Amway TV ad [Archive] - Page 6

icerat

31st July 2009, 02:55 PM

I can't believe you folk are still carrying on this thread. Time to re-enter to address some of the BS being sprouted.

CynicalSkeptic - your math is fine, unfortunately what you're talking about is a pyramid scheme and not legitimate MLMs. It doesn't matter how good your math is if your assumptions are wrong, and yours are wrong for a number of reasons, but I'll take the simplest for now.

I have people in my downline who have ZERO downline, and they profit. One of the simplest defining marks between legitimate MLM and illegal pyramids is the answer to a theoretical question "can the last person who joins profit?"

If the answer is No, as you are claiming, then it isn't an MLM, it's an illegal pyramid.

So, by definition, what you are talking about is NOT an MLM.

Having said that, there are many companies that call themselves MLM that are not, they are illegal pyramids. One problem may be that you're believing them when they say they are MLM, and attributing the characteristics of illegal pyramids to MLM.

Just because someone says they're an MLM doesn't mean they are.

I'd suggest another core problem is that you believe recruiting is the raison d'etre of companies that use MLMs. It's not. In legitimate companies, "mutli-level marketing" is simply a marketing strategy for increasing product sales, and thus revenue. It is not a necessity for achieving revenue. Contrast that with BurnLounge, I believe the most recent company taken to court by the FTC as being a pyramid. To profit in BurnLounge you have to recruit people - the money comes from fees paid by new recruits for their websites. The margins on the actual products (downloadable music) is way to small to be able to cover the expenses of generating the sales. The only way for BurnLounge to make money as a company, and the only way for it's reps to make money, is to recruit new reps. It's a classic pyramid scheme using an ostensibly real product as a cover. That's why when the court brings down it's decision in the next month or so, it will declare them a pyramid scheme. It's the same reason YTB Travel got declared a pyramid scheme by California courts.

By contrast, Amway reps get no revenue at all by simply recruiting and Amway itself merely covers costs with it's membership fee - where it even has one (in some countries it doesn't have one). Virtuall all of it's revenues, and all of the revenues of it's agents, are based on product sales, not recruiting.

You're right in saying that "MLMs can not work for everyone", but that applies to every business. It's not possible for everyone to make money selling Amway. It's not possible for everyone to make money selling computers. It's not possible for everyone to make money selling apples. If everyone tried, who would buy?

On the other hand, if there was a chain of a hundred computer stores all trying to profit - can all of them make money? Sure, there's still plenty of potential customers. If there's a network of a hundred amway distributors, can all of them make money? Sure, there's still plenty of potential customers.

Tex2

31st July 2009, 03:43 PM

See, I told you he was lurking....

NewtonTrino

31st July 2009, 03:47 PM

Your description of burn lounge pretty much sums up Amway as well. Amway has products to give the tools kingpins cover to do their business.

I can't believe you can't see that. It's the exact same kind of scam with slightly more legitimacy.

Ferguson

31st July 2009, 04:04 PM

Newton, you're going over issues that have been addressed already, and you didn't respond. Without a tool scam, a much higher percentage of IBOs make a net profit, and those who aren't, are also not losing nearly as much. You're TOTALLY clueless. LOL

It's true that getting scammed less is better than getting scammed more. But why fall for the scam at all?

NewtonTrino

31st July 2009, 04:10 PM

Because of the brainwashing LOL.

icerat

31st July 2009, 04:23 PM

Your description of burn lounge pretty much sums up Amway as well. Amway has products to give the tools kingpins cover to do their business.

You didn't actually bother thinking about what I wrote, did you?

Tex2

31st July 2009, 04:57 PM

I wouldn't recommend using "Newton" and "thinking" in the same sentence. LOL

NewtonTrino

31st July 2009, 05:50 PM

What's with the ad hominems?

I laugh at your pathetic scamway "businesses". Losing money year after year isn't a business, it's a scam and a cult that keeps it going.

Tex2

31st July 2009, 07:11 PM

Go ahead and laugh. Ignorance is bliss. LOL

CynicalSkeptic

1st August 2009, 06:06 AM

I have people in my downline who have ZERO downline, and they profit.

Really? So they are really just reselling product to someone else and making money? How much do they profit?

Do you see their books?

One of the simplest defining marks between legitimate MLM and illegal pyramids is the answer to a theoretical question "can the last person who joins profit?"

If the answer is No, as you are claiming, then it isn't an MLM, it's an illegal pyramid.

We agree. Show me someone who is making money purely by reselling the product or service in an MLM. Show me their books.

Tex2

1st August 2009, 07:18 AM

CynicalSkeptic

1st August 2009, 07:28 AM

Or what if they're deluding themselves, convinced theyre making a little money when they really don't because they don't put all their costs (including time) in their books.

Tex2

1st August 2009, 08:23 AM

Or what if they're like you, deluding yourself, convinced you're making a little sense when you really don't because you don't respond to the points being made?

NewtonTrino

1st August 2009, 08:45 AM

Or what if they're deluding themselves, convinced theyre making a little money when they really don't because they don't put all their costs (including time) in their books.

In fact this is the position that I think a lot of amway distributors are in. They have a warped view of profit which can include things like "I get a writeoff on my taxes" which is just a way of justifying a loss. In fact many of them use the loss in their business to offset other income taxes costing all legit taxpayers money. The IRS has gone after some of the blatant cases for back taxes.

Anyway given the time investment it takes to find retail customers I highly doubt most distributors make much retail profit. Even if they are really hustling and doing well it's still going to be time intensive to build that customer base and your return per $ isn't going to be good. I would love to be proven wrong on that... with a real businesses P/L statement.

CynicalSkeptic

1st August 2009, 10:05 AM

Cynical, what if they kept 2 sets of books, like Bernie Madoff? Now you should see why you asked a meaningless question. Of course these people probably have a few customers. They probably aren't making the "big bucks", but they are making more than most IBOs, who are getting ripped off via the tool scam. I also have a few customers, but it is meaningless to "show you my books." You either accept the FACT that some IBOs have customers or you don't. Your choice, but with a name like CynicalSkeptic, I think I know your answer. LOL

Or what if they're like you, deluding yourself, convinced you're making a little sense when you really don't because you don't respond to the points being made?

What points did I not respond to?

Ok, I accept that some people in Amway do resell some products to others (just look on ebay for all the MLM garbage being sold below cost), and some might even sell for a profit. But without seeing actual numbers, I don't believe that many are making enough to quit their day jobs, or we'd all be seeing these products in Brick & Mortar retail stores.

The real money in Amway and any other MLM (if we ignore the Tool Scam) is in recruiting people below you and profiting from their purchases. Yes, some people will make money from that, those at the top of the pyramid. It's no better than a lottery, a redistribution of the money that people put in. If you're on top of the pyramid, you're samming those below you. If you're on the bottom, you're getting scammed. If you're in the middle, and breaking even or making a small profit, you're hoping to rise to the top soon.

Tex & Icerat, why are you so afraid to show your books?

How much are you making?

How much is from retail sales?

How much is from commissions off your downline?

What is your churn? How many people do you recruit each month? How many leave?

How much are they (people in your downline) making/losing?

Almo

1st August 2009, 10:40 AM

The margins on the actual products (downloadable music) is way to small to be able to cover the expenses of generating the sales.

If this is true of Amway, then it is only because of the inflated prices. The costco/amway vitamin comparison upthread was pretty damning. So, people outside the pyramid don't tend to buy Amway stuff since it's so overpriced to support the MLM structure.

Which is why MLM = fail, unless you have a large downline, which doesn't work for everyone in the business because of the multiplier effect.

NewtonTrino

1st August 2009, 10:45 AM

I find it rich that the guys on here defending scamway are the suckers who don't even make any money at it. Can you guys at least go and find some successful distributors to come and tell us that they actually make money doing this? Bonus points for someone who is profitable without tools income (ROTFLMAO).

Tex2

1st August 2009, 01:01 PM

Newton, I don't advocate making most profit from personal retailing. If an IBO wants to run their business that way, it's okay with me.

Cynical, you can start here: http://forums.randi.org/showthread.php?t=116252&page=15 It is obvious you are not aware of Amway rules prohibiting product sales in stores, at least in the U.S.

You said, "The real money in Amway and any other MLM (if we ignore the Tool Scam) is in recruiting people below you and profiting from their purchases. Yes, some people will make money from that, those at the top of the pyramid." That's how MLM works. The idea is to work yourself to the top of the "pyramid", if you want to do that. There is no scamming going on with this model (minus the tool scam), it is merely monetarily rewarding those who have been responsible for more volume more than those who have been responsible for less volume. It's called CAPITALISM. If you don't like it, move somewhere else...or re-elect Barry.

You want details? Make the phone call.

Almo, comparing Double X to Costco vitamins is like saying a Yugo is the same as a Bentley, as they both have 4 wheels. LOL

I met a guy in Prague who makes a LOT of money from retail. I won't give his name, because he doesn't want to be sullied on forums like this, and I don't blame him. Icerat/ibofb met him as well.

CynicalSkeptic

1st August 2009, 01:13 PM

You said, "The real money in Amway and any other MLM (if we ignore the Tool Scam) is in recruiting people below you and profiting from their purchases. Yes, some people will make money from that, those at the top of the pyramid." That's how MLM works. The idea is to work yourself to the top of the "pyramid", if you want to do that. There is no scamming going on with this model (minus the tool scam), it is merely monetarily rewarding those who have been responsible for more volume more than those who have been responsible for less volume. It's called CAPITALISM.

No, that's not capitalism, that's a pyramid scam.

I met a guy in Prague who makes a LOT of money from retail. I won't give his name, because he doesn't want to be sullied on forums like this, and I don't blame him. Icerat/ibofb met him as well.
Wonderful unsubstantiated claim.

How much are you making? No, I'm not gonna call, and listen to your pitch. How much are you making?

NewtonTrino

1st August 2009, 01:13 PM

How much is a lot of money from retail?

Tex2

1st August 2009, 01:51 PM

CynicalSkeptic, you are clueless as well. How can a scam happen if every single IBO pays less for their product (after the varying bonus amount is considered) than a customer paying IBO cost?

You won't accept an unsubstantiated claim, yet you want an unsubstantiated claim regarding my own retail volume? QED LOL

Ask Newton whether I "pitched" him on our earlier phone call.

Newton, you want details? Make another call.

NewtonTrino

1st August 2009, 02:42 PM

Call call call whatever. Seriously I don't care that much.

I think given what we know the burden of proof is definitely on the scammers to prove that the opportunity is a good one. Epic fail so far people!

Tex2

1st August 2009, 02:53 PM

That's right, call. I've posted answers to ALL of these questions multiple times on various blogs/forums. I'm not going to waste my time doing it again. If you don't care that much, neither do I.

I'm not trying to prove the opportunity is a good one. I'm focused on shutting down the tool scam. The opportunity comes later.

icerat

1st August 2009, 03:18 PM

I don't believe that many are making enough to quit their day jobs, or we'd all be seeing these products in Brick & Mortar retail stores.

ahhh, I always love this one ... if the products were any good they'd be in stores.

Uhuh. Which part of "Nutrilite is the #1 best selling supplement brand in the world" don't you understand? Wouldn't it make more sense (in fact it's still irrational) to say if GNC was any good, they'd sell it via direct sales, like the market leader does.

Or Artistry ... #4 in prestige cosmetics in the world.

Or eSpring ... #1 in home water treatment systems.

The real money in Amway and any other MLM (if we ignore the Tool Scam) is in [B]recruiting people below you and profiting from their purchases.

So, translation .... the real money in MLM is in recruiting wholesale customers and selling to them at a lower profit margin, so that they can resell at a markup and profit.

Yup, you're kind of right. How many single-man businesses are there that make more money than companies in the same industry with large numbers of staff?

Profiting from "recruiting" is exactly the same as profiting from recruiting wholesale customers in EVERY product distribution business. By your logic, Coca-Cola is a scam because most Coke is not sold to the end consumer by Coca-Cola! They recruit distributors who recruit wholesalers who recruit retailers who recruit customers. What's the problem exactly?

Yes, some people will make money from that, those at the top of the pyramid.

You mean the Coca-Cola pyramid? Who makes the most money from selling Coke? Probably Coca-Cola. Why? They sell more Coke than anyone else does. They last guy in the chain probably sells the Coke to a consumer at a higher profit margin than Coke sells it to their distributors. But Coke makes more money. Why? Because by recruiting others in the distribution chain they sell more coke.

Apart from Coke themselves,the "top" of the distribution "pyramid" is anyone who buys enough Coke for Coca-Cola to deal with them directly. If you became a major purchaser of Coke, you get to be the "top of the pyramid"

Exactly the same as in Amway

You want to explain how Coke is a scam again?

It's no better than a lottery, a redistribution of the money that people put in.

Really? Which lottery do you enter? The ones I know of a based on chance. It's pure "luck" who wins. In the Coca Cola pyramid, the money is "redistributed" from consumers to those who facilitate distribution to consumers. Just like the Amway pyramid. Yet you believe Coca-Cola is no better than the lottery! Clearly that's what you must believe ... since it's the same "pyramid" distribution system.

If you're on top of the pyramid, you're samming those below you. If you're on the bottom, you're getting scammed.

Do you buy Coke? You're at the bottom of the distribution pyramid. You poor scammed fool.

If you're in the middle, and breaking even or making a small profit, you're hoping to rise to the top soon.

Yup, and sell more Coke, you can get it cheaper and make more profit! Not that hope has much to do with it. It has to do with how many people you get buying coke. Just like Amway.

Tex & Icerat, why are you so afraid to show your books?

Who's afraid? I have no books. I haven't been building an Amway business for a decade, and my profitable one was a decade ago in a different country and a different wife. As it happens, I started actively building again the past few days. I ran some meetings, spoke to some people. It's costing me some money. Just like the startup phase of any new business. Today I did a "get start" with a new ABO, she's not making any money either. We started work on a business strategy, for what she wants to achieve and what's she's willing to put in, she doesn't expect to reach break even for about 6 months or so. Pretty damn good for a business.

How much are you making?

I can't say how much we made in my old business, that business is still generating income for my former wife, because of what we did a decade ago. So every month, how much we made increases. Sooner or later it will eventually become zero, then I can add it all up and let you know how much I made, if I'm still alive.

How much is from retail sales?

Ultimately all of the income is from retail sales (sales to an end user). Like most distribution systems though (particular pre-internet), large businesses are primarily doing wholesale sales (sales for the purpose of resale). Unlike traditional distribution though, if you say buy 100,000 cans of Coca-cola and then can't sell it and don't want it for yourself to drink - you lose and Coke still wins. With Amway and other legitimate MLMs, this doesn't happen. You send it back, and Amway loses because they give you all your money back and cover shipping as well.

How much is from commissions off your downline?

How much of Coca-Cola's sales is from sales by Coca-Cola directly to the consumer? How much is from "commissions", ie markup on wholesale sales?

What is your churn? How many people do you recruit each month? How many leave?

For many years now the churn rate in my old business has been zero. Nobody is getting recruited, nobody is leaving. Just a bunch of happy customers buying stuff, and a happy (I assume) former wife getting a percentage.

"churn" though is a legitimate issue, as it is in any business. You gain customers, you lose customers. From what I understand though, the general experience with Amway is much the same as what I've seen - once people try out the products properly, they tend to become quite loyal users of them. Indeed a study I recently read about people's opinions of direct selling companies (ie MLM) found that while large numbers had a negative view of it - they were people who had zero personal experience. When they broke it down by people who had actually bought products from a direct sales company in the past - they overall had a positive view of the industry.

If people like the products and can easily obtain them again, they continue to buy them, year after year after year. One internal Amway survey was dubbed "the lonesome customer", because they found the reason why people stopped by Amway products was because the person supplying them disappeared. Alas, a weakness with the model.

How much are they (people in your downline) making/losing?

In my old group, as far as I'm aware nobody is trying to make any money. Some of them still do anyway, from what they did a decade ago with me. So nobody is losing any money, some are making money.

As I said before, there is no reason why in a network everyone can be profitable. Indeed, the more people that are profitable, the better it works - less churn and less work for everyone. It's certainly my aim that every single person who wants to make money does, but really it's ultimately up to them.

NewtonTrino

1st August 2009, 03:50 PM

Nice long post that says nothing.

Do yourself a favor and find a counselor to help you break away from the brainwashing.

Tex2

1st August 2009, 03:59 PM

As I said before, there is no reason why in a network everyone can be profitable. Indeed, the more people that are profitable, the better it works - less churn and less work for everyone. It's certainly my aim that every single person who wants to make money does, but really it's ultimately up to them. As I said many times before, a major reason why 99% of IBOs are not profitable and the churn rate is so high is the tool scam. If it were your aim that every single person who wants to make money does, you would care how much money is being made via the tool scam. You don't, which makes your aim very poor.

Tex2

1st August 2009, 04:00 PM

Nice long post that says nothing.

Do yourself a favor and find a counselor to help you break away from the brainwashing. Not to be confused with your shorter posts that say nothing. LOL Do yourself a favor and find some facts to help you break away from the ignorance. LOL

icerat

1st August 2009, 04:16 PM

Nice long post that says nothing.

When you don't read them

Do yourself a favor and find a counselor to help you break away from the brainwashing.

Right ... so I read all the evidence I can find, from both independent sources and otherwise, both critical and otherwise. I study it from the inside and outside. I learn more about the company and the people who work with it than more than a handful of people in the world probably know. I study and understand the model in depth. I spend years engaged in discussions with people who failed and people who have succeeded, with critics and supporters.

I read books by business academics about the business. I read dozens of papers by sociologists and economists and other academics. I even try the business myself for a few years.

I come to certain conclusions. I find flaws in the model, I find strengths in the model. I find things that I think can be changed and improved, things I think the company and others have done badly and even unethically.

These are conclusions that agree with the independent academics who have studied the business model.

These are conclusions that agree with independent judiciary around the world who have investigated the business model.

These are conclusions that disagree with you.

Yet somehow, I'm the one who is brainwashed and need counselling?

Check a mirror, friend.

Tex2

1st August 2009, 04:40 PM

You should read one more book, one about business ethics.

You can get all of this right, but if you miss the tool scam, you are missing out on the biggest issue. Why is it the biggest issue? Because 99% of IBOs lose money to the tool scam and are operating at a net loss, while the Emeralds and above make multiple times more from the tool scam than Amway. If anyone wants to know more details, check out my site: http://texsquixtarblog.blogspot.com/2008/03/9-steps-of-truth.html

You are brainwashed and need counseling, just for a different reason than others think.

NewtonTrino

1st August 2009, 06:51 PM

Yet somehow, I'm the one who is brainwashed and need counselling?

Yes.

Tex2

1st August 2009, 07:02 PM

That was deep...as a puddle.

NewtonTrino

1st August 2009, 07:05 PM

Do we really need to rehash the same stuff over and over. Bring up a new point and we'll talk about it!

Tex2

1st August 2009, 07:12 PM

YOU are the one who rehashes the same stuff over and over. I don't think you know a new point you could intelligently discuss, because you have done very little of that so far.

whump!

1st August 2009, 09:43 PM

Sorry, Icerat, the Coca-Cola sales example is invalid (I worked for the company). Their salespeople are "inside" salespeople (meaning employees and not contractors of any kind) with tightly controlled sales territories & customers. A Coke salesperson does not hire (or partner or anything else) his/her friend, relative, passerby bothered in a store, church acquaintance, etc. to be a direct competitor selling Coke and "splitting" any commission. Some of those sales do go to authorized distributors who have their own networks in some limited markets here in the States, but on-the-whole, Coke sells directly to their retail customers who ALSO DO NOT HIRE MORE OF THEIR OWN TO DIRECTLY COMPETE WITH THEMSELVES IN THEIR MARKET. Remember - someone wishing to open a store usually does some diligent level of market research of population density and retail competition within their market before even applying for a bank loan, let-alone contacting any sources of inventory (like Coca-Cola). If you can't guarantee a certain minimum volume, Coke won't sell directly to you. You'd have to buy from Costco or another wholesaler willing to handle a smaller volume through you. That's why 7-11 (a US convenience store chain) uses a company like the McClane Company as their source on almost everything they stock in their stores (most beverages which are a major source of 7-11's sales volume are among the exceptions).

Whump!

NewtonTrino

2nd August 2009, 02:21 AM

Good salespeople are worth their weight in gold in any industry. In scamway they don't really care how good you are at selling as long as you buy tools.

Bluto

2nd August 2009, 04:14 AM

Ah gee, reading all the (rather lengthy - given the paucity of any real value) blather in this thread makes me nostalgic for "Dare to be Great" and "Oil of Mink Koscot Cosmetics" and the downhome marketing wisdom of Glenn Turner.

He was my introduction into the bizarro-world of pyramid scams and cult, "groupthink" living. After Mr. Turner's abrupt exit from the land of the free to the hardrock hotel, I was left without a mentor, so I decided to join a REAL cult. That being a religious organization out of Ohio.

One day we were having a religious pep-rally of sorts in one of the meeting rooms in the Holiday Inn in Beloxi, MS. Unbeknownst to us, in the adjoining room was a pep-rally for Amway "distributors". Both meetings had their breaktime at about the same moment, and all the attendees from both meetings started intermingling. Nobody really knew who was who, but we were all having a great time talking about "positive believing" and "believing will make it so" and other staples of the delusional and we would've gotten along splendidly until we each got to our "bottom line" and realized we were saying the same words, but actually talking about entirely different things.

It was an entertaining half-hour or so - as is this thread...

icerat

2nd August 2009, 04:28 AM

Sorry, Icerat, the Coca-Cola sales example is invalid (I worked for the company). Their salespeople are "inside" salespeople (meaning employees and not contractors of any kind) with tightly controlled sales territories & customers.

What a load of unmitigated crap. Hands up anyone who has bought Coca-Cola from Coca-Cola direct from a Coke employed salesperson?

Right, now hands up who has bought it from a 7-11 or a supermarket or a McDonalds or whatever?

QED. Most people who "sell" coca-cola to retail customers are not employees of Coca-Cola.

A Coke salesperson does not hire (or partner or anything else) his/her friend, relative, passerby bothered in a store, church acquaintance, etc. to be a direct competitor selling Coke and "splitting" any commission.

So you really don't understand what I'm talking about do you? When I said "Coca-Cola" (the company) in the previous post, that naturally includes all their employees. Obviously the corporate entity is unable to really "sell" stuff, it needs people to do that stuff.

Some of those sales do go to authorized distributors who have their own networks in some limited markets here in the States, but on-the-whole, Coke sells directly to their retail customers who ALSO DO NOT HIRE MORE OF THEIR OWN TO DIRECTLY COMPETE WITH THEMSELVES IN THEIR MARKET.

Wow, you don't even know what a "retail customer" is, do you? No wonder you didn't understand my last post and had to resort to silly ignorant statements in all caps.

Let's try again. Hands up anyone who has bought Coca-Cola directly from Coca-Cola (the company) for their own personal use?

And who has bought it from 7-11, the corner store, the kiosk at the ballpark, McDonalds, the supermarket, whatever?

Whump what have us believe that "on the whole" Coca-Cola sells directly to us Coke drinkers and all the stuff you find in stores etc is so minor as to be ignored.

Whump is either really ignorant about how Coca-Cola really operates or he actually has no idea of even some basic definitions, like "retail customer"

Either way, his credibility is shot.

Remember - someone wishing to open a store usually does some diligent level of market research of population density and retail competition within their market before even applying for a bank loan, let-alone contacting any sources of inventory (like Coca-Cola). If you can't guarantee a certain minimum volume, Coke won't sell directly to you.[/quote]

But hang on - you claimed that "on the whole" everyone buys direct from Coke! Oh, that's right, you don't understand what you're talking about.

So we'll ignore that. Who does the guy with the hot dog stand on the corner buy his coke from before he sells it to his retail customer? Does he buy it directly from Coca-Cola? I doubt it. He doesn't reach those "minimum volumes" does he? So who does he buy from?

You'd have to buy from Costco or another wholesaler willing to handle a smaller volume through you.

Bingo! They buy from a wholesaler - this is exactly what I explained in the previous post! Yet a few paragraphs back you're claiming something entirely different.

That's why 7-11 (a US convenience store chain) uses a company like the McClane Company as their source on almost everything they stock in their stores (most beverages which are a major source of 7-11's sales volume are among the exceptions).

And McClane is what, a wholesaler that deals directly with Coca-Cola, and they qualify as such because they order enough?

Sounds exactly like an Amway "direct distributor".

icerat

2nd August 2009, 04:35 AM

Good salespeople are worth their weight in gold in any industry. In scamway they don't really care how good you are at selling as long as you buy tools.

Uhuh. And yet in Amway the compensation plan is 100% based on how much you "sell". You only get a fancy title like "Diamond" if you "sell" a lot of stuff consistently, indeed for a Diamond at least $150,000 worth of stuff a month.

So all the Amway money, and all the Amway titles, it's all based on how much you "sell". But NewtonTrino isn't talking about Amway, he's talking about something called "scamway", which apparently operates differently. The thread's about Amway NewtonTrino, not some mythical company that operates in some other bizarre fashion.

Tex2

2nd August 2009, 05:02 AM

Scamway refers to the tool scam, which DOES operate in a bizarre fashion.

I say again, "You can get all of this right, but if you miss the tool scam, you are missing out on the biggest issue. Why is it the biggest issue? Because 99% of IBOs lose money to the tool scam and are operating at a net loss, while the Emeralds and above make multiple times more from the tool scam than Amway. If anyone wants to know more details, check out my site: http://texsquixtarblog.blogspot.com/2008/03/9-steps-of-truth.html"

Almo

2nd August 2009, 06:29 AM

"The real money in Amway and any other MLM (if we ignore the Tool Scam) is in recruiting people below you and profiting from their purchases. Yes, some people will make money from that, those at the top of the pyramid." That's how MLM works. The idea is to work yourself to the top of the "pyramid", if you want to do that. There is no scamming going on with this model (minus the tool scam), it is merely monetarily rewarding those who have been responsible for more volume more than those who have been responsible for less volume. It's called CAPITALISM.

But volume only comes from those IN the system! That's why it's a pyramid scheme! You're THIS CLOSE to realizing what a hellhole you're in, and getting out of it! It's frustrating for me to see intelligent people understand the trouble they're in, but not how to get out.

ETA: On the Coke thing... Icerat, you missed the important bit. According to Whump, Coke salesmen do not recruit other sales men in their area, since that would be increasing competition with themselves. Amway depends on it, since you can't make enough money selling product to end customers because they are overpriced. The main purchasers of Amway products are the distributors, which is why you must recruit them to earn money.

So nominally, you're recruiting competition (other people who will sell Amway), but in reality, you're recruiting the customers themselves.

Coke sells on the open market to anyone. The Coca-Cola company does not get a cut of sales to me. The Coca-Cola company makes money selling to the bottlers. The bottlers make money selling to me.

The bottlers do not sell to other bottlers who sell to other bottlers who try to sell to me (and other bottlers (who also try to sell to other bottlers who try to sell to me)) so that each person upline gets credit for the sale.

Big difference.

Tex2

2nd August 2009, 07:16 AM

But volume only comes from those IN the system! That's why it's a pyramid scheme! You're THIS CLOSE to realizing what a hellhole you're in, and getting out of it! It's frustrating for me to see intelligent people understand the trouble they're in, but not how to get out.
I have customers, so do others, so it does NOT only come from thsoe IN the system! You are a liar. Admit you're WRONG, LIAR! Also, the FTC has gone on record as saying this issue, by itself, is NOT an illegal pyramid. Get a clue, then get a grip, then realize everything other than the tool scam is merely a distraction! LOL

The Coke analogy wasn't intended to perfectly fit every nuance exactly, it was intended to illustrate a point, and one that went WAY over your collective little brains. So much for this being a critical thinking site. More like pre-K level...now go back to your crayons! LOL

Tex2

2nd August 2009, 11:25 AM

Oh yeah, I forgot to remind you. Crayons are for coloring, they are not supposed to be eaten! LOL

Porkchopjim

2nd August 2009, 11:42 AM

Uhuh. Which part of "Nutrilite is the #1 best selling supplement brand in the world" don't you understand?

When your vitamins, of questionable content (make sure to get your phytonutrients mixed in with alfalfa!), cost factors of 10 above the competition and you define #1 best selling (for AMWAY - not for the poor distributors tossing that junk down their throats to make PV 'sales' goals to please upline and get their $9 rebate check) by the $$$ spent on those products...then the 'understanding' becomes a little different, doesn't it?

When my 30 day supply of Amway vitamins runs me $80 and my Costco 60 day supply costs me $10 (which, shockingly :eye-poppi have quality control awards that Amway can't seem to meet, of just plain choose not to...): who's number 1? Must be Amway!

There is a lot of money and profit to be made in MLM. Amway is proof of that. It's customers (also called IBOs) aren't so lucky.

All this blather about 'sales outside the pyramid not defining a pyramid scheme' is another blatant misrepresentation of what was said:

Buyer's clubs have NO outside sales. They are not illegal.

Amway is NOT a buyer's club. Outside sales ARE important.

IBOFB/ICERAT will claim to his death that IBOs who chug vitamins and XS in order to make 'performance goals' for their business ARE legitimate customers.

Funny how those 'legitimate customers' no longer feel the need to consume 100PV+ of their own products once the leave that glorious business.

I'd bet a donut Tex will claim less than $120 profit from his Amway business this year. $112 of that will be from his rebate for ordering $300 a month from Amway and eating it himself. (He thinks that's profit).

But, don't worry about Tex and his taxes - he made a 620 mile trip (one way) to visit family and happened to attend an Amway convention, so he's writing the whole thing off as a business trip. He's ethical like that.

CynicalSkeptic

2nd August 2009, 12:11 PM

the FTC has gone on record as saying this issue, by itself, is NOT an illegal pyramid.

True. It's a legal pyramid scheme, not an illegal one.

NewtonTrino

2nd August 2009, 12:40 PM

But, don't worry about Tex and his taxes - he made a 620 mile trip (one way) to visit family and happened to attend an Amway convention, so he's writing the whole thing off as a business trip. He's ethical like that.

This is typical in scamway.

icerat

2nd August 2009, 12:55 PM

Even if this was true ....
But volume only comes from those IN the system!

which it categorically isn't ... this doesn't follow -

That's why it's a pyramid scheme!

The FTC has explicitly said the level of "internal consumption" does not determine whether something is a pyramid scheme (read MYTH: It’s a pyramid if most products are bought by IBOs] (http://www.thetruthaboutamway.com/amwayquixtar-myth-its-a-pyramid-if-most-products-are-bought-by-ibos/). EU law, as established by the Unfair Commercial Practices Directive, explictly considers "consumption" the same as "sale" for the purpose of determining an illegal pyramid (see Page 15, para 14 - DIRECTIVE 2005/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:149:0022:0039:EN:PDF)) , and the Canadian Competition Burea law even explicitly states you're only "in the scheme" if you're actually doing things to try to earn money (see Multi-level Marketing Plans and Schemes of Pyramid Selling (http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03035.html#participants).)

Something is a pyramid scheme because you make money by recruiting people. It's really quite simple - the sine qua non of a Pyramid Scheme (without which it is not) is the second element of the so-called "Koscot test" -

the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users"

(see for example USA vs Gold Unlimited (http://openjurist.org/177/f3d/472))

You're not a pyramid scheme unless you're getting paid "unrelated to sale of the product to ultimate users". In Amway and other legitimate MLMs, payment is entirely based on sale of the product to ultimate users. Note "ultimate users", not "people who aren't distributors".

So the law is clear - YOU ARE WRONG.

Furthermore, as Peterson and Albaum point out in On the Ethicality of Internal Consumption in Multilevel Marketing (http://direct.bl.uk/bld/PlaceOrder.do?UIN=217795702&ETOC=RN&from=searchengine),JOURNAL OF PERSONAL SELLING AND SALES MANAGEMENT, 2007, VOL 27; NUMB 4, pages 317-324 -

internal consumption is a common, widespread phenomenon found in all types of firms and that criticism of this aspect of multilevel marketing as being unethical and fraudulent is misplaced

ETA: On the Coke thing... Icerat, you missed the important bit. According to Whump, Coke salesmen do not recruit other sales men in their area, since that would be increasing competition with themselves.

This is completely and utterly false. Coke "salesmen" as outlined by Whump do not sell to end-users, they sell to wholesalers and retailers, the wholesalers also sell to retailers (competition to the coke "salesmen"!) and the retailers sell to end users. Wholesalers will often also have a small retail sale component, which is again direct competition with the "retail sales" of retailers, as well as direct competition to the coke sold by coca-cola in the company cafeteria.

Wholesalers recruit "competitors" in the retail marketspace by selling to retailers all the time. Heck, by the definition of "competitor" you are using, if hot dog stand buys coke from Walmart, and sells it in his hot dog stand at a markup - Walmart is selling to a competitor!!! Strictly speaking you are actually correct. Both Walmart and the Hot Dog stand are competing for a "retail sale". And just like Amway, Walmart and other wholesalers may even give the hot dog stand guy a discount if he buys in large enough volumes.

Amway depends on it, since you can't make enough money selling product to end customers because they are overpriced.

I'm not sure what you're trying to say here. Amway sells virtually all of it's products at around 55% off marked "recommended retail price". What price somebody resells it for has no effect on Amway profitability at all, let alone makes Amway "dependent" on it. As for Amway reps, all profitability comes from products reaching end consumers.

The main purchasers of Amway products are the distributors, which is why you must recruit them to earn money.

Umm, 100% of Amway products are purchased by distributors. Well, almost, Amway staff can purchase from a factory outlet.

I'd venture to suggest that close to 100% of Coke's products are purchased by Coke wholesalers, distributors, and retailers as well.

So guess what! Coke makes money by "recruiting" wholesalers, distributors, and retailers.

This is a problem why exactly?

So nominally, you're recruiting competition (other people who will sell Amway), but in reality, you're recruiting the customers themselves.

So, yup, nominally Coke is recruiting competition, since both Coke and the people they sell to can sell the product to a final consumer.

This is a problem why exactly?

Coke sells on the open market to anyone.

Really? So I can ring up the Coca-Cola factory and buy a can?

No.

The Coca-Cola company does not get a cut of sales to me. The Coca-Cola company makes money selling to the bottlers. The bottlers make money selling to me.

Not usually. The bottlers would normally sell to wholesalers/distributors/retailers, and they would sell either to you or someone else in the distribution chain.

Who here has bought Coke for consumption direct from a bottler? No, I didn't think so.

Setup is much the same for Amway.

The bottlers do not sell to other bottlers who sell to other bottlers who try to sell to me (and other bottlers (who also try to sell to other bottlers who try to sell to me)) so that each person upline gets credit for the sale.

Huh? I've no idea what this rant means. It appears you think this is somehow what happens with Amway?? It doesn't.

Big difference.

No, all you've done is show how similar they are.

icerat

2nd August 2009, 01:27 PM

When my 30 day supply of Amway vitamins runs me $80 and my Costco 60 day supply costs me $10 (which, shockingly :eye-poppi have quality control awards that Amway can't seem to meet, of just plain choose not to...): who's number 1? Must be Amway!

Always amazes me how so many people who claim Amway is somehow a scam are just repeatedly dishonest. What's even more bizarre is how they do it when it's so easy to prove. The closest thing Nutrilite has to a "costco" vitamin is Nutrilite Daily. A 90 day supply at full retail price? $11.30. (http://www.quixtar.com/products/product.aspx?itemno=104174)

All this blather about 'sales outside the pyramid not defining a pyramid scheme' is another blatant misrepresentation of what was said:

Uh. Yeah. Blatant misrepresentation.

I said (http://forums.randi.org/showpost.php?p=4963558) -

The FTC has explicitly said the level of "internal consumption" does not determine whether something is a pyramid scheme
The FTC's actual words were (http://www.mlmwatchdog.com/files/FTC_Letter.pdf) -
In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.

Oh yeah, I blatantly misrepresented them. :rolleyes:

Funny how those 'legitimate customers' no longer feel the need to consume 100PV+ of their own products once the leave that glorious business.

Again, a lie. Half of people who join Amway never buy the products in the first place, they are never customers, and they do not renew. Of the other half, no more than 13% pursue the business. Much of the rest (74%) continue to purchase products. (source: Orrin Woodward et al v. Quixtar, Inc. (http://dockets.justia.com/docket/court-cacdce/case_no-2:2007cv05194/case_id-394017/)). Furthermore, of people who don't even renew their memberships, 25% remain as customers (source: Wilbur Cross (1999),The Definitive History of the Amway Corporation: The True Story of the Company That Transformed the Lives of Millions (http://www.amazon.com/Amway-Story-Company-Transformed-Millions/dp/0425170403))

Tex2

2nd August 2009, 02:41 PM

pcj, you would bet wrong, as usual. Just because you don't understand the tax laws isn't my problem.

Tex2

2nd August 2009, 02:42 PM

Cynical, virtually every organization is a legal pyramid scheme, what's your point?

Tex2

2nd August 2009, 03:11 PM

ibofb/icerat said, "As for Amway reps, all profitability comes from products reaching end consumers." ---- Let's be clear: About 99% of IBOs don't make ANY profit, thanks to the tool scam. Any Amway profit they make goes into the tool scam, which allows the LCKs to "double dip" both Amway and tool scam profit.

Also, the FTC was careful to state there are other factors that come into play, especially intent, which is difficult to measure. All IBOs have an interest in consuming the products for a number of reasons, not the least of which is the ability to get money back, which is not available to customers.

The reason why Amway has a retail sales rule is to ensure the product quality/price equation (value) is acceptable to non-IBOs. Otherwise, your argument could result in $10,000 pencils being the basis of an MLM, which the FTC certainly wouldn't support as legal.

whump!

2nd August 2009, 03:38 PM

Coke does not sell it's products to it's own supply chains in the same manner as a downline leg does. 99% of the Coke produced goes from the warehouse to the retailer to the consumer and there is not a massive chain of open hands between the final retailer and the bottler taking a cut of the sales and each one taking a few items for their own consumption.

I figure by now that anyone able to read this thread has determined that the Amway "opportunity" is not as simple or altruistic as the commercial makes it sound. If the company eliminated by rulemaking the parallel pyramids of "motivational" businesses setup by several distributors, enforced the retail sales rule, and actually controlled the awarding of distributorships by qualifications such as geographic territories, guaranteed volume, etc. just like other "wholesale" businesses and distributorships are done, and changing the attitude of the majority of those currently taking part in it, some of whom often do things morally questionable or even illegal, then the Amway business might actually be seen in the eyes of the majority of people as a real business worthy of investing time in, just like Domino's Pizza or a UPS store.

On to bigger and better things than dealing with the true believer. As I said, the damage to Amway's rep has been done in this thread and there's nothing that Icerat and even Tex can do to repair it (although, Tex is at-least trying to be honest about what he is doing and deserves kudos for admitting to abuses of the system that is Amway). The funny thing about all of this is, it's the damage that the distributors themselves did through their own actions that ultimately has done the damage. All many of us have done is bring the wrongs into the light for public scrutiny. For those of you who have never been to the site where a very good business analysis was done, visit amquix.info and have a good read before taking the plunge into the Amway business.

Whump!

Tex2

2nd August 2009, 03:50 PM

whump, just because Amway isn't identical to every aspect of Coke doesn't make it wrong. The rest of you have done very little to "bring the wrongs into the light for public scrutiny.", as most of what is posted is half-truths, blather, etc., not to mention an extremely small segment of the public is even aware of this forum, let alone this thread, to provide scrutiny. I have said many times amquix is a good source for DOCUMENTS, not ANALYSIS. The site owner has serious accuracy and analytical skill issues.

DOUBLE Whump!!!

NewtonTrino

2nd August 2009, 03:56 PM

Legal != Good business.

Semantic arguments about whether it's a pyramid scheme are pointless. Whatever you call it the business is not a good effective way to turn time into money. When you add the tools scam brainwashing garbage on top of that it becomes downright dangerous.

Tex2

2nd August 2009, 04:33 PM

You don't have a clue what the nature of the Amwya business is minus the tool scam.

NewtonTrino

2nd August 2009, 05:02 PM

Enlighten us then.

whump!

2nd August 2009, 06:10 PM

icerat

2nd August 2009, 06:19 PM

Coke does not sell it's products to it's own supply chains in the same manner as a downline leg does. 99% of the Coke produced goes from the warehouse to the retailer to the consumer and there is not a massive chain of open hands between the final retailer and the bottler taking a cut of the sales and each one taking a few items for their own consumption.

So ... Coca-Cola->Warehouse->Retailer->Consumer.

3 steps to the consumer. 99% of all coke takes that path? I doubt it, but I can accept it's probably a majority.

And what's the situation with Amway? You seem to think there's "a massive chain"? Massive? Funnily enough, we've known exactly how "massive" it is for more than 30 years, thanks to FTC vs Amway (http://www.amwaywiki.com/FTC_vs_Amway#Amway_Distribution_System) -

Currently about half of all Amway distributors were sponsored by a Direct Distributor or by a distributor sponsored by a Direct Distributor. More than 70% were within three positions of a Direct Distributor and 99% were within seven positions
With "distributors" often being the end consumer, half the time it was -

Amway->Wholesaler(Direct)->Customer

Two steps to the consumer. And 70% of them time it was three steps or less.

Some "massive chain", huh?

I figure by now that anyone able to read this thread has determined ....

.... that you don't know what you're talking about. You, NewtonTrino, and PCJ keeping making claims that are outright wrong, and I've supplied sources that prove it if anyone cares to check for themselves.

You and your friends have shown that ... you don't know what a pyramid is, you don't know what a retail customer is, and you don't even know how Amway actually operates.

Back in 2004, Brodie et.al did a study titled Public Perceptions of Direct Selling: An International Perspective (http://westminsterresearch.wmin.ac.uk/2543/)

They surveyed over 4000 people about their experiences with Direct Selling companies such as Amway, Avon, and Herbalife. What they found was that there were two significant groups - one group had a negative impression of Direct Selling and Direct Sellers, the other group had a positive impression.

What was the difference between the groups?

To quote, people who had "actual, first-hand personal experience, have a considerably higher, more positive perception"

People with actual first-hand experience had a positive view of direct selling, they had a positive view of direct sellers, they considered the product to be "value for money", the process convenient, and no problem with "pressure to buy".

The people with no actual first-hand experience had a negative view of all of these things, except an acknowledgement it may be convenient.

Seems to me there's much the same dichotomy here.

icerat

2nd August 2009, 06:50 PM

Amway was designed as follows:

1. Corporation produces products.

2. Corporation uses the network of recruited distributors who pay a yearly fixed fee to sell those products to end-users (consumers). Products were sold wholesale and shipped in bulk to large-volume distributors who in-turn sold them wholesale to more distributors below them (ever done a "product pickup"?) Those distributors then sold them to themselves and to more distributors below and sold product retail as their "own store" and the process continues on down to the bottom tier of distributors.

right so far.

3. Distributors make a commission from the sale of said products, with those who wholesale and retail higher volumes making more commission, but always having to share some of the commission with those above them. Even when you reach a certain level and your checks come directly from the corporation (which you use to pay yourself and pay commissions on the sales volume those below you generate), your volume is also shared with those above you, you just never see it. I'm not making a judgment, just stating a fact.

Also right so far (though outdated mechanisms). It's probably important to point out that apart from calculating volume monthy, rather than at point of purchase, this doesn't differ significantly from traditional distribution.

The Amway model always intended to have distributors do a decent volume through their own retail sales, which negated a need to have a large downline of mostly wholesale consumers who consume mostly for themselves (which is how it really is now) in order to be profitable.

This depends on what you call "decent volume", but the model always had people moving from being retailers to wholesalers as their volume increased through recruiting other distributors. Even back in the early 70s in FTC vs Amway it was reported that a large proportion of volume was from internal consumption.

The products had good reputations and many distributors did very good retail volumes and did not have to recruit their friends/neighbors/co-workers/etc. using the hook of "owning your own business".

Again, read FTC vs Amway. Read any history of Amway. Heck, read the articles of incorporation. Amway was always primarily about offering a business opportunity.

All you ended up doing was diluting your own potential retail sales with the full markup in exchange for recruiting your customers as your wholesale competition.

I absolutely agree. Where you're wrong is in thinking that everyone was operating on the "no customers" model. Right from when I first started we were encouraged to have customers. The "system" I work with has customers as part of it's "vital signs" - ie what a healthy business should look like. We had competitions where signed customer receipts were the entry tickets. We had product and sales training. The "system" I work with spent a deal of money developing a whole weightloss program based around Amway products, and directed towards customers. My group continues to hold skin care clinics and health seminars ... all for customers.

Heck, here in the market I currently operate, Amway has a "member" category, were someone can join Amway for free and get IBO pricing. We do not use it, we do not promote it. Our position is that it's absolutely stupid. These people are customers. You have to treat them like customers. You have to do the work as if they're a customer - but the Amway model for them has no retail profit! We don't want them as members, we want them as customers so we get retail profit.

So we're in complete agreement here. A model with no "full price" customers is dumb - you're cutting into your own profits. Where you're wrong is in assuming all Amway groups are the same.

That's the #1 failure of the "system" due to it being corrupted by the greed of those most successful in the business.

Rule #1 of evaluating a person's comments on Amway ... if they say "the system", then you know they have very limited experience with Amway. There is no "the system". There's dozens, indeed I suspect hundreds of different systems. One of the differences is in how they deal with customers.

Funnily enough, you'll find that the groups that promoted "no customers" have shrunk dramatically over the past couple of decades. What's more, folk who are online critics of Amway almost universally have experience only with those groups (actually they're all one group and it's offshoots).

Icerat - learn the story of Frank & Lorraine Mikolas from Canada and how they went "direct" without any downline. The sold everything they bought and made great money.

Good for them. They're not the only ones that have done that. It has it's strengths (profitability) and weaknesses (lack of stability).

They spoke at the first "rally" I attended in Austin 17 years ago. As you know, Deb at webraw.com/quixtar/ has first-hand knowledge of how her parents built the business that way.

Except they didn't. They had lots of downline, and indeed their biggest leg and biggest contributor to their profits came from the very "the system" you just decried. What's more, without a "system", Deb's family struggled to keep the other legs together and ended up selling their business.

That's it. Really. No spin, no BS. Done as Amway (not the distributors) modeled it, the business of an Amway distributor is a legal multi-level distribution network. Now, with products rather uncompetitive due to pricing and the antics of the motivational organizations that make up the majority of the business,

Again with the myths - the products aren't "uncompetitive". It's simply not true. That myth comes about because of the way some people were marketing the products. They were (still are for that matter) trying to sell BMWs to people who buy Mazda's, and telling them they could get their car 30% cheaper through Amway. A BMW at 30% off is still more expensive than a Mazda. Sell an Amway BMW to a BMW buyer though, and the prices are more than competitive.

Amway is attempting, through the TV ads and people like Icerat, to rehabilitate their public image which has taken a beating because of people who have experienced first-hand the real Amway business as it exists today and don't want to have anything to do with it.

Again, partially true. The thing is the "people who have experienced first-hand the real Amway business" ... haven't. You have people who experience one part of the Amway business, a part that was never a majority of Amway, and then you have even more people who have repeated the stuff those people have said, such as you are doing I expect.

You can pick what I said apart all you want, since you seem to enjoy it so much, but it's all fact. What I said in my 3 points is basically what you get in the SA-4400 prospectus and at any introductory meeting.

We'll I pretty much agree with everything you said here, except you're a little idealistic on the early Amway, and your view of the Amway of the past few decades is really only a view of one part - a minority - of Amway and you're making the mistake of thinking an elephant's tail tells you everything about the elephant.

Tex2

2nd August 2009, 07:58 PM

Enlighten us then.I doubt you could comprehend it, your mind is too stuck in the current scenario.

whump!

2nd August 2009, 08:02 PM

Then I think it's settled. This thread can die and the ad-hominems about people who were involved not knowing what they are talking about from the point of view of somebody who has never been directly involved (meaning actually sponsored) in an American line of sponsorship and "building the business" within our nation can stop.

The end.

Whump!

Tex2

2nd August 2009, 08:24 PM

It's not even close to being settled. It will be settled when there is no longer a tool scam in the U.S.

The Beginning.

Triple Whump!!!

cyborg

2nd August 2009, 11:21 PM

cyborg, human nature does not obey mathematical formulae. LOL

Yes - it does.

Tex2

3rd August 2009, 04:40 AM

Not the ones you suggested. LOL Your own formula proves you wrong. LOL

cyborg

3rd August 2009, 05:33 AM

Tex2

3rd August 2009, 06:32 AM

If your 2x formula was right, all of us would have been sponsored many times over, as Amway has been around a half century.

Also, 20 years ago, those who were 18 or less years old weren't even old enough to be IBO candidates.

So not only has Amway never saturated, it never will, because there are plenty of dunces like YOU out there who don't have a clue....but may wake up some day (I'll be the one NOT holding my breath for that event!).

You would have done much better with the phone call, as the obvious facts you ignored are now available for all to see. LOL

icerat

3rd August 2009, 06:34 AM

I don't believe I offered any formulae - I simply provided the series of powers of two as an exemplar of exponential growth. So I don't know exactly how "my own formla" proves me wrong on anything. Perhaps you would be willing to point out what is wrong? Or is this information that can only be conveyed by using copper wires for voice and not data?

Your formula wasn't wrong per se, it just has nothing to do with how Amway or legitimate MLMs work. What's wrong is your understanding of the business model.

Tex2

3rd August 2009, 06:39 AM

Since he attempted to apply the formula to Amway, it was wrong. Stop trying to twist meaning, you do that far too much with the tool scam.

Tex2

3rd August 2009, 06:57 AM

Be sure to visit my new thread regarding Bill Clinton and network marketing. I think his "system" involves late night pizza and blue dresses. LOL

Also, he takes "getting naked" (being honest, even though the LCKs lie through their teeth) with your upline quite literally! LOL

http://texsquixtarblog.blogspot.com/2009/08/are-we-making-difference.html

cyborg

3rd August 2009, 07:06 AM

Your formula wasn't wrong per se, it just has nothing to do with how Amway or legitimate MLMs work.

Abstract: MLMs work on the basis of recruiting a downline who then recruits downlines etc... each of whom pays back up again. To increase the amount of revenue venturing up the stream either you have more downlines or you have more volume. Exponential growth is unavoidable in the former case unless the expectation is that one's downlines will not recruit more downline's etc...

What's wrong is your understanding of the business model.

No I don't think so.

Tex2

3rd August 2009, 07:12 AM

cyborg, you need to stay in the abstract, because when you start talking practical facts, you are hopelessly lost.

Ad hominem and off-topic. Remember, it is attack the argument and not the aruger...posts must also be on topic/address the OP.

cyborg

3rd August 2009, 07:17 AM

If your 2x formula was right, all of us would have been sponsored many times over, as Amway has been around a half century.

No, because not everyone gets involved in Amway.

The point of the "formula" (and I hesitate to call it that because it is not a formula, is a short expansion of a series) is that is one person recruits two into the system then the two new recruits will at least require two recruits in order to equal the number of downlines their upline had. This is a mathematical certainty.

This makes it inherently problematic to argue that MLMs are sustainable on the basis of selling the idea that new recruits can attain the high number of downlines as old recruits.

In other words there is no way one could honestly continually sell the idea to new recruits that they could one day have a large base of downlines beneath them because eventually everyone would have to be in the scheme.

That would be dishonest - no?

Tex2

3rd August 2009, 07:26 AM

Your theoretical example would be dishonest.

The reality is Amway hasn't saturated after 50 YEARS! There are only a couple hundred thousand IBOs in the U.S., probably less that do much at all, with a population of over 300 MILLION! So, if you sponsor someone, should you tell them they "only" have 299,999,999 others to sponsor?

Now, what does your theoretical example have to do with reality?

I suggest we create the theoretical problem you suggest, then figure out what to do.

I already addressed this and other issues above, which you chose to ignore.

cyborg

3rd August 2009, 07:33 AM

Your theoretical example would be dishonest.

Again: it is not a theoretical example.

The reality is Amway hasn't saturated after 50 YEARS!

Again: one would not - and could not - expect the entire population of the US to be in Amway. Irregardless of any other reason some people just won't be interested.

So, if you sponsor someone, should you tell them they "only" have 299,999,999 others to sponsor?

Er no.

Tex2

3rd August 2009, 08:00 AM

Of course it's a theoretical example, as it has no basis in fact. Amway has been around for a half century and your example bears NO resemblence to reality. BTW, irregardless is not a word.

cyborg

3rd August 2009, 08:13 AM

Of course it's a theoretical example, as it has no basis in fact.

No it's not a theoretical example as it's not theoretical. It simply is.

Amway has been around for a half century and your example bears NO resemblence to reality.

Again: I did not say otherwise. You have completely missed the point.

Say there are 100 IBOs in the US. If each of those has 1000 people then there is no way that those at the lowest levels in all the IBOs could recruit enough people to equal the current level of those at the top because there wouldn't be enough people to go around.

Now if you're saying there's a couple of hundred thousand of them then this likelihood seems much lower - or there are particularly flat heirarchies or just lots of very small ones. Either way I don't really see how one can point to the multi-level part as some sort of benefit.

BTW, irregardless is not a word.

Yes it is.

Bob Klase

3rd August 2009, 08:24 AM

BTW, irregardless is not a word.

Merriam-Webster Online (http://www.merriam-webster.com/dictionary/irregardless) says about 'irregardless':

The most frequently repeated remark about it is that “there is no such word.” There is such a word, however.

And so many other dictionaries disagree with you:

http://dictionary.reference.com/browse/irregardless
http://dictionary.cambridge.org/define.asp?key=93149&dict=CALD
http://www.thefreedictionary.com/irregardless
http://www.onelook.com/?w=irregardless&ls=a

Tex2

3rd August 2009, 08:28 AM

It also simply is not applicable to Amway.

I didn't miss any point. I am contrasting theory and reality.

http://en.wikipedia.org/wiki/Irregardless

Tex2

3rd August 2009, 08:32 AM

Bob,

According to your first reference, "Its reputation has not risen over the years, and it is still a long way from general acceptance. Use regardless instead." I amend my statement: It's not a proper word. But thanks for finally adding to the discussion.

All of the other references you listed said essentially the same thing.

cyborg

3rd August 2009, 08:34 AM

I didn't miss any point. I am contrasting theory and reality.

Simple question: if I were to join Amway tomorrow would I or would I not want to have a large number of downlines?

Tex2

3rd August 2009, 08:38 AM

Even though YOU have not answered numerous simple questions from me, I will answer yours.

Answer: Maybe you would, maybe you wouldn't.

cyborg

3rd August 2009, 08:48 AM

Even though YOU have not answered numerous simple questions from me, I will answer yours.

I have not been asked numerous simple questions.

Answer: Maybe you would, maybe you wouldn't.

So:

Why would I?

Why wouldn't I?

Tex2

3rd August 2009, 08:51 AM

Yes, you have. You also have had the opportunity to answer questions asked of others, and have chosen to remain on the sidelines.

You would if you were interested in the results.

You wouldn't if you didn't want to do the work involved in obtaining the results.

NewtonTrino

3rd August 2009, 08:51 AM

It's pretty clear that growth in north america has substantially slowed. Most of the growth seems to be overseas. How do you reconcile this with the idea that it's not saturated?

Tex2

3rd August 2009, 08:55 AM

Easy. The business IS saturated in the U.S. when the tool scam is taken into account. Take away the tool scam, and the lid comes off the saturation level.

A phyical analogy is trying to fill a bucket that has a number of holes in it. Plug up the largest one (the tool scam), and a new, higher equilibrium level is reached.

NewtonTrino

3rd August 2009, 09:03 AM

So to be clear don't get into the business into the tool scam is shut down, right?

Tex2

3rd August 2009, 09:05 AM

I've said exactly that on many occasions. This is the only language that Amway apparently understands.

Porkchopjim

3rd August 2009, 10:33 AM

Always amazes me how so many people who claim Amway is somehow a scam are just repeatedly dishonest. What's even more bizarre is how they do it when it's so easy to prove. The closest thing Nutrilite has to a "costco" vitamin is Nutrilite Daily. 90 day supply at full retail price? $11.30.

And this is the powerhouse product that propelled Amway to number 1? Right...

No - that is a product that you sell to non-IBOs who want a decent vitamin.

Nutrilite $80 vitamins are bought and consumed by IBOs themselves to make 'performance goals' because volume is all that matters - no matter where it comes from...

Run the numbers and see how close you can get to 'Number one Brand' using only IBOs - only the ones who 'do' anything, of course - chugging Double X and the other overpriced vitamin products and see how close to 'Number One' you get.

Bet it's pretty darn close!

The FTC has explicitly said the level of "internal consumption" does not determine whether something is a pyramid scheme...

Funny how you can read that part but not the rest of that memo...

Amway is NOT a buyer's club - the example cited by the FTC as something with NO external consumption.

Something is a pyramid scheme because you make money by recruiting people. It's really quite simple - the sine qua non of a Pyramid Scheme (without which it is not) is the second element of the so-called "Koscot test" -

Let me sine qua non right back at you:

You can charge a fee, and make a profit, by recruiting someone into a 'Buyers Club' and that new participant doesn't have to do a single other thing. That NEW participant also has the right to recruit new people and make a profit from that, which indeed can be paid upwards ala MLM.

Holy cow! The FTC just outlawed Buyer's Clubs! Son of a Gun! Or, IBOFB/ICERAT/Insider isn't being truthful with everyone. Perhaps not even himself.

So the law is clear - YOU ARE WRONG.

The law is clear. You just misrepresent it - always. That doesn't make me wrong, but it does make you something else.

Anyway - I find it interesting that in the FTC cited sales to non-distributors, and Amway to THIS DAY has specific rules requiring a certain amount of sales to non-IBOs...seeing as they don't matter, according to you.

If the law was as YOU say it were, Amway would save itself a lot of grief by not worrying about something thinking that only IBOs buy their products...

Why are there EXPLICIT rules requiring sales to NON-IBOs?

And Texie,

Seeing as you didn't know you had to SELL something to make a profit and you STILL can't figure out what the UK lawsuit was about...claiming that you understand the tax laws just might be a stretch.:rolleyes: Plus, you've given the kind people here no reason at all to doubt your business acumen...

icerat

3rd August 2009, 10:41 AM

For interested parties I provided links to all sources for my statements, make your own judgements.

Tex2

3rd August 2009, 10:55 AM

Double X is $44.84 for a month supply, PV/BV:20.56/59.63.

An IBO can make a (small) profit without selling anything to non-IBOs, up to 25% off their own purchases. I consider this a profit because it is money not available to a non-IBO customer. You prefer to call it a rebate, and I'm okay with that, but it's the exact SAME amount of dollars, whatever label you want to give it.

I know what the UK lawsuit was all about, and getting rid of the tool scam was a major portion of it....claiming that you understand the tax laws just might be a stretch. Plus, you've given the kind people here every reason to doubt your business acumen, or more accurately, lack thereof...LOL

cyborg

3rd August 2009, 11:00 AM

Yes, you have. You also have had the opportunity to answer questions asked of others, and have chosen to remain on the sidelines.

I'm not generally prone to answering entire backlogs of questions addressed to all and sundry. I have no particular recollection of whatever questions it is you are annoyed by not being answered.

You would if you were interested in the results.

You wouldn't if you didn't want to do the work involved in obtaining the results.

So:

What are the results?

Why wouldn't I want to do the work to get the results?

Bob Klase

3rd August 2009, 11:06 AM

An IBO can make a (small) profit without selling anything to non-IBOs, up to 25% off their own purchases. I consider this a profit because it is money not available to a non-IBO customer. You prefer to call it a rebate, and I'm okay with that, but it's the exact SAME amount of dollars, whatever label you want to give it.

Your definition of 'profit' means I'm making a profit every time I use a coupon at a retail store. Buy something for $20, get $1 off and you made $1 'profit'?

icerat

3rd August 2009, 11:09 AM

For the record, Tex's definition of "profit" isn't one I would use, nor any other Amway business owner I know. Especially since in most parts of the world profits are taxed and rebates are not.

CynicalSkeptic

3rd August 2009, 11:12 AM

I think profit is usually defined as income minus expenses, not just income.

cyborg

3rd August 2009, 11:27 AM

incoming cashflow - outgoing cashflows = profit

outgoing cashflows * x% != profit

Tex2

3rd August 2009, 12:01 PM

cyborg, you don't have to have a recollection, just go back to page 15 and start reading.

The results are published averages for various pin levels. Pick one.

There are various reasons you wouldn't do the work. You're lazy, aren't willing to learn new things, are too afraid to approach other people, etc.

Bob, if you have $1 more in your pocket, call it a rebate. But what happens when that coupon is based on how many other shoppers you are responsible for shopping at the same store, and you get $8? Is it still a rebate?

For the record, icerat/ibofb's definition of "ethics" isn't one I would use, but all Amway LCKs I know, especially Jim Dornan, agree with him. Especially since in most parts of the world ethics are simple concepts, like telling the truth about the business model. Like icerat/ibofb's earlier analogy, I was illustrating a concept, not suggest a perfect parallel scenario. I also clearly stated I have no issue with calling the first level a rebate, but beyond that would say a profit is a more appropriate word to use. The bottom line is the dollars are the same, so call it a tomato for all I care.

cynical/cyborg, the terms you are reaching for are gross profit and net profit. For most IBOs, net profit is GROSSLY negative.

Bob Klase

3rd August 2009, 12:22 PM

Bob, if you have $1 more in your pocket, call it a rebate.

Something cost $20 and you don't buy it. You have $20 more in your pocket- rebate? (or profit?)

But what happens when that coupon is based on how many other shoppers you are responsible for shopping at the same store, and you get $8? Is it still a rebate?

What happens if you spent $10 getting those other shoppers in the store for your $8- is it still profit?

Tex2

3rd August 2009, 12:24 PM

Bob,

Neither.

That would be a gross proft of $8, a net profit of -$2. Don't you read my other posts? You should have been able to figure this one out for yourself. What if those customers keep buying, month after month, year after year, and you spend far less than $10 for that result?

I also noticed you didn't answer my question. That appears to be a trend on this forum. You don't answer my questions, but I answer yours. Interesting.

Almo

3rd August 2009, 01:04 PM

Scientology is legal. Amway is legal. This does not mean they are not scams.

Tex2

3rd August 2009, 01:09 PM

Almo, that was deep....LOL

Skeptic

3rd August 2009, 01:22 PM

Your formula wasn't wrong per se, it just has nothing to do with how Amway or legitimate MLMs work.

There is no such thing as a "legitimate" MLM. In all MLMs, the top 5% (at most) make 95% of the profit -- regardless of how hard those below them work. That it itself would not be so bad if the profit actually came from paying customers. What's far worse is that the vast majority of the profit comes from forcing the bottom 95% to pony up money for worthless "training" and "tools" and "seminars" or to stock their own homes with tons of unsold products.

Take, for instance, Microsoft. Does Bill Gates make more than the guy who answers the phone at tech support? Yes, of course. But both of them make money from outside -- from the customers who are not part of Microsoft who buy Microsoft products. Of course Microsoft people buy MS products too (often at a discount), but they represent only a tiny fraction of Microsoft's entire customer base.

Not so with MLMs. In MLMs, and in Amway especially, the vast majority of the product is bought by those who are themselves in the MLM. Sure, Amway claims a court decided it isn't an illegal business IF it were to obey the "70% rule" (70% of the products must be sold to non-distributors) and various other rules, but it is not hard to see that this is simply not the case. The vast majority of Amway products, over 90% with all probability, are bought by people who are themselves distributors. When it comes to the "tools", the figure is probably closer to 99%.

It's as if Bill Gates, instead of paying the guy who answers the phone a salary, actually demanded that HE (the phone guy) pay HIM (Gates) money for the "privilege" of "joining the great opportunity" of being in Microsoft at all, and that THIS was the source of 90% of Gates' wealth.

It's a scam.

Bob Klase

3rd August 2009, 01:29 PM

Bob,

Neither.

That would be a gross proft of $8, a net profit of -$2. Don't you read my other posts?

Some of them. I try to skip the name calling, LOLing and demands to call you. Leaving all that out there's not really much left but I'm sure I probably miss other things while skipping the garbage.

I also noticed you didn't answer my question. That appears to be a trend on this forum. You don't answer my questions, but I answer yours. Interesting.

The answer to your question is- maybe. It depends on how you define 'rebate'. Then it could depend on how much you paid to get it. It might also be income and/or it could be profit. None of those can be assumed based on the limited information given.

Skeptic

3rd August 2009, 01:35 PM

I think profit is usually defined as income minus expenses, not just income.

Yes, but if you used THAT definition, most Ambots would have to confess that they are losing money. So the definition must be wrong, you see...

oggiesnr

3rd August 2009, 02:01 PM

Tex2

3rd August 2009, 02:17 PM

Skeptic, you don't understand the 70% rule, compared to the retailing volume rule. If I were you, I wouldn't type about what I don't understand, but then we wouldn't see much from you on this forum, would we?

Are buying clubs also illegal, because most of what they sell is to "insider" members? Better call the FBI on that one....different doesn't mean scam, it means different. May be a scam, may not be a scam. In the Amway case (not including the tool scam), it means different and not a scam. In your Microsoft example, when a person answers the phone, they get paid, but so does Bill Gates, because on average they sell something. Bill gets paid more, so Microsoft must be a scam, according to you, because this is how MLM works as well.

Bob, it's obvious you skip over most of the content. The question is how YOU define rebate versus gross profit. As far as I'm concerned, the first 3% is a rebate, everything above it is gross profit. Make a decision, Bob. Just remember it isn't rocket science.

Tex2

3rd August 2009, 02:20 PM

ogg, the amount of markup you describe is typical for the manufacturer.

oggiesnr

3rd August 2009, 02:21 PM

ogg, the amount of markup you describe is typical for the manufacturer.

Only when involved in a pyramid, remember I was that manufacturer!

Steve

icerat

3rd August 2009, 02:29 PM

Sure, Amway claims a court decided it isn't an illegal business IF it were to obey the "70% rule" (70% of the products must be sold to non-distributors) and various other rules, but it is not hard to see that this is simply not the case.

Which just goes to show where YOU got your "MLM education" from.

There is no "70% rule" that says 70% of the products must be sold to non-dsitributors. That's a lie made up by anti-mlm zealots like Jon Taylor and Robert FitzPatrick.

It never existed. They suckered you, dude.

"The 70% rule" is about inventory loading - if you're just buying stock and stacking it up in the garage, you shouldn't earn a volume rebate bonus. To qualify you need to either use the product yourself, sell it to a customer, or resell it downline.

You might want to read MYTH: 70% retail sales rule (http://www.thetruthaboutamway.com/myth-70-retail-sales-rule/)

icerat

3rd August 2009, 02:51 PM

And now for the rest of that ridiculous post from Skeptic -

There is no such thing as a "legitimate" MLM. In all MLMs, the top 5% (at most) make 95% of the profit -- regardless of how hard those below them work.

What a nonsensical statement. Virtually by definition the 5% are the people who work hard. If you work hard then you're not "below" anyone.

That it itself would not be so bad if the profit actually came from paying customers.

The profit comes entirely from paying customers. What are you talking about?

What's far worse is that the vast majority of the profit comes from forcing the bottom 95% to pony up money for worthless "training" and "tools" and "seminars" or to stock their own homes with tons of unsold products.

Uhh, no. Amway makes ZERO (or close to it) from "training materials" and while some distributors do profit handsomely from providing these goods and services to others (nothing like as widespread as Tex claims), this is not included in any of the average income statistics. For example, Amway reported several years back that the average "Founders Executive Diamond" and higher had an Amway income alone of around US$1.5million/yr.

Take, for instance, Microsoft. Does Bill Gates make more than the guy who answers the phone at tech support? Yes, of course. But both of them make money from outside -- from the customers who are not part of Microsoft who buy Microsoft products. Of course Microsoft people buy MS products too (often at a discount), but they represent only a tiny fraction of Microsoft's entire customer base.

Tell me Skeptic, would that remain true if Microsoft said "pay us $50/yr, and we'll put you on the books as an unsalaried employee and you can buy all Microsoft products at employee price"?

I for one would quickly sign up to be an unsalaried MS employee! Why (assuming the $50 only covered admin costs), would this make MS a scam?

Not so with MLMs. In MLMs, and in Amway especially, the vast majority of the product is bought by those who are themselves in the MLM.

Even if this was a problem (it's not, I've already provided you with numerous independent sources on that, both legal and academic), that depends on what you call "in the MLM". The vast majority of products bought from CostCo are bought by people "in CostCo". "So what", you say - "they don't think it will make them rich!". Well, bright spark, the vast majority of people buying Amway products aren't trying to get rich doing that either. Indeed, according to Canadian guidelines (given earlier, you clearly didn't bother to read them), while they may have signed an "Amway IBO" form, they're not "participants", ie they're not "in the MLM". They're just customers.

Governments understand this stuff. The EU spent years studying this before they developed a new directive. So did Canada.

Why do you think you, doing little more apparently than reading a few falsehood filled anti-mlm zealot pages, know so much more than them?

Sure, Amway claims a court decided it isn't an illegal business IF it were to obey the "70% rule" (70% of the products must be sold to non-distributors) and various other rules, but it is not hard to see that this is simply not the case.

see previous post

The vast majority of Amway products, over 90% with all probability, are bought by people who are themselves distributors. When it comes to the "tools", the figure is probably closer to 99%.

No, in fact the complete opposite. Pretty much 99% of tools are bought by people who are NOT "tool distributors", but merely customers of the tool companies. You're not only wrong, you're wrong almost 100%!

It's as if Bill Gates, instead of paying the guy who answers the phone a salary, actually demanded that HE (the phone guy) pay HIM (Gates) money for the "privilege" of "joining the great opportunity" of being in Microsoft at all, and that THIS was the source of 90% of Gates' wealth.

It's a scam.

You'd be right, if that's how Amway operated. It doesn't. This is why you're so wrong again and again and again. What you just described is a clear illegal pyramid. The binary exponential growth example you gave earlier is a clear example of why illegal pyramids are scams and illegal.

Amway doesn't operate that way at all. Indeed in some countries what you "pay" for the "privelige" of "joining the great opportunity" is ZERO. Even in countries where it's not, Amway makes no money on it. It's not the source of any of Amway, or Amway distributors wealth.

Your nick is a misnomer. A true Skeptic is interested in studying the evidence and coming to conclusions based on the evidence. You clearly have not done this at all. You've made various significant and egregious assumptions and just moved on from there. You've apparently made little or no attempt at all to read relevant, reliable literature in the field and simply relied on hearsay of people with an agenda.

That's sad.

Tex2

3rd August 2009, 02:53 PM

ogg, that amount of markup is typical even when NOT involved in a "pyramid."

Tex2

3rd August 2009, 03:06 PM

Uhh, no. Amway makes ZERO (or close to it) from "training materials" and while some distributors do profit handsomely from providing these goods and services to others (nothing like as widespread as Tex claims), this is not included in any of the average income statistics. ---- I'm sure Amway builds the training costs into their product cost structure, has decided to take a bit less profit, or some combination of the above. Your attempt to minimize the tool scam is a waste of time. It is a huge amount.

For example, Amway reported several years back that the average "Founders Executive Diamond" and higher had an Amway income alone of around US$1.5million/yr. ----
The other thing not included in Amway statistics is the lifestyle created by the tool scam, especially for those LCKs who achieved a level once, yet their lifestyle exceeds what an IBO maintaining that level makes. Also, I believe the amount was just under about $1 million/year.

Tex2

3rd August 2009, 03:08 PM

No, in fact the complete opposite. Pretty much 99% of tools are bought by people who are NOT "tool distributors", but merely customers of the tool companies. You're not only wrong, you're wrong almost 100%! ---- I think you (again) twisted his words to meet your agenda. By "distributor" he meant "IBO". Most products are bought by IBOs and virtually all tools are purchased by IBOs. Nice try.

oggiesnr

3rd August 2009, 03:18 PM

ogg, that amount of markup is typical even when NOT involved in a "pyramid."

Sorry, you're wrong. I work in this business, I know what the margins are and how much each layer puts on the final bill. OK I maybe was different because I manufactured and wholesaled. The margin if I wasn't would be about 25% between manufactuer and wholesaler, ie factory cost about £1.70 to give a wholesale price of £2.10, again I know this because that was the price I charged my wholesaler when I got fed up with chasing payment from umpteen different accounts. The 95p the pyramid wanted represented margin for the intervening layers.

A franchise operation wanted the same product at £1.40 so they could add their margin when they sold it on to franchisees.

Now it may be different in the USA but that's how it looks from here.

Steve

Bob Klase

3rd August 2009, 03:22 PM

Bob, it's obvious you skip over most of the content.

If you think garbage = content then I do skip over most of your 'content'.

The question is how YOU define rebate versus gross profit. As far as I'm concerned

Of course that's the second problem with your posts (the first being the amount of name-calling, etc). You only look as far as you're concerned and ignore reality.

The question is not how I define rebate versus gross profit. The question is what do those words actually mean in the real world. Very different than "as far as you're concerned".

As far as you're concerned, if you spend $100 buying things you could buy for $50 then you can ignore the extra $50 expense and count a $25 rebate as 'profit'.

Just remember it isn't rocket science.

Both subjects seem to be over your head so I'm not sure you'd recognize whether it was rocket science.

Tex2

3rd August 2009, 04:25 PM

ogg, are you aware there are hundreds of Amway partner stores in the U.S., which pay out a PV/BV bonus? Now it isn't as much as the Amway products, but it is a bonus. Many Amway products are competitively priced, especially now, with the recent price reductions. Therefore, the 4-5X markup from the MANUFACTURER is reasonable. It may not apply to all products, or the specific product you were dealing in, but it is a reasonable markup.

Almo

3rd August 2009, 04:42 PM

Almo, that was deep....LOL

Glad you thought so. ;)

Tex2

3rd August 2009, 04:47 PM

Governments understand this stuff. The EU spent years studying this before they developed a new directive. So did Canada. ---- Governments understand the tool scam, too. That's why there isn't one in the UK, even though your buddy/hero Jim Dornan stepped on his own crank trying to pin the guilt on Amway, only to retract and reissue a revised letter!

Tex2

3rd August 2009, 04:51 PM

Bob, you wouldn't know garbage versus fact if it crawled up your butt. LOL

There are many products competitively priced, especially with the recent price reductions. You simply don't know what you're talking about, which explains why you refuse to answer a simple question. LOL

Almo...as a puddle!!! LOL

icerat

3rd August 2009, 04:56 PM

Many years ago I was approached to supply a UK near equivilent of Amway with a product we made. The usual retail price was £5 and we charged £2.10 wholesale giving the gift industry's "double plus VAT" standard margin.

In order to meet a £5.00 retail price they needed a price from me of 95p! This was so the end seller down the pyramid could sell it out £5.00 and everyone in between take their cut. I didn't supply them.

Steve

Steve, if I read correctly you're saying your standard wholesale price was £2.10 and standard retail price was £5.00?

That means 58% of the final retail price was markup on wholesale.

I've no idea about the company you were dealing with, but the difference between Amway's best wholesale price and their recommended retail in the UK is roughly ... 30% retail markup + 21% volume rebates + 4% leadership profit sharing + 1% depth bonus + 0.5% "pin bonuses" + 1.5% "other" (Ruby, FAA, trips etc) which equals ....

58%

Remarkable. It's just like your business.

Tex2

3rd August 2009, 05:20 PM

I hope everyone is noticing how icerat/ibofb constantly ignores my posts. The reason is he knows he is wrong, so why bring attention to it?

NobbyNobbs

3rd August 2009, 05:30 PM

I'm not sure what you're trying to say here. Amway sells virtually all of it's products at around 55% off marked "recommended retail price". What price somebody resells it for has no effect on Amway profitability at all, let alone makes Amway "dependent" on it.

Recommended by whom?

icerat

3rd August 2009, 05:35 PM

I hope everyone is noticing how icerat/ibofb constantly ignores my posts. The reason is he knows he is wrong, so why bring attention to it?

No, it's because I believe you clearly fulfill the DSM-IV criteria for NPD (http://en.wikipedia.org/wiki/Narcissistic_personality_disorder) and/or ICD-10 criteria of OCPD (http://en.wikipedia.org/wiki/Obsessive-compulsive_personality_disorder) and perhaps others and don't want to waste my time.

NewtonTrino

3rd August 2009, 06:30 PM

cyborg, you don't have to have a recollection, just go back to page 15 and start reading.

The results are published averages for various pin levels. Pick one.

There are various reasons you wouldn't do the work. You're lazy, aren't willing to learn new things, are too afraid to approach other people, etc.

Bob, if you have $1 more in your pocket, call it a rebate. But what happens when that coupon is based on how many other shoppers you are responsible for shopping at the same store, and you get $8? Is it still a rebate?

Keep in mind these averages are also not profit but simply average income.

Profit is income - expenses. The bonuses on volume are simply rebates that can help improve your income/expense ratio. There are other types of bonuses as well.

If you spend a ton of money on Amway products but don't sell to anyone external this is no profit whatsoever, just rebates. Expenses include things like books, cd's, travel for function etc. There are very few scamway distributors that seem to make an actual profit that is declared on their taxes. At least nobody will own up to it ;)

Almo

3rd August 2009, 06:34 PM

No, it's because I believe you clearly fulfill the DSM-IV criteria for NPD

I didn't know he spoke French and was a politician... NPD (http://www.npd.ca/accueil). :duck:

NewtonTrino

3rd August 2009, 06:47 PM

Steve, if I read correctly you're saying your standard wholesale price was £2.10 and standard retail price was £5.00?

That means 58% of the final retail price was markup on wholesale.

I've no idea about the company you were dealing with, but the difference between Amway's best wholesale price and their recommended retail in the UK is roughly ... 30% retail markup + 21% volume rebates + 4% leadership profit sharing + 1% depth bonus + 0.5% "pin bonuses" + 1.5% "other" (Ruby, FAA, trips etc) which equals ....

58%

Remarkable. It's just like your business.

I didn't know the 21% volume rebate was on the ENTIRE RETAIL price as your calculation here is showing.

Also it's actually based on PV/BV so you can't calculate an exact number like this unless you are getting it from Amway directly or something. So what is your source for these percentages?k Keep in mind your percentages here are assuming MSRP as that's the way you calculated his markup.

In other words your numbers are not accurate. I'm not saying they are way off either because I haven't don't the calculations. Just that these are not accurate.

Bob Klase

3rd August 2009, 06:59 PM

Bob, you wouldn't know garbage versus fact if it crawled up your butt. LOL

Nobody will recognize a fact as long as you keep outputting nothing but garbage. No doubt you had more garbage in that post but I didn't bother reading it. Anything that follows your LOL is guaranteed to be garbage.

Tex2

3rd August 2009, 07:50 PM

No, it's because I believe you clearly fulfill the DSM-IV criteria for NPD (http://en.wikipedia.org/wiki/Narcissistic_personality_disorder) and/or ICD-10 criteria of OCPD (http://en.wikipedia.org/wiki/Obsessive-compulsive_personality_disorder) and perhaps others and don't want to waste my time.You are so far off-base, it would be funny if you weren't so pathetic. Nice try to dodge the tool scam issue.

Tex2

3rd August 2009, 07:56 PM

Keep in mind these averages are also not profit but simply average income. ---- Agreed, and as described above, these are gross profit, not net profit (income).

Profit is income - expenses. The bonuses on volume are simply rebates that can help improve your income/expense ratio. There are other types of bonuses as well. ---- This is why I call the terms GROSS profit and NET profit, as it clarifies the terms.

If you spend a ton of money on Amway products but don't sell to anyone external this is no profit whatsoever, just rebates. ---- You are showing your ignorance. Selling to external customers is not required for Platinums and above.

Expenses include things like books, cd's, travel for function etc. ---- Which is exactly why the cost of these items should be minimized.

There are very few scamway distributors that seem to make an actual profit that is declared on their taxes. At least nobody will own up to it ;) ---- That's because they are being tool scammed.

Tex2

3rd August 2009, 08:04 PM

I didn't know the 21% volume rebate was on the ENTIRE RETAIL price as your calculation here is showing. ---- He didn't say it was. They are separate and add together.

Also it's actually based on PV/BV so you can't calculate an exact number like this unless you are getting it from Amway directly or something. ---- All IBOs now can get their products from Amway directly.

So what is your source for these percentages? ---- The bonus chart and other published figures.

k Keep in mind your percentages here are assuming MSRP as that's the way you calculated his markup. ---- If it isn't exact, it is close enough for the purpose he's illustrating.

In other words your numbers are not accurate. ---- See above.

I'm not saying they are way off either because I haven't don't the calculations. Just that these are not accurate. ---- Again, not exact, but close enough for the purpose he's discussing.

Tex2

3rd August 2009, 08:06 PM

Nobody will recognize a fact as long as you keep outputting nothing but garbage. ---- As if you or most posters on this forum could tell the difference.

No doubt you had more garbage in that post but I didn't bother reading it. ---- No doubt you don't have a clue.

Anything that follows your LOL is guaranteed to be garbage. ---- Anything that follows your name is guarenteed to be garbage. LOL

Vermonter

3rd August 2009, 08:29 PM

All full of venom today aren't we? Yeesh. I wouldn't want to work with you even if you were pushing carts at the local department store.

cyborg

4th August 2009, 12:38 AM

There are various reasons you wouldn't do the work. You're lazy, aren't willing to learn new things, are too afraid to approach other people, etc.

None of these apply to me: I work in an investment bank.

cynical/cyborg, the terms you are reaching for are gross profit and net profit. For most IBOs, net profit is GROSSLY negative.

No it isn't.

What you're talking about isn't gross vs net because that involves tax - which you've not mentioned at all.

Profit generally involves the creation of value - you take raw materials, produce a product and sell the product for more than the cost of the raw materials.

What you are talking about here doesn't apply - there is no value creation going on in discounting. Buying something for less than what someone else buys it for does not mean you have generated profit - and no one is going to allow you to say otherwise because it just does not mean that.

icerat

4th August 2009, 01:46 AM

I didn't know the 21% volume rebate was on the ENTIRE RETAIL price as your calculation here is showing.

Actually (contrary to Tex), I think you are right, I made a late night error there.

This means the markup with Amway is *less* than the that of the traditional system oggiesnr outlined, which makes his argument even MORE wrong, at least as it applies to Amway.

oggiesnr

4th August 2009, 01:58 AM

Actually (contrary to Tex), I think you are right, I made a late night error there.

This means the markup with Amway is *less* than the that of the traditional system oggiesnr outlined, which makes his argument even MORE wrong, at least as it applies to Amway.

So if it's wrong why did the company require the 95p price rather than my standard price? I suggest it's because of the layers in between. I sell to a shop at £2.10 then they take the whole mark-up. If I sell to pyramid the final agent may sell out at £5.00 having bought from the company at £2.10but the company wants its cut, those in the pyramid want theirs so it's not as straight forward as that. Amway International's profit comes from the difference between the price it buys at at the price it sells to its agents at.

I'm not sayng it's wrong, I'm just pointing out that longer chains means something has to give. How often have you looked in a catalogue and thought "That's neat" checked the price and realised that you can get the same on the High Street cheaper? Difference is the length of the supply chain, more links, more profits have to be built in.

Steve

Skeptic

4th August 2009, 02:23 AM

Many years ago I was approached to supply a UK near equivilent of Amway with a product we made. The usual retail price was £5 and we charged £2.10 wholesale giving the gift industry's "double plus VAT" standard margin.

In order to meet a £5.00 retail price they needed a price from me of 95p! This was so the end seller down the pyramid could sell it out £5.00 and everyone in between take their cut. I didn't supply them.

Steve

Of course, if you HAD supplied them, they would have told their idiot retailers and customers how THEIR product is SPECIAL and SO MUCH BETTER than the competition, and REAL winners only buy it... despite the fact that you supplied the competition with the exact same product that they, the competition, sell for half the price.

Skeptic

4th August 2009, 02:34 AM

What a nonsensical statement. Virtually by definition the 5% are the people who work hard. If you work hard then you're not "below" anyone.

Morally, of course, you are correct -- hard workers deserve respect. But considering the fact that one needs to be in the top 5% of workers in Amway to break even, and in the top 1% of workers in Amway to make the equivalent of minimum wage, Amway is just about the worse place in the world to waste you hard work on.

It is far better to get a job at McDonald's. If, as you say, 95% of people are not hard workers, then at McDonald's these folks would at least be making minimum wage, while in Amway they are actually losing money and need to have a second job just to have money for food. The top 5% at McDonald's -- 1 out of 20, that is, someone who manages a store or two -- are, if not rich, at least making credible middle-class salaries. In Amway they are making nothing. The top 1% -- the top guns, the big shots -- which are successful enough to make minimum wage working for Amway, make really good money in McDonald's.

Amway's is a sucker's bet. Virtually ANY other job or business whatever will make you more money for the time and effort invested.

P.S.

Would you make up your mind? EITHER Amway is a community of get-going winners, free-enterprise tycoons superior to those poor slobs who work in J.O.B.s (as you tell the believers), OR they are a bunch of slobs, 95% of whom are just not hard workers and will surely be losers due to this lamentable fact (as you tell those who point out the miserable success rate).

It can hardly be both. Are Amway people winners or losers? If winners, why is the success rate so low? If losers, why are you in it in the first place?

icerat

4th August 2009, 03:04 AM

So if it's wrong why did the company require the 95p price rather than my standard price?

I never said it was wrong for that company - I said it was wrong for Amway.

I suggest it's because of the layers in between. I sell to a shop at £2.10 then they take the whole mark-up. If I sell to pyramid the final agent may sell out at £5.00 having bought from the company at £2.10but the company wants its cut, those in the pyramid want theirs so it's not as straight forward as that. Amway International's profit comes from the difference between the price it buys at at the price it sells to its agents at.

Amway is a large manufacturer, and the products with profit it manufactures itself. While there are products available from Amway that it does not manufacture, their "wholesale" price and the retail price is the same, they're not designed for ABOs to resell, but just for their personal convenience.

The great majority of Amway's revenues, and by extension IBOs revenues, is from products Amway manufactures itself, these days primarily the Nutrilite and Artistry ranges.

I'm not sayng it's wrong, I'm just pointing out that longer chains means something has to give.

How often have you looked in a catalogue and thought "That's neat" checked the price and realised that you can get the same on the High Street cheaper? Difference is the length of the supply chain, more links, more profits have to be built in.

Of course, and the standard Amway "chain" from manufacturer to end user is from 1 to 7 links long, with the majority less than 4, very similar to traditional distribution. I outlined this earlier, with sourcing (the FTC)

You can't find Amway products on "High Street" (Amway flagship stores aside (http://www.thetruthaboutamway.com/amway-uk-flagship-centre-first-look/)), so you can't find them cheaper there. Whenever I've compared with products of similar class, Amway has almost always been cheaper. With non-Amway products available through the Amway catalogue, if it's cheaper I buy it, if it's not, I don't. Some products become cheaper as you get increasing volume discounts though, so the same product may be good value for one IBO and not another.

icerat

4th August 2009, 03:23 AM

Morally, of course, you are correct -- hard workers deserve respect. But considering the fact that one needs to be in the top 5% of workers in Amway to break even, and in the top 1% of workers in Amway to make the equivalent of minimum wage, Amway is just about the worse place in the world to waste you hard work on.

Your figures here are completely and utterly false. You live in some fantasy world were you think that someone who signs an Amway app is suddenly "a worker".

It is far better to get a job at McDonald's. If, as you say, 95% of people are not hard workers, then at McDonald's these folks would at least be making minimum wage, while in Amway they are actually losing money and need to have a second job just to have money for food.

No, if the average McDonald's worker did what the average person who signed up with Amway did, they would be making ZERO, because they'd have been fired long ago. Indeed, they'd be spending money cause all they'd be doing is buying burgers.

They're not in business, they're customers. They don't expect to make money, why on earth do you think they should?

It always amazes me how some anti-Amway zealots seem to think Amway is a scam because you don't make money for nothing.

The top 5% at McDonald's -- 1 out of 20, that is, someone who manages a store or two -- are, if not rich, at least making credible middle-class salaries.

1 out of 20 McDonald's workers is a manager? Ya reckon?

Now tell me, of the other 19, how many show up to work? How many are trying to make money?

In Amway they are making nothing. The top 1% -- the top guns, the big shots -- which are successful enough to make minimum wage working for Amway, make really good money in McDonald's.

Complete and utter BS.

Amway's is a sucker's bet. Virtually ANY other job or business whatever will make you more money for the time and effort invested.

ROLFMAO!!! And here you go even mentioning "time and effort", yet you completely ignore it in all your earlier claims.

P.S.

Would you make up your mind? EITHER Amway is a community of get-going winners, free-enterprise tycoons superior to those poor slobs who work in J.O.B.s (as you tell the believers), OR they are a bunch of slobs, 95% of whom are just not hard workers and will surely be losers due to this lamentable fact (as you tell those who point out the miserable success rate).

Make up MY mind? You're the one making such ridiculous claims, I never made either of the stupid statements you've made here. The raw facts -

50% of people who register with Amway never do a damn thing after registering. Nothing. Not even order products.

Yet you think they should be making money?

Less than 30% ever attend any training sessions, even once, to learn how to develop a business.

Less than 25% ever sponsor even a single person into the business, and less than 13% do that and generate enough volume themselves or from other legs to earn a bonus.

Less 10% are have any customers, also a requirement to earn a bonus or, obviously, retail profit.

Less than 10% are even doing the barest minimum necessary to earn any income at all

Your entire rant here is predicated on the fact the other 90% don't make any money.

They don't expect to make any money. The majority of them are doing nothing more than shop.

They want a product. They order the product. They get the product.

Yet here are you arrogantly declaring them as lazy Amway failures!

It can hardly be both. Are Amway people winners or losers? If winners, why is the success rate so low? If losers, why are you in it in the first place?

"Success" rate? Who are you to define "success" for people? What gives you the right to call someone a failure or a loser when they are 100% successful in reaching their goals, which may be as simple as buying something. Who are you to declare someone who wants to make $100 a month a failure when they achieve it?

Your arrogance is astounding.

Tex2

4th August 2009, 05:08 AM

All full of venom today aren't we? Yeesh. I wouldn't want to work with you even if you were pushing carts at the local department store.Good. The feeling is mutual.

Tex2

4th August 2009, 05:18 AM

None of these apply to me: I work in an investment bank. ---- How do you know the etc. doesn't apply to you?

What you're talking about isn't gross vs net because that involves tax - which you've not mentioned at all. ---- Just because I haven't mentioned tax doesn't mean I don't include taxes in the equation. I don't mention every aspect of an issue every single time it comes up.

Profit generally involves the creation of value - you take raw materials, produce a product and sell the product for more than the cost of the raw materials. ---- Then Walmart makes no profit? All they do is take stuff that is already made and sell it. Same with most every other retail outlet.

What you are talking about here doesn't apply - there is no value creation going on in discounting. ---- Better not tell Walmart that. LOL

Buying something for less than what someone else buys it for does not mean you have generated profit - and no one is going to allow you to say otherwise because it just does not mean that. ---- I have said over and over again I am okay with the word "rebate", at least for the first 3% bonus level. What are YOUR thoughts on the $1 versus $8 rebate/profit question above, oh great investment banker (are you one of the ones that got bailed out?)?

Tex2

4th August 2009, 05:22 AM

Tex2

4th August 2009, 05:28 AM

So if it's wrong why did the company require the 95p price rather than my standard price? I suggest it's because of the layers in between. I sell to a shop at £2.10 then they take the whole mark-up. If I sell to pyramid the final agent may sell out at £5.00 having bought from the company at £2.10but the company wants its cut, those in the pyramid want theirs so it's not as straight forward as that. Amway International's profit comes from the difference between the price it buys at at the price it sells to its agents at.

I'm not sayng it's wrong, I'm just pointing out that longer chains means something has to give. How often have you looked in a catalogue and thought "That's neat" checked the price and realised that you can get the same on the High Street cheaper? Difference is the length of the supply chain, more links, more profits have to be built in.

SteveYou're talking about a single example. We have hundreds of partner stores that sell mostly to non-IBOs, so their prices by definition are competitively priced. PV/BV is lower for them, but they are still willing to sell to IBOs at the same price as their other customers. Also, many of the catalog items are going away in September for that reason.

I did a comparison about 3 years ago, and easily found several Amway products that were competitive on a per use cost basis. Some were less, some about the same, some slightly more than a local grocery store and Walmart. I think I'll repeat the effort, as it has been some time and the recent price reductions should turn out even more favorable.

Tex2

4th August 2009, 05:32 AM

Amway is a large manufacturer, and the products with profit it manufactures itself. While there are products available from Amway that it does not manufacture, their "wholesale" price and the retail price is the same, they're not designed for ABOs to resell, but just for their personal convenience. ---- Then why are these products offered to non-IBO customers?

Rasmus

4th August 2009, 05:37 AM

Tex2

4th August 2009, 05:38 AM

Some products become cheaper as you get increasing volume discounts though, so the same product may be good value for one IBO and not another. ---- The problem is the LCKs don't promote the products by having IBOs consider the volume discounts, they promote them based on the ENTIRE bonus, which has lead to Amway getting lazy with their pricing, which appears to be getting turned around. Unfortunately, this is the second biggest issue, the biggest one is the tool scam.

Tex2

4th August 2009, 05:41 AM

Why would they be offered at all?To make money. That's why businesses exist.

Rasmus

4th August 2009, 05:46 AM

To make money. That's why businesses exist.

Yes, but they seem to restrict who they are selling it to, or am i missing something here?

cyborg

4th August 2009, 05:59 AM

How do you know the etc. doesn't apply to you?

I don't - but then I don't know that it does. You'll have to list the etc...

Just because I haven't mentioned tax doesn't mean I don't include taxes in the equation. I don't mention every aspect of an issue every single time it comes up.

If you're gonig to mention the difference between gross and net profit I would expect a mention of tax since that is the difference.

All they do is take stuff that is already made and sell it.

Yes they do. They then add value by taking stuff that would be difficult for a consumer to get otherwise and place it somewhere where it is easy to get at.

A consumer would not get a "profit" if he bought the same item at Target that was more expensive at Walmart.

If he bought it at Target and sold it at Walmart that's a different story - he'd have just arb'd Walmart to gain a profit.

I have said over and over again I am okay with the word "rebate", at least for the first 3% bonus level.

I don't really care what level it's at - the words mean what the words mean.

As to the 1$/8$ "rebate" thing that would not change the nature of the thing.

Essentially you have different teirs at which things are priced differently dependending on which teir you belong to. The coupon is just a way of expressing that pricing mechanism and the MLM structure a way of deciding who is in what teir.

Tex2

4th August 2009, 07:23 AM

Yes, but they seem to restrict who they are selling it to, or am i missing something here?If you mean they restrict selling to only those who work THROUGH IBOs, you're right. They haven't gone around the IBOs like Avon has done. This is a good thing.

Tex2

4th August 2009, 07:39 AM

cyborg, it would take a while to list every factor. You may have a sensitive ego, such that when someone says no you feel bad and quit. You may be told it's a scam, believe them, and quit. The "etc." list is quite long, and as complex as the human condition.

Taxes are included in getting to net profit, but a much larger impact is the tool scam. I won't be taken off the MAJOR issue in order to address minor issues. I already agreed with you, so what's the issue with taxes?

Yes they do. They then add value by taking stuff that would be difficult for a consumer to get otherwise and place it somewhere where it is easy to get at. ---- Wow, sounds just like Amway!

A consumer would not get a "profit" if he bought the same item at Target that was more expensive at Walmart. ---- As I said above, call it a tomato. It's the same amount of money.

If he bought it at Target and sold it at Walmart that's a different story - he'd have just arb'd Walmart to gain a profit. ---- Call this one a tomatoe.

I don't really care what level it's at - the words mean what the words mean. ---- Profit, rebate, tomato, same number of dollars.

As to the 1$/8$ "rebate" thing that would not change the nature of the thing. ---- It does make it unique, compared to a normal coupon, and should be considered as being different. You can decide it's still a rebate, but you have to admit it is more money.

Essentially you have different teirs at which things are priced differently dependending on which teir you belong to. The coupon is just a way of expressing that pricing mechanism and the MLM structure a way of deciding who is in what teir. ---- It's spelled "tier". You're right, and you can call it profit or rebate or tomato, but it's the same number of dollars. Assuming an organization with width, it is also a very minor component of your overall profit, and frankly not worth the number of words we've expressed about it.

cyborg

4th August 2009, 08:27 AM

cyborg, it would take a while to list every factor. You may have a sensitive ego, such that when someone says no you feel bad and quit. You may be told it's a scam, believe them, and quit. The "etc." list is quite long, and as complex as the human condition.

So there are no externalities whatsoever?

I already agreed with you, so what's the issue with taxes?

The issue is terminology and its correct use.

Wow, sounds just like Amway!

Yes - it sounds like the retail part. It sounds nothing like the MLM part.

As I said above, call it a tomato. It's the same amount of money.

2$ = 2$. Saving 2$ is not making 2$. There is a difference.

You can decide it's still a rebate, but you have to admit it is more money.

I agree that it is a larger number. We disagree on what this actually means.

It's spelled "tier".

Thanks for the spelling correction.

Tomato does not have an 'e' in it.

The quote feature is activated by using a '[' and 'quote' and ']' and terminated by '[/' and 'quote' and ']'.

Tex2

4th August 2009, 09:05 AM

What do you mean by externalities? I gave two examples of someone else's reaction, aren't both of these externalities? I already said the list is extensive. Perhaps you think the prices are too high, because you don't take the quality or concentration factor into account. How's that one? I don't buy all of the products, some don't have the value (price/quality combination), but someone else would value the the quality of a particular product more than me.

The issue is the tool scam, everything else is secondary.

Actually, there are multiple levels of getting most products to the market, so there are more similarities than differences.

It means you have more money in your pocket. $2 (the dollar sign is almost always in front, you should know that, working at an investment bank that obviously doesn't make any profit, since you don't manufacture anything! LOL) minus $2 equals $0. I don't see any difference. Remember, a penny saved is a penny earned. The difference is you exchange some of your money for a product or service. I think you're getting twisted around the axle on this one, the real issue is the tool scam.

I know tomato doesn't have an "e" in it, that's why I said "Call this one a tomatoe.", right after I spelled it correctly, above. I don't care how you spell it or what word you use, the bottom line is the number is the SAME NUMBER, and becomes a negligible number as an IBO's business grows.

I don't care about the quote function, you aren't worth the extra effort.

cyborg

4th August 2009, 09:38 AM

What do you mean by externalities? I gave two examples of someone else's reaction, aren't both of these externalities?

You said "someone says no you feel bad and quit," not, "there is no market for what you are selling so no-one will ever say yes".

Perhaps you think the prices are too high, because you don't take the quality or concentration factor into account.

Or the market just doesn't think that it's worth what you think it does.

It means you have more money in your pocket.

No, it means you have less money in your pocket and an asset. Money is money. Assets are assets.

I don't see any difference.

That is not really relevant.

I know tomato doesn't have an "e" in it, that's why I said "Call this one a tomatoe.", right after I spelled it correctly, above.

That doesn't make any sense. I'm not entirely sure what you're trying to prove when you talk about irrelevancies like typos et al.

the bottom line is the number is the SAME NUMBER, and becomes a negligible number as an IBO's business grows.

That doesn't parse.

I don't care about the quote function, you aren't worth the extra effort.

Who is worth the extra effort?

oggiesnr

4th August 2009, 09:56 AM

... While there are products available from Amway that it does not manufacture, their "wholesale" price and the retail price is the same, they're not designed for ABOs to resell, but just for their personal convenience. ---- Then why are these products offered to non-IBO customers?

If an ABO buys some of these products for their "personal convenience" do the tiers up-stream from them profit by it?

Steve

Tex2

4th August 2009, 10:14 AM

Yes, but not nearly as much as an Amway manufactured product, and both are a distant second from the upline tool scam profit, except in countries that have outlawed the tool scam, such as the UK.

Tex2

4th August 2009, 10:24 AM

You said "someone says no you feel bad and quit," not, "there is no market for what you are selling so no-one will ever say yes". ---- Why would I say that? I KNOW there is a market, because I have customers. That doesn't mean EVERYONE will say yes, but that's not the point.

Or the market just doesn't think that it's worth what you think it does. ---- Ditto.

No, it means you have less money in your pocket and an asset. Money is money. Assets are assets. ---- Now you're starting to parse my answers. I also said, "The difference is you exchange some of your money for a product or service."

No, your opinion isn't relevant, because you don't have a clue what you're talking about. LOL

That doesn't make any sense. I'm not entirely sure what you're trying to prove when you talk about irrelevancies like typos et al. ---- I was simply turning the tables on YOU, by including something that isn't important, such as whether you call an escalating rebate a rebate or profit, when it's the same number of dollars and becomes insigificant as an IBO's business grows. ZOOM! Right over your head. LOL

That doesn't parse. - It "parses" just fine, it is YOU who don't understand the business model. LOL

Who is worth the extra effort? ---- Anyone who either understands the facts or is willing to learn and apply them.

NobbyNobbs

4th August 2009, 10:24 AM

A consumer would not get a "profit" if he bought the same item at Target that was more expensive at Walmart. ---- As I said above, call it a tomato. It's the same amount of money.

If he bought it at Target and sold it at Walmart that's a different story - he'd have just arb'd Walmart to gain a profit. ---- Call this one a tomatoe.

I don't really care what level it's at - the words mean what the words mean. ---- Profit, rebate, tomato, same number of dollars.

As to the 1$/8$ "rebate" thing that would not change the nature of the thing. ---- It does make it unique, compared to a normal coupon, and should be considered as being different. You can decide it's still a rebate, but you have to admit it is more money.

This really shouldn't be this difficult.

Profit=having more money than you started with
Rebate=spending less on a product than you normally would

There's a huge distinction.

Tex2

4th August 2009, 10:31 AM

So what's your answer on the $1 versus $8 "rebate"? Is the $7 difference still a rebate or profit? Remember, you said it was simple, this is a one word answer.

cyborg

4th August 2009, 10:34 AM

Why would I say that? I KNOW there is a market, because I have customers. That doesn't mean EVERYONE will say yes, but that's not the point.

Well it is the point actually if one is going to decide whether it's worthwhile trying to build the MLM.

Now you're starting to parse my answers. I also said, "The difference is you exchange some of your money for a product or service."

Yes you do. This is not a profit. It can only become a profit once the asset is realised.

I was simply turning the tables on YOU, by including something that isn't important, such as whether you call an escalating rebate a rebate or profit, when it's the same number of dollars and becomes insigificant as an IBO's business grows. ZOOM! Right over your head. LOL

If all I'm ever doing is buying cheap stuff I'm not making a profit no matter how cheap it is.

It "parses" just fine, it is YOU who don't understand the business model. LOL

No, I don't understand it. I'm willing to presume you're explaining it badly. This is probably because you would rather be rude than be clear.

Anyone who either understands the facts or is willing to learn and apply them.

Ok. Why not start listing the facts then?

icerat

4th August 2009, 10:50 AM

Yes, but they seem to restrict who they are selling it to, or am i missing something here?

I'm not sure what you mean by the statement? Amway has no restrictions on who products may be sold to, well, apart from unopened international markets and crossgroup selling.

icerat

4th August 2009, 10:54 AM

Well it is the point actually if one is going to decide whether it's worthwhile trying to build the MLM.

Are you seriously claiming a business is only worthwhile if it can expect 100% of the population to be a customer?

Tex2

4th August 2009, 11:05 AM

Well it is the point actually if one is going to decide whether it's worthwhile trying to build the MLM. ---- There's a market for virtually anything. We even "bought" Barry O (although he will hopefully be in the next "garage sale")! LOL Worded another way, I am BEYOND your simplistic question, because I have more knowledge of the facts.

Yes you do. This is not a profit. It can only become a profit once the asset is realised. ---- I just realized I'm wasting my time with you. Is that a profit? LOL

If all I'm ever doing is buying cheap stuff I'm not making a profit no matter how cheap it is. ---- True, because you are part of a simplistic scenario as a consumer. I have other reasons to consider buying Amway products I otherwise wouldn't buy, because I OWN a business.

No, I don't understand it. I'm willing to presume you're explaining it badly. This is probably because you would rather be rude than be clear. ---- I'm willing to presume you can't learn. This is probably because you would rather be ignorant than informed. If you REALLY want to learn, make the phone call, it is much easier to explain verbally. Believe me, I won't try to recruit YOU, that's for sure. LOL

Ok. Why not start listing the facts then? ---- I have, starting on page 15.

cyborg

4th August 2009, 11:06 AM

Are you seriously claiming a business is only worthwhile if it can expect 100% of the population to be a customer?

I don't believe I made that claim.

I would need to have some expectation of what sort of numbers I could expect in order to decide whether it was actually worthwhile or not.

Tex2

4th August 2009, 11:21 AM

What you expect depends on your personality, or lack thereof, as well as how willing you are to learn and apply what you learn. With Amway, you should also expect to be ripped off by the tool scam, unless you happen to be in the UK or another country that has made the tool scam illegal.

icerat

4th August 2009, 11:31 AM

I don't believe I made that claim.

I would need to have some expectation of what sort of numbers I could expect in order to decide whether it was actually worthwhile or not.

That's a more reasonable position, though obviously, as with most businesses it's a point in time issue. When building a distribution network the "product" isn't really the #1 aspect, as it can be changed. Over the last 50 years, Amway went from being (product wise) a soap company, then a home shopping company, then became an internet shopping company, and is now a health & beauty company. Who knows what will go through the network in the next 50 years.

Still, at present the primary products are nutrition, and cosmetics and skincare. Those are enormous markets, with plenty of opportunity to increase both marketshare and increase market size.

cyborg

4th August 2009, 11:41 AM

Still, at present the primary products are nutrition, and cosmetics and skincare. Those are enormous markets, with plenty of opportunity to increase both marketshare and increase market size.

Which takes us back to the previous discussions on the efficacy of nutrional products et al.

When building a distribution network the "product" isn't really the #1 aspect, as it can be changed.

So why talk about them at all then?

Almo

4th August 2009, 11:53 AM

I don't care about the quote function, you aren't worth the extra effort.

But it's REALLY hard to read your posts that don't use it. I tend to skip them since I don't want to fight to make out what you're quoting and what you're saying. If you do use it, more people will take the time to read what you say. It's more for other readers than for the person you are quoting.

Tex2

4th August 2009, 11:56 AM

Which takes us back to the previous discussions on the efficacy of nutrional products et al.

So why talk about them at all then?Although this is not my statement, I have noticed you seem to enjoy running in circles. My answer addressed your statement. Nutrition is a HUGE and growing market (at least it was before the economy tanked), and there is plenty of existing and new discoveries happening all the time that reinforce what Amway has promoted for decades. However, if YOU are not willing to LEARN and APPLY what you learn, you're back to square one, or the beginning of the circle, your pick.

So why talk about them at all then? ---- Because they are #2 or #3, and an integral piece of the discussion.

But it's REALLY hard to read your posts that don't use it. ---- Poor widdle Almo, can I have a pity party for you? LOL

I tend to skip them since I don't want to fight to make out what you're quoting and what you're saying. ---- Good, you'll save yourself some time.

If you do use it, more people will take the time to read what you say. It's more for other readers than for the person you are quoting. ---- I have a better idea, make a phone call! LOL

icerat

4th August 2009, 12:53 PM

Which takes us back to the previous discussions on the efficacy of nutrional products et al.

No it doesn't, because no matter what your view on the efficacy of a product, from a business perspective it's market demand that matters. Doesn't matter if you have a pill that makes you live to 200 if nobody will buy it, and it doesn't really matter if you have a pill that does nothing if people want to buy it.

So why talk about them at all then?

Are you really going to resort to such silly questions?

Porkchopjim

4th August 2009, 12:54 PM

Things always seem to get a little quiet when I ask this question of Insider/IceRat:

Why are there EXPLICIT rules requiring sales to NON-IBOs?

But, no worries – let's have fun with numbers!

Again, a lie. Half of people who join Amway never buy the products in the first place, they are never customers, and they do not renew. Of the other half, no more than 13% pursue the business. Much of the rest (74%) continue to purchase products. (source: Orrin Woodward et al v. Quixtar, Inc.). Furthermore, of people who don't even renew their memberships, 25% remain as customers.

Wow! And with your assertion that IBOs do NOT hyperconsume Amway products (or just give them away or throw them out...all the same to you)...and they most CERTAINLY do not buy products just to make some sort of 'performance goal' to feed the pyramid...

...you'd expect - all things being the same with the normal churn of MLM owners – that Amway would have experienced at LEAST 25% growth every year...as those customers/former owners would have no reason to change their buying habits just because they left the business. Let's not pretend that the difference is made up of paying, retail customers. Because you can't. THAT demand wouldn't go away, either.

That must be a stealth 25% growth...given that a couple of years ago they were even with inflation and did so well last year that they didn't even bother reporting North American numbers at all.

Or, your own numbers just bit you in the Amway again. Funny how that happens when you're busy convincing people that you're not 'misrepresenting' things.

Maybe we could find someone with some actual experience with Amway as a measurable source of income? Insider/IceRat doesn't have that – he's into defending the business, not proving that the shiny Amway magazines of wealth and comfort speak the truth. Tex is still about $40K in the hole.

oggiesnr

4th August 2009, 01:06 PM

Tex2

4th August 2009, 01:07 PM

No it doesn't, because no matter what your view on the efficacy of a product, from a business perspective it's market demand that matters. Doesn't matter if you have a pill that makes you live to 200 if nobody will buy it, and it doesn't really matter if you have a pill that does nothing if people want to buy it. ---- Not over the long term.

Are you really going to resort to such silly questions?Of course, it's an attept to cover up his ignorance, just like accusing me of having various mental disorders is an attempt to cover up the tool scam.

Tex2

4th August 2009, 01:14 PM

Things always seem to get a little quiet when I ask this question of Insider/IceRat:

But, no worries – let's have fun with numbers! ---- icerat/ibofb/insider gets quiet whenever tool scam questions are asked as well. I've answered the question several times, do you recall the answer?

Wow! And with your assertion that IBOs do NOT hyperconsume Amway products (or just give them away or throw them out...all the same to you)...and they most CERTAINLY do not buy products just to make some sort of 'performance goal' to feed the pyramid... ---- Many IBOs do hyperconsume. Many do buy to meet a performance goal.

...you'd expect - all things being the same with the normal churn of MLM owners – that Amway would have experienced at LEAST 25% growth every year...as those customers/former owners would have no reason to change their buying habits just because they left the business. Let's not pretend that the difference is made up of paying, retail customers. Because you can't. THAT demand wouldn't go away, either. ---- There aren't that many new IBOs. I've had customers that have bought once, a couple of times, and some have ordered for years.

That must be a stealth 25% growth...given that a couple of years ago they were even with inflation and did so well last year that they didn't even bother reporting North American numbers at all. ---- See above. The numbers weren't reported last year for the first time ever, as far as I know, while several foreign countries with high growth ARE reported. Quite non-transparent.

Or, your own numbers just bit you in the Amway again. Funny how that happens when you're busy convincing people that you're not 'misrepresenting' things. ---- His life is based on misrepresenting things, at least he's consistent.

Maybe we could find someone with some actual experience with Amway as a measurable source of income? Insider/IceRat doesn't have that – he's into defending the business, not proving that the shiny Amway magazines of wealth and comfort speak the truth. Tex is still about $40K in the hole. Really? How would you know?

Tex2

4th August 2009, 01:19 PM

Even though Amway exists in the UK (and nearly lost their courtccase) I suspect our nearest equivilent is Kleeneze. I know one member who's been in it for years (over thirty) and has done very well by it, she and her husband have built the network and sit back and take the money.

At a local level, every few months we get a catalogue, every time it's a different name as the agent. Suggests to me that the pyramid is fairly full and the people at the bottom can't make a go of it. As in all pyramids the earlier adopters get the cream.

SteveOr perhaps it's a random occurrence. Or perhaps they "sign up" to distribute the catalog to your home, hoping you'll either wake up and buy something or die, and a different person can buy and/or get involved. There's a guy on ibofb's site that got involved in Kleeneze just a year or two ago and claims to be doing quite well. So much for your "earlier adopters get the cream" BS.

icerat

4th August 2009, 01:26 PM

Even though Amway exists in the UK (and nearly lost their courtccase) I suspect our nearest equivilent is Kleeneze. I know one member who's been in it for years (over thirty) and has done very well by it, she and her husband have built the network and sit back and take the money.

Amway did not "nearly lose" their court case. While a cursory reading of the initial judgement looked that way, the appeal judgement made it very clear it was not "close".

The result was much the same as FTC vs Amway - nothing wrong with the business model, but you really do need to monitor the field better.

At a local level, every few months we get a catalogue, every time it's a different name as the agent. Suggests to me that the pyramid is fairly full and the people at the bottom can't make a go of it. As in all pyramids the earlier adopters get the cream.

Right .... so it has a high turnover ratio, just like pretty much all other sales businesses, and it doesn't suggest to you that ... it's just like other sales businesses?

There's a lot of research on turnover in the direct sales, and sales, industry. Perhaps you should read some of it.

oggiesnr

4th August 2009, 01:37 PM

There's a lot of research on turnover in the direct sales, and sales, industry. Perhaps you should read some of it.

Please don't patronise me, it's uncalled for.

I am well aware of turnover in many industries, I see it every week in what I do. In the dim and distant days when I worked in personnel, turnover was a key indicator we looked at, "Why are we losing people?". If the business model is successful AT ALL LEVELS I would not expect to see high turnover because people making money are happy people and who turns up the opportunity to make money? The fact that I see at a local level this high turnover makes me wonder about what's going on.

Steve

icerat

4th August 2009, 01:43 PM

The fact that I see at a local level this high turnover makes me wonder about what's going on.

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

Tex2

4th August 2009, 01:44 PM

Amway did not "nearly lose" their court case. While a cursory reading of the initial judgement looked that way, the appeal judgement made it very clear it was not "close". ---- Yes, they did. The judge said they were very nearly shut down. The main reason he didn't shut them down was because Amway took immediate and effective actions, including shutting down the tool scam, even though your hero Jim Dornan originally put out a letter implying all the problems were in Amway's court, which is blatantly FALSE, and why he had to withdraw the letter and write a new one. Whether the appeals judges looked at it differently is NOT the issue, the original judge was quite clear. Stop LYING.

The result was much the same as FTC vs Amway - nothing wrong with the business model, but you really do need to monitor the field better. ---- Reducing prices by up to 75%, requiring retailing volume prior to sponsoring, and shuting down the tool scam is not changing the business model? LIAR.

Tex2

4th August 2009, 01:46 PM

Please don't patronise me, it's uncalled for.

I am well aware of turnover in many industries, I see it every week in what I do. In the dim and distant days when I worked in personnel, turnover was a key indicator we looked at, "Why are we losing people?". If the business model is successful AT ALL LEVELS I would not expect to see high turnover because people making money are happy people and who turns up the opportunity to make money? The fact that I see at a local level this high turnover makes me wonder about what's going on.

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

Almo

4th August 2009, 01:47 PM

Please don't patronise me, it's uncalled for.

I am well aware of turnover in many industries, I see it every week in what I do. In the dim and distant days when I worked in personnel, turnover was a key indicator we looked at, "Why are we losing people?". If the business model is successful AT ALL LEVELS I would not expect to see high turnover because people making money are happy people and who turns up the opportunity to make money? The fact that I see at a local level this high turnover makes me wonder about what's going on.

Steve

One notable video game company (Relic) has low turnover (3% yearly last I heard). Another notable game company has 25% turnover. This can be used to infer that one company is a better place to work for over long periods, for whatever reason.

I agree with Steve's statement in bold (which I bolded).

Tex2

4th August 2009, 01:48 PM

Almo, how do you know whether it's turnover?

icerat

4th August 2009, 01:56 PM

One notable video game company (Relic) has low turnover (3% yearly last I heard). Another notable game company has 25% turnover. This can be used to infer that one company is a better place to work for over long periods, for whatever reason.

I agree with Steve's statement in bold (which I bolded).

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

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

That should make you wonder too .... ;)

oggiesnr

4th August 2009, 02:05 PM

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

That should make you wonder too .... ;)

Do you have a link or an ISBN?

Steve

oggiesnr

4th August 2009, 02:07 PM

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

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

Steve

oggiesnr

4th August 2009, 02:17 PM

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

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

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

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

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

Steve

Tex2

4th August 2009, 02:29 PM

Do you have a link or an ISBN?

Steve

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

Tex2

4th August 2009, 02:31 PM

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

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

Tex2

4th August 2009, 02:44 PM

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

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

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

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

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

Steve

icerat

4th August 2009, 02:51 PM

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

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

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

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

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

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

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

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

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

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

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

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

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

Tex2

4th August 2009, 03:15 PM

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

Almo

4th August 2009, 03:18 PM

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

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

That should make you wonder too .... ;)

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

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

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

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

icerat

4th August 2009, 03:28 PM

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

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

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

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

Tex2

4th August 2009, 04:39 PM

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

Tex2

4th August 2009, 04:42 PM

NewtonTrino

4th August 2009, 10:35 PM

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

cyborg

4th August 2009, 10:56 PM

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

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

Are you really going to resort to such silly questions?

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

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

Tex2

5th August 2009, 04:44 AM

Tex2

5th August 2009, 04:51 AM

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

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

icerat

5th August 2009, 05:00 AM

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

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

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

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

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

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

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

cyborg

5th August 2009, 05:04 AM

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

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

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

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

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

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

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

Tex2

5th August 2009, 05:10 AM

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

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

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

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

cyborg

5th August 2009, 05:10 AM

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

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

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

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

I'm not seeing a consistent message here.

Tex2

5th August 2009, 05:20 AM

In order to make it perfectly plain for you: nutritional supplements are essentially a scam in and of themselves marketed to the public at large despite any demonstration of efficacy. Now if you have an issue with this you should remember that this is a skeptics board and not an Amway board and that I for one don't really care what your opinion of nutritional products is. ---- Did you know that up until a few years ago, the AMA didn't support taking a multivitamin, and now they do? Do you realize several generations have come on the scene since Nutrilite started, and they would have missed a huge part of their life having optimal nutrition. Being a skeptic doesn't mean you have to be stupid, it's okay to look at the facts and make an informed decision. Really. Try it sometime. However, I really don't care what your uninformed opinion of nutritional products is, and you won't be around as long to argue your case. LOL

So selling Amway on the basis of "higher quality" useless items will not wash with me and nor has it done so with anyone else. A fact that you seem to be unable to process. ---- As I said, if you're not willing to examine the facts and learn, you will have a hard time with Amway. Your loss. NEXT!

Tex2

5th August 2009, 05:24 AM

Well I wouldn't be willing to succeed in the arms trade or illegal drug trade either. ---- Good, neither would I. Amway doesn't carry either one of these lines of products, either. LOL

Is "lack of morals" a required quality? Is that a quality you possess? ---- Just because I have a different opinion about nutritional products makes me immoral? Is the AMA now immoral, because they now promote taking multivitamins? Are you sure you don't participate in the illegal drug trade? Edited to remove incivility. Yes - but there is no presented coherence between these concepts. ---- Sure there is, he said the method is more important than the product. Edited to remove incivility.
Please remember to be civil and don't use personal attacks.

Tex2

5th August 2009, 05:26 AM

icerat

5th August 2009, 05:48 AM

In order to make it perfectly plain for you: nutritional supplements are essentially a scam in and of themselves marketed to the public at large despite any demonstration of efficacy.

In general I agree, however what you think of when you say "nutritional supplements" is a world away from what Nutrilite does, which is why I suggested you do some research.

Now if you have an issue with this you should remember that this is a skeptics board and not an Amway board and that I for one don't really care what your opinion of nutritional products is.

I didn't ask you to care what I thought. I asked you to do some research. If you did then you'd find your first statement is mostly false, with regards Nutrilite, and where it has elements of truth it has more to do with FDA regulations than science.

cyborg

5th August 2009, 05:51 AM

Did you know that up until a few years ago, the AMA didn't support taking a multivitamin, and now they do?

And the NHS has homeopathic practices. I don't really care who said it - just why it was said.

As I said, if you're not willing to examine the facts and learn, you will have a hard time with Amway.

I don't see any facts that support the notion that a multivitamin has any benefit to anyone who is able to eat a balanced diet.

I will just have to live with having a hard time not being a part of an organisation which mediocre profits 99% of which you say should not exist ethically.

icerat

5th August 2009, 06:03 AM

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

I'm not seeing a consistent message here.

That's because you're willfully closing your eyes (or perhaps brain) to make it inconsistent.

Quality and market demand are not independent. You know that, so why are you implying they are?

There's lots of reasons why some products are or are not suited to the MLM model. Low margin commodities, for example, are not well suited to the model. I'm not a fan of, for example, standard telephony services through MLM. The margins are relatively to start with, but if you do succeed in achieving market penetration, existing large players will undercut you, and thus either make you less competitive or force you to drop pricing, dropping profitability and field income.

The ideal product is one with higher margins and that cannot easily be marketed through traditional mechanisms. Imagine if you will, (all hypothetical of course), a food supplement that differed singificantly from traditional vitamin supplements in philosophy and manufacture. Imagine it was developed scientifically and had scientific support for it's efficacy, but generally cost more. You couldn't just stick it on the shelf, people wouldn't buy it because it was more expensive than the normal stuff and they wouldn't know the difference. You couldn't explain it's benefits in a 2 minute commercial, particularly not within FDA regulations.

What you could do is train independent salespeople to explain it's benefits to consumers on a 1-1 basis or in small groups, and reward them for their efficacy.

That kind of approach might even make you the #1 nutritional supplement brand in the world.

icerat

5th August 2009, 06:05 AM

I don't see any facts that support the notion that a multivitamin has any benefit to anyone who is able to eat a balanced diet.

Just ignoring potential other benefits, what about people who don't eat a balanced diet?

Any idea what proportion of the population that is?

I will just have to live with having a hard time not being a part of an organisation which mediocre profits 99% of which you say should not exist ethically.

huh?

cyborg

5th August 2009, 06:11 AM

Quality and market demand are not independent. You know that, so why are you implying they are?

Well yes they are actually.

High quality does not entail high demand - that means they are independent.

There's lots of reasons why some products are or are not suited to the MLM model. Low margin commodities, for example, are not well suited to the model. I'm not a fan of, for example, standard telephony services through MLM. The margins are relatively to start with, but if you do succeed in achieving market penetration, existing large players will undercut you, and thus either make you less competitive or force you to drop pricing, dropping profitability and field income.

Right - there's no particular value in the layers. Which is kinda the main point of criticism a lot of people have here.

You couldn't just stick it on the shelf, people wouldn't buy it because it was more expensive than the normal stuff and they wouldn't know the difference.

Right - so in other words: High Quality != High Demand.

You couldn't explain it's benefits in a 2 minute commercial, particularly not within FDA regulations.

Ok... new product needs partiuclar marketing campaign to establish it...

That kind of approach might even make you the #1 nutritional supplement brand in the world.

... so why is the MLM still required once this is the case? The whole point of brands is that yes, one can indeed shove Nurofen with generic paracetamol on a shelf and expect Nurofen to shift inspite of it being the same product.

cyborg

5th August 2009, 06:14 AM

Just ignoring potential other benefits, what about people who don't eat a balanced diet?

They should eat a balanced diet first.

huh?

As was explored way back at the start of the thread the figures quoted in the Amway advert do not exactly set the world on fire.

Tex says 99% of that shouldn't exist. I'm not entirely sure how that's supposed to be a convincing business proposition.

Tex2

5th August 2009, 07:22 AM

And the NHS has homeopathic practices. I don't really care who said it - just why it was said. ---- You don't think who said it infers anything regarding why they said it?

I don't see any facts that support the notion that a multivitamin has any benefit to anyone who is able to eat a balanced diet. ---- The AMA did literally DECADES of research, and you don't think they changed their recommendations based on ANY facts? You need to do some research, unless you are afraid you will no longer be able to be "skeptical" (ignorant, with no desire to learn).

I will just have to live with having a hard time not being a part of an organisation which mediocre profits 99% of which you say should not exist ethically. ---- As I have recommended many times in the past, it is FAR better to stay out until the tool scam is cleaned up, which has occurred in the UK, and let the adults take care of things until it is "safe" for you to join.

Tex2

5th August 2009, 07:38 AM

They should eat a balanced diet first. ---- People also shouldn't drink and drive, jaywalk, become obese, etc., etc., etc.

High quality does not entail high demand - that means they are independent. ---- BS. It also infers low quality infers low demand. Walmart? There are market SEGMENTS, some individuals value some high quality products, and are willing to pay for them, and others aren't. A different category may mean two individuals would flip-flop.

Right - there's no particular value in the layers. Which is kinda the main point of criticism a lot of people have here. ---- $8.2 BILLION dollars last year, with about 1/3 of it paid back, would indicate you are wrong, DESPITE the tool scam. Do you have more than several BILLION dollars to show otherwise?

Right - so in other words: High Quality != High Demand. ---- No, high quality = education necessary to make buying decision.

... so why is the MLM still required once this is the case? The whole point of brands is that yes, one can indeed shove Nurofen with generic paracetamol on a shelf and expect Nurofen to shift inspite of it being the same product. ---- Because the founders wanted a business opportunity AND the product still has to be sold via education to new customers.

As was explored way back at the start of the thread the figures quoted in the Amway advert do not exactly set the world on fire. ---- That's because you don't understand MLM and think the brand new IBO who hasn't done much work should be a millionaire. That's why I'm more than a little skeptical of your "logic."

Tex says 99% of that shouldn't exist. I'm not entirely sure how that's supposed to be a convincing business proposition. ---- WRONG. The $8.2 billion/year is Amway ONLY, the tool scam is not part of that number. My point is the $8.2 billion, and then some, is being redirected to the LCKs via the tool scam. Without the tool scam, I believe Amway would be 10-100 times bigger.

Almo

5th August 2009, 07:48 AM

The ideal product is one with higher margins and that cannot easily be marketed through traditional mechanisms. Imagine if you will, (all hypothetical of course), a food supplement that differed singificantly from traditional vitamin supplements in philosophy and manufacture. Imagine it was developed scientifically and had scientific support for it's efficacy, but generally cost more. You couldn't just stick it on the shelf, people wouldn't buy it because it was more expensive than the normal stuff and they wouldn't know the difference. You couldn't explain it's benefits in a 2 minute commercial, particularly not within FDA regulations.

"Differ in philosophy?" Either it works, or it doesn't. But that doesn't even matter: homeopathy sells from shelves without MLM, and it's completely useless AND expensive.

The bolded part smaks of CT. I know you're not a CT nut icerat, but saying you might not be able to describe why a product is good in 2 minutes due to FDA regs is... odd. They manage to advertise prescription drugs up here in Canada despite only being able to say one of A) its name B) what it does. It's much more lax in the US.

cyborg

5th August 2009, 08:20 AM

You don't think who said it infers anything regarding why they said it?

Nope.

The AMA did literally DECADES of research, and you don't think they changed their recommendations based on ANY facts?

Sure.

You need to do some research,

My research says that nutritional supplements don't help healthy individuals and are not preferable to getting a balanced diet - since it is not simply a matter of getting a block of vitamins.

As I have recommended many times in the past, it is FAR better to stay out until the tool scam is cleaned up, which has occurred in the UK, and let the adults take care of things until it is "safe" for you to join.

Right... but then once the tool scam is gone you're saying the money is too.

People also shouldn't drink and drive, jaywalk, become obese, etc., etc., etc.

No they shouldn't.

BS. It also infers low quality infers low demand. Walmart? There are market SEGMENTS, some individuals value some high quality products, and are willing to pay for them, and others aren't. A different category may mean two individuals would flip-flop.

Er so again:

High quality can mean high demand.
High quality can mean low demand.
Low quality can mean high demand.
Low quality can mean low demand.

And all this would mean that quality doesn't say anything about demand.

No, high quality = education necessary to make buying decision.

Why isn't that necessary for Apple's products? I don't see Apple holding educational seminars on the virtues of iPhones vs the rest of the market.

Because the founders wanted a business opportunity AND the product still has to be sold via education to new customers.

That's a reply but not an answer: if the argument is that a product cannot be sold on the virtue of quality without sufficient marketing to establish the brand then once the brand is established then one cannot argue that the same continual level of marketing is required.

In other words why is Nurofen not a MLM product?

hat's because you don't understand MLM and think the brand new IBO who hasn't done much work should be a millionaire.

I would like you to quote me where I said or implied anything even remotely like this.

Without the tool scam, I believe Amway would be 10-100 times bigger.

So now you're saying the tool scam is worth nearly a trillion dollars a year?

Tex2

5th August 2009, 08:27 AM

cyborg

5th August 2009, 08:30 AM

The major reasons Amway wants the IBOs to do the bulk of the advertising, especially when it comes to the education, is because the business was set up that way in order to pay out bonuses to IBOs instead of advertisers, and it takes more than minute or two for the educational process, which is much better done in person.

So no good reason then other than a vauge assertion that a two minute educational session is required in order to properly market the product.

Tex2

5th August 2009, 08:49 AM

You don't think who said it infers anything regarding why they said it? - Nope. ---- So if I said the Soviet Union would cease to exist in 5 minutes, it would make the news the same amount it did for Ronald Reagan?
http://www.youtube.com/watch?v=Zv13ZnkpWos Incredible!

My research says that nutritional supplements don't help healthy individuals and are not preferable to getting a balanced diet - since it is not simply a matter of getting a block of vitamins. ---- Your research is incomplete, especially when it comes to plant derived vitamins/minerals.

Right... but then once the tool scam is gone you're saying the money is too. ---- No I'm not, I'm saying the AMWAY money stays in each IBO's hands instead of being shifted to the upline LCKs. The tool scam money goes away, as it should.

Er so again:

High quality can mean high demand.
High quality can mean low demand.
Low quality can mean high demand.
Low quality can mean low demand.

And all this would mean that quality doesn't say anything about demand. ---- No, it means on a macro level this is true, but on an micro (individual person and product) level it is not true.

Why isn't that necessary for Apple's products? I don't see Apple holding educational seminars on the virtues of iPhones vs the rest of the market. ---- No, they hold "home meetings" at their stores! LOL In fact, there are a number of formerly internet only companies that have decided a physical presence is necessary.

That's a reply but not an answer: if the argument is that a product cannot be sold on the virtue of quality without sufficient marketing to establish the brand then once the brand is established then one cannot argue that the same continual level of marketing is required.

In other words why is Nurofen not a MLM product? ---- I think Amway does carry it, the active ingredient iboprofen: http://www.quixtar.com/search/default.aspx?Ntt=iboprofen&sid=8BDBC337E6BC

I would like you to quote me where I said or implied anything even remotely like this. ---- You said this: "As was explored way back at the start of the thread the figures quoted in the Amway advert do not exactly set the world on fire." What did you mean?

So now you're saying the tool scam is worth nearly a trillion dollars a year? ---- NO. I'm saying the tool scam has held back the growth of the Amway business.

Tex2

5th August 2009, 08:52 AM

So no good reason then other than a vauge assertion that a two minute educational session is required in order to properly market the product. ----Not even close. I said, "The major reasons Amway wants the IBOs to do the bulk of the advertising, especially when it comes to the education, is because the business was set up that way in order to pay out bonuses to IBOs instead of advertisers, and it takes more than minute or two for the educational process, which is much better done in person." This means more money in MY pocket rather than to advertisers. It also means it takes MORE than 2 minutes for the educational process, which often involves questions and answers, something best done in person. Nothing vague or an assertion about either one of these. Factual, specific.

NewtonTrino

5th August 2009, 08:58 AM

Tex, PLEASE USE THE QUOTE FUNCTION. Your posts are unreadable!

As for the rest of the argument it still seems like people are arguing the business works. It doesn't! This isn't theoretical-land here people. It's a great way for the founders of Amway and the tool scam artists to get rich. There isn't legit money to be made in Amway in the real world.

Tex2

5th August 2009, 09:02 AM

Newton, PLEASE USE THE LOGIC FUNCTION. Your posts are unreadable!

As for the rest of the argument it still seems like people are arguing the business works. It does! This isn't theoretical-land here people. It's a great way for the founders of Amway and the IBOs to get rich. There is legit money to be made in Amway in the real world.

NewtonTrino

5th August 2009, 09:09 AM

Find me an IBO that got rich without the tool scam.

Now what percentage of all Amway distributors is that?

It's a SCAM. You are brainwashed. Icerat is brainwashed. Sometimes it really is that simple.

cyborg

5th August 2009, 09:09 AM

So if I said the Soviet Union would cease to exist in 5 minutes, it would make the news the same amount it did for Ronald Reagan?

No.

Your research is incomplete, especially when it comes to plant derived vitamins/minerals.

That doesn't mean anything to me.

No I'm not, I'm saying the AMWAY money stays in each IBO's hands instead of being shifted to the upline LCKs. The tool scam money goes away, as it should.

So far you're only served to convince me that the tool scam money is the lucrative part of the business - you have not convinced me that MLM is required to sell anything, regardless of the asserted complexity of understanding the differentation of the product in terms of quality.

No, it means on a macro level this is true, but on an micro (individual person and product) level it is not true.

The "macro" level is the aggregate of the "micro" level so what you're saying is nonsense.

No, they hold "home meetings" at their stores! LOL In fact, there are a number of formerly internet only companies that have decided a physical presence is necessary.

I don't see how the second sentence is connected to the first.

Now - please explain again why the examples I have given of the supposedly high quality goods that are not impossible to sell in the high street are not equivalent to the supposedly high quality goods that need to be sold through a MLM.

I think Amway does carry it, the active ingredient iboprofen: http://www.quixtar.com/search/default.aspx?Ntt=iboprofen&sid=8BDBC337E6BC

So what's special about the Amway iboprofen then?

You said this: "As was explored way back at the start of the thread the figures quoted in the Amway advert do not exactly set the world on fire." What did you mean?

I meant what I said - the figures are presented as being an inducement to join but they are not exactly brilliant for what they are doing.

NO. I'm saying the tool scam has held back the growth of the Amway business.

If 99% of the money is in tools at a value of a trillion dollars I don't really think growing the rest of the business is necessary.

This means more money in MY pocket rather than to advertisers. It also means it takes MORE than 2 minutes for the educational process, which often involves questions and answers, something best done in person. Nothing vague or an assertion about either one of these. Factual, specific.

So now you're saying it's glorified telesales.

And you still haven't been specific as to what is so complex about the product that requires such an exhaustive interview process before one is able to purchase it.

CynicalSkeptic

5th August 2009, 09:10 AM

It's a great way for the founders of Amway and some the IBOs at the top of the pyramid to get rich. There is legit money to be made in Amway in the real world.
Fixed your post.

Tex2

5th August 2009, 10:07 AM

The first several years of IBOs got rich without the tool scam. People are getting rich in China and other locations around the world without the tool scam. People in the UK will probably get rich without the tool scam. Who cares what percentage it was? The tool scam took over. That's like saying what percentage of Germans were good people before WWII? It doesn't matter, because the Nazis took over. It's a TOOL scam. Not an AMWAY scam. You are brainwashed. Icerat is brainwashed. Sometimes it really is that simple.

Tex2

5th August 2009, 10:25 AM

So if I said the Soviet Union would cease to exist in 5 minutes, it would make the news the same amount it did for Ronald Reagan? - No. ---- Thanks, you just proved my point.

Your research is incomplete, especially when it comes to plant derived vitamins/minerals. -That doesn't mean anything to me. ---- I know, you're ignorant and don't want to learn.

No I'm not, I'm saying the AMWAY money stays in each IBO's hands instead of being shifted to the upline LCKs. The tool scam money goes away, as it should. - So far you're only served to convince me that the tool scam money is the lucrative part of the business - you have not convinced me that MLM is required to sell anything, regardless of the asserted complexity of understanding the differentation of the product in terms of quality. ---- I'm not trying to convince you of anything, just laying the facts on the table. You have every right to make your own decision. The tool scam IS the lucrative part of the business, plus it results in 99% of the IBOs losing money. I never said MLM is REQUIRED to sell anything, I said it was the CHOSEN method Rich and Jay chose to enable others to own their own business, and it works best for certain products where education is necessary. But if the person, like you, doesn't want to learn, the IBO should move on to someone else.

The "macro" level is the aggregate of the "micro" level so what you're saying is nonsense. ---- Except we WORK on the micro level so what you're saying is nonsense.

I don't see how the second sentence is connected to the first. ----That's because you can handle only one idea at a time. LOL

Now - please explain again why the examples I have given of the supposedly high quality goods that are not impossible to sell in the high street are not equivalent to the supposedly high quality goods that need to be sold through a MLM. ---- You won't find anything similar to Double X vitamins in the marketplace, high street or low street.

So what's special about the Amway iboprofen then? ---- Ingredient wise, I don't think there's anything special. However, when I, one of my customers, any of my downline or any of their customers buys it, I get a bonus. Some of the items Amway carries are more for convenience than being "special", which makes it pretty special, as many people value convenience.

I meant what I said - the figures are presented as being an inducement to join but they are not exactly brilliant for what they are doing. ---- Then why do so many people join?

If 99% of the money is in tools at a value of a trillion dollars I don't really think growing the rest of the business is necessary. ---- That's how Bernie Madoff felt as well.

So now you're saying it's glorified telesales. ---- In person sales works better.

And you still haven't been specific as to what is so complex about the product that requires such an exhaustive interview process before one is able to purchase it. ---- I can't even get simple ideas regarding how the business works after dozens of pages of typing. Why do you think a product would so much easier, typing is free?

Fixed it again: It's a great way for the founders of Amway and the IBOs who work, over time, to get to the top of the pyramid to get rich. There is legit money to be made in Amway in the real world, minus the tool scam.

Skeptic

5th August 2009, 10:30 AM

The first several years of IBOs got rich without the tool scam.

That's true for every pyramid scheme -- those who get in at the beginning can get rich by getting enough people below them. But that hardly means it's a good deal.

icerat

5th August 2009, 12:48 PM

I guess the actual reality that the IBOs that make the earn the most from Amway are nowhere near "the beginning" or "the top" would have no bearing at all on your chosen belief, would it?

icerat

5th August 2009, 12:52 PM

As for the rest of the argument it still seems like people are arguing the business works. It doesn't! This isn't theoretical-land here people.

uhh ... wow. Talk about delusional. It doesn't work? $8.2billion in sales. Tens of thousands of people earning full-time equivalent incomes and better, from a part-time business, and more every year. Even in the 50 year old market of the United States there are 500 to 1000 new platinum qualifiers every year.

You're right, it isn't "theoretical-land". It's reality.

You however, are in fairyland.

icerat

5th August 2009, 01:10 PM

So far you're only served to convince me that the tool scam money is the lucrative part of the business - you have not convinced me that MLM is required to sell anything, regardless of the asserted complexity of understanding the differentation of the product in terms of quality.

For a "cyborg" you're pretty short on logic and long in logical fallacies.

Nobody said MLM was "required" to sell anything.

Clearly however, the MLM model works for Nutrition and Skin Care/Cosmetics.

Now - please explain again why the examples I have given of the supposedly high quality goods that are not impossible to sell in the high street are not equivalent to the supposedly high quality goods that need to be sold through a MLM.

Which products are you talking about? For nutritional products, go do the research. For skin care and cosmetics ... funnily enough I've just come from a meeting with the local agents for Europe's #2 best selling professional range of skin care treatment products. They want to market their range through direct sales/MLM.

I guess they know something you don't.

Warren Buffet owns and operates an MLM company
Unilever owns and operates an MLM company
Donald Trump just bought an MLM company and renamed it Trump Network

just to name a few.

But I'm sure you know better

So what's special about the Amway iboprofen then?

Amway doesn't make ibuprofen, but it's available through the network if you want it. You won't make any money marketing it though.

I meant what I said - the figures are presented as being an inducement to join but they are not exactly brilliant for what they are doing.

Please advise of other opportunites open to the average person where they could develop the equivalent of an inflation-linked investment of the order of $1million to $5million in less than a decade. (see What's an Amway Business worth? (http://www.thetruthaboutamway.com/what-is-an-amway-or-quixtar-business-worth))

If 99% of the money is in tools at a value of a trillion dollars I don't really think growing the rest of the business is necessary.

Tex doesn't know what he's talking about re "tools", but that's another story altogether.

So now you're saying it's glorified telesales.

All business is based on sales.

And you still haven't been specific as to what is so complex about the product that requires such an exhaustive interview process before one is able to purchase it.

Huh? If you're in the US you can go purchase anything you want, right now -www.amway.com. Anywhere else, look up the phonebook for your local friendly Amway rep.

NewtonTrino

5th August 2009, 01:56 PM

uhh ... wow. Talk about delusional. It doesn't work? $8.2billion in sales. Tens of thousands of people earning full-time equivalent incomes and better, from a part-time business, and more every year. Even in the 50 year old market of the United States there are 500 to 1000 new platinum qualifiers every year.

You're right, it isn't "theoretical-land". It's reality.

You however, are in fairyland.

The lottery, making hundreds of new millionaires every year! I still wouldn't recommend it as a business though ;)

I also would ask how much profit these 500 to 1000 new platinum qualifiers are making. Slim to negative would be my guess based on my MANY YEARS OF EXPERIENCE being involved with hundreds of platinum level and above distributors that I sold software to.

oggiesnr

5th August 2009, 02:14 PM

I also would ask how much profit these 500 to 1000 new platinum qualifiers are making. Slim to negative would be my guess based on my MANY YEARS OF EXPERIENCE being involved with hundreds of platinum level and above distributors that I sold software to.

Overall the figure is under 1%. It could possibly be a bit more if these are higher up the pyramid. Also depends how much of the stuff they're buying for personal consumption.

Steve

icerat

5th August 2009, 02:49 PM

Overall the figure is under 1%. It could possibly be a bit more if these are higher up the pyramid. Also depends how much of the stuff they're buying for personal consumption.

Steve

Sigh ... do you folks know anything about how Amway operates? Platinums, by definition, are "the top of the pyramid".

NewtonTrino has admitted to having experience only within one group of the Amway world. I'm fascinated to hear he knows what all their incomes and expenses were, or at the very least profitability.

Several years ago, before Amway added a lot more money to the compensation plan, the average Amway income for a qualifying platinum in the US was over US$50,000/yr.

New platinums, again virtually by definition, would be significantly lower, so many are significantly higher. The range is also quite wide. One of the reasons Amway had problems with a large group that got kicked out a couple of years ago was that their strategy for building Amway businesses resulted in more people qualifying platinum, but at significantly lower income levels. I've no idea what strategies NT's "platinums" were working with. There's been tens of thousands of platinums in the US, so even experience with "hundreds" of them is a very small proportion. When those "hundreds" are associated just with the one group and it's offshoots, it's clearly not appropriate to extrapolate to other groups with different systems and strategies.

I'd also be interested in asking NT how long ago this involvement was?

NewtonTrino

5th August 2009, 06:56 PM

Sigh ... do you folks know anything about how Amway operates? Platinums, by definition, are "the top of the pyramid".

NewtonTrino has admitted to having experience only within one group of the Amway world. I'm fascinated to hear he knows what all their incomes and expenses were, or at the very least profitability.

Several years ago, before Amway added a lot more money to the compensation plan, the average Amway income for a qualifying platinum in the US was over US$50,000/yr.

And so what was the average PROFIT? $50k a year even as pure profit split between 2 people is a pathetic income anyway. Anyway I could care less about income, profit is the only thing that matters. So even though platinums are technically at the top of their mini-pyramid it still seems like a pretty crap business.

New platinums, again virtually by definition, would be significantly lower, so many are significantly higher. The range is also quite wide. One of the reasons Amway had problems with a large group that got kicked out a couple of years ago was that their strategy for building Amway businesses resulted in more people qualifying platinum, but at significantly lower income levels. I've no idea what strategies NT's "platinums" were working with. There's been tens of thousands of platinums in the US, so even experience with "hundreds" of them is a very small proportion. When those "hundreds" are associated just with the one group and it's offshoots, it's clearly not appropriate to extrapolate to other groups with different systems and strategies.

I'd also be interested in asking NT how long ago this involvement was?

Spin, spin, spin! My direct involvement with my Amway related business ended over 10 years ago. My dad continued that business for quite a while afterwards (I sold him my share when I moved to the west coast). He's also still active building Amway after 30 years and I just spent a week with him last month (took him on a cruise to Alaska). Either way I've been talking with him about the business for many many years. I grew up around all of the people in the business which is one of the things that allowed me to sell software into their groups.

Bottom line, you have NO IDEA what the average profit for a platinum is. I would love you to find me ONE platinum level distributor that is willing to come onto this board and talk business numbers with us. That's my challenge to you, find someone willing to reveal what their business looks like. I'm assuming this sample will be biased towards someone doing great, but that would be interesting as well. You won't find one though because the income claims while correct are very unreflective of actual profit. Prove me otherwise scamboy.

Porkchopjim

5th August 2009, 09:03 PM

What you could do is train independent salespeople to explain it's benefits to consumers on a 1-1 basis or in small groups, and reward them for their efficacy.

That kind of approach might even make you the #1 nutritional supplement brand in the world.

Translation: Getting to #1 - defined by dollar sales, not by product moved - gets explained to consumers (Amway Business Owners) as one of the better 'point value' products per dollar spent and is an easy way to get the reward of their 'rebate' and hopefully a cut on the vitamins that downline buys...if you can get one.

Buying your own overpriced vitamins in order to artificially inflate your 'business volume' is not bona-fide real market demand.

Plus, everyone knows Herbalife vitamins are better because Beckham plays for that team.

cyborg

5th August 2009, 11:26 PM

Thanks, you just proved my point.

No I didn't.

But if the person, like you, doesn't want to learn, the IBO should move on to someone else.

I believe I have learned that - by your own words - the MLM is an unnecessary overhead that adds no value to the sales proposition.

Except we WORK on the micro level so what you're saying is nonsense.

That does not follow.

That's because you can handle only one idea at a time. LOL

No, it's because the second sentence bears no relation to the first.

You won't find anything similar to Double X vitamins in the marketplace, high street or low street.

Again, that response does not answer the question.

Ingredient wise, I don't think there's anything special. However, when I, one of my customers, any of my downline or any of their customers buys it, I get a bonus. Some of the items Amway carries are more for convenience than being "special", which makes it pretty special, as many people value convenience.

More expensive, inefficient distribution = better, more convenient.

Gotcha.

Then why do so many people join?

Presumably for the same reasons so many people buy useless vitamins.

Argument ad populam carries little weight here.

That's how Bernie Madoff felt as well.

Bernie Madoff was running a Ponzi scheme - not selling items of dubious value to members of a cult.

In person sales works better.

I'll interpret that as an agreement - it's glorified telesales.

I can't even get simple ideas regarding how the business works after dozens of pages of typing.

I'm willing to presume this is because you're bad at explaining things.

Why do you think a product would so much easier, typing is free?

That sentence makes no sense.

Fixed it again: It's a great way for the founders of Amway and the IBOs who work, over time, to get to the top of the pyramid to get rich. There is legit money to be made in Amway in the real world, minus the tool scam.

So we return to the dubious benefits of attempting to get to the top of the pyramid scheme - I believe that's been covered in detail.

cyborg

5th August 2009, 11:30 PM

Nobody said MLM was "required" to sell anything.

Then it's an unnecessary overhead.

I guess they know something you don't.

That getting people to work for ridiculously low costs is a sound business proposition but a lousy deal for the worker?

No, I know that.

Please advise of other opportunites open to the average person where they could develop the equivalent of an inflation-linked investment of the order of $1million to $5million in less than a decade. (see What's an Amway Business worth? (http://www.thetruthaboutamway.com/what-is-an-amway-or-quixtar-business-worth))

I believe this has been covered as well - the numbers do not work. NewtonTrino has convered that quite well.

Huh?

You'll have to take that up with Tex.

icerat

6th August 2009, 03:39 AM

And so what was the average PROFIT? $50k a year even as pure profit split between 2 people is a pathetic income anyway. Anyway I could care less about income, profit is the only thing that matters. So even though platinums are technically at the top of their mini-pyramid it still seems like a pretty crap business.

Platinum businesses are typically run part-time by one person, not two, though a partner may contribute in terms of hours put in it's normally insignificant. There's also plenty of completely single platinums.

What's your options for the average person to add $50k/yr to their income on 10-20hrs work a week?

I grew up around all of the people in the business which is one of the things that allowed me to sell software into their groups.

And they all showed you their P&Ls?

Bottom line, you have NO IDEA what the average profit for a platinum is.

I'm making no claims about the average profit for a platinum, you are. Bottom line is YOU have no idea. You're just assuming.

I would love you to find me ONE platinum level distributor that is willing to come onto this board and talk business numbers with us.

For what purpose? So you can call them liars too? Heck, audited KPMG statements presented in a court of law have been challenged as potentially fraudulent on this thread. There is nothing that will satisfy you.

The only thing that can be truly established from this thread is that I'm stupid enough to engage you in debate.

Prove me otherwise scamboy.

Ever heard of Rule 12? Attack the argument, not the arguer.

CynicalSkeptic

6th August 2009, 08:20 AM

I guess they know something you don't.

Warren Buffet owns and operates an MLM company
Unilever owns and operates an MLM company
Donald Trump just bought an MLM company and renamed it Trump Network

just to name a few.

But I'm sure you know better

Yes, they own the company therefore they are at the top of the pyramid., they didn't buy in as an IBO re-distributor.

icerat

6th August 2009, 09:31 AM

Yes, they own the company therefore they are at the top of the pyramid., they didn't buy in as an IBO re-distributor.

nice dodge. It was in response to a claim it was a poor business model for marketing of products.

This of course requires willfully ignoring the fact the model is used and endorsed by highly successful business people and mutlinationals, and unequestionably IS highly successful, resulting in brands like Nutrilite, Avon, Artistry and others being at or near the top of their brand categories.

I can also point you to plenty of successful company owners who have elected to become IBOs, starting "at the bottom" where everyone else did - including Amway founders Rich DeVos and Jay Van Andel, who started "at the bottom" with Nutrilite.

icerat

6th August 2009, 09:41 AM

Translation: Getting to #1 - defined by dollar sales, not by product moved - gets explained to consumers (Amway Business Owners) as one of the better 'point value' products per dollar spent and is an easy way to get the reward of their 'rebate' and hopefully a cut on the vitamins that downline buys...if you can get one.

Buying your own overpriced vitamins in order to artificially inflate your 'business volume' is not bona-fide real market demand.

Plus, everyone knows Herbalife vitamins are better because Beckham plays for that team.

I normally ignore PCJ, he's a known troll, but I thought I'd address some more disinformation he's spreading here. He claims Nutrilite is #1 only because their flagship Double X product is quite expensive, thus driving up the dollar sales.

What he completely ignores, or to be charitable, is ignorant of, is that Nutrilite is #1 throughout the world, and has been for at least 7 years. For most of that time the Double X product was not available outside North America, so it's total $$ contribution was minor. Even in North America, Nutrilite's top selling product is not Double X, it's Daily .... the product which, as was easily shown earlier, is cheaper than the CostCo product PCJ was claiming was a better buy ... and that was at full retail Amway price vs CostCo members price.

It's amazing to me how often the more persistent Amway critics, like PCJ, simply make stuff up and lie. What's sad is I often see their lies repeated elsewhere on the net by people who unfortunately accept their claims at face value, such as earlier in this thread when someone cited some outright false claims by anti-Amway zealot JoeCool. Just today on another forum I was dealing with another anti-Amway zealot, David Brear, who was telling the world that Amway lost a lawsuit brought by P&G and agreed to pay them millions. The truth? Amway was dismissed from the case, and everywhere else P&G tried to pursue Amway, the court threw it out. He lied.

It seems to me that we may have a case of dishonest people projecting their dishonesty on to others.

Porkchopjim

6th August 2009, 11:36 AM

I normally ignore PCJ, he's a known troll, ...

Don't flatter yourself too much, Insider. I didn't come here for you. I was afraid (and proven correct) that Tex was out bothering people again. Come to find out this place is doubly infested.

He claims Nutrilite is #1 only because their flagship Double X product is quite expensive, thus driving up the dollar sales.

While I may use Double X as a generic example of overpriced Amway vitamins, it is my full position that all the vitamins are overpriced.

What he completely ignores, or to be charitable, is ignorant of, is that Nutrilite is #1 throughout the world, and has been for at least 7 years.

It has been overpriced for much longer than that, but it's good they get recognition however you can.

For most of that time the Double X product was not available outside North America, so it's total $$ contribution was minor. Even in North America, Nutrilite's top selling product is not Double X, it's Daily .... the product which, as was easily shown earlier, is cheaper than the CostCo product PCJ was claiming was a better buy ... and that was at full retail Amway price vs CostCo members price.

Substitute 'Double X' with any overpriced Nutrilite product. If it were based on volume and not price - Nutrilite would not be number one. It is immaterial which overpriced pill pack you pull from the Nutrilite bag.

It's amazing to me how often the more persistent Amway critics, like PCJ, simply make stuff up and lie.

I did lie. I made up the price for the Costco vitamins. When I actually did waste my time looking all that up, naturally I found that the Kirkland line was substantially cheaper - and met quality control standards the Amway can't or doesn't choose to - but that part's not made up.

So while on one hand you pretend that Nutrilite's cheapest product is the one that propelled them to number one (...who's heard of Flinstone chewables? ...who's heard of Nutrilite before now?)...

...on the other hand you dedicate an entire page on your site of deception trying to justify the excessive price of Nutrilite products because 'natural' vitamin C is better than artificial vitamin C (any proof for that? Right, dumb question)...and alfalfa is expensive. Sure is! We pay about $4.00 a bail delivered! That MORE than justifies $80 vitamins.

So, seems you like to make excuses and continue to spin in whichever direction your unethical position takes you...and ignore why both the FTC and Amway have explicit rules requiring sales to non-IBOs.

It seems to me that we may have a case of dishonest people projecting their dishonesty on to others.

It's hard to hang around Amway and the likes of you without SOME of that 'valuable training' rubbing off on us.

So while Tex tries to slay the tool-dragon by getting kicked off every forum on the internet (one at a time, of course), I am comfortable that you have been equally effective in changing anyone's mind about Amway.

You are cult retention, that's all.