Thursday, March 31, 2016

Amway Numbers?

One of the things Amway IBOs are taught is to ignore facts, or to ignore numbers. I believe this is because the numbers are not pretty when you take a business like approach to the math behind the Amway business, for most IBOs. It is why upline teaching often "evolves" into things such as Amway saves marriages, or Amway makes you a nicer person, or that Amway is not about money, it is about friendships. That is a load of garbage. Business is about making a profit. If you hear some of these lines from your upline, it should be a red flag. Upline may also feed you other deceptive lines such as an IBO being successful because they showed up at a function, or because they just signed up for standing order. These are all just false lines to encourage an IBO who is not making money.

When you take a good look at the Amway presentation, the majority of IBOs are at the 100 PV level. At that level, they are spending about $300 monthly to reach 100 PV and for their efforts, they receive approximately a $10 check from Amway. Most IBOs will be encouraged to participate in some kind of system, often consisting of voicemail, websites, cds, books, seminars and other meetings. MOST IBOs will not recoup enough cash to cover any of these expenses, let alone all of them. At a glance, the system expenses may appear nominal such as $6 for a cd, $6 for an open meeting, $100 to $125 for a major function, $12 for a book. It is how upline gets you involved, and then after a while, an IBO starts to notice the negative cashflow and then a tough decision needs to be made. Either quit and cut the losses, or press on hoping that the system will eventually deliver on its promises.

What most IBOs don't notice, is that less than one half of one percent ever reach platinum. A fraction of one percent! And in many cases, platinums might break even or even suffer losses! So why would IBOs want to work so hard to reach platinum? They have less than a 1% chance of reaching that level. They have a tiny chance of maintaining that level, and they are still unlikely to earn any significant income at that level. A stody done by an attorney general in Wisconsin (Bruce Craig) revealed that platinum level IBOs averaged a net loss of about $900 annually. While Amway defenders will decry that the study is a bit dated, I will say this: The basics of the Amway business has not changed since that study was done, AND there are actually more system expenses today than there were back then, thus platinums may actually be losing more money annually than before. While not all platinums will lose money, I believe hard core dedicated platinums would stand to lose money.

As an IBO, I hope you are tracking your expenses versus your income. Most IBOs will see a negative cashflow month after month. Even though the Amway business is often promoted as low or no overhead, the system expenses (

Wednesday, March 30, 2016

Amway IBOs Empty Promises?

One of the things I often thought odd as an IBO was how our upline would keep teaching us that the Amway business was all about "helping people". Somehow, our upline felt that showing someone the plan or talking to them about the Amway business was helping someone. That is because our upline felt that everyone was ultimately doomed for financial failure if they didn't join Amway. Of course, nothing could be further from the truth now that I am looking back. In fact, I would have to say that building the business and purchasing tools was the CAUSE of financial disaster for some of my fellow IBOs. I remember reading about more than one home foreclosure and a couple of bankruptcies out of my cross line group.

It's like IBOs held some dark secret and they could save the world by sharing this secret with prospects. So the theme of many voicemails (Amvox at the time) was about how IBOs in the group were saving the world by helping people. I used to wonder how we were helping people when we basically only "helped" IBOs who wanted to build the business. If someone declined to join, they were forgotten and referred to as broke losers. Our upline said we threw them a life preserver but they rejected it, so we are moving on. it was often compared to a church activity where IBOs are saving souls. I actually found this extra weird because we were often taught that we could give the church money in the future ($10,000 checks) and we could serve in ministry after we were "free" because we went diamond. I find this ludicrous now, but at the time, we were told that this was delayed gratification. After I left Amway, I spoke to the senior pastor of my church and he opined that Amway was harmful to many because it simply held too many empty promises. In other words, they promote big dreams and wealth, but very few ever attain any success, for whatever reason. The pastor said the reason for the low success was not relevant. The fact that it was rare to see success was enough to conclude that Amway was not a good opportunity. He said MLM in general basically sold false hopes and dreams.

In fact, some diamonds can be seen as prosperity preachers. They speak about wealth attained through Amway when in reality their wealth may come from other source, such as tools income, yet they falsely promote Amway as their primary source of success. Then they bait and switch IBOs and tell them that the tools system is the only way to succeed, all the while profiting handsomely from the tools. They then justify their conflict if interest by claiming that IBOs are helping people and/or doing God's work by joining Amway. I believe many IBOs are giving false hope and promises to prospects as taught by upline leaders. All the while they themselves are losing money while thinking they are supporting a noble cause. I hope they awaken before it's too late.

Tuesday, March 29, 2016

Amway IBOs Are Not Fooling Anyone!

I often get a kick out of IBOs who make outlandish claims and then mumble and stumble to back up their claims, or to offer at least a verbal explanation of their claims. I believe many IBOs, newbies in particular are loaded with enthusiasm, but lacking in actual Amway business knowledge. Certain groups have a certain philosophy, which sometimes comes out in a conversation. But I believe in most cases, the philosophy is one of talk and not action. Amway's own numbers seem to back up many of the claims made by critics, such as the low amount of sales to people who are not IBOs.

I recently saw a blog post by a WWDB IBO who says he got a nice tax refund from the government, mainly because of his business deductions. He also claims that his Amway business is booming and that he is making money. Now I'm not a tax genious, but if you are writing off losses on your business, you would get a refund, and if you were actually making money, then you would actually be paying more taxes because your taxable income would then be higher. It's amazing how some IBOs will try to fake success in ways that clearly show they are putting up a facade.

Other obvious ways are IBOs who say they are brand new in Amway but are making over $5000 a month. Now I do believe that it can be "possible" to make some money in Amway, and obviously some people do make a nice income from Amway, but generally, these will be tenured higher pins. The vast majority of IBOs do not make any significant money from Amway and if these same IBOs were participating in the teaching systems such as Network 21, WWDB, or BWW, then they are likely ending up with a net loss because the monthly expenditures for voicemail, functions, books and standing orders exceed (by far) the monthly income for most IBOs.

Even diamonds who want to flash around fancy cars and gadgets. I believe many of these diamonds are not making as much as they want you to believe and in fact, if you just get a calculator and figure out what a flashy lifestyle costs, you will see that it will simply not be sustainable on Amway income, even when you factor in the tools income. Some diamonds whose incomes were exposed when they quit or had legal proceedings indicate that while a diamond (or higher) income may be nice, it will not sustain the kinds of lifestyles they speak about at Dream Nite functions, or other functions where great wealth is displayed. Diamonds are very likely living in debt just like the rest of society. Why would they be any different, especially when they clearly live lives of excess?

They may be fooling (some) new prospects, but they do not fool me and I hope they do not fool you.

Monday, March 28, 2016

Your Job Is A Pyramid!

One of ths things I take issue with is how uplines will create an us versus them mentality in the business. Thus friends and family who care about you suddenly become "negative" and association with them should be limited or avoided altogether. In some cases, people are discouraged from excellence in their jobs or professions because it takes the focus off of their Amway business. What I was told was to do my job, but my radar should always be on for new prospects. Some crossline IBOs turned down promotions at work because they did not want to have to work longer hours or take the focus off of their Amway businesses. In other words, they did damage to their long term futures which is ironic because most people join Amway to better their finances.

In some cases, the speaker at open meetings or functions will put down people's jobs. A commonly used acronym was J-O-B = "Just Over Broke". Some leaders also would say that my job was a pyramid because you will never earn more than the boss. A completely ridiculous comparison because someone's job has no relationship with how people view the Amway business (i.e. an Amway pyramid) and in a job, every employee gets paid and has a net gain at the end of the month. Not true in Amway. If IBOs only use KATE for example, an IBO at 100 PV or less will already be at a loss, and that is not considering any other expenses that IBO may have. And while a job may have a hierarchy, or chain of command, the business owner and CEO or manager earns their salary from customers, not directly from the pockets of their employees. Amway diamond pocket money from the volume their downline produces and they also pocket handsomely from the tools and functions they sell their downline.

Some uplines will laugh about people's jobs, stating that they wake up at the "crack of noon". What these same uplines may not tell you is that they wake up at noon because they are up at 3:00 in the morning doing nite owls for their groups and looking for recruits. These same uplines possibly can't do much with their downlines since their downlines mostly tend to have 9-5 jobs. These upline now work the graveyard shift because they have to.

So if you are of the opinion that nobody should criticize the Amway opportunity or IBO behavior, maybe uplines and IBOs should not criticize family and friends who disagree with or are not interested in the opportunity, and maybe the same uplines and IBOs should not criticize people who choose to work jobs. Don't most IBOs rely on their jobs as their Amway income is not sufficient to even pay for their Amway business related expenses?

Thursday, March 24, 2016

The Value Of An Amway Business?

Many many people see the Amway plan, sign up in the hopes that Amway income will help them fulfill their dreams and that they will walk away from their jobs and collect lifelong residual income while walking the beaches of the world while living in the lap of luxury. Sadly, most IBOs will never make a profit or even sponsor a single downline. These IBOs may continue in the business for a while but will eventually quit when they see the writing on the wall. Unfortunately, many IBOs suffer a financial loss before they realize what's happening and walk away.

But wait, you're an "independent business owner". So instead of quitting, why not sell your Amway business? I wonder if any IBOs actually think about what their business is worth. I mean a diamond could either walk away and collect income, or sell their business and live happily ever after right? Here's some food for thought. Why are there any instances of diamonds quitting or resigning from Amway? Why would they just quit when they could either walk away and collect an income "forever" or sell the business? Maybe there is no residual income. Afterall, when approximately 50% of IBOs never even last a year, it's hard to keep that volume moving month after month.

I believe diamonds quit and resign because their business is worth very little or nothing. And most Amway businesses do not even generate a net profit. For IBOs who are seriously pondering on this very important message, try looking up this topic in Amway's rules. There are very complicated steps to be taken when selling your Amway business as each person upline must be offered ownership (To the best of my understanding). This process can go on for a long time and the attrition of your business could render it worthless before you can find a buyer, if you have a buyer at all. Also, if you quit, the downline in your group would be surrendered to the immediate upline anyway. So why would your upline want to buy your business?

Also, as an Amway business owner, what do you own? You don't own your downline, although their volume runs through your business. You don't have staffing and you probably don't have equipment or a rental property or any bonafide assets. You may or may not have some inventory but you are not required to hold any. Selling your Amway business is simply selling your spot on the Amway hierarchy with perhaps some downline already in place.

So IBOs, I ask you. What is your business worth? What is the value of your business? More than likely the equity of your Amway business is zero.

Wednesday, March 23, 2016

Retail Sales Or Charity From Your Friends?

I know Amway defenders will talk about some of the sales they make, and that's fine and good, but when I look at the kinds of sales they make, it is usually insignificant. I recently read some comments that sort of made me laugh. A prospect apparently was invited to an Amway recruitment meeting by a friend, and out of courtesy, sat through the presentation (which nobody else attended) and politely declined to register. The commenter went on to say that after the meeting, he felt sorry for his friend and purchased something off of his friend's IBO website, and it felt like making a charitable contribution. Makes me wonder since Amway's products are mostly consumed by IBOs themselves and I believe less than 5% of Amway good actually made it into the hands of a non IBO customer.

But now I wonder out of the tiny amount of IBO retail sales, how many of those sales are basically charitable contributions made to IBOs by family and friends who simply feel sorry for their acquainted IBO? When I first declined to join Amway under my eventual sponsor, they did ask me to buy some of their goods. But being a single male, my age group demographic didn't really match me with the products they were pushing. If I remember correctly, I ended up buying the liquid Amway car wax. While the car wax worked as well as the other leading brands, I recall that I paid about $12 for it back in 1995 or so. I can currently get a jumbo sized bottle of Nu-Finish or Astroshield liquid car wax for $7.99 at Target or other local retailers, and at times, the store puts them on special sales for $5.99. So basically, I am getting about twice as much car wax for the price if I purchase my car wax on a store special. I know Amway zealots will want to compare the price with an online source but as I said, I make my purchases in person and wait for store soecials which occurs every couple of months.

I know at times, I have seen other family and friends involved in MLM. And while I was once there, I now see their attempts as somewhat pathetic, especially when they are basically walking the same path I did about 12 years ago as an IBO. I do not discourage them, but simply decline to see their plan or register as a downline. I have at times, also made charitable contributions to some friends who had become involved in MLM. If nothing else, just to be supportive of a friend. Ultimately, these MLM friends eventually figured things out on their own and quit as I did. Some of them follow my blog and some just quietly faded into the sunset. They do not run an informative blog as I do, but not everyone can or will. (Sound familar?)

However, after reading the comments about the polite friend who bought an Amway product from a friend, I have to wonder whether IBOs are making true retail sales or merely receiving charitable contributions from friends and family in the form of Amway product purchases?

Tuesday, March 22, 2016

Freedom - Control of Time And Money?

One of the things that uplines do when recruiting new IBOs is to talk about how jobs are a dead end, that someday you will be fired, that you have no control of a job, or that you are never paid what you are worth. They convince you that working a job is a crime and that your boss probably works the longest hours. They may even say that those who make good money working a job often works so much that they don't have time to enjoy it. My former upline used to say that true freedom is the control of time and money.

What I was also told that that in the real world, generally the guys who have enough money are usually so busy working that they don't have time. Or that a broke guy who's got time on his hands is broke so he can't do much of anything. That's when they would convince prospects that only through Amway can you have both. You can have both time and money. You build it right and build it once, and the (Amway) business will pay you for the rest of your life. That's how it was presented to me and looking back, it was a total lie. I have a challenge for any IBO or Amway defender. Amway's been around for more than 50 years. Can anyone name a dozen people who have actually built an Amway business and then stopped working it but continued to collect a significant income that was actually passed onto their heirs? Can anyone name even one or two? Keep in mind that tens of millions of people have come and gone through the business. Also keep in mind that Amway doesn't make these claims. Maybe someone should ask Amway?

It makes me wonder why crown ambassadors don't even walk away and collect money forever. These crown ambassadors are all old and have been around forever yet they continue to work their groups and attend all the functions. Somewhat recently a couple of crowns passed away while still working the business. Sure, maybe their day to day lives aren't as busy as a 9-5 employee with young kids, but still it makes me wonder why not even double diamonds and above (as far as I know) have not exercised the option to walk away and enjoy mountains of residual cash rolling in. I also wonder why there are stories of diamonds quitting and resigning if there was an option to walk away and enjoy lifelong residual income. We also know that diamonds fall out of qualification and we know that many platinums fall out of quallification, providing ample evidence that an Amway business is unstable and that without constant attention, your business is likely to fall apart.

Let me close with this. We know that a typical platinum business has about 100 or more downline IBOs. That doesn't include those who quit. Thus a platinum is already in the top 1% of all Amway businesses and that platinums might not even make that much net income when considering that platinums have many expenses which may include eating losses on tools refunds for the upline diamonds.

Yes, true financial freedom is having complete control of time and money. The problem is that very few people ever achieve financial freedom but it would appear that even fewer Amway business owners achieve that same financial freedom because of the Amway opportunity. Also, showing pictures of mansions and sports cars is not proof of financial freedom. So do Amway diamonds have control of time and money? I say no.

Monday, March 21, 2016

Where Are The Wealthy Amway Retirees?

I have heard or read that Amway has something like 3 million IBOs worldwide and several hundreds of thousands of IBOs in the US and Canada. Over 50 plus years, Amway must have had tens of millions of IBOs. One of the selling points that many people use in promoting Amway is how you can build your business once (and right) and walk away from the business and collect residual income forever, willable to your future generations and recession proof. At least that's how it was presented, and still apparently presented these days. But that is just a big old lie used to entice prospects.

What I find extremely odd is how these alleged Amway retirees seem to vanish off the face of the earth. I mean the diamonds either quit, resign, or continue to work. Even all the crown ambassasdors are still working (some have passed away while working the business). Seems odd that someone can have the option of walking away from their Amway business while boatloads of cash keep rolling in, ye nobody exercises the option. Freedom to golf, travel, have fun and do anything you want, whenever you feel like it. But why do diamonds quit or resign? Why don't any of the big pins exercise the option to walk away? Various defenders of Amway claim there are many people who have excerised this option but nobody has been able to name ever a few of them. Keep in mind that the folks making this claim are likely lying or making it up because only Amway would know who is getting paid, although Amway wouldn't know what kind of effort was made to maintain the business. In other words, claims of people building an Amway business and then collecting significant residual income is a claim that cannot be substantiated, not even by Amway. And I will say this: Amway doesn't advertise this as an IBO benefit. Current IBOs and prospects should think long and hard about this.

I know of retired firefighters, teachers, lawyers, doctors, government workers, accountants, business owners and just about any occupation you can think of. A friend of mine recently retired from a construction material salesman position. Most of them have their homes paid off, and live comfortably on pensions, savings and other assets and investments. They are not dead or broke by age 65. Sure I do know of some people who are around the age of 65 who are not doing as well financially, but none of them are starving, needing government assistance or working at WalMart out of necessity. I believe ths is a scare tactic used by Amway promoters who want you to think that your only hope for financial security is by running an Amway business. Sadly, for most, the result is net losses because of the "systems".

I've asked before, I'll ask again. 50 plus years, possibly tens or hundreds of millions of IBOs. Where are these Amway IBO retirees? Do they actually exist or are they as sketchy as the claims of sasquatch or UFOs?

Friday, March 18, 2016

Success Speaks Volumes?

I heard a great comment from a commentator on a related Amway blog. Basically, he said if IBOs were so successful, people would just naturally be attracted. And that's true! Where I live, the local electric company is an attractive place to work with a good salary and benefits package. When there's a handful of openings, you might get as many as 6,000 people applying for these positions. When the federal government hires for the post office, you get thousands of applicants for a handful of jobs as well.

But IBOs have to justify their positions. The common ones are how Amway products are concentrated, or they have magical ingredients in their vitamins. It is my position that if these products were so good and the opportunity actually produced successful IBOs, there would be no need to be deceptive about the products or opportunity. The products could easily me marketed. In fact, cutsomers would be seeking IBOs to find the products and there would be lines of people waiting to see the opportunity.

Instead, IBOs themselves are the primary consumers of Amway products. Many IBOs are deceptive when inviting people to see the Amway plan. Some prospects are outright lied to when recruited for the Amway opprtunity. The curiosity approach is still used by many, because mentioning "Amway" is more likely to get you funny looks than interest. If what I am writing is not true, why do IBOs need to deceive people? Why don't some IBOs open their books and display the financial success they claim to have? Why so secretive? Why aren't there hoards of new diamonds and emeralds each month? Instead, you mainly hear of the Amway growth in foreign countries. Most likely because the Amway name and reputation has not yet been soiled as it has in the US and Canada.

In the US, I see primarily the same old diamonds who were in control of the functions and systems from more than 12 years ago. In fact, factoring in diamonds who quit or dropped out, I believe there are fewer diamonds now than when I was an IBO. Some of these diamonds also had some apparent financial difficulties. The opportunity is far from how it's promoted. Success spakes louder than words, and where North American Amway success is concerned, the silence is deafening!

Wednesday, March 16, 2016

Is Amway A Bad Idea?

One of my thoughts when I finally left the Amway business was that it was actually a bad idea to begin with. I joined because a good friend of mine had joined and had reached (at the time) the level of direct distributor. I didnt know exactly what a direct distributor was but I knew that it was a fairly high and significant level. My friend told me that it was a lot easier than he thought and that he could easily teach me the secrets of how to do the same thing he did. I started to think that perhaps I could also do the business and hopefully make a few extra dollars, which seemed desirable as I was still young and fairly new to the full time workforce.

So I eventually joined and I had pretty quick success, being able to sponsor some of my good friends and the excitement of the growing business made it seem as if everything was going just the way my friend mapped it out. That I would show the plans and people would join and my business would grown. And on the surface, it looked like I couldn't miss.

But as a few months passed by, I started to see cracks in my upline's teaching, although I didn't pass my "negative" thought to my downline. I saw the upline tell us to get out of debt, which was good advice. But then they would say it was okay to go in debt, but only to purchase Amway products or Amway training as it was an investment in our business. That began to raise red flags. Later, in a "movers and shakers" meeting, I hard some teaching about how you could miss 3 mortgage payments and not have your home foreclosed in case you needed cash to attend the next big function. I was starting to wonder if our leaders were interested in our success or just squeezing money out of downline.

Later on, in a smaller but intimate meeting, as Amway leader taught that we could even have our families skip a meal in order to buy another standing order because it might contain the one thing you need to hear to propel your business to diamond. When I heard this, I really started to question upline's credibility. The end finally came for mhen my upline told me to dump my fiance' because I could focus on my business better without her. That was the last straw and I left the business. Being that I was taught well, I never complained about it and just forgot about it.

Then I saw a magazine article exposing the tools scam. I eventually began researching about Amway and shortly later, Joecool's blog was born. I had concluded based on my research and personal experince that Amway was a bad idea and a scam.

Monday, March 14, 2016

Does Amway Create Millionaires?

I have heard from IBOs that they believe that Amway has created more millionaires than any other company in the US. I call complete BS on that claim. I am not saying that Amway hasn't created any millionaires. Obviously, the Amway owners are worth billions of dollars. But what the IBOs are apparently implying is that the diamonds are millionaires. I'm sure there are some diamonds who might very well be millionaires, especially if they are long tenured diamonds, in particular the crowns and higher. But conversely, I believe that many high level diamonds are not millionaires. I believe it is just as common for a diamond to be in debt as it is for 100 PV IBOs. I also believe that many diamonds did not accumulate their alleged wealth exclusively from Amway. I believe many diamond's wealth is a direct result of the tool and function sales and not so much from Amway. It makes perfect sense because the tools have a much higher margin of profit than the Amway products and lower level IBOs do not get any share of the tool and function profits.

The reason why this is an issue is because these big pins will stand on stage and show off what looks like excessive wealth and imply that it is their Amway income that pays for these mansions, sports cars, jet skis, and in some cases, aircraft. In the US, I attended a function called "Dream Nite" where these kinds of luxuries are displayed, to the tune of the song "I wanna be rich". The diamonds would say that you can have what they have, if only you will do what they advise. These functions still go on today. The diamonds imply that they all wake up when they want and travel and do whatever they want with no monetary worries. I believe they are just performing as illusionists. A diamond's income as reported by Amway, cannot support the lifestyles portrayed at these dream nights. and certainly not paying for mansions and aircraft in cash.

Stanley and Danko's book, "The Millionaire Next Door"

This book makes some very interesting points which I believe applies to Amway diamonds. I will outline the significant ones and I will comment below:

**Predictably, the data shows that most people who you believe to be very rich are not.

**High net worth individuals, statistically, tend to be people that live within their means. They don’t spend a lot of money. They don’t waste money. They tend to be pretty frugal people.

**The authors point out that most of the richest people you know aren’t driving expensive luxury automobiles. That’s what the people who want everyone to think they’re rich drive. This is what the diamonds do. Give the impression that they are wealthy when in fact they may just be middle class

**** Joe's commentary. The book does say that about 1/3 of millionaires acquired their wealth thru a J-O-B and saved and invested, but did mention that many millionaires were also business owners, such as a pest control company owner, etc. But based on the points made by the book above, I can see where it is likely that diamonds portray a wealthy lifestyle as a recruitment tactic, when the reality is they may be living very middle class lifestyles off stage, or may even be in debt. I have seen evidence of diamonds having their homes foreclosed and being in debt (Ruth Carter's book: Amway: Behind the Smoke and Mirrors). In 2009, there was also a report that Triple Diamond Greg Duncan filed for chapter 7 bankruptcy. The report indicated that he could not make his mortgages, or something to that tune. Odd, because when I was in WWDB, most of the upline leaders said diamonds paid cash for everything because paying interest to the bank wasn't very smart.

My question is why IBOs continue to make up these claims? Try googling millionaire or Amway millionaire. There is nothing to indicate that Amway was responsible for creating the "most millionaires" of any US company. If this were true, wouldn't Amway state it on their website? If someone finds any veracity about this claim, inform me and I will post it. Alas, you won't.

The Amway Business - Failure By Design?

When I was being prospected into Amway, I saw the 6-4-2 plan. I am fairly certain that most groups still present the Amway opportunity using the 6-4-2, although I am aware that some groups use different variations of this. The plan sounds so simple. Just sponsor 6. The next layer does less than you and sponsors 4, and the next layer does even less and sponsors 2. First of all, most IBOs don't sponsor a single person to begin with. Many IBOs are unable to even show the plan to another person. So if you cannot achieve even the first step, how can you possibly make the plan come to fruition? The answer is you can't.

Only a fraction of 1% of IBOs ever reach platinum. Out of those who do reach the milestone, few are able to maintain the business and even fewer ever go on and achieve higher levels such as emerald or diamond. WIth the attrition rate so high, even recruiting new IBOs basically keeps you even. The effort required to maintain the business can become a full time job or more for some people. My former sponsor was out showing the plan for himself or for downline every night of the week, save for the functions and other meetings. Amway he said, needs to become your life if you want to succeed.

You have so many factors working against you that it takes an exceptional (and possibly lucky) individual to be able to overcome the challenges to reach a recognized pin level. The spotty name reputation of Amway, the higher (on average) prices of their products, the high attrition rate and the fact that any higher level requires a large downline. These factors make it nearly impossible for anyone to go diamond and reach what appears to be the pinnacle of Amway success. Sure, some IBOs may not have such lofty goals, but the "plan" is designed to achieve diamond. I have not ever seen or heard of a plan for an IBO to achieve 600 PV.

In many instances, whether it's a business, or a sports team, or some other activity, you will notice that the winners or the successes often have a great system. Many fast food businesses for example, have a processing system. A great football team might have a great offensive or defensive system. A large business may also have a proven system. This is where the problem lies in Amway. The system is ineffective. The system as shown to many prospects, needs many "lower level" IBOs working in order for someone to achieve the levels such as platinum.

As you cannot control the actions and beliefs of others, you cannot make people join your business. You cannot make them see the plan. Thus in the past, many IBOs resorted to deception and lies to get people in front of the plan. In college, I was invited to a "beer bust", only to walk into an Amway meeting. The person who invited me said we would do the beer bust after the meeting. Thus my first impression of Amway was a bad one. As one can reasonably conclude, Amway IBOs for the most part, end up failing. But they don;t fail for lack of effort. They fail by design. That's how the 6-4-2 plan is set up (or whatever version your group uses). It is in my opinion, failure by design.

Friday, March 11, 2016

Amway Motivation?

I believe that Amway IBOs have approximately a 50% attrition rate for the first year alone. If you look at a 5 year window, I believe the attrition rate is something like 95%. So what we're saying is that out of 100 IBOs, only 5 will be around in 5 years, or out of 1000 IBOs, 50 will remain after 5 years. This is extremely significant because if you are a business builder, you will need to replace half of your IBOs every single year. For this reason, I am very doubtful that there are IBOs who "built the business right and built it once", who no longer do Amway related work, but still collect significant residual income. I would guess that significant income could be defined as being enough to live a lifestyle in the top tax bracket (for the US) without having to report to a J-O-B.

Now I understand that some IBOs take it personally when I bring up subjects like this. It is because they have been deceived by some upline diamond or big pin who has sold them on a dream of financial prosperity for life if they will only work hard for 2-5 years. I once thought so too, but realized that there isn't a single diamond that I know of who built the business right and walked away to enjoy the beaches of the world while truckloads of money rolls in. Kinda makes you wonder why you see Crowns still working, and diamonds actually quitting or resigning. I have asked the question many times and it has never been answered. Can anyone name a few people who built their business right and built it once who is currently enjoying these lifelong residuals? Also, if that were a benefit, why doesn't Amway say so?

Instead, you have a constant and endless flow of motivation being sold to IBOs. This motivation comes in the form of cds, books, meetings, functions and other things like voicemail messages. It's sad that IBOs have to continue to pay through the nose for motivation and "teaching" about the Amway business when there are cheaper and more efficient means of communication. For example, why would you need an expensive voicemail when a facebook group account can disseminate messages to your group in seconds at no cost? It is because the uplines want to extract every possible dollar from their downline. Because of the internet, I believe people are starting to figure things out and avoid the systems altogether. I hope Joecool's blog contributes to this.

All the motivation IBOs truly need is to see a net profit at the end of the month. If IBOs actually earned an extra $200 a month, or $50 a month, or $600 a month as advertised, there would be no need for motivational speeches. The IBOs would simply look at the growth in their finances and they would keep going. The poor retention rate is easy to explain. IBOs are losing money because of the system expenses and they lose their motivation to continue. If you are an IBO or a prospect, stop and think for a minute. If you are making an extra $200 a month with minimal effort, would you need functions and other materials to motivate you? Or would you have intrinsic motivation from the profit? All the motivation you will ever need is a net profit. Take that to the bank.

Thursday, March 10, 2016

Time And Money?

Time and money. When you control both, you are truly free. At least that's how the business was pitched to me as a prospect. It made sense at the time. If you have enough money, then you don;t have to have a job and go to work every day. Having enugh money allowed you to control your time. It sounded like a great deal to sleep late every day and not have any financial difficulties. It sounds so simple. Join Amway, 2-5 years of work and there you are.

But for most people, joining Amway (and the systems)ironically robs you of what you desire most. Time and money. For those wanting to build a business, you may be told you need to invest in your business, and while that may be true, I do not believe there is any bonafide evidence that can support the relationship between the investment of time and money into the Amway business and earning a significant income. Many people have invested years and thousands of dollars into the business only to end up with nothing, or worse, to wind up with losses. My sponsor was a physician who spent many days away from his practice (lost income) and his oldest child (son) probably didn't see him very much since he was out showing the plan every night. Amway leaders will say your kids are sleeping and won't really miss you. I disagree.

Diamonds give the appearance of being filthy rich with nothing to do but golf abd go shopping but we are now seeing evidence that diamonds may not be all that. Home foreclosures, bankruptcy, former diamonds speaking out, diamonds moving their groups out of Amway, diamonds possibly selling their homes and downsizing. I believe that there are possibly many diamonds who are in financial difficulty and they have not escaped the tough economy as they may have implied in a meeting.

Also, if diamonds were so free and filthy rich as they like to portray, why don't any of the bigger pins ever walk away from the business and live on the beaches of the world that they like to talk about? Why are they always attending and running functions? I am guessing tha most of them are working these functions - because they have to. I suspect that some of these diamonds are in debt trying to portray a lifestyle that they truly cannot afford. Do the math. Even with a great income of say $250,000 (gross). After taxes and business expenses, you are not paying for houses in cash and other luxuries like sports cars and jet skis.

If you are joining Amway to gain more time and money, I urge you to make sure you are keeping track of your income and expenses to see if you are gaining time and money, but if you look carefully, you will probably find that what you desire more of, is what you actually have less of. That is, time and money.

Wednesday, March 9, 2016

Can You "Choose" To Succed In Amway?

Many IBOs seem to think that success in business or in other aspects of life is simply a choice. They mistakenly believe that you can actually choose to succeed or not. They apparently believe that persistence and choosing to win will eventually land them a premiere spot at diamond club. If that were truly the case, wouldn't we see hoards of new diamonds each and every year? Instead, we see one here and one there, and while there are a few new diamonds in the US every so often, we see others quitting, dropping out or leaving Amway for greener pastures. Makes you wonder if the prize is worth pursuing in the first place. If diamond were the ultimate prize, why do some of them quit or resign without walking away to collect residual income?

But IBOs and information seekers should understand quite clearly. You cannot simply "choose" to win or succeed. In a football game, both sides can believe and choose to win, but still, only one can be the victor. In Amway, it is common for a platinum to have 100 to 200 downline. Thus to be a platinum, you need to be in the top one half of one percent of IBOs. To be a diamond, you will need to be in the top 600 to 1200 IBOs, not counting the masses of IBOs who register and do nothing or register and do a little and quit. Only one in about ten to twenty thousand will ever reach diamond in North America.

Sure, IBOs may cite some touching story like "Rudy". Basically a nobody who dreamed of playing football for Notre Dame. He busted his butt and did whatever it took to make the team and the movie ends with him getting in a game, making a sack and being carried off the field by his teammates in a blaze of glory. A great and inspiring movie. But what you don't see is the possible tens of thousands of young men who had the same dream, may have worked every bit as hard but circumstances and situations prevented them from achieving the same limited success. Uplines want you to think these kinds of stories can happen to everyone, but the fact is that there is only a little room at the top. If stories like Rudy were common, then there would have been nothing special about it. An elite athlete like a Michael Jordan or a Tiger Woods only comes along once or twice in a lifetime. It is like achieving diamond. It happens but it is a rare occasion, especially in North America where Amway appears to be shrinking instead of growing.

In the Amway business, many prospects and IBOs are motivated and driven to succeed. Many of them are fine young men and women who want more in life. But the vast majority of those who try will not achieve their dreams via the Amway opportunity no matter how hard they work and no matter how badly they want it. The reason is because there are too many variables that are not in direct control of the IBO. The Amway reputation in North America is spotty at best so sponsoring downline is nearly impossible. And when you can sponsor, chances are your downline will do little or nothing. Many new IBOs will work hard, but quit because they are faced with the challenges I just mentioned. And even if you can overcome the overwhelming odds, you still need to keeping working hard constantly to maintain the business, all for an unstable average diamond income, which doesn't consider taxes, medical insurance and other perks you may receive at a job. All told, I believe the diamond income is not all it's cracked up to be when you consider the charade you must play to display the diamond lifestyle. Do the math and you will be able to see for yourself.

In the end, it seems as though the prize isn't as great as it seems, and the trail to success is one that most cannot endure. And even if you achieve diamond, you can lose it quite easily as others have discovered. The bottom line is that you cannot simply choose to succeed in Amway or any other endeavor. Good luck if you decide to attempt it anyway.

Tuesday, March 8, 2016

Amway Sales Down 12% for 2015?

Amway recently reported that their sales for 2015 was down 12%, to 9.5 billion. At their peak, Amway sales got close to 12 billion. Link: The global economy has been a bit shaky as of late but what accounts for the huge downturn in sales? Retail giant WalMart, while their growth slowed a bit, their sales for 2015 was still up 2%, which is about (ironically) 9.5 billion. Link:

In my opinion, Walmart sales is still steady because they have a predictable set of customers and repeat customers who make regular purchases. Thus even in a global economic slowdown, they continue to increase their sales. In fact, one could argue that Walmart sales would go up in a bad economy because you can find great deals and save money. Walmart has a policy that they will match any printed advertised price if you can find a price cheaper than WalMart. That is a great deal.

So what accounts for Amway's downturn in sales? In my opinion, it's very very simple. Amway does not have a stable and repeat customer base like Walmart has. Instead, they churn through approximately 50% of their sales force each year. Thus Amway's downturn in sales is very likely a result of Amway IBOs simply not replacing IBOs who quit fast enough to keep up with the attrition rate. Thus the sharp decline in sales. Add in a tough economy and who would want to pay premium prices for average quality soap or other household goods? I believe the market has spoken loudly and clearly.

I believe that in order for Amway to grow, their only hope is to continue to expand to new and foreign markets because you can find virgin ground where the name reputation of Amway is less known and not necessarily associated with "scam". In the US and seemingly older markets, Amway sales have been somewhat stable, which means they are likely able to recruit enough prospects to replace those who are quitting. Lucky for Amway that new people turn 18 each day because without adding to the potential IBO market, I believe Amway would be dead in the water in the US.

While this article only reflects my opinion, I believe it to be the truth. MLM and Amway apologists will come up with justifications as to why they think I am wrong, but I cannot see it any other way. People in general, do not like selling, thus a common approach taught by upline is to "buy from yourself" and be your own best customer. Thus it makes perfect sense that the downturn in sales is simply less people in Amway who are "buying from themselves".

Monday, March 7, 2016

Your Amway Education?

Many IBOs justify their involvement in the system of cds, tapes, books and seminars by comparing it to college. They claim they need this education and that it is much cheaper when compared to a college or university. Of course this is the upline propaganda that IBOs are fed, much like the concept that a job is a bad idea. It is a well documented fact that college grads earn more than their non college counterparts. To compare what IBOs are taught to a college curriculum is a joke and I cannot even believe that some IBOs would go so far as to make this comparison.

In college, it is true that not everyone graduates, but approximately half of those who start college end up graduating. Those who do not graduate still benefit from their education on a year to year or course by course basis. When you are job seeking, a college degree will give you more options than those who don't educate. This claim cannot be made by Amway IBOs. The education an IBO receives by seminars and cds do not even equate to success in Amway, much less in other venues in life. Only a small fraction of IBOs ever reach platinum, which supposedly is the break even point. So as an IBO, you have less than one half of a one percent chance to break even as compared to approximately a 50% chance of graduating college and having a higher earning potential than non college graduates.

Also, once you graduate and receive your degree/diploma, it is complete. You are not expected to continue in college unless you pursue a higher level degree such as a masters degree or a doctorate. In Amway, there are many many many examples of people who reached levels as high as diamond or above who could not maintain the level. There are also many examlpes of diamonds who quit Amway. If there were such a thing as "residual" income, why would anyone quit when they could sit back and watch the cash roll in. I think the answer is quite obvious. There is no lifelong residual income. For that reason, you don't see diamonds walking away from Amway while the cash keeps rolling in. Instead, we see diamonds working and not retiring.

There is also no evidence (as far as I know) that your Amway related education of cds and seminars actually work. The tiny fraction of 1% of successful IBOs is not a good case for arguing the success of the system. Colleges on the other hand, have accreditation standards, which is nothing like the ineffective Amway accreditation of groups such as BWW, WWDB or Network 21.

The fact that IBOs even dare to compare a college education to their teaching in Amway is a joke. Try telling a prospective employer about your Amway education and see what that gets you. LOL

Thursday, March 3, 2016

Are Diamonds Like Anyone Else?

I recently read an article on what constitutes wealth. Some say an annual income of $100,000 would make them wealthy, some say assets exceeding $4 million would do it, and some estimated that $2 million would make them "rich". Of course, everything is relative and someone earning $25,000 a year would think that $100,000 a year is wealth, etc. College students might think $40,000 a year is awesome because many have little money to begin with. I'm sure someone like Bill Gates would not consider $4 million to be astonishing. It's all relative. If you are content with what you have, you are likely relatively well off already.

But let's talk about Amway diamonds. I say diamond because it is basically the pinnacle of success in Amway. It is the crowning achievement of the 6-4-2 plan (or other variations) that many groups show. The average diamond earns more than $200,000, according to Amway. Now $200,000 sounds like a lot of money to young people or to those with lower wage types of jobs, or those who are just starting out in their careers. But we also know that diamonds earn income from the sale of tools. Some groups advertise (verbally) that someone might earn $100,000 a year from the tools and honorariums (speaking income).

Let's be generous and say the diamond earns $300,000+ a year from Amway and tools income. Income tax and medical insurance for the family will eat up about 40% of that right off the top, leaving about $180,000. Fantastic you might say? Well, a diamond certainly would live in a million dollar mansion, which would give you about a $6000 a month mortgage (So much for buying homes in cash) or $72,000 a year, leaving $108,000. Fantastic right? Well, diamonds are constantly traveling to various functions, flying first class and staying only at 5 star hotels right? So an average of 1 trip per month with a family, first class and a 5 star hotel would probably cost about $5000 or more per trip, or about $60,000 a year, now leaving $68,000 for this diamond's yearly budget. A good diamond with a family surely consumes 300 PV per month for household goods, or about $900 a month or about $11,000 a year, leaving $57,000 for the rest of the year. A good diamond is often a Christian who would faithfully tithe 10% of his income, or about $30,000 a year, leaving the diamond with $27,000 a year, or about $2250 a month to pay for their monthly electric and utility bills, gas, car payments, meals and entertainment.

Yes, some expenses may be slightly higher or lower, but what I am trying to illustrate is that even an above average diamond with tools income is more likely to be broke than wealthy if they live the lifestyles portrayed at functions such as dream night or other major functions. Do the math. It is unlikely that diamonds pay cash for everything and it is unlikely that fabulous lifestyles can be sustained on a diamond income. There is plenty of evidence out there. Diamond's homes foreclosed, diamonds behind on income taxes, a prominent triple diamond formerly in chapter 7 bankruptcy proceeding, many diamonds selling off their homes in a bad real estate market.

I truly believe that it is quite possible for many diamonds to be broke. Many people live in debt these days. Are diamonds any different, even with more income? The math says diamonds are just like anyone else.

Wednesday, March 2, 2016

Your Upline Helps (Not You) Who?

Over the years, I have encountered many IBOs and they often have a very common theme. They trust their upline 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. It makes your "mentor" more like a aid consultant. A paid consultant who makes money even if you lose your shirt.

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. High prices for products don't help either. The bad reputation makes it difficult to show the plan and to sponsor downline.

What is very 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 their own shortcomings, even when they do exactly what upline told them. It is also troubling that many uplines will tell their faithful followers that they need to purchase more and more tools (voicemail, cds, books, 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. The results are devastating for some. IN what business would anyone be given that kind of advice? I can only think of Amway.

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 30+% in bonuses, your upline(s) will split up about 27+% 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.

Tuesday, March 1, 2016

How To Make Money In Amway?

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

I attended an Amway conference in the Fall 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 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.