The Zombies?

 Amway Zombies? Sometimes it happens to the very nicest of people and it often happens slowly and subtly. These are the signs that you are becoming indoctrinated, and you are likely annoying your loved ones at this point. One thing Amway uplines are good at is indoctrinating their downline. They use clever psychology and get you to agree with them on small things.  For example, they'll get you to agree that taxes are too high, and inflation and other expenses such as taxes eat away at your income.  In doing this, they are building up your trust and then when a degree of trust is installed, then they toss in some of the crazy teaching. Many folks quit after seeing through the scam but some bite hard and follow blindly. My former sponsor is still in Amway after 25+ years and while he was once upon a time a platinum, he is no longer close to that level. I hope this helps someone:

*You're driven to recruit everyone you know.  You call all your friends and family. You may even resort to deception or outright lies to get people to meetings to "see the plan". Before you know it, your family and friends avoid you like the plague. You do this because it's the only way to achieve "diamond" and "residual income". Very little matters to you other than getting people to see the plan or to register as a downline.

*You're encouraged to develop an unreasonable, irrational zeal for the products. Even so far as to justify the quality of toilet paper or to call the household products prestigious. You may even argue the quality of energy drinks or about phyto nutrients, something you may not even know about. You'll justify the higher prices of Amway products by talks of concentration or some other means.  Even when faced with the simple math, you'll continue to believe your upline instead of your own eyes.

*A whole bunch of demands, promises, subtle threats of failure if you don't try hard enough are made in the promotional material and motivational seminars. i.e. If you quit, you are a loser destined to die broke and unhappy.  

*Because the system is touted as the way you're going to make yourself fantastically rich, you're under pressure to drop any conflicting or competing interests such as your bowling league or golf club. Nothing else in life has importance except for the quest of financial freedom. All activities in your life must enhance your Amway business and have an effect on your financial future.  Even friends and family are shunned.  IBOs who skip their brother's wedding is touted as a hero doing "whatever it takes" to achieve the Amway dream.  Eventually, these missed and/or skipped family events become a source of regret for many IBOs.

*Your upline soon becomes your most trusted friend. Your thoughts and feelings are shaped in part by the cds, meetings and functions. You ask upline permission for many personal decisions such as buying a new laptop, a new car, having kids, getting married, etc. As if someone who signed up in in Amway before you is suddenly qualified to counsel you on these decisions.  And what is the basis for this nonsensical hierarchy?  That person signed up for Amway before you, regardless of past experiences or education. 

Do you recognize these behaviors? Hopefully you aren't displaying these behaviors.

Compelling Evidence?

 It is my observation that people who join Amway usually end up losing money in the end. They may get involved to make a few bucks or because they are mistakenly led to believe that they will become millionaires in Amway in 2-5 years. I know my sponsor convinced me that we would be millionaires in a few years. These folks who recruit new IBOs into Amway are often associated with a "system" such as Worldwide Dream builders (WWDB)or Network 21 (N21). These system promoters, often diamonds, may mislead the recruits by showing them pictures of mansions or other luxuries, implying that they attained these goods with their Amway business. In many cases, it is a deception, especially when we know for a fact that some diamond leaders who proclaimed that they only make cash purchases, had their homes foreclosed. Without the hype, I am sure there would be fewer sign ups. But what is the evidence?

It is simple. Amway reports that the average active IBO earns about $115 a month in gross income. This average includes diamonds and other higher end IBOs. I believe if you calculated the median, the average would be much lower.

But what makes IBOs operate at a loss is the system expenses. The system generally consists of voicemail, standing orders, cds, functions, books and other materials. An average business building IBO might spend an average of $250 a month (possibly more, depending on the level of commitment) or so on these expenses. Amway defenders like to decry the amount, but there are couples who would likely spend more and IBOs who must travel by air to functions would spend more. Single IBOs who buy only the minimum might spend a bit less. Some IBOs with abusive uplines might spend much much more than $250 a month on tools. I believe my former sponsor probably spent easily an average of $1000 a month on average. (I am from Hawaii, so the average cost of functions is much greater due to long distance air travel)

Thus, if the average IBO earns $115 a month but the same average IBO spends $250 a month on tools, the average active IBO is losing $135 a month, with lower level IBOs (i.e. 100 PV) would lose more.

Look at a group of 100 IBOs at 100 PV. (This is just a model). If a 100-business building IBOs average $250 a month on tools, they as a group would expend $25,000 a month on tools. Their volume would be 10,000 PV, or about 30,000 BV. This would generate about $7500 in bonuses per month. Thus, this group spent $25,000 to learn and be motivated while the group splits up $7500 a month in bonuses. The platinum would get the lion's share of the bonus but most of the rest of the group will suffer net losses. As the group grows, the bonus may grow, but so will their expenditures on tools.

The only way the group can make money as a whole is to avoid participation in the tools altogether. The evidence is right here with simple math. The systems do not work because the cost of the system is likely to consume all of the Amway generated bonuses and more. I gladly challenge anyone to explain in detail how this post is not reflective of the reality of being in Amway and a system such as WWDB or Network21.

The facts speak for themselves.

Can You Overcome The Name Amway?

 Over the years, I believe that Amway has earned a bad reputation with the general public in the US. It is because IBOs have lied, IBOs had deceived and tricked people into attending recruitment meetings, and IBOs have done zany thing that have turned people off about the Amway opportunity. Factor in the bad experiences some people have had because of the "tools scam" and it's easy to understand why just mentioning the name "Amway" can result in funny looks from others.

While certainly, the blame is not entirely because of Amway the corporation. But certainly, I cannot give Amway the corporation a pass because I believe they have known about the tools "kingpins" and allowed them to operate without resistance. As a result, many IBOs suffered bad experiences such as bankruptcy, homes lost, and other financial devastation as uplines would advise downline to "do whatever it takes" to attend more functions and to buy more tools. While the tools are optional by the letter of the law, the uplines operate from a position of trust, or a position of a trusted friend or mentor. Thus, bad self-serving financial advice was disbursed by many uplines and they apparently helped fund their diamond lifestyles with the proceeds from tool sales (voicemail, websites, standing orders, functions, book of the month, open meetings).

I believe when I was a WWDB IBO in the later 1990's, the tool kingpins were in their heyday. The internet wasn't as readily available with information for prospects. IBOs didn't use the internet to place orders, thus the kingpins ran their unethical businesses unbridled and unchecked. I believe Amway's efforts (if any) to suppress these kingpin's efforts were ineffective, and I believe it is because the kingpins and indoctrinated IBOs were the ones recruiting new members for Amway and taught them the 100 PV (defacto) quota, along with Amway product loyalty.

I remember a meeting in our group where our upline platinum told us that the key to Amway success was the ability to overcome the name "Amway". For the very reasons I have cited here, our group was taught to avoid mentioning the name Amway and to use the term private franchise and other catchy names to avoid detection from prospects. Some people in our group must have outright lied because I attended more than a handful of smaller meetings where guests walked out ticked off, muttering something about being tricked or wasting their time for the meeting.

When I finally quit Amway in 1998 or so, I went on with my life and things were great, having left Amway, which left me with more time and money than previously. It wasn't until I later discovered the blatant upline lies (such as there are ZERO profits from tools) and that IBOs were still subjected to such lies. Having learned that the same uplines were still teaching basically the same things with many of the same lies, I began my blogging career. While Amway apologists claim that my experience is old, I keep running into evidence that suggests that things are more the same than not, save for the internet ordering and automated issuance of downline bonuses.

Many of the leaders who deceived and lied, are still in leadership roles and teaching many of the same abusive advice. Why I keep blogging, is because these leaders continue to profit at downline's expense, and they have never been held accountable for bad advice or for their lies. I hope this blog provides enough information so prospects and IBOs can make informed choices.

The Fallacy?

 (Reprint of a popular article)

There has been much debate by both critics and Amway IBOs and supporters over an issue regarding a WWDB Dream Night function. The issue was an honest question over the cost of a Dream Night Ticket. Well, needless to say, the IBO in question ended up deciding that his blog will no longer accept comments. And while that is certainly his right, he made a statement that IBOs may be told, but makes no sense. Here is the statement:

"Here is a tip when doing research, if you have a question about a company why not give the actual company a call? Wow what a concept."

While on the surface, that might seem logical. If you have a question about how a company works, that might make perfect sense. But the Amway opportunity, along with the attached motivational tools companies, make that a touchy situation. What are you supposed to do? Call WWDB and ask if they are a good company? Call WWDB and ask if they scam downline? What if you call and ask WWDB if most IBOs on their system make money or lose money? If you look at the average income of the majority of IBOs and factor in expenses such as voicemail, standing orders and functions, I can only conclude that the vast majority of IBOs on the system have to be losing money. The longer you stay in the system, the more you lose. Furthermore, I believe there are more people winning the power ball lottery in the US than the number of new WWDB diamonds emerging in the US in the last dozen years ago or so.

Imagine if you had questions and simply asked the person? Hello? Mr. Al Capone, I heard you were a gangster in charge of organized crime. But I thought it would only be fair if I got the answer directly from you. What's that? You're not a gangster and you go to church? Okay, I see. Well, that clears that up. Mr. Capone is not a gangster, I confirmed that by asking him. Do you see the ridiculous justification of just asking the person in question? Isn't a better way to ask a neutral third party?

Many IBOs will also suggest that you check the better business bureau. Well, Amway has a good mark from the better business bureau. But Amway isn't selling you voicemail and other support materials, right? That would be WWDB or some other motivational group, or a particular double or triple diamond, whose business may not have been registered or known to the better business bureau.

I believe IBOs, information seekers, and prospects can find a ton of information on the internet using google. Upline leaders discourage this because too much frank and disparaging information exists about the Amway opportunity. But much of that information is real life true experiences. I was an up and coming "mover and shaker" in WWDB. This blog reflects much of my real experiences and the realizations I came to after having left Amway and WWDB. Sadly, my experience was not a good one, but more and more I see evidence that what I was taught many years ago is still taught today, and by some of the same leaders. I hope my experience can help others.

Amway IBOs In Tax Court?

 A sight visitor posted this link which I found interesting and humorous. I did not post the entire link, so there is more material. Check it out.  It's a bit dated now but I doubt that much has changed over the years.  The business is fundamentally the same.

http://riles52.blogspot.com/2011/06/selling-soap-as-hobby-amway-ibos-in-tax.html

Selling Soap as a Hobby - Amway IBO's in Tax Court
Roger S. Campbell, et ux. v. Commissioner, TC Memo 2011-42

The Amway distributorship system is well known to respondent and this Court
Friscia Construction, Inc., et al. v. Commissioner, TC Memo 2000-192

Quote:  "I included the Campbell case in one of my group posts. It concerned someone whose Amway activities were considered a hobby by the Tax Court denying them deductions for losses. That portion of the post was picked up by someone who calls himself Joecool and posted on his blog under the title "Do IBO's have a clue about business?". I found that there are quite a few blogs dedicated to pointing out the downside of the Amway experience including Married To An Ambot by Anna Banana :

The other attraction of Amway to some people is that it might allow them to deduct as business expenses things like cars, part of their home or entertainment that they would have spent anyway. That's probably the aspect of Amway that the IRS finds most interesting. Joecool did a post on how some IBO's think of their income tax refunds (generated by Amway losses sheltering other income) as profit."  End Quote 

To me the most interesting thing that I found in my search is this excerpt from the Internal Revenue Manual for examiners who are doing information requests:

.4.4.3.39 — Amway Corporation
[Last Revised: 12-10-2007]
(1) Amway Corporation has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or overnight service at Amway Corporation, 7575 E. Fulton, Ada, MI 49355, Attn.: Director, Legal Division. Direct distributors who further qualify for profit sharing bonuses receive the non-cash part of that bonus through a mutual fund account administered by Amway Mutual Fund, Inc., 7575 E. Fulton, Ada, MI 49355, which requires a separate summons

Now I am subject to the AICPA Statements of Standards on Tax Practice, which among other things forbids me from giving clients advice based on what I believe the audit selection process of a taxing authority is. I wouldn't do it anyway, because I think most people who give that type of advice are guessing. Even if you happen to be one of my clients, I'm speaking to you purely as a reader here when I give you this advice:

You don't tug on Superman's cape
You don't spit into the wind
You don't pull the mask off that old Lone Ranger

And you don't take no Schedule C losses from an arrangement with a company that IRS examiners have on speed-dial.

I found 23 cases of IBO's who fought the IRS in Court. (A couple appealed, but I only counted them once)They pretty much all lost. In these type of cases there are really three ways you are denied deductions. The first is substantiation. You didn't prove it. Next is that the expenses are not really ordinary and necessary expenses of the business. When you are talking about cars and business use of the home, those two issues can get blurred together. The third is that there really isn't any business there. Taxpayers fight the IRS and win on that issue frequently even a Vietnamese couple whose "business" was playing slot machines using the principles of Feng Shui. Amway IBO's who take on the IRS on the Section 183 "hobby loss" issue almost always lose.

One of the most common themes is that IBO's seek advice generally only from their "uplines", who of course are not disinterested. They also do not seem to put any energy into trying to control their expenses. I'm going to give you a little snippet from each of the cases and comment a bit on some of them.

LOPEZ v. COMM., Cite as 94 AFTR 2d 2004-7075
Jorge N. Lopez, et ux. v. Commissioner , TC Memo 2003-142

Tax Court properly determined that engineer and wife weren't entitled to business deduction for expenses incurred in connection with their Amway products distribution activity because they didn't engage in activity for profit: although taxpayers showed proof of profit motive, such wasn't sufficient to override govt.'s evidence that included their failure to keep businesslike records, their failure to alter unprofitable methods, their non-dependence on activity income, and their use of activity to socialize with friends and family.

In their own Amway activities, which began in 1996, the Lopezes sold products at cost to both their downline distributors and their customers, which practice eliminated retail sales as a source of gross income. They chose instead to focus their efforts on developing a network of downline distributors to generate performance bonuses. Relying on Amway brochures, the Lopezes concluded that they would need to achieve and maintain a monthly point value of 4,000 for their Amway activities to be profitable. In 1998 and 1999, the Lopezes' point value did not exceed 372 points in any month.


The only advice they sought for their Amway activities was from upline distributors, and when they received unsolicited advice from their accountant, they disregarded it. During the years in question, Mr. Lopez was employed full-time as a petroleum engineer, and Mrs. Lopez was a homemaker.

The tax court ultimately was not persuaded that the Lopezes' primary motive for conducting their Amway activities was for income or profit. It found that the conduct of their Amway activity “virtually precluded any possibility of realizing a profit.” The Lopezes' lack of a business plan for recouping losses and achieving profitable levels of activity indicated the absence of a profit motive. In the face of four consecutive years of losses, the Lopezes still did not change their approach to increase the likelihood of earning a profit. The tax court further found that the Lopezes did not conduct market research to help them assess the potential profitability of their activities. It also noted that, although the Lopezes had no prior business experience, they accepted the advice of upline distributors rather than seeking advice from unbiased, independent business sources.

Since the Mr and Mrs Lopez appealed, they got to lose twice.

OGDEN v. COMM., Cite as 87 AFTR 2d 2001-1299
Michael A. Ogden, et ux. v. Commissioner, TC Memo 1999-397
Contrary to the Ogdens' contention, evidence of profit is not determinative of whether a profit motive exists. See id. at 876 (no single tax regulation factor, nor the existence of a majority of factors, is determinative of whether a profit motive exists). There is overwhelming evidence in the record that, if believed, supports a conclusion that the Ogdens maintained their Amway activity for deductions, personal pleasure and to offset wages. The tax court did not abuse its discretion in denying the motion for reconsideration.

Amway does not have a quota for sales, its products do not have to be sold above cost, and its distributors are not required to sponsor downline distributors. An Amway brochure, The Amway Business Review, states that the potential for earning income increases as the number of distributors in a sponsor's group grows and as sales increase. Distributors devote as little or as much of their time to Amway activities as they desire. The eight page Amway Business Review in large blocks on four of its pages highlights the fact that “The Average Monthly Gross Income for “Active” Distributors was $88.”

We believe Amway distributors may be biased when discussing Amway because they have a natural desire to advance the organization and/or obtain income from a downliner.


ELLIOTT v. COMMISSIONER, 90 TC 960

Deductions denied for business expenses and depreciation connected with Amway distributorship. Activities were conducted in unbusinesslike manner, taxpayers maintained full-time jobs, and little distinction was made between Amway activities and personal social activities. Also, IRS properly imposed penalties for failure to timely file and negligent or intentional disregard of rules.

A further indication of the unbusinesslike fashion in which petitioners conducted their Amway activity was the thin line dividing business activities from personal and [pg. 973]recreational activities. Petitioners offered scant evidence that their Amway activity required them to do anything other than to maintain an active social life. Although they occasionally attended seminars, most of their activity involved giving parties and taking people out to restaurants. While there is no requirement that profit-oriented work be onerous and unpleasant, the evidence presented by petitioners does not indicate activity motivated by a profit objective. On the contrary, the evidence shows that petitioners made some small modifications in their routine social life, kept cursory notes about their activities, and claimed deductions for the cost of nearly everything they owned or did. On this record, we find as a fact that petitioners' activities were motivated by a desire to avoid tax rather than a desire to generate income.

Roger S. Campbell, et ux. v. Commissioner, TC Memo 2011-42

Activities not for profit—profit objective—distributorship and direct marketing activities. Code Sec. 183 deduction limits applied to expenses pro se married real estate and construction business operators claimed in connection with Amway distributorship activity that they engaged in without requisite profit objective. Lack of profit objective was shown by facts that taxpayers commingled expenses, had no idea if they were making profit for any given year until they filed that year's return, didn't keep complete records, and otherwise didn't conduct activity in businesslike manner. It was also telling that taxpayers didn't have experience in this type of activity, didn't seek out independent advice, used activity losses to offset their real estate and construction business income, and stated that they would continue with activity regardless of whether it ever turned profit. Countervailing facts that they spent significant time on activity and increased gross receipts during years at issue weren't dispositive considering overall record

Why Not Have A Job?

 One of the things that Amway IBO leaders do quite often in their recruitment pitch for Amway, is to put down people's jobs. They criticize people's bosses and the fact that an employee needs to report somewhere to earn a living. They try to paint the picture of a job being compared to slavery. They do this apparently to make people feel uncomfortable with their present situation so they will be open to looking at the Amway opportunity as a means to make a living. They may call a job "just over broke" or "jackass of the boss".   Jobs are made to look unappealing as a means to pitch Amway as an alternate to a job.

So, I will ask - What's wrong with a job? A job is not slavery. People apply for their jobs, and they agree to a wage or salary in exchange for their services. Certainly, you can leverage a higher wage or salary if you have an education or a skill, such as being able to work in the construction field. A job usually offers more than just a wage. A job often allows one to have benefits such as medical insurance, a 401K retirement plan, and some other benefits such as paid vacation and/or sick leave. 

A recent site visitor bemoans concept of working for minimum wage, where a husband and wife would earn in the neighborhood of 30K if they both work full time at minimum wage. Of course, a high school student can earn minimum wage so two adults only able to generate that kind of income makes me think my site visitor is speaking of people with very little to offer an employer. Most people may start out as entry level but earn more and more as they gain experience and can offer more to their employer. An employee might also be able to promote themselves if they can prove to the employer that they can manage more responsibility.  

What does the average Amway business owner experience? Approximately $200 a month income (which is probably way above average)? Most IBOs as outlined in "the plan" earn about $10 a month and may have expenses such as standing order which will take away from that tiny profit. Thus, an average business building IBO stands to net a loss. It is very easy to look at the math and make that conclusion. A dedicated IBO attending meetings and functions and buying the other tools will likely spend more than $200 a month on average to be on the system. Couples will spend more. 

So, I ask again. What's wrong with a job? You have a net gain each and every month, be able to pay for your living expenses, and allow you to contribute to society by paying taxes. The average CORE IBO is a drain on the US tax paying society by spending money on standing orders and functions and then deducting these as business expenses when filing their taxes. The only beneficiary is the upline leaders who sell standing orders and function tickets. If the IRS actually took IBOs to task, I'd be interested to see what kinds of deductions would be not allowed? I bet it would help the US treasury to recover all that money.

Total BS?

 Amway supporters keep claiming that Amway has changed and that things are different today. But I keep seeing posts like the one I will attach and you have to wonder. This was posted on July 14, 2011.  It's dated but the humor factor makes it worth a read:

http://lukehimself.net/?p=135&cpage=19#comment-3587

Tim on July 14th, 2011
Hi,
I think that some facts that are in support of Amway should be recognised:

* They are one of the largest debt free companies in the world.

* They have made more millionaires than almost any other company.

* The books provide are all written by established business owners and entrepreneurs, most of who have made their money in traditional businesses, why wouldn’t read a book about success written by a successful person? It’s like reading a book about law, written by a lawyer?

* The company has been audited and analysed thousands of times because good for nothing people who just want to sit around and complain rather than get off their fat arses and do something with their lives try and knock a perfectly legitimate business model because they don’t have what it takes to succeed, and the company is still one of the largest in the world.

* Amway has been around for more than 50 years? How long do scams last, honestly?

So take these facts into account before you try and criticize a way of making money that has helped millions of people achieve their goals,.

====================================

Joe's commentary: It sure looks like the same old same old that upline leaders have been teaching for years now. This sounds like something you might have heard 12 years ago. Those who claim things are different must just see the world through rose colored glasses or something.  It's humorous when you know the truth and see this happening.  

Dead Or Broke By Age 65?

 Below, I have posted an article indicating that about 1/4 of Americans are working beyond the age of 65. That certainly debunks the IBO myth that 98% of people are dead or broke by age 65. It should be noted that the older folks still working make very good money. More food for thought should be how you as an IBO will benefit from the Amway business if you are not making money or if you are losing money due to continuous purchases of "educational" materials.  How is losing money going to help your finances, which is what happens to most people who get involved in Amway and the teaching systems.

http://www.usnews.com/money/blogs/planning-to-retire/2009/7/14/a-quarter-of-americans-still-work-after-age-65.html

A Quarter of Americans Still Work After Age 65
Comment By Emily Brandon

Posted: July 14, 2009

Retirement is a thing of the past for a quarter of Americans over age 65. Just over 25 percent of those between ages 65 and 74 were still working in 2008, according to the latest Census Bureau numbers. And amazingly 9 percent of Americans still go to work between ages 75 and 84. After age 85, the number still working trickles down to 3 percent or about 122,000 people who continue to hammer away at their keyboard or punch in with their time clock.

Most people over age 65 still in the workforce are professionals (20 percent) or hold management positions (19 percent). A large portion of seniors also work in the service industry (18 percent) and sales (15 percent) or have office jobs (12 percent). But a few retirees also manage to do sometimes strenuous jobs such as production and transportation (12 percent) or construction and maintenance (5 percent).

Many of the seniors who continue to work full time have earnings at the top of the pay scale. About 20 percent of those age 65 and over make over $75,000 annually and just over half (53 percent) earn between $25,000 and $75,000 from work. Slightly over a quarter of those working full time in retirement make less than $25,000 annually.

Seems this is just a myth perpetuated by AMO leaders. Possibly to scare people into thinking they should consider Amway as a solution.  It's pretty insidious of these leaders to embellish the truth just to sell their opportunity.

An Anonymous Comment?

 A blog visitor sent me this email some time ago. It might be helpful to some people, so I'll post it.

We were part of what I'm coming to find out as a smaller more unknown team in our region. I’ve run into many Amroids since I first joined until now, and they’ve always seemed to be part of N21 or BWW or WWDB but I'm not sure if our group was any of those? We were part of something called the UR Association. I believe through some unspoken issues years ago in upline, our group was adopted either to Dexter Yagers organization or from his organization. It's never been fully or properly explained to us. Anyway, my upline always had CDs from multiple organizations teaching systems, and we purchased them all. This was because we partly refused to sign up with URA and partly because we just didn’t have to money for that type of monthly fee. We weren’t on Kate either because of this. When my significant other (SO) and I first joined almost 4 years ago, we were typical for this business; broke, unemployed, and young. We went through the paces or coming out to the meetings as guests for free, attending some product expos, etc, until one day it started costing us as guests (we were still evaluating at the time) to attend the regular open meetings. Foolishly, we figured “well we might as well sign up then!”



Looking back now, all the signs were there for us to see since the start. After we got in, our uplines group slowly fell apart. I don’t believe I’ve ever seen his group grow or be on the rise since I joined. I was told of the glory days just months before of how there were over 100 people in his group attending functions, all the pin levels on his team, the recognitions they’ve received, etc. When we joined and he was on the decline, we thought nothing of it, as it was played off as normal and that “Some Will, Some Wont, So What, Some Where, Six Will, so Stop Whining, and Start Working”. We also attended a major Family Reunion shortly after officially signing up and again, the signs were always there, but we just never noticed. That function that we went to was the largest our upline Diamonds organization was we’d ever see. Our open meetings slowly began getting smaller, and we had to increase ticket costs to “pay for the room”. It went from an open meeting every 2 weeks at $5 to an open meeting once a month at $10. Over the years it started switching locations as well, from one hotel conference room to another, and now it is currently held at a Condo, in the main floors’ lobby room (I believe there is still a cost incurred)



One of the CDs that we were always so “keen” to listen to was one by a young diamond from the US, who built a good portion of his organization in Hawaii and in the western states. He’s young, funny, relatable, and therefore an obvious hit with our young group. Anyway, on his CD he mentions that the only “negative thing that can be found online about Amway is that we allegedly make all our money off books and CDs”. I'm loosely paraphrasing, but basically he went on saying “…like that’s a bad thing. Think about it, what's the first thing you do when you are successful at something? Golfing, any sport, a business? Don’t you write a book, cut a CD and go on public speaking events?!” Which of course when twisted around it does seem to make sense, so we never really questioned it. We thought Wow these are totally honest about it! There's not really much else to write about at this point, like I said earlier, a lot of your blogs were 100% correct about what still goes on. The mind games, what uplines say, what's said at opens, all of it. My SO and I reached a max of I believe 300/400 PV and 200PV respectively. SO had a slightly larger group (we were building it separately at the time) with maybe 5-6 downline at its peak, and I had maximum 2. We’ve been in it for 4 years and have seen no results. Despite having no money for monthly subscriptions to books and CDs, we were core. We tried our best to get the proper 50/150, we always used all the products and promoted it like crazy. We tried contacting all the time, and showed plans whenever we could. We listened, read, attended all functions, were accountable, honest, and the only thing we didn’t have was Kate. But the results were never there. Even with the amount of downline each of us had at our maximum, we still never broke more then 300-400PV. It just wasn’t happening. Since we’ve stopped, I have purchased a new(er) car, 2010 top trim, and with a 1 year delayed gratification goal, we saved enough money for a destination vacation paid for in cash. We spared no expense while we were there and bought all sorts of gifts for our friends and ourselves. We are also planning more trips in this coming year.


There are little details here and there im sure i could mention about the really crazy BS we've been through, but perhaps another time :) we're in a phase right now of not thinking about it or dealing with it.

Thanks for reading!

"Anon"

Lying, The Most Important Amway Skill?

 It is my opinion that lying is a required skill in order to make it big in Amway. Before you go all crazy and disregard what I'm saying, let me explain why.

When I was an IBO, diamonds told bold faced lies (I was an IBO in 1997). Back then, the internet was not nearly as accessible as it is now and looking up things was a different task than it is now with google or yahoo. So, the WWDB diamonds stood on stage and swore that NOBODY made a cent on tools and functions. We were told that WWDB was a non-profit organization and that any profits made were simply re-invested back into the company to reduce the cost of future events and functions (which never happened). Without easy access to information, most of the audience believed the diamonds. We had no reason to doubt because they "told us" that they had our best interests at heart.  In reality, they had their own best interests at heart.

Looking back, those lies were the tip of the iceberg. The diamonds told many lies. They more than likely lied about how much income they made from Amway (probably most of them)  and I'm certain some of them lied about paying for everything they own in cash. They lied about WWDB having a nearly nonexistent divorce rate compared to the rest of the world. I'm sure they lied about the "trappings" of wealth they claimed to have. A few diamonds in the past, had some financial problems such as home foreclosures and a prominent WWDB triple diamond filed chapter 7 bankruptcy in 2009 or so. When their financials became public record, we could see debt, unpaid taxes and other problems by people we thought were wealthy beyond our dreams. They were not.

The diamonds also taught the troops to lie and be deceptive about Amway to get people to see the plan or to entice them to sign up. A previous blog post was titled "fake it till you make it", which is about lies and deception taught by upline to help downline to recruit potential IBOs. If the diamonds lie and teach lies to promote Amway, my conclusion is that lying is required in order to succeed in Amway. Apparently, it is a trait that the diamonds I saw, possessed. Even after I quit, I heard numerous lies from IBOs denying that "Quixtar" had nothing to do with Amway, when in fact Quixtar was just a new name for Amway North America. Imagine a prospect asking someone why they were selling Amway products when Quixtar had nothing to do with Amway?

It is my conclusion that lying is indeed needed for Amway success. The better and more convincing the liar you are, the better you can recruit downline and advance in the Amway pay plan. If you don't believe me, name one person who was uber successful by being upfront and open about Amway and any related questions, such as how much they actually make in Amway and how much they make from tools. You will hear crickets more than you hear answers.

Non Amway Millionaires?

 Many people join Amway with the notion that they will become millionaires and live happily ever after without working another day in their lives. I know I once joined Amway hoping to make some good extra money. But chasing the Amway money dream was like finding the end of a rainbow. You can see it but you can never get to it. The Amway dream is basically a myth. Do you see and hear of new diamonds constantly emerging, or do you see the same old tired diamonds year after year and function after function? I know there seems to be new diamonds in foreign countries as the market is not yet saturated but in the US, I don't really hear much about new diamonds. I know some emerge, but at the same time, others are falling out of qualification at the same time. Even when Joecool was an up and coming 4000 pin in Amway, the money wasn't there. Instead, any positive cash flow winded up in my uplines pockets via tool and function purchases. I quit Amway back around 1997 or so and now, nearly 26 years later, I had a revelation just recently about my own financial situation.

I purchased a home back in the year 2000 for just under $300,000. It seems like a ton of money at the time but now 23 years later, I have a lot of equity and there was a huge real estate boom that took place around 2002. The median price of a home in the area where I live is about 1.2 million. I live on the Windward side of Oahu. The equity in my house is about $1,000,000. My 401K currently has a significant value.  That makes Joecool a non-Amway millionaire. How about that? And I accomplished that despite Amway, not because of Amway.

"A millionaire is an individual whose net worth or wealth is equal to or exceeds one million units of currency. It can also be a person who owns one million units of currency in a bank account or savings account."

Now, I am currently retired, having retired at the age of 55.   I do not have a luxury sportscar. My older vehicle is a 2015 truck which I purchased in cash at the time, and I purchased a new SUV in 2022, also in cash.   I have been retired for a couple of years and since I live in Hawaii, I can go walking on nice beaches regularly. All without Amway.

Don't be fooled.  The diamonds may talk about wealth and how rich they are but I suspect many are living a middle-class lifestyle, and many of them might be in debt.  If you think about and research the average income of a diamond, it's not what you might think.  A Q 12 diamond, one who qualifies diamond all 12 months in the Amway fiscal year, makes about $600K, according to Amway.  But A Q 12 diamond is the rare exception, and the vast majority don't see anywhere near that kind of income.  

If I made an educated guess, I'd say a regular, actually qualified diamond, but not a Q12, that diamond might make between $100K and $300K, maybe more or less, depending on the business structure.  Sounds awesome to a guy making $15 an hour.   But after taxes and business expenses such as travel, etc., that's not the kind of money that allows people to purchase mansions in cash or a fleet of Lamborginis.  And to make it harder for the diamonds, they need to portray a lifestyle of fabulous wealth because recruiting people to join a business that allows you to live a nice middle class lifestyle isn't jazzy enough.

Do the math and you'll easily see it.  

Who To Believe? Your Upline Or Your Own Eyes?

 I came across this blog and while I've seen similar posts by Amway business owners, this one was interesting because of the detail and the passion the blog author has for the business (Even though the author of the blog has since quit Amway).  In a nutshell, he lost money in Amway but calls it success because after he received his tax refund, he's now claiming to have a net profit. It's amazing what these Amway/WWDB leaders can get people to believe.   It's like who are you going to believe?  Me or your own eyes?

https://transparencyofadreamer.wordp...sing-in-amway/

Below are excerpts. The blog owner claims to have made a net gain due to a tax refund. He doesn't explain how he arrived at that refund but apparently his losses in Amway lowered his tax liability for whatever income tax was already withheld from either his paycheck (job) or from paying estimated taxes in advance for a business or some other venture. It's quite scary and illustrates how some people can hang on in Amway for so long even when suffering losses. The IBO's are programmed to "think" they actually made money!


Excerpt:

Based on what they have taught me, even though I barely had any increase in my overall organization (ie: I was pathetically lazy, didn’t put any work in and barely increased the size of organization – #sadface) I STILL DID NOT LOSE MONEY!

2013 total Cost Run Down:
Communikate: $443.40
Digital Delivery: $300.00
Premier Membership: $599.40
Major Functions: $595.00
Major Function Hotels: $750.00
Business Support Materials: $240.00
Total Business Cost: $2927.80

Lets bring it all together here, folks.

Total Amway Payout in 2013: $2112.36
Total Cost To Run Business: -$2927.80
= $-815.44

Just like I said last year – “Oh No! I’ve been scammed! I’ve lost money! My upline lied to me! I didn’t put in any work to sponsor anyone this last year and its everyone’s fault but mine! The business doesn’t work! What a total scam!!!”

Hold on now Mr. Negative – Due to running my own business in a country that incentivises business owners to run their own business I received tax benefits that entitled me to a refund for the 2013 year in the amount of $2409.76. Lets do this again, shall we?

Total Amway Payout in 2013: $2112.36
Total Cost To Run Business: -$2927.80
Total Tax Refund For 2013: $2409.76
= $1594.32

So, as I wrap up I hope I made my point very clear – you will not lose money running your own Amway Business powered by World Wide Dreambuilders…. IF you are diligent with your finances, if you don’t blow your budget your coach sets with you. You WILL lose money running your own Amway Business powered by ANY training system IF you don’t have a budget, if you don’t ask for help to set a budget, if you ignore your budget etc.

If your potential sponsor is affiliated with WWDB and is doing what they are taught, you should be educated on some of the numbers I shared above in regards to cost for access to your training and mentorship system.

Ruthless Upline?

 The really insidious part about some of the Amway LOS leaders, such as the ones I had in WWDB, is that they apparently are cutthroat ruthless businessmen with nice suits and disguised as your mentors and friends. They get you to trust them, and they will tell you that they have your best interest at heart, or that they would never purposely lead you astray. On the surface, you may think this is true, but look at their actions and you can easily discern that some of these uplines are absolutely ruthless businessmen who would take every cent from you if they could. I was in WWDB, and I have good reasons to believe that they are still doing this, based on what I still see and hear.  I also still have some contacts familiar with the business.  On this blog, I see much of the same teachings today, that I heard as an IBO and some of the same claims such as buying homes in cash, Amway saves marriages, etc. It's scary.

As an IBO, the diamonds would tell you to never miss a function, ever. The only good reason for missing a function was for your own funeral. I recall some crossline IBOs rearranging pre-planned anniversary parties, weddings, and other special family events in the name of being core and attending all functions. Some IBOs actually did quit their jobs to attend functions and they very well may have done so because some uplines taught this. IBOs were also encouraged and told to go into debt to attend a function. This was okay because it was an investment into your business.  It's a load of guano.

Our group was also strongly encouraged to buy extra cds/audios every week. To be core, you needed to listen to a cd each day and you cannot listen to the same one each day right? Couples were told to buy their own separate standing orders. Brad Duncan even had a true north tape (cd) that said sponsors were to eat the standing orders for downlines who quit because it was too much trouble to call upline who calls upline who calls upline to cancel a standing order. Oddly enough, they didn't mind upline calling upline calling upline to add a standing order.

In the end, I was lucky enough to have been progressing up the pin ranks, so my losses were not that devastating. I ended up losing in my early months of the business but got close to break even when I was at 4000 PV. Sadly though, my crossline did not fare so well. I know of one couple who declared bankruptcy. I don't know how much their WWDB involvement contributed to bankruptcy, but I am certain it was a major factor and I know of two couples who had homes foreclosed, and I believe that their allegiance to WWDB was a factor in those foreclosures. But I guess hey, two WWDB diamonds had homes foreclosed so maybe they were duplicating?

Do not be fooled. The diamonds may have a nice smile and a nice suit, but they are ruthless businessmen who will take your last dime if you allow them to.

Same Old?

 There are some Amway apologists who continually likes to use "old" and "outdated" as their source of criticism against Amway critics. They use this feeble excuse as a means to defend Amway and WWDB. They claim that things have changed, and that critic's experiences are old and invalid. They say some of these things despite the fact that you can still find the same things I heard as an IBO over 25 years ago. These apologists are either wrong or purposely distorting the truth.  Some time ago, I had a WWDB IBO email me with what I opine to be somewhat current WWDB documents, and I will be posting the details below. It is exactly the same stuff I was told as an IBO more than 25 years ago.  Old habits die hard I guess. The only difference is that as an IBO, we did not use the internet to do business.  

Here's the details from the WWDB IBO's documents:

4 STANDARDS
1. Membership with Amway Global
2. Meet the Bigger Team
3. Ditto on the First
4. Check your Team Website Daily and Listen to LIT Updates sent through e-mail

5 NIGHTS A WEEK
Build your business 5 nights a week!

9 CORE STEPS

1. STP 3-5x Each Week
2. Personal Circle (150PV Single/300PV Couples)
3. Customers (50PV Minimum)
4. Membership CD.s- Listen Daily
5. Read a Book from the Book List 15 min. Daily
6. Attend ALL Events / Game Days
7. Associate & Counsel regularly
8. Integrity & Accountability
9. Check your Team Website Daily and Listen to LIT Updates sent through e-mail

3 POWERS
1. Power of Agreement . this means be willing to listen & learn, submit your ego & be teachable.
2. Power of Unity . unity with your growing upline & the bigger Dream Team
3. Power of the Spoken Word . speak positively, expecting the best from yourself & your business

3 CARDINAL RULES
1. Never mess with anyone's money (Is bankruptcy messing with someone's money?  WWDB diamonds had foreclosures and chapter 7 bankruptcy some years ago)
2. Never mess with anyone's ego
3. Never mess with anyone's spouse

3 NEVERS
1. Never embarrass your upline, downline, or crossline
2. Never pass negative downline or crossline
3. Never do anything for the first time without checking upline

Testimony - Amway Saves Marriages?

 http://www.unhappyfranchisee.com/will-amway-make-you-annoying/comment-page-12/#comment-92192

■DoAsISay on January 8th, 2012 9:31 pm
I finally decided to search the web after being out of Amway now since February 2011. I was hesitant to do so because I had been told not to so many times by my uplines that there is negative on the internet even about Mother Teresa. That was the “line” that they used to trick me into not doing my research. I am a college graduate with a bachelors degree in accounting and I was taught to always research a company to learn more about them if you are going to be involved with them. Anyways, I am glad that I did because I now realize that I am not the only one who disagrees with Amway and their approaches to “the business”.

A little more background about my situation which I’m sure is not unique to many others who have been in Amway. My girlfriend and I were introduced to this business by a friend of my girlfriend and her husband. From the presentation that was shown to me I thought that it sounded VERY easy to do. I was told that I only needed 3 friends out of my 200 contacts in my phone to want to save money and make money at the same time. That was the first lie that I later found out. First of all, we didnt save any money. We threw away over $7000 and saw under $300 return. How exactly am I saving money? Secondly, IF, IF you get (trick) 3 friends to signed up, you have alot more work to do than that. Try 50 people and by the time u get 50 people involved, 48 of those will have quit once they finally realize that you took advantage of them and weren’t straight forward with them.

So Time went on and I hung around and observed the behaviors of people in Amway and how they talked. I said to myself, I want to be nothing like these people. They all sounded the same to me and it was just a little weird. Finally I realize that they have all been brainwashed how to think, how to spend their money, who they spend their time with, and how they spend their time. Amway with the help of the “EDUCATION” has completely taken control of the lives of many, many naive, weak minded, gullible, ignorant, or too trusting (you fill in the blank) individuals who worship their upline like they are God. Sure I thought it was cool that I knew a millionaire and got to hang out at his house and all, but Im not going to empty my bank account for anyone! How about this line…”You don’t make money FROM your friends when they get involved, Your making money WITH your friends”. WHAT?!? Last time I checked anyone you sponsor in the business, you collect their business volume from the stuff they buy and get a kickback from those purchases. I believe that’s called making money FROM your friends. They have another sneaky tactic that they use to conceal the truth. “You’re not making money from your friends, Amway is paying you for driving volume to their website. Ok, Yeah that’s still making money from your friends. Im not an idiot and your blender of words and phrases don’t have any effect on me.

Back to November 2010, I got married to my girlfriend I was in the business with and shortly after she became an Ambot as I’ve heard people refer to it. In February 2011, i had enough of it and decided to cut my loses and get out. My wife didn’t share the same thoughts and feelings though because she had been soaking in every last drop of the expensive “Education” we were receiving. Up until the point of me getting out of the business since I had known her, we NEVER had an argument. We were inseparable and much in love. That all changed as time progressed. We started disagreeing and this horrible person came out of her as I never seen before. She physically hit me on 3 occasions and we would fight, mostly her, as I like to be calm and collective. I rather reason things out by gathering the facts and explaining my perspective. Her reasoning went out the door with her mind because everything out of her mouth was something about the business.

I spent many nights home alone waiting for her to get back from those stupid waste of time meetings. Eventually in October I had enough. We got in another fight and she asked me to leave, so I did! Now supposedly when a woman says leave, that means dont leave in translation, but I took it at face value and left. We are currently separated and in the process of filing for a dissolution. I never thought Amway could destroy a marriage like that, but I’ve read so many sad stories where has done just that. Like I said, I’m sure my story isn’t a unique one, but I just wanted to share in hopes that I can TRULY HELP people steer clear of this plague. Not only will it empty your bank account, waste time you could be living your life and enjoying the company of family and true friends, it will destroy your relationships with the ones you love. These people that were in our business call themselves Christians, yet they can easily let a marriage be destroyed and not even flinch. Greed and lies are all I see in these people!

I would like to sit my wife down and show her some information so maybe, just maybe she will snap out of it, but I feel like she is so programmed at this point that I won’t be able to get her to read it. If anybody actually reads my entire story (I know its long) and has any advice on getting her out let me know. I got nothing to lose at this point since I’ve pretty much lost the love of my life.

False Income Claims?

 One of the things I have seen over and over from Amway IBOs and Amway enthusiasts were either false income claims or unsubstantiated income claims. I have yet to see any IBO be forthcoming about their Amway income versus their business expenses. We know that some diamonds teach that they pay for homes in cash. Some of these diamonds were embarrassed when their homes were FORECLOSED! I've also seen IBOs run past a blog saying they are new but earning $6000 a month or other nonsense like that.  Now to be fair, I don't expect anyone to post their tax returns on a blog, but at least provide an explanation as to how you arrived at your claim so it can be scrutinized.  Instead, we often find Amway defenders making wild and/or questionable claims which appear to have zero basis in truth.

What IBOs and information seekers should be aware of is if the information did not come from Amway, then you should verify the truthfulness of that information. For example, Amway doesn't claim that they are a franchise opportunity, or that they are potential source of residual and willable income. While these would be great benefits to enjoy, Amway doesn't promote them. If Amway doesn't promote these benefits, they very likely do not exist. Sadly, systems such as WWDB or Network 21 may promote these questionable claims.

Here's a great example of a questionable claim by Amway's most (formerly) famous internet defender.  IBOfightback was a zealot back some years ago who literally posted about Amway in their defense all over the internet.  At the time, he claimed to have been at a fairly high level in Amway.  He also claimed to have been an expert on the internet and had studied extensively in the field of psychology.  Many suspected this person of being a paid hack for Amway, but it was never officially confirmed.   His credibility took a huge hit not long ago when his social media account listed him as a epidemiologist as he was commenting about other subjects during the height of the covid 19 pandemic.  Since "IBOfightback" is no longer actively posting misinformation about Amway, I do not feel the need to post his actual identity at this time.

http://lukehimself.net/?p=135
Entry #92 - IBOFightback

"There are hundreds of thousands of people around the world who have made full-time incomes and more with a part-time Amway business, including many millionaires."

Here's an Amway representative's response:

Cindy Droog
January 7, 2011 at 09:27

1. This claim would not be possible for us to capture or substantiate, given that people’s definition of “full-time income replacement” varies so widely around the world, even within the borders of the same country

IBOs and information seekers, beware of false claims about Amway!

The Scam?

 Before I signed up to join Amway, I was invited to see "the plan" at an open meeting. The speaker seemed to make sense about running a business to make money and how you and make money and save money by being involved with Amway. Except that he misrepresented the Amway experience. The speaker said you save 30% on goods by shopping with Amway, which is a lie. You can save 30% shopping with Amway if you pay the distributor price instead of suggested retail, except that the distributor price is much more expensive (on average, than paying for the same or similar products at a retailer like Costco to WalMart. Anyone who does an honest price comparison can easily see that this is true. WalMart buys from the manufacturer and adds their markup and sells to you. Amway does the same but they "generously" pay a 30+ % bonus to IBOs and that bonus is included in the prices, thus Amway has to charge much more than a WalMart or Costco to cover the bonuses.

Then the "scam" comes in. The diamonds and bigshots in Amway say "anyone" can go diamond, get rich and walk the beaches of the world while getting wealthy beyond belief. And all you need to do is subscribe to their teaching system consisting of voicemail, books, CDs and seminars/functions. Join and subscribe and do what you're advised, and you're nearly assured of success. It's a lie. There is ZERO evidence that the system helps anyone succeed. Upline will say everyone who succeed is on the system. While that might be true, there are tens of millions of people on the same system who fail. It's like saying everyone who wins the lottery has a ticket while disregarding the millions of people who get on the system and fail. People fail because the Amway compensation plan is designed that way. The multi level compensation plan assures a majority of failures.

So, the Amway business has people joining in the hopes of riches, but they are basically chasing the end of a rainbow. You can see it and chase it, but you will never reach it. Look at the diamonds in the US. Some of them died while still working and some got divorced. But the vast majority of Amway diamonds are the same old diamonds from the 1990's and there are very few new diamonds. If the system actually worked, new diamonds would be churning out regularly, but they aren't.  Amway went from 11.8 billion in 2014 or so to 8.2 billion in 2022. Without new virgin ground to exploit, Amway is saturating and shrinking.

Overall Amway is a scam in my opinion. They sell false hopes and false dreams under the guise of running a low overhead business and then the diamond turns around and sells useless tools that only help the diamonds. The success is not there. The "fruit on the tree" that some diamonds used to talk about is not there. In my opinion, Amway is just a big scam run by diamonds so they can make their fortunes selling tools. I welcome and dare anyone to prove me wrong.

Food For Thought?

 So many people get duped into thinking that they will somehow get wealthy by becoming an Amway IBO. Many recruiters will tell amazing stories about how they were once broke, but signed up, endured challenges and now they are diamonds enjoying untold wealth and luxuries. People get caught up in "dreams" and are often encouraged to ignore the facts. People running businesses should pay close attention to the facts because it tells you much about your business and your likelihood of success. But what are some facts about the Amway business that many people don't know about? I have outlined a few important ones for those who harbor dreams of going diamond.

1. The average (non Q12) diamond, according to Amway, earns about $150,000 a year. Yes, some of this may be supplemented with money from the sale of tools, but after taxes and business expenses such as travel to and from the many functions that a diamond attends would leave a diamond living an ordinary middle-class lifestyle, not one with mansions and sports cars as portrayed in many functions or meetings. Yes, a Q12 diamond would have more earnings, but a Q12 diamond is the rare exception, and not the rule. I might add that a diamond's income is mostly in the form of an annual bonus, thus without tool income, a diamond's monthly income is not much to brag about. I used to correspond to a former emerald and he/she said confirmed that the bonus must be budgeted out to last throughout the year.

2. Most IBOs are NEVER able to sponsor a single downline. Pretty hard to develop six (6) downline platinums when most people cannot sponsor anyone. Even if you sponsor downline, most of them do little or nothing and quit. How can you build an empire with quitters?

3. Most Amway products appear to purchased by IBOs (self-consumption) and not sold to customers. Name a real business that sustains itself by having it's own workers or salesforce purchase most of the goods. MLM is probably the only business where this occurs. Understandably, it explains why 99%+ of "system" Amwayers make nothing or lose money.

4. For most IBOs, the cost of functions, standing orders and other support materials represent the reason why most business building IBOs lose money and it also represents a significant profit for some of the diamonds who sell the materials, which is a major conflict of interest that goes undetected.

5. Not working hard is not necessarily the reason for someone's failure. But conversely, working hard does not equate success in Amway. I would guess that out of those who work hard, it is still a fraction of 1% of hard working IBOs that even attain a significant profit. Doing nothing won't get you anywhere, but in this business, working hard often gets you nowhere as well. It is my informed opinion that the cost of the support materials is the direct reason why so many IBOs lose money, even out of those who work very hard. The system is flawed and designed for the masses to fail in order for a few to succeed. Do the math yourself.

I could go on and on, but these are a handful of facts that IBOs and information seekers should be aware of. I welcome differing thoughts and opinions.

The Diamond Lifestyle?

 One of the things that got me interested in the Amway business was the talk about lifelong or even generational residual income. Residual income is something that keeps coming in even if you don't do anything. For example, if you put $100 in the bank, you would earn interest every month. The problem is that $100 would only get you a few cents each month and it would not be enough for you to retire and enjoy the trappings of wealth. But what is a reality is that you will not achieve this in an Amway business, unless you are one of a tiny fraction of 1% who can overcome incredible odds.

The approximate IBO retention rate of Amway IBO is about 50%. Many IBOs last less than a year and only about 5% of IBOs last more than a few years. Thus, any hopes of "residual income" are unlikely. You cannot get repeat customers and downline when they are quitting faster than you can recruit them. And certainly, you can conclude that you cannot receive residual income when you cannot retain IBOs. In fact, I don't know of any IBOs who have ever "walked away" from their Amway business to enjoy residual income. Have you even wondered why diamonds and crown ambassadors are still working and none of them have quietly retired? I would guess that they don't retire because they cannot. Once you stop, more than likely your income stops. A diamond lifestyle would take a lot of income to maintain. Thus, how can someone walk away and expect to sustain their lifestyle? The answer is obvious to me. You can't walk away a retire. It is probably why even crowns, and all the diamonds continue to work busy schedules. I highly doubt they are working because they "love" their downline.

It's no secret that diamonds earn income from the sale of standing orders, voicemail and functions. But once you stop appearing at functions, I do not believe you would continue to share in tool profits. Also, Amway has a requirement of "side volume" in order for an IBO to receive certain bonuses. How can you maintain a level of side volume without being active and recruiting IBOs? My upline said your downline will do what you do. If you "walk away", so will your downline. The only way for your Amway business to survive is to keep working. Sometimes I wonder if the diamonds even a plan and enough savings and investments have to actually retire someday.

Breaking down a diamond's income is basic math. Even a $250,000 annual income isn't that much when you break down all of the business expenses and the expenses associated with a diamond lifestyle. The diamond lifestyle is an illusion of wealth. One that looks flashy, but I am not convinced that these diamonds are living large behind the scenes. Many professional athletes end up broke within years after their playing careers are over. These athletes earn much more than Amway diamonds. The difference is that diamonds can keep working while pro athletes cannot. But the common denominator in my opinion is living a lifestyle that your income cannot sustain. I hope you see the similarities. To me it is crystal clear.

What Are Your Chances In Amway?

 One thing that many Amway promoters don't like to talk about is what your realistic chances of success are. I will define success as Diamond because that is what the outcome of the 6-4-2 and 2-5 year plan. Of course you may be able to earn some income at lower levels, but my understanding is that diamond is where the real money from Amway and the tools start rolling in. And I can also understand why people promoting Amway do not discuss your realistic chances of winning. Afterall, lottery promoters do not show you the millions of losers, they only parade the winners in front of you.

Many people, including Amway enthusiasts will agree that most IBO do little or nothing. Some people never even place an order or make any attempt to do any business. For the purpose of this article, I am not speaking about these folks. I am talking about people who actually put in some effort to the business.

For many people who want to make an earnest effort, they will purchase and hopefully sell a few items with the goal of reaching 100 PV. For that effort, you will receive approximately $10 from Amway and whatever profit you might have earned by selling products. Here's the catch. You will likely need to pay website fees in excess of the $10 you earn from Amway. For the more dedicated IBOs, you may be paying for voicemail, standing orders, book of the month, and possibly attending functions. These expenses will exceed your income month after month unless you are able to increase your volume by selling enough products and/or sponsoring downline who buy and sell products.  

Because Amway has to include the IBO bonuses in their prices, the products come at a premium price. Thus sales to non-IBOs are relatively low. Without sales to non-IBOs, the only other way to generate more volume is to sponsor people who will buy and sell products. But due to past unethical IBO behavior, getting people to see the Amway sales and marketing plan may be a challenge. Also, most IBOs are unable to sponsor a single downline.

Some Amway enthusiasts will claim that if you do their CORE steps for 2-5 years consistently, that you are likely, or nearly guaranteed to succeed. Sounds easy, but because of the factors I have identified, some of these steps are impossible to do consistently. It's not like walking a mile each day where you have control of the steps. People will likely fail in showing the plan and sponsoring others because they cannot find enough people who are willing to see an Amway plan. Many, possibly most other IBOs can and will do certain steps consistently such as listening to a CD daily and reading a success book. But because of a spotty reputation in the US, IBOs will very likely fail to be able to show enough plans to succeed.

Your realistic chance of success? My informed guess is less than 1 tenth of 1 percent. That's the likelihood of going diamond. Your chance of going platinum? My informed guess will be less than 1/2 of 1 percent. If you think you can beat those odds, go for it. For most people, it might be wise to look into other opportunities.

The Groupthink Phenomena?

I have been blogging and posting my thoughts and opinions of Amway for nearly 20 years now.  This particular blog has been in existence since 2009, although I ran a similar blog that went dead because the host of the blog site went out of business apparently.  I post and have been posting for all these years to keep this blog relevant in the search engines.  The information and sharing of my personal experiences in Amway have been valuable to many and I thank the audience I still have, although traffic is much lower than it was until recent years.  But I keep doing this so people can get truthful information about Amway and the systems that is the cause of so many of the Amway horror stories that circulate around on the internet.

I have read all of these posts. Interesting that seemingly, most everyone who supports Amway cannot spell very well. Lots of typos and grammatical errors in here by those who jump up and down reciting Amway's many virtues. It is a scam and a groupthink phenomenon of staggering proportions. From a psychological perspective, Amway does its best to separate people from those who would challenge its legitimacy and operations. This is not unlike how Hitler or any other leader would silence opponents or dissidents by having them "removed" from the equation. Same thing goes here, Amway teaches people to ignore and remove obstacles and people who challenge the system, even if said challenges are completely rational and offered by people with the IBO's best interest in mind. It hits IBO's in soft spots for family, friends, and freedom (the 3 F's), and it entices them to focus on emotional reasoning rather than very cognitive-based, rational dissection of information. 

Amway IBO's are taught emotionalism, not rationalism. From a business perspective, it is a farce. IBO's are no entrepreneurs, as they wear the collars of their uplines. Over and over, I have been told to do as my uplines say. What if my upline is a total moron and I have a law degree and an MBA?? I'm supposed to follow these uplines?? According to the system, yes, the uplines' words are paramount. So no, IBO's are not entrepreneurs and do not gain any real experience. IBO is a fancy name for distributor, pure and simple.  And why do you bow down to upline?  Simply because someone joined before you?  Does that qualify them to give me business advice?  How about advice for my marriage or other life changing decisions?  Someone can advise me, and I'm expected to follow said advice because my upline joined Amway before I did?

I had the opportunity to meet a number of "diamonds" and "emeralds", all of whom had either left the business to get real jobs or were still struggling in Amway.  Many of them are posting massive losses, and by the way, the IRS does not consider prosuming OR tickets to a convention (to hear some diamond scream at you) to be business expenses. Good luck trying to recover those losses. It is a product pyramid scheme simply because mathematically and considering the law of averages, a downline cannot really earn more than his upline. It just doesn't happen - it's a nice idea, but it doesn't happen. I worked through multiple scenarios with a friend, trying to see how I could out-earn my upline, and we found several variables that would keep that from happening.   The only exception to this is most cases is when your upline quits, which also quite common.

Finally, on a personal level, this Amway monkey business cost me a great friendship, an IBO who decided that taking a chance on some crazy dream was more important than those who loved him most. I think he will continue prospecting and pushing "the plan" until there isn't anyone left. If you know someone in Amway or who is thinking seriously about it, you need to realize that they will soon be lost. Amway people are very much like crack users (very similar psychopathology, actually), and they will choose Amway over you, their family, their friends, and anything that gets in the way.

The Impossible Dream?

 Every year, tens of millions of kids across the US have dreams of playing sports. Some dream of playing professionally, some dream of playing at the collegiate level, some may have dreams of dazzling their high school peers. And this can apply to just about any sport, be it baseball, football, hockey, basketball, golf or whatever endeavor you can think of. As you progress to each of the next higher levels, the number of participants decrease. There are only so many professional teams, and so many college teams, while there are scores of high school teams all across the country. As each level gets higher, it is likely that better physical attributes and greater skills are needed in order to move on. 

I've heard some Amway supporters make comparisons between the Amway opportunity and how the higher levels are like the professionals and the rank and file are like the high schoolers. While I agree that there's only limited space at the higher levels, i think it's extremely important to note why the masses do not achieve the highest levels. In sports, you would need to have the motivation, the physical gifts, as well as the skills to achieve and excel at the highest level. Thus, people who are small in stature likely won't be candidates for the NFL even with a lot of motivation. Someone under 6' tall might have great difficulty in getting a job in the NBA. Of course, there are always exceptions, but those exceptions are made up by perhaps, incredible "other" skills or leadership. Some athletes have a knack for being in the right place at the right time, or an intangible.  

So what does this have to do with Amway? The connection is the massive amounts of Amway IBOs who never achieve even the break-even point. They may come into the program with dreams of financial freedom, or making enough to have a stay home wife, etc. Why do so few achieve even the lowest levels? In my opinion, the Amway business has too many barriers that prevent IBOs from succeeding. These barriers make it nearly impossible for anyone to reach the higher levels. These barriers include but are not limited to high prices that make many products a tough sell. Then you have the optional but allegedly vital training and functions that normally drain whatever profit the lower level IBOs make. Even someone at 2500 or 4000 PV will end up with a net loss if they need to travel by air to functions. You can also factor in some of the zany things previous IBOs have done such as tricking people into attending meetings, or not being accountable to downline, or by messing with your downline's money (bouncing checks).  

In the end, the masses of IBOs just do not possess the ability to overcome these barriers that can stop the charge of a bull elephant. It is why so many IBOs try hard and achieve nothing. While much effort may be expended, it looks as if these folks did nothing and quit. The reality is that most people who sign up were highly motivated but more likely found an impossible barrier and decided to do something else. I know of many former IBOs who went onto succeed in life after Amway. Many do not complain or voice complaints because they were involved in Amway with family and friends.  

So in Amway and in pro sports, there are masses who want to achieve their dreams. In both cases, a tiny percentage might achieve the top levels. The difference is that athletes know that their chances are small. IBOs are often misled into thinking that anyone and everyone can achieve diamond and residual income, which is a myth. Also in pro sports, there is no scam where people have a proven training system that will ensure success if you work hard. In pro sports, it is proven that the elite make millions. Whereas Amway diamonds seem to shroud their success in secrecy, showing pictures of mansions to show off success. Also, athletes may not make the pros, but may have benefited by getting a free college education. There aren't any stories of success in Amway for those who don't "make it", as far as I know. Are you chasing an impossible dream?

Critical Mistakes?

This coming weekend opens the start of a new NFL season, although, technically, the season started yesterday with the Detroit Lions pulling off an upset of the defending champion Chiefs.  Good for the Lions, I always pull for teams that have never won a championship.  But in NFL games, often times, a critical mistake costs a team their chance to win.  In my opinion, IBOs make a lot of critical mistakes, one of them being blindly following bad advice by upline.  

In my opinion one of the most critical mistakes that many Amway IBOs make is to ignore the bottom line when analyzing their Amway businesses. I recall, in my experience, business building IBOs, sadly, taught by their uplines to ignore losses, or to view losses as investments into their businesses, or that money is really not important, because you keep building the business and the "money will be there", which is not true. Some uplines may teach that the business is more about making friends or being a nicer person. All of these things may be nice side benefits of reading personal development books, etc., but when running a business, the most important goal should be to turn a profit.  If not, why are you in business to begin with?  

For many IBOs, their businesses consist of listening to standing orders, attending functions and meetings, but not focused on selling products and earning a net profit. And for most IBOs, nobody can blame them as upline may give them bad advice and because the Amway business is person to person selling, it is so inefficient that many groups end up teaching IBOs to simply buy their own volume and get others to join the business. For groups who operate primarily in this manner, you are probably running an illegal business because new and existing IBOs can profit only by continuing to add more downline IBOs in the hope that they too, will buy their own volume and sponsor others.

When you look carefully at the business plan, whether it is 6-4-2, 9-4-2 or some other variation, the majority of these business building IBOs will have low volume and likely to earn only about $10 a month. But to earn that $10 a month, you are likely to have to spend $300 on products, and if you are on standing order, voicemail and functions, then you likely spend anywhere from $150 to $250 monthly (or more) to participate in the teaching system. Thus, these IBO's bottom line is a net loss! It is only when you are able to sponsor many downlines that your losses will get smaller, and you will only profit when you have a sizable downline. That means your bottom line is a loss. And while Amway defenders will argue that Walmart doesn't even give you $10 a month, you can certainly get more products from Walmart for $300 than you can get from Amway for the same price. Walmart will match any advertised price on a product that they and a competitor may carry. Also, Walmart's advertising reaching millions of people, which is much more effective than person to person. While Amway runs some ads now days, they do not directly drive customers to IBOs. The vast majority of IBO business is still to themselves and their downline, and not to non-IBO customers.  Also, Amway won't match any advertised price like WalMart does.

I challenge IBOs to look objectively at their bottom lines. It is likely a loss. If it is, ask your upline how long this is expected to last. Set hard goals and if you are doing what is advised by upline and results do not improve, you may have to ask yourself what willl change to make your business profitable. Basically, if you aren't adding active downlines and customers regularly, you aren't going anywhere and are likely to be running your business at a loss month after month after month. It won't take long before you realize that you have lost thousands if not tens of thousands of dollars.

As a former IBO with a 4000 PV business with eagle parameters, I was not making a net profit. I saw my bottom line and although doing and achieving what my upline advised, there was no money. I decided the effort, time and money invested wasn't worth it.  Plus, my upline started to interfere in my personal life. I saw my bottom line and wasn't satisfied, and I left Amway. I later discovered the lies my upline had fed me to keep me in the business and to keep me buying tools. It is why I started blogging. For now, my bottom line is to get the truth out about the tools scam run by upline. That is Joecool's bottom line.

Ineffective Teaching?

 After years of studying Amway and blogging, I've noticed some things taught by IBO leaders that simply do not make any sense. It doesn't make sense business wise, and it just doesn't add up. I know that sometimes, you need to think outside of the box and go against the grain to succeed, but some of the IBO practices are simply insane and it's no wonder that so many IBOs fail in their pursuit of their Amway "dream". These same leaders may encourage you to disregard facts and just follow them. Blind loyalty like that can end up costing you a lot of money.

Most IBOs never sponsor a single downline and relatively few products are sold to non-IBOs. These are the reasons why most IBOs do not turn a profit but for some reason, many IBOs still seem to think that training materials are worth the money. The training might motivate you with the "rah rah" tactics, but in the big picture, are ineffective in generating more sales and getting IBOs to sponsor more people. If Amway tool and training worked, Amway sales would far greater than the approximate 8.1 billion they did last year (2022), which is down more since Amway hit a peak of 11+ billion in 2011 or 2012 or so.

Also, "buy from yourself", a fairly common practice, is a bad idea. It is okay to support your business, but if you are the primary or only customer of your own business, you won't make money, no matter what your wise and experienced upline might say.  Any profit you might turn is coming out of your own pockets. I don't know of any successful stores where the primary customers are the owner and the store employees. Yet some IBOs think this is how they will succeed. Also, for this reason, IBOs are always recruiting because they need downline to try to generate more sales volume. But because sponsoring people into Amway is nearly impossible, most people wind up recruiting but never sponsoring a single downline.

Sponsor others. So, you are struggling as an IBO. But the key to success is to try to open other stores by sponsoring downline. As a famous Amway apologist likes to claim, you do not get paid (directly) for sponsoring others. So why is this the emphasis for so many IBOs? Why would you think that opening more (Amway) stores will make you successful when you are running a failing Amway store yourself?? Yes, it is a way to possibly generate more volume, but your "success" will only come by having a bunch of struggling businesses sponsored by you. Is that how you wish to succeed? Also, the quest to sponsor others is probably how Amway got a bad reputation when IBOs tricked people into attending recruitment meetings and/or being deceptive when inviting someone to see the plan.

Folks, a business needs customers to succeed. I live in Hawaii and when tourism is slow, our local economy suffers. It's a very similar concept to your Amway business. Without customers circulating money through your business, you will eventually go out of business unless your job income continues to fund your Amway business. But I'm assuming you don't work a job just to keep your Amway distributorship going. Bottom line, if your Amway business can't support itself through sales, why are you still running it?

The Truth About Amway?

 Comment left on the Happy Franchisee blog.  Gor a reference point, the Dateline "years ago" was a segment produced in 2004 (I believe) that showed some distributors making exaggerated claims about their income and downplaying the profits made from the sales of tools and functions.

http://www.unhappyfranchisee.com/will-amway-make-you-annoying/

mary on December 5th, 2011 10:35 am

My husband and I were involved in the Amway/Quixtar business for 13 years. We worked very hard, attended all the meetings, reached the direct level, and made very little money. Thank God for Dateline. We were convinced that this was a reputable business, the people were great….so we thought. Then we found out the truth. The majority of the money that was told to us was suppose to be on the products and sponsoring /helping others, l was actually made on the books, tapes and seminars. You know they tell you that the speakers take the time from their families to give back to the business. Totally false ! The speakers are paid to perform. That is how they make money. Please believe me when I say that you are not being stupid just convinced by people you trust that you will make money. 

We went to our sponsors and told them we know how they are making money. We watched Dateline , years ago and still could not believe how we were tricked. It is sad that people will continue to believe this opportunity will produce millionaires. Most of the people in our upline were sued by other people and eventually went on to another scam. I know you will find this hard to believe. I did too. I am now reading all this information and at one time felt the same way. Again you are not stupid… just misinformed. We worked long hours, left our children with sitters, argued with our family , and listened to our upline to not believe the internet. If you make money at this business it will be on the books, tapes, seminars and speaking. 

We could not comprehend how our upline could have lied to us… they were good people that also got caught up in the lies. It is really difficult to listen to someone speak highly of this business, I know I would defend the products and the system too. I also thought I knew what was going on but I did not know the truth. Find another way to make money you, will be glad you found out now.

The Millionaires?

 I keep hearing from some IBOs that they believe that Amway has created more millionaires than any other company in the US. I call BS on that claim. I am not saying that Amway hasn't created any millionaires, obviously, the Amway owners are worth billions of dollars. But what the IBOs are apparently implying is that the diamonds are millionaires. I'm sure there are some diamonds who indeed are millionaires, especially if they are tenured diamonds, in particular the double diamonds and higher. But conversely, I believe that many high-level diamonds are not millionaires. I believe it is just as common for a diamond to be in debt as it is for a diamond to be living large. I also believe that many diamonds did not accumulate their alleged wealth exclusively from Amway.

The reason why this is an issue is because these big pins will stand on stage and show off excessive wealth and imply that it is their Amway income that pays for these mansions, sports cars, and in some cases, jets. In the US, I attended a function called "Dream Nite" where these kinds of trapping are displayed, to the tune of the song "I wanna be rich". The diamonds would say that you can have what they have, if only you will do what they advise. These functions still go on today and I believe it is now called Winter Conference.

Stanley and Danko's book, "The Millionaire Next Door" http://www.personalfinanceplaybook.com/2009/08/the-millionaire-next-door/

This book makes some very interesting points which I believe applies to Amway diamonds. I will outline the significant ones and I will comment below:

**Predictably, the data shows that most people who you believe to be very rich are not.

**High net worth individuals, statistically, tend to be people that live within their means. They don’t spend a lot of money. They don’t waste money. They tend to be pretty frugal people.

**The authors point out that most of the richest people you know aren’t driving expensive luxury automobiles. That’s what the people who want everyone to think they’re rich drive.

Joe's commentary. The book does say that about 1/3 of millionaires acquired their wealth thru a J-O-B and saved and invested, but did mention that many millionaires were also business owners, such as a pest control company, etc. But based on the points made by the book above, I can see where it is likely that diamonds portray a wealthy lifestyle as a recruitment tactic, when the reality is they may be living very middle-class lifestyles off stage or may even be in debt. I have seen evidence of diamonds having their homes foreclosed and being in debt (Ruth Carter's book: Amway: Behind the Smoke and Mirrors). Recently, there was also a report that Triple Diamond Greg Duncan filed for bankruptcy. The report indicated that he could not make his mortgages, or something to that tune. Odd, because when I was in WWDB, some of the upline leaders said diamonds paid cash for everything because paying interest to the bank wasn't very smart.

My question is why IBOs continue to make up these claims? Try googling millionaire or Amway millionaire. There is nothing to indicate that Amway was responsible for creating the "most millionaires" of any US company. If this were true, wouldn't Amway state it on their website?

The Real Business?

 When I was first recruited into the Amway business, I was in college and I was invited to a "beer bust", only to find out it was an Amway meeting. I declined. Later, a few years later, I had an old friend show me the plan and I declined. I told him to look me up if he ever made money in Amway. He came back some time later and said he went "direct". I knew that was a somewhat significant level, so I got interested. I eventually signed up and my sponsor told me about the standing orders, books, functions, voicemail.

I wondered why all this stuff was "defacto required" but was told that multi-millionaires in Amway said it was the key to success but if I wanted to try and do it on my own, then go for it. I thought it was a no brainer to follow the advice of someone who was already successful. Who wouldn't right? My sponsor also sold the tools hard, recommending that we buy more than we needed because it was the key to success. When you think about it, it sounds all good, But the upline doesn't disclose the deception.

The deception is about the tools program. Upline diamonds promote the tools program as the "key to success" but I will ask where is the success? Have someone name a few new WWDB diamonds in the US? (I was in WWDB). The fact is there are fewer diamonds now than when I was an IBO in 1997-1998. And in case anyone hasn't noticed, Amway revenues have declined about 25% from 2013 to now. They went from 11.8 billion to now, 8.6 billion.

With Amway sales and revenues declining significantly, how can there be hordes of new diamonds? It can't happen. It only makes sense that there are fewer diamonds and fewer emeralds, platinums, etc.

So how can Amway diamonds stay afloat? It's with the real Amway business. The tools and functions. Obviously, with Amway sales and revenues down, diamond income and bonuses are down (contrary to what Amway diamonds say about Amway being a recession proof business). Amway diamonds claim that soap and other consumables are necessary even when times are hard, but oh, wait, Amway sells "premium products" so they cost more than WalMart or Costco, or CVS. So much for that theory.

Don't be fooled, the real business of the diamonds is to sell support materials. There is a higher profit margin and rank and file IBOs don't share in the compensation plan like they di in the PV/BV plan. It's obvious that the "real" Amway business is the upline selling books, voicemail, cd/audios and functions/seminars.