The Churn?

 What goes completely unnoticed by many Amway folks and prospects is how the upline diamonds actually make their money.  They are told that you make money by purchasing your own Amway products and getting others to copy or do the same thing that you do.  While the diamonds might keep their qualifications by doing this, the real money is in selling tools and functions.  

Tools and functions have larger profit margins than Amway products and the rank and file IBOs do not participate in the compensation plan thus the profits exclusively belong to the diamonds and higher ups.  For example, a function can likely be run for a few dollars per head but the diamonds charge more than a hundred bucks for these functions.  I even hear that virtual functions are still being run at full price.  This is more evidence of the upline greed. 

It’s no secret that most IBOs don’t even last a year in Amway, most likely because of the futility of building an Amway business, along with financial losses associated with the business.  Thus the diamonds need to capitalize on what’s called “the churn”.  That simply means that you get people into Amway and get them plugged into the system of tools and functions. Thus the diamonds profit until these newbies quit.  In the meantime the focus is to keep bringing in people to replace the ones who quit.

Think about this.  If diamonds kept emerging from the system, they would be one share holders in the tool and function profits but if a diamond can just keep replacing quitters, the profits from tools and functions remains in their pockets exclusively and nobody is the wiser.  Sure you need a new diamond here and there so they can proclaim that the system works but overall, the success rate in Amway is miserable at best. 

So if you’re being prospects into Amway or are already an IBO, read this post again and really try to think about this with an open mind. Then you can see through the smoke and mirrors that the upline diamonds are using. 

p.s.  it’s almost Election Day.  Please go out and vote!  

Upline Control?

 One of the reasons I left Amway was because my sponsor started to get weird where he basically told me I needed to submit and to listen to counsel.  I thought it weird that the qualification for someone to counsel me was to Jon Amway before me and really no other reason. 

I recall attending a function where they say you need to be teachable or coachable but in reality what they want us for you to give up control of your life.  They actually advised IBOs to check upline for things like getting married, having kids, buying a car or buying a house.  It was allegedly because they wanted to help you in important life decisions but the reality is a stark difference. 

The reason upline is so concerned about your important life decisions is not because they actually care about you and your Amway business.  What they want is to make sure that you don’t spend your discretionary monies on non Amway things.   Put off that new car, buy more tools and functions. Put off having kids or or buying a house and buy more tools and functions.  

The main theme will always be to save your discretionary money for tools and functions.  In the end I never saw anyone put off any major purchase and got rewarded because of the money rolling in from Amway.  Upline advice always steers the rank and file into spending more and more on tools and functions. 

I even sat in a function where the diamond taught the audience how long you could put off paying your mortgage before foreclosure would take place.  They even taught how long you could put off paying your bills before the water or electric would get cut off because they literally want the shirt off your back.  

But upline wanting control of my life to the point where it got weird, it finally led me to quit my 4000 PV business.  I told all my downline what was going on and they all quit with me except 1or 2 very indoctrinated folks who believed the upline over me.  

In closing, an interesting but true story.  I bought my home in the year 2001.   I bought my house in Hawaii for $305,000.  The real estate agent who served me also knew my sponsor.  She advised my sponsor to buy a home as well.  My former sponsor said he won’t buy a home unless he can pay cash.  Well, my $305,000 home is now worth a million dollars and my former sponsor is still renting trying to save a million dollars to buy a home.  This is the kind of damage that upline can cause to their faithful down line.  Be careful with upline advice.  

The Diamond Lifestyle?

 Many Amway IBOs and prospects see the diamonds and think they are rock stars.  You are given the impression that these folks literally have money to burn and they just live in excessive luxury and have no worries in the world.  Life is just one long and luxurious vacation.  It makes sense because telling you a diamond really just lives a middle class lifestyle wouldn’t be very attractive.  

But some of you out there know the diamonds a bit. Even I got to go to the diamonds house as an IBO because I was an up and coming IBO.  Our diamond had a decent house but it wasn’t a mansion and it wasn’t anything extraordinary. The line they fed us was that the house was paid off and eventually, the diamond would move to a gated community. 

Well, fast forward 20+ years and my former diamond never winded up moving to a gated community and in fact, had at one time fallen out of diamond qualification and was an emerald.  I did hear that he re-qualified as diamond but instead of the gated community in Hawaii, I had heard that the diamond moved to Washington state. Interesting as he used to proclaim that he absolutely loved the ocean. 

So do diamonds live happily ever after with unlimited cash?  It is my informed opinion that diamonds (not all) live in debt like much of the rest of the US.  Diamond income is limited and living a life of excess luxury is very expensive.  Amway reports that  Q12 diamond makes around $600k but a Q12 diamond is very rare.  The average non Q12 diamond last reported by Amway earns about $150k plus sone income from tools and functions.  

A nice income but paying off mansions and Sports cars in cash is a stretch.  I’m not even sure diamonds and their families can afford to fly first class everywhere they go unless they are very tenured and established diamonds.   What many people don’t know is that a diamonds monthly income can be quite small as a significant portion of a diamonds income is made in the form of an annual bonus. 

Just doing the math and using common sense about lifestyles easily shows that a diamond can’t live the diamond lifestyle they often portray unless they are living in debt.  It just makes mathematical sense. 

Your Amway Education?

 One of the really funny things I heard was how your Amway education is like going to college but better because Amway will make you rich but college will give you a job.  Now on the surface that might make sense but looking at it analytically, it is utter BS.  That’s the thing about Amway teaching, it can sound logical but in the end the teaching is just self serving advice to make more money for upline.  

First off, going to college might cost you money but it is a bonafide fact that college graduates earn more money than non college graduates.  So in the end, you may have college loans but over time, the investment will more than pay for itself.  In contrast, most IBOs make nothing or end up losing money.  In other words, the investment into an Amway education never pays off. 

Also, a college education may find you working out of your field of study but a degree shows an ability to learn and to have sone broad degree of learning because that’s how college works.  An Amway education teaches you what exactly?  How to trick people into attending meetings? To answer a question with a question?   What tangible skills does one actually learn in Amway?  

IMO, there are little to no measurable tangible skills learned in Amway except maybe to think positive.  They certainly don’t teach you to run a business or how to actually succeed in Amway.  The teachings are usually rah rah and motivational in nature rather than substantive.  But what most don’t see it because they are blinded with the ideas of trying to get rich in 2-5 years.  They want a shortcut to retirement.  Now I don’t know if such a shortcut exists but I know that for nearly 100% of those who try, Amway doesn’t deliver.  And truth be told, nowhere in Amway’s literature does it advertise any of this. This is upline propaganda.  

You might learn a few things from an Amway education but more than likely, you aren’t going to get anywhere near wealthy or early retirement by running an Amway business for 2-5 years.  

Duplication?

 My upline diamond used to say that the key to success is Amway is duplication, or copying.  He would use an analogy of being in grade school and copying someone else’s answers and that if you can master that one skill, you will be successful in Amway.  Even things downline IBOs do should be duplicatable is what upline would day, meaning others need to be able to copy it. 

Doesn’t that sound sweet and simple.  Just copy as if you’re in school and looking over the shoulder of the class brainiac. Very easy and straightforward right?  But obviously that concept doesn’t work.  If it did, there would be a lot of success constantly churning from the rank and file IBOs.  But instead defat we see is a revolving door of people coming and going (quitting) without making a net profit or losing money, generally from business expenses such as tools and functions.  

And it’s no wonder that duplication doesn’t work in real life because the system is too severely flawed.  You are buying and/or selling products that are relatively unknown and generic in nature but being sold at premium prices.  Now that’s not to say all Amway products are bad or or bad value but overall, you can find better value if you shop at Costco or WalMart.   It’s pretty hard to dispute that unless you’re a fully dedicated and indoctrinated IBO.  

In general, most upline teaching has “core” steps for IBOs to follow and while they are not complicated, they are difficult to follow.  In particular, finding people agreeable to see the plan or to sell products to are difficult tasks and you can’t just duplicate yourself to success.  But what IBOs can do is listen to audios, read books, buy their defacto 100 PV quota, and attend all meetings and functions.  

Sadly, the steps that are easily copied or duplicated are the ones that cost IBOs money and the steps that are vital to growth such as selling products and showing the plan are the ones that are nearly impossible to duplicate. And that in a nutshell is why the vast majority of IBOs make nothing or lose money in the Amway business opportunity. And that is my well informed opinion.  

Amway Is Simple?

 Another one of the lines pitched by upline was how Amway is simple. Some upline used to say that Amway is so easy that a dog could become a direct distributor.  But most of the diamonds would proclaim that Amway is simple but not necessarily “easy”.  What does that mean?  

Simple means that anyone can do it. Like a child’s puzzle, it’s very basic and simple but for a child it may not be “easy”.  When you break down the Amway business, it’s buy some products, sell some products, and sponsor downline.  That’s really how “simple” Amway is.  Would you agree that buying, selling and sponsoring down line is simple?  I mean it’s not that complicated at least on the surface of things.  

So if Amway is simple as upline and the diamonds say, why in the world do you need an endless supply of tools and functions?  I don’t believe that an IBO doesn’t need any training or coaching but for a business that’s supposed to be “simple”, why would you need all that training?  

I recall a conversation with my upline who at the time was pushing tapes ( I was an IBO in the 90’s) hard.  I asked what happens if you own all of the tapes on the listing?  He told me that you keep buying them because tapes sponsor people.  For me that was a WTF moment.  I have never have heard of anyone who heard a tape who decided to get sponsored.   IMO it was just a shameless ploy to sell more tools. 

I have heard that IBOs now give downline some audios/cds and even pay for some downline to attend functions but in the end, that just makes losses worse for dedicated IBOs.  They are squeezing more money from the faithful Amway believers until the upline can convince the prospects and down line to become “real business owners” who pay for their own expenses.  It’s no big deal for the diamonds who sluff off the expense on their downline who have downline. 

It’s sad that this practice continues to roll along.  Beware if you are a prospect or current IBO.  

The Partner Store Lies?

 Many Amway folks who recruit like to throw out big name companies that Amway allegedly “partners” with such as Disney, Nike and some others.  Now typically I see a partnership as a two way street, meaning you help each other. But in Amway’s case, the street seems to be one way.  

What I mean is that Amway IBOs sell stuff from partner stores such as Disney or Nike stuff but Nike or Disney doesn’t sell Amway stuff.  Basically the partnership is just Amway IBOs selling stuff for Nike or Disney and getting Amway PV/BV for it.  That’s pretty much the extent of it.  

But Amway IBOs like to toss around the big named companies as if it brings them some special credibility or something when the reality is that they are just sales people who have access to certain products that are listed in the catalogs.  It’s a no brained for companies like Disney or Nike because nothing is required of them but to pay commissions for sales and basically nothing else.  Since Amway has a large sales force, the “partner” companies have nothing to lose.  

What IBOs don’t mention in their partner store reputations us that Amway once partnered with MCI/Worldcom and Enron, which were of questionable reputations.  I’ve heard IBOs brag about how Amway carefully vets their partners, but well, there you have it.  

So if you get pitched by an Amway IBO trying to sell you on the partner stores, keep in mind what you’ve seen here.  That the partner stores are just hype and not a lot of substance.  Also keep in mind that the middleman commissions almost force the partner stores into charging more than buying direct from the source.  Good luck if you read this and decide to join Amway anyway.