IBO Or Customer?

 I've been debating with others about the concept of customers. Amway's defenders argue that IBOs are customers and holds the position that there are a lot of people who register with Amway simply to be customers. Now I don't know how anyone can possibly make that determination, but regardless of whether it's true or not, these folks are still considered IBOs. I don't want to debate the legal ramifications about the 1979 FTC ruling and the 70& rule, although the spirit of the rule was to prevent IBOs from buying their bonus. in the 2016 FTC ruling against Herbalife, the FTC said sales to distributors do not count as retail sales and required Herbalife to changes their operations because of this rule.

Amway apologists apparently contends that IBOs who purchase and then resell to downline are meeting the sales requirements and the downline are customers. Okay, let's go with that. But wait, IBOs do not buy and then resell to their downline. IBOs order directly from Amway do they not? If IBOs order directly from Amway, their upline gets some volume credit for downline purchases but the upline doesn't buy and then resell anything to downline. So, are IBOs actually making any sales to non IBOs, save for sympathetic friends and family?

If in fact, IBOs are not selling their goods, and are primarily self consuming them, it means that most of the upline bonus is basically generated from the pockets of the downline. I believe the tools business is a product pyramid as only IBOs are buying standing orders and attending functions. The lack of selling Amway products to the public would put the Amway business opportunity in pretty much the same category. I wonder what the FTC would rule today if that were the case? I wonder what the FTC would rule on the tools systems as it is today?

Something to think seriously about. If you are an Amway business owner, and you are selling little or nothing, where do you think your bonus comes from? It either comes from your own pockets, or it comes from taking advantage of your downline, who then pony up a portion of your bonus from their pockets. In a system such as this, the only way to maximize your bonus is to recruit as many downline as possible. Because the more people you can leverage, the more bonus you can get. The problem with this system is that people realize they aren't making money, and that paying in some cases, ridiculous high prices for "prestigious" soap and vitamins is not worth it, and they quit. When these folks lose their Amway dream of mansions and jets, they somehow lose their desire to keep making purchases.

If former IBOs kept on buying Amway goods, then Amway sales would climb pretty much every year as the former IBO's purchases coupled with current IBO purchases should keep going up, not down. But that's not really the case is it? In what business can the employees or company owners be the primary customers and prosper. The answer is none and Amway is not an exception.

My Job Is A Pyramid?

 One of the funny things I take issue with is how Amway uplines will create an us versus them mentality in the business. Thus, friends and family who care about you suddenly become "negative" and association with them should be limited or eliminated.  In some cases, people are discouraged from excellence in their jobs or professions because it takes the focus off of their Amway business. What I was told was to do my job, but my radar should always be on for new prospects. Some cross line IBOs turned down promotions at work because they did not want to have to work longer hours or take the focus off of their Amway businesses.

In some cases, the speaker at open meetings or functions will put down people's jobs. A commonly used acronym was J-O-B = "Just Over Broke". Some leaders also would say that my job was a pyramid because you will never earn more than the boss. A completely ridiculous comparison because someone's job has no relationship with how people view the Amway business (i.e. an Amway pyramid) and in a job, every employee gets paid and has a net gain at the end of the month. Not true in Amway. If IBOs only use voicemail for example, an IBO at 100 PV or less will already be at a loss, and that is not considering any other expenses that IBO may have. And while a job may have a corporate hierarchy, or chain of command, the business owner and CEO or manager earns their salary from customers, not directly from the pockets of their employees.

Some uplines will laugh about people's jobs, stating that they wake up at the "crack of noon". What these same uplines may not tell you is that they wake up at noon because they are up at 3:00 in the morning doing night owls for their groups and looking for recruits. These same uplines possibly can't do much with their downlines during the weekdays since their downlines mostly tend to have 9-5 jobs. So a diamond's job is basically working the night shift and weekends.

So, if you are of the opinion that nobody should criticize the Amway opportunity or IBO behavior, maybe uplines and IBOs should not criticize family and friends who disagree with or are not interested in the opportunity, and maybe the same uplines and IBOs should not criticize people who choose to work jobs. Don't most IBOs rely on their jobs as their Amway income is not sufficient to even pay for their Amway business related expenses?

Amway The Negative Sum Game?

 In my informed opinion, the Amway opportunity as taught and run by the AMOs such as WWDB or Network 21 is a negative sum game.  In other words, the IBOs have X amount of dollars but the system's expenses such as standing orders, function tickets and other training related expenses eat up the resources of the IBOs and it's a a constant and massive drain of the IBO's resources.  This is in contrast to a perhaps poker game where maybe 7 players each bring $100 to the game.  At the end of the day, there might be several winners and losers but when the game ends, $700 still sits in the hands of the players, even if some of them might not have their original stake of $100.

In the IBO world of the AMOs, "serious" IBOs are expected to consume or possibly sell some products but generally, this process reduces the pool of resources that IBOs may possess, but because they receive goods for it, I don't view this aspect of the business as a negative sum game, although there could be debate as to whether these generic in nature products are worth the "premium" price that is often charged.

Now when you get into the tools and functions, this is where the IBO's resources are systematically drained with little to no tangible results.  Those who participate have their resources drained week after week, month after month and year after year if they "don't quit" which is what upline teaches.  In my previous example, a group of poker players might start out with $100 each, and a group of 7 players would have $700 and at the end of the game, they collectively leave with $700, which is a zero sum game.

In contrast, let's say a group of 7 IBOs all start the month with $500.  It they all consume/sell their defacto 100 PV quota, they likely have approximately $250 left after consuming 100 PV's worth of products.  Now, if these IBOs are dedicated to CORE, which is the teaching system these uplines use, then IBOs will spend money on standing order, books, audios, function tickets, meeting tickets, gas money, and possible voicemail.  At the end of the month, these same IBOs have likely zero dollars left.  Amway profits from the sale of products and the uplines profit from the sale of tools and function.  A zero sum game because at the end of the month, IBOs all have less money than they started with even if you disregard the expenses of moving/consuming 100 PV or more.  

Yes, there are times some exceptional IBOs might sponsor and grow their group enough to scrape out a net profit, but if you factor in the business expenses of their downline, then you once again have a net loss.  You could almost compare the AMOs to a casino and IBOs as gamblers.  There are occasional winners, some might even be big winners, but in the end, the house always wins.  In this case, it's the AMOs who win because they profit handsomely despite the fact that their system is so ineffective that the outcomes (IBO's success) seems more coincidental than anything.  Sort of like seeing those infomercials on money making systems where they trot out someone who might have experienced some degree of success, and you'll see a tiny caption on the bottom of your TV screen that says "unique experience, your experience may vary".

And for these reasons, Amway's motivational groups such as WWDB, BWW or Network 21 are running negative sum games where it is inevitable that the upline diamonds always win and the downline loses because the tools and functions expenses heaped upon IBOs systematically drains their resources week after week and month after month.  The lottery is a negative sum game as well, but the sad this about all this is that any significant success in Amway is similar to the odds of a lottery despite the fact that Amway the opportunity is supposed to be a legitimate business opportunity rather than a game of chance.

The Loophole?

 There's been some interesting debate, although not that recently recently on the James Randi Educational Forum (JREF). Most call Amway a scam and one prolific defender cites the point that IBOs are not Amway. And Amway doesn't sell training materials. While that is legally true, the owner of Amway, back in 1983 acknowledged that the sale of tools was, basically unethical and possibly illegal. However, inaction by the Amway corporation led to the heyday of the tool scam and financial abuse of downline. There's the loophole that covers Amway. IBOs are independent.  Therefore, Amway is not directly liable for what their distributors do.  

However, these same IBO leaders could not run free scamming downline if Amway were to intervene. I believe Amway doesn't take any apparent significant action for fear that these leaders would move their groups to another MLM or opportunity.  The result over the years is a lousy reputation in the US where the name Amway is associated with pyramid, scam and other undesirables. I suppose Amway has survived though, because of an alleged saying by PT Barnum. There's a sucker born every minute. I suppose there are enough pockets of young or unsuspecting people who can still be convinced to join, so it's business as usual.

Which brings to to the next point. Unfortunately, new IBOs are basically suckers. They pay a fee to Amway, in order to become an unpaid Amway salesperson. You absorb your own time and expenses in order to move Amway products, and if you move enough of them, you can get a minimal bonus. You also at your own time and expense, recruit other unpaid salespeople for Amway. Your reward for this is you get credited for a portion of their sales, provided they use or actually sell anything. Most IBOs do little or nothing so your efforts are usually in vain.

But the real trick is to have IBO leaders convince downline that voicemail and cds and live meetings (seminars) can actually help you succeed. There is zero unbiased evidence to suggest that this training or tools do anything but make handsome profits for the people who sell them. Even if many IBOs sign up and do nothing, there are enough serious ones to support the Pharoah diamond leaders. And food for thought, do IBOs really need voicemail in an age of email, twitter (X), facebook and other more efficient means of communication?

So yes, Amway IBOs are not Amway. Amway diamond leaders are not Amway.

But if Amway cannot or will not stop those who taint their name, then they simply must live with the reputation of being a scam or a pyramid. They can be legal to the letter of the law, but most people see it for what it is. Being legal doesn't necessarily mean ethical or moral. It is my opinion that when you sign up for Amway, you are nearly assured of losing money. It's not your fault though, it is the result of a bad system. I encourage everyone to do their due diligence before joining any business, Amway notwithstanding.

Success Speaks For Itself?

 I heard a great comment from a commentator on a related Amway blog. Basically, he said if IBOs were so successful, people would just naturally be attracted. And that's true! Where I live, the local electric company is an attractive place to work with a good salary and benefits package. When there's a handful of openings, you might get as many as 6,000 people applying for these positions. When the federal government hires for the local post office, you get thousands of applicants for a handful of jobs as well.

But IBOs have to justify their positions. The common ones are how Amway products are concentrated, or they have magical ingredients in their vitamins. It is my position that if these products were so good and the opportunity actually produced successful IBOs, there would be no need to be deceptive about the products or opportunity. The products could easily me marketed. In fact, customers would be seeking IBOs to find the products and there would be lines of people waiting to see the opportunity. But that isn't the case. Clearly, Amway IBOs use some degree of deception usually called the curiosity approach or outright lies.

Instead, IBOs themselves are the primary consumers of Amway products. Many IBOs are deceptive when inviting people to see the Amway plan. Some prospects are outright lied to when recruited for the Amway opportunity. The curiosity approach is still used by many, because mentioning "Amway" is more likely to get you funny looks than interest. If what I am writing is not true, why do IBOs need to deceive people? Why don't some IBOs open their books and display the financial success they claim to have? Why so secretive? Why aren't there hoards of new diamonds and emeralds each month? Instead, you mainly hear of the Amway growth in foreign countries. Most likely because the Amway name and reputation has not yet been soiled as it has in the US and Canada.

In the US, I see primarily the same old diamonds who were in control of the functions and systems from more than 20 years ago. In fact, factoring in diamonds who quit or dropped out, I believe there are fewer diamonds now than when I was an IBO in the 1990s. Some of these diamonds also had some apparent financial difficulties. The opportunity is far from how it's promoted. Success speaks louder than words, and where North American Amway success is concerned, the silence is deafening!

Amway Is Unwinnable?

 When people see the Amway plan, it sort of makes sense. You need to find six people to go direct, in 2-5 years and you have residual and willable income for life. You are then financially free and can spend your days walking on exotic beaches while checks keep coming in. This is what lures many prospects to take a better look and maybe even test the waters and give Amway a shot. After all, who wouldn't be interested in financial freedom and the ability to fulfill some of your ultimate dreams? Only a fool would turn down such an opportunity right?

While Amway looks reasonable on paper, too many things derail this plan for financial freedom and untold wealth. Over the years I've been blogging, I've challenged Amway supporters to name a couple of people who are financially free and walking the beaches while income rolls in. Very predictably, nobody has identified a single person who achieved some high level in Amway and is sitting back relaxing while money keeps coming. We even see crown ambassadors passing away while still working the business.

So why can't IBOs achieve what they aspire to? Because in my opinion, the odds are stacked against them. Sure, a rare individual might go diamond but the occurrence is very rare and almost as rare as winning the lottery, even though Amway is not a game of chance. I will go and list the reasons why IBOs are playing a game they can't win, even though they think they can. That is the sad part, that the upline is motivating downline to "never quit" even though they will "never succeed".

The system is set up for very few to succeed. Even in the common 6-4-2 plan where everyone did enough to earn a bonus, there is one person at the highest level with 78 downline who earn less. In real life, most IBOs do little or nothing. At Amway.com, you can see income disclosures that show how few people reach the higher levels. It's a tiny fraction of 1% that reach the higher levels. Even reaching platinum is a lofty achievement and platinums might not even see a net profit due to business expenses.

Business expenses such as product packs, catalogs, cds, books, voicemail and functions add up to significant expenses in the course of a month. If you're hoping to achieve financial freedom, you'll be expected to participate in the teaching system and more than likely, these expenses will be the reason for your business losses. Beware of upline who encourage you to go in debt to purchase training.

The products in general are not competitive. Sure, the Amway IBOs may give you some pitch about products being concentrated or of high quality but let's face it, consumers don't care about high quality soaps and household cleaners. There is nothing wrong with the similar products that you can purchase at Target or WalMart at a fraction of the cost. When your products can't compete on a level playing field, on what basis do you expect to sell these products? For that reason, many IBOs become "self consumers" and wind up with no actual customers.

Amway's reputation is soured. Most people know or know someone who had a bad experience with Amway. Due to past IBO behavior, people have developed a negative view of Amway. People being tricked or lied to in the past may have contributed to this issue. Add that to the fact that so few people actually make money turns this business into an almost insurmountable challenge. Even those who achieve often find themselves out of qualification shortly after.

For these reasons, my conclusion is that the Amway opportunity is a game that IBOs simply cannot win, even for those who learn from upline and put forth tremendous effort. And the longer you play. the bigger your losses become. Do your due diligence before undertaking any business opportunity.

Diamonds Are Like "Miners"?

 A lot of people come and go in Amway, but many of those who come and go don't even notice the scam. They get sold on what they believe is a business opportunity that they can make some money at, or at the very least save some money on products that they would normally buy anyway. If they do it right, they can possibly make some "real" money and with some hard work, you can build it right and have the option one day of walking away from Amway and living off ongoing residual income from Amway. It sounds reasonable and therein lies the scam.  

For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam. Amway's distributor force turns over about 50% each year. How can you build a residual income empire when half (or more) of your downline quits each year, and most quit in less than a year, not counting those who join and don't do a thing.  I believe Amway diamonds trade their 9-5 jobs for the night shift. They work at night and into the morning hours because they are working to replace people who quit and to support downline platinums who might struggle or fail to re-qualify for that level. If upline says they are working for the love of their downline, I call BS on that. If walking away and enjoying life was an option, why hasn't anyone chosen it?  Surely a few people would have wanted to quietly retire and enjoy life with money money than they know what to do with right?

Now you could argue that a diamond's "work" isn't that bad and they aren't reporting to a boss. And that could be true, but I imagine the pressure of churning people in and out to keep qualifying can be stressful in itself. If you live on an island like me, you can eventually have trouble finding new people to work with. In 1997 or so, there were a bunch of diamonds in Hawaii and they all seemingly moved to the mainland. Now I'm not sure why but my upline diamond was Scott Harimoto, who loved the ocean and the beaches. Yet he moved to Washington state last I heard. I believe they needed new grounds to mine, just like gold miners.  The grounds they worked ran out of gold so they needed to find new mining grounds?  I don't know this for sure, but it makes sense based on my informed knowledge of how the business works.

The next part of the scam is how IBOs will tell you about Amway's generous money back guarantee. 100% they'll tell you. What they don't tell you is that the guarantee is only on some of the Amway products and the sign up fee. The cds, books, voicemail and functions are not sold or run by Amway. And these expenses can be very significant over a period of time.  IBOs and prospects need to know this. You can lose thousands and get back pennies on the dollar asking for a refund on the sign up fee and perhaps a few products. 

Also, IBOs and prospects are often shown only the very best case scenario (such as going diamond) but not told that your chance of being struck by lightning is much higher than your chance of going diamond, even though going diamond is not a random event. A real life and likely scenario is getting in and trying hard for a while, and then quitting with some business losses. At least if you know this and still try anyway, you will have done so with full disclosure.

Lastly, it's insidious in my opinion, for upline to tell you to trust them and to do as they say, and then turn around and tell IBOs that failure is their responsibility. That they didn't work hard enough or do things just right. That sure isn't what they are preaching when recruiting you into the business. They are saying how sharp you are and how you're likely to tear up the business. But it's just another facet of the scam. I've outlined the parts of the opportunity that I believe are scams, but I'm sure it's not limited to my point of view.

Good luck if you read this and join anyway.

False Income Claims?

 One of the things that is so common on this blog and others is IBOs passing by, making big income claims without a shred of evidence. IBOs will tell you that it's none of your business, or that what they earn is not reflective of what you might earn. I believe it's very relevant. As a prospect, I would want to know what the typical IBO might earn. If I were going to open a Subway franchise, I would want to know what my likely earnings would be. In Amway, they only show you best case scenario and not what is likely or typical. Of course this is to make the opportunity more attractive than it really is in hope of getting you to sign up.

Look at an interesting comment from an anonymous blogger from India:

"Hi i wish to tell you that i am a scientist and full time into research. I have the time for my hobbies like bowling, horse riding etc. But the big news is that i am also at emerald level in Amway. Now what do you have to say about that Mr Joe(un)cool?????????"

If you'll notice, the commenter is basically saying he has a full time job, but enjoys his hobbies all the while running an emerald business. Then he also tosses in a minor insult towards Joecool while he's at it. Now we know there is documentation that many platinums do not make any money (net), therefore, an emerald likely doesn't make that much from Amway. I'm sure a decent job will net you more money than the average emerald.

Also, I call BS on this claim. Someone who is emerald would likely be burning the midnight oil churning out new IBOs to maintain the business and trying to push towards diamond. I'll give the anon one things. the name of Amway hasn't been completely ruined in India as it basically has been in the US and Canada. But I'll toss in one more thing. An emerald, even if making a net profit, likely has several hundreds of downline who are losing money because of functions and other tools that ironically, are designed to help an IBO succeed.

I wonder why IBOs are taught to be deceptive? Why can't they speak honestly about Amway and what they earn from Amway? Is it against Amway rules or do the uplines want to hide something that is painfully obvious? I know that WWDB, my former LOS, taught IBOs to "fake it till you make it". Translated, that meant to lie about your Amway income and to make yourself look successful, even if you had no money to put food on your table.

So which is it? False/inflated income claims or outright lying? You decide.

(Upline's) Dreams Come Tryue?

 One of the issues I have with the Amway plan is that the newest IBO, possibly the one who does the most "Work", receives the smallest compensation. Amway pays about 32% of their income back in the form of bonuses. An IBO who does 100 PV receives a 3% bonus and somewhere, uplines and sponsors receive the rest. Some of the upline may not have even met the IBO who actually did the work. Is that really fair and is that a level playing field? What do some of these uplines do to deserve the lion's share of the bonus you worked to get? Yes, the upline diamond may show the plan in an open meeting, which may help you, but then again, you pay for entrance into that meeting.

Many uplines will talk about dreams and fulfilling your dreams. But if an IBO would stop and think for a moment, you can easily see that you are building the dreams of your upline, and not your own. You receive a tiny portion of the bonus for the volume that you move, and then in addition, if you are on the system, then you are also paying upline in the form of tool purchases for the privilege of giving them bonuses with your product purchases.

It is why your upline diamonds can parade around on stage with designer suits and show you (pictures) of their fancy cars and mansions and other toys. It is because they are cashing in on your efforts. You are making their dreams come true. Your dedication to moving volume and purchasing standing orders are fulfilling dreams. The upline dreams. Yes, someday you can hope to have your own group of downline to exploit for your own benefit, but unless you are adding members to your group regularly, you will never achieve the kinds of dreams that uplines talk about. In the meantime though, you are definitely helping someone upline achieve their dreams with every function you attend. Ironically, the upline leaders will tell you to never quit, even if they don't know your personal circumstances and/or how your business is progressing or failing.

Here's a challenge for IBOs and/or prospects who are being recruited into the Amway business. 100 PV will cost around $300 a month and dedication to the tools system will cost you around $150 to $250 a month on average. Would you not be better off simply writing a check to your upline for $100 and not even joining? Would you not be better off staying home and watching television instead of joining? If you read all of the information available on this blog and still decide to join, good luck to you, but remember this: Whose dreams are being fulfilled by your participation?
Yours or your upline?

The Amway Job?

 Amway IBOs like to call themselves "Independent Business Owners". But when you sit down and think about this for a minute, I believe that the Amway opportunity is more like a job. As an IBO, you are basically acting as a commissioned salesperson without any benefits coming from the Amway corporation. It's great for Amway as they only pay you for products that are moved. You receive no guaranteed salary or wage, and you get no fringe benefits such as health insurance. The time and expenses involved in moving product belongs to the IBO and the compensation plan doesn't pay very well unless you move a lot of volume.  There's no downside for Amway, but plenty of potential downside for IBOs who take on the risk and expenses to move Amway products.

The Amway corporation can sit back, and simply issue bonuses to downline IBOs. It is the IBOs themselves who recruit others, train others and move the products. Many IBOs are fiercely loyal to Amway products even when they could get the exact same product or a similar product, in many cases, at a fraction of the cost at a big box retailer, or even a local retailer. The IBO can also spend a significant amount of money learning to build an Amway business, as well as recruiting downline and trying to move some products.

Uplines get you to see the world differently. That you do not equate an hourly wage with your business. But if IBOs did think of their earnings that way, they would easily see that they are working to lose money or to make pennies an hour. For the larger majority of IBOs, working minimum wage would be far more lucrative than spending countless hours and money chasing an Amway dream that is very unlikely to materialize. Uplines also get you to think you are "investing" in your business by purchasing tools, but in reality, you are just a customer of your upline's tool business. They earn money by selling you training, even if you business is a failure despite your hard work and adherence to upline teaching.

You dedicate yourself to attending meetings, working the phones, meeting with uplines and downlines. You drive a lot of miles. But what many IBOs do not notice is that the priority in building a business should be a focus on getting more customers and expanding sales. But because Amway products can be hard to sell, most IBOs are focused on expanding their business by recruiting others. An endless chain of recruitment, which is why many people think of Amway as a pyramid scheme. Whether it's legal or not as is, is not my call. The continuous recruitment and attrition of downline make the Amway opportunity unsustainable in the long term. It is why the dreams of residual income is a myth. IBOs think they can earn lifelong residual income but how many IBOs can name even a single person who is doing this?

But the bottom line in my view, is that Amway is more like a job than an independent business. Call it what you will, but in either case, business or job, it doesn't pay well (or at all) for most. You can also have your income stopped by Amway and restrictions placed on your business. Does that sound like independence to you?

2-5 Years?

 One of the things I heard, and is still promoted is the concept of a 2-5 year plan to financial freedom. As a prospect, 2-5 years of hard work in your spare time sounds resaonable. Afterall, anyone can work an extra 12 hours a week for a couple of years with that kind of reward awaiting you at the end. The sad reality is that you are likely to suffer 2-5 years of financial losses without getting any closer to financial freedom

When Amway morphed into Quixtar, a very relevant question was how many diamonds were "quixtar only", meaning they signed up in 1999 when quixtar was implemented and then became diamonds in the advertised 2-5 years. As far as I know, there were very few (if any) new diamonds. The new diamonds that were named all seemingly came from other countries, not the US or Canada. Even now, my former LOS (WWDB) is touting "double eagle rubies" which is not a recognized achievement by Amway (as far as I know), and there is no assurance that achieving such a level makes an IBO profitable.

Even today, I do not see a stead stream of new diamonds emerging from Amway. If the 2-5 year plan actually worked, there would be new diamonds constantly emerging. Instead, my former LOS (WWDB), actually has fewer diamonds now than back in my IBO days. And of those diamonds who remain, some of them had home foreclosed and it also appears that at least a few of them ran into some financial difficulties. Make me wonder what a diamond's finances actually look like. I suspect many of them live in debt, especially if they flaunt the "diamond lifestyle", which is probably not sustainable on diamond income as reported by Amway.

So while it might be possible to achieve diamond in 2-5 years (some have done it), but tens of millions have tried. It is much more likely that you will win the lottery (provided you have a ticket) than it is likely that you will join Amway and go diamond. It is also unlikely that people in the US and Canada who join will go diamond in the advertised 2-5 years. The 2-5 year plan is not promoted by Amway, but by the LOS leaders. I believe it is a hoax and the numbers back up my claim. You are much more likely to be better off working part time for 2-5 years and saving and investing for your future. If not, you will end up with 2-5 years of losing money on functions and standing orders.

As many Amway leaders will state: Look at the fruit on the tree. In the US and Canada, the trees are bare.

Upline Credentials?

 I recently read a comment from an Amway apologist on another forum. She mentions that someone's credentials must be considered when looking at information that is presented by critics. I will comment that showing me a sports car or a fancy suit is not proof of financial success. Telling the audience that you buy homes in cash is not proof either. In fact, some of these boasting diamonds were found to have their homes foreclosed and some had financial difficulty, even though they at times had shown off pictures of their lifestyles. I believe that many diamonds are likely to be more like the general US population - in debt. In debt trying to portray a lifestyle that is unsustainable with their Amway and Amway related income.

I find this subject ironic because not one single upline leader, as far as I know, has ever supplied bonafide credentials about themselves. The audience assumes that the person on stage has success and certain credentials, but do they really? I will say that certainly, if someone is wearing a diamond pin for example, that this person has at least achieved the diamond level as recognized by Amway, but the level may not be current, and the level doesn't indicate the kind of income this person earns from Amway. (Joecool is criticized for being outdated even though I was at 4000 PV at one point in my Amway career)

What many people assume is that the diamonds buy homes and cars in cash, that they wake up at noon every day and participate in leisure activities all day while the cash rolls in. I have heard from some new IBOs, that their upline makes more money taking a crap in the morning than a critic makes in a whole year at a job. That IBO became quiet when some critics offered to take that bet. (Do the math people)

But the truth of the matter is that as far as I know, only former diamonds have come clean about their Amway income. They are the only ones who spoke of credentials and accomplishments. Even critics of Amway will often openly speak about their experiences and achieved levels in the business. In the REAL business world, showing business tax returns and credentials are a normal part of doing business. It appears that only in the world of Amway is the supply of credentials and financial statements a big secret. Now I am not suggesting that IBOs or upline leaders should disclose their financials to the entire world, but certainly prospects and some downline should be able to see how their upline is doing financially in Amway, especially if that is the basis for purchasing their standing orders and function tickets. And I refer to business (Amway and Tools) income and expenses only, not from other personal sources.

I believe that IBOs and upline leaders do not disclose that information because it would not be beneficial to them. If it were, they would likely publish it freely, just as they flash around copies of checks. IBOs and prospects should take this to heart and ask upline the tough questions

Endless Training?

 I believe that Amway IBOs have approximately a 50% attrition rate for the first year alone. If you look at a 5 year window, I believe the attrition rate is something like 95%. So what we're saying is that out of 100 IBOs, only 5 will be around in 5 years, or out of 1000 IBOs, 50 will remain after 5 years. This is extremely significant because if you are a business builder, you will need to replace half of your IBOs every single year. For this reason, I am very doubtful that there are IBOs who "built the business right and built it once", who no longer do Amway related work, but still collect significant residual income. I would guess that significant income could be defined as being enough to live a lifestyle in the top tax bracket (for the US) without having to report to a J-O-B.

Now I understand that some IBOs take it personally when I bring up subjects like this. It is because they have been deceived by some upline diamond or big pin who has sold them on a dream of financial prosperity for life if they will only work hard for 2-5 years. I once thought so too, but realized that there isn't a single diamond that I know of who built the business right and walked away to enjoy the beaches of the world while truckloads of money rolls in. Kind of makes you wonder why you see Crowns still working, and diamonds actually quitting or resigning. I have asked the question many times and it has never been answered. Can anyone name a few people who built their business right and built it once who is currently enjoying these lifelong residuals? Also, if that were a benefit, why doesn't Amway say so?

Instead, you have a constant and endless flow of motivation being sold to IBOs. This motivation comes in the form of cds, books, meetings, functions and other things like voicemail messages. It's sad that IBOs have to continue to pay through the nose for motivation and "teaching" about the Amway business when there are cheaper and more efficient means of communication. For example, why would you need an expensive voicemail when a facebook group account can disseminate messages to your group in seconds at no cost? It is because the uplines want to extract every possible cent from their downline. Because of the internet, I believe people are starting to figure things out and avoid the systems altogether. I hope Joecool's blog contributes to this.

All the motivation IBOs truly need is to see a net profit at the end of the month. If IBOs actually earned an extra $200 a month, or $50 a month, or $600 a month as advertised, there would be no need for motivational speeches. The IBOs would simply look at the growth in their finances and they would keep going. The poor retention rate is easy to explain. IBOs are losing money because of the system expenses and they lose their motivation to continue. If you are an IBO or a prospect, stop and think for a minute. If you are making an extra $200 a month with minimal effort, would you need functions and other materials to motivate you? Or would you have intrinsic motivation from the profit? All the motivation you will ever need is a net profit. Take that to the bank

The Real Business?

  I have been reading some ongoing debates about whether the system income for higher pins is more than their Amway bonuses. I believe the systems such as BWW, WWDB, N21 or LTD, does generate more profit for upline than the sale of Amway products. How the system income is divided though, is still a mystery as it doesn't appear that there are bonafide written contracts explaining how tools income is split up among the higher pins. There is also the debate of whether diamonds themselves or their "corporations" receive the profit, which is laughable as a defense.

But it's very easy to determine that more income is made from the system than from Amway. If you move $100 worth of Amway products, Amway will pay about $33 back in the form of bonuses. These bonuses will be split among the Amway IBOs (middlemen), depending on your level. On the other hand, if your group bought say 20 cds at $5.00each, the system will profit about $90 as cds cost about 50 cents to a dollar each to produce in bulk. Some Amway apologists will cite the fact that some groups sell cds for $2.50 or $3.00. While this is true, there is a "member's fee", such as WWDB premiere club, which must be paid. And when you add in the member's fee, the profit for the system is the same or possibly higher! Even when you factor in the system employees, you can easily see the math and determine where the real money is made.

If you buy a major function ticket for $125, the cost of that function might be in the neighborhood of $25 to $30 per attendee, so the system may generate $100 profit on a $125 sale. I believe the smaller functions such as open meetings, books and voicemail have smaller profit margins, but still overall, it's easy to conclude that the profit from the system is greater than profits generated by moving Amway products. I might add that the sales on these functions are often made in cash, thus who knows if the diamonds are even paying the IRS taxes on these sales.

The only question is how much each individual earns. I have "heard" that platinums get a discount on the sale of standing orders and cds, but I have never heard of a platinum sharing any profit for functions, voicemail, or any of the other materials. This is puzzling to me as I believe the platinums do the most work in the system, helping downlines. The platinums are the backbone of the system but unless they break through and become a higher level, they earn pennies for their efforts.

So for the lower level IBOs, if you move $300 in Amway sales (Approximately 100 PV), you will receive about $10 or 3% while upline enjoys the rest of the $90+ in bonuses from Amway. And then when you purchase and move tools volume, you receive nothing and some of your uplines enjoy all of the profit. While I don't see any problem in upline making a profit for selling training materials, I see a problem in the fact that the tools are ineffective. So few IBOs progress to levels where an actual profit is earned that the use of tools cannot be justified. Amway supporters will point out the new platinums emerging each year, but do not mention the platinums who do not re-qualify and platinums who outright quit because they are bleeding money.

Based on my observations, I can only conclude (quite easily) that there is substantially more profit from the sale of support materials for upline to enjoy, and I can also conclude that the support materials are ineffective in training downline IBOs so they can progress to higher levels of the business. But as PT Barnum once said (allegedly), a sucker is born every minute.

Visit A Diamond?

 Some blog visitors have in the past, and recently, advised me to go and visit with a diamond or a platinum. That spending time with someone in the business would give me a different perspective. I'm not sure what my visitors thought I would accomplish by doing this. As an IBO, I spent countless hours with my upline platinum and on many occasions, my upline diamond. My honest opinion is that they were just average everyday people who made their living in a different manner than most. Their homes weren't fancier, they didn't drive special cars, they didn't have the kind of material wealth that's often portrayed in functions and meetings. and that's fine.

What I would challenge prospects and IBOs to do is just that. Ask to spend time with your upline platinum and/or diamond. You are likely to find ordinary people with ordinary lives outside of the business. So many people think that the upline platinums and higher live in the lap of luxury and it's not true, unless they are living beyond their means or unless they have other sources of income that is not Amway.  I do believe that many upline leaders do live beyond their means. It is because showing off material wealth is a vital part in attracting and retaining IBOs. You show them material wealth and get people to dream about achieving the same thing in order to sign them up for Amway and the associated tools and training business. Sadly, the vast majority who register and attempt to build an empire will end up quitting, and most of them, especially the ones who attended the functions will end up with a net loss, even if they put in extraordinary amounts of time and effort. Sure, some people may eventually achieve higher levels in the business but they are the exception and not the rule.

In normal and in real business, one way to prove your results is to open your books and show your financial details. Your upline of course, will tell you that it is none of your business, but if you are being asked to invest your time and money into a business opportunity, you have every right to demand this information. If your prospective sponsor refuses to supply this information, it should be a red flag that they have something to hide.  Now I'm not saying you should see their personal data, but a schedule C business filing seems a reasonable request.  It seems that many IBOs embellish their income claims or try to change the discussion. They may even produce a photo copy of an upline's bonus check, but that proves nothing. What prospects and IBOs should demand is a profit and loss statement. It would give an idea of what expenses someone can expect as an IBO and what kind of income can be expected at various levels.

Joecool has no reason to visit a diamond. But I would certainly say that IBOs and prospects should do so. You might be surprised to find that a diamond is not "all that" when you see them up close and personal.

Reap What You Sow?

 One of the things that many prospects and IBOs believe is that they will make an investment of time and money into their Amway business and that they will eventually get their time and money back in such abundance that they can walk off their jobs, and walk the beaches of the world while living in luxury because of lifelong residual income, all because of the Amway opportunity. For IBOs and prospects of Amway, I wonder if any of you can actually name even five people who have actually accomplished this? How about two? Keep in mind that there have probably been tens of millions of people who also wanted this and tried Amway and the systems, only to find that reality paints a different picture.

Many people they will reap what they sow. While that many sound true, I guess the next logical question is what are you sowing? Are you deceptive when prospecting people to see the plan? Are you having to justify and high priced Amway product comparisons that are not favorable? Are you actually selling goods to customers and actually qualifying for your Amway bonus or are you self consuming and getting others to do the same? Do you have a negative opinion (broke losers) about people who don't join Amway or are not interested in seeing the plan? Do you now think your boss and your job are evil? Do you leave your kids at home to attend endless numbers of functions and meetings? You reap what you sow correct? The questions is what kinds of seeds are you actually planting?

I wonder what some WWDB diamonds were sowing? At least the ones who had their homes foreclosed, and one in particular was involved in chapter 7 bankruptcy proceedings? Are they reaping what they sowed? What about the WWDB diamonds who got divorced? What were they sowing? Are IBO sure about wanting to make the claim of reaping and sowing? And yes, Joecool the person also has his own flaws, but the difference is that I am not on stage proclaiming to be flawless and many diamonds would imply when they speak (and profit from) their tens of thousands of downlines. I am not earning a living by deceiving people and profiting from people I am supposed to be helping. But your upline diamonds are. Take a close look at the fruit on the WWDB tree.

Things Prospects Should Know?

 When I was an Amway IBO, my upline used to advise us to recruit people who had a financial need or young people who were open minded as they may not have preconceived ideas about Amway. When I was recruited, I was not where I wanted to be financially as I was in my 20's when I first got recruited by my sponsor. I believe that this is still common practice today, to look for people who are in need and then offer Amway as a solution. Sadly, Amway and the tools systems will more likely become a problem than a solution for the vast majority who try.

In my opinion, this is why some people defend Amway so fiercely. They accept Amway as their solution for long term financial stability and to admit that they were in error is difficult as it would not only expose the error but would leave the IBO as not having that "hope" of long-term financial freedom. It's hard to admit you got fooled or scammed and some people will dig in and press on, hoping that success will eventually come. Hope is a powerful thing after all. However, for most, it is false hope that is pitched in recruitment meetings and functions.

Many prospects see big dreams when the diamonds parade on stage with designer suits and talk about waking up at noon and enjoying a lifestyle chock full of luxuries. It's almost like dreaming about hitting it big in Las Vegas or winning the lottery. I can't fault prospects for wanting some of these things. I know I certainly had some of these same dreams when I was an IBO. The problem is that Amway is highly unlikely to be the vehicle that delivers these dreams. For most, a second job along with saving and investing will bring more long-term success. The problem is that people don't like to wait for the long term and Amway is presented as a short cut to success.

The sad reality is that some (maybe most) diamonds are simply putting on a show, like a illusionist or a magician. Diamonds may indeed earn a six-figure income, but after taxes and other expenses such as medical insurance, a diamond is very likely to live a very middle-class lifestyle. Now I'm fairly sure that a crown ambassador type may have a million-dollar income, but these Amway crowns are very rare, and the ones who exist have been in the business for a long time. There is not much chance of any new IBO coming in and achieving that level. In fact, as time rolls on, it seems that more diamonds drop out due to divorce, better MLM opportunities or simply quit. It is apparent that long term residual income is a myth. Why do crowns seemingly keep working if they could "walk away" and live a life of luxury with no worries?

Amway reports that the average IBO earns $202 a month. I believe that number is also questionable as "most" IBOs (as shown in 6-4-2) actually earn more like $9 or $10 a month. Is this what you are signing up for? Don't forget about the ongoing expenses for tools and functions which results in net losses for most who get involved.

Amway prospects can benefit by knowing this before signing up.

You Love Your Job?

  One of the things I heard WWDB speakers say on more than one occasion was that nobody "loves" their job. They claimed that if you loved your job, you would do it for free. But that claim is silly. I could turn it around and ask the Amway diamonds if they loved Amway so much, would they do it for free? They might lie and say yes, but the fact remains that these folks are not traveling from function to function out of love. They do it because speaking at functions is a lucrative "job". Additionally, the functions are recorded and turned into a standing order, which is then sold to IBOs.

Truth be told, I am somewhat dedicated to giving information to Amway prospects and information seekers because I don't want them to get ripped off based on lies and deception by upline leaders, who apparently still teach the same old junk today, that was taught many years ago. Amway apologists have their heads so far up her fanny (ass) that they cannot tell up from down. Apologists claim that WWDB is changing for the better, despite participating on a blog by a WWDB IBO who repeats the same garbage I heard as an IBO 13 - 14 years ago. There's a seemingly nice kid named Shaun who runs his blog as a journal of his WWDB experiences. There he speaks about getting out of debt (No apparent thanks to Amway income) and saving up to purchase a home in cash, getting a bigger tax refund (despite claiming to make money in Amway) and he also mentioned that IBOs have a 2% divorce rate versus the rest of the world with a 60% divorce rate. All of these things were taught by WWDB uplines back in 1997 and 1998 when I was an IBO. It's all there for everyone to see, yet stupid people like Bridgett Baron continue to deny it. What is their agenda? Clearly, the vast majority of people who join Amway either do little or nothing and those who work hard usually end up losing money because of the system expenses such as voicemail, functions and standing orders. That is a fact. IBOFB and Bridgett Baron are apparently not interested in facts, but they want to promote their version of the "Truth About Amway".

I would also like to point out that my former uplines and WWDB leaders such as Greg Duncan and Brad Duncan apparently did not work out of love. Even though some WWDB leaders outright lied and said Diamonds did not earn anything from tools, we now know that they lied and that they are/were likely compensated for every single appearance and that rank and file struggling IBOs footed the bill.

Yes, people don't work their jobs out of love. Everyone needs to earn a living, but don't be fooled. Diamonds do not work for love either. They work, likely because they also have to earn a living, just like people who have jobs. Just because they may show you pictures of mansions and sports cars doesn't mean they own them outright or that they can even comfortably afford them.

It is very sad that so many people over the years, possibly tens of millions have suffered financial losses as a result of inaccurate information or deception and lies used to recruit people into Amway. While it may not be (directly) Amway's fault, the fact is that many these people had bad experiences and financial losses. The facts are there for those who seek the facts. It is why Joecool hasn't yet quit the blogging community.