IBO = Independent business owner. I thought it was cool, but looking back at the bottom line, IBOs are just salesmen for Amway with no fringe benefits and no guaranteed salary. Or, a commission only salesman. Salesmen earn their income by selling goods and services, and earn a commission. Sadly, many IBOs sell very few items because they have been taught that you make your money by purchasing items from yourself.
On the surface, buying from yourself sounds sensible but you don't truly make a profit by purchasing your own goods, you simply empty your checking account. Any profit you think you have earned has actually come out of your own pockets. In any business, you must have a base of customers in order to have a steady income. If you are purchasing the majority of your goods, you are only making a profit for Amway the corporation, who makes, or in the case of partner stores, distributes the goods. The ones who actually produce the goods are the ones who profit. An IBO is just someone who sells the goods and who distributes them for a commission.
For most "real" business owners, building their business might mean advertising, creating special sales, and increasing the number of customers or by increasing the volume purchased by existing customers. An IBO who is "building the business" is rarely ever trying to attain more customers. In fact, some of Amway's regulations make it difficult to attain a mass of customers such as restrictions on advertising. Therefore, most IBOs who are "building" are simply seeking to add downline who will hopefully buy their PV and also attain more downline. In this manner, IBOs are increasing volume, and therefore their commissions by adding people to their downline. Ultimately, the upline is making their money by the efforts of their downline and often, from the jobs of their downline because there are usually not enough customers to sustain any significant level of sales. This basically makes the Amway opportunity a product pyramid.
In this day of social networking and power advertising, Amway apparently remains a dinosaur. While they do advertise some of their product line on TV, the salesmen or IBOs have little ability to market their products on a large scale. Instead it is word of mouth, individual to individual. It is highly ineffective. Do you know why it costs hundreds of thousands of dollars for a 30 second commercial in the super bowl? It's because tens of millions of people are watching. What do you think is more effective on increasing sales, a super bowl commercial or word of mouth advertising. Keep in mind that zany IBO behavior has already damaged the Amway name, thus giving you a disadvantage over other opportunities.
In the end, or the bottom line is that an IBO is just a salesman who receives no fringe benefits, and a relatively small commission. It's a great deal for Amway, but is it a great deal for an IBO?
The reason MLM doesn't work is simple mathematics.
ReplyDeleteIf you recruit 10 people and each of these 10 people recruit another 10 people and so on, then you will have exceeded the world's population by the time you reach level 10 (10 to the power of 10).
Now,considering that only a small portion of the population has an actual interest in Amway or its products, when you come in as an Amway newbie in a saturated market like the US in 2019 where Amway has has been around since 1959, you will find that you are at the bottom of the pyramid with next to nothing left to graze below you. That means that you are never going to move up the ladder.
The only chance (big emphasis on that word) that you have of making it big is if you are an early bird in a market where Amway is just starting out. (Are there any left?) This however comes with a whole new line of problems.