I've been debating with others about the concept of customers. Amway's most prolific defender argues that IBOs are customers and holds the position that there are a lot of people who register with Amway simply to be customers. Now I don't know how anyone can possibly make that determination, but regardless of whether it's true or not, these folks are still considered IBOs. I don't want to debate the legal ramifications about the 1979 FTC ruling and the 70& rule, although the spirit of the rule was to prevent IBOs from buying their bonus. in the 2016 FTC ruling against Herbalife, the FTC said sales to distributors do not count as retail sales and required Herbalife to changes their operations because of this rule.
Amway apologists apparently contends that IBOs who purchase and then resell to downline are meeting the sales requirements and the downline are customers. Okay, let's go with that. But wait, IBOs do not buy and then resell to their downline. IBOs order directly from Amway do they not? If IBOs order directly from Amway, their upline gets some volume credit for downline purchases but the upline doesn't buy and then resell anything to downline. So, are IBOs actually making any sales to non IBOs, save for sympathetic friends and family?If in fact, IBOs are not selling their goods, and are primarily self consuming them, it means that most of the upline bonus is basically generated from the pockets of the downline. I believe the tools business is a product pyramid as only IBOs are buying standing orders and attending functions. The lack of selling Amway products to the public would put the Amway business opportunity in pretty much the same category. I wonder what the FTC would rule today if that were the case? I wonder what the FTC would rule on the tools systems as it is today?
Something to think seriously about. If you are an Amway business owner, and you are selling little or nothing, where do you think your bonus comes from? It either comes from your own pockets, or it comes from taking advantage of your downline, who then pony up a portion of your bonus from their pockets. In a system such as this, the only way to maximize your bonus is to recruit as many downline as possible. Because the more people you can leverage, the more bonus you can get. The problem with this system is that people realize they aren't making money, and that paying in some cases, ridiculous high prices for "prestigious" soap and vitamins is not worth it, and they quit. When these folks lose their Amway dream of mansions and jets, they somehow lose their desire to keep making purchases.
If former IBOs kept on buying Amway goods, then Amway sales would climb pretty much every year as the former IBO's purchases coupled with current IBO purchases should keep going up, not down. But that's not really the case is it? In what business can the employees or company owners be the primary customers and prosper. The answer is none and Amway is not an exception.
5 comments:
The only real customers for Amway products are the IBOs, who must purchase a fixed amount of stuff every month to maintain a sufficient PV level to qualify for a bonus check. That's about $300 dollars worth of Amway products to get a ten-buck check.
Actual retail customers, who want the stuff and will buy it regularly? Not a chance.
Your post makes sense, but you should compare Amway to other MLM. Because of all the MLMs Amway is the only corporation that at least continues to make an effort to rectify the 70/30 rule.
Others are straight up ponzi schemes with no products ... just money traveling up with the belief that if you do it long enough, you'll get to the top and make money off your downline. There are people who literally join an MLM knowing full well that it is only for a limited time. You should read Eric Worre's book or check him out on YouTube. MLM industry is basically advertized as a get rich quick knowing full well that late entries are doomed, so it is all about timing.
IN that sense, I respect the fact that Amway has withstood the test of time and even now every year there are new diamonds. Some uplines have surely pushed too much but overall if you compare it to the industry it is the most legit imo.
Amway is no different than other MLMs in terms of not following the 70% rule.
They just ignore it and do their own thing. Nobody polices this rule, even though without it, Amway's legality could be seen as questionable, IMO.
Anonymous at 10:27 is wrong because (as you say) there's no way for anyone to enforce the 70 - 30 rule, and all of the AMO subsystems for Amway openly advise their IBOs to list dead relatives, nonexistent friends, or even their dog as "retail customers" for Amway products. Amway in Ada, Michigan closes its eyes to all of this, claiming that it has "no control" over what is said or done in the AMOs. This provides them with a perfect legal loophole on the 70 - 30 rule.
Anonymous at 10:27.
The point being argued here, is that those signing up with Amway, will almost all likely waste a lot of money, time, and respect.
Comparing it with other MLMs will not change that. What it should be compared with is not signing up (or leaving), which always turns out to be the better choice.
Eric Worre is not what I’d call a credible objective source! He and others have built careers from monetising MLM “wisdom” for people who have been brainwashed to believe their MLM loyalty scheme subscription is a business. They listen to Worre and others to attempt to reach that success they believe is just around the corner.
A real business makes money. A real small work from home business that does not have teams of staff or equipment, should make money almost from day one if the business is going to make it.
Amway can be viewed as buyers club, a subscription to a loyalty scheme, and not a very good one at that. Or it can be viewed as a commission only sales job, where again, it is not a very good one. Outside MLM, there are better commission only sales jobs where hard work and good technique and talent are rewarded, and where you can have more self respect. That is if sales or “motivating people”/“helping others succeed” (as Amway groups call it to attempt to not scare people who say they’re not into sales) is your thing. If it’s not your thing, even more reason to avoid Amway.
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