Is Amway The Least Efficient?

 I once published some pro-Amway comments about how there's nobody between Amway and its IBOs. When I heard the pitch, pretty much the same thing was said. That Amway could pay generous IBO's bonuses because they "eliminated the middleman". On the surface, this might sound correct, but not when you take a closer look at it. Sure, you may not have a traditional middleman, but you have layers and layers of upline and downline, all of you get a cut from the sale of product, provided they qualify for the bonus.   It's quite clear to me at least, that the Amway system adds middlemen to the process which adds cost to the products, even if upline says the contrary.  

Many big companies advertise their products such as Coca Cola or American Eagle Jeans. These products become household names and practically everyone in the US knows of these brands. Not so for Amway. In fact, the name Amway is often associated with pyramid or scam because of bad or unethical behavior on the part of IBOs. Amway pays for some advertising these days, but I wonder what their return on investment is for their advertising dollars?   Or do they advertise just for the sake of advertising?  WalMart's slogan is "live better, save money".  Amway's is "now you know".  Now you know what?

Amway recently reported a sales increase, but I wonder if that was because of actual growth or maybe it was because they simply had a price increase? I wish Amway was more open about some of the numbers they release but that is another issue. The increased sales by Amway however, means nothing to individual IBOs. Amway's growth is not related to individual IBO's profitability. It makes me wonder why so many IBOs brag about the Amway sales when their individual sales might be zero and they might be suffering business losses despite Amway's success?

So IBOs are basically left going person to person, word of mouth to inform people about their products. In my opinion, the least efficient means of moving product from Amway to the customer. Because so many past IBOs were desperate to sponsor downline in order to achieve a level or to leverage their sales, less than ethical practices were often employed. People tricked into attending meetings, people lied to or deceived about the opportunity. The damage in reputation is enormous. For these reasons, Amway is a tough sell in North America. I believe this would explain why there seems to be more growth in Amway sales in foreign countries. I believe this is because people in foreign countries are not yet familiar with being tricked into attending a meeting, or lied to as past practice in North America. 

Do you want to sell products in the least efficient manner? If so, consider joining Amway?

The Diamond Actors?

 In my opinion, Amway diamonds are nothing more than actors. They portray a role and while they might be envied by their downline, when the lights are turned off, what remains? I believe most diamonds are simply middle-class people portraying lifestyles of the rich and famous. We could debate whether or not a diamond has an easy job. Heck, I could concede that speaking at functions can be better than a 9-5 job, but the volatility of an Amway business can make a diamond live under greater stress than someone with a regular and predictable job.

My former diamond used to live in a middle-class neighborhood, and he told the group that he was buying a property in an exclusive gated community and was going to build himself a nice home. He said his home would be on a hill right above a nice beach where he could enjoy his hobby of spearfishing and the ocean. I don't know if he ever built that home but last, I heard, he is living in the State of Washington. Makes me wonder why he would move there when he was allegedly building his dream home in Hawaii near one of his favorite beaches. (Maybe the cost of living is cheaper there?)

Think of the diamond this way. It is a fact that most diamonds are not Q12 (which means they have diamond qualifications for all 12 months of Amway's fiscal year). A Q12 diamond averages about $600,000 from Amway (source: Amway.com) but only a small percentage of diamonds are Q12. The other average non Q12 diamonds average about $150,000 a year and they augment that income with tools scam income. So, an average diamond might make in the range of $250,000. You may thing they are "rich" but after business expenses are considered, plus taxes and family medical and dental insurance, and other miscellaneous business expenses, a diamond is not financially capable of buying homes in cash, having exclusive golf club memberships and buying Ferraris in cash. What is likely is that a diamond lives a middle-class lifestyle while acting like they are rich. I had a conversation with a former emerald who told me that most of her emerald income (or diamond for that matter) comes in the form of an annual bonus so her monthly income was relatively small.

There might be diamonds who are wealthy. But if they truly are, it is because they are at a level higher than diamond and they are also very likely to have income from sources other than Amway. We know that back in 2009, Greg Duncan a WWDB triple diamond filed for chapter 7 bankruptcy in Montana and it is public record. He had homes foreclosed. This man stood on stage when I was an IBO and told the audience that anyone who makes a loan is "stupid". I wonder how Mr. Duncan felt when he reneged on his multiple home loans, despite having a triple diamond income from Amway of about $40,000 a month?

For these reasons, I say Amway diamonds are just actors. Some better than others, but in the end, when the lights and shut off, they are not much better off financially than someone with a good paying job. In fact, I have read in several places that truly rich people don't show off their wealth. That is food for thought, isn't it?

The Hidden Costs?

 One of the things upline leaders do is to disparage people with jobs. Oh, they would say we needed people to wait on our tables and clean our toilets, but in general, jobs were put down and basically the group was told that Amway is their best chance at achieving financial freedom, giving them the ability to flush their jobs. Some upline might even show a video of someone who walked off their job because they made it big in Amway. Ironically, IBO's jobs are what funds their Amway businesses. Most IBOs would be out of business within weeks if not for their job income funding their Amway businesses.

The key selling point appears to be the 2-5 years of part time work rather than working a job for 30 - 40 years and then retiring on social security which may or may not be there when you retire. This plants a fear in people about the future and then the Amway opportunity is presented in a positive light because the Amway opportunity comes with a low startup cost. What uplines do not mention is how the opportunity can become a money pit as the monthly defacto 100 PV quota starts to add up. It is my guess that if people only bought items they truly needed, these IBOs would likely move 100 PV every three months, unless they are actively selling goods to non IBO customers, which also appears to be uncommon.

When an IBO finally agrees to register, it is then that the hidden costs begin to be revealed. Many uplines will introduce standing orders and functions and present these tools as vital to IBO success. Some upline may give you some free cds at first, but eventually you'll be told that a "serious business owner" buys their own. You will also be expected to do the same for your own prospects. Most new IBOs don't know better and feel subtle pressure to conform and give it a try. Some upline may loan some tools to downline in the beginning but eventually, the IBO will be encouraged to be a "serious" business owner who should be purchasing their own tools to loan to their downline and the cycle goes on.

If you examine some version of the Amway recruitment plan, you will see that most IBOs are at the 100 PV level, which will reward you with a monthly bonus of about $10 or so. If that same IBO subscribes to the tools system, then IBO will likely be losing over $100 a month not including the product purchases. And because many IBOs have been convinced that working a job is so horrible, that they can be convinced that this condition of losing money is temporary and that untold wealth is right around the corner. Sadly, for most, this condition is the norm and even the sponsorship of a few downline, the losses continue to mount. Yet many are convinced that this is better than a job.

Ironically, a job allows people to pay their monthly bills, feed their families and many people enjoy their work and coworkers. While upline leaders may convince you otherwise, it is this very same excuse upline leaders use when asked why they are still working instead of walking the beaches of the world collecting massive amounts of residual income. I would encourage IBOs to truly analyze their efforts in Amway and determine if it is beneficial to your finances. In most cases, your Amway efforts ONLY benefits your upline's finances. For most who get involved, the Amway opportunity is not better than a job.

Quitting Is Winning?

 I often see commentary about people quitting Amway and Amway loyalists are quick to call them broke, losers, lazy, lacking guts. Ironically, these same lazy and loser types of people were "sharp" and motivated prospects before they signed up for the Amway opportunity. Someone recently left a comment on my blog about how AMOs should conduct exit interviews with departing IBOs to get to the root of the problems. I think these exit interviews would reveal that people are working hard and applying the AMO teaching, only to lose money,

Based on my years of blogging and Amway experiences, I can honestly say I believe that people quit Amway primarily for one reason. The money isn't there. Amway's own numbers show that the average IBO earns just over $200 a month and that is before taxes and expenses, and that number excludes inactive IBOs. Business building IBOs earn most of the bonuses, but business building IBOs generally have the most expenses, often participating in the system of standing orders, voicemail, books and functions.

When I was an IBO, I did as upline advised and I achieved a fairly significant level (4000 PV), but due to the expenses associated with tools and helping downline, I didn't earn net profit. This is confirmed by a study done by the Wisconsin attorney general some years ago who examined the tax returns of platinume and found that they averaged a net loss of about $1000 a year. While the study was a bit dated, I would suggest it is still very valid as platinums today, have more tools (business building materials) that they are expected to buy from upline. If I made nothing at 4000 PV, anyone with half a brain can conclude that IBOs below 4000 PV and fully participating on the system would end up with a net loss because their expenses would be similar to mine, but with less bonus money.

The bottom line is that people are very likely quitting because they aren't profitable. If people made a few hundred a month with 8-15 hours of work per week, they would continue to run their businesses. But those who work and make nothing or lose money have no reason or motivation to continue. Thus, they simply make a wise business decision and quit. What seemed like a good idea during the presentation simply did not pan out when reality set in. It's also reasonable to conclude that the products are that great because if they were, those who quit would become loyal customers, thus even if the sales force turned over, sales would consistently rise as former IBOs would become customers. It's apparent that most former IBOs do not become loyal Amway customers. In fact, for those who later discover they were lied to or deceived about the Amway opportunity, become critical of Amway instead.

Why do people quit Amway? I think the answer is crystal clear. The quitters are the winners!

A Legal Pyramid?

 Let me start out by saying that Amway appears to be a perfectly legal company, and therefore I am not saying or implying that Amway is illegal. But I believe that the way Amway businesses are run by IBOs, are like pyramids. In most groups, you will have the lowest level IBOs efforts and tool purchases being responsible for the upline bonuses and tools income. Many IBOs are fooled into thinking that the ability to surpass your upline or that you don't get paid to recruit downline makes this a good deal and that they will all be wealthy as diamonds one day.  Nothing could be further from the truth.

Unless you have a very rare group where actual product sales to non-IBOs in sufficient to cover the costs of running your business, functions and all, then it is true that the lower level IBO's jobs are likely the source of income for the uplines. How many groups are like that? None that I have ever seen or know of. In fact, how often do IBOs even sell enough products to cover their expenses for even one month out of the year? The groups that teach "buy from yourself" end up doing the most financial damage to their groups because the downline's expenses are then covered exclusively from the downlines jobs, bank accounts, or drive the downline into debt.

I've seen and discussed group structures in forums many times and I can only conclude that tool sales wipe out what little profits/bonuses some of the downlines might receive. Only when an IBO is able to sponsor enough downline to absorb the losses for them will they finally break even or make a little profit. I would guess that the 4000 PV level or platinum is where a dedicated CORE IBO would break even and possibly start to make some profit.  However, a high dedication to buying tools could still turn these levels into losses.  But we also know that most platinum groups have 100 or more IBOs in order to generate 7500 PV. Thus, we can also conclude that less than 1% of IBOs make a net profit. The only way IBOs can earn a net profit at a lower level is to avoid purchasing tools and to avoid paying for functions. Those who get involved in a system such as WWDB or N21 almost guarantee that they will have a net loss.

Sure, my job may have a pyramid structure with the CEO making the most money. But the difference is that in a company, even the lowest paid employee still receives a paycheck and has money at the end of the month. The same claim cannot be made by IBOs. For these reasons, I believe Amway to be a legal pyramid. IBOs and information seekers are free to participate, but I challenge them to sit down and really analyze their ability to make a net profit. In most cases, the analysis won't be favorable. If you are in the US in particular, you may have great difficulty in even being able to discuss "Amway" without getting strange looks your way from others. Good luck in whatever you decide.

Joecool On Vacation?

Joecool will be on vacation for the next 5 days.  I'll be visiting friends and may have difficulty with wifi so I'll just take a handful of days off.   This article is how IBOs are deceived right from the beginning. 

I was thinking about how Amway prospects are invited to see the plan. In many cases, there will have been a bit of deception or half-truths told in order for an IBO to get a prospect in front of the plan. But then I thought about the plan and how much deception was used in the plan itself by the speaker.

In many cases, IBOs and new prospects are deceived right from the beginning. The speaker might make some small talk, and get the prospect to agree on certain issues, such as income tax and insurance eating away at your paycheck, etc. When a prospect hears this, it will make sense, and they will agree and trust the speaker somewhat. After all, the speaker has been built up to be a financial whiz and all. And much of what the speaker says makes sense, at least on the surface.

Then the deception begins.............

The speaker might talk about IBOs saving 30% on products right from the start, which is false. Here's some information debunking that age old myth:
http://www.amquix.info/Save30_myth.html Not only do many products cost more, factor in shipping and handling fees and it's not even close in many cases.

Then the speaker might talk about 98% of people being dead or broke by age 65, which is not true. The speaker might talk about 90% or more of small businesses failing in the first year (which is also untrue). These little factoids (which are untrue) are apparently used to make other opportunities seem flawed in comparison with the Amway opportunity. Readers and prospects really need to do some research and due diligence, and they will easily see through the mistruths.

The speaker might then talk about how the Amway opportunity is cheap to get started and has little or no overhead. But the problem is that many dedicated IBOs will get hosed as their upline will begin to teach them that they need to invest in their business in the form of voicemail, book of the month, standing order and attending all meetings. These expenses nearly guarantee that an IBO will end up with a net loss of income. What's more, upline may teach that this is success! In many cases, the speakers don't care about the prospects. All they care about is getting people signed up and on the system. Sure, they may loan cds to newbies, but once an IBO wants more, they are likely told that "serious" business owners buy their own tools.

So, a question for IBOs and prospects. Is it a good opportunity when you have been lied to or deceived right from the outset?

No Kings?

 I got a kick out of watching some coverage of the "No Kings" rally that took place over the weekend.  I'm an independent voter who leans right.  What I don't understand is the rage and hatred for our current president.  When he was first running for office, I wondered if he was serious because I knew he was rich but I didn't know much else about him.  I tend to vote for policy over personality.  I agree that at times, Trump is brash and unfiltered, but the way he is treated by the mainstream press and others, I almost can't blame him for lashing out at times.  The press pushed so many lies such as the Russian collusion hoax and others.  The democrats who hate "election deniers" don't seem to mind if people deny the 2024 election.  The hypocrisy is amazing.

Trump was tried and convicted of 34 felonies in NY.  I asked someone was who gleeful about this and they could not specify what the felonies were.  As I understand it, an accountant who worked for Trump received an invoice from a lawyer and recorded the transaction as a "legal fee".  Somehow, the prosecutor with the help of a selected and liberal judge somehow turned a misdemeanor which was past the statute of limitations into 34 felonies.  Now the press and other politicians gleefully say the president is a felon.  I believe this case will be overturned but the purpose of bringing the charges didn't succeed since Trump for elected anyway.  

But this no kings issues is funny.  Trump was duly elected by the American people, in a decisive manner.  If you want to talk about democracy, the democrats haven't held a real primary election in many years.  Biden and Harris were not elected in primaries.  They were appointed.  They even tried to remove Trump from the ballot in several states.  How is that for democracy?   Some of the people who advocate for democracy don't even know what it means, just like those who claim that Trump is a King.

If Trump was "Hitler" or a "Nazi" as they claim, do you really believe that you can go on TV in front of a camera and criticize Trump and be alive the next day?  Or the governor of Illinois saying "when the democrats get back in power", they will prosecute ICE agents (prosecute Federal workers for doing their job?).  If Pritzker believed (truly) that Trump was Hitler, there would be no "democrats getting back in power".  He said the lies out loud.

I sometimes wonder if these protests are even organic.  It seems like many protesters were paid, as evidenced by large groups of people leaving the protests at a certain time, meaning their "shift was over".  I could be wrong, but if I am, don't these people have better things to do?  

If so many people wanted to protest "No Kings". why didn't they do it during covid when we were told to stay home (which didn't slow down covid), or to stay 6 feet apart (which didn't slow down covid) or to avoid gatherings (which didn't slow down covid), or to get vaccinated (which didn't slow down covid) and in the meantime, the Kings like Gavin Newsom is not wearing a mask and eating in a fancy restaurant during the beginning of Covid and Nancy Pelosi who wasn't afraid of sneaking around to get her hair done.  In Hawaii, we were not allowed to sit on benches outdoors at the beach.  The covid police would come and chase people away even though being outdoors was likely the best way to avoid covid.   I was accosted by a police officer because I walked into the road briefly to avoid a group of 5 joggers on the sidewalk.  Once they passed, I went back on the sidewalk, and the officer told me I wasn't supposed to go on the road.  I said I wasn't supposed to be within 6 feet of the joggers also.  He took down my name and gave me a warning and said I could be subject to a fine if I did this again.  

My point?  Nothing Trump has done resembles a king but what many governors did during covid looks like they were the leader of North Korea or some other authoritarian regime.

What Do IBOs Know About Business?

 One of the reasons why I believe that people get duped into joining Amway and then quitting or maybe doing nothing is because of the way the business is presented and the way it is actually done. There are many redundant issues that occur and uplines who show the plan will downplay the problems. These problems then surface when an IBO actually tries to build the business and uplines smooth it over by saying things like someone should never quit or get detail-itis or some other bogus thing to get the focus off the problem.

A big problem is that many prospects join Amway because it is promoted as a way to make quick money. I know many people think they can sell some stuff and make a few quick bucks. That's what I thought at one time also. Many prospects are also told that an Amway business has zero or little overhead, unlike a conventional business. However, many IBOs find that starting an Amway business carries a defacto 100 PV minimum requirement. They might be told that you just change your shopping habits, but many individuals and families cannot possibly consume 100 PV unless they are duped into consuming Amway vitamins which they may never have taken before (or needed).  An artificial demand is what is created when this happens.

IBOs who may be somewhat serious about business will also be encouraged to get on standing order and to attend functions. While upline will claim these are optional, they are defacto requirements for those who are interested in building a business with downline. The standing orders and functions can cost a significant about of money depending on an IBO's level of commitment. I would estimate that a somewhat "serious" IBO would probably expend between $150 to $300 a month or more on these "tools". Amounts vary and can be more or less depending on factors such as whether you are single or a couple, and your level of commitment.

So now a new IBO, who is wanting to make a few extra dollars, might be spending between $450 to $600 a month for products and tools, if they are building a business and trying to sponsor downline. Their reward for this will be about $10 a month in the form of a rebate (bonus) from Amway. That is the typical and likely result for the vast majority of new IBOs. Sure, new IBOs have the zeal and excitement to recruit new downline, but that is an overwhelming challenge in North America when Amway's prices are generally not competitive with big retailers, and the Amway name carries a stigma in North America. It is not uncommon for someone to be ridiculed just for mentioning Amway in a conversation, at least in my experience and observations.

The bigger problem is that many IBOs know little or nothing about business, thus they trust their upline, whose advice is often to buy more tools, make family sacrifices to attend more functions and to do whatever it takes to obtain more tools. All the while, some uplines are laughing all the way to the bank with tool profits. Whether an IBO succeeds or not is irrelevant to many uplines, as long as tool purchasing IBOs are replaced.

As the US has somewhat labeled Amway in a negative light, some tools kingpins are feeling the effects. We have seen some diamonds in home foreclosures, bankruptcy and some bigshot diamonds selling off their homes. Maybe just maybe they weren't as wealthy as they portrayed? Maybe they are reaping what they were sowing? Maybe this is the fruit on their tree? Maybe these uplines didn't know much about business?

Chasing After Losses?

  One thing that many Amway IBOs likely suffer from is having invested too much into the business to quit. They may have spent months or even years working the system hard and they start to realize that the system isn't working out or that the business is just not producing the results that were advertised. You see obvious problems in the business, but you reach a very tough fork in the road.  Some people call this ths sunken cost fallacy where it's hard to quit for this very reason.

To quit would mean failure, as presented by many uplines. To quit is to be broke for life. To give up hope. Quitters are failures and are labeled as losers by the Amway IBOs. What hopes do you have of retirement and walking the beaches once you quit? Are your dreams of success shattered? This is a very difficult decision that must be dealt with by Amway IBOs, or maybe even those considering the business. Often the "sunken cost fallacy" plays a role, where you feel that you've invested too much to just walk away. although in many cases, making a business decision to stop is the only way to stop the financial losses.

I encourage IBOs and/or prospects to completely take the emotion out of this decision. Do not think about dreams, walking the beaches and early retirement. Do not think about what you upline may or may not have promised you. Stop and think only about your Amway business and the results that it has produced or not produced. Has your business been increasing towards your goal of financial independence or are you seeing losses month after month? Do the math. Are you on target to reach your financial goals or are you headed towards bankruptcy? Don't think only about what happens if you quit. Think about what happens if you continue. Are there prospects of making a profit or is that next major function around the corner and likely to put you deeper in the hole?

This post is not about encouraging people to quit or to walk from the business. But certainly, business owners should think like business owners and they should make an honest and realistic assessment about their continued participation, especially if their bottom line is red ink. If you are not making a profit now, what will change next month to make things better? If you repeat what your upline advised. your results are not going to magically get better. Use facts to make an informed decision.

IBOs Should Get Real?

Amway IBOs are often young people, sort of motivated at least to retire young and have uber wealth forever and ever.  That's the hype that sucks them into Amway and motivates them to give the Amway business a try.  Many will put in minimal effort before quitting and it's very common in Amway to see IBOs come and go on a regular basis.  Some people give it an earnest effort and put in a tremendous amount of effort.  But alas, in Amway, whether you put in a lot of effort or not, the results are often similar, which is dismal.

I once bought into the lies and hype of the upline and became an IBO myself back in the mid 1990's.  I initially got in because I thought maybe I could earn a few hundred bucks a month extra and ditch the second job that I had at the time.  Thus, I had joined as a "small" business, but my sponsor kept telling me that I may as well get serious and try to make "retirement" kind of money.  So I got fully involved in the business and I actually had some success, sponsoring a bunch of people and moving up the ranks in terms of pin levels.  I peaked at the 4000 PV level.  It was around that time I started to smell a rat and started wondering about all of these big functions as they didn't seem to help my business grow, but served more as a "hype and motivation" type of purpose rather than practical business advice.

It was around then that I realized that I needed to "get real" and understand that running a tiny person to person soap and vitamin business wasn't going to make me wealthy.  In fact. even at the 4000 level, I was operating at a loss, albeit, close to break even until those big functions came around when I needed to fly to the mainland and rent a car and hotel to see a dog and pony show that didn't do much for my business except for eating up my resources and keeping me business all the time.  I also started to realize that rock bands made a lot of money charging $75 for a sold out concert and here we are paying $100 or more for a weekend function.

Despite this I was still trying to achieve higher levels until my sponsor and upline started to want control of my life.  Ask permission to buy stuff, ask permission to date someone and it just got weird how we had "counseling sessions" where my upline would assess hot many standing orders and function tickets flowed through my group but has little concern and sales and other important business details such as expenses. That's where I sort of had my "AHA" moment.   I eventually met with my group, explained the revelation I had and I left the business.  It was a damaging blow to my sponsor and my group all quit except for one person who had become too far indoctrinated.  

After leaving the business, I felt like a huge burden had been lifted from my shoulders and I felt like I had reclaimed my life and freedom again.  I didn't realize how much time the Amway business and my sponsor took from my life.  I finally figured this out when I had my "get real" moment in Amway.  I hope this post helps others in a similar position as mine.

  

Amway Or A Job?

 One of the ways that upline diamonds would put down jobs was to toss in the phrase that a job was simply trading hours for dollars. As if it were demeaning to have a job where you got paid for your time. I believe it's all relative. Being that many IBOs are young and maybe working in more entry level types of jobs, then yeah, your hours wage might not be that great. If you earn say $10 an hour, then you might be struggling financially, and it may take time before your skills and knowledge increase to a point where your experience is worth more money. What if you had a job paying $1000 an hour and earned over $160,000 a month? Is that a lousy deal trading hours for dollars?  It's all relative, isn't it?

Conversely, having a business can be good or bad also. If you have an Amway business earning less than $100 a month and you spend $200 on functions, standing orders and other training and motivational materials, then you are losing money. You would be better off working for free. That is still a better alternative than working a business where you are losing money. I think most people agree that a platinum group typically has a 100 or more IBOs. Thus, a platinum is in the top 1% of all IBOs. I have heard that the platinum level is where you start to break even or make a little profit, depending on your level of tool consumption. If platinums are barely making a profit, then the other 99+% of IBOs are likely losing money. How much is that worth per hour?

I think uplines cleverly trick IBOs into thinking that a job is bad. Trading hours for dollars, after all, sounds like some kind of indentured servant of sorts. But in the end, what matters is your bottom line. If you are an IBO with little or no downline, and/or not much in terms of sales to non-IBOs/customers, then you are losing money each and every month if you are attending functions and buying standing orders. Your 10-12 hours a week of Amway work is costing you money! But if you spend 10-12 hours a week, even at minimum wage, then you might be making about 300 to 350 a month grow income. After taxes, you make about 250 to 300. At least trading hours for dollars gets you a guaranteed net gain at the end of the month.

Uplines trick you into a "business mentality" where you think that working for a net loss is just a part of business. IBOs should realize that a business promoted as low risk and no overhead should be one where you can profit right away. Instead, IBOs are taught to delay gratification, or to reinvest any profit back into their business in the form of tools and functions, which results in a net loss. If that's the case, I would choose trading hours for dollars.

Remember, trading hours for dollars is not a bad deal if you are making enough dollars per hour. And even those who make less, are better off that those who "run a business" but end up with a net loss. It's all relative and hopefully, this message will help new or prospective IBOs who are being enticed to join the Amway business opportunity. Good luck to those with jobs and those with businesses. You can be successful either way. Remember that!

The Freedom Myth?

 When I was an Amway IBO, I saw my upline diamond driving around town dressed in a business suit. I used to think why does he keep working if he can walk away and collect residual income? My sponsor told me that the diamond only works because he loves and cares about his downline and wants to help them. So, there are two possible scenarios, the diamond is working to help his downline out of a genuine concern, or possibly he is working because he has to! The only difference now is that the diamond works the night and/or graveyard shift, because many IBOs are building the business after they complete their day jobs. **We should also note that my former upline diamond dropped down to the emerald level around 2005 and has since re-established his diamond level. He also moved from Hawaii (he said he loved the ocean) to Washington State and lives in a middle-class neighborhood.

Now Amway has stated that the average (non Q12) diamond earns about $150k a year. That is a decent income, but after taxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle-class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts. Stop "working" and the income stops also.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free and may actually have to spend more time maintaining his group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle.

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nights and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next. Is that financial freedom?

I believe that diamonds may actually be busier at the diamond level than an average Joe who has a 9-5 J-O-B. The difference is that the diamond works the night shift. Is this the freedom you are seeking?

The Reality?

 One of the things that keeps some Amway IBOs going is the "honest reality". What I mean by that is for some IBOs, once you have been in Amway for a while, it can be hard to quit. You were possibly recruited with dreams of lifelong residual income and walking on all of the exotic beaches of the world. Retiring young and spending that time with your wife and family, and Amway friends. To quit means an IBO would have to face the reality that these dreams will not come true, at least not with the Amway business. The fact is that the Amway opportunity probably would not have delivered those dreams anyway. Even a diamond more than likely cannot afford those dreams. In fact, I would estimate that most diamonds, if they flaunt some excessive lifestyle, are near broke or in heavy debt as a diamond income cannot sustain a jet set lifestyle, save for a founder's double diamond or something similar. I believe the prominent WWDB triple diamond bankruptcy shed a lot of light into the finances of an upper-level pin and it wasn't as impressive as I would have thought.

The triple diamond who filed for chapter 7 bankruptcy made about half a million dollars annually from Amway. That's a great income and more than most people earn, but seriously, a half million dollars income is not going to allow you ti buy mansions paid for in cash, or a fleet of sports cars. After paying taxes and business expenses, I'm not even sure someone with that kind of income even lives a worry free life of leisure. And we're talking about a triple diamond, not your average run of the mill regular diamonds who I would safely assume, earns much less than a triple diamond.

But what really is the harsh reality? It's working hard only to drift between 100 and 500 PV. It's finally sponsoring a new IBO only to have a downline quit. It's talking to people about Amway and getting laughed at or getting rejected. It's your upline or sponsor pushing you to do more. Possibly your upline is one who questions your manhood if you aren't working hard enough. It's your upline or sponsor reminding you that a winner doesn't miss functions, especially the major ones. It's staying up late for team meetings or night owls when you need a good night's rest to do your job the next day. It's driving the miles to show a plan, only to have your prospect not show up. It's having to be deceptive about what you are doing. It's skipping functions with family and friends so you can be core to the business.

As IBOs, do you see any of this? I saw some of this during my involvement. While I have not been an IBO in some years now, I still see many testimonies and comments by more current and even some active IBOs to indicate that a lot of this still goes on. While Amway defenders will deny it, I see no reason why any of this would have changed over the years since Amway has made no significant changes to stop abusive uplines. If Amway did make any changes, they are not immediately apparent, and the continuous string of comments and testimonies do not confirm that any clean up has been done.

For active IBOs or prospects, these are the harsh realities that may be attached with the Amway opportunity. Much of it is because of motivational groups such as WWDB, but if you are seeing these traits in your group, ask the tough questions. If you happen to decide that the Amway opportunity is not for you, take heart! There are other ways to achieve your financial goals and dreams and there are more efficient ways out there. Sometimes, quitting something that isn't working is a wise business decisions and sometimes you can lose more by not quitting. Good luck in whatever you decide.

Can You Trust Upline?

 Based on my observations of diamond's behaviors over the years, I have come to the conclusion that many of these men in nice suits and flashy smiles are in reality, cut throat ruthless businessmen. I would not be surprised if some of them would literally steal candy from a baby. During my tenure in Amway, I heard many instances of "never miss a meeting" and "do whatever it takes". These kinds of thins were said to downline IBOss without regard to the IBOs likelihood of success in Amway. One diamond even suggested that a family could skip a meal because something heard on a tape could turn your (Amway) business around for the better.

Sadly, the result of this was incredible IBO turnover, bankruptcies, home foreclosures, and IBOs overspending to meet upline goals, regardless of an IBO's profitability. It is my guess that these IBOs have all quit since my time in the business. I would also guess that even the most abused IBOs never bothered to file complaints because the group was taught that failure was IBO responsibility, no matter how much effort was put in.

The wonderful diamonds will parade around on stage, showing off displays of wealth such as mansions, jets, sports cars and fabulous vacations. All of this was supposedly attainable by the rank and file IBOs if they will only do what the upline diamonds advise them to do. It is all a lie. Since I left Amway and WWDB, I believe more diamonds have quit or moved onto other ventures than new diamonds have emerged. What's more, seems there are countless numbers of lawsuits pitting diamonds versus diamonds. I believe these lawsuits are born out of greed over tool money. Tools income is still a dark secret to many. While some leaders may speak about platinums earning a share of some tool income, how much and the qualifications appear to be shrouded in secrecy. Something that Amway accreditation was to fix. But it looks like the AMOs have skirted the parameters of the spirit of accreditation. Sad, but not surprising.

What is really hard to swallow is knowing that many IBOs, young, motivated and eager to achieve, are often needing and/or wanting more income. Thus they are open to the possibility that the Amway opportunity afford them that "break" that they needed. Upline will use this as a means to suck them into the system, telling them that the tools (voicemail, books, standing order, functions) will nearly guarantee their success when the opposite is true. The tools nearly guarantee failure for the vast majority of IBOs. The tools only guarantee profit for those who sell the tools. What is troubling is that these uplines do this while trying to pass on the impression that they are mentors to their downline. What the unsuspecting downline doesn't know is that some of these upline mentors would steal the shirt off their backs, literally. If you are new, your upline may loan you or even give you some tools to appear sincere. But once you sponsor someone or decide to build a business, the bar will be raised and you will be expected to be a leader and buy your own tools.

Beware, many diamond leaders are simply cut throat businessmen wearing a nice suit and a nice smile. Don't be fooled.

Amway Is Fair?

 One of the bogus things my upline taught us was that the Amway opportunity was fair. That it was a completely level playing field. On the surface, that sounds right because "everyone starts at zero". While everyone does start at zero, the compensation plan is unfair to those who "do the work" and in my opinion, should be revamped so lower level IBOs make more money. It would probably help with IBO retention and maybe, some higher-level leaders wouldn't have to work so hard to keep replacing people who quit. It is my informed opinion that many IBOs quit because they aren't making a profit. Real profits would motivate people to stay involved in the business.

If you are a new IBO, then you might not be really familiar with the Amway compensation plan. Amway pays out about 30+ percent of their gross as bonuses. Thus, if you move 100 PV in goods, or about $300 in sales, then Amway pays out about $100 in bonuses. You as a new 100 PV IBO, would receive about $10 and your uplines, some of whom don't even know you exist, will split up the remaining $90 in bonuses. It truly is not a case of doing the work and getting paid. You are doing the work so upline gets paid. To add insult to injury, upline wants you to purchase materials (functions and other tools) that tries to convince you that this is a good deal.

And something very significant to think about. In what other sales profession are you compensated so low (3%)? I can only think of real estate, but in real estate, your sales are likely in the hundreds of thousands of dollars. In just about any other sales related profession, you get a much higher cut than 3%. Yes, your bonus or commission can be higher if you move more volume, but then you are likely receiving more money because you are now exploiting people doing 100 PV who get only $10 back. In other words, your profits come from your downline's pockets.

Even after you consider the unfair compensation, you must factor in the cost of tools. Most uplines promote tools (cds, voicemail, functions) as vital to an IBO's success. Some uplines push the tools harder than others. But the tools purchases will often be the primary cause of IBO financial losses because the cost of tools will normally exceed an IBO's bonus. It is very common in the US for monthly tool purchases to exceed $200 a month on average, and very very few IBOs will ever reach a high enough level in the Amway compensation plan to earn enough just to break even. Also, the tools apparently do not work. There is no unbiased evidence to suggest that tools have any causal relationship to IBO success.

With Amway's crappy reputation and the unfair compensation plan, IBO retention is spotty. Many IBOs sign up and do little or nothing, and many IBOs don't even last a full year before they quit. What happens is IBOs begin to figure out that recruiting downline is next to impossible and therefore, generating more volume is nearly impossible, even for individuals with skills. If you are a new IBO or a prospect, I encourage you to sit down and really look at the math and factor in the cost of tools. There are many ways to earn a dollar, I just don't feel that Amway is an efficient way to do that.

Low Overhead?

  One of the selling points for the Amway business was low overhead (basically business expenses) and the ability to make quick profits.  But is this true or just another list of lies told by the diamonds?   Basically, when you’re being pitched on Amway, your told that you can sell stuff to make money, and that you can save money by purchasing from yourself.   Sounds simple and seems like common sense on the surface, but these claims are just that.  They sound good until you try to actually apply them in real life. 

Then because you have low or no overhead expenses, Amway just makes sense.  But it’s all just a selling point because the upline diamond will then sell you overhead.  In other words, they will sell you on the vital necessity to purchase tools and functions.  I questioned this as a prospect and was told that so and so diamond was a multi-millionaire and feels that tools are as vital as breathing air, but I was welcome to go it alone and succeed where nobody else has (without tools).   While tools are optional, when it's framed in this manner, it sure doesn't sound as if optional is a real choice.

This is an outright lie because in the Amway business, the tools are your primary business expenses, or overhead.  Even if you manage to sell a few products to actual customers for a profit, more than likely you will still wind up with a net loss because the ongoing use of tools and functions can become expensive immediately and over time.  Many former IBOs have indicated that you can pile up thousands of dollars in losses over a few months and much more if you remain dedicated to the system and the teaching.  

Now the cost of tools and functions would be worth it if the system was churning out success stories on a regular basis. To try and up sell this, diamonds will show you examples of a new platinum or other pin, but won’t mention that a bunch of other big pins may have failed to requalify for their current t levels.  If you go and look up Amway revenues for the last handful of years, you will see that revenues were flat or in decline, which means business was not growing.  

So, what does this all mean   Simple, it means joining Amway makes it highly likely, nearly assured that you will have a net loss of income if you join Amway and participate in the system of tools and functions.  Also now with covid 19, I can only imagine that the ability to recruit down line or approach others to sell products is greatly hampered by state or local restrictions.  Good luck to you if you read this and join anyway.  

It Works?

 The Amway business works if you work it! That's what many gung-ho Amway enthusiasts will claim. I do not believe that is true and I will further explain in this post. Many Amway IBOs who claim that the business works are usually new and are unable to show any real evidence that the business actually works, except perhaps to show a dated photocopied check from an upline diamond or the like.  Some may come up with questionable anecdotal stories,  Some Amway IBOs are taught to fake success and pretend to be successful while losing money each and every month.

Let me make a disclaimer that "some" people do make money from Amway, but most of those folks are tenured diamonds who are in an exclusive club. And these diamonds often do not make all their money from Amway. A significant amount of income is generated from the sale of cds, voicemail, books and seminars/functions.

Also, there is only a short list of new diamonds that I know of in North America, and I have heard that even these new diamonds may have had legs in other countries. It would seem that Amway is severely declining in sales and revenue. Amway sales peaked at about 11.8 billion about a dozen years ago and has declined quite a bit since then, with the last revenue/sales figures sitting at 8.8 billion.

Ok, so Amway enthusiasts claim that the business works if you work it. Business in its simplest form is selling a product or service for a profit. Yet many IBOs spend so much of their time doing other things, as advised by their upline "mentors" who sell them training materials that take up much of their valuable time. Listening to tapes/cds, attending functions, reading books, and other training activities not only costs the IBO money, but takes up valuable time in non -income producing activities. Nobody makes sales reading books or attending seminars. Furthermore, these books and seminars do not necessarily result in IBOs being able to move more product as a result. Inviting people to see "the plan" may be a way to help generate volume if the prospects join, but with Amway's reputation, even this is a hit and (mostly) miss activity.

Yet IBOs spend almost all of their time doing these activities (the work) when they could be better off not getting the training and focusing on selling the Amway products and services. Even that comes with a handicap as Amway products as a whole, costs a lot more than purchasing similar or the same products at a big retailer such as Costco or Walmart. It is why most IBOs eventually get discouraged and quit far before the promoted 2-5 year plan.

Few people will even bother to see the plan once you mention "Amway" and for those who are open minded and motivated to register end up having to deal with a hard to sell opportunity along with high priced common commodities such as soap, vitamins and energy drinks. It's pretty easy to see that the business does not work, even for most of those who actually work it. There are simply too many issues with the business that handicaps those brave enough to try. It seems even the fiercest defenders of Amway are unable to provide a shred of evidence that they have actually made a profit from this opportunity.

I believe Amway doesn't work no matter how hard you work it.

Upline Helps Me?

 Over the years, I have encountered many Amway IBOs and they often have a common theme. They trust their upline and in some cases, consider them mentors. Now in a business venture, it might be good to have a mentor or someone to guide you, but in the Amway opportunity, most of the upline mentors make money off those who they mentor. That is a major conflict of interest but IBOs simply fail to see it. Just about any "help" you receive results in compensation for someone upline. A mentor is not someone you compensate for their help. At least not to my way of thinking. Maybe an ineffective paid consultant is a better way to describe the upline/downline relationship.

When an IBO sees the plan in a big meeting or function, the speaker will often be built up as a financial guru, and possibly as an expert on how to succeed in Amway. An IBO may hear something about the trail was already blazed by upline and you just need to follow the trail. Don't re-invent the wheel, just copy what upline did. But as I have said many times before, duplication sounds easy and looks good on paper, but in real life, the vast majority of IBOs run into problems that they simply cannot overcome, such as the bad reputation that the Amway name has in the US. High prices for products don't help either. Sponsoring people is difficult and most IBOs never sponsor a downline.

What is troubling however, is that IBOs are taught to trust upline and do as they say (defacto requirement), but they are also taught that failure is their own shortcomings, even when they do exactly what upline told or advised them to do. It is also troubling that many uplines will tell their faithful followers that they need to purchase more and more tools (voicemail, cds, seminar tickets). In some cases, an upline may advise their downline to sacrifice basic family needs to buy these tools. I saw some IBOs who were advised to skip meals to buy a cd, or skip paying the mortgage to be able to attend the next big function. The results are devastating for some.

I might also add that as a newer IBO or prospect, you may have heard that "everyone starts at zero", or that it's a level playing field. It is not. As a new IBO, you will likely be in the 100 PV bracket. Since Amway pays out about 32% in bonuses, your upline(s) will split up about 29% in bonuses off your efforts while you get a 3% bonus. That doesn't sound very level to me, especially when you factor in "who did the work".  In addition, you as an IBO are paying for this privilege when you buy tools.

So each IBO should look at things objectively and see if your upline is actually helping you or simply helping himself by giving you advice that ends up in profit for himself with little or nothing for you.

Amway U.?

 One of the really dumb things that some Amway defenders do is to compare the teaching of WWDB or Network 21 (for example) to a real and legitimate college education. Some people even go as far as to encourage young people to skip or drop out of college so they can focus on Amway. That makes me really upset to know that these upline leaders so greedy for a dollar that they would encourage a motivated young student to basically risk their future to build a business where you have a fraction of 1% of making any real money and possibly less than that percentage of keeping and maintaining it.  These are leaders or Charlatan?

There is plenty of documentation available to show that college grads earn more than non-college grads. I believe the difference on average was about $1000 a month more in favor of college graduates. While not all college students graduate, the rate is about 50%. College grads also earn about an average of $80,000 or so. According to Amway, the average IBO earns $202 a month (gross) or less than $2500 a year. The Amway earnings are gross, thus IBOs on the system (functions, standing orders) are probably ending up with a net loss. Try feeding your family with zero dollars.

While there may be some value in some of the material provided from upline to downline, it doesn't seem to translate into net profits.  Thus, an intangible benefits an IBO might receive from his/her Amway education can likely be found elsewhere, without having to run a losing business. Imagine a scenario where two people apply for a job. One candidate has on their resume, a degree from the University of Washington. The other one says they have four years of education from Worldwide Dream Builders. Which candidate is more likely to get a serious look? Do IBOs believe that the stuff they learn at functions is substantial enough to compete with a real and accredited college? If so, then they are likely to get laughed out of the room if the need to compete for a job.

Or how about using the 6-4-2 plan to get a business loan from a bank? What do IBOs learn that can be applied to something outside of the rose-colored world of Amway? I find that uplines who get young people to funnel their education dollars towards WWDB or some other system instead of finishing college is a crime. I hope that information seekers find this information before they get persuaded into believing some of the lies told by some upline leaders. I find it ironic though, that many of these same leaders send their kids to college. Hypocrites?

Anway Or A Job?

 I recall many meetings and functions where the diamonds talked about how your job was making you "just over broke" or "jackass of the boss". They tried to put down jobs, as if working a job were some kind of cruel punishment for the masses. In reality, IBOs could not feed their families, pay their bills and they could not make the diamonds rich without their jobs. I remember seeing videos of people shooting their alarm clocks or a limousine pulling up to someone's place of employment and whisking off someone who recently went diamond or reaching some other pin level.

I suppose that for someone young, who may be in their 20's or 30's, the prospect of working another 30 years seems like a daunting task, thus a "shortcut" such as working 2-5 years sounds like a good alternative. It makes sense, until you actually start trying to build the business and find the name reputation and products difficult to sell. At some point, your investment into standing orders and functions starts to add up. You start to wonder if you made a mistake in trying to find a shortcut to financial freedom. You start to wonder if financial freedom even exists in the Ama-world. Why are the diamonds still working? Why don't any of them "walk away" and collect residual income for life while walking on the beaches of the world?

Luckily, you did not quit your job. While your current job may not equip you with financial freedom, you are likely able to pay your bills and put food on your dinner table. That is more than most people can say about the income they receive from Amway. I used to wonder how much money these diamonds actually make. While they may earn a nice income (if they are actually qualified), a diamond lifestyle can render them even more broke and in debt than the people they recruit into Amway. I believe many diamonds are living month to month, worrying about their finances because they portray a lifestyle that cannot be sustained on the kinds of incomes that Amway reports (i.e. $147,000 average diamond income). A recent triple diamond in bankrupt proceedings revealed that while they earn a nice income, they may not be able to sustain an excessive lifestyle, and certainly not without making a significant income from selling functions and other tools to downline.

Rather than getting excited about seeing a Mercedes Benz, ask your diamond how much they earn from Amway. Ask them why there aren't any diamonds taking advantage of residual income for life, thus walking away from the Amway business? While working a job and saving money may not sound that attractive, it is still a much better alternative than working a job while channeling your income into standing orders, voicemail and functions that do nothing except make your bank account lighter. Financial security and long term sustainability takes hard work and discipline. Many who promote Amway trick prospects into thinking that Amway is a shortcut to get rich. It isn't, save for the owners of Amway and a few old time Diamonds who control the systems. The facts are there, you just need top recognize them.

Why Join Amway?

People join Amway for many reasons.  Some get in starry eyed, and want to be diamonds.  They want the adulation that they could no otherwise garner in this world, so that's their goal.  Sometimes it's not even the money necessarily.   For others, the little extra money is a real hope, and others want to be "rich" like the diamonds because they want to retire early and wake at noon while they do whatever they want.  For me, it was the hope of making a few hundred dollars to pay some bills, but my sponsor eventually talked me into looking at bigger things and committing to building a big business an trying to go "direct" and higher.

For people who have already joined Amway and are trying to make a buck, only to see net losses month after month, you have to wonder at times why you joined Amway. As an IBO, I initially joined as it was pitched to me that I could easily earn a couple of hundred dollars a month, which could make a big impact on my life at the time. Of course, it made sense that I needed to invest a little bit of money to get started and to learn about how to run a business.

When I got started, there was a lot of hype and excitement in my business. I sponsored new people, and my business was on its way. I was touted as a mover and shaker and even got to attend some home board plans with my upline diamond. Even though I did as I was advised, had the parameters (Eagle parameters) in the business that were recommended, I noticed that any cash I had earned still resulted in a loss, or if I made some money, the "next major function" ate it up and then some. As you should know, there are four major functions and a bunch of regional ones. But for many, the major functions take place out of your area, requiring travel, sometimes by air.  Being from Hawaii, we had three functions on the mainland which made it crazy expensive.

It was at the function called "family reunion" where I started to figure out what was happening. My upline platinum was having us "hang out" after the function at about 1:30 am. He started talking about how the business has nothing to do with money. That we made friends, became nicer people, better spouses or parents, and that money was the least important aspect of the business. While many nodded in agreement, I was thinking what the heck??? I wouldn't have joined and "invested" that much time and money into a business where I was "moving and shaking" but not making money.  I though what's the point of a business if not to make money.  But I suppose this was a way to soften up the business for people who were working hard but not making a profit.

Many IBOs are at a point where it may be hard to quit. You may have invested some time, money, and effort into your business and you may have been programmed to think that quitting is failure or that success is right around the corner and you don't want to quit too soon. But I urge you to look at facts. What is your bottom line net income? It is red numbers? Is it a recurring loss, primarily because of tool and function purchases? If that is true, ask yourself why you joined. Was it to be a nicer person or to earn some money?   If your answer was to make money, then what will change that will result in a net profit, because product movement wasn't nearly enough to pay for even the basic voicemail and local functions, let alone mainland weekend functions.

What are your prospects of making a net profit soon if you are breaking even or taking losses? Amway leaders themselves have often said that insanity is doing the same thing over and over and expecting different results. Where are you at?   Did you join Amway to attend functions or to make money?  It's clear that the functions do not sufficiently help IBOs profit.   So why did you join? 

How Diamonds Prosper?

  One of the things that many Amway IBOs do not understand is where the upline diamond profits actually come from. They think they will obtain passive residual income but most do not understand how it works or where the money comes from. What most people see instead, is a photocopy of an upline's check, or they may see upline driving a nice car or something like that. They do not understand how the business works and the fact that there are two businesses at work. The Amway opportunity and the tools (business support materials) business. Frankly, most IBOs would be much better off giving their upline a check for $50 each month and never getting involved in the Amway opportunity to begin with.

Upline diamonds (or higher ups) earn some income from the movement of products. Amway returns about 33+% of their gross in the form of bonuses. Most (active business building) IBOs earn 3% while uplines split up the remaining 30% of the bonus. Not such a great deal when you think about it. Also, most IBOs overspend on Amway products. They are not simply replacing what they normally buy. If they did, then there would be tons of former IBOs continuing to move 100 PV or more. Instead, when an IBO quits, they either buy nothing from Amway anymore, or they may use a few products here and there. The opportunity and the way it is promoted simply creates an artificial demand for Amway products. If the products were so great, why then after 50 years of business, why the Amway sales aren't going through the roof if former Amway IBOs get hooked on the products and keep buying them? The answer is that they typically stop buying once the "dream" of residual income ends.

Then you have the tools business where IBOs don't even get a measly 3% of the profits. Uplines keep all of the tool profits. Also, the tools have a higher profit margin than Amway products. While this may seem acceptable on the surface, keep in mind that the tools are inefficient. There is no unbiased evidence that I know of that suggests that the tools create a natural progression of IBOs from 0 PV to diamond. I cannot name more than a few new diamonds in the US since I left the business in 1997 or 1998. And even if there were some new diamonds, I believe there were even more who quit or left Amway for other reasons. One might wonder why a diamond would quit in the first place if there really was residual passive income involved.

So where does upline profits come from? Simple, it comes directly out of the pockets of downline. If IBOs actually sold products, then some profits would come from sales and customers. Instead, most Amway sales are simply made from upline to downline. And virtually ALL sales in the tools business comes from upline to downline. Thus many IBOs spend $250 to $300 a month on products and get back $10 if they reach 100 PV. Then you factor in the $100 to $250 monthly that IBOs typically spend on tools. Suddenly that cheap or no risk opportunity doesn't sound so cheap. And try working it for several years and IBOs can easily rack up tens of thousands of dollars of expenses or more.

That's where upline profits come from folks. Do the math, most IBOs truly would be better off giving upline a check for $50 a month and doing nothing else.

Conditional Friends?

 You hang out with friends, generally people you like and have similar interests. You have good and bad times, but your true friends are there for you when you need them. You move residences, your friends are there to help you move. They may play a round of golf with you, or watch some sporting events, dinners, backyard barbeques, movies, etc. These are folks you will likely end up retiring with and enjoying your golden years.

But suddenly, you get enticed to join Amway. You see the "chance" to get rich, with a shortcut (not get rich quick, but a "shortcut"). You sign up and your sponsor is your new "best" friend. Most of the people you enjoyed being with think Amway is a questionable venture to get involved in. Suddenly, because of what you have been told or taught, you view these same nice people as "broke" or "losers", simply because they do not share the same ambition of untold wealth working 12-15 hours a week. Suddenly, you friends become prospects, or people you want to sponsor so you start recruiting them. Some may join, but most won't. Suddenly you are immersed in recruitment meetings, functions, and avoiding "negative", which is people and events that do not support your Amway business. Sadly, many of these "negative" people were likely what you previously thought of as "good friends".

Now you are missing birthday parties, barbeques, and other social events. Your social events are now recruitment meetings, seminars and Amway business related events. You are taught that these events (birthday parties, etc.) can be put off and your gratification delayed. You can do whatever you want when you go diamond. (Even though there might be only one (1) diamond out of every ten or twenty thousand IBOs) Your dedication will pay off right? Sadly, for most people, even very dedicated people, all they will see is losses on their yearly tax returns, mainly due to the purchase of cds, books, voicemail and function tickets. But these are your "friends" right?

Here's my take on it. Try missing a few meetings or functions. Stop buying cds and see how many "friends" remain from the business. It is likely that your upline will claim that you walked away from the friendship by slowing down on the "system". If that happens, then you have conditional friends, or fair-weather friends. They are your "friends" while you are pursuing the same cause. They are your friends when you are attending functions. Are they there for you in bad times?

A short while after I attended my last function (I was still an IBO, just not a business builder), my dad passed away. Not a single one of my IBO "friends" bothered to attend the memorial service. Not a single one of my IBO friends called or dropped by the home to pay their respects. All of my "real" friends, who saw through the AMO smoke and mirrors called to talk to me and/or attended the memorial service.

Are your IBO friends conditional friends? Mine were.

Failure By Design?

 There were some interesting discussion points on my Failure by Design article, so I wanted to write a follow up and point out even more reasons why you are doomed to failure in Amway. As discussed earlier, if most IBOs and prospects do little or nothing, then that's already a more than 50% failure rate. Out of the remaining who apply themselves and try to make an effort to profit, less than 50% of those IBOs will make any money because that's how Amway and most other MLM's are designed.

But what makes Amway even worse? It's the systems such as WWDB, Network 21 or BWW that teach you how to fail. Of course, they will call it "CORE steps" or teaching you hot to be successful but what these steps actually teach you is how to engage a lot of your time in activities that cost you money (business expenses) but there are hardly any activities that produce income. Showing the plan can help your business but even many Amway defenders will claim that there's maybe a 20% sponsorship rate. I personally doubt this because most people wanting to sponsor never do. The other step that can make you money is to retail (sell products) but with Amway's bad reputation plus having generic quality products at premium prices, Amway is a tough sell.

The other "success steps" such as reading books, listening to CDs and attending seminars and meetings are activities that cost you money but bring on no income. And these activities comprise the majority of an IBO's time and resources. Even current IBOs can track their activity and expenses and easily see that I am correct. In the famous 6-4-2 plan, the majority of IBOs only earn 100 PV which gets them a (gross income) bonus of about $10. An IBO listening to CDs, participating in voicemail and books and functions easily exceed $150 a month in business expenses and more if they are hard core dedicated. If you were like me where the large quarterly functions (i.e. Family Reunion or Summer Conference) took a plane ticket to get there, then the expenses were enormous relative to the $10 that many IBOs earn.

The only way an IBO can actually make decent money is to sponsor a lot of downlines, who in turn will absorb the upline's losses and allow for a profit, or to sell products like crazy. But I've never seen or heard of a platinum who achieved that level by retailing Amway products alone. Those who do an open minded and honest price assessment will easily see that Amway products are overpriced. The products are overpriced by design, because those generous Amway bonuses that your diamonds and emeralds receive are included in the price of Amway products. How else can Amway pay those bonuses? The Amway owners aren't billionaires for no reason.

So there you have it. Amway is a business opportunity where the vast majority of those who try, fail. But former Amway IBOs and people who had a brush with Amway shouldn't feel bad. They failed because Amway is designed to make most people fail, in my opinion and I have explained how and why I have formed that opinion. Good luck if you read this and still join hoping to overcome the overwhelming odds.

What Are Your Chances?

  One thing that many Amway promoters don't like to talk about is what your realistic chances of success are. I will define success as Diamond because that is what the outcome of the 6-4-2- and 2-5-year plan. Of course, you may be able to earn some income at lower levels, but my understanding is that diamond is where the real money from Amway and the tools start rolling in. And I can also understand why people promoting Amway do not discuss your realistic chances of winning. Afterall, lottery promoters do not show you the millions of losers, they only parade the winners in front of you.

Many people, including Amway enthusiasts will agree that many IBO do little or nothing. Some people never even place an order or make any attempt to do any business. For the purpose of this article, I am not speaking about these folks. I am talking about people who actually put in some effort to the business.  However, to not mention that a significant number of people register as IBOs and do nothing would be deceptive in discussing the overall picture of the Amway business world.

For many people who want to make an earnest effort, they will purchase and hopefully sell a few items with the goal of reaching 100 PV. For that effort, you will receive approximately $10 from Amway and whatever profit you might have earned by selling products. Here's the catch. You will likely need to pay website fees in excess of the $10 you earn from Amway. For the more dedicated IBOs, you may be paying for voicemail, standing orders, book of the month, and possibly attending functions. These expenses will exceed your income month after month unless you are able to increase your volume by selling enough products and/or sponsoring downline who buy and sell products.

Because Amway has to include the IBO bonuses in their prices, the products come at a premium price. Thus, sales to non-IBOs are relatively low. Without sales to non-IBOs, the only other way to generate more volume is to sponsor people who will buy and sell products. But due to past unethical IBO behavior, getting people to see the Amway sales and marketing plan may be a challenge. Also, most IBOs are unable to sponsor a single downline.

Some Amway enthusiasts will claim that if you do their CORE steps for 2-5 years consistently, that you are likely to succeed. Sounds easy, but because of the factors I have identified, some of these steps are impossible to do consistently. It's not like walking a mile each day where you have control of the steps. People will likely fail in showing the plan and sponsoring others because they cannot find enough people who are willing to see an Amway plan. Many, possibly most other IBOs can and will do certain steps consistently such as listening to a CD daily and reading a success book. But because of a spotty reputation in the US, IBOs will very likely fail to be able to show enough plans to succeed.

Your realistic chance of success? My informed guess is far less than 1 tenth of 1 percent. That's the likelihood of going diamond. Your chance of going platinum? My informed guess will be less than 1/4 of 1 percent. If you think you can beat those odds, go for it. For most people, it might be wise to look into other opportunities.

Amway And The BBB?

 Over the years, I have seen literally hundreds (if not more) blogs and testimonials about Amway. Most of them decry the pitfalls of being an Amway IBO. Most of the complaints cite the fact that Amway in general has higher prices than comparable retailers and the fact that the system consisting of voicemail, books, cds and seminars ate up any profits the IBO may have made and resulted in net losses for most. One particular Amway apologist bemoans the fact that the internet is full of bad testimonials about Amway. The reason why there are so many negative testimonials about Amway is because over the years, thousands, possibly millions either had a bad experience for the reasons I cited above or personally know of someone who had a bad experience.

Amway defenders will often cite the fact that many IBOs sign up and "do nothing" as their defense to this. But I will easily point out that I haven't seen anyone say they signed up, failed to do anything or order products, quit and started blogging about a bad experience in Amway. These defenders will also compare Amway to the gym where people sign up and "do nothing". Whether true or not, I also do not see people who sign up and "do nothing" complain about not receiving health benefits by simply signing up. It is a very weak defense. Conversely, I have seen numerous accounts of folks like myself who did put in effort, some for many years, who did what upline advised and did not see the financial rewards that is promoted in "the plan".

Amway defenders will then try to justify themselves, saying that the better business bureau (BBB) receives few formal complaints about Amway. I will agree with this. Many IBOs never bother to file formal complaints to the BBB or to Amway because in many, probably most cases, the person who quits and may have had a bad experience, was sponsored into the business. The sponsor was often a friend or family member of the IBO who left the business. Many will simply leave and forget the episode and chalk it up to a learning experience in life. Some will complain but really have to ne venue to voice their remorse about joining. Some of us have found the internet to be quite effective in sharing our experiences and our opinions on why the business did not work. This is what one Amway defender calls the "internet war". What I have pointed out is that critics most often simply point out what the IBOs themselves have done. In many cases, the IBO is his own worst enemy. Afterall, critics didn't deny Amway and Quixtar had a connection, nor did critics make up claims about perfect water, etc.

It would appear that most of the problems has a root in the AMO systems, such as WWDB, BWW, LTD, or N21. Now, not all upline leaders are unethical, but it appears that many are, and new IBOs have no way to identify the good from the bad. It also appears that some of these upline leaders will issue bad advice. Advice that is detrimental to the IBOs, but financially beneficial to themselves, such as telling IBOs to never miss a function, or to buy more cds. In many cases, these unethical uplines do not care about IBO success, their goal is just to move as many support materials as possible, so they can fund their "diamond" lifestyle. Sadly, it is also apparent that the diamond lifestyle may be a facade in some cases. An illusion of wealth portrayed as a recruiting tool.

If you recognize some of these warning signs, ask tough questions of your potential sponsor and visit this or some of the blogs linked to this one for more information.

Nicer People?

 Many IBOs "think" they have become nicer people as a result of their association with other IBOs and because a part of the system they are with advises them to read self-help books and other positive material. The upline may also advise you to skip watching the news because of the "negatives" you see. They are also taught that as a side benefit of the Amway business, that they are nicer people. Of course, many IBOs mistakenly think that they started a business not to make money, but to become "nicer". If dealing with people made you a nice person, that's a nice side benefit but a business exists to make money, not to soften your demeanor.

I certainly agree that some people can benefit from positive books and association with others, but for many, it is not a genuine "nicer" person, but simply a phony persona that is put on in order to recruit potential Amway downlines. That is how my former sponsor appeared to me. Because I had known him for a long time, the "nicer" looked as phony as phony can be. There are many examples of phony niceness that some IBOs profess. Even Amway's biggest defender was apparently called a "cyber bully" by an Amway corporate blogger and some others for making disparaging comments about those with opposing views. Others have resorted to calling people broke or losers simply because they did not agree that Amway was their savior. Seems IBOs are nicer when they are recruiting you but that goes out the window if you don't sign up. Then you become a broke loser.

On this very blog, there are comments, I assume by IBOs, that make implied or subtle threats. Some of these comments are not subtle at all. In fact, in my blogging experience, it is usually the IBOs and Amway defenders that resort to name calling. I suspect that is because the facts are on the side of the Amway critics. For example, it is a fact that most IBOs never make a dime, even if you don't count the ones who "do nothing". If you look at system IBOs, then the vast majority never make enough to pay their voicemail expenses.

Even the coveted diamond level appears to be a facade, especially seeing diamonds quit, resign and simply walk away from the business without the lifelong passive income. A triple diamond's bankruptcy revealed some financials, and it wasn't all that impressive considering the size of his business plus longevity in the business. The "success" appears to be a façade in Amway, just like IBOs who think Amway has made them nicer people.

So IBOs, are you a nicer person? Is it evident by your words and actions? It doesn't appear to be very clear to me.

Legal, But It Still Sucks?

 Amway is a legal company. They were investigated by the FTC back in 1979 and the FTC ruled that Amway was not an illegal pyramid because they did not pay for recruiting (headhunting fees) and they required product purchases. Also, there is no required purchases, and Amway has a fairly generous refund policy. So yes, by the letter of the law, Amway is a perfectly legal MLM company. What is not true is that the better business bureau (BBB) endorses Amway and the FTC did not "praise" Amway after the 1979 ruling.  Even if this were true, it would still not be indicative of Amway as a business opportunity.

However, that being said, doesn't mean that IBOs and IBO leaders can't run their independent businesses in an illegal and unethical manner. For example, if your upline tells you not to sell anything and to simply buy your volume to qualify for bonuses, that is a very questionable practice. If your upline tells you to deceive people about the Amway opportunity or teaches "fake it till you make it", that is also a questionable practice.

Amway the company has some standards that they uphold but at times, IBOs or IBO leaders will disregard those standards. New IBOs and prospects at times may not know when their upline or sponsor is leading them astray, which is what prompted me to write this post. If you are taught to "submit to upline", keep in mind that you are an independent business owner and will be responsible for what happens with your business. Too many times, I've seen or heard of IBOs failing and accepting the responsibility all the while following the "experienced" advice given by upline. What is troubling is that many serious IBOs will be paying for advice from upline in the form of functions, seminars, cd of the week, open meetings. Yet when followed advise fails, upline will tell the IBO they are responsible for their own failure. WTF??

Some IBOs I've known stayed in Amway for many years, spent tens of thousands of dollars or more and have not made a cent in net profit. They have been programmed to think that they will succeed if they never quit or that success is right around the corner and they can't quit because they don't want to quit just before the business pays off. In the end, a business is a business and IBOs need to look at their bottom line. If you aren't making a net profit after following the plan and advice mapped out by upline, there comes a point where tough business decisions must be made. Maybe Amway is not the way. Maybe it's time to do something else? Nobody can make that decision except the business owner.

So to summarize, the Amway corporation is perfectly legal but your sponsor or your upline can be running things illegally without Amway's knowledge, which can cause you financial damages. New IBOs and people who are looking into the business need to be aware of these facts. I hope this post helps someone.

Warning Signs?

 Having been involved in many Amway discussions for some time now, I recognize the many warning signs of a bad upline or a bad LOS. While not all uplines are the same, I do not believe that any LOS (Line of Sponsorship such as WWDB or BWW) is free of bad teaching, regardless of what you hear. Some of these points are simply clues that you could be in a bad LOS, you still need to think as an independent business owner and watch out for your own best interest because these folks will say they have your best interest at heart, but they really have their own best interest at heart.

When you were prospected or recruited, was your sponsor upfront about the Amway opportunity or were you told about some new e-commerce opportunity or the like? Were you told that selling products was important or were you told that buying from yourself is the way to succeed? Did you know that some uplines make most of their income from selling business support materials and not from Amway? Were you told that functions and other tools were vital to your success? Were you told that the system was "optional, but so is success"?

Were you told that a college education was not important to your success in Amway? Were you told that buying from yourself can result in a profit? Did someone say that the Amway opportunity helps save marriages or makes you a better person? Was the Amway opportunity used to preach religion or politics to you? Did anyone tell you to ignore facts if you have a dream? Were you told to submit to upline? Or were you told to check your ego at the door? Did you get the impression that your upline was a divine being? Did you give the speaker a standing ovation when they entered a meeting or function? Did you ever wonder why?

Were you told that you save money on Amway products only to realize that they are not generally cheaper than other retailers? Were you told that you have joined the best or the fastest growing LOS? Were you shown fancy cars or other luxuries and told that you can also achieve these lifestyles if you follow the system? Did your upline or sponsor tell you and verify how they are performing in the Amway opportunity or were you simply shown a photocopy of some check from an upline? Did you hear that you should always avoid "negative", or that people who are not in Amway are broke or losers?

These are some warning signs that you could be in a questionable LOS. In many cases, an LOS's priority is simply to sell you tools. Tools that are supposed to help you succeed in Amway, but more often than not, they help the person selling the tools to profit, regardless of whether you make a cent in Amway or not. It is important to look at facts, to track your progress and to keep track of expenses. If you are not progressing as the plan was shown, you may want to take a look and make sure that you are not overspending on tools that aren't helping you. Or if you are unable to sponsor downline, you may have to ask if this business is for you.

The business has warning signs. It is up to you to see them or to ignore them.

Joecool Off To Vegas Again?

Another vacation for Joecool.  I'll be back on Tuesday or so.  Until then, please enjoy an article about Amway and recruiting.

What does the HR department is a company do? Recruit?  That's what I was told when a diamond speaker was trying to downplay the fact that so many Amway IBOs are focused on recruiting. If you've ever been accosted by a zealous and probably new Amway IBO, you'll probably know what I'm talking about. Newly sponsored IBOs often have the motivation and zeal to try to recruit anyone and everyone they know. They are trying to achieve what upline has told them is needed to accomplish their "dreams". Afterall, nobody is going diamond or even platinum without an army of downline right?  But it also begs the question, in addition to being unpaid commission only sales people for Amway. IBOs are also unpaid HR staff who do the recruiting as well?  Isn't it amazing how much free for work Amway the uplines get their faithful followers to do for Amway?  It's great for Amway, but maybe not so much for the IBOs.

But upon closer inspection, you can see the real problem. I mean if I as an IBO, someone could simply sell tons of products for a profit, then the focus doesn't have to be on recruiting, but simply on sales. But over the years, I've unsuccessfully challenged IBOs and Amway defenders to name 1 or 2 people who has sizable Amway businesses sustained primarily by sales and not by recruiting an army. Of course, nobody has even been able to give me an answer.  And that's because Amway products are generic in nature but premium in prices. It makes it a tough sell when your friends and family can get far more product and value at a retailer at a fraction of the cost of Amway products. Try doing an open-minded price comparison and you'll easily see what I mean.  I've seen some Amway IBO created price comparisons and they don't hold up well to scrutiny.

For these reasons, upline developed the concept of buy from yourself and get others to do the same. People generally do not like selling things anyway, so it makes sense that a concept of buying from your own store makes the Amway business seem more palatable to the masses. Of course, the problem with this method is that you end up focusing on recruiting and you've basically turned Amway into a product pyramid scheme. Look at the FTC vs. Herbalife some years back. They found that a majority of sales were not made to actual customers but appeared to be made to the distributors themselves. Herbalife is required to track these sales now and it's yet to be seen how this FTC injunction will impact Herbalife long term.  

But if you're a prospect or an IBO and focused on recruiting, then you are likely doing so because you too, are unable to sell Amway products just like all the critics claim. Oh, I've heard stories of people having hordes of customers, but nobody has ever shown evidence of such.   Nobody can answer why the "diamonds" seemingly have large groups of downline "buying from themselves". Like the mysterious "Amway retirees" that no one can identify, nobody has been able to identify a few successful and sustainable Amway businesses that relies on product sales primarily. It's because the majority of groups are basically focused on recruiting and running pyramid schemes.

Sucked In?

 If you have ever sat through an Amway presentation and the follow up teachings as I did, you can get a clear picture of how the uplines slowly suck people into the system. The speaker will be introduced as a picture of success. Possibly introduced as being in the top 1/10 of 1% in income (But with no evidence or proof). They will talk about how taxes, insurance, and inflation eat away at your paycheck. More than likely, they will say they suffered the same way until they figured out how to defeat these issues by making more money. Of course, they will eventually drop the "A" bomb on you and say it's Amway. Very likely they will say that you should not care what it is if it gets results.

You are then shown the plan, and many people think that 2-5 years and "finding six" is something very manageable for the results they promote (walking the beaches while residual income flows in).  Finding six means directly sponsoring six downline legs where there is a qualified direct distributor, pr platinum. At the very least they say, you will make some money and save some money. Who can argue with that kind of logic? They will also likely mention that Amway is low risk or no risk with little or no startup costs. Again, how can you argue with that logic?  On paper, it seems like a no brainer.

You finally convince yourself that you can reasonably do this. You sign up and you are likely told that it is important to get some tools because after all, a carpenter can't build homes without a hammer and saw and that any business owner would have to make some investment into their own business. So now because of the tools, you are operating at a loss. You may then be told that business owners normally operate at a loss for years and that it might also be wise to channel your bonuses back into your business by purchasing more tools to fuel business growth.

Before you know it, months or years may pass before you start to realize that you are on a treadmill. You keep walking but end up going nowhere. Then your upline may tell you that the business is not about money but more about making lifelong friendships.

In my opinion, this whole system is a cleverly designed systematic way for uplines to slowly drain your resources and making you think that you are successful despite showing no profits. Your upline may edify small things like showing the plan or making a sacrifice to attend a function. Sadly, you will rarely see someone edified for actually making a net profit.

It's a slow process, but most people slowly get sucked into the system, just like quicksand. I hope IBOs and information seekers are able to recognize the scheme if and when it happens to them.

Prey On The Needy?

 One of the big things that was taught by my upline was to recruit people who are in need. People in need of time and/or money are perfect candidates is what I was told. You look for a need and use it as a chance to show the plan. Someone who may be looking for more income is likely to be more open minded. It is also why the upper-level pins will display signs of wealth as an enticement, to get people interested and hopefully excited in seeing the plan, and hopefully to get people to register for the opportunity. IBOs will wave around a copy of an upline's check.

Recruits will be asked about their dreams. Amway recruiters will then show a "best case scenario" of people with trappings of great wealth. Of course, they will not show you what is likely, which is a net loss due to the "system".  Best case scenario is how everything is framed, but often this is not based in reality.

At this point, the recruit may start to wonder if he/she might be able to attain the same level of success. The recruit starts to think if he can find "six" as they talk about in the plan. In a 2004 Dateline segment, the show panned in on people in attendance at a function. Some poor saps were in tears. They probably wanted success so badly that they can taste it. They feel that it is definitely within reach. Sort of like how you can see the end of a rainbow, but you can never reach it. That's how success is for the vast majority of Amway IBOs. They want success and will work for it, but sadly, it will never materialize.

There are few people on the stage and thousands of people in the audience. That's the way it has always been. Unless the compensation plan changes, that's the way it is likely to be forever and ever. The 6-4-2 plan has 79 IBOs at 100 PV. Considering the people who never do a thing and those who quit, you can assume that you need much more than 78 downline to build a platinum business. And a platinum business is approximately where you start to break even, or possibly make a small net profit, depending on your level of dedication to the teaching system, which drains IBO's resources. That is because of the costs associated with being involved in a system such as BWW, WWDB, or N21.

For most IBOs who decide to try the business and the systems, they will likely end up losing time and money. LOSING TIME AND MONEY. Unfortunately, most IBOs sign up hoping to gain more time and money. Ironically, what they seek is what they have less of due to their involvement with the systems and Amway.