Thursday, April 28, 2016

Is The 100 PV (defacto) Quota Unfair To Amway IBOs?

I believe the 100 minimum level to qualify for an Amway bonus is unfair and in this article, I will explain why. I also believe that Amway could actually retain and get more sales by changing this to 3% for 1-100 PV. If you were to obtain a cash back credit card, you only get paid likely one time per year, but there is no minimum amount of purchases. If I have 1% cash back card, if I spend 100 dollars, I'll get back $1 and if I spend $5, I get back 5 cents at the end of the year. There are no minimum purchases to qulify for the cash back. Even if you have consumer debt, a cash back card is still better than not having one because you can ear back a small percentage of your spending back. I don't know why everyone doesn't have a cashback card or at least one that gives you airline miles. But these credit card companies count on consumers to carry debt or they would go out of business paying these rewards. If everyone paid their bills each month, they would stand to lose money.

But that isn't the case for Amway. In Amway, once you buy a product, Amway makes a decent profit and charges you for shipping. They make their margin whether you buy 1 PV or 100 PV. But whether or not you buy 1PV or 100 PV, you pay the same price to Amway (as an IBO) and Amway MUST include the IBO's bonus money in their wholesale price because obviously, Amway will not operate at a loss (and who would?). But As an IBO, you pay a registration fee and you spend the time, expense and effort needed to sell Amway products. Some sales might e easy, and some might be difficult (if you have any sales), but still, the IBO gets nothing unless they meet the minimum 100 PV. Amway apologists will argue that you can earn retail profit by selling products (the margin comes from the customer, not Amway), but still Amway products are not competitive with big retailers so the products can be difficult to sell.

So why can't Amway issue their bonus at 3% for lower level IBOs? I believe it's because there would be less money for the people "higher up the pyramid". If you don't meet the 100 PV, you earn no bonus and the next people upline who qualify will receive that bonus, even if you worked hard and sold 68 PV. You would earn nothing for that effort from Amway. As I said, yes you might earn something if you manage to make a retail sale, but it seems that these sales are not as common as Amway defenders want you to believe. I believe that most IBOs end up selling to sympathetic family and friends primarily. Some Amway groups teach "buy from yourself" because most people do not like selling, So self consumption and BS like "prosuming" is taught to IBOs.

I honestly believe that Amway could actually retain lower level IBOs by allowing them to earn bonus rebates at lower levels because there would be a tangible monetary reward for using/and or selling soe Amway products. It won't happen, but why should Amway change? They have billions in sales. But here's food for thought. Amway last year did 9.5 billion in sales with 3 million IBOs worldwide (numbers are approximate). Walmart did nearly 500 billion in sales with about 2 million employees (I saw this comment on another forum and thought it was significant). Obviously one system works and that system is WalMart's. The 100 PV defacto quota is unfair and Amway's results clearly show it.

6 comments:

Paul said...

Wait, so would you join Amway if they gave you a bonus for under 100 PV? That's all you need them to change? What about all their other crap??

Joecool said...

No, I wouldn't join. I still think it's a bad idea, but making bonuses easier and more attainable would certainly incentivize more people to stay because they would get money back, even if it was nominal. That reinforcement can be very powerful.

Dan said...

Lipstick on a pig.

Anonymous said...

Hopefully Amway takes your advice, Joecool, and they retain more IBOs and thrive! Great job!

Joecool said...

Agreed to a point

Joecool said...

If this were done, then people could truly buy only what they need and get a rebate. Sort of like a cash back credit card. You don't need to buy a minimum to earn rewards.