One of the 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. It is my informed opinion that many IBOs quit because they aren't making a profit. Real profits would motivate people to stay involved in the business.
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 (functions and other tools) 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 commission 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. In other words, your profits come from your downline's pockets.
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 crappy 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.
Let's face facts -- the only way to really make money in Amway is to recruit, recruit, and recruit, endlessly, and to get your down-line to do the same thing.
ReplyDeleteEven if you pull this hat trick off, you must constantly replenish your down-line with new recruits all the time, to replace those IBOs who drop out within the first year or two. In other words, the source of money in Amway is not the sale of Amway products (which are essentially meaningless and of little value), but money coming up to you from your down-line.
What is the source of that money? Simple -- the non-Amway income of your down-line IBOs, who must keep their regular jobs in order to afford the "tools," and to buy enough Amway crap to generate monthly PV for themselves. It's a business in which the "products" are of purely secondary concern. That's why big pins who get into arguments with the Amway Corporation can drop out and take their down-lines over to some other MLM that sells a completely different product line. In every MLM racket, the products are unimportant. They are just camouflage.
But the real catch (at least in North America) is that it is becoming impossible to recruit new IBOs in any great numbers. Amway's reputation is so bad that just mentioning the word sends prospects running away from you. And without the recruitment of new IBOs on a steady basis, the entire Amway "Plan" collapses.
This is why, over the last two decades or so, Amway and all of its LOS subsystems have created an entirely non-financial propaganda that emphasizes not earning a profit, but "making friends" and "becoming a better person" and "helping others to fulfill their dreams' and "developing leadership skills" and "making a difference in the world." What absolute crap! Who the devil goes into business to become a better person and save the world? But Amway has to push this silly bullshit because what else can they tell IBOs who are being bled dry of cash month after month?
All Amway can depend upon is the retention of certain dim-witted IBOs who are motivated by some kind of trans-rational "faith," and whose monetary losses don't affect their loyalty to the "Plan." These are the "lifers" whom Anna Banana talks about, who stick with Amway for years on end, even when it is obvious to everyone (including their children and close friends) that the entire thing is a fraudulent scam.
In short, Amway only thrives when it becomes a religious cult, immune to logic and facts.