The Problem With Amway?

One of the reasons I started blogging was to share my personal experiences in Amway and WWDB, and to allow information seekers and prospects to get an insight into what I see as potential problems with the Amway opportunity. In many of my blog articles, you will notice that many of the problems I have identified with the Amway opportunity are more closely ties to a motivational group such as WWDB, BWW, or Network 21. But Amway apparently has allowed many bad practices to go unchecked, thus they are not completely guiltless in the abuse of downline over the years.

Too often, the Amway opportunity is misrepresented by IBOs. For example, I have heard so many times, that Amway is a franchise opportunity, which is not true. I have also heard so many times that an average Joe can work for 2-5 years, and create a willable and residual income that will allow you to not have a job, and possibly to allow you to enjoy untold wealth and luxury. I don't believe this is true for the vast majority of people who were sold on the Amway opportunity. Very very few people make any money from Amway and out of those who do, the profits are also from tools and functions and not exclusively from Amway.

The bigger problem is the promotion of motivational tools as being the key to success in Amway. Although technically "optional", most uplines will promote the tools as necessary and that an IBO would be insane to build a business without tools. Thus many IBOs spend money on tools and sadly, most IBOs never make enough money in Amway to cover the cost of their tools. In fact, over a number of years, I have heard of people losing tens of thousands of dollars (or more) to the tools systems. And once you start participating in the system, the decision to quit can be difficult because of the time and money that an IBO may have already invested. Also, the thought that maybe upline is right and that persistence will pay off. Well, there is no unbiased documentation that persistence and hard work (and applying the system) actually works.

Amway defenders like to point out that all the new platinums and diamonds used the system, but FAIL to point out that the rest of the IBO force who may have worked just as hard simply ended up with business losses. Amway defenders also fail to point out that perhaps a larger number of platinums and diamonds may have failed to re-qualify at that level. So much for willable and residual income. By the way, of residual income is a benefit of the Amway business, why can't I find anything from the Amway corporation to confirm this?

I could go on and on, but lastly for now, I think it's a bit shady for diamonds to show off fancy cars or mansions as a way to flaunt their alleged success in Amway. I would prefer the traditional manner of reviewing business tax returns. Showing a copy of a check means nothing because business expenses may have exceeded the amount of the check, leaving an IBO with a net loss. But in the Amway opportunity, it is commong practice for IBOs to hide their income or to show a diamond's Mercedes as proof of income. It doesn't add up for me and I would urge information seekers and prospects to scrutinize someone who tries to impress you in this manner.

Those are some of the problems I see with Amway.

The Amway Tools?

One of the things that many Amway defenders will claim is that too many IBOs do not apply what they are taught, thus they do not succeed. While I agree with this in principle, I believe that there are many many more problems with the Amway systems that have nothing to do an IBO's willingness to apply what they are taught.

For the record, I will be refering to IBOs who actually make an effort to build the business. I know many IBOs do little or nothing, but that in itself is a whole different issue, probably stemming from deception in the recruitment process. But okay, let's look at the systems.

Voicemail. The voicemail systems used by many groups are not only expensive, but completely unnecessary. Most newer IBOs do not even earn enough money from Amway to pay for their voicemail, and frankly, in an internet based type of business, I don't see why email or skype is not utilized, except for the fact that eliminating voicemail would be eliminating a profit center for many uplines. In fact, if voicemail must be used, why aren't IBOs using the Amway version of voicemail so IBOs can gain PV/BV? The excuse that KATE may be better doesn't fly because I'm sure Amway could make improvements to the system they have. But overall, email would still be just as efficient at no cost.

Standing orders. If you attend functions, why would you need an endless supply of cds or tapes? Most of these are recorded at functions anyway, thus upline is hitting you twice as you pay for the function and then get hit up for the standing order again. And how many standing orders give you specific and practical advice on running a profitable Amway business? I am guessing that very little practical advice is given on these standing orders. Why do you need a new supply every week?

Functions. If standing orders are so valuable, why do you need to spend money on functions, especially functions where airfare and hotel expenses are needed? Why wouldn't there be less major functions and more regional functions? If the true intent of these meetings is to generate IBO success, then shouldn't the IBOs be able to attend functions closer to home to reduce cost and to make them more accessible to the rank and file IBO?

All in all, I believe that some tools may have value and can teach IBOs some sales and relationship techniques, but I also believe that tools are over promoted in many LOS groups, to the financial detriment of many IBOs. If IBOs were made profitable in their first month or months of business, there would be less need for so much motivation. When do you have enough tools?

The Amway House Of Cards?

When I was an IBO, I was in WWDB. I was told that they were the best LOS, the fastest growing, with the best leaders. We were told to look at the fruit on the tree, that surely, that was proof that WWDB was the best. At the time I believed it all. Afterall, my upline diamond was one of the fastest to achieve that level and things were looking up. I had heard of recent functions where there were over 50,000 in attendance at the Kingdome in Seattle (at that time). We were told that nobody made a cent of profit from the functions and other tools. That upline used proceeds to make functions better and cheaper for IBOs. It all sounded like a great organization and I was certainly going to be rich if I only followed the system and their great leaders.

Well, after a year, I quit. Not because I could not build the business, but because my upline became overbearing, demanding that I submit to him, giving me bad advice and he was also unable to answer when I asked why I achieved the level of 4000 with the proper parameters but was not making any net profit. There was no incentive to spend all my time and money building a business for no profit and I quit. My upline's advice of dunping my finacee' to focus on Amway also contributed to my decision to quit. After I quit Amway, my life got back to normal until one day I happened to stumble across a website called Quixtar blog. It was then that I realized how many lies I was fed and how badly our uplines had taken advantage of downline IBOs.

It seems that the WWDB house of cards started tumbling with a couple of WWDB diamonds
having homes foreclosed. We later saw a blog post indicating that a WWDB triple diamond was in bankruptcy proceedings. That was followed by Ron Puryear's river house going up for sale, followed by the listings of other WWDB diamonds who were selling their homes. It is true that they may be selling the homes to liquidate some cash or to downsize, but in a bad housing market and if the homes were paid for in cash as many a diamond claims, then it seems like an odd time to sell. Of course it could also be that Amway in the US is shrinking and with less sales and fewer IBOs, there is less tools income and Amway bonuses, thus perhaps some of these diamonds simply cannot afford these homes any longer? Toss in a prominent WWDB diamond apparently divorcing and rumors of a couple of WWDB diamonds moving to form their own systems and you can see gaping holes in the WWDB system.

It has been my contention that many diamonds are possibly living in heavy debt because even with a decent income, their excessive lifestyles as portrayed in functions, simply cannot be sustained unless they have other major sources of income. In fact, since a large portion of a diamond's income is from annual bonuses, a diamond's monthly income may be relatively small. In any case, it appears to me, that WWDB is on shaky ground and some of their hypocrisy is being exposed. They apparently built a house of cards and now it may be falling apart.

Same Old Amway?

A friend of mine ad former downline (when I was an IBO) told me that his daughter recently joined Amway and WWDB. Despite his warnings and objections, she joined anyway, and insists that things are different in Amway today. That gave me some food for thought. What is different between Amway of today and the Amway I was in? The products are basically the same, perhaps with some new packaging. The concepts are the same. Buy your own stuff and try to get others to do the same. And recruit like crazy. That part of the business hasn't changed at all.

But what also hasn't changed is the same old Amway reputation that hinders the ability to sell products and/or to recruit others and to show the plan. Seems as if people joining and quitting without doing much is still the same. There is still an emphasis of the consumption of tools and functions by the rank and file IBOs, and why not? The diamonds make nice profits from the sale of business support materials and unlike the Amway compensation plan, the rank and file IBOs get no compensation for the tools.

It sure seems as if the same old - old diamonds are around. The Duncans, Puryear, Leslie Wolgamott (Divorced from Brad - WWDB saves marriages?). Harimoto, Tsuruda, Danzik. Where are the new diamonds? It might also be significant to note that Amway revenues have declined significantly from 11.8 billion in 2013 to 8.6 billion in 2017. And that is while the US economy has been doing very well. Perhaps perhaps people are seeing Amway for what it is? A poor business opportunity where your chance of failure is nearly 100%. And it's not because of a lack of effort or motivation. The Amway system is just set up for failure.

A quick look at the common 6-4-2 plan is 79 IBOs. One platinum and a whole bunch who aren't. And this plan doesn't factor in that many people join and quit without doing much of anything. Thus there can only mathematically be a small fraction of 1% who make anything with a whole bunch of wannabes who never make it. And that is what Amway is. The same old sorry ass Amway opportunity where the diamonds sell you false hopes and dreams while their dreams come true from your tools and function purchases.

The Real Amway Business?

When I was first recruited into the Amway business, I was in college and I was invited to a "beer bust", only to find out it was an Amway meeting. I declined. Later, a few years later, I had an old friend show me the plan and I declined. I told him to look me up if he ever made money in Amway. He came back some time later and said he went "direct". I knew that was a somewhat significant level so I got interested. I eventually signed up and my sponsor told me about the standing orders, books, functions, voicemail.

I wondered why all this stuff was "defacto required" but was told that multi millionaires in Amway said it was the key to success but if I wanted to try and do it on my own, then go for it. I thought it was a no brainer to follow the advice on someone who was successful. Who wouldn't right? My sponsor also sold the tools hard, recommending that we buy more than we needed because it was the key to success. When you think about it, it sounds all good, But the upline doesn't disclose the deception.

The deception is about the tools program. Upline diamonds promote the tools program as the "key to success" but I will ask where is the success? Have someone name a few new WWDB diamonds in the US? (I was in WWDB). The fact is there are fewer duamonds now than when I was an IBO in 1997-1998. And in case anyon hasn't noticed, Amway revenues have declined about 25% from 2013 to now. They went from 11.8 billion to now, 8.6 billion.

With Amway sales and revenues declining significantly, how can there be hoards of new diamonds? It can't happen. It only makes sense that there are fewer diamonds and fewer emeralds, platinums, etc.

So how can Amway diamonds stay afloat? It's with the real Amway business. The tools and functions. Obviously, with Amway sales and revenues down, diamond income and bonuses are down (contrary to what Amway diamonds say about Amway being a recession proof business). Amway diamonds claim that soap and other consumables are necessary even when times are hard, but oh, wait, Amway sells "premium products" so they cost more than WalMart or Costco, or CVS. So much for that theory.

Don't be fooled, the real business of the diamonds is to sell support materials. There is a higher profit margin and rank and file IBOs don't share in the compensation plan like they di in the PV/BV plan. It's obvious that the "real" Amway business is the upline selling books, voicemail, cd/audios and functions/seminars.

The Forgotten Amway/WWDB Challenge?

Some people may not recall any of this, but sometime about 8-10 years ago, then Crown Ambassador Ron Puryear made a challenge to all the WWDB Diamonds. He said that in order to prove that going diamond is possible, he challenged the WWDB diamonds to build a diamond business on top of what they already have. That would prove to downline that going diamond is indeed possible and that "anyone" can do it. Of course the diamonds had the advantage of having already achieved some level of success. They could use their experience and credibility to build an even bigger business and to be an example of what downline should be targeting.

Not a single diamond, as far as I know, was able to achieve this feat. All the same diamonds and whatever, remained the same. The challenge fizzled out after a number of months and WWDB leaders just pretended that nothing ever happened. That seems to be a common tactic of WWDB leaders, to just pretend something never happened or to simply revise history to erase this memory. A good example was how Howie Dnazik built his diamondship as a single, when the truth is, he was married to Susan Danzik and went diamond with her, until their divorce. But ask any WWDB people and they'll deny it or make up some story that the marriage failure was all on Susan, when in fact, nobody has ever heard her side of the story.

There was a time when the Internet was fairly new, and WWDB leaders stood on stage and boldly proclaimed that nobody made a cent of profit on the tools and functions. Later, when the Internet exposed that as a lie, the narrative changed to how WWDB diamonds made a profit on tools and functions, but that their profits were minimal. If anyone can do the math on tools and functions, you can see how much profit is inevitable. The tools and functions have a much higher profit margin than Amway products but the rank and file IBOs don't get any portion of the tools and functions profits. For example, a cd or audio might cost pennies to make but if you pay $50 for WWDB premiere club play $2-3 for a cd or audio, upline makes hefty profits. The same goes for voicemail and books. But the major events such as Dream Night, or family reunion are significant profit makers. You might pay anywhere from $75 to $125 for a function ticket and maybe 10-20 thousand people are in attendance. The IBOs provide a lot of the labor for free (ushers, etc) and the set up is basically mics and some video screens, nothing elaborate.

What many people also don't see is that a city or county gives discounts on venues if you're bringing 10 to 20 thousand visitors to their city. I can only imagine how much actualy profit is made by the diamonds on these functions, not to mention they sell shirts, audios and other materials at these functions. Whatever happened to that WWDB challenge? MOst IBOs or leaders will pretend it never happened or make some excuse as to why they could not meet the challenge. To me, the answer is obvious.

There's No PV For Watching TV?

Often times, upline would give you advice, such as "there's no PV for watching TV". It makes sense when you hear it but when you critically analyze the advice carefully, you can easily see that it's BS. The idea was that "broke people" with no direction in life waste their lives away watching TV and doing other activities that do not affect their financial futures while Amway IBOs are out trying to better themselves. On the surface, this sounds like completely sound advice and it makes perfect sense if you're an IBO. Why spend time on your couch when you could be out trying to build your Amway business? Right? Broke people watch TV after all.

But wait a secon, let's turn this around. There's no PV in attending a function. There's not PV in reading some self help book or a Kiyosaki book. There's no PV in subscribing to standing orders or to communiKATE. There's no PV for attending any meetings and there's no PV most of the CORE steps. Technically, IBOs would be better served by concentrating on personal use and by actually selling products tto customers. Only by increasing your PV does your volume get larger. Now sponsoring also has the possibility of increasing volume but most IBOs never sponsor a single downline, ever. So if you follow upline ad vice not to do things that don't get you PV, remind them that those activities include Amway related activities.

To compound the problem, the Amway activities such as standing orders and functions cost money and takes away resources from the IBO into products and activities that the upline profits from. Therefore, the upline is dishing out advice that is self serving: "attend all functions and listen to audios every day". When you really think about it, what direct benefit was there for your business by doing the Amway related activities? Unless you move more volume, your activities are for nothing. It doesn't increase your business and your PV/volume. All you are doing is making your upline wealthy with loyal purchases of tools and functions. That is the Amway business. IBOs think they will be getting rich from Amway while the upline diamonds get rich by selling tools to their downline. To coin a phrase, "you live with the classes when you sell to the masses". That's what the diamonds are doing. Capitalizing on a captive audience whose loyal purchases makes nice profits.

This week, Joecool will not be posting anymore blog posts. I'm flying to the mainland to see an NFL game. I'm accomplishing things that I wanted to do, but now I have the time and resources to do, from saving and investing. Without Amway, I might add. It's been a great life, sans Amway. :)

Upline Profits?

One of the things that many IBOs do not understand is where the upline profits actually come from. They think they will obtain passive residual income but most do not understand how it works or where the money comes from. What most people see instead, is a photocopy of an upline's check, or they may see upline driving a nice car or something like that. They do not understand how the business works and the fact that there are two businesses at work. The Amway opportunity and the tools business. Frankly, most IBOs would be much better off giving their upline a check for $50 each month and never getting involved in the Amway opportunity.

Upline earns some income from the movement of products. Amway returns about 30+% of their gross in the form of bonuses. Most (active business building) IBOs earn 3% while uplines split up the remaining 27+% of the bonus. Not such a great deal when you think about it. Also, most IBOs overspend on Amway products. They are not simply replacing what they normally buy. If they did, then there would be tons of former IBOs continuing to move 100 PV or more. Instead, when an IBO quits, they either buy nothing from Amway anymore, or they may use a few products here and there. The opportunity and the way it is promoted simply creates an artificial need for Amway products. If the products were so great, why then after 50 years of business, that IBOs sell few of their goods to non IBOs, making IBOs the primary and possibly the only consumer of Amway products?

Then you have the tools business where IBOs don't even get a measly 3% of the profits. Uplines keep all of the tool profits. While this may seem acceptable on the surface, keep in mind that the tools do not work. There is no unbiased evidence that I know of that suggests that the tools create a natural progression of IBOs. I cannot name more than a few new diamonds in the US since I left the business in 1997 or 1998. And even if there were some new diamonds, I believe there were even more who quit or left Amway for other reasons. One might wonder why a diamond would quit in the first place if there really was residual passive income involved.

So where does upline profits come from? Simple, it comes directly out of the pockets of downline. If IBOs actually sold products, then some profits would come from sales and customers. Instead, most Amway sales are simply made from upline to downline. And virtually ALL sales in the tools business comes from upline to downline. Thus many IBOs spend $500 to $600 a month on products and get back $10 if they reach 100 PV. Then you factor in the $150 to $250 monthly that IBOs typically spend on tools. Suddenly that cheap or no risk opportunity doesn't sound so cheap. And try working it for several years and IBOs can easily rack up tens of thousands of dollars of expenses.

That where upline profits come from folks. Do the math, most IBOs truly would be better off giving upline a check for $50 a month and doing nothing else.

What's Great About Amway?

Over the years I have been debating with Amway supporters, I cannot see what is so great about the Amway opportunity. Are some of these Amway defenders that stupid or dense that they truly believe that a business where one out of a few hundred people might make a profit and most of the remaining IBOs will lose money is a good opportunity? I'm not talking about people who sign up and "do nothing". Many IBOs sign up and put in a great deal of time, effort and money, only to find out that the system simply does not work (especially in the US) and they make a business decision to quit and/or to do something else.

Of course there are some people who make money in Amway. If nobody made money, then the opportunity would cease to exist. But it is basically exploitation of the downline that accounts for upline success. Amway's admission that sales to non IBOs are low, confirms this. Thus certain upline make their income from their downline's PV volume, and on tool purchases. I mean even a lottery has winners. Even ponzi schemes and other questionable opportunities have some winners. This is not to suggest that Amway in not legal. Amway is perfectly legal, but the way the opportunity is set up, those who profit, primarily do so at the expense of their trusted downline.

There are no groups that I know of where all the IBOs can win and earn a profit. I would guess that there might be a few rogue groups who only focus on retail sales, and while these groups can be profitable as a group, they are few and far between. This is because most IBOs fall under an LOS such as WWDB, BWW, LTD or N21, and these groups all seemingly focus on recruiting of new IBOs. Yes, they may sprinkle in some suggestions about selling goods, but generally speaking, their "training" materials consist of motivation speeches, feel good stories (whether true or not), and the theme of never quitting while continuing to purchase more tools.

Some upline have the nerve to start teaching downline that their Amway business is not about making money, but to save your marriage, make you a nicer person, or some other diversion to make you forget that you are losing money month after month after month. Some groups even mix in religion and politics into their functions and meetings. As far as I can see, the typical business building IBO signs up, gets some of the tools and attends a few functions, and finds that the products are hard to sell because they are not priced competitively with other retailers, and that a damaged reputation is nearly impossible to overcome. These IBOs realize they are not going anywhere, and they walk away, chalking up the losses as a life lesson. But apparently, many uplines who lied and deceived in the past are continuing to do so today, often just revising history for their benefit (i.e. lying about making any profit on tools).

Many IBOs, prospects, information seekers and critics read this blog. My question is very simple. What is so great about the Amway opportunity? For most, it is just a bad use of time and money. While some may exist, I don't know of a single person who "did the work once" and sat back collecting barrels of Amway money while sipping Mai Tais on the beaches of Jamaica. I see crown ambassadors working as hard today as they did many years ago. Diamonds losing homes to foreclosures, a prominent diamond in bankruptcy proceedings, and a hoard of WWDB diamonds apparently selling off mansions that they allegedly paid for in cash. (It os quite possible that their lifestyles are simply not sustainable).

Where is the benefit in the business for the typical IBO? Just as there are some diamonds, there are lottery winners. Displaying a lottery winner doesn't make it prudent to spend your money on lottery tickets. Displaying a diamond's lifestyle doesn't make Amway a good opportunity. While Amway is a business and not a game of chance, the results of either, sadly are eerily similar - that is a few winners and millions of non winners.

What is so great about the Amway opportunity? I don't see it.

A Bad Amway Upline?

A recent comment left on this blog stated that perhaps I had a bad upline, which may have led to my bad experience in Amway. While this may be true, I have to ask how anyone can possibly know who might be a good or a bad upline? As far as I know, all of the Lines Of Sponsorship such as WWDB or BWW or Network21 sell tools which consists of books, cds/audios, functions, meetings and voicemail. They all earn profits from the sale of these materials, thus they all promote these materials. I have heard that many uplines make more from selling tools than they do from Amway.

It makes perfect sense that some upline would make more money on tools than from Amway because the tools have a larger profit margin than Amway products and because to promote these tools, the uplines must travel from city to city to run functions, thus taking time away from running their Amway businesses. And while they may say verbally that tools are an optional expense, many groups promote them as a defacto requirement. For example, I heard that tools were optional but so was success. Or that nobody ever succeeded without tools but I could be the first to try. My sponsor also told me that Greg Duncan was a multi millionaire and he thought that tools were vital but if I thought I knew better, I could try it on my own. What is a new IBO to think? It sure sounds like only a fool would try to build the business without tools.

What's also amusing in some ways, is to debate with Amway supporters or defenders who tell me that I simply had a bad upline, and then to find out that they have the same upline that I had! It amazes me because I was in WWDB and basically, the same leaders are on stage today. The same leaders who were on stage when I was an IBO. These leaders at one time told bold lies, such as nobody made a cent of profit on tools, or that WWDB was a non profit organization. For some reason, IBOs don't seem concerned that upline leaders told these lies. They also mistakenly believe that everything upline tells them now is the truth.

IBOs even deny things that are of public record such as Greg Duncan's chapter 7 bankruptcy proceedings, or Brad Wolgamott's divorce. It seems that uplines just revise history and downlines believe it and do not ask questions or hold upline leaders accountable for their actions. I believe that these leaders should be held accountable and to a higher standard because they have profited handsomely over the years from the sale of tools. But another concern is the utter lack of success from the proven system. Where are the new diamonds? I cannot even think of more than a handful of new WWDB (My former LOS) diamonds from the US since I left the business in 1998 or so. And it might be noted that some diamonds have left since my time in the business.

So I ask the question again. How would an IBO or a prospect know what a bad upline is? Most find out when they finally see the light or when they notice the losses mounting month after month. I hope this blog helps information seekers to see the light.

What Is Your Amway Business Worth?

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. Most people don't complain or seek refunds. They just quit and leave, a life lesson learned.

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. After all, when a significant number of IBOs never even last in the business for 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? They can just tale it over if and when you leave, without compensating you.

Also, as an Amway business owner, what do you own? You don't own your downline, although their volume runs through your business, you have no assurance that the downline will continue in the business and not just quit. You don't have staffing and you probably don't have equipment or a rental property or any real business assets. You may or may not have some inventory but you are not required to hold any.

So IBOs, I ask you. What is your business worth? What is the value of your business? The value is likely ZERO.

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/audios, 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 or $7 for a cd/audio, (WWDB cd/audios cost less if you pay the $50 monthly membership fee, which is basically pre-paying for for cds/audios) $6 or $7 for an open meeting, $100 to $150 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 cash flow 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 cash flow month after month. Even though the Amway business is often promoted as low or no overhead, the system expenses (overhead) eventually begin to add up. Beware and please follow the numbers.

Trusting Upline?

One of the things my upline told me as an IBO was that we didn't have to "reinvent the wheel". We just need to copy what they have done. We needed to simplt "trust them" as they have our best interests at heart and they would never lead us astray. Furthermore, we should not venture out and do things without checking upline because out downline needed to do what we do, thus anything an IBO does has to be "duplicatable". Looking back I find that ironic as many a diamond would speak about buying a home in cash, as if that was duplicatable.

My upline flat out lied about making money from the sale of motivational tools such as standing orders and functions. In fact they even lied about WWDB and claimed it was a non profit organization. Since then, the upline's lies were exposed, but to this day, uplines are less than honest about the profits they earn from tools. Sure, now that the internet has exposed this side of the Amway business, it cannot be covered up so upline will admit they earn money from the tools but how a rank and file IBO can actually qualify to share in the profits, and how much they can earn still appears to be a mystery. Some Amway advocates will make up obscure reasons why this topic cannot be spoken about, but I believe selling tools without any degree of transparency becomes a huge conflict of interest as some uplines make more money from tools than from Amway, while swearing that Amway is the key to financial success.

Another thing my upline said was that as IBOs, we are helping people and saving the world. I thought that was odd as we were always in meetings and we never did a thing for anyone unless they were interested in becoming an IBO. We were also told that it was important as IBOs to "submit to upline". If you are being taught this, then you have to wonder why you are called an "independent" business owner. Shouldn't final decisions be made by the business owner? This is also why some Amway groups are compared to cults.

Lastly (for now), does your upline diamonds and leaders display wealth? Do you see slide shows of fancy cars, mansions, jets, boats yachts and other fabulous goodies? In my former LOS, WWDB, they still have a function called "Dream Nite" where the diamonds display many of these kinds of trappings and tell the audience that you can have what they have if only you will do what they did. But try asking a diamond to verify his claims by showing you their business tax returns or earnings. You will probably get an answer like "none of your business". Sure, they may show you a copy of a check or something like that, but it shows you nothing about how much they keep out of that check.

So the question is, how honest is your upline?

If The Dream Is Big Enough?

One of the things Amway IBOs are taught is to ignore facts, or to ignore numbers. Our Amway upline told the group "If the dream is big enough, the facts don't matter" I believe this is because the facts 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 that sends you packing. 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 encouragement designed to distract from the fact that an IBO 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 cash flow 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 study done by an attorney general in Wisconsin (Bruce Craig) revealed that the top 1% of 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 cash flow month after month. Even though the Amway business is often promoted as low or no overhead, the system expenses (overhead) eventually begin to add up. Beware and please follow the numbers.

Fake It Till You Make It?

One of the things I was taught as an Amway IBO was "fake it till you make it". My understanding was that you were to act successful, even if you had not yet achieved your desired level. By faking success, I suppose you had a better opportunity to prospect other potential IBOs than by showing the reality. Broken down to its purest form, this is deception. To attract others to an opportunity where you are deceptive is less than honest, which I suppose describes my former WWDB upline leaders. What is also sad though, is that I believe this may still be taught.

I guess this should not surprise people who know about the Amway business because I believe that diamonds also embellish success as well. WWDB used to have, and still runs a major function called "Dream Nite". This is a function where the diamonds will parade on stage while showing a slide show of all the lifestyle you can achieve at the diamond level. Do what they do and you can have what they have, is what they teach. But can you really?

For one thing, new diamonds in the US or WWDB for that matter probably earn in the range of $200K to $300K a year when you factor in the Amway income and the income from tools. While that seems like a great income, factoring in taxes and medical and dental insurance and the kind of life style that diamonds portray with fleets of cars and mansions and gaudy jewelry and clothing, and you can easily see that diamonds are very likely playing a game of "fake it" as well. It is why I believe many diamonds are actually in debt and/or living month to month financially, just like the working stiffs they criticize in functions. I have heard testimonies and read comments about how IBOs saw their diamonds actually living in very average homes and at times, renting fancy cars and things to show off because their income likely cannot sustain the lifestyles they portray. A prominent WWDB triple diamond was fairly recently in apparent bankruptcy proceedings and another had their home foreclosed. It is all adding up to what I suspect. That diamonds at best live middle to upper middle class life styles. Not that this is bad, but it is a far cry from how the diamond lifestyle is dishonestly portrayed. Take away the tools income and the picture would not be pretty, in my opinion.

So IBOs and diamonds can fake it, but I suspect that many of them NEVER "make it".
And if I may add, teaching this and doing this "fake it till you make it" is less than honest.

Where Are They?

One of the things that is used to entice Amway prospects into joining the business is the lure of passive residual income that will continue to roll in after someone stops working. Or as some IBOs put it, you do the work once and it pays you for the rest of your life. It sounds like a great theory, but does it actually work? Why aren't there people who retired as am Amway IBO simply walking the beaches and cashing bonus checks? Why are crown ambassadors and double diamonds working until they pass away or working the functions with no signs of slowing down? Some Amway defenders claim that these folks enjoy working the business but I would submit that they work because they live lives of excess and their income from the tools and functions would stop if they stop working,

When there is debate about this alleged income from Amway raging on, why aren't any of these retired Amway folks stepping forward to confirm that they did the work and stepped away? Where are they? Do they exist? I mean some people believe in UFOs and Sasquatch (bigfoot) and while these theories are well known, there has never been bonafide evidence that a UFO exists, and a Sasquatch body has never been recovered. I believe that UFOs or bigfoot might be possible, but there is simply no proof. There were many hoaxes that were uncovered regarding these issues, but no bonafide proof. Everyone seems to know about it and many have claimed that UFOs and Sasquatch exist but not a single significant piece of evidence exists. Same with retired and "walked away from the business" Amway diamonds.

Seems like it's basically the same with Amway residual income. There are many stories and statements made about lifelong passive residual income coming from Amway, but all of the evidence I have seen suggests otherwise. When half to two thirds of Amway IBOs do nothing or quit within a year, and more than 95% of IBOs never last 5 years, what case can you make that the Amway opportunity can provide you with lifelong residual income? Even those who have attained levels where you can allegedly walk away and collect income don't do so. Why is that? Is it because they just love traveling across the country all year long to work functions, or is it the more likely possibility that they keep working - because they have to.

Diamonds show off a very excessive lifestyle. Lifestyles that probably cannot be sustained on the incomes reported by Amway. So is lifelong passive residual income from Amway a myth or reality? I believe it is a lie told by AMOs (The systems) because if this were true, you would hear it from Amway themselves. If people are truly walking away from their Amway businesses and living in luxury, then where are they? They very likely don't exist at all.

How Amway Diamonds Get Wealthy?

One of the things that many Amway IBOs do not understand is where the upline diamond profits actually come from. They think they will obtain passive residual income but most do not understand how it works or where the money comes from. What most people see instead, is a photocopy of an upline's check, or they may see upline driving a nice car or something like that. They do not understand how the business works and the fact that there are two businesses at work. The Amway opportunity and the tools (business support materials) business. Frankly, most IBOs would be much better off giving their upline a check for $50 each month and never getting involved in the Amway opportunity to begin with.

Upline diamonds (or higher ups) earn some income from the movement of products. Amway returns about 33+% of their gross in the form of bonuses. Most (active business building) IBOs earn 3% while uplines split up the remaining 30% of the bonus. Not such a great deal when you think about it. Also, most IBOs overspend on Amway products. They are not simply replacing what they normally buy. If they did, then there would be tons of former IBOs continuing to move 100 PV or more. Instead, when an IBO quits, they either buy nothing from Amway anymore, or they may use a few products here and there. The opportunity and the way it is promoted simply creates an artificial demand for Amway products. If the products were so great, why then after 50 years of business, why the Amway sales aren't going through the roof if former Amway IBOs get hooked on the products and keep buying them? The answer is that they typically stop buying once the "dream" of residual income ends.

Then you have the tools business where IBOs don't even get a measly 3% of the profits. Uplines keep all of the tool profits. Also, the tools have a higher profit margin than Amway products. While this may seem acceptable on the surface, keep in mind that the tools are inefficient. There is no unbiased evidence that I know of that suggests that the tools create a natural progression of IBOs from 0 PV to diamond. I cannot name more than a few new diamonds in the US since I left the business in 1997 or 1998. And even if there were some new diamonds, I believe there were even more who quit or left Amway for other reasons. One might wonder why a diamond would quit in the first place if there really was residual passive income involved.

So where does upline profits come from? Simple, it comes directly out of the pockets of downline. If IBOs actually sold products, then some profits would come from sales and customers. Instead, most Amway sales are simply made from upline to downline. And virtually ALL sales in the tools business comes from upline to downline. Thus many IBOs spend $250 to $300 a month on products and get back $10 if they reach 100 PV. Then you factor in the $100 to $250 monthly that IBOs typically spend on tools. Suddenly that cheap or no risk opportunity doesn't sound so cheap. And try working it for several years and IBOs can easily rack up tens of thousands of dollars of expenses or more.

That's where upline profits come from folks. Do the math, most IBOs truly would be better off giving upline a check for $50 a month and doing nothing else.

Amway Goals?

One of the things that you may be taught as an Amway IBO is to have a goal. While having a goal in a good thing, I believe the context in which it is taught by Amway leaders is misleading. They want to motivate you to "go diamond" or perhaps some other achievement in the Amway business, but there is no specific means to achieve these goals and frankly, I do not believe that many IBOs or prospects understand what they are pursuing. Many IBOs don't even understand what it is to build an Amway business because a conventional business builds their business by increasing their customer base. That is not necessarily the case with Amway where they constantly recruit additional downline.

For example, one way that diamond leaders try to motive their downline is to show displays of wealth. They may show fancy cars, or talk about the mansion they own and paid for in cash, or they may show you a fancy vacation or jewelry. All the while, these diamonds may be up to their ears in debt. Has a diamond ever showed anyone a copy of their bank account balances or a business tax return? While IBOs may claim that this is nobody's business, I beg to differ. In the REAL world of business, these are not uncommon practices. A close friend of mine who recently sold a franchise business not only gave copies on his bank statements, but three years worth of tax returns to the eventual buyer of his business. It was to verify his claim that his business was worth buying.

So for IBOs and prospects, what is your business goal. If it's to make $500 a month, has your "mentor" actually sat down to discuss this and to map out how this can be accomplished? What about setbacks? In the Amway business, the Amway reputation is damaged, thus achieving certain tasks may be much more difficult to conquer than you are led to believe? Is your upline actually helping your individual cause or are they simply leading you to purchase more tools? If your goal is not diamond, are you receiving the same help as others in the group?

The big question though, is are you progressing towards your stated goal and are you on schedule to accomplish the goal and reap the rewards, or have you fallen into a trap of attending meetings and listening to standing order and accomplishing nothing? If you have stated goals, there should be tangible and measurable ways to assess your progress (i.e. profits). If your upline starts to feed to rubbish about being a nicer person or that Amway saves marriages, then your upline may be leading you astray or at least towards goals that won't improve your bottom line.