Thursday, December 9, 2021

Is Your Dream Big Enough?

 One of the things Amway IBOs are taught is to ignore facts, or to ignore numbers. Our Amway upline told the group "If the dream is big enough, the facts don't matter" I believe this is because the facts are not pretty when you take a business like approach to the math behind the Amway business, for most IBOs. It is why upline teaching often "evolves" into things such as Amway saves marriages, or Amway makes you a nicer person, or that Amway is not about money, it is about friendships. That is a load of garbage. Business is about making a profit. If you hear some of these lines from your upline, it should be a red flag that sends you packing. Upline may also feed you other deceptive lines such as an IBO being successful because they showed up at a function, or because they just signed up for standing order. These are all just false encouragement designed to distract from the fact that an IBO is not making money.

When you take a good look at the Amway presentation, the majority of IBOs are at the 100 PV level. At that level, they are spending about $300 monthly to reach 100 PV and for their efforts, they receive approximately a $10 check from Amway. Most IBOs will be encouraged to participate in some kind of system, often consisting of voicemail, websites, cds, books, seminars and other meetings. MOST IBOs will not recoup enough cash to cover any of these expenses, let alone all of them. At a glance, the system expenses may appear nominal such as $6 for a cd, $6 for an open meeting, $100 to $125 for a major function, $12 for a book. It is how upline gets you involved, and then after a while, an IBO starts to notice the negative cash flow and then a tough decision needs to be made. Either quit and cut the losses, or press on hoping that the system will eventually deliver on its promises.

What most IBOs don't notice, is that less than one half of one percent ever reach platinum. A fraction of one percent! And in many cases, platinums might break even or even suffer losses! So why would IBOs want to work so hard to reach platinum? They have less than a 1% chance of reaching that level. They have a tiny chance of maintaining that level, and they are still unlikely to earn any significant income at that level. A study done by an attorney general in Wisconsin (Bruce Craig) revealed that the top 1% of IBOs averaged a net loss of about $900 annually. While Amway defenders will decry that the study is a bit dated, I will say this: The basics of the Amway business has not changed since that study was done, AND there are actually more system expenses today than there were back then, thus platinums may actually be losing more money annually than before. While not all platinums will lose money, I believe hard core dedicated platinums would stand to lose money.

As an IBO, I hope you are tracking your expenses versus your income. Most IBOs will see a negative cash flow month after month. Even though the Amway business is often promoted as low or no overhead, the system expenses (overhead) eventually begin to add up. Beware and please follow the numbers.

1 comment:

Anonymous said...

"Overhead" is what you pay regularly in a business, apart from variable and incidental expenses. That would be things like rent, taxes, insurance, maintenance, and fixed salaries for employees.

No such things exist in Amway, so what up-line does is to create a fictional and utterly unnecessary overhead in the form of required monthly PV purchases, CommuniKate, annual function fees, and above all else a steady supply of "tools" (information in the form of CDs, tapes, books, and publications that you receive every month). An IBO is expected to think of these useless things as "necessary" and "required" in order to run an Amway business.

The result is that most IBOs in Amway are running a "business" that is all overhead and no profit.