Do you hate pumping gas? The routine feels like such a hassel to me. I have to fight to find a free pump most times, and if I do find a free pummp, then I’ve got to make sure I pull up to it with the tank on the right side. You’ve gotta get out of your car, walk around, go thru all those annoying menu’s on the pump. Or worse yet, go inside and prepay. Ugh, yuck.
So you’re probably wondering what pumping gas has to do with Multi-level Marketing. Well there I was, minding my business one fateful afternoon when young man on the other side of my pump decided to pitch his MLM to me.
“Wow, nice Audi, what kind of gas mileage does that thing get?”
“I manage to get about 21-22 city and 27 highway” I replied.
He replied unusually enthusiastic with an “AWESOME MAN!”
“Hey, can I ask what you do?”
Ahh… my favorite question! So I responded; “I hike, camp, rock climb, go kayaking, build websites, read, stuff like that.”
The puzzled expression on his face was a dead give away I had just given him a curve ball to his usual elevator pitch.
Pausing for a brief moment, he replied; “Oh wow, good deal man. I’m actually working with a business team out of Raleigh, North Carolina, helping folks develop web based businesses. We’re actually looking for some sharp folks like yourself who are looking to earn some extra income. Do you keep your options open?”
Carefully thinking over my reply, I realized this was a ploy to get me to come see some MLM plan. More than likely he was your typical IBO with Amway.
“Do I keep my options open? Well who doesn’t keep their options open! Especially if you believe that we live in the land of opportunity. But I’ve learned to carefully evaluate those opportunities and to recognize dead end opportunities without wasting my time. And I’m afraid I’m all to familiar with our pitch. So, to answer your question, I’m not open to your offer at this time.”
From the look he gave me, I knew I had just sunk his battleship.
Has this happened to you? Have you been approached by some young adult, who appears well dressed and genuinely polite?
If you where genuinely dumb enough to say yes, chances are you’ve given your phone number to an IBO. He or she will most likely call you within 1 to 2 days to setup a time to do an in-person meeting. The entire point of this quick meeting is to gauge your interest in coming to see his “business plan” and meet his “business partners”. (Just know that I’ll be using the word “BUSINESS” loosely.) During this entire process the individual will pretend like they’re being selective about who they let in on their opportunity. (It’s a lie, they’re desperate and need you to succeed.)
If you’ve already allowed this individual to schedule a time to come meet you, I’ll save you the trouble now. He/She will come over, show you some fancy little brochure and ask if you are interested in making an extra two to three thousand dollars. If you say yes, then chances are you are going to an open meeting where some person will speak to you about how to make money while drawing circles on a white board.
At the end, you’ll either sign up, or realize it’s a big fact pyramid scheme.
A little background on my perspective
I’ll give you my perspective on the subject since I was once a dumb IBO with “Amway”.
Now I will be honest, Amway is not a scam. Nor is Amway a pyramid scheme. If it was, it’d be illegal and shut down. At the same time, Mary Kay and Avon would also be shut down. They all share the same basic business model with a few variations.
Second thing I will add here is that there are a lot of really decent and honest people in these systems. And just like with anything, there are dishonest people as well. No avoiding that, it’s just a reality of life.
It is also possible to make money with these systems. However, you need to be well aware of some serious flaws within these systems. I personally believe you have greater chances of winning the lottery than making it in Amway.
Most people in Amway are going just short of broke. If you attend one of these business meetings you’ll be presented with a display of just how easy it is to get setup in business for yourself and to start making money. They’ll draw some circles to show you how fast you too can be a millionaire. They tell you all you have to do is get 6 people under you and then you’ll be rich. They’ll probably even give you a book called Rich Dad, Poor Dad. (Which by the way, Mr. Kiyosaki was sponsored by Amway to write that book.)
And they’ll tell you all about the wonderful support and training system you’ll be getting with this new business. And how you’re going to be a part of a TEAM. Everyone will hold hands, and mentor you and invest in your success. It will be flowers and rainbows and unicorns.
But there is a BIG FAT LIE right in the middle of this whole “Business System” that you won’t see at first. Most people don’t realize there are TWO businesses at work here. If you sell products, you get a portion of those sales. That’s a no brainer. If you sign up other IBO’s, you will get a portion of their sales.
The REAL SCAM and the scam that Amway itself turns a blind eye to on a regular basis is the training systems. You see, to become an IBO you have to be registered by another IBO, called your “upline”. Once registered you can sign up all of your friends and anyone else you’d like. The people under you are called your “downline”. Now generally once registered you’ll be a part of some business team. You could always go rogue, but I doubt many people ever do that or know that they can. Besides, it’s the team that is providing all the training you are going to receive to run your business successfully. (Supposedly)
Once you join up and start going to these weekly meetings you will be reminded over and over again how important it is to cut off negative associations and to listen to the CDs promoted by the training system.You’ll be encouraged and reminded over and over again that you need this training to be successful in business. According to them, you can’t succeed in your Amway business without listening to their CDs, without attending their seminars and 3 day conferences. You will also be told to buy books from their system and sign up for over-priced web hosting, voice-mail and a half dozen other useless services you could get elsewhere for free.
However, the money spent on this per month still seems trivial to the average cost spent on getting a traditional business off the ground. Most IBO’s never realize how much money they are actually spending in comparison to how much they actually make in Amway because the money invested is so low. Until you start to add up the money spent over the course of a year do you begin to see the real damage being done. The average IBO is typically in the red.
Let’s do the math, from my experience. (numbers from 2006)
It cost $151.00 dollars to register, and I also had to buy my 100PV (Point Value of products purchased from Amway to get paid) which was $175.00. I was also signed up on the book/CD program which was $60.00 a month.
The very first month I had spent a total of $368.00 (Not counting the open meetings).
Each Tuesday I was suppose to come attend a weekly meeting, it cost $4.00 dollars to attend.
$4 x 52 weeks = $208 (If an important speaker came out, I had to pay $6).
Now lets add up 11 months of 100PV and 11 months of the books/CDs.
$175 x 11 = $1925.00
$60 x 11=$660.00
Then there was the 4 major conferences every year at $110 dollars a ticket which equals $440.00 a year.
So far that’s $3619.00. I haven’t even included how much money was spent on gas and food yet.
Do you see where this is going yet? If your Amway business doesn’t earn you over $4000 dollars a year, guess what? YOU ARE BROKE!!!. YOU MIGHT AS WELL DO THIS WITH YOUR MONEY:
The problem here is that the whole system is promoted like it is the most cost-effective way to do business. The truth is, it isn’t. You will be spending more money a year running your Amway Business than you are likely to ever make. Check Amway’s own stats. Most of their IBOs never make more than $100.00 a year.
Thinking about quitting then? You will be brainwashed to believe the people who fail or quit the system are weak and don’t want their freedom from the 9-5 bad enough.
BULL CRAP. I have watched good people in this system work and work only to ruin their lives. My previous upline for example, ruined his first marriage and has been in the business for longer than 10 years and still isn’t “FREE” from his job. He still works a JOB and pours money and time into Amway, believing that someday he’ll be on a stupid island with a bunch of other dummies.
So where is all this money coming from that these Kingpins, the Diamonds of Amway, are always talking about? Well it’s not Amway, because they limit how much you can make. You can only ever make $32,000 dollars from Amway. The real money-maker is the books, CDs, and conferences. That is where all the real money is that THEY are making off of you. I would attend a conference with a stadium of thousands of IBOs and listen to a fat man on stage tell me he put the whole event on just to make me successful. Bullcrap. How do you think a concert works? What’s $110 x 5,000 IBO’s. Answer: $550,000 dollars. More than enough money to bankroll production and have lots left over.
The real kicker though was the local business meetings. I took it upon myself to find out how much money it cost to rent out the space they where using. I don’t want to get anyone in trouble, but by my estimation at $4 a head with about 500 IBOs in Va Beach, they where raking in $800 dollars every Tuesday after expenses. Whose pocket did that end up in? Yes, the guy in charge of the meetings.
You see, it’s not Amway, it is the training systems that are the real scam. I figured this out early on, but I, like many other people, stuck around because I believed in the other things they promoted. Things like helping people get free, living better lives, and fixing broken marriages, etc. I saw the business have a positive impact on the lives of people. Truly, at each conference I went to, I saw people give their lives by the hundreds to Jesus Christ. How is that not a good thing? But the sad fact remains, there is a darker, more damaging side to MLM.
The truth about the real money is never openly disclosed. Most people never truly succeed at this business, and I suspect 98% are going broke.
If you are in Amway right now, I URGE YOU to examine what you’ve accomplished and how much you’ve actually made. Put everything down on paper.
Are you genuinely profitable?
(I would love to hear your thoughts on the matter below in the comments. I will allow all comments so long as you are not directly insulting me or another person. )
Posted: January 21, 2010 in: Thoughts On
I find this article interesting, and not all-together untrue. The one thing I find particularly humorous is the reference to Robert Kiyosaki’s book, Rich Dad Poor Dad. I have read the book a couple of times as well as listening to it on audio a couple of times… it is a great book. However, I think Michael is stating here would be echoed by Kiyosaki. In other words, Robert Kiyosaki specifically states that to become rich you need to travel through life acquiring assets. (He describes and asset as anything you spend money on which generates more revenue than it costs on a regular basis.) To Michael’s point, the IBO’s (independent business owners) he is describing, are not taking an accurate cost/benefit analysis. In other words, their “business” is not an asset. Bottom line, like any other business venture, you have to periodically take a truly honest assessments of the ROI (return on investment.)
To make Quixtar work you have to take it very seriously like a real business. And it’s a business that requires you to hussle. I also argue that you don’t actually need all the CD’s and Books to succeed in the business.
Some people do make it work, but most simply are going broke, waiting to be the next person on a late night news special crying about how the system abused them.
I have found I get approached by a lot of people trying to sell me on MLM “opportunities” in the business section of bookstores. When someone strikes up a conversation out of the blue in the business section it is always because they are trying to present a business opportunity. If you know this, you can have quite a bit of fun with your answers to their questions.
YES! So very true Mark. I do recall that we where originally told to go to places like Barnes & Noble to meet people, but then someone started the trend of “meeting people while living your life” as they called it, so you didn’t seem like a marketer, but like someone sharing a real opportunity, where now they look for people at places like Walmart, Gas Stations and Grocery Stores.
Hi Mike,
Even here in China I’ve been approached by Amway people on buses!
Thanks for this article. I’ve read many articles for and against MLM. At the end of the day, my gut feeling tells to not to get into it.
So what does your license plate say?
MK3Y LLC
Hi Mike,
I did not realize this fact about MLMs. I did get pitched to one or two times, and it did pique my interest, but I never took the leap just because of all the negativity surrounding them. I wasn’t sure why, however, because a lot of business follow the same model (people referring someone else and getting a portion of the profit, e.g. joint ventures). I just assumed maybe the people in them were just looking for a quick buck and didn’t try hard enough or that the products were not in demand. I did not know about all the paid training that is pushed on IBOs. I guess I do now.
Thanks so much for bringing this to light, I definitely learned something today!
I lived near Amway’s headquarters in Michigan for awhile, so I know some people who have done well in Amway from actually selling the product. The problem I see with those types of systems is that they don’t take any less work than starting some other type of business and if you do become successful, you own a position in a sales channel–not the actual business. The person who owns the business (usually the founders) can make bad decisions and destroy your income and you can’t do anything about it.
Mike, great post. I wasn’t aware of MLM’s or any of the details but you did a good job goign in-depth here and keeping it entertaining.
I knew someone who was into Amway (a couple) when I was much younger and they used to attend local meetings and sell products to me from time to time. I do remember them believing that they would make it; they’d come back from those meetings with renewed energy.
I think Mark has a great point there: if you’re going to put in that much effort into a business, why not your own?
Great post! So true
I can’t stand multi level marketing… on any level 
I was kind of hoping some IBO's would find this and post a comment, get their perspective and maybe a little debate going.
Interesting. I'm an IBO and can definitely see how people can get indoctrinated into the various "extras" of the business. Personally I stick to the actions that make money – sales and sponsorships. I've been to a couple of events and honestly their are just pep-rally type things. Some people need that, some don't.
The system works for sure though, the products are amazing, and it can work if you make it. Amway is totally on top of things technologically and the numbers don't lie. Besides, at it's most basic level it's just like buying a Costco membership and getting access to all the goods. This translates to better value for your money and increased quality of products. It pays for itself easily if you have half a brain, LOL
Yup, the Amway model does work. But Amway Global on it's site states the limits one can make. But it's the other business systems that are a problem, some aren't as bad as others. Personally, not my thing anymore. Opened my ideas to things, but I got myself financially free 100x faster than if I had kept working the business.
I hear you. It’s not for everyone. For us it’s a nice thing to develop while we tackle other entrepreneurial projects. If you ever want access to the products again, just give us a shout =)
lotuslinkinternational.com
Great blog and hope you have an amazing week!
youtube.com/user/lotuslinkintl
I think this is a pretty good estimation of how it works 99% of the time.
My only comment is that Amway/Quixtar does not ‘cap’ you at any number – you mentioned $36k – you must be referring to the 25% compensation plan.
There are plenty of people making 6-7 figures directly from the corporation, but you’re right, the majority of the money that has been promoted through the years has actually come from the ‘education’ side.
I think a bunch of things have changed since I was in the business. As I noticed they are no openly calling themselves Amway Global again instead of just Quixtar like they where. So I may be wrong about those numbers, just quoting what I thought I recalled.
Your summary of MLM is kind of like me saying I don’t go to movies anymore because I saw Glitter once! An entire industry cannot be based your experience with one company. There are thousands of companies out there and some are bad and some are good, you just picked one a bad one in terms of making money.
I agree Amway’s comp plan is horrible, but their training is second to none (even if you have to pay for it)! There has not been an IBO that I have talked to that didn’t have a good approach. I think your forget about what you learned at those conventions/meetings you went to. How to accept rejection, how to deal with people, being part of a team, how to network with people, the things you saw no doubt helped you grow your personal business. It wouldn’t surprise me if some of those people have become your clients. Take a look from that perspective and tell me if that $4000 may not have been such a bad investment.
All business is built on Network Marketing(AKA Word of Mouth). Whether you like it or not, you Network Market every single day. So please change the title from “Multi-Level Marketing will leave you broke” to “Quixtar is a bad business” or something like that.
On a side note, I look forward to meeting you soon. I’m sure our paths will cross at one of the Meetup events. And I’m curious do you keep your options open? =)
Sorry Matt, but I you must of missed my main point. Most people don’t apply the work in multi-level marketing, spend all thier money on the mostly worthless training and then go broke. So I completely disagree.
I say worthless, because after exploring on my own, various books and authors, I found some of my old Quixtar cd’s and decided to listen to a few, and discovered they where rehashing other peoples words ver betam. That makes it worthless. All those conferences, never helped me to grow my business. They just keep me motivated to stay in the business and keep buying the crap.
I have had friendships completely destroyed over MLM marketing. I went to a classmate’s wedding and the bachelor party was an ambush AMWAY style. I sat through an hour and a half of “what is your goal in life” on a white board speech. The most painful experience of my life at the time. I flew in from Japan for the event and couldn’t believe it. I wasn’t interested (as well as other classmates) and it damaged our friendship for years because there is something in their training that prevents them from socializing with folks that aren’t part of their “network”. I hope they do well but the ‘cult’ nature of MLMs and the obtrusive false pretense is fascinating and sad at the same time.
You know what’s the saddest is I know folks just like you, who 10 years later are still in Amway or whatever it’s called now, still chasing their “Dreams” because that’s what it is a pipe-dream, still talking about how they’re going to be free and it’s the best business, yet none of them are free yet. Hey, I’m free and I’m not in Amway. I don’t wake up every day and rush off to a job. So obviously if you’re still in it 10 yrs later and still broke, it ain’t really working for you. I just have to laugh at these folks.
wow… love the story… very compelling. MLM is a tough industry. I think it is addicting, and can pull people away from their reality. There is some “comfort” being part of an MLM even though one is not making any money.
I still want to believe that there is the “perfect MLM” with a great product, affordable, with great leadership and training.
It does not exist. It is a dream. But I still have a glimmer of hope. Not in any MLM now.. but still vulnerable.. lol
Thanks again!
You know, the environment is what really makes MLM’s so attractive. That’s all I was ever attracted to. I’ve recently found that in my own mastermind group.
I work in insurance and we pay for our educational system, it’s a lot more expensive too. Every business has educational support related to their field and industry. That’s absolutely normal. Some have quit their positions because they said that insurance wasn’t for them anymore but it doesn’t make it a scam. Our system is called LTD and our new focus is not to get someone interested but find someone who is already interested. There are less chances of wasting time and money. And the most important thing right now is retailiong and being profitable since day one. A new peron in our team is making from $100 to $500 in profits from sales presentations the first week and we’re apturing an average of 60% of customer to buy the product again every month. Because they work! we can talk about that another day. But the main concept actually captures new ibo’s from the sell presentations wich is more effective than bookstores or gas stations hehehe. It’s not perfect but we’re working on it and we will alway work on it since trends and technology changes .
Yes, many systems have educational material, but misrepresenting that material is a scam. I got out at the tale end of LTD. I still make more money than I did in Quixtar, and unlike the people who where on my team, who still work jobs, I’m free to do as I please. Simple math, investments and learning not to spend more than you make. I’m not a millionaire yet. But if I sat back on just my investments I would be in 30 years. Of course who knows what inflation will do by then, so I keep finding new ways to bring in business and build my income streams. LTD as you may or may not know broke off of BWW the original system that was before it when I first got started. Apparently the profit sharing system was far worse and more abusive, and it’s rumored Larry Winters wanted to correct that and help people succeed faster.
That’s great, but I still know better ways to make money faster without going backwards while doing it. If what you say is true, then you’ll succeed. But any business that has a net loss year after year is going backwards. PERIOD. I never said Quixtar doesn’t or can’t work. But most people will keep justifying zero returns by saying they have to keep purchasing all that material as an investment in themselves that goes no where. If you do the business for ten years and never succeed that was a wasted investment. People pull out of stocks when the go down. If the ROI sucks you sell, you don’t poor more money into it.
Mike, you’re a very smart man and I’m glad you’ve been able to become free. There is more than one way to do it. I personally love real estate and I’ve read Rober Kiyosaki intensively. Larry started LTD and I got started with them 2 years ago. Everything has changed. As I mentioned before, the ROI of the new plan is better than anything I’ve STUDIED before. Let me give you an example. One of our new guys got started about 3 months ago. We did a grand opening (the main focus right after you get started even before contacting prospects) he made $341 which paid for his subscription with ltd and amway the first month and still broke a profit. He added 2 legs and help them make money and then a 3rd when you get 2 legs in the first 90 days you get $100 and when you get a 3rd you getn an additional $200. so we’re totaling an average of $300 a month for the first 3 months + $300 bonus. That’s $1200 the first 90 days. Lets say he is on cep ($46) and going to meeting ($20) and went to a major function ($120) That’s $315 + registration with both companies ($170 + 50) = Total overhead = $535 (Tax deductible!!!!)
Total revenue = $ 1200
Total profit = $665.00
Instead of geting taxed for $1200 of inocme now you’re taxed for only $665 (which you can find more deduction such as miles to meeting + boooks etc)
Now we’re helping him brake 4000pv next month and we’re expecting an average of $700 of income (retail + pv bonus)
We call this LTD 2.0 is brand new way to look at it. Not everyone is as smart as you to create other streams of income in investing or traditional businesses. But everyone can let a person come in into their lives and serve them.
Now consider the bonuses that jump in after platinum? they’re AWESOME! have you been at an Achiever’s trip? you get sent to vegas 1st class all expeses paid right after a bonus of $20K + that month’s (october) pv check and retail profits. Now subtract the the anual overhead of aprox $3000. That’s still pretty good isn’t it?
I shared these numbers with my boss in insurance and he almost threw up. Conventional businesses and investments still work but the risk is much higher and not everyone has the capacity to manage the risk as you have. Thank you for your time
Those numbers do look good, but I’ve watched an upline get a divorce and blow out his whole downline at the same time, to say there is no risk is 100% honest. Sounds like your doing the work and so is your downline. If he wasn’t out there hitting the payment, you wouldn’t be using him in the example. And I’m sure you can agree, to many people dont’ hit the pavement. But I meet tons of people at regular business networking events who shake hands but are just hoping success will land in their lap. It’s the same thing in all areas of life, it only comes to those who will make it happen, and that’s the real sad truth. So long as the business is profitable it’s viable, but not everyone understands how to be profitable. Sounds like your training systems might of gotten better than those old BWW days.
I’m sure if you keep hitting the pavement you’ll succeed. I think I said in my post that the business itself never got into my heart, I was never interested in. I was interested in the atmosphere and the people involved, although a lot of them disappointed me in the end.
There is one thing I hope sincerely has changed about the business, the team I was on, made it a real point to bash anyone who quit the system or wouldn’t join as weak, or stupid. The simple fact of life is God has called different people to different things and not everyone is called to that business, and it really always angered me to hear them repeated trash people who either quit or didn’t want to join.
I’m sure right now someone thinks I’m just some weak guy who quit the business because I couldn’t take it.
Uh huh, more like it wasn’t my hearts desire. Thank you.
Although I think my way of getting free is probably just as hard for some people. I reduced my lifestyle big time, I went from high class living to living like a poor person, I then took my money, climbed out of debt, maintaining a very low lifestyle, practicing that delayed gratification and continued to save up and build up. It was hard when society tells you that you need to look rich and act rich. But I just took comfort in the growing size of my bank account. Eventually after getting rid of my debt, I took a couple months to just travel the country. Meet my wife, came home, got married, went on our honey moon, and started on some new projects. We’re planning on moving to Tampa soon, and we have a vision and plan for our lives.
I forgot to metion the registration is 180 days money back guaranteed.
Who was you upline platinum and diamond? just out of curiosity.
Larry Winters >Jake Baker > Rob Hutermen (SP?) > Marshal Plotner in that order. Jake btw used to have some awesome teaching.
I am also a member of the LTD system. My upline diamond is Jake Baker. (I am five in depth from Jake Baker) And you are 100% correct, most people never do anything with this opportunity. I would just as soon all of those people quit and stop wasting time with this because I truly only want to work with people who want to succeed. People that get in and do nothing with it are going to help me boost up my volume.
And Cristian is right, LTD 2.0 is 100% focused on making sure every IBO makes at least $200 a month through RETAIL PROFIT, not personal consumption. Personal Consumption is the old plan, the new plan is finding people you already know, that might not be interested in their own business, but are already buying energy drinks, home care products, and vitamins. The products are better than anything else on the market, and priced competitively so its not hard to find those people.
Also, the diamonds in LTD are upfront and honest about the fact that they make money from the training system. It’s not a secret. It’s just another incentive for qualifying at a high level. And you don’t have to be a diamond to participate in that revenue. It starts a platinum, which isn’t a lofty goal by any means.
I think it’s great you found another avenue to succeed in! I personally never knew most of these success principles and no one else was teaching me. Positive mental attitudes, persistence, confidence, I never knew these things. And without these principles I never would have gained above average success in anything, now I have that opportunity, but I love the Amway business, I love the products, and I love the people I work with. So I am an IBO for life.
In any business you can find people with lackluster integrity, luckily I do not believe we have to worry about that in LTD.
Let me ask you this, how much after you take out your monthly deductions do you have in actual profit from that $200.00? I’m beating even if you make $200.00 you break even at 0 in what you spent all month. That’s not a profitable business.
The guys speaking at these stadiums, when they hint at you about their secret lives etc. Talking about standing down a police officer while going 100 in there top dollar sports car with just a hand sign. Its because these guys are in the Brotherhood. You think these guys happened to get in this by accident or by chance? No, that is not true. These Diamonds etc. If you knew any better you would be putting the pieces together.
Hey Mike,
I’m an IBO and actually a part of the LTD business team. I’m not a part of the Baker team, but a part of the Campbell Haigh team (which Baker is a downline diamond that Campbell broke). I read most the comments here, and might have missed a few, but from what I saw of you talking about Larry Winters coming from BWW was true. He and his organization started to realize that their philosophies and methodologies of what they wanted out of their business, compared to their original teaching and education system, had changed. Breaking away from their original LOS is never an easy decision to do, and I do really give them credit for taking that step. They are definitely reaping the benefits and rewards of being an example of how to build a legitimate business, and not try to suck people in by promises of these MASSIVE dreams anymore. Yes, the dreams are still there, and yes, they do still show that money as part of the compensation plan that you can acquire one day, but that’s not what they focus on anymore.
I’m not sure if you have checked anything out recently, and I’m not quite sure how long ago you were around Amway/LTD, but as with any business, things have changed. No longer is it teaching “OMG! You can make $250k+ a YEAR, but for right now just suffer through, making $10 a month, and you’ll reap the benefits and rewards later on! Just step out, be something different, and we promise you’ll see it one day!!!!” Those days have come to pass. Last September (2009) Amway dropped the pv/bv and prices on every product they had, which was an outcry for most IBO’s that had been in business before. It is no secret that most Amway businesses in prior years were a personal consumption business. You would teach people to do their 100pv a month, and 50pv in retail, share the same business plan with others, and most of your organization was built off your IBO’s personal consumption (If you do the math, obviously only 1/3 of your entire downline PV would be from costumers.) The problem with most people that were IBO’s that had been around for a while saw this as making it too difficult to get the same amount of PV in their organizations. SMART IBO’s saw this as a blessing, because now every product is truly competitively priced compared to other products on the market. I think most people can agree that most (if not all) Amway products truly are top notch, with thousands of hours of time and development going into them. Prior to this time, though, the products were simply too expensive, and you could not retail them at all. After they dropped the prices on everything, it has changed the game tremendously.
I can’t speak for other organizations, but the LTD team is growing at an astonishing rate right now specifically due to this. Instead of teaching doing personal volume, our focus now is on retailing products, creating a strong costumer base, and teaching others to retail the same as us. Not only is leading with volume creating faster IMMEDIATE money for people (as you know there is a 30-40% mark up on the products when IBO’s sale items, as there is with any business when they sale products. You’re there to make money from sales, not just create PV), but we can actually help people make that $100-300 in their first 30 days in business simply from retail profits. We are experiencing that all the time in our organization now (as well in my personal organization in Las Vegas). Most people’s personal circles (including retail PV and personal) are exceeding 300pv a month now, with about 200pv of that in retail. I’ve even got some people that I’m working with that can’t even afford to do personal volume at all, but with the access to samples and demonstrations that I have, and their desire to sale the products, we can still get the products in front of people. Just by doing this, they are creating about 200-300pv a month from retail sales, and no personal volume at all. This is what the true Amway business model has always been about. Being able to retail products, and teaching others to do the same. When your business becomes a personal use business like it was in the past, it completely takes away the true “Entrepreneurship” of what the Amway MLM business is, and it becomes getting people into your group and making money off what they themselves use (and just a little retail on the side to make money off your downline).
You’re right when you say that you have to focus on your ROI, and actually take a step back and realize how much you’re putting into your business compared to what you’re actually making. We no longer focus on getting people into the business, praying to God that we can get them to a rally, get them on the CD’s, and hope they stay around long enough to get them 2-3 people sponsored so they won’t quite. With the ability to retail products now, our focus is on leading with RETAIL volume, helping to do the same with others, and once they actually reach a point where they are making good, consistent money on a monthly basis and they start to have a business team coming on, then we maybe recommend they get on the education system to help develop themselves as a leader of some people that can motivate, teach, and train. Some people will come into the business and do the opposite, they want the teaching, they want the training immediately (that’s how I was). But with struggling college students or the like, they can’t always afford that step. They’re in this business to make money to help pay for food, rent, or just utilities to live off of. They can’t always dump money into a CEP (continuing education program) when they can barely live or make their monthly payments on things. But that’s where their sponsor/mentor is supposed to step in, use THEIR knowledge and experience to teach them to do what they did, until they do reach that point.
I’m sure you’ve read the book “Who Moved My Cheese”, and as you know with any business, it’s all about changing to markets, adapting to the opportunities that you are presented with and making them work the best for you. People these days are actually starting to see the power and the benefits of a network – mostly accredited to what Facebook has done to keep us together. Amway is really focusing on getting themselves back into the public eye with the advertising they are doing and lowering the prices on all the products. They know that we are interconnected as a people more than ever, and networking marketing business will thrive in this environment (especially with the hurting economy right now).
I will summarize with this: this business is still not for lazy people. Can we help you make $200,300,400 in a month with about 5-15 hours of legitimate effort and work? Yes. Key words being “legitimate” and “work”. People that aren’t afraid of doing work in their spare, extra time, for something different can make those numbers and more. As with any business, it’s about what you put into it. We can never guarantee success, but we can always guarantee an opportunity. What we have isn’t for everyone – because nothing is for everyone. We are just always on the lookout for people that want something different and this can fit their lifestyles. I will never push my personal Amway business onto someone or hate them for not doing it. I will not destroy my friendships I have had for many years because they don’t want to do this with me. All I ask is they be supportive in any venture I seek, and I will do the same for them.
Thank you for not being some of the typical “Amway is a scam” people that we see so much of on the internet these days, and I look forward to any more conversations we may have. Cheers, good sir
P.S- Okay, so before sending this, I just saw the chat you and Christian were having, and I know I typed a few things here that you guys already touched on, and I don’t quite want to go back and redo any of it. So, if any of it is a repeat, then I apologize.
I have tax returns that verify over the course of 4 years I spent an average on $5000 a year on “tools” and conferences in BWW and LTD. That’s $20,000+.
I worked my ass off, was out most nights showing the plan or contacting.
Ruined my JOB work ethic and alienated myself from my 2 year old for 4 years. Would love to have the time back with him.
My sponsor had an alcoholic wife who got in trouble with the law and had health issues so he fell away within a year. His sponsor who became my mentor cheated on his wife with his downline and his Silvership fell apart quickly there after. Tried my best to “make it work” but after changing jobs and realizing that making $75K at work was getting me farther than Quixtar with LTD I faded away. There came a point when the stage talk just wasn’t meshing with what I was learning behind the scenes.
By the way. Larry Winter’s LTD came about from an opportunity for Larry and his diamonds to break away and start their own “education system” because of Bill Britt and Paul Miller’s marital infidelities and the earthquake their actions caused throughout BWW. It gets messed up when your upline diamond knows first hand about the affairs and doesn’t let his downline know that the character bit is an appeal to higher ideals. Most of LTD is a patch work of Lines of sponsorships from the fragmented BWW.
If I was brand new and deciding if I was to be an IBO. I would do the following:
Ask to see monthly checks and past years tax returns.
1) Find an 5 leg emerald that needed that last leg to go diamond.
2) Let him/her spend their money to drive depth in my organization, hand out tools. If I wasn’t in platnium qualification in 6 months. Stop attending everything and just collect the PV checks while they lasted.
3)Not contact anyone at work.
4)Once I was a Q-12 Platnium, sell my organization to the highest bidder.
5)Not sacrifice my family time for a $.
6)Hold yourself to their business model if it doesn’t work in their timeline. Leave.
I was an IBO before Amway reclaimed their name and dumped Quixtar. I happened across this post while researching to find out what happened to Quixtar because my wife wants to buy their cleaning products (how ironic is that). My business stopped after disappearing for a half a year on a trip overseas about 7 years ago. Before that I had a small organization that in my absence fell apart. I honestly was not making money, but rather was paying into it with my job at the time. I just wanted to make a comment about the training. Yes, it cost money, and yes, it wasn’t something that made business sense, but what I have taken away from those years of training has been rather invaluable in my current business success.
I really soaked up everything the training had to offer, and I do have to thank some of the mentors in the system for giving me a more clear perspective on what really is more important in life.. namely family. There are still many mantras I learned in that business that to this day I use in my current dealings in a totally different industry.
I spent well over $25k over the course of years on training and seminars, and while family members are quick to take jabs at me about that time in my life and the ‘waste of money’ it was, I just don’t feel that way. I walked away from it with mad marketing skills, and many of the people in my organization certainly came away with it all smarter. Some however went away so jaded, they really did waste their time and money. As it is in any business where delusions of grandeur become dashed. When I think about how I learned everything and my experiences, I really don’t believe I could have gotten the same kind of hard knocks learning from a classroom. The aspects of human nature and behavior you gain are often a considerable edge over what most people know.
I know some will defend it to the end while others like OP will say its just a waste, but I think its really relative to each persons circumstance. I may have not made money in that business, but the training system and what it gave me to this day still pays off big time. What I ‘wasted’, now pays back almost the same amount I make monthly.
To take another mantra from the biz.. The only guaranteed 100% return on investment is when you invest in yourself.
Every thing is multi-level. There are far more people failing at a job or college, they get promised college is the answer, want to talk about scams! College or a job or Amway is an open door that can only give you the opportunity to success. Remember it’s an opportunity not a serenity to succeed!