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?


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


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.