The Churn?

 What goes completely unnoticed by many Amway folks and prospects is how the upline diamonds actually make their money.  They are told that you make money by purchasing your own Amway products and getting others to copy or do the same thing that you do.  While the diamonds might keep their qualifications by doing this, the real money is in selling tools and functions.  

Tools and functions have larger profit margins than Amway products and the rank and file IBOs do not participate in the compensation plan thus the profits exclusively belong to the diamonds and higher ups.  For example, a function can likely be run for a few dollars per head but the diamonds charge more than a hundred bucks for these functions.  I even hear that virtual functions are still being run at full price.  This is more evidence of the upline greed. 

It’s no secret that most IBOs don’t even last a year in Amway, most likely because of the futility of building an Amway business, along with financial losses associated with the business.  Thus the diamonds need to capitalize on what’s called “the churn”.  That simply means that you get people into Amway and get them plugged into the system of tools and functions. Thus the diamonds profit until these newbies quit.  In the meantime the focus is to keep bringing in people to replace the ones who quit.

Think about this.  If diamonds kept emerging from the system, they would be one share holders in the tool and function profits but if a diamond can just keep replacing quitters, the profits from tools and functions remains in their pockets exclusively and nobody is the wiser.  Sure you need a new diamond here and there so they can proclaim that the system works but overall, the success rate in Amway is miserable at best. 

So if you’re being prospects into Amway or are already an IBO, read this post again and really try to think about this with an open mind. Then you can see through the smoke and mirrors that the upline diamonds are using. 

p.s.  it’s almost Election Day.  Please go out and vote!  

Upline Control?

 One of the reasons I left Amway was because my sponsor started to get weird where he basically told me I needed to submit and to listen to counsel.  I thought it weird that the qualification for someone to counsel me was to Jon Amway before me and really no other reason. 

I recall attending a function where they say you need to be teachable or coachable but in reality what they want us for you to give up control of your life.  They actually advised IBOs to check upline for things like getting married, having kids, buying a car or buying a house.  It was allegedly because they wanted to help you in important life decisions but the reality is a stark difference. 

The reason upline is so concerned about your important life decisions is not because they actually care about you and your Amway business.  What they want is to make sure that you don’t spend your discretionary monies on non Amway things.   Put off that new car, buy more tools and functions. Put off having kids or or buying a house and buy more tools and functions.  

The main theme will always be to save your discretionary money for tools and functions.  In the end I never saw anyone put off any major purchase and got rewarded because of the money rolling in from Amway.  Upline advice always steers the rank and file into spending more and more on tools and functions. 

I even sat in a function where the diamond taught the audience how long you could put off paying your mortgage before foreclosure would take place.  They even taught how long you could put off paying your bills before the water or electric would get cut off because they literally want the shirt off your back.  

But upline wanting control of my life to the point where it got weird, it finally led me to quit my 4000 PV business.  I told all my downline what was going on and they all quit with me except 1or 2 very indoctrinated folks who believed the upline over me.  

In closing, an interesting but true story.  I bought my home in the year 2001.   I bought my house in Hawaii for $305,000.  The real estate agent who served me also knew my sponsor.  She advised my sponsor to buy a home as well.  My former sponsor said he won’t buy a home unless he can pay cash.  Well, my $305,000 home is now worth a million dollars and my former sponsor is still renting trying to save a million dollars to buy a home.  This is the kind of damage that upline can cause to their faithful down line.  Be careful with upline advice.  

The Diamond Lifestyle?

 Many Amway IBOs and prospects see the diamonds and think they are rock stars.  You are given the impression that these folks literally have money to burn and they just live in excessive luxury and have no worries in the world.  Life is just one long and luxurious vacation.  It makes sense because telling you a diamond really just lives a middle class lifestyle wouldn’t be very attractive.  

But some of you out there know the diamonds a bit. Even I got to go to the diamonds house as an IBO because I was an up and coming IBO.  Our diamond had a decent house but it wasn’t a mansion and it wasn’t anything extraordinary. The line they fed us was that the house was paid off and eventually, the diamond would move to a gated community. 

Well, fast forward 20+ years and my former diamond never winded up moving to a gated community and in fact, had at one time fallen out of diamond qualification and was an emerald.  I did hear that he re-qualified as diamond but instead of the gated community in Hawaii, I had heard that the diamond moved to Washington state. Interesting as he used to proclaim that he absolutely loved the ocean. 

So do diamonds live happily ever after with unlimited cash?  It is my informed opinion that diamonds (not all) live in debt like much of the rest of the US.  Diamond income is limited and living a life of excess luxury is very expensive.  Amway reports that  Q12 diamond makes around $600k but a Q12 diamond is very rare.  The average non Q12 diamond last reported by Amway earns about $150k plus sone income from tools and functions.  

A nice income but paying off mansions and Sports cars in cash is a stretch.  I’m not even sure diamonds and their families can afford to fly first class everywhere they go unless they are very tenured and established diamonds.   What many people don’t know is that a diamonds monthly income can be quite small as a significant portion of a diamonds income is made in the form of an annual bonus. 

Just doing the math and using common sense about lifestyles easily shows that a diamond can’t live the diamond lifestyle they often portray unless they are living in debt.  It just makes mathematical sense. 

Your Amway Education?

 One of the really funny things I heard was how your Amway education is like going to college but better because Amway will make you rich but college will give you a job.  Now on the surface that might make sense but looking at it analytically, it is utter BS.  That’s the thing about Amway teaching, it can sound logical but in the end the teaching is just self serving advice to make more money for upline.  

First off, going to college might cost you money but it is a bonafide fact that college graduates earn more money than non college graduates.  So in the end, you may have college loans but over time, the investment will more than pay for itself.  In contrast, most IBOs make nothing or end up losing money.  In other words, the investment into an Amway education never pays off. 

Also, a college education may find you working out of your field of study but a degree shows an ability to learn and to have sone broad degree of learning because that’s how college works.  An Amway education teaches you what exactly?  How to trick people into attending meetings? To answer a question with a question?   What tangible skills does one actually learn in Amway?  

IMO, there are little to no measurable tangible skills learned in Amway except maybe to think positive.  They certainly don’t teach you to run a business or how to actually succeed in Amway.  The teachings are usually rah rah and motivational in nature rather than substantive.  But what most don’t see it because they are blinded with the ideas of trying to get rich in 2-5 years.  They want a shortcut to retirement.  Now I don’t know if such a shortcut exists but I know that for nearly 100% of those who try, Amway doesn’t deliver.  And truth be told, nowhere in Amway’s literature does it advertise any of this. This is upline propaganda.  

You might learn a few things from an Amway education but more than likely, you aren’t going to get anywhere near wealthy or early retirement by running an Amway business for 2-5 years.  

Duplication?

 My upline diamond used to say that the key to success is Amway is duplication, or copying.  He would use an analogy of being in grade school and copying someone else’s answers and that if you can master that one skill, you will be successful in Amway.  Even things downline IBOs do should be duplicatable is what upline would day, meaning others need to be able to copy it. 

Doesn’t that sound sweet and simple.  Just copy as if you’re in school and looking over the shoulder of the class brainiac. Very easy and straightforward right?  But obviously that concept doesn’t work.  If it did, there would be a lot of success constantly churning from the rank and file IBOs.  But instead defat we see is a revolving door of people coming and going (quitting) without making a net profit or losing money, generally from business expenses such as tools and functions.  

And it’s no wonder that duplication doesn’t work in real life because the system is too severely flawed.  You are buying and/or selling products that are relatively unknown and generic in nature but being sold at premium prices.  Now that’s not to say all Amway products are bad or or bad value but overall, you can find better value if you shop at Costco or WalMart.   It’s pretty hard to dispute that unless you’re a fully dedicated and indoctrinated IBO.  

In general, most upline teaching has “core” steps for IBOs to follow and while they are not complicated, they are difficult to follow.  In particular, finding people agreeable to see the plan or to sell products to are difficult tasks and you can’t just duplicate yourself to success.  But what IBOs can do is listen to audios, read books, buy their defacto 100 PV quota, and attend all meetings and functions.  

Sadly, the steps that are easily copied or duplicated are the ones that cost IBOs money and the steps that are vital to growth such as selling products and showing the plan are the ones that are nearly impossible to duplicate. And that in a nutshell is why the vast majority of IBOs make nothing or lose money in the Amway business opportunity. And that is my well informed opinion.  

Amway Is Simple?

 Another one of the lines pitched by upline was how Amway is simple. Some upline used to say that Amway is so easy that a dog could become a direct distributor.  But most of the diamonds would proclaim that Amway is simple but not necessarily “easy”.  What does that mean?  

Simple means that anyone can do it. Like a child’s puzzle, it’s very basic and simple but for a child it may not be “easy”.  When you break down the Amway business, it’s buy some products, sell some products, and sponsor downline.  That’s really how “simple” Amway is.  Would you agree that buying, selling and sponsoring down line is simple?  I mean it’s not that complicated at least on the surface of things.  

So if Amway is simple as upline and the diamonds say, why in the world do you need an endless supply of tools and functions?  I don’t believe that an IBO doesn’t need any training or coaching but for a business that’s supposed to be “simple”, why would you need all that training?  

I recall a conversation with my upline who at the time was pushing tapes ( I was an IBO in the 90’s) hard.  I asked what happens if you own all of the tapes on the listing?  He told me that you keep buying them because tapes sponsor people.  For me that was a WTF moment.  I have never have heard of anyone who heard a tape who decided to get sponsored.   IMO it was just a shameless ploy to sell more tools. 

I have heard that IBOs now give downline some audios/cds and even pay for some downline to attend functions but in the end, that just makes losses worse for dedicated IBOs.  They are squeezing more money from the faithful Amway believers until the upline can convince the prospects and down line to become “real business owners” who pay for their own expenses.  It’s no big deal for the diamonds who sluff off the expense on their downline who have downline. 

It’s sad that this practice continues to roll along.  Beware if you are a prospect or current IBO.  

The Partner Store Lies?

 Many Amway folks who recruit like to throw out big name companies that Amway allegedly “partners” with such as Disney, Nike and some others.  Now typically I see a partnership as a two way street, meaning you help each other. But in Amway’s case, the street seems to be one way.  

What I mean is that Amway IBOs sell stuff from partner stores such as Disney or Nike stuff but Nike or Disney doesn’t sell Amway stuff.  Basically the partnership is just Amway IBOs selling stuff for Nike or Disney and getting Amway PV/BV for it.  That’s pretty much the extent of it.  

But Amway IBOs like to toss around the big named companies as if it brings them some special credibility or something when the reality is that they are just sales people who have access to certain products that are listed in the catalogs.  It’s a no brained for companies like Disney or Nike because nothing is required of them but to pay commissions for sales and basically nothing else.  Since Amway has a large sales force, the “partner” companies have nothing to lose.  

What IBOs don’t mention in their partner store reputations us that Amway once partnered with MCI/Worldcom and Enron, which were of questionable reputations.  I’ve heard IBOs brag about how Amway carefully vets their partners, but well, there you have it.  

So if you get pitched by an Amway IBO trying to sell you on the partner stores, keep in mind what you’ve seen here.  That the partner stores are just hype and not a lot of substance.  Also keep in mind that the middleman commissions almost force the partner stores into charging more than buying direct from the source.  Good luck if you read this and decide to join Amway anyway.  

The Facts Don’t Matter?

 “The facts don’t matter if the dream is big enough”.  I once heard this taught at a function as IBO and a recent comment jarred my memory about it.  When you think about it, someone who invites you to join a business opportunity and says the facts don’t matter, red flags should be flying and you should put on running shoes and run in the opposite way. 

In what business do the facts not matter?  Apparently only in Amway because the fact is that the vast majority of Amway IBOs make nothing or lose money.   The fact is that most IBOs do little or nothing then quit.  The fact is that most IBOs never sponsor a single down line.  The fact is that the average IBO earns about $100 a month and that includes the diamonds.  

Any real business owner would want all the facts and nothing else in making decisions about joining a business opportunity that will use up a lot of time and money.  IBOs don’t know that they are likely to spend hundreds of dollars a month with very little return on investment.  

But the reason so many IBOs just become contributors to the diamonds lifestyle is because that is the real business.  The real business is selling tools and functions.  That’s why the teaching and advise almost always points to the system and dedication to education yourself about Amway.  In previous posts I’ve broken down the math behind this but in a nutshell, tools and functions have a much larger profit margin for diamonds than Amway products and unlike the Amway compensation plan, rank and file IBOs do not participate in the tool and function income.  

So look at the facts.  Do not blindly follow your upline without vetting actual facts.  If you do so, you do it with your own peril and it’s how upline empires are built.  Proceed with caution.  

The Math?

 One of the problems that IBO get into is they ignore, at upline advice, basic math and common sense.  Basically as an IBO, if you just carefully and objectively observe what’s actually going on around you, it’s hard to make a good case for joining or remaining in Amway.  The basic pitch is to come and make money or save money.  

How many IBOs are actually making money or saving money by being an Amway IBO?  Sure, you get the IBO price in Amway goods but those goods are not necessarily saving you any money.  Also, IBOs often try to sponsor their customers who would then receive the IBO price and become a competing IBO.  Yes, you get to leverage a downline’s volume but then you get the conundrum of most IBOs do little or nothing then quit.  Amway’s disclosures show that about half of all IBOs are not active and basically do nothing.  

Additionally, when pitched on Amway, you were likely told that you would make money.  But doing the math shows that the 100 PV that upline wants you to shoot for monthly costs about $300 unless you’re able to sell that volume which would be near impossible unless you have many sympathetic friends and family.  Then you have to cost of tools and functions which can run from $200 a month or more if you are committed to the system. 

All of that expense would generate you about $10 in Amway bonuses.  Only by sponsoring a large group of downline can you start to earn enough to offset some of your Amway related expenses. And here’s another kicker. Amway’s own disclosures show that most IBOs never sponsor a single downline, which makes sense when about half of IBOs don’t lift a finger after signing up.  

So if you just look at the whole picture objectively and assess the math and numbers, in my opinion I can’t understand how anyone can conclude that the Amway opportunity and the related tools and functions is worthy of your investment of time and money.   Good luck if you read this and try anyway. 

Submit To Upline?

 Another cultish teaching that comes from upline diamonds is to submit to upline.  Sometimes it’s called being teachable but as you get more immersed in the system, you are expected to consult with upline did everything, including important life decisions such as getting married or buying a new car.  In retrospect, I believe it’s done because upline doesn’t want you making decisions that could hinder your ability to purchase tools.  

But they make it sound harmless, that checking upline can help you because upline has experience in the business and can tell you how some decisions can impact your business.  Sounds harmless but the upline teaches this more likely for their own benefit than for your benefit.  If you can recognize the game, you can see thru the idiocy of upline teaching.  

Sone upline even “counsels” their downline.  Can you imagine submitting to someone for such important decisions that can affect your life and your uplines qualification to do this is they joined Amway before you.  You could actually be a counselor but you would be counseled by someone upline with less qualifications simply on the basis that they joined Amway before you. 

When I was a IBO back in the 1990s, I was engaged to be married and my upline advised to to dump my fiancée because I could build the business faster and if I achieved diamond, women would line up to court a single diamond.  By then I had already smelled a rat with regards to Amway teaching so that was the last straw for me. 

I was a 4000 PV IBO at the time so I told my group what happened and that because of what happened, I had decided to walk away from Amway.  All of my group except 1 or 2 IBOs downline from me walked away when I did.  So my upline and sponsor went from direct distributor to less than 4000 PV and I do not believe he ever requalified at that level again.  

I do know that my sponsor was still active as recently as 2016 but I’m not sure if he’s still chasing Amway.  Being that he was a physician, I see it as a life wasted on Amway.   Submit to your upline is total BS.  

No Crosslining?

 One of the really stupid and hypocritical things that upline taught the group was no crosslining. In other words, if you had a different sponsor or upline diamond, you were not to talk about business with other business owners.  This is stupid because an effective way to learn techniques and to get tips is to talk to other rank and file business owners. 

If not, why are IBOs expected to attend (and pay for) meetings where a cross line diamond is speaking?  Why would IBOs pay for audios to hear cross line speakers tell them about the business?   The premise is that cross line don’t have a direct interest in your Amway business but it seems that cross lining is ok if your upline can profit from it. 

The real reason the diamonds don’t want you talking to others is because the absolute truth might come out.  That you may have been highly dedicated to Amway and the systems for years and did everything that was asked of you only to suffer a net loss of income.  Or that you did everything that upline taught you but you were still unable to sponsor a single down line.  

Another thing is that the rank and file might compare what they’ve been taught and begin to realize that they’re being scammed.  I once spoke to a cross line IBO and that’s when I started to realize how stupid some of our practices were.  I was an IBO in the old call in your orders and pick up the products.  Our group’s practice took hours and hours because you had to go to your sponsor‘s house And read off your list as they filled your order.  My cross line friend said their upline just put all your stuff in a box and noted anything that was not yet fulfilled. You paid and left in minutes. 

So this is just another example of stupid business practices taught and perpetuated by upline.  But the main reason is they just don’t want the rank and file to speak the truth about what’s really going on in the business.  When you have this kind of teaching, you’re better off running as fast as you can in the other direction. 

Amway Has Low Overhead?

 One if the selling points for the Amway business was low overhead (basically business expenses) and the ability to make quick profits.  But is this true or just another list of lies told by the diamonds?   Basically when you’re being pitched on Amway, your told that you can sell stuff to make money, and that you can save money by purchasing from yourself.  

Then because you gave low or no overhead expenses, Amway just makes sense.  But it’s all just a selling point because the upline diamond will then sell you overhead.  In other words, they will sell you on the vital necessity to purchase tools and functions.  I questioned this as a prospect and was told that so and so diamond was a multi millionaire and feels that tools are as vital as breathing air but I was welcome to go it alone and succeed where nobody else has (without tools).  

This is an outright lie because in the Amway business, the tools are your primary business expenses, or overhead.  Even if you manage to sell a few products to actual customers for a profit, more than likely you will still wind up with a net loss because the ongoing use of tools and functions can become expensive over time.  Many former IBOs have indicated that you can pile up thousands of dollars in losses over a few months and much more if you remain dedicated to the system and the teaching.  

Now the cost of tools and functions would be worth it if the system was churning out success stories on a regular basis. To try and up sell this, diamonds will show you examples of a new platinum or other pin, but won’t mention that a bunch of other big pins may have failed to requalify for their current t levels.  If you go and look up Amway revenues for the last handful of years, you will see that revenues were flat or in decline, which means business was not growing.  

So what does this all mean   Simple, it means joining Amway makes it highly likely, nearly assured that you will have a net loss of income if you join Amway and participate in the system of tools and functions.  Also now with covid 19, I can only imagine that the ability to recruit down line or approach others to sell products is greatly hampered by state or local restrictions.  Good luck to you if you read this and join anyway.  

Charge Yourself Full Retail Price?

 One of the most stupid teachings I heard as an IBO was that IBOs should buy their own products from their Amway business and charge them selves full retail.  Thus the difference between IBO price and full retail would be your profit which you can then bank and use that money to buy tools and function tickets.  For me, that was a WTF moment.  

Some IBOs fall for this garbage and actually have repeated that teaching.  If you buy your own stuff, you’re using your own money, thus your money went from one account to another.  That’s not profit.   Well, I guess an IBO can be fooled into thinking that moving money from your savings to checking is profit.   

Say you purchase double x for the IBO price of $50 but the full retail is $85.  In theory you have now made $35 profit.  You’re supposed to use that profit for tools and functions but if the profit just can out of your pocket, what difference does it make?   You could just as easily pay for double x then pay for your functions and tools. By claiming retail profit, now moving money from one account to another becomes taxable income (profits are taxable).  

Thus teaching is actually dangerous because it just adds to an IBOs already negative cash flow.  And to think I actually paid to attend a function where they taught this crap.  The good side is that this was where I started to smell a rat with regards to upline teaching.  This and the submit to upline garbage.  

Since I’m certain that diamonds are still pushing tools and functions, I’m sure they must be teaching down line to raise capital in some way.  It’s possible that this paying yourself lies are still ongoing.  It’s my hope that this blog post can help unsuspecting IBOs and prospects to see through the silly upline teaching. 

Amway Saves Marriages?

 Looking back, one of the really sill things taught by diamonds was that Amway saves marriages.  Of course I’m sure they didn’t poll the rank and file IBOs who may have gotten divorced, some possibly because of Amway.  One major stressor in a marriage is a lack of finances, thus the monthly negative cashflow for most “serious” IBOs can greatly contribute towards the health of a marriage.  

The diamonds would say that working together in the business actually helps strengthen a marriage and that could be true to some degree, but overall I believe the business and related activities actually become detrimental to marriages.  You also have to factor in social events that are missed due to dedication to the Amway business such as birthday parties, BBQs with friends, etc. 

I even heard a diamond say that Amway IBOs have a 2% divorce rate while everyone else has a divorce rate of more than 50%.  Of course that’s total BS.  I can name some diamonds from our own LOS - line of sponsorship, that divorced.  Wolgamott, Danzik, Kosage, Brooks.  Since there aren’t 200 US WWDB diamonds that I know of, the divorce rate can’t be 2%, but has to be much higher, plus there are likely other pins who have divorced.  

Now I normally wouldn’t care because people get divorced in this day and age but since the diamonds make a thing out of it, I may as well point out the hypocrisy.  And this doesn’t include WWDB rank and file divorces.  I know a handful as well but won’t mention names here.  

No, Amway doesn’t save marriages and don’t buy the BS if your upline tries to sell you on it.  

Working The Business?

 If you’ve ever been an IBO, you probably heard from upline that a “serious” business owner has their mind on business and they are working it 24/7.  You needed that laser focus in order to succeed and to grow your business.  And that even applies to an IBO that has no downline. You’re supposed to sacrifice things like a bowling or softball league in the name of business.  Delayed gratification is what upline called our sacrifices.  

But keeping this in mind, it made me wonder where the diamond freedom is?  If an IBO with no down line is supposed to take the business so seriously that it consumes most of his/her time, where does the diamond have the time to go on never ending fabulous vacations or to do what they want, when they want?  

The more likely scenario is that a diamond is so busy trying maintain their business that they are probably extremely busy.  A diamond has at least 6 platinum down line legs that need help to maintain the diamond qualification and in addition to that, the diamond has their own personally sponsored down line that they are also trying to grow into platinums its above. 

While the diamonds want you to believe that they live a life of leisure and fun, they are more likely busier than if they just had a 9-5 job.  If you’ve been an IBO, you know how busy your schedule can be just to maintain your tiny Amway business.  What do you think it takes for a diamond who might have more than a thousand down line.  And in addition to the busy schedule, they also speak at meetings and functions.  

I highly doubt that there is much leisure and free time as a diamond.  They have simply traded a regular job for one with odd hours,  you can argue that the diamond doesn’t have to answer to a boss but imagine being a manager whose workforce mostly does little or nothing and you have no leverage to fire them, discipline them or require them to lift a finger.  

The diamond freedom is just an illusion.  There is no walking away to collect residual income for life.  If you stop, the income will shrivel up and eventually stop.  You’re constantly working for everything you have.  Is that what you really want from the Amway business?