Amway is not a scam – but you can still be scammed.

I’ve had a few interesting discussions lately both online and offline with folk who are absolutely convinced that multi-level marketing and Amway are scams. The discussions have been with highly intelligent and educated people, including one who is a lecturer in entrepreneurship at a school for business. What I’ve discovered is that the reasoning behind their beliefs fall into two areas –

Ignorance, confusion, and misconceptions about MLM

The first is essentially ignorance or misconceptions. MLM suffers greatly by the fact that virtually all illegal pyramid scams claim to be MLMs. When they inevitably fail or are closed down by the government, the meme that “MLM=scam” is reinforced. In reality this is poor logic. The very reason the scams are claiming to be MLMs is because MLMs are legal, legitimate businesses. Nevertheless, the effect on public perceptions is a daunting problem for the legitimate companies.

Associated with this is many misconceptions about how legitimate MLMs operates. Many folk believe we make money by recruiting others, and “smart” people know that means the model will inevitably “saturate” and you can’t make any money since there’s no longer anyone left to recruit. Of course, this isn’t MLM, it’s an illegal pyramid. We don’t make money by recruiting, we make money through sales volume. MLM isn’t really a business model – it’s a marketing strategy with the aim of increasing sales volume. Indeed, in general for any given level of sales, the more people you recruit to achieve it, the less you make on it. It’s no different to owning say a traditional retail store selling clothes. You could sell them all yourself, and keep the whole profit, or could employ some other sales staff. They’ll cost you money, but you hope that the increase in sales will offset the increase in costs.

These types of misconceptions abound, with people concerned about the legitimate problems inherent in illegal pyramids, and believing they exist in multi-level marketing.

Scammers can scam you with Amway

The second area that seems to influence people is their own personal experiences, or those of people they know, or, increasingly, experiences of others they read on the internet. The interesting thing is, when you delve into the problems with those experiences, they very rarely have anything to do with Amway or multi-level marketing per se, they have to do with how some people operate their multi-level marketing businesses.

You can be scammed in any business. A car salesman can knowingly sell you a lemon. A doctor can overcharge you for a simple procedure. A teacher can “force” you to purchase a substandard text book they’d written and printed themselves. An Amway business owner could sell you Double X by telling you it cures cancer, or you can be a millionaire with little work.

In each case you’ve been scammed, but the scam had nothing to do with the car industry, or the medical profession, or teaching, or Amway. It had to do with those individuals (and perhaps some of their associates) and the way they were behaving.

The multi-level marketing strategy, and Amway as it’s largest representative, is a brilliant way of doing business which allows anyone to start and own their own business, of which ever size they desire, with little financial risk, and without having to pursue it full-time. Just like in any other industry however, you can be scammed, and if you’re so inclined, you can scam people, but like any other industry, the scammers rarely last long.

Amway will soon celebrate it’s 50th anniversary. That should say it all.

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2007 Quixtar Qualifiers

Quixtar, Amway Global’s North American arm, recently published the Special Achievement Issue, highlighting the major recognitions for 2007. User Exwwdbibo was kind enough to add these to AmwayWiki.

New Diamonds and above for 2007 were -

45 FAA Founders Crown Ambassador

Dornan, Jim & Nancy – Georgia

Founders Triple Diamond

Kim, Seung Ho and Hyunja Kim – New York

Triple Diamond

Barry Chi & Holly Chen – Nevada

Double Diamond

Barry Chi & Holly Chen – Nevada
Winters, Larry & Pam – North Carolina

Executive Diamond

Ban, Seungpyo & Hyekyung – California
Rek, Zbigniew & Sophia – California

Founders Diamond

Chheda, Pravin & Madhu – New Jersey
Han, Youngjo & Oksoo – Ontario

Diamond

Chheda, Pravin & Madhu – New Jersey
Donovan, John & Julie – Florida
Doodnauth, Dave & Shanita – Florida
Francis, Greg & Jacquie – Illinois
Kim, Soon Mi & Lee, Min Chul – New York
Ledezma, Adan & Francisca – Arizona
Lee, Jay & Jeong – British Columbia
Li, Xuan & Lu, Lucy Hua – Texas
Paik, Munju – California
Ho, Chil & Yi, Ki Suk – California

Summary

New 45FAA Founders Crown Ambassador: 1
New Founders Triple Diamond: 1
New Triple Diamond: 1
New Double Diamond: 2
New Executive Diamond: 2
New Founders Diamond: 2
New Diamonds: 1
New Founders Emeralds: 23
New Emeralds: 4
New Founders Sapphire: 33
New Sapphires: 56
New Ruby: 34
New Founders Platinum: 335
New Platinums: 544

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Amway Upline: Mentor or Coach?

Over on the Speaking of Amway blog there’s been some interesting discussion about what’s the best way to "train" new IBOs. For quite some time I’ve been thinking that perhaps it’s not any "training" per se that may need adjustment, but rather our overall approach to new IBOs. It’s well known from "system" statistics that generally only 2-3% of registered IBOs ever even participate in their training, and the TEAM vs Quixtar case in California revealed that overall only 5% of new IBOs even place an order after they register.

Bridgett makes the case a few times on the Speaking of Amway site that one of the problems is that folk register people as IBOs that never should be registered. I think this is true, but on the other hand past experience tells us that many of the folk you think should be registered don’t do a thing, and some of those folk who you think are a waste of time build big businesses. So who are we to judge?

I think we, as a whole (meaning the corp., system companies, and upline IBOs), do let down new IBOs, and I suspect one reason is the approach many of us have as upline. We are there for new IBOs as "Mentors", when what they really need is a "Personal Coach". Mentors generally act as people who are there for you when you want guidance and advice. You need to approach them. A modern personal coach however, is a different kettle of fish. People spend fortunes hiring personal coaches who will ring them up and virtually harass them if they’re not at the gym. They’re far more proactive in getting their "clients" to get their bums off the sofa and doing something.

Perhaps we need to do the same thing with new IBOs? I suspect we may treat them as "business owners" well before they’re ready to take that mantle. Should we, with their permission of course, be far more proactive with new IBOs? Or does that risk them ending up being ex-IBOs complaining their upline harassed them and told them what to do?

There has to be some middle ground and some useful guidelines to consider. Are you a mentor or a personal coach with your IBOs? At what point does proactivity become harassment? And most importantly, what can we do to help new IBOs get started properly?

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WIN achieves Quixtar Accreditation

IBO Organisation WIN (World Information Network) has reportedly successfully achieved Quixtar Accreditation.

WIN joins it’s sister group, MarkerMan Productions (MMP), as well as eFinity and ProSystem One as one of the first groups to be accredited. Accreditation is a requirement for qualification for Quixtar’s QBI Awards.

Thanks to SoonerIBO in the forums for sharing this news. Congratulations to the leaders and IBOs of WIN!

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Ask a Diamond

If you could sit down with a long-time Amway Diamond and have an honest conversation about the business today, what would you ask them?

Blogger Chuck Lia, who recently started his site speakingofamway.com happens to be a good friend of Diamond Mike Wilson, having known him since way before he was a Diamond. They play tennis together, and as such have plenty of time for a chat. Chuck has managed to encourage Mike to answer a series of questions about the business and let him post the responses on his blog. What’s more, Chuck is after your input – what would you ask an Amway/Quixtar Diamond?

Let Chuck know at speakingofamway.com

While you’re at it, post your questions here as well, I’ll see if I can get some of my contacts to respond.

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