Wednesday, November 26, 2008

Amway Global Opportunity Blog - Significant Business Expenses?

From the Quixtar Website (Thisbiznow) (Emphasis is mine)

"There may be significant business expenses, mostly discretionary, that may be greater in relation to income in the first year of operation"

So mostly discretionary. I am guessing that some of these exenses means the cost of a website and the discretionary expenses would be tapes, books, cds and seminars. These discretionary expenses vary from group to group. I have heard of expenses below $100 monthly, and I have heard of IBOs who exceeded monthly expenses in excess of $500 a month.

When you first start your business, your volume is likely to be smaller as you need to build volume by selling products and by possibly sponsoring others into the business. IBOs need to seriously consider whether or not to participate in the optional/discretionary motivational systems. Most IBOs never sponsor another IBO and many IBOs have difficulty in selling products. If you experience this problem right from the start, you are unlikely to experience significant success in this business and you should analyze your business and your efforts to determine if investing more money into a struggling business is the way to increase your volume.

The reason why this is important, is because investing in the motivational/teaching system is investing in non productive, non income producing materials/activities which will also consume your time. Reading books, attending meetings and functions, listening to tapes do not increase sales directly and uses up your valuable resources (time and money) that could have been spent finding more customers.

Unless Amway has changed their rules, it is my understanding that your sponsor is obligated to train and motivate you. Why pay for something that should be provided to you by your sponsor?


mike said...

The major problem that many have encountered is the business it's self. Is very difficult business to do, as with many other ventures, it requires skills and determination.

Where the Amway has failed, is that they have opened the business up to anyone, and the AMO's have taken it further by telling everyone "They can do it."

When as it can be seen is that not everyone can do it. Amway is inundated with "Buyer's remorse". Those that join, later find that what they are involved with is not what they signed up for.

Those in the upline are not really stopping anyone from signing up, I liken this to Willy Wonka and his Chocolate factory, when the kids were close to doing something dangerous, he would whisper "stop..please stop" but not yell out that they are in danger.

The intial information is glossed over, vague statements and generalized comments. 2-5 years on average, all you need is six, on a part time basis, the products sell themselves.

quixtarisacult said...

Retail selling is just the front story for the recruitment scam where every distributor actually becomes Amway customers allowing the Amway product supplier to benefit from the relationship from day one. They and the kingpin sellers of tools benefit handsomely while they basically 'school' the IBO consumers to lose money buying all their crap year after year. Their compensation system us set up to benefit those distributors at the top of the pyramid. Success is measured in recruitment and downline volume. The downline volume represents mostly products that the IBOs buy for their own use which makes the whole affair appear more like a buyer's club than a retail selling business.

By the time a IBO expends all his time and money and achieves a minor pin level, he or she is most likely thousands and thousands of dollars down in the hole. Throughout the years leading up to this achievement, they most likely could have bought two products for the price they pay for just one Amway product. It becomes a one for the price of two scheme, and then the distributor further goes in the hole buying mostly inane and useless training materials. The computer access that some folks pay for in the WWDBs is what? Fifty dollars a head maybe, and isn't there a new Amvox message system that also costs a significant amount of money each month? Travel expenses, time spent on the road, stays at motel/hotels, are just some of the sundry expenses that make Amway an obvious scam business that is by purpose designed to funnel money to the top while most everyone else actually lose money.

The money 'dupestributors' spend on monopoly priced products could be best spent in a competitive market outside of the Amway monopoly saving nearly the entire price of the product.

Amway is monopoly because they operate basically a closed market, selling to their distributor faithful first and foremost.

People looking to get into this business should not fall for all the incredible dream selling Amway recruiters do which actually is criminal intent to defraud. Seriously folks, if you've seen the huge yachts, mansions, and luxury automobiles which are presented as possible, you've got to ask yourself if this is all really likely working in your part time, making all the insane purchases, and alienating your friends, neighbors and coworkers? Sure, winning the power ball lottery could happen buy the odds are indeed stacked against even the most die hard of core folk believing in the oversold dream and in lottery tickets.

Mike, as always, you impress me. QiaC

Joecool said...

And an IBO should note, that the Amway business, like the lottery, you cannot simply "choose" to succeed/win. There are many factors involved where you have no control. The low retention rate and the hardship in sponsoring others makes the business today, nearly impossible to build.

mike said...

There is more than just money as a major expense, there is an alteration in the mindset of the IBO, or more important, a worldview that must be in place for the IBO to be follow the system.

The IBO needs to rethink how they view the world. This is the purpose of the system, to reform their mindset to become a part of the system.

Some may call it brainwashing, the term used in the business is that the IBO needs to have a PMA,( Postive Mental Attitude). Or more apt, to have only postive regard for the Amway business.

This is far more costly than what money is spent.

Not only does one need to be able sell products, sign up new people, they have to submit themselves to the views of those above them, as well as be open to altering the minds of those below them.

For me that was an expense that I was not willing to place someone in a business that could put them in that postion, for my personal gain.

Gina said...

Yeah many factors to building a business....LIKE A P/L!!!!
IBO's can't even speak of their expenses, discretionary or not because they have no idea what their expenses are. They get a check from Amway and figure that it is automatically a profit. We have all seen how some IBO's respond to the question of expenses...that they don't track what they spend on food while prospecting or "meeting" with their group because they would eat either way, or that they don't track how many miles they have driven in the name of Amway because they would drive anyway, Internet cost...of course they don't figure that as an expense because they already used the Internet.

A real business owner would keep track of these expenses and then some. They also wouldn't be looking for "investors", "partners" or what ever they want to call recruits by showing a check issued by Amway and call it a profit. I'll bet that the "kingpins" keep accurate P/L's along with VanAndel and DeVos!!!! You can be sure they want to know how they can maximize their profits.

Joecool said...

Mike and Gina, great posts!

What the systems teach is that the $8 check from Amway if profit. You are successful! You are a winner. The rest of the world is a loser with soap in their eyes.

You $200 a month in systemms expenses is not a loss, it's an investment into yourself and you business.

Anonymous said...

yeah, and water and oil mix!