Charitable Donations To Amwayers?

I know Amway defenders will talk about some of the sales they make, and that's fine and good, but when I look at the kinds of sales they make, it is usually insignificant. I recently read some comments that sort of made me laugh. A prospect apparently was invited to an Amway recruitment meeting by a friend, and out of courtesy, sat through the presentation (which nobody else attended) and politely declined to register. The commenter went on to say that after the meeting, he felt sorry for his friend and purchased something off of his friend's IBO website, and it felt like making a charitable contribution. Makes me wonder since Amway's products are mostly consumed by IBOs themselves and I believe less than 5% of Amway good actually made it into the hands of a non IBO customer. Even those who subscribe to Amway teaching may have heard how you should find yourself 10 customers. Now ask yourself what store can survive having only 10 customers?

But I wonder out of the tiny amount of IBO retail sales, how many of those sales are basically charitable contributions made to IBOs by family and friends who simply feel sorry for their acquainted IBO? When I first declined to join Amway under my eventual sponsor, they did ask me to buy some of their goods. But being a single male, my age group demographic didn't really match me with the products they were pushing. If I remember correctly, I ended up buying the liquid Amway car wax. While the car wax worked as well as the other leading brands, I recall that I paid about $12 for it back in 1995 or so. I can currently get a jumbo sized bottle od Nu-Finish or Astroshield liquid car wax for $8.99 at Target or other local retailers, and at times, the store puts them on special sales for $5.99. So basically, I am getting about twice as much car wax for the price if I purchase my car wax on a store special. I know Amway zealots will want to compare the price with an online source but as I said, I make my purchase in person and wait for store soecials which occurs every couple of months.

I know at times, I have seen other family and friends involved in MLM. And while I was once there, I now see their attempts as somewhat pathetic, especially when they are basically walking the same path I did about 12 years ago as an IBO. I do not discourage them, but simply decline to see their plan or register as a downline. I have at times, also made charitable contributions to some friends who had become involved in MLM. If nothing else, just to be supportive of a friend. Ultimately, these MLM friends eventually figured things out on their own and quit as I did. Some of them follow my blog and some just quietly faded into the sunset. They do not run an informative blog as I do, but not everyone can or will. (Sound familar?)

However, after reading the comments about the polite friend who bought an Amway product from a friend, I have to wonder whether IBOs are making true retail sales or merely receiving charitable contributions from friends and family in the form of Amway product purchases?

A Business Or A Joke?

I hear many Amway supporters mention that you will have a real business if you treat it like one. It is my observation that most IBOs do not treat their businesses like a real one. It is also my opinion that the Amway business itself is flawed and many IBOs, in their zeal to sponsor downline, do crazy things at times, such as tricking people into meetings, or being deceptive and misleading. Some IBOs are taught "fake it till you make it". Many IBOs never sell a product and never sponsor anyone. How can anyone build a business under those conditions. Yet that is the most common experience for newbies. Many IBOs do nothing and quit. Knowing these factors, how can anyone expect to build a business when most can't sell products or sponsor people, and when people get sponsored, most "do nothing and quit"?

Many IBOs do not bother to qualify their prospects. They will sponsor anyone who is breathing. It could be due to uplines making the business seem easy. For example, I have heard that going platinum is so easy that someone's dog can go platinum. Another mistake IBOs make is they do not look at the likelihood of an IBO succeeding. They will sponsor anyone, anywhere. Like real stores, opening a new one creates competition and I don't know of any IBOs who take this into consideration before recruiting a new prospect. The solution to a faltering business is apparently to attempt to open more "Amway stores" despite a lack of sales.

New recruits are also encouraged to partake in the teaching system, regardless of their expectations and business goals. This participation in the system is what often leads to IBO failure (business losses). They spend more on tools than what they generate in income. This heavily contributes to the poor retention rate among IBOs. Even IBOs who can progress and make some money will be simply channeling their profits to upline by their tools consumption. It is my informed guess that an IBO must reach the 4000 to platinum level before they start to break even. However, with that said, a hard core dedication to the system can render a 4000 or platinum into a lose money business. And If I might add, only about 1 in 400 IBOs reach the Gold level (source Amway.com) so you are already facing overwhelming odds just to reach the alleged break even point in Amway. 

Here's the real test for an IBO. Walk into a bank. Speak to a loan officer and show the loan officer the 6-4-2 or 9-4-2 plan, whichever plan your group uses. And see if the loan officer will grant you a loan based on that plan. It is more likely that you be laughed out of the bank. Seriously, the plan only makes sense, apparently to people who are unable to properly evaluate a business plan. That's because the presentation is more about selling dreams and hopes than about running a profitable business. 

"Sharp" Prospects?

One of the things taught to our group by upline was to recruit "sharp" people. And in general, I agree that many/most IBOs were sharp people. Most of them nice, motivated and wanting more in life. Certain Amway defenders wrongly claim that I am against Amway and IBOs to a degree where I am maniacal against them. I am not. I recall that most of my group and my crossline were mostly educated and had decent jobs. We all hoped to achieve the dream of walking away from our jobs and living in luxury. We got the idea that is was very reasonable and achievable if only we did as upline advised and immersed ourselves in the "system", which in my case, was WWDB. We were told that WWDB had much fruit on its tree and at the time I was an IBO, that appeared to be true. 

However, we did not know that some WWDB leaders made significant income from selling us tools. You see, we were lied to and speakers at major functions told the audience that nobody made a cent from tools and that upline makes pennies only after you earn dollars. We know know that this is not true and that these speakers were lying. What's more, these leaders were never made accountable for their lies. They just revised history and acted like nothing happened. Sadly, many downline IBOs simply accepted the explanation and continued to buy tools. Currently, the WWDB tree is getting barren, with little "fruit". There are very few new diamonds from WWDB in the US, and some of their more apparently dynamic leaders have left WWDB to start their own systems. Thus it looks like WWDB is left with the same old tired speakers today, as the ones who were around prior to my involvement with Amway. 

But what's puzzling, or maybe not, is why aren't there more successes if many, possibly most IBOs are "sharp" people? Surely large groups of smart and motivated people can accomplish much, but for whatever reason, they are unable to accomplish much in Amway and WWDB. In fact, many of these shapr people cannot sponsor a single downline and have difficulty in selling Amway products. After many years of blogging and analyzing the Amway opportunity, my conclusion is that Amway products are priced too highly and cannot compete with similar products on the open market. Sure, Amway defenders will cite quality or concentration as reasons why Amway is competitive, and in some cases, Amway is competitive, but the general public doesn't care, they just want cheap stuff and Walmart fulfills that need better than Amway. It leaves the majority of Amway sales being made to active business building IBOs. Apparently the artificial need to buy Amway goods disappears when the diamond dream disappears. 

Also, the zany and sometimes deceptive behavior of past and some present IBOs gives the Amway name a bad reputation, making it difficult to get anyone to see the plan, and sponsoring becomes nearly impossible. It is for this reason, I believe Amway is growing in foreign countries and not in North America, where saturation has occured. When you factor in all of these variables, it is easy to conclude that large groups of sharp people fai is not because they are not capable, it is because the Amway opportunity comes with so many handicaps that even sharp people cannot overcome them. It is why so many former IBOs, including myself, ahve done quite well for themselves after leaving Amway. Did I learn some things about business while in Amway? yes, I did learn some things of value, but I also learned that I was lied to and deceived by WWDB leaders and for that reason, my blog continues......

Dreams Fulfilled Without Amway?

One of the things that many Amway IBOs are badly misguided on is the concept of dreams and fighting for dreams. A dream is basically a long term goal. Someone might dream about playing in the National Football League. To accomplish that dream, one might play high school and/or college level football. For most, the dream will end unsuccessfully. No matter how much someone wants to play in the NFL, only so many people are proficient enough to be able to make the team. Even fewer are elite players that become stars. So while you might fight for your dreams, there is also an alternate reality.  I too, wanted to play in the NFL but after high school football, it was apparent that I was not big enough, or fast enough to seriously compete at the D1 college level.  So I had to move on rather than clinging to the dream.  

In the Amway business, via the "systems" such as WWDB or Network 21, the leaders will often sell hopes and dreams to the downline. That the downline can be retired at the age of 29, walking the beaches of the world while the (huge) income just rolls in forever and ever. These kinds of "dreams" would be the same as hoping to win the powerball lottery. You may have seen a few who did it but the chance of you duplicating it is very unlikely. Slim to none is your chance in reality. 

Another things uplines will often do is tell anecdotal stories about crabs keeping each other in a bucket when one tries to escape, or about monkeys preventing each other from grabbing bananas at the top of the pole. While the stories may be interesting and even true, it doesn't necessarily apply to the Amway business. While it is true that an IBO may have friends and family who are skeptical about Amway, it is with good reason. Many people have gone through the Amway business with no success. Many people have lost money doing everyting they were advised to do by upline. There is a track record of financial disasters associated with Amway and the attached "systems". It's not like there's a long list of people who have walked away from Amway with the cash rolling in and not a care in the world. Ever wonder why none of the crown ambassadors have exercised the option to "walk away"? 

I think people should have dreams. I think people should pursue their dreams. I also think people need to know that certain dreams can come true. There also needs to be a degree of reality in their dreams. There will always be some inspirational person such as a "Rudy" who overcame great odds to accomplish a dream, but the untold reality is that there were probably many many young men who dreamed of playing for Notre Dame that year. Likely, no one else accomplished the unlikely dream like a Rudy. What I am saying is that earning a nice income and having the option of early retirement can be acomplished in many ways. You might be choosing to use Amway to accomplish your financial dreams and that is your right. But the reality is that very few people have made all their financial dreams come true due to the Amway opportunity, as compared to the tens of millions who have tried. 

I would opine that saving money and investing it while you are young is a great way to get started in life. Luckily for me, I was given that advice when I just got out of college and I started a 401K at the age of 22 when I started working full time. I had a second job at the time so that second income went into my 401K and now many years later, I have a small fortune saved up and along with some other sources of income that I developed, I was able to retire early at the age of 55 and being able to enjoy a nice retirement. And guess what? These dreams were accomplished without Amway, although the Amway opportunity wasted some of my time and money along the way (I was an IBO in the late 1990's).  

Keep fighting for your dreams, but keep in mind that you might need a plan B and a dose of reality.

Random Observations About Amway?

Observation #1: In general, Amway IBOs are less successful in life than others. That is why they are more open to the business and why they can be convinced that there is a shortcut to retirement and perpetual wealth. When I was an IBO, I was not where I wanted to be financially, as I was younger and at the earlier stages (entry level) of my career. I would not be open to “options” right now, however, many people looking for more in life or a shortcut to retirement may be more susceptible to looking at options. It's just that the Amway opportunity, in my opinion, ir a poor option. 

Observation #2: The biggest zealots/supporters appear to have the smallest businesses. They talk the talk - but no evidence of walking the walk. Also, any discussion about their personal success with the business is limited and shrouded in secrecy or they will make vague references about their level of success. They will say that their incomes are not relevant to the discussion or will point out a copy of someone's check or show a picture of a diamond's mansion, but will never disclose real financials like a REAL business owner would.

Observation #3: The business has a bad reputation and cannot be marketed to the general public without some degree of deception. It’s why there are so many testimonials of people tricked into attending meetings (including myself). Being straight forward with information will likely get you a resounding “No thanks”.

Observation #4: It would appear that much upline teaching is not focused on actually running a profitable business, but dedication to the system. It’s why so many IBOs don’t seem to know what a profit loss statement is, and don’t bother keeping one themselves. It’s also why the content of many BSMs is to purchase more BSMs. At functions, they will tell you to attend more functions and buy more standing orders, and on standing orders, they will tell you to never quit and to attend more functions.

Observation #5: IBOs in general don’t seem to have planned out their retirement. They are convinced that the Amway opportunity will provide for them when they reach their retirement years. They put down people who are working jobs and investing for their futures. They feel that purchasing function tickets is their investment for retirement. While a fraction of 1% might make some significant money in Quixtar, the vast majority do not. The fact that the majority may not have put forth a Herculean effort is irrelevant in my opinion. The bottom line is that the vast majority will not make an income from this opportunity. To ignore this fact is burying your head in the sand.

The Sweat Shop?

To my loyal readers, I apologize for a lack of articles lately but I had some computer issues and writing new arctic;es off my iPhone is a challenge.  I should be more active going forward.

Re:  Sweat Shops;  Some big companies and some private entrepreneurs have been accused of being "sweat shop owners". This is when they exploit workers, often in foreign countries by having them work under harsh conditions and often for a very small wage. For example, a foreign operation may have a warehouse full of women and children working all day under poor conditions for a few bucks a day. The owners of these operations can rake in the dough as they save a ton of money in labor costs.

Some uplines operate just like sweat shop owners, but in many cases, they are worse then sweat shop owners because even exploited workers earn something. At the end of the month, they have a net gain, even if it might be small. In the case of many Amway IBOs, they spend money on Amway products, and uplines take the lion's share of the rebate/bonus that is generated by those sales, and then in turn, these same uplines try to get many of their downline to also become customers of their system of cds, books, voicemail and seminars or functions. In many, probably most cases, uplines will make just as much if not more income from the system, than from Amway.

These same upline will also teach firece loyalty to the system. Never miss a function. Make sacrifices to buy more books or cds, and make sure you are always looking for people to sponsor to add to the system. Joining the system almost guarantees that you will suffer a net loss in the Amway business. It is why I continue to write about what IBOs and prospects should look for when they are being recruited or indoctrinated into these systems. It is why there are so many defenders of Amway, most of whom are losing money, but think they are still successful because it is what upline teaches. 

I know most IBOs won't believe this, but I will say it anyway. IBOs on the system are probably worse off than sweat shop employees because they are paying their upline to do their work. At least sweat shop employees get a salary. Upline will teach you that it is an honor to drive them around, or to do tasks for them. Many platinums works are free doormen and ushers at meetings and functions. Upline benefits by maximizing profits from functions. It is pure downline exploitation and I hope eventually that more and more IBOs will recognize this.

What Do You Own?

 When someone buys a conventional business, they usually have a building or place of operations, inventory and equipment that’s needed to run their business.  Thus if your business doesn’t make it, you have tangible assets that can be liquidated if necessary.   Amway promoters lie and say that these businesses often my no profit for 5 years or more.  The fact is that their first sale likely makes a profit, although the initial investment might not be recovered right away.  

Conversely, Amway promoters like to claim that you can make money right away in Amway with the low overhead expenses.   So why don’t Amway business owners typically profit right away.  It’s because the diamonds fail to mention that they create overhead expenses in the form of standing orders and functions as well as other training materials.  These materials are the most common reason why businesses in Amway operate at a net loss.  

But unlike a conventional business, what do Amway business owners actually own?   They likely don’t carry any significant amounts of inventory, they likely don’t have a building or place if business nor do they typically have employees.   So what does an Amway business owner own?   All they have is a place on the pyramid with rights to a percentage of their downline volume which is useless when so many IBOs do nothing and quit.  

If an Amway business actually had equity and value, a diamond could easily sell a diamond business, make a fortune then go build another diamond business since they claim that anyone can do it.  The fact that this never happens should speak volumes about a diamond business but the diamonds are good at covering up the warts and shortcomings of Amway.   This is great food for thought.