Amway Global - Why IBOs Fail

It is not secret that many IBOs fail in the Amway business opportunity. The retention rate is poor, and frankly, the compensation for IBOs usually won't even cover the monthly cost of the website fees. So uplines should figure out why so many downline fail and then address it instead of advising IBOs to never quit and keep buying more tools. Based on what I experienced, I would have to say my uplines (who are still around today) didn't care about their downline, which is why we received bad advice such as IBOs had to keep paying for standing orders if your downlines quit.

But IBO failure goes beyond this. In order to sustain a business, you need to establish and build a customer base. Amway's own figures suggest that there is about 1 cutomer for every 4 IBOs. Less than 4% of Amway goods are sold to non IBOs. How can any business sustain itself in that manner?

Many IBOs will cite concentration and quality as the reason for Amway's premium prices. But it is apparent that it is primarily IBOs who see things this way. The public more likely sees Amway products as generic with premium prices. Ironically, IBOs seem to shift to the viewpoint of the general public once they stop being IBOs. Seem that IBOs don't mind premium prices when they believe Amway will allow them to retire early and walk the beaches of the world, but when that dream ends, so does product loyalty.

Hard work and effort doesn't necessarily equate success in Amway and I will explain. Say I was selling Iphones for $50. People would be flocking to me to buy one. I would probably run out of the Iphones before I ran out of customers. The price is great and thus the demand exceeds the supply. Now say I was selling regular cell phones and charging $1,000 for a regular run of the mill cell phone. I may sell one, but more likely my only sale will be to myself as a representative of the cell phone company. There would be no demand, only perhaps an artifical demand by the purchase of $1000 cell phones by the cell phone retailers. This is exactly what Amway IBOs, or sales people are experiencing. People in general don't care about the phytonutrients in double x. They see the whopping price and they buy vitamins at Walmart. As a side note, does the inclusion of phyotnutrients in a vitamin drive up the cost that much? I suspect not.

In any case, I believe this is why most IBOs fail. There are too many disadvantages to overcome.

Amway Works?

The business works if you work it! That's what many Amway enthusiats will claim. I do not believe that is true and I will further explain in this post. Many IBOs who claim that the business works are usually new and are unable to show any evidence that the business works, except perhaps to show a photocopied check from an upline diamond or the like.

Let me make a disclaimer that some people do make significant money from Amway, but most of those folks are tenured diamonds who are almost in an exclusive club. There is only a short list of new diamonds that I know of in the US, and I have heard that even these new diamonds may have had legs in other countries. It would seem that Amway is not growing in the US and Canada. Also of note, Amway did not release figures that are seperate between Amway North America and the rest of their overseas operations.

Ok, so Amway enthusiasts claim that the business works if you work it. Business in its simplest form is selling a product or service for a profit. Yet many many IBOs spend so much of their time doing other things, as advised by their upline "mentors" who sell them training materials that take up much of their valuable time. Listening to tapes/cds, attending functions, reading books, and other training activities not only costs the IBO money, but takes up valuable time in non -income producing activities. Nobody makes sales reading books or attending seminars.
Inviting people to see "the plan" may be a way to help generate volume but with Amway's reputation, even this is a hit and (mostly) miss activity.

Yet IBOs spend almost all of their time doing ese activities (the work) when they could be better off not getting the training and focusing on selling the Amway products and services. Even that comes with a handicap as Amway products as a whole, costs a lot more than purchasing similar or the same products as a big retailer such as Costco or WalMart. It is why most IBOs eventually get discouraged and quit far before the promoted 2-5 year plan.

Few people will even bother to see the plan once you mention "Amway" and for those who are open minded and motivated to register end up having to deadl with a hard to sell opportunity along with high priced common commodities such as soap, vitamins and energy drinks. It's pretty easy to see that the business does not work, even for most of those who actually work it. There are simply too many issues with the business that hanidcaps those brave enough to try. It seems even the fiercest defenders of Amway are unable to provide a shred of evidence that they have actually made a profit from this opportunity.

Amway - Get Rich Quick?

I get a good laugh out of IBOs when the talk about Amway not being "get rich quick". If that was how the opportunity was pitched, then why did you join, knowing that Amway's reputation was less than spotless? Seems that many IBO recruits have some kind of need, such as more income, which is why they join Amway in the first place. They join in hopes of making a few extra dollars, and hopefully the business will bloom into a big one where the money rolls in by the barrel full while you sit on a beach sipping mai tais.

Obviously, Amway must have been pitched as having the possibility of creating wealth in 2-5 years or whatever they show prospects these days. I don't think much has changed over the years. The problem in my informed opinion is that too many IBOs think they can create wealth with their Amway business. The sad reality is that in most business structures in Amway, the money is simply taken out of the pockets of downline ans redistributed to upline. This is done by downline having product loyalty. Product loyalty to Amway and the tools systems.

Many IBOs join to get extra time and money, but instead they give up much time and money from their jobs, which benefits upline. Not counting IBOs who do nothing, the remaining will likely buy their 100 PV, and consume voicemail, standing order, books and functions. It would be rare for an IBO to actually make enough Amway money to cover the cost of the tools, much less make a net profit. But I believe uplines will tell you that Amway is not get rich quick, because they want you yo expect to spend several years in the system, all the while lining upline pockets with tools profits.

On most cases, you will not get rick quickly in Amway. You will probably not get rich slowly in Amway either. It is very likely that you won't get anything in the Amway opportunity except a net loss, especially is you are dedicated to your upline's teaching system.

Amway Global - Join Amway And Profit Right Away?

One of the things that the presenters hit upon when showing the plan was how you had a great advantage in joining Amway because you could avoid overhead expenses and profit right away. Plus they threw in the tidbit about saving money thru Amway.

But it appears that IBOs do not profit right away, moreso if they are on the system of voicemail, cds, books and seminars. What's troubling is that IBOs are taught that they should not profit right away. That businesses commonly take years to profit, and that any profits should be invested into more tools. So the business is promoted as being one where you can profit right away, and then upline changes the mindset of profit into Amway being a long term venture. This is often refered to as a bait and switch technique.

It is common for Amway promoters to target needy folks. People who could use an extra buck or more. Someone who is looking for ways to make more money, but not necessarily by working another job. Thus upline will promote the Amway as low risk, easy to get started and no expenses. Then when an IBO commits, the mantra then changes to long term business, reinvest profits, etc etc.

My upline used to tell us that the promise of money got us in, but becoming better people, helping others and long term firendship is what the business is really about. Really? How many people would join and spend all that money to accomplish these goals? Not that these are bad things, but they are contrary to the pitch of joining to own a business.

If you are involved or considering getting involved, I encourage you to ask your sponsor tough questions about this. To ask where the profits are if you're been involved for more than a month. Don't allow them to shuffle the answer under a rug. If they can't or won't answer you, then you have a big decision to make. Stay involved in a business that is losing money, even though profits were promoted as easy, or keep trusting someone who won't give you a straight answer.

Amway Global Average Income $115/Month?

Amway reported that the average IBO income was $115 a month in 2001. As far as I know, there hasn't been an updated figure. The $115 is not really accurate as Amway disregarded about 1/3 of all IBOs as the $115 per month only included "active" IBOs. Some Amway apologists of course, make ridiculous arguments that someone who asks his brother to buy something is active an thus makes $115 for simply asking a question. Of course we know that to receive a bonus, an IBO must qualify by moving at least 100 PV in volume.

But wait, an IBO who moves 100 PV will likely get $9 or $10. How can an average IBO receive that much income? It is my guess that adding in Amway Crown Ambassadors and other high pins into this figure makes it much higher than the reality for most IBOs. If you look at the 6-4-2 plan, it assumes that all IBOs in that move 100 PV, yet the majority of them only receive the 3% bonus, or about $9 or $10 or so.

How much volume would you have to move to actually earn about $115 in a month, which is average? If you sponsored 4 downline and you and your downline all moved 100 PV, you would receive about $90, and each downline would get about $9, thus your bonus would be $54. (Based on each IBO doing 100 PV, 300BV and you are in the 6% bracket). But if you were to sponsor 5 downline, all doing 100 PV, 300 BV, you would receive about $162, and you would pay out $45 to downline. You would have a gross income of $117 a month.

So if you are able to gain and maintain 5 downline, all move 100 PV and about 300 BV each, you would then be in the 9% performance bracket and you would gross about $117a month. You would be considered average or above.

Things to note: Only 1 in 5 IBOs are able to sponsor even one downline. IBOs who sponsor multiple downlines are likely to be less than 1 in 5. Also, even if you can sponsor 5 and reach the 9% level, which would be a notable achievement in Amway, you would probably still have a net loss when if you calculate in taxes, voicemail, books, cds, standing order and functions.

Still think you can simply "choose" to succeed?

Amway Global - "At Least A Founder's 3%"

Amway's biggest defender usually goes by the moniker of "IBOFightback" or "Insider". He and his supporters often criticize the critics of Amway, citing outdated information and/or experiences. We are often told to check the credibility of the person who is writing. Well, here's an interesting coincidence. Could the David Steadson who is listed here: http://www.amquix.info/steadson_hits_3_percent.html
be the famous IBOfightback?

If it is, then maybe he was right when he said he was at least a founder's 3%?

No, it couldn't be IBOfightback, he is from Sweden. :-)

Amway Global - A Foolproof Way To Earn Income?

So many IBOs talk about Amway being the best business around or the best way to earn income. Their tenacity in defending the business is almost scary at times. But the way Amway is promoted by the motivational groups is no different than the people who want to sell you the secret of buying real estate with no money, or selling you income earning strategies. Many of these opportunities are promoted on infomercials, while Amway functions serve as infomercials.

The major function formerly known as dream nite, now known as winter conference is one where the diamonds show off their alleged wealth. They show videos of nice cars, jet skis, mansions, and other trappings, and then tell the audience they can have all of this and more, if only they will do what upline teaches.

It is like a live version of an infomercial. But what many do not notice about the infomercials (when showing success testimonials) is that it most often says "unique experience", your experience may vary. It is more like Amway than you think. Achieving a sginificant level in Amway, such as Emerald or higher, probably qualifies as a unique experience.

If you really think about it, if someone were really making so much money doing something, why wouldn't they continue to do it instead of taking up so much of their valuable time promoting it? Is it because they make more money promoting it than doing it? I will guess it's the latter and not the former.