One of the things my upline leaders used to always talk about was how they wanted everyone to succeed. Looking back, I believe they were lying and simply wanted the faithful downline to keep spending money on tools whether they succeeded or not. Now I am not claiming that every single upline leader does this, but primarily the ones who run "systems", such as WWDB, N21, BWW, LTD and some others. On the other hand, I can't really think of any leaders who didn't run these systems.
When I stopped and really thought about it, pretty much every piece of advice I received, I had to pay for. Voicemails, standing orders, functions, open meetings. I know these are supposedly optional, but in reality, they are a defacto requirement. Anyone with a "dream" is going to buy the tools because the leaders will tell you that you cannot succeed without tools. Ironically, the same leaders will blame individuals and cite personal responsibility for the failure of downline IBOs, even the ones who did everything they were told.The leaders are edified and touted as having great business and financial acumen, thus not following their advice would seem foolish. Yet Amway defenders will try to claim that IBOs should discern the good and the bad and operate independently. It's a redundancy that many people do not see. Sure, a downline should not jump off a cliff because upline said they would pad their fall with a pile of cash, but many IBOs put in an earnest effort in Amway, only to fail because of the handicaps and reputation issues that Amway has. These IBOs are told they were lazy or quit too soon, or did not try hard enough. Yet the very few who manage to break thru are edified along with the system while ignoring the multitudes who do not make it.
The bottom line for IBOs and prospects to know, is that I believe most IBO leaders do not know you or care about you and your success. They are more interested in selling you websites, voicemail, standing orders and functions. They know that people will come and go and they are perfectly happy replacing quitters with new people, as long as the system tools keep flowing. I believe some of the US diamonds are now hurting as Amway is apparently shrinking in the US. I read recently of Amway downsizing some of their operations, seemingly confirming that US sales are down. Also to note, Upline leaders would have to share tool profits with new emeralds and diamonds, which is why I believe they do not want new success.
I believe that Amway, other MLM businesses, Kiyosaki, or real estate gurus all have very limited or rare success with their financial systems. Infomercials usually have a disclaimer that success is a "UNIQUE" experience. Amway is no different. But I believe in all of these cases, more money is generated in selling the system than by actually running the system. If not, success stories would be rampant and people would line up to sign up instead of having to be deceived into even hearing the pitch.
In the old days, con-men would trick their victims with some sort of story, or by the sale of worthless "deeds," or by some one-shot scam that was finished in a day or two. The victims were usually naive and uneducated young guys from the sticks, who had come into a big city out of curiosity or to be entertained. They were known as "suckers" or "marks," and the con-men spotted them easily.
ReplyDeleteThe con-job was over pretty quickly -- the victim lost his money, and the con-men simply disappeared. Chicago was famous for this crime, but it happened in almost every big city in the U.S.
Amway, along with all other MLMs, is merely a much more sophisticated and profitable confidence game. It has a fig-leaf disguise of legality, it poses as a legitimate business, it makes use of modern technology, and it sucks cash from naive victims.
As for the victims, they are still the same: they are mostly small-town losers who are naive about business practices and about money, and who are easily persuaded by slick talk and slogans. They are stupid and trusting.
The big difference is that an MLM can suck money out of its victims on a permanent basis, as long as the victims can be convinced that everything is OK and that they will be rewarded eventually. Even when they quit the business, many of them still don't think that is was a scam, but simply blame themselves for "not working hard enough." This is what is known as a LONG CON, meaning that the victim loses his money but has no idea that he has been cheated.
The more things change, the more they stay the same. Amway is the old Chicago con-racket, dressed up in modern clothing.
From the upline's perspective, the upline is at a very convenient distance from the downline in terms of financial rewards.
ReplyDeleteIt is true that if the downline has a greater turnover (sell more products) either it by self consumption, hoarding to get to the next threshold, actual sales or their downline sales, the upline benefits. This is often taken to mean that upline wants the downline's success. That is misleading, as I will explain:
The first objective of a business, a real business, is not greatest turnover, to sell as much as possible, but to maximise net profit. They superficially sound like the same thing, but they are not. Selling more can help to maximise profit, but it can also work against it. An upline will be tempted to be supportive of sales where the effort and costs to make the sale do not justify the gross profit on the sale. Because while the upline shares in the profit, he does not feel the pain of the costs and effort. If a downline has to show the plan to 50 people and drive hundreds of miles to do that, to sign one new member (which translates to a new offsets of products), it may not be worth it for the downline to have gone through that amount of effort to sign up one newbie. But from the upline's perspective, who cheered from the sides, that one newbie was absolutely worth the extra income. He is incentivised to encourage the downline to go and see 50 more people and drive a few hundred miles more, to sign up one more newbie. So of course he will be "supportive" of every effort to sign up more, if not so much for what actually ought to be best for the downline.
Also the business might get into a situation where it generates gross profits, but those gross profits are just not worth it in the bigger scheme of what it takes, there may be no net profit when expenses are factored in. Or the net profit is so small that it is hardly worth the substantial investment in energy. If that is not changing, then objectively it is time to quit (believe it or not, good actual business people often quit endeavors that don't work. There are books in the business section of every book store or on Amazon on when to quit). But the upline who is sharing in the gross profits for nothing, is not incentivised to support that. From his perspective it is much better if the net loss making business stumbles on as long as possible. Hence the false "business" advise to never ever quit.
That is the problem of having a mentor who is vested in the business's gross profit, but not the expenses or net profit. An ideal mentor should either have nothing to do with the business at all, or share in all the pains and gains. One who shares in sales turnover but not the pain of expenses, such as an Amway upline, is the worst possible business mentor. And that is not even taking into account that uplines at some point gets incentivised on the overhead expenses, like training materials and conferences. That would be the absolute worst possible mentor!
Uplines want their downlines to stay in and have as much sales as possible. But their incentives are completely indifferent as to whether staying in is worth it for the downline, and whether the sales are profitable given the overheads. The notion that "upline wants my success" is based on a fundamental misunderstanding of business.
Kwaaikat has put his finger on something important. The motivating incentives of up-line and down-line in Amway are fundamentally different. Down-line does the hard work of struggling to recruit new members, because he believes that he will be able to develop a network that will eventually make HIM an up-line. But his own up-line is really interested in unearned income from the fees and purchases of the entire network of IBOs below him.
ReplyDeleteThat's the whole dream of Amway -- unearned income from the work of other people in your down-line, most of whom you may not even know.
As for retail sales of Amway products -- well, that's just a fig-leaf to cover up this basic fact.