Monday, July 3, 2017

Amway, Failure By Design?

Many people, including Amway IBOs and prospects see the 6-4-2 plan or a similar version when they are being recruited into the Amway business. The plan consists of 79 IBOs,, all who actually earned a bonus with 1 person being platinum and the rest earning significantly less. Now I can say with virtual certainty that nobody has ever built a group with that many people who all went out and actually earned a bonus. This is because most IBOs do little or nothing and many join and never order a single product.

Thus we know that someone who actually achieves platinum would likely have double (or more) of the amount of people in order to achieve a similar result (7900 PV). For round numbers, let's say an average platinum group has 150 IBOs. Already we can determine that a platinum is less than 1% of the Amway population and the rest mostly earn little or nothing. While the platinum might earn some decent money, a hardcore dedicated platinum can still lose money because of the "system" consisting of voice mail, CDs, books and functions.

Just by analyzing what I've discussed thus far shows that a platinum group would typically consist of 100 or more (most likely more) Amway down lines and therefore the platinum is firmly in the top 1% of IBOs. This demonstrates that Amway is failure by design. If there are 2 platinum groups, then it's 2 guys on the top each with a group of 100 or more downline making little or nothing. A diamond consists of 6 of these groups with the diamond making good money with hundreds if not thousands of downline making little or nothing. If some day, the entire planet signed up for Amway, guess what? Nothing statistical will change.

When I used to see Amway announce 1000 new platinums, all it means is that there are 1000 new people with groups where the vast majority makes little or nothing. Many people get excited about Amway thinking they will be the platinum and "make it big" but even if they do, they have a group of downline making little or nothing, and taking losses if they are on the system of CDs and functions. You can have smart, motivated downline but it doesn't change the fact that Amway leads to failure by design, as does most other MLMs where you are always recruiting new people. Recruiting is priority because in order for you to reach the top, you also need to find your 100 or more downline who make little or nothing (or losses) in order for you to succeed.

Many people think they have what it takes to "make it" but Amway's recent revenue reports indicate that Amway is a tough sell. Their revenues dipping from 11.8 billion in 2014 to 8.8 billion globally in 2016. But if you've seen this and disregard the information, then good luck to you. You'll be on an interesting but most likely a lose money venture.


kwaaikat said...

In the 6-4-2 plan, there are 31 IBO's with at least one downline, and 48 IBO's without ANY downline. IBO's without downline outnumber IBO's with downline by 48 to 31. If everybody follows that plan in turn, perfectly, into perpetuity, IBO's who themselves have no downline will always be the majority.

That is true of ANY plan where members are required to recruit at least two more. You can try out 5-4-3-3 or 8-2-2-3 or whatever. In fact, you can draw any tree of all branching nodes (whatever your imagination allows), however large and small, and the terminal nodes will always outnumber the non terminal nodes. That is mathematical F-A-C-T. The IBO's without downline will always outnumber the combined upline. It will even be true if the Amway opportunity is an easy sell, and the whole world population signs up. It will be true of ANY group within Amway. And it will be true if they work 24 hours a day and are exceptionally motivated.

A business opportunity that is based on growth, is indeed guarenteed to fail by design. The success rate is by design mathematically guaranteed to at no point exceed 50%,. To be sure, it is at no point, EVER. This is a best case constraint. That means reality can be worse but not better.

The only thing that would make this not universally true, is if we waive downline as a requirement for success, if an distributorship is able to build a business that has no downline at all, but makes money solely from selling soap and energy bars to the outside world. In as far as people are told they can become wealthy by redirecting monthly grocery expenses and get others to do the same, it is unumbigiously with absolute certainty with sound discreet maths, guaranteed to have a success rate below 50%.

Anonymous said...

Originally, the Amway Corporation had no problem with some IBOs simply selling products for a profit, and not developing any down-line. In fact a story was frequently told about a young boy in Florida who wasn't of legal age to sign up down-line, but who nevertheless made a small living for himself by selling Amway products to his friends and neighbors.

There was a saying back in the early 1970s in Amway: "There's money in width, but there's security in depth." This meant if you had a lot of customers who bought stuff directly from you, you'd make good money doing so. But getting down-line was a way to be really secure in establishing a big business. In other words, Amway suggested developing a down-line, but didn't present it to you as an absolute necessity.

All that changed with the coming of the various LOS subsystems. These rotten parasites were only interested in quick money gained by rapid and ongoing recruitment of down-line. They didn't even think that selling Amway products was important. They told you to just buy enough personal-use items to earn your required PV, and concentrate on showing the Plan. Those subsystems are what turned Amway into a full-blown pyramid scheme.

Anonymous said...

FYI about the dip in global revenue, that was because China changed it's currency rate. The North American market actually increased last year about 9% over the previous year. That could possibly be because the Hispanics in North America are tearing it up and building their businesses contrary to your stupid nonfact theories about Amway. I haven't used a 6-4-2 plan for over 20 years, so that tells me you are way out of touch and don't have a clue what you are talking about. I am really getting tired of your blog popping up in my LinkedIn news feed. That's probably because you have amway included in the title, you are probably competition that trying to make Amway look bad.

Joecool said...

Rage foreign exchange rate didn't cause Amway to drop 25% in revenues. That's BS.

Anonymous said...

To Anonymous at 7:03 AM

You're a liar. The Amway Corporation doesn't announce its North American revenue figures. So where did you get that 9% number? Did you pull it out of your ass?

Do you even know what the phrase "exchange rate" means in economics? It can refer either to the exchange rate used in handling foreign currencies, or the tariff and import fees charged on products entering the country. Only the second has any bearing on a company's profits in the marketplace. China did not change either, so what the hell are you talking about?

You probably were told by your jackass up-line at a night-owl meeting that if anybody brings up Amway's 25% revenue decline, tell them it was due to the fact that China "changed its currency rate." It's complete bullshit, pal. But nice try.

Anonymous said...

To Anonymous at 7:03 --

Nobody needs to make Amway look bad. Amway already stinks like a rotten fish.

kwaaikat said...

>> Anonymous July 5, 2017 at 7:03 AM

If the opportunity depends on downline to succeed, it means 50% of all sign ups won't succeed. Does not matter whether it's 6-4-2 or whatever. In no branching tree that you can draw will IBO's with downline outnumber those without. No amount of motivation or hard work can change that. And as long as having downline is a requirement for success, no group or sub group will be able to say "we are different, 80% of our guys are successful."

I'd be interested to know whether you pitch the idea that people can become wealthy by selling product alone?

The reason Joe Cool's opinions show up in your feed is because the algorithm considers it popular in your circle, that means a lot of your LinkedIn contacts keep reading it. Oops.