Tuesday, October 2, 2018

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.


Anonymous said...

Very few lowly IBOs in Amway realize that fees and other expenditures by them are the things that make up-line rich.

The few who do see it think this way: "I'll be up-line eventually, and I'll get rich too."

They don't understand that the individuals who become big pins and diamonds in Amway are insanely workaholic fanatics who would get rich IN ANY BUSINESS VENTURE THAT THEY GAVE THEIR ENERGY TO! The Amway "Plan" isn't working for them -- they're working the Amway plan and making it pay off, with their tunnel-vision focus on profits, at the cost of everything else in life.

If you are not that kind of personality, the only thing you will do in Amway is pay money to your up-line, for years and years.

If you are a maniacal, driven, arm-pumping lunatic who'll do anything to sign up an IBO, then yes, maybe Amway will be profitable for you. If you are not that sort of person, you won't make a goddamned dime.

Will said...

I have a question for you Joe. I recently quit Amway/ LTD and I was the guy with the 21 year old college girl sponsor and 26 year old upline. Like I mentioned, I am 30 and felt pretty silly for joining but fell for it due to there being some older folks who had good careers along with folks in their 20's and such. But last week, I mentioned on social media about the dangerous of MLM's particularly Amway and how talked about how another person I know was horribly treated by her sponsor and upline. My old upline and some others whom I wanted to remain friends who are still in Amway saw my post and got offended. I even reached out to my sponsor with a text even apologizing if I offended them and got no response.

My question is do you think I was out of line for telling friends about the dangerous of MLM's and Amway? Do you think I should just remove my old amway folks from social media and just move on with my life?

Joecool said...

It's sad but Amway becomes an "us versus them" game for the dedicated. Sure, you don't want to kick out old friends, but they will probably see you as "negative" and avoid you anyway. But sharing your experience should not be something to be ashamed of. I see it as possibly helping someone to avoid a problem.

Helping people get proper information and to possibly avoid a problem is why I am still blogging after so many years. I feel like if I can help someone make an informed decision then my time will have been worth it.

But if you feel uncomfortable on social media with your old Amway gang still around, then I guess that would be a good reason to consider removing them. On the other hand, you can see if they are still in Amway if you stay friends with them so there's that.

Will said...

I went ahead a removed them from my Facebook. One of them had already unfriended me anyway and I figured since my former sponsor wasn't responding to my texts, she didn't want anything to do with me anymore anyway and would most likely follow suit and unfriend me. It's unfortunate because I did think they were decent people despite them being heavily into Amway. But it's better for me to move on and not dwell on it really. Thanks for the advice Joe and keep up the good work with this blog.

Anonymous said...

The big pins got big only because they got in on the scheme early ,when amway's reputation was not as shitty as it is today.
Some of my former uplines are very hardworking, very good at cold contacting and signing up but still are not getting any success, they are only losing money.

With amway's reputation, expensive products, deceptive IBO practices, information available online, I'd say it's impossible to earn a profitable income through Amway. Most IBOs are losing money month after month hoping that one day they will hit the big pins. Sadly,that will never happen.
My former upline who was founders emerald has now come down to platinum. He will probably soon have to start looking for a job.