Amway - The Plan

More things distributors say while showing the plan

John Hoagland, author of Amway: The Continuing Story, recently snuck into two opens, in seperate organizations. He took notes of all the things the speakers said and forwarded them to me. The amazing thing is that I could have sworn that he was at a Britt open, and he wasn't. The first open was in Yager's organization and the second was in Wilson's.

This business is moral, legal, and ethical

This would certainly be true if all the Rules and Regulations published by Amway were enforced. But they are not. See the 3-part article published by investigative reporter Greg Garland at The Advocate, Amway: An empire built on dreams. Also visit Emerald Direct Jeff & Joni Probst's An In-Depth Look At The Amway® Business. Finally, be sure to read through the pages of readers comments. You will find example after example where people's lives have been emotionally and financially disrupted.

This business captializes on 21st century shopping

Sounds good...but what does it mean? You can only order consumables once a week and they are for the most part more expensive. If you are a warehouse ordering distributor, they will be delivered to your house/apartment. If the organization you are involved with still does product pick-up, you have to go to your uplines residence to get the products and pay shipping costs.

The system is voluntary...but you have to do the work

This is what they say initially, but after you get involved and especially after you have sponsored someone, the tune changes. They may not say plug into the system or else, but there are many standard phrases and techniques used to persuade a person to start buying AMO (Amway Motivational Organization) provided BSM's (business support materials) and attend the functions.

The system is optional, but so is success

I can't say what your chances of success are without the system, but they're not good

It works whether you participate or not

What if it works, what if 10% of what I've said is true

They went on faith and did the work

See what I mean? It gets worse after you get in.

He does NOT ask the audience what dreams they have

This is kind of unusual. When most people show the plan, dream building is a large part of the presentation. After all, the "how" is not important...the "why" is the important part.

68 cents out of every dollar goes into a profit pool

See my page Do 68% of sales get returned to distributors

Money comes from the flow of products, distributors are not paid to sign people up

This is true. A fee is not paid to recruit people. There is a little bit of money made by the entire upline when a full kit is purchased. There are products in the kit that have PV and BV that counts towards the uplines performance bonus. A new distributor does have the option of just purchasing the literature portion of the kit. In the past, Amway would not sell the literature portion by itself. Someone would have to purchase the full kit and either use the products or sell them to customers/downline. Please ask the distributor showing you the plan if this is still true.

Last year, $4 billion dollars went into this profit pool

I don't know if this is true or not. Amway seldom releases information of this nature to the public. One thing is for certain, the profit pool generally impacts only Direct Distributors and above. The performance bonus paid to non-directs has not changed in years. In fact, due to inflation, the cost of buying a 100 points of products has risen over the years.

The corporation is always putting more money into the plan

This only affects upper level distributors. Anybody below the direct level does not benefit from these bonuses.

A Neilsen study [the "TV study" people] found that an average family spends $400-$600 per month on stuff found in this business

Only you can answer whether you are currently spending $400-600 per month (or $5,000 - $7,000 per year) on consumables or the items in Amway's catalog's. I'm not.

The same study found that 75% of people don't like shopping

I have heard of this Neilsen study before, but have yet to see a copy of it anywhere so that these statements can be verified. Personally, I would rather go to a store and be able to see the item I'm buying, try it on, touch it, etc. I do purchase stuff from catalogs. but only when the item is not readily available locally or if it's substantially cheaper.

There is an average on 2:1 ratio [BV/PV], depending on your product mix

This is a very true statement. The ratio between Business Volume and Point Volume is about 2:1, regardless of whether you are buying Amway produced products or catalog items. Many distributors make the implication that 100 points equates to $200 of Amway products at the suggested retail price. This is a lie! The reality is that the average suggested retail price for 100 points of Amway products is $286.28. The average suggested retail price for 100 points of catalog items is an astounding $513.25. See my page How do I do a 100 for more information on this.

The corporation has a Dunn & Bradstreet rating of 'best'

It is a violation of Amway's Rules and Regulations for any distributor to mention Dunn & Bradstreet rating. Dun & Bradstreet may refuse to rate Amway if distributors continue to use it. Besides, this is a rating used by businesses to determine whether to extend credit to a company. It is has absolutely no value in determining whether the Amway business will provide a return on your investment of time and money.

Shows the 6-4-2 plan

This generally goes along with the example provided in the Amway Business Review (SA4400). The way it is presented is that in a few months you can reach the direct level. Occasionally someone does reach the direct level in a few months. Most don't. Please look at the statistical information provided by Amway in the SA4400.

There are hundreds of companies in the system

That is true. A company would be stupid not to want to place products into a supply line where people are taught to buy exclusively from themselves, regardless of cost. You should note that in most cases, you only have access to a limited product mix from any company.

The products found in the catalogs are cheaper 70% of the time

This statement is extremely deceptive. Amway does an annual survey comparing their prices to other high-end mail order catalog companies. Less than 4% of the products in Amway's catalog are compared and Amway never reveals what products were compared or what the price differential is. This is not to say that you can't find good deals in Amway's catalog. The reality is that traditional retail outlets can and do offer most, if not all, of the same products at substantial savings than mail order catalogs.

Amway is joint-ventured with Fortune 500 companies such as MCI, Firestone, Seiko, Sony

Company after company has declared that their relationship with the Amway Corporation is a Buyer/Supplier relationship. Joint venture implies a shared risk. I reckon it just sounds better, eh?

I'm not here to get anyone's money or recruit anyone --(tells a joke and takes off his jacket to get people to relax)

A guest cannot spend money at the open, but come on, why are they showing the plan to you if they are not out to recruit you?

95% of America is broke, 4% are well off, 1% are rich

I don't know where they came up with these percentages. If they tell you the IRS, please read my page Income and Retirement Statistics.

Most of these guys [in the 4% and 1%] own their own business or duplicate it

Research has shown that 2/3 of all millionaires own their own business. The other 1/3 have a J-O-B (Source -- The Millionaire Next Door : The Surprising Secrets of America's Wealthy by Thomas J. Stanley Ph. D, William D. Danko Ph.D)

Most people have 'broke mentality'

Most people have a very low self-image

Ask them who performed this study and when was it done? In my opinion, this is a blatant attempt to make you believe that if you don't do this business, YOU are the one with a broke mentality and low self-image. My personal experience was that my self-esteem went down as a result of the AMO teachings that since I was not succeeding it was all my fault and not the system that I was following.

With this business you'll have a blast doing the things you like doing

Maybe if you are in the tiny percentage of people who actually make a liveable income from the business this could be true. But when you start seeing the schedules of the upper-level distributors you will find that their lives may be more controlled than pre-Amway. Many people find that the business totally dominates all of their spare time.

Dreambuilds on: cars, motorhome, home, playing with kids, travel, retiring, have more free time, send your kids to a good college, help Mom & Dad when they get older

Aaahhh...this is the kind of thing I'm used to hearing. There is nothing wrong with wanting these kind of things and there is nothing wrong with setting goals to acquire these kind of things. I would hope that the goals you set to acquire material things do not get in the way of family relationships or friendships. I would also hope that the dream of acquiring these material things do not drive you in to debt while particpating in the AMO system of BSM's and functions.

He went to one seminar where there were 30,000 people with a high income

He did not mention what kind of seminar he was talking about. If it was a typical weekend function, there may have been 30,000 people there, and certainly some of them were making money, especially from those who purchased tickets to be there. Do the math yourself. Using an average of a 100 people in an organization for a direct distributor and using Amway's count of 3 million world wide distributors, that would mean that ALL the directs and above from the ENTIRE world was there. And just because you're a direct that doesn't mean you're making money.

What if hundreds of millionaires came together and created their own education system?

They sure did, and this is where they are getting their millions

People working are basically saying 'Let's let someone else raise our kids while we're at work'

Listen to the seminar tapes. Married couples are told over and over again to have numerous baby-sitters on hand so that whenever the Mother and Father need to attend a meeting or show the plan, you can have someone available. People are councilled to leave their children with baby-sitters while building the business. Does anybody besides me see a contradiction here? Most couples with children spend a fortune in baby-sitters chasing the AMOway dream.

"45% of retired people are dependent on relatives, 30% receive some kind of charity, 23% keep working, and 2% are independent. Of the 2%, 98% are self-employed in a duplicatable business"

Once again I challenge any distributor to produce proof of these kind of claims. They are outlandish. See my page Income and Retirement Statistics. This page provides you with links to the Social Security Administration's website where you can download information that directly refutes this claim.

There is a 95% chance of being broke after 45 years

Once again you have to wonder where distributors get these kind of statistics. The above link to the SSA's web-site shows that 20% of Americans are retiring with annual incomes in excess of $50,000. Does that sound broke to you?

You need to find a business that is in demand and that is duplicatable

It is my belief that as people are becoming more fully informed of the Amway opportunity, the more they are saying no to it. The proof will be in Amway's sales numbers for fiscal year 1998. For years, they have counted on international expansion to keep their sales growth climbing. The economic turmoil in Asia, the ban in China, bad publicity in Japan, India, Poland and the United States, will probably have an adverse impact on Amway's sales.

We have just tapped into the most incredible economic shift of all time to home-based shopping

Incredible statement in light of the fact that Amway has been in business since 1959.

The products have a lower price than at the store

See my price comparison. Also see the price comparison at the The Amway Distributors "Little White Lie" page, and also the price comparison at any of the Amway Untold Stories mirror sites. Every price comparison ever done shows that you can save money on some of the products, but overall, if you are a core 100% user of the products available from Amway, you will be spending more on the basic consumables you are currently buying from traditional retail outlets.

This educational system will blow your socks off. If you listen to tapes, read the books, and go to the seminars, your income will skyrocket

Review the success statistics in the Amway Business Review (SA4400). It shows that very few people actually succeed.

Shows the plan: you show 9 people to 'shop at home' who show 4 who show 2

First off they should be showing you the 6-4-2 example. Also this is describing a whole-sale buying club, which according to Amway, the Federal Trade Commission, and the IRS is an illegal pyramid.

Spend $200.00 , you actually spend $140.00 since you get a $60 discount and get 100 points, you get $6.00 performance bonus

Once again, the average suggested retail price for 100 points of Amway products is $286.28. The average suggested retail price for 100 points of catalog items is an astounding $513.25. See my page How do I do a 100 for more information on this.

After 9 people show 4 people who show 2 people, you'll get about $3,000.00 a month and with the tax advantages, you will pretty much keep all of it

Tell that one to the Internal Revenue Service. The reality is the only way you are not going to pay taxes on that $3,000 is to have $3,000 in expenses, which means you didn't make a profit.

If you help 3 friends to hit that level, you get $100,000
Help 6 and you get $250,000
Help 9 and you get $300,000
And these are fairly consverative numbers

Compare these numbers to the averages posted in the Amway Business Review.

The more money you want, the more comittment you will have to make

Translation -- you will have to invest more time and money and still have a slim chance at success.

They hired Otto Stotz to help them evolve into another company
They have all the geniuses and experts
They are about 10 years in front of everyone else
Their product line is 100 times greater than anyone else's

Take these statements for what they are worth

About 1 hour and 15 minutes into the presentation and about 15 minutes before the end, he finally mentions that this is Amway

This is very typical. Most distributors wait until the very end before saying the A word.

It's important who you get into the business with (shows Profiles of Success and begins to describe how a few people have become successful in the business)

This is another violation of Amway's Rules and regulations. This Profiles of Success book cannot be used to recruit people. But they violate so many other rules and regulations, what's one more?

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