Wednesday, March 27, 2024

The Millionaire Mentality?

 A comment left by an anonymous site visitor:


"I love Amway. I just don't understand why people have to be negative about it. I don't hurt or steal from anyone yet I make money. I'm not a millionaire as of yet but working towards that goal. It's called "millionaire mentality". Joecool, you will never succeed with penny mentality."

Joecool's commentary:

It would be my informed opinion that most diamonds do not have a millionaire mentality. If you see how they spend money and how they flaunt excessive wealth, I see people who could win the Powerball lottery and wind up broke. They might earn a nice income (even if it may come by lying and deceiving), but they spend it all, and possibly more by portraying the diamond lifestyle. In my opinion, the diamond lifestyle as portrayed in functions such as "Dream night" are not sustainable.  For this reason, we are now seeing evidence of this such as a triple diamond who was in chapter 7 bankruptcy proceedings, diamonds losing homes to foreclosures. We are seeing diamonds selling their mansions. Sure, they might be downsizing or liquidating their assets, but if these homes have been paid in cash as they claim, why sell them in a bad real estate market? Why not wait a few years?

In the past, I have posted some articles showing the traits and characteristics of millionaires. Many of these articles cite saving, investing, and living below your means. Many wealthy people drive regular everyday cars and live in the suburbs. They don't commonly have Porsches, and jaguars. And for the record, the average diamond income, as reported by Amway, isn't all that much when you factor in business expenses and taxes. So why do diamonds try to show off wealth?

I believe diamonds show off wealth because it is a way to attract recruits. Because the Amway opportunity has a high turnover rate, nobody can reasonably "walk away" from their business and have cash rolling in for long. Attrition would eat away your business in a matter of days or weeks. It is why I believe diamonds do not walk away from their businesses, because they can't afford to. The business requires constant attention or it will crumble faster than stake cookies.

Most IBOs are simply fooled into thinking they are developing into having a millionaire mentality. An honest question for IBOs. How do you even know if your upline diamond is a millionaire? Anyone, even a broke guy can wear a nice suit and show off pictures of mansions and sports cars. For that matter, how do you know if your upline diamond is currently qualified as a diamond? Amway doesn't release that information except for new pins.

In my opinion, diamond's displays of excessive wealth and luxury portrays something, but it's not the millionaire mentality.

Tuesday, March 26, 2024

The Real Scam?

 A lot of people come and go in Amway, but many of those who come and go don't even notice the scam. They get sold on what they believe is a business opportunity that they can make some money at, or at the very least save some money on products that they would normally buy anyway. If they do it right, they can possibly make some "real" money and with some had work, you can build it right and have the option one day of walking away from Amway and living off ongoing residual income from Amway. It sounds reasonable and therein lies the scam.

For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam. Amway's distributor force turns over about 50% each year. How can you build a residual income empire when half of your downline quits each year? I believe Amway diamonds trade their 9-5 jobs for the night shift. They work at night and into the morning hours because they are working to replace people who quit and to support downline platinums who might struggle or fail to re-qualify for that level. If upline says they are working for the love of their downline, I call BS on that. If walking away and enjoying life was an option, why hasn't anyone chosen it?

Now you could argue that a diamond's "work" isn't that bad, and they aren't reporting to a boss. And that would be true, but I imagine the pressure of churning people in and out to keep qualifying can be stressful in itself. If you live on an island like me, you can eventually have trouble finding new people to work with. In 1997 or so, there were a bunch of diamonds in Hawaii and they all moved to the mainland. Now I"m not sure why but my upline diamond was Harimoto, who loved the ocean and the beaches. Yet he moved to Washington state. I believe they needed new grounds to mine, just like gold miners.

The next part of the scam is how IBOs will tell you about Amway's generous money back guarantee. 100% they'll tell you. What they don't tell you is that the guarantee is only on some of the products and the sign up fee. The cds, books, voicemail and functions are not sold or run by Amway. And these expenses can be very significant over a period of time. IBOs and prospects need to know this. You can lose thousands and get back pennies on the dollar asking for a refund on the sign up fee and perhaps a few products. Another piece of the scam.

Also, IBOs and prospects are often shown only the very best case scenario (such as going diamond) but not told that your chance of being struck by lightning is much higher than your chance of going diamond, even though going diamond is not a random event. A real life and likely scenario is getting in and trying hard for a while, and then quitting with some business losses. At least if you know this and still try anyway, you will have done so with full disclosure.

Lastly, it's insidious in my opinion, for upline to tell you to trust them and to do as they say, and then turn around and tell IBOs that failure is their responsibility. That they didn't work hard enough or do thing just right. That sure isn't what they are preaching when recruiting you into the business. They are saying how sharp you are and how you're likely to tear up the business. But it's just another facet of the scam. I've outlined the parts of the opportunity that I believe are scams, but I'm sure it's not limited to my point of view.

Good luck if you read this and join anyway.

Monday, March 25, 2024

Artificial Intelligence View On Amway?

 Out of curiosity, I asked my Microsoft Co-Pilot AI (artificial intelligence) if Amway was a poor business opportunity.   The initial part of the response was how you can register as an affiliate for $55.   It goes on to speak about different levels in Amway such as affiliate or a higher level  where you recruit downline, etc.   It also mentions that income increases when you sponsor downline, creating a leadership group.  This is general basic knowledge for people somewhat familiar with the Amway opportunity and the details.

The interesting part is the discussion about the challenges and controversies surrounding the Amway opportunity.  

1.  Amway has faced criticism for its pyramid like structure where recruitment plays a significant role in earning income.  

While Amway was reviewed by the FTC in the past, they were found not to have qualified as an illegal pyramid.  However, this is not to say that Amway was exonerated or spoke of as a good example by the FTC, which is what some Amway IBOs and defenders like to spew on the internet.  Indeed, Amway was fined at one time for $100,000 for violating that 1979 ruling.  In this case, Amway apparently had ads that misrepresented income claims.

was amway fined in 1986 - Search (bing.com)

2.  The company (Amway) imposes strict requirements and sometimes unrealistic goals, making success challenging for many.  

For example, Amway has very strict rules about advertising and other factors that make it difficult to move products to the general public.  And if you have any disputes about these rules and regulations, you appeal to Amway, who gets to be the arbiter of these rules.  Can anyone really challenge and multi billion dollar corporation and win?  I find it highly unlikely, next to impossible.

3.  Amway affiliates cannot sell Amway products on platforms like Amazon or EBay, limiting their options.

So IBOs cannot use retail outlets or even ecommerce giants to move Amway products,  Thus, IBOs can sell person to person.  That is a restriction that is likely to hinder the opportunity to move a high volume of products.  I don't understand this rule because once an IBO makes a purchase from Amway, they get to restrict how that product is marketed to the public?  Maybe there's something I don't know about this, but you'd think Amway would want the market flooded with their products.   During the covid pandemic, online businesses like Amazon went through the roof and sales were booming.  If I'm not mistaken, Amway sales were lower or flat compared to pre-pandemic levels.  Amway had at one time peaked about just over 11 billion (I believe) but their sales and revenues has since dropped.  

And these restrictions are imposed by the corporation but doesn't include charging premium prices for generic in nature types of products, generally speaking.  If you remove any bias from your mind, take a look at what you can purchase from Amway for $100 and see what you can get from Costco or Wal Mart for similar products.  (Costco and Wal Mart don't sell Amway products).   Secondarily, the Amway name reputation has suffered from IBO lies and behavior.  For example, calling people broke or losers because they don't agree that Amway is a great deal.  All these factors add up to what the opportunity is:  A revolving door with high IBO turnover and the potential for business losses.  Is seems as if the longer you stay in and participate in the tools and training systems, the losses mount and become staggering in some cases.  

I know AI still needs to be scrutinized and double checked, but the AI response on Amway is correct, based on my experiences and in my own opinion. 


 

  



Sunday, March 24, 2024

The "System"?

 Based on my experience in Amway, my blogging experience, and observation of other people who give financial advice such as real estate gurus who teach you to buy property with no money down, or others such as Robert Kiyosaki for that matter, commonly show testimonials of successful people. In the end, this is as effective as showing all the people who won the lottery. Focus attention on the people who won but ignore the millions of people who failed trying to accomplish the same thing. Obviously, they do not show you the vast majority of people who try their systems and fail.

It is my informed opinion that whether it is Amway, WWDB, BWW, N21, real estate or the cash flow business, the vast majority of people who try these systems do not make any kind of significant income. Sure, some do, and those are shown as the possibilities. But if you watch infomercials for these "systems", you will see in small print on the bottom of the screen, "unique experience", your results may vary. I believe that a similar message is used at the end of Amway diamond recordings and audios as well. The diamonds basically present only the best-case scenario to prospects while ignoring the most likely results.

These systems in general do not work for various reasons. Many people simply do not have the acumen to work the system. Or the system has too many variables for the system to work, or the system calls for things beyond your control. For example, success in Amway generally requires you to sponsor others, something that is beyond the control of most people. Add in the lazy and people who are hoping for a quick score and it is understandable that most will fail. But these systems are often set up where the majority simply cannot all succeed. Nowhere is that truer than the Amway business where the pyramidal compensation plan nearly guarantees failure for the vast majority of lower level IBOs. The 6-4-2 plan shows 79 IBOs with 1 platinum. Thus, even with everyone in the groups earning a bonus, (practically impossible), you have 1 in 79 achieving platinum, which is the level where you allegedly begin to break even or make a small profit, depending on your level of commitment to the "system".

So what can someone do? Well, it may not be as sexy or attractive but a part time job and investing and saving might be something to think about. Even a part time business where you focus on selling products for a profit might work. It just seems prudent to avoid these "systems" as the primary beneficiary of these "systems" are the ones who directly profit from them - the upline diamonds.

Saturday, March 23, 2024

All Show, No Go?

 Back when I was in college, many young folks were car enthusiasts and tried to fix up older classic cars like a 67 Camaro for example. Some folks would just buy a new car and add on some trinkets to make the car stand out in a crowd. But one of the sayings we had for cars that looked nice, but whose engine had no power, was "All Show and No Go".

Many Amway IBOs and Uplines are very likely to be "All Show And no Go". They talk a good game. They make claims and try to show off fancy toys and things, allegedly obtained with success in Amway. But shine the light on the truth and you will likely see a different picture.  It is why you often saw a parking lot full of beat up cars at functions.  But everyone wears a suit and a nice smile.

On a bigger scale, I believe the major function called Winter Conference, formerly called "Dream Nite", is one where diamonds would show videos or slide shows of mansions, yachts, sports cars, jet skis, golf club memberships, shopping sprees and other kinds of fabulous wealth, all the while proclaiming that it is through Amway that all of this can be achieved. Do as we do, and you will have what we have, is what I heard, and I believe it is still the case today. But despite these claims, more and more evidence is available to show that diamonds may not be what they seem.

Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke And Mirrors) exposed a diamond who had a nice, income, but lived beyond their means and were actually heavily in debt. We have also seen diamonds whose homes were foreclosed. Some of these diamonds may have spoken about paying for everything in cash, including their homes. Diamonds quitting (busts the lifelong residual income myth doesn't it?), diamonds moving to a new MLM, etc. It all points to one thing which is clear in my mind. The diamond lifestyle is not what it is portrayed to be, in many cases. Now I am not saying that a crown ambassador or some other tenured diamonds are not wealthy, I'm sure there are some who are, but they are few and far between. They are the exception and not the rule, in my opinion.

It's all show and no go. Like the Texan with the nice hat with no cattle, or the nice car with a weak engine. It's a show, or a facade for many. They give the appearance of success in order to attract new recruits but behind the scenes, might be living in debt, and/or living from bonus check to bonus check. Let the buy beware!

Thursday, March 21, 2024

The Math Behind The Systems?

 It is my observation that people who join Amway usually end up losing money in the end. They may get involved to make a few bucks or because they are mistakenly led to believe that they will become millionaires in Amway in 2-5 years. I know my sponsor convinced me that we would be millionaires in a few years. These folks who recruit new IBOs into Amway are often associated with a "system" such as Worldwide Dreambuilders (WWDB)or Network 21 (N21). These system promoters, often diamonds, may mislead the recruits by showing them pictures of mansions or other luxuries, implying that they attained these goods with their Amway business. In many cases, it is a deception, especially when we know for a fact that some diamond leaders who proclaimed that they only make cash purchases, had their homes foreclosed. Without the hype, I am sure there would be fewer sign ups. But what is the evidence?

It is simple. Amway reports that the average active IBO earns about $200 a month in gross income. This average includes diamonds and other higher end IBOs. I believe if you calculated the median, the average would be much lower.

But what makes IBOs operate at a loss is the system expenses. The system generally consists of voicemail, standing orders, cds, functions, books and other materials. An average business building IBO might spend an average of $250+ a month or so on these expenses. Amway defenders like to decry the amount, but there are couples who would likely spend more and IBOs who must travel by air to functions would spend more. Single IBOs who buy only the minimum might spend a bit less. Some IBOs with abusive uplines might spend much much more than $250 a month on tools. I believe my former sponsor spent easily an average of $1000 a month on average. (I am from Hawaii so the average cost of functions is greater due to long distance travel)

Thus if the average IBO earns $200 a month but the same average IBO spends $250 a month on tools, the average active IBO is losing $50+ a month, with lower level IBOs (i.e. 100 PV) would lose more.

Look at a group of 100 IBOs at 100 PV. (This is just a model). If a 100 business building IBOs average $250 a month on tools, they as a group would expend $25,000 a month on tools and functions. Their volume would be 10,000 PV, or about 30,000 BV. This would generate about $7500 in bonuses per month. Thus, this group spent $25,000 to learn and be motivated while the group splits up $7500 a month in bonuses. The platinum would get the lion's share of the bonus but most of the rest of the group will suffer net losses. As the group grows, the bonus may grow, but so will their expenditures on tools. Keep in mind that a group of 100 IBOs spitting up $7500 would be an average of $75 each. It is the diamonds that drive up that average. The math bears it out.

The only way the group can make money as a whole is to avoid participation in the tools altogether and to actually sell products to non IBO customers. The evidence is right here with simple math. The systems do not work because the cost of the system is likely to consume all of the Amway generated bonuses and more. I gladly challenge anyone to explain in detail how this post is not reflective of the reality of being in Amway and a system such as WWDB or Network21.

The facts speak for themselves.

Wednesday, March 20, 2024

Most Will Fail?

 Most IBOs fail. That is not a wild guess. That is a fact. Failure would mean doing nothing or trying hard and not making a net profit equal to minimum wage for the hours expended. Amway supporters will argue that many IBOs do little or nothing, and while that might be true, even the remaining IBOs who work hard, still find little or no success. The system is set up that way. If you see a diamond "walking the beaches" as the cash rolls in, that means someone is putting forth the effort to make that happen. It is the downline IBOs who purchase Amway products and tools that allow these diamonds to enjoy what they portray as success. By the way, does anyone actually know one of these diamonds who are retired and doing nothing while cash rolls in? 

We also know that some diamonds overhype their success. There has been evidence that the diamond lifestyle is often not what people think it is. If you could truly earn residual income by the bucketload, why do diamonds quit, resign, lose homes in foreclosure proceedings, and even wind up in bankruptcy court? One could argue that some diamonds are failures. The diamond lifestyle is an illusion created by upline leaders as a means to entice recruits. I would venture a guess that many diamonds are living in debt or struggling to make ends meet. 

Many Amway zealots and apologists try to make ridiculous claims comparing a company owner to a diamond. The big difference is that a company owner has employees who get a regular paycheck. These employees generally wanted the job and probably applied for the work. And if and when an employee leaves, there are other applicants who are willing to step in and do the work. Thus, the business continues to meet their demands and continues to profit. 

In the Amway opportunity, the IBOs spend money purchasing products, and then upline leaders expect these same folks to spend even more money to learn how to be motivated to do the Amway business. But in reality, if IBOs made profits, that would likely be sufficient motivation to run their businesses. Because it is hard to find enough (suckers) prospects to join the business and fork out cash while they lose money, other IBOs have resorted to trickery, deception and outright lying at times, in order to attract potential downlines. This has damaged Amway's reputation. 

The 6-4-2 system ensures that the majority of business builders must "do the work" to uphold their platinum, who (probably) barely earns a net profit. And then you need 3 or 6 groups of IBOs losing money in order to maintain an emerald or diamond. Amway has revealed that less than 4% of product moves to non IBOs. The absence of non IBO customers nearly guarantees that most IBO groups will lose money or make very little. Most IBOs are destined to fail. And it is not necessarily the IBO's fault. The system itself comes with many flaws which most IBOs cannot overcome, even for those who put forth much effort. It is why most IBOs fail. It is why I hope prospects will find and read this information before making a final decision to sign up or not.