MLM Math

[icerat]

Exactly. If it was the Amway Buyer's Club I would have absolutely no problem.

And if it's presented as a buyer's club and a business opportunity (ie get commissions for promoting the club), your choice what you want to do - you'd be fine with it?

That of course is exactly how it usually is marketed.

The straw man is to claim it's not promoted as a buyer's club. Read joecool's many anti-amway sites, you'll see he complains about the "just buy from yourself" approach (ie buyer's club), and if you want more authoritative sources (who wouldn't?) read various FTC reports back as far as 1979 - the fact MLMs are used as buyers clubs is well acknowledged by both the companies themselves and authorities. Heck - go along to an Amway business preview and see how it's explained. Anyone who claims it's not promoted as a "buyers club" is either ignorant or lying. Anything Joecool says needs to be understood in the context of his obsession.

DuvalHMFIC, as already noted on this thread, research indicates people who have actually used products from direct selling companies overall like them and think they are good value. So I have to ask - what experience in using the products from direct sales companies lies behind your sarcasm?

 

[Joecool]

And if it's presented as a buyer's club and a business opportunity (ie get commissions for promoting the club), your choice what you want to do - you'd be fine with it?

That of course is exactly how it usually is marketed.

What a shameless misrepresentation. Who markets Amway as a buyer's club?

Why is Amway so much more expensive than real buyer's clubs?
Because Amway adds middlemen to the distribution chain.

The internet is littered with pictures and stories of Amway recruitment tactics. They often include a 6-4-2 or some other version of the "plan". That plan is to go diamond. The presentation is with IBO's wearing suits and business attire and often feature pictures of wealth. Sports cars, mansions and other trappings of wealth allegedly attained by building the Amway business. I don't wear a suit to go to Costco.

My biggest issue with Amway is luring prospects into the business under the disguise of being a buyer's club or a business opportunity and then insidious uplines/upstreams use the prospects as customers for selling tools. (Seminars, voicemail, cds). Like a bait and switch.

 

[xjx388]

And if it's presented as a buyer's club and a business opportunity (ie get commissions for promoting the club), your choice what you want to do - you'd be fine with it?

That's not the Amway opportunity. It's not supposed to be commissions for promoting the club, it's supposed to be commissions for selling products and for the sales of people under you.

Consider the Amazon affiliate program. You get commissions for linking to products on Amazon. But that's it; you don't have to pyramid to be successful.

All of those commission layers in Amway do only one thing: drive up the cost. Amazon would never survive on such a model.

That of course is exactly how it usually is marketed.

Exactly. That's why it's an illegal pyramid scheme; retail selling of products is a minor part of the business. The real scheme is to get people to join and just buy for themselves. Thus, you are actually getting paid for recruiting which is what makes a scheme an illegal pyramid scheme.

The straw man is to claim it's not promoted as a buyer's club. Read joecool's many anti-amway sites, you'll see he complains about the "just buy from yourself" approach (ie buyer's club), and if you want more authoritative sources (who wouldn't?) read various FTC reports back as far as 1979 - the fact MLMs are used as buyers clubs is well acknowledged by both the companies themselves and authorities. Heck - go along to an Amway business preview and see how it's explained. Anyone who claims it's not promoted as a "buyers club" is either ignorant or lying. Anything Joecool says needs to be understood in the context of his obsession.

The buyer's club angle is what makes it a pyramid scheme. That's why it's such a big deal.

DuvalHMFIC, as already noted on this thread, research indicates people who have actually used products from direct selling companies overall like them and think they are good value. So I have to ask - what experience in using the products from direct sales companies lies behind your sarcasm?

If people want to pay $85 bucks for $25 worth vitamins (if that), go right ahead. But don't tell them they are starting a business.

And it's worth noting that many people think paying a psychic to contact your dead relatives is a good value.

 

[icerat]

That's not the Amway opportunity. It's not supposed to be commissions for promoting the club, it's supposed to be commissions for selling products and for the sales of people under you.

Ok, let me rephrase. Commissions for getting people to buy the products.

Consider the Amazon affiliate program. You get commissions for linking to products on Amazon. But that's it; you don't have to pyramid to be successful.

Unless your a convicted fraudster ala Dunning you can't make a decent living on one level affiliate marketing.

If the profit margins were available (and Amazon's terms allowed it), why do you think it would be wrong for an Amazon affiliate to share his commissions with people who help drive up his volume?

All of those commission layers in Amway do only one thing: drive up the cost. Amazon would never survive on such a model.

Amazon does not manufacture their own products, there isn't enough profit margin to do it.

As already mentioned (apparently ad infinitum) the "commission layers" in Amway are similar to traditional business.

That poor horse has been beaten to death, give it up.

Exactly. That's why it's an illegal pyramid scheme; retail selling of products is a minor part of the business.

Huh? Close to 100% of revenue is from retail sales of products. Demo stock is about the only significant other category.

The real scheme is to get people to join and just buy for themselves.

Which are retail sales

Thus, you are actually getting paid for recruiting which is what makes a scheme an illegal pyramid scheme.

If you get a million people to join and nobody buys any products, either to use themselves (retail sale) or to onsell to a consumer (retail sale) you make zero dollars.

If people want to pay $85 bucks for $25 worth vitamins (if that), go right ahead. But don't tell them they are starting a business.

And it's worth noting that many people think paying a psychic to contact your dead relatives is a good value.

So you believe the business model of consulting services is bogus? Because some of the services offered are?

As I noted earlier, one of the basic assumptions of anti-mlmers seems to be that there is products are not of legitimate value in the marketplace. They usually make that judgement with little or no actual experience with the products. Research shows that overall people purchase products from direct sales companies are happy with the value and would purchase again. As the paper I cited earlier said, the opinions of anti-mlm critics seem to be based on ignorance and hearsay rather than facts.

 

[DuvalHMFIC]

If someone is IN the club and they buy the products, of course they are going to say they are happy with them. If they say they are not, how are they going to get anyone else to buy them.

I already mentioned I have repeatedly been approached about Amway and other MLM companies. I've been given "free samples" of products that tend to cost twice as much as something I can buy from the store, and yet the products I have tried have underperformed compared to the more expensive ones that Amway has let me try.

Psychologists have been able to show that people will make bad decisions to justify their means. It's been one of the reasons people stay in Scientology for so long. To leave would be to admit they were duped and they wasted all that money. Amway and others like it have this same effect working for it.

 

[icerat]

If someone is IN the club and they buy the products, of course they are going to say they are happy with them. If they say they are not, how are they going to get anyone else to buy them.

Ummm, the vast majority of people "in the club" do not try to get other people to buy them

I already mentioned I have repeatedly been approached about Amway and other MLM companies. I've been given "free samples" of products that tend to cost twice as much as something I can buy from the store, and yet the products I have tried have underperformed compared to the more expensive ones that Amway has let me try.

Amway's top two brands are Artistry and Nutrilite, making up something like two thirds of revenues. There is very little comparable to Nutrilite in stores and Artistry compares very favourably to products in it's category on price, almost always cheaper, so I'm not sure what you're talking about.

Psychologists have been able to show that people will make bad decisions to justify their means. It's been one of the reasons people stay in Scientology for so long. To leave would be to admit they were duped and they wasted all that money. Amway and others like it have this same effect working for it.

Right, so let's look at some facts about Amway.

• one of America's largest private companies
• The company does over $11.3 billion in sales.
• It's products win consumer awards all around the world.
• It's ranked as one of the top consumer product companies for product Research & Development, with
• over 1000 patents and hundreds of scientists.
• It's the world's largest selling vitamin and dietary supplements company
• It's one of the world's largest selling premium skincare and cosmetics companies
• The vast majority of people who join Amway do not spend money on seminars, training materials etc (Pokorny vs Quixtar class action settlement)
• The majority of people who buy their products do not attempt to recruit other consumers and do not earn bonuses from their purchases or others. (affidavit of Billy Florence, Team vs Quixtar, Amway Business Opportunity Brochure)

And you believe the primary reason people buy their products is to justify a bad decision?

Ok .....

.... but you might want to reconsider exactly who is suffering from confirmation bias.

 

[DuvalHMFIC]

Let me ask you this...why do you care so much? If someone says they don't like Pepsi, other people don't generally run roughshod over a thread, defending Pepsi. Yet here you are, over and over again, defending Amway's products. Doesn't make a lot of sense, unless you have something to gain.

Sure, people may have a small debate over like coke vs. pepsi, but do you realize you are about 50% of the posts in this thread alone, all defending Amway like it's your firstborn child? Why is that?

 

[icerat]

Let me ask you this...why do you care so much? If someone says they don't like Pepsi, other people don't generally run roughshod over a thread, defending Pepsi. Yet here you are, over and over again, defending Amway's products. Doesn't make a lot of sense, unless you have something to gain.

Personally I don't like all of Amway's products, some of them I think aren't good value, others I think are.

What I'm doing is defending unfair, ignorant, and often downright dishonest attacks on an entire industry of which I'm very familiar and have spent a decade researching and writing about. Those attacks essentially state that when I built an mlm business I was scamming my friends and family, and that the many friends I have who make a living in this industry are also scammers. There are people, friends and family, I introduced to Amway products more than a decade ago who still buy them. I still buy them. Just a few posts back you told me I have been duped and wasted all that money, and that I duped my friends and family into buying them.

You expect me to just sit back and ignore ignorant personal attacks on myself and my friends?

Really?

I don't like bullies, and I don't like BS. When you've got bullies spreading BS about an area I have a deal of expertise in, I'll stand up to them, doesn't matter if it's online or offline. I helped fight to get my son's daycare closed down when I discovered the owners were using it as a government cash machine instead of spending it on the kids. I fought against our bullying co-op head when he tried to screw us over my wife's father's estate. I fought a plumbing industry screwing people over with illegal extra charges, and right now I'm fighting to get the head of a health district fired because his sociopathic ego has led to the almost certain soon death of my mother-in-law when she should have had a treatment that would have cured her. Already got one oncologist's head on a platter, there's more to come.

You expect me just to sit back and ignore it when people spread lies and falsehoods about people I care about?

Sorry, I ain't that kinda guy. Not IRL and not on the 'net.

Sure, people may have a small debate over like coke vs. pepsi, but do you realize you are about 50% of the posts in this thread alone, all defending Amway like it's your firstborn child? Why is that?

You know what I find amusing? Joecool has participated extensivel in this thread, and started several other anti-MLM threads on this forum. He runs several anti-mlm blogs, and has run several others pretending to be pro-MLM and then "turning" anti through his (faked) experience. He writes, on average a full blog post nearly every day and has done so for years. He has posted thousands, probably tens of thousands of anti-mlm comments around the internet.

Far far more time attacking the industry than I ever have spent defending it ... and ... he only ever posts during business hours.

But never ... never have I seen anyone question his motivation.

Odd.

 

[DuvalHMFIC]

Personally I don't like all of Amway's products, some of them I think aren't good value, others I think are.

What I'm doing is defending unfair, ignorant, and often downright dishonest attacks on an entire industry of which I'm very familiar and have spent a decade researching and writing about. Those attacks essentially state that when I built an mlm business I was scamming my friends and family, and that the many friends I have who make a living in this industry are also scammers. There are people, friends and family, I introduced to Amway products more than a decade ago who still buy them. I still buy them. Just a few posts back you told me I have been duped and wasted all that money, and that I duped my friends and family into buying them.
You expect me to just sit back and ignore ignorant personal attacks on myself and my friends?

Really?

I don't like bullies, and I don't like BS. When you've got bullies spreading BS about an area I have a deal of expertise in, I'll stand up to them, doesn't matter if it's online or offline. I helped fight to get my son's daycare closed down when I discovered the owners were using it as a government cash machine instead of spending it on the kids. I fought against our bullying co-op head when he tried to screw us over my wife's father's estate. I fought a plumbing industry screwing people over with illegal extra charges, and right now I'm fighting to get the head of a health district fired because his sociopathic ego has led to the almost certain soon death of my mother-in-law when she should have had a treatment that would have cured her. Already got one oncologist's head on a platter, there's more to come.

You expect me just to sit back and ignore it when people spread lies and falsehoods about people I care about?

Sorry, I ain't that kinda guy. Not IRL and not on the 'net.



You know what I find amusing? Joecool has participated extensivel in this thread, and started several other anti-MLM threads on this forum. He runs several anti-mlm blogs, and has run several others pretending to be pro-MLM and then "turning" anti through his (faked) experience. He writes, on average a full blog post nearly every day and has done so for years. He has posted thousands, probably tens of thousands of anti-mlm comments around the internet.

Far far more time attacking the industry than I ever have spent defending it ... and ... he only ever posts during business hours.

But never ... never have I seen anyone question his motivation.

Odd.

You might wanna go back and read my posts, I've never said any such thing about you. I simply pointed out a possible scenario that pyschologists have discovered. You'll notice my beef pretty much pertains to the business model being counter-productive to a good product, in my opinion. I think the reason you'd need such a business model is to push an inferior product.

Would you not agree that even if Amway is profitable, you would sell MORE product by having it available on the shelves of GNC (in the supplements case) or a Wal-Mart (for the retail style products)?

And yes, I have a problem with the business model. I also said, though, a few posts up that I didn't think it was illegal.

I have had no interaction with Joe Cool, but I do notice you have him blocked.

 

[icerat]

You might wanna go back and read my posts, I've never said any such thing about you. I simply pointed out a possible scenario that pyschologists have discovered.

You clearly implied that people purchase products from MLMs because they've been duped. That means I'm being duped and since I've made money with MLM I must have duped others to buy them.

You expect me not to be insulted?

You'll notice my beef pretty much pertains to the business model being counter-productive to a good product, in my opinion.

Why?

I think the reason you'd need such a business model is to push an inferior product.

As I have stated in this thread one of the reasons why MLM has a poor reputation is because of low barriers to entry, including for people wanting to push an inferior product.

It's a complete non sequitur to say the business model is flawed because it can be misused. As already pointed out, the majority of customers of MLM products are positive to them. According to the University of Westminster, 81% would recommend them to others (and note, only 13% of the sample were, or had been, direct sellers themselves).

Would you not agree that even if Amway is profitable, you would sell MORE product by having it available on the shelves of GNC (in the supplements case) or a Wal-Mart (for the retail style products)?

No, the product requires educating people about the differences between Nutrilite's product and competitors. It's not something you can stick on a label or easily do in a television ad. Heck, it's not easy to do through pages of discussion on forums like this! When I market Nutrilite we primarily do it using hour long talks where we educate people on nutrition and healthy eating, and spend 15 or 20 minutes explaining the difference between Nutrilite and other brands, and then allow people to try them for 3 months with a 100% money back guarantee.

The model clearly works, as shown by the fact it as 2 to the 3 times the market share of the #2 brand (Centrum).

I have had no interaction with Joe Cool, but I do notice you have him blocked.

He's here primarily to troll me.

 

[Mycroft]

How exactly is this "pressure" happening? Telepathy?

I really don't understand what part of my initial statement needs clarification. I already described how it works, and I didn't mention telepathy.

According to Amway statistics, the majority of people who renew their memberships don't attend business meetings, subscribe to CD programs etc etc. The training programs that suggest IBOs should set certain volume goals (through personal use and retailing) also typically suggest something like 100 points or 200 points a month - yet Amway statistics show the average monthly order is less than 40 points.

I think it's astonishing how you can turn statistical evidence of Amway failure into evidence that Amway is...?! I'm not sure what, no matter how you look at those statistics, they're bad. What is it you're trying to demonstrate again?

 

[AdMan]

Let me ask you this...why do you care so much? If someone says they don't like Pepsi, other people don't generally run roughshod over a thread, defending Pepsi. Yet here you are, over and over again, defending Amway's products. Doesn't make a lot of sense, unless you have something to gain.

Sure, people may have a small debate over like coke vs. pepsi, but do you realize you are about 50% of the posts in this thread alone, all defending Amway like it's your firstborn child? Why is that?

Based on the posts I've read of his, my guess is it rhymes with Bill.

 

[icerat]

Based on the posts I've read of his, my guess is it rhymes with Bill.

Which means you're accusing me of criminal fraud. It is illegal in both the EU (where I live) and US (where this board is hosted) to promote a product or company and not reveal any financial connection.

Again, as I pointed out, interesting given how competitors have previously aided and paid Amway critics, that you don't seem to question the activities of joecool, who posts far far more than I do and only posts during business hours.

I really don't understand what part of my initial statement needs clarification. I already described how it works, and I didn't mention telepathy.

You said they're told stuff over and over again. Since it's not happening verbally or win writing, telepathy is all I can come up with.

I think it's astonishing how you can turn statistical evidence of Amway failure into evidence that Amway is...?! I'm not sure what, no matter how you look at those statistics, they're bad. What is it you're trying to demonstrate again?

How is an average customer order of around $120/mth "statistical evidence of failure"?

Walmart averages about $170/mth
Target averages about $130/mth
Amazon averages less than $50

 

[xjx388]

It's a complete non sequitur to say the business model is flawed because it can be misused. As already pointed out, the majority of customers of MLM products are positive to them. According to the University of Westminster, 81% would recommend them to others (and note, only 13% of the sample were, or had been, direct sellers themselves).

I have no problem with people thinking they are getting a good value with Amway's products. That's a very subjective word, "value." I find my Buick LaCrosse to be a great value, but the Lexus E350 owner next door disagrees. That's all subjective. We can have similar debates about products next to each other on store shelves.

What I have a big problem with is outright lies and unscientific claims, especially in the realms of investment/business and healthcare. MLM happens to be a double whammy most of the time. It's always products with dubious benefits and claims.

No, the product requires educating people about the differences between Nutrilite's product and competitors. It's not something you can stick on a label or easily do in a television ad. Heck, it's not easy to do through pages of discussion on forums like this! When I market Nutrilite we primarily do it using hour long talks where we educate people on nutrition and healthy eating, and spend 15 or 20 minutes explaining the difference between Nutrilite and other brands, and then allow people to try them for 3 months with a 100% money back guarantee.

See. I have a big problem here. Who are you (not necessarily you,
but the average MLM salesperson) to lecture people on nutrition? Seriously. I would love to hear the actual content of one of these hour long lectures. I'd wager it's full of dubious claims, no different than the claims for Alkaline Water.

The model clearly works, as shown by the fact it as 2 to the 3 times the market share of the #2 brand (Centrum).

Do you have a source? I would intuitively say that Wal-Mart sells more of their house brand than Amway does of Nutrilite.




He's here primarily to troll me.[/QUOTE]

 

[Joecool]

What I'm doing is defending unfair, ignorant, and often downright dishonest attacks on an entire industry of which I'm very familiar and have spent a decade researching and writing about.

That would be fine if you didn't do it with unfair, ignorant and downright dishonest attacks.

I don't like bullies, and I don't like BS. When you've got bullies spreading BS about an area I have a deal of expertise in, I'll stand up to them,

Funny, an Amway corporate blogger labeled you a cyber bully for attacks you made against me. That article is still on the Amway corporate blog.

You know what I find amusing? Joecool has participated extensivel in this thread, and started several other anti-MLM threads on this forum.

It's funnier that you run 20+ blogs, a wiki and a forum defending Amway. Some think you are a paid shill.

http://network21amway.blogspot.com/2011/04/truth-about-amway.html

 

[marplots]

I get the concept of a shill and the attached motivation.

What's the motivation for the other side? Should I use the same logic to assume someone working covertly for whatever the opposite of MLM is?

And, if I grant the anti-MLM side as simply wanting to fight for truth and justice, wouldn't I then be bound to extend the same motivation to the pro-MLM team?

This is why sticking with evidence and facts is so much better than trying to ferret out underhanded motivations.

 

[Stomatopoda]

Obviously the anti-MLM shills are paid by Big Retail, which feels threatened by the MLM Revolution. They need to suppress MLM with lies and slander, or else the sheeple with learn the Truth and stop patronizing Wal-Mart in favor of paying 10x as much to wait for equal-or-lesser quality goods to arrive from their obnoxious neighbor/cousin/reflexologist.

 

[DuvalHMFIC]

I'm totally down to do some spin control for MLMs if they want to pay me. PM me. I just need a little tuition money, nothing big.

 

[icerat]

What I have a big problem with is outright lies and unscientific claims, especially in the realms of investment/business and healthcare.

So do I.

MLM happens to be a double whammy most of the time. It's always products with dubious benefits and claims.

always? Really?

See. I have a big problem here. Who are you (not necessarily you,
but the average MLM salesperson) to lecture people on nutrition? Seriously.

The "average MLM salesperson" doesn't do these talks. It's trained people, usually with appropriate scientific or health backgrounds.

I would love to hear the actual content of one of these hour long lectures. I'd wager it's full of dubious claims, no different than the claims for Alkaline Water.

All the "claims" are backed by references, and very few, if any, are about products. There are laws about this kind of thing you know.

Do you have a source? I would intuitively say that Wal-Mart sells more of their house brand than Amway does of Nutrilite.

Here's an old confirmation from 2006 data. Since then Nutrilite sales have increased to around $5 billion.

 

[icerat]

I'm totally down to do some spin control for MLMs if they want to pay me. PM me. I just need a little tuition money, nothing big.

Heck, I'm open to it too

Obviously the anti-MLM shills are paid by Big Retail, which feels threatened by the MLM Revolution. They need to suppress MLM with lies and slander, or else the sheeple with learn the Truth and stop patronizing Wal-Mart in favor of paying 10x as much to wait for equal-or-lesser quality goods to arrive from their obnoxious neighbor/cousin/reflexologist.

I get the concept of a shill and the attached motivation.

What's the motivation for the other side? Should I use the same logic to assume someone working covertly for whatever the opposite of MLM is?

And, if I grant the anti-MLM side as simply wanting to fight for truth and justice, wouldn't I then be bound to extend the same motivation to the pro-MLM team?

This is why sticking with evidence and facts is so much better than trying to ferret out underhanded motivations.

I agree.

My point is it's amusing how people never seem to question "the other side" even though there's a documented past history of Amway competitors financially and materially supporting critics. People are happy to accuse me of breaking the law and being a shill (happens all the time), but wouldn't even think to do the same of people who spend way more time on this than I do.

It's just standard ol' confirmation bias I s'pose.

Here's an exercise for an interested party - check through this thread and see how often I link to sources, so you can confirm for yourself what I'm saying, then check how often "critics" do.