Amway TV ad

[billydkid]

I mentioned a year or so ago that one of our kids had gotten involved with them. He and his wife wouldn't listen to a word from us, or anyone. They kept telling us how rich they were going to be, and how they had actually met some of the High Muckety-Mucks at one of the many "conferences" they had to go to, at their own expense and travel. They kept telling us how these impressively wealthy higher-ups had assured them if they'd just stick with it, they'd be rich in no time!

A couple of months ago, I realized I hadn't been hearing a word about Quixtar. I asked my husband why, and he, in turn, asked his son.

Turns out that they had spent so much on conferences, packages, and "tools," that they couldn't afford to operate their "store" anymore and had to give it up. Apparently, they said, the only ones getting rich were the High Muckety-Mucks they'd met.

Oh, if only someone had just told them this could happen!

I think most of us have had our brush with Amway and the Amtoids with their lame manipulations and their "secrets". It turns people you think you know well into mutants for a time.

 

[fls]

PS having said that, you're mostly right. Customer satisfaction does not necessarily mean a product is any good,

Exactly.

but then we're talking business here, where sales and customer satisfaction are key.

As they are for homeopathy.

One would expect that customer satisfaction is an indicator of whether a product works or not.

Why? We have lots of examples otherwise. 'Dietary supplements' are a billion dollar business, but the evidence shows that there isn't any reason to think that they work.

Personally I would argue that many homeopathic products *do* work. "Placebo effect" doesn't mean no effect, and a customer wants the effect, they don't care so much about the mechanism.

Except that the placebo effect is almost meaningless as it doesn't represent what most people think of as 'works'. Most people would consider 'works' to mean something like 'get better faster', or 'prevent death' or 'gets rid of my nausea', and placebo does none of that.

Linda

 

[icerat]

Why? We have lots of examples otherwise. 'Dietary supplements' are a billion dollar business, but the evidence shows that there isn't any reason to think that they work.

And clearly I disagree with that assessment. In any case, customer satisfaction is an indicator, not proof by any means. Interestingly when it comes to "customer satisfaction" ratings, consumerlab.com surveys indicate that folk who purchase supplements that are closer analogues to food are generally more satisfied than those who purchase supplements that are entirely synthetic isolates, and by a very large margin. Now, it could be argued this is an artificate of price, as the later tend to be cheaper than the former, but it could also be that they actually work better - which would make sense if you believe that nutrients in food are actually worthwhile.

Except that the placebo effect is almost meaningless as it doesn't represent what most people think of as 'works'. Most people would consider 'works' to mean something like 'get better faster', or 'prevent death' or 'gets rid of my nausea', and placebo does none of that.

I'm not going to go hunting them up, but I'm pretty certain there's been a number of studies where placebos have caused self-reported decreases nausea or duration of things like colds, as well as things such as pain relief etc. If I recall correctly MRIs or similar are showing placebo-related brain effects showing they are working. Did you know that people think ice cream tastes better if it's in a round tub? Even shows up in the MRIs or MEGs or whatever they did ...

 

[icerat]

I meant buying the product. But now that you mention it, how is customer awareness raised?

Consumers can purchase the products in five ways -

1. direct from an Amway business owner (ABO)
2. from an ABO's personal website
3. from an Amway website, if registered for access by an ABO
4. from an Amway website, by registering as an ABO
5. from an Amway "store", if a registered ABO or customer of an ABO

Brand awarness is raised primarily through word of mouth, but at various times Amway uses advertising and sponsorship to raise public awareness. That's been rare in the US the past 10-15yrs but that has changed recently, particularly with a focus on sports sponsorships.

ps I'm not going to bother replying to the inane posts

 

[Bob Klase]

For any given sales volume, recruiting people in Amway will cost you money, not make you money.

In general, recruiting people doesn't "lose you money".

Thanks for clearing that up. Recruiting people will "cost you money", but recruiting people doesn't "lose you money".

The question was not 'how does it cost money if you have a store and you hire someone to come work for you. The question is "how does recruiting people in Amway cost you money?"

Your example is meaningless because you don't deal with a 'given volume'.

When you recruit someone for Amway, they don't work for you- they start their own business. You don't pay them a salary, and you don't pay them a commission on sales that you've been making (unless you're dumb enough to just give them your customers). You gain a commission on additional sales (if any) they make. Their business doesn't directly reduce the volume of your business.

In general, recruiting people doesn't "lose you money".

While technically true, it would be much more accurate to say "in general, joining Amway will cost you money and you'll be lucky if you ever get enough back to make it worth the time and effort you've invested".

 

[fls]

And clearly I disagree with that assessment. In any case, customer satisfaction is an indicator, not proof by any means.

It's not an indicator if it occurs independent of effect. For example, homeopathy has no effect, yet surveys (not sure how reliable) show high customer satisfaction.

[QUTOE]Interestingly when it comes to "customer satisfaction" ratings, consumerlab.com surveys indicate that folk who purchase supplements that are closer analogues to food are generally more satisfied than those who purchase supplements that are entirely synthetic isolates, and by a very large margin.[/QUOTE]

This would clearly be subject to a selection bias.

Now, it could be argued this is an artificate of price, as the later tend to be cheaper than the former, but it could also be that they actually work better - which would make sense if you believe that nutrients in food are actually worthwhile.

I'm not going to go hunting them up, but I'm pretty certain there's been a number of studies where placebos have caused self-reported decreases nausea or duration of things like colds, as well as things such as pain relief etc.

Placebo (vs. no treatment) shows small changes in reported levels of subjective symptoms - someone will report that their nausea or pain is somewhat better - but there is no difference in whether or not they report the nausea or pain is gone. And other than for pain, it may be that there is no change in the symptom itself but only a change in what someone says about the symptom (an example of the Hawthorne effect). And there is no difference in objective measures or the resolution of an illness.

If I recall correctly MRIs or similar are showing placebo-related brain effects showing they are working. Did you know that people think ice cream tastes better if it's in a round tub? Even shows up in the MRIs or MEGs or whatever they did ...

We can definitely demonstrate that our perceptions are subject to suggestion. However, this isn't really what we ask of our medicines - we ask for substantial symptom relief, faster healing, prevention of dire complications, lives-saved.

Linda

 

[NobbyNobbs]

I need to fess up and say that yes, I have used Amway products in the past and yes, I have found most of them to be very good quality, IMO. However, under the heading of "you get what you pay for", I also found them to be quite pricey. Being on a limited budget, I'd rather forgo the premium floor cleaner and buy the inferior brand at Walmart for half the price.

 

[NewtonTrino]

Does anyone involved in this scam want to claim they are making money and PROVE IT?

 

[BenBurch]

Newton, the ones with a big downline ARE making money. Some quite good money. But not selling that product. The people under them generally are not making big money, and often lose money on it.

The right question is to ask how many ABOs have been minted over the years, and how many are still active.

And I'd like to see one person who could make a fortune JUST selling the product. I doubt it can be done.

 

[NewtonTrino]

Let me rephrase then.

Can anyone prove they are making a profit selling Amway product in this business?

By proof I mean a tax return showing an actual taxable gain.

I have no doubts the high up pins make big money from the tools business.

 

[quarky]

No more door-to-door Amway sales? That's how i came to be aware of the fine products I didn't need. One guy was very hot to sell me some shoe polish, and i told him I only wear sneakers. He tried to convince me that i could polish my sneakers. He lost the sale, but it wasn't as bad as watching someone with a gambling habit.

After that experience, i started dealing with door-to-door sales-people and Jehova's Witnesses in a new way that was fun for me: I would offer them a dollar to leave and never come back. Its surprising how few would accept the dollar, and how many wouldn't come back.

 

[icerat]

When you recruit someone for Amway, they don't work for you- they start their own business. You don't pay them a salary, and you don't pay them a commission on sales that you've been making (unless you're dumb enough to just give them your customers). You gain a commission on additional sales (if any) they make. Their business doesn't directly reduce the volume of your business.

Recruiting sales staff in a retail store doesn't reduce the volume of your business either, nevertheless you'll find their salaries or commissions in the "expense" column.

Another way to look at it, one which was more obvious before Amway took over the logistics. I would buy say $25,000 worth of good in the month at 55% discount off recommended retail price, then I would split that up and sell it to say 3 folk in lots of $8000 for say 45% of recommended retail price - giving me a profit margin of 10%.

This is exactly the same type of setup as in traditional distribution. Buy in large volumes, get a bigger discount, sell in smaller volumes at a markup. Exactly the same principle applies. The only differences is that instead of having to spend all the money upfront and potentially endup with a warehouse full of unsold stock, we order JIT and the volume discount is calculated monthly and paid as a rebate.

While technically true, it would be much more accurate to say "in general, joining Amway will cost you money and you'll be lucky if you ever get enough back to make it worth the time and effort you've invested".

Ok, I get the message, you clearly have no interest in actually discussing this in an adult manner.

 

[icerat]

Placebo (vs. no treatment) shows small changes in reported levels of subjective symptoms - someone will report that their nausea or pain is somewhat better - but there is no difference in whether or not they report the nausea or pain is gone.

if you don't think a decrease in pain is important, you clearly have rarely been in extreme chronic pain.

And other than for pain, it may be that there is no change in the symptom itself but only a change in what someone says about the symptom (an example of the Hawthorne effect). And there is no difference in objective measures or the resolution of an illness.

We've really gone quite off-topic here. My point really is that customer satisfaction is a valid indicator of the value of a product to the customer. If a customer feels they've gotten good value, then they haven't been scammed. Doesn't matter if it's homeopathy or ice cream in a round tub. The homeopathy product might only be water, and the ice cream might be the same as in the square tub, but if the consumer feels they got value for money, then there's no real problem - especially if the person selling the product also believes the consumer was getting value for money.

BTW, this excludes instances where, for example, someone displaces effective medical treatment with something that actually has no real effect, such as the recent case of the girl in australia who died from excema that her parents were treating homeopathically. Clearly they did not get the "value" they expected from it.

But when you're talking about more subjective things like how you feel, or how clean you think your clothes are etc etc, consumer opinion is one of if not the most important factor.

 

[Ferguson]

A roommate i had for one year in college was a Quixtar member and was constantly recruiting me, I always just said I didn't have the money to start a business, though he would tell me at length how much money I could be making. I was an avid Monster drinker (3-4 a day at the time ) and he was always trying to sell me some energy drink. I asked him why I would buy a single can of a drink I've never heard of from him for $3 when I can go downstairs and buy a 4-pack of Monster for $6, his only answer was the "convenience" of buying drinks from my roomate .

He had four boxes of Quixtar crap, and they sat in our dorm room the whole year I lived with him, as I put up with him "pitching" to virtually every guest I had over. Even two years after we were roommates, he was e-mailing me about joining Quixtar, even though I had a year-long front-row seat to his desperate pleas for sales.

My mother has also fallen victim to a few of these "business oppurtunities." Frankly, it's very troubling and painful to me, as she recently suffered a foreclosure and had to move in to a small apartment, where she can barely afford her rent, yet she's always trying some as-seen-on-TV "business" which ends up costing much more than it provides.

I'm not saying it's impossible to make money on such systems. If my college roommate had been enterprising enough, I'm sure he could have found enough suckers for his pricey off-brand crap if he'd gone door to door off-campus (lots of elderly in the surrounding suburbs there), but the focus of his business certainly seemed to be evangelizing to me and anyone else unfortunate enough to hang out with me.

 

[Eddie Dane]

A roommate i had for one year in college was a Quixtar member and was constantly recruiting me, I always just said I didn't have the money to start a business, though he would tell me at length how much money I could be making. I was an avid Monster drinker (3-4 a day at the time ) and he was always trying to sell me some energy drink. I asked him why I would buy a single can of a drink I've never heard of from him for $3 when I can go downstairs and buy a 4-pack of Monster for $6, his only answer was the "convenience" of buying drinks from my roomate .

This is the distribution model? Buying my shampoo from some guy I happen to know? Sorry dude, I went to the supermarket on Monday.
Setting up your own webshop to sell this stuff? How many people would buy these products that way?

Sorry Icerat, the model seems geared to sell to resellers who sell to resellers who get stuck with it.

 

[icerat]

This is the distribution model? Buying my shampoo from some guy I happen to know? Sorry dude, I went to the supermarket on Monday.

I'd venture to suggest that unless his roommate learned a few things he won't have been too successful. One of the strengths of the model is it's low barriers to entry. One of the weaknesses is this means many peoples experiences are encounters with new, untrained, inexperienced reps.

Setting up your own webshop to sell this stuff? How many people would buy these products that way?

According to Internet retailer, Quixtar.com is the #1 health & beauty website in the US. According to Hitwise, the Amway Oz site is #2 in it's category there. Global sales are $8.2billion. So evidently quite a few buy stuff this way.

Sorry Icerat, the model seems geared to sell to resellers who sell to resellers who get stuck with it.

Care to explain how you "get stuck with it" when you don't order it until you want it (either for yourself or you have a customer order) and you can return anything for a full refund at no cost to yourself?

 

[Eddie Dane]

Care to explain how you "get stuck with it" when you don't order it until you want it (either for yourself or you have a customer order) and you can return anything for a full refund at no cost to yourself?

If you can return the stock, or call it in when sold, I take that back.

But personally, I don't think I would be able to offload health and beauty products from my home.

And I say that as someone with a reasonably successful website that sells watches.

 

[icerat]

But personally, I don't think I would be able to offload health and beauty products from my home.

That's not quite how it works. The products are generally better quality than the mass-market competition, but also higher priced. When compared with similar quality competition, they're generally more than competitive.

However, for someone to make a purchasing decision, they have to be educated on how the products are better and why they may be better value. This can be things like a cost-per-use comparison, increased efficacy, all sorts of things. It's the type of thing that can not easily be gotten across in high-speed mass-marketing. It's the ABOs job to explain (and show) a potential consumer why Amway's products are better. While this could be done in your home, it's usually much more effective in their home! While this requires a deal more work than simply having a website selling something, it does create loyal consumers. I moved countries a decade ago, yet 10 years later I still have folk buying things of my Amway site back home. I introduced them to the products way back then, they tried them, they liked them, they can't get them anywhere else, so they keep buying them from me (or rather my website) - and I get a percentage (well ... to be honest, my former wife gets most of it, but that's another story!)

And I say that as someone with a reasonably successful website that sells watches.

IMO consumables and watches are somewhat different markets. Our focus is really on developing resales, which doesn't apply so much with watches. Still, if you went out and about demonstrating your watches and showing people that they were better value compared to what they usually purchased, do you think you'd sell more?

 

[fls]

if you don't think a decrease in pain is important, you clearly have rarely been in extreme chronic pain.

If you've had extreme chronic pain then you realize that what you wish for is relief from that pain - either resolution of that pain, or a meaningful reduction in that pain. What is not useful are reductions in pain that are too small to be meaningful, or that you are willing to report that the pain is decreased when asked but that the actual amount of pain is unchanged.

We've really gone quite off-topic here. My point really is that customer satisfaction is a valid indicator of the value of a product to the customer. If a customer feels they've gotten good value, then they haven't been scammed. Doesn't matter if it's homeopathy or ice cream in a round tub. The homeopathy product might only be water, and the ice cream might be the same as in the square tub, but if the consumer feels they got value for money, then there's no real problem - especially if the person selling the product also believes the consumer was getting value for money.

I agree that customer satisfaction is evidence that the customer is satisfied. But as you admitted earlier, that doesn't mean that the product is any good. When it comes to whether or not my floors are clean, I agree that satisfaction is a reasonable measure of whether my expectations were fulfilled. My point is that for some claims, satisfaction is not a measure of whether those expectations were fulfilled. Now whether or not the ice cream actually tastes better is a trivial concern. But when people take supplements, their expectations is that they will enjoy improved health. And in that case, their expectations won't be met if the product is not effective, yet it is relatively easy to persuade them to be satisfied (especially if you are also persuaded). But willful ignorance does not get you off the hook when it comes to issues of fraud and harm.

BTW, this excludes instances where, for example, someone displaces effective medical treatment with something that actually has no real effect, such as the recent case of the girl in australia who died from excema that her parents were treating homeopathically. Clearly they did not get the "value" they expected from it.

Yet, you will probably find that they are still satisfied with the product. And while the displacement was more dramatic in this case, the issue of displacement is only quantitatively different with your supplements. Any attention that is focused on measures that are ineffective are a loss of opportunity to focus attention on effective measures. People will forego effective measures because they mistakingly think they are using an equally effective substitute (how many times have we heard from people who take a multivitamin in order to continue to enjoy an unhealthy diet?). The supplement industry depends upon an atmosphere of distrust of medical practices. And by presenting non-evidence-based practices as though they were evidence-based, it misinforms people about what science and scientific evidence means.

But when you're talking about more subjective things like how you feel, or how clean you think your clothes are etc etc, consumer opinion is one of if not the most important factor.

I agree. I am not really concerned about whether people are being cheated out of clean clothes, but rather whether or not they are being cheated out of health.

Linda

 

[Bob Klase]

Recruiting sales staff in a retail store doesn't reduce the volume of your business either, nevertheless you'll find their salaries or commissions in the "expense" column.

The volume in a retail store is based on people coming into the store. Hiring a salesman doesn't change then number of people coming in, so the sales you've been making by yourself are now split between two people.

Recruiting someone to start their own business with their own customers doesn't reduce inherently change the business you're already doing yourself.

Ok, I get the message, you clearly have no interest in actually discussing this in an adult manner.

Not when "an adult manner" seems to be a constant stream of invalid comparisons and Amway induced misinformation.