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. In any case, it illustrates that Amway may not saturated in terms of everyone being involved, but saturated to a point where many businesses are treading water. My personal observation with no other factual basis, is that Amway venues seem to be getting smaller, meaning there are fewer IBOs and prospects to seek out. This is based on what I see here where I live and comments about other functions that take place elsewhere.
Amway in Ada, Michigan should have realized that by allowing independent subsystems (what we call AMOs) to operate, they were opening the door to a huge publicity nightmare.
ReplyDeleteAll the AMOs (WWDB, BWW, Network 21, Team, etc.) were not interested in anyone succeeding in Amway, but only in getting persons to SIGN UP in Amway and pay for endless tools and functions. They were teaching organizations that basically made money by charging tuition fees for advising members about the Amway procedures.
This led to all kinds of corruption and lying. Creeps like Dexter Yager and Ron Puryear didn't give a damn whether you made a profit from your Amway business. They just wanted you in their AMO for as long as possible, paying for membership and function fees and the monthly supply of "tools." Your up-line in these AMOs was essentially predatory -- they ripped you off, insulted you, humiliated you in public, interfered in your personal life, and then soothed you with promises and "love-bombing" to keep you on the hook. Naturally, Amway's reputation was dragged through the mud because of this, as thousands of ex-IBOs started to recount their bad experiences on the internet.
This is when Amway picked up the nickname of "Scamway." And recruitment plummeted as word got out that Amway was just a disguised Ponzi scheme and a racket. In fact, one of the first things that happened when the internet get started in the early 1990s was this: the various leaders of the AMOs went to Ada, Michigan and demanded that Amway do something about the terrible negative publicity that was appearing on the internet.
But nothing could really stop it. There was (and continues to be) an avalanche of horror stories and anecdotes and testimony abut how rotten and corrupt the entire Amway MLM is, and about how many persons have been financially ruined by it. As a result, Amway recruitment in North America is pretty much at a standstill.
All Amway could do was try to export itself outside of the United States and Canada to foreign countries where the MLM idea was still unknown. That worked for a while, but Amway still lost billions of dollars in sales, and now the foreigners are starting to get wise too.
So, is Amway getting smaller? Absolutely. The company is trying to disguise the fact, but it's hard to do that when your profits have shrunk by billions of dollars.
Thanks for your comments. I believe the tools (tapes and functions at the time) were designed with the intention of helping IBOs and to motivate distance IBOs. But soon after the good intentions faded away, the big diamond leaders like Yeager, Britt and Puryear quickly realized that the tools were lucrative to the point where it was possibly more lucrative than Amway itself. That's when the training program became a scam, in my opinion.
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