The unjust multi-tiered compensation model is one of the main reasons why I believe Amway is not a viable investment. I've heard Amway pays its IBOs around 32-33%, however I think it's unfair because you get paid more for sponsoring people that move volume than you do for actually selling items. This, I believe, is why so many IBOs are frantic to sponsor people, and why, in some situations, dishonesty and trickery are employed in recruiting, adding to Amway's negative reputation.
This multi-tiered remuneration scheme also favours a select few at the expense of the general public. If an IBO works exceptionally hard and sells 100 PV worth of products, Amway will give the IBO a bonus of $9 or $10, and the layers of upline will divide roughly $90. That doesn't seem fair to me, especially when IBOs appear to suggest "do the task and get compensated." In this situation, you perform the labour while your uplines are compensated.
I believe it would be more efficient for Amway to give all IBOs a 20-25 percent incentive, with the remaining 8-13 percent (33 - 20 or 25) given to various levels of achievers. This, I feel, would enable someone to adjust their purchasing patterns and get some benefit. It would also help retain IBOs because a 100 PV would entitle you to a $60 monthly incentive. You would obtain the retail profit plus the bonus if you sold 100 PV to clients. I believe that there would be a greater emphasis on selling rather than sponsoring. It would relieve IBOs of the pressure to recruit and sponsor, and I believe Amway's reputation might be restored in this fashion. While "going diamond" would be less of a priority, individuals who did achieve it would still be rewarded handsomely.
Implementing this form of pay, I believe, would also reduce the never-ending need for CDs and seminars. Sure, product expos and salesmanship training could help, but I believe that rewarding the "majority" of IBOs would keep them engaged in the business and reduce the need for tools. For the most part, I believe this is a win-win situation for everyone involved.
Some Amway apologists will doubtless find flaws in my logic, but I believe this is a long-term viable answer for Amway. Any and all feedback is appreciated.
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