When I was an IBO, I often saw my upline diamond driving around town dressed in a business suit. I used to think why does he keep working if he can walk away and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios, the diamond is working to help his downline out of a genuine concern, or possoibly he is working because he has to! The only difference now is that the diamond works the nite and/or graveyard shift, because many IBOs are building the business after the complete their day jobs.
Now Amway has stated that the average diamond earns about $147,000 a year. That is a decent income, but after yaxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts.
So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining his group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin.
In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle.
After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle to upper middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nites and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next.
Is this the freedom you are seeking?
Tuesday, June 30, 2009
Monday, June 29, 2009
Amway or College?
Many IBOs justify their involvement in the system of cds, tapes, books and seminars by comparing it to college. They claim they need this education and that it is much cheaper when compared to a college or university. Of course this is the upline propaganda that IBOs are fed, much like the concept that a job is a bad idea.
In college, it is true that not everyone graduates, but approximately half of those who start college end up graduation. Those who do not graduate still benefit from their education on a year to year ot course by course basis. When you are job seeking, a college degree will give you more options than those who don't educate. This claim cannot be made by Amway IBOs. The education an IBO receives by seminars and cds do not even equate to success in Amway, much less in other venues in life. Only a small fraction of IBOs ever reach platinum, which supposedly is the break even point. So as an IBO, you have less than one half of a one percent chance to break even as compared to approximately a 50% chance of graduating college.
Also, once you graduate and receive your degree/diploma, it is complete. In Amway, there are many many many examples of people who reached levels as high as diamond or above who could not maintain the level. There are also many examlpes of diamonds who quit Amway. If there were such a thing as "residual" income, why would anyone quit when they could sit back and watch the cash roll in. I think the answer is quite obvious.
There is also no evidence (as far as I know) that your Amway related education of cds and seminars actually work. The tiny fraction of 1% of successful IBOs is not a good case for arguing the success of the system. Colleges on the other hand, had accreditation standards, which is nothing like the ineffective Amway accreditation of groups such as BWW, WWDB or Network 21.
The fact that IBOs even dare to compare a college education to their teaching in Amway is a joke. Try telling a prospective employer about your Amway education and see what that gets you. LOL
In college, it is true that not everyone graduates, but approximately half of those who start college end up graduation. Those who do not graduate still benefit from their education on a year to year ot course by course basis. When you are job seeking, a college degree will give you more options than those who don't educate. This claim cannot be made by Amway IBOs. The education an IBO receives by seminars and cds do not even equate to success in Amway, much less in other venues in life. Only a small fraction of IBOs ever reach platinum, which supposedly is the break even point. So as an IBO, you have less than one half of a one percent chance to break even as compared to approximately a 50% chance of graduating college.
Also, once you graduate and receive your degree/diploma, it is complete. In Amway, there are many many many examples of people who reached levels as high as diamond or above who could not maintain the level. There are also many examlpes of diamonds who quit Amway. If there were such a thing as "residual" income, why would anyone quit when they could sit back and watch the cash roll in. I think the answer is quite obvious.
There is also no evidence (as far as I know) that your Amway related education of cds and seminars actually work. The tiny fraction of 1% of successful IBOs is not a good case for arguing the success of the system. Colleges on the other hand, had accreditation standards, which is nothing like the ineffective Amway accreditation of groups such as BWW, WWDB or Network 21.
The fact that IBOs even dare to compare a college education to their teaching in Amway is a joke. Try telling a prospective employer about your Amway education and see what that gets you. LOL
Friday, June 26, 2009
Amway - IBOs Don't Know How To Build A Business?
Building a business. That's what many IBOs set out to do, except they don't know how to build a business, and based on IBO behavior and the things they say and do, it makes me wonder what their upline actually knows about building a business.
When you open a store or a restaurant, you may not make a lot of money intitially because not enough customers know about your store and you have not yet built a reputation. New customers who have a good experience are likely to return for more, and they are also likely to tell others about your store. Over time, you create a customer base and your weekly sales become consistent and somewhat predictable.
In the Amway business, many IBOs have no idea about building a business. They are shown great (apparent) wealth by upline, and then told that their business activity consists of showing the plan, listening to standing order and attending functions. Most of an IBO's activity, as prescribed by upline, costs money instead of generating sales. Some uplines do teach IBOs to sell items, but more often than not, it is not taught as a priority, and Amway's own admission confirms that.
What's more, as I said, a new business will get repeat customers when a customer has a good experience. What do you suppose happens when IBOs lie or trick people into attending Amway meetings, or deceive people about their business, or make up wild stories about perfect water? What happens when you embellish the truth about success and then cannot provide an answer when a recruit asks and IBO how they are doing in the Amway business? What happens when an IBO tells a potential recruit that he or she is a loser or stupid for not joining Amway? Would you return to a store if they called you stupid as you were leaving? What if you were called a loser?
These are the reasons why IBOs in general cannot get enough customers to sustain a consistent and predictable amount of sales, and why over the years, Amway has at best a spotty reputation. Just the mention of the name Amway and you may get funny looks from people. It is why certain internet zealots promoting Amway do more harm than good.
When you open a store or a restaurant, you may not make a lot of money intitially because not enough customers know about your store and you have not yet built a reputation. New customers who have a good experience are likely to return for more, and they are also likely to tell others about your store. Over time, you create a customer base and your weekly sales become consistent and somewhat predictable.
In the Amway business, many IBOs have no idea about building a business. They are shown great (apparent) wealth by upline, and then told that their business activity consists of showing the plan, listening to standing order and attending functions. Most of an IBO's activity, as prescribed by upline, costs money instead of generating sales. Some uplines do teach IBOs to sell items, but more often than not, it is not taught as a priority, and Amway's own admission confirms that.
What's more, as I said, a new business will get repeat customers when a customer has a good experience. What do you suppose happens when IBOs lie or trick people into attending Amway meetings, or deceive people about their business, or make up wild stories about perfect water? What happens when you embellish the truth about success and then cannot provide an answer when a recruit asks and IBO how they are doing in the Amway business? What happens when an IBO tells a potential recruit that he or she is a loser or stupid for not joining Amway? Would you return to a store if they called you stupid as you were leaving? What if you were called a loser?
These are the reasons why IBOs in general cannot get enough customers to sustain a consistent and predictable amount of sales, and why over the years, Amway has at best a spotty reputation. Just the mention of the name Amway and you may get funny looks from people. It is why certain internet zealots promoting Amway do more harm than good.
Wednesday, June 24, 2009
Amway - Why IBOs Struggle With Moving Volume - They Can't Sponsor Enough Downline!
When I was an IBO, I often found myself buying more goods than I needed because a single person simply has no use for 100 PV worth of Amway goods on a consistent month to month basis, save for eating double x for breakfast or something. In general, Amway's prices are higher than many retailers, because the cost of the IBO bonus is built into the price of their goods. Up to 34% additional markup is needed for Amway to cover all of the IBO bonuses paid to layers upon layers of upline and downline.
Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make an income. Amway admits that only about 4% of their goods are sold to non IBOs. This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more.
Then comes the next problem for IBOs. Sponsoring. To begin with, most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many many others have left comments on blogs expressing the same experiences. Other were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard ti find someone in the US who has not experienced, or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.
You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.
Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make an income. Amway admits that only about 4% of their goods are sold to non IBOs. This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more.
Then comes the next problem for IBOs. Sponsoring. To begin with, most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many many others have left comments on blogs expressing the same experiences. Other were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard ti find someone in the US who has not experienced, or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.
You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.
Monday, June 22, 2009
Amway - What's Wrong With A Job?
One of the things that IBO leaders do quite often in their recruitment pitch for Amway, is to put down people's jobs. They criticize people's bosses and the fact that an employee needs to report somewhere to earn a living. They try to paint the picture of a job being compared to slavery. They do this apparently to make people feel uncomfortable with their present situation so they will be open to looking at the Amway opportunity as a means to make a living.
So I will ask - What's wrong with a job? A job is not slavery. People apply for their jobs and they agree to a wage or salary in exchange for their services. Certainly, you can leverage a higher wage or salary if you have an education or a skill, such as being able to work in the construction field. A job ususally offers more than just a wage. A job often allows one to have benefits such as medical insurance, a 401K retirement plan, and some other benefits such as vacation and/or sick leave.
A recent site visitor bemoans concept of working for minimum wage, where a husband and wife would earn in the neighborhood of 30K if they both work full time at minimum wage. Of course, a high school student can earn minimum wage so two adult only able to generate that kind of income makes me think my site visitor is speaking of people with very little to offer an employer. Most people may start out as entry level, but earn more and more as they gain experience and can offer more to their employer.
What does the average Amway business owner experience? $115 a month income (which is probably way above average)? Most IBOs as outlined in "the plan" earn about $9 a month and may have expenses such as standing order which will take away from that tiny profit. Thus an average business building IBO stands to net a loss. It is very easy to look at the math and make that conclusion.
So I ask again. What's wrong with a job? You have a net gain each and every month, be able to pay for your living expenses, and allow you to contribute to society by paying taxes. The average CORE IBO is a drain on the US tax paying society by spening money on standing order and functions and then deducting these expenses when filing their taxes. The only beneficiary is the upline leaders who sell standing orders and function tickets. So what's wrong with a J-O-B?
So I will ask - What's wrong with a job? A job is not slavery. People apply for their jobs and they agree to a wage or salary in exchange for their services. Certainly, you can leverage a higher wage or salary if you have an education or a skill, such as being able to work in the construction field. A job ususally offers more than just a wage. A job often allows one to have benefits such as medical insurance, a 401K retirement plan, and some other benefits such as vacation and/or sick leave.
A recent site visitor bemoans concept of working for minimum wage, where a husband and wife would earn in the neighborhood of 30K if they both work full time at minimum wage. Of course, a high school student can earn minimum wage so two adult only able to generate that kind of income makes me think my site visitor is speaking of people with very little to offer an employer. Most people may start out as entry level, but earn more and more as they gain experience and can offer more to their employer.
What does the average Amway business owner experience? $115 a month income (which is probably way above average)? Most IBOs as outlined in "the plan" earn about $9 a month and may have expenses such as standing order which will take away from that tiny profit. Thus an average business building IBO stands to net a loss. It is very easy to look at the math and make that conclusion.
So I ask again. What's wrong with a job? You have a net gain each and every month, be able to pay for your living expenses, and allow you to contribute to society by paying taxes. The average CORE IBO is a drain on the US tax paying society by spening money on standing order and functions and then deducting these expenses when filing their taxes. The only beneficiary is the upline leaders who sell standing orders and function tickets. So what's wrong with a J-O-B?
Friday, June 19, 2009
Amway - How Many Tools Do You Need?
There has been much debate over tools on this blog recently. IBOs contend that they need tools to build their businesses. Some uplines compare tools to the same tools that a carpenter or a mechanic uses. It just so happens that a friend of mine is a mechanic. He attended automotive technology college for about 18 months and occasionally goes to workshops to update himself on the technology used on newer cars, which his employer pays for.
After finishing school, he bought a decent set up tools. He occasionally upgrades some of his equipment. Some of these upgrades are also paid for by his employer. But the majority of his time is spent fixing cars, earning a living for himself and his employer.
The Amway opportunity consists of buying goods, selling goods, and recruiting others into the system. Not the most complex of activities if you break it down to its simplest form. But IBOs seem to think they need an endless supply of tools to build this business. They do not.
IBOs need to stop and think about this for a minute. An IBO only makes money if they sell a product for a profit, or if they sponsor enough downline who actually move enough volume to make a difference. Thus, if an IBO is spending say $100 to $150 a month on cds, books, seminars and voicemail, what return are you getting on this investment in tools? A mechanic or carpenter puts out an investment in tools, but they make up that investment and then some within a month or two. Anything they earn after that is how they earn a living. Most IBOs never recoup their first month's investment in tools, let alone enjoy a net profit.
Stop and think about it. When was the last time a book, cd, voicemail or a function led directly to a product sale or to the sponsoring of downline? And even if you did get a sale or a downline due to one of the tools, was it enough to make it worth buying all those tools? I would guess that for most people, it is not worth it.
Also, if the tools were so valuable, taught you success principles and the like, why do former IBOs sell them for pennies on the dollar when they quit Amway? Why don't IBOs continue to use these tools when they leave the business? I believe IBOs only use these tools because they have been told that the tools will lead to their success. Unfortunately and sadly, for the vast majority of IBOs who use tools, the tools only lead to a lighter bank account.
After finishing school, he bought a decent set up tools. He occasionally upgrades some of his equipment. Some of these upgrades are also paid for by his employer. But the majority of his time is spent fixing cars, earning a living for himself and his employer.
The Amway opportunity consists of buying goods, selling goods, and recruiting others into the system. Not the most complex of activities if you break it down to its simplest form. But IBOs seem to think they need an endless supply of tools to build this business. They do not.
IBOs need to stop and think about this for a minute. An IBO only makes money if they sell a product for a profit, or if they sponsor enough downline who actually move enough volume to make a difference. Thus, if an IBO is spending say $100 to $150 a month on cds, books, seminars and voicemail, what return are you getting on this investment in tools? A mechanic or carpenter puts out an investment in tools, but they make up that investment and then some within a month or two. Anything they earn after that is how they earn a living. Most IBOs never recoup their first month's investment in tools, let alone enjoy a net profit.
Stop and think about it. When was the last time a book, cd, voicemail or a function led directly to a product sale or to the sponsoring of downline? And even if you did get a sale or a downline due to one of the tools, was it enough to make it worth buying all those tools? I would guess that for most people, it is not worth it.
Also, if the tools were so valuable, taught you success principles and the like, why do former IBOs sell them for pennies on the dollar when they quit Amway? Why don't IBOs continue to use these tools when they leave the business? I believe IBOs only use these tools because they have been told that the tools will lead to their success. Unfortunately and sadly, for the vast majority of IBOs who use tools, the tools only lead to a lighter bank account.
Wednesday, June 17, 2009
Amway - IBOs - CORE - Non Income Producing Activity?
One of the things touted by many upline leaders as the "key to success" is CORE. I have outlined the elements of CORE here:
1 - Show the Plan
2 - Retail the Products
3 - Tapes/cds
4 - Books
5- Functions
6 - Accountability
7 - Counsel with Upline (Be teachable!)
8 - Buy 100% of your own products
9 – Communikate
In these nine steps, only #2 may actually net the IBO a profit, but this steps is not emphasized in many groups. In all the other core steps, you either spend time and/or money doing things that do not produce income for your business. If you, as an IBO spend most of your time in non income producing activities, guess what? You will suffer losses. It is no wonder nearly all IBOs lose money, they are taught to spend most of their time in activities that do not produce income!
Imagine owning a brick and mortar store where you open the store for one hour a day. The rest of the day you are reading books, listening to tapes/cds, and paying to attend seminars and listening to voicemail messages. Oh, and in addition to opening your store for an hour a day, you don't advertise except for word of mouth. Could you survive in business? I think not. Amway now advertises, but you are not Amway, you are an independent business.
So can an IBO make money by spending most of his/her time in non income producing activity? I think not.
1 - Show the Plan
2 - Retail the Products
3 - Tapes/cds
4 - Books
5- Functions
6 - Accountability
7 - Counsel with Upline (Be teachable!)
8 - Buy 100% of your own products
9 – Communikate
In these nine steps, only #2 may actually net the IBO a profit, but this steps is not emphasized in many groups. In all the other core steps, you either spend time and/or money doing things that do not produce income for your business. If you, as an IBO spend most of your time in non income producing activities, guess what? You will suffer losses. It is no wonder nearly all IBOs lose money, they are taught to spend most of their time in activities that do not produce income!
Imagine owning a brick and mortar store where you open the store for one hour a day. The rest of the day you are reading books, listening to tapes/cds, and paying to attend seminars and listening to voicemail messages. Oh, and in addition to opening your store for an hour a day, you don't advertise except for word of mouth. Could you survive in business? I think not. Amway now advertises, but you are not Amway, you are an independent business.
So can an IBO make money by spending most of his/her time in non income producing activity? I think not.
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