Amway TV ad

[oggiesnr]

Actually Steve, I just dug up one paper I have on file, Wotruba et.al. (2005), Differences in Turnover Predictors between Multilevel and Single Level Direct Selling Organizations, and they found turnover in MLM is significantly less than in traditional sales.

That should make you wonder too ....

Do you have a link or an ISBN?

Steve

 

[oggiesnr]

What's going on is they decided not to do it anymore, that's all. The barriers to entry are so low anyone can give it a go to see if it fits.

So the question is, why do so many appear to think that it doesn't fit?

Steve

 

[oggiesnr]

How do you know whether it's turnover? Perhaps more people are getting involved? Maybe YOU could have sponsored them all these years and be like the 30 year ones you mentioned, or the 1-2 year one I mentioned. You DO need to do some reading, and try learning some of it while you're reading.

How do I know it's turnover? I live in this community and know a lot of the people involved.

My point about my thirty year friend is that they are high enough up the chain to make a living on the downstream. A characteristic of this type of selling is that if you join late you have fewer opportunities, the market is more crowded.

My personal opinion is that Amway (like Kleeneze) was great to join whilst market penetration was low, in a mature market there is not the same possibilities because you cannot build enough of a downstream and there is too much of an upstream living off you. I do not deny that for some it is a good living but the "some" is very small. The UK court case reckoned it was under one percent.

According to other documentation and reports the growth areas they are now targeting ar India, Russia and China. This makes sense for them and for the early adopters who will (with luck and work) make money. Down the road it will be more broken dreama.

Steve

 

[Tex2]

Do you have a link or an ISBN?

Steve

Looks like it is an article you have to pay for....just google the title.

 

[Tex2]

So the question is, why do so many appear to think that it doesn't fit?

Steve

Probably the same reason so many play the lottery, they want a quick, easy fix.

 

[Tex2]

..

How do I know it's turnover? I live in this community and know a lot of the people involved. ---- Fair enough, but if you keep getting new people, it could also be an indication it's growing. You still haven't answered the question about YOU sponsoring all these people leaving catalogs at your door years ago, or the guy who apparently RECENTLY is successful.

My point about my thirty year friend is that they are high enough up the chain to make a living on the downstream. A characteristic of this type of selling is that if you join late you have fewer opportunities, the market is more crowded. ---- I don't know how "crowded" Kleeneze is, but Amway is definitely NOT saturated, once you take away the tool scam.

My personal opinion is that Amway (like Kleeneze) was great to join whilst market penetration was low, in a mature market there is not the same possibilities because you cannot build enough of a downstream and there is too much of an upstream living off you. I do not deny that for some it is a good living but the "some" is very small. The UK court case reckoned it was under one percent. ---- The reason for the "some" being very small is mostly due to the tool scam. The percentage will ALWAYS be low, so that is NOT a good metric. A better measure is whether there is growth.

According to other documentation and reports the growth areas they are now targeting ar India, Russia and China. ---- And these countries have taken action against the tool scammers as well. It is smart business to go after new emerging markets.

This makes sense for them and for the early adopters who will (with luck and work) make money. Down the road it will be more broken dreama. ---- The early adapters will be dead in a few years, and then new "early adapters" can repeat the process, which is an ongoing die/renewal process. It's not so much the early adapters that make money and kill off the opportunity, it's the LCKs and their tool scam that effectively saturates the market, and the saturation point becomes lower as more information regarding the tool scam becomes available (internet). You need to read some of my posts going back 2-3 pages, or you wouldn't have brought up this lame idea.

Steve

 

[icerat]

My point about my thirty year friend is that they are high enough up the chain to make a living on the downstream. A characteristic of this type of selling is that if you join late you have fewer opportunities, the market is more crowded.

Market saturation is a theoretical characteristic of any business. The same rules apply to MLM as to other businesses, unfortunately many people misinterpret the recruiting aspects as being the business and think it's somehow more of an issue.

The only issue is whether there's a market for the products. If you live in a town of 50 people and 1 coffee shop, and decide to open another coffee shop, you're going to struggle. If you live in a town of 50 people and 1 Amway distributor, and decide to open another Amway distributorship, you will struggle in that geographic market.

Fortunately with Amway you can easily just open another "outlet" somewhere else by recruiting a wholesale customer in another geographic market. Not so easy with a coffee shop.

Furthermore, if a market for a product starts to become saturated or otherwise more difficult to compete in, you can (somewhat) easily change to another product. Amway started marketing concentrated cleaners. There was very little competition. Later the competition started and it became a tougher market with smaller margins, so Amway introduced other products.

My personal opinion is that Amway (like Kleeneze) was great to join whilst market penetration was low, in a mature market there is not the same possibilities because you cannot build enough of a downstream and there is too much of an upstream living off you.

There is no evidence at all to suggest this is the case anywhere. The number of "upstream living off you" doesn't radically change much no matter
where "downstream" you are, since it's inherently limited by volume. What can change over time is perceptions of the opportunity and/or products. If handled properly this can improve the opportunity as the brand gets better known. This has happened in markets like China and Russia. In older markets like the US and UK, poor field behaviour resulted in the opposite effect where the brand was damaged. The products and opportunity haven't inherently changed, market reputation is the problem.

I do not deny that for some it is a good living but the "some" is very small. The UK court case reckoned it was under one percent.

The UK market is an interesting one, as it was one of the early international markets. As per above, brand reputation was very, very badly damaged by poor field behaviour early on, and Amway, enjoying success in emerging markets, never really focussed on trying to fix it.

They are now, in no small part due to the BERR case, however it was already in progress.

Personally I think Amway UK has enormous potential and I plan on moving there in 3-4 years to pursue it.

According to other documentation and reports the growth areas they are now targeting ar India, Russia and China. This makes sense for them and for the early adopters who will (with luck and work) make money. Down the road it will be more broken dreama.

If I recall correctly more than two thirds of Amway markets had growth last year, including ones that were decades old and had been through slumps. It appears that after you account for a large group kicked out of the US a couple of years ago, Amway US is also growing well - even more so with new initiatives implemented over the last 12 months and ongoing.

 

[Tex2]

It appears that after you account for a large group kicked out of the US a couple of years ago, Amway US is also growing well - even more so with new initiatives implemented over the last 12 months and ongoing. ---- If this were true, Amway probably would have announced the volume for last year. For the first time ever, (as far as I know), they didn't, although they did announce the volume for several growing markets. Twist and spin reality all you want ibofb/insider/icerat, I'll be here with the facts.

 

[Almo]

So I say what I said before, if you're interested go and read the research on direct sales turnover. No need to wonder.

Actually Steve, I just dug up one paper I have on file, Wotruba et.al. (2005), Differences in Turnover Predictors between Multilevel and Single Level Direct Selling Organizations, and they found turnover in MLM is significantly less than in traditional sales.

That should make you wonder too ....

If that stat is in fact true, I have a possible explanation. Just speculating here, and it would also help if we had numbers for what turnover was like many years ago.

Amway bumped along for a while, being an MLM distributor of various stuff. At some point, the tools scam came along.

Perhaps the tool scam became important as a means of reducing turnover? That could explain what we see: low turnover in MLMs due to the cultish aspect, which is reinforced by the tapes. I know my friend didn't get out until he went bankrupt. He didn't tell me, either. I found the legal announcement through a google search for his name.

In any case, if the stat is true, it's certainly interesting.

 

[icerat]

I didn't say low turnover, I said lower turnover. In direct sales, turnover of 100% is not all that unusual.

Leaving aside reasons like overhyping by reps, etc I think the major reason for high turnover is that people mistake simple for easy and easy tasks for easy business.

The Amway model is simple and effective, and the work per se isn't hard. But as in most "sales" jobs, at least 90% of what you do gets little or no result. People psychologically have difficulty dealing with this as it feels like constant failure and rejection when it's not. The amount of hours to be put in is also relatively small - "easy" - compared to most things in life, especially other small businesses. But it's not easy, because to build a significant income you usually you have to do this on top of your "normal" life for months or years.

So while it seems simple and even easy when you join, the reality is that it's hard to do consistently - and, unlike a job or traditional small business, ridiculously easy to stop.

 

[Tex2]

About 2/3's of the new IBOs get out (most of them do very little) the first year, about 1/3 of what's left of them the next, etc., so depending on how you count turnover rate, I think the turnover rate would be lower without the tool scam, as people like your friend wouldn't be going bankrupt. Instead, they would make a net profit much sooner and, on average, stay in longer.

 

[Tex2]

I didn't say low turnover, I said lower turnover. In direct sales, turnover of 100% is not all that unusual.

Leaving aside reasons like overhyping by reps, etc I think the major reason for high turnover is that people mistake simple for easy and easy tasks for easy business.

The Amway model is simple and effective, and the work per se isn't hard. But as in most "sales" jobs, at least 90% of what you do gets little or no result. People psychologically have difficulty dealing with this as it feels like constant failure and rejection when it's not. The amount of hours to be put in is also relatively small - "easy" - compared to most things in life, especially other small businesses. But it's not easy, because to build a significant income you usually you have to do this on top of your "normal" life for months or years.

So while it seems simple and even easy when you join, the reality is that it's hard to do consistently - and, unlike a job or traditional small business, ridiculously easy to stop.

While the above is all true, the major reason for high turnover is the tool scam.

 

[NewtonTrino]

I think all of Icerats argument about how great the business are sound good on the surface. However, the proof is in the pudding. Amway as a business simply is not a good place to invest your time compared to almost anything. If it worked we wouldn't be having this discussion.

 

[cyborg]

Although this is not my statement, I have noticed you seem to enjoy running in circles. My answer addressed your statement. Nutrition is a HUGE and growing market

I don't believe I disagreed with this - I'd have a personal problem shifting nutritional products and I certainly wouldn't be using them.

Are you really going to resort to such silly questions?

Your own words indicate the actual product is secondary to the concept of Amway. This is a problem if it is being presented as an opportunity to buy lower cost goods since that would mean the value of the proposition is inherently tied to what goods are available.

You can't continually bait-and-switch between the product and the MLM.

 

[Tex2]

I think all of Icerats argument about how great the business are sound good on the surface. However, the proof is in the pudding. Amway as a business simply is not a good place to invest your time compared to almost anything. If it worked we wouldn't be having this discussion.

It doesn't work because of the tool scam. icerat/insider/ibofb doesn't like talking about the tool scam.

 

[Tex2]

I don't believe I disagreed with this - I'd have a personal problem shifting nutritional products and I certainly wouldn't be using them. ---- Good, at least you agree you are running around in circles. Why would you have a "personal problem" shifting nutritional products? Are you paid more to use the ones you use currently? Do you have proof your current products are better, or so much cheaper for similar quality? Or is there another reason why you "certainly wouldn't be using them?" This is an example of a reason I gave above for not being willing to succeed.

You can't continually bait-and-switch between the product and the MLM. ---- He's not. He is bait-and-switching between Amway and the tool scam. A bait-and-switch is where you don't mention the "switch", and he mentions both product and MLM. What he doesn't mean is the tool scam, that's what makes it the "switch."

 

[icerat]

I don't believe I disagreed with this - I'd have a personal problem shifting nutritional products and I certainly wouldn't be using them.

Then it's clearly not a sensible option for you! However, I do encourage you to research what Nutrilite does and their philosphy. You may find it different to what you think. I'm a converted nutritional skeptic myself.

Your own words indicate the actual product is secondary to the concept of Amway. This is a problem if it is being presented as an opportunity to buy lower cost goods since that would mean the value of the proposition is inherently tied to what goods are available.

Ok, now your mixing individual methods with the model. Apart from the obvious volume discounting benefits inherent in any distribution business, I do not promote Amway as a "cheaper way to shop", nor do I encourage others to do so, and neither does Amway for that matter. Indeed I did a blog post on some of the problems of that approach last year - ABOs - please stop selling Amway as a way to save money

Products do matter since that's where all cashflow comes from. It doesn't matter how good your business model is if the goods or services offered are lousy or otherwise not suited to the MLM model - the whole thing inevitably fails; and I'll be the first in line to say there's an awful lot of startups that use the MLM model to push crappy goods. And they fail. Bad products does not mean a bad business model, it just means, in that instance, a bad business.

You can't continually bait-and-switch between the product and the MLM.

Where's the bait and switch? Both are important, but the specifics of the products are not important to the model. All that's necessary is a model that works and sufficient market demand for whatever you're offering.

 

[cyborg]

In order to make it perfectly plain for you: nutritional supplements are essentially a scam in and of themselves marketed to the public at large despite any demonstration of efficacy. Now if you have an issue with this you should remember that this is a skeptics board and not an Amway board and that I for one don't really care what your opinion of nutritional products is.

So selling Amway on the basis of "higher quality" useless items will not wash with me and nor has it done so with anyone else. A fact that you seem to be unable to process.

This is an example of a reason I gave above for not being willing to succeed.

Well I wouldn't be willing to succeed in the arms trade or illegal drug trade either.

Is "lack of morals" a required quality? Is that a quality you possess?

A bait-and-switch is where you don't mention the "switch", and he mentions both product and MLM.

Yes - but there is no presented coherence between these concepts.

 

[Tex2]

Then it's clearly not a sensible option for you! However, I do encourage you to research what Nutrilite does and their philosphy. You may find it different to what you think. I'm a converted nutritional skeptic myself. ---- Now if we could only convert you from being an ethical and moral skeptic....

Ok, now your mixing individual methods with the model. Apart from the obvious volume discounting benefits inherent in any distribution business, I do not promote Amway as a "cheaper way to shop", nor do I encourage others to do so, and neither does Amway for that matter. Indeed I did a blog post on some of the problems of that approach last year - ABOs - please stop selling Amway as a way to save money ---- Amway to prospects is what they see, and many of them see the LCKs promoting Amway as a "cheaper way to shop", Amway is aware of this (or should be) and turns a blind eye. You are being at best intellectually dishonest, at worst a LIAR.

Products do matter since that's where all cashflow comes from. ---- Another lie. Most cashflow come from the tool scam. 99% of IBOs pay into the tool scam, so they have a net loss. The LCKs double dip, Amway plus tool scam profit.

It doesn't matter how good your business model is if the goods or services offered are lousy or otherwise not suited to the MLM model - the whole thing inevitably fails; and I'll be the first in line to say there's an awful lot of startups that use the MLM model to push crappy goods. And they fail. Bad products does not mean a bad business model, it just means, in that instance, a bad business. ---- This is not consistent with your earlier "unless there's a demand for them" statement. But why ask a liar to clarify?

 

[cyborg]

It doesn't matter how good your business model is if the goods or services offered are lousy or otherwise not suited to the MLM model

the specifics of the products are not important to the model. All that's necessary is a model that works and sufficient market demand for whatever you're offering.

and I'll be the first in line to say there's an awful lot of startups that use the MLM model to push crappy goods.

Is quality relevant or not?
Does market demand trump quality?
How is a good or service suited to MLM? Is is simply market demand or quality?
Why is a MLM relevant at all?

I'm not seeing a consistent message here.