends