The Top Ten + List

I hear many stories of people being presented the plan, but not being interested at that time. Some years later they are again shown the plan and end up getting in. This is not uncommon. It even happened to me. I had seen the plan in 1987 and shrugged it off after looking at the catalogs. I determined then the prices were not good enough to justify my time or even good enough just buy to save money. Later in 1993 after returning from an 18-month assignment in Germany, the Amway business was again shown to me. It was presented as a more efficient way to distribute goods, a new revolution like Wal-Mart, so to say. People would save money and one could have a nice little business because people trying to save money would make up a stable customer base. I was shown all the wealthy people who had "retired", living on easy street collecting their never ending residual incomes, after 2-5 years of hard work. To make a long story short, I was interested but still skeptical. I decided to prove to myself the savings claim was valid if I were going to get excited about the opportunity. That is when I did my price study. I guess I was not amazed to find out what my gut feeling told me in 1987.

Later I was reading some books buy Peter Lynch and others on investing, and decided that I could analyze the Amway business opportunity the same way one would analyze a stock for investment. If you are in the middle of an active Amway group you are blind to what is happening to Amway as a whole. You only see the active people. You are not exposed to the people crossline who quit or people in your upline who just quit. You only see the business as a growing entity since you are protected from any negativity about the business from your upline. With a stock, you might find the products and the business plan very interesting. Without looking at what the market is saying about the company's performance, your ideas and opinions might end up being very wrong. Maybe the market, which is made up of millions of "dollar voters", is saying something is wrong. The most successful stock market investors look for a great idea, and secondly get confirmation from what the market says about the companies sales growth, profit growth, and stock price growth. Truly successful stock pickers will shun the stocks with falling sales, operating earnings, and stock prices. Amateurs are left to buy those, and most will lose money on them. So how does this relate to you? Try looking at the business from a macro economic perspective instead of an emotional dream filled microscopic perspective.

If you are going to turn down the Amway/Quixtar opportunity it might bring you piece of mind to write down the reasons why you don't want to get involved. Come the day the opportunity is once again is presented to you, you will be able to quickly reflect back on the business issues, which made you decide against it and see if those issues are still true. This will save you from repeating the mistake I made. Writing down your reasons will make your decision a better and more solid one. Additionally, you will not be mentally tormented about all those supposedly successful people who are living the "easy" life with their own full time Amway business. Be careful of your buddies who get in and get five people signed up right away and he gets a check for $200 one month. This is the microscopic view. Amway/Quixtar is a long-term proposition. It seems exciting at first since no one is disenchanted at the beginning. People are buying everything for personal consumption to get to their first 100 or 200 PV sales award. Sooner or later those large one time purchases fall off and you run out of friends to contact. The long-term Amway reality is in the macroscopic view of the Amway corporation performance data, which they do not release.

If you choose to get involved, write down the reasons why, and do an annual checkup to see if those reasons are still valid.

Here are my top ten+ business reasons to why I would not get involved with Amway/Quixtar.

  1. Sales Growth - North American Sales have declined 38% in the last two years. International expansion into new markets fueled the growth in the time from 1990 to 1997. I want to invest my time and money into something the market is rewarding with positive sales growth in my market.
  2. High rate of distributor turnover- The number of non-renewals evidences the fact that few people view the products, quality and service highly enough to buy them when they decide they don't want to build a Amway/Quixtar business. Without having the motivation of owning the business, which just happens to sell the products, a high fraction of distributors will stop purchasing the products and not renew their distributorship. If the products and services were truly a value, why don't more people just stay in for the great product, values and service? This observation only tells me there is no overwhelming competitive advantage with their distribution system, products, or service. I want to invest my time and money in something where I don't have to constantly recruit new customers because the old ones don't see enough value to come back.
  3. "When I try to show the plan to people the first thing that comes up is that "how are we saving money? When the prices are higher?" Quixtar IBO site visitor

  4. Target Market - Evidenced by the poor retail sales in Amway/Quixtar, most sales are to IBO's themselves. This means the target market for the business resides in a very small niche of "people looking" to own a small business. The business requires exceptional personality traits in order to be successful and stay in avoiding the near 50% drop out rate. The desired personality traits occur in even a smaller subset of population. This reduces the realistic long-term potential customer base to a very small fraction of the population. The target market is very small (less than 1% of households) and will be very expensive to prospect in terms of "man-hours" by the "high-touch" methods enforced by Amway/Quixtar.
  5. "I stopped doing it, because I could not find people to do what I was doing fast enough. " Site Visitor

  6. The AQMO System - The system of tapes, books, seminars, are all overhead costs which can exceed the gross margin a new distributor brings with his personal sale's volume to the "game". This is a negative sum economic "game" and the majority of people are losing money. Amway/Quixtar will continue to be a negative sum game as long as there is no stable customer base, from whose sales gross margin will offset the typical overhead costs. I want to invest time and money in a business that the majority of people make money or just break even. This will keep them around longer at least to be customers.
  7. Ulterior Motives - The high level distributors have an ulterior motive by getting you into Amway/Quixtar. Many want to sell you their training, motivation, and business support services. Many make the bulk of their income on their non-Amway products business. Ask your Diamond and Emerald for a peek at their books. I want to invest my time and money in a business where there are no ulterior motives and conflict of interests, which could be used to damage one's credibility or question one's true intentions with the Amway products business. It could easily be implied that the uplines only want you in Amway to buy their system, and introduce others to buy their system rather than to help you become a profitable Amway product's distributor.
  8. Lack of Data - There are no data published from Amway or Quixtar about the statistics of the business except those few in the SA4400, and sporadic press releases. Business people would want to look at the business performance numbers to see how successful the opportunity is before risking time and money. Useful data would be sales- by country at distributor cost. Recruiting and retention rates, retail sales on the Quixtar site, time-to-pin data, and pay out ratios are all important in evaluating the business. I want to invest my time and money in a business where the data is easy to get so that one does not have to rely on rumors, myths and unsubstantiated stories, as is the case today.
  9. "we don't release that type of information on the North American market" Dist_relations@amway.com

  10. The Amway reputation. I want to invest my time and money in a business name that is respected, not one that has to be hidden from and ashamed of. If you tell people you sell Amway, you will be immediately shunned. The Amway stigma would be reduced if the purchase of the products by non-distributors increased, increasing the brand reputation. This could only happen if the incentives to purchase the products extended to a far greater majority than those whose sole reason for buying the products was just to support their own businesses sales.
  11. "I decided to do more research, so I asked people I knew....I wasn't interested in making them distributor's but to give me feedback on this cybermall. It turned out that almost every person I talked to said, "If it has anything to do with Amway forget it." So I called my upline and said, "This company has a very poor image, I believe it is too difficult to get past that, and the prices are way to high."

  12. Distributor credibility. I want to invest my time and money in a business where I know all the distributors have been trained by one system run by the corporation. All people should meet minimum knowledge qualifications, and people should follow the rules. The retail sales rules are ignored by many . Many distributors don't even know these rules. They don't take the time to read their materials.
  13. "Retail Sales Rule? What retail sales rule?

    " BSMAA. I'm fairly sure I have never seen or signed one of these just like the retail customer report papers that were torn-up by my sponsor when we broke the kit"

    Quixtar IBO site visitors

  14. Real Profitability - I want to invest in a business in which most people are making money. I don't want to invest in a business where everyone is afraid or embarrassed to disclose to me what he or she reported on their IRS 1040 Schedule C tax form last year. This only tells me they are embarrassed by the amount reported, or worse yet a loss, versus they time they spent in the business. If they showed you their results, you might not be interested.
  15. "My moral objection was to signing people up to lose money so I wouldn't want upline to help me build a downline I wouldn't want anyway." Quixtar IBO

  16. Most Amway/Quixtar distributors are not in professional sales. It is unrealistic for them to effectively sell a premium product line where customers cannot easily perceive the value. The products will sell slowly chiefly to friends and immediate family. I would want to represent a product line with a strong value orientation that does not take exceptional sales skills and does not require an exceptionally narrow target market.
  17. I want to invest in a business that thinks and acts rationally. "Ignoring the facts" as chanted by IBO's at motivational weekends is irrational.

Site Visitor Responses

  1. I prefer to keep my business and social lives separate whenever possible. These selling systems create an underlying social agenda (selling products), that may interfere with my real goal, which is to surround myself with good people. It creates conflict of interests that I'm not willing to take on for financial gain.
  2. Most franchise businesses are granted exclusive franchises within certain geographic boundaries. Amway/Quixtar on the other hand grant no exclusive territories. This is bad from a business stand point since any possible retail demand for the Amway cleaning products will be quickly diluted by a sea of Amway distributors. Worse yet, a good retail customer can bypass the distributor altogether by become a distributor them selves. Competition is always good but when too many McDonalds are in your neighborhood, none of them will make money either.

"since almost everyone knew someone who was willing to sell at distributor pseudo-wholesale to get the PV, we had to sell without a markup too. Consequently, it took a lot of time to make a small amount of money retailing so we stopped after about six months"

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