Amway TV ad

[Porkchopjim]

Believe it or not, not everything is on ebay, not everybody buys from ebay, and price isn't everything. I hope one day you'll stop being dishonest in your claims about what I say, which was never that "it's not hard for customers to get products at reduced ... pricing."

Don't go jumping off the deep end on my account.

As for 'reduced pricing' – there is nothing in there that says 'eBay'. IBOs are free to set their prices at whatever they want. Old Tex offers to sell products at IBO cost. Higher volume IBOs could offer more than that.

Then again, there are IBOs desperate to get something back after reaching their 'goal' and will dump stuff on eBay, but that's not the point.

Significant numbers of independent judges recommending Amway products as good value isn't evidence there might be legitimate demand for the products. Uhhuh. The recommendations of respected experts is one of the things that drives consumer demand. You running out of straws to desperately clutch to yet?

“Might” is a word with lots of wiggle room, isn't it? Well, it is in the real world. Now, I know that word meets your 'scientific standards' when it comes to overpriced vitamins, but again that has little to do with reality.

I've already given numerous price comparisons on this thread. No need to prove you wrong again.

Other folks have already sufficiently dismissed that particular piece of propaganda you offered. All you managed to do is show that you have to pick extravagantly priced products to make Amway look good.

What dismal performance? The evidence suggests the great majority of people who actively pursue the business plan for the necessary time earn decent incomes. There's nothing dismal about it.

We'll just use your own words against you again:

In the US, only 12.9% of registered IBOs are earning volume bonuses outside their own personal purchases.

The evidence suggests that the great majority of people who actively pursue the business plan end up broke and disillusioned.

Unless of course you want to twist the statistics by continuing your hypocrisy that the same group of people who join to get distributor pricing - which you think somehow provide evidence there's little demand - should also be considered as actively building the business and evidence of low success! Talk about spin!

Given the introduction and focus of 'Showing the Amway Plan' – it's not the products that get people signed up as 'business owners.' It's the chance to make income from owning a business. At the end of that first meeting and decision to join, brand new IBOs know a heck of a lot more about the business than they do the products.

What's one of the first recommended things a new IBO does? BUY PRODUCTS SO HE CAN GET TO KNOW THEM.

The idea that IBOs become IBOs just to buy products is idiotic. They end up that way - because they can't sell them or sucker anyone else into joining the pyramid. Spinning Amway's failure as a plus seems to be your MO.

But let's review some facts about Amway again -

1. #2 largest direct selling company in the world with US$8.2billion in sales.

With overpriced products and 'business owners' trying to buy their way to financial freedom, that's a pretty good scam they got going there.

2. Deloitte Touche Global Power in Retailing

Beaten soundly by “BJ's Wholesale Club” (ranking – 95, Amway – 114, although Amway DID beat “Pick and Pay Stores” of South Africa!)

3. One of the largest private companies in the world

Amway is very successful at selling products to its consumers: IBOs.

4. #1 Health & Beauty Internet Retailer
5. #1 best selling Nutritional brand in the world

Based on dollar figures of overpriced products bought and consumed by 'business owners.' We've been through this before.

6. #4 best selling prestige cosmetics brand in the world

"Prestige" doesn't happen to be one of the categories. That would be you making things up.

7. Readers' Digest Most Trusted Brand (Nutritional Supplements) 2005,2006,2007,2008,2009
8. Readers' Digest Most Trusted Brand (Water Treatment Systems)

I love the 'funny but true' stories they have! That's a powerhouse endorsement right there!

9. ConsumberLabs - Nutritional supplements, Most Satisfied Consumers 2005, 2006, 2007, 2008, 2009.

Customers being IBOs scarfing those vitamins to make PV. These are the same folks who fell for the 'Perfect Water' demonstrations. No bias there – asking the sales crew if they are satisfied with the products they try to sell.

Seeing as Amway Global (North America) has been stagnant or dropping in the last 5-6 years, how on earth does someone who sticks with the plan long enough 'make it' without a corresponding failure at the same level. They don't. Zero sum.

But that doesn't matter. All you have to have is someone who made it once to get their picture in the magazine - proof it works! If they included all those folks who 'stuck with it' but no longer qualify to get their picture in the magazine - that would be a REALLY big magazine.

Still waiting on that Amway secret document that both supports and refutes portions of the TEAM complaint.

Despite Icerat's protestations - Amway does indeed get to define who an "Amway Business Owner" is. Amway crows about 3M of them. Whatever the resulting tax actions come of that are irrelevant. Seems Icerat insists on portraying Amway and its business as something even Amway doesn't say it is.

 

[NewtonTrino]

All of this is just semantic wrangling over pointless nothingness.

What really matters is how much money can you make when you do try to make money in it. So far I've seen little to no evidence that anyone with a smallish business can make any kind of profit. Nobody can even produce a business plan!

 

[icerat]

What really matters is how much money can you make when you do try to make money in it. So far I've seen little to no evidence that anyone with a smallish business can make any kind of profit.

Yes you have, you've just chosen to ignore it.

Nobody can even produce a business plan!

Producing full business plans is a massive undertaking. The current one I have for another business I'm launching runs to well over 100 pages. A business plan for a startup Amway business requires nowhere near that work or detail, but I'm pretty certain that anything less would be rejected by you as insufficient. Not to mention that a business plan for an unspecified Amway business, with no idea of the individuals goal or circumstances (not even which country they might be in!) is simply impossible to develop.

So nice job - ask for the impossible then complain you don't get it and offer it as some kind of evidence of failure.

Give me something to work with and I'll consider coming up with an outline at least.

 

[Skeptic]

Using icerat's "logic", just about the best career choice anybody can make is to work part-time at McDonald's. After all, McDonald's is one of the largest and most successful companies in the world -- almost certainly larger and more successful than the company you work for right now. Certainly it's bigger and more successful than Amway.

Of course, just because the company makes money hardly means the people who work for it do. In McDonald's case, they -- by and large -- only make minimum wage, or slightly more.

H'm -- on second thought, at least working at McDonald's means you do make that minimum wage. In Amway, you don't even make that. Certainly a part-time job at McDonald's would be a step up, financially, to most Amway "Business" (ha!) owners.

It would also be a step up in terms of self-respect and usefulness. Working at McDonald's is filling a job doing something -- making and selling hamburgers -- that there is actually a demand for. Practically nobody except those in the Amway pyramid ever buy Amway's crap.

So perhaps taking a part-time job at McDonald's is what the average Amway guy should consider, after all.

 

[Porkchopjim]

I submitted this before any potential Icerat response was posted, but let me see if I can assuage some of Icerat's frustration:

Your (Icerat's) references of awards and the dollar amounts of products that Amway sells are not disputed. But, they in no way indicate any level of true demand for the products.

It's the equivalent of saying that Christmas – which we can for this example all agree actually does exist – proves the existence of Santa Claus. And there's a LOT more proof of the existence of Santa Claus then there is of actual demand for Amway products: books, pictures, movies, stories, paintings, poems and the best proof of all - even to this day I get presents from 'Santa.' In fact, I see him probably 10-20 times each year around Christmas time. He gets a lot of credit for the amount of money that Christmas brings in – but most people know where the money really comes from.

In fact, if you take a room full of people split between those who believe in Santa and those that believe in true market demand for Amway products, I think the level of business acumen between the two would be pretty even.

Let me back that up with some common references we are both familiar with from your Prague trip:

1. Tex. He still thinks, after 16 years of intensive Amway training, that his self-consumption rebate check is profit. He makes sure to reinforce that to anyone who might be interested in 'doing business' with him. Thankfully, that doesn't occur any more – but it did and it may again. Also, he just recently endorsed buying 100PV-300PV of products from yourself in order to provide a good example to downline to do the same. That's Santa Claus demand right there.

2. Bridgett. One of the IBO exemplars. She did not know that you do not pay taxes on that portion of your Amway check that is from your personal consumption. When told that, she didn't even know how to figure out what portion that was! How long had she been an IBO at that time? 2 1/2 years at least?

Which means: she has been thinking, and saying, that she is successful and profitable without ever knowing how much, if any, profit she was making.

She's a system IBO, too, isn't she? Seems that would be something the 'training system' might slide your way after 2 1/2 years. No need to rush, after all! But, as proven from the DISMALL PERFORMANCE of IBOs and their understanding of THEIR OWN BUSINESSES - the systems perpetuate the existence of Santa Claus.

3. Then there's you, who has never built an Amway business to a level where it provides any sort of reliable income so has not direct knowledge of how easy or hard that is - yet you take the word of people who don't even know if they are profitable or not as gospel truth that Amway works.

4. The Big A I have nothing for or against.

5. Dave wins first place for business acumen because he quit.


All your 'awards' and 'sales' prove the existence of Santa Claus as much as they do of real demand for Amway products.

Perhaps your tagline needs to be amended as such:

"The vast majority of Amway products are purchased by consumers who do not know that it is to their economic disadvantage to do so, because they are taught the opposite and called 'Amway Business Owners'."

 

[icerat]

Let's just summarize and be done with it.

Skeptic says "Amway sucks - because I say so"
PCJ says "Amway products sucks - because I say so"
Newton Trino says "Everybody in Amway around the world are crooks - because I say so"

And that's pretty much the extent of the argument.

Which of course cannot be argued against with mere triflings like facts and independent expert judgements.

I'll bow out again now and let you mislead folks for god knows how many more posts before I give up and correct the misinformation again.

 

[Skeptic]

If every time you went to McDonald's...

...the cashier told you how GREAT it is to work for McDonald's,
...emphasized it is one of the biggest corporations in the world,
...asked you if you ever considered joining McDonald's,
...ranted against those LOSERS and QUITTERS who worked for McDonald's as teenagers but couldn't see the GREAT OPPORTUNITY of continuing to work there,
...was really, really proud of the great amount of money made in McDonald -- not by him, of course, but by the CEO and a few other top brass,
...read nothing but McDonald's company magazine,

If in addition,

...you would only ORDER the hamburger, it would arrive in the mail in a week or two,
...and the hamburgers cost about five times as much as they do now,

THEN McDonald's would, indeed, be like Amway, like the Amway folks claim it is.

In that case, of course, nobody except other McDonald's people would bother to go there -- why buy incredibly expensive products in an inconvenient way while being badgered about what a loser you are for not joining this "great opportunity", when you can get practically the same product in the burger king down the street?

In that case, also, the McDonald's owners would give their company all kinds of different names -- "Joe Schmoe's Hamburgers" -- to disguise the fact they're actually a McDonald's, since the very name of the company would get people running the other way.

This is exactly the situation in Amway, isn't it? The only people who buy their crap are other Amway people, and when talking to non-Amway folks they never say "I am an Amway IBO" -- it's always "I'm an independent business owner", "I own my own business, would YOU like to too?", etc., to hide the fact they're Amway folks.

 

[NewtonTrino]

Skeptic nails it.

Icerat, it's a scam and the people running it are crooks. Just my opinion and the opinion of thousands of others. Come back when you've actually make a buck out of this scam.

 

[Tex2]

Skeptic didn't "nail" anything. You can't have a discussion about Amway without including the tool scam. Also, YOU GUYS HAVEN'T SEEN THE RECENT PRICE REDUCTIONS - THEY ARE SIGNIFICANT!!!

 

[metzomagic]

I have found the numbers that prove it's a scam!

People, hi,

NewtonTrino and Skeptic are emphatically correct in their assertions that:

1. Amway/Quixtar is a pyramid scheme, whereby a very small percentage at the top of the pyramid make nearly all the money. For the rest it's a mug's game where they lose money every month pursuing an elusive dream. The harder you pursue it, the more you lose (that is, unless you can manage to weather out the losses for long enough to become a Direct).

2. Nearly all the money at the top is made from the sale of tools and functions. The further you get up the hierarchy, the higher the ratio of tools money to money made actually selling Amway product.

3. The tools aspect of Amway (a.k.a The System) is carefully hidden from the low level distributors. If they knew that all that money they spent on (mostly useless) tools and functions had the sole purpose of lining the pockets of the top level pins, they either wouldn't sign up for Amway in the first place, or would refuse to buy the tools or attend the functions!

4. Amway products are way overpriced due to the number of middlemen necessitated by the MLM structure. As such, virtually the only people that buy them are Amway distributors, or relatives and friends that have been pressured into doing so. I remember reading earlier in this thread that sales to non-distributors only accounted for 3 - 4 percent of total sales.

Enough said there. It's already been said many times in this thread.

Why I'm posting is... we skeptics have been looking for numbers to prove the above, and icerat hasn't exactly been forthcoming. I suffered through the first 20 pages of this thread to ascertain this. BUT, I remember reading the actual figures posted by an Emerald about 5 years ago. So finally this evening I remembered the guy's last name, googled it, and it was the very first result:

http://www.amquix.info/probst/system.htm

He's actually changed his last name on the pages (to avoid harassment) since I read them, but there are photos all over the place so I really don't see the point. The pages are from 1997, but they are *very detailed* (and very damning!). I'm sure you can extrapolate the numbers to today.

Also some very interesting stuff in there at the end about what happens when you try to buck the system. Reminds me a lot of Scientology.

Enjoy. Those pages really do blow the cover on that whole sordid mess that is Amway/Quixtar

Regards,
MetzO'Magic

 

[icerat]

People, hi,

NewtonTrino and Skeptic are emphatically correct in their assertions that:

Edited by Gaspode: 

Edited for moderated thread

1. Amway/Quixtar is a pyramid scheme,

False. Pyramid schemes are illegal. Amway was investigated by the FTC in the 70s and found not be a pyramid scheme. Similar investigations in other countries have come to the same conclusion. The myth however refuses to die.

whereby a very small percentage at the top of the pyramid make nearly all the money.

False. Top achievers pick up between 0 and 4% for most of the sales volume in their network. The other 25% in bonuses, plus 25-35% in retail markup, goes to those "lower down". (source: Amway Business Compendium, Amway Sales & Marketing Plan)

For the rest it's a mug's game where they lose money every month pursuing an elusive dream. The harder you pursue it, the more you lose (that is, unless you can manage to weather out the losses for long enough to become a Direct).

False. The majority of IBOs don't have any expenses, for those that do the expenses do not increase significantly as income goes up. Furthermore the term "direct" hasn't been used for a decade. Goes to show how up to date you are.

2. Nearly all the money at the top is made from the sale of tools and functions. The further you get up the hierarchy, the higher the ratio of tools money to money made actually selling Amway product.

Partially False. While this may have been (and still be) the case for some leaders, typically those who were selling tools to more than just their Amway group, it is rare today even for them. In the largest single "system" in the world, "tool income" for Diamonds and above averages around 15% of total Amway-related income. Furthermore, just like with the Amway business plan, the larger your volume and the further away you are from the end-user sale, the less money you make, not more.

3. The tools aspect of Amway (a.k.a The System) is carefully hidden from the low level distributors. If they knew that all that money they spent on (mostly useless) tools and functions had the sole purpose of lining the pockets of the top level pins, they either wouldn't sign up for Amway in the first place, or would refuse to buy the tools or attend the functions!

False. The nature of the "tool system" has been advised to new IBOs for well over a decade and is highlighted on the distributor contract and various websites as well as corporate magazines. It is no secret.

4. Amway products are way overpriced due to the number of middlemen necessitated by the MLM structure.

False. The "number of middlemen" is about the same as traditional distribution (source: FTC vs Amway), and furthermore, as numerous price comparisons given on this thread have shown, the products are generally priced competitively. (see links earlier)

As such, virtually the only people that buy them are Amway distributors, or relatives and friends that have been pressured into doing so. I remember reading earlier in this thread that sales to non-distributors only accounted for 3 - 4 percent of total sales.

False. You apparently didn't bother reading most of the thread. 3-4 percent refers only to customer volume tracked through the Amway Global website. It does not track customers who register for distributor pricing (but are not acting as distributors) and does not track customer purchases direct from distributors rather than via the website. (source: Team vs Quixtar, California). As shown earlier, the majority of sales are to people who are not "participants in the scheme".

Enough said there. It's already been said many times in this thread.

Indeed. Pity you ignored most of the thread. Can anyone say "confirmation bias"?

Why I'm posting is... we skeptics have been looking for numbers to prove the above, and icerat hasn't exactly been forthcoming.

I've supplied links to price comparisons, lists of independent books about Amway, independent academic studies on direct selling, and court cases with statistics.

How is that "not exactly been forthcoming"?

In contrast, NT, Skeptic, and now yourself have done little but provide opinions, a few anecdotes, and a mass of hasty generalizations.

I suffered through the first 20 pages of this thread to ascertain this. BUT, I remember reading the actual figures posted by an Emerald about 5 years ago. So finally this evening I remembered the guy's last name, googled it, and it was the very first result:

http://www.amquix.info/probst/system.htm

Surprise, surprise, Probst was a member of the same system NT has experience with. Another data point to support my position. When do you guys bring logic in to your decision making? Every single time you quote some "evidence", it comes from the same group and it's offshoots - representing a minority of Amway.

He's actually changed his last name on the pages (to avoid harassment) since I read them, but there are photos all over the place so I really don't see the point. The pages are from 1997, but they are *very detailed* (and very damning!). I'm sure you can extrapolate the numbers to today.

(1) Why do you think you can extrapolate this to all the other Amway groups in the world?

(2) Why do you think you can extrapolate this to today, when Amway has made significant changes to try and bring the type of things Probst talks about under control?

Also some very interesting stuff in there at the end about what happens when you try to buck the system. Reminds me a lot of Scientology.

Enjoy. Those pages really do blow the cover on that whole sordid mess that is Amway/Quixtar

Oh yeah, an 11 year old website, from one of tens of thousands of Emeralds with experience in just one small part of the Amway world

I again ask, and I assume I'll get no response, as usual -

(1) Why do all of these stories and complaints come out of just one Amway group, a minority of Amway?

(2) Can any of you "Amway skeptics" explain why, if all Amway is the same, these complaints don't come out of all the other Amway groups, a majority of Amway?

(3) Can any of you "Amway skeptics" explain why, if all Amway is the same and STILL the same, there has been virtually none of these types of complaints have been made by anyone with actual experience during the last decade, despite the internet making it easier for them to do so?

 

[Porkchopjim]

Skeptic didn't "nail" anything. You can't have a discussion about Amway without including the tool scam.

We have discussed the tool scam. You failed to read it.

Also, YOU GUYS HAVEN'T SEEN THE RECENT PRICE REDUCTIONS - THEY ARE SIGNIFICANT!!!

You already said that. I already said "So what?" All that means is IBOs now have to buy more products to make their 300PV. Perhaps they're only significant to you and other cultists? It's just another ploy to make you feel good about buying your own products.

 

[Porkchopjim]

False. Pyramid schemes are illegal. Amway was investigated by the FTC in the 70s and found not be a pyramid scheme.

With IBOs lying about how much they actually sell to people who aren't either themselves or other IBOs, Amway is found not to be a pyramid scheme. With only 3.4% of the products being sold outside of the pyramid, the vast majority of 'compensation' comes directly out of the pockets of the newest members.

False. Top achievers pick up between 0 and 4% for most of the sales volume in their network. The other 25% in bonuses, plus 25-35% in retail markup, goes to those "lower down". (source: Amway Business Compendium, Amway Sales & Marketing Plan)

Percentage does not show the actual dollar amounts involved. Nonetheless, at 100PV (3%) bonus rate, a full 1000% MORE compensation gets paid upwards. Given your other excuses about 'not lots of middlemen' - 1000% paid upwards certain is the vast majority of money.

False. The majority of IBOs don't have any expenses, for those that do the expenses do not increase significantly as income goes up. Furthermore the term "direct" hasn't been used for a decade. Goes to show how up to date you are.

Of course. The 'majority' of IBOs don't do anything except kiss their registration fee goodbye. So – that's a loss that never gets recovered. The ones 'trying' to do something get even further in the hole. As shown earlier (by me) – MOST don't even know that. Their 'systems' don't seem to teach them that.

Partially False.

We'll take that as an admission of guilt and assign “Completely True” to it.

False. The nature of the "tool system" has been advised to new IBOs for well over a decade and is highlighted on the distributor contract and various websites as well as corporate magazines. It is no secret.

The extent of the 'nature' is a disclosure that says SOME people may make SOME profit from the tools that are sold to IBOs. What the new cult member does not realize is that their sole purpose is to buy tools to provide 'profit' to the heads of those 'systems' while buying their own products in order to make the 'business' look like it works.

False. The "number of middlemen" is about the same as traditional distribution (source: FTC vs Amway), and furthermore, as numerous price comparisons given on this thread have shown, the products are generally priced competitively. (see links earlier)

The 'number of middlemen' still suck up 34% of the price a new IBO pays for his products. The products have been shown to be grossly overpriced.

False. You apparently didn't bother reading most of the thread. 3-4 percent refers only to customer volume tracked through the Amway Global website. It does not track customers who register for distributor pricing (but are not acting as distributors) and does not track customer purchases direct from distributors rather than via the website. (source: Team vs Quixtar, California). As shown earlier, the majority of sales are to people who are not "participants in the scheme".

Using that same reference you try to abuse, the vast majority of sales ARE 'participants in the scheme' – even by your twisted definition as 'distributor pricing (with the associated additional price cuts for volume) are in fact participants – and benefactors – of the scheme.

(1) Why do you think you can extrapolate this to all the other Amway groups in the world?

Because all other Amway groups are modeled after the 'evil one' and their purpose it to provide a cover for 'tool system profits.'

(2) Why do you think you can extrapolate this to today, when Amway has made significant changes to try and bring the type of things Probst talks about under control?

The largest being 'accreditation'? That you even scoff at? I guess what you say in 'public' is different than what you say in 'private.' That would be another example of 'lying to make Amway look good.'

((1) Why do all of these stories and complaints come out of just one Amway group, a minority of Amway?

(2)Can any of you "Amway skeptics" explain why, if all Amway is the same, these complaints don't come out of all the other Amway groups, a majority of Amway?

They do come out of all other groups. Some groups are also just better at controlling their people (I.e. - failure is YOUR fault). Also, I suppose since no murder victims ever complained about their situations on the internet, we can ignore that, too.

How come there aren't hundreds of thousands of Amway proponents on the web saying it's all not true? Hmm... If we're going to use that as a measurement of who's right - you lose with no contest.

(3) Can any of you "Amway skeptics" explain why, if all Amway is the same and STILL the same, there has been virtually none of these types of complaints have been made by anyone with actual experience during the last decade, despite the internet making it easier for them to do so?

Seeing as Quixtar is only a decade old – and many of the complaints are about Quixtar (nee Amway) – it's not easy to explain how there have been 'virtually no' complaints about 'Amway' in the last decade unless you are being untruthful. I know which one it is!]

 

[bookitty]

Icerat, you raise some interesting points.

My cousin said pretty much the same things about Arbonne (an Amway-type beauty product company). More so when she got back from one of their conferences, and doubly so when she tried to get me to join her in selling Arbonne.

There is one thing I just don't understand, perhaps you could help me out. Arbonne (and presumable Amway) make some decent products, priced at the mid range of the market. There is no reason why there shouldn't be a demand.

So if they are making a product that is salable, why the MLM? Why don't they just put it on the shelves, open small retail outlets etc? Why do they need individuals to push these products?

 

[icerat]

So if they are making a product that is salable, why the MLM? Why don't they just put it on the shelves, open small retail outlets etc? Why do they need individuals to push these products?

Direct sales is actually a much older, more traditional method that predates our modern obsession with fixed retail outlets substantially. There's no "need" per se, it's just a different way to market. Spend your money on mass marketing or spend it on incentive programs.

The model has advantages and disadvantages. The biggest disadvantage is of course the problems of field management and reputation control - it's much easier to control your "message" through your own advertising and limited fixed retail locations than it is through an independent sales force. The prime retailing advantage is a better ability to connect with a consumer, demonstrate products, allow them to test them, and explain what differentiates them from others in the market place. With products like Amway's Nutrilite, or Arbonne for that matter, it allows the company to "tell the story" behind the product and why it's better than traditional nutritional supplements - something very difficult, and expensive, to do with mass marketing. With cosmetics and skin care, another popular staple in the direct sales world, it allows consumers to spend more time testing and trying products than is the case with fixed retail outlets.

The approach works. Nutrilite is #1 globally in nutritional supplements, about 3 times the size of it's nearest competitor. Avon is I think #4 in all cosmetics and skin care sales, Amway's Artistry is #9 in all, and #4 in "prestige" cosmetics. Other direct sales brands like Mary Kay and Oriflame are also in the top 20.

For a company (or distributor/retailer) starting out, it's also a very cost effective way to get a product to market, since the majority of your marketing costs aren't incurred until after you've made a sale. Bringing a new skin care product successfully to market would costs tens of millions of dollars using mass market advertising. With direct sales and a multi-level compensation plan that money isn't spent until after it's been generated through sales. As noted by the FTC in the case against Amway in the 70's, it allowed a then small company called Amway to successfully break into the well established detergent market with new, environmentally friendly products. That would have been virtually impossible for Amway to do through mass marketing.

 

[metzomagic]

Everyone just ignores the elephant in the room?

Interesting response. Did anyone read the expose regarding The System that was linked to here:

http://www.amquix.info/probst/system.htm

I'm flabbergasted. No comments regarding the actual figures, anyone?

 

[NewtonTrino]

The only things amway are known for are scamming people and bad john tesh commercials.

 

[Porkchopjim]

There is one thing I just don't understand, perhaps you could help me out. Arbonne (and presumable Amway) make some decent products, priced at the mid range of the market. There is no reason why there shouldn't be a demand.

That's icerat's main contention: there should be demand. His problem is that he can't prove it, because there is little to no demand outside the pyramid itself. Many MLMs do have substantial demand outside of the pyramid – see Avon. Some don't – see Amway.

Spend your money on mass marketing or spend it on incentive programs.

Seeing as the incentive programs are paid by the people who buy (and consume) the products – overwhelmingly the Amway 'business' owners themselves – Amway really doesn't do that choice.

But it's certainly to the advantage for Amway to do it the way they do: they don't suffer the risk or up-front cost of traditional marketing (which the businesses that do hope to recoup in sales). Amway has a captive customer base which has proven it will buy anything and everything that Amway puts out including overpriced vitamins and magic water. Amway 'business' owners, if they want to pretend to have any business at all, need to sell something...so they sell it to themselves. This has made Amway lots of money.

The biggest disadvantage is of course the problems of field management and reputation control - it's much easier to control your "message" through your own advertising and limited fixed retail locations than it is through an independent sales force.

Amway's 'sales force' is independent only because Amway, until very recently, didn't spend a single dime in educating or training them. Part of the smokescreen reforms touted by icerat are Quixtar University (last time I checked – three whole classes, with information so generic that it's hard to fathom why the revolution hasn't started already). The other part of the smokescreen are 'product conventions' that Amway hosts...although that only costs the IBO $25 to attend (good for an Amway product coupon!). Pretty sure Amway isn't losing much money that way, either.

Icerat's main contention is that there is nothing wrong with Amway except for its bumbling, embarrassing and sometimes outright criminal 'independent sales force.' Of course, there are the critics, who were CRUSHED by the courts when TEAM stole all their complaints (because none of the stuff TEAM claimed could have come up independent of the evil critics) and those complaints were proven false by a court of law! Well, not really, but that's his story!

The approach works. Nutrilite is #1 globally in nutritional supplements, about 3 times the size of it's nearest competitor.

At about 8 times the price and considering that the 'business owners' themselves are the ones consuming this product, that's not really something to crow about. But, you take what you can get in Amway.

For a company (or distributor/retailer) starting out, it's also a very cost effective way to get a product to market, since the majority of your marketing costs aren't incurred until after you've made a sale. Bringing a new skin care product successfully to market would costs tens of millions of dollars using mass market advertising. With direct sales and a multi-level compensation plan that money isn't spent until after it's been generated through sales.

Other MLMs seem to do both. They actually have customers outside the pyramid – Avon and Mary Kay sure do. Given the vast efficiencies that icerat claims – you'd hope that Amway's products weren't so grossly overpriced. But, it doesn't really matter. Amway products are not marketed outside of the pyramid because they've found a way to survive by selling within the pyramid just fine.

 

[Tex2]

Interesting response. Did anyone read the expose regarding The System that was linked to here:

http://www.amquix.info/probst/system.htm

I'm flabbergasted. No comments regarding the actual figures, anyone?

That site, and many others, are the basis of my site, which shines a bright light on the tool scam: http://texsquixtarblog.blogspot.com/2008/03/9-steps-of-truth.html

If you or anyone else would like to discuss this issue, my Skype ID is texlckbuster, and I live in the Central time zone. Propose a couple of days/times on my site, here: http://texsquixtarblog.blogspot.com/2009/01/talk-to-tex.html

 

[icerat]

Interesting response. Did anyone read the expose regarding The System that was linked to here:

http://www.amquix.info/probst/system.htm

I'm flabbergasted. No comments regarding the actual figures, anyone?

What's to comment? It's a decade old "expose" of the one system which has generated all significant "tools" issues and has been known about for years.

But since you asked about the figures, here's some comments. He says regarding Weekend Seminar Ticket rebates -

As an Emerald, I receive about $10 per person. I’m guessing the Diamond bonus would be $20-50 per person

Note first of all that he's guessing. He doesn't know. I do know, for our system it's volume based, not pin based, and an Emerald would generally have enough volume that he'd be rebated $0 or $5 per ticket (after downline rebates were deducted) and a Diamond between $0 and $20, with most $15 and less. So on this one "income" alone, Emeralds who work with the org I work with make less than half what Probst was getting, and Diamonds a lot less than he was "guessing" - and this comparing figures nearly two decades apart. Inflation adjusted the difference would have been even bigger then.

With tapes he gives a rebate schedule that ranges from 30 cents to $1.10/tape at Emerald, based on maximum pin level ever achieved over "direct". As he mentions this means of course that if you reach a certain Amway pin level, you get this tape rebate forever, even if your Amway business shrinks - meaning "tool" income would become an increasingly larger proportion of your overall income. Indeed, it can even go up because if your say an Emerald and your downline Directs stop qualifying, you now get all of the rebate instead of having to hand some over to the dowline direct (an Emerald has at least three). Contrast this to the "system" I use, where the rebate scale is volume based. If your Amway group shrinks, your tool volume will also shrink, and so will your volume rebate.

Without going through a multitude of other differences between what he explains and how it differs with my experience, one thing makes it clear:

Probant states -

This makes my grand total income from the system at least $3500.00+ per month

In 2007 the average yearly tool income for an Emerald in the organisation I work with was only a little over $7000.

So Probant was making $42,000/yr "system" income, an Emerald today in a different system is making $7,000/yr "system" income.

Guys like Newton Trino will have you believe there's no difference in those numbers.

How can there be such a difference? Well, little differences all add up. First is things are a little cheaper. Next the profit is split amongst more people (pretty much anyone from "direct" (now called platinum) and above). Third is there's a lot less volume. Probant claimed something like 5000 tapes/month going through his business. An Emerald in our organisation would move at most of a quarter of that. Next is simple production quality and presentation seems higher in my organisation, with a variety of speakers from different groups all around the world, as opposed to hearing from your own upline, and professional audiovisual stuff handling everything. This of course leads to expenses being much higher. Probants group used (use?) directs and above to do all the work, unpaid. Our organisation employees hundreds of staff around the world to handle this stuff, so we can focus on building our Amway businesses. Of course, folk like Skeptic and Newton Trino would have you believe we abuse all these people and put them down for having jobs . Au contraire, we're enormously thankful for the work they do.

Finally, as an interesting aside, Probant lists his "upline" Diamonds from Crown Ken Stewart down as -

Stewart, Rummel, Maxwell, Collinsworth, Hellinghausen

He has numerous audios and photos and quotes of these guys on the site.

All of them were kicked out of Amway years ago.

But oh yeah, all "systems" are the same, nothing has changed, and Amway just turns a blind eye to it all.