Amway Russia BSM rules – a sign of things to come? Part II

This article is a continuation of the early article on Amway Russia's new BSM rules. If you haven't already, I recommend reading that first. Pay particular attention to the definition of BSM (Business Support Materials). In that first article I addressed the new rules as they apply to Events. Today I'll be looking at the new rules as the apply to the "promotion, sale, and distribution of all other BSMs". This is what is commonly known as "tools" – books, CDs, DVDs, websites etc. "Tools" serve a number of purposes. One is to Amway Russiaeducate and motivate the individual Independent Business Owner (IBO), the other is to be used as business tools – to loan out to prospects and new IBOs to help educate and/or motivate them. Used properly they are great time saving devices and effective business tools. Got a new IBO? You could teach him what to do – but perhaps you're brand new as well? Lend him a CD with Founder's Crown Ambassador Jim Dornan teaching him how to get started. Got a prospect who's a real melancholy accountant type, and you're a fun-loving chatterbox sanguine type who he doesn't relate to at all? Lend him a CD of a melancholy accountant who has built this business. Don't know much about Artistry, but have a prospect interested in building an Artistry-based business? Lend them a tape by someone like Double Diamond Glenda Leonard, who did it exactly that.

This second use of "tools" is the one that is generally overlooked by "critics" of BSM and the BSM support companies. In my experience having a library of different CDs, DVDs, and books which you can lend out to prospects and new IBOs is crucial. Not having such a libray is in many ways crippling and unprofessional.

Unfortunately, that is what Amway Russia has decided to do. Here's a summary of the new rules. 

Certification 

  • Only Certified BSM Providers and their designated downline may promote or sell BSM
  • An applicant to be a certified BSM provider must be an internationally qualified Crown Ambassador and at least Emerald within the Russian market
  • Amway may, at it's discretion, designate other individuals with significant Russian business to be a Certified BSM Provider.
  • if a certified provider which to use a 3rd part to produce BSM, thenboth must enter into an agreement with Amway explicitly agreeing they are responsible for the activities and actions of the other party.

Comments: Wow – this is pretty heavy stuff. What it means is that individual IBOs (below Crown Ambassador) cannot produce their own BSM and get it approved by Amway – whether it be a website, or recommend a book, or tape their own training sessions or similar and provide them to their downline – even if no money is involved. Everything you want to use to support your business needs to get approved by Amway, and you can only ask for approval if you're a Crown Ambassador!

  •  each Certified provider will be allowed 6 BSM

Comments: That's not a typo. 6. Six.  1, 2, 3, 4, 5  …. 6. This is so stunning, and IMO absurd, that I'm virtually speechless.

  • bundling of BSM shall not be allowed as one BSM unit

Comments: That single starter pack of 4 CDs and a book you recommend to get people started. There goes 5 of your 6 BSM.

  • Amway will review and approve all BSM
  • Amway will set the pricing of all BSM
  • providers will supply Amway with all financial information surrounding BSM distribution
  • any compensation plan will be approved and modifed as Amway deems necessary
  • providers pretty much agree to let Amway do anything else Amway deems necessary
  • Amway can change these rules whenever they like

Comments: No offence to Amway Russia, but these rules are positively Soviet-like. Amway is saying that not only do IBOs have to have every BSM item they which to use in their business approved, but Amway will also set the price of those items, wants to know all the financial details surrounding them, and can pretty much do as they please when they please. Essentially they are telling privately run companies how they should be run, and wanting all the otherwise private financial details around them.

Remember, Amway is the company that was found guilty of price-fixing by the FTC for wanting individual IBOs to retail products at the same price. The FTC commissioner judged that such requirements infringed on the independence of "independent" distributors. Here they are forcing this requirement for BSM, not only for individual IBOs, but also for independent corporations that aren't even IBOs.

  • Amway will measure the efficacy of BSM products regarding productivty, income, and other measurable areas.

Comments: I used to work as a research scientist, and one of my areas was developing and evaluating the effectiveness of various educational products. So, I mostly like this rule. Products should be evaluated to see if they make a difference. However – and this is a big however – there's the (in)famous lies, damn lies, and statistics. I've spent several years as an inactive IBO. For various reasons I've not been building my Amway business. I have however regularly attended various N21 seminars, and regularly and irregularly purchased other materials from Network 21. Why? Because I (a) enjoy them immensely and (b) find them of great value with regards to my life in general and also my other business pursuits.

How would Amway handle that in their evaluations? Well – I already know that in Quixtar I'd be considered an "active" IBO, because by attending a meeting, even once in a year, they consider me to be "active". Amway will likely consider me to be an active IBO, even though I'm not, and they'd compare my Amway business to the tools being purchased and judge the tools, at least in my case, as being ineffective.

This would be completely and utterly wrong – to the point of offensiveness.

I spent a lot of time as a researcher, and I still do a lot of research as a hobby. One thing that is very very clear to me is that very little quality research is done. Surveys are poorly designed, incorrect or misleading statistics are calculated, and inevitably misleading conclusions are made. Evaluation is crucial – but it has to be done properly. Given Amway currently defines me as "active" even when I'm not, well, i'd fear their evaluations of BSM would be off target as well.

  • any violation of the policy shally automatically result in "loss of good standing" and "suspension"
  • "loss of  good standing" means the AIE (IBO) becomes ineligible for "discretionary" awards
  • "suspension" means withholding or loss of all Amway bonuses, at Amway's discretion
  • violations while suspended will lead to termination

In any business agreement there's always pluses and minuses. As Amway Independent Business Owners, or Independent Entrepreneurs, while we own and run our own businesses, we do give up some of the freedom normally associated with business ownership in return to the benefits afforded by partnering with Amway. For example we abide by rules regarding advertising, and where we can market our products. For some people, loss of such things is a deal breaker and they don't consider it worth the benefits of partnering with a company like Amway.

These rules move even further towards a loss of independence for IBOs, and I am very concerned about them. Is this a template for what Amway would like to implement in other markets? I encourage all active IBOs to imagine building their business with only 6 CDs/books/DVDs available throughout an entire year.  Now, I assume (or at least hope) that Amway is planning on filling the void by offering some of their own materials, but as yet nothing has apparently been said, and these rules come in to force in Amway Russia in about 14 weeks. My russian contacts tell me that russian IBOs are shocked by these rules. BSM has not been officially available to IBOs in Russia in the past, but they have borrowed and scraped together whatever they can from wherever they and used it to the best of their ability. I have zero doubt that many IBOs have probably been violating Amway's BSM rules and bringing in materials from other countries. They've been looking forward to the day that they could start operating with the full power and assistance of professionally developed, successful business education and training systems. Amway has now said they can't. Amway Russia has had spectacular growth in it's first 2 years, ostensibly without BSM, but the reality is that there was already many shadow networks built there before the market opened. It's my belief that such shadow networks and the sheer excitement and enthusiasm of a new market may drive sales for 2 or 3 years, but after this time things tend to settle down and professional business systems are needed to sustain growth. This will now be missing.

Jay Van Andel, co-founder of AmwayWhat perhaps is of most concern is that these rules were implemented without any consultation with the European Diamond Advisory Council – the folk who are actually building Amway businesses. It's somewhat of a cliche, but the truth of the matter is that Amway Corporation itself has almost no inside experience on how to build an Amway business. This is why consultation with IBOs is important, and this hasn't happened here. The history of Amway is one of partnership. Partnership between IBOs and Amway Corporation, and the incredible partnership between Rich DeVos and Jay Van Andel. Rich DeVos is well known for his strength in leadership and inspiration. Jay Van Andel , who passed away in 24, brought a dedication to details and the skills of a natural diplomat and consensus builder. I've wondered over the past year of so if perhaps Amway Corporation and it's current leaders are missing the wisdom of Jay Van Andel more than we realize.

There are issues that need to be addressed surround the use of BSM by Amway and Quixtar IBOs. Anyone who doesn't think so is burying their head in the sand. These new Amway Russia rules, and the way in which they have been developed, are not the solution and they are certainly not in anyway reflective of the spirit of Free Enterprise on which the Amway and Quixtar businesses were founded. I'm glad Amway is taking initiative and realising the need for change. I'm not glad about the way they're going about it. Last week in Monte Carlo, the Amway Founder's Council met. This was more than 1 top IBO leaders from around the world meeting together with corporate leaders. I'm sure they had much to discuss – hopefully Jay Van Andel was there in spirit helping to guide them.

Post a comment below or Discuss this post on Amway Talk

Leave a Reply

Your email address will not be published. Required fields are marked *