Tuesday, July 12, 2016

Amway The Negative Sum Game?

To explain my blogpost, I will explain a zero sum game. A zero sum game is like a poker game. Say that you have 5 poker players who each bring $100 to a poker game. At the end of the nite, one player may go home with the $500 and the rest broke, or they may all go home even with $100 or other variations. But in any scenario, the total sum of cash the players take home will equal $500. A negative sum game would be perhaps a poker game where each player for example, pays $10 to "the house" before playing, thus the game with 5 players would have the house taking in $50 and the players competing for the remaining $450. In this second scenario, it is possible for all five players to leave the game with less than the $100 they initally came to the game with.

In the Amway global business, the business is run much like a negative sum game with Amway and the AMO's being "the house". Except in this game, Amway and the AMOs get most of the money and fewer than 1% of all IBOs being the "winners". Amway benefits from the IBOs who are taught to consume their 100 PV which is about $300 a month in sale for Amway, and the AMOs make their money by selling motivational materials such as seminars and cds. In Amway's case, at least an IBO might be able to return a portion of their goods for a refund, or they may be able to sell or use their products. In the AMO's case, most IBOs do not succeed as a reult of the tools, and the tools are virtually worthless outside of Amway, despite the fact that IBOs claim the tools teach them valuable principles. This is evidenced by the tools being sold, literally for pennies on Ebay or Craig's List.

In virtually every group scenario you can illustrate, the group as a whole will suffer losses because their sales do not cover the cost of overhead, and do not even cover the cost of the IBO's personal use items. IBOs need their jobs to continue to fund their purchase of Amway products and system tools. It is very very rare that you will encounter an IBO who sells enough product to cover his/her expenses and this is evidenced by Amway's own numbers that less than 4% of good are sold to non IBOs.

My conclusion based on the evidence is that the Amway Opportunity is a negative sum game where IBOs and IBO's jobs make Amway and certain select AMO leaders wealthy while the IBO population lives in poverty while thinking they are successful.

Monday, May 12, 2014

Amway's Latest Lawsuit?

Interesting article:


Amway’s latest lawsuit
by Sharon Hill • May 12, 2014 • 0 Comments

Amway, one of the world’s biggest multi-level marketing companies, is in court again.

Amway’s Claims Are Malarkey, Distributors Say.

The world’s largest Amway distributors expanded their business from Taiwan into Chinese communities in the United States, defrauding their new clients with promises of “enormous profits,” nine Amway sellers claim in court.

Lead plaintiff Longsheng Lei and eight other of the self-described “most successful distributors in the entire Amway organization” sued Amway and husband-and-wife Amway distributors Barry Chi and Holly Chen in Superior Court. They allege breach of contract, fraud, false advertising, unfair competition, unjust enrichment, conversion and negligent misrepresentation.

Barry Chi and Holly Chen are named as the most successful Amway distributors in the world. The plaintiffs allege they were persuaded to attend the Chen’s seminars to become “independent business owners” where they were promised enormous profit. But, claim the plaintiffs, these distributors know that most of the new Amway sign-ons make $100-200 a month. Not enough to live on.

It’s rather messy. Amway certainly does recruit distributors with descriptions of big income. (I can attest to this from personal involvement long ago.) They have been accused of running a pyramid scheme where the emphasis is on recruitment rather than selling a product.

There has been a HISTORY of suits. They have had their wrists slapped but the structure is still going strong. Be wise if you are approached by recruiters. Know exactly what you are getting into.

Did you know that Amway distributors were accused of propagating the Proctor and Gamble satanic symbol legend? Procter & Gamble alleged that several Amway distributors were behind a resurgence of the urban legend in the 1990s (probably to benefit their own sales bottom line) resulting in a suit for defamation and slander. Procter & Gamble was awarded $19.25M by a jury from this case.

It’s hard to say how this current suit will play out.

With all the bad connotations and shadiness behind Amway, they have a fair share of detractors. You can read more about it here.

Amway. Quiztar, TEAM, Team of Destiny, Network 21 – The Skeptic’s Dictionary.

It IS a multi-level marketing plan and that is bad news for most participants who remain on the bottom.

Analysis: Amway Accused of Fraud; Pays $150 Million; Where’s the FTC and DOJ? | Pyramid Scheme Alert.

Amway – The Dream Or The Scheme?.

Tuesday, June 18, 2013

Amway IBO Lies?

In my personal experience and even now, I see evidence from IBOs that lying is still a big part of the script for those who are recruiting new IBOs. A business built on lies is a house built on a shaky foundation. If your upline has lied, did you simply ignore and overlook it? Did you see slide shows of wealth as "proof" that Amway works? Do you know if your upline actually owns any of that stuff and is it typical or simply some exceptional diamond who has trappings but tries to imply that alll diamonds and big pins have all of those goodies? Some of the lies: We don't make any money until you do We don't make money from tools Save 30% by becoming an IBO The business is easy All you need is six Diamonds pay cash for everything Jobs are for losers 98% for people are dead or broke by age 65 95% of small businesses fail in the first year **Have you heard any of these statements? Have you been fed lies or half truths (lies)? If these statements sounds familiar, it may be a red flag for you. I urge you to at least verify any questionable claims made by upline or by those recruiting you into the business. Get bonafide proof of financial success. While uplines may say it's not your business, it certainly is if you are being asked to trust the upline leadership and to follow their advice. You should know how successful your uplines are and whether or not following them is indeed worth your time, investment and efforts. If your upline dodge your questions, you should think twice.

Wednesday, March 27, 2013

Whatever Happened To "Anonymous From Canada"?

There used to be an anonymous from Scarborough Canada who used to entertain me and my blog audience with his antics. Here's a reprint of a previous post in his honor. I hope he didn't quit Amway and become a broke loser. :)

Some of my regular readers here knows that there's an anonymous cowardly blogger from Scarborough Ontario Canada who has left threats and insults on my blog almost ad nauseum. I gave him my contact information but he was too chicken to contact me. He is apparently a low level IBO who has a entry level job in a bank. Here's a humorous set of comments he recently left ony my blog. Enjoy!

Anonymous said: "That's why you didn't make the kind of money you were hoping to make. When I registered a thought came to my mind quite early on; instead of me finding 6 people who find 4 who find 2 each, why don't I just find one person who will find 6 people who find 4 who find 2 each? After-all, I still get 7500 PV and 50K/year!!! Sadly, as I found out, in doing so, I would net out only about $700/month instead of $5700/month. Structure is the key baby! BIG DIFFERENCE! So, I got serious about it and went for my 6 people! Did it all go just as advertised? No, but I earn a good $4000-4500 per month. Do I plan to stop here? No! I plan to go 100K/year by December 2011. So remember, business structure is vital for profitability. Stop whining and get to work!"

Anonymous said: "My Amway expenses are WAY FAR from wiping out my monthly Amway earnings. Or are you referring to my general, every day expenses? If yes, then there really is nothing to argue about. The same can be said about anyone whose job income also equals my Amway monthly income. For your information, I make almost twice as much from Amway than any other job I ever had."

Anonymous said: "Buddy Joe, my J.O.B was from 9 in the morning till 6 in the evening, Monday to Friday, working as a customer service representative. I was making about $2360/month. So don't you think that maybe, JUST MAYBE, $4000/month from Amway isn't a little bit, JUST A TINY LITTLE BIT, MORE than $2360? So what if I earn $4000/month you ask? Buddy Joe, I think that you're aware of $4000 figure being TOO REAL TO YOU, it's just that you were nowhere near that and now you're bitter about it. Why am I there and you aren't? Don't know and don't want to know. All I see is your bitterness and complacency. So shut up!"

Joe's commentary: So my anonymous friend in making $4000 a month from Amway? Of course he provides no evidence and not even an anecdotal explanation of how he makes $4000 a month. Of course, $4000 a month isn't much when you still have to pay for medical insurance and your other business expenses. Not to mention, I earn a lot more than that from my job. But anon from Canada, thanks for your entertaining tirades! I truly enjoy what you add to my blog! :-)

Tuesday, February 5, 2013

Going Broke In Amway?

Many people join the Amway business because they believe that they will get rich in doing so. Upline will tell their audiences that they will not "get rich quick". I believe they do this as a disclaimer so that people don't believe this is some scam that is too good to be true. Obviously, many people have the idea that they will evnetually get rich if they will only follow upline advice and do what they are told. On the surface, the Amway presentation looks reasonable and makes sense. Basically, it is sold as make money and save money. Sound easy enough and who wouldn't want to make money, save money, or both? But what's not told to prospects up front is that in order to work the system, you will need to be a leader and a good example for your downline to duplicate. Thus you will be expected to move at least 100 PV each month. 100 PV costs about $300 a month and a leader or serious IBO will be expected to be on voicemail, standing order, and book of the month, as well as attending functions which may include out of town conventions requiring airfare and other trave; expenses. I believe the average dedicated IBO would spend between $200 and $300 a month on average, on these tools. Thus an average business building IBO will spend about $500 to $600 a month in order to become a business building IBO. $500 or $600 a month in expenses might seem reasonable for a business owner, except that you were likely told that the Amway business has little or no expenses. What would you have said if you were told upfront that you needed to come up with $6000 to $7000 annually to participate in Amway? Sure, you get some products with that expense, but more than likely you will also end up with many products you may not need, nor would you have used some of these products if not for your involvement in Amway. Typically, IBOs don't last for long, but a bunch of IBOs do put in a few years of earnest effort before they realize that Amway is not going to deliver their dreams. After 2-3 years, it's possible that you may have "invested" over $20,000. If you are under 30 years of age, do you realize what $20,000 invested can do over the span of say, 30 years when you would likely retire from work? Even if you didn't invest it, couldn't that $20,000 fulfill some of your dreams? A new car, a dream vacation, maybe a down payment on real estate? Sadly, many uplines will lure eager young people into the Amway business and their seperate tool business. They will con them into giving up their resources so they can chase a dream that won't materialize. Then when the IBO wakes up and quits, they are shunned and labeled a loser or a quitter. IBOs and prospects often think they will get rich in Amway. But for most, especially those caught up the the teaching systems, they are far more likely to go broke fast.

Monday, November 19, 2012

Amway Versus Joining The Gym?

One of the feeble defenses I have heard from Amway apologists is a comparison of the Amway opportunity to a gym membership. The defense is that you have to do something to get results. On that point, I agree. Except the comparison is ridiculous as a gym is not a business opportunity. A gym membership is a product/service that one can purchase. It seems that many Amway defenders so deperately want to justify their positions that they come up with silly comparisons. Gym owners don't care if you sign up and do nothing, just as upline leaders don't care if you succeed, as long as you keep buying tools from them. A gym owner could not sustain his business if everyone actually worked out every day, and a diamond leader probably doesn't want a lot of new pins breaking because it would take away tool profits. If the Amway oportunity was compared to a gym owner, wouldn't that be a better comparion? On that point, if you were recruited to be a gym owner, wouldn't you demand to know how other gyms are doing financially? Wouldn't you want to know the likelihood of success if you were to open a gym? Wouldn't you need to know about operating expenses and potential income before you even thinking about buying a gym? What if you were told that maybe only 9 or 10 out of 10,000 gym owners make enough income to live on? If more than half of the gyms went out of business in their first year, would you still be interested? If the greater majority of gym owners lost money, would you still be interested? If the majority of gym owners lost money, and many lost lots of money, would that interest you? Wouldn't any investor with an ounce of business savvy look at this gym opportunity and run in the opposite direction? The fact that Amway defenders like IBOFightback use this weak and feeble defense shows just how desperate they have become. They have no defense against facts so they resort to weak anecdotal stories with no basis in reality. It may be why the Amway business appears to be shrinking in the US. The truth cannot be hidden any longer.

Monday, August 6, 2012

Is Lying Important To IBOs?

One of the things that got me upset after I left the Amway business was the amount of lies and deceit used to attract IBOs, and to keep them in the business. My first encounter with the Amway business was being invited to a beer bust that was actually an open board plan at someone's house. I later attended a meeting and eventually sign up when a very good friend of mine had gotten in and had qualified as Gold Direct (at that time).

As an IBO, I was told that NOBODY made profits from tools. I was also told that WWDB was a non profit organization. Both were lies and to date, as far as I know, not a single WWDB leader has been held accountable for these lies. Other questionable statements were "we don't make pennies until you make dollars", and that upline truly cared about us, and that's why they put on functions. At the time, nobody really knew that some uplines might have been making a living off tools and not from Amway.

Things changed a bit later, with the advent of Quixtar, but then more lies came from many IBOs, such as Quixtar is not Amway and is not even related in anyway. Seems that tricking people into meetings has never changed over the years and still occurs today. There are pockets of IBOs who are ethical, but they are the exception and not the rule. We also saw the perfect water fiasco where IBOs were selling $48 cases of water that allegedly had magical powers, only to find out it was mostly a hoax and Amway finally stepped in to stop some of the wild claims.

The there's the age old lies told about IBO income. I recently had a conversation by email with an IBO who swore that he made $1000 a month from Amway and he said he would shut me up by sending me a PDF copy of his check. Well, none came and he blocked me from contacting him. Now I don't doubt that people can earn $1000 a month from Amway, but the cost will be a bunch of downline to eat losses so you can earn that magical check. Trying to get a straight answer about income from most IBOs is like decpihering hyroglyphics at times.

If you are usinng deception as part of your recruitment process or using other deceptive practices, then you may ask yourself what your prospect will think if and when they discover the truth? This may be why Amway IBOs drop out like flies, where more than 60% of IBOs drop out the first year. I have just touched the tip of the iceberg by the way, I may have to do a follow up blog post to cover more on this interesting topic.