I’m what’s known as a “skeptic”. Skepticism has been defined as “the process of applying reason and critical thinking to determine validity”1. As such, I don’t believe in things like ghosts, astrology, homeopathy, or supernatural beings. Show me some solid evidence then I’ll change my mind. Skepticism though, suffers from the same flaws as any other reasoning system – if you start with incorrect assumptions, or your “facts” are wrong, then you’ll almost certainly come to false conclusions.
Alas that’s something I often see happen with many “skeptics” and the world of multi-level marketing. They have little knowledge of the area, and they unfortunately tend to start their application of reason and critical thinking from a position of false assumption, often based on cursory internet research. It’s no surprise then that they finish with false conclusions. If you want to apply reason and critical thinking to an area, the first thing you need to do is collate facts.
One of the most popular “skeptical” resources on the internet is a website (also now a book) by Robert Todd Carroll known as The Skeptic’s Dictionary. Bob Carroll has two articles that relate to Amway, once is titled Amway® (Quixtar®) (Team of Destiny®) (TEAM®) (Network 21) and the other is multi-level marketing (a.k.a. network marketing & referral marketing). Both are full misrepresentations and display a shockingly poor understanding of the business model and how it functions. How has Carroll managed to write such poor articles? Simple – false assumptions and poor research.
Let’s start by looking at his sources, to understand where he’s getting his information. In the MLM article he cites the following sources as “additional reading” –
- Fitzpatrick, Robert L. and Joyce Reynolds. False Profits – Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes (Charlotte, N.C.: Herald Press, 1997). See my review of this book.
- Klebniov, Paul. “The Power of Positive Inspiration,” Forbes, December 9, 1991.
- Taylor J. M. 2011. The Case for and against Multilevel Marketing: The Complete Guide to Understanding and Countering the Effects of Endless Chain Selling and Product-based Pyramid Schemes. Consumer Awareness Institute.
That’s two self-published books by two self-promoted MLM “experts” (FitzPatrick & Taylor), both of whom earn a living attacking MLM and have been rejected by mainstream academics and most legal authorities. His other source – a journalist. That’s it! That’s his sourcing and recommended reading! He doesn’t reference probably the seminal historical work on multi-level marketing, Professor Nicole Woolsey Biggart’s (1998) Charismatic Capitalism: Direct Selling Organizations in America. He doesn’t reference Professor Dominique Xardel’s (1993) book The Direct Selling Revolution: Understanding the Growth of the Amway Corporation. Nor does he mention Professor Charles W. King’s book, The New Professionals: The Rise of Network Marketing As the Next Major Profession. No mention of peer-reviewed published papers like Peterson & Wotruba (1996) What is Direct Selling? – Definition, Perspectives, and Research Agenda or Albaum & Peterson (2011) Multilevel (network) marketing: An objective view. Nor does he reference any of the other nearly 100 academic works on network and multilevel marketing that I’ve so far been able to collect.
No, he completely ignores all of that work, instead apparently basing his articles on one news article and, frankly, a couple of internet crackpots.
I spent years as a research scientist at world class University. A large part of my job was collecting, collating and assessing previous research so we could get an understanding of the existing knowledge in the particular area we were studying. Alas, we’d often find a lot of research, even peer-reviewed published research, was poorly done and unusable. I wonder how much effort Mr Carroll put in to evaluating the sources he uses? What’s their quality? What’s their credibility? In the case of FitzPatrick and Taylor, that’s worth entire article (or two!) in itself, so for now, let’s go back to Carroll’s article on Multi-level marketing. I’m going to cite each section and comment on it. This makes for a lengthy post, but Carroll covers many of the same absurd claims that other MLM critics espouse, so it’s worth doing.
Carroll: The idea behind multi-level marketing (MLM) is simple. Imagine you have a product to sell. A common MLM product is some sort of panacea, such as a vitamin or mineral supplement.
Yes, “wellness” products are common in multilevel marketing – making up around a quarter of sales. According to the Direct Selling Association though, fully 73% of sales are in other areas, with Home & family care, durables, personal care, services, clothing, leisure, and education materials all coming under the direct sales/MLM umbrella.2 In other words the vast majority of MLM is not “vitamin or mineral supplements”.
Carroll: You could do what most businesses do: either sell it directly to consumers or find others who will buy your product from you and sell it to other people. MLM schemes require that you recruit people not only to buy and sell your product, but who will also recruit people who will not only buy and sell your product but also recruit people….ad infinitum. Only there never is an infinitum to move towards.
No Bob, this isn’t true. First of all, no MLM that I’m aware of “requires” you to recruit people. Secondly there is no more “ad infinitum” in the MLM world than there is in any other business. You can go and buy widget X from some manufacturer, and resell it someone, who can resell it to someone, who can resell it to someone ad infinitum! You can recruit as many resellers as you want, and so can those resellers. Does that happen? No, of course not! There are natural limits to resale of a product, just like there is in MLM. Indeed, when the FTC investigated Amway in the 1970s, clearing it of being a pyramid scheme, they discovered that the number of “middlemen” layers in Amway was much the same or less than traditional distribution systems.3
Carroll: This may seem unusual to traditional business people. Why, you might wonder would you recruit people to compete with you? For, isn’t that what you are doing when you recruit people to sell the same products you are selling? MLM magic will convince you that it is reasonable to recruit competitors because they won’t really be competitors since you will get a cut of their profits.
I’ve covered this silly canard about recruiting competitors before. No Bob, as a member of “traditional business people” I can assure you I don’t find this odd at all. This is exactly what other companies do when they recruit wholesalers and retailers to resell the product. In my town there are Coca-Cola machines owned by Coca-Cola. If I buy from them, I’m buying direct from Coca-Cola. I can also go to the local supermarket and buy Coca-Cola. The local supermarket is in competition with Coca-Cola to sell me a Coke. Why would Coca-Cola do that?!?! They’re recruiting competitors! Do you find that absurd? I doubt you do. Companies recruit “competitors” all the time. The idea is that the decrease in profit margin is made up for by the increase in sales volume, so your overall profit increases.
Carroll: This will take your mind off the fact that no matter how big your town or market, it is finite. The well will go dry soon enough.
Mr Carroll here indicates he appears to be completely ignorant of how MLM works, and indeed some of the advantages of MLM. Nobody is restricted to their own “town or market”. When I started my Amway business, I, obviously, started in my home town. It grew, and I have personally introduced people in 7 countries and many more towns. Because of the low startup costs, the handling of logistics by the parent companies, and the lack of need for major infrastructure, MLM reps are not restricted to their home towns.
Having said that, will “the well” go “dry soon enough”? More than 30 years ago the FTC investigated the exact claim. What did they find?
The preponderance of the evidence in the record does not support the allegation of ‘saturation.’ (Findings (Findings 14852)) From my observation of the demeanor, inconsistencies and uncertainties in the testimony of the witnesses called in support of the complaint in this regard, I believe the reason for their failure was more accurately described by a marketing expert who testified about this subject (Patty, Tr. 3109): ‘I think generally speaking when a saleman tells you that a market is saturated, he has become discouraged for some reason, usually he is simply not making the sale effort that is required.’ 
Carroll: There will always be some distributors who will make money in an MLM scheme. The majority, however, must fail due to the intrinsic nature of all pyramid schemes.
Carroll let’s slip the entire flaw in his “reasoning” here. He hasn’t mention “pyramid schemes” before in the article at all. Now he mentions it as if it and MLM are interchangeable terms. He is stating from the basis of believing that all MLMs are pyramid schemes, and then assigning the very real flaws of pyramid schemes to Multi-level Marketing. It appears that not only is Carroll ignorant of all of the academic work addressing multi-level marketing, he is ignorant of seminal legal cases like FTC vs Amway. Here’s some quick quotes from the decision for Mr Carroll’s edification –
- The Amway Sales and Marketing Plan is not a pyramid plan
- Specifically, we have determined that the Amway Sales and Marketing Plan is not an illegal ‘pyramid scheme’
- It is not a pyramid sales plan
- The Amway Sales and Marketing Plan, not being a ‘pyramid’ plan, has not led to any significant difficulty in recruiting new distributors.
Several years of research, and hundreds of witnesses and affidavits went in to the FTC decision. It was published more than 30 years ago. It is cited in virtually every legal case and peer-reviewed published work on the topic. Yet Mr Carroll appears to be completely ignorant of it’s findings. Perhaps he’s just confused? Perhaps he doesn’t believe Amway is a Multilevel Marketing Company? No, later in the article he states “the most successful MLM scheme is Amway”.
So Carroll believes Amway is an MLM, and that MLMs are pyramid schemes. Perhaps he feels he’s discovered some flaws in MLM that the FTC didn’t address? Here’s a direct quote of one of the complaints assessed –
- Complaint counsel argue that the Amway Sales and Marketing Plan is inherently unlawful because it is ‘a scheme to pyramid distributors upon ever increasing numbers of other distributors.’ They argue that the Amway Plan, even without actual proof of economic failure, is ‘doomed to failure’ and contains an ‘intolerable potential to deceive.’
- it is alleged that the Amway Sales and Marketing Plan is inherently deceptive, as it holds out the promise of ‘substantial income . . . as a result of . . . sales activities from . . . endless chain recruiting activities’; this is essentially a way of saying that the Amway Plan is an illegal pyramid scheme.
These are precisely the kind of claims Carroll is making. Claims dismissed, after a thorough investigation, nearly four decades ago.
Carroll: Multi-level marketing is system of marketing which puts more emphasis upon the recruiting of distributors than on the selling of products. As such, it is intrinsically flawed.
This is nonsensical. The entire purpose of recruiting distributors is to sell products. If you recruit a million distributors in to Amway, and nobody buys any products, how much money do you make? ZERO.
Carroll: MLM is very attractive, however, because it sells hope and appears to be outside the mainstream of business as usual. It promises wealth and independence to all.
Where does “MLM” promise that? This is nothing but a straw man. Any evidence for this assertion, Carroll?
Carroll: Unfortunately, no matter what the product, MLM is doomed to produce more failures than successes. For every MLM distributor who makes a decent living or even a decent supplemental income, there are at least ten who do little more than buy products and promotional materials, costing them much more than they will ever earn as an MLM agent.
Firstly, this is a non sequitur. His claims about “failure rates” does not logically lead to the conclusion he begins with. Secondly, his claims don’t seem to be supported by any evidence. Analysis by an independent expert for the Pokorny et.al vs Quixtar class action settlement estimated that only between 13% and 18% of all Quixtar (now Amway) IBOs over a 9 year period had even $100 in expenses for “business support materials”. That’s not monthly or yearly – that’s total. Yet according to Amway’s income disclosure, the 54% they categorise as “active” (which doesn’t mean they’re actively building a business) earned an average of over $2400/yr, not including the very substantial yearly bonuses. Furthermore, when the independent class administrators contacted over 97% of former Quixtar/Amway distributors from a nearly 10 year period, and offered them compensation if they lost money (without any proof required) only 3% submitted claims.
His scenario might be mathematically possible, with some convoluted set of data, but I’d like to see some supporting evidence!
Secondly, he seems to believe that MLM earning should be covering products costs. That’s a reasonable belief, if they’re a business expense. But how many are? If you purchase products for resale and can’t sell them, you can return them for a refund, so no expense there. If you purchase them for personal use, then they’re not a business expense. The only business expenses would be samples and demo stock – yet the BERR vs Amway UK case revealed to us that only 6% are retailing – so very few have that expense.
So let’s summarise some know facts –
- Less than 18% have even $100 in “promotional material” expenses
- 6% or less have product related business expenses.
- 54% are earning bonuses exceeding an average of $2400/yr, not counting yearly bonuses or retail customer profit
- when offered compensation for losses running an Amway/Quixtar business, only 3% claimed it.
These are known facts.
Carroll’s conclusion, based on who knows what: There are 10 times more people losing money than making money.
Evidence please, Mr Carroll.
Carroll: The most successful MLM scheme is Amway. It has millions of distributors worldwide with sales in the billions. At the turn of the century, the average Amway distributor earned about $700 a year in sales, but spent about $1,000 a year on Amway products.
I’m not quite sure where Carroll apparently gets this data from. He cites a 1991 Forbes article by Paul Klebniov (that’s quite a few years before the turn of the century,) that says – “the average distributor in the US will net around $780 a year in bonuses and markups from selling Amway products. But in addition to the products the distributor sells to others, he will also consume, on average, $1,068 worth of Amway goods himself.”
Ok, so the distributor has made $780+ in bonuses, and purchased Amway products at a saving of nearly $300. Is that supposed to be a bad thing? Well it might be, if, like Carroll seems to believe (and Klebniov seems to imply) buying products for your own personal use is somehow a business expense. If they tried that with the IRS they’d be guilty of fraud! Speaking of fraud, or at least, illegal behaviour, Carroll republishes the entire Klebniov article on his website, which is a clear violation of Forbes copyright if he doesn’t have permission.
Carroll: Distributors also have other expenses related to the business, e.g., telephone, gas, motivational meetings, and publicity material (Amway.com; Klebniov 1991).
That’s only partially true. Active distributors, trying to build a network, may have these expenses – however the vast majority are not active. Data from the FTC vs Amway and TEAM vs Quixtar court cases tell us that less than 1 in 4 ever try sponsoring other people. The BERR vs Amway UK case tells us only 6% are engaging in retailing. The Pokorny class action settlement reveals somewhere less than 18% have even $100 in business support material expenses, and only 3% claim losses.
The evidence clear points to one conclusion – the vast majority of registered Amway “distributors” are not actively trying to build businesses, they are merely customers of the products, and as such their purchases are a source of profit for the active distributors.
For additional anecodtal support – ask anyone who has built any kind of significantly sized Amway business. They’ll tell you the vast, vast majority are not trying to build a business and earn an income. Why MLM critics refuse to accept this simple and obvious fact is beyond me.
Carroll: The reason MLM schemes cannot succeed is because MLM marketing is, in essence, a legal pyramid scheme.
This is just completely absurd. The first known implementation of multilevel marketing was by Mytinger and Casselberry with the products from the California Vitamin Company in 1941.4 That operation became Nutrilite and eventually grew in to today’s Amway corporation. The same basic MLM plan has been in operation for well over 70 years and last year generated sales of nearly $12 billion dollars. If that’s “cannot succeed”, then Robert Carroll has a very interesting definition of “succeed”!
Carroll then claims it’s a “legal pyramid scheme”. Pyramid schemes are illegal. There are no “legal pyramid schemes”. You may as well say “MLM is an legal illegal scheme”. It’s nonsensical.
Carroll: The basic idea is for a sales person to recruit more sales persons. This is very advantageous to those who own the company and supply the products, especially since the sales persons in MLMs are also customers. But it is puzzling why a sales person would think it is to his or her advantage to increase the number of competing sales persons.
Now we’re back to the absurd assertion that it’s “puzzling” that people would want to profit from wholesale sales.
Carroll: This is not to say there is no benefit to MLM membership. You get certain tax write-offs. You get to buy products, some of which you will be happy with.
“Some of which” you will be happy with? Why would you buy them if you’re not happy with them? Furthermore, unlike most of the retail world, most MLMs offer satisfaction guarantees. If you’re not happy with them, then you can return them for a refund.
Carroll:You get to go to inspirational meetings, some of which will make you feel good. You may meet new friends and you may even make a few bucks. But more than likely you will end up alienating some family and friends.
Any evidence Carroll? Or just more blanket assertions? Brody et.al. (2004) Public Perceptions of Direct Selling: An International Perspective found that 58% of encounters with direct sellers were with family or friends, and that “people who have already had dealings with direct sellers have very positive perceptions regarding direct selling”. In the US, 98% of respondents said they would buy again from a direct seller, and 94% would recommend it to others. And just to be clear, the majority of the sample had not ever been direct sellers, and just under 99% of direct sellers use MLM.
Carroll: You will probably end up buying more stuff than you sell.
Yes, probably, because if you’re an “average” person who registers with an MLM, you’re not trying to sell, you’re just buying stuff for personal use.
Carroll: You will probably end up buying more stuff than you sell. And you will learn a lot about deceiving yourself and others. You won’t be allowed to tell anyone how you are really doing, for example. You will always have to think positive, even if that means lying. You will have to tell anyone who asks that you are doing great, that business is wonderful, that you’ve never seen anything go so fast and bring you income so quickly, even if it isn’t true.
A bunch of silly unsupported (and indeed false) platitudes.
Carroll finishes by recommending a couple of self-published anti-mlm screeds. Documents that are probably the source of Carroll’s false beliefs about MLM, since he repeats many of the standard anti-mlm myths in his narrative.
Robert T. Carroll – you were lied to and misled. You have read and believed false information, and then uncritically repeated it to a larger audience, giving it credibility it does not deserve. That is not the way skepticism works.
Note: When I find the time I’ll update this article with further footnoting and sources.
Brian Dunning, What Is Skepticism?, skeptoid.com ↩
Direct Selling Association (2012), Revenue by Product Group, http://dsa.org/research/industry-statistics/ ↩
FTC vs Amway, Findings of Fact 43 ↩
Biggart 1988, Charismatic Capitalism ↩
41 thoughts on “A Skeptical Debunking – Robert Carroll’s A Skeptic’s Dictionary and MLM”
Robert Carroll is just like one of the idiots who actually does not know anything but talk like know everything.
Just poor stupid dying old man
well not dying he actually died
hope he learns something under the ground
The Achieve magazine didn’t explicitly mention that Holly Chen does about a half of Amway’s business. But it mentioned that they have over 2,000 Diamonds in their group (June 2008, page 20). And we know that at about the same time (2009), about 4,000 currently qualified Diamonds were invited to the 50th anniversary celebration to Las Vegas.
That can be open to interpretation too. 2000 Diamonds (ie people) or 2000 Diamondships? 2000 ever qualified Diamond or currently qualified Diamonds? And how many overlap with other organisations (and their own!), thanks to international sponsorship? Not really a simple matter unfortunately, even if we had direct access to Amway’s databases!
In any case, there’s no debate they have a hugely successful organisation!
No matter how you slice it, the 2012 pie is substantially smaller than the 1997 pie. There are 300 less qualified diamonds and 1200 less qualified platinums. Lets hear your story. How many years have you been in? What is your pin level? Once i find those out, then I will have a bunch more questions.
Kelly, I’ve been researching and collecting information on Amway for more than a decade. I’m surprised it’s taken this long to cross paths, since you clearly have access to information others do not. For example, I have no idea what Amway North America’s sales were in 1997. Could you please share them, and your source?
I also have no idea how many qualified Diamonds and Platinums there were in North America in 1997 and 2012. Could you please also share that data, and your source?
Frankly, I don’t think Amway North America has ever had 300 qualified Diamondships at the same time, so your claim that there are 300 less now than in 1997 doesn’t make any sense to me. Your clarification appreciated!
Say what? I challenge you do do some research on your own. Read through the various threads on TTAA. You may find the answers you are seeking.
Kelly is/was just trying to be provocative. Obviously, he doesn’t know what he is talking about. Has he done any research? I doubt it! He wants to spread rumors and listen to stories. Wonder what his story is?
Since psychology has been brought up in this thread about Amway [ it could be applied to almost any human activity ] I wish to share several quotes of the simple rules of behavior that helps produce success if seriously followed :
“Success Is The Progressive Realization Of A Worthwhile Dream”
“Winners Never Quit And Quitters Never Win”
“Never Let Anybody Steal Your Dream”
“You will see it when you believe it”
These phrases were among many that one of the top money earners in Amway practiced and taught to those that would listen. He started as a beer truck driver and grew to a phenomenon of leadership in the business making thousands of Amway business owners residualy successful beyond their income dreams.
Buy the way…it’s much harder to sell anything with no experience actually using the products or services in your marketing business. So by example as a consumer your selling credibility to sales and/or business owner prospects soars when what you are selling is part of your real life. Because you basically get paid for shopping from your own diverse business produce line…why would you buy those items from local stores or online that offer no such reimbursement or bonus at the end of each month. When a percentage of that shopping volume also comes to you from your downline’s monthly orders…you can earn a little or a lot depending on how large you gradually grow your business from like consumers each having the identical opportunity to grow their business and sell to others if they wish to add to their monthly volume.
This simple plan works if you work the plan which has left many with egg on their faces that poo pooed it based on naive unwillingness to do their research before assuming a negative attitude about it. Determined folks holding 3 jobs make time to gradually build MLM businesses. It’s a winning ATTITUDE.
Amway has become the largest MLM in the world (active in approx 80+ countries) with over $11 Billion in annual sales in 2012 beating out Avon…now in 2nd place.
note: removed advertising of competitor business – ibofb
Amway DOESNT have $11 Billion in annual sales… it’s parent corporation Alticor, Inc. has $11 Billion in annual sales. Find out what percentage of that belongs to Amway and you will have a true number… Amway will not release factual information. How much in annual sales for AMWAY alone? How many qualified diamonds are there? It would be easy for them to do… make it available at: amway.com/diamonds and it would have a list of ALL diamonds who ever achieved the pin, and would have an asterisk next to those who are currently qualified. But, that makes too much sense…. If the masses had the correct knowledge, would they still sign up? I thinketh not.
Kelly, they have often noted the “non-Amway” related revenue of Alticor, and it’s been in the order of $100 million or so. In other words, it’s only a percent or so, if that, and Amway sales would still exceed $11 billion.
I’m not quite sure what the focus on “qualified diamonds” is? Platinum is the core of the business, and reflected directly in sales data. More sales means more Platinums. (I’d even go so far as to say Founders Platinum should be the focus). Diamond can be with international legs, sometimes contributing to multiple Diamonds. Heck, you can even lose Diamond qualification but be making more money as a solid qualifying Founders Emerald. People stretch to get the Diamond pin, then relax, one of their teams might drop off in volume, the others can strengthen.
What’s wrong with that?
“They have often noted…”I is anectedotal… show me hard figures. According to Amway released figures, there are only 3640 people who have maintained at least 7500 pv for one month in 2012 (down 2100 from 1997). And mathematically there are only a maximum of 520 diamonds (for one month out of the year) down from 820 back in 1997 (if it was spread out equally). So the math doesnt compute.
Hi, Kelly. Let me try to clear this up a little for you. You are correct, most of those who have been recognized and honored as Diamonds no longer receive a Diamond bonus. Even some higher pins are no longer qualified to attend Diamond Club.
Diamond is a title, just as president, senator, and general are. The USA has several individuals that are addressed as “Mr. President”. Only one is “The President”. Senators that have been voted out of office are still addressed as Senator. When military officers retire they retain their titles. We honor and show respect to all these individuals by addressing them with their former titles. (Plus, they get a very nice check at the end of each month.) Diamonds are treated the same.
Amway North America recognized 487 Diamonds through 1983. 30 years later only 20 were recognized as Legacy Diamonds. That means they had personally attended 30 Diamond Clubs. The others died, retired, sold their businesses, left the business for “other” reasons or failed to re-qualify for one or more years. We still honor all of them with a title.
As a former athlete I have “risen to the occasion” many times when faced with a challenge only to later “take it easy” and “rest on my laurels”. I have treated my Amway business the same way. As you have noticed, others have done the same.
Do a little, make a little. Do a lot, make a lot. Do nothing, make nothing. That is not quite true in Amway. There is a “royalty” income. If you choose to retire, you get paid for past effort. This royalty income is no different than what authors and people that have oil wells on their property receive.
Would you sign up for a deal like that? To make the money you WILL have to do the work. A lot of it! (Lazy doesn’t cut it in the business world.)
Hope this helps.
Kelly, the figure was in sales press releases. I can’t be bothered looking it up.
As for your figures, they seem to be for Amway North America only, and best I can tell you are calculating them based on a flawed understanding of the business plan. Platinums (and Diamondships) are not all independent of each other. In the US, for example, 15000 PV is enough to theoretically cover four platinum qualifiers – you seem to be calculating it as two. Similarly, a Diamond can count as a Platinum in someone else’s qualification, and with international legs considered one platinum can contribute to two different Diamondships. Not to mention of course, international platinums also count towards Diamond qualification.
Furthermore, you seem to be then taking these already flawed calculations and comparing them using 1997 reported estimated retail figures with 2012 actual revenues (ie IBO price).
Doesn’t matter how good your math is, if your assumptions are wrong, so will your conclusions be.
Not all, but some MLM presentations I’ve seen were a lot of hype and fluff, sprinkled in with questionable factoids. I think some money can be made in MLM but it’s so difficult to do that the average bear will try it and quit in frustration after a short while. I do think there is a high failure rate in MLM but that is expected because it is difficult.
I think it’s not that it’s difficult per se, it’s just really easy not to do, so even small bumps in the road are enough to stop people
Believe it or not, the failure rate in Amway is the same as anywhere else. People quit in every area. Those who are willing to work, stay.
And no, it isn’t difficult at all. You just do a little work every day consistently for several years. You just have to be patient and build it step-by-step.
Yes! One has to be consistent in their efforts. The difficulty is that most people people lack vision and patience. They also don’t spend the necessary time in self-development. I’ve known SP75 for over a year now and we have become friends. He practices what he preaches. One is wise to listen to him.
I’ve heard it said that there are lies, damn lies, and statistics. I know just enough about statistics (I was required to take a course in college) to know that numbers can be manipulated to prove just about anything one wants. If we publish numbers as pure facts and show how we are using them, then we can’t be accused of lying. If I say I have a 50% retention rate, I may or may not be saying what you think I’m saying. If I show you my group sponsored 100 and at the end of the year 50 were still with us, we get a little closer to the truth. (Some were sponsored 12 months ago and some were sponsored one month ago.)
Re: The Amway business opportunity.
I just listened to a Jay Van Andel tape. He said that in the traditional business world 80% of businesses don’t last a year. (I’ll take his word for it because I know of his integrity. However, it appears that he was giving round numbers to keep it simple.) He also said that after five years only 10% of the remaining 20% were still in business. If I’m doing my math correctly, only (about) 2% of businesses last for five years. My traditional business lasted about seven years before I sold it (and broke even). As far as my Amway business is concerned, out of exactly 100 the first year 51 were with me the following year. Of those, 40 were still registered the next year. 34 the next. 30, 25, 20, 20, 20… That is better than 2%! Were they still building the business? No. (Probably because I wasn’t.) But, they had product loyalty!
In 2011, the IBOAI created the Legacy Diamond Leaders award. It honors and edifies those who have attended 30 Diamond Clubs. By the end of 1981, 487 had achieved Diamond. 20 attended. (That’s about 4%.) Some of the Diamonds that could have attend didn’t because they were either dead or retired. Their children didn’t qualify to go to the head of the line because they didn’t meet the “personal attendance” criteria. Many “Diamond” businesses carry the title but not the volume. However, they are still viable businesses.
How many IBOs make Diamond? All that want to and are willing to put in the (consistent) effort required. In other words, work. What does it require to be a fully qualified Founders Diamond? Six leaders (Founders Platinums). What does that require? Leadership. Setting the example. More work. “Replacing” those that lose their dreams. Some will. Some won’t. So what. If you aim at nothing, you are sure to hit it!
Re: My point.
I usually agree with SP75. But, in this case he appears to be mistaken. Traditional business: 20% after one year and 2% after five. Amway: (in my case) 50% after one year and 20% after five. Also, those individuals that don’t decide to stick with Amway are not failures. They just decided it wasn’t for them (at that time in their life). We still love them!
Congratulations to SP75 and his wife for qualifying as Founders Platinum. Next goal – – Emerald! What does that take? Three leaders that want to make it happen. You can do it!
The stuffs he’s saying sounds like a cult, or a religion, and it seems he doesn’t provide any facts which I feel, as a university student (I’m on break, ha ha), still doesn’t support any important facts or supporting evidence. If this were to be handed in to my professor, with no quotes or citation, it’d be an “F” written in, big, bold, and red. So far I’ve seen ibofight back provided sources and links to more information. Which is really helpful and does back up what ibofightback says. Thanks! Very helpful and useful information!
@RobertTCarroll RT @ibofb: A Skeptical Debunking – Robert Carroll’s A Skeptic’s Dictionary http://t.co/d4YGNxGJhH
The author of this article doesn’t successfully refute most of what he’s trying to. (I’m a philosophy student with a concentration in logic.) It was entertaining to read an article (well half of it anyway) where the person pointing out a fallacy immediately commits several of their own. I’m not saying the authors he’s trashing are right but they can’t be any less convincing. As far as I’m concerned, luring a person in with an “amazing” opportunity then kicking back and profiting off of their efforts is just grimy, no matter how you word it.
Are the irony, as you end by throwing out a straw man. How about you actually point out the errors in my article?
Huh! I’m a little dense. I don’t get your reasoning. don’tdoit, please explain your logic. Just do it!
How can one arrive at an intelligent, logical conclusion if they don’t bother to get all the facts? Don’t be lazy! Do your homework.
You probably need to read it once again. Or twice. Or…
Perhaps you understand it someday. 🙂
P.S.: No need to go deep into psychology – just use a common sense.
No reply after 11 weeks.
Could he be lazy? Or just letting off steam? Maybe he has a legitimate complaint.
Some people think they can get rich quick by luring others in. They usually don’t last very long. The “plan” is not the problem. It is unscrupulous people that try to game the system.
Bernice Hansen, in an interview she gave at age 99, said, The best distributors [IBOs] come from happy customers. Leonard Kim advises his group to learn about their products and the IBO compensation plan before sharing the business with others. (Gee, what they are suggesting takes time!)
Holly Chin goes even further and indicates you have to really care about people. (Love people and use money.) She and Barry do half of Amway’s business volume with only 10% of all Amway’s IBOs. Do the IBOs in China and Korea have better leadership than IBO’s in the rest of the world?
What ‘don’tdoit’ might consider doing is find a sponsor he/she can trust and respect. That may take a while. The plan will work if you will work the plan. Another thought: Get in and “do it your way”. The correct way. SP75 did it that way and it is working for him. “The proof is in the pudding!”
Howard, I’m skeptical of this claim the Chen’s do half of Amway’s business. Do you have a source? (I’d also note that China and Korea combined do less than half of Amway’s volume, and there’s plenty of business in those countries outside the Chen’s – and you probably mean Taiwan, they’re not that big in Korea are they?)
David, Holly and Barry are Founders Crown Ambassador in three markets and have businesses in many more. They teach the same principles to all their group, wherever they are. See the people, sell the products, show the plan (STP). And, all the while, build relationships. Respect and trust.
They have adopted the original philosophy of the Founders (Van Andel, DeVos, Bass, Hansen, Victor, Dutt, and Teitsma). The business was originally founded upon retail sales to customers. A satisfied customer may become a happy IBO. Product loyalty means they are less likely to quit.
Some of the people that got in with me over 20 years ago are still IBOs and very satisfied with Amway products. My next door neighbor was a customer. Her granddaughter, who sells Avon, loves L.O.C. (Spoke to her today.) Need I say more?
The source, I believe, was Amway, a few years back. (2008?) Just going on recall. Perhaps you have it among all your references. I don’t.
The reference to Korea is: Leonard Kim (and his over 400 Diamonds). The Kims are the only “200 Plus Crown Ambassadors” in the world. Leonard is mentioned in the latest Achieve in the article on Wonbo Shim.
I don’t think it’s correct.
What are you referring to? The 50%?
yup, the 50%
I must apologize to all. I misspoke about the 50% claim. My source close to Amway seriously doubts that it is so. He has no idea what the percentage may be. My only explaination is I must have remembered somebody’s (internet) speculation. Searching hasn’t revealed where I found it.
Preaching to the choir Howard. Network 21, whom I affiliate with, has always taught much the same principles you mention. I too have people in my group who joined 15 years ago and are not actively building but have been happy shoppers the entire time. Heck, I’ve been one of them myself! Mind you, if I recall correctly Holly Chen was a happy customer for a long time before she became an IBO – but it wasn’t the person who was selling the products to her who sponsored her, they’d never shown her the business. Show both, let the person decide what’s for them! But never forget the products are the business.
I suspect most of the “who cares about the products” type of promoters went with the purging of TEAM some years back.
As for Korea vs US, they do much the same sales, however Korea has one sixth of the population. There’s been a bit of academic work on cultural differences in direct selling, and the model does seem to be less “outside of the comfort zone” for Asian cultures than “Western” ones.
Sorry, David. I wasn’t preaching to you. Others are also reading this. I was “preaching” to them. Knowledge is power. New IBOs need that power.
The Wall Street Journal did an article on Holly in 2012. In it they said her organization had over 300,000 members.
Their focus is on retailing, then recruiting. This is counter to what the “get rich quick” people are preaching. Satisfied customers make the best distributors/IBOs.
How many “get rich quick” types are there around promoting Amway these days? There are virtually no contemporary (last few years) examples being posted on the ‘net by the anti-mlmers. Fake stories posted by the likes of Anna Banana and Joecool don’t count!
No idea! Apparently there are still a few. And, there will always be. Human nature.
Leonard and Ester Kim were customers for 15 years.
Holly joined Amway Taiwan the first day they opened for business, because a male friend suggested she check it out.
OK, must have been the Kims I was thinking about.