What Do IBOs Know About Business?

 One of the reasons why I believe that people get duped into joining Amway and then quitting or maybe doing nothing is because of the way the business is presented and the way it is actually done. There are many redundant issues that occur and uplines who show the plan will downplay the problems. These problems then surface when an IBO actually tries to build the business and uplines smooth it over by saying things like someone should never quit or get detail-itis or some other bogus thing to get the focus off the problem.

A big problem is that many prospects join Amway because it is promoted as a way to make quick money. I know many people think they can sell some stuff and make a few quick bucks. That's what I thought at one time also. Many prospects are also told that an Amway business has zero or little overhead, unlike a conventional business. However, many IBOs find that starting an Amway business carries a defacto 100 PV minimum requirement. They might be told that you just change your shopping habits, but many individuals and families cannot possibly consume 100 PV unless they are duped into consuming Amway vitamins which they may never have taken before (or needed).  An artificial demand is what is created when this happens.

IBOs who may be somewhat serious about business will also be encouraged to get on standing order and to attend functions. While upline will claim these are optional, they are defacto requirements for those who are interested in building a business with downline. The standing orders and functions can cost a significant about of money depending on an IBO's level of commitment. I would estimate that a somewhat "serious" IBO would probably expend between $150 to $300 a month or more on these "tools". Amounts vary and can be more or less depending on factors such as whether you are single or a couple, and your level of commitment.

So now a new IBO, who is wanting to make a few extra dollars, might be spending between $450 to $600 a month for products and tools, if they are building a business and trying to sponsor downline. Their reward for this will be about $10 a month in the form of a rebate (bonus) from Amway. That is the typical and likely result for the vast majority of new IBOs. Sure, new IBOs have the zeal and excitement to recruit new downline, but that is an overwhelming challenge in North America when Amway's prices are generally not competitive with big retailers, and the Amway name carries a stigma in North America. It is not uncommon for someone to be ridiculed just for mentioning Amway in a conversation, at least in my experience and observations.

The bigger problem is that many IBOs know little or nothing about business, thus they trust their upline, whose advice is often to buy more tools, make family sacrifices to attend more functions and to do whatever it takes to obtain more tools. All the while, some uplines are laughing all the way to the bank with tool profits. Whether an IBO succeeds or not is irrelevant to many uplines, as long as tool purchasing IBOs are replaced.

As the US has somewhat labeled Amway in a negative light, some tools kingpins are feeling the effects. We have seen some diamonds in home foreclosures, bankruptcy and some bigshot diamonds selling off their homes. Maybe just maybe they weren't as wealthy as they portrayed? Maybe they are reaping what they were sowing? Maybe this is the fruit on their tree? Maybe these uplines didn't know much about business?

Chasing After Losses?

  One thing that many Amway IBOs likely suffer from is having invested too much into the business to quit. They may have spent months or even years working the system hard and they start to realize that the system isn't working out or that the business is just not producing the results that were advertised. You see obvious problems in the business, but you reach a very tough fork in the road.  Some people call this ths sunken cost fallacy where it's hard to quit for this very reason.

To quit would mean failure, as presented by many uplines. To quit is to be broke for life. To give up hope. Quitters are failures and are labeled as losers by the Amway IBOs. What hopes do you have of retirement and walking the beaches once you quit? Are your dreams of success shattered? This is a very difficult decision that must be dealt with by Amway IBOs, or maybe even those considering the business. Often the "sunken cost fallacy" plays a role, where you feel that you've invested too much to just walk away. although in many cases, making a business decision to stop is the only way to stop the financial losses.

I encourage IBOs and/or prospects to completely take the emotion out of this decision. Do not think about dreams, walking the beaches and early retirement. Do not think about what you upline may or may not have promised you. Stop and think only about your Amway business and the results that it has produced or not produced. Has your business been increasing towards your goal of financial independence or are you seeing losses month after month? Do the math. Are you on target to reach your financial goals or are you headed towards bankruptcy? Don't think only about what happens if you quit. Think about what happens if you continue. Are there prospects of making a profit or is that next major function around the corner and likely to put you deeper in the hole?

This post is not about encouraging people to quit or to walk from the business. But certainly, business owners should think like business owners and they should make an honest and realistic assessment about their continued participation, especially if their bottom line is red ink. If you are not making a profit now, what will change next month to make things better? If you repeat what your upline advised. your results are not going to magically get better. Use facts to make an informed decision.

IBOs Should Get Real?

Amway IBOs are often young people, sort of motivated at least to retire young and have uber wealth forever and ever.  That's the hype that sucks them into Amway and motivates them to give the Amway business a try.  Many will put in minimal effort before quitting and it's very common in Amway to see IBOs come and go on a regular basis.  Some people give it an earnest effort and put in a tremendous amount of effort.  But alas, in Amway, whether you put in a lot of effort or not, the results are often similar, which is dismal.

I once bought into the lies and hype of the upline and became an IBO myself back in the mid 1990's.  I initially got in because I thought maybe I could earn a few hundred bucks a month extra and ditch the second job that I had at the time.  Thus, I had joined as a "small" business, but my sponsor kept telling me that I may as well get serious and try to make "retirement" kind of money.  So I got fully involved in the business and I actually had some success, sponsoring a bunch of people and moving up the ranks in terms of pin levels.  I peaked at the 4000 PV level.  It was around that time I started to smell a rat and started wondering about all of these big functions as they didn't seem to help my business grow, but served more as a "hype and motivation" type of purpose rather than practical business advice.

It was around then that I realized that I needed to "get real" and understand that running a tiny person to person soap and vitamin business wasn't going to make me wealthy.  In fact. even at the 4000 level, I was operating at a loss, albeit, close to break even until those big functions came around when I needed to fly to the mainland and rent a car and hotel to see a dog and pony show that didn't do much for my business except for eating up my resources and keeping me business all the time.  I also started to realize that rock bands made a lot of money charging $75 for a sold out concert and here we are paying $100 or more for a weekend function.

Despite this I was still trying to achieve higher levels until my sponsor and upline started to want control of my life.  Ask permission to buy stuff, ask permission to date someone and it just got weird how we had "counseling sessions" where my upline would assess hot many standing orders and function tickets flowed through my group but has little concern and sales and other important business details such as expenses. That's where I sort of had my "AHA" moment.   I eventually met with my group, explained the revelation I had and I left the business.  It was a damaging blow to my sponsor and my group all quit except for one person who had become too far indoctrinated.  

After leaving the business, I felt like a huge burden had been lifted from my shoulders and I felt like I had reclaimed my life and freedom again.  I didn't realize how much time the Amway business and my sponsor took from my life.  I finally figured this out when I had my "get real" moment in Amway.  I hope this post helps others in a similar position as mine.

  

Amway Or A Job?

 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 hours 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 over $160,000 a month? Is that a lousy deal trading hours for dollars?  It's all relative, isn't it?

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 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 grow 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 Freedom Myth?

 When I was an Amway IBO, I saw my upline diamond driving around town dressed in a business suit. I used to think why does he keep working if he can walk away and collect residual income? My sponsor told me that the diamond only works because he loves and cares about his downline and wants to help them. So, there are two possible scenarios, the diamond is working to help his downline out of a genuine concern, or possibly he is working because he has to! The only difference now is that the diamond works the night and/or graveyard shift, because many IBOs are building the business after they complete their day jobs. **We should also note that my former upline diamond dropped down to the emerald level around 2005 and has since re-established his diamond level. He also moved from Hawaii (he said he loved the ocean) to Washington State and lives in a middle-class neighborhood.

Now Amway has stated that the average (non Q12) diamond earns about $150k a year. That is a decent income, but after taxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle-class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts. Stop "working" and the income stops also.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free and may actually have to spend more time maintaining his group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle.

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nights and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next. Is that financial freedom?

I believe that diamonds may actually be busier at the diamond level than an average Joe who has a 9-5 J-O-B. The difference is that the diamond works the night shift. Is this the freedom you are seeking?

The Reality?

 One of the things that keeps some Amway IBOs going is the "honest 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 founder's 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 ti 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.

Can You Trust Upline?

 Based on my observations of diamond's behaviors over the years, I have come to the conclusion that many of these men in nice suits and flashy smiles are in reality, cut throat ruthless businessmen. I would not be surprised if some of them would literally steal candy from a baby. During my tenure in Amway, I heard many instances of "never miss a meeting" and "do whatever it takes". These kinds of thins were said to downline IBOss without regard to the IBOs likelihood of success in Amway. One diamond even suggested that a family could skip a meal because something heard on a tape could turn your (Amway) business around for the better.

Sadly, the result of this was incredible IBO turnover, bankruptcies, home foreclosures, and IBOs overspending to meet upline goals, regardless of an IBO's profitability. It is my guess that these IBOs have all quit since my time in the business. I would also guess that even the most abused IBOs never bothered to file complaints because the group was taught that failure was IBO responsibility, no matter how much effort was put in.

The wonderful diamonds will parade around on stage, showing off displays of wealth such as mansions, jets, sports cars and fabulous vacations. All of this was supposedly attainable by the rank and file IBOs if they will only do what the upline diamonds advise them to do. It is all a lie. Since I left Amway and WWDB, I believe more diamonds have quit or moved onto other ventures than new diamonds have emerged. What's more, seems there are countless numbers of lawsuits pitting diamonds versus diamonds. I believe these lawsuits are born out of greed over tool money. Tools income is still a dark secret to many. While some leaders may speak about platinums earning a share of some tool income, how much and the qualifications appear to be shrouded in secrecy. Something that Amway accreditation was to fix. But it looks like the AMOs have skirted the parameters of the spirit of accreditation. Sad, but not surprising.

What is really hard to swallow is knowing that many IBOs, young, motivated and eager to achieve, are often needing and/or wanting more income. Thus they are open to the possibility that the Amway opportunity afford them that "break" that they needed. Upline will use this as a means to suck them into the system, telling them that the tools (voicemail, books, standing order, functions) will nearly guarantee their success when the opposite is true. The tools nearly guarantee failure for the vast majority of IBOs. The tools only guarantee profit for those who sell the tools. What is troubling is that these uplines do this while trying to pass on the impression that they are mentors to their downline. What the unsuspecting downline doesn't know is that some of these upline mentors would steal the shirt off their backs, literally. If you are new, your upline may loan you or even give you some tools to appear sincere. But once you sponsor someone or decide to build a business, the bar will be raised and you will be expected to be a leader and buy your own tools.

Beware, many diamond leaders are simply cut throat businessmen wearing a nice suit and a nice smile. Don't be fooled.