The Loser?

 One of the things I recall as an Amway IBO was thinking how sorry I felt for people who were not Amway IBOs because we were all going to be rich and everyone else was a loser. Our upline used to tell us that we were winners - and if you weren't a winner, then obviously, you are a loser. Many times, the term "broke" was attached to the term loser. That was my mindset back then but having been out of the system more than ten years, I can look back and laugh, realizing that the losers were the ones buying stuff they don't need, stalking people at malls and bookstores, and wasting their time and money on tapes (cds), books and functions.

What goes unnoticed in many cases, is how much time and money really goes down the drain for IBOs who work the system. Your life revolves around the business if you are dedicated and hard core. You are always looking for prospects and people to show the plan to, and you have to rearrange your schedules, or outright skip social or family gatherings because of the never-ending number of meetings and functions, many of which teach you nothing about running a profitable business. When I first left the Amway business, I was sort of angry at the time and effort that was wasted, along with the cash I threw down the crapper.

But after I did finally cut ties with the business and the people associated with it, I got back into a routine of sorts. I focused on my job and after some years of gaining experience and working my way up the corporate ladder, I received some promotions and I am scheduled to be retired before the age of 60 with a decent retirement income and will likely have my home paid off by then. So while I did have to work a dreaded job to be able to retire, pretty much all IBOs are also working a job or business PLUS having to expend their time and money to run their Amway business which has little to no chance of providing a long term stable and significant income. And if I may add, it is the systems such as WWDB or N21 that usually end up costing the IBOs the most money because of things like the functions.

So, I will ask the question. Who's the real loser? The person diligently working and saving for their future or the person chasing a dream that is unlikely to materialize? Factoring in the expenditure of time also makes the systems even more costly than it appears on the surface.

Ruthless?

 The really insidious part about some of the LOS leaders, such as the ones I had in WWDB, is that they apparently are cutthroat ruthless businessmen with nice suits and disguised as your mentors and friends. They get you to trust them, and they will tell you that they have your best interest at heart, or that they would never purposely lead you astray. On the surface, you may think this is true but look at their actions and you can easily discern that some of these uplines are absolutely ruthless businessmen who would take every cent from you if they could. I was in WWDB and I have good reasons to believe that they are still doing this, based on a WWDB IBO blog. On this blog, I see all the same teachings today, that I heard as an IBO and some of the same claims such as buying homes in cash. It's scary.

As an IBO, the diamonds would tell you to never miss a function, ever. The only good reason for missing a function was for your own funeral. I recall some crossline IBOs rearranging pre-planned anniversary parties, weddings, and other special family events in the name of being core and attending all functions. Some IBOs actually did quit their jobs to attend functions, and they very well may have done so because some uplines taught this. IBOs were also encouraged and told to go into debt to attend a function. This was okay because it was an investment into your business.

Our group was also strongly encouraged to buy extra cds every week. To be core, you needed to listen to a cd each day and you cannot listen to the same one each day, right? Couples were told to buy their own separate standing orders. Brad Duncen even had a true north tape (cd) that said sponsors were to eat the standing orders for downlines who quit because it was too much trouble to call upline who calls upline who calls upline to cancel a standing order. Oddly enough, they didn't mind upline calling upline calling upline to add a standing order.

In the end, I was lucky enough to have been progressing up the pin ranks so my losses were not that devastating. I ended up losing in my early months of the business but mostly broke even when I was at 4000 PV. Sadly though, my crossline did not fare so well. I know of one couple who declared bankruptcy. I don't know how much their WWDB involvement contributed to bankruptcy, but I am certain it was a major factor, and I know of two couples who had homes foreclosed, and I believe that their allegiance to WWDB was a factor in those foreclosures. But I guess hey, two WWDB diamonds had homes foreclosed so maybe they were duplicating?

Do not be fooled. The diamonds may have a nice smile and a nice suit, but they are ruthless businessmen who will take your last dime if you allow them to.

Joecool On Vacation

Joecool is on vacation.  Heading to Vegas for some shows and a little gaming.   Be back in about 5 days.  Until then, enjoy this article titled:  "The Life Of An IBO"?

 I send this message to inform Amway IBOs that they should be aware of their circumstances in business. What I mean is when you are a new IBO, it is common for you to buy/sell your 100 PV and perhaps listen to some cds/audios. If you basically did what your sponsor or upline advised, you made your 100 PV bonus level and you will receive a bonus from Amway for about $10. If you did as advised by your upline/sponsor, then you likely made a name list and started contacting some potential business partners aka prospects. You're probably a bit excited because things are going as you expected. You did your part and a bonus is on its way to your doorstep. Heck, you may have even sponsored a friend or relative because of your newly found excitement and enthusiasm.

But what happens after a few months? If you are still doing 100 PV and have no downline, then what are the chances that you will ever achieve anything? Your excitement is wearing off and now the Amway opportunity is becoming "work". You are also starting to notice that it is starting to get expensive to continue to purchase products, many of which you never purchased before. For example, were you buying cases of energy drinks and "high end" vitamins before Amway? Did you buy $50 cases of bottled water before Amway? Supposedly their laundry soap and other cleaners are highly concentrated, therefore your consumables are the nutrition/vitamin products.

Even if you managed to find some downline, are they duplicating what you do? Are they also moving volume and sponsoring downline? If not, what are your chances of fulfilling the 6-4-2 plan or some similar version of it. When I saw the plan, I thought it was reasonable and I was on my way to platinum. What I discovered though, is that as you progress, upline has greater expectations of you and that includes more tool purchases. (I was in WWDB). In the end, my recommended tool purchases ate up any profits I had and at the 4000 level, I was just about breaking even, which means I was at a loss when factoring in my time spent and other miscellaneous expenses such as gas money.

Where are you at?  If you've been in for more than a year, are you on schedule to become platinum or are you at 200 PV with one downline? Maybe you have a small group with 600 PV? You still aren't close to a net profit. For the vast majority of people, success is not right around the corner. What's around the corner for most is more time lost, more money expended, and no progress. If your group is now growing each and every month, you are sliding backwards. If you don't constantly have new IBOs coming into the group, you are probably stagnant. With about half of IBOs dropping out each year, keeping a group together is a tremendous task.

IBOs, where are you at after a few months? Where are you at after a year? If you haven't gone platinum, it is nearly a certainty that it will never happen, despite what your upline might say. The facts are there; it's a matter of whether you want to believe it or not.

Goals and Dreams?

 One of the things that you may be taught as an Amway IBO is to have a goal. While having a goal in a good thing, I believe the context in which it is taught by Amway leaders is misleading. They want to motivate you to "go diamond" or perhaps some other achievement in the Amway business, but there is no specific means to achieve these goals and frankly, I do not believe that many IBOs or prospects understand what they are pursuing.

For example, one way that diamond leaders try to motive their downline is to show displays of wealth. They may show fancy cars or talk about the mansion they own and paid for in cash, or they may show you a fancy vacation or jewelry. All the while, these diamonds may be up to their ears in debt. Has a diamond ever showed anyone a copy of their bank account balances or a business tax return? While IBOs may claim that this is nobody's business, I beg to differ. In the REAL world of business, these are not uncommon practices. A close friend of mine who recently sold a franchise business not only gave copies on his bank statements, but three years' worth of personal tax returns to the eventual buyer of his business. It was to verify his claim that his business was worth buying.

So, for IBOs and prospects, what is your business goal? If it's to make $500 a month, has your "mentor" actually sat down to discuss this and to map out how this can be accomplished? What about setbacks? In the Amway business, the Amway reputation is damaged, thus achieving certain tasks may be much more difficult to conquer than you are led to believe? Is your upline actually helping your individual cause or are they simply leading you to purchase more tools? If your goal is not diamond, are you receiving the same help as others in the group? Did you know that your sponsor is supposed to help train you free of cost?

The big question though, is are you progressing towards your stated goal and are you on schedule to accomplish the goal and reap the rewards, or have you fallen into a trap of attending meetings and listening to standing orders and accomplishing nothing other than shrinking your bank account? If you have stated goals, there should be tangible and measurable ways to assess your progress (i.e. profits). If your upline starts to feed you rubbish about being a nicer person or that Amway saves marriages, then your upline is leading you astray.

Amway Creates (Debt)?

 One of the things I noticed is that many IBOs who support the Amway opportunity seem to be in debt. I know that being in debt is one of the reasons these prospects are drawn to the opportunity, because they believe that they will earn so much cash that their debts will go away. I remember seeing a presentation where the speaker touched on how people were in debt with credit cards maxed out. Thus, this business is for you because you can earn enough to pay off those credit card bills or maybe go diamond and pay cash for everything.

In my informed opinion, the speakers who promote Amway in this manner are unethical at best, because they will teach IBOs to live below their means, cut expenses, and reduce debt, only to turn around and have the IBOs spend their cash on tools. It's not really debt reduction, but simply redirecting an IBO's purchases towards things that benefits the upline. It is why I often wondered why a speaker would say it was okay to go in more debt, only to invest in their Amway business. I mean, debt is debt and if IBOs are to reduce their debts, they should also be cutting their Amway expenses and focus on selling products, which can result in immediate cash.

I also believe many diamonds to be hypocrites. I heard many of them speak about how diamonds pay cash for everything, including their homes. I find it quite humorous and very hypocritical of some of these speakers who were exposed as having their homes foreclosed. One of these speakers, Greg Duncan, a prominent triple diamond, apparently had filed for chapter 7 bankruptcy some years ago because he could not service his debts. This was public record in the State of Montana.

I also believe that many diamonds may be drowning in debt, more so than the downline that they teach. Why do I believe this? Because they portray lifestyles that are not sustainable on the incomes they have. Sure, a diamond may have a $250,000 income consisting of Amway payments and tools. But if anyone does the math and considers taxes and business expenses, these magical diamonds suddenly don't have much cash left over to be able to purchase mansions and sports cars. So how do they obtain these trappings? I believe many diamonds might be financing their cars and homes and may actually be in heavy consumer debt while trying to portray a diamond lifestyle.

Amway pundits may argue that hey, at least these folks don't have to answer to a boss and wake up early to go to a job. While that may be true, most job people don't have to stay up until 3:00 in the morning showing plans and having night meetings to motivate their downline. Furthermore, a diamond must have to live in fear that a scandal could tear apart their group or that a disagreement with an upline could get you cut from tools profits.

To summarize, I don't believe diamonds are that different than the rank-and-file IBOs. They get divorced, they have debts. They may have bigger incomes, but that is all relative. A man with a $50,000 a year salary could live comfortably and debt free while someone who earns $250,000 can be drowning in debt because they live beyond their means while the $50K man lives below his means. The evidence is there, diamonds live excessively and many flaunt wealth. In the book, the millionaire next door, Stanley and Danko say that people who flaunt wealth, often are not wealthy. Are you as an IBO, drowning in debt? Maybe you are simply following the example of your upline diamond? Maybe?

The System Scam?

 It is my observation that people who join Amway usually end up losing money in the end. They may get involved to make a few bucks or because they are mistakenly led to believe that they will become millionaires in Amway in 2-5 years. I know my sponsor convinced me that we would be millionaires in a few years. These folks who recruit new IBOs into Amway are often associated with a "system" such as Worldwide Dreambuilders (WWDB)or Network 21 (N21). These system promoters, often diamonds, may mislead the recruits by showing them pictures of mansions or other luxuries, implying that they attained these goods with their Amway business. In many cases, it is a deception, especially when we know for a fact that some diamond leaders who proclaimed that they only make cash purchases, had their homes foreclosed. Without the hype, I am sure there would be fewer signups. But what is the evidence?

It is simple. Amway reports that the average active IBO earns about $202 a month in gross income. This average includes diamonds and other higher end IBOs but excludes IBOs who were not active. If you calculated the median, the average would be much lower.

But what makes IBOs operate at a loss is the system expenses. The system generally consists of voicemail, standing orders, cds, functions, books and other materials. An average business building IBO might spend an average of $250 a month or so on these expenses. And that's typical of a single person. Amway defenders like to decry the amount, but there are couples who would likely spend more and IBOs who must travel by planes to functions would spend more. Single IBOs who buy only the minimum might spend a bit less. Some IBOs with abusive uplines might spend much more than $250 a month on tools. I believe my former sponsor probably spent easily an average of $1000 a month on average. (I am from Hawaii, so the average cost of functions is greater due to long distance travel)

Thus, if the average IBO earns $202 a month but the same average IBO spends $250 a month on tools, the average active IBO is losing money each month, with lower-level IBOs (i.e. 100 PV) would lose more.

Look at a group of 100 IBOs at 100 PV. (This is just a model). If a 100-business building IBOs average $250 a month on tools, they as a group would expend $25,000 a month on tools. Their volume would be 10,000 PV, or about 30,000 BV. This would generate about $7500 in bonuses per month. Thus, this group spent $25,000 to learn and be motivated while the group splits up $7500 a month in bonuses. The platinum would get the lion's share of the bonus but most of the rest of the group will suffer net losses. As the group grows, the bonus may grow, but so will their expenditures on tools.

The only way the group can make money as a whole is to avoid participation in the tools altogether. The evidence is right here with simple math. The systems do not work because the cost of the system is likely to consume all of the Amway generated bonuses and more. I gladly challenge anyone to explain in detail how this post is not reflective of the reality of being in Amway and a system such as WWDB or Network21.

Instead Of A Job?

 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. This point is supported by the fact that Amway's sales appear to be growing the 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 hoards 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 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. :-)