Thursday, November 19, 2015

Your Odds Of Success In Amway?

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 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. In that study, the top1% of IBOs were examined and it was found that they averaged a net loss of about $900 each.

A typical platinum group often has 100 or more downline IBOs. Thus a logical conclusion is that less than 1% of IBOs can reach that level. And that isn't even factoring in all the people who sign up and quit. It is also, apparently rare to maintain the level of platinum. Factoring in people who quit, one can conclude that only a small fraction of 1% ever reach platinum. 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 and I'm not sure that any of them are even in the business today. So you have a less than 1% chance of reaching platinum and then you are even less likely 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 start up cost is low. But what is the point of doing all of that when the chance of making money is negligible? A real business owner would look at the risk and reward and while you could argue that Amway is relatively low risk, it can also b said that the rewards are basically non existent, save for a very few elite who can overcome the overwhelming odds to make a significant income.

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 or 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. They dream of only the best case scenario or what is possible. They seem to ignore what is likely and what is 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?

4 comments:

  1. What exactly does it mean to be "edified"?

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    1. Edified is where they talk you up. For example, if you did something like sponsored someone, the platinum would talk about how you sponsored someone new in front of the group. It helps build your credibility.

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  2. Hi there! Just found your blog, and it's all great stuff! Keep it up! I've heard of that statistic where 99% of IBO's lose money, is it on the Amway website somewhere? I know the average monthly income is on Amway's site. Trying to show someone involved in Amway this statistic in hopes they wake up.

    Thanks.

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    1. Amway only gives out bits and pieces of information so you need to do some calculating. But the vast majority does nothing. That is telling. Amway's website shows that .26% reach platinum. That's about 1 in 400. When you factor in business expenses, the only conclusion I can reach is that 1% or less make any profit in Amway. The exception might be someone who only sells a product once in a while and doesn't have business expenses.

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