Is Amway A Scam?

[icerat]

In the worst case, all do so. My new question is this:
"If I am selling nothing at retail, how much volume in dollars does my downline have to do for me to make the same $12,000 yearly goal?"

In other words, if all my retail customers started buying wholesale, how does that change the landscape?

Well, first of all, in the US unless you have at least 50 points in customer volume you'd make nothing. So you'd want to ensure you had that.

It depends on the structure they're arranged it. If they're just all sponsored "frontline" to you (which may or may not be the most sensible) this would be the most profitable in the short-term. Your total volume would qualify you for a 9% volume rebate which would be roughly $200/mth.

Now, in theory they're now ordering for themselves so you're no longer putting in any work to earn this $200/mth, where as before you were actively selling to them, receiving orders, processing and delivering them etc. In reality, without the personal contact some will stop ordering, so you either still need to put in the work (for less profit), but otherwise will now start trying other products without you having to promote them, so increasing volume. With these kind of small numbers its virtually impossible to predict what would happen in the median to long term.

 

[marplots]

Why do people sell stuff on ebay? Seriously?

Amway is a manufacturer
Amway is a direct selling firm
Amway is an internet retailer
Amway is a business opportunity

The Amway home page has 5 splash screens. Four of them are about products the company manufactures and sells. One is about the business opportunity.

You ignored 80% of them.

Biased sampling perhaps?

Amway regularly publishes the following -

• Achieve Magazine
• Business News
• BodyKey
• XS Nation
• The Power of You
• Optimal Health
• True Beauty
• Essential Home.

You ignored 87.5% of them, picked the one focused on recognizing business achievers and decided it was "their magazine" presumably because you didn't know about all the others.

Biased sampling perhaps?

what did you think it meant? I thought it meant it was a opportunity to run a business.

False, and you've had this pointed out to you a few times. Since 2006/2007 Amway has implemented quite strong accreditation standards for anyone marketing products to their IBOs. IBOs who wish to use and promote these products to others in their groups will lose access to bonuses that can be in the tens of millions if the do not use accredited suppliers.

Yup, that's network marketing's biggest strength and biggest weakness. It's open for pretty much anyone. (though I'd disagree on potential market saturation - every business persons dream! - the refund policies are one consideration for that)

I will, for the sake of clarity, grant all of the above.

Let us say that Amway, as a corporation, is very successful at selling things. But what we want to know, and the sole charge we are interested in, is whether Amway, as a business opportunity, is a scam.

The only reason to talk about all the other stuff (the retail sales, buyer's club, whatever) is to bring it up in the context of a bait and switch - I thought I was getting into a business and ended up being a customer.

I don't think what I'm describing is off base. When people talk about Amway being a scam, I think they mean exactly that it is presented as an opportunity to make money and isn't. All the rest is just tangential if this charge stands. No matter what else Amway does, charity work, cure for cancer, etc., it's still a scam if this essential lie is at the heart of it. If it's not a lie, then fine. But if it is, none of the other stuff means squat.

 

[icerat]

The only reason to talk about all the other stuff (the retail sales, buyer's club, whatever) is to bring it up in the context of a bait and switch - I thought I was getting into a business and ended up being a customer.

How would that be a scam?

I remember an older non-Amway talk by Professor Charles King who spoke about this very approach with network marketing - the opportunity to earn income is used as an incentive to get people to try the products. He equated it much like other companies having competitions if you tried a new product, or offer points for everything you buy, etc etc.

I don't see the problem with it - "here, we have this business opportunity and these great products. Check it out, if the business is for you, great, if it's not, that's fine too, feel free to keep buying any of the products you like."

I don't think what I'm describing is off base. When people talk about Amway being a scam, I think they mean exactly that it is presented as an opportunity to make money and isn't.

This is where I just shake my head. I made money. Plenty of people I know made money. Every single day new people join Amway and start making money. Every single year new people achieve high levels of income with Amway businesses. Some people have Amway businesses with revenues in the billions and profits in the tens of millions. They started pretty much the same way as a new person starting today would start.

Statistically speaking, there were at least 2 or 3 people who joined Amway today, and within a few years they will be earning very good incomes from it.

So - my question to you - how is it not an opportunity to make money?

 

[marplots]

Well, first of all, in the US unless you have at least 50 points in customer volume you'd make nothing. So you'd want to ensure you had that.

It depends on the structure they're arranged it. If they're just all sponsored "frontline" to you (which may or may not be the most sensible) this would be the most profitable in the short-term. Your total volume would qualify you for a 9% volume rebate which would be roughly $200/mth.

Now, in theory they're now ordering for themselves so you're no longer putting in any work to earn this $200/mth, where as before you were actively selling to them, receiving orders, processing and delivering them etc. In reality, without the personal contact some will stop ordering, so you either still need to put in the work (for less profit), but otherwise will now start trying other products without you having to promote them, so increasing volume. With these kind of small numbers its virtually impossible to predict what would happen in the median to long term.

Thank you. I understand I may being doing some damage to how things actually work, but I wish to capture some metrics for the sake of analysis.

Using the numbers we've generated so far:
1) Selling solely retail at 35% mark-up, 19 customers at $150 each will generate $12,000 of profit (in my pocket!) on sales of $34,000 in a year.

2) Without any retail sales myself, a person I sponsored who does the above will generate $200/month and $2,400 a year profit (in my pocket!).

3) If I were only make money from my downline (which you've pointed out is against the rules and I would still have to have retail sales), I'd need five people doing what is described in point #1.

4) Five people doing what is described in #1 would mean 95 other people as customers, all buying $150 on average per month, for a total retail sales volume (at a 35% mark-up) of $171,000 a year. I make $12,000 on this deal.

5) The situation in #4 is the same if I only sponsor people who are doing a "buyer's club," except there are no retail sales. My volume isn't dependent on whatever the final consumer pays. But the product volume is the same and, if product usage is the same, the number of people involved would be the same as well.

Am I still on track with running the numbers?

If you would like to describe a real-world mix of downline and retail customers, with numbers attached to reach the $12,000 target, that would be interesting as well.

 

[marplots]

How would that be a scam?

I remember an older non-Amway talk by Professor Charles King who spoke about this very approach with network marketing - the opportunity to earn income is used as an incentive to get people to try the products. He equated it much like other companies having competitions if you tried a new product, or offer points for everything you buy, etc etc.

I don't see the problem with it - "here, we have this business opportunity and these great products. Check it out, if the business is for you, great, if it's not, that's fine too, feel free to keep buying any of the products you like."



This is where I just shake my head. I made money. Plenty of people I know made money. Every single day new people join Amway and start making money. Every single year new people achieve high levels of income with Amway businesses. Some people have Amway businesses with revenues in the billions and profits in the tens of millions. They started pretty much the same way as a new person starting today would start.

Statistically speaking, there were at least 2 or 3 people who joined Amway today, and within a few years they will be earning very good incomes from it.

So - my question to you - how is it not an opportunity to make money?

Perhaps we disagree on the meaning of "opportunity." I think you mean a more technical reading of the word, whereas I mean something more like, "realistic opportunity." This reflects my reading of the word "business" as distinguished from "hobby."

Certainly, I can describe a "business opportunity" that consists of picking up returnable bottles on the roadside. It is capable of generating money, it is capable of generating serious money if you get others to do it for you. But if it doesn't in practice, it would not be deemed a realistic business opportunity.

What percentage of people who sign up as distributors intend to make more than pocket money with Amway?

If your contention is that an Amway distributorship is a way that a very few people can make enough money to live on compared to the numbers that sign up, then that would be fine. But as I've mentioned before, this is not how it is presented on Amway's site. At least, when I read, "We are our own bosses" it sounds like the "we" is a majority, not a very small minority. However, if you wish to define "bosses" as something other than owning a company at which one makes a living, then I can't complain.

My new complaint would be that terms are being used in a misleading fashion and we are right back to "scam."

 

[marplots]

Here is something linked to from Amway.com. The link is "IBO Facts" at the bottom of the main page. It answers questions about Amway and being an IBO.
(http://ibofacts.com/qanda.htm#1)

Here is the first question and answer:

Question 1

What are the chances someone can start from scratch and become a Diamond?

The chances are the same for everyone who starts this kind of independent business. That's because the Independent Business Ownership Plan is structured to provide an even playing field for everyone.

However, whether an IBO (Independent Business Owner) reaches the Diamond level depends ultimately on whether he or she wants to build a business to that particular level. Every IBO has personal reasons to become a business owner and, thus, has personal goals for his or her business.

For example:

• Some IBOs may simply want to earn extra income for a limited time.
• Others may want to generate a modest ongoing income.
• Still others may hope to build a large, full-time business.

As with any business, hard work is necessary to build an independent business powered by Amway North America, and that requires time and commitment, especially in the beginning.

The fact is, this business offers tremendous flexibility. IBOs powered by Amway can start immediately and work at home. They can operate their business when they want, at their own pace, on their own schedule, and according to the goals they have set for themselves. The choice of when, where, and how much time to devote to their independent business is theirs alone.

Can someone point out in there the answer to the question asked?

 

[marplots]

Marplots
The only reason to talk about all the other stuff (the retail sales, buyer's club, whatever) is to bring it up in the context of a bait and switch - I thought I was getting into a business and ended up being a customer.

How would that be a scam?

/thread

 

[TjW]

Here is something linked to from Amway.com. The link is "IBO Facts" at the bottom of the main page. It answers questions about Amway and being an IBO.
(http://ibofacts.com/qanda.htm#1)

Here is the first question and answer:


Can someone point out in there the answer to the question asked?

The first part of that answer could as well be supplied as a truthful answer to PowerBall:
"The chances are the same for everyone who plays. That's because the PowerBall lottery is structured to provide an even playing field for everyone."

 

[icerat]

1) Selling solely retail at 35% mark-up, 19 customers at $150 each will generate $12,000 of profit (in my pocket!) on sales of $34,000 in a year.

Actually closer to $14500 now that I worked out the volume bonuses.

2) Without any retail sales myself, a person I sponsored who does the above will generate $200/month and $2,400 a year profit (in my pocket!).

No, I must have misunderstood the question. If you sponsor one person, they do that, and you do nothing else, you make nothing. They did the work getting products to consumers, not you

3) If I were only make money from my downline (which you've pointed out is against the rules and I would still have to have retail sales), I'd need five people doing what is described in point #1.

Not quite sure what you are saying here.

4) Five people doing what is described in #1 would mean 95 other people as customers, all buying $150 on average per month, for a total retail sales volume (at a 35% mark-up) of $171,000 a year. I make $12,000 on this deal.

No. No idea how you came up with that.

If you set up 5 people each doing this, you're now doing over $14000 in sales a month and getting a 18% volume discount. You're giving your people each a 6% discount for the volume they generated, which gives you a 12% profit margin. That works out at approximately $1711/mth or $20,534/yr gross profit. They still each make $12,000. (or rather, about $14,500).

If you would like to describe a real-world mix of downline and retail customers, with numbers attached to reach the $12,000 target, that would be interesting as well.

This really depends on what you're trying to achieve. If you're wanting a relatively fast income, then retailing and an active income is the way to go. If you're interested in building an ongoing asset-based income, then networking is the way to go. The balance depends on personal circumstances and goals. Networking also incurs greater expenses than straight retailing, as your investing in future growth.

Now, if someone sat down with me in the circumstances you described - essentially wanting to earn a basic income to get out of poverty, then I'd recommend an initial focus primarily on retailing whatever products they feel most passionate about and comfortable promoting. They need to make money before they can think about investing in building a network. So, focus on getting 10 to 20 customers ordering say $50/mth, but keep an eye out for 5 to 10 people who might be interested in making some money as well (either as retailers or network builders). As you find them, work with them to help them do the same, build 3 teams of 2 or 3 people interested in making some money plus a bunch of retail customers and wholesale price shoppers, and a few who jump around not quite sure what they want to do, and it should be enough after 6-12 months to be generating $1000/mth net profit.

 

[Wowbagger]

Pretty much every post. They haven't made money, so they're a failure.

First of all:

"register primarily to get products at the discount pricing, and successfully do so" != "They haven't made money"

I never said the first. But, assume most people go into business to make money. If they didn't, then that would pretty much indicate a failed business.

(Of course, there are exceptions: Charities don't aim to make money. But, Amway is not a charity.)

You also give away 9 months of your life, $5000 deposit, potentially millions, and 20 years.

1. But, the person going into that knows this, before they sign the contract.

2. They are almost guaranteed to make a ton of money back. Failures are very rare for McDonald's.

3. The franchisee would have already had a lot of experience running a business, so there is little doubt they can jump through the necessary hoops to run a McDonald's.

4. I don't think the 9 months figure is accurate. It might only be a month or two for training. But, that's besides the point. Even if it was 9 months, it would still be known that is what the person is going into.

Amway certainly has lower entry requirements than that: A half-hour sales pitch is the minimum training you need, apparently. And, $50 is the minimum upfront cost.

But, I doubt most people going in understand what is actually involved: How convoluted the MLM chains become; the theory and practice behind how the company is supposed to work; etc.

How do I know this? Because I am the one who had to iron out these details, for this thread; from tattered clues you left me, and other things I had to look up.

You, the defender of Amway, could not do that in any coherent, concise manner, even when asked directly.

If you could not do it here, what makes you think your average IBO would be able to?!

So you're back the "the presentation" being it for due diligence.

I think you are getting confused about my meaning:

Diligence on the part of Amway. If Amway is to improve their reputation, and NOT look like a scam - It is up to them to portray their own product accurately.

The "presentation" needs to include a realistic summary of the business, as a KEY PART of their own due diligence.

I am not referring to diligence on the part of the potential buyer. The buyer can take as long as they need to check the company and its system out. Though, I might add, they shouldn't need to sign a contract to do so.

So you're back to claiming doing due diligience is wasting time!

Really?!

Does anyone else in this thread know where I made that claim?!

Because I've re-read it a few times, and I don't see it.

Perhaps you, Icerat, can offer a specific quote where I would make such a claim?!!! I dare you.

In fact, I double dare you! And, if you do not find me a legitimate quote where I claimed "due diligence is a waste of time", I will respond by saying "Liar, liar, pants on fire!" How's that for motivation?

I'm too busy having to point out your BS.

If you wish to turn the tables around, to take on offensive position, rather than remaining on the defensive, all of the time, I suggest you find the time to do so. I honestly tried to jump start you, but you have to weasel out of every wart I unravel.

 

[icerat]

Can someone point out in there the answer to the question asked?

Question - do you think building a business is based on "chance" or on hard work?

/thread

You didn't answer my question. I don't see a problem with it. As pointed out, a professor of marketing doesn't see a problem with it. I've never actually encountered anyone (including myself!) who went through this process who felt "scammed" at all. As I've also pointed out, with links to hard data and independent analysis, hardly anyone who has been associated with Amway feels scammed.

So what do you see as the problem?

Perhaps we disagree on the meaning of "opportunity." I think you mean a more technical reading of the word, whereas I mean something more like, "realistic opportunity." This reflects my reading of the word "business" as distinguished from "hobby."

I've no idea what you're trying to say here, other than that I'm interpreting "opportunity" to mean "opportunity", and you're interpreting it to mean something else.

But if it doesn't in practice, it would not be deemed a realistic business opportunity.

Sure, but what's the relevance? Are you trying to claim that people can't make money with Amway?

What percentage of people who sign up as distributors intend to make more than pocket money with Amway?

As I already pointed out to wowbagger, for the vast majority of people signing up is part of the process of due diligence, it is not where you're part of making a serious decision about what you're actually going to do.

Even then - do you believe intent is what matters in an opportunity, or action?

If your contention is that an Amway distributorship is a way that a very few people can make enough money to live on compared to the numbers that sign up, then that would be fine.

Remove "can" and you're describing reality. Include it, and you're not describing Amway.

But as I've mentioned before, this is not how it is presented on Amway's site. At least, when I read, "We are our own bosses" it sounds like the "we" is a majority, not a very small minority.

You seem to be defining "we" as "anyone who signs up to check out Amway". Amway here I think is defining "we" as "anyone who is operating an Amway business"

However, if you wish to define "bosses" as something other than owning a company at which one makes a living, then I can't complain.

So you don't think anyone is a "boss" of their own business until that business is generating them an income? I've started many businesses. None that I can think of were generating me full time equivalent incomes from the start. Some of them I had employees right from the beginning.

Too right I define "boss" as something different to you.

My new complaint would be that terms are being used in a misleading fashion and we are right back to "scam."

My complaint would be that it is you that are using terms in a misleading fashion, or at the least electing to choose particular definitions that fit the conclusion you've already come to, whilst ignoring other reasonables definitions - much like you focused on just one part of the Amway website, and one of their many publications.

boss - b. One who makes decisions or exercises authority

 

[icerat]

I never said the first. But, assume most people go into business to make money. If they didn't, then that would pretty much indicate a failed business.

So, every time I buy anything, even an apple from the corner store, and fail to sell it, then it's a "failed business".

Can't argue with that.

1. But, the person going into that knows this, before they sign the contract.

And what are you suggesting Amway IBOs don't know about the contract they sign?

2. They are almost guaranteed to make a ton of money back. Failures are very rare for McDonald's.

I'd like to see your statistics on McDonald's franchises.

Note that we're not talking about people who sign the final franchisee agreement. We're talking about people who begin the process. The sign the application (like an Amway application). They pay their $5000 training deposit. They work 9 months for free. They get loan approval and final approval.

Then they've got their investment back (around $2 million), plus of course opportunity cost (especially for the 9+ months working for free as part of training)

3. The franchisee would have already had a lot of experience running a business, so there is little doubt they can jump through the necessary hoops to run a McDonald's.

4. I don't think the 9 months figure is accurate. It might only be a month or two for training. But, that's besides the point. Even if it was 9 months, it would still be known that is what the person is going into.

it's accurate

Can I do the Training in a shorter time period? Part-time?
The volume and method of training at McDonald’s makes it unlikely that you could finish
the course in less than 9 months – it may take longer. The Training would be full time,
working shifts, in the Restaurant.

But, I doubt most people going in understand what is actually involved: How convoluted the MLM chains become; the theory and practice behind how the company is supposed to work; etc.

No of course they don't. Why do you think McDonald's requires people to undergo 9+ months of training etc before finalising the franchise agreement? Do you think they already know everything?

If you could not do it here, what makes you think your average IBO would be able to?!

Who ever suggested anyone can fully explain a business opportunity on a text-based web forum?

The "presentation" needs to include a realistic summary of the business, as a KEY PART of their own due diligence.

You mean, like percentages of people who reach certain income levels etc?

Perhaps you, Icerat, can offer a specific quote where I would make such a claim?!!! I dare you.

yeah yeah and I double dare you

You said it in the very comment I responded to.

I said -

"Here, check this out" [ie do your due diligence!] [/i if it looks interesting give us a $50 deposit (nothing in some countries) give it a go, find as many skeletons as you like. Don't like it we'll give you your $50 back, as well as any money you might have spent on products or training."[/I]

You said in response -

In this case, you claim they could get a refund on money spent. If that is true, then they still wasted their time.

ie they wasted their time doing due diligence

Don't you have to run around the clubhouse naked now or something?

 

[marplots]

My complaint would be that it is you that are using terms in a misleading fashion, or at the least electing to choose particular definitions that fit the conclusion you've already come to, whilst ignoring other reasonables definitions - much like you focused on just one part of the Amway website, and one of their many publications.

Good enough. Perhaps we can clarify things a bit.
First thing - "much like you focused on just one part of the Amway website, and one of their many publications."

This is correct. I am interested in Amway as a money-making opportunity. Insofar as it is presented that way, but is falsely presented, then it is a scam. I am not interested in Amway as buyer's club or hobby or a way to meet people or a way to learn business skills. If all those things are done right, but the business opportunity is being mischaracterized or used as a bait and switch, then Amway is a scam.

Do we agree on this or not? When, in your opinion, should the scam label apply?

 

[Wowbagger]

So, every time I buy anything, even an apple from the corner store, and fail to sell it, then it's a "failed business".

If your intention was to start a business, then it would be a failed business.

And what are you suggesting Amway IBOs don't know about the contract they sign?

Most people don't read the contract they sign, that is why it is up to the contractor to summarize, and make clear, the most important parts directly to the contracted party.

I'd like to see your statistics on McDonald's franchises.

Why are we still trying to defend Amway against McDonald's?

I showed you how McDonald's Corporation takes care to make sure their franchisees know about the business, and are competent in running the business - before the business starts. Doesn't matter if it took 10 years of training.

it's accurate

Ah, I see. It could take up to 9 months, if you are only doing it part time. But, the general argument still holds.

Who ever suggested anyone can fully explain a business opportunity on a text-based web forum?

You're the one who is supposed to be defending Amway. I would assume explaining the opportunity, in a concise manner, would be a necessary skill for doing that.

If you can't do it, how do we expect the average IBO, with only a half-hour of training, to do that?!

You mean, like percentages of people who reach certain income levels etc?

That could be part of it.

I am sure the idea of tapping into a vast logistics network with little risk, is one that (eventually) comes across in the sales pitch.
But other things are probably skipped or glossed over, like: Explaining the theory of how MLM systems work, who gets what income off of whom, etc. The restrictions involved, such as a ban on advertisements, and why they are in place. Perhaps even a reminder to avoid many of the illegal things people might be tempted to do.

And, it wouldn't hurt to communicate who is "right" for Amway, and who is better off not going into it. The salesperson should not try to claim "anyone can succeed"!

Even though the risks might be low, there are still probably a few to watch out for. These should be listed and disclosed. The salesperson should never say "there are no risks!"

I think that could be covered in part of the half-hour session.

You said in response -

In this case, you claim they could get a refund on money spent. If that is true, then they still wasted their time.

Ah, I see you misinterpreted my words to a significant degree. Perhaps I should clarify:

In this case, you claim they could get a refund on money spent. If that is true, then they still wasted their time trying to run the business.

I did not consider "due diligence" to be part of the time wasted, because I assumed the diligence would be taken BEFORE any contract was signed. Like a normal business.

First of all, we are talking about two different types of "due diligence", here: One on the part of Amway Corporation, the other on the potential buyer.

My issue is with diligence on the part of the Corporation. They are obligated, through all of their IBO's sales pitches, to accurately portray the "opportunity", and all of the warts involved, in some way.... BEFORE anyone signs anything.

Diligence on the part of the customer seems to be what you are debating about.

Of course, I think the customer's diligence should also be completed BEFORE they sign anything. But, if they are dumb enough to put it off until afterwards, that is their own doing. In my mind, once they sign up, they are an IBO and therefore "in business".

You seem to think it's a-okay for diligence, on the customer's part to be worked out after signing up. The terms would be more like a trial-run, in this case. Although that is not normal, I can see how you might think that way.

In no case is any diligence a waste of time.

But, signing up to run a business, putting in the time and money necessary, only to flounder and fail, and get a refund for much of that money back... would still be a waste of time. And, I hope you agree.

Don't you have to run around the clubhouse naked now or something?

You first.

 

[icerat]

If your intention was to start a business, then it would be a failed business.

But that's not the criteria you're using to judge "success" with Amway, is it?

Most people don't read the contract they sign, that is why it is up to the contractor to summarize, and make clear, the most important parts directly to the contracted party.

Fair enough. So what's your point?

Why are we still trying to defend Amway against McDonald's?

Is that a royal "we" or just delusions of grandeur?

I showed you how McDonald's Corporation takes care to make sure their franchisees know about the business, and are competent in running the business - before the business starts. Doesn't matter if it took 10 years of training.

Again, that's not the critera you're judging Amway by is it?

If you can't do it, how do we expect the average IBO, with only a half-hour of training, to do that?!

I'm "expected" to?
Average new IBOs are not expected to. This is just another of your straw men.

That could be part of it.

It is part of it.

I am sure the idea of tapping into a vast logistics network with little risk, is one that (eventually) comes across in the sales pitch.
But other things are probably skipped or glossed over, like: Explaining the theory of how MLM systems work, who gets what income off of whom, etc. The restrictions involved, such as a ban on advertisements, and why they are in place. Perhaps even a reminder to avoid many of the illegal things people might be tempted to do.[/quote]

Again your back to a "30 minute sales pitch" and "buy decision" being made on the spot.

Not how it works.

The salesperson should not try to claim "anyone can succeed"!

Why not, if evidence suggests anyone can?

The salesperson should never say "there are no risks!"

I agree with that. How widespread is it?

I did not consider "due diligence" to be part of the time wasted, because I assumed the diligence would be taken BEFORE any contract was signed. Like a normal business.

Except I've already pointed out that doesn't happen with McDonalds. Not a normal business I guess.

I was recently looking at an opportunity in to the European rights to manufacture and distribute a product I thought looked interesting.

If I wanted to proceed to touring their factory, checking out financials etc, I'd have to sign a contract agree to certain terms and conditions first. Not a normal business I guess.

As mentioned I'm a registered Microsoft Reseller. I'm not operating an MS reseller business. There were no real obligations in the contract, and I only got access to all their materials, support services and software to study after I signed the contract, not before. Not a normal business I guess.

Heck, I had to agree to and digitally sign a terms of services to use this forum.

It's just not normal, is it?

In my mind, once they sign up, they are an IBO and therefore "in business".

And therein lies the problem. That's not the way it works in their mind. Or in the mind of the IRS for that matter.

Again, have you read the contract?

 

[Wowbagger]

But that's not the criteria you're using to judge "success" with Amway, is it?

I am being charitable, and assuming anyone who makes money would be considered a "success" at a base level. I don't have the data on how closely anyone came to achieving their goals.

But, even then, the success rate seems to be lower than 50%.

I'm "expected" to?
Average new IBOs are not expected to. This is just another of your straw men.

Therein lies your problem: IBOs should be obligated to.

IBOs selling Amway to other potential IBOs should be obligated to sell the opportunity accurately.

If you don't even expect them to do that, then what you are running could be construed as a scam.

You are, essentially, admitting that what is "sold" is not what people actually "get", when it comes to Amway.

It is part of it.

I doubt it. Like I said, not even you could sell Amway on its merits, very well, when asked directly. Not even you could convey its risks and realities, very well, when asked to delineate them, directly.

So, we must assume the same problem occurs with a large number of its sales pitches.

Again your back to a "30 minute sales pitch" and "buy decision" being made on the spot.

Not how it works.

I should hope that's not how it works.

But, I see otherwise: The pressure to buy into it on the spot seems to be tangible, much of the time.

Why not, if evidence suggests anyone can?

Because, clearly, NOT anyone can. Less than 50% do so.

I agree with that. How widespread is it?

Widespread enough, that the pitch I saw, and the descriptions of others, seem to indicate such things happen quite often: That risks are either ignored, waved-off, or downplayed.

If I wanted to proceed to touring their factory, checking out financials etc, I'd have to sign a contract agree to certain terms and conditions first. Not a normal business I guess.

There is a difference between a non-disclosure agreement, and an insurance waiver, etc.; and an agreement to take part in a business.

And therein lies the problem. That's not the way it works in their mind. Or in the mind of the IRS for that matter.

The contract I am talking about is the one where they become an IBO. Maybe that doesn't get signed right off the bat, after the 30-minute spiel.

But, whenever it is signed, it seems less than 50% of them are "active", which means a large number of them probably should not have signed that contract.

And, that implies Amway probably did not do their own due diligence when selling it to all those people.

 

[icerat]

I am being charitable, and assuming anyone who makes money would be considered a "success" at a base level. I don't have the data on how closely anyone came to achieving their goals.

The issue I'm pointing out isn't "success", it's "intent". You don't care if people "intend" to operate a business, you care even less if they actually start a business.

You're starting point is "signed a piece of paper that gives them the right to get the products at wholesale prices, and the right to market the companies products and services if they chose."

Therein lies your problem: IBOs should be obligated to.

I bought a new car today. The salesman did not know everything about the car. If I had questions he didn't know the answer to, he found out or pointed me to material or people with the answers.

Apparently you think that is wrong.

I bought our house about 18 months ago. The sales person who met us for the first viewing didn't know much about the property at all. But we were interested so investigated further.

I looked at two investment properties last month. I had many questions the sales people did not know the answer to. But we were interested so we investigated further.

Apparently we wasted our time with scammers.

If you don't even expect them to do that, then what you are running could be construed as a scam.

So a salesperson not presenting all information during an initial presentation, constitutes a scam?

You apparently live in a sad world were scams would appear to be common.

You are, essentially, admitting that what is "sold" is not what people actually "get", when it comes to Amway.

Nope. You still have this juvenile obsession with an initial presentation being the whole process.

So, we must assume the same problem occurs with a large number of its sales pitches.

Yeah, probably, given the high number of complaints.

Oh ... wait ....

But, I see otherwise: The pressure to buy into it on the spot seems to be tangible, much of the time.

Yeah, which is why everyone who joins signs up on the spot.

Oh ... wait ....

Because, clearly, NOT anyone can. Less than 50% do so.

Seriously? You're really being absurd now.

There is a difference between a non-disclosure agreement, and an insurance waiver, etc.; and an agreement to take part in a business.

Ok ... where is this "agreement to take part in a business"? I thought we were talking about Amway, apparently you're talking about something entirely different!

Oh how much time we have wasted!

The contract I am talking about is the one where they become an IBO. Maybe that doesn't get signed right off the bat, after the 30-minute spiel.

Oh, you are talking about the Amway contract (the one that is pretty much never signed "right off the bat")?

Could you point out which part of the contract obliges people to "take part" in a business? I can see where it authorizes you to - if you so choose - but nothing that obliges you to.

Tell me Wowbagger - According to you if I sign an Amway IBO contract, I'm operating a business, right?

So that means I can now take advantage of business tax deductions and credits, just buy signing the form?

 

[aggle-rithm]

So a salesperson not presenting all information during an initial presentation, constitutes a scam?

If the salesperson has important information and either withholds it or lies about it...YES. Scam.

Presumably most people involved in Amway are aware that there is little chance, statistically speaking, they will earn any money from the venture. Why wouldn't they share this information, if they know it?

And if they don't know it, why not?

 

[icerat]

If the salesperson has important information and either withholds it or lies about it...YES. Scam.

actively withholds or lies about it? Absolutely.

Presumably most people involved in Amway are aware that there is little chance, statistically speaking, they will earn any money from the venture. Why wouldn't they share this information, if they know it?

(1) Very little in life outside gambling is dependent on chance for success. If you want to rely on chance to succeed in business - any business - then I'd suggest your odds of success are about zero.

(2) Income disclosure statements are required to be given by law and are included in the introductury brochure Amway requires given out to prospects, as well as on the Amway website and various other places, so the point is kind of moot.

 

[Wowbagger]

Look, icerat, you're simply dancing around, and not facing the problem I see with Amway.

If MOST of the IBOs fail to make any money what-so-ever (let along accomplish their goals, even if they do), then why the HELL is Amway letting that happen?

It appears as though there is a serious be a discrepancy between what is "sold" and what is the "reality" of the system.

If Amway is not a scam, it's hard to see how a perfectly legitimate opportunity would be structured like that.

The issue I'm pointing out isn't "success", it's "intent". You don't care if people "intend" to operate a business, you care even less if they actually start a business.

Why would someone become an IBO (that is: An Independent Business Owner), if they did not intend to be a business owner?

Is the "Business Owner" part of "IBO" just as mislabeled as the "Independent" part?

I bought a new car today. The salesman did not know everything about the car. If I had questions he didn't know the answer to, he found out or pointed me to material or people with the answers.

Apparently you think that is wrong.

If the salesman knew that the engine of a car would probably fail to start properly, about 50% of the time, I would expect him to declare that, before I bought one.

I would NOT expect that to be only hidden within the fine print, where I could easily miss such an important detail.

So a salesperson not presenting all information during an initial presentation, constitutes a scam?

All important information.

Important information includes, but is not necessarily limited to: An overview of how the MLM structure works, its limitations and restrictions, any risks involved, a basic idea of what it takes to succeed, and the sorts of habits that lead to failure. Perhaps even a list of potentially illegal maneuvers one might be tempted into, but should be avoided.

You apparently live in a sad world were scams would appear to be common.

Well, actually... they kinda are.... though your examples of houses and cars would not be: Unless important information was knowingly withheld.

You still have this juvenile obsession with an initial presentation being the whole process.

When did I say that?!

The initial process needs to include an accurate disclosure of the important items I mentioned. All of the nitty-gritty details can come later, after the initial presentation.

But, if the basic elements are not part of the initial presentation, you are effectively selling something that is different from what is being bought.

Tell me Wowbagger - According to you if I sign an Amway IBO contract, I'm operating a business, right?

So that means I can now take advantage of business tax deductions and credits, just buy signing the form?

You tell me: Is there any other good reason why someone would become an IBO, other than to become an "independent business owner"?