From site visitors:

Hi Scott, I was a founders platinum, q-12 , whatever you want to call it for ten years.. I came close to Emerald with some promos but never got over the top. At best moved 120 SOT I and 90 SOT II, 130 at Major Functions, made $2000 a month a few times. Enclosed is a very conservative estimate of my overhead. Hope you can use it. LVB

TOTAL----------------------------------------------------------$16,998

Britt Worldwide Monthly Internet service $26.45 x 12 months= 317.40

Kate Personal Assistance $29.95 x 12 Months= 359.40

Bww Standing tape Order $33.00 Per Month x 12 Months = 396.00

Function Attendance (4 times per year)$90.00 x 4 = 360.00

Team Meetings (6 Per Year) 6.00 x 6 = 36.00

Open Meetings (1 per week) 3.00 52 x 3.00 = 156.00

Book of the Month Club (between 10/20 dollars) 15.00 x 12= 180.00

Renew with Quixtar.com $25.00 Per Year

Seminars and Rally’s (1 every 3 Months) $10.00 4 x 10.00 = 40.00

Extra Books and tapes (personal use-1 tape per month 1 10.00 book every 2 months) 139.20

Loan out tapes (1 tape per Month) 79.20

Flip charts/ Eagle brochure (1 each per year) 25.00

Total………. $2113.20 (System Money)

Your evaluation of business expenses is surprisingly accurate and somewhat conservative. For the last fiscal year, my revenue and expenses are outlined below:

+ Gross Receipts $ 350.00 (product income - It doesn't get more pathetic than that...until you look at the expenses!)

+ Other Income $1,500.00 (tools sold downline - I did not profit on tools)

- Advertising/sales/system $4,650.00

- Legal/Professional Svcs $ 100.00

- Office Expenses $ 435.00

- Other Supplies $ 115.00

- Travel $3,300.00 (does not include vehicle milage)

- Meals/Entertainment $ 150.00 (actually spent $300 - only 50% deductible)

- Utilities (phone) $ 630.00 (does not include cell phone charges - probably at least another $600.00)

- Other Expenses $ 330.00 (demonstration products & catalogs)

TOTAL REVENUE = $1,850.00

TOTAL EXPENSES = $9,710.00

PROFIT (LOSS) = ($7,860.00) Net result...a very expensive business lesson!

I did the math on the cost of my tools. The breakdown is as follows:

2 tapes per week at $6 per tape times 52 weeks per year is $624

8 seminars per year at $15 per piece is $240

4 major functions at $85 per ticket, and about $100 for hotel per function is $1,000 .

Books are about $15 per month $180

Total is $2,044.

Gas and food I don't calculate in because we will always need to put gas into our cars, and food on our plates. We get great gas mileage, and we eat pretty cheap, so the gas/food cost are of no consequence.

Bottom line: In 1997, we spent about $4,000 on tools and materials, we made about $360.00! In 1998, we spent about $6,000 on the tools and materials, we made about $200.00. This year I got smart and dropped all tools half way through the year and attended no functions, so we only spent about $500, but our "profit" has been $25!!!!

Here is an estimate of what we spent over the last 21/2 years in the business:

Now, we claimed a loss on our income tax for 1997, 1998, and 1999. We do not plan on claiming this as a business next year even if we re-sign on (only to buy for ourselves very selected products) because it is a "red flag" to the IRS if you do not start making money after 3 years in a business. I know this from my tax preparer and my mother who lives in another state who worked as a tax preparer for H&R Block. Now, look at the money spent. Unbelievable! During tax season, each year, when I added this all up, I was astounded 3 times! Not anymore!

Overhead

SOT - $52.60/mo.

Business Building Seminar - $15/mo.

Book of the Month - not sure, haven't received it yet. Probably about $20/mo.

Major event 4 x 100 / 12 mo. = $34/mo.

Total $121.60/mo. x 12 mo. = 1,459.20

 I spent approximately $50,000 dollars on just tapes/books/rallies and functions during that 8 year period. I made approximately $15,000 during that 8 year period.

I hit Silver Producer. 7500 PV in one month. Never hit it again though. The largest downline we ever had would have been about 50 People. We were heralded as the tough group. We promoted so well and did exactly what we were told that we were moving 50 SOT and 50 GG.

I was in Amway for about a year between '96-'97. I reached the 1000 PV level after spending about $15,000 that year on system tools, functions, etc.

When I was in Amway 8 years ago I lost over $4000 on all of these meetings and tapes and books that are supposed to get you all fired up and go out and sponsor more people. Be really careful of how much of your funds you allocate to these types of functions. Don't get sucked in. It will bleed you dry with no real benefit.

1) Broke my kit (joining) -$145

2) Functions, I attended four, averaging $200 a shot -$800

3) Tapes - I had 100 until recently, when I threw most out for space purposes. I used to buy 2 a week at $13.19 so 100 should have cost -$659.60

4)Books - a bought 8-12, let's guess and say -$130

5) Seminar & Rally - I went to four and bought a ticket on a fifth -$60

6) Opens - attended three, but only paid for one -$5

7) Amvox - got it, quit it, got it , quit it-$60

8) Profiles of Success, I think it cost -$30

9) Tools kit - $50

10) DST-109 - These are little leaflets you can mail people. It's sheer curiosity approach. -$50

11) DST-104 - I call it "the most sinister thing Dex makes money on" because of the context. On the first page, after you open it up it says working the (unnamed) business opportunity 8-10 hours, for 3-12 months, you can be making over $2000. After 2-5 years, you can be at diamond money. I'm looking at one right now, so I'm not saying this out of memory. Flip another page and there's a sheet clearly stating 10 hours a week times 50 weeks times 5 years = 2500 hours. Anyone who has ever spent anytime in Amway knows that is bullshit. I always felt guilty going over those numbers. I wondered to myself "If it's the greatest business opportunity sense sliced bread why do they feel the need to exaggerate it? I never like the numbers - maybe why that's why I never sponsored anyone. By making everyone use this, Dex is corrupting every IBO in his downline - you have to lie just to show the plan. This prepares the IBO for the future lies and half-truths that come into play in the tools scam. $20

12) Dunn Newsletter - this is something handed out in the Childers organization. It goes over all opens for a month. A yearly subscription cost exactly -$32

13) Amway video - forget what it was about or how much it cost. Bubba Pratt and some of his downline were in it. Let's guess and say it cost $15

14) Business cards -$20

15) Catalogs - My PV was low, so I thought I'd see if I could sell office supplies over the phone. (I'd mail them the catalog and they'd choose what they wanted - Like I said earlier, I didn't' have much shopping experience and assumed Amway really was cheaper) $20

16) Phone - my senior year in college I had a phone put in my room. Never would have done that if not for the business - had to move those catalogs! $100

17) Gas - Not as bad as it should be. On long trips I always went with my upline, who knew I didn't have much money as a college student, so he never made me pay gas money. $100

18) Food - buying meals on trips, at Seminar & Rallies and Free Enterprise. Let's take a wild guess $150

19) Golf - My upline diamond had an informal non-business related get-together for anyone who felt like it. (In many groups I suppose this would be seen as crosslining). I didn't have to go at all, so I guess it's a little unfair to put this down, but still, I never would have had to spend the money on the weekend if I weren't in Amway. . I'll guess $100

20) Miscellaneous - As I was coming up with this list I was amazed by all the little things. I probably forgot at least one. To cover myself, let's tack on $50

Which means I dropped $2596.60!

I saved my seminar ticket receipts and tracked my mileage diligently and my accountant showed me my Amway expenses were $2000 more than my Amway income.

I supported the system 100% at first. Why? Because I had no reason not to. My DD, Emerald, and Diamond were all sincere and helpful. Looking back, they had to be...I was a minimum $112 / month (SOT, GG, BOM, Rally, Open)

I've outlined my expenses for Aug to Dec 1999 . Basically the expenses are due to my "plugging into the system" 100%, as constantly suggested by my upline/organization, if I "really wanted to succeed in the business." I learned a lot from this experience. I decided when I first registered I would participate in whatever they recommended to ensure my success, as this business model was totally new to me. I attended everything and read and listened to everything. It still saddens me to learn of all this hidden agenda stuff.

A.Car mileage: 1,1000 : $

Tolls: $50

Meals: $320

B. Advertising Expenses (any "tools" to promote or train myself or downline in business) Total: $791

Details:

1. 4 month subscription to The Future of Business Web site (prospect qualifications site): $9.95 per month: $39

2. 4 month subscription Eddinfo. (Personal website for IBO's. Offered by Storms Organization) $22.95 per month.

3. 4 months; Amvox service. $22 per month.

4. 2 Subscriptions to newsletters offered by upline. $20 per year each

5. Subscription to Network Marketing Magazine (not recommended by upline) $30 year.

6. Weekly tape and Monthly book continuing education program. $503

C.Travel Expense Total: $ 1,359

Functions: $647

Opens & Business Conferences: $59

Airfare: $478.25

Tips: $20

Parking: $155

Train: $20

D. Office Expenses

Cell phone usage: $160

Cell phone: $90

Misc. Supplies (copies,etc): $68.85

E. TOTAL AMOUNT: $2,888.85 (didn't include in car mileage)

We're assuming that the "system" requires about $3,256.00/year to build "a successful direct distributorship." I can not argue with that(that's a conservative estimate)!

"My wife and I have been IBOs for 2+ years in World Wide Dreambuilders and claimed about $5000 Canadian in business expenses each year. We had six personal downline and lost money each month.

They told me about the tools (and the money the upline makes on them), they told me about the money they made (net profit) from just the business, and they explained the $3600 per year cost for the education system.

I'm no longer active in Quixtar. (I still buy the vitamins, though.) There was no way I could logically justify it, and I had been operating on less-than-logic for more than 5 years... I 'd like to share a little info on my PERSONAL EXPENSES that you might find interesting...

While I was "working the Plan," first in Amway, then in Quixtar, I really did "plug in" to the Yager system. It was promoted by my upline and to not plug in was to not be a player on the team. You're well aware of all of this, so...

While going through an old tax return, it struck me to add up all my profits / expenses just to confirm a hunch I had. (At the time I was really trying to understand and get a grip on my personal finances.)

So, the following expenses are on the SYSTEM ONLY. It does NOT include the monthly outlay for products! These are my ACTUAL DEDUCTIBLE EXPENSES from the following years' Federal Income Tax Returns. (I did not claim the business for 2000, although I did have some expenses there as well.)

The deductible business portions of the expenses include the following;

Business Tools (Tapes, Videos, Flip Charts, etc.)
Business Meals
Car Expenses
Dues
Office Supplies
Postage
Seminars
Telephone & Cell Phone
Travel (Hotels, Airfare, Car Rentals, etc.)
Voice Mail
Website Maintenance/Internet Access

Gross Profits Deductible Expenses Minus Gross Profit

TOTALS
Gross Profit = $ 547.00
Total Outlay = $37,471.00

1998 EXPENSES

ADBA $39

AIRLINE $625.50

AUTO $3609.93

CELL PHONE $514.01

INTERNET $310

HOTEL $417.26

MEALS $275.15

OFFICE $282.71

SEMINAR/OPEN TICKETS $1,719"

TELEPHONE $371.98

TOOLS $2210.11

TRAVEL $82.49

VOICEMAIL $341.70

TOTAL EXPENSES $10,965.25 DEDUCTABLE EXPENSES $10,397.

Soon after totaling this up, things really fell together, I cut my losses, and got out. I had also been misinformed - I found out later that business losses are deductible for three years only! (And imagine if I had invested that money into some other tangible asset?!!! - OUCH!)

I hope this is of use to you. All I can say is you're being very conservative in your estimates of what is spent on the System, at least in my case. For most of those five years I was SINGLE, however, so there were no additional
expenses for child care, nor doubling of the expenses for meals out, travel expenses, etc.

Thanks again, for doing what you do. It was definitely a catalyst in really examining what I was doing with the business.

If you need to use the numbers, just call me "Casualty X."

Tools? At least $12 a week for 5.5 years. Total = $1000. I have a separate checking account for my tools and looking over the check amounts, it was more like $40 a week Total = $3,000.

We stopped our Amway business in January of 1998 after spending $35,000 over 3 years on books, tapes, airfare, functions, dining out, showing the plan, gas, printing, shipping, etc...(we half of it on Credit Cards, like most of the distributors do)and only made a total of $3890. from our PV checks in 3 years. So, we lost over $31,000.

Over the course of the five years we spent approx. $12,000 cdn inclusive of travel.

YEARLY cost of doing BUSINESS:
$624 (sot 1 and 2, $12 x 52 weeks)
$180 (bom, cost per book, $15, sometimes they're less)
$180 (seminar, one a month at &15)
$1600 (conventions, does not include airfare, this
is assuming they are driving)
$300 ($25/mth for voicemail system for communications
and business phone number)
$360 ($30/mth spent on xtra brochures and literature)

TOTAL: $3244/YEAR for things directly associated with the business. Now consider other fees not directly associated but used for business purposes; gas, computer/internet connection, meals, etc. with that in mind bump total up to $4000/YEAR.

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