Amway TV ad

[icerat]

That's what started this OT, the number of people selling Amway and what they are actually making.

And this is where your false assumptions start to lead you down such a completely wrong path. You *assume*, falsely and contrary to all evidence, that everyone who registers with Amway is "selling Amway". You also *assume*, falsely and contrary to all evidence, that people only buy the products because they think that will somehow miraculously make money.

If your two assumptions were true, then I'd agree with you, it would be a pyramid scheme, and since pyramid schemes are illegal, that would make it an illegal pyramid scheme.

Given it's been investigated and found not to be a pyramid scheme (and not illegal) and is this week celebrating 50 years of business,
the only logical conclusion is that there is something wrong with the assumptions.

 

[Ferguson]

They're not, read the posts.

You may also want to read Myth: It's a pyramid if most products are bought by ibos

Woa, holy indoctrination, Batman!

Self-described “MLM experts” (but in reality just anti-mlm zealots) such as Robert FitzPatrick of so-called “Pyramid Scheme Alert” repeat the “no retail sales” myth over and over.

Lots of people complain (and even protest in the street) about Coca-Cola, Wal-mart, etc. Still, I never see blogs ranting against "Anti Coca-Cola Zealots." The "we're being persecuted" cry is a classic psychological ploy to band people together and solidify loyalty. It's employed by all manner of religions, cults, and social groups.


Besides that, you seriously don't see a problem with someone joining Amway, and making sales only to himself ("Why buy from my competition when I own my own store?") and his family (who do so to support him/help him/out of pity/out of guilt)?

 

[Almo]

So it's your opinion the average consumer is a complete idiot it more ways than one then?

Last I heard, the "average" consumer stays well clear of Amway products. The "average" consumer shops at Wal*Mart and K-Mart, and other such stores.

 

[Almo]

That's what started this OT, the number of people selling Amway and what they are actually making.

And this is where your false assumptions start to lead you down such a completely wrong path. You *assume*, falsely and contrary to all evidence, that everyone who registers with Amway is "selling Amway". You also *assume*, falsely and contrary to all evidence, that people only buy the products because they think that will somehow miraculously make money.

The ad says how they helped over 3 million people run their own business, with revenue over $6 billion. These numbers are not impressive in the least. But it's indicative of how the business works. The recruiting process doesn't want people who understand numbers or business, or they'd never join. Anyone who analyzes the gee-whiz numbers in the ad will steer clear.

 

[Skeptic]

Well, at least icerat admits, implicitly, that yes, his only (or almost only) customers were other people in Amway. Only now wants us to believe it is a shopping club, to get discounts; that Amway's products are cheap, but if you join, you get them even cheaper.

But, waaaaaaaaaaait a minute.

1). The vast majority of people who buy, say, at Macy's, do not desire to get a Macy's club card because they don't think the discounts are worth it. With Amway, apparently EVERYBODY who buys the products decided that, why, yes, the discounts ARE worth joining the club. Strange, isn't it?

2). In actual shops, most products are in a comparable price range. With Amway, while there might be a few fig-leaf products that are comparable, by far the more common case is that the products are terribly expensive. Why join a shopping club whose "discount" price is usually three times the corner store's retail price? Are we really supposed to believe those few detergents or makeup or health products which are relatively cheap ("Relatively" being the operative word) are the real reason millions joined Amway?

3). With most discount clubs, if you find out that -- say -- you didn't buy enough at Macy's for your Macy's card to be worth the discount, you might not renew the membership, but you WILL probably still buy at Macy's. With Amway, whenever someone quits, nine times out of ten they also stop buying Amway's products at all. Suddenly the "great deals" aren't so great anymore.

All this leads inescapably to the conclusion that, despite the (possible) existence of some (relatively) cheap products, they are merely a fig leaf, an excuse to tout out when the lack of any real customers who aren't in the Amway pyramid themselves is pointed out.

Of course, icerat told us this himself. That is, he himself told us in this very thead that amway is a "business", an "opportunity", a place to get "quality products" (once the cost of Amway's stuff became clear), and so on.

It is only when all these excuses fail -- and when it became crystal clear that, yes, he did only sell Amway's overpriced stuff to those who are themselves in the pyramid -- that he tries to backpeddle and claim that it isn't really a business, that the products are not really that expensive, and that the fact that all his customers are other Amway reps has a perfectly innocent explanation (the lower price of some products) that has nothing to do with Amway being a pyramid scheme.

 

[Eddie Dane]

So, it takes eight pages of discussion to get to the bottom of the MLM subject.
But I think I have it in focus now.

Jesus, Skeptic. You're like Cryptonite to the whole business model.

We could put a stop to the whole MLM concept by parachuting you into the motivational meetings. Armed with nothing but a megaphone.

 

[Almo]

Well, this is the 23rd most-viewed thread in the Economics/Business forum. I hope a lot of people have gotten some good info here.

 

[icerat]

Well, at least icerat admits, implicitly, that yes, his only (or almost only) customers were other people in Amway. Only now wants us to believe it is a shopping club, to get discounts; that Amway's products are cheap, but if you join, you get them even cheaper.

For f***s sake, are you this dishonest in real life? I never said any such thing. Because I don't answer your leading (and misleading!) questions, that doesn't imply anything more than that you're an obstinate twit who seems incapable of considering the possibility they're wrong. Heck, you still persist with this fantasy that there's something such as a "legal pyramid scheme", even in the face of numerous links to reliable, official sources.

I should have stuck to my earlier goal of ignoring your inanities. You are a dishonest troll.

 

[icerat]

I'm curious about something... Several MLM people I've seen on the internet use the word "folk" to refer to either customers or members. Is this something recommended to them? Is it part of the MLM culture? Or is it just easier to type than "people?" The examples quoted are just from this page.

Can't say I've ever heard the term in the "amway culture". I think I picked it up as an english speaker living in sweden, cause it's bad replacement and easier to say than "manniskor".

 

[blutoski]

Well, at least icerat admits, implicitly, that yes, his only (or almost only) customers were other people in Amway. Only now wants us to believe it is a shopping club, to get discounts; that Amway's products are cheap, but if you join, you get them even cheaper.

But, waaaaaaaaaaait a minute.

1).
2).
3).
...

and 4)

My COSTCO membership entitles me to discounts on competing name-brand products, not just the store brand.

Ironically, if AMWAY is heavily dependent on employees/members/owners to be the end consumers of products it manufactures... it's not so much a business as a co-op.

 

[icerat]

and 4)

My COSTCO membership entitles me to discounts on competing name-brand products, not just the store brand.

So does Amway membership in most countries. In the US there's discounts with hundreds (thousands?) of partner stores. They're primarily for the convenience of members, though, not for generating profit.

Ironically, if AMWAY is heavily dependent on employees/members/owners to be the end consumers of products it manufactures... it's not so much a business as a co-op.

It's could be considered a combination. You can be a member of the "co-op" just to shop, or market it and profit-share. Your choice.

 

[Furcifer]

Heck, you still persist with this fantasy that there's something such as a "legal pyramid scheme", even in the face of numerous links to reliable, official sources.

Yes there is a legal pyramid scheme and it's called Amway (among others). The FTC and UK governments discovered this at a great cost to the tax payers. They found that if there was an exchange of something tangible, despite its grotesque representation or mark-up it is in fact legal. "Buyer beware" etc. etc.

It's your pesistence in the matter that's troubling. As if being "legal" somehow makes it legitimate. The lottery is legal, but it isn't a legitimate way to make money. It's foolish to think that, and yet millions of people spend money each week on "the idiot tax". The lottery (in Canada at least) makes very certain people at the very least know it should be viewed as a form of amusement. Given the odds of successfully making any profit at the "Amway game" I feel people should be warned in a similar manner. Amway is an amusement, a past time, something to do in your spare time for fun.

I'll persist in my fantasy that Amway is a legal pyramid scheme and you persist in the fantasy it is a legitimate means of aquiring wealth without bilking the less informed and gullible.

 

[corplinx]

I always figured that e-commerce would be the death of companies like Amway. After all, why let a stranger come to your house when you can buy goods online.

Then when I started studying Costco's business model and success with its Kirkland private label, I was shocked that Amway could still make a convincing case for an MLM model with private labels when stores like Costco make such a killing at it.

Disclaimer: my wife once worked for Clinique doing makeovers for people. As a result, I loathe the entire cosmetics industries which make claims that should qualify for the million dollar challenge daily. Cremes that remove cellulite (if there was a creme that actually removed cellulite, I am pretty sure it would remove the skin, muscle, and bones too). Cremes that supposedly remove wrinkles. Etc, etc. It is no surprise to me that the most successful MLMs like Amway, Avon, Mary Kay, etc relied on products like beauty whose results can't be measured with a slide rule or tested in a lab.

 

[icerat]

I always figured that e-commerce would be the death of companies like Amway. After all, why let a stranger come to your house when you can buy goods online.

Like any other business, if Amway doesn't change and respond, it will die. Ecommerce has certainly challenged the direct sales business and required changes in response. (Mind you, Amway has never really been about "strangers" coming in to your home.)

Cremes that supposedly remove wrinkles. Etc, etc. It is no surprise to me that the most successful MLMs like Amway, Avon, Mary Kay, etc relied on products like beauty whose results can't be measured with a slide rule or tested in a lab.

There's actually an enormous amount of science that goes in to skincare these days, including clinical studies. Cellulite removers and such are still bogus, but there's clinically proven anti-wrinkle treatments, not to mention the benefits of moisturisers, sun-protection etc etc.

 

[Almo]

Can't say I've ever heard the term in the "amway culture". I think I picked it up as an english speaker living in sweden, cause it's bad replacement and easier to say than "manniskor".

Hahaha! Awesome.

 

[NewtonTrino]

Well I'm convinced. Sign me up.

How much would it cost for me to sign up? How much would my monthly tool and function bill (as well as any other recommended costs) add up to?

What does a typical growth curve look like? Could you show me a cash slow analysis for the first 2-3 years of business (including expenses not just income)?

What is the typical place I should look for recruits of my own first in your opinion?

 

[icerat]

If I'd detected even a micron of sincerity in that post I might consider answering what are otherwise sensible questions. Since I didn't, I won't.

 

[Almo]

If I'd detected even a micron of sincerity in that post I might consider answering what are otherwise sensible questions. Since I didn't, I won't.

I'm pretty sure his Freudian slip gave it away: "cash slow analysis."

 

[Ferguson]

If I'd detected even a micron of sincerity in that post I might consider answering what are otherwise sensible questions. Since I didn't, I won't.

In that case, you won't do much to convince the skeptical.

 

[Skeptic]

Well I'm convinced. Sign me up.

How much would it cost for me to sign up? How much would my monthly tool and function bill (as well as any other recommended costs) add up to?

What does a typical growth curve look like? Could you show me a cash slow analysis for the first 2-3 years of business (including expenses not just income)?

What is the typical place I should look for recruits of my own first in your opinion?

There you go again, looking at the AVERAGE Amway guy and the TYPICAL income level.

Don't you know it's really, really not allowed to look at the fac.... I mean, to try and be "average"?

The moment you say, with appropriate contempt, "You don't want to be average, do you?", then all statistical analysis and hard facts can be ignored, you know. You can then just look at the most succesful Amway guys and declare the model works because of them.

Tell you what. I'm going to make a million dollars. I'll play the slot machines in Vegas. Sure, the average player typically loses money, but I don't want to be AVERAGE and TYPICAL, do I? I can just decide that I'm not and -- poof! magic! -- I can just BE one of those 0.1% who make money. (Insert appropriate "hard word and dedication" cliches here).

Of course, if you could do THAT, why would you join Amway? If by mere decision and hard work you could become one of the top 0.1%, you surely won't join Amway, when you need to get to the top 0.1% to make anything like a middle-class living. You'd join the computer industry, or go into movies -- where the top 0.1% are multi-millionaires.

Heck, you'd join McDonald's: someone in McDonald's in the top 0.1% -- who has 1000 people under him -- is almost certainly making tons more than someone in the top 0.1% in Amway.

If I'd detected even a micron of sincerity in that post I might consider answering what are otherwise sensible questions. Since I didn't, I won't.

Unfortunately for you, with the internet, finding out the lousy, indeed pathetic, income you can expect in Amway is no longer a secret kept in the bosom of the higher-ups. Everybody can find it out easily. According to Amway's own statistics, it's about $2000 gross income ("revenues") a year on average -- about $150 a month. According to this web page, based on Amway's own data, in 1996, the average "active" Amway rep made a whopping $88 gross income a month.

Gross income, not profit after expenses or taxes, mind you. This is much less, even if we ignore the difference between "income" and "profit", than a regular part-time job. It is much less than the worst-paying part-time jobs. Heck, this is with all probability less than what panhandlers who aren't particularly good at their job make.

Sure, the big wheels -- say, the "Diamonds" and up -- make $100,000 a year and more. But these are people who have tends of thousands -- literally -- of people "below" them. So Amway's "big wheels" have choosen a job where the top 0.001% (literally!) or so only make a medium six-figure salary? How much does the average CEO of a 100,000 people company make -- $10,000,000 a year? More?

Again, if I could magically organize 100,000 panhandlers and get, say, 5% of their yearly income, I would probably still be making far more than the Amway "Diamond" who has 100,000 people in the organization.

"Pathetic" doesn't begin to describe this "opportunity". Panhandling is a positive road to riches compared to it.