True. I was going with the old lawsuit. What percentage of retail sales do you think should be appropriate for an IBO with no downline?
Entirely depends on their goals. If they've got no downline then they're only ever going to make profit based on what they sell to customers. Whatever they buy for themselves is pretty much irrelevant.
Or, if you want to think of that person as a buyer's club member, what percentage would work for someone just above them (remembering that they are selling at a discount to the guy beneath them).
Again, depends on the goal, as well as their circumstances. The
barest minimum one should aim for as a business owner, as quickly as possible, is break even point - ie make sure you're covering your expenses. Even if you don't need to do that personally (you're willing to invest $$$ for a longer term goal) it's a good idea to set an example for those you sponsor who may not be able to afford it otherwise.
Then it depends what your goals are. Smaller incomes come faster from focusing on retailing with network building handled as the opportunity arises. Larger incomes come faster from focusing on networking with retailing opportunities handled as they arise.
Often forgotten (not least because for a long time Amway didn't really enforce it) is that in most countries Amway itself has rules on a minimum volume of customer sales each month in order to earn the rebates on downline sales volume. In many countries it's simply "10 customers" in North America it's 50PV (around $200 in retail). The group I worked with encouraged having 10 regular customers as soon as possible, this would generally generate at least $400-$800 in retail sales and a $100-$200 profit a month which would cover most peoples general expenses. Then it would simply continue to expand as you move through the process. As a rough guide you should generally have at least 1 full retail customer for each person you sponsor, with the expectancy that 4 out of 5 you sponsor will pretty much have to be treated as customers as well (just with lower margin).
Profiting through wholesaling (ie building a downline) takes longer. Through retailing you can make money straight away.
I'm thinking of a store model (which I do have experience with). In retail, we sold at a discount to employees, but this was such a small fraction of the business, I can't see how that made an impact.
Well this is one of the problems with what's come to be known as the "BFYTODS" model (ie buy for yourself teach others to do the same" which became popular particularly through the 90s and 00s, particularly with some american groups. It was easier to get volume by encouraging people to treat it as a buyers club, getting up to 35% discounts, but you needed a lot more people and a lot more volume to generate the same amount of profit - and expenses didn't really decrease. You still have the same small number of people actively building the networks, its just you've now got the same amount of work managing your customers (whom you've now sponsored as distributors)
for less profit.
So you ended up with bunches of people spending more than they were making, and then getting upset about it on the 'net and elsewhere. That was never really the Amway model though. Rich DeVos, founder of Amway, has always clearly been against it. Dick DeVos, who took over from his father, reportedly was quite happy with the "internal consumption" model. Doug DeVos, who along with Steve Van Andel is now in charge, is clearly back to the model his father envisioned.
