Category Archives: Amway Facts

The Nutrilite Story

TheNutriliteStoryI’ve just finished reading The Nutrilite Story by Dr Sam Rehnborg. What a great read! It not only tells of the origins of Nutrilite and Amway, but the entire multi-level marketing industry and the nutrition and nutritional supplements industry. It’s fascinating, and the life story of Carl Rehnborg is worthy of a movie – more than once I was close to tears, a classic story of someone getting knocked down and getting back up again and again in the pursuit of their dreams.

It’s available on your tablet, phone or PC as an ebook for kindle from Amazon or for nook from Barnes and Noble. Recommended!

 

Part II – Do Diamonds make most of their money from selling tools?

Back in 2009 I wrote a post Let’s Talk About Tools Part I, beginning a conversation about an area that has been of some controversy in the Amway world – the promotion and sale of Business Support Materials or BSM. After a mere 5 year break I’m finally here to talk about Part II – Do Diamonds make most of their money from selling tools?

Just today I saw a claim from an MLM critic that (in 2004) “the best of the best (Diamonds) were earning $250k/yr, but only $60,000 from sales/downline sales.”

He was claiming that while Amway Diamonds and above were making more than $250,000/yr, only about $60,000 of that was from the sale of Amway products through their network – the rest from the sale of “tools” – books, CDs, and seminar tickets. It’s not an unusual claim. Amway critic “Joecool” regularly makes similar claims, and former IBO Scott Johnson (aka Tex) is absolutely obsessed with the idea, commenting about “Stop the Amway Tool Scam” on virtually any news article or website that mentions Amway.

So is there any truth to this claim? As I point out in Part I, successful Amway IBOs can and do earn money from (1) the production and resale of training products and  services to Amway organisations (2) the sale and distribution of tools through ones own downline and (3) by selling their services as professional speakers.

So how much do they make?

Several years ago I and a number of other Amway bloggers were invited to participate in a panel discussion with Amway staff. One of the invitees was the tool-profit obsessed Scott Johnson, so I decided to see if I could get some hard data and information about how much Diamonds made from BSM sales. I emailed all the various “support organisations” I could find contact information for, including Britt WorldWide (BWW), eFinity, INA, Network 21, Yager Internet Services and others to see if they would share some information. Unfortunately only one of them was willing. For confidentiality reasons I won’t name them, but they’re a very significant and large group.

For this company, qualified Amway Platinums and above could earn a monthly volume rebate on the BSM purchased by their Amway organisation. CDs for example sold for a retail price of $7. However, just like with Amway, there was an increasing discount (paid as a rebate) for larger volumes, as follows –

VolumeRebate
 ($US)
0-4990
500-9990.50
1000-19990.75
2000-39991.00
4000-59991.20
6000-79991.40
8000-99991.60
10000-149991.80
15000-199992.00
20000-299992.20

A similar rebate scale works for tickets to seminars. For example, qualified Emeralds and above earned the following rebates on tickets to major Weekend Seminars –

VolumeRebate
($US)
0-490
50-1495.00
150-24910.00
250-49915.00
500+20.00

The schedule works like the bonus brackers of Amway, so a Diamond earing at the “WES 250″ bracket would most likely be “paying out” of their bonus to at least a couple of Emeralds. A Founders Platinum with a volume rebate of 75 cents might be paying out 50 or even 75 cents of that to another downline Platinum.

In addition this organisation pays speakers to present at major functions. Airfaires, hotels, and a per diem for expenses are paid, along with a speakers fee. This fee averages about $3250.

Now, just like with Amway, there are huge differences between organisations. A Diamond can have 6 platinums all in the US, or thousands of platinums spread around the world. So there can be huge differences in their Amway income, and huge differences in the volume of BSM materials they move through their organisation. But how does the BSM income compare to Amway income?

Well, in 2007 the average North American Emerald earned around $70,000 from Amway.

The average North American Emerald in this organisation in 2007 earned around $7,000 from BSM rebates and speakers fees combined.

The average Emerald had “system” or “tool” income of around 10% of their Amway income.

In 2007 the average North American Diamond earned around $155,000 from Amway.

The average North American Diamond in this organisation in 2007 earned around $23,000 from BSM rebates and speakers fees combined.

The average Diamond had “system” or “tool” income of around 15% of their Amway income.

Now, this data is now 7+ years old and it’s important to note a few things. First of all, different BSM companies calculate their rebate systems in different ways. I’m told for example that in the past some BSM companies paid their rebates not based on volume, but based on the pin level they had achieved. So someone who had qualified Diamond received the Diamond rebate level - even if their volumes had dropped and they were no longer qualifying as an Amway Diamond.

Different groups also have different numbers of CDs and meetings they encouraged their groups to attend. I’ve heard of groups that encouraged the members to buy as many as 10 CDs a week. Others are 4 or 5 a month. Obviously if you’re selling a lot more CDs then you’re making a lot more money from this income source. Similarly some speakers are far more in demand (or have far more personal desire) to be on the speaking circuit, and this earn more from that income source. There are also other differences in how the profits (if any) of the production companies are used and/or distributed.

So yes, some Diamonds, in some organisations may earn more from their BSM related activites than from Amway. But this is unusual, not the norm!

Furthermore, in 2007/2008 Amway implemented a whole new accreditation system for companies that supplied BSM to Amway IBOs. As part of this Amway required the companies to allow an independent marketing firm to study their compensation plans for fairness and Amway’s approval. Many changes had to be made – including moving from an “pin level” based rebate to a volume rebate. On top of that, Amway also drastically increased a range of bonuses. In 2007 the average Diamond earned around $155,000. In 2014 the figure is over $600,000.

In the past, cases of Amway Diamonds and above earning more from “tools” and “the system” than from Amway occurred but were not common. In 2014 it’s virtually non-existent.

No, in general Diamonds do not make more money from tools than from Amway.

What does a Professor of International Business think about Amway?

Professor Ing Jiří Jindra, CSc.  is a Full Professor at the University of Economics, Prague, in the Czech Republic, with nearly 100 academic papers published in peer-reviewed academic journals. A few years ago he was interviewed and asked what he thought about Amway. A new Czech blog, Amway Fakta, has posted a video of the interview with English captions. Have a listen (or read! don’t forget to press the CC button to get the english subtitles) to what a  expert says about the Amway business.

Thanks for the great work, Amway Fakta!

Amway reports record sales of $11.8 billion


Amway today reported record sales of $11.8 billion for 2013,  a 4.4% increase on 2012 sales of $11.3 billion. This is the seventh consecutive year of growth and exceeds the previous year’s growth rate of 3.7%.

Amway sales 1959 to 2013
Amway sales 1959 to 2013

While the figures include revenue from other Alticor businesses, including JW Marriott and Amway Grand Hotels, Laura Mercier, and Gurwitch Products, 95% of it is from the Amway direct sales business. It is another solid result confirming Amway’s position as the #1 direct selling company in the world.

45% of sales were from the Nutrilite nutrition brand, 25% from Beauty, and 24% from Home Care and Durables.

Amway Average Incomes 2012

Amway North America has a new Business Opportunity Brochure (BOB) out and it has some new statistics on average incomes.

AverageHighest
Q12 Platinum$55,042$190,264
Founders Emerald$135,664$838,533
Founders Diamond$590,928$2,945,820

One interesting thing is that the percentage of all IBOs reaching these levels has also increased – Continue reading

Amway Europe Average Incomes

Amway Logo

Back in 2009 Amway Europe released some data on the average incomes achieved by Amway Business Owners (ABO) at various levels in Western Europe. I’ve now received some updated statistics, for the Amway financial year from September 2010 to August 2011.

LevelAverage/mthAverage/yrHighest/yr
Founders Platinum/Ruby/Sapphire€2,712€32,548€102,963
Founders Emerald€7,059€84,709€165,822
Founders Diamond€13,916€166,990€226,892

This data includes ABOs from the following countries –

Austria, Belgium, France, Germany, Greece, Ireland, Italy, Holland, Portugal, Scandinavia (Denmark, Finland, Norway and Sweden), Spain, Switzerland and the United Kingdom.

Level2009/20102010/2011Change
Founders Platinum/Ruby/Sapphire€2,434€2,712+11.4%
Founders Emerald€4,668€7,059+51.2%
Founders Diamond€11,271€13,916+23.5%

All levels had a decent increase in income, especially Founders Emerald, however for European ABOs, there’s still concern when comparing to Amway North America incomes (using EUR-USD exchange rates as of September 1, 2010) -

LevelEurope/yr
(2010)
North America/yr
(2010)
Founders Platinum$41,273$51,437
Founders Emerald$107,415$135,052
Founders Diamond $211,752$602,467

It appears the Founders Diamond discrepancy might be because in the US it includes Founders Diamond and above, thus including high achievers such as Founders Crown Ambassadors, whereas the European data seems not to. The discrepancy in Founders Platinum income is even worse than it appears though, as in Europe the statistics include Sapphires, whereas the US disclosure document states they’re excluded in the North American data. On top of this, Platinums and above generate more in sales than their North American equivalents, with 10000PV/mth required to qualify Platinum in Europe, and only 7500PV/mth in North America.

Why are North American Platinums and above getting paid more for lesser results than their European counterparts? I’ve no idea, but it may be one reason why some European markets like Amway Germany have been going backwards. Even so, these are still great incomes for a part-time business!