Even as an Independent Business Owner (IBO), I frequently found myself purchasing more goods than I required because a single individual simply does not have a need for 100 PV worth of Amway goods on a constant month-to-month basis, save for the occasional double x breakfast. Generally speaking, Amway's prices are higher than those of many other merchants because the cost of the IBO bonus is incorporated into the price of their products. Amway will need to increase its markup by more than 30% in order to fund all of the IBO bonuses that are paid to layers upon layers of upline and downline in the United States.
As a result of this "disadvantage," it is extremely rare for an IBO to be able to sell enough goods to generate an income. In accordance with certain documents, Amway sells approximately 4 percent of its items through independent business owners (http://www.mlmamericandreammadenightmare.blogspot.com/2012/03/chairman and ceo of amway have.html). This lends credence to my contention concerning the prices. Given this disadvantage, the only other method an IBO may increase PV volume is to sponsor downline, with the goal that they will consume their 100 PV or more. A sustainable and prosperous Amway business can't be built without a strong downline, and this is true in all cases.
Sponsoring, on the other hand, is a major issue. The vast majority of IBOs are unable to sponsor others. Many independent business owners have found themselves in a situation where they are their own worst enemy. I was personally misled into attending an Amway meeting, and many others have shared their stories on blogs, and many more have posted comments expressing the same sentiments. Others were mislead or downright lied to about the nature of the firm. While not all independent business owners (IBOs) engage in these behaviours, they have become widespread in North America. It is difficult to find someone in the United States who has not had a negative encounter with an Amway Independent Business Owner (IBO) or who knows of someone who has had a negative experience with an Amway IBO. Because of the way some groups operate, there have also been charges of cult-like conduct, and some groups have exaggerated the amount of money required to register in order to attract members. I understand that becoming an IBO can cost as little as $100, but some groups charge as much as $200 or more, and I spoke with a prospect who claimed that a Network 21 group charged more than $600 to become an Amway distributor.
When you combine all of these disadvantages, such as exorbitant prices and a shaky reputation, it becomes clear why IBOs are unable to shift volume or sponsor downline. When new IBOs sign up, they are nearly guaranteed to suffer this fate. Only a few few are capable of overcoming these significant obstacles. Even individuals that "make it" are frequently unable to maintain their previous levels of performance for an extended period of time. Is this a legitimate method of generating "residual" income? No, I don't believe so.
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