Your Amway Job?

I find it very ironic that many diamonds will put down jobs as if you should be embarrassed to have one. They talk about employees being slaves who have to worship an alarm clock and a boss. That your life is so miserable in a job and you will end up broke at the end of your career. They get people to despise their jobs and their boss and offer the Amway opportunity as a solution. Join Amway, 2-5 years of effort and then your job becomes optional, or so they say.

Ironically, the Amway opportunity is basically a job. You sell products and you sell the opportunity to others. That is the key to success according to many LOS's. The flaw is that too many IBOs get fooled into thinking they need to be their own best customer. As an IBO, you are Amway's customer. Anything you purchase results in a profit for Amway, but not necessarily for your business. Have you ever heard of a car salesman buying a new car each month to earn a commission? Or a vacuum cleaner salesman buy a new vaccum each month to increase volume? These concepts sound ridiculous, yet most IBOs run most of their own volume. Some IBOs don't have any customers and end up buying their PV bonus.

While some will argue that they are independent business owners, these nice folks are more like commissioned sales people with no fringe benefits from Amway. Amway has minimal advertising for their products, thus volume moves person to person, and mainly word of mouth. In my opinion, the least efficient means of getting goods to the consumer. When you factor in that the Amway goods are not really cheaper than a retailer like WalMart, you can see why some groups focus on self consumption, because there is no market demand for many of these goods and services, The demand is artificial because the IBOs themselves consume most of the Amway goods and services.

The really damaging aspect of all this is the upline leaders who tout their system of cds, functions, books and voicemail as the key to success. While these materials may have some value, it doesn't equate to success in Amway, and in most cases, the cost of these materials are the reason why so many IBOs end up with a net loss, instead of the extra cash they are seeking. Part of th reason why these materials do not work is because you are dealing with a very inefficient delvery system, coupled with uncompetitive prices (in many cases) and a bad reputation. If the opportunity were "all that", people would be seeking IBOs to sign up instead of IBOs having to lie or trick people into attending recruitment meetings.

Unsuspecting people think the Amway opportunity is a business, but it is more like a job than you think. It is my hope that this article will get you to think about it.

Amway Excuses?

One thing I heard when seeing the plan was how people justify their place in life. Or as the diamond said, "making excuses". I would guess that this is still tossed in when people are showing the plan to potential recruits. What the speaker said was that people justify their place in life so that they feel better that they are doing okay or doing better than others. One such statement was how public school was okay for me so it's perfectly okay for my kids. Whereas diamonds can send their kids to exclusive private schools perhaps?

Or how a man would tell his wife to look in the freezer if she wanted to go on an Alaskan cruise. This is called justification. Another point made was that a man might say he's doing better than so and so, or that they are "doing okay". Afterall, why just settle for okay when you can work for 2-5 years and then retire? Why not put in that effort? Why continue to justify yourself (make excuses) when you can just get it done? On the surface, this may sound sensible, but keep in mind that most people, even those who put in an extensive effort, will never get the promised financial rewards shown in the 2-5 year plan. Most of these people, even those who work hard, will end up with losses, some will end up with life damaging financial losses.

The really sickening part of the whole thing is that the upline will credit the insignificant amount of success in the business while placing failure upon the IBOs, even if they put in an earnest effort. While this may go unnoticed to most, what uplines are doing is justifying their own shortcomings and the crystal clear failure of the system to deliver what they promote. My understanding is that maybe 1 in 20,000 ever get to the level of diamond in the US/Canada. With such an incredible reward (retirement, lifelog residual income), why do so many quit before attaining their goal? Most IBOs who put in effort are hard working and persistent. Certainly not all those folks were lazy. The only reasonable conclusion is that the diamonds deceive people about the system's success rate and that the system doesn't work. Even an occasional diamond is not evidence of system success. The overwhelming failure rate paints a more accurate picture. Add in the high prices in the Amway catalogs and you have an additional impediment to success.

It certainly seems to me that it is the upline and system promoters who must justify and makke excuses for their systems that have no bonafide unbiased evidence of success. All they have to offer is justifications and excuses, something they accuse others of doing. If you are new or thinking of joining, are you making money or are you making excuses that your upline taught you?

The Millionaire Mentality?

A recent comment left by an anonymous site visitor:

"I love Amway. I just don't understand why people have to be negative about it. I don't hurt or steal from anyone yet I make money. I'm not a millionaire as of yet but working towards that goal. It's called "millionaire mentality". Joecool you will never succeed with penny mentality."

Joecool's commenttary:

Most diamonds do not have a millionaire mentality. If you see how they spend money and how they flaunt excessive wealth, I see people who could win the powerball lottery and wind up broke. They might earn a nice income (even if it may come by lying and deceiving), but they spend it all, and possibly more by portraying the diamond lifestyle. In my opinion, the diamond lifestyle as portrayed in functions such as "dreamnight" are not sustainable For this reason, we have seen evidence of this such as a triple diamond in bankruptcy proceedings, diamonds losing homes to foreclosures. We are seeing diamonds selling their mansions. Sure, they might be downsizing or liquidating their assests, but if these homes have been paid in cash as they claim, why sell them in a bad real estate market? Why not wait a few years?

In the past, I have posted some articles showing the traits and characteristics of millionaires. Many of these articles cite saving, investing, and living below your means. Many wealthy people drive regular everyday cars and live in the suburbs. They don't commonly have porsches, and jaguars. And for the record, the average diamond income, as reported by Amway, isn't all that much when you factor in business expenses and taxes. So why do diamonds try to show off wealth?

I believe diamonds show off wealth because it is a way to attract recruits. Because the Amway opportunity has a high turnover rate, nobody can reasonably "walk away" from their business and have cash rolling in for long. Attrition would eat away your business in a matter of days or weeks. It is why I believe diamonds do not walk away from their businesses, because they can't afford to. The business requires constant attention or it will crumble faster than stale cookies.

Most IBOs are simply fooled into thinking they are developing into having a millionaire mentality. An honest question for IBOs. How do you even know if your upline diamond is a millionaire? Anyone, even a broke guy can wear a nice suit and show off pictures of mansions and sports cars. For that matter, how do you know if your upline diamond is currently qualified as a diamond? Amway doesn't release that information except for new pins.

In my opinion, diamond's displays of excessive wealth and luxury portrays something, but it's not the millionaire mentality.

The Reality Of Amway?

One of the things that attracts many IBOs to the Amway opportunity is the idea that they can work part time, 2-5 years and gain a "shortcut" to ongoing and voluminous wealth. Many of the prospects don't have the kind of income or resources that they would like, so the possibility of a shortcut to these trappings sounds like a good idea. They sign up and get started, and then the realities of the business sets in.

100 PV, is the defacto minimum quota for business building IBOs. It costs about $300 to purchase 100 PV worth of products. How many young and single people or couples for that matter, use and/or need $300 worth of household products each month? How many of these same people can actually afford to expend that much cash on household products? The pitch is to change where you shop but how many people were buying these kinds of good prior to Amway? My guess is none. I know I purchased many items, including vitamins, and I didn't need or use before Amway. But my desire to be teachable and to be an example to my downline kept me buying the goods, and trying to pawn off some stuff on friends and relatives to lessen my PV burden.

I also found that getting people to see the plan was no easy task. While my business was growing, it took more and more effort to recruit downline and I can see where many IBOs would reach the saturation point where there simply aren't anymore viable recruits and they might need to resort to cold contacting in order to generate potential prospects. This is probably why there are stories of IBOs stalking people in bookstores, malls and supermarkets. Even when people saw the plan, there wasn't a high percentage of new people signing up. It is why building and maintaining a business is a nearly impossible task, and it is why I believe there aren't people who retire, walk away from their Amway businesses and enjoy six figure residual incomes for life.

The more likely scenario is an IBO signing up, buy and using the products and tools and slowly but surely build up debt. There are countless stories of ex IBOs who got fired up, started building the business and fouond that in a relatively short period of time, found themselves in thousands or tens of thousands of dollars in debt. All the while upline was encouraging them to buy more tools and attend more function, even when they were not profitable. In my opinion, this is confirmation that uplines care more about their tools profits that they do about downline success. I sat in functions where upline would teach about reducing debt, but in the same breath, say it was okay to go deeper in debt if it was to purchase more tools. Self serving advice.

It is why I believe this opportunity, along with the tools system, will nearly guarantee IBO failure. It is sad, but it is also a reality.

Amway IBOs Mistake Tax Refunds For Profits?

One of the things that I have observed is how IBOs are so misguided by their upline, that they think that their business losses, which result in a tax refund is a profit, or that they are getting a free pass with the government footing the bill for their standing orders and functions. In the past, IBOs have been audited and had many business deductions disallowed because the tax department ruled that they were not truly running a business, but participating in a hobby called Amway.

I know that most IBOs are deducting the cost of their training materials on their taxes, but the issue at hand is whether the training materials are resulting in increased sales for your business. If you are running a "buy from yourself" business, then there is a strong possibility that your expenses may not be valid deductions come tax time. If you are not selling products to customers for a profit, then there is a chance that your expenses are not valid deductions. It would be sad indeed to be audited at tax time a few years after you have been an Amway business owner, only to find out that your expenses are not valid and that you may owe tens of thousands of dollars in back taxes.

Another apparently common mistake of IBOs is to think that their business expenses are basically free from the government because they may end up with a tax return. Your expenses are deductible from your taxable income. Thus if you had $10,000 in business expenses, your return would depend on your tax bracket. If you are in the 15% tax bracket, then $10,000 in expenses would get your about a $1,500 tax return, depending on other deductions you may have. But IBOs get duped into thinking they made a score and now get back $1,500 when they may not have had a refund in the past. Obviously in this case, the IBO would have been better off saving the $10,000 and never getting involved in Amway. Some IBOs proudly proclaim their refunds as basically a windfall, almost like it is a profit. That is truly scary.

Folks, there is no free ride. If you are spending money on legitimate business expenses with an intent to make a profit, then there is nothing wrong with that. But if you are traveling to conventions hoping to learn the secret of sponsoring more downline, you could be walking on thin ice should the IRS ever decide to audit your business. There have been many cases in the past where not only did IBOs lose their shirts due to the business support materials they purchaed, but they got double whammied later when the IRS disallowed tax deductions, leaving them in financial ruin. I truly hope you aren't on that path.

Check out this link:
http://www.apollowebworks.com/amway/irs.html

"TRAVEL AND ENTERTAINMENT have always been areas of abuse. Sections 162, 262, and 274 are always applicable and sometimes Section 183. Since most of the travel is primarily to attend social gatherings for entertainment and motivational purposes, any real business purpose is suspect. Unless the taxpayer can show that attending seminars, meetings, etc., meets the requirement of Section 162, the travel should be disallowed. Amway people have been unable to show that attending these meetinqs increased their sales. The agendas of these meetings appear to be primarily for entertainment, socializing, and listening to motivational speeches. The meetings have nothing to do with promoting the sale of Amway products to the general public. In fact, Amway distributors are specifically warned aqainst mentioning either Amway or selling when recruitinq potential downline people. Since it is not likely that the taxpayer will increase his sales by attending these functions, then there is not a reasonable business purpose for the trips"

Amway Upline Credentials?

I recently read a comment from an Amway zealot on another blog. She mentions that someone's credentials (the credentials of an Amway critic) must be considered when looking at information that is presented. I will comment that showing me a sports car or a fancy suit is not proof of financial success. Telling the audience that you buy homes in cash is not proof either. In fact, some of these diamonds were found to have their homes foreclosed and some had financial difficulty, even though they at times had shown off pictures of their lifestyles. I believe that many diamonds are likely to be more like the general US population - in debt. In debt trying to portray a lifestyle that is unsustainable with their Amway and Amway related income.

I find this subject ironic because not one single upline leader, as far as I know, has ever supplied bonafide credentials about themselves. The audience assumes that the person on stage has certain credentials, but do they really? I will say that certainly, if someone is wearing a diamond pin for example, that this person has at least achieved the diamond level as recognized by Amway, but the level may not be current, and the level doesn't indicate the kind of income this person earns from Amway. (Joecool is criticized for being outdated even though I was at 4000 PV at one point in my Amway career)

What many people assume is that the diamonds buy homes and cars in cash, that they wake up at noon every day and participate in leisure activities all day while the cash rolls in. I have heard from some new IBOs, that their upline makes more money taking a crap in the morning than a critic makes in a whole year at a job. That IBO became quiet when some critics offered to take that bet.

But the truth of the matter is that as far as I know, only former diamonds have come clean about their Amway income. They are the only ones who spoke of credentials and accomplishments. Even critics of Amway will often openly speak about their experiences and achieved levels in the business. In the REAL business world, showing business tax returns and credentials are a normal part of doing business. It appears that only in the world of Amway is the supply of credentials and financial statements a big secret. Now I am not suggesting that IBOs or upline leaders should disclose their financials to the entire world, but certainly prospects and some downline should be able to see what their upline is doing financially, especially if that is the basis for purchasing their standing orders and function tickets. And I refer to business (Amway and Tools) income and expenses only, not from other personal sources.

I believe that IBOs and upline leaders do not disclose that information because it would not be beneficial to them. If it were, they would likely publish it freely, just as they flash around copies of checks. IBOs and prospects should take this to heart and ask upline the tough questions

Amway's Hidden Costs?

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

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

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

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

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