Wednesday, December 8, 2010

Signs Of A Pyramid Scheme

http://www.michigan.gov/ag/0,1607,7-164-34739_20942-208400--,00.html

Use Common Sense and Consider These Tips

The pyramid scheme disguised as a multi-level marketing opportunity is not always easy to spot, but is just as much of a scam as the chain letter. Here are some tips to consider before participating in a multi-level marketing program:

Avoid any program that focuses more on recruitment of new people rather than the sale of a product or service to an end-user consumer. If the opportunity for income is primarily derived by recruiting more participants or salespersons rather than by selling a product, the plan probably is illegal. Several courts interpret greater pressure on members to sponsor new recruits than to market company merchandise as evidence of an illegal pyramid.

Be skeptical of plans that claim you will make money through continued growth of your "downline" -- the commissions on sales made by new distributors you recruit -- rather than through your own sales of products.

Be cautious about specific income or earnings claims. Many programs boast about the incredibly high earnings of a few top performers ("thousands per week" or a "six figure income"). The reality is that most of the people recruited into the organization are not making anywhere near those amounts and most actually lose money.

Beware when presented with "testimonies" from other distributors. These "success" stories rarely reflect reality.

Be cautious about participating in any program that asks distributors to purchase expensive inventory. There are horror stories of people with a basement or garage full of merchandise that no one will buy.

Make sure the product or service offered by the company is something you would buy without the income opportunity and the product or service is competitively priced. Illegal pyramid schemes often sell products at prices well above retail or sell products that are difficult to value, such as health and beauty aids, new inventions or "miracle" cures.

Never sign a contract or pay any money to participate in a multi-level marketing program, or any business opportunity, without taking your time and reading all of the paperwork. Talk the opportunity over with a spouse, knowledgeable friend, accountant or lawyer. If you feel that you are being subjected to high-pressure sales tactics or are not being given enough time to review the details, go elsewhere.

When questions are raised about pyramids, comparisons may be made to corporations where there is one person at the top who makes the most money. What they fail to state is that corporations do not seek to recruit an unlimited number of employees or pay employees based on recruiting new employees.

Beware when the products or services are simply vehicles for recruitment. The products may be gimmicks and/or overpriced, but even high quality products may serve as a cover for recruitment activities.

Your Responsibilities:

If you decide to become a distributor, remember that you are legally responsible for the claims you make about the company, its product, and the business opportunities it offers. That applies even if you are simply repeating claims you read in a company brochure or advertising flyer. If you decide to solicit new distributors, be aware that you are responsible for any claims you make about a distributor's earnings potential. Be sure to represent the opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember you could be held liable.

If you join a pyramid scheme disguised as a multi-level marketing program, your decision will affect not only you, but also everyone you bring into the program. Many people devote a substantial amount of time trying to market these worthless ventures. Ultimately, if a multi-level marketing opportunity sounds too good to be true, it probably is.

FOR GENERAL CONSUMER COMPLAINTS, CONTACT THE ATTORNEY GENERAL'S CONSUMER PROTECTION DIVISION

If you have a general consumer complaint, please file a complaint with the Attorney General's Consumer Protection Division at:

Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909

517-373-1140
Fax: 517-241-3771
Toll free: 877-765-8388
www.michigan.gov/ag (online complaint form)

Tuesday, November 30, 2010

Why People Quit Amway?

Someone posed this question on another blog so I thought I would address it here.
Why do so many IBOs quit? To me, the answer is very obvious. Because what Amway recruiters promote rarely comes true.

Many Amway recruiters discuss a "shortcut" to retirement, fabulous toys, mansions, cars and early retirement. They show an unrealistic model of how Amway works. Just sponsor 6 who sponsor 4 who sponsor 2 and everyone does 100 PV and in 2-5 years you will be a diamond making well over $100,000 a year which will roll in forever while you sit on a beach sipping exotic drinks. Okay, maybe I made it sound a little better than how some presenters show the plan, but still, many prospects really believe they will be financially free in a few years and living on easy street happily ever after.

But once the registration kit is busted, then the new IBO realizes that 100 PV may cost up to $300 a month. Attending meetings and finding people to show the plan is hard, especially when past IBOs may have tricked people into attending a meeting, or lied about the Amway opportunity. The cost of standing order and functions starts to mount. The IBO then starts to realize, that what he/she joined for was more time and money, ironically is what they have less of once they get involved in Amway, particularly if they are participating in a "system" such as BWW, WWDB, or N21.

This IBO then realizes that the good life they though was within their grasp really isn't. Then they quit. Now many IBOs sign up and do nothing. These folks don't usually have a complaint as they got what they put into the deal. But many worked the system hard only to not get any tangible rewards. Some disappear into the nite, and some come back to comment or blog about their experiences.

But the bottom line is that so many IBOs quit because, in my informed opinion, the Amway prices are generally too high, the reputation of Amway precedes itself and makes recruiting downline next to impossible, and the ongoing cost of the system starts to become a drain on the family finances, not to mention the time spent away from family and friends in order to attend meetings, plans, functions, etc.

The system doesn't work, so they quit. It's as clear as crystal to me.

Monday, November 15, 2010

The Average Income?

In 2001, Amway published that the average active IBO income was $115 a month and did not factor in taxes or business expenses. What I'm curious about is why Amway hasn't updated this information. It's humorous that Amway defenders like to condemn critics by calling them outdated but don't mention that Amway themselves should update important information. I also believe that the $115 a month figure is inflated because diamonds and above are factored into the figure.

Using the 6-4-2 plan that many IBOs use in recruiting downline and estimating the PV/BV and bonus money that can be extracted from a 6-4-2 group, the average income is about $75 to $85 a month. Thus, the average income as displayed by Amway is actually above average. In the 6-4-2 plan, the majority of these IBOs make closer to $10 a month, which doesn't even cover that IBO's voicemail expenses.

So for IBOs and information seekers, you should ask how likely you are to even make $115 a month. Then factor in the projected expenses of running an Amway business and see if your chances of making a profit are realistic. Far too many people get involved and then they are taught that they are successful even if they lose money. I believe it is a technique by some uplines who just want to retain these downline IBOs so they can keep selling them standing orders and function tickets.

Wednesday, October 13, 2010

Amway On 60 Minutes - Soap and Hope?

A classic transcript of Amway featured on 60 minutes with Mike Wallace. Seems like not much has changed even after all these years:

http://hunza1.tripod.com/amway/60min.html

WALLACE:
Soap and Hope is the story of Amway. Amway, short for "The American Way", is a national phenomenon. It got it's start as a shop-at-home company dealing mostly in soap and soap products and has now become a one and a half billion dollar a year enterprise. But there is more to Amway than soap. What they're really selling is HOPE. The hope of getting rich beyond your WILDEST dreams. Others insist, however, that Amway is just a clever marketing scheme to enrich a few lucky people. Whatever it is, it has gotten a million people into selling soap and it begins with some old-fashioned motivation.

DEXTER YAGER:
I'm not a god. I'm not somebody to worship. There's a big difference between worshiping and LOVING. Some people are gonna love me because they wanna do what I'm doin'. I'm not one of a kind. Anybody can do what I'm doin'. They've just gotta want ta.

[cut to a man and woman walking through a park]

WALLACE: [voice over] But CAN anybody? Nancy and Valiss Johnson of Conway South Carolina were Amway distributors for 8 months when they finally QUIT. They say not only didn't they MAKE money, they ended up losing money for all of their efforts.

[cut to Nancy Johnson]

NANCY JOHNSON: Uh, when you go to these rallies you have to PAAAY to get in 'em. You have to PAAAY your expenses to GET there. You have to get off of your REGULAR work to get there and that's a lot of money going OUT just for some motivation to come back in.

[cut to shot of distributors entering function]

WALLACE: Beyond that, people who want to make it in Amway are told to buy the books and tapes and other motivating tools [shots of distributors buying books and tapes] that will teach them how to do it. The marketing these items runs into the millions of dollars a year. And that cash goes not to the Amway Corporation but to the high level distributors who run these rallies - paid for by the hopeful Amway novices who come to those rallies by the thousands.

[back to Nancy Johnson]

NANCY JOHNSON:
And then when you get back home and you knock on the door, it's slammed in your face each time you say Amway because people are SICK of hearing it.

WALLACE:
Why then do so many people go to work with Amway?

NANCY JOHNSON:
Well, there are plenty of weak people that you can convince 'em that you can do most anything while you've got 'em under your spell.


[cut to Scenes at a Rally]

FEMALE #1: I would like to make $500,000 a year.

MALE #1:
We're exCITed. We're goin' straight to the TOP.

FEMALE #2:
People WANT something better in LIFE than what they've GOT.

MALE#2:
I wanna be a pilot. I wanna travel. I wanna have more vacation. Than my company gives me after 10 years.

WALLACE:
And so you think Amway can DO that?

MALE #2:
AbsoLUTEly.

[cut to closeup of FTC document regarding Amway]

WALLACE:
But IS it that EASY? The FTC, the Federal trade Commission asked that question when it investigated Amway on charges that it was an illegal pyramid operation.

[cut to shots inside Amway manufacturing plant]

And while the FTC had come to the conclusion that Amway is NOT a pyramid because the money in Amway comes from selling real products. The FTC DID say that Amway misrepresented the kind of money that could be made by the average distributor. But the FTC isn't the ONLY skeptic about Amway.

[cut to shot of Bruce Craig, assistance Attorney General from the state of Wisconsin]

CRAIG:
We're charging them with deceptive business practices because of the use of those hypotheticals because they so vary from what we feel is REALITY.

WALLACE:
[voice over] Bruce Craig investigated some examples used in Amway literature. Examples that said that Amway distributors could make in excess of $1200 a month. Money that some Amway distributors could be earned with just a few hours a week. But after looking at the average income of the 20,000 Amway distributors in Wisconsin, Craig came to the conclusion that such a claim was outlandish.

[to Craig] Surely, SOMEbody's making that kind of money.

BRUCE CRAIG:
Yes. That's correct.

WALLACE:
How many? Percentage wise.

BRUCE CRAIG:
About one percent.

WALLACE:
[voice over] Amway DID make the disclaimer that $1200 a month was ONLY hypothetical but that still doesn't convince Bruce Craig.

BRUCE CRAIG:
If the figure of successful distributors was 1 out of 5 as opposed to 1 out of 100 we wouldn't be in court right now.

WALLACE:
[voice over] And, Craig says that even the distributors who, on paper, earn an average of $14,000 dollars a year in Wisconsin actually earn a lot LESS. How much do they actually make?

BRUCE CRAIG:
After business expenses, a net income of minus $918.

WALLACE:
WAAAAIT a MINute! The direct distributors who make a gross income on average of over $14,000 wind up losing almost $1000 after business expenses?

BRUCE CRAIG:
On average. Yes.

WALLACE:
Can you make $1200 a month on 6 to 8 hours a week?

(RICH) DEVOS:
Not that I know of.

WALLACE:
[voice over] But if the founders of Amway are painting a realistic picture of just how much work it takes at least some of Amway's distributors in the field say something quite different.

[cut to couple sitting at kitchen table]

[voice over] Bill and Julie Greenwood had 120 distributors beneath them in Amway and Julie Greenwood says that she and Bill routinely painted a pie-in-the-sky picture of how easy it is to make to the top and that their sponsors counselled them to keep that story going.

JULIE GREENWOOD:
It was an outright LIE!! Because we weren't doing it [succeeding] ourSELVES! And Bill said "What I wanna do is, in my meeting, I wanna tell the people just how much time it takes, I wanna tell them just how much money it takes to build a successful business" and they said "Well, Bill, you can no longer work with your group if you're gonna tell 'em those things." Bill said, "But they're the trUTH!" and they said "But people don't need to KNOW those things."

Wednesday, October 6, 2010

Amway Global - IBO Expenses Exceeds Income?

So many IBOs are loyal to their upline but unknowingly get duped. They think that they will all be successful and living in the lap of luxury by following the system and upline advice. However, simple math proves that the system of voicemail, standing order, books and functions are just leeches on IBO resoirces and guarantees that the IBO group as a whole cannot make a profit. Even those who work very hard and do what they are told are hard pressed to earn a profit.

Here's the premise. Let's look at a group of 100 business building IBOs. They all do 100 PV like loyal soldiers. So 100 PV = roughly $300. 100 IBOs would then spend $30,000 a month on Amway products. Since Amway pays about 32% of their take back as IBO bonuses, 30,000 BV would generate about $9,600. If everyone split this up equally, it would be $96 each. But it doesn't work that way. Uplines somewhere get a cut from these bonuses so most IBOs will get about $10 and the upper level ones will get more, based on their personal group volume.

Now since these are the business building IBOs, they are expected to be on voicemail, standing orders, book of the month and functions. Of course, indivudal circumstances will vary, but many IBOs on average will spend between $150 and $250 a month on these various tools. At $150 a month each, the expenditure would be $15,000a month spent on tools to earn $9,600. If the group is a bit more hardcore and spends $250 a month, then the group would spend $25,000 a month to earn $9,600.

This continual system of expenses exceeding income systematically drains the IBOs of their resources and the upline continues to enjoy their luxuries at their downline's expense. How long can any business last with expenses exceeding income? It is for this reason that I believe upline leaders also teach their downline that they are nicer people or better spouses, because it takes the focus off the losses or gives the IBO a justification for the continuous net losses.

IBOs, and prospects should think about this message carefully. Keep track of your income versus expenses. A business exists to make a net profit. If not, why are you in business to begin with?

Tuesday, September 21, 2010

Amway Global - Go Broke Fast?

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.

Thursday, September 2, 2010

"Tex" Countersuing Amway Global?

http://texsquixtarblog.blogspot.com/

Thursday, September 2, 2010
ONLINE CALL FOR CO-PLAINTIFFS AGAINST AMWAY!!!
If you were an IBO within the past 4 years, and would like to recover your lost Amway Tool Scam money, contact me to join my lawsuit against Amway.

Just email me at hawaiianibo@yahoo.com.

If you want to discuss the issues, use the "TALK TO TEX" option in the left column of this blog.

The more people who join, the greater profit each of us will make, so inform anyone else you know who qualifies about this opportunity as well. Sort of like network marketing!!!

Tuesday, August 31, 2010

Amway Global - Tricked Into A Meeting?

Looks like IBOs do a good job of soiling Amway's already battered reputation?

http://www.complaintsboard.com/complaints/amwayquickstar-c96965.html

On weekend while we went shopping, my husband and I met this person by name Ram Yellamanchi. He started a conversation with us with regards to a product we were looking at buying in the store. He inquired about my husband's nature of job and later phoned us that next day trying to inquire if my husband can spend few hours after his work for his company. We asked him if it was network marketing like Amway, he said he didn't even know what network marketing is and mentioned it was not Amway.

We asked him about his companies website and nature of job and told him if we find it interesting, we might think of it. That next day he phoned us a dozen times asking us to attend a seminar his senior team lead was giving. It was at sheraton. We asked this guy a million times about the nature of the job and stuff, he told us that his companies website is yellamanchalis.com.

When we phoned the hotel to find out what exactly the seminar was all about, we were told it was an e-commerce seminar.

Later when we went in there, we were taken by surprise to see that it was indeed Amway. It was such a waste of time and the most disgusting part is that the guy lied to get us to that seminar.

I have friends who work for Amoco and we order stuff through them and we liked the products too. Sadly because of people like Ram, the company loses its reputation.

Thursday, August 26, 2010

Amway Global - Just The Facts Please?

When I was first recruited for the Amway opportunity, I was tricked into attending a meeting. My second brush with Amway wasn't due to trickery, but filled with lies. One of my upline outright lied. Stood on stage and told the audience that nobody made a profit from tools. Some uplines wanted control of their downline's lives. Let's look at some other facts:

Most IBOs quit in less than a year
Most IBOs never sponsor a downline
Almost all IBOs who purchase tools end up with a net loss
Average IBO earns only $115 a month (including diamonds who drive the average up)
Some diamonds make more money from selling tools that from Amway
Some diamonds are not qualified but still rake in tool profits
Amway's name is soiled in North America
Most Amway products are sold to IBOs and not customers
There are few new diamonds in North America (some groups are shrinking)
Some diamonds lost homes due to foreclosure
A prominent triple diamond was in bankruptcy proceedings

Tuesday, August 17, 2010

Amway Global - What The FTC Says About MLM

Multi-Level Sales

The FTC released a Consumer Alert regarding Multi-Level Marketing Plans in 10/1/2000. This information is provided under a cooperative agreement between the Better Business Bureau and the U. S. Federal Trade Commission (FTC), which has prepared this information.

"The Bottom Line About Multilevel Marketing Plans"

Multilevel or "network" marketing plans are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you'll receive commissions - for your sales and those of the people you recruit to become distributors. These recruits sometimes are referred to as your "downline."

Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes. In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors - not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate.

Joining a pyramid is risky because the vast majority of participants lose money to pay for the rewards of a lucky few. Most people end up with nothing to show for their money except the expensive products or marketing materials they're pressured to buy.

If you're thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan. What's the company's track record? What products does it sell? Does it sell products to the public-at-large? Does it have the evidence to back up the claims it makes about its product? Is the product competitively priced? Is it likely to appeal to a large customer base? How much is the investment to join the plan? Is there a minimum monthly sales commitment to earn a commission? Will you be required to recruit new distributors to earn your commission?

Be skeptical if a distributor tells you that for the price of a "start-up kit" of inventory and sales literature - and sometimes a commitment to sell a specific amount of the product or service each month - you'll be on the road to riches. Often consumers spend a lot of money to "build their business" by participating in training programs, buying sales leads or purchasing the products themselves. Too often, these purchases are all they ever see for their investments.

Your Responsibilities-
If you decide to become a distributor, you are legally responsible for the claims you make about the company, its product and the business opportunities it offers. That applies even if you're repeating claims you read in a company brochure or advertising flyer. The Federal Trade Commission advises you to verify the research behind any claims about a product's performance before repeating those claims to a potential customer.

In addition, if you solicit new distributors, you are responsible for the claims you make about a distributor's earnings potential. Be sure to represent the opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember that you could be held liable.

Evaluating a Plan-
The FTC suggests that you use common sense when evaluating a multilevel marketing opportunity and consider these tips as you make your decision:

Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.

Beware of plans that ask new distributors to purchase expensive products and marketing materials. These plans may be pyramids in disguise.

Be cautious of plans that claim you will make money through continued growth of your downline, that is, the number of distributors you recruit.

Beware of plans that claim to sell miracle products or promise enormous earnings. Ask the promoter to substantiate claims.

Beware of shills - "decoy" references paid by a plan's promoter to lie about their earnings through the plan.

Don't pay or sign any contracts in an "opportunity meeting" or any other pressure-filled situation. Insist on taking your time to think over your decision. Talk it over with a family member, friend, accountant or lawyer.

Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you're considering - especially when the claims about the product or your potential earnings seem too good to be true.

Remember that no matter how good a product and how solid a multilevel marketing plan may be, you'll need to invest sweat equity as well as dollars for your investment to pay off.

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad."

Wednesday, August 11, 2010

Amway Global - Never Quit! Maybe IBOs Need To Reconsider?

One of the things my upline told our group, and I believe it is still taught today, is that you should never quit. Now it isn't Amway the corporation who is teaching this, it is the upline LOS leaders who teach IBOs to never quit. For those who may be seeking information or are being prospected as an IBO, I will translate "never quit" for you. What your upline means by "never quit" is "if you stop buying training materials, I will lose valuable income that pays for my mansions and other luxuries that I lord over you at functions". While it is not a verbatim translation, that is what the underlying meaning is likely to be.

In many businesses, there comes a time when a real business owner will quit, cut their losses and start another business or find some other vehicle to earn a living. A real business owner might also determine what is costing him the most money and can be expendable, and reduce those expenses to make a profit. In most Amway businesses, losses are directly attributable to the purchase of support materials and training such as voicemail, standing orders, functions, books, etc. Most IBOs, if they simply purchased products they needed and sold a few products, would likely make a profit.

IBOs should consider rejecting upline advice if they are following that advice and there are not profits, especially when you consider that some uplines are profiting from your purchase of support materials.

It is a conundrum though, when upline tells their faithful downline IBOs that they should trust upline as they have their best interest at heart. They may also tell the downline that they will succeed if they listen to upline advice and do the work. Ironically, when things go wrong, upline will say you should be a business owner and discern what is helpful or not helpful advice. What a pile of poo these uplines are pushing. They are telling downline to listen to their sage advice and their valuable experience and then avoiding any responsibility for bad advice ot advice that doesn't work by saying the new IBO should disregard what doesn't work. If that's the case, why should the downline buy any support material? How would a new downline know what advice to use and what to disregard?

If your upline tells the group to "never quit", maybe you should reconsider.....

Tuesday, July 20, 2010

Amway Global - The Problem With Amway Defenders?

There is a big division between critics and defenders in the Amway business. I believe that critics play an important role in providing information to the information seeking public. Some promoters of the opportunity are less than honest about what they present and in fact, discourage prospects from seeking more information. It is true that a "rogue" critic who may just be mad at the world may not provide that factual information, but many critics are simply sharing their experiences so others may see the hazards and problems that plagued their experience, and prospects can look out and possibly avoid these same pitfalls.

There are a few supporters, in particular, one who has made it his personal mission to defend Amway, apparently pro bono. But these supporters, are they truly helping the cause? These Amway defenders set up google alerts so they can be notified each and everytime someone writes something about Amway. When there's new information posted, they drop into the blog or forum to quickly "clear up" what they consider to be misconceptions about Amway. In some instances, these so called defenders such as IBOFightback or Bridgett, drop into a conversation unwanted. They drop into an established online community to set them straight about Amway. Instead of setting anyone straight, they simply tick off a host of online community members who are now 100% sour on Amway.

It is my opinion that the Amway defenders like IBOFightback and Bridgett do more harm to the Amway name than good. Imagine you are sitting at a bar with some buddies and someone brings up Amway into the discussion. Some guy across the room comes running over to your gang and says you are all obviously wrong and misled about Amway. Do you invite the guy over to talk with you or punch him in the nose? I'm not saying they don't have a right to publish their own blogs and stories, but to drop into an established forum and trying to "set them straight" is like an unwanted house guest. Ironically, they are currently whining about some potential damage caused by critical statements about Amway but completely ignore how much personal and financial damage has been done to people by untrue positive information about Amway, such as the ability to retire before the age of 30 with lifelong residual income. Who is accountable for that damage?

Saturday, June 26, 2010

Amway - Is Lying Just Part Of The Business?

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.

Thursday, June 3, 2010

Amway Global - The Truth About Tools Profits?

http://www.perrymarshall.com/45/amway-tapes/

#47

I was an Amway distributor from 1980 to 1982, and then again from 1987 to 2003, when I just decided to not renew. My organization was large enough for me to stay home for almost 5 years taking care of my parents and family.

Unfortunately, the truth in the matter is, the tool system is the most important, and most profitable part of the operation. Amway sanctioned the tools business by not forcing its end. As an accountant, I was the tax guy for several of the bigger people in the NY area. I was amazed to see that 60%-80% of the NET income that they were earning was from the tools and functions, not from the movement of products through the organization. Speakers were paid to speak, in cash. I know, because I hosted 100’s of these meetings in the NYC area for many years, and spoke at some of them. As the host It was my job to collect the door proceeds, pay the hotel/room bill, and then give the remaining cash in an envelope at end of meeting to the speaker. Sometimes these dollars were in excess of $ 500.00. The statement that they left their families for the good of the team is nonsense. They did it for the benefit the extra $ 20-30k in “tax free” cash flow. Directs earned $ 1.00 from each tape sold as a monthly standing order to their teams, larger Pins, earned from 1.50 to 3-4 dollars per tape. Tapes cost $ 6.00.

The whole business revolved around functions, where the tapes were made. The standing order tape of the week, (sometimes a double) WERE the recordings from these same meetings. We were told we needed to be on standing order so we could have the access to the upline help. Not on standing order, not at functions, kiss the upline by by.

As I saw what was going on, and seeing the huge expense I and my people were going through, I decided that it was not in my best interest to continue with the lies, and stopped attending functions. I still bought products, and even kept getting tapes via mail. Quixtar transfer killed much of our NY volumne, so income dropped quite a bit. They talk about the relationships. Well, my immediate upline was someone that I knew when I was just 2 years old. Our mothers were best friends for decades, and we spent a lot of time together in our grammer school days.
When my mother died, I was out of business on paper for about a year or so. NOT ONE OF THE PEOPLE IN MY UPLINE ATTENDED THE FUNERAL/WAKE, NOR DID THEY EVEN CALL. Including my old friend, who grew up with me and my family. Her excuse “I could not get a second vehicle to travel there”.

Tuesday, May 25, 2010

Amway Global - 1 in 125 US Citizens Are Millionaires

I don't know how many millionaires Amway has created. I honestly don't think Amway knows either, except for the owners of Amway who are reported as billionaires. But still there is a myth that Amway has created the most millionaires in the US, save for Microsoft corporation. To be perfectly honest, I am fairly sure that there are some millionaires who can attribute their wealth accumulation to the Amway business. But I suspect that there are far fewer millionaires created by the Amway opporunity in North America than your upline would have you believe.

I googled WikiAnswers to see how many people in the US are millionaires. The answer was 1 out of every 125 Americans are millionaires. It did not specify how much income these folks had, nor did it say what kinds of businesses or occupations were likely to make you a millionaire.

But then again, we can make some comparisons of how many millionaires versus various pin levels. 1 out of about 240 IBOs reach the platinum level where depending on your structure, you might earn $30,000 to $50,000 annually. This is before taxes and business expenses are considered. These figures are approximate. 1 out of about 15,000 IBOs reach the level of diamond where you earn about $147,000 annually. This is also before considering taxes and expenses.

But 1 out of 125 people in the US are millionaires. It sounds like most Americans have a better chance of becoming a millionaire (without Amway) than they do of becoming a platinum in Amway.

Tuesday, May 11, 2010

Where Is The Success?

So many IBOs pass through my blogs and they make claims of success. But where is this success? Why aren't there hoards of former IBOs who are collecting residuial income and walking the beaches of the world? Why are crown ambassadors still working all of the functions? Why do so many IBOs make income claims and then disappear when asked for some evidence of their alleged success?

I mean if you look at a cross section of your community or country, there will be retired postal carriers, retired government workers, retired airline employees and a host of other occupations. But as far as I know, I don't know of any former Amway IBOs who have retired in full or even in part because of income they passively generate thru Amway. It might also be noteworthy that Amway the corporation does not promote residual or passive income. This is hype generated by the lines of sponsorship and a way to recruit new IBOs.

I believe that Amway sales in the US has been declining based on the figures that Amway had reported. Thus there is less money going out to IBOs and more than likely, fewer IBOs in the US, and therefore, very likely, fewer big pins.

So I ask, where is the success? Why are former IBOs who collect residual income so rare that noone I know can name even one person who is out there walking the beaches of the world while Amway checks keep rolling in? Wouldn't these folks be as common as retired postal workers or retired airlines employees? Why are they so rare that it almost seems like an extinct population? Where is the success? Maybe there is none?

Tuesday, May 4, 2010

Joining Amway Is Not Like 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.

Tuesday, April 13, 2010

Amway Global - Go Platinum, So You Can Lose Money?

I read about an investigation conducted by Bruce Craig, attorney general (at the time) of Wisconsin. He concluded that the average platinum in Wisconsin (in the 1980's) lost an average of $918 per year. Granted the study is now a bit dated, but even though Amway bonuses may have gone up, the prices of Amway products and the prices of functions and other related expenses have also gone up, therefore we can reasonable conclude that if a platinum lost money back then, it is quite possible that it still happens. In fact, due to the heavy emphasis on the use of cd's KATE, functions and other tools that cost money, I would guess that a platinum's losses could be much more today! Not that much has changed over the years that would lead me to a different conclusion. In fact there are more tools and expenses today that did not exist many years ago, such as website fees and we also have a more expensive voicemail system now than some years back.

I have seen many testimonials from former platinums who said they lost money or perhaps, broke even at best. I was at a pin level with recommended parameters, and I was at break even/small losses. I was not privy to, but have also read of additional functions and expenses once you reach the platinum level and above. One such function is/was Go Diamond Weekend. In the book "Merchants of Deception", it outlined a very expensive cruise that upline put on and profited handsomely from it. It seems that almost every upline does allows them to profit from downline.

Based on my understaning of tools expenses and some believable testimony, I can reasonably conclude that it is quite possible for a platinum to lose money, mainly due to system expenses. If you factor in the cost of products, IBOs can expend a lot of money each month. The products are not a business expenses, but then again, how many "former" IBOs buy any Amway products? And if there are some former IBOs who buy product, how many of them buy 100 PV's worth? Apparently, the business itself creates an artificial need for Amway products.

IBOs who are checking out the business or who are new, should take this information and think about it. If platinums make little or possible lose money, is this truly a viable business option for you? Also, keep in mind that only a fraction 0f 1% of IBOs ever reach platinum. Can you overcome these odds? Can you build a platinum business without the system?

It is possible, but highly unlikely.

Tuesday, April 6, 2010

Amway Global - Panhandling More Lucrative Than Amway?

I just happened to come across this article. It is about panhandling. Based on Amway's "average" income of active distributors, it appears that panhandling might also be more lucrative than becoming an IBO. $10 to $130 in 5 hours shows some potential. Averaged out, that would be about $65 in 5 hours and about $260 in 20 hours. That is more than double of the average income of an active IBO! Of course these results are not scientific, but since we are talking about averages, we can speculate can't we?


http://media.www.dailyemerald.com/media/storage/paper859/news/2008/11/25/News/Peddling.For.A.Pretty.Penny-3561405.shtml


Sexton and Mathew "Huggy" Miller, 21, both said they asked anyone for money, but said it always brought varied results. Some people would give as much as $5 to $50 at once. "You can make anywhere from $10 to $130 in five hours," Miller said. Sexton generally stopped once he hit $20 because it was usually all he needed.

Friday, March 19, 2010

Amway Global - Life At The Top?

Go diamond! That is the battely cry of many thousands of IBOs who participate in a system. These starry eyed IBOs want to be on stage as diamonds so bad that the cry thinking about it. The truly believe that they will be there one day and that they will be the objects of adoration like the diamonds they currently worship. The diamond lifestyle is portrayed as fabulus wealth. They show scenes with mansions, fancy sports cars, jets and other indulgences that most people only dream about.

But the problem is that most downline IBOs don't realize how the diamonds attain these goodies. They think that Amway just rolls in barrels of cash to diamonds. That the money rolls in an will never stop. It is why you hear the term "walking the beaches of the world". This is because many IBOs think they will go diamond, walk away from their business and Amway will keep delivering these barrels of cash, month after month, year after year. Sadly, you don't see or hear of any diamonds engaging in these kinds of activities. Instead they are busy flying around the world rushing off from one meeting to another and continuing to recruit new IBOs. It is because about 2/3 of IBOs never even last a year in the business. Anytime you stop working, your income will shrink, and eventually dwindle down to nothing.

But sadly, IBOs also do not realize that for many diamonds, the lifestyle comes from their dedication to KATE, standing orders and functions. It is these streams of income that will fund the toys that diamonds show in their slideshows. Think about it, you sell Amway products and get a percentage back, but you sell a cd that costs about 50 cents to produce, and sell it for $7.00, that's over 1000% profit!. Or, upline may sell you a cd for $2.50, but have you pay $49 for the priviledge of buying that cd for $2.50. They also make a lot of money on functions as convention centers and city owned arenas can be rented cheap or even free in some cases, if the conventions will fill the city's hotels with visitors.

I believe that for these reasons, the Amway business is slowly shrinking in the US. People know the deal and aren't signing up. In order for there to be more diamonds, you need to have more and more people joining Amway. Because information is easily available, prospects find out the truth and either don't join, or they join because they think they are heroic enough to overcome overwhelming odds. I believe there is now ample evidence that "life at the top", or diamond and above is not all that. Diamonds are getting divorced, having homes foreclosed, going bankrupt, getting in debt, and some quit or resign. (So much for that lifelong residual income claim)

For those aspiring to go diamond, be careful, life at the top may not be all that you think. $150,000 to $200,000 may seem like a fortune compared to what you earn, but try minusing half of that for taxes and medical insurance. Then see if you can buy a mansion in cash, own a top model Mercedes Benz, and some other goodies. What you'll find is that you will simply have higher limits on your credit cards which might still be maxed out and you will have to pretend to be wealthy while living
bonus check to bonus check.

Be careful what you wish for, you might get it.

Wednesday, March 17, 2010

Amway Global - Go Platinum Then Go Broke?

I read about an investigation conducted by Bruce Craig, attorney general (at the time) of Wisconsin. He concluded that the average platinum in Wisconsin (in the 1980's) lost an average of $918 per year. Granted the study is now a bit dated, but even though Amway bonuses may have gone up, the prices of Amway products and the prices of functions and other related expenses have also gone up, therefore we can reasonably conclude that if a platinum lost money back then, it is quite reasonable to conclude that it still happens. In fact, due to the heavy emphasis on the use of cd's KATE, functions, books, websites and other tools that cost money, I would guess that a platinum's losses could be much more today!

I have seen many testimonials from former platinums who said they lost money or perhaps, broke even at best. I was at a fairly high pin level with recommended parameters, and I was at break even/small losses. I was not privvy to, but have also read of additional functions and expenses once you reach the platinum level and above, such as go diamond weekend.

Based on my understanding of tools expenses and some very believable testimony, I can reasonably conclude that it is quite possible for a platinum to lose money, mainly due to system expenses.

IBOs who are checking out the business or who are new, should take this information and think about it. If platinums make little or possible lose money, is this truly a viable business option for you? Also, keep in mind that only a fraction 0f 1% of IBOs ever reach platinum. Can you overcome these odds? Can you build a platinum business without the system? It is possible, but highly unlikely.

More food for thought, IBOs claim that platinums start to share in tool profits, but can anyone explain why platinums only share in profits from standing order and not all the other varieties of money making tools that upline peddles?

Saturday, March 13, 2010

Amway Global - Statues Of Critics?

I recently heard a humorous comment from an Amway defender asking where are the statues of critics if they know so much about everything. I had to chuckle and ask myself, where are the statues of Amway diamonds? There aren't any that I know of. And why would there be? I mean think about it, what has a diamond accomplished? They have done nothing of note. They are only legendary because that's what IBOs have been taught. These diamond leaders mean squadoosh outside of the Amway business.

Have diamonds invented a cure for cancer, or have they achieved something of greatness? The answer is no, all they have done is achieve a level in a multi level business. And if I may add, they have achieved it in many cases, by deceiving and or outright lying to their downline. Instead of a statue, some of these diamonds should be sitting in jail for fraud.

A critic is often just simply sharing an experience or pointing out the obvious, which is that Amway is not a good opportunity as some diamonds would have you believe. And if you sit and think about it, an Amway diamond or an Amway defender has something to gain by duping their prospects and downline. A critic gains nothing.

My only goal in running my blogs is that I hope to inform information seekers so if they still decide to join Amway, they do so with full diclosue that it may not be the greatest business opportunity as they may have been led to believe. The facts speak for themselves. The average active IBO earns just over $100 a month, and the average figure is inflated by some bigger diamonds pins. My guess is that the median income of an IBO is probably less than $35 a month. And that income is instantly eaten up and more, if you are an IBO on the "system".

Wednesday, March 10, 2010

Amway Global - Uplines Are Outdated?

One of the things many Amway defenders like to use in defense of Amway is that critics are outdated. That experiences that are a few year old or older are no longer valid. Yet when you examine the Amway opportunity, not much has changed. At least in North America, IBOs are still deceptive about presenting Amway to a prospect. Many diamonds who ruled the Amway world in the 1990’s are still around teaching today, with few new diamonds emerging. The emphasis for many IBOs is still to sponsor people and not on selling Amway products. Most business building IBOs are told they need the system to succeed. If Amway enthusiasts are going to say that someone’s experience no longer applies, at least state what is different.

In fact, I will cite some specific items that could greatly reduce the cost of running and Amway business and can be done with great efficiency. Of course none of these would ever be fully implemented because the upline leaders would not be able to profit from them as they do now.

Why does anyone need voicemail now when Amway is a web based business? Get rid of KATE and replace it with free email. A leader can very efficiently and without cost, send a message to all downlines with one punch of his keyboard. Everyone has access to a computer either at home of by internet cafĂ©’ or by laptop or iphone. This could save an IBO possibly more than $30 a month plus charges for excess minutes. In fact this would be an upgrade to the current KATE system.

Even standing orders can be streamlined to mp3 messages or some kind of email based transcript to get information to downline. It doesn’t have to be free for those who believe that upline should be paid, but it would eliminate the need to pick up the material from your upline and it would be able to greatly reduce the cost to IBOs.

So I will contend it is my opinion that Amway leaders are either outdated themselves or simply refuse to make technology upgrades because they make a nice profit charging downline for these outdated materials.

Wednesday, March 3, 2010

Amway Global - Why Is Amway So Divisive?

One thing that seems pretty clear about the Amway business opportunity, it is ver divisive. I believe it is this way because of how uplines advise or teach their groups. Amway is often promoted as a way of life. That anyone who disagrees with the Amway opportunity is the "enemy", so to speak. I don't mean that literally, but in some cases, it gets pretty close. It isn't that uncommon for IBOs to shun friends and family members simply because they disagree with whether or no to be involved in the Amway business.

A lot of IBOs are taught to "avoid negative" which may also include friends, family and even news in general. They are to fill their heads with only positive information coming from upline's meetings or standing orders. (And they wonder why some people call Amway a cult?) Often, IBOs will be told that they are winners for being in Amway, so obviously, those who don't join Amway are "losers", or "broke"?
Then conversely, some IBOs might be called Ama-robots because they repeat what they hear on tapes and it sounds like a tape recording.

In no other business, even other MLM businesses do you see such a presence of online critics and supporters. More often than not however, I see critics posting factual information and Amway apologists attacking the critic rather than the information. Also common is for IBOs to make income claims that are hard to believe. Then when called on their bluffs, these IBOs disappear or start the name calling. Other supporters might try the drive through method of jumping into a blog, calling everyone a liar and then disappearing. The worst Amway trolls though, monitor the internet with google alerts or other mechanisms and seek out any discussion on Amway, and then drop into the discussion, whether wanted or not. They disrupt peaceful online communities thinking they will get the group to change their minds or opinions about the Amway opportunity.

Rarely are solutions ever discussed. I have in the past, offered real and viable solutions, but of course, none are ever considered by the other side. But I have yet to see any Amway supporters do much more than to critisize and attck those who disagree with their business.

Amway is a controversial topic. But the real question should be why that is so?

Monday, March 1, 2010

Amway Global - Passive Residual Income, An Amway Myth?

I recently had some discussion about the Amway opportunity and the ability for IBOs to build a stream of passive residual income. I would say that it's possible but highly unlikely. For one thing, how many diamonds or corwn ambassadors for that matter have "walked away" from Amway to jetset to beaches around the world?

I believe it is nearly impossible for IBOs to achieve this dream of income flowing into thei bank account after they leave Amway. I believe that this doesn't happen because most IBOs do not build a repeat customer base. On an Amway corporate blog, it was admitted that less than 5% of Amway goods are sold to non IBOs. Repeat customers, with a genuuine need for goods and services can lead to the possibility of repeat or residual income.

IBOs are trying to build an income that is dependent on keeping IBOs flowing through their business. But that is flawed since less than 1/3 os IBOs last only a year, and the vast majority of these same IBOs are gone in less than 5 years. You cannot build and maintain a business with residual income when people are coming and going. You would need a consistent customer base and a genuine need for these products and services.

I believe that the low sales to non IBOs, coupled with the fact that former IBOs do not appear to remain as loyal customers once the "dream" has faded away is a telltale sign that residual passive income from Amway is simply a myth that is used to promote the business. Why would any diamond ever quit or leave the business when he or she could simply collect check and bonuses month after month, year after year. I believe it is because there is no residual income as IBOs like to claim.

Friday, February 26, 2010

Amway Global versus A McDonald's Employee?

When you visit the Amway Global blog, they have a section I believe called "by the numbers". When you click it, it takes you to "Thisbiznow" and shows the average income of "active" IBOs to be $115 a month - and that's after Amway disregarded about 1/3 of the IBO sales force as they are not "active". I believe that this figure is based on a 2001 survey done by the corporation (And Amway supporters complain and bemoan critics for not having currect information).

One of the things I often hear from Amway supporters is a comparison of Amway and franchises. (McDonalds in particular). First of all, unless I am mistaken, Amway is not a franchisor, and their salesforce (IBOs) are not franchise owners. This is simply a trick used by some lines of sponsorship to make you feel nice and important (I guess). So there is no valid comparison between an IBO and McDonalds.

But let's look at one very telling comparison between Amway IBOs and McDonalds. In Hawaii, the minimum wage is $7.25 an hour. If someone were employed at McDonald's for $7.25 per hour, and they worked 5 hours per week, or 20 hours in a month, their gross income would be $145.00! That's more than an average IBO receives from the Amway opportunity! For you average IBOs out there - want a 30% raise? Get a 5 hour per week job at McDonalds! Go Big Mac!

Tuesday, February 23, 2010

Amway Global - A Typical IBO?

An IBO or an “Independent Business Owner”. Most people involved in the Amway business refer to themselves as IBOs or ABOs, which is an Amway business owner. While this is all good, what does it mean to be an IBO/ABO? It would appear to me that the title is just a trumped up title with little meaning. An Amway business for the vast majority, has no equity. You don’t own your downline, and you probably don’t have much inventory. Your business basically exists only on paper, and if you are like most other IBOs involved in a system, then you are operating at a loss when you factor in business expenses.

For the average person, losing money would cause people to question the system or to make a decision to quit and walk away from the business. I believe this already happens and the theory can be confirmed by the fact that the Amway business doesn’t retain their IBOs. At the end of the first year, you already have about 2/3 of IBOs quitting or not renewing. This indicates to me that the products and the opportunity do not have enough value to maintain the interest of those who sign up. It makes perfect sense. You have presentations where they show how you can earn great riches in a short period of time, and basically retire and walk the beaches of the world. People sign up in the excitement and quickly realize that the business doesn’t produce what was advertised.

Amway is not the only opportunity like this. Many financial gurus sell financial systems promoting an easy path to success, or at least a shortcut to wealth, rather than a more traditional method of working a job and savings for retirement. But looking at the big picture, jobs produce a far greater number of comfortable retirements than Amway or any of these other financial systems. Working a job for 30 – 40 years doesn’t sound appealing, thus these shortcuts appeal to the masses. However, unfortunately, the masses cannot possibly succeed together. A rare individual with exceptional skills may overcome the barriers to succeed at times, but they are few and far between, and likely leave a trail of financial disasters along the way.

I would venture to say that most IBOs are honest, hard working and motivated people. They strive for a better life as most people do, but get lured into the possibility that there is a shortcut to long term success. And while some exceptional and rare people can make the flawed system work, the vast majority of people cannot. Unfortunately, by the time people discover this, they have already invested time and money into the system. At that point, it becomes a tough decision as to whether you press on, hoping for the business to pan out, or to stop and cut your losses.

Fortunately for me, I realized what was happening, and I made a decision to stop. My damage was minimal as compared to some other testimonies I have seen. I blog to help prevent others from falling into the trap.

Friday, February 19, 2010

Amway Global - Eagle or Double Eagle?

EAGLE:

Signed counsel sheet to upline diamond
300 PV Personal use & retail, 200 PV for singles
6 legs at 100 PV or higher
5 legs on standing order
3 legs attending major functions

DOUBLE EAGLE:

Signed counsel sheet to upline diamond
500 PV Personal use & retail, 300 PV for singles
12 legs at 100 PV or higher
10 legs on standing order
6 legs attending major functions

======================================================

These are the parameters for eagle and double eagle (WWDB).
For eagle, a single may have to spend or sell $600 a month or more and a couple, up to $1000 to do eagle parameter PV. Double eagle would be $900 to $1500 for that PV requirements. Since many groups do not emphasize retailing, these IBOs would have to load inventory to qualify. With all the tool movement, I can see why uplines would want to edify an eagle or a double eagle. Upline can make tons of money on an eagle or double eagle group.

If you take all of the expenses into consideration, and look at these parameters objectively, you can see that eagle and double eagles are running their businesses at a loss. But hey, you get recognized at functions right? All you need to do is sponsor some people and spend between $1000 to $2500 a month on products and tools and you too can become an eagle or double eagle.

Is this what IBOs are striving for?

Thursday, February 11, 2010

Amway Global - Are You Moving On?

I know many IBOs get excited and sign up for Amway. They see the possibility of getting wealthy and they think they can do it. That's about the time when the Upline will advise this IBO to get involved in the system. A serious business owner needs tools and tools are vital to your business. Even though there is no requuirement to purchase tools, many IBOs really have no choice when they hear things like "tools are optional, but so is succees", or "nobody has ever made it without tools but you can try to be the first". It's a defacto requirement for many IBOs, especaiily newbies who don't know better.

But even with tools, most IBOs don't even sponsor a single person, and even more disturbing, many IBOs never sell a product to customers. Some don't even try. And some uplines teach IBOs to be "prosumers" or to self consume the products.

So a very simple question for IBOs. Are you moving on? Are you getting direct value from the valuable tools? Are the tools resulting in sponsorship or at least product sales? If you attend a function for $110 and you cannot sell anything or sponsor downline, then you for no return on your investment. I know some IBOs justify themselves, claiming that tools made them nicer or some fluffy statement like that, but a real business owner would consider that a POOR investment in terms of their business. Did the standing order do anything for you? As an IBO, I constantly heard that giving away tapes/cds is sure to sponsor people. I did not witness, not even once, that a tape or cd sponsored someone. I'm sure it may have happened, but it's probably so rare that it's insignificant.

IBOs, are you moving on? If not, why not? Are your tools working or are they just an expense eating away at what little you may be earning? Are any of your crossline moving on? Are there more people quitting than moving on? Look around yourself and take note. I was once there, I just didn't notice. I hope this post serves you well.

Tuesday, February 2, 2010

Amway Global - IBOs Use Soap, Upline Sells Hope

The title of this blog post pretty much sums up what many IBOs apparently experience. Many groups or factions of IBOs teach a self consumption model. While leaders on stage will mention selling of products, it is not emphasized in smaller groups where the "real teaching" takes place. Thus many IBOs primarily self consume Amway products and talk about the "prosumer" concept. Many IBOs get lured into the Amway opportunity by dreams and aspirations of getting rich. Some IBOs deny this, but clearly, if someone said you can join Amway, work hard and end up broke, that would not attract many now would it? I know when I was pitched the plan, my sponsor said it would be easy to reach platinum. I didn't know the likelihood of reaching such a level, and I worked as hard as I could.

But what escaped my attention in the beginning was the side business where the real money was made. That was in the sale of tapes/cds, books, and function tickets. When I was an IBO, we purchased voicemail from Amway, not from our upline. We also did not purchase website fees from upline as we still had call in and pick up. Thus uplines likely make even more income from support materials than ever. While the support materials are promoted as tools, they are cleverly used as "hope". You need motivation, listen to a cd. You need to get fired up, attend a function. My former sponsor claimed that being plugged into the system was your lifeline to success. I believe that is still true today. It is the "hope" of a better life that gets people to sign up for the Amway opportunity and it is that same hope that keeps an IBO going, even when they are losing money month after month.

IBOs continue to hope that success is "right around the corner" or that the business will suddenly turn when they hear that one thing from one of their inspirational leaders. It is my informed opinion that this cling to hope ideal, held by many IBOs is what keeps them in the business longer than a normally rational person would. It's because many IBOs are taught that the only way to fail is to quit. To quit is to give up hope for a better life. It's simply not true.

For many IBOs, quitting is a wise business decision. Your hopes and dreams are not ended. You simply find another way to achieve them. Contrary to what you have have been told, Amway is NOT the only way to achieve your goals. Look at your bootom line. You won't achieve your dreams by losing money afterall.

Monday, February 1, 2010

Amway Global - You're A Winner!

One of the funny things was how our upline would call all the IBOs "winners". Now obviously, an upline has to be positive an upbeat in this people type of business. But a neutral observer would probably be literally rolling on the floor laughing when you saw the reality of the business. You sign up for Amway and you are instantly labeled as a winner. You buy some products and you are a winner! Buy cd's and attend meetings, you are a winner! Part of the problem however, is that these same uplines will imply that people who are not a part of Amway are "losers". I often heard that if you are not a winner, then.........


But it is clear to me (now) that the positive reinforcement is just a part of upline's retention efforts. Call your downline winners, and then there is subtle pressure for people to stay in and "never quit" because then they would be considered "losers" if they left the business.

But this is a business isn't it? A business exists to make a profit and most IBOs who participate in Amway end up with less money than they start with. Even disregarding all the IBOs who "do nothing", still only fraction of 1% makes any money if they are in a system of voicemail, functions, standing orders, books and other support materials.

So if you lose money, are you a winner? If you have been in the business for a few months and cannot sponsor anyone, are you a winner? If you cannot get anyone to see the plan, are you a winner? If you cannot sell any Amway products, are you a winner?
If you never quit and lose money month after month and year after year, are you a winner?

Your upline has probably explained the definition of insanity to you.

Wednesday, January 27, 2010

Amway Global - World Peace and A Cure For Cancer?

Comments made on The Truth About Amway Blog. I guess Amway is great and can cure anything. I also didn't know that Amway increased their bonuses a billion times. Too bad Amway doesn't help improve someone's grammar. LOL

http://www.thetruthaboutamway.com/amway-and-the-internet-a-history-part-i/comment-page-1/#comment-5129

i thik amway is the best thing in the world,infact my parents are in Amway Globel and they have the best reasults.the monthly chek from Amway Globel is a billeon times biger than it was a few years ago ,and i am so glad that Amway Globel was invented and i wish that moae peaple find out about this and not have to live like we did years


hi infact Amway GLOBEL IS THE BEST WORLD WIDE ITS PRODECES ,MY SIS HAD REALY BAD ACNE AND TRID EVERY THING UNTIL SHE TRIED CLEAR NOW SHE WAS VERA INPRESD WITH THE RESULTS NOT GUST THAT BUT EVRY THING NO OTHER PRODUCS CAN BEET THEN ALSO I WOR GLASSES AND GOT RID OF THEM WIYH NUTRELY ,MY DENTIS ALSO SAID MY TEETH ARE THE BEST HE HAD EVER SEEN,AND MY HELTH IS BETTER THAN EVER,MY MOM WAS WAY OVER WAIT AND LOST MORE THAN 90 POUNDS
AND THATS WHY AMWAY IS THE BEST

Wednesday, January 20, 2010

Amway Global - The Business Is Simple But Not Easy?

One of the silly things I hear all the time from IBOs is that the Amway business is simple but not easy. It's a pleasant way of saying something is difficult. Breaking rocks with a hammer is simple but not easy. Licking the sidewalk 5 hours a day is simple but not easy. Walking up 3000 steps in a building is simple but not easy. Many things are "simple" but practically impossible to achieve. I believe going diamond in Amway is one of these tasks that is simple but nearly impossible to achieve.

Buy products, sell products, sponsor downline. That's the Amway business in a nutshell. Certainly these tasks are not rocket science, but the only task that an IBO has control over is to buy products. Convincing customers that highly priced and unfamiliar products are "the best" is a daunting task, and it would appear that an overwhelming majority of IBOs simply cannot do this. Thus the vast majority of Amway sales are to IBOs themselves.

Sponsoring people is also a daunting task. In the US, past IBO behavior has given Amway a bad reputation. Many people cannot even get anyone to see the plan, much less be able to sponsor anyone. Just the mention of the name Amway can get you funny looks from people. Sure, there are some open minded people, but often times in the process of information gathering, they will decide not to get involved. Even for those who do sponsor others, the retention rate of IBOs is so miserable, that you can never stop recruiting if you hope to retain your level of business. And even if you retain some of your IBOs, it doesn't mean they will purchase anything.

So even if someone tells you that the business is simple, it doesn't mean that you will be successful. Remember, breaking rocks with a hammer is simple, but not easy.

Wednesday, January 13, 2010

Amway Global - Comparing Amway To McDonalds?

I think it's time to dispel any silly comparisons of the Amway opportunity to McDonalds. First of all, Amway is not a franchise opportunity. If they were, Amway would say so and you would have to sign a franchise agreement with Amway. Amway would also train you on how to run your business. But this isn't the case. As an Amway IBO, you are basically a middleman distributor who works on comission.

As an IBO, you are dealing with 2 businesses. Amway the corporation sells and supplies you with products. You also earn an income from Amway based on your movement of volume. The second is a for profit business, seperate from Amway that sells voicemail, books, cds, and seminars. Supposedly, these materials are designed to help you succeed in Amway. These for profit groups such as N21, BWW, or WWDB operate independently from Amway. You as an IBO have to decide whether or not you should participate. Given the miserably low success rate that these systems churn out, I would urge prospects and IBOs to think about this if they will spend money to participate.

McDonalds is a large worldwide franchise opportunity. They sell you the rights to a franchise and they train you to run the store. They research demographics and look at geographical locations to make the likelihood of your success nearly 100 percent. When you own a McDonalds, you get your supplies from Golden State foods. Golden State foods operates independently from McDonalds. Ray Kroc and McDonalds corporation does not profit from the sale of hambuger meat and napkins, etc.

Here's the tricky part. You can compare Golden State foods to the tool companies such as N21, BWW, or WWDB, but the difference is that Ray Kroc and other McDonalds owners do not profit from the supplies sold by Golden State foods. In Amway, you have a select few distributors, generally Diamonds and above selling training materials and promoting them as the key to success in Amway. Many of these diamonds and above profit handsomely from the sale of these materials and they are compensated whether an IBO makes a profit or not. Imagine if Ray Kroc and other McDonald's owners owned Golden State foods, and jacked up the prices of the supplies, and then made expensive and ongoing training for new McDonalds franchise owners and told them this is how you succeed, and then 99% of new McDonalds owners failed and went out of business. Now you have a valid comparison to the Amway opportunity as run by the groups such as N21, BWW and WWDB.

In summarizing, there is no comparison. McDonalds owners are very successful as a group while Amway business owners are not. Comparing the businesses are silly and I wish IBOs would stop. It makes them look silly.

Monday, January 11, 2010

Amway Global - What Business Do You Own?

Amway distributor. That's what IBOs were called some years back. I believe it is far more appropriate to call them distributors than IBOs. IBO = Independent business owner. Are you really a business owner? What do you own? You probably don't have a significant inventory. You probably don't have employees. You probably don't have office space or a warehouse. Most IBOs don't even have downline. If you have downline, they are also "independent", thus you don't own them.

Do you think you can use your Amway business as collateral for a loan? Can you leave your business for a month without it falling apart? Can you sell your business for a profit and walk away? What assets can you claim from your business?
Basically, you own nothing. One of the things that is used to attract recruits is the ability to "walk away" from your business and collect residual income forever and ever. Have you ever wondered why it seems that nobody ever walks away from their Amway business to live in luxury on the beaches of the world? I'm fairly sure a qualified crown ambassador couold walk away from Amway and collect an income for a while, but in the US, I believe most or all of the Crown Ambassadors are "old timers" in the Amway business.

So for those of you out there who are recruiting downline and making the pitch, I ask you: What is it you actually own? Do you own a tangible and sustainable business? Or are you simply perpetuating a myth that has been passed on from one Amway generation to the next?

Wednesday, January 6, 2010

Amway Global - Worldwide Dream Stealers?

http://merchantsofdeception.com/mod/wordpress/tag/ruby-direct/

Ruby Direct Lost 2 Homes and a Couple of Hundred Thousand Dollars

Hey there, Eric:

Thanks for your email…and your book.

Our story would be a little lengthy, but in a nutshell, as a former clinical Psychologist, Ruby Direct (stopped by our upline from going Diamond…no joke..we were paying out 28 bonus checks in width…my wife and I had one of the top 60 direct distributorships in North America…won numerous sales contests, trips, etc.), we “lost” easily 2 homes and a couple of hundred thousand dollars AND needed legal intervention and the ADA board to get our upline to stop the incessant attacks and slander! Good old Ron Puryear and World Wide Dream “Stealers”.

The only reason we persisted was because I have been successful in everything I have done in my life…2 time All-American in Wrestling, etc. I was not going to let Amway beat me! I guess we were making our upline look bad…by being honest about the system and making sure people managed their money right…”Don’t spend money on things that you don’t normally buy”, was not to their liking.

It’s a 17 year story….and a 4 year war…We could do a movie on this…

My best to you. Hope to chat soon.

Saturday, January 2, 2010

Amway Global - Winter Conference?

Around this time of the year, you may be invited to a function called "Winter Conference", which used to be called "Dream Night". It was a sit down dinner and the diamonds would put on a slide show and speak about their lifestyles. The slide show had pictures of mansions, jet skis, sports cars, golfing, shopping and other trappings of wealth. The diamonds would proclaim that they need more friends to join them.

When I was an IBO, this function used to cost about $60 or so. I believe it is now about $75. I checked with the Sheraton hotel where our function was held and discovered that even today, you can still hold a sit down dinner for several thousand people for less than $30 per person. The function I attended had about 2500 people so you get the idea.

Anyway, this function is a facade. The diamonds will show you all the fancy things they supposedly enjoy. It is implied that these luxuries are directly attributable to the Amway business, but it is more likely that the tapes/cds and seminar business was more likely the source of their success. It is well known that tools account for the lion's share of a diamond's income in many cases. Back in my days, diamonds told the audience that nobody made a profit fromt tools. To this day, I don't know of any formal agreement that IBOs have, which entitles them to a share of the tools profits. I have heard of a discount on cds, but tools encompass many other sources such as voicemail, functions, and books.

But to sum up, Winter conference (IMO) is just a dog and pony show where diamonds try to impress downlline by showing off wealth. Unfortunately, too many IBOs don't know that the diamond wealth is coming out of their pockets by the purchase of cds, books, standing orders, functions, and voicemail. I hope this article reaches the eyes of new IBOs and prospects so they can decide for themselves.