Amway: The True Story of the Company That Transformed the Lives of Millions reads like an extended advertisement. Its author, Wilbur Cross, became acquainted with Amway cofounders Rich DeVos and Jay Van Andel when they commissioned him to write the first ‘official’ history of the Amway Corporation, Commitment to Excellence, published in 1986. In Amway, Cross repeatedly references the work of Shad Helmstetter, PhD, a ‘motivational expert’ specializing in ‘programming’ yourself to change negative self-talk into positive self-talk. Negativity is expressly verboten in the world of Amway, as it breeds doubt – distributors are advised to get rid of any negative people in their downline as soon as possible if they can’t train them to be positive.
"The two years I was supposedly building my Amway business, I lost nearly $10,000 on tapes, seminars, books, gas, and traveling expenses for out-of-town seminars. My earnings? Less than $500 total. Since I was unemployed -- and pretty much unemployable for any nonburger-flipping job -- those $10,000 came exclusively from my grandmother, who was also my biggest (and only) Amway customer, buying expensive, 'concentrated' Amway products she didn't need, every month to support me."
Ultimately, however, he dealt with his catch-22 through simple fantasies of escape. He was adamant that someday he’d be a millionaire, his current predicament no more than a bad memory. His hand would describe a hyperbola as he explained that The Business was hard at first, but if you’d just stick in there, you’d soon enjoy exponential success. This would happen so soon that he wouldn’t have to prospect long enough even to get particularly good at it. “The point is not to get good,” he insisted, “It’s to get done!”
Amway has great products, however, building an Amway business is very difficult due to the fact that it has a punishing compensation plan. It also has deep market penetration, meaning that most adults know of it and many have had a negative experience in many instances. This requires more touches with the same individual to get them into the business than if you were building a relatively new company for example. For my full Amway review visit http://www.jasonleehq.com/amway-review/
Their vertically integrated supply chain is one of longest in the industry. In addition to running plants, they own organic farms. They have farms in Brazil, Mexico, and the state of Washington where they grow and harvest key botanical ingredients like echinacea, spinach, alfalfa, watercress, and cherries. They then take those products and manufacture intermediates. Cherries, for example, are processed for Vitamin C. These intermediates they both use in their own products and sell to other companies.
Amway doesn’t operate this way. Amway IBOs don’t make any money by bringing more people in – not a single cent. They make money when products are sold, not from recruiting. On each product sold, Amway sets aside a portion of the product cost as a “bonus.” This is shared by IBOs who work together in sales groups, according to their contracts with Amway.
Amway is haunted by the specter of saturation, the success that spells disaster. The 6-4-2 scenario tells it all: To keep one promise of $2,000-a-month, seventy-eight more need to be made whose fulfillment is still pending. The problem is that growth doesn’t improve this ratio: Were Amway to conquer the known universe, fewer than 2 percent of its distributors would be (or mathematically could be) Directs or higher. Of the rest, about 90 percent would be actively losing money—and without a pool of prospects to give them hopes for the future, they would surely quit. Amway would collapse from the bottom up.
“Here we are three years into [the Herbalife battle] and it’s no clearer than it was at the beginning,” Keep told me when we spoke. If the government had rules about where the line was between an illegal pyramid scheme and a legal multilevel marketing company, there wouldn’t be any such dispute. It’s ridiculous that we have to guess what’s illegal.
Amway has a huge collection of 'success stories'. These are recordings by people who have made it big in Amway. They explain how Amway changed their lives and set them on the path to financial freedom. I was briefly a member of Amway and my sponsor's upline became very upset when I refused to pay for a regular motivational CDs. (While I was being recruited, my sponsor loaned me some of his CDs so I got to listen to them). As expected, the motivational material is a big profit maker for those who are making money in the system.
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On the way out, we pass a frame on the wall bearing a quote by Robert Dedman Sr., founder of ClubCorp. My husband stops to read it: ‘‘A club is a haven of refuge and accord in a world torn by strife and discord. A club is a place where kindred spirits gather to have fun and make friends. A club is a place of courtesy, good breeding, and good manners. A club is a place expressly for camaraderie, merriment, goodwill, and good cheer. A club humbles the mighty, draws out the timid, and casts out the sorehead. A club is one of the noblest inventions of mankind.’’
After a year in The Business, Josh and Jean were scarcely able to devote eight hours a week to distributing goods and showing The Plan—activities that required a good supply of prospects, customers, and downlines. They were desperate for new leads, also a scarce resource, and regularly alarmed me with proposals that we all go to some public place and mingle. Of course, that would have required overcoming shyness and other gag responses, impediments that Josh, Jean, and Sherri never really overcame (most of their leads seemed either to be family or, like me, coworkers.) They would, on the other hand, devote entire weekends to “recharging their batteries” at First and Second Looks, Seminars, Rallies, and Major Functions (Dream Night, Leadership Weekend, Family Reunion, Free Enterprise Day); meetings that required only insecurity and neediness, which all three had in spades.