Imagine an island with 100 adult residents. One guy gets sponsored into Amway from a cousin in another area off the island. Well, the island residents are a pretty tight knit group so the one IBO immediately sponsors his six best friends and eventually, all 100 island residents. They are all dead serious about the Amway business so they all work hard, but because everyone is an IBO, they can only self consume 100 PV each. Thus the 100 IBOs (collectively) move 10,000 PV each month. The group as a whole generates about 30,000 BV and the group receives $7500 in bonus money from Amway. Of course, the first IBO sponsored is now a platinum receiving most of that money with the rest of the group receiving smaller bonuses.
Being serious Amway IBOs, they all get standing order, books of the month, and travel by air to functions. They pay on average about $250 a month for their Amway training/tools. Thus the group pays about $25,000 a month for the training that will one day allow them to retire and quit their jobs. The island community is losing a net of $17,500 from their local economy each month. However, there is one resident IBO who is making a nice income urging everyone on. Let's evaluate the group.The platinum IBO is making a nice income and will receive a $20,000 bonus at the end of the year. His 6 downline friends make just about enough to break even (approximately 1000 PV) or lose a little, although they are still spending about $300 a month on products. The rest of the residents have lost over $200,000 collectively ($17,500 a month). The guy who owned the local grocery store went out of business and all the entertainment related business went down because the residents had no disposable income to spend money on anything except for Amway related activities. Eventually they all quit, including the platinum because once his group quit, he too, began to lose money.
Now Amway defenders will cry that this could never happen, but it shows that even if you could get everyone in the US to join, this scenario is what would happen. I believe the Amway name and reputation is for the most part, saturated in the US. Nearly everyone will have heard the Amway name and/or will know someone who had a brush with Amway. Because of the tool peddlers such as WWDB, BWW, or Network 21, there are likely millions of people in the US who ended up with a bad experience, perhaps tricked into attending a meeting, or lied to about something related to Amway.
While this story is fictional, it is what would happen if there was a city where everyone joined the business. It is what happens today. Few people benefit at the expense of their downline. And as usual, it is the tools that drive people to lose money - on Amway island, or anywhere else.
I brought this same argument up when somebody was trying to recruit me for Amway many years ago. I asked about "market saturation" when there were too many Amway dealers competing in the same place for business.
ReplyDeleteI was then told by the recruiter that the city which had the most market saturation for Amway was Montreal, Canada. But, he continued, Amway only accounted for a mere five percent of the soaps and cleansers trade in Montreal (these were the old days, when Amway only made household cleaning products). So even in Montreal the opportunity for making money with Amway was wide open, according to the recruiter.
The issue in Amway isn't the hypothetical one of market saturation (yes, if everybody joined Amway the entire world would be enrolled within a month or two). All MLMs are subject to that hypothetical danger. The real argument against Amway is that it is next to impossible for an IBO to make any serious money in the racket because of its poor rewards system, and its flagrantly criminal "tools" sideline pushed by the various AMO subsystems. Those are what you could call the "inherent" faults in Amway.
But today, the biggest fault with Amway is an "external" one, and that is its utterly rotten reputation. This bad rep is now world-wide, and is affecting overseas operations and is hampering the recruitment of new IBOs. This external fault alone is enough to make Amway a very bad bet for anyone who is thinking of joining.