Sunken Cost Fallacy?

 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.

To quit would represent 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 uplines. 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.  What keeps many IBOs hooked however, it the thought of quitting right before success becomes inevitable, which is what is taught.

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 your 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.

False Hopes?

 The really insidious part of Amway, in my opinion is that certain leaders of AMOs such as WWDB or BWW use the hopes and dreams of people to get them to join Amway and to sell them motivational tools that are supposed to help people to achieve these hopes and dreams. Many of these folks are nice, motivated and hardworking people who have dreams and goals. What they don't often see right away is that those dreams and hopes are not going to be fulfilled by building an Amway business and using WWDB or BWW as a support system.

Since my time in the business, WWDB has fewer diamonds now than there were when I was an IBO. While there may be some new diamonds, I don't really know of many in the US. I believe there are some new diamonds in foreign countries where the Amway name and tool scam hasn't been fully exposed as it has in the US and Canada. This is a glaring issue. If diamond is the pinnacle of success, then where are they? The same old tired diamonds are on stage and apparently teaching the same BS today, that they taught many years ago, despite claims that things have changed.

They still teach about buying everything in cash, and that there is residual income and walking the beaches. I find it very odd that with the benefit of walking away from Amway while cash rolls in, why hasn't anyone exercised their right to do so. Is it that all of these tired old diamonds love Amway and they downline so much that they cannot bear to quit? Or is it more likely that the residual income for life is a complete myth and that these diamonds work because they have to?

I know of at least two (2) WWDB diamonds who had their homes foreclosed. There is also a triple diamond who was declared chapter 7 bankruptcy some years back, and ironically, this diamond is still on stage teaching audiences about his financial acumen. There are some diamonds who lived in and loved Hawaii and the ocean, but saw it fit to move to the mainland US. Many WWDB diamonds put their homes for sale in a bad real estate market some years back as well.  Sure, they may just want to liquidate, but maybe they can't afford these mansions and toys anymore? Maybe.

WWDB still has a function called "Dream Night" where the diamonds parade around showing off sports cars, fancy homes, jet skis and other toys, implying that they all own these things and paid for in cash. They want the audience to dream of obtaining the same and that Amway is the only way to attain it. Sadly, for most, joining Amway and WWDB is far more likely to push you farther away from your hopes and dreams. Amway's own numbers tell the story. $202 a month average IBO income, and one half of one percent (.5%) achieve the gold/platinum level where you might earn about $1000 a month gross income.

Buyer beware.

Lies Are Needed To Succeed?

 The first time I was prospected for Amway, I was in college. I actually didn't know much about Amway but I had somehow formed a negative opinion of it. Needless to say, when I was invited to a beer bust and it turned instead to an Amway meeting, by impression of Amway got even worse. I eventually did join because a close friend of mine had achieved platinum and he had assured me that it could be done and that he would make sure that I would also achieve it. I did achieve a level just below platinum (4000 PV), but I quit for several reasons. First of all, I didn't make a net profit as the tools ate up my profits. Secondly, the more I progressed in the business, the more and more my upline wanted control of my life. For example, we were told that we should check upline before getting married, buying a car, or even having children, etc. I thought that was very strange and I eventually left the business.

But in the US at least, I believe Amway's name to be so battered that an IBO cannot sponsor downline and build a business without lies and deception. There are hordes of stories confirming testimony that lies, and deceit are common in prospecting potential IBOs. This was extremely rampant when Amway changed their name to Quixtar. IBOs would deny the connection or IBOs would say they are with network 21or WWDB and claim something ridiculous such as Amway simply being their supplier. The promotion of perfect water also brought on silly antics about a $50 case of water being capable of performing miracles. If the opportunity could stand on its own merits, then IBOs would not have to resort to such desperate measures.

Even the Amway presentation if often filled with deception and lies. I remember seeing the presentation and they said shopping through Amway, an IBO would save 30%over local retailers. When I actually saw the catalogs, I wondered where the savings was. The 6-4-2 plan or similar variations are made to sound easy, and the presenter talked about lifelong residual willable income, which I also find to be deceptive if not an outright lie.

But can Amway be successfully promoted without lies and deception? It is my opinion that an IBO has no chance of building a business by being completely upfront and honest about Amway and about being an IBO. Even with lies and deceit, many IBOs still cannot get people to see the plan or to buy products. An Amway rep has stated that very little Amway products are sold to non-IBOs. So if you cannot sell products and you cannot get people to see the plan, you cannot build a business and if you are purchasing tools, you are simply digging yourself a financial hole that will only grow larger as time passes. The cost of 100 PV is already more than what most families and/or singles spend in a month on household products. This means that most people simply cannot sustain themselves in the business and it explains why most IBOs drop out in the first year.

It is why lies and/or deception are needed for an IBO to have a chance at promoting and building an Amway business.

Your Upline Car Salesman?

 When I saw the Amway plan, it made perfect sense at the time, because the diamond who made the presentation made everything seem sensible. Make money and/or save money. On the surface, you would have to be nuts to not want to make or save some money. But it is the reality that is the problem. The reality is for business building IBOs is financial damage or financial disaster from the ongoing costs of the system expenses. I saw crosslines go bankrupt and more than one couple lost their homes to foreclosure by "doing whatever it takes" to get to the next function.

Our group (WWDB) edified people who bought extraordinary amounts of extra tapes/cds, extra function tickets and made superhuman efforts to get to functions. Looking back, I remember an IBO who was edified for coming all the way to a family reunion function in Portland Oregon when he was diagnosed with terminal cancer. The speaker said he could have been miserable spending time at home but here he was making a difference in people's lives. WTF? I wrote a post earlier this month about how IBOs think they are saving the world and helping people when in reality, the masses of IBOs are only "helping" their diamonds to attain material wealth by purchasing function tickets, voicemail, standing orders and other materials.

I would agree that some training and information can be helpful for new IBOs, but I do not see any value in a neverending supply of cds and endless number of meetings and functions. The very thing (support materials) that uplines claim is your key to success is the very thing that nearly guarantees business building IBOs to financial struggles. Our upline wanted IBOs to be out of debt, which is good, but they would also say in the same breath that it was okay to go into hock if it was to attend functions or to purchase additional support materials. WTH? Sadly, many IBOs do not see through this self-serving advice.

Most people, including myself are very wary when we deal with car salesmen. We are wary because we know that the salesman is out to make money off of us and will try to sell us every option in the book. Thus, we negotiate and reject the car options that we don't really need to or. Guess what? Your uplines are like car salesmen except that they sell you different options such as premier club, standing order, book of the month, function tickets, voicemail, open meeting tickets. Just like a car buying customer, taking all the options maximizes the car salesman's commission and the car dealer's profit. Buying all the support materials increases your upline's profits. Imagine the car salesman telling you that the extended warranty was vital to owning the car. You'd think twice about it, yet uplines will tell you that functions are vital to your Amway business and many IBOs buy it hook line and sinker. I hope this analogy will encourage IBOs to think of support materials as options on the car. You don't need any options to make the car work. Just as you don't really need support materials to buy and sell Amway products, and to get some downline to do the same.

We are wary of car salesmen. In my opinion, downline and prospects should be just as wary of uplines who promote tools as "vital" to your success in Amway. Keep in mind that a sponsor is obligated to help train any downline, regardless of whether they are on the system or not.

Successful IBOs?

 Success is subjective. Someone making ten dollars might be considered successful. For others, nothing less than a barrel of cash will suffice. One other important point is that there are undoubtably some very successful people in Amway. I am sure that some Amway diamonds are quite well off and enjoy some of the finer things in life. But the reality is that these successes are very very rare and many of these success apparently are not sustainable as many people are led to believe. The more likely scenario is is an IBO making a few dollars a month while spending more than that on training. They are losing money but they think they are successful. The reality indicates otherwise. 

But the bigger issue in the Amway opportunity is where the success comes from. Sure, many people want to "go diamond" and live in luxury while barrels of cash roll in. But what is unknown to many, is that the few who enjoy the lifestyle and trappings do so at the expense of their downline. The downline move the volume and the downline purchases the system materials, both of which is profitable for the upline. Because Amway products, admittedly are not commonly sold to people who are not IBOs, then anyone can conclude that upline success comes from the pockets of the downline. Most downline would be better off writing a check for $100 each month to their upline and not participating in the business or buying products at all. 

This in itself would not be such an issue if the system actually churned out new successes frequently AND if the downline were not led to believe that the system is the key to their success. But less than one half of one percent of IBOs ever reach platinum and out of those who do, only a tiny fraction of one percent ever attain the diamond level. But the business has tens of millions of people who tried and could never achieve what was promoted. Lack of effort may be a factor, but when that many people try and fail, it's evident that the system is flawed as well. The rate of success is comparable to a lottery, which is sad when you consider that Amway is not a game of chance. 

To summarize, it is possible for someone to achieve a level of success in Amway, but it is so difficult and so rare that IBOs probably have a better chance of winning the lottery or being struck by lightning than they do of achieving a significant level in the Amway business. Some people are successful, but it is usually at the expense of their downline. The catch is that uplines will teach their faithful downline IBOs that attending a function or buying a standing order is success, regardless of whether an IBO is earning a profit. So many IBOs think they're successful but they are simply fooling themselves with the help of their upline. 

Success is undeniable, but sadly for the vast majority of IBOs, it is also unattainable, at least in the Amway opportunity.

Working For Free?

 What happens to many unsuspecting people is they join Amway thinking they will attain wealth and riches by "owning their own business", but in reality, they have basically become unpaid commissioned employees of Amway. You don't get health insurance, vacation, or any fringe benefits. You get to work unlimited hours and you get commission by moving products. You can leverage your commissions by increasing this unpaid sales force by sponsoring others into your downline.

Some people do succeed employing this method, but you will need to be an elite recruiter in order to get people to sell Amway products for no salary. You are also handicapped right from the start because past IBO behavior has soiled Amway's reputation in the US and Canada and other areas of the world. This point is supported by the fact that Amway's sales appear to be better in most in foreign countries and not in North America. Seems that everyone I know has been at one time, involved with Amway (and had a bad experience) or knows of someone who had a bad experience (i.e. tricked into attending a meeting, or deceived in some way about the opportunity or the products).

Even if you are a great recruiter, your likelihood of attaining Amway success (emerald or higher) is a tiny fraction of 1%. And for those who attain Amway success, they have great difficulty in sustaining that level. It is why there are hordes of "former" emeralds, diamonds and platinums.

You may hear about how Amway was found "legal" by the FTC or that Amway is #1 in online health and beauty sales. All of this may or may not be true, but it doesn't change the fact that an IBO is basically an unpaid commissioned Amway salesperson. You absorb all the business expenses, pay for your own training, and you get to share your commission with layers of upline (more middlemen), some of whom do not help your business, and some who don't even know you exist. It's a great deal for Amway but not for IBOs. You move their products and absorb the expenses and in doing so and they pay out a commission. As for any awards or credits Amway receives, it's great for Amway, but you are an IBO - an independent business owner. You are not Amway.

Bottom line - if you can get people to work for free, you can find numerous opportunities to get rich that are much better and more lucrative than Amway. :-)

Team Meetings?

  One of the lame things during my time in Amway was what upline called “team” meetings.  I mean we are all individual businesses, so it seems weird to be referred to as a team, based on my own experience, many IBOs seemed to be their only customer, simply buying 100 PV and having no down line but hanging in there hoping to finally strike it big down the road.  While these IBOs have no chance of going diamond or even platinum, they are valuable to the diamond because of the income from tools and functions and the volume of PV/BV that these downline provide via self-consumption.

Our team meetings often took place at midnight on evenings when we had to work the next day.  Our upline told us that our willingness to do what most won’t do will result in rewards that most won’t see.  In the end, nothing useful was ever learned in these meetings and it just made it difficult to work the next day.  Imagine that, our jobs that supported ourselves and the Amway business were supposed to be of secondary importance and while the upline would say that your family and jobs were important, their teaching indicated that Amway was to be the #1 priority in your lives, no matter what.

Most of the discussion at team meetings were just platitudes about success that our upline wanted to drill into our brains.  It was primarily to never quit and to invest more of our money into tools because we were told that standing orders, functions and books were vital to our success.  After a while I thought it was odd because so many people were absolutely dedicated to the system but had not made a dime in profit or sponsored a single down line.  

There’s a saying that a good tree gives good fruit and a bad tree gives bad fruit.  The diamonds used to say this but most people simply had no fruit from their efforts.  This is because most people just don’t realize that the Amway system is severely flawed and only exists to provide income to the diamonds and higher ups.  There is no documented and unbiased evidence to suggest that the system works and there certainly is no consistent progression of new diamonds emerging.

Sure, occasionally someone can overcome power ball lottery types of odds to go diamond, but they are often unable to remain qualified and often disappear from relevance.  But these Amway rising stars are the poster children for why the system works. That’s despite the fact that tens of millions or more have failed over the years despite assurances from upline that everyone can be successful. 

For information seekers and any IBOs who see this, look at facts and analyze your income and expenditures.  Look at your actual prospects of improvement.  If your upline tells you that more tools and functions are the answer, get in wringing that these expenditures are refundable in cash if business doesn’t improve, of course you’ll never get it.  

But good luck if you read this and still decided to try.  😃