The Real Pitch?

 Many people have experienced some kind of pitch by an Amway IBO. My first Amway pitch was an invitation to a beer bust while I was in college. I arrived at the meeting expecting beer and pizza only to see people in suits giving a presentation. They spoke about how you could generate income by eliminating the middleman from product distribution. Creating efficiencies was a way to generate money and Amway was it. On the surface, it can seem as if everything the speaker said made sense, although real life practice doesn't bear it out.   A friend of mine who attended the meeting with me was asking if I thought Amway could work and we both decided it was a bridge too far to actually make money.  Looking back, it was a sound decision.  LOL

Sell and use consumables was the main pitch. Consumables need to be re-purchased so obviously it is a good way to run a small business. What wasn't discussed was the higher prices of the products. What many people do not see is that Amway's generous bonuses have to be built into the price of the products. For this reason, Amway cannot compete with big retailers who don't have to add salespeople bonuses into their prices.   

But if you look beyond all of this and still think Amway is a good opportunity, then the real Amway pitch comes in. People get excited about working part time, 2-5 years to earn will able and residual income which will allow someone to retire early and leave a legacy to future generations. This is the point where the Amway presenter makes the pitch about people needing training.

You need tools. After all, a carpenter can't build a house without tools, right? So many people who think Amway will make them rich, start to invest in their "tools". Sure, the Amway functions and some other materials can make you feel good or motivated, but in the end, the tools are supposed to help you generate sales and to increase your business revenue. What goes unnoticed in many cases is that the Amway tools are the reason for an IBO's net losses. The upline will justify this by telling stories about how success is right around the corner or that you should never quit and you will eventually make it.

All of this rhetoric from Upline is nice, but people who don't quit have no assurance of making it. Look at the fruit on the tree.
My former LOS, WWDB, has fewer diamonds now than when I was an IBO 20 years ago. My former sponsor is still active in Amway after 25 years and he's not even a platinum. You don't see many new diamonds except for in foreign countries. To me, this is evidence that Amway is saturated and there is little chance of future success. This is why there are mostly tired old diamonds working until they pass away. If the diamonds were so "awesome", why aren't all of their kids and close friends also in diamond club?

The answer is that the Amway pitch can sound good, but it doesn't work.  Amway's sales peaked before 2017 or so at (I believe) 11.8 billion in revenue but I do not believe they have ever surpassed that amount again.  

Can Amway Be Like Gambling?

 Let me make a disclaimer right off the top so Amway defenders don't try to discredit the post without reading it. The Amway opportunity is not a game of chance. But I will go on to explain how and why the opportunity can be compared to gambling and why the diamonds can be seen as a casino or the "house".  

In the Amway opportunity, the odds against someone going diamond are astronomical. Literally tens of millions of people have attempted to build an Amway business in North America over the years and diamond club (Held in Maui, Hawaii) for North American diamonds some years back had 160 diamond-ships represented. Certainly, some north American diamonds may have turned down a free trip to Hawaii but I'm guessing that's not a big number.   

The odds are also stacked in favor of the diamonds. Casinos are not built by winners, but by the hordes of losers. Just as a diamond business is not built by having a foundation of winners, but layers and layers of IBOs who are losing money but subscribing to the tools and functions.  The Amway opportunity is simply set up that way. Look at your common 6-4-2 plan or whatever version your group uses. The newest or biggest layer of IBOs make very little and when you factor in expenses such as functions or standing orders, the losses can be staggering.

A diamond, like a casino will attract many young dreamers who think they can conquer the world and will get rich. They use bright lights and profile former winners just as Diamonds show off fancy cars and testimonies to lure in recruits. The newness of the opportunity gets you excited, just as someone walking into a casino might feel the excitement with the sounds of the casino. All you need is some effort and little luck, right? Sadly, that excitement is all too often replaced with the harsh reality that most must lose in order for there to be a few winners, both in casinos and the Amway business.

Like casinos and diamond uplines, there is much caring for active IBOs and for players who are spending their money in casinos. But once you walk out of the casino, there is no special treatment, just as an IBO who stops building a business or stops being core quickly becomes forgotten and maybe even shunned by their once loving group.  In Amway, people who said they were lifelong friends were never heard from again once an IBO missed a few meetings. If you re-emerge, you will find the love again, just as you will get free drinks in a Las Vegas casino when you start gambling again.

And yes, there are some exceptional people who can scratch out a nice living by gambling, but they are few and far between, just as there are diamonds, but diamonds also have thousands of people who wanted diamond but could not achieve it. Those who can finally make it usually have an exceptional blend of skill and a bit of luck. Some even cheat/lie in order to gain a bigger edge, both in gambling and in Amway.

Like a gambling "system", the Amway opportunity has "systems". In either opportunity, the system doesn't work for the masses. There is an exceptional few who can make it work. Except in gambling, most people understand that the odds are stacked against them. In Amway, many new IBOs are told that anyone and everyone can succeed when it simply is not true.

Can you fulfill your dreams by gambling or with the Amway opportunity? The answer is yes, but the reality is that few will ever do so. Like casinos and Amway diamond-ships, both are built on the backs of those who lose, not on those who win.

Ineffective Tools And Functions?

 One of the things my Amway upline always pushed on us was the tools system. While the tools are said to be optional, they are not promoted that way. They were promoted as vital, necessary, almost as if you were insane to try and build an Amway business without tools. Basically the tools were a defacto requirement. My upline always claimed that nobody ever "made it" without tools. Some Amway defenders insist that the tools work, and that IBOs who were on the system proved it with higher levels of success and product volume. But the tools work for maybe a fraction of 1% of IBOs who try them. The vast majority of people who use tools make nothing or lose money. Similar to a lottery.

IBOs participating in the system (voicemail, book of the month, standing orders, functions, etc) do more PV. I believe this is true, but it is true, only because once the upline can convince you to participate in the system, then that same IBO is also convinced that they should or must do 100 PV as part of the deal. People who aren't convinced that the system is vital, subsequently do not purchase or sell as much PV because they have not been convinced that moving PV will make them successful or wealthy.

Critics and Amway supporters have debated this issue for years, but clearly, the evidence supports my position. Why? Because if there was a true demand for Amway products because of their quality and/or value, then there wouldn't be such a steep drop off in movement of volume when an IBO becomes a former IBO. Many, probably most former IBOs never buy a single Amway product once they leave the business. If the products had true quality and value as Amway supporters claim, why don't people continue to purchase 100 PV per month when they quit? Because they never wanted or needed all of that product in the first place? If former Amway IBOs continued to but products, Amway sales would continue to increase. Amway's sales and revenues dropped more than 25% from 2014 to now (2018).

If someone is convinced that Amway will be their financial savior and that by using tools and moving 100 PV will result in long term financial security and residual income as claimed by upline, then that is what they will do in hopes of achieving the end goal. When that goal or dream doesn't materialize, the former IBOs realize that the tools and products no longer have the value they once thought they had. How many former IBOs will buy standing order or attend functions? If these materials really made you nicer, or saved marriages, why don't any former IBOs keep buying them? Why do they resort to selling them for pennies on the dollar on Ebay or Craigslist? What happened to the great return policy?

Bottom line is that the tools don't work. They only work for the uplines who directly profit from the sale of tools, plus the artificial demand in product sales created by those IBOs who are convinced that Amway wil make them rich. Once the reality sets in that Amway will not make them rich, and that the tools are simply draining their resources, then the demand or tools and Amway products disappears almost instantly. There is no unbiased evidence that I know of to suggest that these tools work, and basically, the miserable number of new diamonds emerging in the US seems to confirm this fact.

Its Tax Time?

 A sight visitor posted this link which I found interesting and humorous. I did not post the entire link, so there is more material. Check it out.

http://riles52.blogspot.com/2011/06/selling-soap-as-hobby-amway-ibos-in-tax.html

Selling Soap as a Hobby - Amway IBO's in Tax Court
Roger S. Campbell, et ux. v. Commissioner, TC Memo 2011-42

The Amway distributorship system is well known to respondent and this Court
Friscia Construction, Inc., et al. v. Commissioner, TC Memo 2000-192

I included the Campbell case in one of my group posts. It concerned someone whose Amway activities were considered a hobby by the Tax Court denying them deductions for losses. That portion of the post was picked up by someone who calls himself Joecool and posted on his blog under the title "Do IBO's have a clue about business?". I found that there are quite a few blogs dedicated to pointing out the downside of the Amway experience including Married To An Ambot by Anna Banana :

The other attraction of Amway to some people is that it might allow them to deduct as business expenses things like cars, part of their home or entertainment that they would have spent anyway. That's probably the aspect of Amway that the IRS finds most interesting. Joecool did a post on how some IBO's think of their income tax refunds (generated by Amway losses sheltering other income) as profit.

To me the most interesting thing that I found in my search is this excerpt from the Internal Revenue Manual for examiners who are doing information requests:

.4.4.3.39 — Amway Corporation
[Last Revised: 12-10-2007]
(1) Amway Corporation has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or overnight service at Amway Corporation, 7575 E. Fulton, Ada, MI 49355, Attn.: Director, Legal Division. Direct distributors who further qualify for profit sharing bonuses receive the non-cash part of that bonus through a mutual fund account administered by Amway Mutual Fund, Inc., 7575 E. Fulton, Ada, MI 49355, which requires a separate summons

Now I am subject to the AICPA Statements of Standards on Tax Practice, which among other things forbids me from giving clients advice based on what I believe the audit selection process of a taxing authority is. I wouldn't do it anyway, because I think most people who give that type of advice are guessing. Even if you happen to be one of my clients, I'm speaking to you purely as a reader here when I give you this advice:

You don't tug on Superman's cape
You don't spit into the wind
You don't pull the mask off that old Lone Ranger

And you don't take no Schedule C losses from an arrangement with a company that IRS examiners have on speed-dial.

I found 23 cases of IBO's who fought the IRS in Court. (A couple appealed, but I only counted them once)They pretty much all lost. In these type of cases there are really three ways you are denied deductions. The first is substantiation. You didn't prove it. Next is that the expenses are not really ordinary and necessary expenses of the business. When you are talking about cars and business use of the home, those two issues can get blurred together. The third is that there really isn't any business there. Taxpayers fight the IRS and win on that issue frequently even a Vietnamese couple whose "business" was playing slot machines using the principles of Feng Shui. Amway IBO's who take on the IRS on the Section 183 "hobby loss" issue almost always lose.

One of the most common themes is that IBO's seek advice generally only from their "uplines", who of course are not disinterested. They also do not seem to put any energy into trying to control their expenses. I'm going to give you a little snippet from each of the cases and comment a bit on some of them.

LOPEZ v. COMM., Cite as 94 AFTR 2d 2004-7075
Jorge N. Lopez, et ux. v. Commissioner , TC Memo 2003-142

Tax Court properly determined that engineer and wife weren't entitled to business deduction for expenses incurred in connection with their Amway products distribution activity because they didn't engage in activity for profit: although taxpayers showed proof of profit motive, such wasn't sufficient to override govt.'s evidence that included their failure to keep businesslike records, their failure to alter unprofitable methods, their non-dependence on activity income, and their use of activity to socialize with friends and family.

In their own Amway activities, which began in 1996, the Lopezes sold products at cost to both their downline distributors and their customers, which practice eliminated retail sales as a source of gross income. They chose instead to focus their efforts on developing a network of downline distributors to generate performance bonuses. Relying on Amway brochures, the Lopezes concluded that they would need to achieve and maintain a monthly point value of 4,000 for their Amway activities to be profitable. In 1998 and 1999, the Lopezes' point value did not exceed 372 points in any month.


The only advice they sought for their Amway activities was from upline distributors, and when they received unsolicited advice from their accountant, they disregarded it. During the years in question, Mr. Lopez was employed full-time as a petroleum engineer, and Mrs. Lopez was a homemaker.

The tax court ultimately was not persuaded that the Lopezes' primary motive for conducting their Amway activities was for income or profit. It found that the conduct of their Amway activity “virtually precluded any possibility of realizing a profit.” The Lopezes' lack of a business plan for recouping losses and achieving profitable levels of activity indicated the absence of a profit motive. In the face of four consecutive years of losses, the Lopezes still did not change their approach to increase the likelihood of earning a profit. The tax court further found that the Lopezes did not conduct market research to help them assess the potential profitability of their activities. It also noted that, although the Lopezes had no prior business experience, they accepted the advice of upline distributors rather than seeking advice from unbiased, independent business sources.

Since the Mr and Mrs Lopez appealed, they got to lose twice.

OGDEN v. COMM., Cite as 87 AFTR 2d 2001-1299
Michael A. Ogden, et ux. v. Commissioner, TC Memo 1999-397
Contrary to the Ogdens' contention, evidence of profit is not determinative of whether a profit motive exists. See id. at 876 (no single tax regulation factor, nor the existence of a majority of factors, is determinative of whether a profit motive exists). There is overwhelming evidence in the record that, if believed, supports a conclusion that the Ogdens maintained their Amway activity for deductions, personal pleasure and to offset wages. The tax court did not abuse its discretion in denying the motion for reconsideration.

Amway does not have a quota for sales, its products do not have to be sold above cost, and its distributors are not required to sponsor downline distributors. An Amway brochure, The Amway Business Review, states that the potential for earning income increases as the number of distributors in a sponsor's group grows and as sales increase. Distributors devote as little or as much of their time to Amway activities as they desire. The eight page Amway Business Review in large blocks on four of its pages highlights the fact that “The Average Monthly Gross Income for “Active” Distributors was $88.”

We believe Amway distributors may be biased when discussing Amway because they have a natural desire to advance the organization and/or obtain income from a downliner.


ELLIOTT v. COMMISSIONER, 90 TC 960

Deductions denied for business expenses and depreciation connected with Amway distributorship. Activities were conducted in unbusinesslike manner, taxpayers maintained full-time jobs, and little distinction was made between Amway activities and personal social activities. Also, IRS properly imposed penalties for failure to timely file and negligent or intentional disregard of rules.

A further indication of the unbusinesslike fashion in which petitioners conducted their Amway activity was the thin line dividing business activities from personal and [pg. 973]recreational activities. Petitioners offered scant evidence that their Amway activity required them to do anything other than to maintain an active social life. Although they occasionally attended seminars, most of their activity involved giving parties and taking people out to restaurants. While there is no requirement that profit-oriented work be onerous and unpleasant, the evidence presented by petitioners does not indicate activity motivated by a profit objective. On the contrary, the evidence shows that petitioners made some small modifications in their routine social life, kept cursory notes about their activities, and claimed deductions for the cost of nearly everything they owned or did. On this record, we find as a fact that petitioners' activities were motivated by a desire to avoid tax rather than a desire to generate income.

Roger S. Campbell, et ux. v. Commissioner, TC Memo 2011-42

Activities not for profit—profit objective—distributorship and direct marketing activities. Code Sec. 183 deduction limits applied to expenses pro se married real estate and construction business operators claimed in connection with Amway distributorship activity that they engaged in without requisite profit objective. Lack of profit objective was shown by facts that taxpayers commingled expenses, had no idea if they were making profit for any given year until they filed that year's return, didn't keep complete records, and otherwise didn't conduct activity in businesslike manner. It was also telling that taxpayers didn't have experience in this type of activity, didn't seek out independent advice, used activity losses to offset their real estate and construction business income, and stated that they would continue with activity regardless of whether it ever turned profit. Countervailing facts that they spent significant time on activity and increased gross receipts during years at issue weren't dispositive considering overall record

Amway Testimony?

 A blog visitor sent me this email in the past. It might be helpful to some people, so I'll post it.  There are some spelling and grammatical errors, but so be it.  

We were part of what im coming to find out as a smaller more unknown team in our region. I’ve run into many Amroids since I first joined until now, and they’ve always seemed to be part of N21 or BWW or WWDB but im not sure if our group was any of those? We were part of something called the UR Association. I believe through some unspoken issues years ago in upline, our group was adopted either to Dexter Yagers organization or from his organization. Its never been fully or properly explained to us. Anyway, my upline always had CDs from multiple organizations teaching systems, and we purchased them all. This was because we partly refused to sign up with URA and partly because we just didn’t have to money for that type of monthly fee. We weren’t on Kate either because of this. When my significant other (SO) and I first joined almost 4 years ago, we were typical for this business; broke, unemployed, and young. We went through the paces or coming out to the meetings as guests for free, attending some product expos, etc, until one day it started costing us as guests (we were still evaluating at the time) to attend the regular open meetings. Foolishly, we figured “well we might as well sign up then!”



Looking back now, all the signs were there for us to see since the start. After we got in, our uplines group slowly fell apart. I don’t believe I’ve ever seen his group grow or be on the rise since I joined. I was told of the glory days just months before of how there were over 100 people in his group attending functions, all the pin levels on his team, the recognitions they’ve received, etc. When we joined and he was on the decline, we thought nothing of it, as it was played off as normal and that “Some Will, Some Wont, So What, Some Where, Six Will, so Stop Whining, and Start Working”. We also attended a major Family Reunion shortly after officially signing up and again, the signs were always there, but we just never noticed. That function that we went to was the largest our upline Diamonds organization was we’d ever see. Our open meetings slowly began getting smaller, and we had to increase ticket costs to “pay for the room”. It went from an open meeting every 2 weeks at $5 to an open meeting once a month at $10. Over the years it started switching locations as well, from one hotel conference room to another, and now it is currently held at a Condo, in the main floors’ lobby room (I believe there is still a cost incurred)



One of the CDs that we were always so “keen” to listen to was one by a young diamond from the US, who built a good portion of his organization in Hawaii and in the western states. He’s young, funny, relatable, and therefore an obvious hit with our young group. Anyway, on his CD he mentions that the only “negative thing that can be found online about Amway is that we allegedly make all our money off books and CDs”. Im loosely paraphrasing, but basically he went on saying “…like that’s a bad thing. Think about it, what's the first thing you do when you are successful at something? Golfing, any sport, a business? Don’t you write a book, cut a CD and go on public speaking events?!” Which of course when twisted around it does seem to make sense, so we never really questioned it. We thought Wow these are totally honest about it! Theres not really much else to write about at this point, like I said earlier, a lot of your blogs were 100% correct about what still goes on. The mind games, what uplines say, what's said at opens, all of it. My SO and I reached a max of I believe 300/400 PV and 200PV respectively. SO had a slightly larger group (we were building it separately at the time) with maybe 5-6 downline at its peak, and I had maximum 2. We’ve been in it for 4 years and have seen no results. Despite having no money for monthly subscriptions to books and CDs, we were core. We tried our best to get the proper 50/150, we always used all the products and promoted it like crazy. We tried contacting all the time and showed plans whenever we could. We listened, read, attended all functions, were accountable, honest, and the only thing we didn’t have was Kate. But the results were never there. Even with the amount of downline each of us had at our maximum, we still never broke more then 300-400PV. It just wasn’t happening. Since we’ve stopped, I have purchased a new(er) car, 2010 top trim, and with a 1 year delayed gratification goal, we saved enough money for a destination vacation paid for in cash. We spared no expense while we were there and bought all sorts of gifts for our friends and ourselves. We are also planning more trips in this coming year.


There are little details here and there im sure i could mention about the really crazy BS we've been through, but perhaps another time :) we're in a phase right now of not thinking about it or dealing with it.

Thanks for reading!

"Anon"

Business Principles Ignored?

 So many IBOs quit and fail, I think the Amway corporation might need a calculator to keep track. And of the IBOs who work and try hard, most of those IBOs also end up in failure and losing money. After years of blogging about Amway, I believe it is because the uplines and the tools they sell to help IBOs are ineffective. When I was an IBO, I don't recall many tools that contained information teaching me how to run a business or how to run an Amway business. There was no talk about tracking income and expenses. In fact, our group was advised to ignore the facts. The scary thing about this is that it is evident that some groups are still teaching this.

Many IBOs and prospects are lured into the business by displays of wealth and not because of bonafide and verified business credentials. A friend of mine sold his franchise business a few years ago and part of what he provided to the prospective buyer was the last three years of his tax returns, personal and business returns. But try asking an upline to even see a business profit loss statement or a schedule C business tax return and you are likely to be told it is none of your business. Instead, upline may show off a photocopy of a bonus check which may be an annual or a once in a lifetime bonus. Or upline may show off a sports car as evidence that they are successful. Sadly, some of these uplines might be broke, they may owe back taxes to the IRS and/or they may even be in debt but simply showing off wealth.

Some uplines have the nerve to discourage young people from furthering their education because they would rather, they channel their money into Amway and tools. Some people are told to make family sacrifices to attend more functions or to buy more standing orders. I will grant that not all uplines do this but based on my experience, I would say more uplines do this than not. They will apply subtle pressure on new IBOs and the newbies probably don't know much about Amway or business, so they basically have to choice but to trust a diamond who has allegedly achieved the pinnacle of success in Amway. Then uplines will often betray their disciples by saying that failure is the personal responsibility of the IBO. That advice needs to be discerned by the new IBO and bad advice should be discarded, as if a new IBO would know what good or bad advice is.

I also see experienced IBOs who don't seem to know how taxes work. I see IBOs who were given the impression that Amway is easy and that they will work once and enjoy the fruits of their labor forever. Oddly, I don't know of a single IBO who did the work once and sat back collecting residual income forever. I find it odd that even tenured crown ambassadors continue to keep busy work schedules. I suppose they could just enjoy this lifestyle but still I find it odd that nobody I know of could specifically name an IBO who achieved diamond and higher and sat back collecting income while enjoying the beaches of the world.

Seems that IBO turnover and failure is more common than not in the AMO world. It also appears that incoming IBOs are like fuel to a fire. Without continuous recruitment and replacement of IBOs who quit, the organization would eventually fall apart along with the bonuses that the higher ups enjoy. It is my informed opinion that many IBOs fail because they aren't taught sound business principles. Despite the constant flow of cds, voice messages and functions and meetings, it doesn't seem as if any practical information is passed from upline to downline. Only messages of never quitting and continuing to dedicate themselves to the system. The result is inevitable and the expected result is failure.

Legitimacy?

 I've debated with some IBOs about retail sales to customers in the past. While many Amway IBOs claim to have real customers and to teach retail, the reality seems to paint a different picture. Even an Amway corporate blogger at one time wrote a piece stating that sales to non IBOs were 3.4% of Amway (Quixtar) sales some years back.  I don't even believe that the Amway run blog/forum is even around right now.  Apologists will say that many IBOs are actually customers who only buy stuff and do not build the business. While there might be some IBO customers, I highly doubt that the majority of IBOs are paying renewal fees just to buy soap and overpriced vitamins.

I know some groups have their schtick down. They will say they "teach" their IBOs to have sales to about 20 customers which gives them a monthly income and allows them to qualify for a PV bonus. It certainly sounds great, but I would bet that IBOs with 20 actual regular customers are about as common as a founder's diamond. In many groups, the IBOs are taught to "buy from themselves" primarily. Thus, the income generated for the diamonds simply comes out of the pockets of their downline IBOs. Sadly, "serious" IBOs often wind up paying their upline (via tool sales) to learn that this sham is a good idea.

I can prove right here that IBOs are not focused on selling products. The focus is on selling the opportunity. How can I prove it? Very simple. Every single time I have seen or heard about the Amway business, there was talk about the economy, inflation, etc. The speaker talks about his easy lifestyle, and how he made it big by capitalizing on an opportunity, the Amway opportunity. Then the 6-4-2 plan or some similar variation is shown to the audience. It is shown as "simple", "reasonable" and "doable". The plan is about making money, typically six figures at the diamond level and a decent income at the platinum level. There is little mention about having to sell products, and little or no mention about the actual products that Amway carries. The hype in the meetings is to sell the opportunity. Sure, after the plan is over, a prospect might be given some samples and such, but the emphasis is still on the business opportunity. The products are usually a side note in the presentation.

While IBOs might talk a good game about selling products, the reality is that many active IBOs have very few actual customers. It is my informed opinion that even the few real customers are often sympathetic friends and family of the IBO, rather than people who are genuinely seeking Amway goods and services. I wonder if anyone in Amway has ever "shown the plan" by starting out with product presentations and samples? When you really think about it, unless the business has real customers, all you are doing is exploiting those you sponsor for their personal consumption, which might benefit your business a bit, but won't benefit your downline unless they can dupe others into joining them.

So, take a real look at your business. Are you actually selling goods to outside customers or are you engaged in a personal consumption game? My understanding is that an IBO does not qualify for a bonus without sales to actual customers. Are you legit or not?

You Need Amway To Fight The Four "I's"?

  One of the Amway pitches used by upline was the four Is.   The upline would give a recruitment speech about how the four Is (I) would suck the life out of you.  Now you might be wondering what the heck I’m talking about?   Well, the four Is are insurance, interest, income tax and inflation.  Each of these factors basically made your job futile as you would never be able to overcome these issues because of the limitations of a job.  Or at least that's what Amway leaders want you to believe.

Most everyone has various types of insurance, typically car, home (or renter's insurance) and possibly life insurance where you pay for something you hope you will never need to use.  This expense is depicted as a necessary evil that helps make people broke.  Next you have interest.  As many or most people are in debt, you wind up paying interest.   You pay interest on any debts you have but receive very little of it for your money in the bank.  Uplines often claim diamonds pay cash for everything, loans are stupid because you need to pay interest, and Amway will make you debt free and living a cash only lifestyle.  Total BS.

Then you have income tax.  The government makes sure they take a piece of your earnings to provide public services and taxes seemingly only go up but never down.  You can’t escape paying taxes.  It’s the only sure thing in life besides death.  Lastly there’s inflation.  Luckily with interest rates, they seem to be slowly coming down and inflation is also starting to get under control, but the common denominator is that all of the four Is take pieces of your income.

What gets weird from here is how upline will toss you a pitch to justify how someway somehow, Amway levels the playing field and by doing Amway you can overcome the four Is.  I find it odd how so many IBOs miss the fact that they are cash negative directly attributable to Amway and the related Amway tool and function sales.  But somehow this important point gets missed by so many IBOs sitting in the audience as if it goes right over their head, or upline downplays it as a nothing burger.

While the uplines may give a slippery way of pitching Amway, anyone with common sense and the ability to do some basic general math should be able to see right thru the charade.  How can a cash negative proposition help you with the four Is?  The answer is it can’t, but you need to be able to discern the forest from the trees to see through upline deception.   Also, when you sit and think about it, how does an Amway business help you to deal with these issues?    It only makes things worse if you have more negative cash flow.  This is why I've stated that doing nothing is likely better than Amway.  LOL

Most Do Nothing?

 I saw some recent discussion and some people were debating the average income of Amway IBOs and how $202 a month (average IBO income) as reported by Amway is a lot considering most IBOs do little or nothing. Well, that $202 a month average income survey many years old. Somewhat laughable when Amway defenders like to hang their hats on the possibility that Amway critics claims are outdated. Maybe Amway defenders should complain that Amway's own information is old and outdated. I wonder what updated numbers would reveal.  An even smaller average income?   

Also, what many people are not aware of is that the average income figure as published by Amway, excluded IBOs who did nothing. It only counted "active" IBOs, although Amway's definition of active can leave you scratching your head. Amway describes active as someone who attended a meeting or attempted to sell products. However, we know that unless you actually sell something, you won't make anything and certainly attending a meeting takes money away from you and is not a way to earn money in Amway. Let me also add that Amway diamonds are also a part of the average income, so the "average" is very likely inflated by the six-figure income of the diamonds.

To me, the biggest question is why do so many IBOs get interested enough to sign up and then do nothing? It is my informed opinion that there are several reasons why this happens. I believe that some IBOs are such pests, that their prospects sign up just to get their IBO sponsor to leave them alone. While it may not be common, I believe it happens. Also, I believe some IBOs go into shock when they see the prices of some products. This will cause newbies to realize that the business is nearly impossible before they even get started. Or, a new IBO will go and talk to family and friends about Amway and will get shot down because in North America, just about everyone seemingly had, or knows someone who's had a bad experience in Amway. Sadly, the experience may not be a result of Amway the corporation, but of unethical IBOs who may lie, cheat or trick people into attending meetings. Some IBOs actually get started but soon realize that that Amway opportunity along with the systems such as N21, WWDB or BWW, simply becomes a money pit with the tools and system expenses exceed the monthly Amway income. A few IBOs will bite hard and stay dedicated for a few years or more. Many of these IBOs end up reporting losses that may exceed tens of thousands of dollars.

Sadly, many IBOs and prospects are recruited by family and friends. Thus, even if they quit or have a very bad experience, they just quit and disappear. Folks generally will not file complaints with Amway or the Better Business Bureau (BBB). So IBOs, even if you did little or nothing in Amway, if you got ripped off or treated unethically, you may want to consider filing a formal complaint with Amway or with the BBB. So why do so many IBOs do little or nothing? I believe the answer is crystal clear. Most IBOs do little or nothing because it's not worth the effort for most as very few IBOs will ever attain any kind of significant income. In fact, doing nothing is likely to get you a more favorable result than someone who attends the functions or who subscribes to standing order because doing nothing is cheaper than being an IBO and paying for tools and functions.

Why Joecool Blogs?

 Over the years, I've had comments left here, some deleted and some published, with IBOs and/or Amway supporters calling me names and accusing me of "bashing" Amway. I believe that these folks are misguided. If you carefully read my blog posts, many are not about Amway the corporation, but are aimed at the abusive practices of certain AMOs, or the groups that sell their system of tapes, cds, books, KATE, and functions. I believe that Amway the corporation is somewhat culpable as they did not reign in the abusers, but still, it is certain LOSs who teach bad business practices and give IBOs bad advice, which incidentally, costs the IBOs money.

Joecool was once upon a time, an Amway IBO, and officially quit Amway sometime in 1998. The name quixtar was already floating around. I quit, got on with my life and basically forgot about Amway. But more and more, I discovered that my upline leaders had been liars and had seriously misrepresented the business. I am from the era where upline leaders told us that nobody made a cent from the tools, which is now known as a lie. They told us that diamonds pay cash for nearly everything, which includes homes. We know that is a lie. Based on what I heard about my sponsor, I believe it is still taught as my sponsor, who is a physician, is still renting a small home in a rural area on Oahu. I started to participate on the now defunct Quixtar blog to learn more about the tool scam, and I started blogging to be able to help others learn about what I had discovered. My blog used to get thousands of visitors each day, although that is no longer the case. I have helped many people over the years who benefited by the experiences and information that I have shared. I do not receive any financial compensation for blogging.

For those who call Joecool a loser, let me talk about some things I have accomplished in life sine I quit Amway. I received several promotions at work, and recently started a new job where I was offered a pretty nice salary.  I am now retired and I'm only in my 50's as of this writing.   I own my home (I did not pay in cash, LOL). I bowled a 300 game, made a hole in one, and ran several marathons. I'm just an average middle-class citizen in Hawaii. I started Joecool's blog in 2006 or so. My old blog has been deleted as the host did not maintain the site well and I eventually got hacked and sabotaged. I started this current site on blogger in late 2009.

I am not here to "steal" anyone's dream. I am not here to "bash" Amway. But Amway, the business opportunity is one where most people do not make money to begin with. Add in the expenses for tapes, cds, voicemail and functions and you have almost a 100% chance of failure. Yet some upline leaders will promote Amway as a easy shortcut to retirement with a surefire chance of success if you dedicate to the system. But the system does not work. There is no bonafide evidence that the system works. This is what Joecool's blog is about - primarily the systems and its problems.  And to expose the many lies uplines use to bait and hook their faithful downline into buying tools and functions.

Integrity?

 I used to follow the blog of a WWDB IBO named "Shaun". He runs the blog called "Expeditions Of Truth" http://expeditionoftruths.com/..  The blog is not running as Shaun has now quit Amway (imagine that?  He swore he would be a double eagle ruby making will over 100k.  What could possibly go wrong?)  Now to be fair, Shaun was likely a hard working guy trying to do what was best for his family.  But he got duped into selling out for Amway and probably saw the light and quit.

He seemed to think that not only is he in business with people full of integrity, he also thought that he was going to retire in November 2011. Is this now March 2026?  While I think doing business with people of integrity is a good thing, I also know of many successful people in business who are ruthless.  Sometimes in business, you have to be that way to survive and thrive.  So are Amway and in particular, WWDB people full of integrity or are they just as ruthless as other business people? Does it matter? In my opinion, it doesn't matter except for the fact that WWDB people seem to think that they have integrity filled leaders.

Well, let's look at some of these leaders. Back in the 1990's before the easy access of information on the internet, the current batch of WWDB leaders swore that nobody made a profit on tools. Nobody knew the truth at the time. We now know that this was a lie. Is this integrity? We know that a triple diamond in WWDB  was in chapter 7 bankruptcy proceedings. Not paying for your obligations is integrity? We know that the same triple diamond and another lesser diamond had homes foreclosed (Public information). Is that a move filled with integrity? With the tons of money that diamonds  make, couldn't they have made an effort to pay off their debts?
If you look at a blog linked to this one "Rocket's Rants", there's a YouTube video of a "crown" telling rank and file IBOs that they can make "hundreds of thousands of dollars" a month. First of all, I wonder if this crown has achieved this himself, let alone any others? Even if someone had achieved it, it would be illegal or unethical to portray that kind of success as achievable to a a prospect.  

A prominent double diamond used to talk about how WWDB had a low divorce rate. Is it full on integrity for WWDB leaders to separate or divorce when they talk about integrity and how Amway and WWDB saves marriages? What about other WWDB diamond divorcees?  Are they full of integrity? What say you diamonds in WWDB?  Is it integrity to say you built the business as a single when the diamond previously built the business with his former wife?  (The Danziks)

Amway's owner Rich DeVos acknowledged that the "tools" were likely a pyramid scam and Amway did nothing after sales dropped following some attempts to clean it up. Is that an integrity move? I don't know but it sure seems as if WWDB and Amway have issues where integrity is concerned.

Cash Only?

  When I was an Amway IBO, I was always taught that diamonds always pay cash for everything.  Paying interest on loans or financing is a bad idea right?  According to diamonds, even buying a home in cash is the way to go.   They also taught that one day, after following the foolproof WWDB system, that I too, would be strolling on the beaches of the world, with cash rolling into my bank account with no worries in the world. We were told that diamonds pay cash for all purchases, even homes and other large ticket items. As evidence, the diamonds would show slideshows of mansions and sports cars, golf club memberships and other lavish items. All paid for in cash we were told. I have reason to believe that WWDB still teaches this except that it is probably a bunch of lies.

First of all, in looking back, the group really had no way of knowing what was paid for or not. We just assumed that diamond made so much money that everything the diamonds spoke of were true. However, there have been events, some recent, that exposed some of the apparent lies told by these diamonds. There were two (2) diamonds whose home foreclosures became public knowledge and a prominent triple diamond who was involved in bankruptcy proceedings. Now your home cannot be foreclosed if it's paid for in cash right? Technically, nobody would care whether a diamond's home was mortgaged or paid for, but when diamonds parade in front of a crowd bragging about wealth, and then telling the audience that they too will achieve the same success by following the system and upline advice, well that's a bit misleading in my opinion. So many people in the audience are practically crying because they want what the diamonds are flaunting, except that possibly, many of these diamonds don't even have what they are selling.

A average diamond might make about $150,000 (according to Amway for non Q12 diamonds) and let's just say another $150,000 from selling support materials. When you factor in taxes and business expenses such as travel to and from functions, what's left over certainly is not going to allow you to purchase million dollar mansions and fancy sports cars, much less in cash.   Some higher up pins might make a bit more, but still, purchasing mansions and other luxuries in cash is a stretch. It would be my guess that most diamonds indeed have a mortgage on their homes and may even have car payments. That's not necessarily a crime but it is unethical to lie about your income in order to recruit new downlines.

For IBOs and other newbies, if your uplines are bragging about paying for homes and other things in cash, ask them to show proof of these claims. I can show you pictures of multi million dollar mansions and sports cars, it doesn't mean that I paid for them in cash. But then again, admitting to having a mortgage or having monthly car payments are not quite as attractive or exciting as claiming to pay for these things in cash.

Building Wealth On 8-12 Hours A Week?

  One of the myths that our upline used to, and likely still perpetuate is the silly claim that you can build an Amway mega empire on 8-12 hours 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.

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 already close to nine hours of time used and neither of these activities produces any income for your Amway business. In fact, both activities cost you money and produce no tangible result and no income. 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 customers, at least for IBOs who actually may have some customers. If you spend 8-12 hours of non income producing activities, how will that turn into financial freedom? The answer is simple. It doesn't. That activity primarily benefits your upline diamond who profits from selling you cds/audios or function tickets, or voicemail.

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, there non income producing activities such as listening to a cd, 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. Attending functions and meetings are promoted as learning activities but again, how does it benefit an IBO to spend money instead of making money?

You sell the prospect the dream of financial freedom. You tell that 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 many formal complaints about the business. Most people chalk it up as a life lesson and do not complain or file complaints.

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. Look at your return on investment and/or your profits and losses at the end of the month. What you will see is a consistent net loss because of the system and no profit, also because of the system.

How The IBOs Get Duped?

  In my informed opinion, Amway is a huge bait and switch scam run by the diamonds. The crowd sees the diamonds as someone to be worshipped. They arrive to standing ovations when they appear to show the plan and/or to speak at a function. The diamonds speak of untold wealth beyond the reach of most people. They show slide shows of fabulous trips and events that they attend and possibly golf outings and other fun things that are associated with people who have money. The diamond often has some sports car or a nice sedan such as a Lexus or Mercedes. And all of this alleged wealth comes from Amway. Just join and get the secrets to wealth from the diamonds and you too will be living in fabulous wealth. 2-5 years, build it right and build it once is what I heard.

But it's a bait and switch scam. They show you wealth and speak of their large incomes (without verification of course) and people tend to believe what they are told. The diamonds claim to have the key to the secret of success. All you need to do is get plugged into their system and you are nearly assured of success. Right? Listen to those diamonds. They are the pinnacle of success and all you need to do it copy what they have done. So simple even a dog can become a platinum. All you need is 2-5 years, do it right and do it once and you're set for life.

So, you subscribe to their system of voicemail, books, standing orders (audios/CDs), meetings and functions/seminars. In the teachings, the theme seems to be similar. Never quit, and the answer to most Amway problems are to consume more tools and functions. If you are struggling and losing money, the solution seems to be to invest more in tools and functions. It's like a struggling business spending more on overhead without simply trying to increase sales. This is why so many IBOs quit, because they struggle to make sales and/or to sponsor downline. Despite all of the teaching and tools and seminars, it is apparent that very few IBOs make any profit.

What people don't see is that the Amway business itself is just a shill for the real business. Amway IBOs unknowingly recruit prospects into Amway thinking they can make a fortune in Amway. In the meantime, the diamonds are raking in the dough by selling monthly subscriptions for voicemail, books, audios and meetings and seminars. Additionally, the diamonds put on a "major" function each quarter where they can make possibly hundreds of thousands of dollars in a single weekend. I believe some diamonds make way more income from the tools and functions than from Amway. A diamond is a lifetime achievement so someone could qualify diamond for 6 months, never qualify again, but still make a nice living from speaking honorariums and selling other tools. The tools business is the real business. The Amway business is like a "front" to conceal the real business, much like the Italian restaurant is a front for the mob. The restaurant is a legal business that helps conceal the illegal activity. And that my friends, is the Amway bait and switch scam.

The Loch Ness Monster And Sasquatch?

 "Build it right and build it once" and collect residual income. Work the business 2-5 years and go diamond and be able to walk away from Amway while collecting residual income. Now what does that have to do with the Loch Ness Monster or Sasquatch? Well, Amway retirees who walked away from Amway while rolling in the big bucks are legendary and many people have heard about them but like the other legendary monsters, nobody has ever provided Bonafide evidence of their existence. Sure, lots of people have heard about these things but in all my years, not a single shred of solid evidence.  That goes for Amway diamonds who "walked away" to collect residual income and the Loch Ness Monster and Sasquatch.  

I once had a debate with (at the time), Amway's biggest defender:  IBOFightback AKA David Steadson about these Amway retirees and he claimed there was a long tenured emerald who had a trust fund set up through Amway. So, I called it an unsubstantiated claim unless he could provide details about this trust fund. Of course, he couldn't provide any evidence other than his word, which is not worth a cent in my book. Also, we don't know what kind of income is derived from this alleged trust fund. Afterall, it takes big bucks to fly first class to exotic beaches around the world to sip mai tais while walking them. And isn't that what the diamonds and other big pins advertise in functions? It's all about lifestyle and financial freedom, right?

Well, in my opinion, these legendary Amway retirees do not exist. Why not? Because for one thing, an exotic lifestyle with mega luxuries cannot be had on 100K or 200K per year, which is what you would be lucky to have when you stop building Amway. Think about this, if about 50% of your downline quits each year, how can the residual income keep coming unless these IBOs are replaced?  Also, a large portion of a diamond's income comes from tools and functions, but I would presume that you would no longer receive speaking fees if you're not speaking. And there are other examples of diamonds quitting and resigning from Amway. Now why would anyone quit or resign and leave residual income on the table? It's because more than likely, there is no residual income. It's an urban myth.  You can easily google and look up diamonds who have quit or resigned.

So next time you see an IBO spouting off about Amway retirees and lifelong residual income, ask them to name 1 or 2 people who achieved it with some supporting evidence. That's when the insults, excuses or dead silence will begin. Is it possible there's someone out there collecting some residual income? Well, mathematically it's possible but when you factor in attrition and keeping in mind that 2 crown ambassadors died while still working Amway, you'd have to wonder where the truth lies. In my opinion, there is no true residual income. Because in Amway terms, that would be getting something for nothing, with IBOs claim doesn't exist. And these Amway retirees are as easy to find as a Sasquatch or the Loch Ness monster. Lots of people know about it, some claim to have seen them, but not a single shred of credible evidence.

Joecool out!

Trading Hours For Losses?

 One of the ways that upline diamonds would put down jobs was to toss in the phrase that a job was simply trading hours for dollars. As if it were demeaning to have a job where you got paid for your time. I believe it's all relative. Being that many IBOs are young and maybe working in more entry level types of jobs, then yeah, your hourly wage might not be that great. If you earn say $10 an hour, then you might be struggling financially, and it may take time before your skills and knowledge increase to a point where your experience is worth more money. What if you had a job paying $1000 an hour and earned $160,000 a month? Is that a lousy deal trading hours for dollars? I think your perspective would change if that were the case.

Conversely, having a business can be good or bad also. If you have an Amway business earning less than $100 a month and you spend $200 monthly or more, on functions, standing orders and other training and motivational materials, then you are losing money. You would be better off working for free. That is still a better alternative than working a business where you are losing money. I think most people agree that a platinum group typically has a 100 or more IBOs. Thus a platinum is in the top 1% of all IBOs. I have heard that the platinum level is where you start to break even or make a little profit, depending on your level of tool consumption. If platinums are barely making a profit, then the other 99+% of IBOs are likely losing money. How much is that worth per hour?

I think uplines cleverly trick IBOs into thinking that a job is bad. Trading hours for dollars, after all, sounds like some kind of indentured servant of sorts. But in the end, what matters is your bottom line. If you are an IBO with little or no downline, and/or not much in terms of sales to non IBOs/customers, then you are losing money each and every month if you are attending functions and buying standing orders. Your 10-12 hours a week of Amway work is costing you money! But if you spend 10-12 hours a week, even at minimum wage, then you might be making about 300 to 350 a month gross income. After taxes, you make about 250 to 300. At least trading hours for dollars gets you a guaranteed net gain at the end of the month.

Uplines trick you into a "business mentality" where you think that working for a net loss is just a part of business. IBOs should realize that a business promoted as low risk and no overhead should be one where you can profit right away. Instead, IBOs are taught to delay gratification, or to reinvest any profit back into their business in the form of tools and functions, which results in a net loss. If that's the case I would choose trading hours for dollars.

Remember, trading hours for dollars is not a bad deal if you are making enough dollars per hour. And even those who make less, are better off that those who "run a business" but end up with a net loss. It's all relative and hopefully, this message will help new or prospective IBOs who are being enticed to join the Amway business opportunity. Good luck to those with jobs and those with businesses. You can be successful either way. Remember that!

The Reality Of Amway?

 One of the things that keeps some Amway IBOs going is the "harsh reality". What I mean by that is for some IBOs, once you have been in Amway for a while, it can be hard to quit. You were possibly recruited with dreams of lifelong residual income and walking on all of the exotic beaches of the world. Retiring young and spending that time with your wife and family, and Amway friends. To quit means an IBO would have to face the reality that these dreams will not come true, at least not with the Amway business. The fact is that the Amway opportunity probably would not have delivered those dreams anyway. Even a diamond more than likely cannot afford those dreams. In fact I would estimate that most diamonds, if they flaunt some excessive lifestyle, are near broke or in heavy debt as a diamond income cannot sustain a jet set lifestyle, save for a founders double diamond or something similar. I believe the prominent WWDB triple diamond bankruptcy shed a lot of light into the finances of an upper level pin and it wasn't as impressive as I would have thought.

The triple diamond who filed for chapter 7 bankruptcy made about half a million dollars annually from Amway. That's a great income and more than most people earn, but seriously, a half million dollars income is not going to allow you to buy mansions paid for in cash, or a fleet of sports cars. After paying taxes and business expenses, I'm not even sure someone with that kind of income even lives a worry free life of leisure. And we're talking about a triple diamond, not your average run of the mill regular diamonds who I would safely assume, earns much less than a triple diamond.

But what really is the harsh reality? It's working hard only to drift between 100 and 500 PV. It's finally sponsoring a new IBO only to have a downline quit. It's talking to people about Amway and getting laughed at or getting rejected. It's your upline or sponsor pushing you to do more. Possibly your upline is one who questions your manhood if you aren't working hard enough. It's your upline or sponsor reminding you that a winner doesn't miss functions, especially the major ones. It's staying up late for team meetings or night owls when you need a good night's rest to do your job the next day. It's driving the miles to show a plan, only to have your prospect not show up. It's having to be deceptive about what you are doing. It's skipping functions with family and friends so you can be core to the business.

As IBOs, do you see any of this? I saw some of this during my involvement. While I have not been an IBO in some years now, I still see many testimonies and comments by more current and even some active IBOs to indicate that a lot of this still goes on. While Amway defenders will deny it, I see no reason why any of this would have changed over the years since Amway has made no significant changes to stop abusive uplines. If Amway did make any changes, they are not immediately apparent, and the continuous string of comments and testimonies do not confirm that any clean up has been done.

For active IBOs or prospects, these are the harsh realities that may be attached with the Amway opportunity. Much of it is because of motivational groups such as WWDB, but if you are seeing these traits in your group, ask the tough questions. If you happen to decide that the Amway opportunity is not for you, take heart! There are other ways to achieve your financial goals and dreams and there are more efficient ways out there. Sometimes, quitting something that isn't working is a wise business decisions and sometimes you can lose more by not quitting. Good luck in whatever you decide.

Why Blog About Amway?

 Over the years, I've had comments left here, some deleted and some published, with IBOs and/or Amway supporters calling me names and accusing me of "bashing" Amway. I believe that these folks are misguided. If you carefully read my blog posts, many are not about Amway the corporation, but are aimed at the abusive practices of certain AMOs, or the groups that sell their system of tapes, cds, books, KATE, and functions. I believe that Amway the corporation is somewhat culpable as they did not reign in the abusers, but still, it is certain LOSs who teach bad business practices and give IBOs bad advice, which incidentally, costs the IBOs money.

Joecool was once upon a time, an Amway IBO, and officially quit Amway sometime in 1998. The name quixtar was already floating around. I quit, got on with my life and basically forgot about Amway. But more and more, I discovered that my upline leaders had been liars and had seriously misrepresented the business. I am from the era where upline leaders told us that nobody made a cent from the tools, which is now known as a lie. They told us that diamonds pay cash for nearly everything, which includes homes. We know that is a lie. Based on what I heard about my sponsor, I believe it is still taught as my sponsor, who is a physician, is still renting a small home in a rural area on Oahu. I started to participate on the now defunct Quixtar blog to learn more about the tool scam, and I started blogging to be able to help others learn about what I had discovered. My blog used to get thousands of visitors each day, although that is no longer the case. I have helped many people over the years who benefited by the experiences and information that I have shared. I do not receive any financial compensation for blogging.

For those who call Joecool a loser, let me talk about some things I have accomplished in life since I quit Amway. I received several promotions at work, and recently started a new job where I was offered a pretty nice salary.  I am now retired and I'm only in my 50's as of this writing.   I own my home (I did not pay in cash, LOL). I bowled a 300 game, made a hole in one, and ran several marathons. I'm just an average middle-class citizen in Hawaii. I started Joecool's blog in 2006 or so. My old blog has been deleted as the host did not maintain the site well and I eventually got hacked and sabotaged. I started this current site on blogger in late 2009.

I am not here to "steal" anyone's dream. I am not here to "bash" Amway. But Amway, the business opportunity is one where most people do not make money to begin with. Add in the expenses for tapes, cds, voicemail and functions and you have almost a 100% chance of failure. Yet some upline leaders will promote Amway as a easy shortcut to retirement with a surefire chance of success if you dedicate to the system. But the system does not work. There is no bonafide evidence that the system works. This is what Joecool's blog is about - primarily the systems and its problems.  And to expose the many lies uplines use to bait and hook their faithful downline into buying tools and functions.

The Amway Iceberg?

 I was in discussion on another forum and a comment was made about Amway being an iceberg, because you see the shiny clean ice on the top, but you do not see the majority of the iceberg. Or in other words, the diamonds show you the fancy suits, jewelry, care, mansions, jets and what you don't see is the financial carnage that takes place in their downlines at times. My former upline would tell audiences that they could skip meals to buy more standing orders because you might hear the one thing that could make your business explode.  For most IBOs, that explosion never came no matter how much effort was made.

Sure, on standing orders, you won't hear too much of the unethical and "wrong" teaching, because some of this is monitored by Amway, but it's the night owls and smaller group meetings where the real teaching is disseminated. This is where you are told to practically sell your soul to achieve in Amway. This is where the teaching comes in where you should be purchasing excessive amounts of tools in order to succeed. This is where you are told to never miss a function unless it's for your own funeral. A newbie or casual observer won't see these things but if you ever commit to becoming a business builder, this is likely to become your world.

You don't see the backstage at functions and meetings. Former rubies and platinums have made commentary about the diamonds literally laughing about how gullible the downline are. You don't see the where the cash collected at the meetings and functions go. There had been some past comments about literally, suitcases of cash leaving the premises. If your upline has a mansion and a fleet of nice cars, it's likely that your tools money played a significant part in your diamond obtaining it.

It's a simple conclusion. The tools have a higher markup than Amway products and have fewer beneficiaries to split up the bonus. A $7.00 Amway product might cost $3.00 or so to make and the rest will be bonus money split up by the layers of IBOs. Whereas a $7.00 cd might take 50 cents to produce and only platinums and higher receive any compensation from this source of income. But rank and file IBOs rarely ever see a true and transparent picture of this business. It is shrouded in secrecy, just like the underside of an iceberg. I challenge IBOs to be real businessmen and women and ask upline the tough questions about where the money is made. Do not accept rhetoric and anecdotal stories. In real business, schedule C business tax returns are the normal way for verification of business income. If you are going to "invest" your hard earned money into the system to the benefit of upline, you should demand this information.

Would any of you purchase a conventional business from someone without proof that it is profitable? Why would an Amway business be any different?

Amway IBOs Are Funny?

  I often get a kick out of Amway IBOs who make outlandish claims and then mumble, stumble and bumble to back up their claims, or to offer at least a verbal explanation of their claims. I believe many IBOs, newbies in particular are loaded with enthusiasm, but lacking in actual Amway business knowledge. Certain groups have a certain philosophy, which sometimes comes out in a conversation. But I believe in most cases, the philosophy is one of talk and not action. Amway's own numbers seem to back up many of the claims made by critics, such as the low amount of sales to people who are not IBOs.

I recently saw a blog post by a WWDB IBO who says he got a nice tax refund from the government, mainly because of his business deductions. He also claims that his Amway business is booming and that he is making money. Now I'm not a tax genius, but if you are writing off losses on your business, you would get a refund, and if you were actually making money, then you would actually be paying more taxes because your taxable income would then be higher. It's amazing how some IBOs will try to fake success in ways that clearly show they are putting up a facade.  

Other obvious ways are IBOs who say they are brand new in Amway but are making over $5000 a month. Now I do believe that it can be "possible" to make some money in Amway, and obviously some people do make a nice income from Amway, but generally, these will be tenured higher pins. The vast majority of IBOs do not make any significant money from Amway and if these same IBOs were participating in the teaching systems such as Network 21, WWDB, or BWW, then they are likely ending up with a net loss because the monthly expenditures for voicemail, functions, books and standing orders exceed (by far) the monthly income for most IBOs.

Even diamonds who want to flash fancy cars and gadgets. I believe many of these diamonds are not making as much as they want you to believe and in fact, if you just get a calculator and figure out what a flashy lifestyle costs, you will see that it will simply not be sustainable on Amway income, even when you factor in the tools income. Some diamonds whose incomes were exposed when they quit or had legal proceedings indicate that while a diamond (or higher) income may be nice, it will not sustain the kinds of lifestyles they speak about at Dream Night functions, or other functions where great wealth is displayed.

They may be fooling (some) new prospects, but they do not fool me, and I hope they do not fool you. But it is funny when you see it happening.

The Solution?

 I just shake my head when I read about the kinds of advice that Amway IBOs receive from their trusted mentors and upline.   Now let me say that I would have nothing to criticize if downline IBOs were regularly progressing and moving up the ranks and actually making money.  But it’s obvious that most IBOS are spinning their wheels getting nowhere fast and the only advice that upline seemingly gives is to spend more money on functions and tools that are already proven to be ineffective.   Your Amway business isn't growing?  Buy more tools and functions?  What kind of business expends more resources on non-revenue producing materials other than Amway IBOs?

When most real business owners are cutting expenses or looking at strategies to bring in more revenue, Amway IBOS and uplines are advising people to spend more money on activities that don’t make them money.  Why not just get a pile of cash and burn it?  The result would be the same except the diamonds wouldn't profit from it.  Keep in mind that the upline profits from the sale of tools and functions so it seems pretty dubious that upline would advise struggling downline to spend more time and money on things that haven’t worked in the first place.  

What is the real solution to a failing business?  I can’t tell you that, but I can tell you that spending more money on things that do not result in more sales and profits is not the solution.  Most dedicated IBOs lose money because of the tools and functions which are not effective in helping IBOS become profitable.  What makes it more insidious is that uplines profit nicely for giving downline bad
advice even if their bad advice results in bigger losses.  And the sad part is the upline will say they would never mislead downline (on purpose), which in my opinion is a huge lie.  They almost always mislead downline for their own profit, again, in my opinion.

When it comes to Amway, it seems apparent to me that the only logical solution is to walk away, seek refunds on whatever you can and find another activity to make some income. Sitting at home watching TV is more profitable to most IBOS than actively trying to run an Amway business.

Con Artists?

 A site visitor comment mentioned that a diamond us basically a con artist.  Con is short for confidence.  They get you to trust them with small talk, building you up and eliciting your goals and dreams.  Once they get you there, suddenly they try to close the deal by saying you can’t afford to open a real business so Amway makes perfect sense and with their nearly foolproof system you can’t go wrong.  This is where the hook comes in.  You might take "baby" steps, but eventually the hard sell comes.

They may start you out with a few free audios or meetings, but the bar gets raised soon enough.  You’ll be told that a real business owner needs to invest in their business.  An investment into learning about the business and how to build it.  You just need to be reachable and open minded and follow the footsteps of your upline leaders.  Ironically many IBOS call their upline mentors when in reality, they are like con artists working a scam or working theirs "marks" as one might call it.  

In a way, they’re not much different than any run of the mill scammer.  You get the prospect hooked and get them to hand over money.  One difference is that the upline just takes smaller amounts but on a regular basis via their system of books, audios, functions, meetings and other educational materials. If Amway IBOS actually did the work and many were profitable, my opinion would be different.  Instead, the masses contribute to the diamonds lifestyle with the irony being that the IBOS treat the diamonds like rock stars and worship them.  That's like a guy smiling as he reaches into your pocket and takes your wallet.

The vast majority of IBOs make nothing or lose money.  That isn't even remotely disputable.  Some people lose a lot of money.  What’s worse is the diamonds apparently don’t care that many are hurting and possibly struggling to make ends meet.   But they continue to exploit their down line by running functions but charging high prices for giving the IBOs useless information.  But in the end, the Amway business is person to person and typically face to face.  I can’t imagine any serious useful teaching coming from upline.  Not that normal functions have useful teaching.  Where's the actual sales to customers?  Where's the attention to someone's bottom line?  Aren't those things more important than having IBOs stalking people in coffee shops?

In the end. it is my informed opinion that Amway diamonds operate just like con artists but they try to make themselves look like business associates and mentors.  Big deal.

Joecool's Blog?

 Over the years, I've had numerous comments left here, some deleted (for racial and abusive language) and the vast majority published.   Many Amway IBOs and/or Amway supporters often calling me names and accusing me of "bashing" Amway. I believe that these folks are misguided. If you carefully read my blog posts, many are not about Amway the corporation, but are aimed at the abusive practices of certain AMOs, or the groups that sell their system of tapes, cds, books, KATE, and functions. I believe that Amway the corporation is somewhat culpable as they did not reign in the abusers, but still, it is certain LOSs who teach bad business practices and give IBOs bad advice, which incidentally, costs the IBOs money.

Joecool was once upon a time, an Amway IBO, and officially quit Amway sometime in 1998. The name quixtar was already floating around. I quit, got on with my life and basically forgot about Amway. But more and more, I discovered that my upline leaders had been liars and had seriously misrepresented the business. I am from the era where upline leaders told us that nobody made a cent from the tools, which is now known as a lie. They told us that diamonds pay cash for nearly everything, which includes homes. We know that is a lie. Based on what I heard about my sponsor, I believe it is still taught as my sponsor, who is a physician, is still renting a small home in a rural area on Oahu. I started to participate on the now defunct Quixtar blog to learn more about the tool scam, and I started blogging to be able to help others learn about what I had discovered. My blog used to get thousands of visitors each day, although that is no longer the case. I have helped many people over the years who benefited by the experiences and information that I have shared. I do not receive any financial compensation for blogging.

For those who call Joecool a loser, let me talk about some things I have accomplished in life sine I quit Amway. I received several promotions at work, and recently got promoted to a new job where I was offered a pretty nice salary.  I am now retired and I'm only in my late 50's as of this writing.   I own my home (I did not pay in cash, LOL). I bowled a 300 game, made a hole in one, and ran several marathons. I'm just an average middle-class citizen in Hawaii. I started Joecool's blog in 2006 or so. My old blog has been deleted as the host did not maintain the site well and I eventually got hacked and sabotaged. I started this current site on blogger in late 2009.

I am not here to "steal" anyone's dream. I am not here to "bash" Amway. But Amway, the business opportunity is one where most people do not make money to begin with. Add in the expenses for tapes, cds, voicemail and functions and you have almost a 100% chance of failure. Yet some upline leaders will promote Amway as a easy shortcut to retirement with a surefire chance of success if you dedicate to the system. But the system does not work. There is no bonafide evidence that the system works. This is what Joecool's blog is about - primarily the systems and its problems.  And to expose the many lies uplines use to bait and hook their faithful downline into buying tools and functions.

An 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.

Responsibility?

 One of the disturbing things I have noticed about Amway IBOs and IBO leaders is how they will tell downline to trust them. To trust them as they have already blazed a trail. No need to re-invent the wheel. Just ride the coattails of your upline to success. The system is proven. Many IBOs take this to heart and put forth tremendous effort. Then when they fail, upline will shun them and tell them that the failure is their own. That they are personally responsible for failure. The sad thing is that many IBOs believe this and allow their upline a "pass" when it comes to responsibility.

Now I am not talking about IBOs who sign up and do nothing or never place an order. I do believe that the fact that many IBOs sign up and do nothing brings concerns about how these IBOs were recruited, but I do not recall ever seeing an IBO do nothing and then complain that Amway was a scam or anything like that. What does concern me and should concern Amway prospects is that the IBOs are paying for the advice that doesn't work. A dedicated IBO who is on standing order, book of the month and attending functions are paying for these tools in order to be successful, or successful as their upline claims they will be.

What's interesting, however, is that many people who are critical of Amway and the systems, put forth much effort, did everything they were told, and did not find the success that upline promoted, or in some cases, guaranteed. My former sponsor was still active; last I heard and has been in Amway for over 20 years. I do not believe he has ever gone beyond platinum, and I know that he was never a Q12 platinum. Some Amway apologists might see being a platinum as a bonus, but when you are hard core sold out to the systems, platinum is a break even or make a small profit business. Factor in that time spent by husband and wife and these folks are breaking even or making a fraction of minimum wage. Is this the dream that will allow you to buy mansions with a cash payment?

What is also disturbing is how people will tout the system as responsible for any success but hide the vast majority that the system doesn't help. Sure, some will succeed in Amway, but for every success, there are hundreds if not thousands or tens of thousands who fail. And if you consider diamond as the benchmark of success, the failures could be in the millions. As I said, some succeed, but very very few in relation to the number who try. Going diamond is probably less common in the US than winning the lottery.

Succeed and the systems and upline take credit, but fail or quit and it is your own responsibility. Are these the kinds of leaders or mentors you want advice from? It's a matter of "heads I win and tails you lose" (not in yout favor) if you buy into this system.

The Secret Of Amway Success?

  My upline diamond used to say that the key to success is Amway is duplication, or copying.  He would use an analogy of being in grade school and copying someone else’s answers and that if you can master that one skill, you will be successful in Amway.  Even things downline IBOs do should be duplicatable is what upline would day, meaning others need to be able to copy it.  But oddly, the few people who can actually copy or duplicate their way to success is very miniscule.  In fact, it seems like most IBOs wind up copying each other while doing what upline advises and they still lose money in droves.  

Doesn’t that sound sweet and simple?  Just copy as if you’re in school and looking over the shoulder of the class brainiac. Very easy and straightforward right?  But obviously that concept doesn’t work.  If it did, there would be a lot of success constantly churning from the rank-and-file IBOs.  But instead, what we see is a revolving door of people coming and going (quitting) without making a net profit or losing money, generally from business expenses such as tools and functions.  Many IBOs may try for a while but find the process difficult and frankly, frustrating along the way, not to mention the part about the masses losing money on a regular basis.

And it’s no wonder that duplication doesn’t work in real life because the system is too severely flawed.  You are buying and/or selling products that are relatively unknown and generic in nature but being sold at premium prices.  Now that’s not to say all Amway products are bad or are of bad value but overall, you can find better value if you shop at Costco or Walmart.   It’s pretty hard to dispute that unless you’re a fully dedicated and indoctrinated IBO.   I can go to Costco for example, a get a cart full of stuff for a few hundred dollars and the same amount of cash gets you maybe a handbasket of stuff from Amway.

In general, most upline teaching has “core” steps for IBOs to follow and while they are not complicated, they are difficult to follow.  In particular, finding people agreeable to see the plan or to sell products to are difficult tasks and you can’t just duplicate yourself to success.  But what IBOs can do is listen to audios, read books, buy their defacto 100 PV quota, and attend all meetings and functions.  This is what the majority of core IBOs do, based on my own observations from my time in the business as an IBO myself.

Sadly, the steps that are easily copied or duplicated are the ones that cost IBOs money, and the steps that are vital to growth such as selling products and showing the plan are the ones that are nearly impossible to duplicate. And that in a nutshell is why the vast majority of IBOs make nothing or lose money in the Amway business opportunity. And that is my well-informed opinion.  

No Crossline?

  One of the really stupid and hypocritical things that upline taught the group was no cross lining. In other words, if you had a different sponsor or upline diamond, you were not to talk about business with other business owners.  This is stupid because an effective way to learn techniques and to get tips is to talk to other rank and file business owners.  You exchange ideas and tips on how to do things better.  Why would upline discourage this unless they want to control your information intake, in my informed opinion?

If not, why are IBOs expected to attend (and pay for) meetings where a cross line diamond is speaking?  Why would IBOs pay for audios to hear cross line speakers tell them about the business?   The premise is that a cross line doesn’t have a direct interest in your Amway business, but it seems that cross lining is ok if your upline can profit from it via the sales of audios and functions.   

The real reason the diamonds don’t want you talking to others is because the absolute truth might come out.  That you may have been highly dedicated to Amway and the systems for years and did everything that was asked of you only to suffer a net loss of income.  Or that you did everything that upline taught you, but you were still unable to sponsor a single down line.  In my case also, my sponsor committed an "Amway sin" by bouncing a bonus check to my business.  I'm sure that's taboo to speak about.  

Another thing is that the rank and file might compare what they’ve been taught and begin to realize that they’re being scammed.  I once spoke to a cross line IBO and that’s when I started to realize how stupid some of our practices were.  I was an IBO in the old days where you call in your orders and pick up the products.  Our group’s practice took hours and hours because you had to go to your sponsor‘s house and read off your list as they filled your order.  My cross line friend said their upline just put all your stuff in a box and noted anything that was not yet fulfilled. You paid and left in minutes. 

So, this is just another example of stupid business practices taught and perpetuated by upline.  But the main reason is they just don’t want the rank and file to speak the truth about what’s really going on in the business.  When you have this kind of teaching, you’re better off running as fast as you can in the other direction. 

Merits Of The System

 Amway has been around for a long time. When the company first began, it wasn't uncommon for people to go door to door, perhaps with products in a radio flyer to sell them as a way to make some extra money. There was no extensive training program that I know of and certainly, there wasn't the stigma that the company has now. But in today's world, when people refer to Amway as being a scam, what they are usually referring to the motivational leaders and the associated systems. I believe that the systems were first invented as a genuine way to train distance groups, but the income and power of systems seduced some upline leaders into becoming conmen. Thus, I believe that many if not most systems are corrupted. I witnessed personally and still hear of stories where IBOs are encouraged to go into debt or sacrifice basic family needs in order to purchase more system materials. Amway's involvement in this is knowing that these abuses occurred and not taking any substantial action.

But what are the merits of the program when broken down? Many Amway defenders are quick to point out that many IBOs "do nothing", which may be true, but for the sake of argument, let's not even consider the ones who do nothing. Take the 6-4-2 plan that many use in recruiting. It involves 1 IBO with 78 downlines, all of whom do 100 PV. This plan also generally assumes that IBOs will be a part of the system apparently, because non system IBOs generally do not have the dedication to keep moving and selling products. This is because many systems teach IBOs that they are successful when they lose money! In 6-4-2. you have one platinum, allegedly the break-even point for system IBOs, and 78 non platinum, spending money on products, and winding up with a net loss, if they are dedicated to the system.

Of course, system expenses vary, depending on which system you are a part of. I have heard IBOs mention that their system expenses may be as low as $75 a month, to over $1000 month for hard core fully dedicated IBOs. I have issued a challenge, which no one has ever undertaken, to shows an actually platinum group where the collective group made a net profit after system expenses were accounted for. Noone has ever come forward to disprove this point. I believe a retailing group could show a net profit, but I do not believe that a group of prosumers or buy from yourselfers could ever collectively net a profit.

So for Amway IBOs and prospects, please keep in mind that it is the system that is often the downfall of many IBOs. A dedication to any system is very likely to nearly guarantee that you will end up with a net loss as an IBO. Can someone still succeed? Sure, but your chances are similar to that of someone hitting a big jackpot in the lottery.

Low Overhead?

   One of the major selling points for the Amway business was low overhead (basically business expenses) and the ability to make quick profits.  But is this true or just another list of lies told by the diamonds?   Basically when you’re being pitched on Amway, you're told that you can sell stuff to make money, and that you can save money by purchasing from yourself.   On the surface, who doesn't want to make money or save money?

Then because you have low or no overhead expenses, Amway just makes sense.  But it’s all just a selling point because the upline diamond will then sell you overhead.  In other words, they will sell you on the vital necessity to purchase tools and functions.  I questioned this as a prospect and was told that so and so diamond was a multi millionaire and feels that tools are as vital as breathing air but I was welcome to go it alone and succeed where nobody else has (without tools).   So to the newbie or prospect, the tools are defacto required when framed in that manner.

This claim that Amway has little to no overhead is an outright lie because in the Amway business, the tools are your primary business expenses, or overhead.  Even if you manage to sell a few products to actual customers for a profit, more than likely you will still wind up with a net loss because the ongoing use of tools and functions can become expensive over time.  Many former IBOs have indicated that you can pile up thousands of dollars in losses over a few months and much more if you remain dedicated to the system and the teaching.  

Now the cost of tools and functions would be worth it if the system was churning out success stories on a regular basis. To try and up sell this, diamonds will show you examples of a new platinum or other pin, but won’t mention that a bunch of other big pins may have failed to requalify for their current t levels.  If you go and look up Amway revenues for the last handful of years, you will see that revenues were flat or in decline, which means business was not growing.  

So what does this all mean   Simple, it means joining Amway makes it highly likely, nearly assured that you will have a net loss of income if you join Amway and participate in the system of tools and functions.  Also now with covid 19, I can only imagine that the ability to recruit down line or approach others to sell products is greatly hampered by state or local restrictions.  Good luck to you if you read this and join anyway.