Amway’s spring cleaning – tough decisions and smart decisions

A couple of interesting changes reported out of Amway this week. The first was the opening of the new Amway Insider blog site – Amway was a bit of a pioneer in the corporate blogging world when they launched first Robin Luymes Real Quixtar blog and then Beth Dornan’s Quixtar Insider blog. In December 2006 they however made what I began to think of as a strategic mistake – they launched The OpportunityZone and progressively added more and more blogs from more and more contributors.

On the face of it you might think that was a good idea, however there’s two reasons why it’s generally a bad idea to have so many blogs! First of all it’s a burden on your staff. Blog posting essentially became yet another task for what were already busy staff – and not surprisingly after various initial flurries of activity, most of the postings started to trail off in frequency.

The other reason is that it’s tough for your audience. It was extremely difficult to keep up with all the different blogs, and even harder to keep a conversation going. When building an online community you have to build the community, and conversation, first – only then you can think about expanding. It appears there will be a lot fewer blogs individual blogs in the new setup, so more regular postings, easier to track, and easier to keep a conversation going. Smart move Amway.

The other interesting news is out today is the announcement of the closing of some manufacturing and warehousing facilities and the moving of some manufacturing to Europe and Asia. Given 80% of Amway’s sales are outside the United States (and that sounds a significant underestimate to me), it makes smart business sense to have manufacturing facilities closer to your customers. It’s clearly bad news for the local communities where the facilities are closing, but for them I have a simple solution – support your local Amway distributor and buy Amway products. It means jobs in your town, and you get the bonus of some of the best products in the world! Again – smart move Amway.

16 thoughts on “Amway’s spring cleaning – tough decisions and smart decisions”

  1. I AM building the business. I applaud you for being willing to go the extra mile to help your downline. However, you will have a herculean task of getting people in and keeping them in when you have to try to keep them in the business AND in the system when the system keeps them in a money losing position for the first year or two while they build a solid Platinum business.

    I saw what the system did to the Silver Producer leg that I developed. It literally destroyed it because they were spending so much money on tools and functions, they were not profitable. That leg now does only about 1,000 PV and the only ones left either quit the system or were not ever on it. If I had been using the 400 PV Personal PV Circle that I am using today, that leg would probably not only be a Platunum, it would probably be running Ruby volume. I’ll never go back to the cave man days of the system.

  2. Jeffrey,
    The only reason a Diamond is a Diamond is because they help their downline succeed. If you had ever built the business to any kind of level you would realize that we as the upline work much harder for the downline than they do for themselves. I ran Platinum Plus volume last month and I can tell you I didn’t withhold any secrets from my downline Ibo’s and as I break my first 6 platinum’s I plan on working many times harder for my Ibo’s as I help them achieve more.

    You need to get out of the past and go rip this thing up. Now is a wonderful time to be building your business if that is your desire. I’m sure your upline would be overjoyed to help you as long as you were serious about your desire.

    Go get em!

  3. Yeah, maybe I do generalize a lot. Anyway, about a year ago, I got tired of being an orphan in the business, so I bit the bullet and re-joined my upline’s system. After a while, maybe about 2 or 3 minutes, I realized that it was the same old stuff as before. No real training materials on how to get someone started properly, outdated materials that didn’t really say much of anything about the business opportunity or the products, a list of the “new” achievers that was literally six months old, constant relentless promotion of the next big function with $150 tickets and $99 rooms that was 658 miles away. Whatever. Needless to say, I didn’t renew my membership.

    I will admit that the problem with me having to write all my own literature is that I’m a perfectionist so I will do it over and over again until I really feel comfortable with it. Then I submit it, and the company rejects it because it isn’t worded properly as to be FTC compliant. (Ahh, The federal government–my other favorite entity–NOT.) The last time I went through this, the company and I literally sent the materials back and forth six times and it took a full six months to get it approved. Then they let Diamonds get on stage and spew things that are not completely true like income claims, then reject a piece of literature because I said “How much money do you want to earn per month?” And I had to change it to “How much income do you want to make?” Ridiculous. Of course, there isn’t anything that any agency of the United States government does that makes any sense, the FTC being no exception. I guess Amway is just doing what they have to so they don’t get spanked. However, if the Diamonds would quit being so greedy and share their literature with everyone and let it be bought through the company, it would be a lot easier. Oops, my mistake. A business isn’t supposed to be easy.

  4. Regarding your post IBOFB,

    I agree that Opportunity Zone is too hard to follow, particularly because one has to subscribe to each and every blog post in order to be updated with all the comments. That makes it too time consuming to follow any/all conversations, thus making it hard to keep the conversation going.

    I’m pleased that the new The Amway Insider blog is set up differently–all contributors on one blog, and all comments in one feed.

  5. We need the option of value-based or weight-based shipping for each order. Then let us choose which one is most economical. I have never liked value-based shipping charges. I don’t know who dreamed it up but they must have been smoking something pretty potent.

    If the company would get together with the Diamonds to create the tools, then the company could, for real, take over the tool production and the entire Amway organization would benefit. Know why it will never, ever happen? The tool system is a Diamond’s cash cow, especially if they qualified once and never qualified again. That way they can keep their exorbitant lifestyle whether or not they continue building the business. If the money comes from the business, I don’t care how much they make or how they spend it, but it’s no secret that many Diamonds make a lot more from tools than they make from the business. They do it all the time and it’s deceptive. An analogy: Don’t try to sell me candy by telling tell me you’re in the health food business because sugar cane is a natural food. Yes, it’s technically true, but not ethically true. The Diamonds need to bite the bullet and get rid of their systems and go back to building the business by building a customer base, then branch out into sponsoring after they create a 400 PV circle, and leading by example. That way their income from the business would truly be from the business.

    This one is fairly new, within the last few months.: A customer now has to be registered to have their sales count. If they are not registered, there is no way to account for it because they took the reporting away. The order either has to be placed directly by the customer or the IBO has to make a receipt with a customer’s number for it to count. I think it’s a bunch of baloney. It’s just one more way to create a roadblock to keep people from earning a bonus. If they qualify a bonus on their volume, for heaven’s sake, pay them. If the company withholds a bonus from someone brand-new and their upline Platinum refuses to roll it up, guess what? They’re gone and they’ll never come back. And they won’t go quietly.

    1. Jeffrey, your comments on tool income being connected to “qualified once, never qualified again” is overgeneralized and outtdated. Many systems *never* had that arrangement. For those that did, it’s been phased it. Your claim that “many” make more from tools than from Amway is also highly inaccurate. In the system I work with, average yearly Diamond “tool” income (tapes/tickets/speaking fees/etc) is roughly 15% the average income from Amway for a Diamond. Whatever the source of your bitterness, don’t take it out on everyone.

      It’s ironic of course that your simultaneously wanting Amway to take more control of the field while complaining about them doing so. The reason why customers have to be registered is two-fold – (a) because some leaders were apparently teaching people to fake it and (b) it’s important evidence the business is a legitimate business, and helps Amway correctly set pricing.

      Customers should always get a receipt, so I’m really not sure why you have a problem with it.

      With regard Platinums not rolling up bonuses – complain to the company, obviously.

    2. To Jeffrey,

      I’m confused about what you are upset about in regards to registered customers. I have customers who have never ordered directly off my personal website, nor But they are still registered customers with unique customer numbers. And when I fulfill their orders “offline” I report that volume to their registered customer number.

      1) I then have a record of what they ordered,
      2) they have a receipt,
      3) that volume is added to the 50PV customer requirement that is necessary in order to receive bonus money on downline differential,
      4) and “faking” customer volume like peeps have done in the past, is minimized.

      So…I’m not understanding why having to assign volume to specific customers is a bad thing.

  6. Here’s the thing about shipping…it’s never FREE. Having shipped stuff myself, I am shocked at what all the companies–USPS, UPS, FEDEX Ground, etc.– charge.

    Even small stuff. I sent out a few catalogs and it cost me $5.

    Shipping costs a lot of money. And so if Amway were to give everyone “free” shipping or $6.95 flat shipping, then they’d increase the cost of each product to cover those costs.

    That’s what those other companies do. Nothing is free. It’s a marketing gimmick for CUSTOMERS.

    Because we sell “heavy” items like home care products and drinks (XS, Perfect Water, shakes, sports drinks, etc.) the shipping costs are pricey, because they don’t separate out the heavy (laundry powder and liquids) from the light (supplements, skin care).

    XS is attempting to alleviate this challenge with the palet shipping. But with that, there is then a need for a “product pick up” situation, as most individual IBOs don’t sell 144 cases of XS that fast.

    Bridgett’s suggestion: Rather than a flat or “free” rate, I’d like to see the heavy and light have a different shipping rates. I don’t think it’s “fair” to charge the same for shipping for a 10 pound bag of SA8 as a 2 oz bottle of Rhodiola, simply because have similar price tags. ESPECIALLY when there is a higher profit margin on the supplement than the home care.

  7. The free shipping is only for customers when they place an order of $75 or more. It used to be for everything. Just in the last couple of weeks, they eliminated the “Options” products from free shipping. IBOs used to get free shipping on orders over $750. Now we don’t get free shipping at all. Orders over $750 have a shipping cost of $31.50. Platinums now get four free shipping orders per month. When I spoke with the company about it, they said that Platinums are “encouraged” to “share” their free shipping with their downline. I guess that means going back to the old call-in, pick-up days. If the company thinks that Platinums are going to share that freebie, they must think that pigs fly, too. My upline Platinum won’t even pay the bonus roll-up which he is required to do according to the rules, so I know he’ll never share his free shipping with anyone. Well, maybe with a favorite IBO or two that is deep into his books-CDs-and functions that will probably never go Platinum but they are “at the function where the leaders are.”

    The rules are accreditation, the requirement that IBOs have to do 150 PV with 50 PV of it being customer volume (the customer volume can’t be from Partner Stores), or they will withhold the bonus on the downline volume. They also have a new requirement that before you can get the year-end bonuses, you have to take required courses at the Learning Center. I am an independent so that means that for me to get the year-end bonuses when I go Platinum, I literally have to write, revise, submit, and re-revise all my own literature. The last time I did that, it literally took 6 months to get approved. Most people not affiliated with a system won’t do that.

    The company was going to let us do media advertising and even announced a roll-out, then retracted it, so the advertising rules are still just as tight as they’ve always been. The inability of us to promote our own “businesses” because of Amway’s archaic rules is ludicrous. It’s 2010, not 1964. They need to give us the pre-approved ads that we can run on our own and quit being a jerk about it.

    It’s just like the government. They don’t understand how people really are in the real world. Some half-wit politician says, “We need a law to fix this” so they pass it, and everybody and their dog either finds a way around it or they don’t comply at all. In Amway’s case, people just simply quit ordering. Since the current management team doesn’t understand the business, they can’t figure out why people aren’t standing up and shouting “rah rah rah!” whenever they pass a new rule. All you have to do is read or listen to some of the things that the current managing director, his director of sales (who worked with him at his previous company), and the fairly new marketing director write or say, and you can see that they don’t get it. They gave away the store with the free shipping and now they’re trying to cover their butt. It isn’t going to work. They should have given everybody, including Platinums, a flat shipping rate of $6.95. That would have encouraged everyone to place small orders, big orders, and lots of orders. Nope, they give some people free shipping, and jacked up the rates through the roof for everybody else, then wonder why business is falling off a cliff. Trickle-down economics didn’t work under Reagan and it won’t work in the Amway business today.

    Also, the company adamantly refuses to get rid of cycle-shipping. It is slow, slow, slow but they defend it. When it takes up to two weeks to get a box of detergent and a bottle of vitamins, people usually won’t call the company or their IBO to inquire about it. They just quit ordering and say, “Screw this. I’ll just go to the store.” It is extremely frustrating. What they are doing up in Ada simply isn’t working and since they don’t get it, they can’t fix it. And since I don’t have a pin with big sparkly rocks on it, they don’t think I know what I’m talking about.

    I write all this stuff because I care about the business. If I didn’t care, I would just go out and get more janitorial accounts, stick my CD walkman in my pocket, put on my headphones, and vacuum all night listening to my re-mastered Beatles CDs and let the business go. The company desperately needs to bring Nan Van Andel back. I think she could replace about three or four of the current management team and really turn the North American business around. They need to do something quick because what they’re doing now isn’t working. Isn’t closing two major facilities and laying off 100 people in addition to the 15 laid off last year proof enough that the business is in a steady decline? Good grief.

    1. Jeffrey,
      I agree re the shipping issues, I’ve never understood the crazy US setup there. What do other companies do for shipping, like Amazon or Walmart online etc?

      * 50PV, that’s not a new rule
      * Accreditation and financial incentives to ensure you undertake training is IMO a good thing
      * Having to get materials approved is not a new thing either. I believe approval speeds have improved though. Don’t complain, in Russia when the rules first came out you had to be EDC before they’d even accept it!

  8. I truly hate to say it because I’m still currently building the business, but it really appears that Amway is a company that has lost its way. The new management team just doesn’t get it, and they keep piling on more and more ridiculous rules rather than kicking out the ones that are still being deceptive. I’ve repeatedly spoken to them about their slow delivery methods and exorbitantly high shipping costs, but they are not listening. I sincerely hope they get it together within the next couple of years or there is going to be another major exodus. People will not stay with a company that is stagnant. They definitely need a completely new and aggressive management team for North America and they need it fast.

  9. I have to agree that getting into the business at start and seeing how many different blogs there were it really did not feel well connected. It was more scattered. I usually like to check out one or two places on any particular topic, industry, or whatever.

    Moving manufacturing closer so that you can serve your customers… awesome! Sometimes it can be a tough decision to close down facilities and or move them but if the stats are as they are it just makes sense. Kudo’s for making the right decision.

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