I've been having a discussion with several friends concerning the concept of customers. Amway's most vocal supporter maintains that independent business owners (IBOs) are clients, and claims that a large number of people register with Amway just to become consumers of the company. Now, I'm not sure how someone could possible 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 repercussions of the 1979 FTC ruling and the 70 percent rule, even though the law's intent was to prevent IBOs from purchasing their bonuses in exchange for commissions. A final point to mention is that Amway does not consider independent business owners (IBOs) to be customers, and that Amway defines a retail sale as a sale to a non-IBO.
ICERAT/David Steadson/IBOFB/Insider/Icerat According to reports, IBOs who purchase and then resell to downline members are meeting the retail sales standards, and the downline members are clients of the organisation. 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 mostly 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 company is a pyramid scheme because only independent business owners (IBOs) are purchasing standing orders and attending activities. Because Amway items 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 now 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 method is that people eventually realise they aren't making any money and that paying exorbitant amounts for "prestigious" soap and vitamins is not worth it, and they quit. When these people give up their Amway dreams of mansions and private planes, they seem to lose their motivation to continue making purchases and return to their old habits of shopping at WalMart or Costco instead.
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.
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