Tuesday, October 9, 2018

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.


Anonymous said...

Joe, you're quite right -- the numbers in Amway simply do not add up. IBOs are in the red every single month. They spend wasted money on all sorts of useless tools and meetings and stupid "functions."

Spending $300 to get back a check for ten dollars is so obviously insane that it's hard to see how any rational human being would do it. And it's for junk that you don't really need or want! And it's certainly junk that you can't sell.

Because the entire Amway racket is essentially a ripoff, Amway freaks have to make up lies about how the real purpose of the business is to "make you a better person," or "develop a network of good friends," or "give you business acumen." What complete and utter bullshit. If a business isn't profitable, it isn't worth your time and effort.

Joecool said...

Spending $300 to get $10 would be ok, if you truly just bought what you needed. But for most Amway IBOs, how many of you were purchasing products of lesser value after you joined Amway? Let's use glister toothpaste. I can buy 2-3 times more toothpaste buying Crest for example, at WalMart. How do I save any money that way? Most people didn't drink energy drinks or take all kinds of supplements prior to joining Amway but they do so because you really can't use 100 PV each month unless you reach and buy stuff you don't need.

Anonymous said...

This article is amazing: https://www.businessforhome.org/2018/09/amway-usa-15-retail-sales-not-compliant-with-the-ftc-business-guidance-for-mlm/

De Vos and Van Andel are liars, not surprising, but only 12-13% of retail sales?

Outright scam and Amway clearly does not obey 1979 FTC decision.

Anonymous said...

Amway has never obeyed the 1979 FTC decision. It still functions as a disguised pyramid scheme.

Even if the bigshots in Ada Michigan wanted to, they can't tell the corrupt LOS subsystems (like WWDB, BWW, Network, and all the others) to do business in a legal manner. These subsystems act independently, and simply pay no attention to Amway directives.