Trust Upline?

 One of the things that was emphasized in my days as an IBO was to trust your upline. They said they had my best interests at heart and that they would never intentionally lead me astray as they wanted my success. At the time I believed them but looking back, I see that it was a charade and the upline really wanted their own success at my expense. For many groups, I believe this is still true although some upline leaders may have backed off just a bit since the heyday of the AMOs, which was the mid to late 90's.

Upline's profits from tools are spoken about today, although I believe most IBOs do not know exactly how they can qualify, nor do they know how much they would receive when they qualify. Back when I was an IBO, uplines stood on stage and proclaimed that NOBODY made a profit from the sale of tools. None of these leaders were ever made to account for their lies and with some revisionist history, the whole episode was covered up.

Some groups also teach submission and faith in the upline. Some will say there is no need to reinvent the wheel, simply copy or duplicate your upline and you will be successful That makes me wonder why so many tools and functions are needed. Also, I find it odd that someone who has my best interest at heart and truly cared about my success, get compensated for every action he/she takes to "help" my business. Voicemail, standing orders, books and functions are all profit centers for some upline leaders and therefore, just about any meeting or material designed to help an IBO puts money in the pockets of upline. Some upline even went so far as to say you should check upline before purchasing a new car, or even before having children.

Despite the request for trust and faith in upline, I find it odd that uplines never take responsibility for the outcome of an IBO's fortunes. Many IBOs work hard and earnestly do all the recommended steps of CORE, only to fail. These IBOs are told they did not work hard enough or did not follow the steps properly. Uplines, as far as I know, have never taken responsibility for their downlines. They only take credit for downline success, but not failures.

I find a huge conflict of interest for an upline to profit from any help that he provides to downline, and then to tell downlines that training materials are vital to their business. I also see a problem when these same uplines take no responsibility when an IBO does the work but does not profit. Ironically, it is often the cost of the training materials that prevents the IBO from making a net profit. Now not all uplines are like this, but I am hopeful that some of the red flags mentioned here can be an alert for IBOs and information seekers.

How Likely Is Success?

 Many people consider the platinum level in Amway as a significant achievement in Amway. While it may be nice to achieve that level and gain recognition from the Amway corporation, I will point out that there was a study done in Wisconsin where the attorney general (a bit dated, but still applicable, IMO) analyzed and found that platinums on average, lost money. The study is somewhat dated, but I will also point out that today, there are MORE expenses associated with running an Amway business than before. (Voicemail, books, functions, standing orders, shipping). I would guess that it's possible that platinums lose more today than when the Wisconsin study was done.

A typical platinum group often has 100 ore more downline IBOs. Thus, a logical conclusion is that less than 1% of IBOs can reach that level. It is also, apparently rare to maintain that level. My former upline diamond had 7 frontline platinums in his heyday. Actually, 6 of them were ruby level. None of them hold the platinum level today.  So, you have a less than 1% chance of reaching platinum and then you are unlikely to be able to maintain that level.

What serious prospective business owner would even consider opening a business where you have such a tiny chance of success? Even those who achieve platinum are likely to lose that level. If platinums cannot maintain their level, then it's easy to see why there are former diamonds as well. It seems that people are willing to take a chance on an Amway business because the startup cost is low. But what is the point of doing all of that when the chance of making money is negligible?

To compound the problem, many IBOs spend a lot of time and money building an Amway business that is unlikely to give them any return on their investment. I'd guess that the average serious IBO would spend $250 a month of more on tools. That money invested over a number of years in mutual funds would give you a much better chance of achieving some dreams. Even putting the money in the bank would make you better off than the vast majority of IBOs. A serious business owner would want to know their realistic chance of making money. For some strange reason, prospects and IBOs seem to ignore this reality.

It is because uplines are in the business of selling tools and distributorships. They are not truly interested in your long-term sustainable success. If you don't believe me, try to stop purchasing standing orders and function tickets and see how much longer you are edified and given help from upline. Seriously, would a real business owner be interested in a less than 1% chance of success?

A Tough Business?

 There are some folks who try to sell the Amway opportunity as one that works in a good or bad economy. The pitch might be that people need household products such as soap or cleaners in a good or bad economy. While that may be true, in a tough economy, people will be looking for the bottom line, or the cheapest price. That is why Walmart is wildly successful. Walmart's slogan is "live better, save money". Being that Walmart sales exceed 500 billion dollars; it means that one day's sales exceed Amway's sales for more than a month. Clearly, price is important to consumers.

Amway apologists like to cite that not everyone buys a Porsche or a Lexus. While that is true, it is ridiculous to think Amway products are a Porsche or Lexus compared to other household products, and that consumers in general, even care less about issues like that. What do IBOs do? Brag that their laundry soap is better than their neighbors. 

Another silly tactic that some Amway IBOs employ is to drop names such as Robert Kiyosaki, or Warren Buffet promote MLM.  The fact of the matter is Robert Kiyosaki makes him money from Network Marketers, not from Network Marketing. Or he's selling the IBOs books and seminars. Warren Buffet and others apparently own MLM companies, thus they also profit FROM network marketers and not from distributing the good themselves. It's a silly argument and anyone with some discernment can see right through it. I even see rumors spread by some IBOs that various movie stars or celebrities are involved in Amway. The truth is that there are some celebrities that are involved with Amway, but typically, they are paid to endorse Amway rather than being rank and file IBOs.

That brings us to whether Amway is a viable business opportunity. Let me put a disclaimer that people who may try to sell goods without participating in the training system might have a chance to make a few dollars, but these folks are quite rare. Many people get drawn into going diamond and chasing a dream. It is why you see big functions and conventions of people chasing dreams that likely won't come to pass. The typical IBO doesn't do much, if anything at all. Out of those who actually put in effort, a fraction of 1% might go platinum and an even smaller fraction of 1% might make some money. Amway's own numbers and the plan shown by many IBOs confirm this. Amway says the average "active" IBO makes just over $200 a month. We also know that it takes about 100 IBOs or more to form a platinum group. We know that many IBOs do little or nothing. That already provides a clear picture that only a small percentage of IBOs can ever reach that platinum level where you might net a small profit, depending on your business expenses.

Factoring in the Amway (crappy) reputation and you have a very tough business opportunity. Now Amway itself may have done good things (politically) but IBOs themselves have ruined the Amway name. They have lied or tricked people into attending recruitment meetings, or they have called people broke or losers.  Amway is a very tough business to succeed in, regardless of your level of effort.

IBO Expenses?

 Many uplines will use slightly deceptive recruitment tactics when getting new people to see or register into the Amway business. One of the common things was how joining Amway has very little risk, no or very little overhead. This is true, if an IBO is not involved in any of the system related training. However, it is the goal of many if not most uplines to get as many IBOs involved in the system as possible. This is probably because selling standing orders, voicemails and seminars has a higher profit margin for some uplines than the actual movement of Amway volume. So, some newbies might join thinking Amway won't cost them much, only to find out that 100 PV might run them more than $300. They may not be aware that standing orders and functions never end and can add an additional cost of up to several hundreds of dollars more. Uplines will then justify the expense by saying the IBO is investing in his/her business.

New IBOs, and especially IBOs who are single should seriously think about the cost of being a business building IBO before joining. Many or most prospects don't know that building an Amway business using system tools and "coaching" can cost them up to$500 or more each month. A single person more than likely cannot possibly consume 100 PV worth or products on a monthly basis unless they almost exclusively consume XS drinks and Nutrilite vitamins. And secondly, how many singles or prospects were consuming cases of energy drinks and vitamins ($300 monthly) before being presented with the Amway business? How many people were willing to fork out hundreds of dollars for a weekend function that may require airfare and hotel stay? I don't think too many people like this exist. But I believe they do so because they have been sold a dream of financial freedom, of early retirement and not having to work a job anymore. But the evidence would suggest that once the dream disappears or reality sets in, how many (former) IBOs continue to purchase Amway products and attend seminars?

I know of many former IBOs and I don't know of any who purchase Amway products on a regular basis and I don't know of ANYONE who has ever forked out money to attend an Amway/AMO function after they stopped being an IBO. Amway's numbers bear out this claim as there is very little sales to people who are not IBOs. The IBO salesforce is responsible for consuming the lion's share of Amway's products and services. I myself have purchased an Amway product or two since I left the business. But I did so only to humor friends who were still in the business. They have all since quit. It is very reasonable to conclude that once the desire to build the business stops, the desire to purchase Amway products also stops.

Most eager young and motivated people who sign up often do not realize that these IBO expenses exist. While Amway acknowledges that these tools and systems expenses are optional, the uplines who promote the tools may suggest that it is insanity to attempt to build an Amway business without the tools or strongly encourage new IBOs to partake. A common statement was that we "needed" to be at the next function no matter what. Missing it would set your business back six months. New IBOs and prospects don't know better so they will often conform. Sadly, there is ZERO unbiased evidence that the tools and seminars do anything to increase IBO volume and/or the sponsorship rate. In my informed and experienced opinion, the tools are ineffective and the vast majority if IBOs would be better off handing their upline a monthly check for $100 and not building the business or buying any products.

IBOs and information seekers should be aware of these potential IBO expenses and determine if the expenses would be worth your while. Keep in mind that someone upline profits handsomely from the tools, even if you do not make a cent from your Amway business. You should have your best interest at heart, no matter what your upline tells you.

Amway Makes Me Nicer?

 Many Amway IBOs "think" they have become nicer people as a result of their association with other IBOs and because a part of the system they are with advises them to read self-help books. They are also taught that as a side benefit of the Amway business, that they are nicer people. Of course, many IBOs mistakenly think that they started a business not to make money, but to become "nicer".  This notion is absurd.  A business exists to make a profit.  If not, you don't have a business.  

I certainly agree that some people can benefit from positive books and association with others, but for many, it is not a genuine "nicer" person, but simply a phony persona that is put on in order to recruit potential Amway downlines. That is how my former sponsor appeared to me. Because I had known him for a long time, the "nicer" looked as phony as phony can be. There are many examples of phony niceness that some IBOs profess. Even Amway's biggest defender was apparently called a "cyber bully" by an Amway corporate blogger and some others for making disparaging comments about those with opposing views. Others have resorted to calling people broke or losers simply because they did not agree that Amway was their savior.

On this very blog, there are comments, I assume by IBOs, that make implied, veiled, or subtle threats. Some of these comments are not subtle at all. In fact, in my blogging experience, it is usually the IBOs and Amway defenders that resort to name calling. I suspect that is because the facts are on the side of the Amway critics. For example, it is a fact that most IBOs never make a dime, even if you don't count the ones who "do nothing". If you look at system IBOs, then the vast majority never make enough to pay their voicemail expenses.

Even the coveted diamond level appears to be a facade, especially seeing diamonds quit, resign and simply walk away from the business without the lifelong passive income. A triple diamond's bankruptcy revealed some financials which were public record because of the chapter 7 bankruptcy, and it wasn't all that impressive considering the size of his business plus longevity in the business.

So IBOs, are you a nicer person? Is it evident by your words and actions? It doesn't appear to be very clear to me.

The Super Bowl?

 One of the things I thankfully never missed because of my involvement with Amway was a Superbowl party. It truly is an event that I enjoy. We hang out with friends for the afternoon. Lots of great food and great fun! But as an IBO, I remember the upline always wanting everyone to make sacrifices in the name of the business. For example, my sponsor told me that he gave up on all of his hobbies in order to focus on Amway. That the delayed gratification would eventually pay off. Sadly, my former sponsor was still active in Amway, 28 year's worth, last I heard a few years ago.. I don't know if his hobbies are still on hold, but I remember people being edified for dumping their golf clubs, their tennis club memberships and other sacrifices.  At this point, I really don't know if my former sponsor is active in Amway.  I hope he saw the light and got on with his life.

I remember people would say how they would one day travel the world to play golf, or to fly and play tennis in world famous venues. That idle time spent with family and friends would not be missed but one day would pay off big when they had diamond groups. That one day, they too could stand on stage, tell about their selfless sacrifices and how it propelled them to diamond. They would look back and realize how small of a sacrifice it really was.

The reality is that IBOs often ended up sacrificing valuable time with their families, their kids, and their friends for nothing. Not a single IBO from my days in the business ever hit the emerald level. I saw kids who grew up with their parent missing important events in their lives in the name of Amway and the dream of financial freedom. The diamonds would say that when the kids are sleeping, you can be showing the plan. But sadly, time passes quickly and can never be replayed. I wonder how some parents, who finally quit after a number of years, were able to explain to their kids about the dreams and unfulfilled promises? I hope honesty was involved in these cases. I truly do.

Luckily for me, my involvement was about a year or less. My damage was minimal. But I feel for people who neglected family and friends to chase a dream that will never come. Hopefully, the family and friends of IBOs who quit will be patient and understanding. Maybe this article will help someone cope. Hopefully, the word will get out, so fewer people sell their souls to the upline. I hope everyone has a safe and happy Superbowl party and gets to and from their parties safely.

Why So Many Fail?

 Over the years, there must have been tens of millions of IBOs (or more) who had some experience or brush up with Amway. Obviously, not all of these folks got involved in a system or had the intention of trying to make millions of dollars. But looking at the business as a whole, the number of people who make a significant income from Amway is a tiny fraction of 1%. If a typical platinum has about 100 IBOs in a group, then you can conclude that platinum is in the top 1% of all IBOs. And we know that many IBOs quit and go through the business each year. The attrition rate can be staggering for bigger pins who need to keep working to replace those who quit.  So, do you really believe that the end game of Amway is to walk away from Amway to retire in luxury?   Implausible. in my point of view, not to mention that Amway doesn't even mention this as a benefit.

But the question that seems to be ignored is why so many IBOs end up failing? Now for the sake of this discussion, let's exclude IBOs who do nothing and quit. Let's talk about IBOs who make an earnest effort. Often, the serious IBOs will be on the system consisting of voicemail, standing order, functions, books and other meetings. These all come at a cost, therefore, IBOs need to make several hundred dollars a month just to break even. Amway reports that the average income of active IBOs is $202 a month. Therefore, the average business building IBO is operating at a loss.  Also, I might add that the $202 average includes the diamonds and EXCLUDES IBOs who did absolutely nothing.

Let's look at some of the reasons why Amway IBOs cannot succeed. In general, Amway product pricing is higher than local big box retailers. Amway pays bonuses, therefore the bonus payout is included in the price of the products. I suppose a platinum gets a good deal, being at the 25% level, but a platinum is in the top 1% of IBOs. The majority of the rest receive a paltry 3% (if they receive any bonus ay all) which leaves them at a loss when business expenses are factored in.

Past IBO abuse and past IBO behavior makes it nearly impossible, at least in North America, to find potential downline IBOs and customers. Seems everyone knows of someone who was tricked into an Amway meeting or was deceived about Amway in some manner. I believe Amway has seen a decline in sales in North America, with foreign countries being responsible for any current growth in business.

Another factor is that IBOs are taught by uplines to engage in too many activities that do not produce income. Attending meetings, listening to cds, reading books and other functions cost the IBO money. They do not result in more sales to customers. These non income producing activities seem to be the majority of an IBO's activities, thus it's easy to see why so many IBOs fail. While system leaders claim that their system works, there is no reasonable evidence to support this claim. Just the fact that new diamonds and emeralds are so rare these days suggest that the system, with their severely limited success is producing less success these days.

All told, an IBO's chance of succeeding in earning long term sustainable income is so tiny that IBOs seriously would be better off buying lottery tickets instead of buying tools such as standing orders and function tickets. At least buying lottery tickets would not use up 10-15 hours per week of your time, and your chance of winning is about the same. The system doesn't work, it is why most IBOs fail.