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.
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.
A question:
ReplyDeleteIn Amway, would it be possible to tell your up-line sponsor that you are only going to sell Amway products to non-Amway customers, and that you aren't going to buy any CDs or tapes or other "tools," and that you don't want CommuniKate or a website, and that you aren't going to attend any meetings or functions, and that you don't want him to contact you at all except for the fulfillment of your product orders?
What would his reaction be? What I have just outlined above is purely hypothetical, but it would not be against any Amway rule. How exactly would your up-line answer you if you proposed it to him?
Let's put the matter in a nutshell: Your chance of succeeding in Amway is the same as that of a snowball in hell.
ReplyDeleteAnonymous on December 28th, you could do that and actually make some profit if you sell products and do not participate in the systems, but you would be considered an "also ran" in the business. The leaders only edify people who participate in the system. I think most people know why.
ReplyDeleteAnonymous on Dec 28th, and Joecool. Let's consider that for a moment, let's imagine you have an understanding
ReplyDeleteupline who supports your endevour to approach as an actual sales business.
To earn 6K per month (average salary) the way I read the compensation plan, you'd need 40K turnover
which would put you on 15% bonus, which gets you to 6K gross.
If the average customer spends $300, to reach 40K, you'd need 134 customers who buy every month. Even if you don't
spend on training and stuff, there would be some overheads, so 50K sounds a bit safer, which is 166
recurring customers to be supported and fall off replaced, which is about the same as the amount of
regular working hours in a month. Not even talking about building the base from scratch. And you'd need
time for admin and planning too. To me it sounds quite tough.
The problem with Amway is that the commissions (especially when starting out) are too low for the
transaction sizes. Real estate agents can do with 5% to 10% commission because the amount of work
to reach a large turnover is feasible. For lower turnover sales, % commissions in sales
tend to be higher to make up for that. Amway as a sales business is odd because it is low commissions
(especially when starting) and low turnover, with relatively small transaction sizes meaning you'd need a lot of customers.
And that in a business where you can't draw or pull customers with advertising or signage.
My feeling is that any person with the sales skills and discipline who can pull off making even an
average living from that, would, rather than working himself to death with Amway, be able to make a killing
selling cars, real estate, computer software, swimming pool fences, kitchens or medical equipment.
Even working for somebody else, such a person would have a lot of control of his income and time.
And such a person probably won't take long to see a gap to use his or her contacts to go sole either,
if that is the aim. In time he would make himself valuable by gaining knowledge of cars, real estate, computer
software or whatever, and be able to match needs to offerings, which means he would serve a real niche,
where having the guidance of a sales person actually makes sense. You'd be in demand even if the business
does not work out.
My Amway example is full time, with a 40K turnover, and therefore a handsome (in Amway terms) 15% bonus. When
looking at it on a smaller case, it makes even less sense because the bonus % falls signifficantly. For
those wanting to earn a little extra part time, selling cookies, craft beer or lemonade will probably turn out to
be a better proposition. Plus, as with my full time examples, you'd be able to choose something that suits
your talents and interests, in case it is not shampoo, soap and detergents.
Since you can choose a margin from day one that make's it worth the while, the actual time to profit would be much shorter,
and the real effective startup costs (which should include investments made before first net profit, which Amway defenders ignore) would be much lower. And you can walk around in public with a baseball cap sporting the logo of the stuff you sell, without feeling self conscious or ashamed.
Yes, I see your point. Just selling Amway products to the general public (and excluding all payments for tools and training and functions) would never generate a significant income. It might allow a young person or a housewife to earn just a little extra cash on the side. But it would take a huge and endless effort to earn somebody 6K per month.
ReplyDeleteA person with the energy and drive to have 166 recurring customers per month would no doubt be a super-salesman, and he would do much better to go off on his own rather than be caught up in the tedious Amway racket.
This is why Amway is essentially a pyramid scheme. Big profits in the business really depend on recruitment and DEEP DOWN-LINE. An IBO's personal sale of Amway products is meaningless, but if he develops a deep down-line, then the sheer volume of persons underneath him will provide him with that Holy Grail of "residual income" that Amway types are always dreaming about.
@Anonymous 3 Jan.
ReplyDeleteAgreed, of course. The only difference is that I don't think even a part timer young person or housewife have any real prospects of making it worth it for them either.
Justifying the numbers of Amway product selling at a smaller scale, as extra cash for a young person or housewife, would be even more difficult than justifying the numbers for a person wanting to go full time and earn 6K per month. That is because the "bonus" proportion (commission) is much, much lower than the 18%-21% that a 6K gross profit business gets, starting at 0% before creeping up in wide bands to 3%, 6% etc. If earning 6K per month full time from sales on 18%+ commission would take a huge effort, then earning 1K per month on part time sales on 3% to 10 % is practically impossible.
People selling anything on small scale, whatever it is, would typically require a much larger commission (say 20% to 50%) from the get go.
A housewife would do much better approaching a niche supplier of educational toys (for example) who are trying to enter the market, and sell their product at 30%+ commission to other moms to get her business off the ground, and see if she can find a shop or two to which she can sell the toys at 10% commission in larger quantities. Sure there is no guarantee that it would work. But I already see lower startup cost than an Amway distributor, lower risk (of loosing much money due to monthly expenses), a higher ceiling (who knows, if she could sign up a few toy stores, who knows where this could lead to), and a welcome lack of the creepiness factor.
OK, I understand what you're saying. But would a manufacturer of such products (the educational toys) want to use a housewife as an independent distributor? Wouldn't that be a somewhat roundabout and risky way for them to get their stuff out there? Why would they use her as a middleman?
ReplyDeleteIt would be different if the woman were an independent creator of toys (or art objects, or ceramics, or whatever) who then went around to various shops either selling her stuff to them directly, or leaving it there to be sold on a commission basis. There would be no middleman, and the woman would be in control of her business.
So the IBO is an independent creator of amway products who then went around to various shops either selling their stuff to them directly, or leaving it there to be sold on a commission basis. Ok, right
ReplyDeleteNo, of course not. Nobody in Amway "creates" the products; they just get them from their up-line, who in turn gets them from Amway. And no Amway IBO can leave these products at independent shops to be sold on commission. The IBO has to sell (or consume) the products himself.
ReplyDeleteWhat the discussion deals with is the hypothetical situation of a housewife being the distributor of a manufacturer's toys (or whatever other products) to shops, and the better idea of her making products on her own and selling them without a middleman.
In either case, she'd be much better off than she would be as an Amway IBO, whose main task is always recruitment of others into the Amway plan. Amway, with its insane over-regulation and its crappy compensation percentage, is the least "independent" business of them all.