I believe that Amway IBOs have approximately a 50% attrition rate for the first year alone. If you look at a 5 year window, I believe the attrition rate is something like 95%. So what we're saying is that out of 100 IBOs, only 5 will be around in 5 years, or out of 1000 IBOs, 50 will remain after 5 years. This is extremely significant because if you are a business builder, you will need to replace half of your IBOs every single year. For this reason, I am very doubtful that there are IBOs who "built the business right and built it once", who no longer do Amway related work, but still collect significant residual income. I would guess that significant income could be defined as being enough to live a lifestyle in the top tax bracket (for the US) without having to report to a J-O-B.
Now I understand that some IBOs take it personally when I bring up subjects like this. It is because they have been deceived by some upline diamond or big pin who has sold them on a dream of financial prosperity for life if they will only work hard for 2-5 years. I once thought so too, but realized that there isn't a single diamond that I know of who built the business right and walked away to enjoy the beaches of the world while truckloads of money rolls in. Kinda makes you wonder why you see Crowns still working, and diamonds actually quitting or resigning. I have asked the question many times and it has never been answered. Can anyone name a few people who built their business right and built it once who is currently enjoying these lifelong residuals? Also, if that were a benefit, why doesn't Amway say so?
Instead, you have a constant and endless flow of motivation being sold to IBOs. This motivation comes in the form of cds, books, meetings, functions and other things like voicemail messages. It's sad that IBOs have to continue to pay through the nose for motivation and "teaching" about the Amway business when there are cheaper and more efficient means of communication. For example, why would you need an expensive voicemail when a facebook group account can disseminate messages to your group in seconds at no cost? It is because the uplines want to extract every possible sent from their downline. Because of the internet, I believe people are starting to figure things out and avoid the systems altogether. I hope Joecool's blog contributes to this.
All the motivation IBOs truly need is to see a net profit at the end of the month. If IBOs actually earned an extra $200 a month, or $50 a month, or $600 a month as advertised, there would be no need for motivational speeches. The IBOs would simply look at the growth in their finances and they would keep going. The poor retention rate is easy to explain. IBOs are losing money because of the system expenses and they lose their motivation to continue. If you are an IBO or a prospect, stop and think for a minute. If you are making an extra $200 a month with minimal effort, would you need functions and other materials to motivate you? Or would you have intrinsic motivation from the profit? All the motivation you will ever need is a net profit. Take that to the bank
4 comments:
Truth and succinct. Excellent post. Thank you.
That extra $200 a month goes straight back into functions and materials. Today they have an app for all of the audios and some are doing books PDF style but not everyone prefers PDF. So some IBO still has to fork out the money for the physical books. I have seen that the Diamonds do a board plan like 12-20 times a month. Well, when they said it was walking away from you 9-5 they meant it. They just meant you work the graveyard shift now.
The numbers do not lie. I built a very large business and still draw a monthly income from the Amway business. I have had 4 legs over 7500 PV with many downline platinums in the group. My largest 1099 from Amway was $79,000.00. My business today after 11 years of complete inactivity pays me about 600.00 per month. So, my perspective is very credible.
I agree, there is absolutely no reason for the motivational systems as they appear today. IBO's are being taken advantage of by the systems and the profits of the system. Very few one time diamonds are even qualified emeralds at this point. How they keep their groups motivated is beyond me. I am personally friends with many former very successful IBO's and every one of them is glad to no longer be building the business. I know of a triple diamond from Tennessee that is barely qualifying as an Emerald today. Function counts have dropped from several thousand to a few hundred. The die hards just keep coming.
If you are new and reading this: Look at your expenses, do not waste money on useless tools. If the tools actually worked the success rate would be more than 1:79.
Yes, it is true that without the motivation of seeing a steadily increasing profit, most IBOs will drop out of Amway sooner or later. But how do we explain the CORE types, who remain for years and years without making a dime? Why do they stay?
Here's where we must have recourse to a psychological explanation. Being in Amway satisfies a deep need in some persons, and it it is not dependent on income. This why Amway is at heart a cult, largely financed by mesmerized initiates who turn a blind eye to their losses.
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