Is Selling Amway Child Abuse?

[madurobob]

How do you explain average incomes excluding any income from training materials of over $600,000/yr.

Is that not "real money"?

First, note the source of that $600K figure and note there is no explanation of how they came to that figure. I'd like to see some other metrics from the data - median income, and the distribution across income levels. I'd also like to see something a bit more - um - independent.

Secondly, what makes you think that is excluding training materials ("tools")?

 

[icerat]

First, note the source of that $600K figure and note there is no explanation of how they came to that figure. I'd like to see some other metrics from the data - median income, and the distribution across income levels. I'd also like to see something a bit more - um - independent.

I'd like to see more data too, but note that at the higher levels (eg Founders Crown Ambassador and above) you're starting to talk about very small numbers of people, which means the data points start becoming identifiable.

As for "independence", there's no such thing as independent income data. Even individual audited data relies on the accuracy and honesty of people providing the data.

Note however that there are statutory requirements to provide some of this information. Lying about it would clearly be an extremely dumb thing for a 52 year old multi-national to do, particularly one that has a number of vocal critics.

Secondly, what makes you think that is excluding training materials ("tools")?

What makes you think Amway would have access to the private financial records of thousands of people and know what income they receive from other companies? I'm guessing you think Amway sells the BSM? Accept in limited situations they don't. From the brochure where the figures are provided -

*Includes compensation from Amway IBO Compensation Plan and Growth Incentives (GI) Program during 2009
*Amway does not compensate IBOs for BSM sales, nor does Amway receive compensation for BSM sales.

 

[marplots]

(1) It's irrelevant to the issue I was addressing. The claim was there's no "real money" from the Amway business.

(2) It's not even remotely true. Do you have any sources to support your assertion the average founders diamond and above has "10,000 workers under them" Or forget workers, how about 10,000 just registered under them?

Yes. You posted a link to the information. I read it. Here's the link: http://www.thetruthaboutamway.com/updated-amway-north-america-average-incomes/

It says Diamonds (those making over $600,000 on average) are .01% of the number of distributors. That's 100/0.01 = 10,000. I am stuck using the figures and links you provide. Did you not want me to do so?

 

[madurobob]

What makes you think Amway would have access to the private financial records of thousands of people and know what income they receive from other companies?

Thats the rub, isn't it? Amway knows full well the Tools market is what drives the business, but its not something they mention much, is it? Why is that, do you think?

And, if Amway does no know what income the Diamonds are receiving from the tools they market down line, they must also not know what costs are associated with each individual business (Diamond). So, is the 600K figure income, or is it revenue? There is a huge difference.

 

[icerat]

Yes. You posted a link to the information. I read it. Here's the link: http://www.thetruthaboutamway.com/updated-amway-north-america-average-incomes/

It says Diamonds (those making over $600,000 on average) are .01% of the number of distributors. That's 100/0.01 = 10,000. I am stuck using the figures and links you provide. Did you not want me to do so?

Not unless it was to prove you were clueless as to the business model. Diamonds are not discrete units and may (in fact, usually do) overlap.

 

[icerat]

Thats the rub, isn't it? Amway knows full well the Tools market is what drives the business, but its not something they mention much, is it? Why is that, do you think?

If you mean the "tools" help grow the Amway business you'll get no argument for me.

But claiming they don't mention the BSM business much? It's in pretty much every piece of literature for prospects, plus the business reference guide, plus the contract you need to sign.

Frankly it shouldn't be needed anyway. Seriously, does someone really need to be told that if someone sells you something they might be making a profit on it?

And, if Amway does no know what income the Diamonds are receiving from the tools they market down line, they must also not know what costs are associated with each individual business (Diamond). So, is the 600K figure income, or is it revenue? There is a huge difference.

Entirely depends on how you want to account it and how you want to define those terms. It's one source of revenue, the bonuses and commissions for sale of Amway goods and services either (retail) through their personalized website or (wholesale) to their downline after cost of goods and payments to downline are subtracted. It does not include retail profit not handled through the website, nor does it include any "tool" income, nor does it include expenses.

 

[MatildaGage]

The OP info does not sound like child abuse in any way, just a stupid financial decision and a culty corporation that maintains its relationships with its salespeople by convincing them to keep brainwashing themselves (tapes, seminars). That is not unlike other cults who succeed by first undermining a person's intelligence/knowledge, then insisting they correct it by constant retraining.

My only contact with Amway has been people with no ethical boundaries trying to get others to sell it.

I suspect most people lie about how much $ they make.

I can tell you I was briefly an Avon lady and it seems very similar. Lots of lying about how much $ you make. IRL you had to pay for your catalogs and makeup samples, and only made 10% commission, so I declared a loss on my income taxes that year. There was something about returns too--IIRC, Avon encouraged customers to return stuff if they weren't happy, but it was me who had to cover the cost [or at least I had to pay the shipping]. The only way to make more is to recruit a new salesperson to work under you in the pyramid. You had to sell quite a bit just to break even.

I have permanently boycotted Avon and Amway.

 

[marplots]

Not unless it was to prove you were clueless as to the business model. Diamonds are not discrete units and may (in fact, usually do) overlap.

You are right. I didn't know that more than one Diamond would profit from a single IBO. This is what you are saying, right? If I, as an IBO, sells something, more than one Diamond will get a piece? Is it because there might be more than one Diamond in my upline?

But that doesn't matter, does it? If Diamonds are, on average, .01% ( 1 to 10,000) then it wouldn't matter. Crank the numbers. One Diamond, 10,000 people -- what confused the matter was that these are average. Certainly there could be a Diamond with only 100 people under them, as long as it is balanced out by another that has 19,900. This is how averages work, right?

So we are back to the original thing I read in the link you provided. With the lack of progress here, I think I understand why it took you so much work to learn all the ins and outs of Amway. It seems like getting a grip on this consists of one step forward and then one back (or to the side).

Now I'm wondering how many new IBOs actually learn what they are getting into. Certainly someone would investigate any business they are thinking of signing up with. They may be smarter than you and I though and learn it more quickly. Or they might just trust someone who already knows.

 

[icerat]

You are right. I didn't know that more than one Diamond would profit from a single IBO. This is what you are saying, right? If I, as an IBO, sells something, more than one Diamond will get a piece? Is it because there might be more than one Diamond in my upline?

Not quite the way it works. Bonuses for Emeralds and above are generally taken out of entire corporate profits, not as a percentage of any particular sale.

But that doesn't matter, does it? If Diamonds are, on average, .01% ( 1 to 10,000) then it wouldn't matter. Crank the numbers. One Diamond, 10,000 people -- what confused the matter was that these are average. Certainly there could be a Diamond with only 100 people under them, as long as it is balanced out by another that has 19,900. This is how averages work, right?

Again, not quite. "Diamond" qualification is not strictly sales volume based. It's a recognition of how many separate "silver producer" teams you've developed - six to be recognized as a Diamond. One of those "silver producer" teams could actually be a Diamond themselves, indeed all six could be. Or none of them could be. And strictly speaking once a team reaches "silver" for Diamond, it's no longer "under them" at all, it breaks away, though the Diamond does get complicated.

The basics of the Amway model is volume discounting, but once you get to the top of the volume bonus scale, it does indeed get complicated. In traditional retailing what usually happens if someone you're supplying gets big enough to deal with a manufacturer directly, you simply lose them as a customer. Amway avoids this through various incentives.

So we are back to the original thing I read in the link you provided. With the lack of progress here, I think I understand why it took you so much work to learn all the ins and outs of Amway. It seems like getting a grip on this consists of one step forward and then one back (or to the side).

I think there's two separate issues with understanding Amway. First is that the basic model is exactly the same as normal retailing, just Amway handles the logistics. Unfortunately it's not explained that way. Second is that apart from certain contractual obligations, Amway independent business owners really are independent. They do pretty much what they want when they want. Some of them join together in large groups and work together in a systemised fashion, but there's many of these large groups. You can get to a seminar of 40,000 active, business building distributors in North America and you've still only seen a small part of Amway.

Now I'm wondering how many new IBOs actually learn what they are getting into. Certainly someone would investigate any business they are thinking of signing up with. They may be smarter than you and I though and learn it more quickly. Or they might just trust someone who already knows.

Well this is one of the reasons why legitimate MLMs offer extensive money back guarantees. You can give it a go, learning along the way, for 6 or 12 months and if you figure it's not for you, you can get your money back. At worst (unless you're a complete idiot and alienate all your friends) you've lost some time and gained some experience.

 

[Foolmewunz]

No, JoeCool, it's no more child abuse than an a philatelist with OCD is a child abuser. Not that said stamp collector, by our only definition, is necessarily NOT a child abuser, but it's not a cause/effect sort of thing.

Anyone who obsesses to the point of monomania on any topic that takes them away from their financial and emotional obligations to their family could be termed a child abuser in the framework of the OP. And in that framework, might that one parent be a child abuser - well, yes, if you accept the definition. But so could a model railroad building dad, or the dad who wants to build a seventy foot precisely scaled replica of the Taj Mahal out of marzipan. In short, some people are crap as parents.

 

[Minoosh]

I sold Cutco knives for a few weeks in the '70s - had to pay for the demonstration kit, which was $160 or so, and sold a couple of pairs of scissors and a paring knife. The thing is they are great knives! But I was a lousy salesperson. I had to trail the head Cutco guy on a couple of calls and one of the customers was a young woman desperate to get out of her commitment to buy the knives. It was all a bit too hard-sell for me, the whole culture. I did end up with a bunch of great knives though. Later I moved in with a roommate who also (surprise!) had a full set of Cutco knives ...

I imagine there are all kinds of sales schemes that play on the naivety of recruits. Neglect of children is abuse, and I suppose overwhelming faith in a no-win game could lead to neglect, but I don't know that I'd peg Amway as the culprit. Naivety is the culprit. If Mom or Dad are born suckers, someone will find a way to exploit them.

 

[NewtonTrino]

If amway people making $600k a year is common surely we can find one to come onto JREF and tell us all about it? Instead we get super amway defender who doesn't even have a successful amway business.

If you make $600k a year in bonuses I guarantee you make a lot more than that by selling "function" tickets, cd's and subscriptions to communication services etc.

For the record I don't consider the listed incomes to be all that great. If you are a good enough entrepreneur to do this then open a real company where you are building real value that you can sell.

 

[theprestige]

A better way to phrase the question could be "Can selling Amway under cult like influences lead an otherwise rational person to neglect or abuse their children under the pretense that they are doing good"? And I think the answer is "yes".

People who neglect or abuse their children aren't "otherwise rational".

Amway doesn't lead rational people to child abuse. Irrational people end up abusing their children, or selling Amway, or both, or neither but rather something else that showcases their irrationality (such as hoarding cats, poopsocking WOW, etc.).

Amway and child abuse are both symptoms, not causes.

 

[Joecool]

No, JoeCool, it's no more child abuse than an a philatelist with OCD is a child abuser. Not that said stamp collector, by our only definition, is necessarily NOT a child abuser, but it's not a cause/effect sort of thing.

Anyone who obsesses to the point of monomania on any topic that takes them away from their financial and emotional obligations to their family could be termed a child abuser in the framework of the OP. And in that framework, might that one parent be a child abuser - well, yes, if you accept the definition. But so could a model railroad building dad, or the dad who wants to build a seventy foot precisely scaled replica of the Taj Mahal out of marzipan. In short, some people are crap as parents.

Agreed. I think though, that Amway leader's teaching is often that you don't miss your kids while they're sleeping and that you're supposed to build the business in 2-5 years, go diamond, get wealthy beyond your dreams and make up for that lost time with your kids a thousandfold.

 

[madurobob]

Agreed. I think though, that Amway leader's teaching is often that you don't miss your kids while they're sleeping and that you're supposed to build the business in 2-5 years, go diamond, get wealthy beyond your dreams and make up for that lost time with your kids a thousandfold.

I'm no Amway fan, but that's not exactly my takeaway from what contact I've had with them. My good friend who went "all in" was in Florida. The organization there was very right wing and very christian. You were expected to sign up, work your butt off, and make lots of money. You were also told that your primary goal was to afford to get your kids into private school (because public education was a failed experiment in socialism) and to have your wife stay at home (because the bible says so, or something). Any man whose wife had a job or whose children were in public school was considered only partly a man.*

They expected to see you in church on Sunday and they expected your wife and kids (and, really, you needed to have a wife and kids) to join up with all the other Amway wives and kids and do the cute things wives and kids do when the men are out working. That is, form a nurturing community.

I found the political and religious aspects pretty sad, but the idea of community where kids were taken care of and specifically NOT neglected was a good one (if perhaps poorly executed).

* This made for interesting dinner conversation when my friend stopped by one fall with his family. He went into his bit about a man being only a partial man if his wife had a job, and how demeaning and emasculating it was, really, for any woman to have a job. I smiled and kept eating, knowing he was just trying on the ideas that were being drilled into him. My wife, however, went OFF! She's had a pretty successful carer and really enjoys what she does.. and has a bit of a temper. She let him know exactly how stupidly misogynistic those new ideas of his were. Her lecture was, I think, the beginning of his abandoning Amway.

 

[icerat]

Just so folk know, "joecool" is a well-known anti-amway blogger. He left Amway a decade ago yet remains obsessed with it, currently running 3 separate blogs (he's had others) and has made nearly 250 anti-amway blog posts so far this year alone. Many of them are attacks on me (I run a pro Amway blog), and I believe he came to JREF primarily because he wanted to troll me.

Anyway, madurobob, you'll be happy to know (as a left-leaning atheist and Amway supporter I certainly was) that several years ago Amway implemented an accreditation system for the various companies and organizations that run training and support systems for Amway people. Part of the accreditation contract requires them to agree to no proselytizing of religion or politics via their affiliation with Amway. That doesn't always stop everyone of course, but it's a significant improvement.

 

[Marduk]

WHAT DO YOU THINK? HAVE YOUR PARENTS BEEN INVOLVED WITH AMWAY? WHAT HAS BEEN THE EFFECT ON YOUR LIFE?

what planet is it where having to listen to your parents choice on a stereo is child abuse ?

 

[Joecool]

Just so folk know, "joecool" is a well-known anti-amway blogger. He left Amway a decade ago yet remains obsessed with it, currently running 3 separate blogs (he's had others) and has made nearly 250 anti-amway blog posts so far this year alone. Many of them are attacks on me (I run a pro Amway blog), and I believe he came to JREF primarily because he wanted to troll me.

Anyway, madurobob, you'll be happy to know (as a left-leaning atheist and Amway supporter I certainly was) that several years ago Amway implemented an accreditation system for the various companies and organizations that run training and support systems for Amway people. Part of the accreditation contract requires them to agree to no proselytizing of religion or politics via their affiliation with Amway. That doesn't always stop everyone of course, but it's a significant improvement.

Thanks for the personal attack. Maybe you can tell the audience why YOU wrote an article about accreditation being a joke:

http://www.thetruthaboutamway.com/amway-global-accreditation-transformation-or-a-sad-joke/

US Republican Congressman Bob McEwen speaking at Yager Free Enterprise Celebration, held in October 2008. While he carefully tiptoes around naming names, amonsgt other things, McEwen clearly implies that voting Democrat will lead the USA on to the path of being a “slave state” like North Korea. He clearly implies that “the left”, ie Democrats, lack integrity. He directly blames President Clinton for the current US sub-prime mortgage crisis, and not surprisingly, he also attacks the entire Climate Change movement.

The whole speech is an extremely thinly disguised political rant designed to scare people into voting Republican.

Now … I don’t want to get in to a discussion about whether his claims are correct or not. What I want to discuss is the effect of this kind of talk at a seminar where people have spent money to be inspired to and learn how to build a successful Amway business.

I’ll tell you the effect – you deliberately alienate and p**s off (at least) half your potential market. I know this, because you’d p**ss me off. I would have walked out. In my opinion the entire speech was thoroughly dishonest and extremely offensive. If I had attended this as my first Amway-related seminar, I doubt I ever would have returned. I would have been out of the Amway business.

 

[caniswalensis]

R.’s father forced the children to listen to “long, boring tapes,” a practice that many consider child abuse and could have long-term psychological effects.

Children not getting to choose the radio station in their parent’s car is not child abuse.

 

[Joecool]

Just so folk know, "joecool" is a well-known anti-amway blogger. He left Amway a decade ago yet remains obsessed with it, currently running 3 separate blogs (he's had others) and has made nearly 250 anti-amway blog posts so far this year alone. Many of them are attacks on me

Can you kindly name a few of these "many" posts I have written about you? I don't believe I wrote any articles about you this year, except for reposting one by "Mr. Million".