The Big Fallacy?

There has been much debate over the years by both critics and Amway IBOs and supporters over an issue regarding a WWDB Dream Night function. The issue was an honest question over the cost of a Dream Night Ticket. Well, needless to say, the IBO in question ended up deciding that his blog will no longer accept comments. And while that is certainly his right, he made a statement that IBOs may be told, but makes no sense. Here is the statement:

"Here is a tip when doing research, if you have a question about a company why not give the actual company a call? Wow what a concept."

While on the surface, that me seem logical. If you have a question about how a company works, that might make perfect sense. But the Amway opportunity, along with the attached motivational tools companies, make that a touchy situation. What are you supposed to do? Call WWDB and ask if they are a good company? Call WWDB and ask if they scam downline? What if you call and ask WWDB if most IBOs on their system make money or lose money? If you look at the average income of the majority of IBOs and factor in expenses such as voicemail, standing orders and functions, I can only conclude that the vast majority of IBOs on the system have to be losing money. The longer you stay in the system, the more you lose. Furthermore, I believe there are more people winning the power ball lottery in the US than the number of new WWDB diamonds emerging in the US in the last twenty five years ago or more.  At least in Hawaii, I only know of one (1) new diamond since I left Amway and that diamond is a female (Yamamoto). 

Imagine if you had questions and simply asked the person? Hello? Mr. Al Capone, I heard you were a gangster in charge of organized crime. But I thought it would only be fair if I got the answer directly from you. What's that? You're not a gangster and you go to church? Okay, I see. Well, that clears that up. Mr. Capone is not a gangster, I confirmed that by asking him. Do you see the ridiculous justification of just asking the person in question? Isn't a better way to ask a neutral third party that has no dog in the fight?  

Many Amway IBOs will also suggest that you check with the better business bureau. Well, Amway has a good mark from the better business bureau. But Amway isn't selling you voicemail and other support materials right? That would be WWDB, BWW or some other motivational group, or a particular double or triple diamond, whose business may not have been registered or known to the better business bureau.

I believe IBOs, information seekers, and prospects can find a ton of information on the internet using google or other search engines. Upline leaders discourage this because too much frank and disparaging information exists about the Amway opportunity. But much of that information is real life true experiences. I was an up and coming "mover and shaker" in WWDB. This blog reflects much of my real experiences and the realizations I came to after having left Amway and WWDB. Sadly, my experience was not a good one, but more and more I see evidence that what I was taught many years ago is still taught today, and by some of the same leaders. I hope my experience can help others.

Buy From Your Own Store?

 One of the apparently common practices among major IBO groups is still the concept of "buy from yourself". I believe IBO leaders teach this because most people are not familiar or not comfortable selling goods and services. Therefore, to teach buy from yourself makes the business an easier sell. In reality, an Amway IBO is simply a commissioned salesperson with no benefits. But presenting the opportunity that way is unlikely to yield results either, thus the buy from yourself has become a common practice. It sounds like something that most people can do, rather than emphasizing the need to sell to people you don't know, not to mention the endless cycle of recruiting downline, something that many IBOs are unable to do.

Buying from yourself makes you a customer and not a business owner. Buying from yourself doesn't generate your business a profit. Would you open a car dealership to buy a car? Now I am not suggesting that supporting your own business is a bad idea. What I am suggesting is if you are the primary or exclusive customer of your Amway business, then you aren't really running a business. You are simply a glorified customer. I believe some or many IBOs fall into this category because they are simply unable to move a sufficient amount of products to non-IBOs to make actual business profits.. 

What an IBO is really doing is paying his upline's bonuses. Amway overcharges more than 30% of the cost of their product. They have to do this in order to be able to pay IBO bonuses. Since most IBOs are at 100 PV or less, the lion's share of the bonuses earned are channeled upline when a purchase is made. It is not a level playing field as some IBO leaders might suggest. Also, some of your uplines who don't even know you might benefit from your efforts. Now that's residual income, right? 

What compounds the situation and makes it worse is when an IBO pays for standing order or attends functions where some of these IBO leaders may teach this bad business practice. You as an IBO already overpay for products for which upline gets most of the bonus, but then the problem is made worse by IBOs paying to receive this bad advice. When I was an IBO, I heard speakers talk about skipping rent or mortgage payments to attend more functions, or having your family skip a meal so you can buy standing orders. Buying from yourself is just another example of bad advice given from upline to downline. What makes it worse is that some uplines profit by giving bad advice. 

Are you buying from yourself almost exclusively? Can you think of any truly successful business where the owner is the main or possibly the only customer? I can't think of a single one.

Why So Many Believe?

 Many IBOs cannot be convinced that Amway is not the best opportunity in the world, because they want to believe the lies/deception that is often used when they are recruited. They want to believe that 2-5 years of part time effort will result in lifelong residual income and that they will be traveling to the beaches of the world while cash keeps rolling in. They want to believe that they can ditch their (often) less than adequate jobs. They want to believe that a part time soap business will make all of this possible. The people (upline) who claim to have everyone's best interest at heart will sell them a proven system of success and all they need to do is follow the steps to success.

Many people sign up for Amway and do absolutely nothing. They may not ever order or try products. But these folks do not complain about Amway and the expenses they may incur are minimal. Most do not even bother to seek a refund on their starter kit. It makes me wonder why these folks even bother to sign up. Although, there are stories of people being pestered into registering. Anyway, the part where this business gets dicey is when people register and do put in an earnest effort, only to end up with financial losses. Sometimes the losses are in the tens of thousands of dollars. You get squeezed for a couple of hundreds of dollars a month and after a few years of effort, you can find yourself drowning in debt, even after doing everything your upline advised. The fact that uplines don't disclose their business financials speaks volumes. Former uplines who have come forward have shown that most of their income was from hawking standing orders and seminars, and not from Amway sales as they would imply.

I bought into the hype at one time. I believed the lies. I believed my upline that no profit was made from tools. At the time I was an IBO, I too, wanted to believe that I could work part time for 2-5 years and ditch my job. That I would retire at the age of 35 and live in luxury forever. I wanted to believe that. But having reached the 4000 PV level, the precipice of platinum, I also realized that I had no profit. I sat down and did the math and realized that they would be little profit at platinum. I came to the realization that a second job would have suited me better. I finally quit when I realized this, along with my upline wanting total control of my life. But I hung in as long as I did because I wanted to believe that Amway would be the vehicle that delivered my financial freedom.

Having dropped out of Amway, my life quickly got back to normal. Friends that I had avoided returned to my life. My disposable income increased, and my cash flow was positive once again, now that I was no longer obligated to purchase tools. I also noticed years later that the same old leaders on stage were still working as hard as ever, and none of them had taken the option to retire and walk the beaches of the world. Perhaps these leaders also want to - or have to believe in Amway because they have already invested too much time and effort to call it quits and start something else. I wanted to believe, but the fact is that people were not succeeding. People were not getting free. What I saw was home foreclosures, bankruptcies and financial struggles made worse for people because of Amway and the tool systems. And apparently, these same issues apply to the diamonds. Do your research and you will likely find the same conclusion that I did. That Amway is an impossible dream.

Building A Business?

 When I was an Amway IBO, many people would talk about "building a business". But many folks who spoke about building a business didn't actually know what that meant. I believe it is because they were taught that building a business meant listening to cds and attending functions. Or building a business might mean sponsoring others. In my segment of the Amway world, building a business pretty much meant recruiting and showing the plan. Apparently, I was misled and many others were as well.  

Building a business, generally speaking (in real business terms) means building a customer base. A business moves products and services for a profit. In groups that focus on buying from yourself or prosumer nonsense, generally will struggle because the revenue they generate in their business is coming from their own pockets. Or their jobs are actually supplying the money for their own bonuses. In this model, the only way to profit is to sponsor many downlines so the pyramidal compensation plan can work in your favor.

Many IBOs compare themselves to a franchise. Can you imagine a true franchise where your long-term success depended on your ability to open other franchises? What if you as the owner and your family accounted for the majority of the sales? Could this franchise survive? More than likely not. Yet this is exactly what many Amway IBOs do and they mistakenly think they will be successful. The only reason why Amway IBOs are able to play out this model longer than a traditional franchise owner is because they do not have to rent office space or hire employees.

If an Amway IBO ran their business like a traditional business, the lack of retail sales to non-IBO customers would be immediately apparent when the first month's electric bill or lease payment arrived.

Building a business entails many things. These things may include advertising, marketing of products, and do not necessarily include any training. In its simplest form, the Amway business is about selling and using products and getting others to do the same as you do. Why do IBOs think such extensive training (standing order and functions) is needed? I challenge IBOs to write up an actual business plan for their Amway business, including projected sales and expenses and see what you come up with. If you think I am just being negative, write up your Amway presentation and show it to a loan officer at a bank. See what they have to say. Seriously.

Anway 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".

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 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 recent triple diamond's bankruptcy revealed some financials, 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, especially IBOs such as David Steadson or Bridgett Baron. :-)

Independent Business Owners aka IBOs?

 IBO = Independent business owner. I thought it was cool to own my own business, but looking back at the bottom line, IBOs are just salesmen for Amway with no fringe benefits and no guaranteed salary. Or a commission only salesman. Salesmen earn their income by selling goods and services and earn a commission. Sadly, many Amway IBOs sell very few items because they are commonly taught that you make your money by purchasing items from yourself and recruiting downline who do the same.  If you find "six", you could be wealthy right?

On the surface, buying from yourself sounds sensible but you don't truly make a profit by purchasing your own goods, you simply empty your checking account. Any profit you think you have earned has actually come out of your own pockets. In any business, you must have a base of customers in order to have a steady income. If you are purchasing the majority of your goods, you are only making a profit for Amway the corporation, who makes, or in the case of partner stores, distributes the goods. The ones who actually produce the goods are the ones who profit. An IBO is just someone who sells the goods and who distributes them for a commission.  In other words, the IBO is the middleman that upline claims they eliminate when they show the plan.

For most "real" business owners, building their business might mean advertising, create special sales, and increase the number of customers or by increasing the volume purchased by existing customers. An IBO who is "building the business" is rarely ever trying to attain more customers. In fact, some of Amway's regulations make it difficult to attain a mass of customers such as restrictions on advertising. Therefore, most IBOs who are "building" are simply seeking to add downline who will hopefully buy their PV and also attain more downline. In this manner, IBOs are increasing volume, and therefore their commissions by adding people to their downline. Ultimately, the upline is making their money by the efforts of their downline and often, from the jobs of their downline because there are usually not enough customers to sustain any significant level of sales. This basically makes the Amway opportunity a product pyramid.

In this day of social networking, social media and power advertising, Amway apparently remains a dinosaur. While they do advertise some of their product line on TV, the salesmen or IBOs have little ability to market their products on a large scale. Instead, it is word of mouth, individual to individual. It is highly ineffective. Do you know why it costs hundreds of thousands of dollars or millions for a 30 second commercial in the super bowl? It's because tens of millions of people or more are watching from around the world. What do you think is more effective on increasing sales, a super bowl commercial or word of mouth advertising. Keep in mind that zany IBO behavior has already damaged the Amway name, thus giving you a disadvantage over other opportunities.

In the end, or the bottom line is that an IBO is just a salesman who receives no fringe benefits, and a relatively small commission. It's a great deal for Amway, but is it a great deal for an IBO?

The Negative Truth?

 One of the silly things many Amway IBOs are taught is to avoid negative. I believe this is taught today by uplines and it was certainly a point of emphasis even in my days as an IBO. The upline diamond would say that the world of full of negatives and that we as people take in too much of these negatives. Therefore, the IBOs were told to avoid television, newspapers and other forms of communication with the outside world. The group was also told to avoid people who speak negatively about Amway. For this reason, many people have considered Amway groups such as WWDB or N21 as cultish or cult-like. (information deprivation or information control).

I can agree that you surely don't want to only take in negatives as it can wear you down, but not seeing the news or reading about current events in the paper simply makes you apathetic and uninformed. For example, wouldn't you want and need to know if there was a storm heading your way? I live in Hawaii, and we occasionally have hurricanes. Avoiding news could be very detrimental to your family and home. If you lived in the midwest of the US, wouldn't you want and need to know if a tornado was headed your way? Do you avoid the doctor because his assessment of your health might not be "positive"? For these reasons, I believe that many Amway IBOs walk around wearing a mask with a false smile, trying to appear overly positive.

Another important thing that many IBOs cannot distinguish is the difference between negative and the truth. If your wife asks you if her new dress makes her look fat, the truth might be that the new dress indeed makes her appear fat. That answer may be uncomfortable for you to deliver, but the truth is the truth. The truth at times can be positive or negative but it is still the truth.

Most IBOs earn less than $100 a month. That is the truth. Most IBOs lose money if they participate in functions and standing orders and such. That is the truth. Most IBOs will never even sponsor a downline. That is the truth. Most IBOs, filled with motivation and dreams, will never see those dreams fulfilled. That is the truth. Many upline diamonds, who advise IBOs to purchase tools and attend functions, and fill the IBO's heads full of dreams, make significant incomes from the sale of tools and functions. That is also the truth. In a 1 year time span, approximately 50% of IBOs will quit in the first year. That is the truth.

Is it negative to tell the truth? Or can IBOs not handle the truth?