Diamonds Are Forever?

 I've seen some interesting discussion about how achieving a diamond pin is like winning a gold medal. That you don't get it taken away from you later even if you don't qualify anymore. The discussion also flowed as to where they mentioned that former US President Jimmy Carter is still addressed as Mr. President. Or that someone with a Superbowl ring can be addressed as a Superbowl champion. While I agree with that to some degree, I think the issue of diamond or former diamond is significant and different from former President Carter or a former Superbowl Champion. Terry Bradshaw or Joe Montana don't parade around as if they just won the Superbowl last year.

The diamond pin is a significant achievement for sure. Seems that recently, it's even harder to achieve in North America. I don't know of more than a few new diamonds emerging in the last ten years or so in the US. But if say a diamond qualified in 1988 and never qualified again, how would you as an IBO feel about paying to see this diamond speak function after function and how many would continue to buy standing orders from a guy who may have achieved diamond 20 years ago and never again? Would the audiences be "fired up" to see these speakers? I find this ironic also, because many Amway defenders like to criticize Amway critics for having an outdated experience. Well, conversely, a one time diamond would be basically the same thing. If not then Joecool should command the respect of a 4000 PV Eagle since that was my highest level.

I actually have no issue with Amway allowing the achiever to carry their highest pin as a recognized achievement, but I do believe that those who use their former pin status to exploit and profit from new IBOs and prospects should be stopped. I know I would not have been so excited attending a function where the keynote speaker went diamond for 6 months a decade ago and was no longer qualified. Else, by upline's definition, he will teach me to go diamond and fall apart? I believe there are fewer North American diamonds now than ten years ago. Some diamonds resigned and some outright quit. So much for residual/passive income. Obviously if these things existed, then nobody would quit or walk away from residual income.

BTW, a recent article on an Amway Corporate website says this about passive income:
"Passive income is a term we do not permit distributors to use and it’s not a term the Corporation uses. In our business, there is no such thing as doing no work, and expecting money to still come in.” Link:
http://blogs.amway.com/answers/2010/11/02/unwelcome-words/#comments

Still think there's a free ride at the end of the tunnel?

The Diamond Actors?

 In my opinion, Amway diamonds are nothing more than actors, with some of them bad actors.. They portray a role and while they might be envied by their downline, when the lights are turned off, what remains? I believe most diamonds are simply middle-class, possibly upper middle-class people portraying lifestyles of the rich and famous. We could debate whether or not a diamond has an easy job. Heck, I could concede that speaking at functions can be better than a 9-5 job, but the volatility of an Amway business can make a diamond live under greater stress than someone with a regular and predictable job.

My former diamond used to live in an ordinary middle-class neighborhood and he told the group that he was buying a property in an exclusive gated community and was going to build himself a nice home. He said his home would be on a hill right above a nice beach where he could enjoy his hobby of spearfishing and the ocean. I don't know if he ever built that home but last I heard, he is living in the State of Washington. Makes me wonder why he would move there when he was allegedly building his dream home in Hawaii near one of his favorite beaches. (Maybe the cost of living is cheaper there?)

Think of the diamond this way. It is a fact that most diamonds are not Q12 (which means they have diamond qualifications for all 12 months of Amway's fiscal year). A Q12 diamond averages about $600,000 from Amway (source: Amway.com) but only a small percentage of diamonds are Q12. The other average non Q12 diamonds average about $150,000 a year and they augment that income with tools scam income. So an average diamond might make in the range of $250,000. You may think they are "rich" but after business expenses are considered, plus taxes and family medical and dental insurance, and other miscellaneous business expenses, a diamond is not financially capable of buying homes in cash, having exclusive golf club memberships and buying ferraris in cash. What is likely is that a diamond lives a middle class lifestyle while acting like they are rich. I had a conversation with a former emerald who told me that most of her emerald income (or diamond for that matter) comes in the form of an annual bonus so her monthly income was relatively small.

There might be diamonds who are wealthy. But if they truly are, it is because they are at a level higher than diamond and they are also very likely to have income from sources other than Amway. We know that back in 2009, Greg Duncan a WWDB triple diamond filed for chapter 7 bankruptcy in Montana and it is public record. He had homes foreclosed. This man stood on stage when I was an IBO and told the audience that anyone who makes a loan is "stupid". I wonder how Mr. Duncan felt when he reneged on his multiple home loans, despite having a triple diamond income from Amway of about $40,000 a month?   By the way, wouldn't most IBOs and other think a triple diamond would make much more than $40 a month?  A great income but you aren't buying mansions in cash or flying on your own private jet with that kind of income.

For these reasons, I say Amway diamonds are just actors. Some better than others, but in the end, when the lights and shut off, they are not much better off financially than someone with a good paying job. In fact, I have read in several places that truly rich people don't show off their wealth. That is food for thought isn't it?

Bad Leaders?

 Over the many years of Amway's existence, their reputation in the US and Canada has tanked. And it's not due to Amway the corporation, but rather Amway IBO leaders who teach and condone unethical behavior. Of course, I don't know of any significant measures that Amway has taken to discipline some of their wayward IBOs, but that's another story. However, it's apparent to me that some Amway leaders really are just not good people. They will do and say anything even lie to recruits to make a buck off them. They will sell false hopes and dreams to make their living.

During my blogging career, I've seen young people who were discouraged from attending college so they could build an Amway business. I've personally seen people go bankrupt and lose their homes because they followed the advice of their all knowing uplines. Sure, people have some responsibility for their actions but I feel as if some of these kinds of actions by some IBOs and IBO leaders is predatory, and focuses on people who can least afford to funnel money into the business and the leech teaching systems such as WWDB or Network 21. Downlines are taught to trust in their upline and to follow their advice, and to make it worse, the uplines then blame the IBOs for any failures.

I've seen ridiculous product claims such as people claiming that bottled water could cure ills and make you athletically superior. Of course this water costs about $50 a case when you could buy 10 cases of water at WalMart for the same price. They claim superiority in their vitamins without unbiased scientific evidence to support their claims. Perhaps that is why the Amway vitamins seemingly are consumed nearly exclusively by IBOs themselves. Nobody except IBOs buy the stories and the prices of Amway diamonds.

Despite claims by Amway supporters and IBOs that things are changing in Amway for the better, there is plenty of evidence that nothing has changed. Outrageous income claims. I thought the Dateline show exposed some crazy stuff with an IBO leader claiming that people could earn $250K per year with a part time effort, but then my friend Rocket finds this gem with an IBOAI member and crown ambassador in WWDB/Amway claiming you can make hundreds of thousands of dollars a month: http://rocketsrants.blogspot.com/2011/09/amway-guys-they-sure-say-stuff.html

I wonder if Brad Duncan himself even makes that kind of money. Ironically, his triple diamond brother (Greg) wasn't even close to that when his bankruptcy papers were exposed a few years ago.

So to Amway prospects and apologists, the Amway corporation itself may be perfectly legal and clean, but the root of many evils comes from Amway uplines and AMO leaders. It is for this very reason that many get turned off just at the mention of the Amway name. Amway can stop them, but will they?

Sponsoring New Downline?

 When I was an Amway IBO, I often found myself buying more goods than I needed because a single person simply has no practical use for 100 PV worth of Amway goods on a consistent month to month basis, save for eating double x for breakfast lunch and dinner or something like that. In general, Amway's prices are higher than many retailers, because the cost of the IBO bonus is built into the price of their goods. Probably more than 30% additional markup is needed for Amway to cover all of the IBO bonuses paid to layers upon layers of upline and downline.

Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make a retail sales income. There's some documentation that Amway sells only about 4% of their goods IBOs (Http://mlmtheamericandreammadenightmare.blogspot.com/2012/03/chairman-and-ceo-of-amway-have.html). This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more. You basically can't build a sustainable and profitable Amway business without downline.

But sponsoring new downline is a big problem. Most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many others have left comments on blogs and forums expressing the same experiences. Others were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard to find someone in the US who has not experienced or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.

You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.

IBO Integrity?

 I used to follow the blog of a former WWDB IBO named "Shaun". He runs the blog called "Expeditions Of Truth" http://expeditionoftruths.com/ It sure looks like Shaun has quit Amway and has disappeared. His blog is no longer running, and his other twitter accounts indicate no sign of Amway.  He used to be very active and often spoke about how he was going to retire his wife.  A noble gesture and I wish him no ill will.  But it clearly illustrates how nice and hard working people can be sucked into the Amway vortex until they catch on a realize that it doesn't work as advertised.

He seemed to think that not only is he in business with people full of integrity, he also thought that he was going to retire in November 2011. Is this now July 2023? While I think doing business with people of integrity is a good thing, I also know of many successful people in business who are ruthless. So are Amway and in particular, WWDB people full of integrity or are they just as ruthless as other businesspeople? Does it matter? In my opinion, it doesn't matter except for the fact that WWDB people seem to think that they have integrity filled leaders.

Well, lets look at some of these leaders. Back in the 1990's, the current batch of WWDB leaders swore that nobody made a profit on tools. Nobody knew the truth at the time. We now know that this was a lie. Is this integrity? We know that Greg Duncan (triple diamond) was in chapter 7 bankruptcy proceedings. Not paying for your obligations is integrity? We know that Greg Duncan and David Shores had homes foreclosed (Public information). Is that a move filled with integrity? With the tons of money Duncan and Shores make, couldn't they have made an effort to pay off their debts?

If you look at a blog linked to this one "Rocket's Rants", there's a youtube video of "crown" Brad Duncan telling rank and file IBOs that they can make "hundreds of thousands of dollars" a month. First of all, I wonder if Brad Duncan has achieved this himself, let alone any others? Even if someone had achieved it, it would be illegal or unethical to portray that kind of success as achievable to a prospect.

Brad Wolgamott used to talk about how WWDB had a low divorce rate. Is it full on integrity for WWDB leaders to separate or divorce when they talk about integrity and how Amway and WWDB saves marriages? What about Dean Kosage? Another divorcee? Are they full of integrity?  What about Howie Danzik whose website doesn't mention that he was once married to Susan? Is it integrity to say you built the business as a single when Howie previously built the business with his former wife?  In fact I attended a Howie and Susan Danzik function.  Howie is now married to Teresa and apparently re-wrote history to exclude Susan as if she never existed.

Amway's owner Rich DeVos acknowledged that the "tools" were likely a pyramid scam and Amway did nothing after sales dropped following some attempts to clean it up. Is that an integrity move? I don't know, but it sure seems as if WWDB and Amway have issues where integrity is concerned.

The "Buy From Yourself" Nonsense?

 As an IBO, our group was often told that selling products were not that important. Just buy from yourself and get others to do the same. When prospecting, you ask if someone likes selling and if they say no, you say "great, this business is perfect for you". Or if someone says they like selling, you say "great, this business is perfect for your". Keep in mind that a business exists to sell a product or service for a profit. I believe Amway folks forget about this fact.

People naturally do not like selling stuff to people, thus the adaptation to being your own best customer or buying from your own store. While it's fine to support your own business, it is not true that a McDonald's owner would never eat at a Burger King or other sill claims. Do you believe that a McDonald's owner would only eat food sold at his own restaurant? I guarantee you that isn't true. I know someone who owns a very popular pizza franchise and she says she never eats at her own restaurant because she's sick of eating pizza. You make money selling pizza so you can have other options.

Another things that Amway IBOs are probably not aware of is that buying from yourself and getting others to do the same without real sales to actual customers is running a illegal pyramid scheme. Another MLM company Herbalife, was investigated by the FTC and while they were not shut down, they were fined and had to change their operations because the FTC found that they lacked sales to legitimate customers. Herbalife is now forced to track retail sales with a compliance monitor watching their moves. There are stories of Herbalifers trying to fudge sales and Herbalife higher ups encouraging people to sign up as preferred customers instead of business builders. That suggests to me that Herbalife is basically admitting they are a sham. If they had legitimate demand, they would run a campaign to recruit more business builders who would in turn, sell products to customers who want their products.

So Amway IBOs, are a majority of your PV sales to yourself or to customers? Are your customers your family anf friends who are somewhat reluctantly buying products from you, if at all? If you are just buying and using your own products, you are actually not entitled to an Amway performance bonus. On the bright side, it seems that Amway just ignores this requirement and pays bonuses anyway. But without legitimate demand, sales and revenues dry up when the markets begin to get saturated. Amway's sales hit a peak at 11.8 billion in 2014 and has gone into a downward spiral since. In 2016, Amway sales dropped 7% to 8.8 billion which was preceded by a dounble digit drop in 2015.

With sales and revenues down, that can only mean there are less sales and volume, therefore there are less Platinums and diamonds that can be supported. But Amway prospects will never know because once you earn diamond recognition, Amway never updates it. Once a diamond, always a diamond, if you will. Thus the leaders that are Bing worshipped on stage might not even be diamonds anymore.

In the end, I write this post to give you food for thought. Too many prospects and IBOs are not aware of these issues but they certainly should be,

Joecool Is Cruising?

Joecool is going on a European cruise this week so I'll be gone for at least a week before any new articles will be posted.  In the meantime, enjoy this reprinted article I posted in 2013:

 When I was an IBO, I often found myself buying more goods than I needed because a single person simply has no use for 100 PV worth of Amway goods on a consistent month to month basis, save for eating double x for breakfast or something. In general, Amway's prices are higher than many retailers, because the cost of the IBO bonus is built into the price of their goods. Probably more than 30% additional markup is needed for Amway to cover all of the IBO bonuses paid to layers upon layers of upline and downline.

Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make an income. There's some documentation that Amway sells only about 4% of their goods IBOs(Http://mlmtheamericandreammadenightmare.blogspot.com/2012/03/chairman-and-ceo-of-amway-have.html). This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more. You basically can't build a sustainable and profitable Amway business without downline.

But sponsoring is a big problem. Most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many many others have left comments on blogs expressing the same experiences. Other were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard ti find someone in the US who has not experienced or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.

You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.