Tuesday, October 27, 2009

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.


quixtarisacult said...

Right on. You sum it up perfectly! They fail because they are always playing against the house.

A business that consumes its own inventory isn't really a business. They sell exhorbitantly priced mostly mundane generic crap to themselves and view their little commision check as getting paid for buying from themselves, but aren't they really buying from 'Amway'? Is this really a business then? Who really pays in the Amway game of greed? Who outside of Amway has really ever heard of Glister? Go figure?

"Steal a little and they call you a thief; Steal a lot and the call you Amway!"

Anonymous said...

You may wanna check out the posts at ex eagle blog

Joecool said...

Thanks, I have added you as a link on my website. I look forward to reading your blog.

Anonymous said...

Funny how an ex eagle knows more than a platinum but quits before he goes platinum. Don't listen to broke people guys, just do whatever it takes (make smart decisions, don't act out of impulse) build belief and confidence in yourselves, use the available tools and you'll go diamond. Just stay focused at it every day for 1 or 2 hours or however long you can and you'll get the results.

Joecool said...

That's the problem. Even many people who do the work don't get results.