Amway Success – What are your odds?

A common cry of the anti-Amway zealots is that the “odds” or “chance” of an individual being successful in Amway are low. They’ll typically look at some of Amway’s published statistics, such as the fact that in 2005, .0120% of “Direct Fulfillment IBOs of Record” qualifed at the Diamond level, and claim that your “odds” of going Diamond are 1 in 8333, so you’d be better off at Vegas, where your “odds” of winning on a single number in say, roulette are 1 in 29.

Oft-quoted anti-MLM zealot Jon M. Taylor, Ph.D., President, Consumer Awareness Institute, and Director, Pyramid Scheme Alert, for example, claims that -

The odds of winning from a single spin of the wheel in a game of roulette in Las Vegas is 286 times as great as the odds of profiting after enrolling as an Amway/Quixtar “distributor”

Amway is not a game of chance

A quick bit of math shows that Dr Taylor thus claims the “odds” of profiting in Amway are 1 in 8294. He calculates these “odds” based on numerous assumptions (for which I might add, he has next to no data to support), including what peoples expenses are. Now, for the purposes of this post I’m going to ignore these type of assumptions, but if they are correct (they’re not) then his “odds” might be a reasonable statistic to consider, except for one thing – unlike roulette, Amway is not a game of chance.

For many people, the term “odds” is most familiar in the area of betting and horse racing, so I’ll use an example from that arena. The Kentucky Derby is one of the world’s biggest horse races. The 2008 Derby had 20 starters, of which (ties aside), only 1 could win. What are the odds than any particular horse would win? Using the thought processes of anti-MLM zealots like Jon Taylor, they’d be 1 in 20, or 5%. In reality, bookmakers provided betting odds that ranged from 50:1 (2%) for Big Truck to 3:1 (25%) for the eventual winner, Big Brown.

Why aren’t the “odds” of winning the Kentuck Derby for each horse simply 5%, as Dr Taylor’s Amway assertion would have you believe? Simple – horse racing is not a game of chance. Bookmakers take in to account many factors in deciding whether a horse is likely to win, including past performance, track conditions, the weather, the jockey etc etc.

The same principles apply to the Amway business. The “odds” of your success vary dramatically based on a number of factors. The first factor is, of course, determining precisely what “success” is for you. For example, in their investigation into a proposed new business opportunity rule, the FTC said that MLM company Shaklee reports 85% of folk who join that company do so purely to receive products at distributor pricing. “Success” for a such a person would be placing an order and receiving it successfully!

If this was your goal in joining Amway (and it is for many people), what are your “odds” of success, using the methodology proposed by Dr Jon Taylor?

Goal: Buy Amway products at distributor pricing
Odds of success: 50% (Jon Taylor methodology)

50%?!?!? Surely everyone who registers with Amway as an Amway business owner gets their products at distributor pricing? Well … yes (UK&ROI market aside, which has a slightly different model) … however statistics revealed in the Team vs Quixtar dispute of 2007 show that only 50% of folk who registered with Quixtar ever placed an order after joining.

I’m sure you’ll agree though, that shopping from Amway/Quixtar is not a game of chance. There are things you can do to influence your success – you could for example, actually place an order! Voila - your “odds” have suddenly doubled to around 100%.

Dr Jon Taylor, Robert FitzPatrick, and other anti-Amway zealots such as “JoeCool” and “Rocket” would have us ignore not only what an individual’s goal(s) are, but also factors that influence that goal. Clearly this is a ridiculous and indefensible position. In Dr Taylor’s case, it’s a disgraceful one, as he is the holder of a Ph.D in Applied Psychology from the University of Utah. Having qualifications in psychology myself, I can assure you that you do not achieve a Ph.D. without a reasonable grasp of probability and statistics.

With regards to MLM statistics, Dr Taylor is either delusional or utterly dishonest.

There are things you can do to increase your odds

So what are the real odds of success in Amway for various goals, and what factors influence them? Well, clearly if your goal is wholesale price purchasing, then your odds of success are close enough to 100% if you place an order. Just as clearly, someone who joins and never even places and orders products is extremely unlikely to ever make any money. Indeed, I would suggest the probability of success for that group is 0%. Using this kind of information, just like bookmakers with horses, we can come up with “odds” that better reflect reality.

The 2008 Amway Global Sales Incentive Brochure reports for example that 0.3685% of North American IBOs qualify as Platinums or higher – that’s about 1 in 271. Yet we know that half of those 271 never even place an order, so their “odds” of reaching platinum were effectively zero. So …

If you place an order, your odds of being a platinum are about 1 in 135.

The TEAM vs Quixtar lawsuit in California also revealed that only 23.4% of Amway business owners ever sponsor anyone. While I’m sure there are folk who have qualified platinum purely on customer sales, without having sponsored anyone, it’s likely that the percentage who do so approximates zero. So …

If you sponsor at least one person, your odds of being a platinum are about 1 in 63.

Refining it further, the TEAM case revealed that only 12.9% of Amway business owners ever receive a bonus on downline volume. To receive a bonus you have to have a downline and at least 50PV of customer volume, plus be at a higher bonus bracket than the downline.

If you qualify for a bonus on downline volume, then your odds of being a platinum are 1 in 35.

Let’s put this in perspective. If all you do is join Amway and do enough to earn a bonus on downline volume, then already your “odds” of being close to developing a business earning $50,000K/yr+ (Q-12 Platinum) is approaching 1 in 35 – compare this to Dr Taylors simplistic claim that the “odds” of simply making a profit are 1 in 8294 (0.01%)

Clearly, earning a profit in the Amway business involves a lot more than simply signing a form and paying the registration fee, as Dr Taylor and others would have us believe. Taking action makes a difference! Indeed, the BERR vs Amway case in the United Kingdom revealed some even more astounding statistics -

  • only 6% of agents bought Amway products to sell on
  • 10% of agents make a profit

Leaving aside the fact this shows Dr Taylor’s claims re profit were out by a factor of 1000(!!!), it also reveals something else. It’s a reasonable assumption that those agents who made a profit included virtually all of those who onsold the product to consumers. If so -

if you have customers, then your “odds” of making a profit from an Amway business are approximately 100%

Amway is not a game of chance. It’s a business. Treat it as such and the odds of success are clearly very good indeed.

207 thoughts on “Amway Success – What are your odds?”

  1. My boyfriend is in amway and this is the first time his business is starting to “grow.” However he has not hit eagle yet. I feel like you get pressured into cutting off social relationships. He hardly talks to his family and friends since he wants this to work. Do you think that people who are already rich will succeed more than those who are financially strained? I feel like that is a factor since his uplines were already trust fund babies or were people who had 6 figure incomes at their jobs.

    1. A reality is that if you start a new venture on the side of what you’re already doing, then there’s naturally going to be less time for existing social relationships. Doesn’t matter if it’s a part-job, a course, a sport, or an Amway (or any other) business. It takes time. In addition if your existing social networks aren’t supportive of what you’ve decided to do (again, doesn’t matter what) then you’re going to be inclined to want to spend time with them. Nothing unusual about that.

      As for whether being already “rich” helps? Yes and no. If you’re already successful in some other venture, then you’ve quite probably already learned or developed a number of the types of traits necessary to succeed in other endeavours (people skills, goal setting, leadership, focus etc). With “trust fund babies”, probably not, unless their successful parents taught them these things.

      There’s been rich people succeed, there’s been plenty of people start with nothing and succeed! But it does takes time and effort.

      1. But what if you are supportive? How long do you let the person do the new venture until you call it quits? Is it appropriate for a person to only acknowledge you once a week when they’ve been working on this for around 3-4 years? It just seems like a high risk situation because another venture you know what is at the end of 4 years (a degree, a promotion etc.) but within this context you really don’t know if you will be successful or have postpone being with your family/friends another some odd years.

        My other qualm is that I feel like people within the organization have so much self respect that they condescend others. For example getting a job and retiring at 65 is such a dumb notion to them.

        1. That’s something that its up to each individual to decide. In my experience most people who aren’t growing, if they sat down and were honest would admit they’re not actually doing the things they know are necessary to grow. Often from “the outside” it looks like they’re working hard, but they’re not, they’re often “thinking hard” about working hard. It’s rare for someone to actually put in the effort and “fail”, and there’s enough prior examples to know that if you genuinely put in the effort consistently, it’s low risk, not high.

          Having said that, some people might need to take an honest hard look at themselves and acknowledge they never are going to do what’s necessary, so they’d be better off putting their time and effort in to something that does inspire them. It’s pretty much impossible for anyone except the individual to know when that point is, however. Having said that, from your first post it sounds as if he maybe is having some success now. What might be worthwhile is setting some deadline, together. Say “ok, I’ll support you 100% in this if you do what successful people say is necessary for the next X months (or years or whatever), but you have to agree that if you haven’t gotten Y results then you agree to focus on something else instead.

          Regarding respect for others, I’m aware there are groups that have a condescending attitude to people with jobs or who elect to pursue other ventures. I personally don’t have respect for them. Being an entrepreneur isn’t for everyone, and that’s just fine.

          1. Agree with you 100%, IBOfightback. That’s the way I’ve approached it.

            Everyone in my team has always constantly re-affirmed to me that my relationships come first, and my current studies come second, and that my business therefore comes third. The consequence is that it may take me longer to develop my business, but it means that I don’t fail anything in my degree and it means that I don’t end up with a disgruntled partner, family, or group of friends,

            I hate the condescension that seems to be so ubiquitous among the platinums and above. Some of the IDA material encourages you to believe that if somebody claims they don’t have the time or interest for this business that they’re going to “lose in life”, which is complete and utter nonsense.

        2. Not sure why having a job and retiring at 65 is a problem. I hear about all these Amway folks having tons of money but they don’t appear to be retired either. Is that the goal they speak of when presenting the business?

          1. Brad, we each have our own goals, our own why. In a business presentation many potential goals may be offered and/or solicited. The question asked may be, “Why work for someone else and retire at age 65?” Why not do something on the side that will potentially make you enough money that you can decide when and if you want to retire? What would be one of your goals if money was not an issue?

            I am 69 years old. Many of my Diamond friends are about the same age. We have fun helping others make money. (I am having fun writing to you! At the same time I may be helping others. My time is to use as I see fit.) To whom much is given, much is required. Sow and reap. ” Give and it shall be returned…”

            Building any kind of successful business takes “a lot of hard work.” When you enjoy what you are doing, it doesn’t seem so much like work. Amway’s philosophy of “People Helping People” makes the “work” enjoyable. its all in what you believe. You have to think outside the box. Stretch a little more than what seems comfortable.

          2. Most presentations I’ve seen talking about having more choices and options to do as you please. That might be building Amway, it might be doing something else. I personally know a platinum, a diamond, and a CA that pretty much took a decade off from building Amway because they wanted to prioritise other things. None of them need to build Amway for money – the platinum built a very successful traditional business during that decade – but all of them are back building Amway businesses again because they choose to.

      2. Sudha, if you are truly supportive of your boyfriend, don’t place conditions on that support. If others are not supportive, then don’t talk about “the business” when you are around them. Only talk about what they are interested in. That doesn’t mean you have to cut them off. They are still your friends! They just have different interest, that’s all. The two of you get to chose your priorities. Of course they are going to be different than your friends’ priorities.

        Once you have established a clear and concise WHY for building your business, it will be easier to do so. Your WHY will allow you to FOCUS your energy on what you BELIEVE is important.

        A friend recommended a book recently that re-energized me. Perhaps it will do the same for you. Larry Winters, a very successful Double Diamond wrote: “LIVE THE DREAM, No More Excuses”. I’ve read it twice, already.

  2. Hi

    I read both sides of the story and all the confusing mambo jumbo and lack of information and finally came to an conclusion….

    Bugger Amway – if you are prepared to work hard selling ANY PRODUCT after hours OR earning commissions OR having a second job, You’”ll :

    - earn real money,
    - be a business owner,
    - and be able to employ others to do it in the future…

    So if anything – the motivational principles are what people need (available in books), then simply lift you fat arse and “get the products to the market”. – no funny structure, commissions, oplines etc… Once big enough – employ people… Simple as pie!

    1. sure, that’s an option, but extremely difficult to do part-time with little capital investment and then you have all the management overhead. Even ignoring the work involved with employees, Where, for $50/yr (free in some markets!) can you get a $12 billion multinational to handle all your billing, collections, deliveries, website design, R&D, advertising etc etc etc?

      Simple? Really? Ever done it?

  3. I love facts, stats and commonsense.
    Thanks a bunch IBOFB!!!
    Your posture is awesome and your unbiased and analytical approach is wonderful.
    Hoping to one day have a long (non-cross lining) chat with you in the incredible future sometime if our paths would cross.
    I like how your mind ticks and this website just puts it in a simple way.
    The biggest point being that YOU actually have to DO something to be SUCCESSFUL in business, any business or anything in life!

  4. This was helpful somewhat. Basically for whatever reason less than 1% of people ever make much but if they do get a downline and if they qualify for a bonus then I would be able to make it.

    But when I speak to the ones who have done it, they are not Q12.

    Also I’m not sure if you are sayi g that because of those factors Otis really 1-35 chance of you making it if you do what they ask (bring someone in and get a bonus).

    The more I read, the more I am inclined to think that Amway is not for me. There is just too much need to prove that it’s not a pyramid and not a scheme. Granted that most people won’t push themselves to platnium so they are not really competition and you do get out of it what you put into it, I’m still getting the feeling of scam.

    There should be 3 level, customer, prefered customer and IBO (of which is not really independent but co-dependent). This way it’s doesn’t look like the IBO is customer but is a distributor. Also allows for not getting to a point of oversaturation.

    BTW if MLM is the best way to go, why don’t more companies do it? Why doesn’t McDonald’s or Staples do the same thing?

    1. (1) regarding “proving” it’s not a pyramid/scheme, you’ll find the people who think that will *never* be convinced of otherwise, so it’s rarely worth much effort trying to do so. The irony is, in my experience the people most likely to claim things like this are often also the least successful people in their lives so far! People experienced in business rarely respond in that way.
      (2) regarding customer/preferred customer/IBO, the problem is what to do with people who want to change? What if you work this month to build the business, then have personal challenges and just buy the products for 6 months or 6 years or whatever then want to build again? How do you define the different groups and over what time period? And given it’s really only the anti-mlm zealots who are worried about it, why make the effort anyway?
      (3) MLM is not suited to every type of product or market, you need enough profit margin to support the agents. Things like nutrition and skin care/cosmetics are high margin products, so there’s enough profit to support the business model. The model also offers advantages in that trained agents can provide individual service and support to customers, explaining why and how the products are different to what you find on regular retail store shelves. It clearly works as Amway is the #1 nutritional company in the world. Someone suggested to me the other day that MLM/direct sales was a bad an unnecessary model for skin care/cosmetics since companies like Revlon do just fine without it. I looked up the annual reports and discovered Avon , an mlm/direct seller, does nearly 10 times the sales of Revlon! Amway, with it’s Artistry brand, is one of the top 5 premium brands in the world. The business model works.
      (4) The big secret of MLM is that hardly anybody actually does it seriously. Even fewer do it seriously for a sustained period of time. Those that do nearly all make a success of it. Be careful in evaluating what others are doing though. I had a gal in my organisation whom I thought was working hard but seemed to be getting nowhere. Eventually we managed to sit down with her and talk about what she’d been doing. We discovered that in the previous year she’d only done 15 presentations. That’s what we recommend for a decent month! Undoubtedly her friends and family may have thought she was working hard and failing too, but the reality is she was just looking like she was, attending meetings and talking a good talk, but she wasn’t doing the work. Like any business it doesn’t work without work. Heck, if it was easy there’d be no money in it :)

  5. I am an IBO of 3 years and still going. What I have learned is that you have understand that your greatest investment is you. You are going to have to put money into the very asset that you own before you will get back a profitable award. Its just like farming. You have to plant the seeds, establish patience, and you will reap the harvest next season. It is a 2-5 year plan which has improved since the 1990s. With World Wide Group and an even more profitable compensation plan called Fast Track, IBOS are given great opportunity for immediate benefits. You just can’t quit. Keep going. Thats with anything you do in life. Its like a stone mason cracking at a rock all day. Others may not see any progress on the outside but on the inside of that rock there is alot of activity going on. When most people would give up the stone mason cracks at the rock one more time and next thing you know the rock breaks open and there is a diamond inside. The system works. If it didnt then why am I getting paid bonus checks every month? Should I send the checks back?

  6. i won’t say “scam” but i left quixtar in 2004 after becoming an ibo in 2002. My wife and I invested quite a lot into our ibo and we actually were able to establish a downline of 3 but thats as far as it went, when i finally gave up i was way in the hole and when i could’nt afford to “tools” i was chastised by my platnuim.. just my 2 cents. Michael

  7. i really like where this article is going…. man people quit and dont have determination or drive to continue when they are doing bad… but if you believe and cont. and strife to what your real goal is. Your investment and time and sweat will pay off

    1. Seriously? A 20 year old webpage with a poorly done statistical analysis leading to false conclusions is “useful”? And from a country you don’t even live in? Makes one wonder if you’re just trying to spam your “competitor” website link … (which I have edited)

  8. I guess a factor to take out of this is that starting IBOs who don’t have a steady stream of points from a downline get a hard time since they don’t always have anything to show. Then they get added as one of these statistics. That’s what I found the hard way throughout the past summer and this current school year.

    1. It’s tough at the beginning of any business. You have to work hard for little or no reward. The thing with Amway and other MLMs is that, unlike another business where you may have invested thousands or tens of thousands, it’s really easy not to do.

Please Leave a Reply. Abusive comments, comments with fake email addresses, or comments soliciting for business will be deleted.