One of the things I heard as an Amway IBO and I believe is still said in some Amway meetings is that conventional businesses do not profit for up to five years. That's bogus. Conventional businesses make a profit as soon as they sell their first product. They may not have a net profit right away because of the initial investment into equipment and rental property, but they do profit by selling goods. The same principle would apply to an Amway business except that Amway IBOs have difficulty selling products. If you opened an Amway catalog and compared their prices to local retailers, you would know what I'm talking about.
Despite the small start up costs and the little to no overhead costs, most IBOs never turn a profit. I will acknowledge that many IBOs probably never do a single thing once they sign up. I believe there is an underlying story behind this as well, but I will move on. Out of the more serious IBOs, even in this group, most of them will never make a net profit if they are using tools. Factoring the cost of the website, the voicemail, standing orders, books and functions and cds, IBOs simply get drained of their money a couple hundred of bucks a month at a time. Amway uplines meanwhile, are earning nice profits on product purchases and someone upline are also earning profits on the tools. The tools carry a higher profit margin so it would make sense that some uplines earn more from tools than from Amway.Toss in other challenges such as high prices for many products (higher than local retailers) and a crappy reputation from IBO behavior such as tricking people into meetings and you have an opportunity with nearly insurmountable handicaps. Yes, a rare few and usually charismatic people can overcome these odds, but only one or two out of tens of thousands are able to do so. And even those who reach the pinnacle of diamond, may not be able to maintain qualification. It's very common for someone to reach the level of emerald or diamond only to backslide and not qualify the following year. So much for residual income and walking the beaches of the world.
So I don't know all of the detailed statistics about how long it takes for a conventional business to turn a net profit. It may take up to five years. But based on my experiences and some number crunching, I'd have to say that the vast majority of Amway Business Owners NEVER TURN A PROFIT - EVER, and most of them ending up with net losses when business expenses are factored in. And toss in the fact that Amway allegedly has little or no overhead costs and I can only conclude that the Amway opportunity sucks.
I've heard a lot of nonsense every time the say "any business" or "ask any business owner".
ReplyDeleteThere are two types of small one person businesses. If it's services you profit sooner, particularly if it's stuff you do on a computer, and you already have one. You really charge for time. Photography, assuming you need to buy a camera (most who turn it into a business will have something) only requires a relatively small additional investment. But mostly what you need to start, are paying clients. If you work in an industry where you have contacts, people who start this often make sure they already have a pipeline before they start. This is work from home, or going to client premises close to home, one person businesses, who are in that respect what one would compare an Amway distributor with. They profit from the start if they are ever going to work.
The other is one you would need assets for, let's say some type of shop where you need shelves, stock, fridges, pay point etc. Such businesses need investments, but the investments are in tangible assets. If the business does not work out, they can be sold and a large part of the investment can be recovered.
An Amway distributor business, people appear to invest a lot on learning the business, and on scouting to build a downline group. Most of the investment yields no tangible assets. It is simply money spent in trying to get the business going. My question then is, is it correct to say they are investments, because to me they really sound like startup costs. If it takes even 2 years for a one person run from home business to profit, during which time they make these type of expenses, what we are talking about, is a business with excessive startup costs. If it takes 5 years to profit, no business plan for a one person work from home business, has such high startup costs.
That is the card they pull to keep people going in the absence of results. But a conventional business does not have absence of results if it is every going to work. Even a shop has gross profits as it pays off the investment into furniture and fridges. If they take 5 years to break even, and you visit them after two and a half years, what you'll find is not nothing, but an operational business with hard assets 50% paid off.
I can only laugh when I hear "any business". If "any business" has an owner spending all of his free time, and after 18 months they've got little to show for it and wave a $10 cheque as some do, then it should be dead obvious that the business is not working.