I've been having a discussion with several friends concerning the concept of customers. Amway's most vocal defender maintains that independent business owners (IBOs) are customers, and claims that a large number of people register with Amway solely to become customers of the company. Now, I'm not sure how anyone could possibly come to that conclusion, but regardless of whether it's correct or not, these individuals are still classified as IBOs in the United States. I'm not going to get into the legal ramifications of the 1979 FTC ruling and the 70& rule, even though the rule's intent was to prevent IBOs from purchasing their bonuses with their bonus money.
ICERAT/David Steadson/IBOFB/Insider/Icerat According to reports, IBOs who purchase and then resell to downline members are meeting the sales requirements, and the downline members are customers of the company. Let's just go with it for now. What's more, independent business owners (IBOs) do not buy and then resell to their downline. Isn't it true that IBOs order directly from Amway? Purchasing directly from Amway allows independent business owners (IBOs) to receive some volume credit for their downline purchases, but the upline does not purchase and then resell anything to the downline. So, other from sales to supportive friends and family, are IBOs actually making any sales to those who are not IBOs?
If independent business owners (IBOs) are not selling their products, but rather are primarily consuming them themselves, it follows that the majority of the upline bonus is derived primarily from the pockets of the downline. I believe that the tools business is a pyramid scheme because only independent business owners (IBOs) are purchasing standing orders and attending functions. Because Amway products are not sold to the general public, the Amway business opportunity would fall into the same category as the Amway product line. I'm curious as to what the Federal Trade Commission would say today if that were the case. I'm curious as to how the Federal Trade Commission would rule on the current state of the tools system.
This is something to give careful consideration. If you are an Amway business owner and you are selling little or nothing, where do you believe your bonus will come from, you might be surprised. Depending on how you go about it, it either comes from your own pockets or by taking advantage of your downline, who then contribute a portion of your bonus from their own pockets. A system like this requires you to attract as many people as possible into your downline in order to maximise your bonus. Because the greater the number of people you can leverage, the greater the amount of bonus you can earn. One of the problems with this system is that people eventually realise they aren't making any money and that paying exorbitant prices for "prestigious" soap and vitamins is not worth it, and they quit. When these people give up their Amway dream of mansions and private jets, they seem to lose their drive to continue making purchases in the company.
Amway sales would increase almost every year if former IBOs continued to purchase Amway products. This is because the former IBO's purchases combined with current Amway sales should continue to rise, rather than decline. The reality however, is not quite as simple as that. What type of business allows employees or company owners to serve as the principal clients and still prosper? Amway is not an exception to the rule, which is because there is none.
Amway, much like other multi-level marketing businesses, places a significant amount of emphasis on the role of its independent business owners (IBOs) in the promotion and sale of the company's wares. On the other hand, a widespread misconception among detractors is that IBOs are essentially existing customers who are persuaded to become business partners for the purpose of increasing the company's overall number of transactions and profits.
The contention is that the majority of IBOs join Amway because of the allure of financial independence and the opportunity to run their own company, but in reality, they wind up spending more money on Amway products than they bring in through sales. The bulk of IBOs, according to many detractors, have a difficult time making ends meet, whereas the top-tier IBOs, who have vast downlines and get commissions from their sales, allegedly make the majority of the money in the business.
due of the way that the Amway business model is constructed, one of the primary reasons why some individuals consider IBOs as customers is due of this framework. In order for Independent Business Owners (IBOs) to be eligible for incentives and commissions, they are encouraged to purchase a particular number of products each month, which is referred to as their "personal volume" (PV). The higher an IBO's rank and the more potential revenues they have, the more PV they have.
However, some believe that this creates a system in which IBOs are encouraged to acquire things largely for the purpose of preserving their rank and receiving bonuses, rather than because they are selling to actual customers who are interested in the products themselves. Because of this, Independent Business Owners may end up buying more merchandise than they are actually able to move, which results in a load on their finances and prevents them from making a profit.
A high turnover rate within Amway's business is another factor that adds to the idea that independent business owners are the company's clients. Because so many independent business owners (IBOs) give up on their companies during the first year or two of operation, it can be challenging to establish a reliable clientele. Additionally, because of the emphasis placed on recruiting new IBOs, there is a possibility that less attention may be paid to the actual process of selling products to clients.
On the other hand, one must keep in mind that not all IBOs are merely clients. This fact is quite essential. Many people are able to construct prosperous enterprises by putting their attention on increasing product sales and developing a dedicated customer base. In point of fact, Amway is there to help Independent Business Owners (IBOs) become successful business owners by providing them with training and support.
In the end, the subject of whether independent business owners (IBOs) are considered clients or not is a complicated one that is determined by each person's perspective on the company. Although there are instances in which Independent Business Owners (IBOs) have been urged to concentrate more on purchasing things for their own personal use rather of selling to customers, there are also instances in which IBOs have developed successful enterprises by placing a priority on the sales of products and the fulfillment of the needs of consumers.
It is essential for Independent Business Owners (IBOs) to conduct an in-depth analysis of their approach to the company in order to guarantee that they are placing a high priority on product sales as well as the development of a base of devoted customers in order to achieve sustained success in their endeavors.
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