Many folks involved with Amway call themselves "Independent Business Owners", or IBOs for short. The idea of "owning a business" sounds pretty cool, and is a selling point in recruiting new people. But in a business that touts itself and being so simply, why don't more people actually make a profit? Even some avid Amway supporters understand that most dedicated IBOs suffer a loss, primarily due to system expenses, but they dismiss the failure by saying these IBOs did not work hard enough, quit too soon, or did not take their business seriously enough.
A business exists to make a profit. Sadly, many uplines do not teach IBOs to be profitable. Instead, these uplines teach dedication to the business and to the teaching system rather than teaching IBOs to be profitable business owners. Ironically, the teaching system is disguised as a success system that is practically guaranteed to lead you to wealth. Ironically, the system in it's simplest form, simply transfers money from downline to upline. The uplines profit from the system, thus the uplines can make a nice profit whether anyone downline succeeds or not. Although uplines will say they want you to succeed, I don't think they give a rat's ass about downline success. It's more profitable for certain upline if people keep joining and quitting, as long as the standing orders get sold and there are butts in the seats at functions. If you stop and think about this for a moment, you can see that it makes perfect sense from a business standpoint.
So as a business owners, are you making business decisions with regards to expenditures? And are you assessing the worth of these expenditures? For example, if your monthly income from Amway is $25, is there enough value in attending a major function which might cost several hundreds of dollars (if out of town)? Say a major function costs $500 with airfare and hotel included. Is it worth 20 months worth of your business income to attend? If you say the function is worth the expense, then you should ask yourself what direct benefit your business received by your attendance. If your voicemail expenses exceed your monthly Amway income, how long do you stay committed to such an expenditure? Does your standing order expenses exceed your monthly Amway income? Are your expenses exceeding your income month after month? If so, as a business owner, you need to assess these expense and perhaps cut or reduce these expenses.
Are you consistenly driving more traffic to your website to generate sales? If you are not gaining more customers month after month, how do you expect to generate income? Do your uplines teach you how to drive traffic to your websites? These questions and examples are only meant to be though provoking for new and established IBOs. I have seen too many IBOs rack up tremendous debt by following the system without looking at their expenses with a critical eye.
Are you a business owner?
Tuesday, February 16, 2010
Wednesday, February 10, 2010
Amway - Working Hard Makes You Successful?
One of the things that many Amway defenders will cite is that the people who don't succeed didn't work hard enough or didn't put in enough effort. While I agree that one must work hard to succeed in many endeavors, I will also state my informed opinion that working hard and success in Amway may not be related. I say this because I have seen so many testimonies of people who worked the Amway business hard and achieved little or no results.
Psrt of the problem is that many uplines emphasize recruiting as their focus, even though there is no direct compensation for doing so. In fact, recruiting downline often comes with much expenses such as gas, babysitters, and the false belief that an IBO needs standing orders and seminars to learn this. Also, Amway has a spotty reputation in the US, thus making recruiting potential downline a very diffcult task.
An important part of any business is to find customers to buy your goods. Because IBOs already spend much of their time recruiting and not selling, they are already at a disadvantage over many other businesses. Add in the seemingly uncompetetive prices of Amway and Amway partner store products and you give IBOs yet another disadvantage over most other businesses. If there were better value in these goods and services, then IBOs who sell instead of recruit would be much more common. Also, the Amway compensation plan often rewards uplines rather than the IBOs who actually do the work of moving the volume.
I also believe that the Amway business is so outdated and inefficient. While you may have a website to sell your goods, you have restrictions that severely limit the ability of an IBO to drive traffic to their website. The person to person touch may sound nice and flowery, but it is the most inefficient way to make sales. It is why people pay millions to advertise during the Superbowl, because you may have a hundred million people watching the adervtisement and can drive up your name recognition and sales.
While working hard is definitely important to succeeding in any venture, I don't believe there is any bonafide correlation that working hard equates success in the Amway business for the reasons I have outlined in this post.
Psrt of the problem is that many uplines emphasize recruiting as their focus, even though there is no direct compensation for doing so. In fact, recruiting downline often comes with much expenses such as gas, babysitters, and the false belief that an IBO needs standing orders and seminars to learn this. Also, Amway has a spotty reputation in the US, thus making recruiting potential downline a very diffcult task.
An important part of any business is to find customers to buy your goods. Because IBOs already spend much of their time recruiting and not selling, they are already at a disadvantage over many other businesses. Add in the seemingly uncompetetive prices of Amway and Amway partner store products and you give IBOs yet another disadvantage over most other businesses. If there were better value in these goods and services, then IBOs who sell instead of recruit would be much more common. Also, the Amway compensation plan often rewards uplines rather than the IBOs who actually do the work of moving the volume.
I also believe that the Amway business is so outdated and inefficient. While you may have a website to sell your goods, you have restrictions that severely limit the ability of an IBO to drive traffic to their website. The person to person touch may sound nice and flowery, but it is the most inefficient way to make sales. It is why people pay millions to advertise during the Superbowl, because you may have a hundred million people watching the adervtisement and can drive up your name recognition and sales.
While working hard is definitely important to succeeding in any venture, I don't believe there is any bonafide correlation that working hard equates success in the Amway business for the reasons I have outlined in this post.
Monday, February 8, 2010
Amway - The Amway Compensation Plan?
One of the major reasons why I think Amway is not such a good opportunity is because of the unfair multi tiered compensation plan. I have heard that Amway pays out about 32-33% to their IBOs, but I find it unfair in that you get rewarded for sponsoring people who move volume more than you do for actually selling products. I believe this is why so many IBOs are desperately trying to sponsor people and in some cases, deception and trickery is used in recruiting, which contributes to Amway's bad reputation.
This multi tiered compensation plan also rewards a few people at the expense of the masses. If an IBO works really hard and sold 100 PV worth of goods, that IBO would get $9 or $10 in a bonus from Amway and layers of upline would split up about $90. I fail to see how that is fair, especially when IBOs seemingly say "do the work and get paid". In this case, you do the work and your uplines get paid.
I think Amway would be more efficient by giving all IBO's 20-25% back as a bonus, with the remaining 8-13% in bonus (33 - 20 or 25) going to certain levels os achievers. I believe that this would truly allow someone to change their buying habits and gain some value. It would also be good for retention of IBOs because a 100 PV would get you a monthly bonus of about $60. If you sold 100 PV to customers, you would get the retail profit plus the bonus. I believe there would be less of an emphasis on sponsoring and more of an emphasis on selling. It would put less pressure on IBO's to recruit and sponsor, and I believe that Amway's reputation could be repaired in this manner. While you would have less emphasis on "going diamond", those who did achieve it could still get handsome bonuses.
I believe implementation of this type of compensation would also eliminate the endless need for cds and seminars. Sure, product expos and some teaching on salesmanship might help, but I believe that compensating the "majority" of IBOs would keep them interested in doing business and would lessen the need for tools. I believe this is a win-win for the majority of those in the business.
I'm sure some Amway apologists will find fault in my line of reasoning, but I believe this is a long term sustainable solution for Amway. Comments are welcome.
This multi tiered compensation plan also rewards a few people at the expense of the masses. If an IBO works really hard and sold 100 PV worth of goods, that IBO would get $9 or $10 in a bonus from Amway and layers of upline would split up about $90. I fail to see how that is fair, especially when IBOs seemingly say "do the work and get paid". In this case, you do the work and your uplines get paid.
I think Amway would be more efficient by giving all IBO's 20-25% back as a bonus, with the remaining 8-13% in bonus (33 - 20 or 25) going to certain levels os achievers. I believe that this would truly allow someone to change their buying habits and gain some value. It would also be good for retention of IBOs because a 100 PV would get you a monthly bonus of about $60. If you sold 100 PV to customers, you would get the retail profit plus the bonus. I believe there would be less of an emphasis on sponsoring and more of an emphasis on selling. It would put less pressure on IBO's to recruit and sponsor, and I believe that Amway's reputation could be repaired in this manner. While you would have less emphasis on "going diamond", those who did achieve it could still get handsome bonuses.
I believe implementation of this type of compensation would also eliminate the endless need for cds and seminars. Sure, product expos and some teaching on salesmanship might help, but I believe that compensating the "majority" of IBOs would keep them interested in doing business and would lessen the need for tools. I believe this is a win-win for the majority of those in the business.
I'm sure some Amway apologists will find fault in my line of reasoning, but I believe this is a long term sustainable solution for Amway. Comments are welcome.
Thursday, February 4, 2010
Amway - Diamond, Possible, But Not Likely?
When I was shown the plan, the plan was to go diamond. I believe that most plans shown result in the ultimate goal of going diamond. That appears to be the pinnacle of success in the Amway business. It certainly is the beginning of the speaking engagements and where you would be doing your own open meetings. You are the sought after person for functions and your faithful downline are your servants. These downline would be willing to chauffeur you around, mow your lawn, etc,. Anything to gain association time because you might say that one thing that propels their business to diamond.
In nearly every meeting I attended, the "diamond" lifestyle was flaunted. I attended a function called "Dream Night", which is still in existence, where some diamonds will present a slide show to display all the trappings of being a diamond. I also believe I have seen ample evidence that this still goes on in WWDB today. Anyway, I saw pictures of mansions, jet skis, jets, boats, ATVs, sports cars, designer clothes, shopping sprees, golf outings and other luxuries. While the diamonds may participate in these outings and may own some of these toys, I highly doubt that a diamond or even an above diamond lifestyle consists of basically dooing nothing, waking up at noon and going golfing and then spending the evening shopping and buying more extravagant items. In light of recent events in WWDB, i would say that hard times are falling on the diamond lifestyle. A prominent triple diamond went bankrupt and a host of other diamonds selling off mansions. While we don't know all the details of what is going on, we can certainly conclude that the economy has affected the diamonds as well.
But getting back onm topic. I understand the salesmanship of someone showing the plan, but for information seekers, just be aware that much of the extarvagance you may see is quite possibly an illusion. Just as in a real business, I sugggest that you see to inquire about business financials as real business owners do when getting involved in a new business venture. A lack of willingness to share and/or a lack of transparency by the person recruting you should set off red flags all over the place. Based on figures provided by Amway, it appears that less than 1 in 240 IBOs ever reach platinum. That is less than one half of one percent. And out of those few who reach platinum, less than one percent of them ever reach diamond. Even if you reach diamond, there's a good chance that attrition will eat away at your business before the shine on your diamond pin wears out.
Going diamond is possible, but highly unlikely. In a business where the evidence suggests that most people never make a single dime of profit, I would just caution prospects from jumping into the business blindly without asking tough questions and demanding answers. It's because Amway recruiters will always show you what is possible, but not what is likely.
In nearly every meeting I attended, the "diamond" lifestyle was flaunted. I attended a function called "Dream Night", which is still in existence, where some diamonds will present a slide show to display all the trappings of being a diamond. I also believe I have seen ample evidence that this still goes on in WWDB today. Anyway, I saw pictures of mansions, jet skis, jets, boats, ATVs, sports cars, designer clothes, shopping sprees, golf outings and other luxuries. While the diamonds may participate in these outings and may own some of these toys, I highly doubt that a diamond or even an above diamond lifestyle consists of basically dooing nothing, waking up at noon and going golfing and then spending the evening shopping and buying more extravagant items. In light of recent events in WWDB, i would say that hard times are falling on the diamond lifestyle. A prominent triple diamond went bankrupt and a host of other diamonds selling off mansions. While we don't know all the details of what is going on, we can certainly conclude that the economy has affected the diamonds as well.
But getting back onm topic. I understand the salesmanship of someone showing the plan, but for information seekers, just be aware that much of the extarvagance you may see is quite possibly an illusion. Just as in a real business, I sugggest that you see to inquire about business financials as real business owners do when getting involved in a new business venture. A lack of willingness to share and/or a lack of transparency by the person recruting you should set off red flags all over the place. Based on figures provided by Amway, it appears that less than 1 in 240 IBOs ever reach platinum. That is less than one half of one percent. And out of those few who reach platinum, less than one percent of them ever reach diamond. Even if you reach diamond, there's a good chance that attrition will eat away at your business before the shine on your diamond pin wears out.
Going diamond is possible, but highly unlikely. In a business where the evidence suggests that most people never make a single dime of profit, I would just caution prospects from jumping into the business blindly without asking tough questions and demanding answers. It's because Amway recruiters will always show you what is possible, but not what is likely.
Wednesday, February 3, 2010
Amway - My Job Is A Pyramid?
One of ths things I take issue with is how uplines will create an us versus them mentality in the business. Thus friends and family who care about you suddenly become "negative" and association with them should be limited. In some cases, people are discouraged from excellence in their jobs or professions because it takes the focus off of their Amway business. What I was told was to do my job, but my radar should always be on for new prospects. Some crossline IBOs turned down promotions at work because they did not want to have to work longer hours or take the focus off of their Amway businesses.
In some cases, the speaker at open meetings or functions will put down people's jobs. A commonly used acronym was J-O-B = "Just Over Broke". Some leaders also would say that my job was a pyramid because you will never earn more than the boss. A completely ridiculous comparison because someone's job has no relationship with how people view the Amway business (i.e. an Amway pyramid) and in a job, every employee gets paid and has a net gain at the end of the month. Not true in Amway. If IBOs only use KATE for example, an IBO at 100 PV or less will already be at a loss, and that is not considering any other expenses that IBO may have. And while a job may have a hierarchy, or chain of command, the business owner and CEO or manager earns their salary from customers, not directly from the pockets of their employees.
Some uplines will laugh about people's jobs, stating that they wake up at the "crack of noon". What these same uplines may not tell you is that they wake up at noon because they are up at 3:00 in the morning doing nite owls for their groups and looking for recruits. These same uplines possibly can't do much with their downlines since their downlines mostly tend to have 9-5 jobs.
So if you are of the opinion that nobody should criticize the Amway opportunity
or IBO behavior, maybe uplines and IBOs should not criticize family and friends who disagree with or are not interested in the opportunity, and maybe the same uplines and IBOs should not criticize people who choose to work jobs. Don't most IBOs rely on their jobs as their Amway income is not sufficient to even pay for their Amway business related expenses?
In some cases, the speaker at open meetings or functions will put down people's jobs. A commonly used acronym was J-O-B = "Just Over Broke". Some leaders also would say that my job was a pyramid because you will never earn more than the boss. A completely ridiculous comparison because someone's job has no relationship with how people view the Amway business (i.e. an Amway pyramid) and in a job, every employee gets paid and has a net gain at the end of the month. Not true in Amway. If IBOs only use KATE for example, an IBO at 100 PV or less will already be at a loss, and that is not considering any other expenses that IBO may have. And while a job may have a hierarchy, or chain of command, the business owner and CEO or manager earns their salary from customers, not directly from the pockets of their employees.
Some uplines will laugh about people's jobs, stating that they wake up at the "crack of noon". What these same uplines may not tell you is that they wake up at noon because they are up at 3:00 in the morning doing nite owls for their groups and looking for recruits. These same uplines possibly can't do much with their downlines since their downlines mostly tend to have 9-5 jobs.
So if you are of the opinion that nobody should criticize the Amway opportunity
or IBO behavior, maybe uplines and IBOs should not criticize family and friends who disagree with or are not interested in the opportunity, and maybe the same uplines and IBOs should not criticize people who choose to work jobs. Don't most IBOs rely on their jobs as their Amway income is not sufficient to even pay for their Amway business related expenses?
Tuesday, February 2, 2010
Amway - Investing In Your Business?
One of the things that many Amway IBOs do is to purchase cds, books, voicemail, websites, seminar tickets, etc. These materials are supposed to help an IBO to succeed, but apparently the people who sell these materials are far more successful than those who use them. What makes these materials potentially harmful to an IBO's resources is that many IBOs are told that these "tools" are an "investment" into their business. I believe that these tools are simply a drain on an IBO's bank account and not truly an investment. I will explain.
If you owned a tradional business, you would have to come up with a lot more money than opening an Amway business. That is true, but a traditional business will likely come with a building and possibly some real estate. This is a tangible investment. If your business doesn't work out, you can still sell the land and/or building, or transfer the lease to another business owner and recoup some of your initial investment. Contrast this with former IBOs who endup selling their Amway tools on ebay or craigslist for pennies on the dollar. I'm not even sure they have any takers, except for morons who think the tools have any value.
Also, in a traditional business, you may have to make other "investments" such as perhaps purchasing a company van or other equipment that will help your business be efficient. These materials, while they will depreciate, still carry value and can be liquidated if your business is sold. What can an IBO sell to offset losses if they stop their Amway business? Sell their white board and easel I suppose, or they can try to sell their excess inventory if any, but generally, an IBO's business doesn't gain any equity. You don't own your downline. You don't own anything really, except the right to distribute products.
The way I see it, the purchase of tools is an investment. An investment into your upline's business. The more you purchase, the more your upline prospers.
If you owned a tradional business, you would have to come up with a lot more money than opening an Amway business. That is true, but a traditional business will likely come with a building and possibly some real estate. This is a tangible investment. If your business doesn't work out, you can still sell the land and/or building, or transfer the lease to another business owner and recoup some of your initial investment. Contrast this with former IBOs who endup selling their Amway tools on ebay or craigslist for pennies on the dollar. I'm not even sure they have any takers, except for morons who think the tools have any value.
Also, in a traditional business, you may have to make other "investments" such as perhaps purchasing a company van or other equipment that will help your business be efficient. These materials, while they will depreciate, still carry value and can be liquidated if your business is sold. What can an IBO sell to offset losses if they stop their Amway business? Sell their white board and easel I suppose, or they can try to sell their excess inventory if any, but generally, an IBO's business doesn't gain any equity. You don't own your downline. You don't own anything really, except the right to distribute products.
The way I see it, the purchase of tools is an investment. An investment into your upline's business. The more you purchase, the more your upline prospers.
Monday, February 1, 2010
Amway - Early Retirement?
One of the humorous things I read is when am IBO says he or she is 19 years old and will be "retired" at the age of 24 because of the Amway business. I erpsonally don't know of anyone who has retired primarily on residual Amway income, as many seem to claim. I am not suggesting that nobody has ever done this, but I suspect that there are so few people who may have done it that it is not noteworthy. Even the Crown Ambassadors appear to not only be working, but have very busy schedules where they are constantly on the run. The poor retention rate of IBOs would suggest that even a sizable Amway business could fall apart rather quickly without a constant replacement of IBOs.
I ask this of IBOs. Is your upline diamond, or someone in between you and the diamond retired because of (primarily) Amway income? Do you as an IBO have a projected date when you will "walk away" from the business and retire? When I was an IBO, I always wondered why nobody "walked away" from their business after they went diamond. I believe the answer is crystal clear. Because IBO turnover is so high, if a diamond were to walk away from the business, he would probably fall out of qualification in less than a year. The bonuses would disappear and the diamond would probably have to look for a job. There are many examples of diamonds who have quit, and in some cases, went back to work.
Many unsuspecting prospects may be lured into the Amway business with the hope of an early retirement. Amway recruiters may mention that control of time and money is the key to success, but ironically, for most who sign up, will end up with less time and money than if they did not join at all. For many people. especially young people, it might be a good idea to seek financial advice from a professional and to make long term investment goals. Am investment of about $200 a month can net you close to a million bucks after 30 to 40 years.
Yes, there may be "some" people who retired early due to (primarily) Amway income. But I don't know any. Do you?
I ask this of IBOs. Is your upline diamond, or someone in between you and the diamond retired because of (primarily) Amway income? Do you as an IBO have a projected date when you will "walk away" from the business and retire? When I was an IBO, I always wondered why nobody "walked away" from their business after they went diamond. I believe the answer is crystal clear. Because IBO turnover is so high, if a diamond were to walk away from the business, he would probably fall out of qualification in less than a year. The bonuses would disappear and the diamond would probably have to look for a job. There are many examples of diamonds who have quit, and in some cases, went back to work.
Many unsuspecting prospects may be lured into the Amway business with the hope of an early retirement. Amway recruiters may mention that control of time and money is the key to success, but ironically, for most who sign up, will end up with less time and money than if they did not join at all. For many people. especially young people, it might be a good idea to seek financial advice from a professional and to make long term investment goals. Am investment of about $200 a month can net you close to a million bucks after 30 to 40 years.
Yes, there may be "some" people who retired early due to (primarily) Amway income. But I don't know any. Do you?
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