When I was an IBO, I was in WWDB. I remember many questionable things that were said and taught by some of the upline leaders. I heard that Amway saves marriages, that diamonds pay cash for everything, including homes. I heard that NOBODY made a red cent off of the tools systems. Quit your job if you can't get time off for a function. Okay to sink yourself into debt if you are using the money for buying more tools.
Many of the things said and taught by these WWDB leaders were either lies or very unethical in my opinion. Well, as a wise man once said, a house built on sand will not survive the test of time. I have been out of Amway for over ten years and have done much with my life since then. But time has exposed the apparent hypocrisy and falsehoods told by some WWDB leaders.
Diamonds in bankrupcty, diamonds failing to pay their mortgages (homes paid in cash?), diamonds quitting, diamonds divorcing, revisionist history. I believe as more time passes, more hypocrisy will be exposed. Now an Amway apologist might claim that a diamond's divorce or home foreclosure is nobody's business. While that might be true, I do not believe it applies when you stand on stage and/or sell tapes/cds proclaiming that Amway saves marriages, or that you pay off your homes in cash, unlike "broke" people who need mortgages.
Here's a small sampling of links, exposing the utter hypocrisy of these leaders:
http://www.amquix.info/amway_harstad.html
http://www.amquix.info/duncan_bankrupt.html
http://www.amquix.info/amway_real_estate_crisis.html
http://www.amquix.info/quixtar_wwdb_rewrites_history.html
http://www.amquix.info/quixtar_wwdb_diamonds_2007.html
http://www.amquix.info/wwdb_shores.html
http://www.amquix.info/kosage.html
http://amwayblog.com/wwdb-updates-site-with-authentic-information-about-brad-and-leslie-wolgamott/
Thursday, September 10, 2009
Wednesday, September 9, 2009
Amway - Business Owner or Not?
Join Amway and own your own business! It sounds like a pretty cool concept. I know it sounded cool to me and was part of why I joined. But as an Amway IBO, are you really a business owner? Yes, you technically own a business where you pay taxes and whatnot, but it is not really different than a self employed salesman who works on commission or under contract.
Thins about this for a moment. If you are a business owner of a real business, you sell a product or service and you get to keep the profit. You keep all the profit. Amway pays roughly 30% of product sales for bonuses. But unless you have enough donwline and/or volume, you get only 3% or 6% of that 30% and the layers of middlemen/upline get the rest of the bonus for your work. When you sponsor someone and increase your volume, your upline gets more action fro your downline than you do. Isn't that almost exactly like being an employee where the company owner makes money off your efforts? You as an IBO only start to get a bigger piece of that bonus if you are able to sponsor enough downline and/or move enough volume to reach the higher levels of the business. I would guess you need to reach approximately the 18% bonus bracket or higher before you can cover your IBO expenses which may include functions and standing order.
Did I mention that sponsoring people is a difficult task? Most IBOs are not able to sponsor a single downline. Many IBOs cannot even find people who are interested in seeing the Amway sales and marketing plan. Did I mention that all of yuor efforts in finding people to sponsor also benefits your upline more than yourself, until you find enough people to help move your volume to about the 18% level. So although an IBO and his sponsor/upline do not have an employee - employer relationship, an IBO is basically a commssioned employee UNLESS that IBO is able to sponsor enough downline who will move volume, or unless that IBO is a very rare IBO who sells a lot of products/
So IBOs, are you fooling yourself into thinking you are an independent business owner when you are actually operating as a commisioned employee?
Thins about this for a moment. If you are a business owner of a real business, you sell a product or service and you get to keep the profit. You keep all the profit. Amway pays roughly 30% of product sales for bonuses. But unless you have enough donwline and/or volume, you get only 3% or 6% of that 30% and the layers of middlemen/upline get the rest of the bonus for your work. When you sponsor someone and increase your volume, your upline gets more action fro your downline than you do. Isn't that almost exactly like being an employee where the company owner makes money off your efforts? You as an IBO only start to get a bigger piece of that bonus if you are able to sponsor enough downline and/or move enough volume to reach the higher levels of the business. I would guess you need to reach approximately the 18% bonus bracket or higher before you can cover your IBO expenses which may include functions and standing order.
Did I mention that sponsoring people is a difficult task? Most IBOs are not able to sponsor a single downline. Many IBOs cannot even find people who are interested in seeing the Amway sales and marketing plan. Did I mention that all of yuor efforts in finding people to sponsor also benefits your upline more than yourself, until you find enough people to help move your volume to about the 18% level. So although an IBO and his sponsor/upline do not have an employee - employer relationship, an IBO is basically a commssioned employee UNLESS that IBO is able to sponsor enough downline who will move volume, or unless that IBO is a very rare IBO who sells a lot of products/
So IBOs, are you fooling yourself into thinking you are an independent business owner when you are actually operating as a commisioned employee?
Tuesday, September 8, 2009
Amway - Why You "Need" A Business Mentality?
One of the catch phrases that IBOs spout quite often is that you need a "business mentality". Those of us who have an "employee mentality" simply cannot cut the mustard in Amway. I find this ironic since the vast majority of Amway IBOs have a job. A job that then NEED in order to pay for their Amway business. A job that pays for their voicemail, cds, functions and books, in addition to the cost of the Amway products.
Apparently, a business mentality is one that doesn't expect quick profits, despite upline's claim that the Amway business has low risk and low overhead. A business mentality is also one where you reinvest any or all profits back into buying support materials. A business owner doesn't expect to make a profit for 5 years. Many of these claims are taught by unethical uplines and unfortunately, many IBOs accept the teaching and buy into it.
Now it is true that a business owner might have to think and view things differently than an employee. For example, an employee might do a great job from 9-5 but after 5, that employee may be headed home to care for his or her family, or to participate in some exercise or recreation. The business owner might be inclined to stay after hours to finish a job because he or she may have invested much, and will want to make sure that the business succeeds.
It is my suspicion that uplines want their downline IBOs to adopt a business owner mentality, not because they want downline to succeed, but because it instills a dedication to the tools purchases and it also takes an IBO's focus off profits for a few years. Thus IBOs think they are successful (without profit) is they are listening to standing order, attending all the functions and showing the plan. It is a gimmick used to retain IBOs who are not profitable. If IBOs were actually making money, there would be little need to continue to motivate them with an endless suppy of cds and functions. But because most IBOs lose money or make little, the average IBO must be taught that a "business owner" commonly loses money for a number of years, or that they must continue to reinvest their profits in order to succeed.
In posting this, I say to IBOs, just make a profit. That is all the motivation you need. Keep track of your bottom line and look at the return on your investment of time and money. That is the action of a real business owner.
Apparently, a business mentality is one that doesn't expect quick profits, despite upline's claim that the Amway business has low risk and low overhead. A business mentality is also one where you reinvest any or all profits back into buying support materials. A business owner doesn't expect to make a profit for 5 years. Many of these claims are taught by unethical uplines and unfortunately, many IBOs accept the teaching and buy into it.
Now it is true that a business owner might have to think and view things differently than an employee. For example, an employee might do a great job from 9-5 but after 5, that employee may be headed home to care for his or her family, or to participate in some exercise or recreation. The business owner might be inclined to stay after hours to finish a job because he or she may have invested much, and will want to make sure that the business succeeds.
It is my suspicion that uplines want their downline IBOs to adopt a business owner mentality, not because they want downline to succeed, but because it instills a dedication to the tools purchases and it also takes an IBO's focus off profits for a few years. Thus IBOs think they are successful (without profit) is they are listening to standing order, attending all the functions and showing the plan. It is a gimmick used to retain IBOs who are not profitable. If IBOs were actually making money, there would be little need to continue to motivate them with an endless suppy of cds and functions. But because most IBOs lose money or make little, the average IBO must be taught that a "business owner" commonly loses money for a number of years, or that they must continue to reinvest their profits in order to succeed.
In posting this, I say to IBOs, just make a profit. That is all the motivation you need. Keep track of your bottom line and look at the return on your investment of time and money. That is the action of a real business owner.
Friday, September 4, 2009
Amway - Lies, Damn Lies And Statistics - IBOFB Spinning Average Income Stats Again
IBOFightback recently posted an article on his blog about Amway's average income.
Amway reports that the average income on an active IBO is $115 a month. But Amway disregards "inactive" IBOs in determining the average income.
Amway defines an active IBO as follows:
"An “active” IBO is one who attempted to make a retail sale, or presented the Amway Global IBO Compensation Plan, or received bonus money, or attended a company or IBO meeting during the year."
So IBOFightback (David Steadson) says on his blog: "That’s it. If you ask your brother, once, in a whole year, if he wants to buy a can of XS … and he says no! … you’re active! $115/mth is a pretty good income for that, isn’t it? Or how about if you and your spouse are both in to health and each buy Nutrilite Double X and Omega 3 …. you’ll have bought more than 100 points of products, and qualify for a 3% rebate! Congratulations, you’re now “active”. Amway critics think it’s scandolous that you only earn $115/mth for doing your shopping!
Of course, that’s not what’s going on at all is it?
Lies, damn lies, and statistics." (Quote IBOFightback)
Of course, it's just complete propaganda and I will disprove IBOFB (yet again) by using basic math and the common 6-4-2 plan. The 6-4-2 plan assumes that there is a group where there are 79 IBOs, all doing 100 PV. So the group PV is 7900. If BV is about a 3:1 ratio, then 7900 PV is equal to 23,700 BV.
For a platinum group, Amway will pay 25% as their bonus. 25% of 23,700 is $5,925. $5,925 divided by 79 IBOs is $75. And that is the "average". We know that the platinum will get the lion's share of the bonus and "most" IBOs will in fact earn $9 or $10 each. And these figures are gross income and do not include business expenses such as standing order, functions, taxes, and other business expenses.
If you factor in Amway's one time platinum bonus of $10,000 (which only the platinum receives), then the average for these 79 IBOs goes up to about $85 a month, which is still short of the $115 a month average.
So we can conclude logically that Amway's average income is probably inflated by including Crown Ambassadors or at least higher up pins in their count, which drives up the average.
So there you have it folks, the "average" income for a completely active group is about $75 to $85 a month, before taxes and expenses. Add in all the IBOs who do little or nothing, which IBOFightback claims is "most" and the average income for all these IBOs would be significantly less than $75 or $85 a month. Factor in taxes and tools expenses and it is easy to see how "most" IBOs can indeed suffer losses. Notice ho IBOFB doesn't use real life examples in his article? Only anecdotal stories.
So IBOFighback is right when he says "Lies, damn lies, and statistics", except he doesn't talk about how he is spinning the statistics.
It might be interesting and amusing to note that I recently discovered a website, linked on my other blog showing that a "David Steadson" from Australia, recently qualified at 100 PV for the first time in 2008. :-)
Amway reports that the average income on an active IBO is $115 a month. But Amway disregards "inactive" IBOs in determining the average income.
Amway defines an active IBO as follows:
"An “active” IBO is one who attempted to make a retail sale, or presented the Amway Global IBO Compensation Plan, or received bonus money, or attended a company or IBO meeting during the year."
So IBOFightback (David Steadson) says on his blog: "That’s it. If you ask your brother, once, in a whole year, if he wants to buy a can of XS … and he says no! … you’re active! $115/mth is a pretty good income for that, isn’t it? Or how about if you and your spouse are both in to health and each buy Nutrilite Double X and Omega 3 …. you’ll have bought more than 100 points of products, and qualify for a 3% rebate! Congratulations, you’re now “active”. Amway critics think it’s scandolous that you only earn $115/mth for doing your shopping!
Of course, that’s not what’s going on at all is it?
Lies, damn lies, and statistics." (Quote IBOFightback)
Of course, it's just complete propaganda and I will disprove IBOFB (yet again) by using basic math and the common 6-4-2 plan. The 6-4-2 plan assumes that there is a group where there are 79 IBOs, all doing 100 PV. So the group PV is 7900. If BV is about a 3:1 ratio, then 7900 PV is equal to 23,700 BV.
For a platinum group, Amway will pay 25% as their bonus. 25% of 23,700 is $5,925. $5,925 divided by 79 IBOs is $75. And that is the "average". We know that the platinum will get the lion's share of the bonus and "most" IBOs will in fact earn $9 or $10 each. And these figures are gross income and do not include business expenses such as standing order, functions, taxes, and other business expenses.
If you factor in Amway's one time platinum bonus of $10,000 (which only the platinum receives), then the average for these 79 IBOs goes up to about $85 a month, which is still short of the $115 a month average.
So we can conclude logically that Amway's average income is probably inflated by including Crown Ambassadors or at least higher up pins in their count, which drives up the average.
So there you have it folks, the "average" income for a completely active group is about $75 to $85 a month, before taxes and expenses. Add in all the IBOs who do little or nothing, which IBOFightback claims is "most" and the average income for all these IBOs would be significantly less than $75 or $85 a month. Factor in taxes and tools expenses and it is easy to see how "most" IBOs can indeed suffer losses. Notice ho IBOFB doesn't use real life examples in his article? Only anecdotal stories.
So IBOFighback is right when he says "Lies, damn lies, and statistics", except he doesn't talk about how he is spinning the statistics.
It might be interesting and amusing to note that I recently discovered a website, linked on my other blog showing that a "David Steadson" from Australia, recently qualified at 100 PV for the first time in 2008. :-)
Thursday, September 3, 2009
Amway - Everyone Starts At Zero?
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 nto know about. That factor is the possibility of PV manipulation. I believe that groups that are 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 about less than a year ago that some groups still are on call in and pick up.
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" and build a diamondship again.
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 2009 how to build the business in a way to address people in 2009, and the fact that the business is mostly internet based as opposed to the old days.
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 diamondship here in the US, where the reputation and shrinking sales would be handicaps too great to overcome for the vast majority of propsective IBOs. I recall back in 2005 or 2006, an LOS had some kind of commitment to personal growth amongst the diamonds and above. I do not believe much fruit was grown out of that effort.
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" and build a diamondship again.
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 2009 how to build the business in a way to address people in 2009, and the fact that the business is mostly internet based as opposed to the old days.
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 diamondship here in the US, where the reputation and shrinking sales would be handicaps too great to overcome for the vast majority of propsective IBOs. I recall back in 2005 or 2006, an LOS had some kind of commitment to personal growth amongst the diamonds and above. I do not believe much fruit was grown out of that effort.
Wednesday, September 2, 2009
Amway - The System Doesn't Work?
Most IBOs involved in Amway belong to some kind of line of sponsorship, which has a system. These systems consists of groups such as Worldwide Dreambuilders (WWDB), BWW, Network 21, INA, LTD, etc. The system usually consists of tapes or cds, voicemail, books, websites, and functions or seminars. The system typically costs on the lower end, $100 a month on average, and for very dedicated IBOs, up to $500 a month or more, depending on what the IBOs are taught. But does the system work?
Based on observation, and information revealed by Amway, I can conclude that the system does not work. After discarding IBOs who do nothing, the average income of the remaining IBOs is a paltry $115 a month. Furthermore, if the system worked, then then would be a consisten progression of people moving from 1000, to 2500, t0 4000, to platinum and higher. While new and inspired IBOs can rise rapidly to the silver or platinum level with excitement, they will often fall apart and end up quitting, which is why you probably do not see very many new diamonds. Also, it appears that Amway growth is primarily from foreign markets and not the US. In the US, the Amway name appears to be saturated and finding new recruits is very difficult. Some tools zealots (i.e."Tex") claim the system works but the prices are too high. Well, Tex is dead wrong. If the system worked as advertised, then the price of the system would be seen as reasonable by most.
Tex will also claim that the system will work if only the prices were lowered. Well, again, Tex is dead wrong because the price of the system doesn't have any causal relationship with the effectiveness of the tools. The only difference is that the uplines who produce the tools, would have little or no incentive to produce tools if they need to take the financial risk for small or no profits. Because we know that many Amway businesses fall apart, even at the diamond level and higher, maintaining your income and lifestyle can become difficult and diamonds and higher may not be motivated to take time away from their Amway businesses to produce tools if there is little or no profit in them.
I will contend that the system does not work. I challenge anyone to prove this wrong with facts, preferably unbiased facts. *crickets chirping*
Based on observation, and information revealed by Amway, I can conclude that the system does not work. After discarding IBOs who do nothing, the average income of the remaining IBOs is a paltry $115 a month. Furthermore, if the system worked, then then would be a consisten progression of people moving from 1000, to 2500, t0 4000, to platinum and higher. While new and inspired IBOs can rise rapidly to the silver or platinum level with excitement, they will often fall apart and end up quitting, which is why you probably do not see very many new diamonds. Also, it appears that Amway growth is primarily from foreign markets and not the US. In the US, the Amway name appears to be saturated and finding new recruits is very difficult. Some tools zealots (i.e."Tex") claim the system works but the prices are too high. Well, Tex is dead wrong. If the system worked as advertised, then the price of the system would be seen as reasonable by most.
Tex will also claim that the system will work if only the prices were lowered. Well, again, Tex is dead wrong because the price of the system doesn't have any causal relationship with the effectiveness of the tools. The only difference is that the uplines who produce the tools, would have little or no incentive to produce tools if they need to take the financial risk for small or no profits. Because we know that many Amway businesses fall apart, even at the diamond level and higher, maintaining your income and lifestyle can become difficult and diamonds and higher may not be motivated to take time away from their Amway businesses to produce tools if there is little or no profit in them.
I will contend that the system does not work. I challenge anyone to prove this wrong with facts, preferably unbiased facts. *crickets chirping*
Tuesday, September 1, 2009
Amway - Is Amway A "Real" Business?
Many IBOs are taught to "buy from themselves". Although in some of these groups, retailing may be mentioned, it certainly is not taught in a serious manner. I believe it is because people in general simply are not comfortable with selling products. Thus the concept of buy from yourself makes the masses comfortable. What they do not realize is that they are simply loyal Amway customers and not running a business. As I mentioned in a previous post, in what business do you not have customers? It is why IBOs must ask themselves, are they running a "real" business?
For many IBOs, the focus of their efforts is on recruiting others. But why would someone want to join a system where they basically sign up to be a loyal customer and be a recruiter for other loyal customers? The pyramid like compensation plan is what drives many IBOs. Find enough downline and eventually, your downline will absorb the financial losses for you and will become the srouce of your income. I believe that the 4000 PV or platinum level is about where you as an IBO can find teh break even point if you are dedicated to the "system" consisting of tapes, cds, books, voicemail and functions.
Secondarily, in addition to signing on as a loyal customer of Amway, if you join a system and participate in standing order and/or functions, then you have also become a loyal customer of the "system". Sadly, many upline will push IBOs to keep purchasing tools regardless of the IBO's progress in the business.
So I ask the question again for IBOs and potential recruits. As an IBO, are you running a real business? Can you get a business loan using the 6-4-2 plan? Have you tried showing it to a loan officer? Can you cite BWW or WWDB as educational credentials when applying for a job or will you be laughed out of the room? For these very reasons, I can only conclude that many, possibly most IBOs are not running a "real" business. They are simply doing what their upline advises. These uplines are more concerned about selling their tools than they are about their downline IBOs. It appears that downline IBOs are expendable. They quickly become bitter, broke, or not having expended enough effort if they do not "make it".
So are you running a real business?
For many IBOs, the focus of their efforts is on recruiting others. But why would someone want to join a system where they basically sign up to be a loyal customer and be a recruiter for other loyal customers? The pyramid like compensation plan is what drives many IBOs. Find enough downline and eventually, your downline will absorb the financial losses for you and will become the srouce of your income. I believe that the 4000 PV or platinum level is about where you as an IBO can find teh break even point if you are dedicated to the "system" consisting of tapes, cds, books, voicemail and functions.
Secondarily, in addition to signing on as a loyal customer of Amway, if you join a system and participate in standing order and/or functions, then you have also become a loyal customer of the "system". Sadly, many upline will push IBOs to keep purchasing tools regardless of the IBO's progress in the business.
So I ask the question again for IBOs and potential recruits. As an IBO, are you running a real business? Can you get a business loan using the 6-4-2 plan? Have you tried showing it to a loan officer? Can you cite BWW or WWDB as educational credentials when applying for a job or will you be laughed out of the room? For these very reasons, I can only conclude that many, possibly most IBOs are not running a "real" business. They are simply doing what their upline advises. These uplines are more concerned about selling their tools than they are about their downline IBOs. It appears that downline IBOs are expendable. They quickly become bitter, broke, or not having expended enough effort if they do not "make it".
So are you running a real business?
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