The Real Scam?

 A lot of people come and go in Amway, but many of those who come and go don't even notice the scam. They get sold on what they believe is a business opportunity that they can make some money at, or at the very least save some money on products that they would normally buy anyway. If they do it right, they can possibly make some "real" money and with some had work, you can build it right and have the option one day of walking away from Amway and living off ongoing residual income from Amway. It sounds reasonable and therein lies the scam.

For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam. Amway's distributor force turns over about 50% each year. How can you build a residual income empire when half of your downline quits each year? I believe Amway diamonds trade their 9-5 jobs for the night shift. They work at night and into the morning hours because they are working to replace people who quit and to support downline platinums who might struggle or fail to re-qualify for that level. If upline says they are working for the love of their downline, I call BS on that. If walking away and enjoying life was an option, why hasn't anyone chosen it?

Now you could argue that a diamond's "work" isn't that bad, and they aren't reporting to a boss. And that would be true, but I imagine the pressure of churning people in and out to keep qualifying can be stressful in itself. If you live on an island like me, you can eventually have trouble finding new people to work with. In 1997 or so, there were a bunch of diamonds in Hawaii and they all moved to the mainland. Now I"m not sure why but my upline diamond was Harimoto, who loved the ocean and the beaches. Yet he moved to Washington state. I believe they needed new grounds to mine, just like gold miners.

The next part of the scam is how IBOs will tell you about Amway's generous money back guarantee. 100% they'll tell you. What they don't tell you is that the guarantee is only on some of the products and the signup fee. The cds, books, voicemail and functions are not sold or run by Amway. And these expenses can be very significant over a period of time. IBOs and prospects need to know this. You can lose thousands and get back pennies on the dollar asking for a refund on the sign up fee and perhaps a few products. Another piece of the scam.

Also, IBOs and prospects are often shown only the very best-case scenario (such as going diamond) but not told that your chance of being struck by lightning is much higher than your chance of going diamond, even though going diamond is not a random event. A real life and likely scenario is getting in and trying hard for a while, and then quitting with some business losses. At least if you know this and still try anyway, you will have done so with full disclosure.

Lastly, it's insidious in my opinion, for upline to tell you to trust them and to do as they say, and then turn around and tell IBOs that failure is their responsibility. That they didn't work hard enough or do thing just right. That sure isn't what they are preaching when recruiting you into the business. They are saying how sharp you are and how you're likely to tear up the business. But it's just another facet of the scam. I've outlined the parts of the opportunity that I believe are scams, but I'm sure it's not limited to my point of view.

Good luck if you read this and join anyway.

The Amway Phenomena?

 http://scamadvocates.com/164-Amway.html

Other November 27 2011

"""I have read all of these posts. Interesting that everyone who supports Amway cannot spell very well. Lots of typos and grammatical errors in here by those who jump up and down reciting Amway's many virtues. It is a scam and a groupthink phenomenon of staggering proportions. From a psychological perspective, Amway does its best to separate people from those who would challenge its legitimacy and operations. This is not unlike how Hitler or any other leader would silence opponents or dissidents by having them "removed" from the equation. Same thing goes here, Amway teaches people to ignore and remove obstacles and people who challenge the system, even if said challenges are completely rational and offered by people with the IBO's best interest in mind. It hits IBO's in soft spots for family, friends, and freedom (the 3 F's), and it entices them to focus on emotional reasoning rather than very cognitive-based, rational dissection of information.

Amway IBO's are taught emotionalism, not rationalism. From a business perspective, it is a farce. IBO's are no entrepreneurs, as they wear the collars of their uplines. Over and over, I have been told to do as my uplines say. What if my upline is a total moron and I have a law degree and an MBA?? I'm supposed to follow these uplines?? According to the system, yes, the uplines' words are paramount. So no, IBO's are not entrepreneurs and do not gain any real experience. IBO is a fancy name for distributor, pure and simple.

I had the opportunity to meet a number of "diamonds" and "emeralds" recently, all of whom had either left the business to get real jobs or were still struggling bringing in about $30,000 per year. Many of them are posting massive losses, and by the way, the IRS does not consider pro-suming OR tickets to a convention (to hear Yager scream at you) to be business expenses. Good luck trying to recover those losses. It is a pyramid scheme simply because mathematically and considering the law of averages, a downline cannot really earn more than his upline. It just doesn't happen - it's a nice idea, but it doesn't happen. I worked through multiple scenarios with a friend, trying to see how I could out-earn my upline, and we found several variables that would keep that from happening.

Finally, on a personal level, this Amway monkey business cost me a great friendship, an IBO who decided that taking a chance on some crazy dream was more important than those who loved him most. I think he will continue prospecting and pushing "the plan" until there isn't anyone left. If you know someone in Amway or who is thinking seriously about it, you need to realize that they will soon be lost. Amway people are very much like crack users (very similar psychopathology, actually), and they will choose Amway over you, their family, their friends, and anything that gets in the way."""

Sustainability?

 One thing that is very clear to me after having researched and blogged about the subject of Amway and the Amway Motivational Organizations (AMOs) is that most (most meaning the vast majority) Amway businesses are not sustainable. It is why I believe there is such a high dropout rate and why there are so many people who have formed a bad opinion about Amway. Now a real business relies on income from customers. The customers purchase goods and services from a business, and if they like it and/or find value in the goods and services, they become repeat customers and as long as there continues to be value in the goods and services, sales are made.  A lack of value also means a lack of repeat customers.

In the Amway, business, there appears to be a "perceived" value to the goods and services. In many groups (such as BWW or WWDB), the perceived value is that the purchase and use of Amway products will lead to untold wealth and the possibility of early retirement. Sadly, for most IBOs, the reality sets and the IBOs end up quitting, and more often than not, the products that had great value and price to an IBO, suddenly becomes expensive and irrelevant to non-IBOs. If former IBOs had continued to buy Amway products, the company growth would be significant even with the high attrition rate. It appears that the dreams and aspirations of a new IBO are directly related to their dedication to Amway products.

But why aren't most Amway businesses sustainable? Isn't it simple? Do your 100 PV and get others to do the same? In my opinion, this is what has destroyed the Amway reputation. All too many IBOs in the past have done all kinds of crazy and in some cases, deceitful or unethical things in an attempt to recruit other IBOs. What probably in mentioned, but not a meaningful way is the absolute need for IBOs to get customers, and plenty of them. Even groups that may teach some need to get customers do not advise IBOs focus primarily on customers. They still advise many/most IBOs to sponsor downline. The lack of customers means that the diamond wealth seen on stage at functions comes primarily from IBO purchases of Amway goods and business support materials (standing order, voicemail and functions)

But you may wonder why a diamond appears so successful? It's because a diamond business has many customers. All downline who purchases voicemail, standing orders, books and functions are all customers of the diamonds. The are all generally repeat customers as well. A diamond or higher may have hundreds to even thousands of downline who purchase support materials (on the diamond's advice). That is why in many cases, a diamond will seem successful, because they have all their downline as customers or potential customers. However, with the apparent illusion of a diamond lifestyle, even that diamond income may not be enough to sustain the "diamond lifestyle". It appears that the downturn of growth in north America may have affected the north American diamonds (bankruptcy, foreclosures, etc).

And if a diamond may not have enough customers to sustain their business and lifestyle, what chance do you have with little or no downline, and little sales to people who are not IBOs? I suspect if you're reading this, you already know the answer.

Integrity?

 I used to follow the blog of a WWDB IBO named "Shaun". He used to run a blog called "Expeditions Of Truth" http://expeditionoftruths.com/..  The blog is not running as Shaun has now quit Amway (imagine that?  He swore he would be a double eagle ruby making will over 100k.  What could possibly go wrong?)  In typical fashion, Shaun did not allow opposing views on his blog.

He seemed to think that not only is he in business with people full of integrity, but he also thought that he was going to retire in November 2011. Is this now May 2024?  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, let's 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, a triple diamond, was in chapter 7 bankruptcy proceedings some years ago.  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?    Is that integrity?

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 an Amway 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 say you Shaun Guthrie of WWDB? 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 Susan?

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.

Recruiting?

 What does the HR department is a company do? Recruit? That's what I was told when a diamond speaker was trying to downplay the fact that so many Amway IBOs are focused on recruiting. If you've ever been accosted by a zealous and probably new Amway IBO, you'll probably know what I'm talking about. Newly sponsored IBOs often have the motivation and zeal to try to recruit anyone and everyone they know. They are trying to achieve what upline has told them is needed to accomplish their "dreams". Afterall, nobody is going diamond or even platinum without an army of downline right?

But upon closer inspection, you can see the real problem. I mean if I as an IBO could simply sell tons of products for a profit, then my focus doesn't have to be on recruiting, but simply on sales. But over the years, I've unsuccessfully challenged IBOs and Amway defenders to name 1 or 2 people who has sizable Amway businesses sustained primarily by sales and not by recruiting an army. Of course, nobody has even been able to give me an answer. And that's because Amway products are generic in nature but premium in prices. It makes it a tough sell when your friends and family can get far more product and value at a retailer's outlet at a fraction of the cost of Amway products. Try doing an open minded price comparison and you'll easily see what I mean.

For these reasons, upline developed the concept of buy from yourself and get others to do the same. People generally do not like selling things anyway, so it makes sense that a concept of buying from your own store makes the Amway business seem more palatable to the masses. Of course, the problem with this method is that you end up focusing on recruiting and you've turned Amway into a pyramid scheme. Look at the somewhat recent FTC vs. Herbalife. They found that a majority of sales were not made to actual customers but appeared to be made to the distributors themselves. Herbalife is required to tracked these sales now and it's yet to be seen how this FTC injunction will impact Herbalife long term.

But if you're a prospect or an IBO and focused on recruiting, then you are likely doing so because you too, are unable to sell Amway products just like all the critics claim. Oh, I've heard stories of people having hordes of customers, but nobody has ever shown evidence of such.  Nobody can answer why the "diamonds" seemingly have large groups of downline "buying for themselves". Like the mysterious "Amway retirees" that no one can identify, nobody has been able to identify a few successful and sustainable Amway businesses that relies on product sales primarily. It's because the majority of groups are basically focused on recruiting and running product pyramid schemes.

Level Playing Field?

 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 not 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" again and build a diamond business.

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 2016 how to build the business in a way to address people in 2016, and the fact that the business is mostly internet based as opposed to the old days, not to mention the advance of social media, text messaging and other modern forms of communication.

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 diamond ship 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, WWDB had a commitment for personal growth amongst the diamonds and above. I do not believe much fruit was grown out of that effort. The diamonds had committed to duplicating their groups to prove it could be done. Not a single one of them, as far as I know, advanced to a significantly higher level (i.e. diamond to double diamond).

The Impossible Dream?

 Every year, tens of millions of kids across the US have dreams of playing sports. Some dream of playing professionally, some dream of playing at the collegiate level, some may have dreams of dazzling their high school peers. And this can apply to just about any sport, be it baseball, football, hockey, basketball, golf or whatever endeavor you can think of. As you progress to each of the next higher levels, the number of participants decrease. There are only so many professional teams, and so many college teams, while there are scores of high school teams all across the country. As each level gets higher, it is likely that better physical attributes and greater skills are needed in order to move on.  opportunity and how the higher levels are like the professionals and the rank and file are like the high schoolers. While I agree that there's only limited space at the higher levels, i think it's extremely important to note why the masses do not achieve the highest levels. In sports, you would need to have the motivation, the physical gifts, as well as the skills to achieve and excel at the highest level. Thus, people who are small in stature likely won't be candidates for the NFL even with a lot of motivation. Someone under 6' tall might have great difficulty in getting a job in the NBA. Of course there are always exceptions, but those exceptions are made up by perhaps, incredible "other" skills or leadership. Some athletes have a knack for being in the right place at the right time, or an intangible.  

So, what does this have to do with Amway? The connection is the massive amounts of Amway IBOs who never achieve even the breakeven point. They may come into the program with dreams of financial freedom, or making enough to have a stay home wife, etc. Why do so few achieve even the lowest levels? In my opinion, the Amway business has too many barriers that prevent IBOs from succeeding. These barriers make it nearly impossible for anyone to reach the higher levels. These barriers include but are not limited to high prices that make many products a tough sell. Then you have the optional but vital training and functions that normally drain whatever profit the lower level IBOs make. Even someone at 2500 or 4000 PV will net a loss if they need to travel by air to functions. You can also factor in some of the zany things previous IBOs have done such as tricking people into attending meetings, or not being accountable to downline, or by messing with your downline's money (bouncing checks).  

In the end, the masses of IBOs just do not possess the ability to overcome these barriers that can stop the charge of a bull elephant. It is why so many IBOs try hard and achieve nothing. While much effort may be expended, it looks as if these folks did nothing and quit. The reality is that most people who sign up were highly motivated but more likely found an impossible barrier and decided to do something else. I know of many former IBOs who went onto succeed in life after Amway. Many do not complain or voice complaints because they were involved in Amway with family and friends.  

So, in Amway and in pro sports, there are masses who want to achieve their dreams. In both cases, a tiny percentage might achieve the top levels. The difference is that athletes know that their chances are small. IBOs are often misled into thinking that everyone can achieve diamond and residual income, which is a myth. Also in pro sports, there is no scam where people have a proven training system that will ensure success if you work hard. In pro sports, it is proven that the elite make millions. Whereas Amway diamonds seem to shroud their success in secrecy, showing pictures of mansions to show off success. Also, athletes may not make the pros, but may have benefited by getting a free college education. There aren't any stories of success in Amway for those who don't "make it", as far as I know. Are you chasing an impossible dream?