Friday, May 29, 2009

Amway Global - Former IBO Testimony

The Problems I have with the Quixtar/Amway System

I was signed up with Quixtar for 8 months or so, and had a huge problem with everything they are and everything they stand for. In my opinion, and I’m sure many people disagree with me, Quixtar/Amway is one of the worst scams to hit North America… Ever!

1. They Sell Hope to People Who Need it The Most: The recruiters tell you how easy it is, how little time it takes, and how a 6-figure income is just around the corner. What they don’t tell you is how much it costs in the long run, how many tapes, books, etc… you’re going to have to buy, and how hard it is to recruit people.

2. 1 Hour a Week: Yeah right, they glamorize how little time you have to spend talking to people to get them to sign up. My recruiter talked drove 2 hours to get to me, 2 hours talking to me, 1 hour signing me up, and 2 hours driving home. Wow… 1 hour a week, and he’s experienced.

3. Highest Quality Products Available: In what world? These products aren’t any better than the products you buy in stores, I tested the laundry detergent on two brand new shirts and the Quixtar brand faded a lot quicker than Tide.

4. Lower than Costco Prices: In what century? The prices are unbelievably high. When I asked my recruiter why he told me that the prices are a little higher because they save us time and gas money. What?

5. Products not available anywhere else: Only if you don’t know where to look, all the supplements I signed up to receive at discount prices were available online for ¾ of the price Quixtar offered them.

6. Food Products Are Delicious: Nope, sorry, no way. These products were disgusting, worst protein shakes ever, the candy was stale, and the energy drinks tasted like battery acid.

7. They’ll Ship Right to Your Door, Even if you Live out of Town: Wrong again, I live 5 minutes out of town and I had to meet the delivery guy at the bus station. I wouldn’t be upset about this, but my Recruiter promised me that he would make sure the products were delivered to my door.

8. 6-Figure Income: The average salary of a Quixtar IBO is $115 a month. You spend at least $180 a month getting your 20 points, so most members are in the hole $65 every month.

9. Success: This is the main beef I have with Quixtar. The success of the people at the top is dependant on the failure of the people at the bottom. Top level Quixtar members can make up to $150,000 a month, but the majority of people are losing up to $200 a month. That’s what keeps the system in perfect balance.
I hope you’ve enjoyed this read, if you’re looking for more info on the Quixtar “Opportunity” google Dateline Quixtar.
Thank you,

Thursday, May 28, 2009

Amway Global - Comments On System Income From A Higher Level Pin?


I believe that I have covered this on a couple occasions as an "Anonymous" poster but here again....

By the way, one of the things that gets glossed over, time after time on this site and others, is that, in many organizations the "System Income" is incorporated into the 6-4-2 at the open meetings. Although not specific, for various intangibles based on structure and balance. Amway has been trying to come up with a compensation plan that rivaled the systems bonus plans, in an futile effort to draw more loyalty to the corporation, rather than the teams that IBO's belong to.

Think of Teams in terms of Unions and Amway as the corporation. The Growth Incentive Bonuses, 20K Q12 and 150K & 500K Founder Diamond and Emerald Bonuses are efforts in that direction.

In my organization, and I will also remind you that in an earlier posting, that triggered a girl named Gina to start demanding to see P&L statements and Balance Sheets, that I knew of the system income at the outset and was determined to be earn the right through performance, to participate in the revenue sharing plan.

Breaks and bonuses based on tool flow begin at the Platinum level and go up to greater percentages at Sapphire, Emerald, Emerald with 4 & 5 Platinum legs and then Diamond. Function attendance bonuses begin at Emerald.

It is very possible and in my case true, that an IBO with a properly balanced and structured business will make considerably more in the revenue sharing plan through the team than trough Amway's bonuses. However with the new Amway bonuses, that is not as much of a certainty.

This is not the "big secret" that I believe that most bloggers think they are exposing like Jack Bauer at CTU. It's pretty well known. When the Dateline program hit the airwaves several years ago, I lost 2 people from it. both of those people were perpetual "Founders 65 PV'ers". Most everyone else was reaction was "Oh, we already knew that, because it's in the plan every week"

As I have said before also, the other thing that is ignored in this long running debate, is that every Platinum, Emerald or Diamond, started at ZERO and received no special inside favors to earn their way up the ladder. Totally opposite from corporate America and current state of the economy today.

Look, Amway has it flaws, many of them and the systems have theirs as well, but what doesn't? If you want to really do something constructive, why not focus on those that abuse their privilege while in the system, like the Cincinnati Emerald that had about 10 affairs and ripped downline off with bad business deals and owes more than 100 k to a family that he got to go into kiosk deals and a bridal shop. These are the people that need to be exposed.

May 28, 2009 7:11 AM


Joe's commentary: Anonymous, thank you for what appears to be a reasonable and believeable answer. I understand that some systems talk about their system income with IBOs. My bigger issue is that the systems that do talk about system income are not specific about how you qualify and how much you qualify for at various levels. At least I do not know of an IBO who has a written compensation plan.

The even bigg issue, is that there is, as far as I know, zero evidence that the system actually works for anyone. Take my former LOS for example, WWDB. How many diamonds have emerged since I left Amway? A handful? But keep in mind that more than a handful have dropped out since I left as well. If they went backwards, what good is this wonderful system? Same goes for other LOS's in the US.

Tuesday, May 26, 2009

Amway Global - What Was Your Sales Volume?

I keep on seeing IBOs talk about Amway sales. Amway did about 8 billion dollars in sales for 2008 and last I heard, Amway sales for North America was about 1 billion dollars. That is great for Amway! Many IBOs boast about these sales and certainly, Amway made a handsome profit from these sales.

But IBOs are not Amway. An IBO is a "Independent Business Owner". Amway could do 100 billion dollars in sales but if you did not move volume, you get nothing. So for all the proud IBOs out there - what was your sales volume? Did you actually sell products to customers or did you simply self consume your 100 PV? If you self consumed your 100 PV, you are basically a customer and not a business. If you have donwline who copied your self consumption model, then your group is a bunch of customers of Amway and not business owners.

There are some uplines who teach self consumption, and they call these IBOs "prosumers". I believe if you are getting this advice, it is bad advice. A business needs customers to make a profit. If you are participating in a self consumption model, your ability to make a buck depends on your downline purchases, and your ability to continue to add downline. You are also running a product pyramid if you are running your business in this manner.

So I ask again of IBOs - what was your sales volume? That is really the only figure that matters.

Friday, May 22, 2009

Amway Global + The System = A 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.

Wednesday, May 20, 2009

Amway Global - Diamonds, Luxurious Lifestyle Or A Traveling Amway Salesman?

If you have attended a big Amway function put on by one of the Motivational Groups such as BWW, WWWDB, or N21, you probably saw video clip and/or pictures of diamonds living the good life. Waking up at noon, taking fabulous trips, retiring at the age of 30, fancy cars and suits, etc etc. These are all recruiting tools for the Amway leaders. Afterall, the Amway Global Opportunity would not sound quite as attractive for a diamond (or higher) to mention that their Amway business takes up 5o hours a week, that they don't have time to "hang out" with family and friends, or that they have a 30 year mortgage on their homes, and possibly lease or rent the fancy cars that you seem them drive up in at functions. Many IBOs simply assume that diamonds and above has inlimited money pouring in from the Amway corporation.

Based on the average diamond earning just under $150,000 a year, and the diamonds constantly having to travel to do functions and open meetings, as well as working a personal group and helping their platinums legs to maintain their qualifications, a diamond probably spends full time hours maintaining their Amway business. Additionally, there is a need to keep recruiting downline as IBOs quit every day. The moment you stop working, your group is likely to backslide. Even a minor scandle within the group can wipe out an entire leg.

So do diamonds actually live the lifestyle they portray at functions? It is my best guess that diamonds live a decent middle class lifestyle. I believe that a regular diamond, or perhaps higher, but without the founder's designation, probably lives life like a traveling Amway salesman. The only difference being that these folks sell dreams and hopes more so than Amway products. I would guess that contant traveling to and from various functions and meetings can get to be tiring and cumbersome. Also, when you are away from your home base, your personal group may suffer a bit. This can cause great stress if the diamond IBO is borderline on re-qualifying for their current level.

Also, my understanding is that much of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be relatively small, with a lump sum coming at the end of the Amway fiscal year in the form of a bonus.

Does the lifestyle of a traveling salesman appeal to you? If not, re-read this blog post and take a second look.

Monday, May 18, 2009

Amway Global - IBOFightback, Amway Enthusiast and Cyber Bully?

Personally, "ibofightback" would by crazy to step out from anonymity because the shear level of cyber-bullying you heap on anyone with an opposing opinion, simply is not worth it. Fortunately for some of us myself included, we easily see you for the angry, abusive, bully that you have become. Sticks and stones Dave, sticks and stones! The fact that you continue to throw poison, doesn't magically make anything you say right. For any reasonable reader, it just continues to make your position weaker!



Maybe you are unawar of this but your own beloved IBOFB was called a “cyberbully” by Beth Dornan on her Inside Quixtar blog because of disparaging things he posted about me.


Thursday, May 14, 2009

Amway Global - The 6-4-2 Plan - IBOFightback Shows How Clueless He Is Once Again

I recently wrote a post about how an platinum group, collectively loses money if they are on the system. I beliebe this is true of any group, especially if they are CORE IBOs. Here is the original post:

IBOFightback, (See links below) apparently is a discredited lower level IBO, much like the prolific "Tex". He has been known to lie and spin facts to make the Amway business opportunity look better. When I wrote the above listed post, I most certainly undertstood that an Amway group is fluid, meaning some IBOs sign up and do nothing, some sign up and do a little, and some sign up and work very hard. In any group, you will have a core group of IBOs who put forth the most effort and that is the gist of the post. So it is very likely that a platinum group has well over 100 to 150 IBOs, with some doing nothing, some doing little, and some working hard, with the hard working obviously comprising most of the PV.

But IBOFightback makes absolutely ridiculous comments which I will refute.

IBOFightback ”Because the 6-4-2 simplified model does not reflect a real business”

Joecool says: In what business model, franchise or other does a business show a simplified model that does not reflect a real business? If you were recruited to buy say a McDonald's franchise, would you ask for bonafide real financials or would you be persuaded to buy the franchise based on a "simplified model that does not reflect a real business"? Seems to me only a shyster would present such a model, and only a fool would jump into a business after seeing a presentation which has no basis in reality. (And yes, I was foolish enough to buy this at one time)

IBOFightback goes on to spin some more: "JoeCool here is assuming that every single IBO in a Platinum group is working (and spending) hard building a business"

Joecool says: I fully understand that some IBOs do nothing or little and said so in my comments. It is the recruiting IBOs showing the plan who are showing the "6-4-2 simplified model (which) does not reflect a real business" who are assuming that every single IBO in a platinum group is working and building a business. If it's wrong to assume that every single IBO is building a business and working, why is it shown as your business model? Seems deceptive and hypocritical to me.

So in closing folks, once again it is IBOFightback and other IBOs who are their own worst enemies. They come up with a ridiculous argument once again to try and spin and deflect the obvious truth. That the 6-4-2 or 9-4-2 is a ridiculous way to present the business as in IBOFighback's own words, "Because the 6-4-2 simplified model does not reflect a real business".

My question, why don't IBOs use a real life example to show a prospect? Is the truth embarrassing? Or do they purposely try to deceive unsuspecting prospects by showing them a "6-4-2 simplified model (which) does not reflect a real business"? When the plan is shown, I've have never heard of the presenter qualifying the plan as such.

Wednesday, May 13, 2009

Amway Global - Producing Millionaires?

One thing I occasionally hear from fired up IBOs is that Amway works and that Amway has produced more millionaires than any other company or system. Now I am sure over the years, Amway has certainly produced some millionaires. Most notably, the owners of Amway who were listed as billionaires. However, Amway or IBOs wouldn't know how many millionaires were made as a result of the Amway business income, unless these millionaires were giving their financial statements to Amway. I don't believe that is happening. It is far more likely that this is another "myth" taught by some uplines as an enticement to join the business.

Amway's own numbers tell a different story. The average IBO earns $115 a month and the average diamond earns about $150,000. But this alone is insufficient to determine whether or not someone is a millionaire. Also, does the IBO have other bsuiness interests and/or a job? The income from the tools business is mostly a secret thus we cannot make any firm conclusions except to say that there is the possibility that the tools income has likely produced some millionaires. But in my opinion, the amount of millionaires produced as a direct result of being an IBO or an IBO leader is insignificant in the general population of the US.

I have linked an analysis below. Although a bit dated, I do not see anything of significance that would lead me to a different conclusion. If anything, there are fewer millionaire today because of the recent economic meltdown and the downturn of the stock market. But I would imagine that these issue may have affected Amway related millionaires as well.


"How many millionaires are there in Amway? No one really knows. When asked, many Amway distributor will tell you that Amway has produced more millionaires than any other type of business...but cannot tell you how many millionaires have been created. In my mind, that creates a credibility problem. How can they know they've created more millionaires if they don't know the actual numbers?"

Tuesday, May 12, 2009

Amway Global - Diamond Wealth Is An Illusion?

One of the things I noticed after walking away from the business was how IBOs and higher pins try to create an illusion of wealth. They wear suits to all of their meetings, act as if they are already successful in Amway, as if acting the part will make it so. Some IBOs are taught to fake this success, or "fake it till you make it". I suppose this is taught so prospects will be enticed into looking at the business or possibly joining because they see success and want a piece of the action.

But as time passes, more and more evidence has become available which shows that the diamond level may not be all it's promoted to be. There are stories of diamonds quitting the business, diamonds fighting and suing each other over tools income, and diamonds having homes foreclosed or going bankrupt. A book written by Ruth Carter about a diamond who was her former employer showed a diamond with a gross income of over a million dollars, yet this diamond apparently was broke, living in debt but continuing to portray success while on stage.

What many starry eyed IBOs and prospects see on stage are pictures of the easy life, early retirement, no job, fancy cars and homes, fancy vacations and exclusive things in life. All of these can be achieved by joining Amway and going diamond right? Amway reports that the average diamond earns less than $150,000 and that is before taxes and business expenses. When you sit down with a calculator, it is easy to see that it is virually impossible for most diamonds to achieve what they portray. Amway apologists will claim that their groups don't do this, but basically, the function that is currently called "winter conference" used to be called "dream nite" where the theme was the lavish goodies that diamonds have, and you can have, if only you will build the business.

So why do the diamonds put on this show? Simple, because it's a recruiting tool. People won't want to join if you tell them to work hard, achieve diamond and live a middle class lifestyle. Unfortunately, I believe that a diamond income will mostly provide a middle class lifestyle and not that of a jetsetter. Do the math and it's very clear. Also, one should note that much of a diamond's $150,000 income is in the form of a one time annual bonus, thus a diamond's monthly income might be quite low. Many people don't know this and believe the hype they see on stage.

This blog and this post is to clear up some of the hype and myths behind a diamond lifestyle.

Friday, May 8, 2009

Amway Global - Analysis Of A Platinum Group

Many people who are in Amway, or were in Amway at one time is very likely to have seen the 6-4-2 plan. I understand some modifications may have been made in certain groups but the basic premise of this post will still hold true. An IBO who sponsors 6 who sponsor 4 who sponsor 2 would have a group of 78 IBOs. All told, this group would allow the platinum to earn about $47,000 (before expenses).

The plan assumes that IBOs all move 100 PV. 100 PV costs about $300, thus each month, this group would spend $23,400, or $280,800 annualized. Amway takes in the $23,400 in sales and returns about 33% in bonuses, thus the bonus on $23,400 is
$7722, or $92,664 annualized. These bonuses are returned to the IBOs based on their volume with IBOs receiving various amounts based on their level. The majority of IBOs will receive $9 or $10 and a select few will make some significant money.

Now let's say this same group purchases tools such as standing order, KATE, functions and other system materials. Lets say the average business building IBO spend on average $200 a month on tools. This same group would spend $15,600 a month on tools, or $178,200 a year. NONE of this money is returned to the IBOs, thus somewhere upline keeps ALL of the profit on the tools.

Thus this group spends $23,400 a month on product and $15,600 on tools. That is a total of $39,000 a month a group of IBOs spends on products and tools. Annualized, this same group spends $468,000 on product and tools.

Amway gives back about $7722 a month in bonuses or $92,664 a year in bonuses and the LOS such as WWDB, BWW, or Network 21 gives back zero to the IBOs.

Thus a platinum business spends $39,000 a month to earn $7722, or annualized, spends $468,000 to earn $92,664.

Simple math CLEARLY shows that only a few can receive any significant bonus. Guess what? If this bonus money were divided evenly, it would result in each IBO receiving $99 each, per month. Amway reports the average active IBO earning about $115 a month. There is a minor variance, but this post clearly shows that Amway groups as a whole, cannot collectively profit unless many products are sold to people who are not IBOs.

Some if not most IBOs are taught to "buy from themselves".

Tuesday, May 5, 2009

Amway Global - Who Benefits From Being CORE?

One thing that many IBOs are taught by upline is to be CORE. CORE is a set of steps designed to make you a successful IBO. I reviewed the steps and I believe that the steps of CORE are far more beneficial to upline than to the IBO himself/herself.

1 - Show the Plan
2 - Retail the Products
3 - Tapes
4 - Books
5- Functions
6 - Accountability
7 - Counsel with Upline (Be teachable!)
8 - Buy 100% of your own products
9 – Communikate

Show the plan. Recruitment. This may benefit an IBO, but it also benefits upline more, until an IBO is able to reach higher levels of the business. Keep in mind that the poor retention rate makes this a non stop activity, provided an IBO can even find people to see the plan.

Retail. This may benefit an IBO, but for some reason, some groups are taught not to sell but to self consume products. Also, high AMway prices make this very difficult when a similar or same product can be purchased at a local store for less.

Tapes, books and functions. These all benefit upline financially. Some IBOs claim they learn from these activities but their correlation with finanical success is illusory at best.

Counsel with upline and be teachable. This is where upline outs an IBO on the hook. You are supposed to be teachable and do what upline advises. Yet at the same time, failure is attributed to the IBO and not the upline's advice. In counseling sessions, IBOs may be told to "submit" to upline, or check your ego at the door.

Product loyalty. Buy 100% of your own products. Seems sensible except an IBO doesn't make any products. And IBO is basically a distributor, or middle man and product loyalty to non Amway products makes little sense.

Communikate. A voicemail system. While this may be handy, I find it odd that IBOs do not use the Amway voicemail system which would net an IBO some PV/BV. This is also a big financial benefit to someone in your upline and the IBO is in conflict with product loyalty no? Seems as though you can be in conflict with upline teaching, as long as upline benefits financially by the conflict, as in Communikate.

Friday, May 1, 2009

Amway Global - Amway and Amway Motivational Organizations – A Symbiotic Relationship?

A symbiotic relationship is basically one where two parties receive mutual benefits from each other. It happens a lot on nature. For example, if you’re ever seen national geographic or discovery channel, big sharks often have pilot fish attached to them. The pilot fish eats parasites off the shark, and in return the shark provides the pilot fish protection from other predators.

It is my opinion that Amway and the Amway Motivational Organizations (AMOs) have this type of relationship. I believe that the AMOs such as WWDB, BWW, N21 have been operating with little to no intervention by Amway corporation. There are countless stories of misrepresentations and outright lies told by some of these AMO leaders which has resulted in financial losses by IBOs which may be billions of dollars. Yes, Amway corporation started an accreditation program, but it has no teeth. Even some avid Amway supporters agree that accreditation was/is a joke.

Amway apparently ignores reports of upline leaders teaching unethical and bad business practices, but some of these practices are beneficial to Amway, such as the defacto 100 PV requirement for IBOs, and well as the continual recruitment of new IBOs. These practices by AMOS keep Amway’s sales fairly consistent and keeps Amway profitable. Amway has developed a spotty reputation in North America, because of the antics of IBOs on the recruiting trail. You don’t hear any complaints about IBOs trying to sell products. The complaints are about recruiting practices. People tricked into attending meetings for example.

Amway’s defense is that they cannot control the actions of independent business owners. While this is true to some degree, much of the problems can be traced upline. IBOs didn’t invent the zany anctics such as Amway has no connection with Quixtar, or Perfect water, or other lies about the tools systems. Downline are taught many of these things by upline leaders. I will admit that nobody expects Amway to infiltrate all IBO meetings, but certainly they are capable and can afford to monitor some of these meetings.

Unless something is done to curb abuses, eventually with information so easily accessible, Amway will struggle in North America. It appears to be evident already as I have read about functions being downsized to smaller venues. Some AMO leaders are also apparently falling into financial difficulties. Is the (legal) pyramid crumbling?