Bait And Switch?

  In my informed opinion, Amway is a huge bait and switch scam run by the diamonds. The crowd sees the diamonds as someone to be worshipped. They arrive to standing ovations when they appear to show the plan and/or to speak at a function. The diamonds speak of untold wealth beyond the reach of most people. They show slide shows of fabulous trips and events that they attend and possibly golf outings and other fun things that are associated with people who have money. The diamond often has some sports car or a nice sedan such as a Lexus or Mercedes. And all of this alleged wealth comes from Amway. Just join and get the secrets to wealth from the diamonds and you too will be living in fabulous wealth. 2-5 years, build it right and build it once is what I heard.

But it's a bait and switch scam. They show you wealth and speak of their large incomes (without verification of course) and people tend to believe what they are told. The diamonds claim to have the key to the secret of success. All you need to do is get plugged into their system and you are nearly assured of success. Right? Listen to those diamonds. They are the pinnacle of success and all you need to do it copy what they have done. So simple even a dog can become a platinum. All you need is 2-5 years, do it right and do it once and you're set for life.

So you subscribe to their system of voicemail, books, standing orders (audios/CDs), meetings and functions/seminars. In the teachings, the theme seems to be similar. Never quit, and the answer to most Amway problems are to consume more tools and functions. If you are struggling and losing money, the solution seems to be to invest more in tools and functions. It's like a struggling business spending more on overhead without simply trying to increase sales. This is why so many IBOs quit, because they struggle to make sales and/or to sponsor downline. Despite all of the teaching and tools and seminars, it is apparent that very few IBOs make any profit.

What people don't see is that the Amway business itself is just a shill for the real business. Amway IBOs unknowingly recruit prospects into Amway thinking they can make a fortune in Amway. In the meantime, the diamonds are raking in the dough by selling monthly subscriptions for voicemail, books, audios and meetings and seminars. Additionally, the diamonds put on a "major" function each quarter where they can make possibly hundreds of thousands of dollars in a single weekend. I believe some diamonds make way more income from the tools and functions than from Amway. A diamond is a lifetime achievement so someone could qualify diamond for 6 months, never qualify again, but still make a nice living from speaking honorariums and selling other tools. The tools business is the real business. The Amway business is like a "front" to conceal the real business, much like the Italian restaurant is a front for the mob. The restaurant is a legal business that helps conceal the illegal activity. And that my friends, is the Amway bait and switch scam.

The Key To Success = Lying?

  The first time I was prospected for Amway, I was in college. I actually didn't know much about Amway, but I had somehow formed a negative opinion of it. Needless to say, when I was invited to a beer bust and it turned instead to be an Amway meeting.  My impression of Amway wasn't that good already and being tricked into a meeting didn't help.  Some years later, I eventually did join because a close friend of mine had achieved direct distributor (now called platinum) and he had assured me that it could be done and that he would make sure that I would also achieve it. I did achieve a level just below platinum (4000 PV), but I quit for several reasons. First of all, I didn't make a net profit as the expenses for tools ate up my profits. Secondly, the more I progressed in the business, the more and more my upline wanted control of my life. For example, we were told that we should check upline before getting married, buying a car, or even having children, etc. I thought that was very strange and I eventually left the business for good.

But in the US at least, I believe Amway's name to be so battered that an IBO cannot sponsor downline and build a business without lies and deception. There are hordes of stories confirming testimony that lies and deceit are common in prospecting potential IBOs. This was extremely rampant when Amway changed their name to Quixtar. IBOs would deny the connection or IBOs would say they are with network 21 or WWDB and claim something ridiculous such as Amway simply being their supplier. The promotion of perfect water also brought on silly antics about a $50 case of water being capable of performing miracles. If the opportunity could stand on its own merits, then IBOs would not have to resort to such desperate measures which include lies and deception.

Even the Amway presentation if often filled with deception and lies. I remember seeing the presentation and they said shopping through Amway; an IBO would save 30% over local retailers. When I actually saw the catalogs, I wondered where are the savings?? An open-minded price comparison will easily show that Amway products are not cheaper than a retailer like Wal-Mart. It's not possible when you consider that Amway's bonuses must be a part of their product price.

The 6-4-2 plan or similar variations are made to sound easy, and the presenter talked about lifelong residual willable income, which I also find to be deceptive if not an outright lie. The presenter never mentions that only about 1 in 400 ever reach the platinum level, where allegedly you begin to break even as an IBO if you are consuming training and tools.

But can Amway be successfully promoted without lies and deception? It is my opinion that an IBO has no chance of building a business by being completely upfront and honest about Amway and about being an IBO. Even with lies and deceit, many IBOs still cannot get people to see the plan or to buy products. It is my opinion that overall, very little Amway products are sold to non-IBOs. So if you cannot sell products and you cannot get people to see the plan, you cannot build a business and if you are purchasing tools, you are simply digging yourself a financial hole that will only grow larger as time passes. The cost of 100 PV (about $300) is already more than what most families and/or singles spend in a month on household products. This means that most people simply cannot sustain themselves in the business and it explains why most IBOs drop out in the first year.

It is why lies and/or deception are needed for an IBO to have a chance at promoting and building an Amway business. Because the truth is not pretty and more than likely, will not work effectively for building an Amway business.

"Partner Stores"?

 I wanted to write this post because I had a debate with an (apparent) Amway IBO who is bragging about Amway partner stores. The tag line is Amway certainly does their due diligence, as well as partner stores as partner stores would not want to associate with Amway if they were a scam, etc. After reading this post, you will see that "partner" stores would be insane not to partner with Amway. Before going into that, maybe someone can explain what due diligence was put into partnering with Worldcom (formerly MCI) and Enron, for selling energy products and services. Surely all those high-priced lawyers must have known about these epic failures (scams)?

Now, when an Amway IBO refers to a partner store, we are talking about a one-way road. What I mean is that Amway sells products for these partner stores, but the partner stores don't sell any Amway products and have nothing to do with Amway other than a business agreement (apparently) to allow Amway IBOs to act as commission only salespeople for these partner stores. Amway IBOs take on all the time and personal expenses of moving partner store products, often at noncompetitive prices, and get a small commission, but only if they meet a minimum quota (100 pv), which is roughly $300 USD, but could be more because partner stores PV amounts are typically quite small.

Imagine that a partner store basically has the entire Amway sales force potentially selling their products and the partner store can charge whatever they want. The Amway IBOs are often taught to buy from Amway and the catalogs, so the entire sales force often becomes loyal customers as well. And to make the deal even sweeter, the partner stores pay nothing unless the Amway IBO sells at least $300 worth of products, although partner store and Amway products can be commingled. In my way of thinking, it's a no brainer for partner stores to hook up with Amway. They have no risk and potentially a lot of addition sales. High upside and no downside.  If there's a big downside, I certainly don't see it.

And the cherry on the sundae for Amway and the partner stores is that Amway IBOs will also recruit and train other Amway and partner store commission only salespeople at their own time and expense. Amway and partner stores can't possibly lose!! I almost want to go and create Joecool's widgets and become an Amway partner store myself. If Amway people sell my $100 Joecool widgets that cost me $5 to make, I rake in huge profits and the most commission I would pay is about 25%. It's a great deal because Joecool has zero risk. I only pay if the product gets sold. and I don't pay if products don't move. I might even be able to sell Amway IBOs my catalog so they can sell my stuff. It's heads I win and tales they lose for me.

So, if you ever hear about and Amway IBO bragging about how Amway partner stores like Nike, Barnes and Noble or whatever big-name company might "partner" with Amway, you can laugh to yourself and to use Amway's own catch phrase: "Now you know".

Sustainability?

 One of the key selling points of the Amway business is for people to do the work once and then reap financial benefits for life. Thus, the term lifelong residual income or passive income. But that simply does not happen for the vast majority of IBOs. The reason why most IBOs do not have a sustainable business is because their business is not based on sales to genuine customers with a genuine need. Most IBOs themselves will not buy Amway products once their affiliation to Amway is over. Many IBOs are willing to pay the "premium" prices while they believe Amway will make them rich, but when the reality sets in that they are not making money, somehow their loyalty to Amway products goes out the window.

If you are an IBO doing your 100 PV monthly, then your only way to increase volume is to sponsor downline in hopes that they will also do their 100 PV as shown in the plan. And even if you are somehow able to accomplish this and sponsor a bunch of people as shown in the plan, chances are that many IBOs will "do nothing" and of the remaining, some will move 100 PV, but they will likely quit in one year or less. The attrition and failures in Amway make it nearly impossible to build and sustain a group. Even diamonds are working hard to help their downline keep up the volume or they too, will fall out of qualification. Has anyone actually heard of a diamond who walked away from Amway and is collecting large residual checks while doing nothing? IBOs often talk about it but not a single one can name one of these individuals.

In many or possible most cases, IBOs are only selling the Amway opportunity and not Amway products. They sell the possibility or hope that they will build a business, walk away and collect untold wealth for the rest of their lives. It isn't going to happen. Say for example, you sold 100 PV monthly on a consistent basis to customers. These customers will automatically go online and make purchases when they run out of their products. If you are lucky, they will also refer friends to make purchases. But most IBOs do not sell products, they are selling the opportunity. Thus, once the business building stops, so goes the product purchases in most cases.

That brings up the next point about why an Amway business is not sustainable for most. The products cost more than most other retailers. That will limit the potential for customers and referrals. Amway defenders like to cite quality issues, but most customers who shop online aren't familiar with Amway products and have no way to know whether Amway has quality products or not. That leaves them to decide based on prices. And Amway in general, costs much more than Walmart for the same or similar products. A tough sell indeed and for these reasons, I find the Amway business to be unsustainable. There is no other conclusion that can be made.

Financial Freedom?

 Financial Freedom! That was one of the major battle cries when I was recruited for the Amway business. You gain control of time and money by creating residual or passive income. That is true financial freedom. You wake up at noon, no job, and just do whatever you please, whenever you please. I remember the speaker saying that broke/unemployed people also had freedom, but it was different because they were broke and could not afford to go golfing or do other activities that required money on a regular basis. I wonder sometimes how often the diamonds enjoy such fun and frivolity? My upline diamond always seemed to be working.

I am assuming that this is still the case for many IBOs. Of course, upline leaders may toss in a disclaimer that you don't get rich quick as an IBO, but the pitch apparently still contains the financial freedom and residual income theme, based on my experiences with IBOs. IBOs still think they will be rich. Also, 2-5 years sounds like "get rich quick" to me. Diamonds are likely cautious to avoid get rich quick talk because prospects may be way about those kinds of claims.

But hey, financial freedom would be a great thing, don't get me wrong. Who wouldn't want to be 35 years old with enough cash to never have to work again? I mean I could spend some time imagining how fun that would be. It would also be fun to imagine what you would do with all the cash if you hit the powerball lottery as well. But for the starry eyed IBOs, I simply have a few questions for you to ponder. A few realistic questions that you should be asking yourself. The answers to these questions will tell you a lot.

1. Who in your group or upline truly has achieved financial freedom? Have you seen their financials or simply a display of wealth such as slide shows of mansions and fancy cars? Mansions and fancy cars could just be a massive pile of debt. Not too long ago, there apparently were diamonds who had their homes foreclosed, and a triple diamond who was in chapter 7 bankruptcy proceedings. Find out if anyone in your group/upline has actually achieved the success that they are using to recruit you. Also, if they are financially free, why do they work at function after function? Traveling and speaking might not be a traditional job, but it is still work, nonetheless.

2. Even if you find someone who is retired and golfing everyday because of Amway residual income, ask yourself what the likelihood is that you will be able to achieve the same results. If diamonds are still working, what chance do you have of success if you are new or inexperienced in Amway, and have few or no downline. More than likely, your chance of winning the lottery will be greater than your chance of achieving a significant residual income from your Amway business. Also, I don't know of any Amway retirees who built their business once and walked away with any significant residual income from Amway. Do you?

Joecool Headed For Seattle?

 I'll be out of town for about a week.  I'm going to Seattle this weekend to attend a certain football game.  All at my own expense, no Amway residual income.  LOL.  I'll be back posting early next week.  

In the meantime, I have this blog post called "Is Amway A Scam"?

The short answer is no. Amway the company is not considered a scam.  However, IBOs powered by Amway and/or leaders from groups connected to Amway such as WWDB, BWW, or Network 21 can end up scamming people by using the Amway opportunity as a front. They'll promote Amway as a way to earn a lifestyle of the rich and famous. They may promote Amway as a means to earn lifelong financial security. The catch will always be that you need to follow their system.  The system has been referred to as a scam by many over the years as it is often the reason why 

The system normally consists of cds, voicemail, standing orders, books, functions and seminars. Some of this technology is outdated, but likely has not changed in many years because uplines profit from the sale of these "tools". It's basically a bait and switch. They lure you in with the hopes and dreams of a fabulous life and uncountable amounts of cash rolling in. They then sell you the secrets of gaining these trappings. Sadly, only a tiny fraction of 1% will ever see any kind of significant success. And out of those who do enjoy some significant success, many of these people find out that Amway success may not be sustainable.

The truly horrifying result of all this is that probably 99% or more people who have dreams of a better life and financial security will actually end up with a net loss of money and time that they could have used more productively. In my IBO days, I saw some crossline lose their homes or enter bankruptcy following the advice of their trusted upline mentors. It almost always had something to do with skipping out on financial obligations in order to buy more tools or to attend a major function. The secrets of a diamond lifestyle is apparently to sell standing orders, functions, voicemail, but not necessarily selling Amway products, at least for the higher ups.  

If you look at the earnings of platinums and diamonds, you will easily see that those kinds of incomes cannot sustain million dollar lifestyles, especially when you factor in business expenses such as traveling (first class?) and hotel stays. If diamonds fly first class everywhere they go, that's a lot of cash to run their businesses.

So, is Amway a scam? No, Amway the company is not a scam, but Amway IBOs and Amway IBO leaders who run functions can certainly scam you. Beware!

 

Most Do Nothing?

 I saw some recent discussion and some people were debating the average income of Amway IBOs and how $202 a month (average IBO income) as reported by Amway is a lot considering most IBOs do little or nothing. Well, that $202 a month average income survey many years old. Somewhat laughable when Amway defenders like to hang their hats on the possibility that Amway critics claims are outdated. Maybe Amway defenders should complain that Amway's own information is old and outdated. I wonder what updated numbers would reveal?  An even smaller average income?   

Also, what many people are not aware of is that the average income figure as published by Amway, excluded IBOs who did nothing. It only counted "active" IBOs, although Amway's definition of active can leave you scratching your head. Amway describes active as someone who attended a meeting or attempted to sell products. However, we know that unless you actually sell something, you won't make anything and certainly attending a meeting takes money away from you, and is not a way to earn money in Amway. Let me also add that Amway diamonds are also a part of the average income so the "average" is very likely inflated by the six-figure income of the diamonds.

To me, the biggest question is why do so many IBOs get interested enough to sign up and then do nothing? It is my informed opinion that there are several reasons why this happens. I believe that some IBOs are such pests, that their prospects sign up just to get their IBO sponsor to leave them alone. While it may not be common, I believe it happens. Also, I believe some IBOs go into shock when they see the prices of some products. This will cause newbies to realize that the business is nearly impossible before they even get started. Or, a new IBO will go and talk to family and friends about Amway and will get shot down because in North America, just about everyone seemingly had, or knows someone who's had a bad experience in Amway. Sadly, the experience may not be a result of Amway the corporation, but of unethical IBOs who may lie, cheat or trick people into attending meetings. Some IBOs actually get started but soon realize that that Amway opportunity along with the systems such as N21, WWDB or BWW, simply becomes a money pit with the tools and system expenses exceed the monthly Amway income. A few IBOs will bite hard and stay dedicated for a few years or more. Many of these IBOs end up reporting losses that may exceed tens of thousands of dollars.

Sadly, many IBOs and prospects are recruited by family and friends. Thus, even if they quit or have a very bad experience, they just quit and disappear. Folks generally will not file complaints with Amway or the Better Business Bureau (BBB). So IBOs, even if you did little or nothing in Amway, if you got ripped off or treated unethically, you may want to consider filing a formal complaint with Amway or with the BBB. So why do so many IBOs do little or nothing? I believe the answer is crystal clear. Most IBOs do little or nothing because it's not worth the effort for most as very few IBOs will ever attain any kind of significant income. In fact, doing nothing is likely to get you a more favorable result than someone who attends the functions or who subscribes to standing order because doing nothing is cheaper than being an IBO and paying for tools and functions.