I believe that Amway IBOs have approximately a 50% attrition rate for the first year alone. If you look at a 5 year window, I believe the attrition rate is something like 95%. So what we're saying is that out of 100 IBOs, only 5 will be around in 5 years, or out of 1000 IBOs, 50 will remain after 5 years. This is extremely significant because if you are a business builder, you will need to replace half of your IBOs every single year. For this reason, I am very doubtful that there are IBOs who "built the business right and built it once", who no longer do Amway related work, but still collect significant residual income. I would guess that significant income could be defined as being enough to live a lifestyle in the top tax bracket (for the US) without having to report to a J-O-B.
Now I understand that some IBOs take it personally when I bring up subjects like this. It is because they have been deceived by some upline diamond or big pin who has sold them on a dream of financial prosperity for life if they will only work hard for 2-5 years. I once thought so too, but realized that there isn't a single diamond that I know of who built the business right and walked away to enjoy the beaches of the world while truckloads of money rolls in. Kinda makes you wonder why you see Crowns still working, and diamonds actually quitting or resigning. I have asked the question many times and it has never been answered. Can anyone name a few people who built their business right and built it once who is currently enjoying these lifelong residuals? Also, if that were a benefit, why doesn't Amway say so?
Instead, you have a constant and endless flow of motivation being sold to IBOs. This motivation comes in the form of cds, books, meetings, functions and other things like voicemail messages. It's sad that IBOs have to continue to pay through the nose for motivation and "teaching" about the Amway business when there are cheaper and more efficient means of communication. For example, why would you need an expensive voicemail when a facebook group account can disseminate messages to your group in seconds at no cost? It is because the uplines want to extract every possible sent from their downline. Because of the internet, I believe people are starting to figure things out and avoid the systems altogether. I hope Joecool's blog contributes to this.
All the motivation IBOs truly need is to see a net profit at the end of the month. If IBOs actually earned an extra $200 a month, or $50 a month, or $600 a month as advertised, there would be no need for motivational speeches. The IBOs would simply look at the growth in their finances and they would keep going. The poor retention rate is easy to explain. IBOs are losing money because of the system expenses and they lose their motivation to continue. If you are an IBO or a prospect, stop and think for a minute. If you are making an extra $200 a month with minimal effort, would you need functions and other materials to motivate you? Or would you have intrinsic motivation from the profit? All the motivation you will ever need is a net profit. Take that to the bank.
Was approached a year ago by a former colleague for the "business opportunity". Actually Network21, although it talk a while to extract that info, and even longer to extract the Amway bit. He said he was running it for 15 years, and he wanted to empower others to reach their goals (by implication, as well, as he did). It was not immediatly obvious to what extent, if any, he had reached his goals..He seemed worse off in terms of time stress and finances, than his colleagues in his still held real job, but I understood looks could be deceiving.
ReplyDeleteI said I would absolutely look at it, and would like to evaluate in terms of an income statement or Profit/Loss statement. (The guy was an employed IT professional, who had accounting as one if his majors, so I wasn't intimidating him with jargon). I heard of him once again, and after again mentioning that an income statement would allow me to make a call (rather than hearing about someone else's Ferrari or mansion) I never heard anything again.
Why this comment on this specific post? At the first conversation I mentioned that I thought one should not discard the importance motivation and training, and that I was a big fan of it. I was therefore especially excited to see his training expense as percentage of turnover and net profit, and how the return on investment was realised.
I have to conclude that the movement is very similar to a gambling obsession or substance dependency. All reason is discarded (the guy did not apply what he knew so well about business, to his own "business"), life is neglected, everything to feed the obsession. And it seems that materials and tools are necesarry to keep people motivated by brute force in the wake of lack of net results in free time or finances.
One of the many reasons people fail in Amway is from stupid blogs like yours. You are probably from one of our want-a-be like Amway competitors. Did you ever make to a level in Amway that you can prove all of your statements? Probably not. I ran into a couple going to achievers, they said, "they had never sold one Amway product in their life. Their parents left them the business in inheritance to them. And they still qualify for Amway Achievers convention every year."
ReplyDeleteSo sorry to bust your bubble joecool but people like you are part of the problem not the solution. Have a nice life.
HI Rick, I guess you never read my profile. And for thr record, your story reeks of bullshit.
ReplyDeleteThat's the problem with people like you. You wouldn't know the truth if it slapped you in the face. 4000 pv does not make you profitable if the people under you are doing the work. And 4000pv doesn't make you knowledgeable about how Amway works for the higher levels. What it makes you is an expert, ex being a hasbin and spurt being a drip under pressure.
DeleteI've been building the business for over 20 years and will continue to build it for the rest off my life. I've reached the 7500pv level and it pays pretty good. Your right you won't make very much if you only have one or two legs and they are doing the work.
I loose about 25% of my people a year for several reasons.
1. They read stupid garbage written by someone who didn't make it. My own son stopped building the business because he and his small group that was at1000pv found blogs that were like yours.
2. I've lost my first 7500pv leg to another MLM Herbalife moved in and promised more money. The Herbalife person made them stock up on their weight loss products and they all lost a lot of money. Needless to say they are all not very interested in any MLM.
So if you would kindly stop blogging about your Amway experience, I would appreciate it. Because it does hurt those who are honestly trying to build their businesses.
This "Rick" is an asshole, but what he says is very revealing.
ReplyDeleteIt's clear that he is infuriated by the existence of Joe Cool's blog, and the many other hard-hitting anti-Amway and anti-MLM blogs now in operation. He attributes IBO failure in Amway to these blogs.
Wow! I guess we really have gotten under their skin. Keep up the good work, Joe. Amway is hemorrhaging members because of this blog's existence. That's really great news, even if we have to hear it from an asshole like "Rick."
Hi Rick,
ReplyDeleteWhat is the truth? The truth is that more than 99% of people who sign up for Amway make nothing or lose money. The truth is the average income of all IBOs is about $100 a month, and that includes diamonds. The truth is that Amway products are overpriced because Amway's "generous" bonus is included in the price of the products. The truth is that it's nearly impossible to build and sustain a business where most people do nothing and out of the rest, very few do enough to actually build a business. The truth is that most people get swayed by the lure of residual income and wealth and they quit disillusioned when they realize that Amway is a dirty word and selling overpriced products and sponsoring is nearly impossible when Amway's reputation is in the gutter. The truth is Amway sales globally went from 11.8 to 8,8 billlion in the last threee year.
I built my Amway business to 4000. I had eagle parameters and was the rising "star" in the group for a while. I know how the bbusiness works and I understand what happens backstage at functions. You might have made some money. Good for you. But it comes at the expense of your downline. Sadly, those folks believe in you and you are leading them down a road of financial doom.
NO, I won't stop blogging. My experiences, knowledge and awareness of the business provides valuable information so people who are prospects or wanting to join Amway can get real information. Something that people like you withhold to get people to join.
My blog has reached well over 1.7 million people in the last 6 years or so. I look forward to serving another 1.7 million people.
I servie pro bono, unlike Amway leaders who squeeze every dime they can out of their downline.
"Kindly give up your 1st amendment rights b/c I'm having a hard time ripping people off when the facts are out there"
ReplyDeleteCongratulations to your son for seeing what a scam this is.
ReplyDeleteRick said, "That's the problem with people like you. You wouldn't know the truth if it slapped you in the face. 4000 pv does not make you profitable if the people under you are doing the work. And 4000pv doesn't make you knowledgeable about how Amway works for the higher levels."
ReplyDeleteWTF are you talking about? The business doesn't change if you are at the bottom or the top. There is only one payment structure and there are only two ways to make money. You have to recruit or you have to sell the products. Since Amway has gone WAY out of its way to help install these stupid LOS' and promote "duplication" along with a stringent set of rules on how to sell, there is really only one method of success. You have to recruit and you have to be darn good at teaching people how to recruit.
Rick said, "I've been building the business for over 20 years and will continue to build it for the rest off my life. I've reached the 7500pv level and it pays pretty good. Your right you won't make very much if you only have one or two legs and they are doing the work."
That's fascinating Rick, especially since the business was brought to me as a "2-5 year plan" or a "10,000 hour plan", or a 10-15 hours a week plan, and yet you have been doing it for 20 years and are still not retired...hmmmmmm
What does that mean if they are doing the work? Does that mean they are doing a better job recruiting than you are directly? Well duhhhhhhhhh, you get paid way less if the people are further away from you...that's how these things work.
Rick said, "I loose about 25% of my people a year for several reasons."
You LOSE* 25% of people for one reason. THEY AREN'T MAKING THE MONEY YOU CLAIM THEY WILL MAKE!!! For the record, 25% is probably lower than half of the normal drop out rate. I obviously can't prove it, but you don't seem like the sharpest tool in the shed so it is fair to say that this is probably a lie. Also, if you have a 25% churn rate, how the heck are you still finding people after 20 years? It sounds like you are a platinum and that usually means a downline of around 1,000 people. I find it highly improbable that you are getting 250 people replaced every year.
Rick said, "1. They read stupid garbage written by someone who didn't make it. My own son stopped building the business because he and his small group that was at 1000pv found blogs that were like yours."
You just gave Joe a bunch of crap for being 4x more successful so why would you care if they walked away at 1000 PV? That means they were obviously failing and losing tons of money. That also means they realized you are completely full of shit and don't want to be like you. Good for them!
Rick said, "2. I've lost my first 7500pv leg to another MLM Herbalife moved in and promised more money. The Herbalife person made them stock up on their weight loss products and they all lost a lot of money. Needless to say they are all not very interested in any MLM."
ReplyDeleteHow does one lose a 7500 PV leg? If someone was that devoted to one MLM they could certainly run a second at the same time. I've read people are in multiple MLMs at the same time frequently. This logic makes no sense, and they probably left because they were failing and realized they were never going to be successful after they saw where you are in 20 years. Your excuse for them suddenly getting hosed by Herbalife doesn't make any sense either as front loading has been very regularly used in Amway. You can watch the Dateline episode with Eric Schiebeler and he will show you what an Emerald's lifestyle looked like.
At this point, I'm pretty convinced you never were a 7500 level guy anyways because you wouldn't be wasting your time here when "25%" of your downline is constantly needing to be replaced. That is more than a full time job.
Rick said, "So if you would kindly stop blogging about your Amway experience, I would appreciate it. Because it does hurt those who are honestly trying to build their businesses."
LOL!!!!!!!!!!!!!!!!!!!!! You are asking him to stop blogging because he is successful at doing the very thing he is trying to do? Good luck with that logic! Kudos to you Joe! Another A+ for freeing many from the Amway scam!
Man oh man, this guy "Rick" is a real piece of work.
ReplyDeleteHe wants Joe to stop writing his blog because it's making it hard for Rick to get new IBOs. Well, DUH! That's like the owner of an auto body shop complaining that all those traffic lights and stop signs are hurting his business.
He's losing 25% of his down-line every year, but it never even occurs to him that they are departing because THEY AREN'T MAKING MONEY! Oh no -- it must be because they read a blog.
This "Rick" is dedicated to Amway, but he's been in it for twenty years and still can't retire to walk the beaches of the world. What happened, Rick? You were supposed to get rich in two to five years.
Losing a 7500. Many reasons. Same thing as a manager of Wal-Mart becoming a manager of targert
ReplyDelete1000 people. 1 Person invite each month
ReplyDelete12,000. A year. No hard to get 250 people there.
50% drop off rate
ReplyDelete1 Ibo month
12 year
6 Ibo year 2
6x10 60. All Ibo bring 10 each
66 people
33 Ibo year 3
33 x 5. All Ibo bring 5 people
165 people
80 Ibo year 4
80 x3. All Ibo bring in 3 people
240 people
120 Ibo year 5.
With 50% drop off and even less recruiting per Ibo still can grow
""1000 people. 1 Person invite each month
ReplyDelete12,000. A year. No hard to get 250 people there.""
Amway always sounds easy on paper. Reality paints a different picture.
What the bloody hell are you talking about, Rashaad?
ReplyDelete