When I was recruited into Amway, one of the catch phrases was that you are now a business owner. It sounds cool to be a business owner, but in reality, it appears that IBOs are simply salesmen for Amway who are afforded no guaranteed wage or any fringe benefits. In fact, many Amway salesmen do Amway a favor and go out recruiting other salesmen for Amway without any compensation. It makes sense though, because to attain levels of significance, you need to have downline. While it is possible (but nearly impossible) to reach platinum and even ruby without downline, any levels higher will require you to have downline.
So as an Amway salesman, you have no minimum sales requirement. That may seem like a good thing but many uplines will impose a defacto 100 PV requirement for "serious" IBOs. If you are planning to sponsor someone, your upline will likely tell you that your donwline will duplicate your efforts, therefore the 100 PV "requirement". 100 PV will cost about $300. While it is possible to sell some products, it would seem that most IBOs simply buy their own goods and do not sell to non IBOs. It's puzzling to me that so many IBOs argue about Amway's superior quality of products, yet so few former IBOs continue to use Amway products at all once they are not IBOs and even those that do, would rarely ever attain 100 PV. So much for that argument.
What many IBOs do not realize is that their upline diamonds are also salesmen. In addition to moving Amway volume, they will be selling you voicemail, standing orders, premiere club, functions, book of the month. All of these materials brings in a higher profit margin than Amway products. Thus it would only make sense that your upline salesmen would want to sell tools more than Amway products because it has more profit. Where this gets shady is when your upline tells you that they have your best interest at heart or that you virtually cannot succeed without these tools. Imagine your reaction if a vacuum cleaner salesman told you that he has your best interest at heart and that you cannot possibly clean your home without his vacuum. In an odd way, that is exactly what is happening when you purchase tools from upline. What's even worse is that the tools rarely ever work out for the IBOs who buy them. What if you bought a vacuum that didn't work? You would return it for a refund. What if the salesman said you can't return it because you used it?
I find it odd that IBOs accept this BS from upline. That you can only return unused tools. You should be able to return a product because it didn't work! Did that standing order actually help you to sponsor new people? Did you sell more products because you attended a function? Whether a tool is used or unused should not matter. You should be able to get a full refund if the tools didn't work. If not, IBOs who cannot return tools should complain to Amway and the better business bureau, and file formal complaints. Many IBOs simply quit and walk away, giving the tool sellers a break. If the tools don't work, you should return them on that basis and demand a refund. If I bought a product at Costco or WalMart and the product did not work or I was not satisfied, I can return it no questions asked. I challenge IBOs and former IBOs to do this with their products and tools.
One of the most upsetting things is the way they tell IBO's to read, Business in the 21st Century by Robert Kiyosaki so they can be reconditioned to think in the "B" quadrant. The problem with this is two fold:
ReplyDelete1. Robert Kiyosaki has not only failed in the business he is hyping in his book, but also continues to scam people with seminars for real estate. He has no accreditation or accolades.
2. This is the bigger problem. Being an IBO does not make you in the "B" quadrant ever. Before you get to the success of a diamond you are stuck between the E and S quadrants taking the worst from both. You are an employee, because you have no control over product direction, marketing, sales techniques, or research. You are simply being given a product and essentially forced to consume it or sell to friends and family. You are in the S quadrant, because you get to make up your own hours, but you also don't get any health insurance, 401k, or pension. These are commonly found in most jobs that fall into the E category that are not entry level.
Let's say you do make it to Diamond and you have 1,000 downlines that are helping to fill your PV. Instead of these people working for you, you are essentially a slave to them. Every year 50% of them will quit, which means you need to find another 500 downnlines just to keep your minimum diamond PV. No other job has 50% of people quitting every year. They would be out of business. You are also not allowed to walk away and let someone run the show for you. As soon as you leave, you are instantly cut off, and the next person in your downline will seize the assets you have created. You are essentially a prisoner to this gig for the rest of your life if this is your main source of income. You cannot sell off your equity to your downlines, because there is no equity in your business.
"B" businesses are the opposite of this. They have massive amounts of equity built in, and are often leveraged and bought out (Botox being bought by Pfizer for 100's of billions) is a perfect example of this. There is no diamond buying out another diamond when they want to move on with their life, instead they drop out of sight or go bankrupt (Greg Duncan...looking at you buddy).
This is a terrible fallacy that needs to be confronted every time an IBO brings up this ridiculous book, and compares Amway to businesses like Microsoft. The only B in this business is BULLSHIT and the people who run it.
Good post Mike.
DeleteKiyosaki is just another financial guru who has no fruit on the tree, except selling BS to a captive audience (Amway IBOs)
A diamond cannot "walk away" because the attrition would eat up his business and the income would drop dramatically or stop altogether shortly after a diamond stopped working the business. Also, the honorariums and income from cds and other tools would stop.
Your Amway business has no equity. There's no real estate for a brick and mortar building, no equipment and you don't own your downline. All you own is your place on the pyramid.
IBOs get sucked into this thinking because they want to believe they are entrepreneurs or real business owners but the fact is they are commission only sales people with all the risk and no paid benefits from Amway.
Right on, Mike and Joe, your comments hit the nail on the head.
DeleteRemember Kiyosaki talking about majority of people in the rat race?
Ironically, Diamonds and low-level IBO's are in the rat race and more than 99% will remain trapped in the rat race.
Amway has it's own rat race. Recruiting anyone with a pulse and working yourself to the bone so you have the honor of giving your money to your up line.
DeleteSo as i stated before on a different blog entry I am currently being recruited to be a IBO. Of course I have no intention of joining just looking out for a friend who I hopes sees the light very soon. But I did read that book and thought half of it was interesting. The other half is just the same story over and over again and filler.
DeleteI currently am a S quadrant guy so if my projects dried up tomorrow i would be screwed. So the one thing that that book did for me was light a fire under me to form a real company. Not a IBO but hopefully a real online company that i can later sell down the road. I would never follow what Kiyosaki says (I mean Forbes outed that he never had a "rich dad") but I liked the message of doing something for yourself. But not as a IBO thats for sure.
I believe Kiyosaki is a fraud who never made any real money by doing what he preaches. He is just like the Amway up lines. They make their money selling books, CDs and seminars.
DeleteI heard his seminars are painful as all they do is try to sell you a more expensive seminar along the way. These kinds of scams should be shut down.
The fact that your up-line is resistant to buying back "tools" is a sure sign that the tool system is a profit-maker for him. If he did provide the tools to you at cost, he'd have no objection to refunding your money and then re-selling the CDs or tapes to new IBOs.
ReplyDeleteAnd the stipulation that only "unused" tools will be bought back is a sure sign of a rip-off. How can you tell that the tools are worthless to you unless you use them at least once?
That lying douchebag, Dexter Yager, refused to allow anyone to duplicate any of his tapes and thereby save money. His reason? A duplicated tape would not be of the same audio quality as an original purchased from his system. You really have to have set of stainless steel balls to come out with a lie like that.
Of course, duplicated tapes don' make him money. I bet if you said you would listen to the CD with a friend, he would tell your friend to buy his own. They are shameless when it comes to squeezing every last cent from downline IBOs.
DeleteIt's true. My sponsor was a roommate of mine. We asked why we couldn't just get one cd since we live with each other. We were answered with, "two separate businesses, it's not the way you want to duplicate things."
DeleteUs being young sheep at the time, hesitantly obliged. Looking back... STUPID!!
I believe Kiyosaki, and all of these annoying Amway Diamonds and Crowns that are still in the business have one good trait that can go a long way in a business, and that is charisma. That seems to be the most powerful ingredient to a great company that is growing. In any business there will be so much negativity poured in every step of the way, and they can teach you to set your priorities straight and find a way to persevere.
ReplyDeleteWith that being said, they know how good they are being charismatic, and utilize that to brainwash, manipulate, and drain people's bank accounts. I believe the anonymous that stated he wants to be in the B quadrant did take the only thing of value from that book. All you have to do to get there is have a good idea, and inspire people to believe in your idea.
P.S. To clarify my last sentence, that means something ethical, and beneficial to society. I can understand how people will say that is why Amway is good.
To a neutral but trained observer, you can see how these up lines (in addition to having some charisma), use clever psychology in their speeches.
DeleteThey'll make small talk that you can agree with such as taxes are too high, cost of living keeps going up. I wished I had a way to generate some extra income to battle these issues.
Then the hook comes and they 'I was in that boat too" until I discovered Amway. Then they qualify it by saying "it's not get rich quick" and make is relatable by saying "anyone can do it".
Then they set the hook by saying "you can do it" and "I can help you".
A lot of these are deceptive half truths but sounds perfectly sensible and doable to a prospect.
Then the final hook is to say "our foolproof system of cds, books and seminars" are a key and vital to your success.
Amway defenders will chime in that the tools are optional but to a newbie speaking to an alleged millionaire who was made credible by the audience, it would be hard to refute such wisdom coming from an experience and high ranking Amway diamond.
And that's when the business losses begin......
Let me add my two cents here. The question is charisma itself -- is it a good thing? Joe and Mike seem to agree that charisma can be a positive asset that leads to good things: giving incentive to others, generating energy for a new idea, and recharging one's initiative. The Amway big pins who use their charisma to bleed IBOs dry are, from this perspective, abusing a naturally good thing for selfish ends.
ReplyDeleteBut I'm not so sure about that. Human beings are morally weak and subject to all kinds of temptations. Someone who has the gift of charisma faces a very serious temptation to use it selfishly to exploit others who don't have the gift. Isn't that what we've been railing against here at this blog? Smirking diamonds with big smiles and blow-dried hair beaming at us from the stage as they talk about their mansions and their new Mercedes? That's the kind of evil "charisma" that keeps the Amway fraud in business.
But is it any different in any other activity or enterprise? The charisma of entertainment celebrities that energizes fandom and groupies and frenzied crowds? The charisma of stupid politicians that starts campaigns? The charisma of some televangelist preaching to hordes of dimwitted true believers? The charisma of the good-looking stud who seduces and abandons dozens of naive young girls? When is charisma EVER good?
If charisma is basically just glitz and hype and the capacity to generate mindless enthusiasm, then it is a dangerous thing in itself.
You are right but diamonds seem to use their charisma to lure gullible prospects into buying stuff they don't need so the diamonds can profit.
DeleteI think charisma is inherently bad. It allows one person to mesmerize and control others. And the desire to control other people's lives is, as the psychiatrist C.G. Jung said, the most evil propensity on earth.
ReplyDeleteIt can be good or bad. The diamonds use their charisma for bad.
DeleteI have to disagree with your thought that charisma is inherently bad, and I think that charisma is actually inherently good. I think that people's mindsets to take advantage of being captivating for the purpose of deceit and fraud is the true issue. Charisma in itself is an incredibly powerful device that will only help people. The problem is that it can help people to do the wrong thing, and hurt people.
Delete