Joecool is going on a European cruise this week so I'll be gone for at least a week before any new articles will be posted. In the meantime, enjoy this reprinted article I posted in 2013:
When I was an IBO, I often found myself buying more goods than I needed because a single person simply has no use for 100 PV worth of Amway goods on a consistent month to month basis, save for eating double x for breakfast or something. In general, Amway's prices are higher than many retailers, because the cost of the IBO bonus is built into the price of their goods. Probably more than 30% additional markup is needed for Amway to cover all of the IBO bonuses paid to layers upon layers of upline and downline.
Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make an income. There's some documentation that Amway sells only about 4% of their goods IBOs(Http://mlmtheamericandreammadenightmare.blogspot.com/2012/03/chairman-and-ceo-of-amway-have.html). This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more. You basically can't build a sustainable and profitable Amway business without downline.But sponsoring is a big problem. Most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many many others have left comments on blogs expressing the same experiences. Other were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard ti find someone in the US who has not experienced or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.
You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.
If an IBO can't sell Amway products to members of the general public, and can't recruit new members to be in his down-line, his business is DEAD IN THE WATER. Period. End of story.
ReplyDeleteA smart IBO sees this is two or three months, and immediately quits. A stupid IBO lives in a world of dreams and fantasies that can last for years.
Just came across this blog. I can tell some stories and perhaps I will at some point. I was in the business as a young guy in the late 70s to early 80s during which time the company was havinb exponential growth. As a college student studying marketing I always had some very uncomfortable questions for people LOL, but I was interested in the MLM concept as a non-traditional channel. I learned a lot and was saved from wasting too much time and money by being smart and believe it or not, being associated with a group of uplines that were honest and good people who were quietly critical of the direction some of the groups were going in and the company's half hearted attempts at addressing the issues. About 15-20 years later I had a relative by marriage get in the business who I tried to educate as he tried to get me back in. His story ended up disastrously despite my efforts. No one I knew personally lasted in the business for the long haul (up to Diamond Level) and many of the stories ended up in bankruptcy and divorce.
ReplyDeleteThanks for the comments!
ReplyDeleteHow about we take a look at what the FTC and BBB has to say about Amway rather than the rantings of a guy that doesn't post using a real name and others that could not, it seems, be responsible for their own choices, shall we?
ReplyDeletehttps://en.wikipedia.org/wiki/In_re_Amway_Corp.
https://www.bbb.org/search?find_country=USA&find_latlng=42.961832%2C-85.493764&find_loc=Ada%2C%20MI&find_text=Amway&page=1&touched=1
LOL. Anyone can post on wikipedia, anonymously.
ReplyDeleteAnd the BBB comments on Amway has nothing to do with how lousy Amway is as a business opportunity.
You have to try harder that that.
To Anonymous at 8:16 AM --
ReplyDeleteYou complain about someone posting as Anonymous, but you post as Anonymous too.
Are you a hypocrite, or just stupid, like most Amway freaks?
Why don't you tell us your real name, whether you are in Amway or not, and if so, how much money you have made (or lost) so far? That would be a lot more useful that crap from the FTC and the BBB.
@Anonymous February 11, 2024 at 8:16 AM
ReplyDeleteThe BBB evaluates customer service, for customers. It does not evaluate business opportunities for entrepreneurs.
As per the link you posted on Wikipedia regarding the 1979 FTC ruling, do yourself a favour and read the link you posted. It is quite short and easy reading, I am quite surprised you did not seem to have read it, because it's not exactly flattering to Amway. As you'll see, the FTC wasn't overly impressed, it ruled that Amway should "cease misrepresenting to its distributors (participants) the average participant's likelihood of financial security and material success".
It ruled Amway not be a pyramid scheme "according strictly to the statutory definition". That is hardly language of praise and comfort!
The FTC then accepted and used as reasoning the role of retail sales to customers, it named Amway's 10 customer rule. Perhaps you can provide an update on how that rule is being adhered to in practice?
I am guessing not very, because Amway has a history of being found violating rulings, the same wiki article it states that Amway agreed in 1986 to pay a penalty for having violated the ruling.
Interesting that you mention the FTC, because it does not exactly sound as if it endorsed Amway, does it? What really puzzles me is that it's all there on the link you posted.