Joecool is headed for some sightseeing, including some camping in Alaska. I might be in remote areas so this blog won't be updated until I get back around June 10th. Please enjoy the story below about my time as an IBO in Amway back in the mid 1990's;
When I was recruited into Amway, I was told that I could make money, which would roll in forever and ever. Residual income. That was the concept that appealed to me when I was recruited. I was also intrigued when I was told that I could do as much or as little as I wanted. I winded up signing up for Amway sometime in 1997 or so.
However, when I signed up, my sponsor told me that I would be wasting my time signing up to sell products (not verbatim). That if I was going to get involved and spend the time, I may as well try to build an organization and make the big bucks. I consented and then he immediately told me that I needed to get on standing order. I was told that standing order was a tape subscription, and it was only $6 a tape. Nobody ever mentioned that every other week, it was a two tape set so basically, you are buying at least 6 tapes (now cds) per month minimum.After a week or two, I had registered a couple of my friends into the business and my sponsor tells me that I cannot be a leader without attending all of the functions, and that I cannot listen to the same tapes (cds) over and over. That's when my expenses shot up like crazy. Of course, I was excited with the folks I had sponsored so I went along with the plan, and I was edified for it, so it seemed like I was "being an emerging leader" and was propped up as an example of how to build an Amway business.
Amway defenders question how I could possibly spend an average of nearly $1000 in a month for tools. Here's the breakdown, and although my WWDB group experience may not apply to all, I certainly continue to hear similar stories of abuse. (This story is a reprint from my experience as an IBO, and the numbers in terms of expenses are from back in the mid 1990's. I'm sure expenses are much higher now)
Standing order $36 a month. (6 tapes a month @ $6 each)
5-7 extra tapes each week $$120 - $168 a month
Amvox (voicemail) $24 a month
Open Meeting $6 a month (plus parking fees)
Regional functions $24 a month (plus parking fees)
Subtotal: $258/month (not including parking fees)
Major functions (4 times a year) I live in Hawaii, and major functions required mainland travel at peak travel times (January, March, July, October).
Round trip airfare $700
Hotel: $240 (for 2-3 days)
Rental car: $150 - 50 per day for 2-3 days)
Function tickets $100 to $150
Meals and other misc. expenses pushed a major function to over $1200 for each trip.
These costs, not including gas money, totals about $8000 a year. Add in the cost of products and you are spending about $1000 a month on Amway. Yes, the products are not a business expense, but then again, how many of those over-priced products would you buy if you were not an IBO? Do any former IBOs still buy double x? Do IBOs actually sell any double x? I believe these customers are rare.
If your sponsor told you that Amway would cost you nearly $1000 a month (higher end, including product) or $100 a month (low end, not including products), would you still join? Once you agree to register, the expenses are then slowly revealed to you and in many cases, called investments into your business. Be wary and ask tough questions as to whether these items help you to make a profit, or whether they take away your profit.
Upine will often lure you in by giving you tools or cds and even paying for your first function or two. But if you show signs of interest or if you sponsor a downline, you will become a "business owner" and you'll be expected to do the same for the downline you sponsor. Amway can become an expensive lesson in why you should avoid MLM altogether. Caveat Emptor.
2 comments:
A serious membership in Amway will certainly cost you $1000 a month, and in today's climate it will very likely cost you twice that amount.
What's really shocking (and revealing) in the above account is that the man who was recruiting you actually admitted that trying to sell Amway products to the general public was a total waste of time, and would never earn you any serious money. Getting rich in Amway was all about recruiting, and pretty much nothing else.
This is why the Tools racket developed in the Amway subsystems (or AMOs). Those smarter members who realized that trying to retail Amway products was a losing proposition saw that there was a profit to be made instead by teaching down-line by means of tapes (now CDs), and endless meetings and functions.
In 1983, at the famous Fontainebleu meeting in Florida when Amway officials from Ada, Michigan met with the heads of the various AMO subsystems, there was major fight over the Tools racket. The officials from Michigan pointed out that the Tools operations were illegal, and that the the government was bound to crack down on them eventually as pyramid schemes. The AMO heads told Amway to mind its own business, since the AMOs were independent enterprises and not subject to Amway's control. They told Amway to stick with making the products, because Amway wouldn't be making a dime without the regular monthly orders that were extorted from IBOs in the AMO down-line systems. Nobody in the general public was interested in buying Amway products.
Amway from Michigan surrendered. They knew the truth -- Amway products are non-competitive with more popular brands, and the only way Amway was moving any products was through the AMO subsystems.
Great post. You could always tell something just wasn’t up to scratch when looking at the relationships of the AMOs with Amway.
When I was in URA / UR Association / URAssociation , the IBOAI was often put on a pedestal as if they were fighting for us little guys (IBOs).
Each story told from stage seemed to be some power struggle between the Board and Amway. And of course the usual big named Pins were named as being on the Board. And sometimes our Executive Diamond would show slideshows of the big IBOAI meeting that just took place and would hype up the latest and greatest breaking news.
The IBOAI folks know that they have so many people in their groups that they have Amway by the balls. They also know they can leave at anytime, take their teams with them, and sell the newest MLM Scam.
Then again, the two groups realize they need one another IBOAI folks know that if they leave and join another MLM, that getting people to sell that crap will be harder than getting them to sell the current crap. Meanwhile, Amway needs rather volume for their high priced goods which they get with these AMOs.
It’s a hate/hate relationship even though it’s painted as rosy, strictly business, and with the Downline IBO being the so-called focus.
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