Multi-level Marketing - the way of credulous.

[The Atheist]

My all-time favourite business model - MLM.

What a crock of *****.

I have a list of people who have tried to sell me on Amway and other MLMs over the past 20+ years. I ring them up on their birthday to enquire as to why they're still working in dead-end jobs instead of sitting back and watching their "passive income" flows.

Not too many of them are amused by it, I can assure you!

Multi-level marketing is a rort of the lowest kind - a pyramid scheme dressed up as a genuine business. It came as no surprise to me to find that Amway finish their meetings with a prayer, or full church service, if there are enough attendees.

As far as Amway Inc is concerned, the business is a winner - there's no question that a significant amount of product is sold, but it's a poor means of involving oneself in business.

There are a wealth of genuine franchise ideas available for people who wish to be self-employed and some of them are very good businesses.

People joining MLM schemes are missing the number one rule of business - if it looks too good to be true - it is!

[quixotecoyote]

Yep. Primerica almost got me a few years ago with it's insurance MLM. Did a little digging and found that the people who didn't get poorer but wiser and leave quickly got trapped into a cultlike cycle of trying to recruit new members and exhausting themselves traveling to as many customers as possible, living in bunkhouse conditions, and never getting ahead. Every once in a while someone would break though and it was a quasi-religious faith that they would be next that kept the drones going.

[Wolfman]

Well, that's not entirely true. If you are one of the people at the top levels of an MLM, it can be very lucrative.

But yes...for the average person, all the figures and profits they dangle in front of you are pure illusion, based on assumptions that will never come true.

[The Atheist]

Every once in a while someone would break though and it was a quasi-religious faith that they would be next that kept the drones going.

Bingo. That's exactly how it works.

Well, that's not entirely true. If you are one of the people at the top levels of an MLM, it can be very lucrative.

But yes...for the average person, all the figures and profits they dangle in front of you are pure illusion, based on assumptions that will never come true.

As I said, it's profitable alright.

The trouble is that there's ever only the top layer makes any money and unless you're good mates with whoever's starting it all off, there's no show of making a living out of it.

[Wolfman]

For many years, Amway was illegal in China; a few years back, the Chinese gov't changed the laws to make it legal. One of my Chinese friends was one of the very first people to be an official Amway representative in China, and he truly stumbled upon a complete cash cow. There are now so many people in his network who are selling that he doesn't need to do a thing except sit back and collect his share of their sales.

Unfortunately, as these things go, stories about my friend and others who got in on Amway right at the beginning have fueled images of becoming independently wealthy by selling Amway; but the truth is, the market is so saturated that anyone who joins up now is gonna' be lucky to make enough money to even justify it as a part-time job.

My favorite version of the MLM is the scam email that says, "Send $5.00 to the five people who are listed below; then erase the top address, and add your address at the bottom; and send this email to 20 friends. Just figure it out! Within a short time, you could be receiving hundreds or even thousands of dollars!" It is really just a condensed form of MLM, albeit much more obvious. The sad thing is how many people still fall for it...if they fall for something this obvious, no wonder they fall for things like Amway.

[Miss Anthrope]

Oh yes, I remember the day my ex husband came home--the one who's so proud of his Mensa card--and told me he signed "us" up with Amway.

I wound up going to a few of the weekend conventions because it meant a hotel on the beach.

Needless to say, he never made "diamond". Of course he blamed my refusal to "work the business" with him for his very predictable failure.

Listening to all those motivational tapes in the car, dreaming and talking about the future....it was positively RELIGION for him!

[The Atheist]

Oh yes, I remember the day my ex husband came home--the one who's so proud of his Mensa card--and told me he signed "us" up with Amway.

Wow, that's most unusual - all of the people I've seen who have been sucked into the gaping maw have been of decidedly limited brainpower.

And he's your "ex"....

:bgrin:

[quixotecoyote]

Oh yes, I remember the day my ex husband came home--the one who's so proud of his Mensa card--and told me he signed "us" up with Amway.

I wound up going to a few of the weekend conventions because it meant a hotel on the beach.

Needless to say, he never made "diamond". Of course he blamed my refusal to "work the business" with him for his very predictable failure.

Listening to all those motivational tapes in the car, dreaming and talking about the future....it was positively RELIGION for him!


I'm in the process of moving, I think I threw out my last motivational Primerca cd. "The S Curve" pseudo-scientific economic BS used as a sermon.

[Miss Anthrope]

Wow, that's most unusual - all of the people I've seen who have been sucked into the gaping maw have been of decidedly limited brainpower.

And he's your "ex"....

:bgrin:

Brownie points noted and recorded ;)

I chalk it off to materialism and greed. Some kinds of intelligence don't seem to be assessed on IQ tests--he'd fail miserably in the common sense section.

[Wolfman]

I think this has more to do with personality than with intelligence.

There are simply those people out there who are always looking for "the easy way to make it big". They don't want to have to do all the groundwork and spend years slowly building it up; they want it all right now, and they know they deserve it, they could do it if someone would just give them the chance.

And then, presto, along comes someone who gives them that chance. "You don't need any previous experience, we'll give you everything you need to be successful right now!"

It doesn't matter if they're a genius or a moron; it appeals to all such people equally. In fact, it could appeal to the genius even more, because he knows he's smarter than the people who are doing this already. If they can make money at it, of course he can make even more!

[Miss Anthrope]

Brilliant, Wolfman. You're on a roll tonight!

[simonmaal]

I think this has more to do with personality than with intelligence.

There are simply those people out there who are always looking for "the easy way to make it big". They don't want to have to do all the groundwork and spend years slowly building it up; they want it all right now, and they know they deserve it, they could do it if someone would just give them the chance.

And then, presto, along comes someone who gives them that chance. "You don't need any previous experience, we'll give you everything you need to be successful right now!"

It doesn't matter if they're a genius or a moron; it appeals to all such people equally. In fact, it could appeal to the genius even more, because he knows he's smarter than the people who are doing this already. If they can make money at it, of course he can make even more!

Brilliant synposis, I like it! In other words, appeal to emotion tends to override the critical functioning of the intellect (and a high IQ is no better a defense than an average one). Which makes the psychological processes involved in these schemes very similar to those used in evangelism. It's little wonder they include church services in the system; probably helps them hone their techniques :p

Anyway, before I pick up that ball and run with it, back to topic. I was once sent an introductory CD for a company called Good Life or something (I must verify the name to avoid accusations of being woolly). I watched this mind-numbing, banal piece of marketing for a full 20 minutes in a vain attempt to discover what the product was. I got to the end of the presentation and I managed to work out that there was no product involved whatsoever! It was a pyramid scheme based on nothing other than fresh air!!! It was a way of passing on an increasing amount of debt to an increasing number of people.

[The Atheist]

It was a pyramid scheme based on nothing other than fresh air!!! It was a way of passing on an increasing amount of debt to an increasing number of people.

I've actually had the fortune to bust a couple of those. It was actually busting financial frauds which got me started on the whole asking questions bit.

Man, if want the BS to flow, show 'em the $$ signs!

[JonnyFive]

I think this has more to do with personality than with intelligence.

There are simply those people out there who are always looking for "the easy way to make it big". They don't want to have to do all the groundwork and spend years slowly building it up; they want it all right now, and they know they deserve it, they could do it if someone would just give them the chance.

And then, presto, along comes someone who gives them that chance. "You don't need any previous experience, we'll give you everything you need to be successful right now!"

It doesn't matter if they're a genius or a moron; it appeals to all such people equally. In fact, it could appeal to the genius even more, because he knows he's smarter than the people who are doing this already. If they can make money at it, of course he can make even more!

I know exactly what you're talking about. A couple years ago, when I was looking around for a new job after finishing school, I (for reasons that are not quite clear to me) considered working as a sales rep for Aflac. Now, Aflac is a legitimate insurance company, and not some MLM scam, but they use the same kind of approach to try to recruit you into their sales force.

Fortunately, I did my research into them, realized it was a much tougher sell than they make it sound (truth is, lots of insurance companies offer a similar product to Aflac), and there are a lot of issues with market saturation.

(Also, I realized I hate sales with a burning passion.)

[Victor Meldrew]

A different viewpoint from someone who actually makes money in an MLM business....

I agree with you totally about all the hype and ******** that surrounds MLM - 'get rich quick' ; 'anyone can do it'; 'I made a million pounds in 10 minutes!' ;'no sales skill required' etc etc - all utter bull. Makes me embarrassed to be involved with the industry.

But, just like there are some good franchise opportunities out there, there are some good MLM opportunities too - FOR THE RIGHT PEOPLE.

Many people who join an MLM company would not start a franchise - because they would have to make a serious time and monetary investment in the opportunity - so they would have to consider whether they really are capable of running their own businesses. Not so with MLM - websites and meetings promote money easily made, and the hype (and pressure of distributors already at the meeting) leads to people getting carried away and signing up. The feelgood factor may last for a few hours, a few days, often a few weeks, before reality hits.

Speaking from a personal basis, I joined an MLM company in March 2005 and worked the business hard for 6 months. Then I sat back.

I am still involved with the business, and still earn around £500/$1000 per month from it. For approximately 1 hours work per month.

The pertinent points to be mentioned are : I had already been involved in 2 other MLM opportunities (both went under - nothing to do with me - honest!) so I had experience in the field.

I was an experienced sales person already. (Most people who get sucked into MLM are told you don't need to sell, you just recommend products. Yeah, right.)

I had previously been self employed, so I knew that there was more to running a business than actually selling (or recommending) products. Things like marketing, time management, team management, finance control etc etc.

Unfortunately, the vast majority of MLM products are overpriced, making them difficult to sell, and I also have huge concerns about the validity of the claims of many of the products (magnetics, vitamin supplements etc).


Please note that Rule 10 for the public area requires that all swear words must be fully asterisked. (Edited to ensure compliance.)

[dudalb]

My Brother is a Sales Rep,and according to him any decent salesman would not look at a job and/or franchise unless it contained a exclusive territory clause.
Frankly,some MLM's are little better then Pyramid Schemes with just enough legal cover to avoid coming under the Anti Fraud laws.

[The Atheist]

(Also, I realized I hate sales with a burning passion.)

What do you do for a crust? I actually had you marked down as just the type to be a salesman!

I was an experienced sales person already. (Most people who get sucked into MLM are told you don't need to sell, you just recommend products. Yeah, right.)

You've hit the nail on the head there - a good salesman will succeed at MLM, just as a good salesman will succeed at any business reliant upon sales of product or service.

That's why I get asked so often to join these bloody rorts - I am a legendary salesman! (Not to be too guilty of hubris, but I do train people in selling and I've been acknowledged as being rather good at it.)

My Brother is a Sales Rep,and according to him any decent salesman would not look at a job and/or franchise unless it contained a exclusive territory clause.

Smart man.

Frankly,some MLM's are little better then Pyramid Schemes with just enough legal cover to avoid coming under the Anti Fraud laws.

I have a friend at the moment who is running one based on lotto tickets. I'm expecting to see him carted off in a black maria any day!

[JonnyFive]

What do you do for a crust? I actually had you marked down as just the type to be a salesman!

I'm an insurance underwriter, so I review loss experience, issue proposals for coverage, evaluate current business, write up insurance reports, etc.

It's an interesting job, and I enjoy it. Been back at school studying mathematics, so I hope to eventually move into actuarial science.

[Gord_in_Toronto]

Did not Jesus comment on this?

. . . many are called, but few are chosen — Matthew 22:14, KJV

[The Atheist]

I'm an insurance underwriter,....

Well, I probably could've looked under your avatar and figured that!

LOL

Do you know RandFan? He's an insurance actuary, I think.

[The Atheist]

Did not Jesus comment on this?

:dl:

Entirely appropriate.

I was once under-privileged to have a watch an Amway meeting in Auckland unfolding - I was staying with one of the attendees. Seeing around 5000 of them turn out for the Sunday Amway Prayer MeetingTM was a highlight of my life!

[JonnyFive]

Well, I probably could've looked under your avatar and figured that!

LOL

Quite right, sir, quite right. :)

Do you know RandFan? He's an insurance actuary, I think.

I don't know him personally, no. I had no idea he was an actuary, that's excellent.

[SusanB-M1]

In the 70s, casting around for interesting things to do as a hobby outside of teaching, I looked at quite a few MLMs and was invited to a meeting or two. I was astonished to see how some of the people there did not see the obvious flaws and that they did not ask the questions I did. Never a sensible answer of course did I hear.

...Except in the case of Tupperware, however, and I did become a demonstrator.
- No initial money outlay was required and, although there was no gain until money taken exceeded cost of kit, that didn't take long.
- I made it clear that as soon as anyone tried to push me into doing more or persuading people to join, then I would go (and the manager I was with quickly realised I was worth keeping). If people asked me about joining, that was different.

I kept it as a hobby for a long time, thinking that I would do more when I retired, but then I had to give up driving and in fact of course Tupperware closed down in this country for several years.

[The Atheist]

...Except in the case of Tupperware, however, and I did become a demonstrator.
- No initial money outlay was required and, although there was no gain until money taken exceeded cost of kit, that didn't take long.
- I made it clear that as soon as anyone tried to push me into doing more or persuading people to join, then I would go (and the manager I was with quickly realised I was worth keeping). If people asked me about joining, that was different.

I kept it as a hobby for a long time, thinking that I would do more when I retired, but then I had to give up driving and in fact of course Tupperware closed down in this country for several years.

Ah! Tupperware parties! I'd clean forgotten about them. Avon Cosmetics used to do the same sort of thing - one of my sisters-in-law had an Avon business for years.

I guess they were the true forerunners of Amway, but as you say, they were a lot cleaner and with no upfront outlay required.

[RandFan]

Do you know RandFan? He's an insurance actuary, I think.And on that day it is said that RandFan's head grew three sizes. :D

Sorry, no, just a lowly insurance auditor and part time programmer.

[The Atheist]

Tell 'em I gave you a promotion. Don't forget to ask for more money.

[JonnyFive]

And on that day it is said that RandFan's head grew three sizes. :D

Sorry, no, just a lowly insurance auditor and part time programmer.

Ah, damn it, I was going to ask for advice on taking the SOA tests. :D

What lines of coverage do you work with, RandFan?

[Rob Lister]

Speaking from a personal basis, I joined an MLM company in March 2005 and worked the business hard for 6 months. Then I sat back.

I am still involved with the business, and still earn around £500/$1000 per month from it. For approximately 1 hours work per month.


Well, I won't say that I disbelieve your claim but I will say that I'm highly dubious of it -- I've know more than a few that made such claims falsely in trying to convince me to come in. In every case, bar none, they were lying.

Not saying you are.

...it could be that you got in on or near the ground floor of a particularly trendy new variant, and I know there really is money to be made at such levels. I personally find them unethical, but that's just me.

[Mycroft]

Oh yes, I remember the day my ex husband came home--the one who's so proud of his Mensa card--and told me he signed "us" up with Amway.

I wound up going to a few of the weekend conventions because it meant a hotel on the beach.

Needless to say, he never made "diamond". Of course he blamed my refusal to "work the business" with him for his very predictable failure.

Listening to all those motivational tapes in the car, dreaming and talking about the future....it was positively RELIGION for him!

The insidious thing about MLM is that people become convinced it is a pyramid scheme, which lends the whole idea credibility. Pyramid schemes do make money, unlike MLMs.

The real secret of the MLMs and how they make money is in those motivational tapes and weekend conventions. They cost money, and you buy them from your upline. You get recruited and told you're a sales force, but the hidden truth is you're really the market. The product isn't the cleaning products or the other nonsense from the catalogue, it's the motivational tapes, books, and weekend conventions.

[Rob Lister]

The insidious thing about MLM is that people become convinced it is a pyramid scheme, which lends the whole idea credibility. Pyramid schemes do make money, unlike MLMs.

The real secret of the MLMs and how they make money is in those motivational tapes and weekend conventions. They cost money, and you buy them from your upline. You get recruited and told you're a sales force, but the hidden truth is you're really the market. The product isn't the cleaning products or the other nonsense from the catalogue, it's the motivational tapes, books, and weekend conventions.

Bravo.

[SpaceMonkeyZero]

One thing I really hate about my Sirius radio is all those MLM scam commercials and "lose weight with a cayenne pepper nose spray that also cures your sinus problems and will wash your dog"

That Bruce Berman needs to DIAF.

[JonnyFive]

One thing I really hate about my Sirius radio is all those MLM scam commercials and "lose weight with a cayenne pepper nose spray that also cures your sinus problems and will wash your dog"

That Bruce Berman needs to DIAF.

There are a ton of those things on regular radio too. A lot of "get rich quick with real estate," Bruce Berman crap, weight loss, herbal supplments for "natural male enhancement," etc. etc.

The Bruce Berman commercials are particularly rankling.

[juniper_ann]

I like cockeyed's take on the Herbalife MLM:
http://cockeyed.com/workfromhome/workfromhome.html

[Wirelight]

Great article. And yeah, them signs are everywhere here too.

[jimbob]

re: Miss Anthrope's posts, there is a British Army Saying that I can't repeat here except to refer to BBB, The last tow are "Baffles Brains", a corolory of this and Miss A's postis the reason that scammers, e.g. Yuri Geller* tend to like performing in front of scientists, and not magicians.

*(is that sort of language allowed under rule-8)

[firecoins]

People joining MLM schemes are missing the number one rule of business - if it looks too good to be true - it is!
thats the #1 rule of business? I thought it was to make more money than you spend.

[Bob Klase]

Originally Posted by The Atheist
People joining MLM schemes are missing the number one rule of business - if it looks too good to be true - it is!

thats the #1 rule of business? I thought it was to make more money than you spend.

You are correct. The "if it looks too good to be true" is the #1 rule of life, not business.

[Spindrift]

What I always found amazing is that those pitching Amway and Primerica always refuse to name the company they are pitching.

It's always a 'new business opportunity' or some such thing.

I've been trapped into Amway pitches by people I trusted twice. These were people whom I worked with previously and had discussed business ventures, so when they called I wasn't suspicious. The first person I let go through there spiel and told them I'd really have to think about it. The second one, I stopped immediately as soon as I figured out it was Amway. I basically forced her to admit it was Amway as her "upline" squirmed. I then got up from the table and said thanks, but no thanks. The "upline" started stammering, but I just ushered them out the door.

I have gotten several telephone pitches from someone selling Primerica, looking for "management". One time, I asked the guy where he got my phone number. He said the phone book, that's what they told him to do. I asked him what kind of business would use the phone book as list of leads, shouldn't they have a better way? He said, "I never thought of it that way." Then I asked, "How good of business could it be, if you're afraid to mention it's name?". He said, "That's kind of bothered me, too." We talked for a bit. Seems he was in his late fifties, had been laid off from some middle management job and had been out of work for quite some time. I told him it might be a good idea to try something new, but perhaps he should do a little more investigation before jumping at such "opportunities." He actually thanked me and he'd really have to re-think it. I just hope he had the courage to quit it before his upline really got to him.

[Deus Ex Machina]

What I always found amazing is that those pitching Amway and Primerica always refuse to name the company they are pitching.

It's always a 'new business opportunity' or some such thing.


The spouse of a co-worker tried to persuade me to come to "help him evaluate a business proposal". I had my suspicions about it simply because it was so vague and when I asked for clarification all I got was "come to the meeting". I did some checking around and found out is was Quixtar/Amway.


I've been trapped into Amway pitches by people I trusted twice. These were people whom I worked with previously and had discussed business ventures, so when they called I wasn't suspicious. The first person I let go through there spiel and told them I'd really have to think about it. The second one, I stopped immediately as soon as I figured out it was Amway. I basically forced her to admit it was Amway as her "upline" squirmed. I then got up from the table and said thanks, but no thanks. The "upline" started stammering, but I just ushered them out the door.


I never got to the meeting this jerk tried to con me into. I first of all braced him about the fact that far from wanting my "help to evaluate" he was trying to get me to sign up for something he had already joined. I asked him if this as the way he normally conducted himself? Lying to people? I am afraid I was a little nasty about it.

His wife (my co-worker) called me up at work the next day and she was a little shell shocked. After I had finished taking off a layer of her hide for daring to give me name to her husband for a "business venture" I then rubbed some salt into by repeating my statement that lying to people to get them to join something is the hallmark of a cult and that her husband was setting up to try and make his fortune with a company where he is afraid to say its name!


I have gotten several telephone pitches from someone selling Primerica, looking for "management". One time, I asked the guy where he got my phone number. He said the phone book, that's what they told him to do. I asked him what kind of business would use the phone book as list of leads, shouldn't they have a better way? He said, "I never thought of it that way." Then I asked, "How good of business could it be, if you're afraid to mention it's name?". He said, "That's kind of bothered me, too." We talked for a bit. Seems he was in his late fifties, had been laid off from some middle management job and had been out of work for quite some time. I told him it might be a good idea to try something new, but perhaps he should do a little more investigation before jumping at such "opportunities." He actually thanked me and he'd really have to re-think it. I just hope he had the courage to quit it before his upline really got to him.

I have never received a call from Primerica. But your approach sounds good to me!

[Ranillon]

Much of this sounds like just another manifestation of the modern cult of "Egalitarian Elitism" -- so common nowadays it seems -- that implicitly argues that somehow all of us can be the "big winner" despite the fact that by design the "system" (I use that term loosely) will only allow for a tiny minority of the super successful.

Needless to say, this myth/ideology tends to skew at that of people's attitudes concerning "success" -- as many of the examples above illustrate.

[Mycroft]

I've been trapped into Amway pitches by people I trusted twice. These were people whom I worked with previously and had discussed business ventures, so when they called I wasn't suspicious....

This has happened to me before, and I take it as an opportunity to talk people out of Amway. So far I've been able to convince two people to walk away.

My method is pretty simple. I walk them through the math.

1) I invite them to pick the product they feel is best and that they feel most comfortable selling.

2) Then I ask them how much money they want to make. Then I ask them to scale it back, how much money would they feel comfortable making?

3) Then we do the math. How much of product X do you have to sell to make that much money?

The result is always a huge amount of product, and they always respond with yeah, but you recruit all these people to sell for you, it's exponential...!, so you do the math again.

How much is your cut from what your recruits sell? How much does your downline have to sell for you to make the money you want? How much do they have to sell two levels removed? Three? The numbers just keep getting bigger and bigger, exponential goes both ways.

Then you come in with the killer questions:

How long have you been working at this? What are your sales so far? Extrapolate, if you've achieved that level of success so in the amount of time you've given it, at your current rate of growth, how long will it take to reach the level you feel comfortable with? (usually the answer is never, since they have yet to achieve any stable level of monthly sales)

How long has your up-line been working at this? What are his monthly sales? Extrapolate, how much longer does he have to work to grow his business before he reaches the level where you said you would feel comfortable? (Usually this drives home the point that his upline is a loser as well.)

If they're not completely demoralized by that point, then you start comparing their profits to their costs.

How much have you spent on this so far? You need to be probing here because they tend to downplay their expenses. You may need to remind them of books, CD's, seminars, gas, etc.

Then you ask them how much they have to sell of their favorite product before they reach their break-even point. Will they be buying more inspirational or promotional materials? (That's a tough question for them. They're drilled with the idea that if they want success they need the motivational tools for success, so it's hard for them to say they won't buy any more motivational materials, but when you lay out the math they can clearly see how far it sets them back from the benchmark of breaking even.)

If they're still not ready to quit, start calculating the amount of time they've spent on it and calculate their earnings as an hourly wage. How many hours a week do you spend on this? How many meetings do you attend? How long do they last? How much time do you spend trying to recruit friends and family?

If they try to low-ball you on the hours, comment that it doesn't seem like a very strong commitment to the program, they almost always up the estimate then. THen do the math, total profits so far divided by total number of hours. Ooh, that's not very much. You call yourself my friend trying to recruit me into this?! Then compare their earnings to minimum wage. Minimum wage starts to look pretty good in comparison.

[Geek Goddess]

I did some research on this, when a former co-worker's wife mentioned she sold Amway. (She wasn't trying to recruit me or anyone I knew). Although she was in her late 20s, she had been very active, and very aggressive, for quite a long time. She rented a warehouse to hold all her stock, expanded into selling pay phones to small business (for a share of the receipts), and so on. She would only recruit people who were as aggressive as she was.

My research on MLMs, in general, discussed that MLMs are often marketed toward blue-collar workers as a way to 'get rich like the other guys.' To the surprise of many (according to the articles I read, this was pre-Internet), the ones who tended to be more successful at actually making money in MLM were people like...doctors or other small-business entrepreneurs. The reasoning was that they generally had enough contacts, business associates, partners, and other ready-made customers to sustain a group and see a constant cash flow. In general, the average working-class American does not have sales experience or business savvy (that's most of us), to develop a business. That's why most of us tend to work for a salary or wages.

[Spindrift]

Just before I met my wife, good friends of hers got into Amway. They tried to recruit her, but all she did was buy some of their products. She said some of the things were pretty good. My wife wasn't going to sell the stuff herself, but she figured if it helped a friend and the stuff was decent then no big deal.

When my wife and I started dating and I met them, my wife told them in no uncertain terms that they were not to bring up their business. I think it had caused problems with a previous boyfriend.

Eventually, the subject did come up since it had become an integral part of their life, but to their credit (or fear of my wife's wrath) they never tried to recruit me directly. They talked about how they were planning to be at diamond or whatever level it's called within 5 years. At that point they could both go into semi-retirement and enjoy the good life. We've lost touch with them, but it's been almost 20 years and the last we heard they still hadn't reached their 5 year goal and they really work at it. The husband still has a full-time job, the wife spends her time dealing with the Amway stuff. They go to the conventions, buy all the tapes. Early on, I tried to get them to see the limitations but they were too invested emotionally, financially and I think spiritually as well.

I've often wondered if they put that much time and effort into another business that they could have been much better off.

[NobbyNobbs]

I couldn't tell you much about the Amway/Quixtar system, but I have used their products. Generally, they are quite good, if a bit expensive.

[Elind]

This has happened to me before, and I take it as an opportunity to talk people out of Amway. So far I've been able to convince two people to walk away.



So normally you deprogram people from what?:boggled:

[tube]

I've never posted in this sub-forum before, so perhaps the following anecdote is old news to some people.

Years ago, when I was a new homeowner, my neighbor asked me to help her move an unweildy mattress into her house. Her husband was unable to help, due to an injured foot. After the mattress was in place inside, the woman launched into a pitch for magnetic insoles. This was cringe-inducing, but I soldiered on, as I very much wanted to fulfill the image of the "good neighbor".

The pitch even included the old vaudeville stunt of holding your arm out, testing its strength, then applying the stimuli (in this case magnetic insoles) then finding your arm was "stronger" with the magnetic insoles.

Eventually I had to blurt out something to the effect of "is this some kind of multi-level marketing scheme?" To which she answered that it was not. However, it was clear from her pitch that it was.

This happened about a dozen years ago, but I seem to remember the company was called "Nikken". They do indeed sell magnetic insoles:

http://www.nikken.com/product.cfm?ThemeID=3&GetProductGroup=Magnetic%20Insoles

In searching the net for information, I came across this page from the Onion on magnetic insoles:

http://www.theonion.com/content/node/29554

[NewtonTrino]

All of the Amway kingpins make their money from the books, tapes (now cd's I guess) and seminars. In addition they get paid to give speeches at other organizations seminars.

How do I know this? I worked on some financial software used by some of these kingpin distributors and got to see some of the numbers. Stay far far away from these cults, you will only get burned. I know people who have been chasing "the dream" for close to 30 years without turning a profit.

The mind control aspect is not to be understated. The primary way they keep people in is brainwashing through the books and the tapes. People literally lose touch with reality. Even "IQ Smart" people can get involved and become brainwashed.

Scary scary stuff.

[Mycroft]

One of the amazing things about Amway and other MLMs is how often people get into it, lose money, fail miserably, yet still blame themselves and not the system for their failure.

It seems to be to be obvious that you just can't sell enough soap/toothpaste/whatever to your friends and family to support yourself, yet nobody seems to be able to see this basic flaw in MLM, and they continue to attribute their lack of success to personal failings.

[jimbob]

Because if the fault is with you then there is hope that the next round of motivational bumf would fix your finiancial woes, and incidently prove your worth as a human being for existing? you, and incidentially solve your financial woes, vindicating your decision?

[Elind]

Years ago, when job hunting, I got suckered into interviews with some of these. Primerica comes to mind. However I did see that there was nothing to sell, but more memberships and after 3 or 4 of these "meetings" I came to recognize the ads quite easily. In fact they seemed to have perhaps 25-50% of the job ads for a time when I was looking in the newspapers. I also listened to a few pitches at job fairs "Do you want to TAKE CONTROL of your life?" and similar BS.

Sad.

[jimbob]

Here (http://www.otherhealth.com/showthread.php?t=8097), it is possible to conflate this with quackery...

Thanks to the Badscience "Sue the young homeopath", and veryscarymary threads

Hello,
I am a happy Homeopath who lives and works in Bath and this is a quick note for you! If you want to either set-up in practice or are already practicing as a Homeopath find out:
How to create a firm and long-lasting foundation for your business
How to let your practice serve you, rather than you serve your practice
The 6 steps you’ll need to take - to make a real difference
Who is the most important person for you to know in your business
The 5 factors that create an ideal strategy for you
How you can get maximum exposure with minimum expenditure
How to organise a constant supply of top quality enquiries for your services - and what you must do with them
...and much, much more!

Go to our website <You think i will help their google ratings?> for more details and make that VITAL shift now!

[pinoythinker]

Hello,

Recently I had one of these companies call me up about a job. From the get go i was already skeptical. First off i had never heard of this company and they dont really give details as to who they are. Said they would be dropping off a letter to explain benefits...."benefits?" i had not given any such info so more red lights went off.

So i get this letter talking about getting benefits through my "union" which cant possible since i am looking for work and never joined any unions. I kept the letter and looked at the company logo and looked at it and did a bit of research on the net and found out it was a scam. At the moment i cannot recall the company and i did keep the letter for a short bit (darn brain fart).

Amazes me what these supposed companies will try.

[Father Dagon]

Oh yes, I remember the day my ex husband came home--the one who's so proud of his Mensa card--and told me he signed "us" up with Amway.

I wound up going to a few of the weekend conventions because it meant a hotel on the beach.

Needless to say, he never made "diamond". Of course he blamed my refusal to "work the business" with him for his very predictable failure.

Listening to all those motivational tapes in the car, dreaming and talking about the future....it was positively RELIGION for him!Mensa, is that a club for retarded with numbers? ;) Nothing beats streetwiseness.

Almost 3 years ago, I was lured away to some Amway/Network-21 hullabaloo. I left after the break in the middle. It was the worst time of my life. My right and left brain hemispheres was raped from every direction. The speakers lashed out at the middlemens in the chain of trade. But don't have to tell companies that they can cut costs by eliminating a middleman.

It would've been amusing if I could see it on my teevee, but this was basically vampires on stage waiting to sic the zombies at me.

[six7s]

My favorite version of the MLM is the scam email that says, "Send $5.00 to the five people who are listed below; then erase the top address, and add your address at the bottom; and send this email to 20 friends. Just figure it out! Within a short time, you could be receiving hundreds or even thousands of dollars!" It is really just a condensed form of MLM, albeit much more obvious. The sad thing is how many people still fall for it...if they fall for something this obvious, no wonder they fall for things like Amway.

This just in, be quick!

The First Worthwhile Chain Letter

This chain letter was developed by virile men in order to make their sex life even more fantastic. As opposed to normal chain letters, this one costs nothing, and you can only win

Simply send this email to 9 of your best friends who are just as virile as you

Then…

Anaesthetise your wife/girlfriend


Put her in a large carton (don't forget some ventilation holes)



Send it to the person who is at the top of the list


Soon, your name will be at the top of the list and you will receive 2,093,429 women through the post!!!

Statistically among those women, will be at least:


0.5 Miss Worlds

15.5 models

247 wild nymphos

4,237 good-looking nymphos

65,326 who enjoy multiple orgasms

1,048,576 bi-sexual women

In total that is 1,118,402 women who are simply hornier, less inhibited, and tastier than the grumpy old bag you posted off

And, best of all, your original package is guaranteed not to be one of those that come back to you


! ! ! DO NOT BREAK THIS CHAIN LETTER ! ! !


One bloke for example who sent the letter to only 5 instead of 9 of his friends got his original bird back, still in the old dressing gown he sent her off in, with the same old migraine attack, and the accusatorial expression on her face

On the same day, the international supermodel he'd been living with since he sent off his old girlfriend moved out to live with his best friend (to whom he had not sent the chain letter)

While I am sending this letter, the bloke that is in 6th place above me has already received 837 women and is lying in hospital suffering from exhaustion. Outside his ward are 452 more packages

! ! ! YOU MUST BELIEVE THIS E-MAIL ! ! !

! ! ! THIS IS A UNIQUE OPPORTUNITY ! ! !

! ! ! TO ACHIEVE A TOTALLY SATISFYING SEX-LIFE ! ! !


No expensive meals out



No lengthy conversations about trivialities (that only interest women) just so that you can sleep with her



No obligations


No grumpy mother-in-law



No unpleasant surprises like marriage or engagement



! ! ! DO NOT HESITATE! ! !

! ! ! SEND THIS LETTER TODAY TO 9 OF YOUR BEST FRIENDS ! ! !

P.S. This letter can also be copied to women you know so that they can prepare themselves for the great adventure that they may soon undertake

P.P.S. Must dash, the post has just arrived


"Send this letter today to 9 of your best friends" assumes you have nine... ;)

[Flo]

At the same time, I was sending this one:

This chain letter was started in hopes of bringing relief to other tired and discouraged women.

Unlike most chain letters, this one does not cost anything.

Just send a copy of this letter to five of your friends who are equally tired and discontented. Then bundle up your husband or boyfriend and send him to the woman whose name appears at the top of the list, and add your name to the bottom of the list. When your turn comes, you will receive 5,625 men. One of them is bound to be better than the one you already have.

At the writing of this letter, a friend of mine had already received 184 men, 4 of whom were worth keeping. They buried her yesterday, but it took three undertakers 36 hours to get the smile off her face.

REMEMBER -- this chain brings luck. One woman's pit bull died, and the next day she received an NFL offensive tackle. An unmarried woman living with her widowed mother was able to choose between an orthodontist and a successful gynecologist.

You can be lucky too, but DO NOT BREAK THE CHAIN!

One woman broke the chain, and got her own husband back again.

[Father Dagon]

Just recalled this: After the episode of getting my senses and sensibilites raeped, I did some research about Amway/Network-21. I found out that non-conformist churches have had problems with exactly those vampires. Not beacuse of their beliefs, but beacuse those churches are tightly knit communities where they share each others joys and sorrows and trust each other. Once you get a foothold in a small community like this, you can infect all the population pretty quick.

This is one reason why I shun friend-to-friend marketing ploys. I learned to know my friends through various long and spontaneous processes, nothing that no-one ever will exploit. Period.

[Tokenconservative]

My all-time favourite business model - MLM.

What a crock of *****.

I have a list of people who have tried to sell me on Amway and other MLMs over the past 20+ years. I ring them up on their birthday to enquire as to why they're still working in dead-end jobs instead of sitting back and watching their "passive income" flows.

Not too many of them are amused by it, I can assure you!

Multi-level marketing is a rort of the lowest kind - a pyramid scheme dressed up as a genuine business. It came as no surprise to me to find that Amway finish their meetings with a prayer, or full church service, if there are enough attendees.

As far as Amway Inc is concerned, the business is a winner - there's no question that a significant amount of product is sold, but it's a poor means of involving oneself in business.

There are a wealth of genuine franchise ideas available for people who wish to be self-employed and some of them are very good businesses.

People joining MLM schemes are missing the number one rule of business - if it looks too good to be true - it is!

Wow....and some people call me petty.

Actually, a fair number of Amway, Avon and Mary Kay sellers make a decent living at it.

A pyramid scheme typically involves no exchange of goods/services and a reliance entirely upon signing up new people to generate money for the few who start the thing.

Amway, Mary Kay, Avon, etc., all sell a product and all of them have large, very loyal customer bases.

My wife signed up for Avon to teach our kids a couple of things: how hard it is to make a living, how to run a business and how tough this kind of sales is. She has mabye a couple of dozen regular clients who buy PRODUCT from her. They have not signed up anyone else under them. There's no need to, if you don't want to.

No money has been made (mostly because the wife overestimated last summer's demand for a product Avon sells that actually repels mosquitoes), but none's been lost, either, and the kids have gotten a taste of business.

Not sure why this poster is so bitter, but then he probably hates the Church, too.

Tokie

[Tokenconservative]

Hello,

Recently I had one of these companies call me up about a job. From the get go i was already skeptical. First off i had never heard of this company and they dont really give details as to who they are. Said they would be dropping off a letter to explain benefits...."benefits?" i had not given any such info so more red lights went off.

So i get this letter talking about getting benefits through my "union" which cant possible since i am looking for work and never joined any unions. I kept the letter and looked at the company logo and looked at it and did a bit of research on the net and found out it was a scam. At the moment i cannot recall the company and i did keep the letter for a short bit (darn brain fart).

Amazes me what these supposed companies will try.

They do tend to prey upon the down-on-their luck and suchlike.

Years ago I was looking for work w/out much luck and ran into this guy selling a series of kids books at a fair. The books we bought; they were pretty good, though the kids outgrew them long before they got through them.

He calls me up and flatters me, tells me I seem like a "smart young man," and would I like to meet and discuss a business idea he has (hey...sure, why not?). Turns out he's pushing some MLM...I didn't know whether to punch him or what.

In hindsight, I wish I had. Today, I'd have been able to afford the criminal and civil cases...not then, so it's probably good I did not.

Tokie

[Tokenconservative]

Years ago, when job hunting, I got suckered into interviews with some of these. Primerica comes to mind. However I did see that there was nothing to sell, but more memberships and after 3 or 4 of these "meetings" I came to recognize the ads quite easily. In fact they seemed to have perhaps 25-50% of the job ads for a time when I was looking in the newspapers. I also listened to a few pitches at job fairs "Do you want to TAKE CONTROL of your life?" and similar BS.

Sad.

"Hey guys and gals! Want to have FUN while you work with other fun guys and gals!!? and make $5000, $10,000 even as much as $15,000 a week!?"

Sheesh. Yeah, I remember those ads. What about the employment agencies that have all those great jobs....well, not today...sorrry, the really good jobs went last week, but we do have this assembly line work for $3/hour....

If it sounds too good to be true....

[Rob Lister]

Wow....and some people call me petty.

Actually, a fair number of Amway, Avon and Mary Kay sellers make a decent living at it.

A pyramid scheme typically involves no exchange of goods/services and a reliance entirely upon signing up new people to generate money for the few who start the thing.

Amway, Mary Kay, Avon, etc., all sell a product and all of them have large, very loyal customer bases.



Tokie

I've never, ever met anyone that made a living selling amway products. I've never even met anyone that broke even selling amway products. I know of two people that made substantial green selling amway promotional talks and stratagies, but both of them are now bankrupt after having been sued for other less-than-savory business deals (but not, I admit, for their personal involvement in the amway scams).

Fact is, the only way to make money with amway is to admit to yourself that it is a losing proposition unless you can sell not the products, but the ideas.

what does that tell you? Doesn't matter. Believe what you want.

[Shrike]

Wow....and some people call me petty.

Actually, a fair number of Amway, Avon and Mary Kay sellers make a decent living at it.

A pyramid scheme typically involves no exchange of goods/services and a reliance entirely upon signing up new people to generate money for the few who start the thing.

Amway, Mary Kay, Avon, etc., all sell a product and all of them have large, very loyal customer bases.

My wife signed up for Avon to teach our kids a couple of things: how hard it is to make a living, how to run a business and how tough this kind of sales is. She has mabye a couple of dozen regular clients who buy PRODUCT from her. They have not signed up anyone else under them. There's no need to, if you don't want to.

No money has been made (mostly because the wife overestimated last summer's demand for a product Avon sells that actually repels mosquitoes), but none's been lost, either, and the kids have gotten a taste of business.

Not sure why this poster is so bitter, but then he probably hates the Church, too.

Tokie

They do tend to prey upon the down-on-their luck and suchlike.

Years ago I was looking for work w/out much luck and ran into this guy selling a series of kids books at a fair. The books we bought; they were pretty good, though the kids outgrew them long before they got through them.

He calls me up and flatters me, tells me I seem like a "smart young man," and would I like to meet and discuss a business idea he has (hey...sure, why not?). Turns out he's pushing some MLM...I didn't know whether to punch him or what.

In hindsight, I wish I had. Today, I'd have been able to afford the criminal and civil cases...not then, so it's probably good I did not.

Tokie

So, you want to punch people who want to involve you in MLM, but your wife is involved in them?
And no money has been made? How many hours of work has she done to make no money?
Granted, it's not a bad idea to show the kids how hard it is to make a living.

[Tokenconservative]

So, you want to punch people who want to involve you in MLM, but your wife is involved in them?
And no money has been made? How many hours of work has she done to make no money?
Granted, it's not a bad idea to show the kids how hard it is to make a living.

Here's something I've found useful and marvelously refreshing: read what a person actually says, not what it is you desperately WANT them to say.

I wanted to punch that guy, yes. Avon is not MLM as you think of it. It is a line of products (with something like 70 years behind it) that lots of people like and look for, many of whom thank my wife profusely because they have not been able to get it for x-number of weeks/months/years, etc.

That's what I said: no money made so far...did I say that she'd been doing this for 25 years or something? I don't think I did. It's been oh, maybe a year and a half, and the idea was to get the KIDS working at it to understand um...well, working.

I imagine YOUR kids understand: daddy writes us a check.

Well, mine have been taught something...different.

In a few years, when yours are working for mine, cleaning the toilets say at one of the 6-8 McDonald's they own, let me know how YOUR type of economics training worked out for them, k?

Tokie

[Tokenconservative]

I've never, ever met anyone that made a living selling amway products. I've never even met anyone that broke even selling amway products. I know of two people that made substantial green selling amway promotional talks and stratagies, but both of them are now bankrupt after having been sued for other less-than-savory business deals (but not, I admit, for their personal involvement in the amway scams).

Fact is, the only way to make money with amway is to admit to yourself that it is a losing proposition unless you can sell not the products, but the ideas.

what does that tell you? Doesn't matter. Believe what you want.


I don't know much about Amway. Mary Kay and Avon provide nice extra $$-to- a good living for a number of folks.

You don't like that, rant away. Ignorance can be its own reward, I guess.

Tokie

[NobbyNobbs]

An illegal pyramid scheme typically involves no exchange of goods/services and a reliance entirely upon signing up new people to generate money for the few who start the thing.



Fixed.

It is true that Avon, Mary Kay, and Amway involve products. This does not mean they are not pyramid schemes. They are.

And the fact that they are pyramid schemes does not mean they are illegal. They are not.

And the fact that they are legal does not make them moral. This is up to the opinion of the individual.

Here's something I've found useful and marvelously refreshing: read what a person actually says, not what it is you desperately WANT them to say.

I wanted to punch that guy, yes. Avon is not MLM as you think of it.

http://www.npros.com/2006%5C4%5C19%5Cavon-stays-on-top-of-mlm-rankings/
Avon, Inc maintained the strongest online public interest for March on MLMRankings.com.

http://www.mlm-thetruth.com/avon.htm
Avoid falling for the semantic trap of chain-selling promoters who say they are not MLM, or multi-level marketing. If the program pays on more than one level of participants, it is multi-level or MLM.


http://sbinfocanada.about.com/cs/marketing/g/mlm.htm
Multilevel Marketing, or MLM, is a system for selling goods or services through a network of distributors.....Successful well-known MLM businesses include Mary Kay Cosmetics, Avon, and Tupperware.

http://mlm.business-opportunities.biz/2007/04/30/avon-targets-designer-fragrances/ (Note the name of the site: MLM Business Opportunities)

http://ezinearticles.com/?Double-Your-Earnings-From-MLM&id=73791
Network marketing, also known as multi level marketing (or MLM), comes in many forms. One of the most popular network marketing methods is selling by brochure, and one of the biggest companies using this method is Avon, the worldwide cosmetics company.


http://www.mlmwoman.com/issue4.htm
Lisa Wilbut has been selling and recruiting for Avon Products, Inc. for 14 years and is currently a Senior Executive Unit Leader in Avon's MLM program with 1995 downline retail sales topping $1.9 million.

So yes, Avon is an MLM as I think of it. Not that there's anything wrong with that. (By the way, Token, since you prefer one-to-one schooling, consider this an educational lesson. Above, you see the purpose and power of including links. They are so that you can back your opinions with actual facts. I'll bet if you used them more often, people might be more willing to concede points to you.)

I agree with the other poster's confusion, though. On the one hand, you wanted to punch a guy for trying to involve you in an MLM. On the other hand, your wife is already in one, ostensibly to teach the kids how to be in business. On the other hand (too many hands!), she's not making money from it. So the lesson is, you can't make money from being in business for yourself? Is that what you're attempting to teach?



In a few years, when yours are working for mine, cleaning the toilets say at one of the 6-8 McDonald's they own, let me know how YOUR type of economics training worked out for them, k?

Tokie

I'll support my kids, no matter what they decide to do, but I would hope they choose to affect the world more than just owning a fast food place. Is that the highest you can hope they would aspire? To serve fatty hamburgers and greasy fries?

[Shrike]

I wanted to punch that guy, yes. Avon is not MLM as you think of it. It is a line of products (with something like 70 years behind it) that lots of people like and look for, many of whom thank my wife profusely because they have not been able to get it for x-number of weeks/months/years, etc.


So how is it MLM? Or is it a pyramid scheme? Why did you want to punch somebody for trying to involve you in a MLM, yet you know support your wife when she is involved in a MLM?

Here's something I've found useful and marvelously refreshing: read what a person actually says, not what it is you desperately WANT them to say.

I have, and I don't have anything I want you to say, let alone desperately. I saw too different viewpoints expressed by you in two consecutive posts, therefore I asked you a question.
About reading what a person actually said:

Granted, it's not a bad idea to show the kids how hard it is to make a living.

Combine this with:

I imagine YOUR kids understand: daddy writes us a check.

First: how do you know if I have any kids? You're not a stalker, are you? I have, but at this moment they're too young to understand the concept of money.
Why do you imagine I write them a check? How have you concluded this from three sentences?

In a few years, when yours are working for mine, cleaning the toilets say at one of the 6-8 McDonald's they own, let me know how YOUR type of economics training worked out for them, k?

So, you'll be happy when your kids are working for McDonalds? As the previous poster said, I'll support my children whatever they do, but I hope they make a better contribution to this world than keeping people fat.
And then again:
About reading what a person actually said:

Granted, it's not a bad idea to show the kids how hard it is to make a living.

This is actually some sort of compliment.

Avon is not MLM as you think of it. It is a line of products (with something like 70 years behind it) that lots of people like and look for, many of whom thank my wife profusely because they have not been able to get it for x-number of weeks/months/years, etc.

That's what I said: no money made so far...did I say that she'd been doing this for 25 years or something? I don't think I did. It's been oh, maybe a year and a half, and the idea was to get the KIDS working at it to understand um...well, working.



OK, well, let us know when money starts coming in.

[NoZed Avenger]

I've never posted in this sub-forum before, so perhaps the following anecdote is old news to some people.

Years ago, when I was a new homeowner, my neighbor asked me to help her move an unweildy mattress into her house. Her husband was unable to help, due to an injured foot. After the mattress was in place inside, the woman launched into a pitch for magnetic insoles. This was cringe-inducing, but I soldiered on, as I very much wanted to fulfill the image of the "good neighbor".

The pitch even included the old vaudeville stunt of holding your arm out, testing its strength, then applying the stimuli (in this case magnetic insoles) then finding your arm was "stronger" with the magnetic insoles.



It's a pity those insoles don't work on injured feet.

[sgf8]

Need some advise from you wise ones.

Short story: next door neighbor keeps inviting us to learn about a company dealing with communications and Donald Thrump. Red Flags are at full mask for me, but my boyfriend insists that these are good people whom we will be living next door to for years and ect ect. I avoided one "meeting" but tonight I knew I had to get it over with.

Took my older son and boyfriend and wasted over an hour of my life. It was horrible, but I knew that in the end I would be able to teach my family what to avoid and how they are MLM.

The company is ACN and I don't need advise on this specific company, cause it took me only about 5 minutes to locate the anti-ACN site on the Internet. Thanks also to "the skeptic guide to the universe" episode that I just happened to listen to last week.

The advise I need concerns my neighbor. I know she is just starting in this (two weeks) and I know she has paid her $499 already. I doubt that even if she wanted out they would give her back her money.

I want to be a good neighbor, and by trying to recruit me I feel she has struck the first arrow. BUT I know she is in that la la la element that she does not know that she is doing harm to her friendships.

I could approach her and give her the website that I found the anti-ACN info at, or I could simply tell her that it is a MLM and why I know that. She is all excited about attending the functions (one is tomorrow morning).

Or I could, just avoid her and not mention it again. She should fail at this within a couple months and probably will be so embarrassed that she will never mention it.

If she should persist and try and pressure me, I would feel no qualms about telling her what she has gotten involved in.

But should I approach her and hope to save her now before she wastes more time and money? Guess this is my real question.

She isn't exactly a friend, but my next-door neighbor that I really like and want to keep great relations with for years. If she finds out later that I knew it was a scam all along and didn't tell her then she will probably be upset.

I don't know what to do. I feel like I should just let it happen, and avoid her until the scam has run its course and sucked her dry.

Advise please

Susan

[sgf8]

And BTW Avon is NOT a MLM.

My mother sold it for more than 20 years and they do not fit the characteristics that are defined on the http://www.pyramidschemealert.org/ site.

They do not want to over saturate the market with sales people. They do not spend time recruiting people to sell. You are never promised you will make large sums of money. They simply sell product, and lots of it. You do buy a kit but that only makes sense with a company like this, you need bags and sales booklets ect...

Susan

[SusanB-M1]

It is difficult to give advice on this of course, but I think I would say something like this: 'Although I am not interested in joining you in this venture, I do wish you luck of course. I do most strongly advise that you check out all aspects of the way the company works, both for and against and, most importantly, if you do decide to give it a go, keep a very close check on the amount of money you pay out, how long it is taking you to recoup that money and whether, during the first year, you find that the effort you put in has been worth it.' And I suppose you could add something on the lines of, 'If I can help with advice and the things I know about Avon*, I would be happy to help...'


All said in a warm, friendly, smiley sort of way!
*And, having been a Tupperware Demonstrator for years, I will happily contribute comments too. I did it as a hobby - not to make money, but I certainly never lost money on it.

I shall be interested to read other posters' responses here.

[sgf8]

It is difficult to give advice on this of course, but I think I would say something like this: 'Although I am not interested in joining you in this venture, I do wish you luck of course. I do most strongly advise that you check out all aspects of the way the company works, both for and against and, most importantly, if you do decide to give it a go, keep a very close check on the amount of money you pay out, how long it is taking you to recoup that money and whether, during the first year, you find that the effort you put in has been worth it.' And I suppose you could add something on the lines of, 'If I can help with advice and the things I know about Avon*, I would be happy to help...'


If she were to ask if I were interested I suppose your response is the nicest one. I think if she asks I will probably come straight out and tell her that she is involved in a MLM company. I can give her the web site and tell her that it is okay, lots of intelligent people fall for MLM's.

I haven't seen her since that last night, I don't want to say anything to her first about the "class" because she may have already gotten out of it. I would think it takes longer to realize what happened, like 2 months. If she is out, she is going to be very embarrassed, I will just be friendly and say Hello when I see her, this would let her know that I'm not holding any grudge.


If she comes after me in a aggressive manner then all bets for niceness are off.

Susan

[skepticalbeliever]

There was this big scam back in highschool where this company was trying to get people to promote an internet service via MLM. I remember people paying 1 grand to obtain a licence to do sales pitches for this internet company. I forgot what it was, but I remember being told how much money I could make by doing it.

I wish I could remember the name of the company.

[sgf8]

There was this big scam back in highschool where this company was trying to get people to promote an internet service via MLM. I remember people paying 1 grand to obtain a licence to do sales pitches for this internet company. I forgot what it was, but I remember being told how much money I could make by doing it.


It was Google


seriously don't we all wish we had got in at the beginning of Google? I could have possibly worked for them, though I don't have the tech skills but I live about 45 minutes away from them. Heck, I would have done housekeeping chores and taken a cut in pay to have received some stock.

That was a very big deal out here about 10+ years ago. Companies looked like they could be the next Apple or Microsoft.

I was talking about MLM to my kids, and I can't think of any that market to the young adult. Guess they want to wait until you have some money before they offer you a job opportunity. Hummm

Susan

[SoBitter]

A friend of mine is an "Independent Associate" for Pre-paid Legal. We've been trying to tell him it's a scam since he started it, maybe 3 years ago, but he insists it's legit. The funny part of it is that not only are they scamming the people who work for them, but they don't even sell a product. They sell the availability of legal help should you need it in the future, and I don't know if they even come through with that.

He's still working at an automotive shop 3 years later, so it's not making him that much money. I think MLM especially targets people who aren't familiar with common American business procedure, for example, immigrants. It seems like a lot of people I've come in contact with who fall for it grew up in other countries.

[sgf8]

My city is full of immigrants, the only thing I have heard of them falling for are one deal scams like the lottery one. My good friend who is from Mexico sold water filters when he first immigrated. But though a difficult thing to sell it wasn't a scam (?).

I would think that immigrants would be easy to recruit as they have been told that America is the land of opportunity and American's will buy anything. BUT immigrants like teens may be gullible but they lack the important element of income and savings.

The few people I know who are/were sucked in MLM are all Americans.

Susan

[Whack01]

Years ago, when job hunting, I got suckered into interviews with some of these. Primerica comes to mind. However I did see that there was nothing to sell, but more memberships and after 3 or 4 of these "meetings" I came to recognize the ads quite easily. In fact they seemed to have perhaps 25-50% of the job ads for a time when I was looking in the newspapers. I also listened to a few pitches at job fairs "Do you want to TAKE CONTROL of your life?" and similar BS.

Sad.

I went to one of their meetings. Best presentation in a can I've ever heard, and I got a free meal. I gotta say though, folks really ought to stay away from it in my opinion. If anyone is interested in it, I'd recommend doing a google search for "primerica fraud".

just a few quick points for the unwary

-> Do not give out contact info for your references, especially if they hand you a clipboard. They ask this so that they can do a "warm" sell if you don't sign up. (maybe even if you do)

-> If there are 200,000 sales reps and 10,000 reps making over $60,000 a year this does not mean you have a 5% chance to succede. Why? Because if you boast 200k sales reps the year prior, 210k sales reps in the current year and 200k new sales reps this year, then your chances are 10,000 in 410,000 not 10,000 in 210,000 because all the new hires from last year have already quit.

-> The sales presentation is scripted, you will be invited to a more detailed meeting on the weekend most likely. This is standard operating procedure and not unique to you.

-> they will likely try to sell themselves as doing good, if you go deep enough into this to actually bother learning about their pricing do yourself a favor and compare their interest rates to their competitors.

[streetsmart1980]

Has anyone here ever heard of Melaleuca, it's an mlm as well. It sounded like the best one I had ever heard of so I went to check it out. I had a little bit of experience with these types of systems, I had gone to a few meetings about Excel (phone service which went bankrupt) and Qixtar (which is Amway in disguise) a few years ago and definately had my suspicions. I have a friend who was part of Mangosteen (which is supposed to be some sort of wonderjuice) and that sounded like complete garbage.

Anyway here are some things they told me at Melaleuca. "We have a 94% retention rate". Well they make you sign up for a 'backup order' so if you forget to order one month they will charge you and send you another package. Also that number refers to their month to month retention, but they present it like it is a lifetime retention. Also you have to cancel at just the right time, or else they will just send you that backup order which conveniently helps their retention statistics. My friend had a prepaid credit card and just decided to let his money run out and figured that would cancel the subscription, but they sent him a package anyway, although he didn't pay for it and they told him he was in debt to them and they wound't cancel his account till he paid. I told him to demand his money back and ship that garbage back to the sender. They said they would give him his money back. Great.

They say that you get 7% of everyone's shopping dollars that joins under you, which sounds reasonable, but then you learn that you only get 7% of their points which is worth only like 50 cents on the dollar or less.

The products cost like double as much as the products would be at the grocery store. They say it is healthier and more environmentally friendly, but I was incapable of verifying that in any way. It is just a clever pyramid scheme. Give me $10 for a $5 bottle of shampoo. Why not just skip the shampoo and give you $5. Oh right and if that is not bad enough they charge you processing fees and 'Shipping and Handling'. When I go to Walmart they don't charge me 'S&H', it's included in the price.

Then they say, this is the best, that even if you join and buy your products and don't really recruit anyone you can still 'make it'. If the person that signed you up, signs another person up, they can put them under you in the pyramid. That way they get 7% and you get 7% and you don't have to do anything. But here is the kicker, they won't give you access to all the commissions under you unless you recruit like at least 7 committed people or more, I forget.

It really was amazing to check out. Most people don't have the tenacity or research skills to ask questions or think about this stuff. I found it difficult myself, but these people are praying on the type of people who would go to the casinos or buy the lottery. It is sad.

I had the privledge of meeting some very successfull Melaleuca MLM people who made like 3 million with it. I asked them these questions and they wanted to know what I did for a living. I was going to tell them dramatically that I was an 'Exorcist' but decided to tell them I was a Hitman. They laughed and I began to ask them if their products had any Hydrogen Peroxide (H2O) in it. They assured me that none of their products did and they were 'super healthy'. It was great fun. Hope that amuses some of you. I got some of that from Penn and Tellers episodes.

[JonnyFive]

(snip)

I had the privledge of meeting some very successfull Melaleuca MLM people who made like 3 million with it. I asked them these questions and they wanted to know what I did for a living. I was going to tell them dramatically that I was an 'Exorcist' but decided to tell them I was a Hitman. They laughed and I began to ask them if their products had any Hydrogen Peroxide (H2O) in it. They assured me that none of their products did and they were 'super healthy'. It was great fun. Hope that amuses some of you. I got some of that from Penn and Tellers episodes.

That's good and all, but the joke is "dihydrogen oxide" (H2O).

Hydrogen Peroxide is H2O2 and is different than water (http://en.wikipedia.org/wiki/Hydrogen_peroxide). Also, hydrogen peroxide has very strong oxidizing properties and would really mess you up at a sufficiently high concentration. It's used to bleach stuff.

Anyway, welcome to the forums. Glad you didn't fall for the whole MLM trap.

[Francesca R]

That's good and all, but the joke is "dihydrogen oxide" (H2O).

Hydrogen Peroxide is H2O2 and is different than water (http://en.wikipedia.org/wiki/Hydrogen_peroxide). Also, hydrogen peroxide has very strong oxidizing properties and would really mess you up at a sufficiently high concentration. It's used to bleach stuff.Kudos Jonnyfive, I should have been quicker on the draw and got to that one myself. I so rarely get the chance to put my chemistry BSc to practical use these days. :)

[sgf8]

Then they say, this is the best, that even if you join and buy your products and don't really recruit anyone you can still 'make it'. If the person that signed you up, signs another person up, they can put them under you in the pyramid. That way they get 7% and you get 7% and you don't have to do anything. But here is the kicker, they won't give you access to all the commissions under you unless you recruit like at least 7 committed people or more, I forget.

I suppose they don't mention the word "pyramid" do they?

BTW Welcome to the forum, thanks for a well thought out well written first post.

Susan

[JonnyFive]

Kudos Jonnyfive, I should have been quicker on the draw and got to that one myself. I so rarely get the chance to put my chemistry BSc to practical use these days. :)

I have been known to pick nits, from time to time. :D

Edit: By that way, I didn't mean to come across as a pedantic ass. It was a good first post, and he did a good job of analyzing the truth behind the claims made by that particular MLM group. They like the shout out statistics about how great everything is, but those rarely hold up under scrutiny.

[Francesca R]

Oh sure I'd add my welcome and fine post--making one's first post in this section is a good sign. (It didn't exist when I joined) :)

[James Fox]

Oh sure I'd add my welcome and fine post--making one's first post in this section is a good sign. (It didn't exist when I joined) :)

I second the good first post. And Francesca... rockin new animation!

Just got back from lunch where a coupe for friends and I were talking about a couple we all know and like…. except that they’ve been AmWay zombies for about seventeen years; which means they have been responsible for “extorting” money from the gullible and uninformed again and again. When they first asked started talking to us about “their business” we knew the buzz words and quickly said no and never again. There was no more closeness or dinners together after that incident seventeen years ago and I later learned that AmWay folk are to avoid and disassociate from negative people. All that to say that while AmWay is known to be a fraud, the level of manipulation is insidious and damages friendships along with bank accounts.

[sgf8]

damages friendships along with bank accounts.

That is the really sad part. Once these people open their eyes to the fact that they have scammed all their friends and relatives do they go back and apologize or move far far away?

I have only waved at my neighbors who made us attend their "opportunity" to join ACN. I talked to another neighbor who went to the first meeting and she said that she knew it was an MLM scam within a few minutes of their speech. We compared notes and she thought that the video phone was included in the $499 they ask for. I told her that I didn't think so, they never mentioned it. What she didn't understand but I cleared up for her, was that the phone was never what was for sale. They gave us a sales pitch but it had nothing to do with a video phone or changing your phone service.

So now the neighbors are talking, and who knows what this will do to our friendly neighborhood. We all try to get together a few times a year. Now until I know they are MLM free I don't think I will invite them over.

Do you think people recover and understand that they have been had, or do you think they just kinda let it go as wasted money and don't think much about the friends they lost? Kinda depends on their personality I think. Does anyone have any experience with recovering MLM's?

Susan

[sgf8]

damages friendships along with bank accounts.

That is the really sad part. Once these people open their eyes to the fact that they have scammed all their friends and relatives do they go back and apologize or move far far away?

I have only waved at my neighbors who made us attend their "opportunity" to join ACN. I talked to another neighbor who went to the first meeting and she said that she knew it was an MLM scam within a few minutes of their speech. We compared notes and she thought that the video phone was included in the $499 they ask for. I told her that I didn't think so, they never mentioned it. What she didn't understand but I cleared up for her, was that the phone was never what was for sale. They gave us a sales pitch but it had nothing to do with a video phone or changing your phone service.

So now the neighbors are talking, and who knows what this will do to our friendly neighborhood. We all try to get together a few times a year. Now until I know they are MLM free I don't think I will invite them over.

Do you think people recover and understand that they have been had, or do you think they just kinda let it go as wasted money and don't think much about the friends they lost? Kinda depends on their personality I think. Does anyone have any experience with recovering MLM's?

Susan

[sgf8]

Thinking about it, it is important for MLM's to be shown the light of day. Because this is an Educational Foundation and there are probably 50 lurkers to every post I want to be clear what I experienced and thought. Maybe someone will be helped?

So here is my story....skip if you are already familiar of how this works. My thoughts are in red. Sorry so long...

Neighbor invites us over, my boyfriend tells me we are going, I say what for and what is it. He said they only told us it was something to do with Donald Trump and communications. I managed to avoid this meeting. First red flag, they do not tell the name of the company but when you go to meeting they mention the company about 100 times. So they know the name but don't want to tell you in advance because you may research them. Amway does this exact thing, they even use another name. My ex-employee who started to get involved in Amway did this exact thing, she would not tell me the company name until I asked her if it was Amway, I asked her why aren't you concerned to be linked to a company that is afraid of people knowing its name? She said she was told not to say it because they have had a bad rep in the past and are trying to fix it, most people will not listen to what you have to say if they find out its Amway. I said, "so they ask you up front to be dishonest to your friends and family, if they are such a great company then they should be proud of their name."

Two weeks later they again approached my boyfriend and said that they are having another meeting and would we please attend. I knew we could not avoid this, and I also knew that this MUST be a MLM because they were so persistent, and did not approach me (who is much more skeptic with my opinions) Also again they would not tell him the company name or what it was for.

They had munchies, and chairs all seated around the TV, a computer was set up and a woman was trying to get a video phone connected to the Internet (at least that is what it looked like, these neighbors have Comcast cable with DSL as I do so I know they have no internet problems) It was a real friendly room, I was so upset that I was dragged to this, my boyfriend would not believe me when I told him it will be a MLM, he said that we HAVE to go because they are good neighbors, and they have come over to see my mom late at night (they are nurses). I told him that being good neighbors I will have a hard time ever speaking to them again if it is a MLM and it would be best not to go. But he never thinks I am right, so for peaces sake we went.

In a way I am very glad I went, my son learned a lot about MLM, and I had never seen this first hand. It is amazing how closely it fit with the generic MLM scam listed on the Internet. You could almost tick it off a check list. Now I am telling just about anyone who will listen what these things are and how you can be sure, almost none of my friends have every heard of Amway. One employee told me, Susan, those things are for the Duh Duh Duh people....you know....people who don't get it. So she was on it, the only person I have talked to that was aware of pyramid scams. Another employee has never heard of the Nigerian scams and she is 21, and uses the Internet. So if you wonder how it is possible for people to fall for this, then believe me, lots of people have never heard of it.

They introduced everyone one other person that I knew from a Spanish class, and a neighbor came later (whom was ostracized for being late) My boyfriend, myself and my 20 year old son Caspian were there also.

There were two people from the company there to "help" one woman was ex-military and said she wanted to spend time with her children, the man who was above her used to work for Kaiser (a local hospital). My friend and her husband both RN's (my next door neighbors). My friend had been recruited by the military woman (only with the company a month or two) and the military woman was recruited by the Kaiser man (working for 2-3 years for ACN)

They kept talking up my neighbor, her leadership qualities, how they just knew she was going to go far in the company, would start making real money real soon, lots of clapping. Each time one of them spoke and the next one got up to speak they would clap and hug each other. I wonder if the whole meeting was to really get my neighbor into it, they appealed to her so many times that I kinda think she was the real target. They clapped and hugged, the audience just looked at them. Really strange feeling, we were so quiet and they were so rehearsed.

The "product" the video phone was just sitting on a counter and they would point to it from time to time. No mention of the price, what it included, service...nothing Classic sign you are involved in a MLM. The product they are selling is not the object they are pointing to, the product they are selling is the opportunity for you to become a seller. Big red flag here...at a candle party they try to get you to buy candles, they tell you the price, they hand them around, they talk about how great they are, they try to close on the sale, and at the very end they try to get you to book a party. MLM's are only interested in you, they don't know you at all, but somehow they just know that you are going to be PERFECT to work for this company. They also don't worry about how many people are selling the "product" in a area, you would think that if the video phone was important then if half of the people in my neighborhood were selling it then maybe that is too many people in one area? Nope, they are upfront about this, they don't care.

They showed us a video of healthy, very happy, very rich looking people talking about how this company has changed their lives for the better. Everything in the video looked rich, the backgrounds, golf courses, hotels, vacations, some might have been in the background quietly, but they were there. This is also a big red flag, the product is not mentioned, only that you will be rich and be able to quit your job. Someone about 20+ years ago gave an employee a cassette (audio only, thats how far back I am talking) and all it had on it were people telling us how happy they were. Noting about the product at all. (remember, the job is the product).

They kept referring to a magazine "Success Magazine" they had two new looking copies that also showed their lifestyle. They said that these were magazines you could buy anywhere. I though it was odd that I had never heard of this magazine, and why would a magazine devote almost the whole issue to one company? Caspian researched this magazine and found out that they are MLM friendly. Probably ACN purchased the right to be in this magazine that month. Amway is next month (or some other MLM) This makes the company look more legit very flashy and rich looking mag.

Donald Trump was mentioned a lot, at least 25 times. He endorses this company and was even on the video. I have never liked this man. So his endorsement did nothing for me, he has always been on the fringe as far as I'm concerned. I hope that they take him down for his support of MLM's but somehow I don't think that will happen. He is too slippery!

The man who was senior kept talking about his past job and how now he can spend time helping out his mom with her bills. He mentioned how happy he was and how he is so busy helping others start their own business. He kept talking about residuals, and to explain that word to us he used the Elvis empire, and how Elvis is dead but he still earns money. When we join ACN we will earn money even after we choose to leave. Now what kind of job would do that. The anti-pyramid site I found said that most people will who change their service will change it back to what it was before after two months because the service is awful and you will end up paying more not less. Also the web site said that you do not get residuals until you have recruited 20 people (I think that was the number). The money isn't in the residuals it is in the sign up fees.

They gave us a flow chart to explain everything (but it was kinda confusing so of course you don't want to ask questions about what you are looking at because he just finished explaining that the paper was easy to understand, so who wants to look stupid?) Really who does? This is why more than 95% of people (some number like that) people don't complain because they don't want to look like they were stupid falling for this scam.

They explain that you will get people to change their phone carriers through ACN, not sure how this works but they said that they work though main carriers, like Sprint (?). I guess they would call Sprint and say you are now their customer and with their special ACN discount we would get lower bills but still be a customer of Sprint. They could do cell phones, and LAN lines as well as Internet connections. They had some kind of point value (not very important, just there to confuse us). Where we were supposed to get the money as commission from was every time people paid their bills we would get a small residual. Even if we quit the company we would get paid. He again said that his mother had had the same phone company for something like 30 years and people don't change their service. His poor mother, most of us like our mothers and so we sympathies with helping out our mothers. Surprised he didn't mention college education for our children and puppies and kittens.

They never gave us a chance to ask questions, but told us there were three kinds of people, those that wanted to sign up right away, those that had more kinds of questions but were still interested, and those that aren't interested right now. They did say that this is NOT a pyramid scam, and he was skeptical at first, but now he is sold on it. They only want 499 to sign us up for this opportunity, a small enough number to just slap on a credit card and we will get that money back in a few weeks. 499 is exactly what he said, the word dollars was no where near that sentence. Very old sales trick, 499 sounds closer to 400. Only when he said "put it on a credit card" did it hit me that he was talking about $499.00 and not $4.99.

They gave us blank employment applications that included a space for our social security number and said that we didn't need to fill it out right that moment, just fill out the top part, name and SS# and phone number. Hum

They wanted us to now gather around the computer (this was after an hour of listening) and they were going to show us something to do with the cell phones, we would have an opportunity to change our service at that time.

I stood up as if I were going around the computer then said, "is that the time? I still have to go grocery shopping, thanks Chrissy, bye!" My family followed us out, my boyfriend said, "thanks for inviting us, bye." And we were out the door and in front of our computers in minutes, I found a critical web site in minutes. My boyfriend looked up all the video ACN phones for sale on E-bay they also link to some critical and pro sites for ACN. Caspian looked up the "Success Magazine."

We had tons of knowledge in about 10 minutes. Which makes you wonder how is it possible for computer literate people to be sucked into this kind of thing? I had a ex-employee who was introduced to Amway, I asked her years ago if she had tried to do any research on this company? She said that she had on the Internet but that she thought that they were just disgruntled and had the rare bad experience. That is why with MLM and woo we need to speak out. Get this info onto the Internet and to our friends and family, teach them the warning signs and red flags. The next scam might be totally different, but in my experience, they follow a pattern, which is why I explained my thoughts through out the process.

Thinking about it again after writing this post, I think this man wanted us to leave as quickly as possible without asking questions (which he would have done one-on-one not in the group) I think he had made up his mind about my group right away and was hoping to get the woman I know from Spanish class, and to re-enforce my neighbor's involvement. So when we left so quickly without any questions he was probably relieved.

My boyfriend and son said that they wanted to ask questions about the numbers and the companies status on the stock exchange (public or private) and other questions hoping to trick them up. I explained that the person would answer their question with whatever he made up at that moment. You would have no way of checking until you had gone home and then you would never see them again. You need to remember that these people are going to lie right to your face, whatever needs to be said to sign you up and get your 499 they will say.

They also talked a lot about attending a big meeting the next day. They really wanted everyone to attend because it would answer a lot of our questions. It would jazz us up as well, with very happy "cultish" people. Some CPA who is very high up in the company was doing everyone the favor of attending.

Sorry again this post was so long, but I didn't want to leave anything out. The experience I went through seems so typical of most MLM's. People searching for some info on this topic may venture here and find some help for those about to take the plunge. I have no advise for someone involved. My ex-employee who was starting to get involved in Amway was barely at the beginning. When I asked her the questions that I did, she left in a huff. She said she would go home and order her own products and not worry about letting us earn money also, she was only trying to help us. The next day, she called me and apologized, realized that I was right, re-looked at the Internet and said she hopes that she will find a legit company just like this one so her and her husband could retire.

Susan

[The Atheist]

Sorry again this post was so long, but I didn't want to leave anything out.

Don't be sorry at all - excellent post. If you save one person from listening to the two hours of babble these people usually come out with, you've already done the world a favour.

[JonnyFive]

sgf8, that was a very detailed and thoughtful analysis of the MLM sales pitch. It's definitely a good rundown of the various techniques used to pitch the membership in the "business opportunity" over the product(s) they claim to be selling.

You know, I think I'll nominate you for the language award. :)

[sgf8]

Wow!

[roger]

Wow!If you think that is exciting, I have a great deal for you. For only $199 I can get you nominated for the language award weekly. All you have to do is start selling language award nominations distributorships. This is really awesome because even if you leave the forum you will still get money from all the new people joining the distributorship. As we all know, winning the TLA is a lofty goal most hanker for, but never achieve. This program will make it a reality for everyone. Don't delay, because by tomorrow somebody else may have already bought your distributorship. I just know you are a perfect fit for my company. Join now!

[JonnyFive]

If you think that is exciting, I have a great deal for you. For only $199 I can get you nominated for the language award weekly. All you have to do is start selling language award nominations distributorships. This is really awesome because even if you leave the forum you will still get money from all the new people joining the distributorship. As we all know, winning the TLA is a lofty goal most hanker for, but never achieve. This program will make it a reality for everyone. Don't delay, because by tomorrow somebody else may have already bought your distributorship. I just know you are a perfect fit for my company. Join now!

Don't believe his lies! He's just out to scam you.

I can set you up as an officially licensed Language Award nomination distributorship for only $99*.







*Plus one-time $100 processing charge.

[Tanstaafl]

There was this big scam back in highschool where this company was trying to get people to promote an internet service via MLM. I remember people paying 1 grand to obtain a licence to do sales pitches for this internet company. I forgot what it was, but I remember being told how much money I could make by doing it.

I wish I could remember the name of the company.


Could that have been DotPlanet?

It sounds like their style, although I didn't think it was that expensive to get into it.

[sgf8]

If you think that is exciting, I have a great deal for you. For only $199 I can get you nominated for the language award weekly. All you have to do is start selling language award nominations distributorships. This is really awesome because even if you leave the forum you will still get money from all the new people joining the distributorship. As we all know, winning the TLA is a lofty goal most hanker for, but never achieve. This program will make it a reality for everyone. Don't delay, because by tomorrow somebody else may have already bought your distributorship. I just know you are a perfect fit for my company. Join now!

Ahhhh....can I put it on a credit card?

Don't believe his lies! He's just out to scam you.

I can set you up as an officially licensed Language Award nomination distributorship for only $99*.







*Plus one-time $100 processing charge.

But he seems so nice! And the processing charge is only one-time?

Susan

[JonnyFive]

Ahhhh....can I put it on a credit card?



But he seems so nice! And the processing charge is only one-time?

Susan

How silly of me, I forgot my standard legal boilerplate you can safely ignore.

Terms and/or conditions may apply at the point of sale or receipt of product. No guarantees or warantees, express or implied, are included in the purchase of this product. Product purchase is considered an employment contract in the states of Alabama, New York, Kentucky, and Connecticut. Product purchase is considered a gambling venture in the states of California, Alaska, Florida, and Massachusetts. The term "one-time" refers to a monthly charge with a sixteen-year contract. All terms are final, legally binding, and non-negotiable. By reading this paragraph you absolve GlobalSolutionsForU, Inc. of any and all legal liability for all possible outcomes of your purchase transaction including but not limited to loss of income, loss of real property, sweaty palms, dry mouth, telemarketing calls, and death.

Don't let this offer pass you by! :D

[sgf8]

Terms and/or conditions may apply at the point of sale or receipt of product. No guarantees or warantees, express or implied, are included in the purchase of this product. Product purchase is considered an employment contract in the states of Alabama, New York, Kentucky, and Connecticut. Product purchase is considered a gambling venture in the states of California, Alaska, Florida, and Massachusetts. The term "one-time" refers to a monthly charge with a sixteen-year contract. All terms are final, legally binding, and non-negotiable. By reading this paragraph you absolve GlobalSolutionsForU, Inc. of any and all legal liability for all possible outcomes of your purchase transaction including but not limited to loss of income, loss of real property, sweaty palms, dry mouth, telemarketing calls, and death.

But I don't want sweaty palms or dry mouth! Good thing I'm in CA at least it is a gamble for me.

On another note, my neighbor just yelled over the fence at my boyfriend, "guess what I just got my video phone working" He asked her how much she paid for it, and she said, $164.00 (so the phone isn't in the 499 price). My boyfriend said he saw lots of ACN phones on e-bay for under $100. (So she got had again) She only responded by telling him that she was having another "meeting" this Friday night. He said, "great, gotta go now, have a nice day."

I am giving her 2 months to let this run its course. It's been about a month. Ahhhhh she is here right now, she doesn't know I am sitting on the other side of the door he is talking to her while he is working on the door. Hee hee hee. She just asked him if he would like to go to a meeting with her tomorrow night, so he can see the "bigger picture" He told her he has other plans, so she said "Okay, I'll see you Friday night then." No question mark on the end of that. My boyfriend is sooo nice. If she had seen me sitting here I guess I would just have to tell her. "Chrissy, you are involved with a MLM company, (can't quite figure out how to finish that sentence....little help here.....)

Feels stupid to hide from people we have been friendly with for a couple years. It all sounds good on paper, but how do you deal with these people in person?

Susan

[The Atheist]

Feels stupid to hide from people we have been friendly with for a couple years. It all sounds good on paper, but how do you deal with these people in person?

You can't.

It's no coincidence that Amway run church services at their meetings which are conducted by fundy pastors. The [lack of] intelligence, personality and originality shown by converts to MLM mirrors that of fundamental christians and the chances of change are about the same. In reality, I've found MLM converts harder to deal with than fundies; at least fundies will just put you down as being possessed by Satan and leave you alone. MLM converts just will not shut up and avoidance becomes the only cure.

[sgf8]

You can't.

It's no coincidence that Amway run church services at their meetings which are conducted by fundy pastors. The [lack of] intelligence, personality and originality shown by converts to MLM mirrors that of fundamental christians and the chances of change are about the same. In reality, I've found MLM converts harder to deal with than fundies; at least fundies will just put you down as being possessed by Satan and leave you alone. MLM converts just will not shut up and avoidance becomes the only cure.

You know this is just so sad. I don't want to believe that this is a whole change of mindset for these people. I want to think that in a couple weeks to a month they will just say, "boy were we stupid" and go on with life.

I don't want to think they have gone all fundie on me! We have such a nice neighborhood, I wanted to bar-b-que with them and other people. And they are such nice people, they have a really nice cat too....

Do I just sound too pitiful? Whose going to tell me, "Face it Susan, this is real life, get over it, you have lost your neighbors, and the ability to play Frisbee in the front yards and garden for hours when the neighbors are home."

Susan

[The Atheist]

You know this is just so sad. I don't want to believe that this is a whole change of mindset for these people. I want to think that in a couple weeks to a month they will just say, "boy were we stupid" and go on with life.

I bet that happens occasionally, but just for a laugh I phoned up a bloke recently who tried to get me on the Amway bandwagon 10 or 12 years ago. At that time, he was going to be a millionaire in 10 years' time with a passive income of hundreds of thousands a year.

When I rang him, he was still in the same dead-end job and was still drawing circles every second night.

Do I just sound too pitiful?

Yes.

Face it Susan, this is real life, get over it, you have lost your neighbors, and the ability to play Frisbee in the front yards and garden for hours when the neighbors are home.

[JonnyFive]

Face it Susan, this is real life, get over it, you have lost your neighbors, and the ability to play Frisbee in the front yards and garden for hours when the neighbors are home.

It may suck mightily, but he's got a point. Something about the MLM scams has a very powerful hold over people. They may get bored and stop soon, or they may stop when they've lost a bit of money or decide it's not a good business model. Hopefully they aren't so into the MLM pitch that they drag their finances and personal lives down into the hole for it, but only time will tell.

There is something addictive to some people about the whole MLM myth. All the statistics and facts in the world can't stop the belief that their system is not a scam like those others and they will make it big. It strikes me as similar to how gambling addicts seem to view their habit.

[Tanstaafl]

It really disturbs me how many friendships are destroyed and families torn apart due to the greed of those running these scams. They seem to teach their converts to harrass the people closest to them. I've seen it a couple of times first-hand, and it's really sad.

[sgf8]

I bet that happens occasionally, but just for a laugh I phoned up a bloke recently who tried to get me on the Amway bandwagon 10 or 12 years ago. At that time, he was going to be a millionaire in 10 years' time with a passive income of hundreds of thousands a year.

When I rang him, he was still in the same dead-end job and was still drawing circles every second night.

So you didn't ask him about what happened to his millions?

What does it mean, "drawing circles every second night", never heard that expression before? Or does that mean he works drawing happy faces on bummer stickers?

Susan

[The Atheist]

So you didn't ask him about what happened to his millions?

You bet I did! Apparently, it was working great, but he felt the need to occupy his days, so kept working.

What does it mean, "drawing circles every second night", never heard that expression before? Or does that mean he works drawing happy faces on bummer stickers?

Susan

Amway people had this awful habit of drawing circles to represent the layers involved so as to avoid the appearance of a pyramid game, because they're highly illegal here. Some bright spark figured that if the sellers draw circles it would be more appealing, basing on a "cell" system.

He may well be doing the bumper sticker thing too!

[sgf8]

Amway people had this awful habit of drawing circles to represent the layers involved so as to avoid the appearance of a pyramid game, because they're highly illegal here. Some bright spark figured that if the sellers draw circles it would be more appealing, basing on a "cell" system.

Well I learned my new fact for the day. Two more to go, then my brain is full for today.

Susan

[666]

If you think that is exciting, I have a great deal for you. For only $199 I can get you nominated for the language award weekly. All you have to do is start selling language award nominations distributorships. This is really awesome because even if you leave the forum you will still get money from all the new people joining the distributorship. As we all know, winning the TLA is a lofty goal most hanker for, but never achieve. This program will make it a reality for everyone. Don't delay, because by tomorrow somebody else may have already bought your distributorship. I just know you are a perfect fit for my company. Join now!
What a rip-off. Join my scheme (http://forums.randi.org/showpost.php?p=2821458&postcount=354)! Original and best.

[sgf8]

You sign-up for this wonderful scheme through me as your manager. You then write a scintillating post to this thread and hope that it gets nominated for the Language Award. If it does, you keep half the nomination for yourself and transfer the other half to me, so we both gain.

Uh... how do you half a nomination?

Susan

[JonnyFive]

Uh... how do you half a nomination?

Susan

Using proprietary technology he is stealing from me, and he'd better pony up and pay me the $6 hojillion in fees he owes me or I'll sue him into internet oblivion! I, like the mighty George Simpson, have never lost a case I have filed prose.

[Baron Samedi]

This is a little late, but thank you for your posts, Susan. I've known a few people who have been suckered into these things, each time claiming, "But this isn't a scheme! It's for real!" So again, thank you for your information.

My question is, is there any way to nominate this thread for the Forum Spotlight section?

[Thinking in CT]

Has anyone noted a recent notice by the FTC (Federal Trade Commission) dropping the MLM industry from its proposed amendment to the Business Opportunity Rule? The proposed rule change would require marketers of business opportunities to inform prospective customers as to the actual money making history of buyers of their schemes. The rule change proposed last year included the MLM industry in the disclosure requirement; but just last week the FTC posted a revised rule proposal that dropped MLMs from the rule. This was done, I presume, in response to a wave of negative comments sent into the FTC by MLM industry flaks. The FTC is currently accepting public comments on the amended rule. Here is a copy of my comment sent into the FTC:

"As a lawyer in the public sector in the consumer protection field I am dismayed and disheartened by the FTC’s decision to drop the MLM (pyramid scheme) industry from this proposed rule. The literature on the subject overwhelmingly establishes that this “industry” is based almost entirely on unfair and deceptive practices. In sum almost all MLM promoters lie to prospective “distributors” about the nature of the products/services they sell, the efficacy of the business model they promote and the actual money making histories of the other “distributors”. All that the proposed rule would require is the MLM peddlers tell some of the truth about their businesses to persons who have a need to know and a right to these facts and who are not in a position to get the facts elsewhere. These disclosures would cost the MLM promoters little (in actual cash outlay, that is) and the public purse nothing.

The MLM industry is based on two principles: 1. “There’s a sucker born every minute.” and 2. “Never give a sucker an even break.”

I expect more from my fellow public servants and urgently ask the FTC to reconsider its dropping of the MLM “industry” from the proposed rule."

Any member of the public can sent a comment to the FTC via this web address:
https://secure.commentworks.com/ftc-bizopRNPR/

I urge readers of this forum to do so.

[JonnyFive]

Has anyone noted a recent notice by the FTC (Federal Trade Commission) dropping the MLM industry from its proposed amendment to the Business Opportunity Rule? The proposed rule change would require marketers of business opportunities to inform prospective customers as to the actual money making history of buyers of their schemes. The rule change proposed last year included the MLM industry in the disclosure requirement; but just last week the FTC posted a revised rule proposal that dropped MLMs from the rule. This was done, I presume, in response to a wave of negative comments sent into the FTC by MLM industry flaks. The FTC is currently accepting public comments on the amended rule. Here is a copy of my comment sent into the FTC:

(snip)

Do you have any details on the legislation? I wasn't previously aware of anything like that, and I'd be interested in reading up on it.

[Thinking in CT]

Here is the Proposed Rule as reprinted on Quackwatch.org when the Rule was first announced. As originally posted the Proposed Rule would include MLM schemes under the regulatory aegis. The recently announced Revised Proposed Rule excluded MLMs from the regulation. http://www.mlmwatch.org/06FTC/business_opportunity/proposed_rule.html

Please note, this is not "legislation" per se (i.e. an act before the US Congress or a state legislature), but rather a proposed regulation being considered by a government agency with rule making powers granted to it by statute. To fully understand this "rule making authority" one really needs to take a course in "Administrative Law" at a law school, an activity that has been known to cause many a poor law student's head to explode. Very few citizens, even very educated and involved ones, know much about this
arcane process, but you can be sure that the regulated industries know lots about it!

[Senex]

This is a true story.

A close friend of my mom who is a registered nurse and has a nutritionist as a friend opened a business. They had an electronic microscope and would take a blood sample from you -- they would examine your blood sample -- they would make a video of your blood sample and tell you what supplements (that they sold) you would need. My mom went through this process and bought close to $200 worth of supplements. Keep in mind this happened six or seven years ago before I posted on the JREF site. Now am the first person to yell BS but I wasn't then. At the time I told my mom that I thought it was suspicious that someone would use a tool to diagnose illness that they sold the answer for. My mom told me to go myself because she thought I needed digestion supplements. I laughed but she said she would pay and I wanted to witness this thing so I went. They took a blood sample and the electron microscope was real.

I didn't take the supplements because I knew this was all BS. It turns out they pick how close to the end of your sample to scope because the middle shows one result and the edge shows another. What I recently learned was this was a multi-level marketing scam under the name Infinity2. My mom's friend is either stupid or crooked. I can't get my mom to take a position.

Why I recently learned this is because I looked it up on Quackwatch. This is a wonderful resource.

[The Atheist]

My question is, is there any way to nominate this thread for the Forum Spotlight section?

Just send Darat a PM.

Has anyone noted a recent notice by the FTC (Federal Trade Commission) dropping the MLM industry from its proposed amendment to the Business Opportunity Rule?

Damn!

What a missed opportunity. I hope all US residents who read this will send in a protest.

[JonnyFive]

Here is the Proposed Rule as reprinted on Quackwatch.org when the Rule was first announced. As originally posted the Proposed Rule would include MLM schemes under the regulatory aegis. The recently announced Revised Proposed Rule excluded MLMs from the regulation. http://www.mlmwatch.org/06FTC/business_opportunity/proposed_rule.html

Thanks, I'll read through it when I get the chance.

Please note, this is not "legislation" per se (i.e. an act before the US Congress or a state legislature), but rather a proposed regulation being considered by a government agency with rule making powers granted to it by statute.

Well, I was using "legislation" in the very general sense that a non-lawyer (as I am not a lawyer) would use it. An internet perusal of the Webster's Law Dictionary entry for the word leads me to believe there is a specific and more technical definition in the legal profession, which doesn't surprise me.

To fully understand this "rule making authority" one really needs to take a course in "Administrative Law" at a law school, an activity that has been known to cause many a poor law student's head to explode. Very few citizens, even very educated and involved ones, know much about this arcane process, but you can be sure that the regulated industries know lots about it!

I think I understand the basic concept involved, if not the technical details. The NY State workers' comp board exerts similar regulatory powers over the type of group disability insurance I primarily evaluate.

Anyway, thanks for the link.

[dudalb]

The Bitter face it most salesmen who are really good at their job will not touch a MLM with a ten foot pole. My Older Brother is a Sucessful Salesman who makes income comparable to what a sucessful doctor or lawyer makes, and he considers Amway and other MLM schems to be suckerbait. He states that no decent salesmen will look at a job and/or product unless some guarantees of an exclusive territory is given.

[sgf8]

He states that no decent salesmen will look at a job and/or product unless some guarantees of an exclusive territory is given.

This has been my experience also.

Note: The ACN people are next door right now, my boyfriend insisted we go to dinner and he looked at his watch to make sure we stayed away past the time they started their "meeting" Chicken! Now he is in bed taking a nap 7:30pm. I think this is really stressing him out, he hates confrontation, and I have been ribbing him about insisting we all go to this "communication thing featuring Donald Thump" I told him that he needs to tell her "no, I'm not interested" the next time she says anything otherwise because he is too nice, and says things like "not that night I have plans" or whatever.

Normal people would recognize that they were irritating others. Guess they have passed the "normal person" stage and are quickly moving on to desperate people hoping to make their money back.

Susan

[jimbob]

Or is it a "fundamentalist" semi-religious approach, waiting for the promised land?

I wonder if the story of the monkey's paw, or something similar could help explain why it won't work.

[DevilsAdvocate]

This has been my experience also.

Note: The ACN people are next door right now, my boyfriend insisted we go to dinner and he looked at his watch to make sure we stayed away past the time they started their "meeting" Chicken! Now he is in bed taking a nap 7:30pm. I think this is really stressing him out, he hates confrontation, and I have been ribbing him about insisting we all go to this "communication thing featuring Donald Thump" I told him that he needs to tell her "no, I'm not interested" the next time she says anything otherwise because he is too nice, and says things like "not that night I have plans" or whatever.

Normal people would recognize that they were irritating others. Guess they have passed the "normal person" stage and are quickly moving on to desperate people hoping to make their money back.

SusanWhy not be polite, honest, and a good neighbor? Tell them:

I was thinking about that business opportunity you mentioned. Thank you so much for thinking of me. I have looked into it and feel this business is not for me. I think it may require more time and money than the literature portrays and more than I am willing to invest. I’m not interested in this kind of business.

I also looked up the company on the Internet and found some information that concerns me. I feel like I wouldn’t really be a good friend and neighbor if I didn’t share it with you. I’ll email you the information I found. It kind of raised some red flags for me. It looks like it might a multi-level marketing company. I found out some of these MLMs are not much more than pyramid schemes and only make money for the top few by selling tapes and videos and seminars and stuff to the people they recruit. I’ve heard some MLMs have caused people to lose lots of money and even destroyed their personal relationships. Like I said, I’ll send you some of the information I found.

This business looks too risky for me, but I hope it works for you and that you don’t end up losing a lot of money in this. So, I’m not interested in this business, but I really like you as a friend and neighbor and hope we can get together for a barbeque some time.


There is no reason you can't be friends. Just be honest and let them know how you feel. I've been friends with complete woo-woos, born-again Christians, and all manner of people that have their own beliefs and own agendas. You simply agree to disagree to get along. If they come over for a barbeque and start selling meetings, let them know this is a social event for friends and not a work event for business recruiters. :)

[Ateius]

My parents fell for AMWAY/Quixtar when I was around 10 years old, when we were struggling under debts to make ends meet. It seemed to me they were putting in a lot of money and getting none back, but they assured me that they would be getting lots soon enough. When I learned the term "pyramid scheme" I immediately associated it with this "business" and told them, but they again assured me otherwise. Promises of a trip to Disney World once they "went Direct" were enough to keep me complacent.

They alienated a lot of family and friends trying to sell this stuff to them, and I had to eat a lot of terrible AMWAY cereal, along with being subjected to hearing their promotional seminar and musical tapes on car trips. After a few years of no returns they gradually gave up on the business. Now that they were no longer expending time, effort and money on the scam, our financial situation improved gradually but noticeably.

[JonnyFive]

My parents fell for AMWAY/Quixtar when I was around 10 years old, when we were struggling under debts to make ends meet. It seemed to me they were putting in a lot of money and getting none back, but they assured me that they would be getting lots soon enough. When I learned the term "pyramid scheme" I immediately associated it with this "business" and told them, but they again assured me otherwise. Promises of a trip to Disney World once they "went Direct" were enough to keep me complacent.

This is a theme I've seen in many, many of the Amway/Quixtar stories on the 'net. In particular, the idea that everything will be fine in just a little bit. The MLM scams seem to do a very good job of convincing their victims that success is just around the corner even when they are being financially drained to support the scam.

[Mycroft]

What amazes me is how many people fail at Amway and then blame themselves for their failure.

[sgf8]

What amazes me is how many people fail at Amway and then blame themselves for their failure.

The company knows that most people are going to fail, so don't they brainwash you from the beginning this way. Don't they push "if you fail it is your fault!" angle?

Besides the reason why people get into Amway is because they believe everyone is making money, and not just "some money" but "tons of money?" So if you fail then it must be your problem.

Pretty funny, when you think how often people blame others for their failings in normal life.

Susan

[streetsmart1980]

Thanks JohnnyFive for pointing out the correct way to say H20. To tell the truth, I can't remember if I got it right when I talked to the MLM people, but then again facts, science or reason were of no major importance to the people I was dealing with. They were more interested in testimonies and so forth. My chemistry education was so long ago, I couldn't remember exactly what the number two applied to. In any event, the joke worked and I was able to dominate the situation by stealing the spot light from the leader. I may have quoted mixed up information, but joking around with the 'supreme leader' put him on an equal level with me, and then exposing him as someone who is gullible like the rest of us also humbled him a bit. They always want to deify the leaders in these MLM things. I must say I did feel a bit naughty joking around on them like that.

That whole MLM thing is so much like a religion/cult. They develop beliefs and expectations in people that are unrealistic, and then the predators and the super-charismatic people start exploiting those who are gullible. The group think they bring about is amazing. They set up their events and social interactions in such a way that you feel like a 'party pooper' for asking clarifying or skeptical questions.

I actually saw my MLM friend just this last week at a social gathering and I was amazed how much I had been influenced by the whole thing. I actually got this feeling to promote her MLM by nodding and agreeing while she was telling others about it. There was a sort of unspoken minimum of support I had to show for the MLM or else I was attacking our friendship. We aren't that great of friends, but as it comes up and I am sure it will I will tell her I am not interested in the 'business opportunity'. I can already tell she will be disappointed with me and will consider me a sort of traitor for leading her on the way I did. It sounds calloused, but I am kind of glad to ignore the false guilt these scammers put on people. I hope to enjoy visiting more scams in the future to see how they operate.

[Ateius]

What amazes me is how many people fail at Amway and then blame themselves for their failure.

Interestingly, my parents didn't blame themselves for failing with AMWAY/Quixtar ... they blamed everybody else. People in Nova Scotia (where we were living at the time) just weren't "motivated", "driven", or "go-getters".

I should talk to them again and ask what their opinion of AMWAY/Quixtar is now, a decade after the fact...

[sgf8]

I should talk to them again and ask what their opinion of AMWAY/Quixtar is now, a decade after the fact...

Call them tonight and report back

Susan

[six7s]

Call them tonight and report back

Susan

If they're reluctant to talk, offer them a FREE set of steak knives and an opportunity to get in as top-level distributors of a new line in dictionaries - the ONLY ones including a definition for the word 'gullible'

[The Atheist]

Bon avatar M. le Quarante-deux.

[six7s]

Merci, L'Athée... il sont seulement un png, mais, ils dit qu'un png est worth une mille mots...

Est vous avez-ing une early nuit on Jeudi dans preparationnement?

[The Atheist]

What the hell is French for LOL!

:dl:

Avez-ing.

[six7s]

Je pense qu'il must etre something comme rire d'extérieur fort

L'avez sont something je spotted moins d'une deuxiemme apres frappe-ing le post boutton...

[JonnyFive]

It sounds calloused, but I am kind of glad to ignore the false guilt these scammers put on people. I hope to enjoy visiting more scams in the future to see how they operate.

I don't think it sounds callous at all. I think the callous thing is for these MLM systems to set up an environment in which friends and family are essentially preying off each other in order to recruit more "downline" or sell more overpriced products/services or whatever other crazy thing the specific MLM system is pushing.

I feel sorry for the people that get caught up in MLMs, because I know how seductive their pitches can be. I've probably said before that insurance sales makes a similar pitch to prospective salespeople where the monetary potential is heavily emphasized and the often grueling nature of the job is downplayed. Not to say that legitimate sales is like the MLM model, because it really isn't, but they both use highly loaded pitches to make the job seem attractive. The only catch is that your odds of making a decent living in the MLM model are quite a bit smaller than in legitimate sales, even if you are a great salesperson and do all the legwork.

The whole MLM system is something that really works its way into the lives of its victims - like some kind of parasite. It poisons their relationships with friends and family because eventually everything is about the MLM. One of the most common themes I see in the stories of those who've been in MLM systems is the degree to which their everyday lives became entwined with the MLM. Eventually you don't have an identity separate from the MLM: it doesn't shut down at 5 or 7 or 10 at night - it stays with you all the goddamn time.

Streetsmart, I hope you continue to post here. You've got some good stuff to add to this discussion.

[Damien Evans]

Merci, L'Athée... il sont seulement un png, mais, ils dit qu'un png est worth une mille mots...

Est vous avez-ing une early nuit on Jeudi dans preparationnement?

I will be.

[icerat]

Hmmm .... it seems this thread has spent a lot of time criticising the way some (ok, a lot) of people operate MLM businesses rather than offering any real criticism of the MLM model itself.

As I'm sure JonnyFive can attest, it's more than possible to scam people in the insurance industry. That doesn't mean the insurance industry as a whole scams people.

[NewtonTrino]

True enough icerat. However, from what I've seen they all seem to be cut from the same cloth. The real money is MLM is owning the power to push product down the pyramid, the most profitable being books and tapes. Do you know of a legit MLM that's actually a good business opportunity? From what I've seen they don't seem to exist (mostly because the math just doesn't work).

[icerat]

I've run an MLM business on and off for a decade (yes, and made and continue to make money). I don't particularly want to get into promoting any particular opportunity though. I'm very concerned about the extreme number of misconceptions that abound about legitmate MLMs however. A lot of this is because of the fact that many scams try to pass themselves of as MLMs. Perceptions also aren't helped by the weird and bizarre way some folk operate even legitimate businesses.

One issue to start with for example - "mostly because the math just doesn't work". Would you care to elaborate on that?

[NewtonTrino]

Let me be more specific. The math doesn't work unless you retail a tremendous amount of product or you are selling something that's a scam.

There are plenty of sites that go through the math on this but the typical "just sponsor more people don't worry about retail" pattern is a negative sum game. In Amway specifically most of the money comes from selling functions, books and tapes that make the pyramid profitable for those at the top. Everybody else loses money or makes a pittance for the amount of work they put in.

Just out of curiousity icerat, do you have good statistics on your total overall profit vs how many hours you have put in? Do you actually claim a profit on your tax return?

Personally I think the only misconception that people have is that you can actually make decent money doing this without being in on the scam.

[icerat]

Let me be more specific. The math doesn't work unless you retail a tremendous amount of product or you are selling something that's a scam.

That's not really an elaboration :-)

There are plenty of sites that go through the math on this but the typical "just sponsor more people don't worry about retail" pattern is a negative sum game.

ahh, the old "negative sum game" thing. Again, that's a criticism not based on MLM itself, but on how some people chose to run their MLM businesses. It's also based on an all to common misunderstanding of what "retail" is.

In Amway specifically most of the money comes from selling functions, books and tapes that make the pyramid profitable for those at the top.

This is a myth. First of all, "top" belays a misunderstanding of how legitimate MLM works. Secondly, while some folk have undoubtedly exploited the support materials side of the business, it's nowhere near as widespread as some would have you believe. It also, again, about how they're running their businesses and does not exclude making money from MLM.

Everybody else loses money or makes a pittance for the amount of work they put in.

Even if true, which it isn't (most people join just to buy products, they don't spend money or put in work), it again isn't an inherent part of the MLM model.

Just out of curiousity icerat, do you have good statistics on your total overall profit vs how many hours you have put in?

No, but then I don't have that for any of my businesses (I have several). Indeed, when you're building any type of long-term business it's not even a sensible question, as what you're trying to do is building an asset. If you're simply interested in your own personal direct selling, then it's a sensible question, but for long term asset building it's not sensible, or answerable.

Do you actually claim a profit on your tax return?

I try not to :)

Personally I think the only misconception that people have is that you can actually make decent money doing this without being in on the scam.

Many MLMs publish statistics on incomes, there's plenty of people making money.

[sgf8]

No, but then I don't have that for any of my businesses (I have several). Indeed, when you're building any type of long-term business it's not even a sensible question, as what you're trying to do is building an asset. If you're simply interested in your own personal direct selling, then it's a sensible question, but for long term asset building it's not sensible, or answerable.

Red Flag

[The Atheist]

Many MLMs publish statistics on incomes, there's plenty of people making money.

Nobody doubts that.

The problem is, those few are making money at the expense of the many who don't.

Last time I saw any stats from Amway, there were 10,000 Amway fools operators in NZ. 9,500 of them made no more than $10k per year, with the average for that 95% of operators being around $3000.

Seriously, most people would make more money delivering shopping brochures than they ever do from an MLM. All MLM models are flawed. That doesn't mean it isn't possible to make money out of them.

[NewtonTrino]

Whether the big Amway pins make their money on books, tapes and functions isn't a question. If you google you can find the information including lots of lawsuits flying back and forth between the big pins.

However, in this case I don't need those records. I have pictures of me sitting on Dexter Yeager's knee when I was a kid. My Dad has been involved in this scam for 30 years so I know the ins and outs of it well. In addition I wrote a popular software package used by many distributors in the 90's, including many big pins so I got to see ACTUAL DATA FROM REAL BUSINESSES WITH MY OWN EYES. I am straightup telling you that the big pins make the vast majority of their money by selling books, tapes and especially functions.

Almost everything they tell you about Amway is a lie. Good luck getting a tax return from someone in Amway. Either it's a big pin and that would give away the game or it's one of the suckers who never turn a profit. There isn't much in between although there are some directs-emeralds that scrape by making minimum wage type money (but working their asses to the bone, the lifestyle isn't as portrayed in the motivational materials).

Anyway, you never said what MLM you are in. I don't have specific information about anything other than the big A, so yours could be legit. LOL.

[icerat]

Red Flag

Sigh. Yeah, that's a sensible response. I'll elaborate for you. I own a number of businesses, I've built and sold a number of businesses. Calculating some "hourly rate" is simply not a sensible question. You can't decide what the time put in was "worth" until the business is closed or sold. One of my networking businesses I started a decade ago, I've had nothing to do with in nearly 8 years, yet it still produces income. How much income did I receive for the time I put in? I don't know, it's still producing income. Another example with another (non-MLM) business I built. I put enormous hours in for very little immediate return. After some years I sold it. It was only after selling it that I could give you a dollar figure on what my return on "time" investment was. (and that's completely ignoring the intangibles of "experience", which has been invaluable in other ventures).

[icerat]

The problem is, those few are making money at the expense of the many who don't.

How?

Last time I saw any stats from Amway, there were 10,000 Amway fools operators in NZ. 9,500 of them made no more than $10k per year, with the average for that 95% of operators being around $3000.

Actually I'd say that's incorrect and on the high end. The question is - what percentage of them were trying to make an income? In FTC vs Amway it was revealed that the majority of folk who joined Amway expected to earn less than $2000/yr. More recently, the FTC's initial report on it's proposed Business Opportunity Rule revealed that 85% of folk who join Shaklee do so for the purpose of obtaining Shaklee products at wholesale pricing.

(PS I tried to post links to the FTC sources for the above, but I'm less than 15 posts here so the board won't let me :( )

Seriously, most people would make more money delivering shopping brochures than they ever do from an MLM.

Quite possibly. And most people would likely lose more weight doing that than they would from simply signing up for a gym membership as well. That doesn't mean exercise doesn't work for weight loss.

All MLM models are flawed. That doesn't mean it isn't possible to make money out of them.

In what way are they flawed? They operate on the same basic principle as "traditional" product distribution businesses - greater volumes means larger discounts which means profit margins for resale in smaller volumes.

[icerat]

Whether the big Amway pins make their money on books, tapes and functions isn't a question. If you google you can find the information including lots of lawsuits flying back and forth between the big pins.

I've read all of those lawsuits. Most of them have claims but no evidence. "platinums" are suing claiming "emeralds and diamonds" are making all this money. "emeralds" are suing claiming "diamonds" are making all this money. And "diamonds" are suing claiming the folk who make the "tools" are making all the money. Furthermore, virtually all of the lawsuits are about the same Amway group and the same names keep appearing. Yet thousands of other folk who have reached similar and higher levels of success have no such accusations against them except in blanket statements like yours. On the other hand, I've also read divorce proceedings involving an Amway Diamond which include financial statements - the "tool income" is minimal. I've got the rebate schedules and statistics for two different Amway organisations which reveal it's statistically almost impossible for folk in those groups to earn more from "tool income" than "Amway income".

However, in this case I don't need those records. I have pictures of me sitting on Dexter Yeager's knee when I was a kid. My Dad has been involved in this scam for 30 years so I know the ins and outs of it well. In addition I wrote a popular software package used by many distributors in the 90's, including many big pins so I got to see ACTUAL DATA FROM REAL BUSINESSES WITH MY OWN EYES. I am straightup telling you that the big pins make the vast majority of their money by selling books, tapes and especially functions.

It would be interesting to learn more. However, see my comments above re "the same names keep appearing". How much experience do you have with folk not in Yager's downline or affiliated or originally affiliated with Yager's Internet Services?

[NewtonTrino]

Gimme a break. This is like the not a true christian thing that christians try to pull. Almost all of Amway is cut from this same cloth whether it's Dexter, Brit etc etc. As I said my Dad has been involved for many years, nobody is pretending the money isn't in the tools.

Anyway, you sound like a true believer so have fun with it. It has enough brainwashing involved with it that I'm pretty sure you aren't ever going to agree with me on this.

[icerat]

Interesting you say "almost all of Amway", that in itself acknowledges that even if there's a problem with "tool income", then it's not all of Amway, and thus not a problem that's a necessary component of MLM.

The rest of your comment is little more than "everyone knows" and emotional attacks. However, I'd still appreciate an answer - how much experience do you have of Amway outside of Yager-affiliates?

[sgf8]

What oh what is "tool money"

[The Atheist]

In what way are they flawed? They operate on the same basic principle as "traditional" product distribution businesses - greater volumes means larger discounts which means profit margins for resale in smaller volumes.

Simply - there are far too many people taking a cut and the idea of making money by selling imaginary "franchises" is bunkum.

MLMs are just a cute way of escaping pyramid game legislation.

Hint: pyramid games don't work - ask an Albanian.

[icerat]

What oh what is "tool money"

A large side business in personal development, motivation, and training material has developed in educating MLMers how to build MLM businesses. Quite profitable. Some folk have extended their offerings to folk outside of their own MLM organisations and are making more from the original side business than from their MLM business itself.

[NewtonTrino]

Tool money is the money from books, tapes and functions.

I do have some exposure to different groups that didn't use his tools, however every group I interacted with had some sort of tools. Otherwise there is no way to make big money (you can make small money however if you have a huge group).

Look, if you are actually in Amway and you participate in "the system" you are probably completely and utterly brainwashed. What's objectively obvious to everyone else won't be very easy for you to accept.

Anyway, if you've been in this business for 10 years and you are still doing it you must be making some sort of money, right? Just give us an idea of the amount of time you've spent, amount of money you' ve invested and what you've made. This question has been asked of many distributors over the years on different boards and nobody has ever met the challenge. This is because NOBODY is making money. Everyone is doing "fake it till ya make it". Once you hit a higher pin like Diamond you will start to make some good money from the tools. Speaking at other's functions is very lucrative too (usually 5-10k for a Diamond for the weekend + they take care of all expenses).

Anyway, this subject is huge. I could go on forever about all of the different aspects of the scam but for those interested you can just google it. The only difference with me is that I've actually SEEN IT with my own eyes so I know the stories are true. Stay far far away from this stuff kids. They brainwash the crap out of you with tapes, books and rallies. They use sleep deprivation techniques, sing songs and sell sell sell the lifestyle late into the night.

They rake in the dough on all of it and split it up based on how many in your organization paid up (this is why function tickets used to have upline marked on them, made splitting up the money in the back room easier). Directs would get so much a head, Emeralds more, Diamonds more etc. Not the inversion, the higher up the pyramid you are the more you make PER UNIT. This is why the tools money is so lucrative for the top pins that they can fly around in private jets.

Like I said, this subject is huge. I encourage everyone to do their research before becoming involved.

[icerat]

Simply - there are far too many people taking a cut and the idea of making money by selling imaginary "franchises" is bunkum.

Atheist, in legitimate MLM you don't make money by selling imaginary "franchises". If you do, then it's likely an illegal pyramid and not a legitimate MLM. This is one of the issues I raised earlier, MLM suffers through association since many scams try to disguise themselves as MLMs.

As for your "far too many people taking a cut" idea, on what basis do you make that claim? Again, according to FTC vs Amway, the seminal case legitimising MLM, the number of people in that business "taking a cut" was 4 or less in 70% of cases, and less than 8 in 99%. This is not significantly different to traditional distribution.

MLMs are just a cute way of escaping pyramid game legislation.

I'd agree that pretending to be an MLM is a cute way of trying to avoid pyramid game legislation.

Hint: pyramid games don't work - ask an Albanian.

Of course they don't, we're in 100% agreement on that. Well - they work for they guy who starts them :(

[sgf8]

Everyone is doing "fake it till ya make it".

The ACN guy I heard give his talk was telling us how he got involved. He said he saw this very young man drive up in some really nice car (he told us what it was but meant nothing to me). They struck up a conversation mainly because he wanted to know how a young guy like him could afford a nice car like that. And so he listened as the young car man got him involved in ACN.

I would suppose that once you understand you have to recruit people in order for you to make money, you probably try to start living that wealthy lifestyle right away. Probably max out some credit cards, and spend lavishly whenever anyone is looking. This might be the real crime of MLM's. The years it takes to recover your income and your credit history.

The one employee that almost got involved in Amway kept telling me that "I know I can make money with this, the woman who introduced me to it is making a ton of money, she has a really nice house and dresses great." Thankfully I was one of the first people she tried to recruit. (We skeptics are good for something at least)

Susan

[icerat]

Tool money is the money from books, tapes and functions.

I do have some exposure to different groups that didn't use his tools, however every group I interacted with had some sort of tools. Otherwise there is no way to make big money (you can make small money however if you have a huge group).

Small money? So the million dollar checks are fakes? Amway is lying about the bonuses they pay out to the thousands of people that have qualified as Diamonds? Quixtar in the US is lying when they say the average Diamond has an income of about $150,000? You're making some pretty serious claims of fraud there.

Look, if you are actually in Amway and you participate in "the system" you are probably completely and utterly brainwashed. What's objectively obvious to everyone else won't be very easy for you to accept.

Uhuh. I'm providing facts and logical discussion, but I don't agree with you, so I must be brainwashed. Good argument.

Anyway, if you've been in this business for 10 years and you are still doing it you must be making some sort of money, right? Just give us an idea of the amount of time you've spent, amount of money you' ve invested and what you've made.

I honestly couldn't tell you. I can tell you I was profitable (yes, after expenses) within 6 months of starting. And that business continues to generate income with zero work. I've also been inactive as regards to building (yes, Amway) for most of that 10 years, for reasons that have nothing to do with the business.

This question has been asked of many distributors over the years on different boards and nobody has ever met the challenge.

Rubbish, I once provided details years ago on one of these boards. I was accused of lying. They wanted certified documents etc etc. I offered to provide all of this as long as they were willing to cover the expenses to do so. They weren't. I've similarly obtained and provided actual average "tool income" data for a major Amway organization. Again, I was told it was falsified (it wasn't).

This is because NOBODY is making money. Everyone is doing "fake it till ya make it".

This is an absurd claim. You are accusing tens of thousands of people of being liars. You are accusing one of America's largest private companies of falsifying public statements. You are accusing public held Amway companies in countries like Malaysia of falsifying corporate records. Indeed, you're accusing them of all lying, successfully, not only to government authorities (of numerous political hues) in 50+ countries, but of having covered it up for nearly 50 years!

This is some conspiracy you've got going here.

Once you hit a higher pin like Diamond you will start to make some good money from the tools. Speaking at other's functions is very lucrative too (usually 5-10k for a Diamond for the weekend + they take care of all expenses).

And how does that speakers fee compare to others fees in the speaking industry?

Anyway, this subject is huge. I could go on forever about all of the different aspects of the scam but for those interested you can just google it.

Ahh, it's on the internet, so it must be true!

The only difference with me is that I've actually SEEN IT with my own eyes so I know the stories are true. Stay far far away from this stuff kids. They brainwash the crap out of you with tapes, books and rallies. They use sleep deprivation techniques, sing songs and sell sell sell the lifestyle late into the night.

I've been to dozens of these "rallies" and only once sang a song. It was ABBA, they happened to have a speaker who was also a professional musician. If it's on a weekend we normally finish by about 11pm, and start again about 9:30 next day. Not exactly a recipe for sleep deprivation.

They rake in the dough on all of it and split it up based on how many in your organization paid up (this is why function tickets used to have upline marked on them, made splitting up the money in the back room easier). Directs would get so much a head, Emeralds more, Diamonds more etc. Not the inversion, the higher up the pyramid you are the more you make PER UNIT.

What, you mean the more units of a particular product you buy, the cheaper you get it? Oh the horror! It's just shocking the way if I buy 10000 pens I get them cheaper than someone who buys 10, and I can make a profit through it! :eek:

This is why the tools money is so lucrative for the top pins that they can fly around in private jets.

Like I said, this subject is huge. I encourage everyone to do their research before becoming involved.

Absolutely, and be sure to read more than just the same folk rabbiting the same false, overgeneralized, or exaggerated claims.

NT, I'm in no way wanting to devalue your discredit your personal experience. My point is that you've seen one small part of the Amway world and are extrapolating that to the entire of Amway, and indeed the entire of MLM. Yager is but one of nearly 100 folk who have reached the "highest levels" of the Amway performance scale (Crown Ambassador). I encourage you to, open mindedly, reread those lawsuits, and your past experience, and see how many of the people involved were in someway associated with the Yager organization (incl Britt, his downline), and how many were not. You'll find the "not" category is pretty much empty. Try it, and then think rationally about what that may mean.

[icerat]

I would suppose that once you understand you have to recruit people in order for you to make money

ummm ... no. You don't have to recruit people into ACN to make money. Not in any other legitimate MLM I'm aware of either. Just like any other business however, you're unlikely to be able to develop a business of any size by yourself.

you probably try to start living that wealthy lifestyle right away. Probably max out some credit cards, and spend lavishly whenever anyone is looking. This might be the real crime of MLM's. The years it takes to recover your income and your credit history.

That has nothing to do with the MLM model. That has to do with people using a (stupid in my opinion) "fake it till you make it" approach to marketing.

The one employee that almost got involved in Amway kept telling me that "I know I can make money with this, the woman who introduced me to it is making a ton of money, she has a really nice house and dresses great." Thankfully I was one of the first people she tried to recruit. (We skeptics are good for something at least)

No offence, but in this case you were guilty of poor thinking. You have no idea whether that woman was wealthy from Amway or not. You've made an assumption that all people involved with Amway are dishonest and come to conclusions based on that assumption. There is nothing in the MLM model, or Amway or ACN, that requires you to be dishonest. This type of approach is indeed used by some MLMers, but again, there's nothing inherent in the MLM approach the requires it and I for one which they didn't do it. I've never experienced it, never done it, never been taught it, nor ever taught it to anyone else.

Again, we need to separate the discussion of the legitimacy of the MLM business model from the issue of whether people are operating that model legitimately. I'm in 100% agreement that many people do not.

[NewtonTrino]

Dude. I'm not parroting some false claims. I have personal specific information about how this business works. I saw the businesses of several high pins. Seriously, I have seen it with my own eyes, I'm not parroting anything.

Dexter is not of 100's he represents a significant percentage of the overall Amway business. There are only a few kingpins of his size. This is one of the reasons he shows his bonus checks to people as they are among the largest around. Another website (don't have a link handy) calculated how large a % of Amway's business he was from the size of the check and it was significant. Also everyone should keep in mind that tax return information isn't available for these people (otherwise the jig would be up so to speak).

I pointed out the inverted pyramid for tools because that's not the way the pyramid can work normally. It means nobody at the bottom makes money. In the "real" Amway pyramid the person retailing gets the largest cut and as you get higher up the chain your cut gets smaller. The tools work the opposite which is why they are so lucrative.

I do agree that a diamondship could be making $150k a year in bonuses. Unfortunately the income claims for diamond are much higher than $150k. More like 150k a month! Which they do make, just not from Amway income, from tool income. Unless they aren't cut in...

Anyway, as everyone else who is rational can see the brainwashing is very effective.

And yes I am claiming that the tools, books and tapes are a complete fraud and that the big pins make the majority of their money from them. The corp itself doesn't do anything technically illegal or fraudulent that I'm aware of other than letting the tool scam continue.
The numbers they give out AFAIK are accurate in terms of who gets paid what bonuses etc. Keep in mind the company is privately held and nobody knows the true sales numbers but I do trust their numbers on bonuses etc. Those numbers tell a story that isn't nice for the business btw...

And yes, I am claiming that 10's of thousands of people are lying about their Amway related income. Fake it till you make it baby! Get fired up! Very very few distributors make a profit so the standard line is "I'm just getting started, talk to my more succesful friend here". If you actually got to look at the books (if they even have books!) you will find they are losing money paying for travel to functions, tickets, books, tapes and other services sold by their upline. They are literally taught not to tell people how much they are making and/or lie about it by trying look more successful. For the amount of hours you have to put in you really make a pittance. If you build a large organization they cut you in on the tool money. However, this is "optional" money and they make you sign a hardcore arbitration agreement preventing you from suing over it. E.g. they can use this to control you and your business and keep you quiet.

Don't even get me started on the upline edification cult like aspects, it's a truly truly truly scary thing to get involved with. And again, I don't think I'm overgeneralizing. The vast majority of amway groups are run like this even though they themselves refuse to admit it.

Anyway, again I encourage people to research it themselves. Pay special attention to testimonials of ex-distributors. Especially ones that were higher pins like Directs, Emeralds and Diamonds who have seen the tool money and the darker sides of "the business".

PS I'm using a lot of slang from the business here let me know if you have questions.

[NewtonTrino]

Here are some links.

This first one is a book that a former Emerald wrote. Basically his upline didn't cut him in on the tool money so he was barely scraping by (he didn't realize it existed!). Very interesting book although not especially well written it is entertaining actually.
http://www.merchantsofdeception.com

For general information you can check out:
http://www.amquix.info/

And for fun you can visit Dexter Yeager's website the capo of the capo's. Notice how vague it is about what he does? He "sells the dream" to people, that's his business. This guy owns one of the larger facilities for actually manufacturing the tapes/cd's etc. He's also a hardcore christian fundy nutjob.
http://www.dexandbirdieyager.com/

[The Atheist]

Atheist, in legitimate MLM you don't make money by selling imaginary "franchises". If you do, then it's likely an illegal pyramid and not a legitimate MLM. This is one of the issues I raised earlier, MLM suffers through association since many scams try to disguise themselves as MLMs.

Does Amway not count as a "legitimate MLM" any more? Although no signing on fees are obtainable, without conning friends and other gullible people into the Amway fold, there's no money to be had.

Please feel free to describe how Amway is anything other than an imaginary franchise, because that's exactly what it is.

As for your "far too many people taking a cut" idea, on what basis do you make that claim? Again, according to FTC vs Amway, the seminal case legitimising MLM, the number of people in that business "taking a cut" was 4 or less in 70% of cases, and less than 8 in 99%. This is not significantly different to traditional distribution.

Traditional distribution of what?

Most consumer items I can think of have two or three tops.

Did it ever occur to you why Amway had to prove its legitimacy? Does any other trader have to go through that saga?

Amway and other MLMs skirt the law by moving goods, but they are still nothing more than pyramid games.

Seriously, if a group of people organised themselves into a buying bloc they'd get far better deals than are available through any MLM.

If you really want to prove your case that MLMs have any value whatsoever, give me the average hourly rate of all Amway salespeople. I contend that that rate will be far lower than the average wage, and probably less than the minimum hourly rate. Amway and MLM are business ideas for people who don't have the skills to even buy a franchise. They are "sold" as easy money, when the facts are that to be a success at Amway/MLM, the first key is to suck as many other people in as possible and easy money is the least likely result.

For most people, joining and even trying to succeed at an MLM alienates friends and family and generally wastes an awful lot of time.

Another stat I'd like to see from Amway is what their customers' reorder levels are. Again, I'd lay hefty bets that their reorder levels are lower than any other business - I could name literally hundreds of people who have bought Amway products then never bought them again.

[sgf8]

I've run an MLM business on and off for a decade (yes, and made and continue to make money).

It was the 8th post after you told us the above when you told us your MLM business is Amway. That is the second Red Flag.

Another thing that worries me is how detailed you have looked into the litigation involved in Amway. Why are you so interested in this aspect?

ummm ... no. You don't have to recruit people into ACN to make money. Not in any other legitimate MLM I'm aware of either. Just like any other business however, you're unlikely to be able to develop a business of any size by yourself.

Well....according to the very long post I made earlier when I recounted my experience with the ACN group. At no time did anyone try to sell me their video phone, or change my phone service. No price was mentioned for their products, the video phone sat on a table nearby, but we were not encouraged to touch it, nor did we see it in use. Now I may not be a fancy business owner myself, but I have been in sales for 25 years, and that is NOT how to sell a product.

That has nothing to do with the MLM model. That has to do with people using a (stupid in my opinion) "fake it till you make it" approach to marketing.

In my very limited experience with meeting MLM members (no idea what they call themselves) they have all fit this model.

No offence, but in this case you were guilty of poor thinking. You have no idea whether that woman was wealthy from Amway or not. You've made an assumption that all people involved with Amway are dishonest and come to conclusions based on that assumption. There is nothing in the MLM model, or Amway or ACN, that requires you to be dishonest. This type of approach is indeed used by some MLMers, but again, there's nothing inherent in the MLM approach the requires it and I for one which they didn't do it. I've never experienced it, never done it, never been taught it, nor ever taught it to anyone else.

So you are saying that when I encounter person after person acting this way, I should just say to myself, "I'm practicing poor thinking, I'm sure not everyone involved in MLM's act this way. There are probably loads of honest ones out there just wanting to sell me the product, they are probably not at all interested in recruiting me into their wealthy lifestyle. I'm sure if I asked them if I could join they would turn me away because they are worried about market saturation."

Susan

[icerat]

Dude. I'm not parroting some false claims. I have personal specific information about how this business works. I saw the businesses of several high pins. Seriously, I have seen it with my own eyes, I'm not parroting anything.

I was hoping folk on a board of this nature would be a little more experienced to make generalized claims based on that.

Dexter is not of 100's he represents a significant percentage of the overall Amway business. There are only a few kingpins of his size. This is one of the reasons he shows his bonus checks to people as they are among the largest around. Another website (don't have a link handy) calculated how large a % of Amway's business he was from the size of the check and it was significant. Also everyone should keep in mind that tax return information isn't available for these people (otherwise the jig would be up so to speak).

How long ago was this? Yager has a very large business, yes, but he is indeed one of nearly 100 Crown Ambassadors. In the 80s he was a significant part of the business, but no longer. There are 12 separate Amway legs linked to the corporation. He is in depth in just one of those 12. I'd love to see that calculation if you can find it. In my experience most of those types of calculations have been done with inadequate knowledge of the compensation system. The operator of the largest anti-amway site for example, revealed only a year or so ago to not even understand how the 4% leadership bonus worked, and he had published many "analyses" using his flawed understanding.

I pointed out the inverted pyramid for tools because that's not the way the pyramid can work normally. It means nobody at the bottom makes money. In the "real" Amway pyramid the person retailing gets the largest cut and as you get higher up the chain your cut gets smaller. The tools work the opposite which is why they are so lucrative.

This is not true, or at least not universal. Here for example is the volume rebate scale for what is reportedly now the largest Amway-affiliated BSM company -

0-499 $-
500-999 0.50
1,000-1,999 0.75
2,000-3,999 1.00
4,000-5,999 1.20
6,000-7,999 1.40
8,000-9,999 1.60
10,000-14,999 1.80
15,000-19,999 2.00
20,000-29,999 2.20

These work the same as the Amway rebate scale, so someone purchasing say 6000 CDs get's a $1.20 rebate, but if they have a leg purchasing 5000CDs, that comes out of it, leaving them with 20 cents. The largest markup between levels is at the "bottom" with the person ultimately supplying the product to the enduser, 50 cents. Those further up can make larger rebates than that through volume differences, but in the same was as with the Amway compensation plan - selling smaller volumes to multiple groups.

I do agree that a diamondship could be making $150k a year in bonuses. Unfortunately the income claims for diamond are much higher than $150k. More like 150k a month! Which they do make, just not from Amway income, from tool income. Unless they aren't cut in...

The $150K amount is a required disclosure, its on the contracts and on numerous websites. Such average incomes have been a legal requirement since FTC vs Amway. Anyone making claims of 150k month is breaking the rules. My experience to yours is different. I have *never* heard anyone claim $150K/mth as a Diamond, that's absurd. Now higher than Diamond they may very well. Indeed the average income for Founders Executive Diamond and above was reported by Quixtar (Amway US) several years ago as a fraction under US$1.5million. That's from Amway income alone.

Anyway, as everyone else who is rational can see the brainwashing is very effective.

I realized sometime ago that many MLM and Amway critics are far more "cultlike" in their attitudes than the MLMers. They believe they have the "one truth" and anyone who disagrees with them is wrong and brainwashed, even when evidence is presented to support it. Quite ironic really.

And yes I am claiming that the tools, books and tapes are a complete fraud and that the big pins make the majority of their money from them. The corp itself doesn't do anything technically illegal or fraudulent that I'm aware of other than letting the tool scam continue.

Are you aware of Quixtar Accreditation? Launched several years ago it's a system where BSM (Business Support Materials - tools) companies can be "accredited" by Quixtar as providing quality materials. Part of this includes contracts and transperancy regarding distribution of tool profits. IBOs who are not accredited or linked to an accreditated organization by August this year will not be eligible for all the "discretionary" bonuses from the corp. This means most yearly bonuses, free trips, and more.

The numbers they give out AFAIK are accurate in terms of who gets paid what bonuses etc. Keep in mind the company is privately held and nobody knows the true sales numbers but I do trust their numbers on bonuses etc. Those numbers tell a story that isn't nice for the business btw...

What, $150,000/yr for an essentially part-time business, plus the opportunity to earn money on the speaking circuit (similar to many other industries) isn't a reasonable outcome? $1.5million/yr isn't a great outcome?

And yes, I am claiming that 10's of thousands of people are lying about their Amway related income. Fake it till you make it baby! Get fired up! Very very few distributors make a profit so the standard line is "I'm just getting started, talk to my more succesful friend here".

Very very few distributors do much in the way of work. Only 50% of distributors even buy any products after registering. Less than 13% introduce more than 2 people, which, like any other business, is necessary to profit from volume rebates. No more than 10-15% of folk regularly participate in training sessions, around 1% put in the recommended hours for a sustained period. Given these numbers, it's no surprise also that only 30% continue registered after a year.

Tell me, in how many other businesses would you expect to make a significant profit it if your purchased no inventory, had no education in the industry, did no work, and didn't even try for longer than a year?

If you want to be critical of anything, you can be quite reasonably critical of the fact that the so-called "motivational organizations" actually do a pretty lousy job of "motivating" the new distributor.

If you actually got to look at the books (if they even have books!) you will find they are losing money paying for travel to functions, tickets, books, tapes and other services sold by their upline.

I can look at my own books. I've built multiple Amway businesses in multiple countries. In each case I was profitable, after expenses, at latest around the 9-12% level. And that's ignoring tax breaks.

If folk want to spend excessive money on other services without making money, then that's their decision. It's not an inherent part of the Amway business model.

They are literally taught not to tell people how much they are making and/or lie about it by trying look more successful.

Who is this "they"? Are you honestly claiming, from your limited experience about what around 9 million (in any given) year Amway business owners are being taught by all the myraid of different BSM companies? You've admitted you've only had a little experience outside Yager. Tell me, how do you know how Schwarz International operates their training system? How about Plum Blossom? International Connection? Heckel? I'm very curious as to how you know so much about all their operations.

For the amount of hours you have to put in you really make a pittance.

I've already told you, I'm still making money from Amway despite putting in ZERO work. But I guess I've just been brainwashed and am lying, huh? :rolleyes:

If you build a large organization they cut you in on the tool money. However, this is "optional" money and they make you sign a hardcore arbitration agreement preventing you from suing over it. E.g. they can use this to control you and your business and keep you quiet.

Your knowledge is limited and even for where you have experience, outdated.

Don't even get me started on the upline edification cult like aspects, it's a truly truly truly scary thing to get involved with. And again, I don't think I'm overgeneralizing. The vast majority of amway groups are run like this even though they themselves refuse to admit it.

Right, so tell me again about the Schwartz operation and how they operate.

Anyway, again I encourage people to research it themselves. Pay special attention to testimonials of ex-distributors. Especially ones that were higher pins like Directs, Emeralds and Diamonds who have seen the tool money and the darker sides of "the business".

Indeed, and then do what any good researcher would do. Look at the sample for, for example, any self-selection bias. Compare also the sample size to the population to see if you're even remotely close to having a group from which you could claim statistical significance for any claims about the population as a whole.

PS I'm using a lot of slang from the business here let me know if you have questions.

ditto :)

[NewtonTrino]

Here is a nice little article nicely summing up Amway from the UK perspective.
http://www.amquix.info/amway_uk_times_online.html

[NewtonTrino]

I tire of arguing Amway theology.

Caveat Emptor. It's not my job to try and protect everyone out there from being scammed but people please be wary of these schemes. The amount of harm done is IMHO grievous having seen many families split, men's spirits broken, friends driven away, good jobs lost or thrown away etc. I've seen all of this personally people.

So again, Caveat Emptor.

[icerat]

Here are some links.

This first one is a book that a former Emerald wrote. Basically his upline didn't cut him in on the tool money so he was barely scraping by (he didn't realize it existed!). Very interesting book although not especially well written it is entertaining actually.
http://www.merchantsofdeception.com

The guy obviously had some legitimate issues with his upline (who incidentally, is no longer with Amway) but there's also plenty of "red flags" in his book. For example, he claims to have been "surprised" at the small amount he received in depth bonus, when even a cursory understanding of the bonus (it was explained to me in my very first training session) makes it obvious the first time you receive it it is very small. There's no way he didn't know this. Note also how he is very careful throughout the book to only ever talk about his net income. As a former federal auditor, he know doubt new many ways to legitimately claim expenses against his business.

For general information you can check out:
http://www.amquix.info/

Oh, you mean the guy who after 8 years of running the self-proclaimed largest Amway site on the internet still didn't understand one of the basic bonuses of the business? The guy who has been caught fudging numerous figures and info about amway (http://www.amwaywiki.com/index.php?title=Scott_Larsen). By all means, use his site as a reliable resource.

And for fun you can visit Dexter Yeager's website the capo of the capo's. Notice how vague it is about what he does? He "sells the dream" to people, that's his business.

That's because of a somewhat IMO stupid and poorly implemented Amway rule with the intended purpose of preventing people making improper claims on their websites.

This guy owns one of the larger facilities for actually manufacturing the tapes/cd's etc.

Yes, which manufactures tapes/cds for many customers, not just Amway related. And not surprisingly he makes money on it.

He's also a hardcore christian fundy nutjob.
http://www.dexandbirdieyager.com/

So? I'm a hardcore atheist.

[NewtonTrino]

This is not true, or at least not universal. Here for example is the volume rebate scale for what is reportedly now the largest Amway-affiliated BSM company -

0-499 $-
500-999 0.50
1,000-1,999 0.75
2,000-3,999 1.00
4,000-5,999 1.20
6,000-7,999 1.40
8,000-9,999 1.60
10,000-14,999 1.80
15,000-19,999 2.00
20,000-29,999 2.20

These work the same as the Amway rebate scale, so someone purchasing say 6000 CDs get's a $1.20 rebate, but if they have a leg purchasing 5000CDs, that comes out of it, leaving them with 20 cents. The largest markup between levels is at the "bottom" with the person ultimately supplying the product to the enduser, 50 cents. Those further up can make larger rebates than that through volume differences, but in the same was as with the Amway compensation plan - selling smaller volumes to multiple groups.



One more thing before I go. You DON'T HAVE THE TOP OF THE PYRAMID HERE.

Answer me this: What is the max discount there? $2.20? What's the cost of the product? $6 or more? So where's the other $4+ (hint: not in manufacturing).

[sgf8]

The Government investigation claims to have revealed that just 10 per cent of Amway’s agents in Britain make any profit, with less than one in ten selling a single item of the group’s products. It claims that Amway’s main activity is encouraging other people to join its salesforce so that they pay the registration fee and buy marketing materials.

Yeah, well, what do they know!:rolleyes:

Susan

[icerat]

It was the 8th post after you told us the above when you told us your MLM business is Amway. That is the second Red Flag.

Only if you're already biased.

Another thing that worries me is how detailed you have looked into the litigation involved in Amway. Why are you so interested in this aspect?

Why wouldn't I be? I'm fascinated by the whole industry, but in particular Amway. My background is as a scientist and researcher turned business entrepreneur. Interesting how often folk direct me to read this stuff, and now the fact I have is a concern!

Well....according to the very long post I made earlier when I recounted my experience with the ACN group. At no time did anyone try to sell me their video phone, or change my phone service. No price was mentioned for their products, the video phone sat on a table nearby, but we were not encouraged to touch it, nor did we see it in use. Now I may not be a fancy business owner myself, but I have been in sales for 25 years, and that is NOT how to sell a product.

I agree, but nowhere in the MLM model is that a required method of doing business. It is however somewhat uncommon. Personally I don't think telecommunications is a particular good product for the MLM model. You don't have any "exclusive" product to help maintain customer loyalty and there's too many extremely large competitors who can cause you to very quickly lose either customers or profit margins through dropping prices to compete.

In my very limited experience with meeting MLM members (no idea what they call themselves) they have all fit this model.

It's the "lead with the business first" approach. The idea is that it's easier to convert someone not interested in the business into a customer than it is to convert a customer into someone interested in the business. There were statistics to back this up in the past, particularly with the boom in people interested in owning their own business and also the internet, but the pendulum is swing back to a more product focused approach lately, at least with Amway.

So you are saying that when I encounter person after person acting this way, I should just say to myself, "I'm practicing poor thinking, I'm sure not everyone involved in MLM's act this way.

There's nothing dishonest in that approach, it can just appear weird when done inappropriately, which is unfortunately all to often.

There are probably loads of honest ones out there just wanting to sell me the product, they are probably not at all interested in recruiting me into their wealthy lifestyle. I'm sure if I asked them if I could join they would turn me away because they are worried about market saturation."

I'm not sure I understand your "market saturation" point? If you owned an insurance company, and someone came and offered to work for you for commission only, and you earned a percentage of whatever business they brought in - why on earth would you be worried about "market saturation"? Or are you saying it would be unethical to let them do that if you believed the market for the product was saturated? In which case I 100% agree.

[icerat]

One more thing before I go. You DON'T HAVE THE TOP OF THE PYRAMID HERE.

Answer me this: What is the max discount there? $2.20? What's the cost of the product? $6 or more? So where's the other $4+ (hint: not in manufacturing).

Umm, well gee. I guess they run some incredibly efficient business that has zero expenses! :rolleyes:

That particular company employees over 300 staff in nearly 40 countries. Like any other business they engage in research and product development. They invest in new markets. They have office expenses, accounting expenses, legal expenses, tax expenses etc etc etc etc

And ... shock horror ... the guys who spent their time and their money, and took the risk, establishing the company make some money out of it. :eek:

A terrible thing, making a profit from a business. :rolleyes:

Manufacturing tends to be a relatively minor expense in many industries, why would you think it is any different in this type of company?

[sgf8]

I'm not sure I understand your "market saturation" point? If you owned an insurance company, and someone came and offered to work for you for commission only, and you earned a percentage of whatever business they brought in - why on earth would you be worried about "market saturation"? Or are you saying it would be unethical to let them do that if you believed the market for the product was saturated? In which case I 100% agree.

humm my point is that it is unfair to allow too many people in one area to sell a product. You might be making a profit off these people, but how can those individual people succeed? In a normal business model, saturation is a concern. You don't want too much competition from other like businesses and from your own company.

In the ACN model, they were not concerned at all with this. In fact the man mentioned it and laughed it off, "you don't have to worry about that!" He wasn't lying either, once you pay the $499 to join up (plus all the other fees) you won't be selling a product, you are going to just ruin your friendships, and then be out of the game in a few months. No worries about market saturation.

Susan

[icerat]

The Government investigation claims to have revealed that just 10 per cent of Amway’s agents in Britain make any profit, with less than one in ten selling a single item of the group’s products.

So let me see ... 1 in 10 sell the products and 10 per cent make a profit ... is it just me or does anyone else suspect some kind of connection?

It claims that Amway’s main activity is encouraging other people to join its salesforce so that they pay the registration fee and buy marketing materials.

Yeah, well, what do they know!:rolleyes:

Susan

Not very much clearly, given Amway doesn't sell much in the way of marketing materials, and that which they do sell they make no profit on. It's indepdent companies not setup by Amway that sell and profit marketing materials to Amway folk. I'm sure NT will confirm that.

Amway also makes no profit on the registration fee, and typically makes less than 10% of it's revenues from products bought at registration.

I'm told by people familiar with the case that the DTI also completely ignored the profit made by selling those products in their calculations, and used "expense" figures that were provided as "maximum amounts" rather than average amounts. Amway's lawyers apparently dismissed that one with ease.

Amway UK has had some problems, including both some IBOs (Independent Business Owners) doing the wrong thing and Amway itself failing to respond to changing market conditions.

Funnily enough, just like any other business, that meant their revenues were shrinking and the business was overall going backwards.

[NewtonTrino]

Twist, turn, wiggle. Now you admit there is profit in the tools? With a lot emoticons as you wiggle around. I have no problem with people making profit, but what these guys do is BRAINWASH people and suck as much money as they can out of them.

You can have CD's duplicated in bulk for well under a buck. These kingpins who make this stuff and their cronies are making millions while the lower levels lose money like crazy.

[icerat]

humm my point is that it is unfair to allow too many people in one area to sell a product. You might be making a profit off these people, but how can those individual people succeed? In a normal business model, saturation is a concern. You don't want too much competition from other like businesses and from your own company.

sure, but people you introduce into an MLM business are not simply competition. If we take the insurance analogy again, do you think that, in general, 2 insurance salesman can sell more insurance than 1? Of course. Same with MLM. Even in a traditional retail outlet, employing staff is an *expense*. It's hoped however that that increase in expenses will be offset by increases in sales. Same goes with MLM.

In the ACN model, they were not concerned at all with this. In fact the man mentioned it and laughed it off, "you don't have to worry about that!" He wasn't lying either, once you pay the $499 to join up (plus all the other fees) you won't be selling a product, you are going to just ruin your friendships, and then be out of the game in a few months. No worries about market saturation. [/QUOTE]

Just like any other business, market saturation is a potential problem. If you live in a small town and sell ferraris, and every person already owns a ferrari, you're in trouble. Employing additional staff would not be a helpful move.

While I see no evidence that the market for telecommunications is even remotely saturated, even if it was ACN and other MLMs offer money back guarantees if you find it too hard.

If you ruin friendships, well that's your own stupid fault for being an idiot - which *is* a problem in the MLM model. Idiots are allowed to join too. Some of them are even very successful and duplicate their idiocy. Not a real positive for public reputation. :(

[icerat]

Twist, turn, wiggle. Now you admit there is profit in the tools? With a lot emoticons as you wiggle around.

Where did I ever deny there was profit it tools? Of course there's profit in tools, it would be a pretty strange business setup if there wasn't.

What I disputed was that your claim you couldn't make money from Amway or that making more from BSM (tools) than from Amway is universal or even significantly widespread, taking in to account all of Amway rather than just an individual group.

I have no problem with people making profit, but what these guys do is BRAINWASH people and suck as much money as they can out of them.

oh good grief, give me a break. I mentioned I was a scientist and researcher - it was with a background as a psychologist. Despite the protestantions of self-described cult busters like Rick Ross (and to a lesser extent Steven Hassan) the whole idea of "brainwashing" without physical coercian has been well debunked by serious researchers in the field.

You can have CD's duplicated in bulk for well under a buck.

Sure, except without a costly support structure those CDs would never be ordered or never distributed. Again, manufacturing is typically one of the smaller portions in the final price of a product.

Again, why do you think BSM companies should somehow be so magnificently more efficient than any other company in producing and distributing their products?

[NewtonTrino]

The brainwashing isn't of the CIA secret programming whacko type. It's the same kind that's present in something like scientology or evangelical christianity. You deny this is possible?

As for the rest, there is a TON of profit in these cheap to produce items that isn't accounted for, even taking into account reasonable distribution costs. Bottom line, you are missing a big part of the pyramid that I HAVE SEEN due to the unique nature of my relationship to the business (growing up and living my entire home life around the business for 20 years including meeting and associating with many of the big pins and their kids). In addition to that my software was used by some of the pins higher up in the pyramid so I got to see tool price breaks and tool volume schemes as well (I actually remember when they started going that instead of having a straight up commision for each pin level like they used to). So sorry, whatever you think you know about the business, you are just wrong or lacking information. I'm arguing from authority here, so you can take it or leave it as you see fit.

I lost my virginity at an Amway "Rally" btw. I know this scam inside and out ;)

[icerat]

Does Amway not count as a "legitimate MLM" any more? Although no signing on fees are obtainable, without conning friends and other gullible people into the Amway fold, there's no money to be had.

Amway UK has had a moritorium on sponsoring new people for nearly a year. They're still selling products.

One of my Amway businesses went 7 years without a single person actively building the business or a new person joining. Every single month there were product sales and volume and profit.

Please feel free to describe how Amway is anything other than an imaginary franchise, because that's exactly what it is.[/QUOTES]

What's imaginary about $7.2 billion dollars in revenues with less than 10% from products purchased by new "recruits"?

[QUOTE]Traditional distribution of what?

Most consumer items I can think of have two or three tops.

Manufacturer->Wholesaler->Retailer->Consumer is the standard outline, and in larger situations there is often an independent "jobbers" who find new clients and earn a commission -

Manufacturer->Jobber->Wholesaler->Jobber->Retailer->Consumer

Then of course you can throw in the advertising industry between retailer and consumer, or even additional steps like the sports club that buys from a retailer and sells to club members.

Did it ever occur to you why Amway had to prove its legitimacy? Does any other trader have to go through that saga?

Oh, this is an interesting piece of logic. You're trying to imply that Amway is not legitimate because it's legitimacy was queried, despite a 5 year mult-million dollar investigation declaring it was legitimate. Good one. :rolleyes:

Amway and other MLMs skirt the law by moving goods, but they are still nothing more than pyramid games.

And there's no way reality or facts is going to change that opinion! It astounds me that otherwise intelligent people believe that with regard to MLM they know "the truth" but 50+ governments around the world and 50+ states of the US, of all particular political bents over the years, have all somehow been hoodwinked and simply don't understand it like you do. Governments - hoodwinked. Business academics - hoodwinked. Politicians - hoodwinked. UN - hoodwinked. Business associations - hoodwinked.

Seriously, if a group of people organised themselves into a buying bloc they'd get far better deals than are available through any MLM.

Quite possibly, if your interest is saving money. But MLM isn't the same thing as a buyers club. It's a business - it financially rewards people for creating sales volume.

If you really want to prove your case that MLMs have any value whatsoever, give me the average hourly rate of all Amway salespeople.

Sigh. Again you're simply demonstrating either your ignorance of business in general and MLM in particular, or a completely lack of interest in being honest.

An hourly rate is a meaningless concept when you're building a business

Ask any business owner what their "hourly rate" was in the initial stages of building a business and the majority will tell you it is lousy, especially when you account for initial investment, which you should do for a proper comparison.

You're being dishonest because you're asking for "all" Amway sales people, when I've already provided you data, with sources, showing that very few people try to earn an income. If the "hourly rate" attempt was actually seriously done and future earnings ignored it would probably average out to "infinite" since to numerous decimal places the average number of hours put in would work out at zero.

I contend that that rate will be far lower than the average wage, and probably less than the minimum hourly rate.

Contend it? For that loaded and essentially irrelevant question I guarantee it.

Amway and MLM are business ideas for people who don't have the skills to even buy a franchise.

What a load of rot. I have multiple degrees and have founded and own (and sold) multiple successful (and unsuccessful) businesses. My sponsors both have degrees and have founded and run multiple successful businesses. There sponsors are the same, including a franchise. MLM has significant advantages over traditional franchises, the primary one being an awful lot less financial risk.

They are "sold" as easy money, when the

Again - what a load of rot. Do you seriously think working 10-20hrs+ a week, on top of your normal job and everything else in life, for several years is "easy money"?

Done properly it's easier than the alternatives, but it's bloody hard at the beginning. As is starting any business. Actually, as someone who has developed "traditional" businesses I can tell you that in my experience, Amway is indeed "easy" compared to starting a "traditional" business. When taking the whole picture into account it's less financial investment, less work, and better results, faster.

facts are that to be a success at Amway/MLM, the first key is to suck as many other people in as possible and easy money is the least likely result.

For most people, joining and even trying to succeed at an MLM alienates friends and family and generally wastes an awful lot of time.

Another stat I'd like to see from Amway is what their customers' reorder levels are. Again, I'd lay hefty bets that their reorder levels are lower than any other business - I could name literally hundreds of people who have bought Amway products then never bought them again.

How much do you want to bet? FTC vs Amway (http://www.mlmlaw.com/library/cases/mlm/ftc/amway.htm) -

186. Amway's products have very high consumer acceptance. A market study in the record shows that of 37 brands of laundry detergent, Amway's product, with only a very small market share and no national advertising, was third in brand loyalty. (Cady, Tr. 5823) Amway's dishwashing liquid soap led all 16 brands surveyed in consumer acceptance. (Cady, Tr. 5819*22) In each of the markets for automatic dishwasher detergents, detergents for fine clothing, bleaches, rug cleaners, and laundry additives, Amway's products were second in brand loyalty. (Cady, Tr. 5822) Professor Cady, a marketing specialist from the Harvard Graduate School of Business Administration, testified that (Tr. 5823):

What this means overall is that consumers are obviously well served by the products that Amway supplies them with. In fact, they are so well*served, in the face of a large number of available substitutes, they purchase Amway products to a degree which is almost unknown to other brands in the market.

Consumer Labs (http://www.nutraingredients-usa.com/news/ng.asp?id=50330) -

Direct sales brand Nutrilite gained a 96 per cent satisfaction rating, coming out on top

I can give you plenty more if you want. Amway brands have won numerous independent awards for consumer satisfaction. But let's not get independent research get in the way of your personal opinion.

[icerat]

The brainwashing isn't of the CIA secret programming whacko type. It's the same kind that's present in something like scientology or evangelical christianity. You deny this is possible?

That's what's known as "coercive persuasion" or "social coercion" and exists to some extent in pretty much all organisations, including workplaces, sports fan clubs, heck even the family, and yes, even Amway. In more extreme cases (like for example scientology) there is much greater control of the environment than is the case for normal coercion, and certainly a lot more than is the case for Amway.

As for the rest, there is a TON of profit in these cheap to produce items that isn't accounted for, even taking into account reasonable distribution costs.

And there's a TON of expenses you're failing to account for. Particularly for large modern, international BSM companies. I'm aware of one BSM company that invested over a million dollars into the Phillipines market before Amway launched there. 10 years later they are yet to break even. In other words, they're running at a loss in that market.

Bottom line, you are missing a big part of the pyramid that I HAVE SEEN due to the unique nature of my relationship to the business (growing up and living my entire home life around the business for 20 years including meeting and associating with many of the big pins and their kids).

Many of the big pins huh? There's been around 5000 qualify at Diamond and higher, how many is your many? How many were not associated with Yager?

Bottom line, your extrapolating from limited (and likely outdated) data to a population as a whole. The Yager organisation itself appears to have changed cultures significantly since the son's took control, and in my monitoring has generated very few complaints on the 'net in recent years. Of course this may just mean their shrinking in size, which means your extrapolation is even less valid.

In addition to that my software was used by some of the pins higher up in the pyramid so I got to see tool price breaks and tool volume schemes as well (I actually remember when they started going that instead of having a straight up commision for each pin level like they used to). So sorry, whatever you think you know about the business, you are just wrong or lacking information. I'm arguing from authority here, so you can take it or leave it as you see fit.

Right, so my personal experience involved with one Amway organisation in multiple countries, along with years of research and factual, up to date data involving other Amway organisations is to be ignored, but your personal experience (how long ago?) with one Amway organisation and it's affiliates in one country is to be accepted as the "one truth" for all of Amway.

Oh yeah, that seems sensible.

You've again failed to answer my questions about your knowledge and experience with non-Yager organisations.

I lost my virginity at an Amway "Rally" btw. I know this scam inside and out ;)

Well, you can't say you got nothing out of Amway :)

[The Atheist]

What a load of rot. I have multiple degrees and have founded and own (and sold) multiple successful (and unsuccessful) businesses. My sponsors both have degrees and have founded and run multiple successful businesses. There sponsors are the same, including a franchise. MLM has significant advantages over traditional franchises, the primary one being an awful lot less financial risk.

That's great.

I never disputed that people who are willing to rip off friends, associates and others can make money out of Amway.

See, you talk about Amway and how well it works, yet you shoot yourself right in the foot with the $7bn turnover.

How many Amway reps are there worldwide? 1,000,000? That would be my guess at a minimum number, with 10k in NZ. So, the average turnover per rep is a wondrous $7k. Even at 30% profit, that a whopping $2100 per year.

Woohoo!

Two grand. Live it!

Face it; for almost all particpants, Amway is a joke. Some, like yourself, manage to scam a living off the gullible and good for you.The simple reason most of them don't try is because most people are in the end quite reticent about scamming friends - most people prefer retention of their friends than the pittance Amway can provide. Those who do scam their friends end up with some customers and no friends. Interestingly, only today I received an e mail from a friend who is being chased so hard by one of her friends to join some BS MLM that she is about to sever the friendship.

Again - what a load of rot. Do you seriously think working 10-20hrs+ a week, on top of your normal job and everything else in life, for several years is "easy money"?

That is how it's sold and if you disagree with that, you're flat lying.

"Passive income" is the byword of Amway conmen. You have to put the effort in to create a passive income. Again, I can assure you that for almost all people they will be far better off earning money at an extra job for those 10-20 hours per week and invest the money in a rental property. That's a true passive income.

I mean, your own figures which show pitiful growth are enough of a guide that most people have now woken up to MLM and give it a swerve.

Even with distribution you can't be honest, because no statistics I know of count the consumer as a step in the distribution chain and I seriously doubt they do for Amway, unless some cute sidestep is allowed due to the fact that the retailer and consumer are sometimes the same person.

I can give you plenty more if you want. Amway brands have won numerous independent awards for consumer satisfaction. But let's not get independent research get in the way of your personal opinion.

You'd better find plenty more, because none of that covered what I said, so I'll repeat it.

Amway would have the lowest repeat business of any product range, and I'll expand that include new customers especially.

Of course a percentage of buyers remain loyal! Those with vested interest are clearly going to buy the product so as to maximise the pathetic return on their investment. [mostly of time]

Nice of you to avoid the hourly rate equation as well, in another typical fundie move. Instead of coming and spewing more utter rubbish and Amway-fundie obfuscation, answer the questions put to you. How much people earn is always accountable as an hourly figure. I can see why you'd want to avoid that, but stating that it's an unfair comparison because people are "setting up a business" is a load of old cobblers, especially when a vast majority of those people will never get past the setting up phase.

I have no doubt that you're a believer and successful at selling the product and system.

Unfortunately, as you'll find here, anecdotal evidence of one person does not a case make.

So far, you really do come across like a fundie christian, which point I raised much earlier - the tactics are remarkably similar for both. You've avoided questions, typed a million words which say nothing and generally beaten your own drum. You're not likely to find many recruits here, so please at least be as honest as you're able to be about the Church of Amway/MLM and the returns they fail to create for almost all members.

[icerat]

How many Amway reps are there worldwide? 1,000,000? That would be my guess at a minimum number, with 10k in NZ. So, the average turnover per rep is a wondrous $7k. Even at 30% profit, that a whopping $2100 per year.

Now offence, but go take a basic course in statistics and learn that average is meaningless or indeed extremely misleading when used with non-normal distributions and non-homogenous populations. The level of work, training undertaken, and even goals set by Amway folk is as far from normally distributed or homogenous as you can reasonably get. Average is worse than useless in such circumstances.

Don't believe me, go do the course and learn it from someone else.

Face it; for almost all particpants, Amway is a joke.

Face it; the majority of participants do not treat Amway seriously. Do I keep having to quote statistics for you, or is hard data something you're allergic to?

Some, like yourself, manage to scam a living off the gullible and good for you.The simple reason most of them don't try is because most people are in the end quite reticent about scamming friends - most people prefer retention of their friends than the pittance Amway can provide. Those who do scam their friends end up with some customers and no friends.

And since you can't deal with the hard data that contradicts your world view, you choose instead to ignore it, you simply resort to emotional attacks and ad hominems.

Interestingly, only today I received an e mail from a friend who is being chased so hard by one of her friends to join some BS MLM that she is about to sever the friendship.

And it's not her friends fault at all. She has absolutely no control over herself and just does what her master orders. Yes, MLM has indeed perfected unfailing human control :rolleyes:

I have many customers. I make money from Amway. I have many friends. Most of my friends who were friends before I joined Amway, are still friends. I've never lost a single friend because of Amway, I've made many.

That is how it's sold and if you disagree with that, you're flat lying.

Mmmhhhmm .... you can't possible accept that perhaps not everyone operates the way you think they do. You have to accuse them of lying.

"Passive income" is the byword of Amway conmen.

And the emotive attacks continue.

You have to put the effort in to create a passive income.

Really? Oh! I've had it so wrong all along! :eek: Oh ... wait, yes, that's exactly what I was told, and tell other people. Glad we have a point of agreement. :rolleyes:

Again, I can assure you that for almost all people they will be far better off earning money at an extra job for those 10-20 hours per week and invest the money in a rental property. That's a true passive income.

It can indeed be a passive income. And since it doesn't fit your worldview, I must obviously be lying about the fact I get "passive" income from my original Amway business. Still, I'm curious as to where you managed to get statistics about the success rates of Amway folk who actually put in 10-20hrs a week.

Care to provide the statistics, since you obviously must know them to make such claims?

Actually, I'll take your claim a little further but add a dose of reality. In 100% of circumstances, people would be far better off financially taking an extra job than joining Amway and doing nothing or very little.

I mean, your own figures which show pitiful growth are enough of a guide that most people have now woken up to MLM and give it a swerve.

Pitiful growth? I don't recall showing any growth figures apart from talking about the UK market. Failure to adapt to changing business conditions and suffering lack of growth isn't exactly unique to MLMs. As it happens Amway globally grew substantially last year. Here's an historical sales graph for you -

http://www.amwaywiki.com/images/c/cf/Alticorsales1960-2007.png

There's been hiccups, but again, what's uncommon about that in the world of business? I'd suggest there's very few 50yr old multinationals that haven't had hiccups in that time.

Even with distribution you can't be honest, because no statistics I know of count the consumer as a step in the distribution chain and I seriously doubt they do for Amway, unless some cute sidestep is allowed due to the fact that the retailer and consumer are sometimes the same person.

Who counted the consumer as a step in the distribution chain? I didn't.

You'd better find plenty more, because none of that covered what I said, so I'll repeat it.

After you take that course in stastics, you may want to go study marketing and learn what "brand loyalty" means. It means repeat business.

Amway would have the lowest repeat business of any product range, and I'll expand that include new customers especially.

I've already provided independent evidence proving you wrong, in one case from Harvard Business Professors no less. Of course, it doesn't fit your worldview, so you dismiss it.

Of course a percentage of buyers remain loyal! Those with vested interest are clearly going to buy the product so as to maximise the pathetic return on their investment. [mostly of time]

A percentage of buyers that is enough to rank Amway products at or near the top of their categories for brand loyalty (ie repeat business). Again you chose to live in your bubble and ignore reality and hard, independent data.

Nice of you to avoid the hourly rate equation as well, in another typical fundie move. Instead of coming and spewing more utter rubbish and Amway-fundie obfuscation, answer the questions put to you. How much people earn is always accountable as an hourly figure.

What a load of rubbish. Have you have started a company? Nevertheless, I'll give you my honest to goodnes hourly rate calculations for one of my Amway businesses.

Average Hours Per month = 0.0000
Average income/month >1

Average monthly income/average hours= infinite/incomputable.

An infinite hourly rate! Fantastic.

I can see why you'd want to avoid that, but stating that it's an unfair comparison because people are "setting up a business" is a load of old cobblers, especially when a vast majority of those people will never get past the setting up phase.

You're the one that insists in including them in the statistics. Do you judge the efficacy of treadmill exercise by including folk who say they'll get on the treadmill but never do?

Do you judge the average time for completing the London Marathon by including people who put in an entry but never race?

Do you judge the income of the hamburger business by mixing people who've done nothing more than decide they want to open a restaurant with folk who've been operating for 40 years and expanded to tens of thousands of outlets around the world?

These are the type of things you're wanting to do here, and it's patently absurd. Any rational person with a skerrick of knowledge in the area would refuse to answer such questions.

I have no doubt that you're a believer and successful at selling the product and system.

Unfortunately, as you'll find here, anecdotal evidence of one person does not a case make.

Of course it doesn't. Neither does anecdotal evidence of 100 people. I've provided you with hard data and statistics, including from independent sources, you've chosen to ignore them.

So far, you really do come across like a fundie christian, which point I raised much earlier - the tactics are remarkably similar for both. You've avoided questions, typed a million words which say nothing and generally beaten your own drum.

I haven't avoided any sensible question. I've pointed out and explained why the "hourly rate" question is not a sensible. I'd suggest you're coming across as far more of a "fundie christian" than I am - you're fixed in your beliefs and are completely unwilling to accept hard data that undermines those beliefs even when the data is from verifiable, reputable, independent sources.

You're not likely to find many recruits here, so please at least be as honest as you're able to be about the Church of Amway/MLM and the returns they fail to create for almost all members.

I'm not here to recruit. You continue to be offensive. I've been nothing been honest in my posts. It appears you continue under the misguided apprehension that such returns are supposed to miraculously happen without effort. I'm under no such misapprehension.

The statistics are clear -
(a) Very few people who join Amway make significant money. (source: Amway)
(b) The average incomes of the tens of thousands of people who have successfully created sales volume is significant (source: Amway)

The statistics are just as clear that -

(a) very few people who join expect to make significant income (source: FTC vs Amway)
(b) the majority of people who join MLMs do so not to make an income, but to take advantage of wholesale pricing (Source: FTC report on proposed Business Opportunity Rule)
(c) only 50% of Quixtar (Amway US) even order products after joining, obviously a prerequiste to being able to market and sell them (source: Quixtar vs Woodward)
(d) less than 10% of Amway UK IBOs retail products to non-IBOs, necessary to earn a profit from personal retailing (source: DTI vs Amway) (and indeed necessary in the rules to earn a profit from networking, as per below)
(e) less than 13% of Quixtar (Amway US) build a network, necessary to earn a profit from building an organisation (source: Quixtar vs Woodward)

We obviously have somewhat different ethical standards.

I believe it's reasonable to expect people receive a reward for their work, and not reasonable to expect people receive a reward for doing no work. Clearly from your statements you do not agree, and just as clearly, if you are consistent in your thinking, you consider that folk who join the gym and then do not exercise are well within the rights to blame the gym for their lack of improved fitness or weight loss.

I guess we'll just have to agree to disagree on that.

[The Atheist]

Average is worse than useless in such circumstances.

Especially when it completes negates your case'

;)

Face it; the majority of participants do not treat Amway seriously. Do I keep having to quote statistics for you, or is hard data something you're allergic to?

No need for statistics, I'm happy that the majority of participants fail, which is your point - we just differ on why. You say it's because they don't treat it seriously, I say it's because MLM is bollocks.

And since you can't deal with the hard data that contradicts your world view, you choose instead to ignore it, you simply resort to emotional attacks and ad hominems.

Utter garbage. If you present some figures to support your case, I'll gladly look at them, but so far, you've brought nothing but irrelevant evidence.

And it's not her friends fault at all. She has absolutely no control over herself and just does what her master orders. Yes, MLM has indeed perfected unfailing human control :rolleyes:

What is the point of this paragraph?

Has anyone suggested MLM controls people? As far as I'm aware, nobody has mentioned any kind of brainwashing.

I have many customers. I make money from Amway. I have many friends. Most of my friends who were friends before I joined Amway, are still friends. I've never lost a single friend because of Amway, I've made many.

Congratulations.

I have said several times that it works for some people. You are clearly one of them - well done. I will repeat that the plural of anecdote is not evidence, though.

Mmmhhhmm .... you can't possible accept that perhaps not everyone operates the way you think they do. You have to accuse them of lying.

No. Only when they lie.

And the emotive attacks continue.

Emotive attack? Come on. I know you're new, but if a little criticism offends thee, harden up.

It can indeed be a passive income. And since it doesn't fit your worldview, I must obviously be lying about the fact I get "passive" income from my original Amway business. Still, I'm curious as to where you managed to get statistics about the success rates of Amway folk who actually put in 10-20hrs a week.

Jesus. When unable to refute a point, crying about it doesn't actually add much. I repeat [again] that I don't doubt your success, I'm talking about the 950,000 people who don't make money out of it - or at least make less money than they would for a similar time investment spent delivering circulars or equally tedious task.

Care to provide the statistics, since you obviously must know them to make such claims?

No statistics required - you gave the turnover, it's pretty simple to divide that by the number of reps.

Actually, I'll take your claim a little further but add a dose of reality. In 100% of circumstances, people would be far better off financially taking an extra job than joining Amway and doing nothing or very little.

Yay! The truth at last. Most people do very little because they are unable to accept that sucking in their friends and family to a pyramid game is bad for relationships - in most cases.

Pitiful growth? I don't recall showing any growth figures apart from talking about the UK market. Failure to adapt to changing business conditions and suffering lack of growth isn't exactly unique to MLMs. As it happens Amway globally grew substantially last year.

Gosh, this smacks of the smackdown I gave someone last week.

Your graph is by Amway, for Amway and estimations only. If you're going to present a graph of sales, audited actuals may be useful.

I could do a graph of estimates which show Amway's growth declining.

Tip: when using evidence, self-referencing doesn't work at all.

There's been hiccups, but again, what's uncommon about that in the world of business? I'd suggest there's very few 50yr old multinationals that haven't had hiccups in that time.

Ah, but how many 50-year old businesses have the staff turnover and pitiful return per person that Amway does.

Realistically, the $7B turnover sounds impressive to the uninitiated, but even in a tiny economy like New Zealand's a turnover of $7B is nothing special. For a global company with almost 1,000,000 agents, $7B is not only nothing special, but rather ordinary.

Who counted the consumer as a step in the distribution chain? I didn't.

scroll back and check - you sure did. Twice.

After you take that course in stastics, you may want to go study marketing and learn what "brand loyalty" means. It means repeat business.

Dear, oh dear. You've presented no statistics of any value and you've yet again swerved around the repeat business question.

How many new buyers return to Amway after the first purchase?

I've already provided independent evidence proving you wrong, in one case from Harvard Business Professors no less. Of course, it doesn't fit your worldview, so you dismiss it.

:dl:

You have provided nothing which refutes my allegations - everything you've presented has been either vague, estimates or irrelevant.

Try again.

"Harvard Business Professors no less!" Appeal to authority - nice touch.

A percentage of buyers that is enough to rank Amway products at or near the top of their categories for brand loyalty (ie repeat business). Again you chose to live in your bubble and ignore reality and hard, independent data.

Are you having difficulty reading?

I explained - as alluded to above - that I accept repeat business and explained why.

When are you going to be honest about repeat sales to first-time buyers?

An infinite hourly rate! Fantastic.

Wow. That's silly enough to belong to one of our longer term "woo" merchants.

You consistently refuse to answer this question because you know the answer shows Amway to be a joke.

Note that I'm after an average rate, not yours.

You're the one that insists in including them in the statistics. Do you judge the efficacy of treadmill exercise by including folk who say they'll get on the treadmill but never do?

Have you ever heard of a "non sequitur"?

It appears so as the above is a fairly good one.

Do you judge the average time for completing the London Marathon by including people who put in an entry but never race?

And another.

Do you judge the income of the hamburger business by mixing people who've done nothing more than decide they want to open a restaurant with folk who've been operating for 40 years and expanded to tens of thousands of outlets around the world?

And another.

Hell, you must have heard the term - you're pretty good at them.

These are the type of things you're wanting to do here, and it's patently absurd. Any rational person with a skerrick of knowledge in the area would refuse to answer such questions.

Non sequiturs usually are.

I haven't avoided any sensible question. I've pointed out and explained why the "hourly rate" question is not a sensible. I'd suggest you're coming across as far more of a "fundie christian" than I am - you're fixed in your beliefs and are completely unwilling to accept hard data that undermines those beliefs even when the data is from verifiable, reputable, independent sources.

Hint: bolding the irrelevant reasons why you don't wish to answer a question you know very well destroys your case doesn't help either.

I'm not here to recruit. You continue to be offensive. I've been nothing been honest in my posts. It appears you continue under the misguided apprehension that such returns are supposed to miraculously happen without effort. I'm under no such misapprehension.

Just another logical fallacy. Nowhere have I said that returns are supposed to happen without effort, in fact, I've belaboured the point that people can earn better money delivering newspapers, but you refuse to answer the question then create a strawman out of what I didn't say!

Yes, I do continue to be offensive - I'm offended by Amway people who will not tell the truth.

The statistics are clear -
(a) Very few people who join Amway make significant money. (source: Amway)
(b) The average incomes of the tens of thousands of people who have successfully created sales volume is significant (source: Amway)

The statistics are just as clear that -

(a) very few people who join expect to make significant income (source: FTC vs Amway)
(b) the majority of people who join MLMs do so not to make an income, but to take advantage of wholesale pricing (Source: FTC report on proposed Business Opportunity Rule)
(c) only 50% of Quixtar (Amway US) even order products after joining, obviously a prerequiste to being able to market and sell them (source: Quixtar vs Woodward)
(d) less than 10% of Amway UK IBOs retail products to non-IBOs, necessary to earn a profit from personal retailing (source: DTI vs Amway) (and indeed necessary in the rules to earn a profit from networking, as per below)
(e) less than 13% of Quixtar (Amway US) build a network, necessary to earn a profit from building an organisation (source: Quixtar vs Woodward)

I've bolded the relevant bits. 87% of people who join seem to show some brains.

We obviously have somewhat different ethical standards.

No doubt in my mind on that score.

I believe it's reasonable to expect people receive a reward for their work, and not reasonable to expect people receive a reward for doing no work.

Same strawman for about the 10th time.

Unless you can show where I have taken that opinion, you really ought to drop it - I have said consistently that effort = reward.

Clearly from your statements you do not agree, and just as clearly, if you are consistent in your thinking, you consider that folk who join the gym and then do not exercise are well within the rights to blame the gym for their lack of improved fitness or weight loss.

Is there a record for most non sequiturs in a post you're going for? I've never seen more myself.

[icerat]

I supplied statistics, you ignored them. Heck, in this post I supplied a graph of Amway sales data you challenged it as unreliable because the data used to produce it came from Amway (as it happens I did the graph, not Amway, the figures come from Amway's official public announcements), effectively accusing Amway, and it's numerous publicly listed subsidiaires of falsifying their records. This is a extremely serious accusation. I explained clearly why "hourly rate" is not a sensible question and even if it was, "average" is a meaningless statistic due to the nature of the data. I even provided statistics and sources showing the data is not suitable for calculating averages. Despite this you persist in asking the meaningless question.

As for a non sequitur, I know very well what it is, I'm wondering if perhaps you do not.

You have clearly stated that you consider participation rate as irrelevant to judging the success of Amway.

If you are consistent in this line of reasoning in judging other pursuits, then the other statements I made do in fact follow.

Analysis of the success of Amway should not consider whether people actually undertook the Amway business, only if they signed a form allowing them to do so.

Analysis of the success of weight loss programs should not consider whether people actually undertook the weight loss program, only if they signed a form joining the program.

Analysis of the success of a drug trials should not consider whether people actually took the drug, only if they signed a form joining the trial.

Your position is that "compliance" or "participation" is irrelevant in judging the success of a program. The other statements follow logically from that position.

Honestly I don't believe you believe the latter statements. What I believe is you do not think rationally when it comes to MLM and Amway. Your constant referral to it as a "pyramid game" is clear evidence of that. Since you enjoy latin, I'm sure you understand what sine qua non is? Go look up what US law, and virtually every other law, states as the sine qua non of a pyramid. I haven't finished the article yet, but you can read MYTH: Amway is a Pyramid (http://www.amwaywiki.com/index.php?title=MYTH:_Amway_is_a_Pyramid) and perhaps correct your false understanding of what Pyramids are.

[icerat]

NewtonTrino,
Earlier you said the following about Dexter Yager -

Another website (don't have a link handy) calculated how large a % of Amway's business he was from the size of the check and it was significant

This intrigued me so I went searching. I couldn't find the analysis, but I thought I'd have a look at if it could be done. The amquix site has photocopies of a numer of Yager checks. One is his 1995 North American Diamond Bonus, for $466,423.60. The Diamond bonus is 1/4 of 1% of the markets revenues, shared amongst Diamonds based on their percentage of the business.

1995 Global Amway revenues were $6.3 billion at estimated retail sales. Using the 2000 and 2001 data when Amway began reporting actual revenues rather than retail sales, we know the conversion factor (32% markup) and can establish that $6.3 billion represented $4.77 billion in actual global revenues. In an early '99 interview Doug DeVos stated that North America represented approximately 30% of the global business. Now, this is the only assumption we need, which is that this didn't change significantly from 1995 to 1998. 30% of $4.77billion is $1.43billion 1/4 of 1% of this, the Diamond Bonus pool, is $3,575,000. Yager's share was thus 13%.

Now, there is significant business outside of Diamonds. For just two examples, I have a personal friend who is Emerald with downline Rubies and Platinums who has no Diamonds between him and the corporation. Neil Maaskant, the original Nutrilite sponsor of Rich DeVos and Jay Van Andel (Ja-Ri), maintained his position as their sponsors when they began Amway. His business qualified at Emerald and has legs other than Ja-Ri. I'm sure there are others. This means Yagers actual share of the total Amway business must be less than 13%. Furthermore, our assumption earlier regarding North American sales is likely incorrect, it is almost certainly an *under* estimate, since Amway opened 13 overseas markets from 1995 to 1999, including the hugely successful Chinese market. This means that North America's share of 1995 sales would actually have been significantly higher than in 1999, making Yager's share of it considerably lower.

I think it's a reasonable assumption that this puts Dexter Yager's North American business in 1995 at less than 10% of Amway's total. A very large, significant, and successful business to be sure, but it also means >90% of Amway was outside of that.

[timhau]

Here in Finland, a MLM company called Wincapita (http://en.wikipedia.org/wiki/Wincapita) recently came under official investigation. They had been operating solely on-line, and once the company got wind of the investigation, their web pages disappeared overnight. They fleeced about 10,000 investors out of at least 69 million euros.

The truly depressing part of this was in the Sunday pages of our biggest daily: despite the criminal investigation, links to money laundering and the fact that all the high-ups in the company have disappeared, plenty of Wincapita investors still believe in the company and have faith that the crooks who vanished the money will soon come back and reward them with huge profits. Sorta like Jesus, but with cash.

[JonnyFive]

The reason that most businesses, including insurance (which is, by the way, notorious for its relatively high sales commissions) do not have large sales "lines" is because such a model doesn't support itself well. Because I don't expect you to simply believe me, let me expain my reasoning:

Assuming there is a finite market for any product (M), and a smaller finite amount of business available at a given time (m, assuming less than full market penetration), then this necessarily limits the number of distributors (d) that can be present in this market and still make c amount of commissions. Obviously, if we want to increase d and still make c, we necessarily need to increase our market share m. There are two concerns with increasing m that make this problematic:

1-m has an upper bound M that represents the total market that cannot be increased until new consumers enter the market. This process if also finite, so you cannot have an M without an upper bound.

2-The rate of change of m (let's call that m') will generally decrease as m approaches M. This concept is studied in economics, and practically speaking it is the result of the fact that many of the final consumers that comprise M are those least willing to buy your product. As a matter of practicality, not everyone is going to want what you're selling, and the easiest sales are likely to be made earlier than the harder ones. Additionally, the larger, more lucrative prospects comprising M will also likely be sold to earlier, leaving smaller and harder targets to push your m greater.

If we cannot increase m but we still increase d (by adding new distributors on the "downline"), then we naturally run into the problem of c decreasing. As there is a pass-through commission on volume from the downline, there is obviously an incentive to create a firm downline to provide the upline with residual income. I'm not sure exactly how Quixtar currently handles this, but it's not actually that important. The important point is that you are increasingly dividing up your relatively static m and c with each new layer of downline (the propagation in the traditional MLM model is a tree, essentially, with each node having its own downline nodes and single upline node). Thus, the people at each new level are fighting an increasing number of d for an increasingly smaller c of an increasingly smaller m. Remember that both m' and c' (rate of change of c) are going to tend to decrease over time, so m and c are not simply decreasing in a nice, neat linear fashion, their rate of decrease is actually getting bigger over time.

This is my issue with the viabilty of the MLM model in general, not just Amway/Quixtar. I think some of the things big Amway/Quixtar IBOs have done in the name of their business are despicable, but that is completely beside the point. From an ecomomic and mathematical standpoint, the MLM model is suboptimal at best (unsustainable at worst) without an infinitely large M, which does not exist.

Then there is the matter of Quixtar's published income statistics. According to Quixtar1 (http://www.quixtar.com/about/content.aspx?pid=9896&ctg=16305), the average monthly gross income for an active IBO is around $115. That is, before paying for the products they sold, they made $115. This implies that, on average, the IBOs end up in the red every month after paying for products and tools. This amount also does not include the IBOs who, as you said, don't do any business.

But you're right - statistics can be misleading. And no, I don't think we're dealing with an even distribution around the mean at all when it comes to income. No, given the number of Amway/Quixtar distributors, the mean active IBO income, the reported average higher-pin income, the percentage of higher pins, and the reported "largest incomes" on Quixtar's web site, it seems like we're dealing with a fairly large left tail on the distribution of the income data. Essentially, most of the active distributors are not making any substantial amount of money. See my post below for more on the statistics issues.

You may say that hourly rates mean nothing in business, but that's only true in terms of "I am growing my business and don't care about the hours because I will be rewarded later." In terms of analysis of sales and investment performance, it provides a very useful metric (for example, hourly rates are extremely enlightening when examining nontraditional investments like "house flipping") to determine whether or not you'd be better off, say, putting your money into another form of investment rather than putting it into your Amway/Quixtar business.

There are, of course, ways of calculating expected future return versus present cost and deciding if the loss of present income is worth the probable future returns. Similarly, there are ways of evaluating the value of your time and comparing it to what you could expect to yield, say, working at a traditional second job, or trying some other form of self-employment or business formation. As I explained above, I see Amway/Quixtar as one of the least efficient business models. Why not simply buy things yourself and sell them directly, doing all the legwork yourself?

In any case, I hope that makes my objections to the model itself more clear. I have tried to make this as generic as possible while trying to tie it back into the Amway/Quixtar issue. I think I have a fairly sound understanding of statistics, and the statistics underlying Amway/Quixtar (the ones on their web site, no less) do not lead me to believe they are a very good business opportunity on average. Can one make money in the MLM system? Sure, I don't see why not. You can also make money trading junk bonds.

But is it an optimal system, or the best one for most people, or even that good of an investment... no, I don't think the underlying analysis supports that idea at all. For the business-savvy, it seems like a more traditional business model would probably be more profitable, and for the unsophisticated (in the investment sense of the word) there are many better investment choices (seeing as the average active IBO would have a negative net income after system and product costs, I think you could probably do a bit better in bonds or mutual funds).

As a final aside, icerate, you mentioned something about 9-12% on your business. What do you mean by that, exactly? Do you mean you make a 9-12% return on your business investment in Amway/Quixtar?

[JonnyFive]

Now offence, but go take a basic course in statistics and learn that average is meaningless or indeed extremely misleading when used with non-normal distributions and non-homogenous populations. The level of work, training undertaken, and even goals set by Amway folk is as far from normally distributed or homogenous as you can reasonably get. Average is worse than useless in such circumstances.

Don't believe me, go do the course and learn it from someone else.

I don't think you should be making such snarky comments about other people's understanding of statistics. The average is misleading when taken by itself, but it is far from meaningless.

The amount of work, training, etc. probably is normally distributed, given the large size of the population. It seems that you're confusing the concept of a normally distributed variable with the idea of plotting one variable against another (the work/income or time/income plot probably would be skewed, but that's not the same as the concept of normal distribution on a variable) and examining the shape of the graph to see if it's skewed or not.

The homogeneity of the population is certainly something to consider, but there are ways to account for this as well. Some of it is taken care of by Quixtar themselves, who are nice enough to report the average gross income of only active IBOs, which at least cuts out some of the cruft.

In terms of work/time invested versus returns, you're drifting from one area to another. Looking at the income curve will tell us some things (like, for example, what percentage of active IBOs are making substantial income off of Amway), and looking at data on time/training versus income will tell us other things.

We could look for correllation between work/time and income, and see what kind of relationship is present. In particular, the time/income comparison would be highly useful, as one of your implications seems to be that more work means more income. While I don't doubt there is some relationship there, I believe the fundamental problems in the MLM model ensure that the correllation between time/work/skill/training and income in the MLM systems is less strong than in other business models.

Also, the shape of the time/income plot would tell us some very interesting things. If you have a sample of raw data, I would be happy to plot and interpret it.

I don't know how you would quantify "goals" and put that into the plot though. I expect the general goal is "to make money" and the amount of time and effort put into the way of making money is a pretty good indicator of how badly the person wants to make it.

But, in any case, you can't just run away with "the average is meaningless" because the average isn't meaningless at all - it's part of a larger analysis problem.

[Psiload]

At any given time you'll see dozens of Amway "tools" up for auction on ebay:

http://search.ebay.com/search/search.dll?sofocus=bs&sbrftog=1&dfsp=32&from=R40&satitle=amway+tapes&sacat=-1%26catref%3DC6&sargn=-1%26saslc%3D2&sadis=200&fpos=ZIP%2FPostal&sabfmts=1&saobfmts=insif&ftrt=1&ftrv=1&saprclo=&saprchi=&fsop=32%26fsoo%3D2&fgtp=

There's probably a sad story behind every one of them. People trying to recoup pennies on the big dollars they wasted.

Amway tried to pressure ebay into shutting down the sale of their "tools", citing "copyright issues". Ebay complied for awhile, but there are just too many people out there desperate to salvage whatever few crumbs they can get out of their Amway nightmares, and ebay finally gave up and just let the auctions continue.

[icerat]

Here in Finland, a MLM company called Wincapita (http://en.wikipedia.org/wiki/Wincapita) recently came under official investigation. They had been operating solely on-line, and once the company got wind of the investigation, their web pages disappeared overnight. They fleeced about 10,000 investors out of at least 69 million euros.

TimHau - this is a classic example of what I was talking about earlier - pyramid scams are calling themselves MLM and destroying the reputation of legitimate MLMs. From what I can find online Wincapita was NOT an MLM. It appears to have been a classic pyramid or ponzi scheme. Warning sign 1 - a very large non-refundable investment. In legitimate MLMs the joining. (BIF) Warning sign 2 - there's no product!

The very reason they claim to be MLM is because MLM *is* legitimate and legal. In my experience Scandinavian countries actually has had quite a problem with pyramid scams claiming to be MLMs over the years. If you can understand Swedish (which I believe many Finns can, a great explanation of the different is available here (http://www.direkthandeln.org/Upload/Docs/pdf/kapitel5.pdf)

[Spock Jenkins]

After reading some very long-winded posts regarding the positives and negatives about Amway – I figured I throw my own two cents in. I have been approached about Amway, but never signed up. I do live in an area that benefits greatly from the generosity of the founders and their families. I drive by the companies’ world headquarters almost daily. If they aren’t in the business of manufacturing and/or distributing products, I can’t imagine what the owners of all those cars parked in the lot every day do with their time. I can’t imagine what else they do with that ridiculously large facility that looks strangely like a combination office complex, warehouse, and factory. Go to the coordinates 42°57’ N; 85°29’W in Google Earth and check it out from the air. Head over to 32’W and you’ll see Quixstars’ facility. Lots of semi trailers and train cars for picking up and distributing product.

Seems to me the opponents on the board consider Amway a get rich quick scheme and are quick to point out that the vast majority of participants in fact do not get rich quick (or at all for that matter). If that’s the measuring stick, then they win.

However, as is being indicated by icerat, anyone who starts a business assuming that it will magically generate income for them without having to work really hard will fail.

There are a multitude of reasons why people do join Amway. One of them is to start a business and try to earn a living. More common, as pointed out, is to buy products at wholesale prices and save a trip to the store. If people are signing up for that reason, it would be unreasonable to expect that someone would buy much more than $1,000 worth of household products for personal use. It would also be unreasonable to factor in the results of these individuals and use that to say that Amway as a business model is a failure.

I don’t know if the statistics are available, but I would like to see a break out of those individuals who say that they are involved in Amway with the intent of establishing a successful business and have financial independence. Fact is many of these folks will fail as well. In fact, the failure rate will be far greater than franchises or Mom and Pop businesses. The reason? Amway has no up front filter to reduce the number of attempts. Anybody can sign up. High school dropouts’ with zero business acumen can sign up; there are no barriers to entry.

In franchises, the franchise themselves will have minimum financial and experience requirements for those who wish to establish a location. Once approved by the franchise, they then need to secure funding from a financial institution if they lack the upfront capital or simply don’t wish to risk their own capital. The franchise might say yes (look up the requirements – they sift out a lot of people up front), but the bank would say no. The business doesn’t fail because it doesn’t start. The Bank might say yes, but require some form of government guarantee (SBA in the U.S. is typical) and the government might say no. With no guarantee, the Bank changes their decision. No business starts, no business fails.

It’s even harder for a Mom and Pop to get a business loan to fund a start up from a Bank. At least the Bank has the franchise name, national advertising campaign, and up front scrutiny to fall back on. With a Mom and Pop – all the bank has to review is the credit worthiness of the business owner, experience, business plan, financial status, and comparisons to peer group. It’s not easy for folks to get funding to start a business. If it doesn’t start, it doesn’t fail. Of the ones that do successfully get started, only 44% are still operating after four years:

http://app1.sba.gov/faqs/faqindex.cfm?areaID=24

Many other individuals attempt to start home-based businesses, but don’t really work hard at it and they make no legal provisions for the establishment of a legal entity. These businesses never existed as far as statisticians are concerned, but Amway has to include them as failures because they signed up or worse, include their ongoing lack of financial results because they never officially discontinued their affiliation and may buy a bottle of dish soap once in a while.

[NewtonTrino]

icerat:
I think it's a reasonable assumption that this puts Dexter Yager's North American business in 1995 at less than 10% of Amway's total. A very large, significant, and successful business to be sure, but it also means >90% of Amway was outside of that.

Ok, so you've just proven yourself wrong. If he's 10% (and I think he's higher because I think the revenues are overestimated but that's another issue) then there aren't "hundreds" like him. You can qualify as a crown ambassador with a much smaller organization than Dexter's. You said there were many others like him didn't you?

Anyway, here's my challenge to you. You are one of the ones that actually make money , right? TELL US HOW MUCH! How many years did you spend building the business? How much expense did you incur? What is your residual income? Is it going up or down? You can claim you are the exception because you worked it, so what are your numbers?

Put up or shut up. You can't deflect this to someone else because I've never seen a big pin willing to open up about their business profitability (again the jig would be up about the tool money).



People on here are giving Icerat WAY WAY too much credit for "his" success. I doubt he makes as much as a crappy job as far as profit goes and probably less than minimum wage. What's your pin level?

[Spock Jenkins]

Bottom line for me on the MLM's is that they eliminate barriers to entry. In fact they strongly encourage entry. The old marketing technique of throwing enough stuff at a wall and some of it is bound to stick.

Other business face much larger barriers to entry. If you can get past all those barriers to entry, than your odds of success are much greater. However, even with all those barriers, only 44% of start ups in the U.S. are still in operation after four years (see post above for reference).

[NewtonTrino]

Spock,

Quite frankly the corp itself seems fine so I don't necessarily disagree with you on a lot of stuff. The only crime they committed is letting the scam go on so long, they do make legit if not overpriced products and I'm sure they're good for the Grand Rapids area. However, when you join Amway you are also going whatever line of sponsorship you get into. This is where the problems are, not at the corp level (at least for the most part).

Basically the Amway Sales and Marketing Plan is the legal pyramid that let's the illegal super profitable pyramid hide within it. It's kind of a symbiotic relationship. The corp gets paid a premium on it's products and the kingpins of the motivational organizations have a way to look legit.

[Jekyll]

Now offence, but go take a basic course in statistics and learn that average is meaningless or indeed extremely misleading when used with non-normal distributions and non-homogenous populations.
The main complaint with use of the mean in situations like this, where your profit margin is bounded below but not above, is that it gives a disproportionate weight to those who do really well, skewing the average return upward.

So, The Atheist's figures were only misleading in the sense that the vast majority of people will see nothing like AUS$2k a year.

[icerat]

I don't think you should be making such snarky comments about other people's understanding of statistics. The average is misleading when taken by itself, but it is far from meaningless.

I disagree, given a population of this nature it absolutely meaningless.

The amount of work, training, etc. probably is normally distributed, given the large size of the population.

No, it's *extremely* skewed. I spent years as a university employed statistician, so I'm not a neophyte in this area.

The homogeneity of the population is certainly something to consider, but there are ways to account for this as well. Some of it is taken care of by Quixtar themselves, who are nice enough to report the average gross income of only active IBOs, which at least cuts out some of the cruft.

Unfortunately the "active" definition Quixtar uses is driven by legal considerations, not statistical ones. You are considered in "active" in this data simply by attending one meeting in a year, or simply *asking* somone, once in a year, if they wanted to buy a product. While more homogenous than the earlier population, this one is still extremely skewed. About the only useful data Quixtar provides with regards "averages" is average income per "achievement level", and even that isn't much help as there's no indication of the size of the population.

In terms of work/time invested versus returns, you're drifting from one area to another. Looking at the income curve will tell us some things (like, for example, what percentage of active IBOs are making substantial income off of Amway), and looking at data on time/training versus income will tell us other things.

Yes it would, unfortunately little data of this type exists in any useful form. Any data also needs to account for the lifetime of the business involved (how long they've ben involved), which tends to be a crucial factor in determining profits in any startup-type businesses.

There is increasing interest in the academic world with regards this business model and there are moves to set up a Center for Network Marketing attached to a US university, so hopefully decent independent research is going to more forthcoming. The Direct Selling Association has commission numerous surveys, some of which are available on http://www.dsa.org. I belive more than 90% of direct selling companies today use some kind of multi-level compensation plan.

We could look for correllation between work/time and income, and see what kind of relationship is present. In particular, the time/income comparison would be highly useful, as one of your implications seems to be that more work means more income. While I don't doubt there is some relationship there, I believe the fundamental problems in the MLM model ensure that the correllation between time/work/skill/training and income in the MLM systems is less strong than in other business models.

I would disagree. While having no hard data I've seen an exercise done numerous times where all attendees at a major seminar (5000+ attendees) were asked to stand if they had done the recommended work the previous month. At an estimate less than a third stood up. They were asked to remain standing if they'd done it consistently, for each of the last 6 months. Most sat down. The remainder were asked on stage, and each was asked their "level" in the business, which roughly correlates to income. Every time I've seen this done (with different groups) much the same result has occurred -

(a) the number of attendees (by itself a self-selecting sample of more active participants) who had done the recommended work for at least 6 months was no more than 5% of the total number of attendees.

(b) every single one (or close two it, perhaps 1 or 2 exceptions) of those who HAD done the work was at least a level which has a min average US$ income of around $47,000/yr.

While there's obvious weaknesses in the methodology, it gives a pretty big hint about the major issue with MLM - very few people actually do the recommended work.

IMO there's quite sensible psychological reasons for this, but it's for another discussion.

Also, the shape of the time/income plot would tell us some very interesting things. If you have a sample of raw data, I would be happy to plot and interpret it.

If I had the data I'd plot it myself! I've been in discussions with a major Amway organization to try and start collecting this type of data. I believe it's one of the next major steps in the professionalising of the industry.

I don't know how you would quantify "goals" and put that into the plot though. I expect the general goal is "to make money" and the amount of time and effort put into the way of making money is a pretty good indicator of how badly the person wants to make it.

Actually that's not necessarily true. Research indicates that "money" itself is a very poor motivator. This is one reason why MLM groups tend to focus on "the dream" which is a little more personal. In any case I'd agree there's likely some kind of correlation between goal and time put in, but I think it would be better to separate people with different expressed goals. Those whose aim is to make $100/mth would have significantly different businesses than those whose aim is to make $10000/mth, not just in time put in, but even in basic business strategies.

But, in any case, you can't just run away with "the average is meaningless" because the average isn't meaningless at all - it's part of a larger analysis problem.

When you have such extremely skewed heterogenous data it's worse than meaningless, it can be extremely misleading.

I'll have a look at your earlier post in a while.

[NewtonTrino]

Ah, the old, they aren't working hard enough excuse. HAHAHAHA. The work consists of buying as many books and tapes and attending as many functions as you can so the brainwashing can continue. And of course recruiting as many of your friends and family as possible to do the same. It's a suckers game and frankly Icerat you sound like one of the suckers to me. Care to prove us wrong by showing us how much you've made?

[icerat]

icerat:Ok, so you've just proven yourself wrong. If he's 10% (and I think he's higher because I think the revenues are overestimated but that's another issue) then there aren't "hundreds" like him.

The revenues, and Yagers check, was for Amway North America only, Yagers main market. The "hundreds" of Crown Ambassadors was for Amway globally. His global marketshare is likely to be significantly less as the major european (Müller-Meerkatz,Schwartz, Network 21) are not associated with him, nor are the major asian groups (Heckel, Crador, majority of TOP4).

Anyway, here's my challenge to you. You are one of the ones that actually make money , right? TELL US HOW MUCH! How many years did you spend building the business? How much expense did you incur? What is your residual income? Is it going up or down? You can claim you are the exception because you worked it, so what are your numbers?

And this is red herring. My success or otherwise has little bearing on the overall success of the Amway business, unless you believe that nobody is successful. Given you're aware of Dexter Yager then you already know it is possible to be successful. I made the decision years ago after providing my actual data to "critics" and being accused of lying that I'm simply not taking the bait again. Deal with it. My business is essentially irrelevant. I'd prefer to be considered a researcher with academic interest and deal with the larger picture rather than any individual business.

People on here are giving Icerat WAY WAY too much credit for "his" success.

Well they shouldn't. Apart from being one example it's possible, it's pretty irrelvant in the big picture. There are plenty of much better examples and much more successful businesses than me.

[icerat]

The main complaint with use of the mean in situations like this, where your profit margin is bounded below but not above, is that it gives a disproportionate weight to those who do really well, skewing the average return upward.

So, The Atheist's figures were only misleading in the sense that the vast majority of people will see nothing like AUS$2k a year.

They're misleading because you're discussing the average income of people who neither expected nor "deserved" (poor choice of words but can't think of another right now) to generate at income. They shouldn't be considered in the analysis in the first place.

Unfortunately we simply don't have the data to be able to do a meaningful analysis. I'm working on it trying to get it, but don't hold your breath.

[icerat]

Amway tried to pressure ebay into shutting down the sale of their "tools", citing "copyright issues". Ebay complied for awhile, but there are just too many people out there desperate to salvage whatever few crumbs they can get out of their Amway nightmares, and ebay finally gave up and just let the auctions continue.

This claim is complete rubbish. None of those tools are even produced by Amway, they're produced by independent 3rd-party companies. Amway owns no copyright on them and has certainly has not tried to stop their sale on eBay. Utter BS.

[JonnyFive]

I wouldn't compare the MLM model to the franchise model at all. You're really signing up as a reseller for the Anway line of products - another middleman in a fairly lengthy string of middlemen.

Also, the distributor prices for the Amway products seem to be greater than the bulk retail prices for comparable brands at, say, Wal Mart or BJ's, let alone the wholesale prices. This is logical and straight-forward - Amway carries a considerably heavier weight in terms of the distribution chain, and the products they sell are by no means unique (and are thus sold in a highly competitive environment without any real price protection).

In any case, the Amway that produces and distributes their products has little to do with the MLM aspect of the business, other than that they are providing the product for sale (at the cost of the distributors, of course).

My primary criticism of the MLM model in general is that it is a highly suboptimal model in which the vast majority of the participants appear to make next to nothing (quite likely end up spending more than they make on the MLM after costs). Still, the MLM's like Amway sell themselves as excellent business opportunities.

I don't believe the statistics (or underlying financial and economic analysis) lend any credibility to this whatsoever. Becoming an Amway/Quixtar distributor is a very hard, rough road that causes many of their IBOs never to realize any profit. It is burdened by an excessively cumbersome and outdated "upline/downline" model that adds layers, cost, and complexity to the business.

[NewtonTrino]

Here is a really nice summary from amquix.info (http://amquix.info/amway.html) that really gives the basic idea. Note the quote from a DIAMOND in this.


The business has strayed far afield from the original intentions of its founders as being a way for the little guy to make a little extra money by retailing products. Instead, it has turned into a symbiotic relationship between the corporation and a few king pin distributors supporting each others interests to take the little guy's money with cult tactic training materials and overpriced products.

The relationship between the corporation and its top king pin distributors is unique. The Corporation could not survive without the misinformation and false income claims spread by the kingpin's systems introducing people to Amway/Quixtar products business. At the same time, the king pin's motivation businesses could not survive without the legitimacy, political and legal support provided by the billion dollar Alticor/Quixtar/Amway Corporations.

"I was taught and therefore taught that the system was put in place to assist people in building their "Amway" business. This is as far from the truth today as you can get as when you are making 80% of your income off of the system, it is totally reversed, Amway is in place so people can sell their system!" Don Lorencz: Former Diamond Direct Distributor
Other Lorencz Quotes

Distributors advertise a jackpot payoff of time and financial independence just by building communities of Quixtar consumers. However, the financially independent multi-millionaires are really the kingpin distributors bilking their downline with high pressure sales techniques for their tape and seminar systems. These systems are technically illegal pyramid schemes since they sell most of their products within their own groups who hope to one day make money from these materials as well.

The tapes and seminars, otherwise know as "tools", brainwash distributors as to why the tapes and seminars are so "valuable", and why a distributor's success hinges on continuing to consume them. You should also get your downlines to consume them so that your success is further assured.

[Psiload]

This claim is complete rubbish. None of those tools are even produced by Amway, they're produced by independent 3rd-party companies. Amway owns no copyright on them and has certainly has not tried to stop their sale on eBay. Utter BS.

Ha... you walked right into my trap.

Do tell... how do these "tools" work? Who are these "third party companies" who run the "tools" rackets? What is Amway's position on "the tools"... are they for or against? How does Amway feel about the huge income being generated through tools/seminars in their name, while they reap none of this income?

[JonnyFive]

I disagree, given a population of this nature it absolutely meaningless.

Since we don't have the data to plot, how are we going to estimate the shape of the distribution again?

No, it's *extremely* skewed. I spent years as a university employed statistician, so I'm not a neophyte in this area.

Why would you expect the variable of time to be non-normally distributed? You say you were a professional statistician, so you must have an excellent reason for this. Personally, I can't think of one. I would think the time investment would tend to cluster more-or-less near the mean (in a roughly normal fashion), with those spending dramatically more or less time as outliers.

Mind, we're talking the probability distribution of time only, not the the distribution of income. Income seems to be the thing that will introduce the skew (AQ's stats appear to indicate a positive skew would be a distinct possibility, as the top earners are well above the averages for the level of achievement, and those are well above the active average, indicating a pull of the mean to the right by a relatively small number of disproportionately high values).

Unfortunately the "active" definition Quixtar uses is driven by legal considerations, not statistical ones. You are considered in "active" in this data simply by attending one meeting in a year, or simply *asking* somone, once in a year, if they wanted to buy a product. While more homogenous than the earlier population, this one is still extremely skewed. About the only useful data Quixtar provides with regards "averages" is average income per "achievement level", and even that isn't much help as there's no indication of the size of the population.

So it omits people who are simply buying the products for their own uses and never trying to sell them or recruit anyone? Actually, that's the basic exclusion I was hoping for, and really all I expected.

Yes it would, unfortunately little data of this type exists in any useful form. Any data also needs to account for the lifetime of the business involved (how long they've ben involved), which tends to be a crucial factor in determining profits in any startup-type businesses.

Sure, that would be useful to have. It's too bad that Amway/Quixtar doesn't provide that kind of very useful information to its prospective IBOs. Is it generally the case that investments and business opportunities conceal data on the financial performance of the people investing in those opportunities?

There is increasing interest in the academic world with regards this business model and there are moves to set up a Center for Network Marketing attached to a US university, so hopefully decent independent research is going to more forthcoming. The Direct Selling Association has commission numerous surveys, some of which are available on http://www.dsa.org. I belive more than 90% of direct selling companies today use some kind of multi-level compensation plan.

Yes, I'm sure many direct selling companies use "some kind" of multi-level compensation. However, the degree is incredibly important here. What does Amway/Quixtar do to limit the complexity of the downline and prevent excessive numbers of IBOs from trying to operate in the same sales territory? From what I've read, they don't seem to do very much.

All of that carries weight in terms of end costs for the consumer and sustainability in the market.

I would disagree. While having no hard data I've seen an exercise done numerous times where all attendees at a major seminar (5000+ attendees) were asked to stand if they had done the recommended work the previous month. At an estimate less than a third stood up. They were asked to remain standing if they'd done it consistently, for each of the last 6 months. Most sat down. The remainder were asked on stage, and each was asked their "level" in the business, which roughly correlates to income. Every time I've seen this done (with different groups) much the same result has occurred -

(a) the number of attendees (by itself a self-selecting sample of more active participants) who had done the recommended work for at least 6 months was no more than 5% of the total number of attendees.

(b) every single one (or close two it, perhaps 1 or 2 exceptions) of those who HAD done the work was at least a level which has a min average US$ income of around $47,000/yr.

While there's obvious weaknesses in the methodology, it gives a pretty big hint about the major issue with MLM - very few people actually do the recommended work.

You have just made a number of highly specific claims without any hard evidence to back them up, and lacking a number of appropriate details. Do you have anything better than anecdotal evidence from a seminar?

By the way, is that $47,000+/yr gross or net? If it's gross, what were the costs involved and what was the net profit? I'm guessing that wasn't discussed, but I'd like the details if it was.

And again, this underscores my point: I believe the MLM model is highly suboptimal. It requires more work and investment to gain similar income to a non-MLM model. I'd rather not play the anecdote game, in any case.

If I had the data I'd plot it myself! I've been in discussions with a major Amway organization to try and start collecting this type of data. I believe it's one of the next major steps in the professionalising of the industry.

Yes, it would be. Unfortunately, given the nature of the MLM model Amway appears to be using, I think that the raw data might not paint the glowing picture they might like.

Actually that's not necessarily true. Research indicates that "money" itself is a very poor motivator. This is one reason why MLM groups tend to focus on "the dream" which is a little more personal.

That's pretty vague. So what are these people starting up distributorships for if not "money" or "the dream" or financial independence (i.e. "money"). You can phrase it in whatever flowery way makes you feel best, but it ultimately boils down to making enough money to retire, support your family, do what you like when you like, get nicer things, etc.

I don't buy that whole "great direct prices" line. There are far easier ways to get comparable (or better) prices on comparable goods. You know... like going to BJ's and buying the stuff yourself for far less than Amway offers it.

In any case I'd agree there's likely some kind of correlation between goal and time put in, but I think it would be better to separate people with different expressed goals. Those whose aim is to make $100/mth would have significantly different businesses than those whose aim is to make $10000/mth, not just in time put in, but even in basic business strategies.

Now you're talking income targets, which is a lot easier to quantify. Out of curiosity, are you talking gross or net with your numbers, because $100/month gross through AQ seems like it would be a net loss.

When you have such extremely skewed heterogenous data it's worse than meaningless, it can be extremely misleading.

Unless you have a decent set of data to plot, you're using that average to determine that the data is skewed in the first place, so what you're saying here makes absolutely no sense.

I'll have a look at your earlier post in a while.

Go ahead. Bear in mind that it is far more generally talking about the extended MLM model rather than talking specifically about AQ. Obviously it's a simplified model, and I tried to be as general as possible.

[Dragoonster]

So, what are the current contentions?

That MLMs are suboptimal vs. other businesses that rely on direct sales?

Or that the MLM model is unethical? Or should be illegal?

Or that all MLMs are scams or pyramid schemes? Or only if those attempting them have false expectations, or don't sell a product?

Or that Amway in particular is any of these?

From reading the whole thread things to be at a stalemate on most of these, and the only thing I see approaching unethical about MLMs is their not granting location exclusivity for their salespeople. Otherwise I really don't see much difference between them and say, newspapers that employee paper carriers; or then carrier businesses that subcontract to other carriers.

[NewtonTrino]

1) That Amway itself is a legit but crappy way to make a buck.

2) That the "Amway" that most people know is in fact the motivational organizations built on top of the Amway pyramid. These organizations are systematically fraudulent and use brainwashing and other cult techniques to suck money out of you.

Go take a look at amquix.info for much more in-depth analysis.

I don't have specific information about other pyramid schemes but I have to see one that looks like a good idea.

[NewtonTrino]

Oh, and I'm disappointed that you think it's a stalemate as others are claiming that there is good money to be made WITHOUT ANY PROOF.

Notice that Icerat has continually ignored me asking him how much he's making from his business? Put up or shut up Icerat!

[jimbob]

As a bystander and mostly lurker in this thread

is there a simple explaination why all MLMs are not pyramid schemes?

I am willing to be persuaded, but I just can't see from what little I understand about the business models.

If most of the customers are also going to be sellers then surely it works as a pyramid scheme even if it somehow misses the legal definition of one.

[NewtonTrino]

The simple explanation is that the ONLY reason they are legal is the retail customer aspect. There were specific rules put in place by the FTC about how many retail customers you must have to be legit. Unfortunately the Amway owners are currently protected politically so the rules are not being enforced (one of them ran for republican governor of Michigan and they are decent sized politcal donors).

[dudalb]

The simple explanation is that the ONLY reason they are legal is the retail customer aspect. There were specific rules put in place by the FTC about how many retail customers you must have to be legit. Unfortunately the Amway owners are currently protected politically so the rules are not being enforced (one of them ran for republican governor of Michigan and they are decent sized politcal donors).

Correct. MLM are not legally pyramid schemes becuase technically they are selling a product, but they are a very,very,poor opportunity.
Even if icerat is telling the truth,he is in the position of someone who got lucky in the lottery and is now saying that buying lottery tickets is a good way to earn a living.

[NewtonTrino]

Trust me, he won't come through with any income statements. Unless he is a MAJOR pin he's not making any substantial amount of money. More than likely he's overall lost money although he could be making a few hundred a month in residuals if he built up a decent size organization. Overall though I doubt he's actually made a penny. I've seen it OVER AND OVER AND OVER again... They don't call it Scamway for nothing people.

[icerat]

I wouldn't compare the MLM model to the franchise model at all. You're really signing up as a reseller for the Anway line of products - another middleman in a fairly lengthy string of middlemen.

Except this is a myth, as I outlined before with hard data from the FTCs investigation into Amway. There is not a "fairly lengthy string of middleman". 70% of registered distributors, most of whom are primarily consumers, not business owners, are within 3 levels of the manufacturer.

Also, the distributor prices for the Amway products seem to be greater than the bulk retail prices for comparable brands at, say, Wal Mart or BJ's, let alone the wholesale prices.

Again, simply not true (though I'm unfamiliar with BJ's). Amway's major product lines are Nutrilite, Artistry, and eSpring, comprising 80-90% of total revenues. Comparable products, as defined by independent agencies such as EuroMonitor, are simply not available at WalMart. For example, Euromonitor categorised Artistry cosmetics as a "prestige brand", and one of the top 4 or 5 best sellers in this category. The competition being Lancome, L'Oreal and such. These brands are not typically available at WalMart and typically cost *more* than the equivalent Artistry products.

My primary criticism of the MLM model in general is that it is a highly suboptimal model in which the vast majority of the participants appear to make next to nothing (quite likely end up spending more than they make on the MLM after costs). Still, the MLM's like Amway sell themselves as excellent business opportunities.

And my criticism of such criticism is that you tend to define "participants" so broadly as to include people who by any sensible measure are not "participating". The great majority of people who register for MLMs are not participants in the business opportunity, they are simply retail customers taking advantage of wholesale pricing. This was clearly established indenpendently by the FTCs recent report into its proposed business opportunity rule.

I don't believe the statistics (or underlying financial and economic analysis) lend any credibility to this whatsoever.

The available statistics are actually not much good for deciding credibility either way. A major problem is that decent statistics which would actually tell us something "real" are extremely thin on the ground. As I mentioned I'm attempting to address that issue, as are others, but it will likely take some years.

Becoming an Amway/Quixtar distributor is a very hard, rough road that causes many of their IBOs never to realize any profit.

Sure, as is the case with starting and developing virtually any business. The key advantage of NWM is the relatively low cost of entry, which is usually refundable, and thus relatively low finanical risk. There is of course a risk of time, which is a little harder to get back. NWM isn't for everyone, neither is starting traditional businesses. Neither is being an employee for that matter.

[icerat]

The simple explanation is that the ONLY reason they are legal is the retail customer aspect. There were specific rules put in place by the FTC about how many retail customers you must have to be legit.

This is false. Amway had rules in place regarding this issue *before* the FTC investigation and there are no such rules regarding numbers of retail customers. The benefit of having retail customers is it proves you have a legitimate product.

Unfortunately the Amway owners are currently protected politically so the rules are not being enforced (one of them ran for republican governor of Michigan and they are decent sized politcal donors).

Uhuh. And they've been protected politically throughout all the Democrat administrations and the various different political groups in power throughout 50+ countries for nearly 50 years.

Must be The Illuminati :eek:

Time for a tin foil hat dude.:cool:

[The Atheist]

Wow, this thread's grown some legs in the last couple of days!

I supplied statistics, you ignored them.

No, I explained why they were irrelevant.

Heck, in this post I supplied a graph of Amway sales data you challenged it as unreliable because the data used to produce it came from Amway (as it happens I did the graph, not Amway, the figures come from Amway's official public announcements), effectively accusing Amway, and it's numerous publicly listed subsidiaires of falsifying their records. This is a extremely serious accusation.

Utter rubbish again.

If the figures are so reliable, why are sales figures almost 10 years old only estimates?

I explained clearly why "hourly rate" is not a sensible question and even if it was, "average" is a meaningless statistic due to the nature of the data. I even provided statistics and sources showing the data is not suitable for calculating averages. Despite this you persist in asking the meaningless question.

Funny how those questions which show Amway as it truly is become meaningless questions, eh?

You have clearly stated that you consider participation rate as irrelevant to judging the success of Amway.

That's simply a lie.

You continue to produce no evidence beyond that which supports your case.

I'm over it and quite happy for your refusals to stand as evidence for the real picture.

[Dragoonster]

Oh, and I'm disappointed that you think it's a stalemate as others are claiming that there is good money to be made WITHOUT ANY PROOF.

Notice that Icerat has continually ignored me asking him how much he's making from his business? Put up or shut up Icerat!

He didn't ignore you, he said he went through a similar demand on another forum a while back and when he went through the trouble of providing the numbers they simply called them fabricated. Maybe he's lying. But the tenor of those in this thread seem to suggest they'd also simply dismiss them as fabricated.

Or as I would, a mere anecdote that disproves a claim that hardly seems substantial in the first place. As far as I know Amway doesn't require a seller to buy any corporate crap or attend any meetings, a person's income is more determined by how gullible they are in buying this stuff, plus the pyramid-like incremental lowering of the net profit per unit going down the chain.

Otherwise, an easy answer would be to define what "good money" is, then provide a net profit per unit of product, then multiple that by sales per hour. Could multiple that by the standard 2080 hours per year of a full-time job. The variable would be how many units the salesperson sells per hour. At some point this will push the final result to over "good money". If it seems an unreasonable number of sales per hour for even an excellent seller, then the average and likelihood of "good money" is quite low. But that doesn't disprove that some very gifted and networked person could achieve "good money" solely through selling product, not through downlining at all.

Then one could compare that result to another business dependent on sales. My hunch is the other business would earn far more, which if true would certainly mean Amway without the cult/pyramid aspect is a poor model for a full-time job. After that, the variable would be hours/year, perhaps it actually does make sense for some people to do; just as it makes sense for little kids to earn a pittance on paper routes due to their capabilities and desires.

As far as I know this hasn't been done and while I'm interested in the thread, I'm not interested enough in this particular question to research. Was just dropping in and getting some clarifications in order to further understand the focuses of the current argument.

[NewtonTrino]

This is false. Amway had rules in place regarding this issue *before* the FTC investigation and there are no such rules regarding numbers of retail customers. The benefit of having retail customers is it proves you have a legitimate product.

Uhuh. And they've been protected politically throughout all the Democrat administrations and the various different political groups in power throughout 50+ countries for nearly 50 years.

Must be The Illuminati :eek:

Time for a tin foil hat dude.:cool:

Bottom line, the FTC got involved and having retail customers is needed to be legit. Amway had a rule that you needed 10 retail customers to get a performance bonus. This rules has been unenforced lately from what I can tell partly because the FTC doesn't really seem to care about these scams at the moment.

No tinfoil hat needed btw. Then again I think that a good chunk of the world has been defrauded by religion, so this scam is small potatoes in comparison.

STILL WAITING FOR US TO TELL YOU ABOUT THE BIG MONEY YOU HAVE MADE. Not going to hold my breath though.

Also he claimed he put up in another forum, how about some links to that?

[icerat]

<snip technical explanation of market saturations>

This is all true and applies to all businesses. There is a theoretical finite limit to any product

If we cannot increase m but we still increase d (by adding new distributors on the "downline"), then we naturally run into the problem of c decreasing.

Yes, but this is unlikely to happen as virtually by definition if you are adding new distributors, the market is not saturated, because they themselves believe there is a market for the products - which in most cases includes them.

Furthermore, if those new distributors find the market is indeed saturated, then they will not be able to sell the products and they can get a full refund. If the situation was common then the company would go out of business. There is no evidence to suggest that the market for the types of products typically marketed through MLMs (health, beauty, telephony for example) are even remotely saturated.

As there is a pass-through commission on volume from the downline, there is obviously an incentive to create a firm downline to provide the upline with residual income. I'm not sure exactly how Quixtar currently handles this, but it's not actually that important. The important point is that you are increasingly dividing up your relatively static m and c with each new layer of downline (the propagation in the traditional MLM model is a tree, essentially, with each node having its own downline nodes and single upline node). Thus, the people at each new level are fighting an increasing number of d for an increasingly smaller c of an increasingly smaller m. Remember that both m' and c' (rate of change of c) are going to tend to decrease over time, so m and c are not simply decreasing in a nice, neat linear fashion, their rate of decrease is actually getting bigger over time.

Except you've neglected the fact there is an inbuilt limiter to the number of "levels". In Amway for example, once a "branch" of the tree reaches around $20,000/mth in sales volume, the MLM part of the compensation plan no longer applies. As mentioned, the FTC found in FTC vs Amway that >70% of reps were within 4 levels of Amway, and 99% within 7 levels - not significantly different from traditional business.

This is a common misconception that the commissions are divided "ad infinitum". If they were, it would clearly be a problem as you outline.

This is my issue with the viabilty of the MLM model in general, not just Amway/Quixtar. I think some of the things big Amway/Quixtar IBOs have done in the name of their business are despicable, but that is completely beside the point. From an ecomomic and mathematical standpoint, the MLM model is suboptimal at best (unsustainable at worst) without an infinitely large M, which does not exist.

I've found that the better the mathematician, the more likely they are to have this misconception. :) Your forgetting the inbuilt limits!

Then there is the matter of Quixtar's published income statistics. According to Quixtar1 (http://www.quixtar.com/about/content.aspx?pid=9896&ctg=16305), the average monthly gross income for an active IBO is around $115. That is, before paying for the products they sold, they made $115. This implies that, on average, the IBOs end up in the red every month after paying for products and tools. This amount also does not include the IBOs who, as you said, don't do any business.

No, that *does* include people who don't do any business. Simply asking someone if they want to buy a product, once in a year, or attending one meeting in a year, is enough to get you included in the statistics. Indeed, even buying enough products in a month to earn a rebate on your own shopping will include you in the "active" category.

Essentially, most of the active distributors are not making any substantial amount of money.

That's absolutely true, for that definition of "active", which is clearly an absurd one for determining if it's functional as a business. My preferred definition is that the IRS or equivalent tax authorities would consider you to be running a business. The ATO in Australia has actually issued explicit guidelines for defining this in Australia.

There are, of course, ways of calculating expected future return versus present cost and deciding if the loss of present income is worth the probable future returns. Similarly, there are ways of evaluating the value of your time and comparing it to what you could expect to yield, say, working at a traditional second job, or trying some other form of self-employment or business formation.

Absolutely, and I have done so. For example, in North America the average time to "Diamond" (avg income $150,000/yr) is a little under 10 years. Now, if you stop working that income may decrease, or it may increase depending what others in the network do. There are people who have been dead for decades whose estates are still being paid by Amway.

But lets say it drop to $100,000/yr. In 10 years you have developed an asset that generates $100,000/yr income, linked to inflation (since its based on sales of products).

That's equivalent to say $1,000,000 with a 10% return, which is a pretty damn good return. How long would it take you save or build a million dollar asset with a 10% return? How many of those assets would be linked to inflation? How many of them would generate an income for many of those years while you were generating it.

This is not theory, people have done this. If you can suggest a better model for the average person, I'm interested to here it. A million dollar asset, indexed to inflation, in 10 years.

Now if we want to think in terms of "hourly rates", then lets do so. If the IBO worked an average 20hrs/wk over that 10 year period (likely less at the beginning and more when "on a goal"), then they've worked 10400hrs to develop that million dollar asset. In addition, if we assume a steady progression, a 33% tax rate, and ignore tax deductions and expenses, and other bonuses like free international holidays, there's an additional $500,000 of income over that 10 year period. Throw tax on the income equivalent necessary to do this through hourly earnings, and you've got a total income of $1830000 over that time frame.

That's a $176/hr "job" (on top of your normal income, at least for the first 3-5years) plus the resulting asset is linked to inflation.

Some people can most certainly do that or better, but it's certainly not common.

As I explained above, I see Amway/Quixtar as one of the least efficient business models. Why not simply buy things yourself and sell them directly, doing all the legwork yourself?

For the same reason a clothes store owner will employee additional sales stuff. The increased profit from increased volumes will (hopefully) offset the expenses of having the employee.

As a final aside, icerate, you mentioned something about 9-12% on your business. What do you mean by that, exactly? Do you mean you make a 9-12% return on your business investment in Amway/Quixtar?

No, it's essentially a measure of the volume discount obtained. It could mean anywhere from 0-12% profit margin on the sale of any particular product in the network.

[NewtonTrino]

Big long responses to other people that are softpeddling you but no response when asked to verify that you have actually made any money from this?

Do us a favor and go find someone in your upline who makes at least 100k per year as a diamond and have them show us a little about how their business works in terms of profitability.

I'm also interested in hearing from anyone with a residual business who is able to completely walk away that built their business in the last 10-15 years. These organizations tend to go away unless you constantly tend to them (the turnover of distributors is huge).

[icerat]

so, NewtonTrino, anecodotal evidence from one person is all you need to believe MLM is a legitimate business opportunity. Pull the other one, it's go bells on. When I've provided you with hard data from other sources you've simply accused me of lying, or in one case accused Amway of serious corporate fraud and falsifying their public records.

And you expect me to believe that you'd accept someone coming here claiming to be a Diamond as telling the truth? You don't even accept Amway as telling the truth.

[godofpie]

1st rule of business-Never underestimate the other guys greed.
2nd rule of business -Never get high on your own supply. (doesn't really apply here except for maybe huffing cleaning products.):rolleyes:
Amway does make good products. The problem is you can never find anyone to sell them to you. Why is that? Because Amwayians are more interested in trying to sign you up to be one of their distributors. Why is that? Because it is drummed into their brains that that is where the REAL money is. Amway could move a **** of a lot more product if they put them on store shelves, but the don't. Why is that? Because they are making a **** of a lot more money fleecing their drones than they could legitimately distributing it through retail channels.

[NewtonTrino]

I've never said that I believe AMWAY CORP is lying. Their numbers paint a crap picture of the business from the average perspective though.

Anyway if a Diamond showed up here it would be easy to verify if he was legit. There aren't exactly a lot of them. Either way THEY DON'T NEED TO because there are plenty of ex-Diamonds on the net who will tell the true story. The money comes from the tools, plain and simple. Anyone that disputes this is either brainwashed and hoping to make it big (like yourself) or a liar.

Again, I do believe you CAN make some sort of living, it's just a pittance compared to the work involved. The tools business leverage makes the whole thing actually insanely profitable to the big pins at the expense of the little guy.

Everyone stay FAR FAR away from these scams. I've seen, I've lived it and these guys are total scammers.

Again, I challenge you to tell us how much money you've personally made in the last 10 years in your business (and of course your real expenses including attending the many rallies you claim to have been to).

[icerat]

Bottom line, the FTC got involved and having retail customers is needed to be legit.

Completely false. Indeed the FTC has explicitly stated that (a) internal consumption of the products (ie sales to end users within the network) are legitimate retail sales and (b) the level of internal consumption vs the level of retailing to "outside" customers is not a determinate of whether something is an illegal pyramid.

What is needed is a legitimate product that actually has legitimate demand. Having significant external customers just provides fairly concrete evidence you have that.

[icerat]

JonnyFive,
Another thing about your "market saturation" analysis as it applies to MLM. It assumes that MLMs do not adapt and change to different market conditions. They do. Successful ones develop and market new products all the time. Amway is perhaps best known for it's cleaning products, but that market became extremely competitive when other manufacturers began offering concentrates. IMO the Amway cleaning products are still some of the best in the world, but it's a real tough market. If they'd stuck with them chances are they'd be long gone as a company. These days Amway's primarily in the Health and Beauty business. Who knows what products we'll be marketing in 20 years.

I learned recently that Nokia was primarily a rubber boot and car tire company years ago. Would they still be around or anywhere near as successful if that's where they'd stayed? Businesses that don't change and adapt to market conditions die, doesn't matter if they're MLM or not.

[NewtonTrino]

from http://www.ftc.gov/speeches/other/dvimf16.shtm

In In re Amway Corp.,(19) another landmark decision from the 1970's, the FTC distinguished an illegal pyramid from a legitimate multilevel marketing program. At the time, Amway manufactured and sold cleaning supplies and other household products. Under the Amway Plan, each distributor purchased household products at wholesale from the person who recruited or "sponsored" her. The top distributors purchased from Amway itself. A distributor earned money from retail sales by pocketing the difference between the wholesale price at which she purchased the product, and the retail price at which she sold it. She also received a monthly bonus based on the total amount of Amway products that she purchased for resale to both consumers and to her sponsored distributors.(20)

Since distributors were compensated both for selling products to consumers and to newly-recruited distributors, there was some question as to whether this was a legitimate multilevel marketing program or an illegal pyramid scheme. The Commission held that, although Amway had made false and misleading earnings claims when recruiting new distributors,(21) the company's sales plan was not an illegal pyramid scheme. Amway differed in several ways from pyramid schemes that the Commission had challenged. It did not charge an up-front "head hunting" or large investment fee from new recruits, nor did it promote "inventory loading" by requiring distributors to buy large volumes of nonreturnable inventory. Instead, Amway only required distributors to buy a relatively inexpensive sales kit. Moreover, Amway had three different policies to encourage distributors to actually sell the company's soaps, cleaners, and household products to real end users. First, Amway required distributors to buy back any unused and marketable products from their recruits upon request. Second, Amway required each distributor to sell at wholesale or retail at least 70 percent of its purchased inventory each month -- a policy known as the 70% rule. Finally, Amway required each sponsoring distributor to make at least one retail sale to each of 10 different customers each month, known as the 10 customer rule.(22)

The Commission found that these three policies prevented distributors from buying or forcing others to buy unneeded inventory just to earn bonuses. Thus, Amway did not fit the Koscot definition: Amway participants were not purchasing the right to earn profits unrelated to the sale of products to consumers "by recruiting other participants, who themselves are interested in recruitment fees rather than the sale of products."(23)



I would love to see a reference to your claim that downline sales are considered legit retail sales. I don't know that the quixtar model has been explicitly challenged by the ftc at this point so it may or may not be legal.

[icerat]

If the figures are so reliable, why are sales figures almost 10 years old only estimates?

Amway changed reporting standards several years ago. They used to report "estimated retail sales", which assumed Amway distributors sold products at estimated retail price. Amway has no control over what price distributors sell for, or if they just use the products themselves, so they can only provide "estimates".

When the formed the holding company Amway they changed to reporting actual revenues, a much better reflection of reality. For the purposes of comparison, in that graph I've converted each to the other using data from the FTC vs Amway case as well as Amways figures when they provided both.

[NewtonTrino]

Icerat, even if you won't tell us how much money you've made can you tell us some other things?

How many hours went into building your residual business originally?

Do you still work the business? If so how many hours?

What was your highest pin level?

How much money did you spend on "the system" per month when you were active?

How much do you spend on "the system" now?

[icerat]

I would love to see a reference to your claim that downline sales are considered legit retail sales. I don't know that the quixtar model has been explicitly challenged by the ftc at this point so it may or may not be legal.

March 15, 2007 edition of the Wall Street Journal -

“Deciding what a retail sale is can be tricky,” Peter Vander Nat, the FTC economist who co-wrote a 2002 paper on the subject, says it depends on intent.

“If people are buying because they want to use a company’s products, those sales can count as “retail.”

An extended analysis of the definition of a "retail sale" is here (http://www.thetruthaboutamway.com/index.php/content/view/3651/69/lang,en/)

Also, from 2004 official FTC staff advisory letter to the DSA (a link to a copy of the letter is at the site just provided) -

Much has been made of the personal, or internal, consumption issue in recent years. 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. The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.

[NewtonTrino]

Well I never claimed Amway was illegal per se anyway. I would argue that given the way most of the business is run by the upline that they don't meet the intent of this FTC paper though. People are told "use 100pv yourself and sponsor more to do the same". The tools system I think is a blatant violation of this rule as well.

Bottom line, if you run it like the founders intended it's not terribly lucrative. This is the whole reason the tools scam came into existence and who this fraud has gone on for so long. These scammers have hooked themselves up to a legit organization and hijacked it from the inside.

Please answer my questions with regards to the amount of work and money you have put into your business.

I also encourage others to read up more about this scam. There are a lot of resources on the net talking about the various horror stories (for example try to sell "your" business and see what kind of red tape you run into).

[sgf8]

Not very much clearly, given Amway doesn't sell much in the way of marketing materials, and that which they do sell they make no profit on. It's indepdent companies not setup by Amway that sell and profit marketing materials to Amway folk. I'm sure NT will confirm that.

This seems very odd to me. Why would an outside company produce and sell Amway marketing materials? How do they know what the company wants said about them. How do they know the contact info for the (owners?)? Seems silly for Amway to allow this when they could only do so with permission of Amway. Why would a business allow another company....?

Hey, I'm going to the mall tonight, I'll look at the directory, maybe there is a MLM-R-US store I haven't noticed before?

While I see no evidence that the market for telecommunications is even remotely saturated, even if it was ACN and other MLMs offer money back guarantees if you find it too hard.

I read through a lot of unhappy testimonials (yes only the unhappy ones post negative comments, I know) and one complaint was that they could not get their money back. When I looked at e-bay and saw many many of their video phones offered for very cheap I knew that the company was probably not allowing refunds. Also looks like people are either trying to recruit using e-bay or they just wanted to make a little money back from the money they put out.

Reading through one ACN related source, the person posting it showed the wordage used for refunds. Unless the article is in the original packaging, they will not take a refund. If the items are in the original packaging then they can get some of the money back.

Susan

[icerat]

Well I never claimed Amway was illegal per se anyway. I would argue that given the way most of the business is run by the upline that they don't meet the intent of this FTC paper though.

I would argue that you have no idea how most of the business is run. You have limited and likely outdated experience with one group representing less than 10% of one Amway market.

MLM is not a scam. Amway is not a scam. But folk can most certainly scam people using it as a cover if they so choose. Indeed, in my opinion folk have. But it's not endemic as you appear to believe.

People are told "use 100pv yourself and sponsor more to do the same".

Which according to the FTC is fine, as long as those purchases are put of legitimate demand. If they are not, and one major group got kicked out of Amway recently partly for pushing this too far, then you can indeed fall into illegal pyramid territory. But you have to be breaking the rules to do so.

Personally I don't think the "by from yourself and teach others to do the same" model is particularly smart business, and it's not something I've promoted. It's just not illegal or inherently a scam either. The corp has introduced plenty of incentives to move folk off that model anyway, and it's dying as a strategy.

Bottom line, if you run it like the founders intended it's not terribly lucrative.

Building a million dollar asset, linked to inflation, in under ten years is not terribly lucrative?

This is the whole reason the tools scam came into existence and who this fraud has gone on for so long. These scammers have hooked themselves up to a legit organization and hijacked it from the inside.

I won't disagree this hasn't happend to a certain extent, but your overgeneralizing from a relatively limited experience. Amway is much, much, much bigger than you think.

Please answer my questions with regards to the amount of work and money you have put into your business.

I've addressed that issue.

I also encourage others to read up more about this scam. There are a lot of resources on the net talking about the various horror stories

And they mostly are (a) from the same Amway organizations (which incidentally are the ones you had experience with and (b) are actually extremely small in number compared to the total number of folk who have had encounters with the company.

When discussing MLMs in their recent report on the proposed business opportunity rule (http://www.ftc.gov/os/2008/03/R511993business.pdf) the FTC said one of the reasons why they decided to remove MLM from the requirements of the rule is that there are so few complaints that arise against MLMs.

Amway has some serious reputation problems on the internet, originating from poor behaviour on the part of some IBOs, but worsen significantly by their original "hands off approach" (see Amway and the Internet - A History, Part I (http://www.thetruthaboutamway.com/index.php/content/view/8610/90/lang,en/)) but significantly worsened by the nature of the internet (see Amway/Quixtar Myths, Psycho-facts and the Internet Echo Chamber (http://www.thetruthaboutamway.com/index.php/content/view/1801/90)

(for example try to sell "your" business and see what kind of red tape you run into).

For very sensible reasons, due to the nature of the business there is a contractual order of "first refusal" in selling. Plenty of folk have sold their businesses over the years. Some have been happy with the price, some haven't. That's business. That's part of this business. If you don't like it, then don't do it. Pretty simple really.

[NewtonTrino]

Building a million dollar asset, linked to inflation, in under ten years is not terribly lucrative?

Proof? I've heard a lot of claims to this effect but I haven't seen it. Keep in mind that just because an active diamonship could be built in less than 10 years that this doesn't prove the above as every Diamond I've ever met who is in qualification works their asses to the bone. Of course many of the higher pins speaking and making tools profits don't necessarily requalify at Diamond (they are still allowed to speak at their highest qualification level btw).


I've addressed that issue.


No you haven't. Not even in the slightest have you answered my questions about your business. I'm guessing the numbers are embarassingly bad (e.g. little to no profit but lots of time and money invested).

And BTW I've started several business in the past and I understand this stuff quite well thank you. Hell one of the business I founded was the one that sold software to distributors! Very profitable btw being part of the tools business.
I currently own a round number of percentage of the company I work at (80ish employees at the moment).


Amway is NOT a lot bigger than I think. Are there any downlines that aren't scammers? Possibly but I've never met one I'll grant that one could exist.

[icerat]

This seems very odd to me. Why would an outside company produce and sell Amway marketing materials? How do they know what the company wants said about them. How do they know the contact info for the (owners?)? Seems silly for Amway to allow this when they could only do so with permission of Amway. Why would a business allow another company....?

How can you stop it? This is a legitimate problem Amway has had for a couple of decades. Amway reps are "independent agents" and as such Amway can't simply tell them what books or tapes they're allowed to read and listen to. Heck, the FTC fined them for telling the reps how much they should sell the products for!

MLM is a huge industry and a lucrative business has sprung up around (hopefully) teaching network marketers how to develop their businesses. Just like in any other industry, successful folk have been "selling" their experience to others for a profit, writing books and selling for a profit, going on the speakers circuit for a profit, etc etc.

Amway has had rules about what folk are allowed to say when presenting the actual business opportunity or product, but they're extremely hard to enforce. What they have done recently is quite clever. They've setup an "accreditation" program where these Business Support Materials (BSM) companies can submit all their materials and contracts etc to Amway for evaluation. If Amway thinks they're fine, then they'll call grant them "accreditation". They're backing that up with random telephone surveys of the reps to see what they've actually been taught and told. It's an expensive and time consuming process for the BSM companies, so most were slow to participate. This year however Amway stuck out a HUGE carrot. They said if you're not personally accredited or linked to an accredited organisation by end of August, you won't be eligible for various non-contractual bonuses they dish out each year. These tend to be the *big* bonuses, as well as free trips etc etc. Suddenly all the BSM companies were lining up!

Some of the significant requirements are that they're enforcing a "no politics or religion" component. One of the larger groups in the US (the one NewtonTrino) has experience with, and one if it's major offshoots, has been very well known for the extreme christian fundamentalist and republican viewpoints of it's "leaders". Now, due to the nature of networking, folk tend to know folk like them, and thus their whole group is somewhat homogenous in terms of belief systems. It's not surprisingly very successful in some parts of the US. Now, if a leftie atheist like me had gone into one of their seminars or heard one of their tapes I would have walked straight out the door and likely ended up on the internet screaming "Amway's a cult!". Fortunately I had a wholly different experience.

I've got copies of some of their tapes and they're quite frankly scary - but it's not Amway that's being cult-like, it's this group. If they continue in that fashion, they'll no longer be eligible for most of the significant incomes and will clearly dwindle in influence and size. About time.

Hey, I'm going to the mall tonight, I'll look at the directory, maybe there is a MLM-R-US store I haven't noticed before?

Much of the "self-help" industry bloomed out of MLM actually, so just go to your local bookstore :-). Some of that's good, some if it's not.

I read through a lot of unhappy testimonials (yes only the unhappy ones post negative comments, I know) and one complaint was that they could not get their money back. When I looked at e-bay and saw many many of their video phones offered for very cheap I knew that the company was probably not allowing refunds. Also looks like people are either trying to recruit using e-bay or they just wanted to make a little money back from the money they put out.

That's exactly the type of thing that gives the industry a bad name. I've returned a number of products to Amway, never had a problem with a refund, they even pay freight.

Reading through one ACN related source, the person posting it showed the wordage used for refunds. Unless the article is in the original packaging, they will not take a refund. If the items are in the original packaging then they can get some of the money back.

Well, in their defence that's a pretty common disclaimer for most businesses. Still, *because* of the potential for abuse, MLM companies need to be a little more flexible here. I can buy a packet of pasta from Amway, eat it, and send back the empty packet and tell them I didn't like it. They'll give me a full refund. It really is quite an incredible company once you dig past the BS on the 'net. (note: much of the BS has legitimate origins!)

[icerat]

Of course many of the higher pins speaking and making tools profits don't necessarily requalify at Diamond

No, which is one reason the corp introduced Founders Diamond and similar recognitions some years back. It's a harder standard.

(they are still allowed to speak at their highest qualification level btw).

There you go again with dogmatic claims based on limited experience. Some groups operate like that, but others don't. In some groups, with a couple of years grace, your introduced at your currently qualifying level. I think this approach is likely to spread.

Amway is NOT a lot bigger than I think.

I've already provided evidence of that with your assertions about Yager. His business was a much smaller percentage of Amway than you believed. The main reason being you have so little experience outside his organization. You simply don't know how big Amway is outside of that. You didn't believe there were 100s of Crown Ambassadors. Go check on AmwayWiki (http://www.amwaywiki.com) and you can find the names of 80% of them. We're having trouble with the chinese ones :)

But lets test -

So - how many people do you think have ever qualified at Diamond?
How many people are being catered for at next years global Diamond conference in LA to celebrate Amway's 50th Anniversary?

Let's see how close you get. I'm hopefully you'll be closer now than you would have been when we started this conversation.

[NewtonTrino]

How about this test. You tell us how much money you have made and how much effort you have put in. You said you WORKED IT, so your results should be typical, right?

I'm not answering any other questions until you cover those. Frankly I have real work to do and it's not my job to make sure nobody else gets scammed. This is like arguing theology with a Christian fundamentalist or trying to each a pig to fly.

BTW All you did was show that Dexter is AT LEAST 10% of Amway NA, not that he isn't much bigger than that (which I think he is but guess what NO NUMBERS ARE AVAILABLE).

Bottom line, you and your cohorts (and I include my own familty member in this) are bunch of lying scammers.

Put up or shut up, show me your typical results.

[sgf8]

The reason? Amway has no up front filter to reduce the number of attempts. Anybody can sign up. High school dropouts’ with zero business acumen can sign up; there are no barriers to entry.

This was my experience with ACN. Right away I thought this was really fishy. They don't ask any questions about us, don't want to know our skills or education, are we U.S. citizens, nothing? They would have taken anyone that walked in the door that could supply a social security number.

How can you stop it? This is a legitimate problem Amway has had for a couple of decades. Amway reps are "independent agents" and as such Amway can't simply tell them what books or tapes they're allowed to read and listen to. Heck, the FTC fined them for telling the reps how much they should sell the products for!

Sorry I'm still not buying this. Imagine a McDonalds or Little Ceasars that are franchises selling their thing. Can they charge whatever? Can they come up with anything that includes the the company logo without approval from corporate.

Avon also uses independent owners. No way on earth would Avon allow someone else to sell a workbook or "tool" with the Avon name on it.

Again how would an outside independent company be able to contact Amway people? How would they get a hold of the contact info without approval of Amway.

You stated that Amway "had" a bad rep years ago. The few people that I have talked to started out the exact way you did. "I have my own business" when questioned it takes some time of back and forth and evasiveness to get them to omit that the business they "own" is Amway. When I asked my ex-employee why she took so long to tell me the name she said that she was told to do that, "because in the past they had a bad reputation and Amway is a new company that has changed and we don't want to start out with that hanging over us...."

Icerat you did the exact same thing, why? I asked you earlier but you didn't explain why you did that? To be fair, I don't think we asked you the name of your business, but looking back it just seems odd for you to have posted 8 times afterwards and not mentioned it. Because we were talking about Amway at the time, it just seemed very relevant to the conversation.

Susan

[icerat]

How about this test. You tell us how much money you have made and how much effort you have put in. You said you WORKED IT, so your results should be typical, right?

uhh, no, that doesn't follow at all.

I'm not answering any other questions until you cover those. Frankly I have real work to do and it's not my job to make sure nobody else gets scammed. This is like arguing theology with a Christian fundamentalist or trying to each a pig to fly.

uhuh

BTW All you did was show that Dexter is AT LEAST 10% of Amway NA, not that he isn't much bigger than that (which I think he is but guess what NO NUMBERS ARE AVAILABLE).

No, I showed it was *at most* 13% and most likely less than 10%.

Bottom line, you and your cohorts (and I include my own familty member in this) are bunch of lying scammers.

It's always nice to engage in a friendly, knowledgeable exchange of ideas, with no name calling and appeals to emotion, don't you think?

[icerat]

Sorry I'm still not buying this. Imagine a McDonalds or Little Ceasars that are franchises selling their thing. Can they charge whatever?

Actually they can, and do. At least McDonald's franchises do. Tends not to happen too often since McDonald's supplies them with marketing that promotes the price.

Can they come up with anything that includes the the company logo without approval from corporate.

Avon also uses independent owners. No way on earth would Avon allow someone else to sell a workbook or "tool" with the Avon name on it.

If something has Amway on it, then it's either company approved or breach of copyright. If you check Amway "tools" for sale on ebay you'll find the great majorityy do not have Amway on them, they have the brands of the third party companies, such as BrittWorldWide, Internet Services etc etc

Again how would an outside independent company be able to contact Amway people? How would they get a hold of the contact info without approval of Amway.

They're independent companies, but that doesn't mean there is no connection. They've generally been setup by successful Amway reps, who market their products first within their groups, and if they prove popular/successful then other groups may be interested in using them to. Higher level "reps" are treated to numerous trips by the corp each year, so do meet regularly and exchange ideas.

You stated that Amway "had" a bad rep years ago. The few people that I have talked to started out the exact way you did. "I have my own business" when questioned it takes some time of back and forth and evasiveness to get them to omit that the business they "own" is Amway. When I asked my ex-employee why she took so long to tell me the name she said that she was told to do that, "because in the past they had a bad reputation and Amway is a new company that has changed and we don't want to start out with that hanging over us...."

Did I say "had"? If so I misspoke. It still does, particular on the 'net. Mind you, in terms of public opinion surveys I believe the "no opinion either way" is the largest group.

Icerat you did the exact same thing, why? I asked you earlier but you didn't explain why you did that? To be fair, I don't think we asked you the name of your business, but looking back it just seems odd for you to have posted 8 times afterwards and not mentioned it. Because we were talking about Amway at the time, it just seemed very relevant to the conversation.

I didn't actually read the whole thread before I joined in, so I missed the Amway conversation, my apologies. The reason I didn't mention it is because I wanted to actually discuss the misconceptions surrounding the MLM concept itself, not any particular company. Once you start talking about any particular company then exactly what happened happens - it devolves in to a mudslinging fest regarding the strengths and weaknesses of some particular company.

Plus of course to avoid being accused of being here to recruit, which didn't take long anyway :covereyes

[Ateius]

Call them tonight and report back

Susan

The consensus was that they gained "business experience" from it, but if given the opportunity now they would not have signed up for it, because they lost so much money.

[NewtonTrino]

It's always nice to engage in a friendly, knowledgeable exchange of ideas, with no name calling and appeals to emotion, don't you think?

Sorry but these guys are a bunch of criminals and the lot of them should be in the slammer. I've personally seen this stuff screw peoples lives up, it's not a joke to me. The money that the big pins are making is blood money, have no doubt about that.

[JonnyFive]

This is all true and applies to all businesses. There is a theoretical finite limit to any product

I understand that.

Yes, but this is unlikely to happen as virtually by definition if you are adding new distributors, the market is not saturated, because they themselves believe there is a market for the products - which in most cases includes them.

Their belief that there is a market for the product is wholly irrelevant. I know firsthand how belief can easily override logic, especially when one is not sophisticated in finance.

To say that the MLM system expands M by adding the value of d to it is an argument I anticipated, and I do not find it particularly persuasive. All this indicates is that the MLM systems can claim they are expanding a market when all they are doing is feeding back into the system. It doesn't do you very much good to start a business, buy your own products, and then claim you've massively increased sales. It might be true in a very base, technical way, but it doesn't indicate you've actually increased your business.

Furthermore, if those new distributors find the market is indeed saturated, then they will not be able to sell the products and they can get a full refund. If the situation was common then the company would go out of business. There is no evidence to suggest that the market for the types of products typically marketed through MLMs (health, beauty, telephony for example) are even remotely saturated.

No, my market saturation had more to do with the presence of the Amway/Quixtar brand in a territory than anything else. If you'd like to talk about some of the specific products they sell, I believe the MLM model runs into more problems with competition than anything else. This is another discussion entirely. Not one I would be adverse to having, but let's save it for the moment.

Except you've neglected the fact there is an inbuilt limiter to the number of "levels". In Amway for example, once a "branch" of the tree reaches around $20,000/mth in sales volume, the MLM part of the compensation plan no longer applies. As mentioned, the FTC found in FTC vs Amway that >70% of reps were within 4 levels of Amway, and 99% within 7 levels - not significantly different from traditional business.

What do you mean by this? You mean that the passthrough commission no longer applies? That it is capped?

The distributors are still getting "bonuses" from Amway though, aren't they? All costs incurred by a business ultimately pass through the consumer, regardless of what they are named. This ultimately hurts the ability of the low-level distributors (who really don't have the clout to do anything in the business) to move their products. This, of course, can be circumvented by focusing on recruiting new distributors to build the downline and pick up Amways bonuses, but you've assurred us all that Amway isn't like that (anymore? ever?).

So how does keep the system efficient? How do they keep a broad, deep downline of people making under $20K/month in sales volume from eating up competitive advantage and profits with bonuses and passthrough commissions?

A traditional business is usually optimally within three levels (excluding transportation infrastructure and production-end levels - issues that are still present in the MLM model, so we can ignore them for the sake of simplicity), and each of those levels burdens the business more and more. Being seven levels of distribution from the manufacturer is quite far away.

This is a common misconception that the commissions are divided "ad infinitum". If they were, it would clearly be a problem as you outline.

No, I don't think that the specific MLM divides the commissions infinitely. The issue of declining share still applies, it simply has a bound.

I've found that the better the mathematician, the more likely they are to have this misconception. :) Your forgetting the inbuilt limits!

There are two issues at work here:

1-The issue of straight commission. I understand that, practically, specific MLMs may limit their commission passthrough. However, if the passthrough is sufficiently deep, the same issues are going to erode the ability of the lowest downline to move product. A common complaint from those that put in time with Amway and failed seems to be that it was very difficult to make sales, and there was a lot of indirect pressure to keep recruiting downline (or buy the product themselves to meet bonus goals). I understand that much of this comes from individual upline distributors, but those distributors are the MLM on the ground. You can't simply stick your fingers in your ears and yell "LALALALAAMWAYCORPORATEDOESNTDOTHAT" when a decent chunk of the major distributors are doing things like this, and Amway is one of the more legit MLMs.

2-The other issue is raw market share in a given market. Is there a hard cap on the recruitment of new distributors in a territory (protected sales territory) in Amway? Is there such a cap in all MLMs? Is that cap set so that the new distributors have a good chance of enjoying protection from competition with other distributors from the same company?

No, that *does* include people who don't do any business. Simply asking someone if they want to buy a product, once in a year, or attending one meeting in a year, is enough to get you included in the statistics. Indeed, even buying enough products in a month to earn a rebate on your own shopping will include you in the "active" category.

What about average hours worked? Given the same sample, this would enable us to derive a meaningful conclusion about the income of the average Amway IBO based on activity level. Does Am/Quix publish this information?

Absolutely, and I have done so. For example, in North America the average time to "Diamond" (avg income $150,000/yr) is a little under 10 years. Now, if you stop working that income may decrease, or it may increase depending what others in the network do. There are people who have been dead for decades whose estates are still being paid by Amway.

But lets say it drop to $100,000/yr. In 10 years you have developed an asset that generates $100,000/yr income, linked to inflation (since its based on sales of products).

That's equivalent to say $1,000,000 with a 10% return, which is a pretty damn good return. How long would it take you save or build a million dollar asset with a 10% return? How many of those assets would be linked to inflation? How many of them would generate an income for many of those years while you were generating it.

Actually, it's not equivalent to that at all.

First of all, this doesn't appear to account for cost involved. It also fails to account for time invested. As you have said several times that this is about putting the time in, then I would expect that the time expense involved in the development of a $100K/yr distributorship to be considerable.

Moreover, that would not be passive income, especially if you wanted it to continue. I don't consider my job to be the equivalent to an investment earning a rate of return - I consider it compensation for my labor. You also have no access to this mythical $1 million principle, which is a serious concern in finance.

Also, it's not perfectly indexed to inflation. If you've studied macro and micro economics, you are no doubt familiar with the concept of price "stickiness," correct? You might also notice that goods vary in how closely they index inflation versus change in cost due to other factors.

You picked a very bad analogy here. It sounds like BS sales talk to me. Also, $100 - $150K a year (possibly before cost too, ouch) sounds pretty bad given the amount of work that seems to be required for the business. You keep saying it isn't easy and requires a lot of time, and I believe you 100%.

No, the only equivalent to a $1,000,000 investment earning 10% APR indexed to inflation would be a $1,000,000 investment earning 10% + annual inflation % APR. Maybe a $1,000,000 TIPS, but I don't know if you'd get 10% APR on that.

This is not theory, people have done this. If you can suggest a better model for the average person, I'm interested to here it. A million dollar asset, indexed to inflation, in 10 years.

Except you don't have a million dollar asset. You have an income-generating distributorship, if you're lucky, that you may or may not be able to actually do anything with.

You don't own the corporate name, or the exclusive rights to really do anything, so it doesn't sound like you could really sell anything, certainly not anything worth $1 million. Like I said, this is a bad analogy.

Okay, you've done this. Could you possibly give us a ballpark on how much this business generates in income for you versus cost. You've been asked politely a few times, and I'd be interested in hearing an answer.

I'm also interested in what you feel your effective APR is on your investment into the business every year.

Now if we want to think in terms of "hourly rates", then lets do so. If the IBO worked an average 20hrs/wk over that 10 year period (likely less at the beginning and more when "on a goal"), then they've worked 10400hrs to develop that million dollar asset. In addition, if we assume a steady progression, a 33% tax rate, and ignore tax deductions and expenses, and other bonuses like free international holidays, there's an additional $500,000 of income over that 10 year period. Throw tax on the income equivalent necessary to do this through hourly earnings, and you've got a total income of $1830000 over that time frame.

That's a $176/hr "job" (on top of your normal income, at least for the first 3-5years) plus the resulting asset is linked to inflation.

Some people can most certainly do that or better, but it's certainly not common.

I'll leave your "linked to inflation" claim alone this time. It's misleading and technically incorrect, but I already covered that.

Your calculation is horrifically flawed. First of all, only a tiny percentage of the IBOs, even the active, striving IBOs, make it so far as to collect this $100-$150K level of income. You can talk all you want about how the "active" stat is misleading, but let's try to hash this out more.

I think your "20 hours a week" average to reach diamond is ridiculous, and you yourself have said this is no part-time gig if you want to make big money. Still, let's assume you put only 20 hours a week into your Amway business.

Assuming you jump right to the $133K a year level, with no expenses whatsoever, and that's post-tax, then you'd be making $1.33 million for those 10,400 hours of Amway work. Pretty good. That's about $128 from Amway income an hour. Pretty sweet, huh?

Because you included other work income. At a rate of $50K a year (pre-tax, for the moment), which is a good salary. So you'd make a total of $1.83 million (like you said), pre-tax.

But here's where your analysis strikes me as deceptive. First: You didn't include working time in your analysis. Let's say you put in 40 hours a week at work - a reasonable assumption (about what I work, for example). So that's 60 hours a week, or 31,200 for $1.83 million, or $58.65 an hour.

Still not bad, but hardly $176 an hour. But here's where it gets really fun: discounting.

But then there's the issue of whether or not this "$100K a year" is really post-tax or not. Perhaps it's pre-tax, which would make sense since nobody bothers to state their bloody post-tax income. That takes the Amway egg down to about $1 million, so our new total egg is $1.5 million, and the hourly is now $48.08, which is a long way from $176.

But wait, there's more. There are some other things unaccounted for:
-Discounting based on the fact that your distributorship does not magically become worth $1 million at ten years, and does not provide $100K a year in income for those ten years. Without knowing the specifics of the income progression I can't give an estimate, but you're talking a bit less than $48.08 an hour now.

-Discounting based on the fact that I believe that building a $100K/year distributorship takes a wee bit more than 20 hours a week. If it takes 40, even the optimistic calculations make the hourly $43.99, or $36.06 if that "$100K" wasn't really the post-tax amount. Also, the difference in life impact between an extra 20 hours a week and an extra 40 is considerable.

-Discounting based on costs. This is such a big thing that its continual absence makes me highly suspicious. No one bothers to say "average diamonds are making $200K gross with $50K in average costs" or anything. I would love to know if that miraculous $100-$150K includes costs or not. I'm guessing Amway probably reports gross numbers, so costs are an open issue.

For the same reason a clothes store owner will employee additional sales stuff. The increased profit from increased volumes will (hopefully) offset the expenses of having the employee.

But IBOs aren't new sales staff - they are independent salespeople running little mini-businesses. They are also able to recruit downline. A sales staff is one fixed layer, often paid a fixed salary or a commission controlled by management to ensure profitability. Sales staff do not compete with each other for market share, and they do not have the ability to hire new staff in a commission layer.

Again, this is not a good analogy.

No, it's essentially a measure of the volume discount obtained. It could mean anywhere from 0-12% profit margin on the sale of any particular product in the network.

Wow, that's completely useless information to me. What kind of ROI do you see on your investments into Amway/Quixtar?

I can understand if you don't want to give out specific income details, because that's pretty personal, but I don't see why you don't bother with a basic APR ROI. I mean, I think that's a pretty important metric to consider.

[icerat]

It doesn't do you very much good to start a business, buy your own products, and then claim you've massively increased sales. It might be true in a very base, technical way, but it doesn't indicate you've actually increased your business.

Of course it doesn't. But it does mean your upline has increased sales.

What do you mean by this? You mean that the passthrough commission no longer applies? That it is capped?

Of course, once you top out the rebate scale (21% or 25% percent, depending on the market) there is no pass through commission, the MLM part of the structure effectively stops.

The distributors are still getting "bonuses" from Amway though, aren't they? All costs incurred by a business ultimately pass through the consumer, regardless of what they are named. This ultimately hurts the ability of the low-level distributors (who really don't have the clout to do anything in the business) to move their products.[/QUOTE]

Huh? The fact there are costs in product distribution ultimate hurt the person supplying to the end-user? Sorry, but that's just a silly claim.

This, of course, can be circumvented by focusing on recruiting new distributors to build the downline and pick up Amways bonuses, but you've assurred us all that Amway isn't like that (anymore? ever?).

How can it be circumvented? If the market is saturated, then by definition there won't be any Amway bonuses. Doesn't matter if your recruit 10000 people or no people. Market saturation means there's no market for the products. If there's no market for the products, then nobody is buying the products and there is no money being made.

You seem to think money is made by recruiting? That's an illegal pyramid, not MLM.

So how does keep the system efficient? How do they keep a broad, deep downline of people making under $20K/month in sales volume from eating up competitive advantage and profits with bonuses and passthrough commissions?

Sorry, I don't quite understand the question.

A traditional business is usually optimally within three levels (excluding transportation infrastructure and production-end levels - issues that are still present in the MLM model, so we can ignore them for the sake of simplicity), and each of those levels burdens the business more and more. Being seven levels of distribution from the manufacturer is quite far away.

Sure, but that was less than 1% of the time and not a static situation. That person who was seven levels away can (and does) become 1 level away.

No, I don't think that the specific MLM divides the commissions infinitely. The issue of declining share still applies, it simply has a bound.

There are two issues at work here:

1-The issue of straight commission. I understand that, practically, specific MLMs may limit their commission passthrough. However, if the passthrough is sufficiently deep, the same issues are going to erode the ability of the lowest downline to move product.

How? The lowest downline buys the product initially at exactly the same price as the "highest". As an end result after rebates they may have a lower margin than the "highest", but that's the same in traditional distribution as well - and is why factory outlets are popular. The difference is in this situation the "highest level" has incentive to help the "lowest level". The idea with MLM is that when you're at the "lowest level" your income comes primarily from retailing to end-users, as you develop a network your progressively becoming more and more of a wholesaler, with retaling a smaller and smaller percentage of your business.

You're analysis seems to be predicated on the assumption that the whole point of MLM is to recruit other people. It's not. The whole point is to increase sales volume. Recruiting additional folk to do sales is just a marketing strategy to increase sales volume. It has exactly the same risks and benefits of other businesses. If Starbucks or McDonald's or whoever opens too many outlets in an area, then they can cannibalise the market and not actually make any more money. If this happened they don't just keep opening up new outlets, they'd change strategies. MLM is no different.

A common complaint from those that put in time with Amway and failed seems to be that it was very difficult to make sales,

In FTC vs Amway the prosecution brought in people claiming they couldn't make sales, the defence brought in people from the exact same area of town who were making heaps of sales (including new business). It's generally a skill or motivation thing, not a market saturation thing. There is no evidence at all that the market for Amway's products are saturated *anywhere*. For most people, sales *are* difficult. There's no claims of it being "easy", except perhaps from the occasional neophyte. Simple, yes. Easy, no.

and there was a lot of indirect pressure to keep recruiting downline (or buy the product themselves to meet bonus goals).

Sure, but again, that comes down to my original comment about how individuals are running their businesses, not the model itself. Indeed, if you're buying product to meet bonus goals rather than out of legitimate demand, then you're moving into illegal pyramid territory. There's Amway stories about the proverbial "garage full of soap". Well, if anyone has got a garage full of soap, they had to explicity break Amway's rules to do it. It's a fraudlent business practice. Fraud happens in other business too, and there's nothing about Amway that precludes it from having fraudsters involved (aside from the rules of course).

I understand that much of this comes from individual upline distributors, but those distributors are the MLM on the ground. You can't simply stick your fingers in your ears and yell "LALALALAAMWAYCORPORATEDOESNTDOTHAT" when a decent chunk of the major distributors are doing things like this, and Amway is one of the more legit MLMs.

If you want my honest opinion, after years of research in this area I actually think that a significant number of companies that call themselves MLMs are scams. The problem is, like the WinCapital example earlier, they're not legitimate MLMs. They're trying to hide themselves under that banner and hope to get away from it. From our perspective this is disasterous - they often say things like "no, no, we're not a scam, we're just like Amway". A few months or years later they're out of business and thousands are out of pocket, and folk (who typically have a poor sense of logic) think "we're just like Amway" also means "Amway is just like them!"

It's a serious problem for us.

And yes, within Amway there are also folk I consider are scamming people. But if it was a "decent chunk" as you suggest, then believe me you'd know about it. In any given year there's something like 10,000,000 Amway business owners in the world. 70% of those pretty much do nothing with it, and move on to other things. Over a 10 year period that's 70 million people! If it truly was a "decent chunk" then it would be a scandal of unbelievable proportions and Amway would have been shut down a long time.

2-The other issue is raw market share in a given market. Is there a hard cap on the recruitment of new distributors in a territory (protected sales territory) in Amway? Is there such a cap in all MLMs? Is that cap set so that the new distributors have a good chance of enjoying protection from competition with other distributors from the same company?

Is there such a cap in clothing stores or coffee stores? Why should there be? Market forces prevail. The BIG difference with Amway is that if you open up a coffee store in what ends up being a coffee store saturated market, youll likely lose all your capital investment. If that happened in Amway, or even if you just thought it had happened, like the FTC example given earlier - no problem, you can get all your money back. But it is a potential issue, particularly in small towns (but who doesn't know people who live elsewhere?) which is why there's money back guarantees.

What about average hours worked? Given the same sample, this would enable us to derive a meaningful conclusion about the income of the average Amway IBO based on activity level. Does Am/Quix publish this information?

Amway does not publish information about the average hours worked. They do occasionally run surveys and ask that (I've been asked) but I've never seen it released. The DSA also runs similar surveys. Again though, hours->income is a little to simple, you also have to adjust for the age of the business. You could try to compare *total* hours, which would be a nice measure, but quite frankly I think it would be virtually impossible to collect reliable data for that.

First of all, this doesn't appear to account for cost involved. It also fails to account for time invested. As you have said several times that this is about putting the time in, then I would expect that the time expense involved in the development of a $100K/yr distributorship to be considerable.

I gave the hours put in. Other expenses are minimal, particularly in "management" phase, as well as tax deductible.

Moreover, that would not be passive income, especially if you wanted it to continue.

Sorry, why not? This isn't theory, people do this. Heck, I've done it (though not to the 100K/yr level)

I don't consider my job to be the equivalent to an investment earning a rate of return - I consider it compensation for my labor.

Of course, and if you stop the job the income stops. Build an income producing asset properly, like an Amway business, you can stop the work and the income keeps coming. That's one of the major attractions.

You also have no access to this mythical $1 million principle, which is a serious concern in finance.

Not entirely true, you can sell it, though like anything else you're unlikely to get the price you think it's worth! It's a theoretical example, not a perfect reflection of reality. Heck, my sponsor "retired" from the business a few years back. Their income from that asset keeps getting *bigger*, not shrink by a third.

Also, it's not perfectly indexed to inflation. If you've studied macro and micro economics, you are no doubt familiar with the concept of price "stickiness," correct? You might also notice that goods vary in how closely they index inflation versus change in cost due to other factors.

You're being overly pedantic now. Given some 450-500 Amway manufactured products, plus (depending on market) the thousands of products available from other manufacturers through Amway, it's likely a pretty good approximation of inflation. Heck, in some countries you can even by your gasoline and electricity through your Amway business.

You picked a very bad analogy here. It sounds like BS sales talk to me. Also, $100 - $150K a year (possibly before cost too, ouch) sounds pretty bad given the amount of work that seems to be required for the business. You keep saying it isn't easy and requires a lot of time, and I believe you 100%.

So tell me how else to develop an asset in 10 years, of whatever worth, that generates 100K cash a year.

You don't own the corporate name, or the exclusive rights to really do anything, so it doesn't sound like you could really sell anything, certainly not anything worth $1 million. Like I said, this is a bad analogy.

A hundred grand a year without having to work for it anymore is still a hundred grand a year. And again, yes you can sell it. This isn't theory, it happens. Most large distributorships are corporations, quite a number have changed hands.

I suspect you've not really got a handle on how big these businesses are.

Okay, you've done this. Could you possibly give us a ballpark on how much this business generates in income for you versus cost. You've been asked politely a few times, and I'd be interested in hearing an answer.

I'm also interested in what you feel your effective APR is on your investment into the business every year.

I'll PM you. There's personal reasons I can't answer that.

Your calculation is horrifically flawed. First of all, only a tiny percentage of the IBOs, even the active, striving IBOs, make it so far as to collect this $100-$150K level of income. You can talk all you want about how the "active" stat is misleading, but let's try to hash this out more.

Umm ... the calculation has nothing to do with how many active, that in noway makes it flawed. What's more, it's just one example. Many people don't even have that as a goal (a dream perhaps, but not a goal!).

I think your "20 hours a week" average to reach diamond is ridiculous, and you yourself have said this is no part-time gig if you want to make big money. Still, let's assume you put only 20 hours a week into your Amway business.

I never said it was no part-time gig. It *is* a part-time gig. Indeed, by it's very nature it's difficult to do "full-time". 20hrs a week is not at all ridiculous, and I'd ask your basis and experience for making such a claim.

Assuming you jump right to the $133K a year level, with no expenses whatsoever, and that's post-tax, then you'd be making $1.33 million for those 10,400 hours of Amway work. Pretty good. That's about $128 from Amway income an hour. Pretty sweet, huh?

Because you included other work income. At a rate of $50K a year (pre-tax, for the moment), which is a good salary. So you'd make a total of $1.83 million (like you said), pre-tax.

You misunderstood. My apologies, I mustn't have explained clearly. I did *not* include other work income. I included Amway income you were earning a long the way. You don't earn nothing during that 10400hrs.

But here's where your analysis strikes me as deceptive. First: You didn't include working time in your analysis. Let's say you put in 40 hours a week at work - a reasonable assumption (about what I work, for example). So that's 60 hours a week, or 31,200 for $1.83 million, or $58.65 an hour.

Again, I didn't include "normal" working time or working income at all.

Still not bad, but hardly $176 an hour. But here's where it gets really fun: discounting.

But then there's the issue of whether or not this "$100K a year" is really post-tax or not. Perhaps it's pre-tax, which would make sense since nobody bothers to state their bloody post-tax income. That takes the Amway egg down to about $1 million, so our new total egg is $1.5 million, and the hourly is now $48.08, which is a long way from $176.

The 100K is not post-tax, it's pre-tax. What I was referring to was the "asset", the Amway business itself, which is not taxed. To "save" the money (any tax breaks for savings in your jurisdiction to one side) you would have to earn it, have it taxed, and then save.

But wait, there's more. There are some other things unaccounted for:
-Discounting based on the fact that your distributorship does not magically become worth $1 million at ten years, and does not provide $100K a year in income for those ten years. Without knowing the specifics of the income progression I can't give an estimate, but you're talking a bit less than $48.08 an hour now.

I included that and assumed a straight line progression over 10 years. Actually I made an error, I used 100k/yr as the endpoint instead of 130k/yr, so I actually *underestimated*.

Discounting based on the fact that I believe that building a $100K/year distributorship takes a wee bit more than 20 hours a week.

Some have done it more, some have done it in less. A colleague of a friend of mine did it in 3 years, not 10, and I know of a couple of ladies who built a business twice that size in less than a year.

What perhaps your missing is the fact it's not being done alone, a Diamond business will typically have a few hundred people "downline" putting in those kind of hours, for their own reasons and their own separate earnings from it. What's more, your "upline" is also putting in the hours, particularly at the beginning. The compensation plan has various incentives (separate to the MLM component) to encourage this.

If it takes 40, even the optimistic calculations make the hourly $43.99, or $36.06 if that "$100K" wasn't really the post-tax amount. Also, the difference in life impact between an extra 20 hours a week and an extra 40 is considerable.

Few people maintain full-time work after attaining the "emerald" level. Those who enjoy their "normal" careers often continue part-time or as consultants. But you have hit on what's hard about MLM, or starting any business part-time on the side.

Building the business itself is not in itself that difficult. Putting in 20hrs/wk on top of your normal 40hrs a week, for 2-3 years ... it doesn't indeed have a significant life impact. It's damn hard. Not surprisingly, most people don't stick it out.

Discounting based on costs. This is such a big thing that its continual absence makes me highly suspicious. No one bothers to say "average diamonds are making $200K gross with $50K in average costs" or anything. I would love to know if that miraculous $100-$150K includes costs or not. I'm guessing Amway probably reports gross numbers, so costs are an open issue.

It's slightly confusing because the great majority of say, cost of goods sold, are all handled on the Amway end, as are payouts to downline etc etc. Running expenses are generally travel and support materials, plus of course phone, internet etc. These generally range from $2000-$5000/yr and do not increase significantly as a business gets larger.

But IBOs aren't new sales staff - they are independent salespeople running little mini-businesses. They are also able to recruit downline. A sales staff is one fixed layer, often paid a fixed salary or a commission controlled by management to ensure profitability. Sales staff do not compete with each other for market share, and they do not have the ability to hire new staff in a commission layer.

Downline are not competing for marketshare with their upline. I first came across this "myth" last year and it really surprised me for it's fundamental lack of understanding. Downline are contributing to an *increase* in your marketshare. My downline are in effect purchasing their products off me. The more they buy, the greater my volumes and marketshare. Yes, on any given unit I'm selling to them at a reduced margin than if I sold the product myself, but so effectively is the store owner with sales stuff. It's really no different at all to traditional distribution. Buy in volume, sell wholesale and retail for a profit margin. As volumes increase, get the goods cheaper. The only difference is that instead of having to by say 10000 units upfront to get the discount, I pay a base rate and my discount is calculated and rebated based on monthly volumes.

[NewtonTrino]

These generally range from $2000-$5000/yr and do not increase significantly as a business gets larger.

HAHAHAHAHAHA

No let me say again. HAHAHAHAHAHA.
HA.
HA.
HA.

You live in dreamland.

[JonnyFive]

This is, as is often the case, getting very long. I'm going to cut some of the more piddling points and cut to what I'm really trying to discuss.

Huh? The fact there are costs in product distribution ultimate hurt the person supplying to the end-user? Sorry, but that's just a silly claim.

Not what I said. I said it hurts the end consumer. The person buting those products. This is a fundamental principle of basic micro-economics. All costs incurred in a business impact the cost of doing business, and ultimately are either eaten by that business or passed to the consumer. Perhaps I should have stated more clearly that costs must be passed to the consumer to maintain a stable level of profitability?

How can it be circumvented? If the market is saturated, then by definition there won't be any Amway bonuses. Doesn't matter if your recruit 10000 people or no people. Market saturation means there's no market for the products. If there's no market for the products, then nobody is buying the products and there is no money being made.

Market saturation means that the present market for the products is exhausted. By recruiting new distributors who would not otherwise be MLM customers and having them purchase products to meet bonus goals, you are effectively temporarily increasing the full market for your product. The non-MLM market may be saturated, but there is a kind of internal market for the products.

You seem to think money is made by recruiting? That's an illegal pyramid, not MLM.

So you're telling me there's no more pass-through commission on the sales of one's downline? That's wonderful to hear, because it would mean a welcome change in the MLM model Amway/Quixtar has been using for years.

I never said you make money directly by recruiting. You make a commission on your downline, and they're the source of this 100K/yr. passive income you keep going on about, so there's an incentive to recruit. Don't take me for a naive fool.

Sorry, I don't quite understand the question.

Assuming you have a large number of distributors in your downline who are coming in under the cutoff threshold for passthroughs, this would mean a lot of profit is being passed to the upline. What does Amway do to address such "broad but not deep" distributorships?

How? The lowest downline buys the product initially at exactly the same price as the "highest". As an end result after rebates they may have a lower margin than the "highest", but that's the same in traditional distribution as well - and is why factory outlets are popular. The difference is in this situation the "highest level" has incentive to help the "lowest level". The idea with MLM is that when you're at the "lowest level" your income comes primarily from retailing to end-users, as you develop a network your progressively becoming more and more of a wholesaler, with retaling a smaller and smaller percentage of your business.

You said it yourself: the issue is the profit margins. The more profit gets passed to the upline, the less of a margin the downline makes. In order to maintain profit, cost goes up... or the downline stops selling.

You're analysis seems to be predicated on the assumption that the whole point of MLM is to recruit other people. It's not. The whole point is to increase sales volume. Recruiting additional folk to do sales is just a marketing strategy to increase sales volume. It has exactly the same risks and benefits of other businesses. If Starbucks or McDonald's or whoever opens too many outlets in an area, then they can cannibalise the market and not actually make any more money. If this happened they don't just keep opening up new outlets, they'd change strategies. MLM is no different.

As I said before, the employees of Starbucks and McDonalds are not empowered to start their own mini-franchises.

I think it has more to do with increasing sales volume, I think it has to do with creating that vaunted passive income. That whole "passive income" concept is really uncommon in sales, actually. I mean, I've worked with serious, big brokers in insurance who make millions in commissions, and they work their asses off to get it. Stock brokers, investment bankers, insurance brokers... none of them recruit downline so that they don't have to do anything for their income anymore, which is what you seem to be suggesting with this whole "100K a year I don't have to work for."

Even when they own the brokerage they don't do this.

Sure, but again, that comes down to my original comment about how individuals are running their businesses, not the model itself. Indeed, if you're buying product to meet bonus goals rather than out of legitimate demand, then you're moving into illegal pyramid territory. There's Amway stories about the proverbial "garage full of soap". Well, if anyone has got a garage full of soap, they had to explicity break Amway's rules to do it. It's a fraudlent business practice. Fraud happens in other business too, and there's nothing about Amway that precludes it from having fraudsters involved (aside from the rules of course).

But the MLM model is what encourages this kind of behavior. Why doesn't Amway limit its sales depth? Why not do more to protect sale territory? Why not alter commission structures to de-emphasize "bonuses" and focus on product sales? Why not address the reportedly corrupt "tools business?"

That the Federal government had to step in and make a call on this doesn't exactly leave me with the best picture of Amway as a responsible parent company.

If you want my honest opinion, after years of research in this area I actually think that a significant number of companies that call themselves MLMs are scams. The problem is, like the WinCapital example earlier, they're not legitimate MLMs. They're trying to hide themselves under that banner and hope to get away from it. From our perspective this is disasterous - they often say things like "no, no, we're not a scam, we're just like Amway". A few months or years later they're out of business and thousands are out of pocket, and folk (who typically have a poor sense of logic) think "we're just like Amway" also means "Amway is just like them!"

What you're seeing is the MLM model free of some of the restrictions that Amway places on it. I agree that there are worse MLMs out there... which is why I think Amway has been as enduring as it is.

And yes, within Amway there are also folk I consider are scamming people. But if it was a "decent chunk" as you suggest, then believe me you'd know about it. In any given year there's something like 10,000,000 Amway business owners in the world. 70% of those pretty much do nothing with it, and move on to other things. Over a 10 year period that's 70 million people! If it truly was a "decent chunk" then it would be a scandal of unbelievable proportions and Amway would have been shut down a long time.

Those 10 million IBOs are all "major distributors" which is the word I used, thank you.

So what's with all these people leaving the distributorships with all these complaints? Tools business? Any comments?

Is there such a cap in clothing stores or coffee stores? Why should there be? Market forces prevail. The BIG difference with Amway is that if you open up a coffee store in what ends up being a coffee store saturated market, youll likely lose all your capital investment. If that happened in Amway, or even if you just thought it had happened, like the FTC example given earlier - no problem, you can get all your money back. But it is a potential issue, particularly in small towns (but who doesn't know people who live elsewhere?) which is why there's money back guarantees.

Sure, you just lose whatever money you were in the red supporting your Amway business by not making enough in sales to cover sunk and variable costs.

The issue is that Amway distributors compete with each other for the same territory. Why doesn't Amway do a better job of enforcing sales territory?

"All your money," hmmm? Amway will reimburse you for your fuel costs, your other travel costs, the money you spent on "motivational" products, the cost of goods sold at a loss, and the value of any time spent?

Amway does not publish information about the average hours worked. They do occasionally run surveys and ask that (I've been asked) but I've never seen it released. The DSA also runs similar surveys. Again though, hours->income is a little to simple, you also have to adjust for the age of the business. You could try to compare *total* hours, which would be a nice measure, but quite frankly I think it would be virtually impossible to collect reliable data for that.

Let me know when they publish a figure.

I gave the hours put in. Other expenses are minimal, particularly in "management" phase, as well as tax deductible.

No, you gave a very rough estimate.

Be careful with those business tax deductions. I'm not an accountant, but there are a lot of pitfalls there.

Sorry, why not? This isn't theory, people do this. Heck, I've done it (though not to the 100K/yr level)

Because you'll have to keep maintaining your business. Either you keep making sales, or your keep your downline managed so that they are deep enough to keep your bonus at that level. I've heard it's tough to keep people in the downline at that level of production.

Sure they do, I don't doubt it. But the question is at what rate, and at what cost to the others in their distributorships.

Not entirely true, you can sell it, though like anything else you're unlikely to get the price you think it's worth! It's a theoretical example, not a perfect reflection of reality. Heck, my sponsor "retired" from the business a few years back. Their income from that asset keeps getting *bigger*, not shrink by a third.

How typical is your sponsor's experience?

Also, what are the rules concerning control of downline and receipt of commissions/bonuses? You're taking a very rough approach to asset valuation, and I suspect that this distributorship isn't worth nearly as much as you seem to think.

You're being overly pedantic now. Given some 450-500 Amway manufactured products, plus (depending on market) the thousands of products available from other manufacturers through Amway, it's likely a pretty good approximation of inflation. Heck, in some countries you can even by your gasoline and electricity through your Amway business.

No, I'm not being pedantic. You throw out these terms ("indexed to inflation") but I don't think you really know what they mean, or what the implications are.

So tell me how else to develop an asset in 10 years, of whatever worth, that generates 100K cash a year.

Except that the distributorship, from what you're saying, sounds more like a job that pays around 100K a year, if you're lucky and very persistant.

Step 1: Go to engineering school (4 years + 2 years if masters)
Step 2: Get work as an entry-level engineer (2 - 4 years)
Step 3: Income should exceed $100K/yr.

A hundred grand a year without having to work for it anymore is still a hundred grand a year. And again, yes you can sell it. This isn't theory, it happens. Most large distributorships are corporations, quite a number have changed hands.

I suspect you've not really got a handle on how big these businesses are.

I don't disagree that there are some very large distributorships, but now you're arguing against a straw man. I never said that there aren't people making money off of MLMs, I simply said they are generally terrible business opportunities. I said that most of the people who sign up as IBOs appear to be making very crappy incomes for the amount of work they put in.

I'll PM you. There's personal reasons I can't answer that.

Got it.

I never said it was no part-time gig. It *is* a part-time gig. Indeed, by it's very nature it's difficult to do "full-time". 20hrs a week is not at all ridiculous, and I'd ask your basis and experience for making such a claim.

So when you responded in the affirmative to my comment about it being a long and hard road to creating profitable distributorship here (http://forums.randi.org/showthread.php?postid=3645741#post3645741), that wasn't what we would conventionally call "true?"

As to my basis for making such a claim, I'd say that starting and maintaining any business is not a 20 hour a week part time job. Analysis from former Amway distributors who were actively trying to build their business makes it look more like a full time occupation. Is their experience atypical?

You misunderstood. My apologies, I mustn't have explained clearly. I did *not* include other work income. I included Amway income you were earning a long the way. You don't earn nothing during that 10400hrs.

You say below that the $100K is pre-tax. That means the actual post-tax amount would only be a bit over $75K, yet you use $133K in your calculations. Also, it sounds like you're saying you got $133K a year in Amway income, plus $50K a year in Amway income. Why break it out like this? Your calculations don't make any sense.

The 100K is not post-tax, it's pre-tax. What I was referring to was the "asset", the Amway business itself, which is not taxed. To "save" the money (any tax breaks for savings in your jurisdiction to one side) you would have to earn it, have it taxed, and then save.

If the 100K income is pre-tax, your full income would be only 75K a year based on your tax rate assumptions.

I included that and assumed a straight line progression over 10 years. Actually I made an error, I used 100k/yr as the endpoint instead of 130k/yr, so I actually *underestimated*.

No, you didn't, I checked your math. You apparently assumed you would make 133K a year for ten years, plus another $50K a year for ten years. 133K+50K x 1.83 million, just like you said. You completely failed to give me an accurate estimate for a straight line progression.

I had a response to some other stuff, but I'm going to stop right here and show you how to do some modeling. Next post, baby, next post. :cool:

[JonnyFive]

For the fun of it, I'm going to recreate the model icerat claims he used for his income projections, but I'm going to go into detail on how the model is constructed. To be clear, these are the criteria he's laid out:

-Straight-line progression (I have assumed this to mean a fixed rate of interest, but he could have meant a fixed dollar increase per month, and I've run both models)
-$130K/yr. target income
-All income figures pre-tax (I have also taken the libery of calculating the post-tax amount)
-Avg. 33% tax rate

There's the matter of that $50K/yr. thing that is still unclear to me, and he didn't specify a starting figure, so I'm making some assumptions. For my purposes, I will include a model assuming that the model distributors makes an extra $50K a year in MLM income from their starting business on top of their other MLM income. Frankly, this doesn't make sense to me and sounds confused and muddled, but I'll do it anyway.

I set up a simple compounded interest model in a spreadsheet, assuming a fixed rate determined by the goal amount, assuming zero costs, and assuming monthly compounding. Moreover, I made the assumption (and I believe it is a highly generous one) that the distributor starts off making $1000 a month from their MLM income (not including that mysterious $50K).

Here's how the data pans out:
(Note: numbers to the right are yearly income figures)

Month | Income | Yearly Totals
1 $1,000.00
2 $1,021.19
3 $1,042.83
4 $1,064.93
5 $1,087.50
6 $1,110.54
7 $1,134.07
8 $1,158.10
9 $1,182.65
10 $1,207.71
11 $1,233.30
12 $1,259.43 $13,502.25
13 $1,286.12
14 $1,313.38
15 $1,341.21
16 $1,369.63
17 $1,398.65
18 $1,428.29
19 $1,458.56
20 $1,489.46
21 $1,521.03
22 $1,553.26
23 $1,586.17
24 $1,619.78 $17,365.53
25 $1,654.11
26 $1,689.16
27 $1,724.95
28 $1,761.51
29 $1,798.83
30 $1,836.95
31 $1,875.88
32 $1,915.63
33 $1,956.22
34 $1,997.68
35 $2,040.01
36 $2,083.24 $22,334.17
37 $2,127.38
38 $2,172.46
39 $2,218.50
40 $2,265.51
41 $2,313.52
42 $2,362.54
43 $2,412.61
44 $2,463.73
45 $2,515.94
46 $2,569.26
47 $2,623.70
48 $2,679.30 $28,724.45
49 $2,736.07
50 $2,794.05
51 $2,853.26
52 $2,913.72
53 $2,975.47
54 $3,038.52
55 $3,102.91
56 $3,168.66
57 $3,235.80
58 $3,304.37
59 $3,374.40
60 $3,445.90 $36,943.13
61 $3,518.92
62 $3,593.49
63 $3,669.64
64 $3,747.40
65 $3,826.81
66 $3,907.90
67 $3,990.71
68 $4,075.28
69 $4,161.64
70 $4,249.83
71 $4,339.88
72 $4,431.85 $47,513.35
73 $4,525.76
74 $4,621.66
75 $4,719.60
76 $4,819.61
77 $4,921.74
78 $5,026.04
79 $5,132.54
80 $5,241.30
81 $5,352.37
82 $5,465.79
83 $5,581.61
84 $5,699.89 $61,107.93
85 $5,820.68
86 $5,944.02
87 $6,069.98
88 $6,198.61
89 $6,329.96
90 $6,464.09
91 $6,601.07
92 $6,740.95
93 $6,883.80
94 $7,029.67
95 $7,178.63
96 $7,330.75 $78,592.21
97 $7,486.10
98 $7,644.73
99 $7,806.73
100 $7,972.16
101 $8,141.09
102 $8,313.61
103 $8,489.78
104 $8,669.68
105 $8,853.40
106 $9,041.01
107 $9,232.59
108 $9,428.24 $101,079.11
109 $9,628.03
110 $9,832.05
111 $10,040.40
112 $10,253.16
113 $10,470.43
114 $10,692.31
115 $10,918.89
116 $11,150.26
117 $11,386.54
118 $11,627.83
119 $11,874.23
120 $12,125.86 $130,000.00

The APR based on the starting data and end goal is about 25.43%.

Based on this information, the model predicts that this MLM income will total approximately $537,162.13, not $1,000,000, at the end of ten years. Income breakdowns are as follows:

No-Tax:
Total Income @ 10 years: $537,162.13
Annualized Income: $53,716.21
Hourly @ 20 hours: $51.65
Hourly @ 40 hours: $25.83
Hourly @ 60 hours: $17.22


Total + $50K/yr.: $1,037,162.13
Annualized Income: $103,716.21
Hourly @ 20 hours: $99.73
Hourly @ 40 hours: $49.86
Hourly @ 60 hours: $33.24

Taxed:
Total Income @ 10 years: $403,881.30
Annualized Income: $40,388.13
Hourly @ 20 hours: $38.83
Hourly @ 40 hours: $19.42
Hourly @ 60 hours: $12.94


Total + $50K/yr.: $779,821.15
Annualized Income: $77,982.12
Hourly @ 20 hours: $74.98
Hourly @ 40 hours: $37.49
Hourly @ 60 hours: $24.99


Icerat, your estimate was far too high. It only works if you assume a flat income starting at $183,000 a year and never increasing or decreasing. That assumption seems a bit ridiculous, given that you've said that building the business takes time and effort.

I also calculated the figures using a fixed dollar increase per month. That dollar amount would be about $94.61 added to the business profits per month. I'll spare you the raw data, but here's what the tables like before:

No-Tax:
Total Income @ 10 years: $686,899.56
Annualized Income: $68,689.96
Hourly @ 20 hours: $66.05
Hourly @ 40 hours: $33.02
Hourly @ 60 hours: $22.02

Total + $50K/yr.: $1,186,899.56
Annualized Income: $118,689.96
Hourly @ 20 hours: $114.12
Hourly @ 40 hours: $57.06
Hourly @ 60 hours: $38.04

Taxed:
Total Income @ 10 years: $516,465.84
Annualized Income: $51,646.58
Hourly @ 20 hours: $49.66
Hourly @ 40 hours: $24.83
Hourly @ 60 hours: $16.55

Total + $50K/yr.: $892,405.69
Annualized Income: $89,240.57
Hourly @ 20 hours: $85.81
Hourly @ 40 hours: $42.90
Hourly @ 60 hours: $28.60

Make of that whatever you will, I'm just trying to clear things up a bit.

[icerat]

HAHAHAHAHAHA

No let me say again. HAHAHAHAHAHA.
HA.
HA.
HA.

You live in dreamland.

And you are living in the distant past. Did you ever answer my question about *when* you were involved?

Welcome to the age of the internet and direct fulfillment. Expenses have plummetted. You do understand that even BSM fulfillment is direct? You do understand that some professional systems employ staff to handle everything from organising and running conferences through financials etc? That IBOs have to do very little in the way of running and organising this stuff. Heck they even put on training sessions for your distance groups so you don't have to travel so much, and if you're willing to train others groups when you do travel, they'll cover your expenses and pay a stipend, all income I did not include.

I suspect you had experiences in the age of the dinosaurs and haven't yet noticed they're pretty much extent.

Still, I will agree that IBOs with *really* large groups do indeed have more expenses, they'll intend to employ someone to handle paperwork and such things

[icerat]

For the fun of it, I'm going to recreate the model icerat claims he used for his income projections, but I'm going to go into detail on how the model is constructed. To be clear, these are the criteria he's laid out:

Dear oh dear, I think we need to sit down and have a cup of coffee some time. You've done an awful lot of work for little reason here.

-Straight-line progression (I have assumed this to mean a fixed rate of interest, but he could have meant a fixed dollar increase per month, and I've run both models)

Straight line progession from $0/mth income to $150,000/yr income over 10 years.

Based on this information, the model predicts that this MLM income will total approximately [FONT=Arial][SIZE=2]$537,162.13, not $1,000,000, at the end of ten years.

And if you'd understood what 'd said then you'd know we're pretty much in agreement. I gave a total 10 year income of $500,000, very similar to your result. I did not give a $1,000,000 income. That was the value of the asset that had also been built while earning the income.

You had earned an income of $500K over that 10 years, *plus* you had built an asset equivalent (no, it's not a perfect analogy) that coul be considered roughly equivalent to an investment of $1,000,000 with a 10% ROI.

Think of it in terms of traditional business perhaps. You work hard building a company for many years that sells edible widgets. You earn income while you are building that business and selling more and more edible widgets. Very little at the beginning, but increasing as the business grows in size.

After a while the business is too big for you to run yourself, so you begin employing staff. They're an expense, but the increase in edible widget sales more than offsets it, and having started the business, you earn a percentage of each edible widget sold. You go more into management, still getting paid a percantage on each edible widget. Eventually the profits are so nice you hire management rather than do it yourself. Again, it comes out of your edible widget percentage, but it means less work for you, and you're still getting a very nice income from your widget percentage.

You go sit on the beach and drink cocktails. Every month people are buying edible widgets, every month a percentage of the sales is put in your bank account.

You lie on the beach and drink more cocktails.

One year they employ a new wizbang marketer and widget sales triple!

You lie on the beach, drink more cocktails, and even a larger amount of money goes kaching into your bank account.

That's the scenario. Now, tell me, what's the hourly rate for the guy lying on the beach? What's his APR ROI?

[JonnyFive]

Dear oh dear, I think we need to sit down and have a cup of coffee some time. You've done an awful lot of work for little reason here.

A lot of work? It took ten minutes in Excel. I thought you worked as a statistician a while ago; you never did simple modeling as a statistician?

Straight line progession from $0/mth income to $150,000/yr income over 10 years.

What do you mean when you say "straight line progression:" fixed interest rate or straight graph when you plot the monthly income (fixed increase per month). Now it's $150,000/yr? You said $130,000 before, and $100,000 before that.

And if you'd understood what 'd said then you'd know we're pretty much in agreement. I gave a total 10 year income of $500,000, very similar to your result. I did not give a $1,000,000 income. That was the value of the asset that had also been built while earning the income.

Do you understand what I originally asked you about? I was asking you to estimate how much the average earnings would be in the course of building that asset.

This is what you said:

Now if we want to think in terms of "hourly rates", then lets do so. If the IBO worked an average 20hrs/wk over that 10 year period (likely less at the beginning and more when "on a goal"), then they've worked 10400hrs to develop that million dollar asset. In addition, if we assume a steady progression, a 33% tax rate, and ignore tax deductions and expenses, and other bonuses like free international holidays, there's an additional $500,000 of income over that 10 year period. Throw tax on the income equivalent necessary to do this through hourly earnings, and you've got a total income of $1830000 over that time frame.

That is the result of taking $133K, adding $50K, and multiplying it by 10. That isn't even how you evaluate the NPV of a future asset that is paid out in freaking cash, let alone the value of an Amway distributorship (what's the average resale rate on that one, anyway?).

You had earned an income of $500K over that 10 years, *plus* you had built an asset equivalent (no, it's not a perfect analogy) that coul be considered roughly equivalent to an investment of $1,000,000 with a 10% ROI.

So what you're really trying to say is that you earn $500K in 10 years, but at the end of it you have a distributorship paying $100K per year... or $130K... or $150K, depending on which of those figures you choose to use?

This is a misunderstanding of valuation of an asset of this nature.

Think of it in terms of traditional business perhaps. You work hard building a company for many years that sells edible widgets. You earn income while you are building that business and selling more and more edible widgets. Very little at the beginning, but increasing as the business grows in size.

(snip little story about edible widgets)

One year they employ a new wizbang marketer and widget sales triple!

You lie on the beach, drink more cocktails, and even a larger amount of money goes kaching into your bank account.

That's the scenario. Now, tell me, what's the hourly rate for the guy lying on the beach? What's his APR ROI?

That depends on what the guy lying on the beach has invested into the business, what risks he took to get there (which isn't strictly involved in ROI calcs here, but it sure is nice to know when evaluating the potential value of a business venture), and what stake he has in the business. Since you didn't bother to give me hard numbers for this, I (and anyone else in the world) couldn't possibly give a rough estimate of the return on investment as an annualized percentage return.

If you want me to get really pedantic, it also depends on the corporate arrangement that the owner of the company has and what risks he bears on the company's collapse. If he is a sole proprieter, making 100% of the profit for himself, he also takes 100% of the risk if the company collapses, possibly including the risk of personal assets as well. This gets into the question of company ownership, responsibility, and ownership of the asset.

But I haven't said that it's impossible for anyone to make money in the MLM model, only that it's a crappy way to do it that results in the vast majority of those who try failing. Some of your arguments strike me as arguing against a claim of "it is impossible to make money in MLM ever," which isn't one I made.

I'm going to quote the last thing you wrote again:

That's the scenario. Now, tell me, what's the hourly rate for the guy lying on the beach? What's his APR ROI?

Sounds challenging, almost hostile to me.

You know what? I think Amway's a crap way to make money. I think it's a honey trap for eager potential business owners that don't have a lot of starting capital and don't know quite what to do with themselves - but damn it they're hungry for a piece of that residual income!

I think the people who really make it in the MLM system either bust their asses off more than they ever would need to make a regular business work, or they do it by stepping on everyone else in a race to get to the top.

This all sounds very long on fuzzy generalities and very short of specific business analysis.

[icerat]

A lot of work? It took ten minutes in Excel. I thought you worked as a statistician a while ago; you never did simple modeling as a statistician?

Never in excel actually! :)

What do you mean when you say "straight line progression:" fixed interest rate or straight graph when you plot the monthly income (fixed increase per month). Now it's $150,000/yr? You said $130,000 before, and $100,000 before that.

No I didn't, your mixing pre and post-retirement incomes. Please read what I say more carefully.

So what you're really trying to say is that you earn $500K in 10 years, but at the end of it you have a distributorship paying $100K per year... or $130K... or $150K, depending on which of those figures you choose to use?

Pick any figure to use, it's going to vary from business to business. This was simply an example using average incomes at the Diamond level ($150K/yr) and average time to Diamond (just under 10 years). It's a little more homogenous than for all dsitributors, but at least the actual size of business is similar and it's been a little more normalized on other factors.

That depends on what the guy lying on the beach has invested into the business, what risks he took to get there (which isn't strictly involved in ROI calcs here, but it sure is nice to know when evaluating the potential value of a business venture), and what stake he has in the business. Since you didn't bother to give me hard numbers for this, I (and anyone else in the world) couldn't possibly give a rough estimate of the return on investment as an annualized percentage return.

Ok, financial risk - little. Minimal investment need. The "franchise fee" and all products have 100% money back guarantees. Ownership stake=100% or less if undertaken as a partnership or with some other contractual agreement.

If you want me to get really pedantic, it also depends on the corporate arrangement that the owner of the company has and what risks he bears on the company's collapse. If he is a sole proprieter, making 100% of the profit for himself, he also takes 100% of the risk if the company collapses, possibly including the risk of personal assets as well. This gets into the question of company ownership, responsibility, and ownership of the asset.

What risk? There's pretty much nothing in the way of fixed assets, debtors or creditors, and little stock on hand past a month to month situation for personal clients. That stock on hand would rarely exceed a few hundred dollars, and chances are you could still use it or sell it if the supplier went bust, your administrators certainly could if you went bust. There *is* risk of loss of the "intellectual property" of the distribution network, which is essentially the asset you've created, and Amway has contractual rules to try to limit potential damage there. There is also the risk of a dispute with Amway and contract termination, an area in which I believe Amway has overstepped it's mark. It's being thrashed out in various courts at the moment.

But I haven't said that it's impossible for anyone to make money in the MLM model, only that it's a crappy way to do it that results in the vast majority of those who try failing.

On what basis do you make that claim? There's no statistics I've been able to find to support it, unless you and I have substantially different interpretations of what "try" means. One significant problem with evaluating MLM isn't poor statistics, it's a lack of (good) statistics. I think there's sensible business and legal reasons for that, but hopefully it will change.

Sounds challenging, almost hostile to me.

My apologies if it came across as hostile, it's not meant to be - but it is meant to be challenging. My point being it's not as simple an exercise as you would apparently like to imply.

You know what? I think Amway's a crap way to make money. I think it's a honey trap for eager potential business owners that don't have a lot of starting capital and don't know quite what to do with themselves - but damn it they're hungry for a piece of that residual income!

Did I miss where you gave a better option for similar potential?

I think the people who really make it in the MLM system either bust their asses off more than they ever would need to make a regular business work, or they do it by stepping on everyone else in a race to get to the top.

I've founded eight traditional businesses, sold some, failed with some, still have two in addition to my Amway businesses. I'm starting another non-MLM business at the moment. In my experience there's a LOT more ass busting required for a lot less return in traditional business than in MLM. Your experience may be very well be different.

I'm more than open to hearing the alternatives.

This all sounds very long on fuzzy generalities and very short of specific business analysis.

I suspect part of the problem is your analysing it more from the perspective of valuing and purchasing an existing business, rather than evaluating it as business model. Any given Amway business is going to be significantly different to any others, there's effectively an unlimited number of permutations. You can work your butt off for almost no return, you can even get a shiny little pin with a fancy title and still be earning stuff all. It all comes down to a few simple questions.

Is there a good product(s)?
Is there a significant market for the product(s)?
Is there sufficent margin to be significantly profitable after expenses?

If the answer is yes, then you've got a business. For some MLMs I believe the answer is no. For others it's unquestionably and provably yes.

The MLM model itself is really no different to traditional distribution. Buy in volume at a discount. Sell in smaller volumes at a markup. Control expenses. Make money.

That's it. It's that simple.

[NewtonTrino]

Still, I will agree that IBOs with *really* large groups do indeed have more expenses, they'll intend to employ someone to handle paperwork and such things

Exactly why I was laughing my ass off! I'm well familiar with the reality of a large group.

[NewtonTrino]

Everyone reading, don't forget to HALVE all of the above hourly income numbers because the typical Amway plan assumes BOTH spouses are working the business.

I'm curious Icerat, what is the time to success number that you guys tell new recruits? It's not still the 2-5 year plan is it?

[icerat]

Q: "How long does it take to achieve Diamond?"

A: "How long does it take to get a flat stomach? Depends how hard you work. People have done it in a year, people have done it 20 years."

It's like asking how long it takes to get a karate black belt. An old sensei of mine likes to answer that with "a few minutes on the internet". :)

I managed to source a database of some 200 diamonds, with joining year and year of being recognized at Diamond in the corp magazine (typically up to a year after actually achieving it). The median time to diamond was I think 6.2 years from joining, which is fully consisten with the "2-5 years of work" plan, since most folk take some time to decide to commit after joining. Range was from 1 year to 20 years. More than 30% were in the 5-6 years and less, so it's more than possible to do it even with 5 years of joining. Even in older markets like the US there's still people in recent years who have qualified Diamond less than 5 years after joining. Average time to Diamond (not median) in the US is however almost 10 years. The median time in the data I have is probably effected by new markets, which typically have faster growth (a couple went Double Diamond in 6 months in the Ukraine when that market launched, though I suspect there was probably some unathorised pre-launch activity there)

The problem is some people (particularly folk who are now critics) seem to interpret "it takes 2-5 years" as "it takes 2-5 years after joining to achieve Diamond" rather than "it takes 2-5 years of hard work to achieve Diamond". Folk who did it in 10 years will tell you that they went Diamond in 2-5 years of hard work, it's just they spread the work out over 10 years and had some rests in between.

[icerat]

Exactly why I was laughing my ass off! I'm well familiar with the reality of a large group.

Yeah, but that's generally folk bigger than Diamonds, or folks running their own systems, which also means significantly more income as well.

I don't know any Diamonds these days that are affiliated with a major system and have any staff for the business. I certainly can't think of any in our organisation that I'm aware of. I know of Crown Ambassadors that do, even affiliated with professional system companies, but Crown Ambassador is a whole different kettle of fish to Diamond.

[NewtonTrino]

or folks running their own systems, which also means significantly more income as well.


Really, why would that be? I thought the tool system profit was minimal?

The reality is that tools system money is the only place to make money real money.

[icerat]

Really, why would that be? I thought the tool system profit was minimal?

The reality is that tools system money is the only place to make money real money.

I never said it was minimal. Even if it's 10% (which is "minimal" from one perspective), as an average Diamond it's still over $15,000/yr, nothing to sneeze at.

Apart from which, the comment was with regard folk who founded and own BSM companies, which is a different matter altogther. For a start they've put in the time and money (and risk) to get the business together, and in most cases they've found customers outside of their personal Amway business. It's a separate issue to Diamonds make more from BSM sales through their personal group than from Amway sales through their personal group. The latter is rarer, and from what I can establish has tended only to occur in groups where the BSM rebates are based on "ever achieved" pin level and backroom deals rather than on actual volume. So a non-qualifying Diamond maybe be having shrinking margins on their Amway volume, since the margins are linked to volume, whereas their BSM margins would stay the same, making BSM profits progressively a greater part of their income. Not sound economics and a recipe for trouble, as history has proven.

I'm not aware of any groups still operating that way.

[NewtonTrino]

I'm not aware of any groups still operating that way.

So you admit said groups existed though? You just think they've cleaned up their act?

How many large scale functions still happen in NA on a monthly basis? How much profit do you think these generate?

[icerat]

So you admit said groups existed though? You just think they've cleaned up their act?

Some still need a bit of scrubbing IMO, but yes of course this has been an issue. Just not as universal as you and others think.

How many large scale functions still happen in NA on a monthly basis?

no idea

How much profit do you think these generate?

You can't answer that question sensibly. They don't exist in a vacuum. I'm aware of one BSM company that was taken to court and the case was dropped - but it cost them half a million euros in legal fees to defend themselves. In another case a BSM company invested a million dollars in opening a new market, which 10 years later still isn't profitable for them. Another BSM company I'm familar with has spent a fortune on developing some very nice websites to offer to their IBO clients. This money has to come from somewhere, and it comes from profit from other things - and that's not counting all the general expenses of running large multi-nationals. Asking how much profit is made on just one of a companies products without accounting for all their expenses is simply silly.

One thing I can say is that when price comparisons are done, their offering better prices than the competition for similar services, as discussed here (http://www.thetruthaboutamway.com/index.php/content/view/3813/90/lang,en/)

[NewtonTrino]

Exactly. YOU DON'T KNOW.

What was your highest pin level again? How big is your group? How much do you make in profit? How much work did you put into building your business?

Can you go over again with us the rules about selling your business?

[The Atheist]

I'd just like to say:

:bigclap

to J5.

[icerat]

Exactly. YOU DON'T KNOW.

Right, but on the other hand, you, who had an experience with just one group in one country some years ago (you refuse to answer), know how thousands of different diamonds in 80+ markets operate.

If only I was as omniscient and dogmatic as yourself I could answer :rolleyes:

Can you go over again with us the rules about selling your business?

Never went over it in the first place. Rule 6.6 if you want to look it up.