Wednesday, April 25, 2018

Amway And Debt?

Getting out of debt sounds like good advice. On the surface it is because people should not be racking up consumer debt or committing large sums of their income for cars they cannot afford. But what does it mean for an IBO? I know my former upline taught our group to get out of debt. However, I believe my former uplines had self serving intentions when they taught this. Let me translate what I believe they meant:

"You should not have any debt because it would affect your ability to buy more PV and tools. If you have debt, it affects my cashflow"

Ironically, for many, maybe most IBOs, although taught to get "get out of debt", the bottom line result is more debt. There is more debt because the cost of products and tools begin to mount. How many families actually spend $300 a month (approximate cost of 100 PV) on household products? And then to add onto that expense, IBOs who are trying to be "successful" need tools which cost anywhere from $150 a month up to more than $500 a month depending on whether the IBO is married, single and the level of commitment. Thus IBOs are now spending at least several hundreds of dollars that they never spent before.

Most IBOs, especially new IBOs, generally earn less than $50 a month. In fact, $50 a month income in this business would make you quite exceptional. Most IBOs earn less than $20 a month. With that kind of income and with the expenses I listed above (tools = voicemail, books, standing orders, and functions), nearly all "serious" IBOs operate in the red and never turn a profit. The only way an IBO can turn a profit is to sell Amway products like crazy (which I have never witnessed) or to sponsor enough downline to absorb the losses for them. The only true success stories are the ones who sell the tools.

The reason why I believe that my former uplines (who are still in WWDB and apparently teach the same things now as they did back when I was an IBO) are teaching self serving advice because although they said to "get out of debt", they made an exception to this and said it was perfectly okay to go in debt to attend functions or to buy more standing orders. IBOs were also told to do "whatever it takes" to get to the next function or to buy more tools. It is why I witnessed some crosslines go bankrupt, more than one couple lost their homes following upline advice. And these couples were told they shouldn't worry because they can pay cash for their homes when they go diamond. Another apparent lie told by WWDB leaders, especially those who had their own homes foreclosed.

Let's be perfectly real here. If you join Amway and participate in the system consisting of voicemail, books, standing orders and functions, you are far more likely to get into debt or increase your debt rather than making money and getting out of debt. The math bears it out if you are willing to look at it objectively.

1 comment:

Anonymous said...

Way back in the 1970s, when I was briefly involved in Amway, we would hear a story about a young kid in Florida who was a member. Because he was not yet 18, he could not legally sponsor any down-line. So instead the kid simply did a business of selling Amway products in his local vicinity. He was a pretty good salesman, and he managed to make a nice monthly profit as a result of this.

Now if Amway IBOs today followed that kid's example, and sold as much stuff as they could to non-Amway buyers, I could see some sense in the business. They wouldn't be shelling out huge sums of cash for stupid "tools" and "functions." They'd simply make a retail profit and build up their PV.

What destroyed this was the coming of the LOS subsystems, and their exclusive focus on recruitment of down-line. When up-line screams "You don't need to sell anything! Just self-consume, and recruit others to do the same!", they are really running a pyramid scheme.