Another thing Amway IBOs are taught is to ignore facts or numbers while making business decisions. "If the dream is large enough, the facts don't matter," our Amway upline informed the group. I believe this is due to the reality that when you take a business-like approach to the math behind the Amway operation, the statistics are not pretty for the majority of independent business owners (IBOs). It is for this reason that upline training frequently "evolves" into phrases like "Amway saves marriages," "Amway makes you a kinder person," and "Amway is not about money, it is about friendships," among other things. That is a complete and utter heap of rubbish. Making a profit is the goal of every business. If you hear any of these phrases from your upline, it should raise a red flag and cause you to leave immediately. Other false lines may be sent to you by your upline, such as an IBO being successful because they attended a function or because they recently signed up for a standing order. All of this is merely phoney encouragement intended to draw attention away from the fact that an IBO is not producing any money.
When you look closely at the Amway presentation, you will notice that the vast majority of IBOs are at the 100 PV level. Their monthly expenditure is around $300 to reach 100 PV, and they receive approximately a $10 check from Amway in recognition of their efforts at that level. Most independent business owners (IBOs) will be urged to participate in some sort of system, which will typically include voicemail, websites, CDs, books, seminars, and other meetings. MOST independent business owners will not regain enough money to cover even a portion of these expenses, let alone all of them. At first sight, system expenses such as $6 for a CD, $6 for an open meeting, $100 to $125 for a large function, and $12 for a book appear to be insignificant, but they are not. It is the method by which your upline recruits you, and then, after a period of time, an IBO begins to notice a negative cash flow, at which point a difficult decision must be made. Alternatively, you may give up and cut your losses, or you could keep going in the hope that the system will eventually deliver on its promises.
What the majority of IBOs are unaware of is that less than one-half of one percent of all IBOs ever achieve platinum status. A fraction of a percent, to be exact! Furthermore, platinum may either break even or even incur losses in several circumstances! So why would IBOs want to put in the effort to achieve platinum status? Their chances of achieving that level are fewer than one percent. Their chances of keeping that level are extremely slim, and they are still unlikely to generate any considerable revenue at that point in their careers. According to a research conducted by an attorney general in Wisconsin (Bruce Craig), the top 1 percent of IBOs saw an average net loss of almost $900 per year. While Amway defenders will argue that the study is out of date, I will point out that the fundamentals of the Amway business have not changed since it was conducted, and that there are actually more system expenses today than there were back then, which means that platinums may be losing money on an annual basis than they were in the previous study. While not all platinums will suffer a financial loss, I believe that hard core dedicated platinums will suffer a financial loss.
As an IBO, I hope you're keeping track of your costs in relation to your income. The majority of independent business owners will experience negative cash flow month after month. The system expenses (overhead) of the Amway business gradually pile up, despite the fact that the firm is frequently marketed as having low or no overhead. Please be cautious and adhere to the figures.
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