FTC Fines Amway And WWDB (WWG) + LTD $225,000,000?

 FTC Takes Historic Action Against Multilevel Marketing Operator Amway for Unfair and Deceptive Business Practices | Federal Trade Commission

Breaking News 9/25/26!

Amway and two (2) of their affiliates, WWDB and LTD, will fork over what appears to be a historic $225 million dollars.  The fine is for deceptive and unfair recruitment practices.  Where are the Amway defenders to try and spin this?   I wonder if IBOFB peed in his pants after seeing this, or is he pretending to be an AI expert now on that discussion?   :)

The complaint also addressed deceptive and unfair practices about potential earnings, to incentivize and pressure IBOs into buying products they don't want/need and often end up being difficult to sell.  The allegations also include IBOs falsely reporting sales of products to apparently create the air of legitimacy about the actual sale of products rather than recruiting IBOs who purchase Amway products.  

Apparently, WWG (WWDB) and LTD recruit IBOs and encourage them to buy a set amount of products whether or not the IBO needs them and may have difficulty selling them.  "As a result, according to the complaint, Amway, together with WWG and LTD, set up an unfair and unlawful system to pressure IBOs to purchase Amway products for reasons other than a genuine demand for them".

***Looks like Joecool's blog was correct and justified all along???  Vindication baby!

Other highlights: 

IBOs and prospects falsely told they are likely to earn substantial income that can replace their job ($40K and up).  and lead to early retirement.

Falsely telling IBOs they are likely to be able to recruit other IBOs into the system when most in fact are unable to successfully recruit potential downline.  

Falsely telling IBOs they are joining an exclusive opportunity in which they will be able to get access to special mentoring from highly successful leaders when in fact, anyone can be sponsored.  And, those who work with mentors are typically not highly successful.

 The FTC will be releasing details of their redress program later this year.  

This is an important new note:  Amway MUST require approved providers such as WWG (WWDB) and LTD, to not charge new IBOs for any training or services in their first year.   (Joe's commentary:  I can only imagine that the diamonds will not be showing off sports cars and trappings because without the ability to sell tools and functions, especially to new IBOs, where will they make their "real" income?  A triple diamond chapter 7 bankruptcy from 2009 revealed that this diamond made at least half of his income from tools and functions).   In other words, the cash cow is being put out to pasture.  

:)    :)    :)

More to come as information is available.

Debating Amway?

 I once had a debate with an Amway supporter, and I sometimes wonder how some Amway supporters can continue to defend some of the claims they make even when they have no facts to back them up. For example, the supporter insists that Amway has created more millionaires than any other company. So I asked where he found that information because as far as I know, Amway has never made that claim and if it were true, there would be no reason for Amway to hide it.  The most valuable company in the world right now is NVDA.   I'd say most of their employees and a lot of their investors have become millionaires since NVDA was founded.  The company valuation exceeds 5 trillion dollars.  Meanwhile Amway has less than 10 billion in revenue, last I heard.  Do the math.

The Amway supporter also insisted that he is proof that Amway works because he is successful. He never spoke about the financial condition of his downline, nor revealed anything about his level or structure. Instead, challenged Joecool to talk about my former business and why I wasn't profitable. As I explained in a previous post, my Amway business didn't prosper because I followed upline advice to reinvest my profits into tools. And I am certain that I am not alone in having been given this advice. I do not claim they don't exist, but it is my guess that a group where even half of the IBOs make a net profit would be very rare, especially when some groups teach their downlines to primarily "buy from themselves".

When discussing the miserable average income of an IBO, supporters like to cite that some IBOs do little or nothing but fail to mention that when calculating the average income, Amway disregarded the IBOs who were not considered active. And because we know that you need to move at least 100 PV pv to earn a bonus, then we can conclude that IBOs as a whole, earn very little, with a few big pins bringing up the average. I believe if we looked at the median income for IBOs, it would be far less than $115 a month.

So the question is how can an IBO actually prove that they are successful? Maybe the first step is to be willing to talk about your business. Most IBOs are anonymous commentor on this blog, yet outright refuse to disclose any details about their business, and downplay the expenses associated with the business, even when upline will promote "low overhead" as an incentive to join Amway. While $150 or $200a month might be low overhead, it is very high if your monthly income is $10 a month. Somehow, upline will convince IBOs that taking losses is a sign of success. Or that an IBO is successful as long as they remain on standing order and continue to attend functions.

Honesty and transparency is how an IBO can prove his or her success. Making a nice living on the backs of your downline is not success, that is exploitation of your downline.

The Millionaire Next Door?

 I keep hearing from some IBOs that they belive that Amway has created more millionaires than any other company in the US. I call BS on that claim. I am not saying that Amway hasn't created any millionaires, obviously, the Amway owners are worth billions of dollars. But what the IBOs are apparently implying is that the diamonds are millionaires. I'm sure there are some diamonds who indeed are millionires, especially if they are tenured diamonds, in particular the double diamonds and higher. But conversely, I believe that many high level diamonds are not millionaires. I believe it is just as common for a diamond to be in debt as it is for a diamond to be living large. I also believe that many diamonds did not accumulate their alleged wealth exclusively from Amway.

The reason why this is an issue is because these big pins will stand on stage and show off excessive wealth and imply that it is their Amway income that pays for these mansions, sports cars, and in some cases, jets. In the US, I attended a function called "Dream Nite" where these kinds of trapping are displayed, to the tune of the song "I wanna be rich". The diamonds would say that you can have what they have, if only you will do what they advise. These functions still go on today and I believe it is now called Winter Conference.

Stanley and Danko's book, "The Millionaire Next Door"
http://www.personalfinanceplaybook.com/2009/08/the-millionaire-next-door/

This book makes some very interesting points which I believe applies to Amway diamonds. I will outline the significant ones and I will comment below:

**Predictably, the data shows that most people who you believe to be very rich are not.

**High net worth individuals, statistically, tend to be people that live within their means. They don’t spend a lot of money. They don’t waste money. They tend to be pretty frugal people.

**The authors point out that most of the richest people you know aren’t driving expensive luxury automobiles. That’s what the people who want everyone to think they’re rich drive.

Joe's commentary. The book does say that about 1/3 of millionaires acquired their wealth thru a J-O-B and saved and invested, but did mention that many millionaires were also business owners, such as a pest control company, etc. But based on the points made by the book above, I can see where it is likely that diamonds portray a wealthy lifestyle as a recruitment tactic, when the reality is they may be living very middle class lifestyles off stage, or may even be in debt. I have seen evidence of diamonds having their homes foreclosed and being in debt (Ruth Carter's book: Amway: Behind the Smoke and Mirrors). Recently, there was also a report that a Triple Diamond filed for (chapter 7) bankruptcy in 2009 or so. The report indicated that he could not make his mortgages, or something to that tune. Odd, because when I was in WWDB, some of the upline leaders said diamonds paid cash for everything because paying interest to the bank wasn't very smart.

My question is why IBOs continue to make up these claims? Try googling millionaire or Amway millionaire. There is nothing to indicate that Amway was responsible for creating the "most millionaires" of any US company. If this were true, wouldn't Amway state it on their website? If someone finds any veracity about this claim, inform me and I will post it.

Ineffective Tools?

 One of the things my Amway upline always pushed on us was the tools system. While the tools are said to be optional, they are not promoted that way. They were promoted as vital, necessary, almost as if you were insane to try and build an Amway business without tools. Basically the tools were a defacto requirement. My upline always claimed that nobody ever "made it" without tools. Some Amway defenders insist that the tools work, and that IBOs who were on the system proved it with higher levels of success and product volume. But the tools work for maybe a fraction of 1% of IBOs who try them. The vast majority of people who use tools make nothing or lose money. Similar to a lottery.

IBOs participating in the system (voicemail, book of the month, standing orders, functions, etc) do more PV. I believe this is true, but it is true, only because once the upline can convince you to participate in the system, then that same IBO is also convinced that they should or must do 100 PV as part of the deal. People who aren't convinced that the system is vital, subsequently do not purchase or sell as much PV because they have not been convinced that moving PV will make them successful or wealthy.

Critics and Amway supporters have debated this issue for years, but clearly, the evidence supports my position. Why? Because if there was a true demand for Amway products because of their quality and/or value, then there wouldn't be such a steep drop off in movement of volume when an IBO becomes a former IBO. Many, probably most former IBOs never buy a single Amway product once they leave the business. If the products had true quality and value as Amway supporters claim, why don't people continue to purchase 100 PV per month when they quit? Because they never wanted or needed all of that product in the first place? If former Amway IBOs continued to but products, Amway sales would continue to increase. Amway's sales and revenues dropped more than 25% from 2014 to now (2018).

If someone is convinced that Amway will be their financial savior and that by using tools and moving 100 PV will result in long term financial security and residual income as claimed by upline, then that is what they will do in hopes of achieving the end goal. When that goal or dream doesn't materialize, the former IBOs realize that the tools and products no longer have the value they once thought they had. How many former IBOs will buy standing order or attend functions? If these materials really made you nicer, or saved marriages, why don't any former IBOs keep buying them? Why do they resort to selling them for pennies on the dollar on Ebay or Craigslist? What happened to the great return policy?

Bottom line is that the tools don't work. They only work for the uplines who directly profit from the sale of tools, plus the artificial demand in product sales created by those IBOs who are convinced that Amway wil make them rich. Once the reality sets in that Amway will not make them rich, and that the tools are simply draining their resources, then the demand or tools and Amway products disappears almost instantly. There is no unbiased evidence that I know of to suggest that these tools work, and basically, the miserable amount of new diamonds emerging in the US seems to confirm this fact.

Submit To Upline?

  Another cult-like teaching that comes from upline diamonds is to submit to upline.  Sometimes it’s called being teachable but as you get more immersed in the system, you are expected to consult with upline for everything, including important life decisions such as getting married or buying a new car.  In retrospect, I believe it’s done because upline doesn’t want you making decisions that could hinder your ability to purchase tools.  Thus IMO, they will advise you to do things that keep disposable income available so they can teach you to buy more tools and functions.

But they make it sound harmless, that checking upline can help you because upline has experience in the business and can tell you how some decisions can impact your business.  Sounds harmless but the upline teaches this more likely for their own benefit than for your benefit.  If you can recognize the game, you can see thru the idiocy of upline teaching.  Looking at it in another angle, how much analysis did upline do on your business before giving you business advice.

Some upline even “counsel” their downline.  Can you imagine submitting to someone for such important decisions that can affect your life and your upline's only real qualification to do this is they joined Amway before you.  You could actually be a counselor, but you would be counseled by someone upline with less qualifications simply on the basis that they joined Amway before you.  Or can you imagine a young say 30 year old single guy sponsoring a 45 year old married guy.  The married guy would get advice from someone who isn't married any may not have been in Amway for long.   Yes, the sponsor will go upline to seek more expertise, but is that really a reliable "system"? 

When I was an IBO back in the 1990s, I was engaged to be married and my upline advised to dump my fiancée because I could build the business faster and if I achieved diamond, women would line up to court a single diamond.  By then I had already smelled a rat with regards to Amway teaching so that was the last straw for me. 

I was a 4000 PV IBO at the time, so I told my group what happened and that because of what happened, I had decided to walk away from Amway.  All of my group except 1 or 2 IBOs downline from me walked away when I did.  So, my upline and sponsor went from direct distributor to less than 4000 PV and I do not believe he ever requalified at that level again.  

I do know that my sponsor was still active as recently as 2019 but I’m not sure if he’s still chasing Amway in a "all in" manner.  Being that he was a physician, I see it as a life wasted on Amway.   Submit to your upline is total BS.  

Always A Diamond?

 I've seen some interesting discussion recently about how a diamond pin is like winning a gold medal. That you don't get it taken away from you later even if you don't qualify anymore. The discussion also flowed as to where they mentioned that former US President Jimmy Carter is still addressed as Mr. President. Or that someone with a Superbowl ring can be addressed as a Superbowl champion. While I agree with that to some degree, I think the issue of diamond or former diamond is significant and different from former President Carter or a former Superbowl Champion. Terry Bradshaw or Peyton Manning don't parade around as if they just won the Superbowl last year.

The diamond pin is a significant achievement for sure. Seems that recently, it's even harder to achieve in North America. I don't know of more than a few new diamonds emerging in the last 25 years or so in the US. But if say a diamond qualified in 1988 and never qualified again, how would you as an IBO feel about paying to see this diamond speak function after function and how many would continue to buy standing orders from a guy who may have achieved diamond 25 years ago and never again? Would the audiences be "fired up" to see these speakers? I find this ironic also, because many Amway defenders like to criticize Amway critics for having an outdated experience. Well, conversely, a one-time diamond would be basically the same thing. If not, then Joecool should command the respect of a 4000 PV Eagle since that was my highest level.

I actually have no issue with Amway allowing the achiever to carry their highest pin as a recognized achievement, but I do believe that those who use their former pin status to exploit and profit from new IBOs and prospects should be stopped. I know I would not have been so excited attending a function where the keynote speaker went diamond for 6 months a decade ago and was no longer qualified. Else, by upline's definition, he will teach me to go diamond and fall apart? I believe there are fewer North American diamonds now than ten years ago. Some diamonds resigned and some outright quit. So much for residual/passive income. Obviously if these things existed, then nobody would quit or walk away from residual income.

BTW, an article on an Amway Corporate website says this about passive income:
"Passive income is a term we do not permit distributors to use and it’s not a term the Corporation uses. In our business, there is no such thing as doing no work, and expecting money to still come in.” Link:
http://blogs.amway.com/answers/2010/11/02/unwelcome-words/#comments

Still think there's a free ride at the end of the tunnel?

IBO = Glorified Customer?

 One of the silly things IBOs say is how they need to be their own best customer. That a McDonald's owner would never eat at Burger King, etc. That is complete hogwash. While there is nothing wrong with supporting your own business, IBOs are blinded by the fact that their business produces nothing. They are simply middlemen distributors. Do you really think diamonds consume thousands of dollars of standing orders because they own or profit from tool companies, which are for profit companies that produces training materials? Of course not. When you purchase something from your Amway business, you make no profit. Any "false" profit you see is simply money out of your own pocket moving to the other pocket. The Amway corporation makes the profit. Yes, you may receive a volume bonus, but that is still a lot of your own money being given back to you. Spend $300 and get back $10. If you can get enough people to follow you and move volume, your bonus will increase, but the increase then comes out of your follower's pockets instead of your own. The only real profit would be selling product to actual non-IBO customers.

I know some business owners, and they are never the best or sole customer of their own stores. Many Amway business owners are their only customers or their best customer. That simply is not how a business is run. Any REAL business cannot support itself by having the owners and perhaps the owner's employees as the primary customer base. For any business to thrive, you need customers and a demand for products. Without customers and a demand for products, you have no business. But some upline leaders still teach "buy from yourself" as the primary means of doing business. Other leaders may ask you to sell, but to focus on sponsoring others because they are hopeful that this will result in increased volume. Sadly, most IBOs will never sponsor a downline, and many will never acquire a customer other than themselves.

It seems as though many IBOs think they are business owners, but the reality is that they are simply glorified customers of their own business. Their only hope of making a profit is to sponsor others. In my opinion, this method of doing business is a pyramid because the only way to eventually make a profit is to sponsor enough downline until you can leverage enough volume to finally break even or profit. An IBO with a real customer (and not buying tools) can make a profit by selling a single product. But many IBOs are not taught this because their upline makes a much bigger profit by selling to their downline IBOs standing orders, voicemail, books and seminar tickets. Many IBOs do not realize that they are simply customers of Amway and customers of the tools system.

For people already involved or considering involvement in the Amway opportunity, you are highly encouraged to seek more information and to fully understand how a profit is made in this business. Simply seeing circles drawn oversimplifies the process as most IBOs never get close to finding six (6) like-minded people. Even those who find six are unlikely to be able to retain them. Over time, the cost of the products and the cost of the training will start to add up and the losses will escalate. For real business owners, an assessment of profit/loss and return on investment should be done and if the return is not good, a real business owner would consider other options.

So, are you a business owner or a glorified customer?

Something For Nothing?

 In my opinion, Amway is a legal pyramid. They have not been found illegal but still operates a product pyramid. The reason why they remain legal, apparently is because they do not pay anyone for directly recruiting downline and they claim to sell products to actual customers. But most everyone has been or knows someone who was recruited by a zealous Amway IBO. The emphasis of most active IBOs is on recruiting and much of the teaching by upline is on techniques to recruit and/or how to talk to people without tipping their hat to reveal the Amway name. Most IBOs are not very good at this and they stick out like sore thumbs in many cases. It's also comical when uplines teach crazy antics, like how some IBOs use to deny that Amway and Quixtar were even remotely connected, or if anyone remembers the "perfect water" fiasco a number of years back.

One of the reasons IBOs use to justify their involvement in the product pyramid is that they can earn more than their sponsor. While that is true, it is only because everyone below the emerald or diamond level is basically expendable, or a slave in the pyramid. There are many IBOs who achieve fairly high levels who quit or had upline wreck their businesses. Thus, even platinums are expendable to upline. In fact, an upline might make more money by removing the platinum because then the downline are directly under his/her control and spot in the hierarchy.  For new IBOs or recruits, do you really believe that you are going to ever surpass your current upline diamond or higher? If you believe that, you are sadly mistaken.

And for those who dream of achieving diamond and walking the beaches of the world. How do you think you can ever achieve that? You don't get something for nothing unless someone gets nothing for something. In order for you to receive income for little or no efforts, your downline IBOs must keep purchasing products and replacing IBOs who quit. If your downlines cannot keep up with the attrition rate, your business will collapse in a hurry. Come to think of it, if a diamond can walk away and collect a large income forever, why hasn't anyone done it? I mean we still see crown ambassadors still busy working functions or dying on the job and I don't know of any who walked away to spend their lives jet setting on the beaches of the world.

The sad reality is that you see new faces at meetings and functions, just as often as you see familiar faces disappear. With that kind of attrition rate, you may have to work even harder at the higher levels just to keep your business status quo. In Egypt, the slaves built the pyramids. Do you have enough slaves? What many Egyptologists find amazing is how the Egyptians were able to motivate the slaves to keep on going, doing backbreaking work all of their lives. The same can be said of a diamond level business (or higher)

Dreams?

 One of the things that Amway leaders use to attract new IBOs is to talk about the dreams that these folks have. They may talk about how having a job will wear you out and dreams that you once had as a child or young adult gets suppressed and/or completely forgotten. They try to revive some of these dreams in the hopes that they can convince prospects that Amway is the only way, or the easiest or best way to accomplish these dreams. They also try to instill the notion that people can choose to succeed in Amway. Being that success in Amway has so many variables out of the direct control of an IBO, nobody can simply choose to make it big in Amway anymore than they can choose to win the lottery. And by the way, the chances of going diamond and maintaining it is about as remote as winning a lottery.

What is somewhat cruel is reviving dreams that for many, will never come to fruition, no matter how much work is done, and no matter how many tools are consumed. There are many instances where no matter how big the dream, it will never come to pass because of physical and financial limitations. For example, as a child, many of us had dreams of playing professional football, hockey or basketball, and living in the glory of winning. However, no matter how many hours you put in and no matter how hard you work, the vast majority of people will never be pro athletes. And even out of the ones who become pro athletes, very few are considered "elite".

Yet the Amway promoters will have people believe that just buying a few products and selling a few products and 2-5 years of "hard" work, people will join the financially elite in the world. As if home care, beauty and nutritional products moved from person to person is going to make you achieve your dreams. That you will quit your jobs and walk the beaches of the world while the cash rolls in by the barrel full. Sadly, many young people become attracted to a proposition that allows them a shortcut to retirement instead of working until age 62 or whatever the standard retirement age is. They are basically promoting false hopes and promises to the vast majority of people who get involved. I believe those who are deemed as "dream stealers" might be doing their family and friends a favor by stealing their dream, which will not come to pass anyway.

With about 1 out of 240 IBOs reaching platinum (the alleged break even point) and about 1 in 20,000 IBOs reaching diamond, the dream is a stretch indeed. Even for the select few who can overcome major challenges and hurdles, maintaining their status often becomes impossible and and not worthwhile (many diamonds have quit).
Also, if you do make it, you will leave behind a trail of people who could not or did not come close to that level of success. It means that in many cases, your success will come at the expense of those you sponsor. It is why many claim that Amway is a legal pyramid.

Having dreams and goals is a good thing. But do you want to accomplish your ultimate dream by hurting (financially) those who trusted you and agreed to be your downline? Is it your dream to go diamond and have 500 to 1000 or more downline IBOs losing money? Is it your dream to be wealthy by exploiting people who trust you and believe that they can achieve the same level of success, when the opposite is true?

What is your dream? Are you willing to hurt others to achieve it?

A Letter To Amway?

 This is an open letter basically explaining Joecool's position and why in my opinion, criticism of Amway doesn't stop. 

Dear Amway,

Why does criticism of Amway continue Ad Nauseum? Because you have not taken any apparent visible action(s) against higher level IBOs (Usually Diamonds) who make their living by ripping off unsuspecting prospects and faithful downline by feeding them lines about how easy it is to build an Amway business and how they can ditch their jobs and live on easy street. I saw it and there are countless testimonies and experiences posted on the internet.

When I was an Amway IBO in WWDB, we were fed outright lies by upline. Nobody made any money from tools being the biggest. Downline were taught how long they could string out their mortgages or electric bills so they can attend functions and buy more tools. Yes, IBOs have culpability as well, but the culture of these groups is one of trust and loyalty to the diamonds. Amway's owner, Mr. DeVos acknowledged this in his 1983 speech "directly speaking". But despite the speech, no apparent visible action was taken, thus status quo continued. Even the accreditation system which seemed nice on the surface appears to be a farce. I believe that possibly millions of people over the years have been adversely affected financially because of some of these Amway IBO leaders.

Many of the same leaders who lied to benefit themselves are still at it. A fellow blogger named "Rocket" at one time, reported a possible violation where crown ambassador and IBOAI member, Brad Duncan is caught on tape claiming that IBOs can make "hundreds of thousands of dollars" a month in Amway. Your response was to make non sensical remarks and then eventually no response when pressed for one. I also reported a WWDB IBO who was making disparaging and false statements about some competitor's products while making misleading positive statements about Amway products. Your response was no response and my comment wasn't even published on your "Amway Answers" blog. Ironically, one of the topics on that blog was about how Amway doesn't turn a blind eye to problems. Yeah, you can say it but your actions show something else.

Maybe someone can explain why actions in other countries indicate that the folks who sell Amway tools are scammers. For some reason, the regulatory agencies in the US have not taken notice of the tools business. The Dateline segment in 2004 exposed the tools and systems. It became a big debate on the internet with critics and proponents. While Amway can claim innocence because the unethical actions were taken by IBOs, or "independent" business owners, I still believe that Amway has a responsibility to reign is some of the sales force that represents them.

Food for thought: Joe Paterno was an assistant and head coach, an icon at Penn State University for more than 60 years. He was fired some time ago because he had knowledge of child abuse occurring at the program under his watch. While he was not personally guilty of this, and did many good things for Penn State and the community, still his inactions may have caused harm to befall innocent children. Ultimately, he had the ability and power to stop the wrongdoing but did not. It is a sad ending for a man who many consider a legend. I wish his family well.

Amway can reign in the tool abuse and take control of some of the bad leaders, but apparently has not and will not. The fight goes on.....

The Phenomemon?

 http://scamadvocates.com/164-Amway.html

Other November 27 

"""I have read all of these posts. Interesting that everyone who supports Amway cannot spell very well. Lots of typos and grammatical errors in here by those who jump up and down reciting Amway's many virtues. It is a scam and a groupthink phenomenon of staggering proportions. From a psychological perspective, Amway does its best to separate people from those who would challenge its legitimacy and operations. This is not unlike how Hitler or any other leader would silence opponents or dissidents by having them "removed" from the equation. Same thing goes here, Amway teaches people to ignore and remove obstacles and people who challenge the system, even if said challenges are completely rational and offered by people with the IBO's best interest in mind. It hits IBO's in soft spots for family, friends, and freedom (the 3 F's), and it entices them to focus on emotional reasoning rather than very cognitive-based, rational dissection of information.

Amway IBO's are taught emotionalism, not rationalism. From a business perspective, it is a farce. IBO's are no entrepreneurs, as they wear the collars of their uplines. Over and over, I have been told to do as my uplines say. What if my upline is a total moron and I have a law degree and an MBA?? I'm supposed to follow these uplines?? According to the system, yes, the uplines' words are paramount. So no, IBO's are not entrepreneurs and do not gain any real experience. IBO is a fancy name for distributor, pure and simple.

I had the opportunity to meet a number of "diamonds" and "emeralds" recently, all of whom had either left the business to get real jobs or were still struggling bringing in about $30,000 per year. Many of them are posting massive losses, and by the way, the IRS does not consider pro-suming OR tickets to a convention (to hear Yager scream at you) to be business expenses. Good luck trying to recover those losses. It is a pyramid scheme simply because mathematically and considering the law of averages, a downline cannot really earn more than his upline. It just doesn't happen - it's a nice idea, but it doesn't happen. I worked through multiple scenarios with a friend, trying to see how I could out-earn my upline, and we found several variables that would keep that from happening.

Finally, on a personal level, this Amway monkey business cost me a great friendship, an IBO who decided that taking a chance on some crazy dream was more important than those who loved him most. I think he will continue prospecting and pushing "the plan" until there isn't anyone left. If you know someone in Amway or who is thinking seriously about it, you need to realize that they will soon be lost. Amway people are very much like crack users (very similar psychopathology, actually), and they will choose Amway over you, their family, their friends, and anything that gets in the way."""

Failure By Design?

 Many people, including Amway IBOs and prospects see the 6-4-2 plan or a similar version when they are being recruited into the Amway business. The plan consists of 79 IBOs, all who actually earned a bonus with 1 person being platinum and the rest earning significantly less. Now I can say with virtual certainty that nobody has ever built a group with that many people who all went out and actually earned a bonus. This is because most IBOs do little or nothing and many join and never order a single product.

Thus, we know that someone who actually achieves platinum PV). For round numbers, let's say an average platinum group has 150 IBOs. Already we can determine that a platinum is less than 1% of the Amway population and the rest mostly earn little or nothing. While the platinum might earn some decent money, a hardcore dedicated platinum can still lose money because of the "system" consisting of voice mail, CDs, books and functions.

Just by analyzing what I've discussed thus far shows that a platinum group would typically consist of 100 or more (most likely more) Amway down lines and therefore the platinum is firmly in the top 1% of IBOs. This demonstrates that Amway is failure by design. If there are 2 platinum groups, then it's 2 guys on the top each with a group of 100 or more downline making little or nothing. A diamond consists of 6 of these groups with the diamond making good money with hundreds if not thousands of downlines making little or nothing. If some day, the entire planet signed up for Amway, guess what? Nothing statistical will change.

When I used to see Amway announce 1000 new platinums, all it means is that there are 1000 new people with groups where the vast majority makes little or nothing. Many people get excited about Amway thinking they will be the platinum and "make it big" but even if they do, they have a group of downline making little or nothing and taking losses if they are on the system of CDs and functions. You can have smart, motivated downline but it doesn't change the fact that Amway leads to failure by design, as does most other MLMs where you are always recruiting new people. Recruiting is priority because in order for you to reach the top, you also need to find your 100 or more downline who make little or nothing (or losses) in order for you to succeed.

Many people think they have what it takes to "make it" in Amway but that doesn't change the reality in what can be extrapolated from Amway's own business disclosures.  For example, the average income of any IBO in Amway is $202 (last I checked).  But that $202 is only for "active" IBOs.  Approximately half of all IBOs are not considered "active, so the real average income is roughly $101 a month.  And that $101 a month include the diamonds, double diamonds and crown ambassadors.   I can't explain every nuance and "what if" about this average income, but I think you get the idea.  

Level Playing Field?

 The Amway business is a level playing field. At least that's what my upline told us when I was an IBO. That everyone starts at zero. While that is somewhat true, there were other factors that existed, that most IBOs did not know about. That factor is the possibility of PV manipulation. I believe that groups that are/were not on direct fulfillment (Groups still calling in and picking up) are able to transfer PV around. Thus, certain groups or favored downline could be manufactured into higher pins. I believe most groups are currently on direct fulfillment, but I did confirm, years ago that some groups still are on call in and pick up.  If not for products, they still did call in and pick up for tools.  

But let's examine the concept that everyone starts at zero. While this aspect may be true, certain people are simply better at selling, or better and more adept at socializing and talking to others. So while your PV count may be zero, the skills needed to start and run a business is not a level playing field for most. I believe uplines state this to give prospects the idea that everyone has an equal chance at succeeding in Amway. I just cannot believe this to be true. Even current diamonds, while having achieved a certain level, probably could not "start at zero" again and build a diamond business.

Thus, when you really think about it, the "old timers" of the diamonds should actually be given less credibility than the newer ones. Do you really believe that a diamond or higher pin who built his business in the 1970's can really teach people in 2026 how to build the business in a way to address people in 2026, and the fact that the business is mostly internet based as opposed to the old days, not to mention the advance of social media, text messaging and other modern forms of communication.

It is easy to stand on stage, tell people how great you are, show off material wealth and then tell prospects that everyone starts at zero and that anyone can build the business. I do not believe that it is true. I also strongly suspect that very few (if any) of the current diamonds would be able to "start at zero" and build a new diamond ship here in the US, where the reputation and shrinking sales would be handicaps too great to overcome for the vast majority of prospective IBOs. I recall back in 2005 or 2006, WWDB had a commitment for personal growth amongst the diamonds and above. I do not believe much fruit was grown out of that effort. The diamonds had committed to duplicating their groups to prove it could be done. Not a single one of them, as far as I know, advanced to a significantly higher level (i.e. diamond to double diamond).

The Symbiotic Relationship?

 Over my Amway and blogging experience, I have come to a conclusion which I will stand by. And this, in my informed opinion, is a significant problem with the Amway opportunity. The Amway owner, Rich Devos acknowledged this issue back in 1983 in his "directly speaking" tape and unfortunately, nothing apparently substantial was ever done and therefore, the problem exists today.

The Amway opportunity is one part of the issue, with the tools systems being the other prong. Over the years, the Amway opportunity and the tools systems have formed a symbiotic relationship. It is as if Amway needs the system and the system needs Amway. What I mean is that Amway provides the opportunity, and then the system uses the opportunity to sell the system. In the meantime, the system leaders teach 100 PV, product loyalty, and do most if not all of the new IBO recruiting. Amway benefits as the system teaches movement of PV whether by sales or self-consumption, and new IBO recruitment, and the system leaders benefit by having a captive audience to sell their cds, books, seminars, voicemail, and website fees.

A conflict of interest occurs when uplines tell their new IBOs that they "need" to attend a certain function, or that they "need" standing order to succeed. The upline is smart enough not to say the system is "required", but certainly, they will put a defacto requirement by saying things such as nobody has ever succeeded without the system, but you can try to be the first, or they may say the system is optional, but so is success. Or someone may say so and so diamond (insert) name is a multi-millionaire and he advocates the system, but you can go against his advice if you think you know better.  On the surface, you'd almost have to be nuts to avoid the system after hearing stuff like that.

The bigger problem is that these upline leaders will tell you that you basically cannot succeed without these tools, but at the same time, the more tools you buy, the more profit these uplines make. Some Amway apologists will justify this by saying a college professor may sell his own books to his students. But this is not the same thing. A college professor may spend years researching to write that one book. He will be teaching his expertise that is written in the book. When you attend seminars or listen to cds, you do not have one expert guiding you with clear documentation on how they succeeded. You have very general generic experiences coming from various speakers who may or may not have any common background with IBOs. Thus, these upline leaders will profit from their downline IBO volume and also from tools that they advise downline to purchase regardless of downline success or progress in the business.

As evidence of these bad practices by upline, consider this. If upline truly has "valuable" information that would help you succeed, they would get that information to you in whatever means they could. Either by email, Facebook, twitter, text message, MP3, YouTube or whatever. Why would they withhold trade secrets if they really wanted your success? Has it ever occurred to IBOs that maybe uplines don't want your success? Maybe it is why you must pay for any piece of advice or support you receive. Maybe upline is perfectly happy with people coming and going as long as there are tool purchases because then there are no new IBOs (platinums and up) to share the tool profits with.

There is a definite conflict of interest with profiting uplines advising you to buy tools. The question is whether you see it or not?

Just A Customer?

 I've been debating with others about the concept of customers. Amway's most prolific defender argues that IBOs are customers and holds the position that there are alot of people who register with Amway simply to be customers. Now I don't know how anyone can possibly make that determination, but regardless of whether it's true or not, these folks are still considered IBOs. I don't want to debate the legal ramifications about the 1979 FTC ruling and the 70& rule, although the spirit of the rule was to prevent IBOs from buying their bonus. in the 2016 FTC ruling against Herbalife, the FTC said sales to distributors do not count as retail sales and required Herbalife to changes their operations because of this rule.

Amway apologists apparently contend that IBOs who purchase and then resell to downline are meeting the sales requirements and the downline are customers. Okay, let's go with that. But wait, IBOs do not buy and then resell to their downline. IBOs order directly from Amway do they not? If IBOs order directly from Amway, their upline gets some volume credit for downline purchases but the upline doesn't buy and then resell anything to downline. So, are IBOs actually making any sales to non-IBOs, save for sympathetic friends and family?

If in fact, IBOs are not selling their goods, and are primarily self-consuming them, it means that most of the upline bonus is basically generated from the pockets of the downline. I believe the tools business is a product pyramid as only IBOs are buying standing orders and attending functions. The lack of selling Amway products to the public would put the Amway business opportunity in pretty much the same category. I wonder what the FTC would rule today if that were the case? I wonder what the FTC would rule on the tools systems as it is today?

Something to think seriously about. If you are an Amway business owner, and you are selling little or nothing, where do you think your bonus comes from? It either comes from your own pockets, or it comes from taking advantage of your downline, who then pony up a portion of your bonus from their pockets. In a system such as this, the only way to maximize your bonus is to recruit as many downlines as possible. Because the more people you can leverage, the more bonus you can get. The problem with this system is that people realize they aren't making money, and that paying in some cases, ridiculous high prices for "prestigious" soap and vitamins is not worth it, and they quit. When these folks lose their Amway dream of mansions and jets, they somehow lose their desire to keep making purchases.

If former IBOs kept on buying Amway goods, then Amway sales would climb pretty much every year as the former IBO's purchases coupled with current IBO purchases should keep going up, not down. But that's not really the case is it? In what business can the employees or company owners be the primary customers and prosper. The answer is none and Amway is not an exception.

Avoid The Name "Amway"?

 I often find it comical that to this day, I still see people who like to hide the Amway name when recruiting others. I believe this tactic has been a major factor in why Amway has a bad reputation in North America. When I was recruited, I was lied to as well. I was invited to a "beer bust" only to find out it was an Amway meeting. I went home that night thinking WTH was that? They lie to us and then expect us to join the business. And to this day, I believe this practice continues. They might use another name such as "Liberty Marketing" or "Worldwide Group" to mask the opportunity they are pitching. My question is why?

Over the years, IBOs have tried all kinds of ways to disguise the Amway opportunity. In the past, it was network marketing, e-commerce, online shopping mall and the corporation even changed Amway in North America to "Quixtar". Sadly, the name change to quixtar did not work, probably because the same tactics were used when recruiting new IBOs into Quixtar. Amway eventually changed the name back to Amway. I believe this bad reputation in North America is why Amway, in years past, enjoyed the most business growth overseas where people either do not know the Amway name, and likely because there haven't been enough former Amway/AMO victims to soil the name in other countries. As markets mature and people get to know about Amway, we se what is happening now. Amway revenues have plummeted from 11.8 billion in 2013 to 8.8 billion (global) in 2016. That's a serious decline!

So IBOs, how can you expect someone to trust you and do business with you if you are deceitful or outright lie about the Amway opportunity? Are you ashamed of the Amway name? If you are ashamed or scared to drop the "A bomb" on people, how will you ever be able to show any plans, let alone sponsoring anyone into the business? My former sponsor used to tell our group that the biggest challenge is overcoming the name Amway. To be fair, Amway the corporation is not the reason for the bad reputation. It is the unethical and bad behavior of IBOs that lead to a bad reputation but on the other hand, it's not the like Amway police have been cracking down and visibly taking action against the violators so Amway is also guilty to some degree.

Conversely, people who come right out and talk about Amway are unlikely to net any decent results either because of the past reputation. It's an almost no-win situation for IBOs and prospects. For these reasons, I believe it to be nearly impossible to build and maintain a group, especially if your goal is to reach diamond. It seems as if more diamonds have left Amway in recent years than there have been new diamonds. I believe this to be spot on for WWDB, my former LOS. So IBOs, are you ashamed of Amway? If not, why are there still so many IBOs using trickery and deception in recruiting prospects?

If you avoid using the Amway name, what are you ashamed of?

The Sad Reality?

 Comment left on Happy Franchisee blog:

http://www.unhappyfranchisee.com/will-amway-make-you-annoying/

mary on December 5th, 2011 10:35 am

My husband and I were involved in the Amway/Quixtar business for 13 years. We worked very hard, attended all the meetings, reached the direct level, and made very little money. Thank God for Dateline. We were convinced that this was a reputable business,the people were great….so we thought. Then we found out the truth. The majority of the money that was told to us was suppose to be on the products and sponsoring /helping others,l was actually made on the books,tapes and seminars. You know they tell you that the speakers take the time from their families to give back to the business. Totally false ! The speakers are paid to perform. That is how they make money. Please believe me when I say that you are not being stupid just convinced by people you trust that you will make money. We went to our sponsors and told them we know how they are making money. We watched Dateline , years ago and still could not believe how we were tricked. It is sad that people will continue to believe this opportunity will produce millionaires. Most of the people in our upline were sued by other people and eventually went on to another scam. I know you will find this hard to believe. I did too. I am now reading all this information and at one time felt the same way. Again you are not stupid… just misinformed. We worked long hours, left our children with sitters, argued with our family , and listened to our upline to not believe the internet. If you make money at this business it will be on the books, tapes, seminars and speaking. We could not comprehend how our upline could have lied to us… they were good people that also got caught up in the lies. It is really difficult to listen to someone speak highly of this business, I know I would defend the products and the system too. I also thought I knew what was going on but I did not know the truth. Find another way to make money you, will be glad you found out now.

Uoline - The Root Of Many Evils?

 Over the many years of Amway's existence, their reputation in the US and North America in general, has tanked. And it's not all due to Amway the corporation, but rather Amway IBO leaders who teach and condone unethical behavior. Of course, I don't know of any significant measures that Amway has taken to discipline some of their wayward IBOs, but that's another story for another day.

During my blogging career, I've seen young people who were discouraged from attending college so they could build an Amway business. I've personally seen people go bankrupt and lose their homes because they followed the advice of their all-knowing uplines. Sure, people have some responsibility for their actions but I feel as if some of these kinds of actions by some IBOs and IBO leaders is predatory and focuses on people who can least afford to funnel money into the business and the leech teaching systems such as WWDB or Network 21.

I've seen ridiculous product claims such as people claiming that bottled water could cure ills and make you athletically superior. Of course, this water costs about $50 a case when you could buy 10 cases of water at Walmart for the same price. They claim superiority in their vitamins without unbiased scientific evidence to support their claims. Perhaps that is why the Amway vitamins seemingly are consumed nearly exclusively by IBOs themselves.

Despite claims by Amway supporters and IBOs that things are changing in Amway for the better, there is plenty of evidence that nothing has changed. Outrageous income claims. I thought the Dateline show exposed some crazy stuff with an IBO leader claiming that people could eanr $250K per year with a part-time effort, but then my friend Rocket finds this gem with an IBOAI member and crown ambassador in WWDB/Amway claiming you can make hundreds of thousands of dollars a month: http://rocketsrants.blogspot.com/2011/09/amway-guys-they-sure-say-stuff.html

I wonder if Brad Duncan himself even makes that kind of money. Ironically, his triple diamond brother wasn't even close to that when his bankruptcy papers were exposed a few years ago.

So, to Amway prospects and apologists, the Amway corporation itself may be perfectly legal and clean, but the root of many evils comes from Amway uplines and AMO leaders. It is for this very reason that many get turned off just at the mention of the Amway name. Amway can stop them, but will they?

IBOs And Taxes?

 I came across this blog and while I've seen similar posts by Amway business owners, this one was interesting because of the detail and the passion the blog author has. In a nutshell, he lost money in Amway but calls it success because after he received his tax refund, he's now claiming to have a net profit. It's amazing what these Amway/WWDB leaders can get people to believe.

https://transparencyofadreamer.wordp...sing-in-amway/

Below are excerpts. The blog owner claims to have made a net gain due to a tax refund. He doesn't explain how he arrived at that refund but apparently his losses in Amway lowered his tax liability for whatever income tax was already withheld from either his paycheck (job) or from paying estimated taxes in advance for a business or some other venture. It's quite scary and illustrates how some people can hang on in Amway for so long even when suffering losses. The IBO's are programmed to "think" they actually made money!

Based on what they have taught me, even though I barely had any increase in my overall organization (ie: I was pathetically lazy, didn’t put any work in and barely increased the size of organization – #sadface) I STILL DID NOT LOSE MONEY!

2013 total Cost Run Down:
Communikate: $443.40
Digital Delivery: $300.00
Premier Membership: $599.40
Major Functions: $595.00
Major Function Hotels: $750.00
Business Support Materials: $240.00
Total Business Cost: $2927.80

Lets bring it all together here, folks.

Total Amway Payout in 2013: $2112.36
Total Cost To Run Business: -$2927.80
= $-815.44

Just like I said last year – “Oh No! I’ve been scammed! I’ve lost money! My upline lied to me! I didn’t put in any work to sponsor anyone this last year and its everyone’s fault but mine! The business doesn’t work! What a total scam!!!”

Hold on now Mr. Negative – Due to running my own business in a country that incentivises business owners to run their own business I received tax benefits that entitled me to a refund for the 2013 year in the amount of $2409.76. Lets do this again, shall we?

Total Amway Payout in 2013: $2112.36
Total Cost To Run Business: -$2927.80
Total Tax Refund For 2013: $2409.76
= $1594.32

So, as I wrap up I hope I made my point very clear – you will not lose money running your own Amway Business powered by World Wide Dreambuilders…. IF you are diligent with your finances, if you don’t blow your budget your coach sets with you. You WILL lose money running your own Amway Business powered by ANY training system IF you don’t have a budget, if you don’t ask for help to set a budget, if you ignore your budget etc.

If your potential sponsor is affiliated with WWDB and is doing what they are taught, you should be educated on some of the numbers I shared above in regards to cost for access to your training and mentorship system.

A Viable Business?

 Over the years I have been debating with Amway supporters, I cannot see what is so great about the Amway opportunity. Are some of these Amway defenders that stupid or dense that they truly believe that a business where one out of a few hundred people might make a profit and most of the remaining IBOs will lose money is a good opportunity? I'm not talking about people who sign up and "do nothing". Many IBOs sign up and put in a great deal of time, effort and money, only to find out that the system simply does not work (especially in the US) and they make a business decision to quit and/or to do something else.

Of course there are some people who make money in Amway. If nobody made money, then the opportunity would cease to exist. But it is basically exploitation of the downline that accounts for upline success. Amway's admission that sales to non-IBOs are low, confirms this. Thus, certain upline make their income from their downline's PV volume, and on tool purchases. I mean even a lottery has winners. Even Ponzi schemes and other questionable opportunities have some winners. This is not to suggest that Amway in not legal. Amway is perfectly legal, but the way the opportunity is set up, those who profit, primarily do so at the expense of their trusted downline.

There are no groups that I know of where all the IBOs can win and earn a profit. I would guess that there might be a few rogue groups who only focus on retail sales, and while these groups can be profitable as a group, they are few and far between. This is because most IBOs fall under an LOS such as WWDB, BWW, LTD or N21, and these groups all seemingly focus on recruiting of new IBOs. Yes, they may sprinkle in some suggestions about selling goods, but generally speaking, their "training" materials consist of motivation speeches, feel good stories (whether true or not), and the theme of never quitting while continuing to purchase more tools.

Some upline have the nerve to start teaching downline that their Amway business is not about making money, but to save your marriage, make you a nicer person, or some other diversion to make you forget that you are losing money month after month after month. Some groups even mix in religion and politics into their functions and meetings. As far as I can see, the typical business building IBO signs up, gets some of the tools and attends a few functions, and finds that the products are hard to sell because they are not priced competitively with other retailers, and that a damaged reputation is nearly impossible to overcome. These IBOs realize they are not going anywhere, and they walk away, chalking up the losses as a life lesson. But apparently, many uplines who lied and deceived in the past are continuing to do so today, often just revising history for their benefit (i.e. lying about making any profit on tools).

Many IBOs, prospects, information seekers and critics read this blog. My question is very simple. What is so great about the Amway opportunity? For most, it is just a bad use of time and money. While some may exist, I don't know of a single person who "did the work once" and sat back collecting barrels of Amway money while sipping Mai Tais on the beaches of Jamaica. I see crown ambassadors working as hard today as they did many years ago. Diamonds losing homes to foreclosures, a prominent diamond in bankruptcy proceedings, and a hoard of WWDB diamonds apparently selling off mansions that they allegedly paid for in cash. (It is quite possible that their lifestyles are simply not sustainable).

Where is the benefit in the business for the typical IBO? Just as there are some diamonds, there are lottery winners. Displaying a lottery winner doesn't make it prudent to spend your money on lottery tickets. Displaying a diamond's lifestyle doesn't make Amway a good opportunity. While Amway is a business and not a game of chance, the results of either, sadly are eerily similar - that is a few winners and millions of non-winners.

What is so great about the Amway opportunity? I don't see it.

Be Accountable?

 Part of what Joecool perceives as the problem with the Amway opportunity is the utter lack of accountability of upline leaders. They may tell you to trust them, to submit to them and simply copy or duplicate what they have done, and they imply that you will get the same results. Many downlines over the years have put in blood sweat and tears into the business only to suffer massive losses following the system. Upline will then place the blame on the downline. Citing that they either did not try hard enough or they didn't put in enough time and effort, or they didn't do things just right. Despite a shockingly low success rate of system IBOs, nobody seems to fault the system and upline as being flawed. And nobody seems to question whether upline is at fault. It's a game of blaming the victim.

In my observations, I would say that many financial systems are similar. Whether it be BWW, N21, WWDB, real estate gurus or other systems, the success rate is low. Many systems that advertise on television will have a disclaimer that a success testimony is a rare or unique experience. I believe it is similar to the systems in Amway. Dedication or continued spending on the system is not the problem. The problem is often the system itself. It can work for some exceptional people. These people were likely to succeed in other venues anyway. The problem is that is does not work for the majority of people.

The bigger problem, is that for many many years, some uplines have lived high on the hog off of the dedicated tool purchases of their downline. All the while, quesitonable or bad advice was given to the faithful downline. Advice such as quitting a job to attend a function, skipping financial obligations such as the rent or electric bills to buy more tools. One upline even said your family can skip a meal because the standing order may contain the one thing you needed to hear to make your business grow. I have personally seen couples lose their homes and go bankrupt because they followed upline advice. Upline to "has their best interest at heart". Granted, the couple has some culpability in these decisions, but uplines who give this advice seem to get a pass.

Where is the accountability? Some of these uplines who give and gave bad advice, are still active today, and some are still giving bad advice to their downlines. Advice that profits upline and drains downline. Even with valid complaints, it appears that many uplines avoid any accountability. For some, perhaps there is poetic justice, such as diamonds having their homes foreclosed. But as many uplines have nobody to hold them accountable, do you really want to do business with these folks? Would you invest your retirement money with a broker who could not be held accountable? Would you have your car repaired by a shop whose mechanics could not be held accountable? I believe the answer is not to these questions, yet many people are asked to trust and follow the advice of an upline who is not held accountable for their advice.

The system is credited for the few successes that are visible, but the individual is held accountable for any shortcomings or failures. IBOs, I encourage you to hold your upline leaders accountable for the advice they give you. If they won't answer tough questions or take responsibility, then one should wonder why the upline should be given your trust.

Alternatives?

 One of the humorous things that IBOs often bring up is that someone who sees Amway in a critical eye should bring up viable alternatives. I mean if someone prevents you from falling over a cliff, they should have warned you and given you alternatives right? If I recognized you getting conned by a conman, I should find viable financial investments for you before warning you of the potential scam you are about to walk into? It sounds completely ridiculous, but Amway IBOs have actually made those comments on this blog and some other Amway related websites.

Well, let's explore a few anyway just for fun. How about you stay home and do nothing? For most IBOs, you would be better off financially than committing your time and resources into Amway's products and their ineffective training materials and functions. If you are really dedicated to tools, sending your upline a check for $50 monthly and not buying Amway goods or related training materials would make you better off.

A second job where you actually receive a paycheck is a better alternative. While there's no hype and hopes of getting rich in 2-5 years, you can do much for your future by saving a portion of that paycheck each month. If you are young, this especially applies to you. But anyone can help their future by saving and investing. Even someone who pan handles is more likely to have more net cash than most Amway IBOs. The vast majority of business building IBOs actually have a net loss because of the expenses they incur with training materials such as cds and seminars.

Sure, some people do make money in Amway and some make a lot of money. The problem is they make money by exploiting their downlines and those hopeful downlines basically have no hope. In other words, you profit by selling false hope and false dreams. Basically, you can gain wealth in Amway by being a conman. Can you live with yourself in order to profit at any cost? They sell you on Amway as a financial vehicle, but they turn around and tell you that cds, books and functions are the key to success and then make significant profits from those materials whether even if you make nothing or suffer huge business losses.

I haven't even gone into the amount of time lost chasing prospects and attending functions. Your time might be the most valuable commodity that is lost chasing the 2-5 year dream. Ask yourself this question. Where are these diamonds who did the 2-5 year plan living in luxury and doing nothing? I don't know of any/ Do you?

Climbing A Pyramid?

 Let me start out by saying that Amway, at least to the letter of the law, appears to be a perfectly legal company. Therefore, I am not saying or implying that Amway is illegal. But I believe that the way Amway businesses are run, 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 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. Think about it for a bit. Aren't most Amway gatherings about motivation and recruiting?

Unless you have a very very rare group where actual product sales to non-IBOs is sufficient to cover the costs of running your business, functions and all, then it is true that the lower-level IBO's jobs are the primary source of income for the uplines. How many groups are like that where selling is nearly exclusively to retail customers and not downline? 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 downline's 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 easily 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 a small profit.  On the other hand, a hard CORE dedicated IBO can still lose money at 4000 or at platinum.    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 product 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

Get Out Of Debt BS?

 One thing that many Amway/WWDB IBOs like to tout is how their upline teaches them to get out of debt. While on the surface that sounds like an awesome thing to do, it's not what WWDB mentors are actually doing. They want to give the appearance that they have your best interest in mind and that they want you to succeed. At least that's what they want you to think. Sadly, many IBOs get sucked into believing this. I will go on to explain why this is and to give prospects and information seekers some food for thought.

If you have an open mind, you will see my point. Prior to someone joining Amway, they most likely didn't buy any Amway products and certainly didn't focus on spending about $200 to $300 monthly on buying household products, especially if they are single people. So how is buying more stuff than you used to, supposed to help you get out of debt? All you are really doing is sacrificing things you used to enjoy spending on Amway stuff. If you actually made a net profit from your Amway business, that might be okay. But most IBOs are making nothing or losing money while being taught to never quit or that success is right around the corner.

If your upline or mentor is teaching you to get out of debt, are they also advising you to invest any "extra" money into investments? Are they teaching you to plan for the future, in case the Amway business doesn't pan out? Are they advising you to save money? More than likely, the answer is "no".

Your upline will be advising you to use any money you have available to invest in tools and functions. WWDB premiere club, download audios (at a charge), standing orders book of the month and attend all functions. You will be advised to do this even if your business has not made a cent in profit. But you say your sponsor or upline loans you tools and pays for your functions? That might be true, but guess what? Once you sponsor someone, you will be the one loaning tools (that you paid for) and/or paying for your downline's functions because with a downline, you are now a "real business owner". It's amazing how so many people get fools into believing that upline wants you out of debt for your own good. Upline wants to out of debt for upline's good. For that reason, you might be told to get to the next big function at any cost, no matter what. That your business will be set back months or years if you miss it. The reality is missing a big function might be your wisest financial decision.

Your upline may want you out of debt, but they more than likely have their own interest at heart and not yours. Look at it objectively and ask your trusted friends who are not in Amway what they believe. This is advice from someone who has no reason to lead anyone astray. I experienced this and fell for the trick as a young and hopeful dreamer. Now I am hopeful that my experience can prevent others from falling into the trap that I fell into.

Don't Quit?

 Never quit!  That's what some uplines will teach new Amway IBOs. They will make anecdotal comparisons about sports champions never quitting. For example, Tiger Woods will never quit in a golf tournament. While this may be true, the golf tournament will end and Tiger will play another day in another tournament. A football player may not quit, but the game will end and they will play another game on another day. The same thing happens in many sports. It's silly to compare a sport to a business in this manner.  Not to mention in sports, the players are worried about income and expenses during a live game or tournament.

When someone says never quit, they mean don't stop trying, but it doesn't necessarily mean never quit Amway or never quit the tools systems. Many business owners at one time, have found themselves in a losing position. At times a business owner may have to make a business decision to close his current business due to lack of business, rent/lease is too high, etc. It doesn't mean that the owner is a quitter. This very same owner may open a new and very different business. That new and different business might be very prosperous.   Don't quit trying is not the same as not quitting a losing business or a losing proposition.

It appears to me, that some uplines use the catch phrase of never quit, and puts a negative label on those who quit Amway, as a means to apply subtle pressure to IBOs. I believe it is because an IBO who quits will not continue to be a customer of their lucrative tools systems. More likely an upline could care less if you succeed or not, as long as you continue to purchase tools. It's why they want people to never quit. Do they assess your business or is this a blanket statement to a large audience?   In my own experience, it was just a blanket statement without individual analysis  of each IBO's business.

IBOs and prospects need to take a critical look at their businesses. Take a look at your income versus your expenditures. Are you netting a profit or are you seeing losses month after month? Another vital factor is whether you are suffering a loss almost exclusively because of the expenses associated with the standing orders and functions? Some uplines will encourage IBOs to ignore facts, or they will try to install hope with talk about success being around the corner, but these teachings are more likely self serving, to get IBOs to continue to buy tools, whether or not it is in the best interest of that IBO. You are an independent business owner and as such, need to make your own decision about taking on expenses if you do not have enough revenue to cover those expenses. 

This message is to provide an insight into the strategy that some uplines employ, simply to keep you in business longer for their (the upline) personal gain.

Amway Works?

 1. The Amway products are too expensive overall to compete with other brands. While IBO's claim high quality, that is subjective and for most consumers, Amway products are not well known and seen as generic in nature with a premium price. Many people consider Amway products "satisfactory" or "average". Some people do enjoy Amway products, but overall in the US market, it clearly indicates that price is a factor and people apparently choose Costco or WalMart to get consumables and cleaning products. Also, person to person advertising is not as effective as national advertising such as Proctor and Gamble. While Amway did some advertising recently, they are too far behind in the game and their spotty reputation precedes them.

2. The Amway compensation plan is very unfair to new IBO's. The new guy does the work but gets only a tiny fraction of the generous bonus Amway pays out. A new IBO who moves 100 PV would get back $10 or so while layers of uplines split up the remaining $90 or so on bonuses generated by the 100 PV. The only way an IBO can increase volume is to sponsor downline and hope that they will also buy into the system and dedicate themselves to moving volume consistently. But this will also fail due to reasons #3 and #4.

3. Amway's reputation is so bad that sponsoring downlline to build a group is nearly impossible. Even getting people to see the plan is a tough sell. It is why building a business without some deception is nearly impossible. It is why many uplines begin to teach that Amway saves marriages, or that you become nicer by building an Amway business, or that the Amway business is about friends and not money. That is a bunch of BS. Business is about making money. If not you have joined a social club. That should be a huge red flag if your upline is teaching you that your Amway business is not about making money. If money wasn't a factor, why do they always show (but not verify) pictures and slide shows depicting untold wealth and luxury? Why do they talk about retiring young? It's all about the money!

4. The uplines push the tools scam on their downline while they make handsome profits from these books, voicemails, standing orders and functions. What's more, these tools do not help an IBO build a business because of the reaons listed above. In fact, I believe that any IBO who actually succeeds, does so in spite of the system and not because of the system. There is zero unbiased evidence to indicate that the system tools have any relationship to IBO success. And most systems are more alike than not, despite what they may claim. Also, any "success" is also not sustainable. The road to Amway riches is littered with former success stories. There are also many former diamonds/ Why would there be any former diamonds if they could collect residual income?

It is for these reasons that I believe Amway is not a good business opportunity for the vast majority of people. When you factor in the system expenses, you nearly assure yourself of a losing proposition. Do the math and do the research. Your conclusion should be clear.

Business Owners?

 Amway IBOS call themselves business owners, but they seemingly know so little about business, despite their all-knowing upline's valuable insights and teaching.  Their knowledge is often clouded by the BS they are fed by their all-knowing upline.  Ironically, many IBOS refer to upline as mentors or coaches.  They see nothing wrong with the massive failures that upline produces and most don’t seem to think it’s a problem that many IBOS blame themselves despite following the paid fir arise that they received from upline.

For example, the upline may sell them on an Amway business by pitching the low cost and low overhead only to have upline later tell them that they need to invest in Amway like any other business.  They are told that Amway can give them quick profits, but when those profits don’t materialize, they are told that business owners often spend 5 years without making net profits.  So they compare Amway to quick profits when it suits them, then says your business is like a conventional business, meaning net profits takes time.  What about the low overhead?   Well, if tools and functions cost more than your entire Amway revenue, what does that tell you?

The reason why IBOS fall for the upline BS is because they really know little to nothing about actually owning and running a business.  They fall for the upline’s apparently faulty advice and although many make an earnest effort to build their business, Amway's business model is flawed, IMO,  and the upline advice is ineffective and flawed as well, sadly, the expenses of running an Amway business and the cost of the system can quickly turn into losses of thousands of dollars or tens of thousands and more, depending on the level of dedication.

The way to get around this is for IBOS to track their income and expenses very closely and to run a profit loss analysis weekly or at least monthly.  If there are no real prospects to increase income or reduce expenses, there is no point in continuing to run an Amway business because the math will tell you all you need to know.   If you attend functions, is there a direct relationship between attendance and increased business income?  If not, then why attend?  Same goes for other tools such as standing orders.

Quitting Amway is a good business decision if there are no profits and no concrete measurable plans to make a profit. Isn’t profit the reason you started an Amway business in the first place?

Bait And Switch?

 Many prospects an even Amway IBOs are apparently unaware that the Amway business along with the insidious "tools" business is a bait and switch scam. Prospects are told that with some part time effort, they can achieve untold wealth and retire early. Many people get "fired up" at the thought of a shortcut to early retirement and wealth beyond their dreams. If the prospect gets excited enough to actually sign up, that's when the bait and switch scam occurs.

You see, if you register to be an Amway IBO and get involved with purchasing support materials such as books, CDs, voice mail and seminar tickets, you think you are on the road to riches as an IBO. Don't feel bad, many people have made this mistake, including myself. But when you register as an Amway IBO, you think you will be an "independent business owner". But nothing can be further from the truth. This is just an illusion that the upline will use on prospects.

When you register for Amway, you actually become a customer of Amway and a customer of the tools business run by upline. YOu purchase products from Amway, and if you purchase enough product, you might receive a rebate of sorts. 100 PV, roughly $300 in cost, will get you a rebate of 3%, or roughly $10. Your 100 PV actually generates about $100 in Amway bonuses, but the remaining $90 goes to your uplines. If you can sponsor downline who also use and/or move products, you can earn a greater percentage of a rebate, but in the end, you are still basically an Amway customer. As an Amway business owner, you can't easily advertise or do things to generate more sales without Amway's permission. You are also at the mercy of Amway in the event of a dispute.

As an Amway IBO, you are also a customer of the tools. Your upline will sell you an endless supply of materials which I listed above. What IBOs also don't know is that these products/tools also carry and larger profit margin than Amway products and, the rank and file IBOs don't get to earn any bonus of the volume of tools. And I might add that the tools may cost more than the cost of your 100 PV worth of products. So you buy in and you get nothing. I might add that the tools are ineffective, otherwise there would be a constant movement of people achieving higher levels.

Sure, Amway apologists will point out all of the new platinums, but they fail to mention that there are also thousands of people who were, but no longer qualify as platinum or higher. Amway sales were at 11.8 billion in 2013 but sales have dropped more than 25% since then, with Amway doing in the neighborhood of 8.5 billion last year.

So for prospects and current IBOs, I hope you realize that you're not really an IBO, but a customer of Amway and a customer of the tools. How many customers do you know of that became wealthy by purchasing things? I can't think of any.

Where's The Fruit?

 When I was an IBO, I often heard that phrase "look at the fruit on the tree". I came from the LOS WWDB, or Worldwide Dream Builders, or Worldwide Group. Back in the 1990's, Amway and WWDB were doing quite well. Amway was expanding into foreign countries, and it seemed as if Amway and WWDB had gained a great deal of momentum. I recall hearing the term "look at the fruit on the tree" and it was somewhat true. There were new diamonds emerging in Amway WWDB and Amway had experienced worldwide growth.

Then Amway turned into Quixtar and it was comical to see Amway IBOs denying that Quixtar = Amway. The terms "Ecommerce" and "private franchising" became common, but it didn't fool many people. This was a time when Amway folks were very active in defending Amway and Amway related blogs and forums were all over the Internet.

But let's look at the "fruit on the tree". Where are all the new diamonds? Sure, there were a few new diamond couples in the US since the 1990s', but what other fruit is on that tree? Brad Wolgamott, who said "WWDB saves marriages", got divorced, and Triple diamond Greg Duncan declared chapter 7 bankruptcy in 2009. David Shores apparently had a home foreclosed around 2009 or 2010. Jim and Betty Jean Brooks got divorced, Ron Puryear passed way (condolences to his family) but Ron, a crown ambassador worked until he passed as far as I know.  Where's the freedom?

Sure, a diamond may not have a tough life working but you still need to be somewhere at a particular time to earn money. That's not much different from a job. Where is even a single person or couple who built it once and built it right, and walked away to enjoy "financial freedom" and lifelong "residual income" from Amway? Why can't anyone for all my blogging years, show clear evidence of a diamond or emerald who built it once and built it right, who walked away from Amway and is living in luxury while collecting just collecting bonus checks in the mail?

Maybe there is no fruit on the Amway/WWDB tree and there is no residual income? If that were a true possibility, why has nobody opted for that? The answer is clear. There is no true residual income from Amway due to the high attrition rate and there is little to no fruit on the WWDB tree. The tree is bare and barely surviving from my POV.

Life Changing?

 One of the things that was heavily promoted when I was an IBO, and I believe is still promoted, is the control of time and money. I recall hearing that "broke" people often have lots of time, but can't do much because of a lack of money, or how a very hard-working man might have money but a lack of time as he is working 80 hours per week. So why not join Amway, work hard for 2-5 years and have all the time and money you need for life?

Well, it sounds good on the surface, but how many people actually do that? I don't know of any IBO who worked the business 2-5 years and walked away from their business to enjoy control of time and money forever. And there are reasons for that. Attrition. Most IBOs who join don't do much and more than half of all IBOs won't even be in business for more than a year. IBOs also need to be active and moving side volume in order to qualify for some of the bonuses. It is why I believe that there aren't any diamonds who left to enjoy their time and money because of passive ongoing Amway income. Diamonds and above must continually work the business or their businesses will fall apart like the waves would erode a sandcastle at the beach.

For many IBOs ironically, what they desire most, time and money, is what they have less of because of their involvement in the Amway opportunity. It is because of the way many IBOs are taught by the systems such as WWDB, BWW or N21. Many of these groups will teach a defacto PV requirement of 100 PV which costs about $300 monthly. In some cases, you are getting a small box of goods for the same amount of cash that would have gotten you a cartload of goods at WalMart or Costco. For system IBOs, you are also paying for instruction that basically tells you that this is a great idea and that you should never quit.

So now when your family and friends have backyard barbeques or birthday parties, you are absent because you are securing your financial future. Your kids surely won't mind you missing their baseball games or sending them to the sitters while you attend a function. Your family and friends will be wowed when you retire next year and throw them a part to end all parties. It all seems surreal, and for most, it truly is. There may be $10 or even $50 monthly checks rolling in from Amway but is never covers the cost of your expenses. You can't quit because success might be right around the corner.

Suddenly your sponsor or upline might tell you that the Amway business is not about money. You might be told that you are a nicer person or a better parent (even if you neglect your kids to attend functions), or that the business opportunity has saved your marriage. Which leads to my question. What have you achieved in the Amway business that has given you more control of time and money? Do you have less time and money as a result of your involvement with Amway?

During my involvement with Amway, my life was changed, but not for the better. And it wasn't because of Amway. It was self serving teaching by WWDB leaders designed to suck the life out of IBOs. We were to attend all meetings. All means all. We were to submit to upline. Check your ego at the door. We were to buy extra tapes/cds because you can't listen to the same ones each day. Wives and husbands needed separate standing orders. If downline quit, you don't cancel standing order. It is why I saw crosslines go bankrupt, lose a home to foreclosure and many ended up quitting and with large financial loss.

I hope this message of personal experience helps information seekers.

Broke Losers?

 One thing I will give Amway some credit for is their customer service. Whenever I called the corp as an IBO to order or for other things, their staff was always courteous and friendly. But IBOs, on the other hand, do not seem to value potential customers that way. What I mean is when prospects are called stupid, or broke losers just because they do not wish to become an IBO. What you have done basically, is ensure that the prospect will never be a customer of yours, and possibly Amway. Some uplines teach that people not in Amway are broke or losers and/or if you quit the ranks of being an IBO, you become a broke loser. 

Imagine walking into a retail store and realizing that maybe you didn't have enough cash in your pocket, or that the store did not have the item you were looking for, so you leave. As you leave, the stores employees said "what a fool". What a broke loser he is not buying anything from us or wanting to open a similar store. While this may be an extreme example, I believe it is a perfectly valid one. If you value your customers and treat them with courtesy and respect, you have a good chance of retaining them. Calling someone a loser is almost a sure way to fail in Amway or any other business. Why some leaders choose to label people as such is a mystery to me. 

I believe that this comes from two things. Number one is that IBOs are not very interested in selling products. They are mostly interested in sponsoring. And that is the number two reason. IBOs are mainly focused on building their group, because that is the key to moving up the ranks, in terms of a pin. Some groups simply teach IBOs to self consume and then focus on sponsoring. It leads to the opportunity being borderline in terms of whether the opportunity is a pyramid where there are no sales to non participants (pay to play).  

This division between potential customers and potential IBOs is what causes Amway to have a bad reputation with the general public. It is evident here on my blog, where IBOs criticize me, without even supporting their arguments. This is not the only reason, but a contributing factor to Amway's bad reputation in the US. 

IBOs, if you take a hard look at what I have written, it is not negative, it is a perfectly valid reason why so many do not succeed. You need to treat your potential customers and downline with respect, regardless of whether they choose to join or buy products from you right away.

Early Retirement?

 Many uplines will use slightly deceptive recruitment tactics when getting new people to see or register into the Amway business. One of the common things was how joining Amway has very little risk, no or very little overhead. This is true, if an IBO is not involved in any of th system related training. However, it is the goal of many if not most uplines to get as many IBOs involved in the system as possible. This is probably because selling standing orders, voicemails and seminars has a higher profit margin for some uplines than the actual movement of Amway volume. So some newbies might join thinking Amway won't cost them much, only to find out that 100 PV might run them more than $300. They may not be aware that standing orders and functions never end and can add an additional cost of up to several hundreds of dollars more. Uplines will then justify the expense by saying the IBO is investing in his/her business.

New IBOs, and especially IBOs who are single should seriously think about the cost of being a business building IBO before joining. Many or most prospects don't know that building an Amway business using system tools and "coaching" can cost them up to $500 or more each month. A single person more than likely cannot possibly consume 100 PV worth or products on a monthly basis unless they almost exclusively consume XS drinks and Nutrilite vitamins. And secondly, how many singles or prospects were consuming cases of energy drinks and vitamins ($300 monthly) before being presented with the Amway business? How many people were willing to fork out hundreds of dollars for a weekend function that may require airfare and hotel stay? I don't think too many people like this exist. But I believe they do so because they have been sold a dream of financial freedom, of early retirement and not having to work a job anymore. But the evidence would suggest that once the dream disappears or reality sets in, how many (former) IBOs continue to purchase Amway products and attend seminars?

I know of many former IBOs and I don't know of any who purchase Amway products on a regular basis and I don't know of ANYONE who has ever forked out money to attend an Amway/AMO function after they stopped being an IBO. Amway's numbers bear out this claim as there is very little sales to people who are not IBOs. The IBO salesforce is responsible for consuming the lion's share of Amway's products and services. I myself have purchased an Amway product or two since I left the business. But I did so only to humor friends who were still in the business. They have all since quit. It is very reasonable to conclude that once the desire to build the business stops, the desire to purchase Amway products also stops.

Most eager young and motivated people who sign up often do not realize that these IBO expenses exist. While Amway acknowledges that these tools and systems expenses are optional, the uplines who promote the tools may suggest that it is insanity to attempt to build an Amway business without the tools or strongly encourage new IBOs to partake. A common statement was that we "needed" to be at the next function no matter what. Missing it would set your business back six months. New IBOs and prospects don't know better so they will often conform. Sadly, there is ZERO unbiased evidence that the tools and seminars do anything to increase IBO volume and/or the sponsorship rate. In my informed and experienced opinion, the tools are ineffective and the vast majority if IBOs would be better off handing their upline a monthly check for $100 and not building the business or buying any products.

IBOs and information seekers should be awar of these potential IBO expenses and determine if the expenses would be worth your while. Keep in mind that someone upline profits handsomely from the tools, even if you do not make a cent from your Amway business. You should have your best interest at heart, no matter what your upline tells you.