Amway And Your Cashflow?

 If you’ve ever heard the Amway pitch, they use buzzwords like simple.  Simple doesn’t necessarily mean you can do it or that it’s easy.  Lifting 500 pounds is simple but most people are not capable of doing it.  The same goes for being able to show the plan, sponsor down line and sell Amway products.  So to say Amway is simple might be true but that’s not to say that success is likely, or anymore likely than being able to lift 500 pounds.  

The pitch from the diamond sound good.  They’ll say save money and make money.  Taken at face value, who doesn’t want to make more money or save money?  It sounds good except that it’s not true.  For example I can buy a 8 ounce bottle of Amway shampoo for around $8.00 but I can buy a quart of shampoo at Walmart for a similar price. That’s not to say there are no Amway products if value but overall you will not save by shopping with Amway.  

What you are most likely not told is that joining Amway will probably cause you serious cash flow issues if you join Amway.  In order to move 100 PV or more will cost you about $300 or more and if you are participating in tools and functions, you will likely spend $200 or more to do what upline advises.   That’s $500 a month or more.  

So you need to spend $500 a month or more to participate in Amway in business building mode.  Tell me again how you’re saving or making money?  Moving 100 pv will generally earn you a 3% bonus or about $10.  How are you saving or making money?

Upline will say that’s $10 more than you would have doing nothing.   But that’s not true.  You don’t need tools and functions to buy stuff at retailers.  Since Amway products are not cheap, are you really saving money?   The reality is you are our $500 a month less the products if you join Amway?  We’re you told upfront that yours likely to have serious negative cash flow unless you sponsor an army of down line or unless you’re able to sell a ton of overpriced products?  

I fail to see how upline can stand behind the myth or making or saving money.   Food for thought:  I can earn 1 or 2 percent as a rebate shopping elsewhere with a cash back credit card without a minimum purchase and without needing tools and functions.  I hope this post helps someone.  

Where’s The Wealth?

 One thing that Amway diamonds like to do is to show off the diamond lifestyle.  But what is the diamond lifestyle?  Basically, it’s a show of excessive wealth.  Allegedly they fly first class everywhere and stay in five star hotels.  They wear designer clothes and supposedly buy expensive cars and homes all in cash. They come and go as they please and they only work out of love for their down line.  

At least that’s the story they want you to buy when you are at meetings or at functions.  There are poor saps in the audience who want that so badly that they have tears in their eyes because they want it so badly.  It certainly inspires you to try harder and to get your business booming with growth and excitement. 

I hate to break this news to IBOs and prospects but I highly doubt that any diamond lives like that unless they are up to their ears in debt.  But then again showing you a middle class lifestyle wouldn’t quite be as exciting.  How do I know this? Simple, just do the math. 

Amway used to report that an average diamond earns about $150k annually but now Amway days a Q12 diamond earns $600k annually.  However, a Q12 diamond is rare, just a small fraction of the diamonds.  Thus the average diamond likely earns around $150k annually along with income from tools and functions.  Even if they earn another $100k from tools and functions, that an income of about $250k.  

Now that’s a nice income for sure, provided the diamond is currently qualified although Amway doesn’t say who is and who is no longer qualified. Assuming they are qualified, their taxes, medical insurance and other expenses and business expenses likely claims more than half of that income. 

Let’s say a diamond clears $10k per month after all if the expenses I mentioned and believe me I’m being very generous here.  Well, you can’t buy a home in cash on that income so you likely have a mortgage.  If a diamond pays $3000 a month for a mortgage, they have $7000 remaining.  You aren’t buying a sports car in cash.  

If the kids go to a private school, more income is gone.  How much if left for first class travel and five star hotels did fabulous vacations.  I’d say a diamond lives a middle class lifestyle.  I believe some of the higher up pins such as crowns might live better but the rest of the diamonds lifestyle probably would impress you if you saw the truth. 

So where is the Uber diamond wealth?  I don’t know, you tell me. 

What Is An Ambot?

 I’ve heard of a humorous term “ambot” which refers to an Amway IBO, often new but has learned enough to parrot the lines that the upline diamonds feed them. If you’ve ever been prospected for Amway, you probably know what I mean.  The teaching evolves a bit but for the most part, the message remains the same.  Got a while they tried to compare the Amway opportunity to a buyers club but later it evolved into e-commerce.  

The diamonds will teach you to consume tools and functions like your life depended on it.  What happens is the teaching and “fake” relationships you form almost become like a drug that you feel the need to maintain.  Nothing is better than a pat on the back from the upline diamond right?  IBOs develop a desire to get recognition from the diamond.  

In the meantime, the group of IBOs are taught to show adulation towards the higher ups, almost as if the diamond is a cult leader to be worshipped. The IBOs all dress alike, often buying things from the Amway catalog.  It really is as if the diamonds are just making clones out of the faithful down line.  If you step back and view it from a neutral perspective, it’s actually quite funny.   Another aspect can be an irrational zeal for products such as toilet paper or cleaning products  

But the reality is the Amway sales force is often an army of mind numbed robots all acting, dressing and parroting lines taught at functions, meetings and on recorded audios.  They are often sleep deprived because uplines love to hold late night meetings as a way to test your loyalty.  They say you can sleep when you go diamond.  

So there you have it.  A brief but fairly concise definition of an Ambot.   The sad thing is once someone gets indoctrinated, you really can’t help them and they’ll have to see the light and snap out of it on their own.  Debating with them only makes them dig in harder because by now they will also have developed an irrational loyalty to the upline over long time friends and family 

This would be funnier if it weren’t so sad and so true. 

Get Rich Slow?

 One of the lies told by upline diamonds is how Amway is not a get rich quick scheme. That more likely you’ll get rich slow in Amway.  They likely say that because to come out and say Amway is get rich quick would raise skepticism from many people.  Amway already raises skepticism from some of the teaching of upline diamonds but they are careful about this issue.  

But what do you call it when the opportunity is sold as 2-5 years, build it right and you can be financially free for life living on residual income and being able to retire at a very young age.  2-5 years sounds like a get rich quick pitch to me.  No other business opportunities other than other MLMs make this kinds of projections.  

But the fact of the matter is that it is highly unlikely that you will even make a net profit in Amway, let alone build a business that generates wealth.  Most IBOs do little or nothing and wind up quitting. How do you build a business that generates residual income under these conditions?  The answer is you don’t.  

Think of Amway IBOs as customers at an amusement park.  They buy a ticket and get on a ride.  Some are satisfied and get off the ride and go elsewhere.  Some get hooked and continue to buy more tickets to ride again.  In the end the riders may have had some fun, some may get motion sickness but in the end, the diamonds are like the ride operators who make money off the rides but Amway is like the owner of the amusement park who owns the rides.  

In the end the upline diamonds don’t really care who comes and goes as long as there are new people flowing into the business.  The diamonds know that most won’t do much but they hope they will buy sone products and audios and attend a few functions.  The upline will also praise their core die hard IBOs who supply them with a regular income.  

But in my opinion, other than the folks who own Amway, few are truly rich and that includes the diamonds.  They might earn some nice incomes but showing off a diamond lifestyle can be very expensive and spending what you make doesn’t make anyone rich.  Do the math and it will be crystal clear.  

Amway Recruiting?

 If you’ve ever been in Amway or have been associated with Amway folks, you probably know that it’s primarily about recruiting down line. I believe a lot of people get prospected and think you can make money by selling products which is true, but because your upline makes more money by recruiting down line, that becomes the emphasis.  

Amway products are for the most part generic in nature but premium in in price, making it difficult to sell anything other than to sympathetic friends and families.  This is why it is common for IBOs to be taught the common “buy from yourself” concept where you primarily consume products from your own business and get others to do the same. Some upline cleverly called this a buyers club like Costco but that’s a faulty comparison.  

As a Costco member I am not out recruiting other members for Costco.  Neither Costco or Amway compensates you to recruit members so why does it happen in Amway?  It’s because IBOs understand that to attain levels such as platinum or diamond, you need to have downline and plenty of them because you are credited for their volume as well as yours so it’s possible to parlay that into larger bonuses.  

Where this plan fails us that Amway has a spotty reputation which makes recruiting and retaining downline a big challenge in itself. Another failure is Amway’s own disclosures admit that about half of registered IBOs do absolutely nothing.  And then out of those who have some activity, they are likely to quit in less than a year anyway.  

Even if you could manage to sponsor a new downline each month the likelihood of you making a net profit is highly unlikely if you participate in the tools and functions.  The diamonds who claim they are free and live in leisure with loads of money are actually quite busy running around replacing IBOs who quit so they can maintain their levels. If not they might miss out on bonuses and for sure the income from tools and functions would disappear without new people coming into the system. 

Behind the Amway curtain, it’s all about recruiting and little else.  Once you understand the concept it’s all very clear.   

Diamonds Rolling In Dough?

 Most rank and file IBOs and prospects assume that the diamonds are Uber wealthy and they roll in dough and the cash is endless.  I believe they are badly mistaken. Amway reports that a Q 12 diamond earns around $600k from Amway.  But a Q12 diamond means they qualified at the level for all 12 months in Amway’s fiscal year.  Q12 diamonds make up only a small fraction of Amway diamonds 

Most Amway diamonds do not qualify Q 12.  Amway used to report that an average diamond earns about $150k annually in earnings and bonus say that diamond also earns a respectable $100k from tools and functions.  Now $250k is a great income but after taxes, medical insurance and other normal monthly expenses, let’s say a diamond clears $10,000 a month.  Now that’s still a nice income.  

But $10,000 a month does not allow someone with a family to purchase a house in cash, or even a top of the line Mercedes Benz for that matter.  Even traveling first class every time you travel might put a strain on the budget.  It would not allow you to enjoy a jet set lifestyle that diamonds commonly portray at meetings and functions.  

The picture is see more realistically is diamonds living a middle to upper middle class lifestyle with running functions and building the Amway business as their main occupation. Now that may not sound as glamorous as the diamond lifestyle that is displayed at functions s but it looks more realistic than what you see at functions.  In fact, diamonds who try to constantly show off wealth and luxury could easily wind up in debt despite having what looks like a nice income 

Many Americans live in debt.  Having a large income doesn’t prevent that.  Sone diamonds who had their incomes revealed in the past have shown to be living in debt including a triple diamond who filed chapter 7 bankruptcy about 10 years ago.  But on the other hand, promoting Amway as a way to earn a middle class lifestyle probably won’t be as effective as the illusion of a diamond lifestyle.  

Fake It Till You Make It?

 One of the really funny things I heard as an IBO was to fake it till you make it.  The upline meant we were to appear successful because eventually we would someday be successful as long as we don’t quit.  What it really meant was to lie and misrepresent the Amway business in order to give the appearance of being successful even if you’re not.  

Thus you might see an Amway meeting or function where everyone is dressed up in business attire which gives the appearance of success but if you attend the event early, you’ll see IBOs driving up in old clunkers, sone look like their cars are on their last legs.  But it’s amazing that the dreams that they were sold is enough to fuel their desire to build Amway. 

Rank and file IBOs really have little to no credibility thus the upline will commonly issue a photo copy of some large bonus check that someone may have received.  The check is no indication of success and the person receiving the check may not have even made a net profit but it all fits into the fake it till you make it narrative.  

The sad part fir nearly all IBOs is they will fake it but never make it.  The math behind Amway success is dismal at best.  The common 6-4-2 plan shows a group of 79 IBOs, all of who moved 100 PV (which is impossible) and one guy is at 7500 PV and the rest are at various other lower levels. Amway’s own disclosures, last I saw indicates that .26% of IBOs go platinum or about 1 in 400.  

At the end of the day. You can fake it but you won’t make it.  A few people do break through nearly impossible odds to achieve diamond here and there but the numbers of diamond achievers are statistically insignificant.  Good luck to you if you’ve read this and still sign up for Amway.