Why do you have to be recruited? There seems to be a need by Amway that you have to have one.
Not entirely true.
The products are primarily marketed through word of mouth. The people who generate the sales are compensated for that. Amway occasionally does more traditional marketing, if those leads were handled directly by Amway then they would be in direct competition with the field, which generates the great majority of their volume.
In addition, the field is expected to provide first line customer support. If a lead comes in to Amway from say a TV ad, that lead will be passed on to a local IBO, if the person agrees. If they don't agree then that person can be a direct customer of Amway, with any sales volume put into a pool and profits shared with the active field. (this setup varies from market to market)
So none of your profit goes to your upline? The upline doesn''t get any financial rewards from what you sell?
That's really two separate questions, and even then the answer depends on how you look at the distribution and compensation system. In it's simplest form it's the same as traditional distribution. An example -
* Manufacturer makes 200 widgets and sells 100 widgets to two Wholesalers for $A/widget
* Wholesaler sells 20 widgets to 5 Retailers for $A+(wholesalers profit)/widget
* Retailer sells 1 widget to 20 customers for $A+(wholesalers profit)+(retailers profit)/widget
None of the "retailers profit" went to the wholesaler or manufacturer, but the manufacturer and wholesaler do get financial rewards because the retailer is buying and selling the products.
Its not really. Coca Cola sell their product to the wholesaler / retailer and in the main thats the end of their involvement, the retailer has the right to dictate price, product position etc. Do Amway reps have this right?
Yes, Amway reps have similar rights.
The other way the product is sold is by Coca Cola traveling reps (UK this is), and yep you've guessed it they are employed by Coca Cola with sales targets.
Does that not mean that other retailers are in competition with Coca-Cola? And that Coca-Cola is thus "recruiting competition" when the sell to other wholesalers and retailers?
It is also worth noting you chose one of the biggest manufacturers in the world that have a massively successful business model of selling in bulk to wholesalers and retailers - yet not one rep from Amway has been in discussions with Asda /Walmart, Tesco's etc. The holy grail for any product is to get into the supermarkets.
Note for these types of products it's not. You'll tend not to find "high end" products of any type in Walmart, Tesco etc.
Incidentally just this month Amway UK has relaxed some of the retail outlet rules and hair salons, health stores, gyms, hair professionals etc are all now able to display Amway products for sale if they wish. Hair salons are a good example actually - most of the shampoos etc you find for sale there you won't find in supermarkets.
I'd structure it like most other businesses, permanent trained competent staff where I can control customer care / service and apply sales targets. Thereby taking the maximum return while maximising return customers.
And that's fine as a business model too. It's interesting to note though, that in it's two primary categories, Amway's approach has made it #1 (Nutrition) and #4 (prestige skincare and cosmetics) in the world, clearly outselling competitors who use the more traditional model. Clearly the model has some strengths!
It would be a horrible idea if that salesman was the rudest person in the world and saw of punters left right and centre but you had very little control over them.
Clearly the model also has some weaknesses!
