An Amway Observation?

 http://forums.randi.org/showthread.php?t=192279&page=8

It's refreshing to see so many good people on this forum telling the truth about Amway. It looks like the pro-Amway shills here and on other sites are becoming increasingly outnumbered and desperate. I've read through this entire thread and think it is hilarious how many times the shill has to move the goal-posts or play word games to make Amway look like an amazing business opportunity.

I was originally introduced to Amway many years ago in my late teens by an uncle of mine. I attended a few of their seminars, and was impressed at first. But the whole thing started to seem ridiculous and unrealistic and so I didn't get involved any further. Also, I'm not that materialistic, so Amway's message doesn't appeal to me. I wish my uncle had been more skeptical.

My uncle was very devoted to Amway for a few years. He bought all their products(especially the tapes and books), tried to get others to buy them, and also tried to recruit all his family and friends into his new religion. He eventually lost money and friends and alienated himself from much of his family.

Already heavily in debt, he eventually fell for another, even bigger get-rich-quick scam shortly after quitting Amway(to Amway's credit, they don't threaten to kill anyone for leaving Amway). This one robbed him of his entire life savings. The scammers got away with it because they knew how to play him right(he met one of them through Amway). His wife divorced him soon after.

As if this wasn't enough, after making a modest financial recovery with his business over the course of several years, he loses it all to yet another scam. He had to borrow heavily from the few friends he had left since no bank would ever give him a loan, and almost no one in the family has anything to do with him anymore. I haven't seen him for 15 years.

One thing I wonder about my uncle is if all those seminars and inspirational tapes and books softened him up to fall for all those other scams he fell for after quitting Amway(he didn't have a reputation for being gullible before joining Amway, though he was never that bright to begin with). If I remember correctly, he tended to blame himself for failing at Amway, and may have never understood that it was a big scam or at least not a good business opportunity.

I still remember those crazy seminars and how they told everyone that joining the Amway cult will likely lead to yachts, exotic vacations surrounded by hot bikini babes, and shiny expensive cars, among other symbols of wealth. Everyone is told at the seminars and in the "tools" that they have all this unfulfilled potential, but to realize this potential we must avoid those small-minded "dream killers"(skeptical family members and friends).

The story about my stupid uncle is true. There are many other people out there just like him who have fallen for Amway and others MLMs. The few people I've met who claimed they were very successful at Amway usually seemed sleazy or I would find out years later they were up to their eyeballs in debt.

The person who said before that the people who regularly attend these seminars are mostly fools and misfits was spot on.

The Con Game?

 Great Thread posted at scam.com:

http://www.scam.com/showthread.php?t=142975

It is stunning to realize the enormity of this con. Multi-million and billion dollar companies, stock exchange listed companies, companies that put on the facade of being a good corporate neighbor and innocent "business" (cough) next door.

Nework marketing is a flawed and unsustainable business model that effectively is fed and supported by those on the bottom. Those on the bottom work a job to fund their product purchases. Those spoils of war then are divided up by the upline and sponsor company. Those on the bottom, who use funds from their jobs (rather than product sales) to sustain the "business", are an ever expanding rotating door of new recruits.

Although the products may be of high quality and slickly packaged, and give the impression that you are a marketeer of these sundry goods...the reality is much different. You are required to buy monthly quotas for personal use and recruit your ass off to gain entry into the promised land. The product you are really selling is a dubious "business opportunity"...your real market is "opportunity seekers".

A real business markets and sell goods and services. They are sustained by real retail sales. They order only what they know they can sell. From what I see all these mlms push recruiting as the ticket to the good life. Products and retailing mean nothing.

Another major difference is a real business owner holds title to his business...something he can sell. In mlm, you own nothing but your small product inventory.

The nature of this false and flawed business model will always have in its wake a vast turnover at the bottom of the pyramid structure. It's the nature of the beast and can be no other way, all math aside. The many "losers and the quitters" and dreamers who hang in there waiting for their ship to come in are those who support the top and sponsor company. There will always be a relentless drive to recruit at the bottom as it has nothing to do with true product retailing to support the business but finding and recruiting opportunity seekers. The emphasis is always on finding new recruits rather than selling product. And indeed, many of these mlm businesses put restrictions on the associate's ability to retail the product...which subtly strengthens its true goal of recruiting as the primary revenue stream...not product sales.

These "businesses" (cough again) are predatory and prey on the many by appealing to dreams of luxury and a life of ease, especially those with troubles in their life. The start money is low to get into the "business", which is unlike a real business that takes more sizable seed money, some knowledge and guidance and a real business plan.

Those few that actually make sizable incomes from these schemes must live with the knowledge that their life is supported by the broken dreams, efforts and losses of those on the bottom. They conveniently set aside any feelings of culpability after stepping on the bodies of their fellow man so they can proclaim that they worked hard and made it.

There simply is no parallel between a network marketing model as a "business" and how a "normal?" business really works. I understand this because I own a real business that retails real product.

Network marketing is simply the greatest con game of all time. They should all be shut down.

8-12 Hours Per Week To Prosperity?

 One of the myths that my Amway upline used to, and likely still perpetuate is the claim that you can build an Amway mega empire on 8-12 hours of effort per week. I'm venturing an educated guess that this number is used because while it still represents time, it is probably less hours than working a part time job. But let's take a closer look at this 8-12 hours per week.  (Some groups might teach 10-15 hours per week, etc.)

If you listen to one (1) cd/audio per day as recommended by upline and read one of their "success" books 15 minutes each day, you are already close to nine to ten hours of activity used per week and neither of these activities produces any income for your Amway business. In fact, both activities cost you money and produce no tangible result or income.  Upline says you are getting better and "educating" yourself, but how much education do you need to buy stuff, sell stuff and recruit downline?   If you spend another 15 minutes a day contacting people, you are close to 12 hours per week. Where will you find additional time to show the plan and to expand your name and contact list? What about servicing retail customers, at least for IBOs who actually may have some customers. 

What about attending meetings and functions? These are also non income producing activities. It's no wonder the vast majority of IBOs don't make money. Their upline has them running around participating in activities that produce no income for their businesses. Ironically, these non-income producing activities such as listening to a cd/audio, produces a lot of income for certain uplines who produce and sell them. To me, it is just an elaborate game of bait and switch played by upline. They tell you that their system is foolproof and that you will make it if you don't give up. Not true.  All these activities accomplish (listening to audios, reading books and attending meetings and functions) is to provide upline with a stable and sizable regular income.  Many people don't know this, but a diamond may have a small monthly income, possibly $5000 a month.  Of course, it depends on business structure, etc.  But the average run of the mill, non Q12 diamond (the vast majority) probably makes a small monthly income and the rest of that $100 to $150K they speak of comes in the form of annual bonuses.  

But diamonds sell the prospect the dream of financial freedom. You tell the IBOs that Amway is their best chance. You tell them that you can help them and that the tools of the business (standing order, voicemail, books, functions) are the key to their success. Those who are serious enough to commit to the system likely won't quit without making some effort and will allow uplines to earn some nice profits before these downline eventually realize they aren't profitable and quit. Because many IBOs are sponsored by family and friends, you don't see too many formal complaints about the business. Most people chalk it up as a life lesson and do not complain.  

But IBOs and information seekers, do not be fooled into thinking that you will create a financial empire by working 8-12 hours a week. That would be far-fetched, almost too good to be true.  If that's not a get rich quick scheme, what is?  The number of highly successful Amway IBOs versus the number who sign up are likely fewer than lottery winners.

Are Diamonds Just Middle Class People?

 I recently read an article on what constitutes wealth. Some say an annual income of $100,000 would make them wealthy, some say assets exceeding $4 million would do it, and some estimated that $2 million would make them "rich". Of course, everything is relative and someone earning $25,000 a year would think that $100,000 a year is wealth, etc. College students might think $40,000 a year is awesome because many have little money to begin with. I'm sure someone like Bill Gates would not consider $4 million to be astonishing. It's all relative. If you are content with what you have, you are likely relatively well off already.

But let's talk about Amway diamonds. I say diamond because it is basically the pinnacle of success in Amway. It is the crowning achievement of the 6-4-2 plan (or other variations) that many groups show. The average diamond earns more than $200,000, according to Amway. Now $200,000 sounds like a lot of money to young people or to those with lower wage types of jobs, or those who are just starting out in their careers. But we also know that diamonds earn income from the sale of tools. Some groups advertise (verbally) that someone might earn $100,000 a year from the tools and honorariums (speaking income).

Let's be generous and say the diamond earns $300,000+ a year from Amway and tools income. Income tax and medical insurance for the family will eat up about 40% of that right off the top, leaving about $180,000. Fantastic you might say? Well, a diamond certainly would live in a million dollar mansion, which would give you about a $6000 a month mortgage (So much for buying homes in cash) or $72,000 a year, leaving $108,000. Fantastic right? Well, diamonds are constantly traveling to various functions, flying first class and staying only at 5 star hotels right? So an average of 1 trip per month with a family, first class and a 5 star hotel would probably cost about $5000 or more per trip, or about $60,000 a year, now leaving $68,000 for this diamond's yearly budget. A good diamond with a family surely consumes 300 PV per month for household goods, or about $900 a month or about $11,000 a year, leaving $57,000 for the rest of the year. A good diamond is often a Christian who would faithfully tithe 10% of his income, or about $30,000 a year, leaving the diamond with $27,000 a year, or about $2250 a month to pay for their monthly electric and utility bills, gas, car payments, meals and entertainment.

Yes, some expenses may be slightly higher or lower, but what I am trying to illustrate is that even an above average diamond with tools income is more likely to be broke than wealthy if they live the lifestyles portrayed at functions such as dream night or other major functions. Do the math. It is unlikely that diamonds pay cash for everything and it is unlikely that fabulous lifestyles can be sustained on a diamond income. There is plenty of evidence out there. Diamond's homes foreclosed, diamonds behind on income taxes, a prominent triple diamond formerly in chapter 7 bankruptcy proceeding, many diamonds selling off their homes in a bad real estate market.

I truly believe that it is quite possible for many diamonds to be broke. Many people live in debt these days. Are diamonds any different, even with more income? The math says diamonds are just like anyone else.

Business Owner Or Customer?

 One of the silly things IBOs say is how they need to be their own best customer. That a McDonald's owner would never eat at Burger King, etc. That is complete hogwash. While there is nothing wrong with supporting your own business, IBOs are blinded by the fact that their business produces nothing. They are simply middlemen distributors. Do you really think diamonds consume thousands of dollars of standing orders because they own or profit from tool companies, which are for profit companies that produces training materials? Of course not. When you purchase something from your Amway business, you make no profit. Any "false" profit you see is simply money out of your own pocket moving to the other pocket. The Amway corporation makes the profit. Yes, you may receive a volume bonus, but that is still a lot of your own money being given back to you. Spend $300 and get back $10. If you can get enough people to follow you and move volume, your bonus will increase, but the increase then comes out of your follower's pockets instead of your own. The only real profit would be selling product to actual non IBO customers.

I know some business owners and they are never the best or sole customer of their own stores. Many Amway business owners are their only customers or their best customer. That simply is not how a business is run. Any REAL business cannot support itself by having the owners and perhaps the owner's employees as the primary customer base. For any business to thrive, you need customers and a demand for products. Without customers and a demand for products, you have no business. But some upline leaders still teach "buy from yourself" as the primary means of doing business. Other leaders may ask you to sell, but to focus on sponsoring others because they are hopeful that this will result in increased volume. Sadly, most IBOs will never sponsor a downline and many will never acquire a customer other than themselves.

It seems as though many IBOs think they are business owners but the reality is that they are simply glorified customers of their own business. Their only hope of making a profit is to sponsor others. In my opinion, this method of doing business is a pyramid because the only way to eventually make a profit is to sponsor enough downline until you can leverage enough volume to finally break even or profit. An IBO with a real customer (and not buying tools) can make a profit by selling a single product. But many IBOs are not taught this because their upline makes a much bigger profit by selling to their downline IBOs standing orders, voicemail, books and seminar tickets. Many IBOs do not realize that they are simply customers of Amway and customers of the tools system.

For people already involved or considering involvement in the Amway opportunity, you are highly encouraged to seek more information and to fully understand how a profit is made in this business. Simply seeing circles drawn oversimplifies the process as most IBOs never get close to finding six (6) like minded people. Even those who find six are unlikely to be able to retain them. Over time, the cost of the products and the cost of the training will start to add up and the losses will escalate. For real business owners, an assessment of profit/loss and return on investment should be done and if the return is not good, a real business owner would consider other options.

So are you a business owner or a glorified customer?

Climbing A Pyramid?

 Let me start out by saying that Amway, at least to the letter of the law, appears to be a perfectly legal company. Therefore, I am not saying or implying that Amway is illegal. But I believe that the way Amway businesses are run, are like product pyramids. In most groups, you will have the lowest level IBOs efforts and tool purchases being responsible for the upline bonuses and tools income. Many many IBOs are fooled into thinking that the ability to surpass your upline or that you don't get paid to recruit downline makes this a good deal. Think about it for a bit. Aren't most Amway gatherings about motivation and recruiting?  Also, if most IBOs do little or nothing then quit, it wouldn't be that hard to earn more than you sponsor right?

Unless you have a very very rare group where actual product sales to non-IBOs is sufficient to cover the costs of running your business, functions and all, then it is true that the lower level IBO's jobs are the primary source of income for the uplines. How many groups are like that where selling is nearly exclusively to retail customers and not downline? None that I have ever seen or know of. In fact, how often do IBOs even sell enough products to cover their expenses for even one month out of the year? The groups that teach "buy from yourself" end up doing the most financial damage to their groups because the downline's expenses are then covered exclusively from the downlines jobs, bank accounts, or drive the downline into debt. 

I've seen and discussed group structures in forums many times and I can only conclude that tool sales easily wipe out what little profits/bonuses some of the downlines might receive. Only when an IBO is able to sponsor enough downline to absorb the losses for them will they finally break even or make a little profit. I would guess that the 4000 PV level or platinum is where a dedicated CORE IBO would break even and possibly start to make a small profit.  On the other hand, a hard-CORE dedicated IBO can still lose money at 4000 or at platinum.    But we also know that most platinum groups have 100 or more IBOs in order to generate 7500 PV. Thus, we can also conclude that less than 1% of IBOs make a net profit. The only way IBOs can earn a net profit at a lower level is to avoid purchasing tools and to avoid paying for functions. Those who get involved in a system such as WWDB or N21 almost guarantee that they will have a net loss. 

Sure, my job may have a pyramid structure with the CEO making the most money. But the difference is that in a company, even the lowest paid employee still receives a paycheck and has money at the end of the month. The same claim cannot be made by IBOs. For these reasons, I believe Amway to be a product pyramid. IBOs and information seekers are free to participate, but I challenge them to sit down and really analyze their ability to make a net profit. In most cases, the analysis won't be favorable. If you are in the US in particular, you may have great difficulty in even being able to discuss "Amway" without getting strange looks your way from others. Good luck in whatever you decide.

Making Profits Or Excuses?

 I've been a blogger now for a number of years. I've debated with Amway apologists and they ultimately resort to excuses and/or personal attacks when they run out of defenses. Food for thought, when you have to make excuses about why your opportunity isn't a scam or a pyramid scheme, that should already make you stop and think for a minute. The easy excuse is to say that "my group isn't like that". Yet I see testimonies and statements that indicate to me that things have not changed, even in all the years since I left the Amway business myself.

Even the product's prices need to be justified. That there is concentration or other factors that really make Amway stuff a better value. Strange how that better value doesn't seem to translate further once an IBO realizes that there is no residual income at the end of the rainbow. Many IBOs don't seem to mind paying for Amway stuff when they believe that they will one day walk the beaches of the world while more money than they can count will keep rolling in. When the dream fades, so does the desire to purchase these awesome products. If not, with tens of millions of former IBOs, Amway sales should be through the roof after all these years. But it hasn't. Although Amway recently reported an increase in north American sales, that wasn't the case in the last 10 years. Amway apologists even have excuses about why that is the case.

Amway also reported some years back, that they have updated their average IBO income. While it is still miserable, it has gone up, although a clear explanation as to how and why they calculated the "average income" was not apparently given. One thing was clear, the average income went up after Amway discarded IBOs that they didn't consider "active". So, the debate continues. Critics analyzing and predicting how and why, and Amway apologists making excuses and justifying their position. Why not just be transparent and end the debate once and for all? I think most people know the answer. The bottom line for most is whether or not they make a net profit. For the vast majority of IBOs, especially the ones on the system, the answer is a net loss. It is predictable and easy to conclude. The 6-4-2 or any other version of the compensation plan clearly shows that very few people can make any decent money. If a platinum IBO typically has 100 or more IBOs, that is your answer there. It should be noted that a platinum might not even be very profitable if they are sold out on buying system tools.

Amway defenders can make justifications and excuses, but I've not seen a single comprehensive argument as to why the Amway business is a good idea and how it can be profitable.

So IBOs and Amway defenders, are you making money (net profit)? Or are you just making excuses?

Exploiting Your Family And Friends?

 Happy Thanksgiving from Joecool's Blog!   I hope you all receive an extra portion of blessing this year.  In the meantime, I posted this article about IBOs trying to exploit family and friends:

Many prospects see the Amway plan, and get unrealistic dreams of attaining incredible material wealth and retiring in a few years. I find it strange that nobody has been able to point out anyone who actually got in, worked a few years and then walked away from the business and is now enjoying buckets of cash rolling in while they spend their days on exotic beaches sipping mai tais. The more likely scenario will be debt, higher credit card bills, and boxes of unused cds and other various products. The alleged wealthy people in Amway are often spoken about but have you ever heard of or known someone who was retired and living a luxurious lifestyle because they made so much money in Amway? I know Amway IBOs hear about it, but they believe it without any kind of actual evidence. I could say I am retired because I make millions by blogging, but is that believable? In the same train of thought, do you believe that people join and work hard for 2-5 years and then enjoy life with financial freedom and live happily ever after?

So why would someone joining the business become annoying? It's because to the average person, it becomes clear that to achieve this, you need to find "six" people. Thus, to find six people, you need to make contacts to show the plan. Cold contacts of people on the street would be unlikely, even for the boldest of people, so new IBOs start looking at people they know. They start with people they are familiar with, or family and friends. They may also think their family and friends will want to get rich with them. So, the IBOs start making phone calls and contacts. Pretty soon all your family and friends know about your involvement in Amway, and most will not be interested. Where do you recruit now? That's when the cold contacts begin, which makes it nearly impossible to succeed in Amway.

Sadly, for most new and enthusiastic IBOs, they will find that they are shunned by family and friends. Over the years, IBOs have done too much damage to Amway's reputation and overcoming this challenge is too much for the rank and file IBOs. They will hear stories about failures and opinions that Amway is a pyramid and/or a scam. Of course, IBOs will have "canned" answers to respond to from their upline. One of the humorous ones is that Amway is praised by the BBB or the FTC and is the shining example of an MLM. To those familiar with this line of reasoning, it can become side splitting humorous.

At first, the family and friends may humor the new IBO, but relentless persistence can eventually turn ugly. This is where uplines will teach the new IBOs to avoid "negative" and to shun these family and friends. This is why some people charge the Amway leaders with being cult - like. It's at about this point where IBOs might realize that Amway products are costly and try to sell off some of them to reduce their own costs. Often times, sympathetic family and friends might make a token purchase to show support. but that can get old in a hurry also. Most IBOs will eventually quit and make amends with family and friends, but some lose friendships for good.

To information seekers and new IBOs, hopefully this message is food for thought......

Annoying Your Friends And Family?

 Many people see the Amway plan and get unrealistic dreams of attaining incredible material wealth and retiring in a few years. I find it strange that nobody has been able to point out anyone who actually got in, worked a few years and then walked away from the business and is now enjoying buckets of cash rolling in while they spend their days on exotic beaches sipping mai tais. The more likely scenario will be debt, higher credit card bills, and boxes of unused cds and other various products. Can anyone really dispute this? It seems to be a pretty common claim among former Amway IBOs.

So why would someone joining the business become annoying? It's because to the average person, it becomes clear that to achieve this, you need to find "six" people. Thus, to find six people, you need to make contacts to show the plan. Cold contacts of people on the street would be unlikely, even for the boldest of people, so new IBOs start looking at people they know. They start with people they are familiar with, or family and friends. They may also think their family and friends will want to get rich with them. And that's when you friends and family begin to get annoyed when you pepper them with Amway related BS.

Sadly, for most new and enthusiastic IBOs, they will find that they are shunned by family and friends. Over the years, IBOs have done too much damage to Amway's reputation and overcoming this challenge is too much for the rank and file IBOs. They will hear stories on failures and opinions that Amway is a pyramid and/or a scam. Of course, IBOs will have "canned" answers to respond to from their upline. One of the humorous ones is that Amway is praised by the BBB or the FTC and is the shining example of an MLM. To those familiar with this line of reasoning, it can become side splitting humorous. Sure, the diamond may ask the rank and file to use his credibility to be able to recruit downline but in the end, the results are generally futile.

At first, the family and friends may humor the new IBO, but relentless persistence can eventually turn ugly. This is where uplines will teach the new IBOs to avoid "negative" and to shun these family and friends. This is why some people charge the Amway leaders with being cult - like. It's at about this point where IBOs might realize that Amway products are costly and try to sell off some of them to reduce their own costs. Often times, sympathetic family and friends might make a token purchase to show support. but that can get old in a hurry also. Most IBOs will eventually quit and make amends with family and friends, but some lose friendships for good.

To information seekers and new IBOs, hopefully this message is food for thought....

The Con Artists?

 One of the things that Amway diamonds remind me of is a con artist. Now why in the world would I say that? I say that because in my opinion, it is absolutely true. The diamonds stand on stage, showing off trappings of wealth to lure prospects into the business. They then sell them "tools" or training and promote the tools/training as the key to success. Then when the prospect fails, they say the prospect didn't work hard enough or they didn't do things exactly right. I was an IBO, and I did what my upline advised, I had eagle parameters, and I still did not have a net profit even at the 4000 PV level. I highly doubt anyone could honestly claim I didn't work hard enough, or I didn't do things right. I would have had a net profit but by upline diamond wanted me to re-invest the money into tools - because they are con artists. Yes, I was partly culpable for listening to them but was I supposed to question and argue with someone who allegedly had achieved the pinnacle of success in Amway?

Over the years I have been blogging, I have had contacts with some fairly high level IBOs (platinums) who told me stories of backstage conversations where the diamonds basically refer to the audience as hopeful suckers, knowing that these folks are going to fail. But they have the nerve to stand on stage and try to sincerely sell hope in the form of cds, books, functions and voicemail. And the audience believes it because deep down, they want to believe that you can work hard for 2-5 years and retire young with money pouring into your bank accounts. Who wouldn't want that? But the diamonds know it's a lie, but they still promote that next function or meeting as if you can expect to strike gold when you attend.

I came from WWDB (World Wide Dream Builders) and while some groups might be slightly different, they are mostly alike as these groups are for profit companies that sell training to Amway IBOs for a profit and they make a nice profit, even if all the IBOs lose money. There is no evidence that these tools/training does anything to help IBOs succeed. In fact, I believe that anyone who succeeds in Amway, does so in spite of the tools, not because of the tools. When you think about the Amway teaching, most of their "core" steps involve activities that cost you money instead of making you money. Some of the teaching I heard in meetings involved how long you can put off paying your rent/mortgage and other bills before you would be in trouble. I suppose the diamonds wanted you to spend your last dollar on tools. One diamond said your family could skip a meal to buy more cds because that cd cold contain the one thing that propels you to diamond. These folks were shameless and would take your last cent if they could. Two of my crossline IBOs had some difficulty in Amway and they followed upline advice. One couple ended up in chapter 7 bankruptcy and the other couple had their home foreclosed.

While the diamonds have nice suits and nice smiles, you have to wonder whether they actually believe the very teaching they profess on stage. One thing that Amway confirmed was that once you achieve diamond, they recognize the diamond pin forever, even if you no longer qualify. Thus, some diamonds might be selling you training materials and functions and they may not even be a qualified platinum, let alone a diamond. Some old timer diamond from the 1980's such as the Duncans might have high rankings today but really, they built their businesses in the days prior to the internet and social media. How does that qualify them to teach today, unless they can prove that they are still qualified as diamonds?

In my opinion, prospects and information seekers need to be careful when someone is trying to get you in the business because the diamonds can give you a smooth story and make the business sound "simple" and "doable" but in reality, Amway products can be difficult to sell other than to sympathetic family and friends. And sponsoring is difficult in the US where saturation has likely occurred.

But beware of the diamonds, who look and seem sincere, but are more like con artists trying to sell you on a business that you are unlikely to make any net profit, much less earn untold and limitless wealth. At least if you read this blog post, you can detect some of the angles that Amway IBOs use to lure people into the business.

Are IBOs "Suckers"?

 Quick disclaimer, I was once an IBO. Therefore, I was once a a sucker myself. Of course, back when I was an IBO, it wasn't so simple to google Amway and find so much information. Basically, I was fed many lies about the business and the training system. I was fed the 2-5 year plan. On the surface, it sounds very reasonable and achievable. However, the reality is that the Amway reputation is so tarnished that it's nearly impossible to get people to see the plan, let alone actually sponsoring people into your downline.

I was also told that the training system was vital and that nobody had ever succeeded without it. Of course, that is a lie because some of the current diamonds and crowns pre-date the emergence of tools. Also, the reality that maybe only 1 out of tens of thousands of IBOs achieve diamond in the US should be an indicator of your likely results. Many dream of going diamond, but very few ever get anywhere near that level. Even those who do achieve diamond, likely find it nearly impossible to maintain it. This is evidenced by the number of diamonds who fail to qualify and end up quitting. Seems that only the ones who profit from the tools stick around. It looks like the tools is where the "residual" income comes from. But that income is from constant traveling and working and not from walking the beaches sipping exotic drinks.

Amway also charges exorbitant prices for some of their products. Take double x, basically Amway's flagship vitamin product. It retails for about $80 or more while IBO pricing is around $60+.  A site visitor once left me a message that Amway employees (not IBOs) can purchase double x from Amway for around $12. I tried to confirm with Amway but they did not or would not confirm it. I believe that Amway could probably make a healthy profit selling double x for about $17. Let's not even get into Amway's perfect water (bottled water) which used to retail for nearly $50 a case.

The somewhat entertaining part, is that with all the reputation issues and high prices, is that many IBOs are convinced that they need an endless supply of training in order to succeed. Some upline even have the gall to tell their audience to look at the fruit on the tree. Well, the trees are barren with the leaves falling off, like many trees in the winter. Basically, Amway and the AMOs survive by continuously recruiting new and unsuspecting suckers to join. If you truly believe your upline cares about you, try missing a few functions and see if they still edify you. Many people have been suckered in the past. Hopefully, with readily available information, the tool scam will finally be exposed for the fraud that it is.

How Prospects Get Sucked Into The System?

 http://hunza1.tripod.com/amway/directly.html

While each of these Systems claims to be different from and superior to the others, they seem to me mostly indistinguishable from each other, sharing a number of common characteristics:

1. Recruits are lured in by exaggerated income claims and ostentatious displays of wealth.

2. Once they are in, it is repeatedly stressed that they will not have any chance of attaining said wealth unless they strictly adhere to the System, meaning they should buy at least one tape per week, attend all meetings and rallies, and spend most or all of their free time trying to recruit others. Amway's rules state that the purchase of motivational motivational tools is optional, but it seems clear that those who sell the tools have figured out how to pay lip service to these rules while continuing to exert pressure on their downlines to buy the tools. "The tools are optional, and so is success," goes the oft heard refrain.

3. Retailing is downplayed or ignored completely in favor of self-consumption of Amway products. It's not surprising that these Systems have been the subject of a series of lawsuits, as they are inherently deceptive and fraudulent. Distributors are routinely not informed that their upline may be making as much or more from the sale of motivational tools as they are from the sale of Amway products. Without this vital piece of information, distributors naturally assume that the incomes and lifestyles of their upline are attributable to their Amway businesses, and they buy the motivational tools in the hopes of achieving a similar success. It's an insidious and self-perpetuating cycle: the more motivational tools the masses of downline distributors buy, the more successful the upline distributors appear to be in their Amway businesses, which in turn inspires the downline distributors to buy more motivational tools, and round and round she goes. Lower level distributors are either bled dry and quit, or hang in long enough to make it to the level where they start to get a cut of the tools profits.

Are Diamonds Fraudulent?

 I've heard over the years, many IBOs who failed in the Amway opportunity who blamed themselves for not putting in enough effort, not trying hard enough or not working the system. While I don't doubt that some IBOs don't work hard enough, I cannot fathom that so many motivated and eager prospects simply failed because they didn't work hard enough. I believe IBOs are taught to accept failure as their own.

Uplines will tell new IBOs to trust them and that these new IBOs will succeed if only they will follow the advice of the allegedly successful diamond because they have already blazed the trail for you. Ironically, after many IBOs fail, upline will never take responsibility for the advice they issued that led to downline failures. They then turn the tables on their donwline and say that their advice is like a buffet. You pick and choose the advice you need and disregard the rest. That is such a bunch of crap that I cannot fathom downline IBOs buying what they are shoveling. A new IBO places their trust in the diamonds because they have achieved the pinnacle of success, but a new IBO is supposed to pick and chooe which advice to follow? And then failure is the fault of the downline?

Ironically and sadly, thse downline, when they ultimately fail, often end up blaming themselves and just disappear unless someone recruits them again. They are often sponsored by friends and family, so you won't see them filing complaints against Amway or the uplines who led them astray. Uplines nearly assured their success if only these new IBOs would buy the training materials and attend all of the functions. But many IBOs work hard and do everything outlined by upline only to fail. It is likely because the system doesn't work. Many financial systems are for sale out there and most of them have very little success. Amway is no different, except that uplines promote their systems as sure fire.

It is however, my belief that many or possibly most IBOs are the victims of fraud in that they are given possibly false positive information about the Amway opportunity. They get involved and find out that the system doesn't work, and then they end up quitting with a loss and them blaming themselves. Brilliant for the uplines who profit but in my opinion, it makes IBOs the victims of fraud by upline. Upline profits whether or not their downline makes a cent. Some upline strongly encourage downline to buy more and more tools, even when they know that those downline have no chance of making money in the Amway opportunity. It makes the IBOs victims and it makes the uplines a bunch of crooks.

Interesting Observation About Amway?

 

An Observation About Amway?



http://forums.randi.org/showthread.php?t=192279&page=8

It's refreshing to see so many good people on this forum telling the truth about Amway. It looks like the pro-Amway shills here and on other sites are becoming increasingly outnumbered and desperate. I've read through this entire thread and think it is hilarious how many times the shill has to move the goal-posts or play word games to make Amway look like an amazing business opportunity.

I was originally introduced to Amway many years ago in my late teens by an uncle of mine. I attended a few of their seminars, and was impressed at first. But the whole thing started to seem ridiculous and unrealistic and so I didn't get involved any further. Also, I'm not that materialistic, so Amway's message doesn't appeal to me. I wish my uncle had been more skeptical.

My uncle was very devoted to Amway for a few years. He bought all their products(especially the tapes and books), tried to get others to buy them, and also tried to recruit all his family and friends into his new religion. He eventually lost money and friends and alienated himself from much of his family.

Already heavily in debt, he eventually fell for another, even bigger get-rich-quick scam shortly after quitting Amway(to Amway's credit, they don't threaten to kill anyone for leaving Amway). This one robbed him of his entire life savings. The scammers got away with it because they knew how to play him right(he met one of them through Amway). His wife divorced him soon after.

As if this wasn't enough, after making a modest financial recovery with his business over the course of several years, he loses it all to yet another scam. He had to borrow heavily from the few friends he had left since no bank would ever give him a loan, and almost no one in the family has anything to do with him anymore. I haven't seen him for 15 years.

One thing I wonder about my uncle is if all those seminars and inspirational tapes and books softened him up to fall for all those other scams he fell for after quitting Amway(he didn't have a reputation for being gullible before joining Amway, though he was never that bright to begin with). If I remember correctly, he tended to blame himself for failing at Amway, and may have never understood that it was a big scam or at least not a good business opportunity.

I still remember those crazy seminars and how they told everyone that joining the Amway cult will likely lead to yachts, exotic vacations surrounded by hot bikini babes, and shiny expensive cars, among other symbols of wealth. Everyone is told at the seminars and in the "tools" that they have all this unfulfilled potential, but to realize this potential we must avoid those small-minded "dream killers"(skeptical family members and friends).

The story about my stupid uncle is true. There are many other people out there just like him who have fallen for Amway and others MLMs. The few people I've met who claimed they were very successful at Amway usually seemed sleazy or I would find out years later they were up to their eyeballs in debt.

The person who said before that the people who regularly attend these seminars are mostly fools and misfits was spot on.

The Smoke And Mirrors Of Amway?

 There is a book called "Amway Motivational Organization - Behind the Smoke and Mirrors", written by Ruth Carter in 1999. Ruth Carter was an IBO and also worked as an employee of a diamond. Her close and personal insight into the life and finances of a diamond is quite horrifying when you see the details. Based on my observations and years of blogging experience, I believe that this diamond as described in this book, is more typical than not. I believe this because this diamond had a nice income. but also was living in debt. Basically the diamond in the book (not identified) lived a lifestyle to portray wealth, but behind the illusion of wealth was a pile of debt.

This diamond operated in the mid 1990's, the heyday of the AMO abuse. While Amway pundits will make claims such as the story is a bit dated, I still say the story is quite valid because not much has changed in the business. Yes, online shipping replaced the call in and pick up method of delivering goods, and for some groups, the voicemail system changed, but the diamonds in the business still portray wealth. My old LOS, WWDB, still has a function called Dream Night, where the diamonds parade around and show off mansions, sports cars, jet skis and other luxuries. The diamonds still make claims of buying bit ticket items in cash, and they apparently still have the nerve to teach that the Amway opportunity can save your marriage.

The diamond in the book had a nice home, a couple of fancy cars and a nice income. The diamond in the book had a gross income of just over 3 million dollars. But after business expenses, this diamond had a net income of $323,000, with only $96,000 of the income coming from Amway. For the Amway defenders who like to cite religion and call Amway a God pleasing business, I will note that this diamond only had $10,000 of their income given to charity. This diamond had the fancy suits, a couple of nice cars and a nice home. This diamond also had a mortgage and a home with little equity. The diamond had not paid their income taxes for several years and this diamond also had credit card debts in the hundreds of thousands.  Diamonds pay cash for everything?  LOL

How can someone who has achieved the Amway pinnacle of success be in debt? Simple, by portraying a illusion of wealth that cannot be sustained on the income generated by Amway volume and tools sales. An income of $323,000 is certainly nice, and more than most people will ever achieve. But the lifestyle they live might require a million dollar a year income or more. Amway reports that the average diamond earns about $150,000 a year. I might add that a diamond's monthly income may not be that great as much of the income of a diamond comes from annual bonuses.

So why do diamonds live a lifestyle that they cannot sustain? It is my guess that diamonds need to keep recruiting new IBOs in order to maintain what they have. Thus they portray an easy lifestyle with no job and tons of luxuries. Some diamonds show off more than others. But in order to entice prospects, you need to show things that most people cannot attain with a job. I believe it is why there have been other signs of financial trouble in diamond land. Other diamonds have had homes foreclosed. A prominent triple diamond was in bankruptcy (chapter 7) proceedings, and a host of diamonds were selling off mansions in a bad real estate market. The signs are there. You can believe your own eyes of continue to deny what appears to be the norm in this business.

Amway Motivational Organizations and their diamonds are creating illusions of wealth, behind the smoke and mirrors, I suspect many of them are in financial difficulty, living month to month and bordering on massive debts. The evidence is there. The question is whether or not you believe it.

The Expensive Hobby?

 Many Amway IBOs get into the business with high expectations. They get in with oftentimes, a dream of early retirement, living a fabulous lifestyle, mansions, sports cars and "walking the beaches. In order to do this, IBOs are taught that they need to "plug into the system". So IBOs get on standing order, they attend all the meetings and functions, they read books and show the plan. They think these activities will make them rich. The sad reality is that it lines their upline's pockets.  When you look at the business-related activities that the diamonds pimp, you'll notice that activities such as reading books and attending functions, are not income producing activities for the IBOs.  They are however, a major profit center for diamonds.  Whose best interest is at heart when diamonds give advice?

But because the Amway business has so many handicaps and shortfalls, the IBO soon falls into the trap of "playing Amway". The IBO will do their 100 PV, either by self-consumption or selling, or a combination of the two, and will continue to listen to the cds or tapes and will continue to attend every meeting. When I was an IBO, our group had many IBOs who did not sponsor a single person, yet they were at all of the meetings and functions. These folks, in my opinion, had Amway as a hobby.  When you factor in the cost of the tools and functions, Amway is just an expensive hobby that doesn't produce income.

A hobby is something you do in your spare time, usually something you enjoy. For many people, Amway meetings are a social event. It is evidenced when some people say they enjoy the meetings, being with "positive people", and they have become nicer as a result of their involvement. While this may or may not be a side benefit of the functions and meetings, it is not relative to the bottom line of a business. A business exists to make money. If a business is losing money, expenses are usually cut, or a decision is made to stop running a, unprofitable business.    

If you have been an IBO for more than a month or two, have you actually sponsored someone? If the excitement of being a new IBO has not resulted in acquiring new downline, it is unlikely that you will ever have a downline. If you have been in the system reading books, listening to standing order and attending functions and showing the plan, and you have no results, you have Amway as a hobby and not a business. Don't feel bad, sponsoring other IBOs is not a common or easy feat. But as a business owner, you should think about your involvement in the business and if you find you are participating in a hobby rather than running a profitable business, then you should decide whether or not you are accomplishing what you set out to do. 

Are you running a business (to make money) or are you playing Amway?

The Illusion?

 One of the things my Amway upline taught us ad nauseum was that we needed to have faith in our business and in our upline. That we needed to believe that we were going to be successful. IBOs are told that they should act successful even if they are still working their way up the ranks in the business. It is why they ask (require) IBOs to wear suits and business attire to all meetings and functions. This is one of the weird quirks about the business in my opinion. I live in Hawaii, and I remember a function they held in the middle of July in a high school auditorium and there was no air conditioning. I think my suit needed special cleaning because it was completely saturated with perspiration.   I also remember the brainwashed IBOs saying how the room was cool despite their shirts and coats being drenched with sweeat.

Anyway, with this part of the year, soon (in a few months) there will be thousands of IBOs shuffling off to a function called dream night, or in some cases, winter conference. The tickets are about $100 or more and includes a dinner. What IBOs are often unaware of is that many venues will allow you to run these conferences for $25 to $50 per person. The rest of that ticket price goes directly into your upline's pockets. Anyway, the dream night function will feature slide shows of mansions, yachts, jet skis, sports cars, fabulous vacations and other trappings of wealth.  There will be screams for financial freedom and how IBOs need to "get it done" and be free of their awful and oppressive jobs.

What many IBOs don't realize is that this display of wealth is just that. There is no Bonafide evidence to indicate that these diamonds actually own all of those toys and trappings and mansions. The diamonds probably won't verbally confirm it either, because these toys and goodies may not really be owned by them. It could be rented, or maybe some upline crown ambassador may own the mansion, but IBOs will assume that these trappings of wealth are common once you reach diamond. As an IBO, I never actually knew how much a diamond really earned. I just assumed it was a lot because we were shown all of these goodies and just assumed all diamonds had these kinds of lifestyles.  But looking back, I recall my upline diamond had a regular home, although in a decent neighborhood.  But the claim was that the house was all paid for.

If I posted a picture of a mansion and a jet and said I owe it all to my earnings as a blogger, people would cry foul, that I am lying and making things up. And they would be right. Well, I would guess that many diamonds are doing the very same thing if they appear on stage and implying that they have jets and mansions. As I said, someone may own a mansion and a jet, but to imply that this is a part of the typical diamond lifestyle is a stretch. The evidence is there. Some diamonds have lost their homes to foreclosure. My old LOS diamonds (WWDB) taught us that diamonds pay cash for everything, including homes. Now confirmed as a blatant lie. Who knows what else they may have misrepresented? 

I ask IBOs and prospects who may be attending dream night, to watch with a critical eye. What is being implied with the display of wealth? Analyze if those goodies can be purchased with a diamond income (maybe $150,000 (gross income) plus some tool income). Ask yourself if this lifestyle is truly sustainable? Ask yourself if you can live with yourself if deception is a part of earning your diamond lifestyle?  Not only that, you likely need to exploit your family, friends and faithful downline who you advise to trust in you.  I for one, could not libe with myself if I needed to do that, to achieve the illusion of success.

Part Time Work?

 

Had a great trip to some Asian countries and just got back.  What a great trip and Amway wasn't needed to fund a fabulous vacation!

Many people pitch Amway as an easy, and somewhat shortcut to riches. It's all over the internet, it's what I saw as an IBO, and I have good reason to believe that many still pitch Amway in this manner. I believe that people want to believe that you can create wealth part time in 2-5 years. IBOs and prospects may be told "it's not get rich quick", but 2-5 years to quit your job and live off ongoing lifelong residual income sure sounds like the pitch of a get rich quick scam. It is what has contributed to Amway's current bad reputation.  

A typical IBO (not counting those who do nothing), according to the "plan" will consume and possibly sell some goods on their way to 100 PV, which will earn them about a $10 bonus from Amway. There might be some profit from sales to customers, but there are also expenses involved in running a business. If an IBO is on the system, then their expenses might run from $100 or so to $500 a month, depending on level of commitment (brainwashing). In the end, a flawed system and generally noncompetitive pricing and products leads to most IBOs eventually quitting. The vast majority of IBOs on the system will wind up with a net loss, even with a tremendous amount of effort. Seems that effort has no relationship with success in Amway. Based on my experience, deception and lies seem to be a better way to succeed in Amway than by hard work.

But what if someone basically worked a part time job instead of Amway? If someone simply got a 20 hour a week job at $10 an hour (not that difficult), someone could earn about $800 a month gross income, or about $9600 a year. In ten years, even with no raises in salary, that person would have earned close to $100,000 more income. That money, if invested into a diverse portfolio can be the nest egg that would allow someone to retire early, or to retire more comfortably than most. And that salary is guaranteed if you work the hours.  

In Amway, there are no assurances of anything, even if you work 40 hours a week. The only assurance if that you will help your upline earn more than yourself by moving products. If you are on the system, you are basically paying your upline (via tool purchases) for the privilege of boosting your upline's volume. It is why uplines teach you to "never quit" and to be "core". These virtues help assure your upline of profits, but does little for the rank and file IBOs. I write this blog post just to stimulate thought amongst IBOs and prospects. There are better and easier options than the Amway opportunity. If you are reading this, you are looking at one potential alternative. It's your job to decide.