Many prospects an even Amway IBOs are apparently unaware that the Amway business along with the insidious "tools" business is basically a bait and switch scam. Prospects are told that with some part time effort, typically 8-12 hours per week, they can achieve untold wealth and retire early. Many people get "fired up" at the thought of a shortcut to early retirement and wealth beyond their dreams. If the prospect gets excited enough to actually sign up, that's when the bait and switch scam occurs.
You see, if you register to be an Amway IBO and get involved with purchasing support materials such as books, CDs, voice mail and seminar tickets, you think you are on the road to riches as an IBO. Don't feel bad, many people have made this mistake, including myself. But when you register as an Amway IBO, you think you will be an "independent business owner". But nothing can be further from the truth. This is just an illusion that the upline will use on prospects.When you register for Amway, you actually become a customer of Amway and a customer of the tools business run by upline. You purchase products from Amway, and if you purchase enough product, you might receive a rebate of sorts. 100 PV, roughly $300 in cost, will get you a rebate of 3%, or roughly $10. Your 100 PV actually generates about $100 in Amway bonuses, but the remaining $90 goes to your uplines. If you can sponsor downline who also use and/or move products, you can earn a greater percentage of a rebate, but in the end, you are still basically an Amway customer. As an Amway business owner, you can't easily advertise or do things to generate more sales without Amway's permission. You are also at the mercy of Amway in the event of a dispute.
As an Amway IBO, you are also a customer of the tools. Your upline will sell you an endless supply of materials which I listed above, and possibly more. What IBOs also don't know is that these products/tools also carry a larger profit margin than Amway products and, the rank-and-file IBOs don't get to earn any bonus of the volume of tools. And I might add that the tools may cost more than the cost of your 100 PV worth of products. So, you buy in and you get nothing. I might add that the tools are ineffective, otherwise there would be a constant movement of people achieving higher levels. Sure, you have people achieving 1000 PV, etc., but those levels are insignificant and unlikely to generate enough income to break even, when factoring in the purchase of business support materials (AKA tools).
Sure, Amway apologists will point out all of the new platinums, but they fail to mention that there are also thousands of people who were, but no longer qualify as platinum or higher. Amway sales were at 11.8 billion in 2013 but sales have dropped more than 25% since then, with Amway doing in the neighborhood of 8.1 billion last year (2022).
For prospects and current IBOs, I hope you realize that you're not really an IBO, but a customer of Amway and a customer of the tools. How many customers do you know of that became wealthy by purchasing things? I can't think of any.
3 comments:
Amway members are divided into two distinct groups: the scammers and grifters in the higher up-line who make money by selling tools and charging fees for training, and the lowly IBOs who sign up and stay for a while, paying endless sums of money every month for nothing at all.
You get a glimpse of this when an up-line type tells you "Just consume a few products from our array of products ($300 worth) every month, and convince other people to do the same thing!"
In other words, just be a consumer of Amway products, and don't bother trying to sell them to the general public. Pure bait-and-switch, since you were recruited into Amway with promises that you would become a millionaire.
As this post shows, the time investment and costs are a lot more than advertised before any results are seen (assuming for a minute the results do tend to happen at some point), so clearly the "low startup costs" is a gross misrepresentation. It is used as bait but bears no resemblance to reality. Even a "traditional" one person work from home business should not have those levels of expenses before it generates substantial income, and should not have such a long time to profit, if it is ever going to work. Especially not expenses on activities that don't directly produce income. The Amway opportunity therefore, in comparison to non MLM alternatives, has very high startup costs.
One other part of the bait is the idea of replicating a tried and tested "proven" plan (the implication being that chances of success are a lot higher than alternatives because no need to reinvent the wheel). Even assuming the dismal success rate of distributors still counts for "proven", most businesses on Earth follow some existing plan used by other similar business anyway, so there is nothing unique about the Amway opportunity doing that. Doing what has worked for someone else in itself is not not a guarantee of anything - most business models pass that test.
The trick is to operate at a time and place where the market is not overexposed from others with whatever product or service (or "opportunity") the business is selling. If Amway groups were doing this, they would be wary of signing up two neighbours or friends who have overlaps in their contacts. The trick is also good financial management, especially reigning in overhead expenses at the start. When I started consulting, my accountant who serviced many small businesses advised that if I had engagements lined up, things like business cards, office stationary, books could all wait and take second seat. He said one of the most common causes for business failure was cost control, in particular for young businesses overspending on non income generating activities, and owners wasting time on non income generating activities. Even if these are "hard work", "hard work" for it's own sake means nothing. Most business owners are committed at the start anyway. "Hard work" may sound vitreous, but "hard work" is not a differentiator of success. Coming back to the importance of controlling overhead expenses and time, it is something I would later see echoed many times. Even established businesses should be wary not to get distracted by non income generating activities and expenses.
The Amway groups's way is the complete opposite of that proven wisdom. Not only do these groups not warn against overhead expenses and time wasting, they encourage those. With out of context misrepresentations such as that for any business you'd have to invest. Again it sounds good, but is completely misapplied here. And they happily pitch to anyone who would listen, with zero consideration of overcrowding demand. And with that is the talk of "hard work" as if it is some kind of karma, that would would pay off just because the business builders have exhausted themselves. I have to say, if there was a thing such as an "anti business" mentality, that would probably be it.
The bait is a business opportunity with low startup costs, presented as ideal for novices due to a easy to follow recipe with high chance of success, and purported to be ideal to scale up or down between part time and full time. What is really on offer, is none of that, even, especially, compared to what they call "traditional" businesses. (I find "traditional" as a contrastive term a bit misleading and condescending, my own term for the alternatives is the word "real").
It is because the opportunity can't deliver on any of the expectations under which people are lured in, that defenders come up with nonsense later, such as that it made them a better person.
Excellent analysis!
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