A recent comment left on my blog inspired this article. The comment was that basically, IBO's are "donating" to their upline on a monthly basis. You start by donating upline in the form of monthly purchases. Your 100 PV is roughly equal to $300 and most of the bonus generated by that volume goes somewhere upline. This will go on forever until you either quit and stop buying, or unless you somehow manage to sponsor enough downline who will then "donate" to you.
If you attend those open meetings, you are again donating to the upline's coffers. As an IBO, I was strongly encouraged to attend these meetings even if I had no new prospects to bring. And of course, there was an entrance fee at the door. I don't think this was a major profit center but still, a room with perhaps 1000 attendees = $6000 collected and a room with chairs and a speaker doesn't cost that much for an evening.If you purchase standing orders, you are donating to your upline on a weekly basis. If the upline can reproduce audios for 50 cents or even a dollar a piece, this is a very healthy profit center. Also, most upline recommend that you listen to a cd/audio each day, thus you need to purchase some additional audios/cds in addition to the standing orders.
Voicemail and book of the month are also monthly donations. Who in the world needs voicemail these days? But uplines still recommend it as they make some serious coin from it. The book of the month might have some value but the uplines are still making profits from these. Think about it, these diamonds claim they want your success but they make you pay for just about any help you receive, regardless of whether that help is beneficial to your business or not. By Amway rules, your sponsor is supposed to train and motivate you free of charge.
The regional and major functions are like the monthly fund raisers for the diamonds. Major functions can have thousand or tens of thousands of people in attendance. If they pay $100 (or more) each, it is a serious money maker for upline. A convention center or arena has costs in running events but those costs (while they vary) might be $10 to $25 per person. The rest is pure profit for the diamonds.
All in all, the profit margin is much higher for these tools and functions than from Amway products. Thus it's perfectly reasonable to think that the diamonds can make much more money from selling tools than from Amway itself. For groups where current qualifications are not required for a cut of the tools, these diamonds might make nearly all of their money from tools and functions. It's more like a diamond fundraiser than a function to help IBO's. Afterall, who gets the biggest financial benefit from the tools and functions? The diamonds or the IBO's?
2 comments:
The CD/audio tapes that you are required to buy and listen to are not just about giving up-line an unending stream of profit. They are also about brainwashing.
I'd like to hear about any other business enterprise in the world that requires ongoing and endless training tapes for employees. Most new employees, if competent and intelligent, learn the ropes of their jobs within a few weeks or months. But Amway (along with its utterly corrupt AMO subsystems) insists that you buy these CDs or tapes because they know that an IBO who is losing money needs CONSTANT REINFORCEMENT if he is to remain in the business. He has to revved up and fired up and enthused all the time, and the audiotapes or CDs provide that energizing.
Besides, if you listen to the tapes you'll know that they provide practically no serious training at all for the nuts-and-bolts of selling Amway products, or even of recruitment. All they do is sing the praises of the Amway plan, talk about future riches, and tell you how great you are for having signed up in this wonderful enterprise. Those aren't "training tapes." They are just propaganda.
But many people are very susceptible to propaganda, and for this reason your up-line will insist that you purchase CDs or tapes regularly and listen to them every single day. Yes, this puts money in his pocket. But more important, it tends to keep IBOs in the racket for much longer than they would stay without the constant drum-beat of praise for Amway.
I've never heard of these functions referred to as "Diamond fundraisers", but the more I think about it, the more you're spot on.
I was thinking back to the profit margin of these in URA. Our meetings were $5 and were held mostly on Thursday nights. Say we had an average of 180 IBOs. That's $900 before you subtract the hotel meeting room rent which I think was about $250 or $300 a night. That's $600 a week or $2,400 a month that is being cleared. And that is just one meeting out of at least 10 in the organization. Some are larger, some are smaller. But I think it's realistic that URA was clearing $20,000 a month just from all of the regular weekly meetings. That's about $240,000 a year. And just because you might have a MAJOR function coming up, doesn't mean you have the week off.
Let's go to the next step. "Success Seminars." $15 a head inside of a church or a school auditorium on a Saturday night twice a year. Say we averaged about 800 people in ours. That's $12,000 a seminar or $24,000 a year. There are about 20 to 30 of these across the organization over the year (usually held in May and December). That's a lot of money flowing upline and the rent on those places are much cheaper than the hotel ballrooms. So depending on the overall sizes, maybe that's another $300,000 a year.
And then the major functions. This is where the money gets really good. Our functions were $93 a pop at four times a year. Say we have 5,000 a function. That's about $465,000 per and $1,860,000 a year before the costs of four weekends of renting a large hotel ballroom. That's not counting the profits on books, CDs, clothing that is made as well.
So that's just function money. Tools money is a different beast. Despite a cheaper $42 a month version, we had to buy the $53 a month version so that our Upline could tick the box as this was one of the qualifying pieces for the Arrow program. This was a made-up program like WWDB's Eagle program not recognized by Amway.
Say you have 5,000 IBOs on membership at $53 per month. That's $265,000 a month or $3,180,000 a year. Hire a couple of contractors to keep the app and the website up and hire a couple of people to work in the "office" and you still clear a lot of month.
And even if the Emeralds made $100,000 a year in tools and functions and Rubies and Platinums made a smaller percentage, there is still a LOT flowing to the top to the Diamonds.
So I've essentially broken down the numbers for you just most of the system and tools money in one of the smaller AMOs in Amway. Can you imagine how much is flowing upline to bigger organizations such as WWDB, BWW, and LTD?
I've laid out how the REAL money is made and used my former organization as a rough example. The money is not in soap.
When I opened my mind and started doing the math, I realized it is all a scheme and left shortly after. I encourage those who might be drinking the Kool-Aid to start putting this simple math together using loose amounts from their organization and realize if their monthly donations to the Diamonds are worth it to themselves and to their own bank accounts.
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