Your "Chances" In Amway?

One thing that many Amway promoters don't like to talk about is what your realistic chances of success are. I will define success as Diamond because that is what the outcome of the 6-4-2 and 2-5 year plan. Of course you may be able to earn some income at lower levels, but my understanding is that diamond is where the real money from Amway and the tools start rolling in. And I can also understand why people promoting Amway do not discuss your realistic chances of winning. Afterall, lottery promoters do not show you the millions of losers, they only parade the winners in front of you.

Many people, including Amway enthusiasts will agree that many IBO do little or nothing. Some people never even place an order or make any attempt to do any business. For the purpose of this article, I am not speaking about these folks. I am talking about people who actually put in some effort to the business.

For many people who want to make an earnest effort, they will purchase and hopefully sell a few items with the goal of reaching 100 PV. For that effort, you will receive approximately $10 from Amway and whatever profit you might have earned by selling products. Here's the catch. You will likely need to pay website fees in excess of the $10 you earn from Amway. For the more dedicated IBOs, you may be payin for voicemail, standing orders, book of the month, and possibly attending functions. These expenses will exceed your income month after month unless you are able to increase your volume by selling enough products and/or sponsoring downline who buy and sell products.

Because Amway has to include the IBO bonuses in their prices, the products come at a premium price. Thus sales to non IBOs are relatively low. Without sales to non IBOs, the only other way to generate more volume is to sponsor people who will buy and sell products. But due to past unethical IBO behavior, getting people to see the Amway sales and marketing plan may be a challenge. Also, most IBOs are unable to sponsor a single downline.

Some Amway enthusiasts will claim that if you do their CORE steps for 2-5 years consistently, that you are likely to succeed. Sound easy, but becaue of the factors I have identified, some of these steps are impossible to do consistently. It's not like walking a mile each day where you have control of the step. People will likely fail in showing the plan and sponsoring others because they cannot find enough people who are willing to see an Amway plan. Many, possibly most other IBOs can and will do certain steps consistently such as listening to a CD daily and reading a success book. But because of a spotty reputation in the US, IBOs will very likely fail to be able to show enough plans to succeed.

Your realistic chance of success? My informed guess is less than 1 tenth of 1 percent. That's the likelihood of going diamond. Your chance of going platinum? My informed guess will be less than 1/2 of 1 percent. If you think you can beat those odds, go for it. For most people, it might be wise to look into other opportunities.

Amway Is Fair?

One of the many bogus things my upline taught us was that the Amway opportunity was fair. That it was a completely level playing field. On the surface, that sounds right because "everyone starts at zero". While everyone does start at zero, the compensation plan is unfair to those who "do the work" and in my opinion, should be revamped so lower level IBOs make more money. It would probably help with IBO retention and maybe, some higher level leaders wouldn't have to work so hard to keep replacing people who quit. 

If you are a new IBO, then you might not be really familiar with the Amway compensation plan. Amway pays out about 30+ percent of their gross as bonuses. Thus if you move 100 PV in goods, or about $300 in sales, then Amway pays out about $100 in bonuses. You as a new 100 PV IBO, would receive about $10 and your uplines, some of whom don't even know you exist, will split up the remaining $90 in bonuses. It truly is not a case of doing the work and getting paid. You are doing the work so upline gets paid. To add insult to injury, upline wants you to purchase materials that tries to convince you that this is a good deal. 

And something very significant to think about. In what other sales profession are you compensated so low (3%)? I can only think of real estate, but in real estate, your sales are likely in the hundreds of thousands of dollars. In just about any other sales related profession, you get a much higher cut than 3%. Yes, your bonus or comission can be higher if you move more volume, but then you are likely receiving more money because you are now exploiting people doing 100 PV who get only $10 back. 

Even after you consider the unfair compensation, you must factor in the cost of tools. Most uplines promote tools (cds, voicemail, functions) as vital to an IBO's success. Some uplines push the tools harder than others. But the tools purchases will often be the primary cause of IBO financial losses because the cost of tools will normally exceed an IBO's bonus. It is very common in the US for monthly tool purchases to exceed $200 a month on average, and very very few IBOs will ever reach a high enough level in the Amway compensation plan to earn enough just to break even. Also, the tools apparently do not work. There is no unbiased evidence to suggest that tools have any causal relationship to IBO success. 

With Amway's spotty reputation and the unfair compensation plan, IBO retention is spotty. Many IBOs sign up and do little or nothing, and many IBOs don't even last a full year before they quit. What happens is IBOs begin to figure out that recruiting downline is next to impossible and therefore, generating more volume is nearly impossible, even for individuals with skills. If you are a new IBO or a prospect, I encourage you to sit down and really look at the math and factor in the cost of tools. There are many ways to earn a dollar, I just don't feel that Amway is an efficient way to do that.

What Financial Freedom?

Merry Christmas Blog readers!

Financial Freedom! That was one of the major battle cries when I was recruited for the Amway business. You gain control of time and money by creating residual or passive income. That is true financial freedom. You wake up at noon, no job, and just do whatever you please, whenever you please. I remember the speaker saying that broke/unemployed people also had freedom, but it was different because they were broke and could not afford to go golfing or do other activities that required money on a regular basis. 

I am assuming that this is still the case for many IBOs. Of course, upline leaders may toss in a disclaimer that you don't get rich quick as an IBO, but the pitch apparently still contains the financial freedom and residual income theme, based on my experiences with IBOs. IBOs still think they will be rich. Also, 2-5 years sounds like "get rich quick" to me. 

But hey, financial freedom would be a great thing, don't get me wrong. Who wouldn't want to be 35 years old with enough cash to never have to work again? I mean I could spend some time imagining how fun that would be. It would also be fun to imagine what you would do with all the cash if you hit the powerball lottery as well. But for the starry eyed IBOs, I simply have a few questions for you to ponder. A few realistic questions that you should be asking yourself. The answers to these questions will tell you a lot. 

1. Who in your group or upline truly has achieved financial freedom? Have you seen their financials or simply a display of wealth such as mansions and fancy cars? Mansions and fancy cars could just be a massive pile of debt. Not too long ago, there apparently were diamonds who had their homes foreclosed, and a triple diamond who was in bankruptcy proceedings. Find out if anyone in your group/upline has actually achieved the success that they are using to recruit you. Also, if they are financially free, why do they work at function after function? Traveling and speaking might not be a traditional job, but it is still work, nonetheless. 

2. Even if you find someone who is retired and golfing everyday because of Amway residual income, ask yourself what the likelihood is that you will be able to achieve the same results. If diamonds are still working, what chance do you have of success if you are new or experienced in Amway, and have few or no downline. More than likely, your chance of winning the lottery will be greater than your chance of achieving a significant residual income from your Amway business. Also, I don't know of any Amway retirees who built their business once and walked away with any significant residual income from Amway. Do you?

LOL, Amway Business Mentality?

One of the things IBOs "think" they posssess, but in reality they are far from it, is "Business Mentality". It is not necessarily the fault of the IBOs. Many are sponsored into Amway by trusted friends and lacking business experience, they will "submit" to upline as they are advised and will try to learn about the Amway business. The problem is that many upline leaders teach self serving business practices such as hard core dedication to their tools system, from which they often handsomely profit. Let's examine some of the questionable practices.

"Buy from yourself". If you have a business owner mentality, you only buy from yourself if it's beneficial to your business. Many IBOs talk about ridiculous things like a McDonald's owner would never eat at Burger King. That's bull crap. Just because I own a McDonald's doesn't mean I am eating Big Macs the rest of my life. You cannot spend yourself to prosperity. If I sold pens for $1.00 and my cost was .50, and my competitor had a special on the same pens at 3 for $1.00, I'm buying them from my competition. Also, buying from yourself makes you a customer, not a business owner.

"Ignore facts if you have a dream". This is probably the biggest heap of bull crap taught by some upline. I have seen this spouted in particular by IBOs downline from WWDB and BWW leaders. A business owner studies the facts, not ignores them. Any REAL business owner wants to know how much he is bringing in and how much is going out. That's how you detect the heartbeat of your business. A site visitor named Gina on this site, recently posted a profit/loss statement from her real business. Naturally, IBOs were at a loss to discuss it because it was foreign material to them.

"Submit to upline" Another load of hogwash. Why should someone submit to upline simply because they "sponsored me" or whatever? A real business owner would think independently and make business decisions based on facts and numbers, not on the advice of someone upline who hasn't taken the time to assess each IBO on a personal level to be able to give advice on an IBO's "Indepdendent Business", or worse, advice on their personal lives".

"Dedication to the system". Silly advice as well. What dedication does the system have for an IBO? If an IBO succeeds (which is very rare), the system takes credit, but for the more than 99% of people who never make a significant income, it is their own fault if they don't make it. Amway apologists will defend this by saying that many may not have signed up wanting a significant income. While that may be partially true, tell me where people show "plans" designed for the guy who wants an extra $100 a month? The plans shown are always (AFAIK) to go platinum or diamond.

IBOs and information seekers, does any of this sound familiar? Is this a part of your experience? If so, I encourage you to ask questions here and get more information before proceeding with any more "business" activity.

IBOs Help People?

One of the things my Amway upline said at nearly every meeting was how we were helping people by sharing the dream and showing others the Amway plan. "Helping people". He claimed that IBOs became better people and were doing good for the community by helping people. I always thought ths was odd because the only people we really "helped" were those who got into the business. We didn't hang out with or help anyone else. We certainly didn't do anything for the community or for charities. 

How do you help someone when your life is dedicated to buying and selling Amway products, recruiting Amway prospects and attending Amway related meetings to learn how to recruit more Amway IBOs and to motivate yourself to never quit the business. I used to think about people doing volunteer work, or community service projects, or even outreach through their churches. These are the real everyday heroes who are helping others. While an outreach volunteer feeds the homeless, IBOs are in meetings. When people are doing community service projects, IBOs are showing the plan or prospecting the malls for new recruits. Who is actually helping people?  

Yes, I am aware that IBOs at times, contribute to Easter Seals and the like, but do they invest the kind of time that others do? And I'm not faulting IBOs, but simply pointing out that the Amway business activities can eat away at your time and prevent you from spending quality time with family and friends, and prevent you from actually "helping others". While the Amway business is no different that other businesses and the like in that regard, I do not feel that the tiny average earnings of IBOs make it worth their while to spend all of that time in meetings and recruitng to make their return on their investment a worthwhile activity. 

So in all of the activities you engage in as an IBO, are you helping people? Or are you only helping people who might be interested in joining your Amway business? Are you really helping them or recruiting them under the guise of helping them? Do you continue to try and help them if they aren't interested in Amway? Isn't the IBO saying "some will", "some won't", "so what, next"? Doesn't that mean that prospects are expendable once they have said "no" to Amway? That's what I recall from my IBOs days. I really don't think much has changed.

The "Amway" Lady?

Great post from another blog: 

http://corruptionincortez.blogspot.com/2012/06/june-4-2009-amway-lady.html 

"As I stood next to my hot cab on a warm summer afternoon a nice lady came over and talked with me for a bit. She was probably in her late 50’s, and was quite pleasant. It was quite slow so I spoke with her about the “island” and engaged in general small talk. She mentioned that she liked the drivers in Cortez and would periodically take a cab home to her place in La Mesa. Since we had a good rapport I passed along my business card and told her to drop me a line if she ever needed a lift home. 

A few weeks later she called me, but not for a ride. She had a business proposition that she wanted to discuss with me. I obliged, looking for a way to supplement my income. We met at a Starbucks where we went over the business model as well as what was expected from me and what was possible to achieve. It sounded too good to be true – it was… I was skeptical, but I gave her the benefit of the doubt. What made me immediately suspicious was that she seemed to be overly upbeat and didn’t mention the company name. The conversation was centered around commodities – things that we will buy throughout our lifetime (food, toothpaste, toilet paper, paper towels, etc…). She invited me to a second meeting and informed me that she would follow up with the details shortly. She was persistent. I had free time that Wednesday evening, I left a spot open. 

When she called to explain where the meeting would be I realized things were becoming even stranger. The gathering was to take place at a house in a cul-de-sac in La Mesa. There would be fellow entrepreneurs there. Or so it would seem… 

When I arrived I was in denial. An older couple, presumably in their 70’s served up cookies and smiles and told me to grab a seat on their couch. Then the clean cut guy with the suit came into the room, complete with a slick haircut and a cool demeanor. He talked of massive profits with minimal effort, while scribbling fractions and graphs on the whiteboard in front of him. And then came the kicker. He was selling Amway. My night had been a total waste. I didn’t want to be rude and walk out, everyone was so thrilled to have the company. They were serving up shit sandwiches and I was forced to take a big bite. For those of you who don’t know, Amway is a pyramid scheme. Basically the people at the top of the pyramid (the recruiters) make money off of the people they recruit by keeping a percentage of the sales that you (the recruit) sell. Any people that you recruit that happen to sell anything, well you would get a portion of that, as well as the person who recruited you. The person at the top gets a portion of everything. It can be profitable, if you are willing to harass your friends and family relentlessly by peddling your crappy Amway products. You have to be willing to act shamelessly. In retrospect, it would likely be a good position for many of the other drivers… Eerily, the other drones that attended the meeting were surprisingly gung-ho about the whole thing. They drank the Kool-Aid, right down to the last drop. 

I told Alice (the Amway lady) that I would have to consider it. She was quite pushy. This was her time to seal the deal, to have me become further invested in their enterprise. A few days later she called me again and I told her that I would not be attending any more meetings. I was polite – something that she was not. She just threw a fit and acted like a child, by explaining how I was making a big mistake and missing out on a once in a lifetime opportunity. I wished her the best and reassured her that she would find people who much more eager to become filthy rich selling junk from Amway." 

The Likelihood Of Success?

Many people consider the platinum level in Amway as a significant achievement in Amway. While it may be nice to achieve that level and gain recognition from the Amway corporation, I will point out that there was a study done in Wisconsin where the attorney general analyzed and found that platinums on average, lost money. The study is somewhat dated, but I will also point out that today, there are MORE expenses associated with running an Amway business than before. (Voicemail, books, functions, standing orders, shipping). I would guess that it's possible that platinums lose more today than when the Wisconsin study was done.

A typical platinum group often has 100 ore more downline IBOs. Thus a logical conclusion is that less than 1% of IBOs can reach that level. It is also, apparently rare to maintain that level. My former upline diamond had 7 frontline platinums in his heyday. Actually, 6 of them were ruby level. None of them hold the platinum level today. So you have a less than 1% chance of reaching platinum and then you are unlikely to be able to maintain that level.

What serious prospective business owner would even consider opening a business where you have such a tiny chance of success? Even those who achieve platinum are likely to lose that level. If platinums cannot maintain their level, then it's easy to see why there are former diamonds as well. It seems that people are willing to take a chance on an Amway business because the start up cost is low. But what is the point of doing all of that when the chance of making money is negligible?

To compound the problem, many IBOs spend a lot of time and money building an Amway business that is unlikely to give them any return on their investment. I'd guess that the average serious IBO would spend $250 a month of more on tools. That money invested over a number of years in mutual funds would give you a much better chance of achieving some dreams. Even putting the money in the bank would make you better off than the vast majority of IBOs. A serious business owner would want to know their realistic chance of making money. For some strange reason, prospects and IBOs seem to ignore this reality.

It is because uplines are in the business of selling tools and distributorships. They are not truly interested in your long term sustainable success. If you don't believe me, try to stop purchasing standing orders and function tickets and see how much longer you are edified and given help from upline. Seriously, would a real business owner be interested in a less than 1% chance of success?

Just "Buy From Yourself"?

One of the apparently common practices among major IBO groups is still the concept of "buy from yourself". I believe IBO leaders teach this because most people are not familiar or not comfortable selling goods and services. Therefore, to teach buy from yourself makes the business an easier sell. In reality, an Amway IBO is simply a commissioned salesperson with no benefits. But presenting the opportunity that way is unlikely to yield results either, thus the buy from yourself has become a common practice. It sounds like something that most people can do, rather than emphasizing the need to sell to people you don't know. 

Buying from youself makes you a customer and not a business owner. Buying from yourself doesn't generate your business a profit. Would you open a car dealership to buy a car? Now I am not suggesting that supporting your own business is a bad idea. What I am suggesting is if you are the primary or exclusive customer of your Amway business, then you aren't really running a business. You are simply a glorified customer. I believe some or many IBOs fall into this category because they are simply unable to move products to non IBOs. 

What an IBO is really doing is paying his upline's bonuses. Amway overcharges more than 30% of the cost of their product. They have to do this in order to be able to pay IBO bonuses. Since most IBOs are at 100 PV or less, the lion's share of the bonuses earned are channeled upline when a purchase is made. It is not a level playing field as some IBO leaders might suggest. Also, some of your uplines who don't even know you might benefit from your efforts. Now that's residual income right? 

What compounds the situation and makes it worse is when an IBO pays for standing order or attends functions where some of these IBO leaders may teach this bad business practice. You as an IBO already pverpay for products for which upline gets most of the bonus, but then the problem is made worse by IBOs paying to receive this bad advice. When I was an IBO, I heard speakers talk about skipping rent or mortgage payments to attend more functions, or having your family skip a meal so you can buy standing orders. Buying from yourself is just another example of bad advice given from upline to downline. What makes it worse is that some uplines profit by giving bad advice. 

Are you buying from yourself almost exclusively? Can you think of any truly successful business where the owner is the main or possibly the only customer? I can't think 

Road To Riches Or Perdition?

When I saw the Amway plan, it was presented sort of as a road to riches. Yes, the presenter was careful not to say it was "get rich quick", but 2-5 years is relatively quick when compared with working 40 hours a week for 40 years as the business plan was shown to us. And while some exceptional people do achieve diamond, there is a massive trail of IBOs who suffer losses, some of them staggering. In our own group, I know of at least one couple who lost their home following upline advice, and another couple to ended up filing for chapter 7 bankruptcy. I must state that the bad advice leading to bankruptcy and foreclosure most likely came from upline leaders. I also know of a gal who quit her job to attend a function, faithfully following upline advice from WWDB. It took her a while to recover from that bad advice. 

So what is the experience of many CORE IBOs? I'm not talking about those who "do nothing", but IBOs who actually make an effort. Well, if they do their 100 PV, then they are spending about $300 a month on Amway stuff and dedicated IBOs will typically spend about $200 a month or more on average for tools. This is for a single person. A couple or family would be expected to do more, thus spend more. So for these 100 PV IBOs, they will expend about $500 a month or more and get back maybe $10. Of course if they were not in Amway, they would still have some expenses for household goods, but not anywhere near $500 a month. 

Over the course of a few years, these expenses add up and can become staggering losses. Hard core IBOs might expend even more. The only way a rank and file IBO can gain relief is to sell products (which is difficult given the prices and the Amway name reputation) or to sponsor downline who wil then suffer some of the losses for you. It would be my estimate that an IBO might break even at about the 4000 PV level. However, at 4000 PV, you might have significant expenses associated with running a group, such as showing distance plans for your group.  

Over the years, I would suspect that millions of IBOs have come and gone through the Amway opportunity, and probably lost billions of dollars. But many of those who lose money think they are successful, because many upline will edify those who buy tools, regardless of IBO results. After a few months, if your group and PV are not growing consistently, it is highly unlikely that you are headed for success. 

IBOs and newbies, are you on the road to riches or financial disaster? Keep in mind that a net loss is not success, despite what you upline mentor may tell you.

Amway Business Equity?

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. Sadly, most IBOs will never 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. The fact that many people sign up and do little or nothing is a problem that seems to go ignored by many.  

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 sell their business and live large happily ever after right? Here's some food for thought. Why are there instance 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? What would an Amway business be worth? You don't really own equipment or a building. You probably don't have employees. Your Amway business likely has little or no equity. You don't own your downline, although their volume passes through your business. But if they do nothing, you get nothing, which is why people cannot just "walk away" and collect income forever. 

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? Why not just do nothing and let the downline be defaulted to you?  

So IBOs, I ask you. What is your business worth? Food for thought....

Amway Is Fair?

One of the major reasons why I think Amway is not such a good opportunity is because of the unfair multi tiered compensation plan. I have heard that Amway pays out about 30-33% to their IBOs, but I find it unfair in that you get rewarded for sponsoring people who move volume more than you do for actually selling products. I believe this is why so many IBOs are desperately trying to sponsor people and in some cases, deception and trickery is used in recruiting, which contributes to Amway's already bad reputation.

This multi tiered compensation plan also rewards a few people at the expense of the masses. If an IBO works really hard and sold 100 PV worth of goods, that IBO would get $9 or $10 in a bonus from Amway and layers of upline would split up about $90. I fail to see how that is fair, especially when IBOs seemingly say "do the work and get paid". In this case, you do the work and your uplines get paid.

I think Amway would be more efficient by giving all IBO's 20-25% back as a bonus, with the remaining 8-13% in bonus (33 - 20 or 25) going to certain levels os achievers. I believe that this would truly allow someone to change their buying habits and gain some value. It would also be good for retention of IBOs because a 100 PV would get you a monthly bonus of about $60. If you sold 100 PV to customers, you would get the retail profit plus the bonus. I believe there would be less of an emphasis on sponsoring and more of an emphasis on selling. It would put less pressure on IBO's to recruit and sponsor, and I believe that Amway's reputation could be repaired in this manner. While you would have less emphasis on "going diamond", those who did achieve it could still get handsome bonuses.

I believe implementation of this type of compensation would also eliminate the endless need for cds and seminars. Sure, product expos and some teaching on salesmanship might help, but I believe that compensating the "majority" of IBOs would keep them interested in doing business and would lessen the need for tools. I believe this is a win-win for the majority of those in the business.

I'm sure some Amway apologists will find fault in my line of reasoning, but I believe this is a long term sustainable solution for Amway. Comments are welcome.

Just The Facts?

So many people get caught up in hype about Amway. Perhaps not from Amway the company, but the Amway groups leaders such as WWDB, N21, or BWW. They may present themselves as the ultra rich, or you may be shown pictures of wealth such as jets, mansions and nice cars and jewelry. Amwayers dress up in suits and business attire. It is all to give prospects the illusion of success when the reality is a stark contrast. I remember as an IBO, seeing all kinds of IBOs driving clunkers to the meetings but dressed up in a nice suit. But the reality was cars on their last legs and (probably) car payments. These nice folks were probably just misled that Amway's opportunity could lead them out of debt, or they could earn enough for their wives to be "job optional" or they might even make enough to walk the beaches of the world while residual income rolls in. The audiences see hope, but it is false hope.  

That fact is that IBOs on average earn a gross income of about $100 a month. Amway says the average income of IBOs is $204. But their small print also says only 46% of IBOs are considered active, and therefore, Amway did not count inactive IBOs. So that representation is not a true "average". I might also add that the $204 is gross income, and IBOs who attend functions and purchase voicemail and cds are more than likely operating at a net loss.  

Amway presenters also like to talk about the money you can save by shopping with Amway. The fact is that you can get a great deal more value (and products) by shopping at Walmart or Costco. Some Amwayers will say that Walmart doesn't sell Amway products, and while that is true, Walmart does sell some similar or same products which will almost always be cheaper than obtaining them from an IBO. I can't imagine that laundry soap or shampoo would be cheaper through Amway. In past price comparisons that I posted, you can get up to 4 times more product for the same price. This is very plausible when you factor in the real money added to Amway's cost because of the IBO bonuses that they pay. That's not to say that you can't find a single Amway product that might be competitive, but overall, there is no comparison. If you use a cashback credit card like I do, then you too, can be "paid" for shopping at Walmart or Costco. 

It is also a fact that diamonds are not the care free uber wealthy people they would lead you to believe they are. As time passes, we see examples of former and current diamonds who spoke of their incomes and in some cases, foreclosures and bankruptcy also revealed through public documents, some background on what a diamond might earn and spend. It is my educated guess that many diamonds, if they try to keep up with the Joneses, are in financial difficulty. Ask your diamond for the facts. In real business, financials are verified, but alas, diamonds and Amway presenters are secretive about their income. Because they don't want you to see the facts? '

Joecool Is On Vacation?

For my loyal readers, I will be out o the country for a few weeks.   I'll be traveling the world, taking a trip to Europe, Israel, Korea and Japan.  It's looking to be an incredible trip.  I won't be blogging much for the next few weeks.  If possible, I will post a few articles from my lap top but for the most part, I might be in areas with limited wifi.

Please note that I will return.  This is not the end of this blog.  I'm still dedicated to fighting the good fight!

Have a great holiday season if I don't converse with some of you until then.  I should be back ending of this month.

Building Your Business?

When I was an IBO, many people would talk about "building a business". But many folks who spoke about building a business didn't know what that meant. I believe it is because they were taught that building a business meant listening to cds and attending functions. Or building a business might mean sponsoring others. In my segment of the Amway world, building a business pretty much meant recruiting and showing the plan. Apparently I was mislead and many others were as well. 

Building a business, generally speaking means building a customer base. A business moves products and services for a profit. In groups that focus on buying from yourself or prosumer nonsense, generally will struggle because the revenue they generate in their business is coming from their own pockets. Or their jobs are actually supplying the money for their own bonuses. In this model, the only way to profit is to sponsor many downline so the pyramidal compensation plan can work in your favor. 

Many IBOs compare themselves to a franchise. Can you imagine a true franchise where your long term success depended on your ability to open other franchises? What if you as the owner and your family accounted for the majority of the sales? Could this franchise survive? More than likely not. Yet this is exactly what many Amway IBOs do and they mistakenly think they will be successful. The only reason why Amway IBOs are able to play out this model longer than a traditional franchise owner is because they do not have to rent office space or hire employees. 

If an Amway IBO ran their business like a traditional business, the lack of retail sales to non IBO customers would be immediately apparent when the first month's electric bill or lease payment arrived. 

Building a business entails many things. These things may include advertising, marketing of products, and do not necessarily include any training. In its simplest form, the Amway business is about selling and using products, and getting others to do the same as you do. Why do IBOs think such extensive training (standing order and functions) is needed? I challenge IBOs to write up an actual business plan for their Amway business, including projected sales and expenses and see what you come up with. If you think I am just being negative, write up your Amway presentation and show it to a loan officer at a bank. See what they have to say. Seriously.

What's Wrong With A Job?

One of the things that Amway IBO leaders do quite often in their recruitment pitch for Amway, is to put down people's jobs. They criticize people's bosses and the fact that an employee needs to report somewhere to earn a living. They try to paint the picture of a job being compared to slavery. They do this apparently to make people feel uncomfortable with their present situation so they will be open to looking at the Amway opportunity as a means to make a living. They may call a job "just over broke" or "jackass of the boss". 

So I will ask - What's wrong with a job? A job is not slavery. People apply for their jobs and they agree to a wage or salary in exchange for their services. Certainly, you can leverage a higher wage or salary if you have an education or a skill, such as being able to work in the construction field. A job ususally offers more than just a wage. A job often allows one to have benefits such as medical insurance, a 401K retirement plan, and some other benefits such as paid vacation and/or sick leave. 

A recent site visitor bemoans concept of working for minimum wage, where a husband and wife would earn in the neighborhood of 30K if they both work full time at minimum wage. Of course, a high school student can earn minimum wage so two adults only able to generate that kind of income makes me think my site visitor is speaking of people with very little to offer an employer. Most people may start out as entry level, but earn more and more as they gain experience and can offer more to their employer. An employee might also be able to promote themselves if they can prove to the employer that they can manage more responsibility.  

What does the average Amway business owner experience? Approximately $200 a month income (which is probably way above average)? Most IBOs as outlined in "the plan" earn about $10 a month and may have expenses such as standing order which will take away from that tiny profit. Thus an average business building IBO stands to net a loss. It is very easy to look at the math and make that conclusion. A dedicated IBO attending meetings and functions and buying the other tools will likely spend more than $200 a month on average to be on the system. Couples will spend more. 

So I ask again. What's wrong with a job? You have a net gain each and every month, be able to pay for your living expenses, and allow you to contribute to society by paying taxes. The average CORE IBO is a drain on the US tax paying society by spending money on standing orders and functions and then deducting these as business expenses when filing their taxes. The only beneficiary is the upline leaders who sell standing orders and function tickets. If the IRS actually took IBOs to task, I'd be interested to see what kinds of deductions would be not allowed? I bet it would help the US treasury to recover all that money.

Just Give Me A Straight Answer?

One of the humorous things about Amway IBOs is their ability to say a whole lot without having any substance. They'll talk about how great the business is and how much they have learned and then when you ask if they made any money, you either get dead silence or you get some answer about how they's seen a copy of a check from someone's upline diamond or something like that. But it's very rare that an IBO will be upfront about their earnings. Of course I can understand that someone brand new might not have made a whole lot, but I have seen some IBOs outright lie and say they've been in Amway a month and they're making $5000 a month or some other tall tale like like.

Even when discussing some Amway released information such as the average earnings of an IBO, you can hear all kinds of excuses provided by Amwayers. They will make excuses like most IBOs do nothing. As if that isn't a problem in itself. Or they make stupid analogies about people signing up for a gym membership and then not doing anything. As if owning a business and exercising are the same thing. I even hear questionable claims about how so many people sign up as IBOs to get lower prices. I chuckle when I hear that because Amway's prices in general, are not competitive with big retailers. I believe that is because Amway must add the cost of IBO bonuses in the cost of their goods and services. While an IBO might save from the full retail price of Amway products, you can (in most cases) find the same or a similar product cheaper online or at Walmart.

Another area where IBOs like to divert the discussion is when the discussion is about the success rate of IBOs in general. Based on Amway's own numbers, less than one half of one percent of IBOs reach the level of platinum. Platinum is the level where allegedly, an IBO either breaks even or starts to make some net profit. It would depend on whether the IBO is involved in the tools and to whet level of participation. But IBOs like to downplay this fact as if people simply did not work hard enough or did not learn enough, rather than simply acknowledging that the system itself might be flawed. 

The last area I see issues is when talking about selling products. I suspect that product sales to no IBOs is relatively small. I believe there may be some exceptional people who can sell, but people in general, do not like to or do not possess the skills to sell products. Yet I see IBOs making all kinds of stories about "selling" to customers. I rarely get a straight answer about product sales as well. The fact that many Amway IBOs can't give a straight answer is quite telling.

The Bottom Line?

In my point of view. one of the most critical mistakes that many IBOs make is to ignore the bottom line when analyzing their Amway businesses. (Many IBOs don't even analyze their businesses) Most business building IBOs, sadly, are taught by their uplines to ignore losses, or to view losses as investments into their businesses, or that money is really not important. Some upline may teach that the business is more about making friends or being a nicer person. All of these things may be nice side benefits of reading personal development books, etc., but when running a business, the only goal should be to turn a profit. 

For many IBOs, their businesses consist of listening to standing orders, attending functions and meetings, but not focused on selling products and earning a net profit. And for most IBOs, nobody can blame them as upline may give them bad advice and because the Amway business is person to person selling, it is so inefficient that many groups end up teaching IBOs to simply buy their own volume and get others to join the business. For groups who operate primarily in this manner, you are probably running an illegal business because new and existing IBOs can profit only by continuing to add more downline IBOs in the hope that they too, will buy their own volume and sponsor others. 

When you look carefully at the business plan, whether it is 6-4-2, 9-4-2 or some other variation, the majority of these business building IBOs will have low volume and likely to earn only about $10 a month. But to earn that $10 a month, you are likely to have to spend $300 on products, and if you are on standing order, voicemail and functions, then you likely spend anywhere from $150 to $250 monthly to participate in the teaching system. Thus these IBO's bottom line is a net loss! It is only when you are able to sponsor many downline that your losses will get smaller and you will only profit when you have a sizable downline. That means your bottom line is a loss. And while Amway defender will argue that Walmart doesn't even give you $10 a month, you can certainly get more products from Walmart for $300 than you can get from Amway for the same price. Walmart will match any advertised price on a product that they and a competitor may carry. Also, Walmart's advertising reaching millions of people, which is much more effective than person to person. While Amway runs some ads now days, they do not directly drive customers to IBOs. The vast majority of IBO business is still to themselves and their downline, and not to non IBO customers. 

I challenge IBOs to look objectively at their bottom lines. It is likely a new loss. If it is, ask your upline how long this is expected to last. Set hard goals and if you are doing what is advised by upline and results to not improve, you may have to ask yourself what willl change to make your business profitable. Basically, if you aren't adding active downlines and customers regularly, you aren't gooing anywhere and are likely to be running your business at a loss month after month after month. It won't take long before you realize that you have lost thousands if not tens of thousands of dollars. 

As a former IBO with a 4000 PV business with eagle parameters, I was not making a net profit. I saw my bottom line and although doing and achieving what my upline advised, there was no money. I decided the effort, time and money invested wasn't worth it. Plus my upline started to interfere in my personal life. I saw my bottom line and wasn't satisfied, and I left Amway. I later discovered the lies my upline had fed me to keep me in the business and to keep me buying tools. It is why I started blogging. For now, my bottom line is to get the truth out about the tools scam run by upline. That is Joecool's bottom line.

Why Amway IBOs Fail?

One of the things touted by many upline leaders as the "key to success" is CORE. I have outlined the elements of CORE here. I believe most AMO groups teach CORE as the key to success. 

1 - Show the Plan 

2 - Retail the Products 

3 - Tapes/cds 

4 - Books 

5 - Functions 

6 - Accountability 

7 - Counsel with Upline (Be teachable!) 

8 - Buy 100% of your own products 

9 – Communikate 

In these nine steps, only #2 may actually net the IBO a profit, but this step is not emphasized in many groups. Some leaders gloss over this step and instead, promote "buy from yourself". In all the other core steps, you either spend time and/or money doing things that do not produce income for your business. If you, as an IBO spend most of your time in non income producing activities, guess what? You will suffer losses. It is no wonder nearly all IBOs lose money, they are taught to spend most of their time in activities that do not produce income! 

Imagine owning a brick and mortar store where you open the store for one hour a day. The rest of the day you are reading books, listening to tapes/cds, and paying to attend seminars and listening to voicemail messages. Oh, and in addition to opening your store for an hour a day, you don't advertise except for word of mouth. Could you survive in business? I think not. Amway now advertises, but you are not Amway, you are an independent business. 

So can an IBO make money by spending most of his/her time in non income producing activity? I think not.

8-12 Hours A Week To Financial Freedom?

One of the myths that my Amway upline used to, and likely still perpetuate is the claim that you can build an Amway mega empire on 8-12 hours per week. I'm venturing an educated guess that this number is used because while it still represents time, it is probably less hours than working a part time job. But let's take a closer look at this 8-12 hours per week.  (Some groups might teach 10-15 hours per week, etc.)

If you listen to one (1) cd/audio per day as recommended by upline and read one of their "success" books 15 minutes each day, you are already close to nine to ten hours of time used and neither of these activities produces any income for your Amway business. In fact, both activities cost you money and produce no tangible result. If you spend another 15 minutes a day contacting people, you are close to 12 hours per week. Where will you find additional time to show the plan and to expand your name and contact list? What about servicing customers, at least for IBOs who actually may have some customers. 

What about attending meetings and functions? These are also non income producing activities. It's no wonder the vast majority of IBOs don't make money. Their upline has them running around participating in activities that produce no income for their businesses. Ironically, these non income producing activities such as listening to a cd/audio, produces a lot of income for certain iplines who produce and sell them. To me, it is just an elaborate game of bait and switch played by upline. They tell you that their system is foolproof and that you will make it if you don't give up. Not true.  

You sell the prospect the dream of financial freedom. You tell that that Amway is their best chance. You tell them that you can help them and that the tools of the business (standing order, voicemail, books, functions) are the key to their success. Those who are serious enough to commit to the system likely won't quit without making some effort and will allow uplines to earn some nice profits before these downline eventually realize they aren't profitable and quit. Because many IBOs are sponsored by family and friends, you don't see too many formal complaints about the business. Most people chalk it up as a life lesson and do not complain.  

But IBOs and information seekers, do not be fooled into thinking that you will create a financial empire by working 8-12 hours a week. That would be far fetched. The number of highly successful Amway IBOs versus the number who sign up are fewer than lottery winners.

The Amway "Hobby"?

Many Amway IBOs get into the business with high expectations. They get in with oftentimes, a dream of early retirement, living a fabulous lifestyle, mansions, sports cars and "walking the beaches. In order to do this, IBOs are taught that they need to "plug into the system". So IBOs get on standing order, they attend all the meetings and functions, they read books and show the plan. They think these activities will make them rich. The sad reality is that it lines their upline's pockets. 

But because the Amway business has so many handicaps and shortfalls, the IBO soon falls into the trap of "playing Amway". The IBO will do their 100 PV, either by self consumption or selling, or a combination of the two, and will continue to listen to the cds or tapes, and will continue to attend every meeting. When I was an IBO, our group had many who did not sponsor a single person, yet they were at all of the meetings and functions. These folks, in my opinion, had Amway as a hobby. 

A hobby is something you do in your spare time, usually something you enjoy. For many people, Amway meetings are a social event. It is evidenced when some people say they enjoy the meetings, being with "positive people", and they have become nicer as a result of their involvement. While this may or may not be a side benefit of the functions and meetings, it is not relative to the bottom line of a business. A business exists to make money. If a business is losing money, expenses are usually cut. 

If you have been an IBO for more than a month or two, have you actually sponsored someone? If the excitement of being a new IBO has not resulted in acquiring new downline, it is unlikely that you will ever have a downline. If you have been in the system reading books, listening to stnding order and attending functions and showing the plan, and you have no results, you have Amway as a hobby and not a business. Don't feel bad, sponsoring other IBOs is not a common or easy feat. But as a business owner, you should think about your involvement in the business and if you find you are participating in a hobby rather than running a profitable business, then you should decide whether or not you are accomplishing what you set out to do. 

Are you running a business (to make money) or are you playing Amway?

Amway Groupthink?

I have read all of these posts. Interesting that everyone who supports Amway cannot spell very well. Lots of typos and grammatical errors in here by those who jump up and down reciting Amway's many virtues. It is a scam and a groupthink phenomenon of staggering proportions. From a psychological perspective, Amway does its best to separate people from those who would challenge its legitimacy and operations. This is not unlike how Hitler or any other leader would silence opponents or dissidents by having them "removed" from the equation. Same thing goes here, Amway teaches people to ignore and remove obstacles and people who challenge the system, even if said challenges are completely rational and offered by people with the IBO's best interest in mind. It hits IBO's in soft spots for family, friends, and freedom (the 3 F's), and it entices them to focus on emotional reasoning rather than very cognitive-based, rational dissection of information. 

Amway IBO's are taught emotionalism, not rationalism. From a business perspective, it is a farce. IBO's are no entrepreneurs, as they wear the collars of their uplines. Over and over, I have been told to do as my uplines say. What if my upline is a total moron and I have a law degree and an MBA?? I'm supposed to follow these uplines?? According to the system, yes, the uplines' words are paramount. So no, IBO's are not entrepreneurs and do not gain any real experience. IBO is a fancy name for distributor, pure and simple. 

I had the opportunity to meet a number of "diamonds" and "emeralds" recently, all of whom had either left the business to get real jobs or were still struggling bringing in about $30,000 per year. Many of them are posting massive losses, and by the way, the IRS does not consider pro-suming OR tickets to a convention (to hear Yager scream at you) to be business expenses. Good luck trying to recover those losses. It is a pyramid scheme simply because mathematically and considering the law of averages, a downline cannot really earn more than his upline. It just doesn't happen - it's a nice idea, but it doesn't happen. I worked through multiple scenarios with a friend, trying to see how I could out-earn my upline, and we found several variables that would keep that from happening. 

Finally, on a personal level, this Amway monkey business cost me a great friendship, an IBO who decided that taking a chance on some crazy dream was more important than those who loved him most. I think he will continue prospecting and pushing "the plan" until there isn't anyone left. If you know someone in Amway or who is thinking seriously about it, you need to realize that they will soon be lost. Amway people are very much like crack users (very similar psychopathology, actually), and they will choose Amway over you, their family, their friends, and anything that gets in the way.

Ashamed Of Amway?

To this day, I still see people who like to hide the Amway name when recruiting others. I believe this tactic has been a major factor in why Amway has a bad reputation in North America. When I was recruited, I was lied to as well. I was invited to a "beer bust" only to find out it was an Amway meeting.  To be polite, I never complained about it during the meeting, but I went home that night thinking WTF was that? They lie to us and then expect us to join the business. And to this day, I believe this practice continues.  

Over the years, IBOs have tried all kinds of ways to disguise the Amway opportunity. It was network marketing, e-commerce, online shopping mall and the corporation even changed Amway in North America to "Quixtar" at one time. Sadly, the name change to quixtar did not work, probably because the same tactics were used when recruiting new IBOs into Quixtar. Amway eventually changed the name back to Amway. I believe this bad reputation in North America is why Amway seems to be enjoying the most business growth overseas where people either do not know the Amway name, and likely because there haven't been enough former Amway/AMO victims to soil the name in other countries.  But conversely, Amway sales tanked for a while and apparently only started a minor recovery recently.  

So Amway IBOs, how can you expect someone to trust you and do business with you if you are deceitful or outright lie about the Amway opportunity? Are you ashamed of the Amway name? If you are ashamed or scared to drop the "A bomb" on people, how will you ever be able to show any plans, let alone sponsoring anyone into the business? My former sponsor used to tell our group that the biggest challenge is overcoming the name Amway. To be fair, Amway the corporation is not the only reason for the bad reputation. It is the unethical and bad behavior of IBOs that lead to a bad reputation buy on the other hand, it's not the like Amway police have been cracking down and visibly taking action against the violators so Amway is also guilty to some degree. 

Conversely, people who come right out and talk about Amway are unlikely to net any decent results either because of the past reputation. It's an almost no-win situation for IBOs and prospects. For these reasons, I believe it to be nearly impossible to build and maintain a group, especially if your goal is to reach diamond. It seems as if more diamonds have left Amway in recent years than there have been new diamonds. I believe this to be spot on for WWDB, my former LOS. So IBOs, are you ashamed of Amway? If not, why are there still so many IBOs using trickery and deception in recruiting prospects?

Can Someone Make A Living Off Amway?

I've been blogging for many nears now and one of the conclusions I have made is that there really is no defense for debating the merits of an Amway business when the IBO is participating in a system such as WWDB or Network 21. I have no issues with IBOs who sign up and sell actual products to non IBO customers, but these sales oriented IBOs are very rare. Most IBOs who are entrenched in a system are often focused on sponsoring downline because that is the only way an IBO can achieve certain levels such as emerald or diamond. The emerald or diamond level is the goal of many because it is allegedly the level where an IBO can "walk away" and enjoy barrels of cash rolling in for the rest of their lives. I find it ironic that even crown ambassadors keep busy schedules and have not walked away into a quiet life of retirement and uncountable amounts of money.  Instead, Crowns such as Ron Puryear, Bill Britt, And others just died on the job.  

In general, it would take about 100 IBOs or so to make up a platinum level business. That's 1% at best and even less when you factor in IBOs who do nothing or IBOs who start and quit. In my estimation, a very dedicated hard core IBO would lose money, or only begin to break even or make a little bit of income at the 4000 PV or platinum level. Of course, your business structure would be a factor in determining how much you can earn. Sponsoring width gives you more profit and sponsoring depth allegedly gives you some stability. Thus you could reasonably argue that about a fraction of 1% of IBOs break even or make a little bit of income. What real businessman would even consider opening a business where your chance of making a profit is less than 1%? Yes, you can argue that Amway is a business and not a game of chance, but a prudent decision also factors in your chances of success. 

Other factors that would make Amway unattractive is that the products are priced higher (in general) than comparable or the same products that are available at people's local retailers. Yes, Amway folks will argue quality and concentration factors but those arguments are simply justification for the higher prices. The vast majority of people are satisfied getting cheaper prices at Walmart. Also, IBOs are restricted from advertising their goods, thus are relegated to person to person advertising, which is probably the least effective methos of getting the word out. Higher prices and unfamiliar products results in what many groups have - IBOs who "buy from themselves" in order to earn their bonuses. Also, any bonus that is earned by most IBOs is just a partial refund on having overpaid for a product. Not to mention unless you are at a higher level in the business, your upline(s) get most of the bonus, whether they helped you or not. 

Yes, it is possible for some people to make some money in Amway. Yes, some people do make some good money from Amway. It is not possible for all IBOs to make money unless they are selling products to non IBOs and we know that most IBOs don't sell anything or sell just a few items to others. We also know that the tools systems generally eat away any small bonuses IBOs earn and leave them with a net loss. For the truly dedicated IBOs, the losses can mount into thousands of dollars and more. 

Can someone make a living with Amway? The answer is that it's possible but not likely. But as to whether the Amway business and associated tools is a good idea? For that there is no defense.