Amway "Tools Systems" Expenses?

It is my observation that people who join Amway usually end up losing money in the end. They may get involved to make a few bucks or because they are mistakenly led to believe that they will become millionaires in Amway in 2-5 years. I know my sponsor convinced me that we would be millionaires in a few years. These folks who recruit new IBOs into Amway are often associated with a "system" such as Worldwide Dreambuilders (WWDB)or Network 21 (N21). These system promoters, often diamonds, may mislead the recruits by showing them pictures of mansions or other luxuries, implying that they attained these goods with their Amway business. In many cases, it is a deception, especially when we know for a fact that some diamond leaders who proclaimed that they only make cash purchases, had their homes foreclosed. Without the hype, I am sure there would be fewer sign ups. But what is the evidence?

It is simple. Amway reports that the average active IBO earns about $00 a month in gross income. This average includes diamonds and other higher end IBOs. I believe if you calculated the median, the average would be much lower. This figure does not include factoring in business expenses.

But what makes most IBOs operate at a loss is the system expenses. The system generally consists of voicemail, standing orders, cds, functions, books and other materials. An average business building IBO might spend an average of $250 a month or so on these expenses. Amway defenders like to decry the amount, but there are couples who would likely spend more and IBOs who must travel by air to functions would spend more. Single IBOs who buy only the minimum might spend a bit less. Some IBOs with abusive uplines might spend much much more than $250 a month on tools and functions. I believe my former sponsor probably spent easily an average of $1000 a month on average. (I am from Hawaii so the average cost of functions is greater due to long distance air travel)

Thus if the average IBO earns $200 a month gross, but the same average IBO spends $250 a month on tools, the average active IBO is losing $50 a month, with lower level IBOs (i.e. 100 PV) would lose more as they wouldn't earn anything close to $200 from Amway.

Look at a group of 100 IBOs at 100 PV. (This is just a model). If a 100 business building IBOs average $250 a month on tools, they as a group would expend $25,000 a month on tools. Their volume would be 10,000 PV, or about 30,000 BV. This would generate about $7500 in bonuses per month. Thus this group spent $25,000 to learn and be motivated while the group splits up $7500 a month in bonuses. The platinum would get the lion's share of the bonus but most of the rest of the group will suffer net losses. As the group grows, the bonus may grow, but so will their expenditures on tools. And I might add the collective losses would grow as well.

The only way the group can make money as a whole is to avoid participation in the tools altogether. The evidence is right here with simple math. The systems do not work because the cost of the system is likely to consume all of the Amway generated bonuses and more. I gladly challenge anyone to explain in detail how this post is not reflective of the reality of being in Amway and a system such as WWDB or Network21.

Amway IBO Realities?

One of the things that keeps some IBOs going is the "harsh reality". What I mean by that is for some IBOs, once you have been in Amway for a while, it can be hard to quit. You were possibly recruited with dreams of lifelong residual income and walking on all of the exotic beaches of the world. Retiring young and spending that time with your wife and family. To quit means an IBO would have to face the reality that these dreams will not come true, at least not with the Amway busines. The fact is that the Amway opportunity probably would not have delivered those dreams anyway. Even a diamond more than likely cannot afford those dreams. In fact I would estimate that most diamonds, if they flaunt some excessive lifestyle, are near broke or in heavy debt as a diamond income cannot sustain a jetset lifestyle, save for a founders crown ambassador or something similar. I believe the prominent WWDB triple diamond bankruptcy shed a lot of light into the finances of an upper level pin and it wasn't as impressive as I would have thought.

But what really is the harsh reality? It's working hard only to drift between 100 and 500 PV. It's finally sponsoring a new IBO only to have a downline quit. It's talking to people about Amway and getting laughed at or getting rejected. It's your upline or sponsor pushing you to do more. Possibly your upline is one who questions your manhood if you aren't working hard enough. It's your upline or sponsor reminding you that a winner doesn't miss functions, especially the major ones. It's staying up late for team meetings or nite owls when you need a good nite's rest to do your job the next day. It's driving the miles to show a plan, only to have your prospect not show up. It's having to be deceptive about what you are doing. It's skipping functions with family and friends so you can be core to the business.

As IBOs, do you see any of this? I saw some of this during my involvement. While I have not been an IBO in some years now, I still see many testimonies and comments by more current and even some active IBOs to indicate that a lot of this still goes on. While Amway defenders will deny it, I see no reason why any of this would have changed over the years since Amway has made no significant changes to stop abusive uplines. If Amway did make any changes, they are not immediately apparent and the continuous string of comments and testimonies do not confirm that any clean up has been done.

For active IBOs or prospects, these are the harsh realities that may be attached with the Amway oppportunity. Much of it is because of motivational groups such as WWDB, but if you are seeing these traits in your group, ask the tough questions. If you happen to decide that the Amway opportunity is not for you, take heart! There are other ways to achieve your financial goals and dreams and there are moe efficent ways out there. Sometimes, quitting something that isn't working is a wise business decisions and sometimes you can lose more by not quitting. Good luck in whatever you decide.

Amway IBO's Hosed By The IRS Again!

Check out this post by Forbes blogger Peter Reilly. He has written articles in the past documenting some cases of Amway IBOs being hosed by the IRS in tax court because they have no business plan or a realistic plan to make a profit. He even mentions Joecool's blog. Imagine that? My blog mentioned in Forbes!

http://www.forbes.com/sites/peterjreilly/2016/06/25/tax-court-denies-amway-losses-due-to-lack-of-profit-motive/#662835204815

I was surprised to see that I haven’t written about an Amway case in over two years. Well, a new one came out this week and James E. Hess, like pretty much every taxpayer who has ever disputed disallowance of Amway losses in Tax Court, lost. Amway cases are a subset of Section 183 (commonly known as hobby loss) cases.

The rule is that in order to post losses to your tax return, the underlying activity has to be one in which you were trying to make money. I have written about quite a variety of activities where the taxpayer has contested an IRS hobby loss determination- musicians, artists, drag racers, players of slot machines, even blogging to name a few. The most common though are horses and Amway. The horse people frequently win, but the Amway people pretty much always lose

A Bit About Amway

The Hess decision is of interest because it has more in the way of discussion of the Amway IBO (Independent Business Owner) experience. There is the big picture of how you can make money in Amway.

"Amway distributors can generate revenue by: (1) selling products directly to consumers; (2) earning points through Amway’s reward point system; and (3) sponsoring other individuals who join Amway as distributors. In the latter case, the original distributor is called an “upline” distributor, or a sponsor, in relation to his new recruit, the “downline” distributor. The upline distributor receives points when any member of his downline sells Amway products even though he does not participate in the sale. Those points can then be redeemed for cash in the form of a bonus check. If a downline distributor engages another individual to be his downline distributor, the original upline distributor takes a percentage of the sales of both downline distributors even though he had nothing to do with the activities of the new downline distributor. Thus, to maximize Amway-related income, a distributor must sell Amway products and also try to enlist other individuals as Amway distributors."

The Missing Business Plan

The Tax Court denied the losses because Mr. Hess did not have any sort of a business plan. What he received from Worldwide Group “did not contain information that is generally found in a formal business plan”. It was more of a description of how revenue could grow.

It is interesting to note that the Tax Court has become a little more relaxed in calling for formal business plans in Section 183 cases recognizing that people in essentially crap shoot businesses like art and horse breeding don’t need accountants to tell them how to make money. Yet it seems to be holding the line when it comes to Amway.

Mr. Hess reported net losses from 2005 to 2011 ranging from $10,000 to $25,000. In only one year did revenue exceed $1,500. Nothing changed.

Tax Court Seems To Align With The Critics

What I found most intriguing about this decision, is that way that it mirrors critiques of the Amway experience, which seem to have their own section of the blogosphere. For example Joecool of Amway – The Dream Or The Scheme? recently wrote in a post called Amway Success?
“

Submission to upline was one of the things we were told. Our group was told that upline would never purposely lead us astray so we should trust them and never try anything without checking upline.

Our group was taught to reduce debt, but ironically, upline said it was okay to go deeper in debt if it was to attend a function or to buy more cds.

Anytime we asked about how much income uplines may have been earning, we were either told it’s none of our business or shown a photocopy of a 10 year old bonus check that someone upline may have received. Our proof that the business worked was upline showing off pictures of sports cars and mansions.

Losing money is success. Many times, our group was told that losing money was a sign of success. It was success because we were investing in our futures. That the business really is not about money but about friendships. I suppose upline taught this because everyone was losing money so it was nice to hear that success was around the corner, and that we were all nicer people and on our way to success if we just attended more functions and bought more standing orders

Amway Crabs In A Pot?

Another funny story told by my uplines, and apparently still told today is the story of the crabs in a pot. That crabs will prevent other crabs who want to escape the pot by pulling them back in or pulling them down. The story goes that people in the working world also do this, by stepping on others to get ahead. I've never actually seen for myself if crabs actually pull each other down if one of them tries to escape, but I suppose it might be true. I do know of some people who will do anything to get ahead and they can be ruthless.

But the people who are willing to sacrifice others to get ahead do not appear to the the majority, but the exception. Many people are willing to work a career job and maybe over time, they move up the corporate ladder. Many people do this without having to "pull people down" in order to succeed. I believe this crab in the pot is just another ploy by uplines to get IBOs to think that their friends and family, by warning them of the potential perils of Amway, are just crabs pulling you back into the pot. It simply isn't true. Think about it, why are there so many negative stories and experiences floating around out there about Amway and the tool systems? Why is there a lack of new success continuosly emerging fro Amway? Who do diamonds quit or walk away from the business under unfriendly terms? Where are all the people who retired and walk the beaches of the world? Why do crown ambassadors keep working until they die?

Maybe the success you think there is in Amway simply doesn't exist. Let me repeat. Maybe the success you were led to believe exists in Amway, just isn't there. Amway's been around more than 50 years. Why can't anyone name a dozen or so people who built their Amway business once, then walked away, collecting significant residual income since? I wonder why Amway doesn't advertise this as a benefit of being an IBO?

Speaking of crabs in a pot. Ever wonder why all these virtuous diamonds break away from their beloved mentors to form their own groups? Ever wonder why there are countless issues of diamonds suing diamonds over tool income? If the money coming in is uncountable, why can't these diamonds come to a peaceful agreement? Why use lawyers which many diamonds talk about a evil because lawsuits are often about getting something for nothing.

Maybe it is the diamonds themselves who are crabs in the pot, all pulling each other down whenever one of them is on the verge of success? Maybe the diamonds are the crabs in the pot pulling IBOs down and squeezing tool money out of them?

Anyone Can Succeed In Amway?

One of the "false hope" things my upline used to tell our group was that everyone was going to succeed. That although things are tough, one day we will all be at diamond club together looking back at the struggles and laughing. Well, nothing could be further from the truth. One of the things that Amway promoters like to state is that "anyone" can succeed", but in the same line of reasoning, I could also say that "anyone" can win the lottery. The same thing can apply to not "everyone" can succeed in Amway and not "everyone" can win the lottery. Amway is not a game of chance like the lottery, but this still applies.

Using the term "anyone can succeed" is simply a statement that gives people hope. It appears that Amway promoters love to use the psychology of giving people hope as a means of recruiting and retaining IBOs. Hope is what keeps people motivated. The problem with the Amway opportunity, is that it is false hope. It is very easy to see that in most groups, the majority of downline IBOs will lose money. The majority of active IBOs, if they receive a bonus, will get only about $10 a month from Amway. If they use voicemail, or subscribe to standing order, they are already at a net loss for the month. Never mind the open meetings, major functions and other expenses associated with the Amway business.

I believe it is hope that makes gambling popular. One pull on a slot machine handle can change your life. Many IBOs believe that one good run of business can change thir lives. Unfortunately, the Amway business has not appeared to produced much fruit in North America. It seems that any new success is simply replacing older pins who no longer qualify. In my opinion, it is a telltale sign that Amway has stopped reporting North American sales. I'm sure if sales were up, they would stand on their rooftops and trumpet out such success. While Amway reported an increase in sales, there is insufficient data to determine the cause and effect of the sales increase. I have heard some chatter that it could be a result of increased prices. I wish the corporation would just be more transparent about these issues.


To summarize, "anyone" can succeed. But that simply means that you never know who the next platinum or diamond may be. You don't know where they will come from. And it is unlikely to be a new recruit. If you are using a system such as N21, WWDB, or BWW, then I can say with certainty, that "everyone" cannot succeed.

Amway Success?

Looking back at my IBO days, I can now laugh at some of the strange stuff we did and believe it or not, I have reason to believe that my old LOS, WWDB still teaches some of this and some other major groups also teach it. I believe some of these practices were the reason why some people refer to the Amway business as cult or having cult like qualities. If you recognize some of these practices, you might be in an unethical group and you should ask your upline the tough questions and possibly reconsider or reprioritize your involvement in the business.

Submission to upline was one of the things we were told. Our group was told that upline would never purposely lead us astray so we should trust them and never try anything without checking upline. Afterall, upline had experience and probably had all the answers. Some of this checking upline included asking permission to get married, buy a car or a home, or even something as small as purchasing a camera. The upline said maybe someone upline might have advice on how to get a good deal on a camera so no harm in checking upline before making a purchase. It is my guess that upline didn't want your disposable income being spent on anything other than standing orders and functions. Our group was taught to reduce debt, but ironically, upline said it was okay to go deeper in debt if it was to attend a function or to buy more cds.

Late meetings. Our upline was into late meetings, many occuring after midnight. I suppose it was a show of loyalty and dedication to the upline and the system. In reality, it made most people angry at their jobs because they had to wake up early to go to work. For me it made me mad at our upline because the meetings taught us nothing of substance and it just made us tired. Our upline used to talk about time being important but it was never important enough to make him show up on time for his own late night meetings. Another cult like factor - sleep deprivation.

Secrets. Anytime we asked about how much income uplines may have been earning, we were either told it's none of our business or shown a photocopy of a 10 year old bonus check that someone upline may have received. Our proof that the business worked was upline showing off pictures of sports cars and mansions. Of course we now find that some WWDB diamonds had homes foreclosed, and one prominent triple diamond had some dealings in bankruptcy court. Looking back, I suspect that many diamonds have mortgages, which would be nor problem except that these leaders scoffed at the stupidity of having a loan. That diamonds pay cash for everything, including homes. My former sponsor still lives in a run down rented home beause he won't purchase a home unless he's got the cash. My former sponsor is a physician so I find his position on buying a home preposterous. His oldest child, a son probably grew up deprived of his parents because of dedication to the system and the functions.

Losing money is success. Many times, our group was told that losing money was a sign of success. It was success because we were investing in our futures. That the business really is not about money but about friendships. I suppose upline taught this because everyone was losing money so it was nice to hear that success was around the corner, and that we were all nicer people and on our way to success if we just attended more functions and bought more standing orders. People who sold off some of their personal property were edified if they did so to attend a function. Obviously these folks were not advised to run their business within their means. Upline even said that going into debt was okay, but only if the debt was to invest in the business or to buy extra function tickets.

While some of these practices seem bizarre, I believe it is because the upline advice was self serving and meant to channel their downline's dollars into tool purchases. It is the only conclusion I can make. What's your conclusion?

Amway Is "Fair"?

One of the bogus things my upline taught us was that the Amway opportunity was fair. That it was a completely level playing field. On the surface, that sounds right because "everyone starts at zero". While everyone does start at zero, the compensation plan is unfair to those who "do the work" and in my opinion, should be revamped so lower level IBOs make more money. It would probably help with IBO retention and maybe, some higher level leaders wouldn't have to work so hard to keep replacing people who quit. It is my informed opinion that many IBOs quit because they aren't making a profit. Real profits would motivate people to stay involved in the business.

If you are a new IBO, then you might not be really familiar with the Amway compensation plan. Amway pays out about 30+ percent of their gross as bonuses. Thus if you move 100 PV in goods, or about $300 in sales, then Amway pays out about $100 in bonuses. You as a new 100 PV IBO, would receive about $10 and your uplines, some of whom don't even know you exist, will split up the remaining $90 in bonuses. It truly is not a case of doing the work and getting paid. You are doing the work so upline gets paid. To add insult to injury, upline wants you to purchase materials (functions and other tools) that tries to convince you that this is a good deal.

And something very significant to think about. In what other sales profession are you compensated so low (3%)? I can only think of real estate, but in real estate, your sales are likely in the hundreds of thousands of dollars. In just about any other sales related profession, you get a much higher cut than 3%. Yes, your bonus or commission can be higher if you move more volume, but then you are likely receiving more money because you are now exploiting people doing 100 PV who get only $10 back. In other words, your profits come from your downline's pockets.

Even after you consider the unfair compensation, you must factor in the cost of tools. Most uplines promote tools (cds, voicemail, functions) as vital to an IBO's success. Some uplines push the tools harder than others. But the tools purchases will often be the primary cause of IBO financial losses because the cost of tools will normally exceed an IBO's bonus. It is very common in the US for monthly tool purchases to exceed $200 a month on average, and very very few IBOs will ever reach a high enough level in the Amway compensation plan to earn enough just to break even. Also, the tools apparently do not work. There is no unbiased evidence to suggest that tools have any causal relationship to IBO success.

With Amway's spotty reputation and the unfair compensation plan, IBO retention is spotty. Many IBOs sign up and do little or nothing, and many IBOs don't even last a full year before they quit. What happens is IBOs begin to figure out that recruiting downline is next to impossible and therefore, generating more volume is nearly impossible, even for individuals with skills. If you are a new IBO or a prospect, I encourage you to sit down and really look at the math and factor in the cost of tools. There are many ways to earn a dollar, I just don't feel that Amway is an efficient way to do that.

Amway Is Get Rich Slow?

One of the things upline used to say was that Amway is not "get rich quick". I suppose they say this because most people would more likely think scam if they promoted it that way. But when you stop and think about it, 2-5 years, build it right and you have willable, residual income for life while walking the beaches of the world? That's not get rich quick? Or is it more of a disclaimer so that the opportunity doesn't sound "too good to be true"? One thing is for sure, even if uplines tell you that it's not get rich quick, it's obvious that IBOs think they will eventually get rich, even if it's not "quick".

What most IBOs don't figure out quickly enough, is that they are unlikely to even make a net profit, let alone getting rich in Amway. How many of these people exist? Where are all of these retired Amway IBOs who built a business in 2-5 years and then walked away from their business and will be collecting a significant residual income for many years to come afterwards? I don't know of a single person who has done this and none of the Amway defenders and zealots I have encountered over the years have been unable to supply this information either. It's like some kind of myth or urban legend that people have actually retired from Amway on residual income. We also know that due to attrition, it is virtually impossible to maintain a profitable Amway business. People quit the business daily, thus even what looks like a solid business can be gone in a very short amount of time.

I can acknowledge that Amway is a business opportunity and will definitely take some work to be able to achieve something. But thinking realistically, what business could you actually be able to walk away in 5 years and not work again? More than likely that business doesn't exist, whether it's Amway or not. Say you opened a conventional business. There wouldn't be many scenarios where you could walk away after a number of years. The business would still require work and maintenance. But for some reason, people are mislead to believe that you can do this in Amway where there is a high attrition rate and where your business can only expand by person to person.

Sadly, many of the people who are attracted to the Amway opportunity are often young people looking to get more out of life. They are often ambitious but may lack a means to gain wealth, thus the appeal of the opportunity is there. Unfortunately, these nice young people are more likely to end up channeling their hard earned dollars into standing orders and functions which will almost guarantee that they end up with a net loss. The bottom line is that not only is Amway not get rich quick. The more likely scenario is that your involvement with Amway will very likely be not getting rich at all. A net loss is the most likely result. I challenge anyone to try and prove me wrong on this point.

How To Make Big Bucks In Amway?

RK = Robert Kiyosaki and RDPD = Rich Dad, Poor Dad, Kiyosaki's book.

http://www.johntreed.com/MLM.html

“Mr. Reed,
I found your site interesting, especially your analysis of RDPD. I must admit that I enjoyed the book because of its "easy read," but your analysis is right on target.

I attended a Quixtar (aka, QuixScam, Amway, AmQuix, Scamway, etc.) conference in the Fall of 2000 at which he was a keynote speaker. He espoused network marketing and recommended complete dedication to building the Quixtar pyramid business even though he hadn’t found pyramid businesses worth his time. Ultimately, RK has found a way to obtain significant financial benefit from pyramid-based businesses without having to build one of his own.

The story is that Bill Galvin discovered his book at a carwash in (or about) Houston Texas. At that time, RK could not get his book published and distributed in a more traditional manner. Bill Galvin is a diamond under the Dexter Yager organization for Amway/Quixtar. In fact, I still have an old prospecting tape of a dialogue between Bill Galvin and Robert Kiyosaki. You can have it if you want it. I’m sure you’ll enjoy it. By the way, the tapes he produces for Amway/Quixtar diamonds are also distributed by the 10’s of thousands for which he gets a cut of each $6 tape that costs less than $1 to produce.

Anyway, Bill Galvin distributed RDPD to the "leaders" in his group. Bill and his leaders loved the book, so they contacted RK to buy more. The distribution of motivational tools in the Amway/Quixtar distributor networks is extremely efficient (and profitable for higher ups). His popularity grew quickly as his books were channeled to many thousands of lower level distributors by diamond distributors. Distributors would often buy several to hand out while prospecting new recruits. Not wanting to be left in the dust, other MLM networks picked up on the book and it has spread through their organizations as well. I would guess that the MLM industry was responsible for putting RK on the best seller list.

If you take RK’s mantra of "financial literacy" seriously and begin take financial control of your life, the vague and inconsistent information in his book becomes progressively more alarming. I tried to research any record of Kiyosaki but found practically nothing. I am impressed that you found as much as you did.
You made some very interesting references to "cult of personality." RK appears to benefit from that phenomenon and it probably explains why various MLM organizations (especially Amway/Quixtar) have latched onto him. Many of the high level distributors in MLM organizations also benefit from what could be described as a "cult of personality." There is obviously some "synergy" there. If you don't mind, I'll quote you on your reference to cult of personality.

My disappointment with RK has grown steadily due to inconsistencies, vaguesness, unsubstantiated claims, and his chosen association with MLM organizations. That alone should be sufficient to arouse suspicions.

By the way, did you know that his first two bankruptcies were supposedly related to a nylon wallet manufacturing business? I'm not sure where I heard that...it may be on that Galvin/Kiyosaki prospecting I told you about or in one of his books. If you recall in the late 70s early 80s there was a fad with bright colored nylon wallets. RK was supposedly involved in manufacturing those...first domestically and then importing them from China. Since that was pre-internet, Secretary of State corporation records don't reliably go back their far to do an online search.

After deciding that manufacturing wasn't for him, he built a financial education (or services) company that had 11 offices around the world. He sold his business or his share of the business for "several million." I didn't know if you were aware of that.

After that, RKs goal was to buy "one to two houses per year." [I am not a real estate expert, but why would RK focus on buying houses versus other RE investments?]

Sorry if all of this is old news. I can't remeber what he information he published versus what he talked about in the prospecting tapes he has made for Amway/Quixtar distributors.” Best Regards, Jeff Parsons.

Your Amway Upline Salesman?

Our group (WWDB) edified people who bought extraordinary amounts of extra tapes/cds, extra function tickets and made superhuman efforts to get to functions. Looking back, I remember an IBO who was edified for coming all the way to a family reunion function in Portland Oregon when he was diagnosed with terminal cancer. The speaker said he could have been miserable spending time at home but here he was making a difference in people's lives. WTF? I once wrote a post about how IBOs think they are saving the world and helping people when in reality, the masses of IBOs are only "helping" their diamonds to attain material wealth by purchasing function tickets, voicemail, standing orders and other materials. While people are doing community service, IBOs are sitting in functions and rah rah meetings.

I would agree that some training and information can be helpful for new IBOs but I do not see any value in a neverending supply of cds and and endless number of meetings and functions. The very thing (support materials) that uplines claim is your key to success is the very thing that nearly guarantees business building IBOs to struggle financially. Our upline wanted IBOs to be out of debt, which is good, but they would also say in the same breath that it was okay to go into hock if it was to attend functions or to purchase additional support materials. Sadly, many IBOs do not see through this self serving advice.

Most people, including myself are very wary when we deal with car salesmen. We are wary because we know that the salesman is out to make money off of us and will try to sell us every option in the book. Thus we negotiate and reject the car options that we don't really need to or. Guess what? Your uplines are like car salesmen except that they sell you different options such as premier club, standing order, book of the month, function tickets, voicemail, open meeting tickets. Just like a car buying customer, taking all the options maximizes the car salesman's commission and the car dealer's profit. Buying all the support materials increases your upline's profits. Imagine the car saleman telling you that the extended warranty was vital to owning the car. You'd think twice about it, yet uplines will tell you that functions are vital to your Amway business and many IBOs buy it hook line and sinker. I hope this analogy will encourage IBOs to think of support materials as options on the car. You don't need any options to make the car work. Just as you don't really need support materials to buy and sell Amway products, and to get some downline to do the same.

We are wary of car salesmen. In my opinion, downline and prospects should be just as wary of uplines who promote tools as "vital" to your success in Amway. Keep in mind that a sponsor is obligated to help train any downline, regardless of whether they are on the system or not.

Dreams (Your Upline's) Come True In Amway?

One of the issues I have with the Amway plan is that the newest IBO, possibly the one who does the most "Work", receives the smallest compensation. Amway pays about 32% of their gross back in the form of IBO bonuses. An IBO who does 100 PV generates close to $100 in bonus money, but the IBO only receives a 3% bonus (abuot $10) and somewhere upline and in between, uplines and sponsors receive the rest About $90). Some of the upline may not have even met the IBO who actually did the work. Is that really fair and is that a level playing field? What do some of these uplines do to deserve the lion's share of the bonus you worked to get? Yes, the upline diamond may show the plan in an open meeting, which may help you, but then again, you pay for entrance into that meeting. Basically your upline gets more bonus money than you by the simple virtue of signing up first.

Many uplines will talk about dreams and fulfilling your dreams. But if an IBO would stop and think for a moment, you can easily see that you are building the dreams of your upline, and not your own. You receive a tiny portion of the bonus for the volume that you move, and then in addition, if you are on the system, then you are also paying upline in the form of tool purchases for the priviledge of giving them bonuses with your product purchases. Does that sound like a good deal?

It is why your upline diamonds can parade around on stage with designer suits and show you their fancy cars and mansions and other toys. It is because they are cashing in on your efforts. You are making their dreams come true. Your dedication to moving volume and purchasing standing orders are fulfilling dreams. The upline dreams. Yes, someday you can hope to have your own group of downline to exploit for your own benefit, but unless you are adding members to your group regularly, you will never achieve the kinds of dreams that uplines talk about. In the meantime though, you are definitely helping someone upline achieve their dreams with every function you attend. Ironically, the upline leaders will tell you to never quit, even if they don't know your personal circumstances and/or how your business is progressing. Does that sound like sound advice coming from someone who knows nothing about your business?

Here's a challenge for IBOs and/or prospects who are being recruited into the Amway business. 100 PV will cost around $300 a month and dedication to the tools system will cost you around $150 to $250 a month on average (For a single person. Couples pay more). Would you not be better off simply writing a check to your upline for $100 and not even joining? Would you not be better off staying home and watching television instead of joining? If you read all of the information available on this blog and still decide to join, good luck to you, but remember this: Whose dreams are being fulfilled by your participation? Yours or your upline?

The math says not your dreams.

The Truth About Amway Diamonds?

One of the things that irks me about some Amway leaders is their blatant revisionist history. They never take responsibility for anything except for the miniscule amounts of success that seeps through their system. Real problems and issues are ignored, or leaders pretend they never happened, or they simply rewrite history to fit their goals and agendas. And to make matters worse, these same leaders teach their downline to accept personal responsibility for their failures, even when downline faithfully purchase and apply teaching from tools such as voicemail, standing orders and functions.

One good example was the complete lie that nobody made profits from tools. Then when caught red handed, leaders now admit that they make profits from tools but nobody seems to know exactly how much, or how you actually qualify to receive compensation. And there was no backlash for having told such blatant lies.

Leaders in my former LOS, WWDB used to teach how so few IBO couples ever gets divorced. I heard that Amway couples had a 2% divorce rate as compared to the rest of the world where over 50% of couples get divorced. Yet, WWDB uses their own revisionst history. One good example is Howie Danzik, who WWDB says built his business as a single and later married Theresa Tsuruda. I guess I must have imagined the emerald function I attended where Howie and his wife at the time, Susan, said they built the business together. There are other examples of this, but what amazes me is how the downlines seem to ignore these facts.

Another fairly recent example was how an IBO insisted that a prominent triple diamond in WWBD (Duncan)did not have homes foreclosed or was not involved in chapter 7 bankruptcy proceedings, even when there are numerous public documents providing ample evidence that it is true. It's mind boggling. If Tiger Woods were a diamond and denied that he had any affairs, I bet his downline would believe him as well. Scary.

I just have to wonder when IBOs, who dedicate themselves to various systems, will ever hold these leaders accountable for their actions. If you buy a television and it didn't work, you would ask for a refund. Well, if those standing orders and functions contain vital information and you apply them and they don't work, you should ask for a refund as well. People should also ask upline the tough questions. If someone gives you bad advice, they should be held accountable. If someone tells you buying a home with a mortgage is stupid because of the interest you will pay, then you find out they have "interest only loans", that makes them a hypocrite and their advice should be questioned.

Don't allow these well compensated leaders to simply rewrite history to ignore their mistakes and trangressions.

An Amway & WWDB Wife's Testimony?

This comment was left on my blog a couple of years ago and I'm now posting it because it gives a really interesting insight on the thinking and teaching in Amway and WWDB. Keep in mind that this comment is pretty recent so it's not some outdated teaching.

Let me tell you a story about my "successful" Amway marriage.
Was in WWDB. Upline Diamond: Puryear (seriously)

Husband (now ex-) and I were core all the way. Drank the koolaid, ate the food bars, no TV, only listened to tapes and read books. Attended all the functions. Major functions were our "vacations" and "dates." In public, we were Mr. and Mrs. Amway. In private, he was physically abusive. I finally got a chance to leave.

Upline sponsors, Platinums and Emeralds called me, yelling at me, telling me that it was "unbiblical" to leave my husband. Guess it was okay for him to do what he was doing?

I left and never looked back. It was tough to deprogram after the WWDB brainwashing.

My husband wasn't abusive when we met and were first married. That started happening maybe six months after we were married.

He was already in Amway when we met, but he wasn't very active. After we got married, he started to get more active in "the business."

I didn't know much about Amway when I met him. I met his upline sponsors when we got engaged and I thought they were just good friends. After we were married, I went to a rally and was struck by how the wives seemed to be so supportive. Then I heard the Emerald wife speak, and all she did was edify her husband or go on to "us gals" that we needed to let go of any negativity. As I went to more functions, I heard the wives tell "us gals" to be submissive - that we were wrong for having any needs or requests. It's one of the kids' birthday or your birthday and there's a function? Guess which one takes priority. You can celebrate later when you're "Free," when you're a Diamond.

I thought there would be some sales training. I went to an Artistry clinic - they taught us how to put on makeup and showed us some of the latest colors. But there was nothing about how to find customers, generate sales, or even have a makeup party. At one time, there was a tape by Bettyjean Brooks (wife of Jim Brooks, WWDB) about how to build a retail business. I ordered it, but never received it. She and Jim divorced. Jim stayed in WWDB and the tape suddenly became "unavailable."

Husband really followed the "fake it 'til you make it" teaching. To everyone, he was Mr. Successful. After our child was born, I became a stay at home mother. He led everyone to believe that it was our Amway income that allowed me to stay home. We weren't even at 1500 PV. We never made any money. I kept my mouth shut and played the submissive/supportive wife role. Keeping the books, running call-in and pickup for our downline, and trying to peddle the products to "customers." He never tried to sell anything - that was the wife's job. WWDB taught that.

It all came to a head when the police got involved because of the abuse. He had to move out of our house. He lied to everyone, saying that it was all really nothing and that the courts (and I) were blowing everything out of proportion. After going through counseling and therapy, it was clear to me (and to the therapist) that he was not being honest with any of us. I filed for divorce.

It was then that the upline contacted me. Our sponsor (the wife), platinum and emerald each called me. It started out that they were "concerned" about me and wanted to counsel me. When I told them exactly what happened and why I was leaving, they told me that it was "unbiblical" for me to leave my husband. Yelling at me. Accusing me of negativity. They also said that there was no way he could have done those things, that they just couldn't believe it. I offered to let them see a copy of the police report. Nobody ever took me up on that offer.

Now, I can't say that Amway taught him to be abusive, but I wholeheartedly believe they taught him to be a good liar and how to hide the truth and dodge questions. They did everything short of preach that the "little lady" stay at home, pregnant and in the kitchen. Wives on stage used to brag about how the couple drove a hundred miles and left their kids sleeping in the car while they went inside someone's house to show a plan.

Freedom, indeed. More like servitude.

Why Amway IBOs Fail?

One of the selling points of the Amway business is for people to do the work once and then reap financial benefits for life (Ongoing residual income). But that simply does not happen for the vast majority of IBOs. The reason why most IBOs do not have a sustainable business is because their business is not based on sales to genuine customers with a genuine need. Most IBOs themselves will not buy Amway products once their affiliation to Amway is over. And this is a problem. Recently, the FTC imposed injunctions on a company called Vemma, stating that 51% of sales must be to actual customers not affiliated with Vemma. No problem as Vemma claimed that most of their distributors were actually just discount customers. Sales fell 95%. Where were these loyal discount customers?

If you are an Amway IBO doing your 100 PV monthly by mostly self consumption, then your only way to increase volume is to sponsor downline in hopes that they will also do their 100 PV as shown in the plan. And even if you are somehow able to accomplish this and sponsor a bunch of people as shown in the plan, chances are that many IBOs will "do nothing" and of the remaining, some will move 100 PV, but they will likely quit in one year or less as they discover that making sales difficult to impossible, and sponsoring downline is no easier.

In many or possibly most cases, IBOs are only selling the Amway opportunity and not Amway products. They sell the possibility or hope that they will build a business, walk away and collect untold wealth for the rest of their lives. It just isn't going to happen. Say for example, you sold 100 PV monthly on a consistent basis to customers. These customers will automatically go online and make purchases when they run out of their products. If you are lucky, they will also refer friends to make purchases. But most IBOs do not sell products, they are selling the opportunity. And since the opportunity doesn't pan out for most people, you have constant churn but not enough actual sales to sustain your business. If you were an IBO and quit building the business, but you had enough repeat customers to move 300 PV for example, you would make over $100 a month in retail profits and PV bonus. There would be no reason to quit, even if you weren't building a big business. But that isn't the case. People who make nothing or lose money will quit. And that is exactly what I believe happens in Amway.

That brings up the next point about why an Amway business is not sustainable for most. The products cost more than most other retailers. That will limit the potential for customers and referals. Amway defenders like to cite quality issues, but most customers who shop online aren't familiar with Amway products and have no way to know whether Amway has quality products or not. That leaves them to decide based on prices. And Amway in general, costs much more than Walmart for the same or similar products. A tough sell indeed. Also, when it comes to soap or other household goods, people simply don't care about having "premium" goods, the value is in the price. And for these reasons, Amway IBOs fail.

Amway WWDB Facebook Page?

Some quotes from an Amway WWDB IBO on her facebook page. Can you recognize the "tapespeak"? Now I'm sure this is a good and motivated young person but she looks like she's been bitten by the Amway bug hard.


"What would you do if you could save 50-100 dollars extra a month?"

"Who's ready to change their life and be finally independemt?"

"Anyone interested in being an entrepreneur? Work in network marketing? It's work but it can help you live a better life. Having extra income so money is not a worry. Being able to live and work ( or not work). Most importantly to be able to live your dream whatever that dream may be... here is the question of the day what is your dream?"

"There is a HUGE job opportunity with Amway and world wide dream builders. If you have a big dream you would like to accomplish but need the financial freedom to do it!? This is a great way to get of the path everyone else is taking. Plus no money cap on what you can make!"

"What is network marketing?... I have heard so many people tell me that it's a scam. The truth is its not a scam. It's a way to buy into a buisness get great products, become a consultant or independent buisness owner and get paid for sharing it with other people. Tell me would you rather be your own boss, make your own hours and have no cap on what you can make OR work under someone, have a set wage, work long hours and fight to get days off? Personally I'm quiet fond of the first option just because there is so much I want to do in life and I don't want a set wage to tell me what I can and cannot do. What would you rather do on this beautiful day?"

"People following there dreams is what built this country. What is your dream?! Always follow your dreams. You never know where they may take you."

"I have been asking a few people of what their dreams are, my dream is to be able to spend more time with my family and my horse and not have to worry about that next paycheck. What's your dream and why. Otherwise take a chance to make it come true"

"I was just out of college when this opportunity to own my own online business came into light. I cant imagine my life without this business."


Link:

https://www.facebook.com/Financial-independence-via-Amway-WWDB-1493218800956662/

Amway Facts?

So many people get duped into thinking that they will somehow get wealthy by becoming an Amway IBO. Many recruiters will tell stories about how they were once broke, but signed up, endured challenges and now they are diamonds enjoying untold wealth and luxuries. They even "show" you pictures of mansions and cars as *proof* that they are wealthy. People get caught up in "dreams" and are often encouraged to ignore the facts. People running businesses should pay close attention to the facts because it tells you much about your business and your likelihood of success. But what are some facts about the Amway business that many people don't know about? I have outlined a few important ones for those who harbor dreams of going diamond.

1. The average diamond, according to Amway, earns around $150,000 a year. Yes, some of this may be supplemented with money from the sale of tools, but after taxes and business expenses such as travel to and from the many functions that a diamond attends would probably leave a diamond living an ordinary middle class lifestyle, not one with mansions and sports cars as portrayed in many functions or meetings. Yes, a Q12 diamond would have more earnings, but a Q12 diamond is the exception, and not the rule. You could argue that a diamond's job of speaking at functions is easier than 9-5 with a boss, but still, a diamond basically has a job.

2. Most IBOs are NEVER able to sponsor a single downline. Pretty hard to develop six (6) downline platinums when most people cannot sponsor anyone. Even those who can sponsor a few people, will find that attrition will make it impossible to keep these IBOs involved and active. It's also difficult to overcome Amway's reputation and uncompetitive pricing.

3. Most Amway products are purchased by IBOs and not sold to customers. Name a real business that sustains itself by having it's own workers or salesforce purchase most of the goods. MLM is probably the only business where this occurs. Understandably, it explains why probably 99%+ Amwayers lose money when factoring in tool puchases.

4. For most IBOs, the cost of functions, standing orders and other support materials represent the reason why most business building IBOs lose money and it also represents a significant profit for some of the diamonds who sell the materials. A serious conflict of interest in my opinion.

5. Not working hard is not necessarily the reason for someone's failure. But conversely, working hard does not equate success in Amway. I would guess that out of those who work hard, it is still a fraction of 1% of hard working IBOs that ever attain a significant profit. Doing nothing won't get you anywhere, but in this business, working hard often gets you nowhere as well. It is my informed opinion that the cost of the support materials is the direct reason why so many IBOs lose money, even out of those who work very hard.

I could go on and on, but these are a handful of facts that IBOs and information seekers should be aware of.

Living On Amway Island?

Imagine an 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 tigh 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 monthly 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 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 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 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 went down 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 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 would happen if there was a city 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.

Edification In Amway?

Edification. During my time in the Amway business, we saw many IBOs get edified, including myself. Of course it felt great when your upline platinum or diamond would say something that made you stand out in the crowd. For example, I remember an IBO being exalted because he quit his job to attend a major function. His boss wouldn't allow him to use vacation time so he quit to attend the function. I remember Brad Wolgamott telling people it's just a job, attend the function and get another one (job). I remember at a family reunion function, a man was edified by the diamonds because he was diagnosed with terminal cancer but instead of being at home and bitching and moaning, there he was at an Amway function, making a difference in the world they would say. But looking back, I truly believe that the upline's intentions were to uplift those who went thru extraordinary efforts to spend money on tools or functions.

In other words, you are buying your edification. Of course when I say you are buying your edification, you are not necessarily doing so in dollars. It can either be in dollars or in time. For example, you may have been edified for listening to 15 standing orders in one day, or you may be edified for driving the miles to show plans, even if the guest was a no-show. I also recall some IBOs in the group being edified for 1000 PV personal use in a month. I honestly don't know how anyone can possibly do 1000 PV in personal use without the purchase of some big ticket items. I mean how much SA8 or LOC can anyone use in the month? I suppose that you could make Nutrilite vitamins your main source of food or something like that and move a lot of PV, but it's ridiculous to spend that much on personal use. Isn't the idea to replace your normal purchases with Amway products? Did anyone spend that much on consumable products prior to Amway? Somehow I don't think so.

So to what extent are you willing to go to get edified? For my upline sponsor, it was what he lived for. My sponsor was/is a physician and he therefore could have a nice lifestyle without Amway but he was more interested in the recognition and edification. He ate it up when he was asked to speak at a function once. He told the group in a nite owl that the dream of being on stage as a diamond was more important to him than the money. Sadly, he never got beyond the platinum level as far as I know and last I heard, he was below 2500 PV. Whatever your dream or reason for building Amway, I honestly believe you need to look at the cost of it. For example, you wouldn't sell your soul to the devil in order to go diamond, or at least I hope you wouldn't. I actually wonder how my former sponsor feels these days now that our upline diamond (his hero) has moved to Washington and he cannot spend much time with him anymore?

The cost of edification in Amway is high. Are you willing to foot that bill? I'm glad I woke up and decided that there are much better ways to spend my time, money and efforts. Joecool's blog is one of the better things. :-)

The Real Amway Scam

A lot of people come and go in Amway, but many of those who come and go don't even notice the scam. They get sold on what they believe is a business opportunity that they can maksome money at, or at the very least save some money on products that they would normally buy anyway. If they do it right, they can possibly make some "real" money and with some had work, you can build it right and have the option one day of walking away from Amway and living off ongoing residual income from Amway. It sounds reasonable and therein lies the scam.

For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam. Amway's distributor force turns over about 50% each year. How can you build a residual income empire when half of your downline quits each year? I believe Amway diamonds trade their 9-5 jobs for the night shift. They work at night and into the morning hours because they are working to replace people who quit and to support downline platinums who might struggle or fail to re-qualify for that level. If upline says they are working for the love of their downline, I call BS on that. If walking away and enjoying life was an option, why hasn't anyone chosen it?

Now you could argue that a diamond's "work" isn't that bad and they aren't reporting to a boss. And that would be true, but I imagine the pressure of churning peope in and out to keep qualifying can be stressful in itself. If you live on an island like me, you can eventually have trouble finding new people to work with. In 1997 or so, there were a bunch of diamonds in Hawaii and they all moved to the ainland. Now I"m not sure why but my upline diamond was Harimoto, who loved the ocean and the beaches. Yet he moved to Washington state. I believe they needed new grounds to mine, just like gold miners.

The next part of the scam is how IBOs will tell you about Amway's generous money back guarantee. 100% they'll tell you. What they don't tell you is that the guarantee is only on some of the products and the sign up fee. The cds, books, voicemail and functions are not sold or run by Amway. And these expenses can be very significnt over a period of time. IBOs and prospects need to know this. You can lose thousands and get back pennies on the dollar asking for a refund on the sign up fee and perhaps a few products. Another piece of the scam.

Also, IBOs and prospects are often shown only the very best case scenario (such as going diamond) but not told that your chance of being struck by lightning is much higher than your chance of going diamond, even though going diamond is not a random event. A real life and likely scenario is getting in and trying hard for a while, and then quitting with some business losses. At least if you know this and still try anyway, you will have done so with full disclosure.

Lastly, it's insidious in my opinion, for upline to tell you to trust them and to do as they say, and then turn around and tell IBOs that failure is their responsibility. That they didn't work hard enough or do thing just right. That sure isn't what they are preaching when recruiting you into the business. They are saying how sharp you are and how you're likely to tear up the business. But it's just another facet of the scam. I've outlined the parts of the opportunity that I believe are scams, but I'm sure it's not limited to my point of view.

Good luck if you read this and join anyway.

Joecool's Amway Sponsor?

This blog post is about my old Amway sponsor who started sometime in 1993 or 1994 and last I heard, he was still active in Amway. At one time, he reached the level of Gold direct. I believe he peaked there and has never surpassed that level. I don't know where he's currently at but I can confirm he's still active and I can confirm that one of my former cross line, who was one of his loyal downline, is still active. My sponsor was/is a physician and I knew someone who had contact with his office so I had some information passed on from time to time.

My sponsor (Let's call him Jim) approached me to join shortly after he joined and I declined his offer to join, telling him to visit again if he made any money. He came back some time later as a Gold direct and I joined (my story is on this blog). I am of the belief that if you repeat a lie long enough, you begin to believe it. My sponsor, while probably not making much from tools, pushed them hard. He also helped to perpetuate the lie (at the time) that nobody made money on tools. He was a good soldier. He kept repeating what upline told him and never let up and never quit.

I believe my sponsor may not have been in Amway only for the money. I mean, he wanted to go diamond and leave his medical practice behind, but for him, it was more important to receive adulation from the group and he told me he really wanted to be on stage because he has always dreamed about speaking to a large audience and being treated like a rockstar. For that reason, he was really pushing me hard because he thought I would be his first downline direct.

During my tenure as IBO, I was growing quickly and my sponsor was in contact with me almost daily. He would even drop by my house at midnight sometimes, to see if I was home or out building the business. As my business grew, he became more and more "controlling" of my activities. He wanted to be involved in every decision I made. He told me I should ask for advice even for things like buying a new car, or even getting married. At the time, I had a girlfriend and he told me to ditch her, build the business to diamond and I could choose any of the single ladies in my group. At that point, I knew he went off the deep end and I thought about it and quit. At 4000 PV, I wasn't making any net money despite upline promises that I would. I told my group I was leaving and explained why. They all went with me except 1 or 2 IBOs who had developed loyalty to the upline. (That girlfriend has now been married to me for more than 20 years).

After I left Amway, my sponsor Jim called a few times, asking how I've been and whether he could help me with anything. This is a technique called "stirring the pot" and was taught by a diamond (possibly Dave Severn) and the intent was to stir the pot just to see if there was any renewed interest or curiosity that you can capitalize on. I wasn't biting and I shortly after, got on with my life and forgot all about Amway. I tried to keep tabs on Jim just to see if he would wake up or keep going. Well, from all accounts I could access, he was going as strong as ever, but not making any progress. That didn't surprise me at all.

Then in 2001, my wife and I were purchasing a house (without asking anyone's permission!) and our real estate agent was also an acquaintance with Jim. After we purchased our house for about $300K, our agent asked Jim if he would also like to look at homes. Jim declined, saying it was a bad idea to pay interest on loans and would buy a home when he could pay cash. (Typical Amway teaching). So as of today, Jim, a physician is still renting a home, and me, a former quitter, and bitter broke loser, owns a home recently appraised at more than 800K. (Hawaii has a real estate boom between 2002 and 2007). That's quite a good appreciation on my investment, which Jim missed out on because of adherence to bad Amway upline advice.

I last ran into my sponsor Jim about a year ago. We just said hi and exchanged some pleasantries. I later told my wife, I feel sorry for him. He sold out 1000% on Amway. He probably did everything upline asked of him. He sold out on the system. I know he drove the miles and worked the system hard. I know he did this for more than 2-5 years. I know his kids grew up missing a lot of his spare time, likely due to functions and meetings. While I'm sure a physician can still provide well for his family financially, I wonder what he missed while he was, and is still chasing an impossible dream?

Your Amway Upline "Helps" You?

Over the years, I have encountered many Amway IBOs and they often have a common theme. They trust their upline to a fault and in some cases, consider them mentors. Now in a business venture, it might be good to have a mentor or someone to guide you, but in the Amway opportunity, most of the upline mentors make money off those who they mentor. That is a major conflict of interest but IBOs simply fail to see it. Just about any "help" you receive results in compensation for someone upline. Upline should actually be paid consultants with no accountability.

When an IBO sees the plan in a big meeting or function, the speaker will often be built up as a financial guru, and possibly as an expert on how to succeed in Amway. An IBO may hear something about the trail was already blazed by upline and you just need to follow the trail. Don't re-invent the wheel, just copy what upline did. But as I have said many times before, duplication sounds easy and looks good on paper, but in real life, the vast majority of IBOs run into problems that they simply cannot overcome, such as the bad reputation that the Amway name has in the US. Uncompetitive prices for products do not help the cause either. If you don't believe that, go and do an honest price comparison.

What is troubling however, is that IBOs are taught to trust upline and do as they say (defacto requirement), but they are also taught that failure is due to their own shortcomings, even when they do exactly what upline told/advised them. It is also troubling that many uplines will tell their faithful followers that they need to purchase more and more tools (voicemail, cds, seminar tickets). In some cases, an upline may advise their downline to sacrifice basic family needs to buy these tools. I saw some IBOs who were advised to skip meals to buy a cd, or skip paying the mortgage to be able to attend the next big function. One diamond even taught about the foreclosure procedures so people could skip a payment. That same diamond talked about how long you can hold off the electric company before being shut down. The results o this bad advice are devastating for some. I saw some fellow IBOs go bankrupt and/or lose their homes following this advice.

I might also add that as a newer IBO or prospect, you may have heard that "everyone starts at zero", or that it's a level playing field. It is not. As a new IBO, you will likely be in the 100 PV bracket. Since Amway pays out about 31% in bonuses, your upline(s) will split up about 28% in bonuses off your efforts while you get a 3%bonus. That doesn't sound very level to me. In addition, you as an IBO are paying for this priviledge when you buy tools.

So each IBO should look at things objectively and see if your upline is actually helping you or simply helping himself by giving you advice that ends up in profit for himself with little or nothing for you.

Amway WWDB King Pin Puryear Passes Away?

http://www.spokesman.com/stories/2016/jun/03/amway-impresario-ron-puryear-is-dead/

James Ronald Puryear, has died.

His office in Spokane Valley, World Wide Dream Builders, confirmed his death but declined to provide any other information.

At one time World Wide Dream Builders had more than half a million distributors in over 30 countries. Puryear, known as Ron, ran the business with his wife, Georgia Lee Puryear.

Locally, the Puryear family may be best known for the construction of a 26,000-square-foot vacation home along the Spokane River in Post Falls. The “Amway House” quickly became a landmark for boaters when it was built over the course of five years, starting in 1995. It features 13 bedrooms and bathrooms, a saltwater pool, immaculate grounds, stunning views and several boat docks. It’s currently for sale, priced at just under $10 million - down from $20 million in 2010.

During construction, neighbors complained that full-size Greyhound buses loaded with Amway distributors would stop by on their way to Amway conferences in Spokane.

Joe's commentary: My condolences to his family. He is the third crown ambassador in recent years to pass away (Bill Britt and Jim Dornan). Oddly enough, despite a great degree of alleged wealth, these crowns never "walked away" from Amway to quietly enjoy life. They ironically and apparently worked until they could work no longer. Rest in peace.

Amway And Poker Championships?

Every year at about this time of year, Binion's Horseshoe Casino in Las Vegas organizes the "World Series of Poker". Thousands of people fly to Las Vegas, pony up $10,000 and play in the main event. Most people expect to lose their money but they think of it as an experience. Some people hope to win, but ultimately, there can be only one champion. There will be a small group of people who actually take home more than their $10,000 entry fee, but the vast majority will lose money. Most people are aware of the tremendous odds against them winning at the final table, but they press on anyway.

The Amway opportunity, as promoted by the Amway Motivational Organizations (AMOs), operate in a similar manner. The main difference is that most prospective IBOs go into the venture expecting to win, and there is no assurance of there being a champion (new diamond). In the Amway opportunity, there is the real possibility of all the IBOs losing money. Sadly, as I said earlier, most participants go in expecting to win. Most participants do not realize the tremendous and overwhelming odds against them making a net profit, let alone achieving the legendary "diamond" status.

In both scenarios, the vast majority of participants lose money in order for a few to win. The difference is that poker players generally understand that they are likely to lose, whereas Amway participants are often mislead into thinking they are likely to succeed. Most Amway participants figure this out and quit. The difference here is that poker players generally do not quit playing poker. Most Amway participants want nothing to do with Amway or its products when they quit.

This can be confirmed by the fact that former IBOs generally do not continue to purchase Amway goods once they are out of the business. If they did, then Amway sales would continually increase even if their IBO force were to shrink. But that isn't the case. I recently read some Amway supporters bragging about an increase in IBO retention, but even if true, it doesn't appear to be translating into better sales or an increase in the number of new diamonds emerging from the systems.

If I'm not mistaken, I believe there were far more World Series of Poker Champions in the last ten years than new diamonds and emeralds in North America. (The World Series also has smaller events, thus there are many many more champions than new diamonds and emeralds)

Amway Is Foolproof?

One of the pitches I heard about Amway was that it's basically "foolproof". And what the speaker meant by that is that when you join Amway, you either make money or save money because you save about 30% by buying from Amway. On the surface, that sounds like a can't lose proposition. How can you lose when you either make some money by selling tuff or at least save money by purchasing at a discount from your own "store"? Well, if you take the statement at face value, you'd be a fool not to sign up right?

But most people do not check into these statements with a skeptical eye. Amway products are generic in nature, but premium in price. And they have to be because Amway's "generous bonus" to the IBOs are included in the cost of their products, not to mention Amway has to make a decent profit. For that reason, you would be hard pressed to find similar products at WalMart or Costco that aren't a fraction of Amway's prices. Take the time to do your own comaprisons and you'll see. Also, the 30% savings that is referred to is 30% off full retail price for Amway products. It is not a 30% savings from comparable products you can get at WalMart or Costco. So a good example, is Amway's flagship vitamins (double x). Double X multi vitamins (30 day supply) is around $80 at full retail price and the IBO price is about $52 or so. So yes, you have significant savings as an IBO from the full retail price. However I can get a 90 day supply of multi vitamins at Costco or WalMart for about $24.99. You can argue quality, but there are no unbiased scientific studies that indicate that Amway vitamins are any better.

The other flaw in Amway's foolproof opportunity is Amway's money back guarantee. Amway has a decent return policy on products that aren't satisfactory and they may even refund your sign up costs for the business opportunity. But here's the flaw in that refund policy and in the past, resulted in Amway settling (without admitting fault) to pay damages for people who lost money running Amway businesses. presumably following bad business advice by Amway uplines and diamonds. So look at it this way. You get lured into a business opportunity where you can spend significant time and money after signing up to be an Amway IBO. You can follow upline advice amd you can still lose a lot of money. For all your lost time and money, Amway might make some product refunds and refund your small sign up fee. Despite what you may hav been told, you may have endured sigificant financial risk running an Amway business. Some people have lost thousands, tens of thousands and even hundreds of thousands trying to build their business. It's no consolation to get some product and possibly the sign up fee refunded.

Therein lies the scam. If you are trying earnestly to follow upline advice and "hang in there" and try your best, you may expend significant time and money trying to succeed in your Amway business. Big deal if Amway gives back the sign up fee. What about the thousands you may have spent on standing orders, attending functions, ordering books, and "driving the miles" to succeed. While Amway may have some small print disclosures about how you may not achieve the same results, there certainly isn't the kind of full disclosure that legitimate business opportunities have. And Amway is legally separate entities from their IBOs because they are "independent". In my opinion, the only way to stop this is to hold Amway accountable for lies and deception used by their IBOs. And that's how it should be - because if someone lies or deceives to get someone to sign up and build the business or to sell products, Amway is certainly a beneficiary of those lies and deceit. They should be held accountable.

Amway is far from foolproof, unless you have been fooled.

Outearning Your Amway Sponsor?

One of the silly defenses that Amway supporters use to defend their business is that it must not be a pyramid or it must be legitimate because you have the opportunity to earn more than your sponsor. While many downlines in fact do earn more than their sponsors, it's likely because about half of all IBOs don't stay for even a year and factoring the business expenses for those who are on tools, the reality of suffering business losses also causes many people to exit the business. It's not that hard to earn more than people who quit. But even at that, someone who quits is often better off than IBOs who continue.

An IBO at the 100 PV level will earn about $10 in bonus income from Amway. If they are attending functions, buying standing orders and voicemail, they will operate at a loss. Thus, unless their business grows each month (highly unlikely, even if they do as upline advises) then they will suffer losses each month and those who quit will be better off. It is why I have stated that doing nothing or staying home and watching television can honestly be better options than joining Amway and the systems such as WWDB, N21 or BWW. It is why reasonable people can conclude that working for minimum wage, even a few hours a week makes you better off than joining Amway and the systems.

The defense that someone can outearn their upline is silly. The true benchmark of this statement would be for a new guy to start a business, and in 2-5 years, outearn a long tenured diamond. It will never happen because upline has direct influence over the fortunes of their downline, even at the diamond level. It is why you have seen diamonds quit, or split from their upline to start their own training systems. They cannot affect change from downline, without upline consent, thus the breaking away from their "mentors" or leaders. At times there have even been lawsuits over the tools income. Do people really sue their mentors? Don't diamonds teach you that suing people is wrong? That you don't get something for nothing? Yet they want you to believe you can build your business "right" and then sit back while the cash rolls in like crazy.

You can surely outearn your sponsor. All it takes is for your sponsor to quit. However, your sponsor quitting might mean you don't outearn your sponsor. See my example above. Taking losses is not outearning someone. Keep in mind that everyone in Amway is equal. You are all unpaid commissioned Amway salespeople, bound to Amway's terms and agreements. You don't own your downline. You don't really own much as an independent business owner. You can outearn your sponsor, but that means squidly diddly when your sponsor makes nothing or takes a loss. Come back and chirp when you outearn your upline diamond. Do I hear crickets chirping now? :-)

Amway Freedom?

When I was an IBO, I often saw my upline diamond driving around town dressed in a business suit. I used to wonder why he keeps working if he can "walk away" and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios, the diamond is working to help his downline out of a genuine concern for them, or possibly he is working because he has to! The only difference now is that the diamond works the nite and/or graveyard shift, because many IBOs are building the business after the complete their day jobs. This is probably why diamonds sleep until the "crack of noon", because they are working all night!

Now Amway has stated that the average diamond earns about $150,000 a year. That is a decent income, but after taxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts. I do not believe there is any "residual" income from the tools business.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining his group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle, and stays in 5 star hotels. It is probably why diamonds need free transportation to and from the airport and why they stay with friends when traveling as much as possible.

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle to upper middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nites and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next. It is very expensive and time consuming to travel from city to city showing off your freedom and diamond lifestyle.

Is this the freedom you are seeking? But we are supposed to believe that a diamond can walk away while cash keeps rolling in but they "choose" to keep working? Over the years, I've challenged may IBOs and Amway supporters to name just one person who built an Amway business and walked away, and lives in luxury because the Amway residual income keeps coming. So far that challenge has gone unanswered.

The Facts Don't Matter In Amway?

One of the things our group was told in Amway was that "If your dream is big enough, the facts don't matter". WHat I took this to mean was that no matter how overwhelming the odds were, you needed to keep going so you can be a winner and go diamond. I also heard on some tapes/cds that "so and so" made a decision to go diamond. Well, regardless of what anyone says or decides, the facts do matter.

A diamond group has at least 6 downline sponsored groups that qualify at the platinum or direct distributor level, When I was an IBO, we had to actually phone in orders, pick them up and then distribute the products. We also had to track volume and issue bonus checks to downline. In that regard, things are easier now as Amway ships products to you and issues checks to qualified IBOs. An IBO's work is much easier in that regard.

But let's look at the facts again. 100 PV is equal to about $300 in product purchases. If an IBO is unable to sell enough product, then to qualify, that IBO must end up purchasing their own volume to qualify. That is why so many IBOs rack up debt and often get stuck with products they can't use, despite what people claim is a good return policy by Amway. And the fact is that Amway products are generic in quality but premium in price. That is a difficult issue to overcome. People are not interested in paying premium price for household commodities. It's also why WalMart is incredibly successful.

Sponsoring people is difficult. Most people never sponsor anyone. And even if you sponsor people, there's a good chance they'll do nothing and quit. How can anyone build a business under these circumstances? The prices of the products are too high, you have a minimum quota to qualify for a bonus, and sponsoring people to leverage your volume is difficult to impossible given Amway's name reputation. These are facts. Even if your dream is big enough, you are unlikely to be able to overcome such daunting problems.

The statement that the facts don't matter if your dream is big enough is BS. It's a ruse to get people to continue and persevere even when the facts simply don't add up. It's as if Amway is some lottery ticket and people get hooked into the system, thinking success is right arond the corner or that they will succeed ifthey don't quit. But the reality is that Amway for some, is like a person with a gambling habit. They will only go deeper in debt and will not get better until they quit or their funds get cut off. In business it is only the facts that matter.

Let me repeat. In business, only the facts matter. Your dreams and wishes are nice, but there must also be a dose of facts tossed in. For example, I can "dream" of playing in the NFL. But if I'm 5'7 and I run a 5.1 40 yard dash, that dream will not come true no matter how much I want it. The measureable facts tell me so. It's no different in Amway.

I'll end with a funny story. An IBO some years ago told me he wanted to wager that his upline diamond made more money taking a crap in the morning than I earned in a whole year. I generously allowed his upline a full hour to take a crap and when we did the math (facts), his upline's one hour didn't come close to what I earn in a year. That's a fact. Of course the IBO never paid up. LOL