Sunday, September 4, 2016

Just The Facts Please?

If anyone's been involved with the great Amway debate, you'll notice that the "pro Amway" aruments are full of anecdotal stories and best case scenario situations, or showing off a guy who allegedly made millions. After all, even an MLM scam must have some success stories, or you couldn't recruit enough people to sustain the scheme. But in the end, even the most staunch critics of Amway don't claim there is no success in Amway. They mainly claim that the success of the few, comes at the expense of the masses. What the pro Amway arguments never contain are logical and reasonable explanations, math included, on how more than a tiny percentage of people can reasonable be expected to succeed.

Recruits are shown copies of large checks, or pictures os mansions or the latest sports cars. They are alleged examples of what you can attain with a part time effort. The success is allegedly attainable to all. Anyone can join, work hard and follow your upline advice and you simply can't miss. If you fail, it's because you didn't work hard enough, or didn't do things "just right". But at the same time, the business is promoted as "simple" or "duplicatable" (just copy) and that "anyone" can do it. "Anyone" can do it, just as "anyone" can win the lottery. What they never mention is that "everyone" can do it. In a job, you may not make a lot of money, but everyone who does some work will receive a paycheck and have a net gain.

In Amway, the masses (including those who work hard) make nothing or lose money. It's a product of the MLM system. In Amway's common 6-4-2 plan, it shows 79 IBOs. One IBO is a platinum and the rest are not. The plan also assumes that ALL IBOs did enough to earn a bonus. In reality, a platinum would likely have much more than 100 downline. Some do little or nothing and some work hard. The result is a few winners and a mass of those who make nothing or suffer losses.

But to this date, not a single Amway defender has delivered a reasonable explanation of how someone can work the business and actually make money. They may say to gather 20 customers who buy $25 of stuff a month, but in all my years, not a single IBO has demonstrated that they have that kind of customer base. And Amway products are so overpriced that a lot of customers seems implausible to begin with. Most purchases come from sympathetic friends and family, at least that's my take (and experience) on the matter.

So while the debate goes on, the critis support their claimes with math. Such as the average income of all Amway distributors is about $100 a month and if you disregard "inactive" distributors, then it's about $200 a month. But think about this, how do you build a residual income empire with a downline where about half of the IBOs are "inactive" and the "average" income of the "active" IBOs is about $200 a month. And that $200 average includes diamonds and crown ambassadors. Food for thought. The diamonds skew the averages because they have higher earnings. Most IBOs who earn a bonus move 100 PV, which qualifies them for about a $10 bonus. That's the likely scenario for most IBOs who give the business an earnest try. What is not told is earning $10 a month while spending hundreds on cd, functions and books is not a winning proposition.

Even at my 4000 PV level, I was only at break even when factoring in the average cost of the Amway tools. So what is the inevitabke result for the rest who never reach 4000 PV? The answer is business losses. I still haven't heard a logocal response explaining how I am wrong.


Anonymous said...

You're not wrong, Joe.

It's just that a great many persons in Amway are simply NOT RATIONAL. By this I mean that they aren't thinking in monetary terms that make any kind of sense. Lay it out for them on paper, with facts and figures, and they'll still defend Amway.

What's keeping them going? The hype, the social connection, the energy, the fanaticism. Ultimately, these people DON'T CARE if they lose money. They are psychological basket cases who are desperate for a sense of inclusion and solidarity and comradeship.

This is what Amway feeds on: the profound helplessness of losers, and their craving for friendship, human linkage, hope, and joy.

Anonymous said...

The only way you're going to get a stranger to give you $25 regularly per month for Amway products is get him to believe the following three things:

1. The products are of exceptional quality, and he needs them every single day.
2. The high price of the products is worth it.
3. He can't get anything of comparable value elsewhere.

These three things are precisely what the ordinary IBO can't manage to convince strangers about. The simple truth is that Amway products are mostly ordinary and you probably won't use them up in a month; their high price is unjustified, and you can get just as good or better stuff elsewhere.

When he realizes this, the IBO either quits, or decides that the main purpose of Amway is to recruit a down-line of your own IBOs, and to self-consume all purchases from Amway.

David Steadson and Bridgett Baron can jawbone to the contrary all they want -- that's the basic bottom line of Amway. Recruitment, and self-consumption.

Joecool said...

I doubt that anyone actually has 20 "real" customers that buy Amway stuff every month. I believe most customers are the IBOs themselves and sympathetic family and friends.

IBOFB and bridgett can jaw all they want but have never provided a real argument for Amway supported by numbers and real evidence.

Anonymous said...

Yes, recruitment and selfconsumption.

Selfconsumption is required here by Amway pins in eastern Europe:

Even czech diamonds claims selfconsumption is essential requirement (pity it is not in EN, but only CZ version). Who does not adhere to it, is actually not considered perspective Amway IBO.

They do here what would not be acceptable in US.

Up to that, what Amway does here is most probably tax evasion.

Recently Amway offices in Russia had been raided by FSB, because Amway Russia, though actually very succesful, generates losses year by year therefore not paying any taxes!!!

The same is here in Czech republic:

True is, they are not very succesfull here, but still only generating losses. Now it is around 600 - 700 thousand dollars in cumulative losses and really funny thing is, that based on czech laws, EY auditors recommended them to fill bankruptcy... :-)