Monday, February 3, 2020

Doomed From The Start?

So many people join Amway with high hopes and dreams.  It’s no wonder considering how the recruitment meetings go.  Prospects are filled with delusions of untold wealth and retiring at the age of 29.  They are shown displays of wealth from the diamonds who allegedly live a jet set lifestyle with money just rolling in.

I believe a look at reality would be bad for recruiting new people into Amway so they are shown glimpses of wealth that the diamonds allegedly have obtained from the Amway businesses.  But when you study Amway’s own disclosures, you’ll see that diamonds might make a decent income of perhaps 100 to 200k annually but that is gross income.  Taxes, medical coverage and business expenses likely eat up a lot if a diamond’s income, leaving them in debt like most Americans or perhaps a middle class lifestyle at best.

Again, do the math yourself and it’s hard to reach any other conclusion.  Imagine a family of four with a gross income of $200k.  After taxes, medical coverage, and business expenses, it East to see that they aren’t buying mansions with cash payments.  They likely aren’t even buying a nice car in cash.  Sure, some tenured long time double diamonds might have a nice life but these are the exceptions and not the rule.

If not, why is my former diamond (Harimoti) still only a diamond more than 20 years since I left Amway?  I even heard that he fell back to emerald for a while which raises sustainability questions.

The truth is that most IBOS are doomed from the start.  They peddle average products at premium prices.  They also have negative cash flow because of the inefficient training system.  Just because a few new people manage to achieve higher levels doesn’t change the fact that more than 99% of all IBOS make nothing or lose money, because they are doomed from the start.


Anonymous said...

Another fact to consider is this: some Diamonds use the money that they make in Amway to buy investments such as stocks or bonds, or rental properties, or other profitable things. If they are intelligent enough to build up those investments, they can pose as fabulously rich "Amway success stories" at the functions. The simple-minded IBOs at the functions see all the fancy homes and cars, but don't realize that Amway was only the seed-money that went into traditional investments.

In other words, using the annual bonus checks or tool money that he receives from Amway will allow a smart Platinum to get into a REALLY good thing, like tax-free bonds or real estate, which will provide him with some excellent permanent income. And then he can still get paid for going to functions, and posturing as an Amway hero who has made millions by drawing chalk circles and eating energy bars.

What a fraud!

Anonymous said...

@February 4, none of the Amway cultists that I know have any seed money left after it is squandered on tools, functions and self-consumption, often excessive and buying things that they would not have bought otherwise.

Better advice would be to take the seed money used for the Amway habit and invest that in anything other than Amway, from the very start.

Anonymous said...

Well, I don't mean the average IBO. I mean the one percent of up-line big pins who actually manage to get big bonuses, and a cut of the tool and function money. They use this seed-money to invest in other profitable things, and perhaps they become millionaires that way.

The crime is that they go around boasting that the reason they are rich is because they have been working hard at Amway. But that's a lie. They are rich because they made good financial investments in the ordinary way: stocks, bonds, IRAs, real estate, and rental property.