Business Owner Or Customer?

 One of the silly things IBOs say is how they need to be their own best customer. That a McDonald's owner would never eat at Burger King, etc. That is complete hogwash. While there is nothing wrong with supporting your own business, IBOs are blinded by the fact that their business produces nothing. They are simply middlemen distributors. Do you really think diamonds consume thousands of dollars of standing orders because they own or profit from tool companies, which are for profit companies that produces training materials? Of course not. When you purchase something from your Amway business, you make no profit. Any "false" profit you see is simply money out of your own pocket moving to the other pocket. The Amway corporation makes the profit. Yes, you may receive a volume bonus, but that is still a lot of your own money being given back to you. Spend $300 and get back $10. If you can get enough people to follow you and move volume, your bonus will increase, but the increase then comes out of your follower's pockets instead of your own. The only real profit would be selling product to actual non IBO customers.

I know some business owners and they are never the best or sole customer of their own stores. Many Amway business owners are their only customers or their best customer. That simply is not how a business is run. Any REAL business cannot support itself by having the owners and perhaps the owner's employees as the primary customer base. For any business to thrive, you need customers and a demand for products. Without customers and a demand for products, you have no business. But some upline leaders still teach "buy from yourself" as the primary means of doing business. Other leaders may ask you to sell, but to focus on sponsoring others because they are hopeful that this will result in increased volume. Sadly, most IBOs will never sponsor a downline and many will never acquire a customer other than themselves.

It seems as though many IBOs think they are business owners but the reality is that they are simply glorified customers of their own business. Their only hope of making a profit is to sponsor others. In my opinion, this method of doing business is a pyramid because the only way to eventually make a profit is to sponsor enough downline until you can leverage enough volume to finally break even or profit. An IBO with a real customer (and not buying tools) can make a profit by selling a single product. But many IBOs are not taught this because their upline makes a much bigger profit by selling to their downline IBOs standing orders, voicemail, books and seminar tickets. Many IBOs do not realize that they are simply customers of Amway and customers of the tools system.

For people already involved or considering involvement in the Amway opportunity, you are highly encouraged to seek more information and to fully understand how a profit is made in this business. Simply seeing circles drawn oversimplifies the process as most IBOs never get close to finding six (6) like minded people. Even those who find six are unlikely to be able to retain them. Over time, the cost of the products and the cost of the training will start to add up and the losses will escalate. For real business owners, an assessment of profit/loss and return on investment should be done and if the return is not good, a real business owner would consider other options.

So are you a business owner or a glorified customer?

Climbing A Pyramid?

 Let me start out by saying that Amway, at least to the letter of the law, appears to be a perfectly legal company. Therefore, I am not saying or implying that Amway is illegal. But I believe that the way Amway businesses are run, are like product pyramids. In most groups, you will have the lowest level IBOs efforts and tool purchases being responsible for the upline bonuses and tools income. Many many IBOs are fooled into thinking that the ability to surpass your upline or that you don't get paid to recruit downline makes this a good deal. Think about it for a bit. Aren't most Amway gatherings about motivation and recruiting?  Also, if most IBOs do little or nothing then quit, it wouldn't be that hard to earn more than you sponsor right?

Unless you have a very very rare group where actual product sales to non-IBOs is sufficient to cover the costs of running your business, functions and all, then it is true that the lower level IBO's jobs are the primary source of income for the uplines. How many groups are like that where selling is nearly exclusively to retail customers and not downline? None that I have ever seen or know of. In fact, how often do IBOs even sell enough products to cover their expenses for even one month out of the year? The groups that teach "buy from yourself" end up doing the most financial damage to their groups because the downline's expenses are then covered exclusively from the downlines jobs, bank accounts, or drive the downline into debt. 

I've seen and discussed group structures in forums many times and I can only conclude that tool sales easily wipe out what little profits/bonuses some of the downlines might receive. Only when an IBO is able to sponsor enough downline to absorb the losses for them will they finally break even or make a little profit. I would guess that the 4000 PV level or platinum is where a dedicated CORE IBO would break even and possibly start to make a small profit.  On the other hand, a hard-CORE dedicated IBO can still lose money at 4000 or at platinum.    But we also know that most platinum groups have 100 or more IBOs in order to generate 7500 PV. Thus, we can also conclude that less than 1% of IBOs make a net profit. The only way IBOs can earn a net profit at a lower level is to avoid purchasing tools and to avoid paying for functions. Those who get involved in a system such as WWDB or N21 almost guarantee that they will have a net loss. 

Sure, my job may have a pyramid structure with the CEO making the most money. But the difference is that in a company, even the lowest paid employee still receives a paycheck and has money at the end of the month. The same claim cannot be made by IBOs. For these reasons, I believe Amway to be a product pyramid. IBOs and information seekers are free to participate, but I challenge them to sit down and really analyze their ability to make a net profit. In most cases, the analysis won't be favorable. If you are in the US in particular, you may have great difficulty in even being able to discuss "Amway" without getting strange looks your way from others. Good luck in whatever you decide.

Making Profits Or Excuses?

 I've been a blogger now for a number of years. I've debated with Amway apologists and they ultimately resort to excuses and/or personal attacks when they run out of defenses. Food for thought, when you have to make excuses about why your opportunity isn't a scam or a pyramid scheme, that should already make you stop and think for a minute. The easy excuse is to say that "my group isn't like that". Yet I see testimonies and statements that indicate to me that things have not changed, even in all the years since I left the Amway business myself.

Even the product's prices need to be justified. That there is concentration or other factors that really make Amway stuff a better value. Strange how that better value doesn't seem to translate further once an IBO realizes that there is no residual income at the end of the rainbow. Many IBOs don't seem to mind paying for Amway stuff when they believe that they will one day walk the beaches of the world while more money than they can count will keep rolling in. When the dream fades, so does the desire to purchase these awesome products. If not, with tens of millions of former IBOs, Amway sales should be through the roof after all these years. But it hasn't. Although Amway recently reported an increase in north American sales, that wasn't the case in the last 10 years. Amway apologists even have excuses about why that is the case.

Amway also reported some years back, that they have updated their average IBO income. While it is still miserable, it has gone up, although a clear explanation as to how and why they calculated the "average income" was not apparently given. One thing was clear, the average income went up after Amway discarded IBOs that they didn't consider "active". So, the debate continues. Critics analyzing and predicting how and why, and Amway apologists making excuses and justifying their position. Why not just be transparent and end the debate once and for all? I think most people know the answer. The bottom line for most is whether or not they make a net profit. For the vast majority of IBOs, especially the ones on the system, the answer is a net loss. It is predictable and easy to conclude. The 6-4-2 or any other version of the compensation plan clearly shows that very few people can make any decent money. If a platinum IBO typically has 100 or more IBOs, that is your answer there. It should be noted that a platinum might not even be very profitable if they are sold out on buying system tools.

Amway defenders can make justifications and excuses, but I've not seen a single comprehensive argument as to why the Amway business is a good idea and how it can be profitable.

So IBOs and Amway defenders, are you making money (net profit)? Or are you just making excuses?

Exploiting Your Family And Friends?

 Happy Thanksgiving from Joecool's Blog!   I hope you all receive an extra portion of blessing this year.  In the meantime, I posted this article about IBOs trying to exploit family and friends:

Many prospects see the Amway plan, and get unrealistic dreams of attaining incredible material wealth and retiring in a few years. I find it strange that nobody has been able to point out anyone who actually got in, worked a few years and then walked away from the business and is now enjoying buckets of cash rolling in while they spend their days on exotic beaches sipping mai tais. The more likely scenario will be debt, higher credit card bills, and boxes of unused cds and other various products. The alleged wealthy people in Amway are often spoken about but have you ever heard of or known someone who was retired and living a luxurious lifestyle because they made so much money in Amway? I know Amway IBOs hear about it, but they believe it without any kind of actual evidence. I could say I am retired because I make millions by blogging, but is that believable? In the same train of thought, do you believe that people join and work hard for 2-5 years and then enjoy life with financial freedom and live happily ever after?

So why would someone joining the business become annoying? It's because to the average person, it becomes clear that to achieve this, you need to find "six" people. Thus, to find six people, you need to make contacts to show the plan. Cold contacts of people on the street would be unlikely, even for the boldest of people, so new IBOs start looking at people they know. They start with people they are familiar with, or family and friends. They may also think their family and friends will want to get rich with them. So, the IBOs start making phone calls and contacts. Pretty soon all your family and friends know about your involvement in Amway, and most will not be interested. Where do you recruit now? That's when the cold contacts begin, which makes it nearly impossible to succeed in Amway.

Sadly, for most new and enthusiastic IBOs, they will find that they are shunned by family and friends. Over the years, IBOs have done too much damage to Amway's reputation and overcoming this challenge is too much for the rank and file IBOs. They will hear stories about failures and opinions that Amway is a pyramid and/or a scam. Of course, IBOs will have "canned" answers to respond to from their upline. One of the humorous ones is that Amway is praised by the BBB or the FTC and is the shining example of an MLM. To those familiar with this line of reasoning, it can become side splitting humorous.

At first, the family and friends may humor the new IBO, but relentless persistence can eventually turn ugly. This is where uplines will teach the new IBOs to avoid "negative" and to shun these family and friends. This is why some people charge the Amway leaders with being cult - like. It's at about this point where IBOs might realize that Amway products are costly and try to sell off some of them to reduce their own costs. Often times, sympathetic family and friends might make a token purchase to show support. but that can get old in a hurry also. Most IBOs will eventually quit and make amends with family and friends, but some lose friendships for good.

To information seekers and new IBOs, hopefully this message is food for thought......

Annoying Your Friends And Family?

 Many people see the Amway plan and get unrealistic dreams of attaining incredible material wealth and retiring in a few years. I find it strange that nobody has been able to point out anyone who actually got in, worked a few years and then walked away from the business and is now enjoying buckets of cash rolling in while they spend their days on exotic beaches sipping mai tais. The more likely scenario will be debt, higher credit card bills, and boxes of unused cds and other various products. Can anyone really dispute this? It seems to be a pretty common claim among former Amway IBOs.

So why would someone joining the business become annoying? It's because to the average person, it becomes clear that to achieve this, you need to find "six" people. Thus, to find six people, you need to make contacts to show the plan. Cold contacts of people on the street would be unlikely, even for the boldest of people, so new IBOs start looking at people they know. They start with people they are familiar with, or family and friends. They may also think their family and friends will want to get rich with them. And that's when you friends and family begin to get annoyed when you pepper them with Amway related BS.

Sadly, for most new and enthusiastic IBOs, they will find that they are shunned by family and friends. Over the years, IBOs have done too much damage to Amway's reputation and overcoming this challenge is too much for the rank and file IBOs. They will hear stories on failures and opinions that Amway is a pyramid and/or a scam. Of course, IBOs will have "canned" answers to respond to from their upline. One of the humorous ones is that Amway is praised by the BBB or the FTC and is the shining example of an MLM. To those familiar with this line of reasoning, it can become side splitting humorous. Sure, the diamond may ask the rank and file to use his credibility to be able to recruit downline but in the end, the results are generally futile.

At first, the family and friends may humor the new IBO, but relentless persistence can eventually turn ugly. This is where uplines will teach the new IBOs to avoid "negative" and to shun these family and friends. This is why some people charge the Amway leaders with being cult - like. It's at about this point where IBOs might realize that Amway products are costly and try to sell off some of them to reduce their own costs. Often times, sympathetic family and friends might make a token purchase to show support. but that can get old in a hurry also. Most IBOs will eventually quit and make amends with family and friends, but some lose friendships for good.

To information seekers and new IBOs, hopefully this message is food for thought....

The Con Artists?

 One of the things that Amway diamonds remind me of is a con artist. Now why in the world would I say that? I say that because in my opinion, it is absolutely true. The diamonds stand on stage, showing off trappings of wealth to lure prospects into the business. They then sell them "tools" or training and promote the tools/training as the key to success. Then when the prospect fails, they say the prospect didn't work hard enough or they didn't do things exactly right. I was an IBO, and I did what my upline advised, I had eagle parameters, and I still did not have a net profit even at the 4000 PV level. I highly doubt anyone could honestly claim I didn't work hard enough, or I didn't do things right. I would have had a net profit but by upline diamond wanted me to re-invest the money into tools - because they are con artists. Yes, I was partly culpable for listening to them but was I supposed to question and argue with someone who allegedly had achieved the pinnacle of success in Amway?

Over the years I have been blogging, I have had contacts with some fairly high level IBOs (platinums) who told me stories of backstage conversations where the diamonds basically refer to the audience as hopeful suckers, knowing that these folks are going to fail. But they have the nerve to stand on stage and try to sincerely sell hope in the form of cds, books, functions and voicemail. And the audience believes it because deep down, they want to believe that you can work hard for 2-5 years and retire young with money pouring into your bank accounts. Who wouldn't want that? But the diamonds know it's a lie, but they still promote that next function or meeting as if you can expect to strike gold when you attend.

I came from WWDB (World Wide Dream Builders) and while some groups might be slightly different, they are mostly alike as these groups are for profit companies that sell training to Amway IBOs for a profit and they make a nice profit, even if all the IBOs lose money. There is no evidence that these tools/training does anything to help IBOs succeed. In fact, I believe that anyone who succeeds in Amway, does so in spite of the tools, not because of the tools. When you think about the Amway teaching, most of their "core" steps involve activities that cost you money instead of making you money. Some of the teaching I heard in meetings involved how long you can put off paying your rent/mortgage and other bills before you would be in trouble. I suppose the diamonds wanted you to spend your last dollar on tools. One diamond said your family could skip a meal to buy more cds because that cd cold contain the one thing that propels you to diamond. These folks were shameless and would take your last cent if they could. Two of my crossline IBOs had some difficulty in Amway and they followed upline advice. One couple ended up in chapter 7 bankruptcy and the other couple had their home foreclosed.

While the diamonds have nice suits and nice smiles, you have to wonder whether they actually believe the very teaching they profess on stage. One thing that Amway confirmed was that once you achieve diamond, they recognize the diamond pin forever, even if you no longer qualify. Thus, some diamonds might be selling you training materials and functions and they may not even be a qualified platinum, let alone a diamond. Some old timer diamond from the 1980's such as the Duncans might have high rankings today but really, they built their businesses in the days prior to the internet and social media. How does that qualify them to teach today, unless they can prove that they are still qualified as diamonds?

In my opinion, prospects and information seekers need to be careful when someone is trying to get you in the business because the diamonds can give you a smooth story and make the business sound "simple" and "doable" but in reality, Amway products can be difficult to sell other than to sympathetic family and friends. And sponsoring is difficult in the US where saturation has likely occurred.

But beware of the diamonds, who look and seem sincere, but are more like con artists trying to sell you on a business that you are unlikely to make any net profit, much less earn untold and limitless wealth. At least if you read this blog post, you can detect some of the angles that Amway IBOs use to lure people into the business.

Are IBOs "Suckers"?

 Quick disclaimer, I was once an IBO. Therefore, I was once a a sucker myself. Of course, back when I was an IBO, it wasn't so simple to google Amway and find so much information. Basically, I was fed many lies about the business and the training system. I was fed the 2-5 year plan. On the surface, it sounds very reasonable and achievable. However, the reality is that the Amway reputation is so tarnished that it's nearly impossible to get people to see the plan, let alone actually sponsoring people into your downline.

I was also told that the training system was vital and that nobody had ever succeeded without it. Of course, that is a lie because some of the current diamonds and crowns pre-date the emergence of tools. Also, the reality that maybe only 1 out of tens of thousands of IBOs achieve diamond in the US should be an indicator of your likely results. Many dream of going diamond, but very few ever get anywhere near that level. Even those who do achieve diamond, likely find it nearly impossible to maintain it. This is evidenced by the number of diamonds who fail to qualify and end up quitting. Seems that only the ones who profit from the tools stick around. It looks like the tools is where the "residual" income comes from. But that income is from constant traveling and working and not from walking the beaches sipping exotic drinks.

Amway also charges exorbitant prices for some of their products. Take double x, basically Amway's flagship vitamin product. It retails for about $80 or more while IBO pricing is around $60+.  A site visitor once left me a message that Amway employees (not IBOs) can purchase double x from Amway for around $12. I tried to confirm with Amway but they did not or would not confirm it. I believe that Amway could probably make a healthy profit selling double x for about $17. Let's not even get into Amway's perfect water (bottled water) which used to retail for nearly $50 a case.

The somewhat entertaining part, is that with all the reputation issues and high prices, is that many IBOs are convinced that they need an endless supply of training in order to succeed. Some upline even have the gall to tell their audience to look at the fruit on the tree. Well, the trees are barren with the leaves falling off, like many trees in the winter. Basically, Amway and the AMOs survive by continuously recruiting new and unsuspecting suckers to join. If you truly believe your upline cares about you, try missing a few functions and see if they still edify you. Many people have been suckered in the past. Hopefully, with readily available information, the tool scam will finally be exposed for the fraud that it is.