Wednesday, December 7, 2016

Why Amway Isn't Sustainable?

One of the selling points of the Amway business is for people to do the work once and then reap financial benefits for life. 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. They don't mind paying inflated prices while they have dreams of untold wealth, but their desire for those products fade as their dreams fade.

If you are an IBO doing your 100 PV monthly, 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.

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 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. Making residual income sounds like a good idea, but paying for overpriced vitamins and other goods "wears out its welcome" once an IBO realizes that their Amway business will not deliver lifelong residual income.

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. And quality is subjective, so most people will decide on price alone. And on that basis, Amway cannot compete.

15 comments:

Anonymous said...

These blogs are boring...how is this helping you in life again?

Anonymous said...

http://www.justmeans.com/multimedia-with-summary/amway-president-doug-devos-encourages-participation-during-international

Joecool said...

Anonymous @12:25. If you find this blog boring, then beat it.

The information here has been useful and helpful to many.

Anonymous said...

How about you stop crying about Amway, start your own business(If you haven't already), expand so the people under you that is building your business are making over 200k yearly. Can you do that instead? No reward goes to a critic, you're better than that

Anonymous said...

Sounds to me as if 1 or 2 legs is where most of your "4000PV" flowed down. If that's the case then no wonder you're not profitable.

Joecool said...

It sounds more like you don't know what you're talking about. How much have you made in Amway? I'll bet you have a net loss.

Anonymous said...

To Anonymous at 1:27 PM --

You really are an asshole if you actually think that any IBO underneath you can be making 200 K per year in a rip-off scheme like Amway.

And if you're so hot and bothered by Joe Cool's website, why are you coming here to comment? Is it because deep down you know that Amway is a goddamned fraud?

People like you are the idiots on whom Amway gets fat.

Anonymous said...

Is it true that you are competing against your upline and other IBO's at the same level as you?

Anonymous said...

Anon @1:27PM That means that the only way to make 200K or whatever is by RECRUITING which means JoeCool is telling the truth.

Joecool said...

In any MLM, you can't possibly make any "serious" money in MLM. In the recent FTC vs. Herbalife, they found that Herbalife "bigshots' made their money by recruiting and not by sales to customers. And the vast majority lost money. Those are the hallmarks of a pyramid scheme, even though the FTC didn't charge them as such. The FTC instead, settled for fining them 200 million and overhauling their entire US operations to make them prove that they have a majority of retail sales to customers who are not Herbalife distributors.

I think Herbalife will survive because about 80% of their business is out of the US, but I believe the US operations will shrink.

John Doe said...

Joe,

Did you see how Edith Ramirez, chair of the FTC, referred to Herbalife? She basically said, Herbalife at this time can't be called a pyramid, but it also can't not be called a pyramid...this is the most politically correct statement to basically say Herbalife is a pyramid, but we can't come out and directly say it, because we had a settlement.

Joecool said...

Yes, I saw Ms. Ramirez' comments. I believe the FTC is allowing Herbalife to hang themselves. I doubt that they had significant retail sales to non distributors. Most products were bought by distributors and Herbalife relied on the churn of new distributors to stay alive.

Herbalife recently opened or isopening brick and mortar stores in Kansas so I wonder how that works with nutrinition clubs and copeting with Herbalife distributors? I believe Herbalife will fail in the US and rely on foreign expansion to stay alive. 80% of their business is overseas. It will be interesting. Stay tuned, Herbalife must implement fully, all the FTC injunctions by May 2017, so we'll see what happens.

Anonymous said...

IBO's have to spent countless hours recruiting new members and replace those members that quit. Recruiting is crucial to IBO's commission.

Anonymous said...

"Not determined not to be a pyramid." -edith's quotes on John Oliver's show.

John Doe said...

Thank you Anonymous for giving the exact quote! What a line from the chair of the FTC!!! After hearing that, how could anyone feel comfortable being involved in these companies when they are all under the same umbrella?