Imagine an a city or island with 100 adult residents. One guy gets sponsored into Amway from a cousin in another area off the island. Well, the island residents are a pretty tight knit group so the one IBO immediately sponsors his six best friends and eventually, all 100 island residents. They are all dead serious about the Amway business so they all work hard, but because everyone is an IBO, they can only self consume 100 PV each. Thus the 100 IBOs move 10,000 PV each month. The group as a whole generates about 30,000 BV and the group receives $7500 in bonus money from Amway. Of course, the first IBO sponsored is now a platinum receiving most of that money with the rest of the group receiving smaller bonuses.
Being serious IBOs, they all get standing order, books of the month, and travel by air to functions. They pay on average about $250 a month for their Amway training/tools. Thus the group pays about $25,000 a month for the training that will one day allow them to retire and quit their jobs. The island community is losing a net of $17,500 ($25,0000 in expenses minus the $7500 in income generated from Amway) from their local economy each month. However, there is one resident IBO who is making a nice income urging everyone one. Let's evaluate the group.
The platinum IBO is making a nice income and will also receive a $20,000 bonus at the end of the year. His 6 downline friends make just about enough to break even (approximately 1000 PV) or lose a little. The rest of the residents have lost collectively, over $200,000 ($17,500 a month). The guy who owned the local grocery store went out of business and all the entertainment related business closed up because the residents had no disposable income to spend money on anything except for Amway related activities. Eventually they all quit, including the platinum because once his group quit, he too, began to lose money.
Now Amway defenders will cry that this could never happen, but it shows that even if you could get everyone in the US to join, this scenario is what would more than likely, happen. I believe the Amway name and reputation is for the most part, saturated in the US. Nearly everyone will have heard the Amway name and/or will know someone who had a brush with Amway. Because of the tool peddlers such as WWDB, BWW, or Network 21, there are likely millions of people in the US who ended up with a bad experience, perhaps tricked into attending a meeting, or lied to about something related to Amway.
While this story is fictional, it is what I believe would happen if there was a city/island where everyone joined the business. It is what happens today. Few people benefit at the expense of their downline. And as usual, it is the tools that drive people to lose money - on Amway island, or anywhere else.
When I was being prospected for Amway in 1970, I brought up the question of over-saturation of a market, and how that would make the entire Amway scheme impractical.
ReplyDeleteThe answer I got was the following: "Right now, the biggest city for Amway is Montreal, Canada. That's where there is the greatest concentration of Amway distributors. But Amway only accounts for five percent of the retail sales of soap and cleanser products in that city! So even with a lot of Amway people at work in a city, there's still 95% of the population that is available to be prospected!"
(Note: Amway didn't have cosmetics or vitamins back then. It was only soap and cleansers).
It was only years later that I realized the basic flaw in this argument -- namely, that if Montreal had so many Amway distributors, why were 95% of the population not buying Amway products?
The answer to that, of course, is simple: People in Montreal didn't want the crummy Amway shit, and therefore the bulk of all Amway "sales" were to Amway distributors.
People in Amway never think logically, or with any sort of mathematical sense. For them the only things that matter are hoopla and hype.
Great comment. Saturation doesn't mean that literally everyone in in Amway. But most people know that Amway products aren't the best and that the Amway business is most likely to result in financial losses. It is only the infusion of new people constantly that prevents the whole thing from imploding. I had heard (but cannot prove) that the function venues are shrinking, which would make sense because Amway revenues have shrunk about 25% from 2013 to now.
ReplyDelete(11.8 billion in 2013 to 8.6 billion is 2017)