Friday, October 14, 2016

How Much Money Can An Amway IBO Lose?

When I was recruited into Amway, I was told that I could make money, which would roll in forever and ever. Residual income. That was the concept that appealed to me when I was recruited. I was also intrigued when I was told that I could do as much or as little as I wanted. I winded up signing up for Amway sometime in 1997 or so.

However, when I signed up, my sponsor told me that I would be wasting my time signing up to sell products (not verbatim). That if I was going to get involved and spend the time, I may as well try to build an organization and make the big bucks. I consented and then he immediately told me that I needed to get on standing order. I was told that standing order was a tape subscription and it was only $6 a tape. Nobody ever mentioned that every other week, it was a two tape set so basically, you are buying at least 6 tapes (now cds) per month minimum.

After a week or two, I had registered a couple of my friends into the business and my sponsor tells me that I cannot be a leader without attending all of the functions, and that I cannot listen to the same tapes (cds) over and over. That's when my expenses shot up like crazy. Of course I was excited with the folks I had sponsored so I went along with the plan, and I was edified for it so it seemed like I was "being an emerging leader" and was propped up as an example of how to build an Amway business.

Amway defenders question how I could possibly spend an average of nearly $1000 in a month for tools. Here's the breakdown, and although my WWDB group experience may not apply to all, I certainly continue to hear similar stories of abuse.

Standing order $36 a month. (6 tapes a month @ $6 each)
5-7 extra tapes each week $$120 - $168 a month
Amvox (voicemail) $24 a month
Open Meeting $6 a month (plus parking fees)
Regional functions $24 a month (plus parking fees)
Subtotal: $258/month (not including parking fees)

Major functions (4 times a year) I live in Hawaii, and major functions required mainland travel at peak travel times (January, March, July, October).
Round trip airfare $700
Hotel: $240 (for 2-3 days)
Rental car: $150 - 50 per day for 2-3 days)
Function tickets $100 to $150
Meals and other misc expenses pushed a major function to over $1200 for each trip.

These costs, not including gas money, totals about $8000 a year. Add in the cost of products and you are spending about $1000 a month on Amway. Yes, the products are not a business expense, but then again, how many of those over-priced products would you buy if you were not an IBO? Do any former IBOs still buy double x? Do IBOs actually sell any double x? I believe these customers are rare.

If your sponsor told you that Amway would cost you nearly $1000 a month (higher end, including product) or $100 a month (low end, not including products), would you still join? Once you agree to register, the expenses are then slowly revealed to you and in many cases, called investments into your business. Be wary and ask tough questions as to whether these items help you to make a profit, or whether they take away your profit.

Upine will often lure you in by giving you tools or cds and even paying for your first function or two. But if you show signs of interest or if you sponsor a downline, you will become a "business owner" and you'll be expected to do the same for the downline you sponsor. Amway can become an expensive lesson in why you should avoid MLM altogether. Caveat Emptor.


Ankit Raj said...

Hi, i am also an abo of amway since past 2 years and i did not find such big expenses that you had mentioned above. And i am happy with what i have chosen. This is my view altogether but seriously i and my colleagues did not face these situations.
No offence by the way.
Thank you

Mark Kunkle said...

This is a good article and very representative of how MLM gets a bad name. Frankly I do not know how Amway stays in business. MLM is by far the best way for an individual can make a killing. Stay away from Amway. There are many other MLM's that are no brainers. Am
bit Energy for example has a true residual because it comes from what you pay for already - Energy.

Additionally, with the inception of apps - the game has totally changed. Quit Amway and take a look at apps. This is the future. Amway is the past.

Mark Kunkle

Joecool said...

Ankit, but you did not mention making any net profit. Did you simply have smaller losses?

Joecool said...

Sorry Mark, MLM is just a legal way to extract money from downline. I have yet to see one where downline are exploited so some (insert gem name) big shot can live an asy life.

John Doe said...

Mark said, "MLM is by far the best way for an individual can make a killing."

Sorry, but this is not true, has not been true, never will be true, and continues to be a perpetuated lie by MLMers to lure unsuspecting consumers. MLMs are famously known for having lost more people money than any other business venture, and have the highest failure rates across the board.

Mark said, "Ambit Energy for example has a true residual because it comes from what you pay for already - Energy."

Mark, you must have missed the massive lawsuits Ambit has been hit with, and the continued complaints about them raising rates unexpectedly on people due to the deregulation of their energy markets. Ambit is just like Viridian which is just like Ignite...a very very bad middle man that tricks people into switching energy providers and then raises rates to insane levels.

Mark said, "Additionally, with the inception of apps - the game has totally changed. Quit Amway and take a look at apps. This is the future. Amway is the past."

Can you elaborate on this point? I don't understand how apps make MLM better? MLM in itself is an antiquated system based on people getting friends and family members into businesses. How do apps have anything to do with this?

Anonymous said...

To John Doe:

This guy mark Kunkle is merely taking advantage of Joe Cool's excellent article on the faults of Amway in order to surreptitiously draw prospects to his "Ambit Energy" MLM. I've seen this happen time and again at anti-Amway websites.

Here's the usual scenario: The website director or chief blogger puts up a devastating piece on the fraudulence and theft that permeate Amway. The piece draws a lot of attention from Amway IBOs, who are naturally interested in information that their up-line won't give them.

The article upsets them and gives them doubts (rightly) about the entire Amway racket, and they begin to think of quitting. And then along comes someone like this Kunkle character, who immediately tries to hook them on some different MLM scheme that is "better than Amway," or "part of the future." What the guy is hoping to do is to get disappointed Amway IBOs into his organization, and bleed them just as they were being bled by Amway. He's trying to hook them "on the rebound," as is sometimes said concerning romantic breakups.

It's a sleazy and contemptible tactic. But I never put anything past the creeps who are running MLMs.

Anonymous said...

Not to forget, how much you have to spend for your fuel when driving to open meetings?

Anonymous said...

Opportunity is same for all in a beginning. You have to make a step fwd if you want to move.

Anonymous said...

What the bloody hell does THAT mean? Did you get it from a fortune cookie?

Anonymous said...

Amway hooks you by telling someone how much money you an potentially get you into the program. They throw the books, CD's and tickets to rallies after you signed up and buy your kit. Common sense would tell you that it's not a good business opportunity if you are pouring more money into something than what you are actually making. Amway has their IBO's stop thinking critically and instead have them think emotionally. I did Amway for about 6 weeks, and quit before the first major function.