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.
Tuesday, November 30, 2010
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.
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."
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?
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.
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!!!
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.
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.
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