Wednesday, February 8, 2023

Nonsense: I Can Outearn My Sponsor?

 One of the reallt silly defenses that Amway supporters use to defend their business is that it must not be a pyramid, or the Amway business must be legitimate because you have the opportunity to earn more than your sponsor. While many downlines in fact do earn more than their sponsors, it's likely because about half of all IBOs quit in a year or less.   Those who stay for even a year, when you factor in the business expenses for those who are on tools, the reality of suffering business losses also causes people to exit the business. It's not that hard to earn more than people who quit. But even at that, someone who quits is often better off than IBOs who continue because those on the system are losing money.  Then there is also the countless number of IBOs who sign up and do absolutely nothing.

An IBO at the 100 PV level will earn about $10 in bonus income from Amway. If they are attending functions, buying standing orders and voicemail, they will operate at a loss. Thus, unless their business grows each month (highly unlikely, even if they do as upline advises) then they will suffer losses each month and those who quit will be better off. It is why I have stated that doing nothing or staying home and watching television can honestly be better options than joining Amway and the systems such as WWDB, N21 or BWW. It is why reasonable people can conclude that working for minimum wage, even a few hours a week makes you better off than joining Amway and the systems.

The defense that someone can out earn their upline is silly. The true benchmark of this statement would be for a new guy to start a business, and in 2-5 years, out earn someone like Bill Britt. It will never happen because upline has direct influence over the fortunes of their downline, even at the diamond level. It is why you have seen diamonds quit or split from their upline to start their own training systems. They cannot affect change from downline, without upline consent, thus the breaking away from their "mentors" or leaders. At times there have even been lawsuits over the tool's income. Do people really sue their mentors? Don't diamonds teach you that suing people is wrong? That you don't get something for nothing?

You can surely out earn your sponsor. All it takes is for your sponsor to quit or for your sponsor to sign you up and then do nothing else.  However, your sponsor quitting might mean you don't out earn your sponsor. See my example above. Taking net business losses is not out earning someone. Keep in mind that everyone in Amway is equal. You are all unpaid commissioned Amway salespeople, bound to Amway's terms and agreements. You don't own your downline. You don't really own much as an independent business owner. You can out earn your sponsor, but that means squidly diddly when your sponsor makes nothing or takes a loss. Come back and chirp when you out earn your upline diamond. Do I hear crickets chirping now? :-)

2 comments:

kwaaikat said...

The question of pyramid or not is not whether something is a hierarchy, or whether someone can outearn another higher up in the hierarchy.

Sales people in corporate teams can sometimes outearn a team leader too.

It is whether members get paid from the contributions of other members (pyramid), or whether they get paid from the gross margins of sales to outside customers who are interested in nothing but the products (not a pyramid). If it's mostly the money from members that are used to pay successful members, then it is a pyramid.

Amway Groups are pyramids because in practice the money comes from the personal consumption of other members. If little or nothing comes from outside, it is impossible for everyone in any such group to earn more money than they pay. The design means a certain amount (a majority) of losers are required to pay the winners.

Every time when they show the plan and they say "Not into sales? No problem! I'm not a sales person type myself, and we are not looking for sales person" they are admitting that. Every time they say members only need to change their buying habits and motivate and support others to do the same, they are confirming that.

Put differently. In a fast food franchise, it is possible for every outlet to succeed. They don't always, but failure of some is not a requirement.

In Amway, it is not possible for everybody to succeed if it is almost exclusively members who buy the products. Because money comes from members, some must contribute into the pot, more than they get out.

Joecool said...

Kwaaikat, excellent response. Spot on! If only more people and prospects could see this, they could avoid a trap that upline sets for unsuspecting rubes.