Monday, February 28, 2011

IBOs, How's Your Cashflow?

As an IBO, I mostly had a negative cashflow, primarily because ofthe tool purchases. Tools are generally standing orders, voicemail, functions, and other meetings, and books. While some will argue the value of the tools, it is still apparent that the tools are the main reason why the vast majority of IBOs end up with a net loss at the end of the month.

Because most IBOs are unable to generate enough sales, they end up purchasing most of their own sales. With a lack of sales, an IBO can only profit in turn, by recruiting (sponsoring) downline to leverage volume. Of course, when you finally have enough downline, they are taking the losses in order for you to profit. In this model, Amway's opportunity can be seen as questionable from a legal standpoint. While Amway defenders cite the 1979 FTC ruling, that ruling found that Amway was not a illegal pyramid because of their sales requirement. I believe that groups operating primarily as a "buy from yourself" concept are doing so illegally.

But what is concerning and scary is how IBOs seems to disregard to justify their negative cashflow. You move your 100 PV. If you are typical, that 100 PV is mostly from your own consumption and you end up with a 3% bonus, which is about $10 a month. If you are attending functions, buying books and standing orders and using voicemail, you have a negative cashflow. You will likely be taught to justify this as an investment into your business. What I find ironic is that prospects are often told that the Amway opportunity has little or no overhead. Then when you get started, you are told that a business owner needs to invest in their busines.

Investments into a business would be okay, except that it is a rare thing for any of these IBOs to recapture their investments and turn a profit. For most, they will realize this and quit, or hang on and lose tens of thousands of dollars over a number of years. IBOs and prospects should lok at things objectively and ask themselves honestly, what is my business cashflow like? Am I funneling my job income into this business (moneypit) or are there real prospects of turning a profit? If your motivation hangs on a dream and a prayer, maybe you need to sit down with an accountant and truly analyze your business profit and loss statement. If you don't know what that is, you need to find out right away!

Saturday, February 26, 2011

My Job Doesn't Pay Me What I Am Worth?

One of the things I observed and I believe is still taught today, is that Amway recruiters and IBOs will talk about people's jobs and how you can only earn what the job is worth, and not what you are worth. Then they tell you to join the Amway business as a means to rectify that situation.
Sadly, many will join and end up with a net loss, even after putting in an honest effort.

When you stop and think twice about this, you have to wonder. If your employer doesn't pay you what you think you deserve, you are welcome to offer your services to a higher bidder. If you are unable to find a higher bidder, then you either need to increase what you have to offer, or you have overestimated your value as an employee. But at least as an employee, you have a paycheck that you can depend on, and more than likely, you know when your paydays are.

Now you get excited about being a business owner. Are you now paid what you're worth? Or at least, are you on your way to being paid what you are worth? Have you even asked or thought about what you are worth? Most IBOs, not counting the ones who "do nothing". end up moving 100 PV and getting $10 back from Amway. If they are on the system, they are likely to have spent over $100 a month to participate. Are you now "paid what you are worth?". You are in the negative, and even adding some downline is unlikely to change your situation significantly.

When you spend about $300 to make 100 PV, Amway gets paid. When you earn your 100 PV, Amway will give back about $90 in bonus money (30%). Middle men in your upline take about $80, leaving you with $10. Are you paid what you are worth? Who did the work and who got the lion's share of the reward?
Would you have joined knowing that out of $90 in bonuses you generated, for moving 100 PV, that your uplines would get most of the bonus? What happened to their saying of do the work and get paid? Or are the uplines saying "you do the work" - "so I can get paid"?

Let's say you worked really hard for a couple of years. You finally reach platinum and you earn maybe $40K or 50K (before taxes). After taxes and business expenses, let's say you net $25,000. Have you now earned what you are worth? A platinum is in the top 1% of all IBOs and they net maybe $25,000 to $30,000. Are they paid what they are worth? If you can't answer yes to any of these questions, you have to ask yourself if the whole thing is worth it? Is Amway paying you what you are worth?

Friday, February 25, 2011

Where Are The Diamonds?

How many diamonds are there in Amway? I don't know for sure. Nobody knows for sure except Amway and Amway isn't telling. I once emailed Amway to ask this question and I was told to ask the person who invited me to a meeting. An Amway supporter once wrote a post on his propaganda blog decrying Amway critics for creating an "echo chamber" effect where people searching for information will be mislead about how many diamonds there are in Amway. Of course, he doesn't criticize the corporation for not publishing this valuable and controversial piece of information. He wrote a blog post claiming there are about 4000 Amway diamonds worldwide. While that may or may not be true, given this Amway supporter's propensity for lying, it certainly doesn't speak well about the number of Diamonds in the US and Canada. Nobody seems to be able to name at least ten new diamonds who came out of North America in the last 5 or six years.

On one of the Amway PR blogs, I posed a question (several years ago) and Anna Bryce of Quixtar (at the time) stated that there were 160 Diamondships in attendance to 2006 Diamond club. Assuming there were some absentees, there might be a few more than 160 Diamonds in Amway North America. 160+ Diamondships in nearly 50 years of existence is not much to get excited about. Also, in Amway, a diamond is not forever. Diamonds fall out of qualification, probably more often than a new one emerges.

Some Amway supporters talk about the thousands of people who may have achieved success thru this opportunity. They don't mention however, the MILLIONS who may have been harmed by participating in this wonderful opportunity, albeit possibly from a motivational organization and not necessarily from Amway, Quixtar or Alticor. Although the motivational organizations have mostly been allowed to operate freely to cause this harm, and blemish the corporation's reputation.

The point being missed here is that the more diamonds there are, it is likely that there will be more and more people who lose money. Nearly all diamonds that I know of hard sell their cds, seminars and other support materials. Thus the more diamonds there are, the more downline, and probably more people on the system. The vast majority of people on the system lose money because of the system expenses. A lack of sales to non IBOs almost guarantees a loss for IBOs because the only way to increase volume without sales is to increase downline who then suffer the losses for you. The more diamonds there are, the more lower level IBOs there are, and more IBOs who make little or lose money in order to support these higher pins.

Where are all the diamonds? Are they hiding? Or becoming extinct?

Tuesday, February 22, 2011

Amway Sales Up For 2010?

ADA, Mich., Feb. 17, 2011 /PRNewswire/ -- Amway's parent company, Alticor Inc., reported sales exceeding $9.2 billion for the year ended December 31, 2010, a 9.5 percent increase over sales of $8.4 billion in 2009. The 2010 performance results mark Alticor's 10th sales increase in the last 11 years.

Amway said growth was fueled by strong 2010 results in China, the company's largest market, as well as healthy gains in India, Korea, North America and Latin America.

The company, which is privately held, does not generally release individual market sales or disclose profitability.

"Our message of free enterprise and individual opportunity continues to resonate across markets and across cultures," DeVos said. "We're proud to help entrepreneurs take the first step towards business ownership, and to support them with brands that are becoming better known every day."

The company announced that category sales of NUTRILITE approached $4 billion, attributed to overall growth in the category as well as increased visibility for NUTRILITE in 2010. Major campaigns included "Color Yourself Healthy," a global awareness program that promoted the benefits of plant ingredients for optimal health. Global sponsorships focused on major sports teams and well-known athletes continue to build brand awareness for NUTRILITE.

ARTISTRY skin care and cosmetics led beauty category sales for Amway. The company cited a successful launch of ARTISTRY Intensives Renewing Peel, the first product in a new Intensives line of skin care products designed to provide professional results at home. Masstige brand beautycycle™ successfully launched in Europe and Australia, targeted to consumers who are looking for high-quality skin care and cosmetics products containing natural ingredients.

Brand building continues to be a significant focus for Amway around the world. "Our distributors are realizing the benefits of our global investment in building our brands," said DeVos. "It is easier for them to sell products that consumers already know to ask for by name." To increase consumer access to its brands, Amway expanded its physical presences across the globe to complement its direct selling business model.

The company also unveiled a new Amway brand identity in 2010, highlighted by the opening of the Amway Center, home to the National Basketball Association's (NBA) Orlando Magic, which became the first high-profile venue in North America to showcase Amway's new brand identity.

Operationally, the company took steps to evolve into a true global enterprise – leveraging technology to improve supply chain efficiencies, help distributors run their businesses more efficiently and gain consumer insight vital to developing strong customer relationships. Said Van Andel: "We are a global business, with 90 percent of sales outside the U.S., and we are taking necessary steps to support customers worldwide."

Monday, February 21, 2011

Amway Or Working At McDonalds?

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 disregarding 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 current 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. If Amway were franchising businesses, I am sure they would tell you so.

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 30% 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!

Wednesday, February 16, 2011

Anonymous From Scarborough Canada Entertains Joecool

My of my regular readers here knows that there's an anonynous cowardly blogger from Scarborough Ontario Canada who has left threats and insults on my blog almost ad nauseum. I gave him my contavt information but he was too chicken to contact me. He is apparently a low level IBO who has a entry level job in a bank. Here's a humorous set of comments he recently left ony my blog. Enjoy!

Anonymous said: "That's why you didn't make the kind of money you were hoping to make. When I registered a thought came to my mind quite early on; instead of me finding 6 people who find 4 who find 2 each, why don't I just find one person who will find 6 people who find 4 who find 2 each? After-all, I still get 7500 PV and 50K/year!!! Sadly, as I found out, in doing so, I would net out only about $700/month instead of $5700/month. Structure is the key baby! BIG DIFFERENCE! So, I got serious about it and went for my 6 people! Did it all go just as advertised? No, but I earn a good $4000-4500 per month. Do I plan to stop here? No! I plan to go 100K/year by December 2011. So remember, business structure is vital for profitability. Stop whining and get to work!"

Anonymous said: "My Amway expenses are WAY FAR from wiping out my monthly Amway earnings. Or are you referring to my general, every day expenses? If yes, then there really is nothing to argue about. The same can be said about anyone whose job income also equals my Amway monthly income. For your information, I make almost twice as much from Amway than any other job I ever had."

Anonymous said: "Buddy Joe, my J.O.B was from 9 in the morning till 6 in the evening, Monday to Friday, working as a customer service representative. I was making about $2360/month. So don't you think that maybe, JUST MAYBE, $4000/month from Amway isn't a little bit, JUST A TINY LITTLE BIT, MORE than $2360? So what if I earn $4000/month you ask? Buddy Joe, I think that you're aware of $4000 figure being TOO REAL TO YOU, it's just that you were nowhere near that and now you're bitter about it. Why am I there and you aren't? Don't know and don't want to know. All I see is your bitterness and complacency. So shut up!"

Joe's commentary: So my anonymous friend in making $4000 a month from Amway? Of course he provides no evidence and not even an anecdotal explanation of how he makes $4000 a month. Of course, $4000 a month isn't much when you still have to pay for medical insurance and your other business expenses. Not to mention, I earn a lot more than that from my job. But anon from Canada, thanks for your entertaining tirades! I truly enjoy what you add to my blog! :-)

Tuesday, February 15, 2011

The Motive Behind "The Plan"?

I’m not sure whether this plan was carefully crafted out or whether it just evolved, but the way some uplines show the plan is cleverly designed to suck people into their systems. If you aren’t aware or careful, it’s easy to get caught up in the excitement of the presentation. The presentation if full of deception and I will try to point out these items in my analysis.

The speaker may talk about how he once thought he was “doing okay” in life. That he was making a living and able to meet his financial obligations. But he thought there might be more. One day he saw the plan and it changed his life. He did not realize he had gotten into a rut of going to work and going home every day and looking forward to his 2 weeks off each year. (This is relatable for many) That time and money are so important in life. Control of time and money is the key to success. Many people have lost of money but work all day and nite. Or people have time but are broke and can’t do much. The speaker might mention dreams or goals such as having an extra $500 a month or more. What would you do for an extra $500 a month. What about an extra $50,000 a year? Wouldn’t it be nice to have the wife stay home with the kids instead of leaving the family to go to work? Like the “Leave it to Beaver” days? (This gets the women excited)

The speaker will likely mention something about the economy and how prices always go up. The speaker may mention the 4 “I’s” that suck money out of your paycheck. The four I’s are Interest, Income Tax, Insurance and Inflation. The speaker may talk about how the government will take their cut and so on until you get yout “net”. The speaker may mention how so many Americans are dead or broke by age 65, and that social security will collapse. (This instills fear in many people).

The speaker might also go on to mention how so many marriages are falling apart in the US because of financial stress. That couples work so hard that they have no family time and it hurts marriages. That people work so many hours these days that they are married to their desks. The “manager” of the office is the first one there and the last one to go home. That despite all of this work and effort, people are falling into debt. Credit cards maxed out, loans, trying to keep up with the Joneses. (Many people can relate to this)

But now, because he was looking for opportunity/open minded one day, he saw an opportunity. This opportunity changed his life and can do the same for you! The speaker now wakes up at the crack of noon. His wife stays home with him and the kids. They take nice vacations and they do what they want when they want. (Of course, who doesn’t? But is this true?) The opportunity takes advantage of the internet and allows you to leverage your time and money so that you can create a residual walk away income. (But nobody walks away do they?)

This is approximately the point in the presentation where they mention “Amway” At this point, the speaker will defend Amway, stating that if you can make money, does it matter.? If you can save money, does it matter? The speaker may go into the product line and mention partner stores and will likely show a 6-4-2 plan or a variation of it. In every case, they will show a best case scenario, not what is likely. Many prospects will leave thinking “all I need is six”. They don’t understand how unlikely it is to sponsor six platinums and there is no mention of the retention rates, the income most IBOs can expect, and firm questions will be deflected to the prospect’s inviter. The speaker may also discourage you from speaking to friends and family as they may have a bad experience but the diamond is successful and knows more about Amway than your family and friends.

Joe’s commentary: So the speaker becomes very relatable from the start. His situation in life will be like many in the audience. He will talk about doing okay,. But wanting more or looking for more. He talks about debts and many in the audience will also relate. They get people to think about dream cars or vacations. He talks about walk away income, but doesn’t mention that very very few ever make significant money and apparently, not many actually walk away either. They say you will make money and save money by doing the business. It’s hard to argue against that,.except most people will not make money or save money. In fact most people, if they participate fully or partially in the training system, they will lose money. For the dedicated IBOs, many of them LOSE LOTS OF MONEY. The plan is crafted out to sound sensible and relatable, but many IBOs will give it a try and shortly after, will realize that the system doesn’t work, that the reputation of Amway IBOs is soiled and sponsoring people or even getting people to see the plan is a barrier that most people simply cannot overcome. At least if you know what’s going on, you may be able to avoid the trap.

Monday, February 14, 2011

Tax Time - IBO Profits Go Up?

One of the things that I have observed is how IBOs are so misguided by their upline, that they think that their business losses, which result in a tax refund is somewhat like a profit, or that they are getting a free pass with the government footing the bill for their standing orders and functions. In the past, IBOs have been audited and had many business deductions disallowed because the tax department ruled that they were not truly running a business, but participating in a hobby called Amway.

I know that most IBOs are deducting the cost of their training materials on their taxes, but the issue at hand is whether the training materials are resulting in increased sales for your business. If you are running a "buy from yourself" business, then there is a strong possibility that your expenses may not be valid deductions come tax time. If you are not selling products to customers for a profit, then there is a chance that your expenses are not valid deductions. It would be sad indeed to be audited at tax time a few years after you have been an Amway business owner, only to find out that your expenses are not valid and that you may owe tens of thousands of dollars in back taxes.

Another apparently common mistake of IBOs is to think that their business expenses are basically free from the government because they may end up with a tax return. Your expenses are deductible from your taxable income. Thus if you had $10,000 in business expenses, your return would depend on your tax bracket. If you are in the 15% tax bracket, then $10,000 in expenses would get your about a $1,500 tax return, depending on other deductions you may have. But IBOs get duped into thinking they made a score and now get back $1,500 when they may not have had a refund in the past. Obviously in this case, the IBO would have been better off saving the $10,000 and never getting involved in Amway. Some IBOs proudly proclaim their refunds as basically a windfall, almost like it is a profit. That is truly scary.

Folks, there is no free ride. If you are spending money on legitimate business expenses with an intent to make a profit, then there is nothing wrong with that. But if you are traveling to conventions hoping to learn the secret of sponsoring more downline, you could be walking on thin ice should the IRS ever decide to audit your business. There have been many cases in the past where not only did IBOs lose their shirts due to the business support materials they purchaed, but they got double whammied later when the IRS disallowed tax deductions, leaving them in financial ruin. I truly hope you aren't on that path.

Check out this link:

"TRAVEL AND ENTERTAINMENT have always been areas of abuse. Sections 162, 262, and 274 are always applicable and sometimes Section 183. Since most of the travel is primarily to attend social gatherings for entertainment and motivational purposes, any real business purpose is suspect. Unless the taxpayer can show that attending seminars, meetings, etc., meets the requirement of Section 162, the travel should be disallowed. Amway people have been unable to show that attending these meetinqs increased their sales. The agendas of these meetings appear to be primarily for entertainment, socializing, and listening to motivational speeches. The meetings have nothing to do with promoting the sale of Amway products to the general public. In fact, Amway distributors are specifically warned aqainst mentioning either Amway or selling when recruitinq potential downline people. Since it is not likely that the taxpayer will increase his sales by attending these functions, then there is not a reasonable business purpose for the trips"

Amway Diamonds - Traveling Salesmen?

If you have attended a big Amway function put on by one of the Motivational Groups such as BWW, WWWDB, or N21, you probably saw video clips and/or pictures of diamonds living the good life. Waking up at noon, taking fabulous trips, retiring at the age of 30, fancy cars and suits, etc etc. These are all recruiting tools for the Amway leaders. Afterall, the Amway Opportunity would not sound quite as attractive for a diamond or higher) to mention that their Amway business might take up to 50 hours a week, that they don't have time to "hang out" with family and friends, or that they have a 30 year mortgage on their homes, and possibly lease or rent the fancy cars that you see them drive up in at functions. Many IBOs simply assume that diamonds and above has unlimited money pouring in from the Amway corporation. And many IBOs think that diamonds do not have to work. That diamonds work out of love for their downline. I believe nothing could be further from the truth.

Based on the average diamond earning just under $150,000 a year (gross), and the diamonds constantly having to travel to do functions and open meetings, as well as working a personal group and helping their platinum legs to maintain their qualifications, a diamond probably spends full time hours and then some, maintaining their Amway business. Additionally, there is a need to keep recruiting downline as IBOs quit every day. The moment you stop working, your group is likely to backslide. Even a minor scandle within the group can wipe out an entire leg. There are many stories of this happening. If you really believe people can walk away from Amway and collect tons of money while doing so, I challenge you to name some of these nice people.

So do diamonds actually live the lifestyle they portray at functions? It is my best guess that diamonds live a middle class lifestyle. I believe that a regular diamond, or perhaps higher, but without the founder's designation, probably lives life like a traveling Amway salesman. The only difference being that these folks sell dreams and hopes more so than Amway products. I would guess that contant traveling to and from various functions and meetings can get to be tiring and cumbersome. Also, when you are away from your home base, your personal group may suffer a bit. This can cause great stress if the diamond IBO is borderline on re-qualifying for their current level. But the diamonds travel because they must. In order to earn some of their tool money and honorariums for speaking, they must continue to work the functions. The diamonds are traveling salesmen. They sell the Amway opportunity, they sell you tools and motivation and they sell you dreams and hopes. Sadly, very few reap the rewards promoted by the diamonds. In fact, in the US and Canada, it sppears that the diamonds are becoming extinct.

Also, my understanding is that much of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be relatively small, with a lump sum coming at the end of the Amway fiscal year in the form of a bonus. Thus a diamond bonus must be carefully budgeted ro the diamond can easily get into financial difficulty.

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

Sunday, February 13, 2011

IBOs Need To Modernize?

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 years old or older and 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 a 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 an 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. If you still use voicemail and other costly tools, try asking your upline why they don't modernize and reduce IBO cost? I bet they feed you BS if you ask this.

Why does anyone need voicemail now when Amway is a web based business? Get rid of KATE and replace it with free email. Heck, with Facebook, your entire group could receive inportant messages and respond. These are free, but uplines keep using outdated technology that costs their downline money. Why? 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. Why do uplines use the most inefficient means of communication? Because it gets them the most profit?

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. I truly hope IBOs will take this post to heart and ask upline these tough questions. I would truly like too know the answers.

Saturday, February 12, 2011

Are You An IBO Or A Misled Customer?

Many people who register to distribute Amway products are taught to "buy from yourself". Of course using the products you sell is a good idea because you gain familiarity with the products and you may be able to explain and promote the products. However, one of the issues with this is some IBOs are taught to use the products exclusively without selling products to others. This makes them customers and not IBOs. It is also a potential violation of Amway rules, which apparently, some uplines conveniently ignore.

Buying products is not a business activity. A business exists to sell goods and services to customers for a profit. That's it, plain and simple. Any other activities that you engage in such as listening to a tape/cd, attending a function or reading a book, might be educational in nature, but it is not a business related activity. This is key. Many IBOs are foold into thinking that attending functions is business, or that listening to standing orders is businesss. It is not. Only selling products or services in an attempt to profit is a business activity. Uplines have perverted the IBO's thinking and thought process.

Many many IBOs are mislead by upline into thinking that simply buying their own goods is a means to succeed in Amway. One somewhat prolific but grossly mislead IBO (Tex) thought that he can buy his way to prosperity. He is dead wrong and his results prove it. Buying from yourself is a technique used by upline because many people do not like to sell. Therefore, they are told to sell to themselves. Of course, you are now a customer and not a business owner. And - any profit made from the buy from yourself model is coming out of your own pockets. You are just fooling yourself.

If you are being taught to "buy from yourself", almost exclusively, you may want to step back and analyze your profit/losses and see if you are accomplishing what is shown in the "plan". IBOs who engage in the buy from yourself philosophy are basically building a product based pyramid. Keep in mind, are you a misled customer or an IBO?

Friday, February 11, 2011

Statement From A WWDB IBO

The compensation plan is untouchable and uncomparable to anything else I've been shown. Most people that try to prospect me some other business model just do not have the stability and security and financial statement and most importantly integrity of individuals on purpose as our company has. Which is why I only show this to and work with those who qualify.

For your research, I'd reccomend several websites:

www. thisbiznow. com (What our partners are saying)
www. quixtarfacts. com (the answers you need as you consider this opportunity)
www. quixtarnewsroom. com (company news you need to know)
www. wwdb. com (username:guest / password:dream)
www. alticor. com (more about our parent company)
www. amway. com (your link to a global business opportunity)
www. iobai. com (the official site of Independent Business Owners Association International)

I cannot be quoted, but figures depend on group volume ran. A Ruby may earn around $10k-15k a month running approx about $20K-$50K of business dollars monthly through their personal team of people with the 2008 comp plan. Every year the comp plan is restructured and increases for all independent business owners. There are additional bonuses and incentives to be eligible for along the process.

Keep in mind: edibles and consumables are renewable when used up and you can make a lot of money with them.

I dont want to waste my time just to peek a person's curiosity about what I do and what I'm in. I'm very serious about what I do, this is not something people do as a side hobby, and I work with thousands of successful individuals that also feel the same.

Those questions and much more can be answered and fully explained by being shown the full business plan. I dont show it to people unless they qualify and earned their right to.

Perhaps you can correct me, but you've already given me the impression you didn't want to see it. I respect you, however I dont know you well enough as a potential business partner to share the business with. If you're serious about really giving it the respect of being looked into, I just may reconsider.

P.S. I did a follow up on this IBO and apparently she has left WWDB and Amway.

IBOs Must Lose Money!

Most IBOs who get involved in the Amway opportunity lost money. IBos and critics have debated this issue for years, but the fact is that IBOs lose money, because they must! For the sake of this discussion, let's disregard IBOs who sign up and do nothing. Those who sign up and do nothing get exactly what they put into the business. Let's instead, talk about the IBOs who put in some work, and purchase and use training and tools from the upline.

If you analyze the common 6-4-2 plab or any variation, the "2s", or bottom layer is the majority of IBOs. They are at the 100 PV level, thus the typical IBO at that level is moving 100 PV, and getting a bonus from Amway of about $10 a month. These IBOs will also be spending possibly several hundreds of dollars a month for training and tools. The next layer up of the "4s" will earn maybe $40 to $50 a month, they also spend up to hundreds of dollars a month on tools and training. It is very likely that the platinum is the only one who might clear a small profit in the end.

IBOs will justify their position by claiming that they will eventually go platinum, and eventually go diamond. Really, for those in the US or Canada, can you actually name even a dozen new diamonds from the last several years? I believe there are fewer diamonds now than a few years ago as it appears that Amway is shrinking in the US and Canada. But for those who cling to the notion that they will go platinum or diamond, here's the counter point.

For every platinum, there will be typically be up to a hundred or more IBOs downline losing money. Therefore, if there emerged 10 new platinums, then it is likely there are a thousand or more downline losing money. The more new platinums you have, the more people exist who are losing money. And let me be clear, they are losing money because of the training and tools. The training and tools are just a drain on IBO resources and the training and tools do very little to help IBOs learn to run a profitable business.

My conclusion is that IBOs lose money because they have to! The system of products, tied together with tools and training guarantees financial losses for more than 99% of those who participate. It is well known to everyone, except, apparently to the IBOs. I hope this blog post helps.

Wednesday, February 9, 2011

IBO Failure?

It is no secret that many IBOs fail in the Amway business opportunity. The retention rate is poor, and frankly, the compensation for IBOs usually won't even cover the monthly cost of the website fees. So uplines should figure out why so many downline fail and then address it instead of advising IBOs to never quit and keep buying more tools. Based on what I experienced, I would have to say my uplines (who are still around today) didn't care about their downline, which is why we received bad advice such as IBOs had to keep paying for standing orders if your downlines quit. There was even a standing order that confirmed this nonsense at one time.

But IBO failure goes beyond this. In order to sustain a business, you need to establish and build a customer base. Amway's own figures suggest that there is about 1 cutomer for every 4 IBOs. Less than 4% of Amway goods are sold to non IBOs. How can any business sustain itself in that manner? And the solution to bad sales in Amway is to open more stores? Ludicrous!

Many IBOs will cite concentration and quality as the reason for Amway's premium prices. But it is apparent that it is primarily IBOs who see things this way. The public more likely sees Amway products as generic with premium prices. Ironically, IBOs seem to shift to the viewpoint of the general public once they stop being IBOs. Seems that IBOs don't mind premium prices when they believe Amway will allow them to retire early and walk the beaches of the world, but when that dream ends, so does product loyalty. I believe that most IBOs who quit, will never buy another Amway product again.

Hard work and effort doesn't necessarily equal success in Amway and I will explain. Say I was selling Iphones for $50. People would be flocking to me to buy one. I would probably run out of the Iphones before I ran out of customers. The price is great and thus the demand exceeds the supply. Now say I was selling regular cell phones and charging $1,000 for a regular run of the mill cell phone. I may sell one, but more likely my only sale will be to myself as a representative of the cell phone company. There would be no demand, only perhaps an artifical demand by the purchase of $1000 cell phones by the cell phone retailers. This is exactly what Amway IBOs, or sales people are experiencing. People in general don't care about the phytonutrients in double x. They see the whopping price and they buy vitamins at Walmart. As a side note, does the inclusion of phyotnutrients in a vitamin drive up the cost that much? I suspect not.

In any case, I believe this is why most IBOs fail. There are too many disadvantages to overcome.

Tuesday, February 8, 2011

Sounds Familiar?

I'll post two made up speeches. Figure out which one sounds more like your diamond. I laugh when Amway defenders claim their diamonds talk about renting homes and being conservative. I have never seen or heard of a diamond talking like that.

Hi gang. I'm so fired up right now seeing you all. You are all winners, doing whatever it tales to get it done! You see, every single one of you can be on stage, and having what I have, if you do what I do. And I will tell you how to do this business! I own some mansions in Whitefish Montana. Of course I paid cash for these mansions because people who take out loans are broke or stupid! I have a fleet of sports cars, all paid in cash and I'm thinking about buying a jet next year! man this business is so simple, all you have to do is copy me!

Or is this one more likely by a diamond?

Hi gang. It's great to see all of you in the audience. I hope none of you are here unless you can truly afford to attend. you know, a diamond lifestyle is great, but not flashy. I have to rent a home because i am living below my means until I can afford a nice home. I buy second hand cars to save money. You know we have to be fiscally prudent. I'm here to teach you about how to build your business and how to make wise financial decisions regarding your Amway business. You should not buy tools unless you can afford them.

So which speech sounds like an Amway diamond? I know which one. So do you!

Monday, February 7, 2011

The Seeds Of Doubt

Some IBOs and Amway supporters have accused Joecool and others of planting "seeds of doubt" in the minds of IBOs. Granted, I am a critic of the Amway opportunity but it's not like I am telling lies about the Amway business. I am basically telling my story, and what I see wrong with the Amway opportunity, which is primarily the motivational groups such as WWDB, Network 21, and/or BWW. Obviously, the flaws and problems are many or there would be fewer critics, and Amway would likely have a better reputation in North America. The root of the problem, I believe, is the motivational groups that sell tools.

These motivational groups entice prospects to join Amway, and then encourage the IBOs to subscribe to KATE, standing order, book of the month, attend seminars, open meetings, etc. These materials and seminars are often promoted as "key to your success" or "vital" to your business, yet there is no bonafide evidence that these materials help anyone to build a profitable business. Instead, the vast majority of IBOs end up channeling money into these materials, which makes their uplines wealthy. I see it as a gross conflict of interest very unethical. Yet for years, these uplines have shamelessly emptied the pockets of the downline, all the while pretending to be great leaders and teachers. If these teachings actually led to business success, there would be few critics. Some Amway apologists will claim that most if not all who go diamond and above use the system, and at the same time, disregard the millions of IBOs over the years who used the same system with no results. What I find very humorous is that the Amway Champion himself (IBOFightback) has apparently not achieved anything of significance in Amway, except for his 3% bonus, if even that.

What Amway supporters may call "seeds of doubt", is in reality, I believe an IBO's conscience simply telling the IBO that what is printed on this blog and similar blogs is probably the truth and that what is said here often makes more sense than what upline is teaching. If the truth is negative then so be it.

So IBOs and prospects, ask yourself, are these seeds of doubt or simply the awakening of your conscience who tells you to think twice?

Sunday, February 6, 2011

Invest In Your Amway Business?

One thing that is very interesting to me, is how IBOs seem to think that spending money on cds, tapes or functions is an investment in their business. If I owned a restaurant for example, I would have to purchase equipment such as ovens and grills. If my business does well, I may choose to re-invest some of my profits for perhaps more efficient cooking equipment, or nicer chairs and tables for my patrons, etc. The things I invest or re-invest in makes an immediate impact on my business for the better. Food is served faster, and perhaps the environment is nicer for my customers. It becomes a direct benefit for the business owner to make that investment. In Amway, those benefits are very questionable.

What exactly do IBOs get from cds or attending functions? What do they get from standing orders and night owls? They likely end up with less money. Attending a function for example, not only costs money, but takes you away from your business for a weekend each month. In what business is it beneficial to spend money and take a weekend away from your business? Only in Amway do upline leaders teach this kind of questionable business practices. It wouldn't seem so bad if upline leaders weren't the primary financial beneficiary of these functions. Ironically, it is the uplines exclusively who make the most bucks out of the functions.

Now if an IBO spent time and money creating advertising for their products, or a business gameplan, that would be a reasonable investment of their resources to benefit their business. It is too bad that upline leaders teach bad business practices that end up in IBO failure while they are enjoying financial gains for teaching this crap. I hope IBOs and information seekers are able to recognize this and avoid getting into a losing situation.

Saturday, February 5, 2011

The Cost Of Being An IBO?

The actual cost to register as an IBO, I believe is in the neighborhood of $50. Many motivational groups such as BWW or WWDB or others, may have different costs because of product samples and/or tools included in the signup process. But aside from the cost of registration, what does it cost an IBO to run a Amway powered business? Many, if not most IBOs probably sign up thinking they will make money right away, only to find out that ongoing costs easily turn small profits into losses. Some of the costs I will display are optional, but often promoted as mandatory. Listed below are conservatively estimated monthly costs:

100 PV = $300
KATE (voicemail) = $20
Website fees + $20
Standing Order (Tape/cd subcription) $42
Extra tapes/cds (two per week) $56
Book of the Month $10
Functions/Major functions (averaged out) $125
Monthly Open Meeting $8

These somewhat minimal estimates of monthly expenses add up to $581. Were you informed that a business building IBO would have to spend in the neighborhood of $600 a month? Would you have been interested if this were disclosed? I woudn't have joined if this was disclosed to me. These costs are actually lowball estimates if you are a hard core IBO. These estimates would run you about $7000 a year. In five years, you may have spent $35,000 to build a business where you have a tiny fraction of a one percent chance of making any real money.

What could you do with an extra $7,000 a year? What could you do with an $35,000, say 5 years from now?

The average active IBO earns less than $1,500 a year. Never mind the social cost of missing family gatherings, your kid's ball games and other fun things.

Do the math!

Friday, February 4, 2011

IBOs Lie To Succeed?

In my personal experience and even now, I see evidence from IBOs that lying is still a big part of the script for those who are recruiting new IBOs. A business built on lies is a house built on a shaky foundation.
If your upline has lied, did you simply ignore and overlook it? Did you see slide shows of wealth as "proof" that Amway works? Do you know if your upline actually owns any of that stuff and is it typical or simply some exceptional diamond who has trappings but tries to imply that alll diamonds and big pins have all of those goodies?
Some of the lies:

We don't make any money until you do

We don't make money from tools

Save 30% by becoming an IBO

The business is easy

All you need is six

Diamonds pay cash for everything

Jobs are for losers

98% for people are dead or broke by age 65

95% of small businesses fail in the first year

**Have you heard any of these statements? Have you been fed lies or half truths (lies)?

If these statements sounds familiar, it may be a red flag for you. I urge you to at least verify any questionable claims made by upline or by those recruiting you into the business. Get bonafide proof of financial success. While uplines may say it's not your business, it certainly is if you are being asked to trust the upline leadership and to follow their advice. You should know how successful your uplines are and whether or not following them is indeed worth your time, investment and efforts. If your upline dodge your questions, you should think twice.

Thursday, February 3, 2011

Why So Many IBOs Quit?

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. They show the best case scenario. not the likely outcome. It's like showing only the lottery winners.

Many Amway recruiters discuss a "shortcut" to retirement, fabulous toys, mansions, cars and vacations. 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.

Wednesday, February 2, 2011

Amway Questions And Answers

Question: What are the chances a person can start from scratch and become a Diamond?

Answer: A tiny tiny fraction of 1%. I might add that achieving diamond and maintaining diamond are two separate issues.

Question: Why are tapes/cds, books, and meetings common in this business?

Answer: Because upline allegedly wants train downline via these tools,
The sad reality however, is that many upline make far more income from the sale of these tools and meetings than from Amway.

Question: Do tapes, books, and meetings offer value as well as a money-back guarantee?

Answer: Supposedly they do, yet for some reason, yet you see the items sold for pennies on the dollar on ebay. You also do not see a steady stream of successful results from those who use the system/

Question: Are prices for your products offered on competitive?

Answer: Generally, Amway prices are not competitive with Walmart or other big stores because Amway must overcharge their cost by about 30% or so in order to pay out their bonuses.

Question: What makes the Amway Independent Business Ownership Plan legal while some businesses perceived to be similar are illegal?

Answer: Because Amway has products moving and there is no actual payment for recruiting. It must be noted though, that many IBOs make little or no effort to sell stuff, and much emphasis is on recruiting.

Question: Should a business dispute occur with another IBO, what options do they have?

Answer: To quit or go through a company arbitration process.

Question: I’ve heard rumors that I have to “follow the system” (listen, read, and attend) to get help from my upline. Is there any truth to that?

Answer: Technically, this is optional, but many many uplines will make it a defacto requirement. i.e. Tools are optional but so is success.

Question: I heard some Emeralds and Diamonds have quit their businesses. Is that true?

Answer: This is true. And some who quit admitted that as much as 90% of their income came from selling tapes/cds and tickets to meetings

Question: What is the difference between "the system" and "the business"?

Answer: The system is basically a secret but more lucrative business than the Amway business.

Question: Is one IBO organization or group better than another?

Answer: Just about all organizations claim they are “the best”. If you base “the best” on their miserable results, they are more similar than not.

Question: How much money can I really earn? How fast?

Answer: The average IBO, according to Amway, earns $115 a month and that is gross income for “active” IBOs. After business expenses, most IBOs have a net loss.

Question: Am I “in Amway” or am I really an "Independent Business Owner"?

Answer: You may be called “independent”, but in reality, you are more like a commissioned sales person.

Question: When I search Amway on the Internet, I find some negative stuff. What's up with that?

Answer: Because the vast majority of people make nothing or lose money. Many people were lied to when recruited. Over the years, you develop a bad reputation that way.

Question: Is the business plan today as valid as it was 20 or 30 years ago?

Answer: You are more likely to fail these days, unless you are only interested in buying and selling a few products. This is because the system expenses nearly guarantee net losses for most IBOs.

Question: Am I required to hold certain beliefs to be accepted?

Answer: no you are not required, but some “tools” organizations push religion and politics at meetings, which is against corporation rules.

Question: Odd as it may sound, I’ve heard some rumors that Amway Global/Quixtar is a cult. Is there anything to that?

Answer: Yes, many compare the Amway meetings to a cultlike atmosphere.

Tuesday, February 1, 2011

You're In Amway Or You're A Loser?

One of the things that Amway owner Rich DeVos once said was that you should not call someone a loser just because they don't agree with you about the Amway oppportunity (not verbatim). I find this so ironic when simple math bears out the fact that an average business building IBO is losing money. How did I conclude this? Well, Amway reports that an average IBO earns about $115 a month gross income. This figure excludes IBOs who sign up and "do nothing".

A business building IBO who subscribes to standing order, attend functions, open meetings, has voicemail and reads a book a month has expenses that exceed $115 a month, therefore an average business building IBO is losing money. But ironically, these same IBOs who are losing money mistakenly believe that everyone else is a loser. I remember when I was "gung ho" about Amway, I used to think the same way. I almost felt sorry for people who weren't in Amway, as if IBOs have the secrets to life anf finances unlocked and those who say "no" are simply dooming themselves to financial disaster in their golden years.

I believe that uplines used the term quitter, failure, or loser as a subtle means of applying pressure to prevent IBOs from leaving the business. Nobody wants to leave thinking they have suddenly gone from being a winner to being a quitter or loser with no hope in life. I believe this strategy also contributes to Amway's reputation issues. I know that prospects have also heard this term in the past. In fact, I recall an online dialogue where an IBO was prospecting someone online and was very courteous until the prospect declined the invitation to be sponsored. Just like Jekyl and Hyde, the IBO starts calling the prospect a broke loser who wouldn't have accomplished much anyway. Talk about damaging the reputation and basically taking away any future chance of doing business with that prospect.

It is more likely that you are a loser because you're in Amway than not. Prove me wrong if you disagree.