Friday, October 5, 2018

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.


QuitAmway said...

My uplines would talk about delayed gratification. It meant that we had to give up instant gratification until we went diamond and could then afford all the goodies money could buy. We were told not to buy expensive clothes,cars,electronic gadgets or take any vacations . The point was to funnel all our money into buying amway stuff-products,CDs,books,seminar tickets etc.

Somehow,delayed gratification never came into the picture when it came to buying amway stuff. What if I had told my upline that i would buy products only from the commission i earn from retail sales? That would be a strict no-no. Isn't that delayed gratification? The hypocrisy!

Love from India :)

Will said...

It was the same in LTD when it comes to uplines and diamonds talking about delayed gratification. They wanted everyone to budget and spend all their extra income on Amway products (300/ month 100 PV Level), audios, info sessions/ team meetings, and conferences. They told us NOT to go to the movies, listen to music (only audios), cancel Netflix, sell video game consoles, or go on vacations and a host of other fun things. Basically, they want your whole live to revolve around Amway and spending more and more money into this fake business. I of course refused to do any of that crap they would talk about because I wasn't going to stop living my life and doing fun things just to get a 10 dollar check from Amway and keep putting money in the pockets of uplines and diamonds.