This is a blatant straw man. Asking people to show alternatives is not the same as demonstrating that Amway is a good way to obtain that income.
No, of course it isn't. But if it can be done in Amway (and it has, many times), so it's perfectly reasonable to ask for alternatives to establish whether it's a "good" way or not. It's not a straw man at all. Without comparison one can't make a judgement.
Business analysis would be nice, but it's nonexistant. The best income stats are craptacular
No there not. They're not perfect, but they're quite reasonable statistically.
For Quixtar (Amway North America) -
* IBOs earned $370.1 million in bonuses and incentives in fiscal 2006, bringing their seven-year total to more than $1.72 billion.
* More than 370,000 Independent Business Owners received a bonus in FY 05.
* The average bonus and cash payments earned by a Diamond IBO in 2005 were $146,995.*
* The average bonus and cash payments earned by an Emerald in 2005 were $72,241.*
* The average bonus and cash payments earned by a Q12 Platinum, an IBO who qualifies at the Platinum level all 12 months of the year, were $47,472.*
* The largest annual bonus earned by a Diamond IBO in 2005 was $1,083,421.
* The largest annual bonus earned by an Emerald IBO in 2005 was $688,869.
The average incomes for Platinums, Emeralds, and Diamonds are the important ones. They tell you what type of gross profit you can expect if you build a business of a certain size turnover.
I read
this through, and the author has to make some interesting statistical leaps to reach his conclusions, because the data just isn't that good.
No, the data isn't that good, so one has to deal with what one has. That is my site, and my article. Some assumptions were necessary but nothing I'd call a "leap".
I put out my objections to the MLM model generally, and I stand by them. You said a bunch of what basically amounted to "but that's not MLM," but you're just redefining things to suit your own needs
I'd disagree and say that's what you are doing, not me. The fact that what you claim is MLM would result in a non-sustainable business model that is likely illegal is a bit of a hint that perhaps you're not the one who is correct. There are many MLMs that have been around for decades. They've been checked out by governments and other authorities and OK'd. Given the nature of language however, if enough of the "scams" keep calling themselves MLM, then that pretty much makes that the definition of MLM, in which case legitimate companies like Amway need to come up with another term - which folk regularly try to do because of this very issue.
I would say however that those "scams" already have a names - illegal pyramids. Just because they claim to be MLMs doesn't make them legal, and doesn't make them MLM.
(and focusing things on Amway, because I'm assuming that's your main/only MLM experience).
Direct experience, yes, I have however been researching MLMs of all varieties for a decade and correspond regularly with folk from other branches of the industry.
MLM, at its most basic, is a business model that focuses on the use of an expanding downline to obtain business and spread out.
And that's different
how to traditional distribution? A manufacturer sells to a number of wholesalers, who sell to a larger number of retailers, who sell to an even larger number of consumers. The manufacturer wants more wholesalers, the wholesalers want more retailers, the retailers want more consumers.
Only real difference in our model is it's relatively cheap and simple for a consumer to become a retailer if the want. It's relatively simple for a retailer to move into wholesaling if they want.
The rest are details left to the specific company. It's primary problem is that expanding downline - it can impose extra cost burden, infrastructure burden, and it can become cumbersome and obnoxious to the customers, depending on how the actual MLM is organized.
Please, I've explained this to you many times. Not just using my data, but in particular the Federal Trade Commissions.
There isn't an ever expanding downline. The majority of MLMs use what's called a "breakaway" plan. Once it gets to a certain size, the MLM component stops. It's like what happens in traditional distribution. If a retailer gets to the stage where he's dealing in large enough volumes, he'll stop dealing with the wholesaler and go straight to the manufacturer. The "breakaway" plans use the same approach, except that the original wholesaler gets a percentage for having found the business in the first place.
There is no extra cost burden, since the MLM structure is limited. There is no extra infrastructure burden within the network, except perhaps expansion of manufacturing capacity. There is
zero perceivable difference to the end consumer no matter what the size of the network. Cumbersome and obnoxious how? Get online, order whatever products you want, have them delivered to your door. It doesn't change no matter the size of the business you have, a double triple super duper diamond or a brand new IBO or indeed a customer all does the same.
Are you familiar with the logical fallacy known as "no true Scotsman?"
It comes down to the question of who gets to define what an MLM is. In essence it's as I outlined above. It's a model where any consumer can become a retailer if they so chose, and any retailer can become a wholesaler if they so chose. That's pretty much it. This is why earlier in this thread I've mentioned that MLM isn't really a type of business, it's a business strategy.
And the volume of sales in MLM are absolutely dwarfed by retail sales, and growth stats seem to indicate the two grow at similar rates. So MLM doesn't seem to exactly be taking the world by storm.
So? Doesn't make it a bad business anymore than that would make traditional retail a bad business. Just because some folk rant and rave about it taking over the world is irrelevant to anything except perhaps your opinion of them. Plenty of folk ranted and raved the same thing about more traditional dot coms. They were wrong too.
And then you say stupid stuff like how everyone that isn't interested in Amway's business model is either stupid, misinformed or criminal (well, to be fair, you didn't say it - you simply agree with the sentiment).
I do. As a business person, I honestly cannot understand how anyone who truly understood this model would not be interested. Heck, even just as a consumer, in the major markets the Amway model has some serious benefits if you're willing to do a little bit of work at the beginning. Compared to traditional business there's a lot more plusses and a lot few minuses. The biggest minus is how misunderstood it is. Which, btw, is ultimately entirely the fault of the industry itself. For an industry that's supposed to be about marketing, it's actually done a pretty awful job of marketing
itself. As Charles King talks about though, that's changing. The organization I work with, within Amway, is chock full of folk with both degrees and other businesses. It's a different approach and different environment to the rah rah evangelicalism most often associated with Amway, something I personally find anathema, but fortunately also have never directly experienced. I have however experienced it through my MLM and Amway research efforts, which comes back to my original point - it's about the folk and the way they run their businesses, not the model itself. Indeed, you said earlier that perhaps MLM lends itself to "scammers", and there's some truth in that. The thing is that virtually
anyone can start a business in this model. It takes very little capital and very little knowledge to get started. With no entry exam or licensing, and low cost of entry, there's little to stop folk who want to scam people from starting.
It's a plus and a minus. Amway is making some changes in this area however. In the US they're making some online courses compulsory for folk to be able to earn bonuses. They've also set up a voluntary accreditation system for the companies that want to sell training and motivational materials to IBOs. It's voluntary, but they linked many of the major bonuses for IBOs to being associated with an accredited organisation, or accredited one self. In the UK they'll be trialling a system where you can't sponsor anyone until after you've undertaken certain courses and developed a certain level of product sales. All of this should have very positive effects, but I imagine it will take years to become apparent to the marketplace at large.
