Moderated MLM Crap :(

[icerat]

I call BS on these tool income quotes from Icerat. If a diamond took his family to several events first class, stay at a 5 star hotel, etc, they'd end up with a loss from the tools and we know that there are at least 4 major functions and a bunch of other smaller ones going on each month.

Huh? I don't even understand what you're trying to say here

On one of Icerat's own forums, one of his droogies admitted that his upline diamond in BWW made about $20,000 a month on voicemail alone. Basic math clearly displays the income potential of the tools.

link?

A cd costs 50 cents to a buck to produce.

No, it costs 50 cents to duplicate. There's an awful lot more involved in getting a product to market.

They sell for $7.00 or so. They sell 6 or more cds each month to the "serious" IBOs. They earn about $75 to $100 per head at the major funtions. They earn $5-$10 per head on local functions.

You continue to persist in the fantasy that multimillion dollar international companies operate with no expenses.

Thesf diamonds who speak at and run these functions don't work for love. They make tons of money on it or they wouldn't do it at all.

In the major organisations Diamonds don't run functions.

How else could a diamond earning $150,000 a year from Amway purchase mansions, jets and sports cars? Icerat is insulting people's intelligence with his pedantry.

Joecool is insulting people's intelligence by claiming diamonds earning $150,000 a year from Amway are purchasing mansions, jets and sports cars.

Can you name any JC?

In the organisation I work with I know of only one leader who has purchased a jet, and their income from Amway alone is in or close to the 8 figure a year range. They've been earning 7 and 8 figure incomes from Amway for more than 2 decades, and only bought a jet 3 years ago. Even ignoring any income from sale of motivation and training materials they would easily be able to afford a jet from this income plus several decades of astute investments.

 

[Joecool]

Huh? I don't even understand what you're trying to say here

A diamond averages $23,000 in tool income. If that diamond travels with his family first class to a function, that alone can cost $10,000 a for week. Howe many functions does a diamond attend? Your former pal "Brad" mentioned that his diamond was pulling in 20,000 a month on voicemail royalties. It's not hard to figure. You make 10 bucks for each subscription for example, and you have 2000 active downline. Voila.

No, it costs 50 cents to duplicate. There's an awful lot more involved in getting a product to market.

You mean like a diamond telling people to buy them at a function that the IBOs paid to attend?

In the organisation I work with I know of only one leader who has purchased a jet, and their income from Amway alone is in or close to the 8 figure a year range. They've been earning 7 and 8 figure incomes from Amway for more than 2 decades, and only bought a jet 3 years ago. Even ignoring any income from sale of motivation and training materials they would easily be able to afford a jet from this income plus several decades of astute investments.

Apologies. You see, Icerat lives in Amway Utopia where everyone makes money, everyone achieves diamond and nobody uses less than honest techniques to recruit downline. If you believe that, I am selling shares of the Brooklyn bridge.

 

[Mycroft]

2007 Average Diamond income from system (Tools, Events and Speaker Fees)
$23,200/yr

2007 Average Emerald income from system (Tools, Events and Speaker Fees)
$7,000/yr

So where do these figures come from and where are the income stats for sales you're comparing them too?

 

[Spindrift]

I've been approached several times by friends wanting to recruit me. The question they would never answer until I repeated several time was, "This is Amway, isn't it?" Why are they instructed to be ashamed of their road to riches?

 

[icerat]

A diamond averages $23,000 in tool income. If that diamond travels with his family first class to a function, that alone can cost $10,000 a for week.

I'm not aware of any diamonds that regularly travel with their families first class to multiple functions a month.

Howe many functions does a diamond attend?

Depends on the nature and extent of their business I suppose, as well as whether they're expanding. Those in demand on the speaking circuit, and who choose to avail themselves of it, would also obviously be more than others. I haven't seen my upline Diamond at an event I've attended for more than 10 years, and I've attended plenty of major seminars in that time (mostly for pleasure, not profit)

Your former pal "Brad" mentioned that his diamond was pulling in 20,000 a month on voicemail royalties.

Again, link?

It's not hard to figure. You make 10 bucks for each subscription for example, and you have 2000 active downline. Voila.

According to the Quixtar data presented in Team vs Quixtar, the average qualifying Diamond and above had 4624 IBOs in their group. According to statistics provided by WWDB and Network 21, less than 20% of IBOs utilise support systems, even fewer would be on voicemail (we don't even have it in my market). So, Diamonds and above (that's everything up to Founders Crown Ambassado 70, which is at a minimum 20 times the size of a Diamond business), would average less than 1000 IBOs on voicemail at all.

So the average vanilla Diamond has a lot less than 1000 IBOs on voicemail. Probably less than 500.

As for profiting $10/mth per subscriber? Where'd you get that figure from? When I had voicemail I wasn't even paying that much per month for the service. So you subtract the cost of the service provider, plus all the staffing and management expenses of Network 21, then the profit sharing with platinums and emeralds .... not that much left in profit per month to share with the Diamonds.

You mean like a diamond telling people to buy them at a function that the IBOs paid to attend?

Well let's see. I'll assume costs of recording a CD at a function were covered by function income, but then many CDs (for example from outside sources like John Maxwell or Ron Jensen or Allan Pease) are licenced.

So you have a licencing fee for them
You need someone to listen to all recordings and choose the best for duplications
You have to pay someone to check and edit the recording to ensure it doesn't violate any amway rules
You have to pay someone to edit in copyright and other notices (eg licence expiry dates)
You have to pay for creation of the master.
You have to pay for the design and production of packaging
You have to pay staff handling orders, subscriptions, returns, accounts payable and receivable
You have to pay staff attending functions (at weekend and/or night rates) to sell the CDs
You have to pay staff to ship orders
You have to pay executive/management staff who are responsible for all of this (Network 21 has several hundred employees and offices in a couple of dozen countries)
You have to subtract payment processing charges (eg Visa fees)
You have to subtract taxes
You have to pay an accountant to keep track of all this stuff
You have to pay for office space and all associated office expenses (phones, electricity, equipment, consultants etc etc)
You have to pay for design, hosting, and maintenance of websites that sell all this stuff
You need to maintain funds for R&D and investment in growth, eg new market openings

And not to mention the folk who promote the stuff need compensating. Yes, those platinums and above make money on sale of CDs! How much?

In the case of Network 21, $2.20 of the $7 CD is distributed to the platinums, emeralds, diamonds etc who promote (and in some cases, distribute) the stuff. A Diamonds cut of the profit would usually be 20 to 40 cents. By contrast, of a $7 product sold by Amway, $4.55 is distributed to the IBOs marketing it.

Get that?

Percent profit shared with IBOs from sale of CD - 31%
Percent profit shared with IBOs from sale of Amway product - 65%

And the average active IBO generates much more sales of Amway products than they do of "tools". Yet you'd have us believe more is made from selling CDs?

You said to do the math. There it is.

Apologies. You see, Icerat lives in Amway Utopia where everyone makes money, everyone achieves diamond and nobody uses less than honest techniques to recruit downline. If you believe that, I am selling shares of the Brooklyn bridge.

Yup, if you believe that's what I claim, then you would indeed believe joecool has a bridge to sell.

Joecool lives in a business utopia where there are no expenses apart from duplication of a mastered product.

 

[icerat]

So where do these figures come from and where are the income stats for sales you're comparing them too?

BSM income stats were supplied by the Network 21 North America office. Network 21 is the largest global company offering BSM to Amway business owners.
Amway income stats were supplied by Amway North America.

The Amway data is supplied to all IBOs, the N21 data I obtained because in my efforts researching the field I've developed a friendship with one of the executives of the company (and no - again - neither he nor they pay me). It normally would not be provided to a lowly rank and file IBO like me

I've tried to get similar data from other BSM supply companies but without success

Note that, as I said earlier, promoting the ability to earn income from the BSM companies to prospects could be considered an illegal inducement, so these companies, and Amway, have good reason not to openly provide this information.

I've been approached several times by friends wanting to recruit me. The question they would never answer until I repeated several time was, "This is Amway, isn't it?" Why are they instructed to be ashamed of their road to riches?

Lots of reasons, mostly lack of confidence rather than being "instructed" per se, though I'm aware some groups took that approach -

Why don't people just tell you it's Amway?

 

[Aepervius]

Ummm. No. It can be as little as one, but it can be a lot more. For example -

Manufacturer - distributor - exporter - importer - distributor - retailer - customer

Thats seven levels.

It's only when buying direct from a manufacturer are you getting one level.

When the FTC investigated Amway in the 70s they found that the more than 70% of transactions within Amway were within 4 levels or less of manufacturer, with 99% within seven.

The difference today is that Amway "links" are volume based and virtual (virtually everyone buys direct from Amway) rather than actual links in a distribution chain.

Still, changes in retailing like big box stores and the internet have meant companies using MLM have had to adapt and change, like for example as Amway has done moving focus into the higher margin health & beauty categories.

Those are *NOT* different teams, and they do not grow exponentially. That is waaay different. Plus MLM are only occuyping *mostly* the last two level with their pyramide : distributor - retailer.

 

[Joecool]

In the case of Network 21, $2.20 of the $7 CD is distributed to the platinums, emeralds, diamonds etc who promote (and in some cases, distribute) the stuff. A Diamonds cut of the profit would usually be 20 to 40 cents. By contrast, of a $7 product sold by Amway, $4.55 is distributed to the IBOs marketing it.

The bold is mine. So by Icerat's own admission, Amway products are grossly overpriced in order to fund the IBO bonuses.

That means someone buying the same product directly from Amway could get the same product for $2.45. But because the layers and layers of upline (middlemen) must be paid, that same product now costs $7.00.

A solid diamond, even at the low and unlikely estimate of earning 20 cents per cd, probably sells a thousand a week. Standing order is ususally 6 cds a month. That's a bare minimum of $1200 a month or $14,400 a year. A diamond earning 40 cents a cd and a 1000 active downline would get $28,800 a year from cds alone, and that's if your extremely conservative estimate is true. Simple math destroys your theory (again).

And this does not include profits from books, additional cds, functions and voicemail and other open meetings. You really believe that a diamond earns only $23,000 a year from tools? When are you coming to see the Brooklyn bridge?

 

[icerat]

Those are *NOT* different teams, and they do not grow exponentially. That is waaay different.

Sorry, I don't understand what you're trying to say about different teams?

MLMs don't tend to grow exponentially either. They do it times, but they also have ups and downs and flat spots just like other businesses.

Plus MLM are only occuyping *mostly* the last two level with their pyramide : distributor - retailer.

With regard "most" MLMs, you have something more like

distributor-wholesaler (-..repeat from zero to six times ...) -retailer

With the wholesalers and retailers taking on the duel role of marketing

Companies like Avon and Amway are also manufacturers and importers and exporters as well. Very few (if any?) of the top MLMs are merely distributors of others products.

They tend to be the fly-by-nighters that are gone within a few years. Obviously they don't have the same margins to play with as a manufacturer, so you can easily end up with challenges being competitive.

 

[icerat]

The bold is mine. So by Icera's own admission, Amway products are grossly overpriced in order to fund the IBO bonuses.

That means someone buying the same product directly from Amway could get the same product for $2.45. But because the layers and layers of upline (middlemen) must be paid, that same product now costs $7.00.

By that thinking virtually every product by every company is "grossly overpriced" in order to pay distribution and marketing costs.

But yes, $2.45 is indeed close to the price Amway sells a product for that ultimately retails for $7. (I should have said "a product sold though Amway", not "by Amway") Around 5-10% is for incentive bonuses, but the base price Amway sells a $7 amway product for is about $3.15.

If you want to get that price, you need to be regularly purchasing in volumes of at least $23000/mth.

Just like other businesses, buy in larger volumes you get a better price. That's the basis of the Amway model.

Do you consider the fact companies give discounts for volume purchasing means that the amount an end user buying single units is paying "grossly overpriced"?

 

[Joecool]

By that thinking virtually every product by every company is "grossly overpriced" in order to pay distribution and marketing costs.

But yes, $2.45 is indeed close to the price Amway sells a product for that ultimately retails for $7. (I should have said "a product sold though Amway", not "by Amway") Around 5-10% is for incentive bonuses, but the base price Amway sells a $7 amway product for is about $3.15.

If you want to get that price, you need to be regularly purchasing in volumes of at least $23000/mth.

Just like other businesses, buy in larger volumes you get a better price. That's the basis of the Amway model.

By contrast, consumers can likely get a simlar or equal product from Costco or Walmart for under $3.00 because the big retailers buy it in volume and pass the savings onto the consumers. In Amway, the additional cost is tacked on for distributor bonuses and that cost is passed onto the IBOs and whatever rare and few customers there are in Ama-world.

As for functions, let's use a major function for example. 25,000 people paying $125 = $3,125,000 gross. Factoring in the cost for the venue and some other expenses, I'd guess that at least half will be profit. How many diamonds speak at a function? 10 - 12? That would still be about $100K profit for each speaker just from this one function.

Do you really believe that diamonds make only $23,000 annually from tools?
If so, you are wearing rose colored glassed and sipping kool aid.

Before you answer this, keep in mind that whatever few diamonds who quit and came clean about their finances revealed that 50% to 90% of their income was from tools. Greg Duncan made about half of his income from tools, revealed when he was in bankruptcy. Bo Short said about 80% of his income was from tools. Don Lorencz said about 90% of his income was from tools. Icerat is arguing that 2+2 = 6.

 

[NewtonTrino]

For anyone that cares I did a bunch of calculations in the other thread showing how a diamond who makes $150k a year in amway profit could easily clear another $500k a year in tool income in a very conservative manner.

Icerat lives in a completely bizarro world where most of the tool profit doesn't go into the hand of the upline and he cannot account for where all of the money goes other than claiming some sort of corporate overhead. Of course the person that owns this company he's talking about is yet another one of the kingpin distributors so all of the money from the cd's, seminars etc flows into his pockets.

The sad part is I actually believe that Icerat believes this stuff himself. I know it's hard to believe but given the other true believers that I personally know it's not a stretch at all. There is a hardcore business cult element to this entire thing.

Hey Icerat, HOW MUCH MONEY HAVE YOU MADE THIS YEAR FROM YOUR AMWAY BUSINESS? Until you can come back and show some success I think you need to consider how bad you are making amway look with your strident defense of a broken cult system.

 

[icerat]

By contrast, consumers can likely get a simlar or equal product from Costco or Walmart for under $3.00 because the big retailers buy it in volume and pass the savings onto the consumers.

If you willing to have an incredibly broad definition of "similar" then the same problem applies for all non big-box retailers.

Yet all these other retailers still survive and thrive.

As for functions, let's use a major function for example. 25,000 people paying $125 = $3,125,000 gross. Factoring in the cost for the venue and some other expenses, I'd guess that at least half will be profit. How many diamonds speak at a function? 10 - 12? That would still be about $100K profit for each speaker just from this one function.

If your "guess" is correct. North American major functions cost Network 21 $75 to $100 per person, leaving $25 to $50 profit per ticket, before volume rebates - and they don't host 25,000 people seminars. In north america N21 finds 5000 to 10000 to be a maximum optimal size and splits them up if there's more demand.

Diamonds do not profit share functions. Average speakers fee in 2007 for an IBO at a major function in North America was $3250 plus airfare, hotel and food.

Do you really believe that diamonds make only $23,000 annually from tools? If so, you are wearing rose colored glassed and sipping kool aid.

It's an average, based on the real world instead of your fantasy. Some make more, some make less.

Before you answer this, keep in mind that whatever few diamonds who quit and came clean about their finances revealed that 50% to 90% of their income was from tools. Greg Duncan made about half of his income from tools, revealed when he was in bankruptcy.

Not true and already discussed on this thread. That was the maximum possible that could have come from the "tool company" after eliminating Amway income and XS income, without knowing what all his different business incomes were. Furthermore he was a Triple Diamond, not a Diamond, and more than half of his "tool company income" was as one of the board members of the company, something not available to all Diamonds in that organisation. In other words, not a normal case.

Bo Short said about 80% of his income was from tools.

source?

Don Lorencz said about 90% of his income was from tools.

source?

Icerat is arguing that 2+2 = 6.

Both of these guys were Diamonds many years ago and got kicked out by Amway. Don Lorencz also provably lied about his income, claiming on his blog (no defunct) a qualified Diamond income that was mathematically impossible. Bo Short also admitted to "buying" his qualifications, ie purchasing products in order to reach a qualification level. He also made his various claims about Amway while launching a startup competitor to Amway and having been terminated by Amway. Not exactly an unbiased perspective.

Both of these Diamonds were also part of organisations that did not distribute tool profits to all qualifiers, so total profit was shared amongst fewer people, meaning much higher profits for those that did earn them. They also did not base rebates on volumes, such that even if your volumes dropped, which would happen if you were no longer a qualifying Diamond and thus earning less from Amway, you continued to receive "diamond level" tool profits.

This means that if your Amway business shrinks (and neither Short or Lorencz ever qualified as "founders", which means they never sustained a decent level for at least 12 months), then "tool income" becomes progressively more and more of your income.

Network 21 has never operated in that manner, and Amway effectively banned that model of compensation some years back, so even if we believe your figures, they're irrelevant to 2011.

 

[icerat]

For anyone that cares I did a bunch of calculations in the other thread showing how a diamond who makes $150k a year in amway profit could easily clear another $500k a year in tool income in a very conservative manner.

Heck, I can show you how they could make $10 million from "tool income"! Anyone can come up with hypotheticals. Yet actual real live data just doesn't match your hypotheticals does it?

Icerat lives in a completely bizarro world where most of the tool profit doesn't go into the hand of the upline

Oh, you mean the real world

and he cannot account for where all of the money goes other than claiming some sort of corporate overhead. Of course the person that owns this company he's talking about is yet another one of the kingpin distributors so all of the money from the cd's, seminars etc flows into his pockets.

When I joined Amway, the owner of the company I was buying tools from was not a member of my upline. His "tool company" sells products to a larger customer base than his Amway business downline, also providing products and services to many other Amway networks. I've no idea how much he makes from it, but it wouldn't be at all strange if he made more from it than Amway.

And why not?

The sad part is I actually believe that Icerat believes this stuff himself. I know it's hard to believe but given the other true believers that I personally know it's not a stretch at all. There is a hardcore business cult element to this entire thing.

Yeah, really sad how I base my beliefs on actual data and information

Hey Icerat, HOW MUCH MONEY HAVE YOU MADE THIS YEAR FROM YOUR AMWAY BUSINESS?

more than you.

Until you can come back and show some success I think you need to consider how bad you are making amway look with your strident defense of a broken cult system.

Gee, and I'm participating in the Tour De France thread and haven't competited in a cycling race for many many years .... not to mention I don't think I've ever propositioned a woman in an elevator!

I guess any information and opinion I bring to a thread just has no credibility then ....

 

[NewtonTrino]

H
more than you.

Evasion noted. Everyone pay attention. This is such a great business but I make no money from it. Nice try, come back when you have some credibility.

I guess any information and opinion I bring to a thread just has no credibility then ....

Correct. You are an admitted cultist. This would be like taking information from a priest on birth control or even just sex in general.

 

[Joecool]

Network 21 has never operated in that manner

You sure seem to know a lot about something you're not "actively" involved in.

http://www.webraw.com/quixtar/archives/2005/08/diamond_lorencz_explains_the_money.php

(Emphasis mine)

Quote: "Lorencz encourages readers to ask questions about Quixtar and demand answers about the status of upline Diamonds, where the tool money goes and how much is regularly generated.

...if one of 'your leaders' that are professing to be making all of this money, lifestyle, toys etc are claiming what I am saying here is not true, it is very, very simple to find out the truth.

Just ask them to show you their income statements directly from Amway/Quixtar for the last year and also their tax returns to Revenue Canada or the IRS last year showing their 'total' income for the year. If they won't show you these figures, wouldn't you think the truth is obvious?"



What say you Icerat? Do we believe actual testimony from former diamonds or your anecdotal stories? I think Newton Trino is right. You live in some Bizarro world and you actually believe what you are saying.

As Newton says, even if the diamond income is what you say it is, the big kingpin diamonds still own the AMOs such an Network 21, WWDB, or whatever group it is and reap the corporate profits. There is big money involved in these functions and you have comepletly failed to explain where the profits flow. Even at the most conservative estimate of only $50 profit per head, 10,000 IBOs is half a million. That one venue and function would more than cover the annual income for more than 15 diamonds. Where's the rest of the money? I think your failure or calculated strategy to omit this information says a lot to the readers here.

 

[icerat]

Evasion noted. Everyone pay attention. This is such a great business but I make no money from it. Nice try, come back when you have some credibility.

I'm sorry, on what basis should I expect to be making money from Amway?

You seem to think it's a scam because people who aren't trying to make money from it don't make money from it?

Uhuh

Correct. You are an admitted cultist. This would be like taking information from a priest on birth control or even just sex in general.

An admitted cultist? rofl.

 

[Joecool]

Evasion noted. Everyone pay attention. This is such a great business but I make no money from it. Nice try, come back when you have some credibility.



Correct. You are an admitted cultist. This would be like taking information from a priest on birth control or even just sex in general.

I know for sure that Icerat made about ten bucks back in 2008. I posted that link on page 2 of this thread.

He has all this detailed information and could shut everyone up by displaying it, but instead we get anecdotal stories ad nauseum.

This thread could be in the same one with UFOs and and Bigfoot. Everyone's heard about rich Amway guys who retired at the age of 25 and do nothing but travel to the exotic beaches of the world but nobody can actually name one of these folks. Just like there are bigfoot sightings with no bonafide proof that they exist.

Bizarro world indeed.

BTW, even if there were 100 of these retired Amway guys (but there aren't), Amway would still suck as a business opportunity overall.

 

[Joecool]

I'm sorry, on what basis should I expect to be making money from Amway?

You seem to think it's a scam because people who aren't trying to make money from it don't make money from it?

Uhuh

An admitted cultist? rofl.

It's a scam because people who try to make money from it usually end up losing money. People who do nothing don't seem to be on these forums complaining that they did nothing and lost money.

It's a scam because prospects are told they can get rich and retire in 2-5 years even though nobody is doing it.

It's a scam because diamonds show off lifestyles that many of them cannot sustain on Amway income and then you have diamonds actually making half or more of their income from tools which do not help IBOs to succeed as advertised.

It's a scam because the tools do not work, even when applied properly. Icerat thinks people who apply the system have a 100% success rate because his upline told him so. Some people can swim with weights tied around their necks but the vast majority of them drown. Just like people using the tools.

It's a scam, that's why many IBOs are afraid to name the company they represent when recruiting propsects.

It's a scam because you have about as good a chance of winning the lottery as you do of going diamond. The difference is that the lottery odds are clear.

 

[icerat]

You sure seem to know a lot about something you're not "actively" involved in.

Says the guy who writes more than a blog post a day about the company. Tell me, how many Diamonds and above have you talked to in the last decade?
How many staff and management of "tool companies" have you spoken to?
How many books about Amway have you read?
How many academic research papers about Amway and MLM have you read?

You must have done lots of research to be able to write more than a blog post a day, right?

Tell us what it is.

http://www.webraw.com/quixtar/archives/2005/08/diamond_lorencz_explains_the_money.php

You link to an article proving the unreliability of Lorencz? As you said, do the math. It's impossible to be a qualified diamond and earning the income he claims

What say you Icerat? Do we believe actual testimony from former diamonds or your anecdotal stories?

uhh ... web republishing of blog posts by two former diamonds are anecdotal stories.

statistics sourced from a company about their operations are not.

As Newton says, even if the diamond income is what you say it is, the big kingpin diamonds still own the AMOs such an Network 21, WWDB, or whatever group it is and reap the corporate profits.

This is an entirely different issue. It's like your basing claims about the average income of Microsoft resellers on the income of the owners of Microsoft.

Makes no sense.

There is big money involved in these functions and you have comepletly failed to explain where the profits flow. Even at the most conservative estimate of only $50 profit per head, 10,000 IBOs is half a million.

Except of course the most conservative estimate given was $25 profit per head and 5000 IBOs. But hey, you haven't let facts get in the way before, I don't expect you to start now.

That one venue and function would more than cover the annual income for more than 15 diamonds. Where's the rest of the money? I think your failure or calculated strategy to omit this information says a lot to the readers here.

I've already provided you with a list of just some of the type of expenses a large company of this type has

You continue to ignore it.

But gee, guess what, at the end of the day the folk who took the risk and invested money to start a company make a profit too!

Is that really so shocking?