Category Archives: Market News

Does Amway Europe understand how to motivate people?

Sometimes Amway drives me nuts.

From this month’s Amway Amagram throughout Europe

Read the GIP 2013/14 section on your local Amway website available from September 2013

GIP stands for “Growth Incentive Programme”. It’s a program that is announced yearly with various rewards and incentives, including free business trips, for ABOs who grow their businesses. Great, right? So why does it drive me nuts? Because the first day of qualification is September 1 the beginning of the new Amway “year”. And the requirements for qualification are made available when? After then. Many of the incentives require you to have qualifying volume for 12 months, so to receive the reward that you learn about in September you already need to be in qualification.

Now, to be fair, many of the incentives are for people who have already reached Platinum and above, and they do get notified of the GIP details a little bit earlier (but often not by much). ABOs below platinum, however (ie those who most need incentive, as they’re not yet making much money) – it’s kept secret from them. This is even the case with an incentive that’s probably the most popular – the Amway Leadership Training Seminars (LTS). Qualifers have just recently been enjoying EuroDisney, courtesy of Amway. For various reasons I haven’t been actively building an Amway business for some years, and I don’t qualify for these Leadership seminars, but as a parent with two young children, an all expenses paid trip to EuroDisney is a huge attraction for me. When did Amway Europe first tell me and other not-yet-qualifying ABOs about the EuroDisney incentive?

After it was too late to be able to qualify!

What on earth is the logic behind this? What is Amway thinking?

Watch this video, this is for the Amway Europe LTS in 2014. Have you ever wanted to go on a cruise through the magnificant fjörds of Norway?



Looks beautiful doesn’t it! Can you picture yourself on the boat? The snowcapped mountains rising from the see around you? Treading the streets of cities that were founded more than a thousand years ago? Climbing to the top of Pulpit’s rock, with it’s  sheer cliff face dropping to the waters more half a mile below you?

Put yourself in the picture! Would you like to go? All paid for by Amway? Does that motivate you to build an Amway business?

Sorry, you had to be in qualification for that a year ago. It’s too late. But don’t worry, there’s another trip coming up you can qualify for! It’s  …. somewhere … put yourself in the picture! Imagine going there! Imagine walking the … beaches? streets? ????…

This is NOT motivating. Indeed, psychologists will tell you that this kind of “disappointment”, seeing what you can’t have, what you’ve missed out on, can be demotivating.

I simply don’t understand why Amway doesn’t have these incentive programmes decided upon and publicised 6 to 12 months in advance? You’d still motivate the leadership who are already or on their way to qualifying but you’d also motivate the new ABOs, and the many many ABOs like myself that have not yet prioritised building an Amway business.

C’mon Amway Europe. Fix this.

Amway Sales – Top 10 Countries 2012

Country Sales (USD$m) Growth
China $4,385 +1%
Japan $1,185 +2%
Korea $885 +2%
United States $861 +5%
Russia $629 +19%
Thailand $568 +10%
India $493 +7%
Taiwan $340 +8%
Malaysia $263 +8%
Ukraine $150 +7%

source: Amway Europe Leadership Training Seminar 2013

 

India Police continue harassment of Amway India

In news out today, Amway India CEO William Pinckney and two company directors, Sanjay Malhotra and Anshu Budhraj, have been arrested, charged, and remanded in custody for 14 days. This continues a pattern of what can only be called police harassment in the Indian states of Kerala and Andhra Pradesh. Details have been hard to come by, but the charges apparently result from 4 complaints lodged against Amway in the Wayanad district of Kerala. Amway had reportedly been aware of, and co-operating with police regarding one charge, but the arrest resulted from three other complaints. According to the Times of India, the known charge was from a 2011 complaint and –

Vishalakshi alleged that Amway agents collected Rs.3.5 lakh from her for products sold by the companies and asked her to add more members to the chain. As she could not add more members, she sought a refund but the agents refused

3.5 lakh rupees is over US$6500!!! I’ve been unable to discover when this offence was alleged to have occurred, but clearly this is pretty bizarre, and if true it’s clear some Amway business owners (including, I would suggest, this woman!) have seriously abused the Amway business model.

Amway was apparently dealing with this issue and had already received “anticipatory bail” for the executives. The current arrests are apparently related to new complaints. And that’s where it get’s really bizarre –

The three complainants — Jafar, T Ashraf and P Hareendran — had alleged that in 2002 Amway India attempted to collect money from them with the intention to deceive them by involving them in a money-chain scheme.

This “offence” allegedly occurred more than a decade ago (!!!) and indicates that someone merely “tried” to collect money and deceive them. Yes, that’s right – three company executives of a multi-billion dollar multi-national award winning company have been arrested and thrown in jail because three people claim that, more than a decade ago, someone tried to recruit them in to Amway, and they believe Amway is illegal and in violation of the Prize Chits and Money Circulation Scheme.

Sorry, India, but this is shameful.

Indian contacts have suggested to me that the problem may be that Amway India is not corrupt and refuses to pay the bribes that local officials typically demand. Corruption is, unfortunately, rife in India, with most Indians reporting they have had to pay bribes to officials (including police) in order to get normal tasks completed.

Amway India IBOs should keep the story of Amway Korea in mind. In 1993, David Ussery, general manager of Amway Korea, was arrested, interrogated, and then held in jail for a week, with various allegations made against Amway. Eventually the charges were dismissed, and today, Korea is Amway’s third biggest market. In 2011 the Korean Government named Amway one of the 30 most successful foreign companies in the country.

update: sources tell me the Amway executives have been granted bail

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.

Level Average/mth Average/yr Highest/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.

Level 2009/2010 2010/2011 Change
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) –

Level Europe/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!

The disgusting censorship of Howard Megdal, Emma Span, Sports on Earth and Capital New York

Amway recently opened a business center at Citi Field in New York, home to the New York Mets baseball team. There was nothing secret it about, I published a story about it more than two months ago. The opening of the business center apparently came as a shock to some New York journalists, and in particular one by the name of Howard Megdal, who wrote two disparaging and ridiculously inaccurate articles about the Amway/Mets deal for the website Capital New York. According to Bridgett blogged appropriately about the response – America’s National Pastimes: Amway-Bashing & Baseball.

I wrote a reply to Howard in the comments on one of the Capital New York articles, pointing out some of the errors. The site said I needed to register, so I did, upon which I received an email saying my account needed approval before the comment would be posted. I waited. No post. No approval. Other comments appeared. I tried registering a new account, separate from the article, using my full name and email address. I received an email saying my account needed approval. No approval was ever forth coming. Attempts to log in said the accounts were blocked.

I posted a comment on twitter, tagging both Howard Megdal and Capital New York to protest. Megdal replied they weren’t deleting anything. I still couldn’t post.

HowardMegdalCensorship

I tried again, I still couldn’t post a comment. In the meantime, Amway showed nothing but class and reached out to Megdal and invited him to tour the facility.

His response was a third article on the website Sports On Earth, a join venture between Major League Baseball and USA Today. The article was again full of tired cliches and outright falsehoods about Amway and multilevel marketing. I posted a reply there. Sports On Earth uses the Disqus commenting system, so I could see my comment in my My Disqus control panel. It said it was awaiting moderator approval.

Then it disappeared.

I wrote a very short comment on the same article asking Howard why he was deleting my comments. It appeared immediately. Megdal replied that he wasn’t deleting comments, and couldn’t. I pointed out that if it wasn’t him, then his moderators certainly were. Another commentator said they’d like to see my responses for some balance. So I wrote several responses addressing the many inaccuracies in his article. A moderator, another “journalist” on the site,Emma Span, said she had deleted the original comment, accusing me of spamming “Amway PR”, and said if I posted again she would delete all my comments. She was true to her word, for when I protested she deleted my responses and the comment from other readers saying they wanted to read my responses.

Not surprisingly, I can no longer comment there.

This kind of censorship from ostensibly professional media outlets is nothing less than disgusting. I was not offensive in my comments, I did not in any way violate the terms and conditions for commenting on these websites. I simply pointed out the many inaccuracies in the article, with appropriate citations to back up what I was saying.

Those responsible simply didn’t want people to read what I had to say.

Interestingly, I researched Howard Megdal a little further as I wrote this article, and it seems I may have misread his motives a little bit. I thought he was unfairly attacking Amway. It seems though his target isn’t Amway at all, it’s the Mets and their owner, Fred Wilpon. In 2010 he wrote a whole book lobbying to become the Mets General Manager. Apparently it didn’t work, and in 2011 he wrote another book attacking them – Wilpon’s Folly: The Story of a Man, His Fortune, and the New York Mets.

The Mets challenged many of the assertions Megdal made in the book, removed his media credentials, and wrote in response –

The author’s desperate self-promotional campaign for relevance has led to perpetuating baseless speculation and complete inaccuracies.

Now, I haven’t read any of Megdal’s books and neither am I an expert on the Mets. I do however consider myself to have some expertise on the subjects of Amway and Multilevel Marketing. If Megdal’s reporting on other topics is as wildly inaccurate and misleading as his reporting on Amway and MLM, and if he condones the active censorship of those who challenge that reporting – well, I’d suggest trusting very little of what he writes.

Missing: Amway victims – if found please report to Boies, Schiller & Flexner

As regular readers would know, a few years back some disgruntled former Quixtar IBOs, Pokorny & Blenn, launched a class action lawsuit in California against Quixtar (now Amway) and Britt World Wide. In my view the case was clearly bogus, but Amway decided to avoid the cost of a long court case, and also take the opportunity to clear the decks of any issues from the past. What they did was to not only offer a settlement, but to bring all the other major Amway business support groups in to the case as well, so that any IBOs who felt they’d been exploited could get some restitution and agree not to launch any future legal actions. Everyone could just move on.

Well, today I received an email from the “Class Counsel” handling the settlement that began like this –

Records show that you are a current or former Amway/Quixtar distributor (“IBO”). Former IBOs can get benefits from a Settlement providing $34 million in cash and $21 million (retail value) in free products from Quixtar. Initially, eligible claimants had until August 17, 2012 to file a claim to receive cash or free products. However, after accounting for the claims that have already been filed, there is excess cash and products in the Settlement Funds.

Critics of multilevel marketing claim there are literally hundreds of millions of “victims” of MLM companies that have lost thousands, even tens and hundreds of thousands of dollars. When asked where all these “victims” are, and why they haven’t requested refunds, or complained to authorities or groups like the Better Business Bureau (there are very, very few complaints against legitimate MLM companies), critics claim that these “victims” are too ashamed to complain.

Right now, hedge fund short seller Bill Ackman has been making similar claims against Herbalife, another large MLM company. He has made various accusations against them, including that it is an illegal pyramid scheme, and is betting it will be closed down, in which case he will make hundreds of millions of dollars from shorting the stock. (In reality he stands to make a lot of money just by driving the stock price down, which he successfully did just by making the accusations). Another investor, Daniel Loeb, made the following comment about Ackman’s accusations –

“The short thesis rests on the notion that the FTC has been asleep at the switch, missed a massive fraud for over three decades, and will shortly awaken (at the behest of hedge fund short seller) to shut down the company,” Mr. Loeb wrote. “We find this thesis to be preposterous.”

We find this thesis to be preposterous. Loeb has stated well the reality of  many of the claims of critics of the multilevel marketing industry. We find this thesis to be preposterous.

Well, following Amway’s settlement in the Pokorny Class Action, the administrators endeavoured to contact every single Amway/Quixtar IBO over the last decade in the United States. They contacted them and offered them money.

The result? To clear the settlement money they’ve had to extend the time to submit a claim by seven months and expand the benefit dramatically. The value of the product packs available has doubled, and if you spent money on BSM, you can just write a letter and claim you spent money, and how much, and get some of the cash.

So c’mon, don’t be ashamed! Get your free wag now at www.quixtarclass.com