We were educated that the Amway opportunity was fair by our upline, which was a complete fabrication. That everything was played on an equal playing field. On the surface, this appears to be correct because "everyone starts at zero." While everyone begins at zero, the compensation model is unfair to those who "put in the effort" and, in my opinion, should be revised to ensure that lower level IBOs get more money than higher level IBOs. It would almost certainly help with IBO retention, and it is possible that some higher level executives would not have to work as hard to continually replacing employees who quit. It is my educated view that many independent business owners (IBOs) resign because they are not earning a profit. The prospect of real profits would encourage people to remain participating in the firm.
If you are a new Amway Independent Business Owner, you may be unfamiliar with the company's compensation structure. Amway awards bonuses that account for around 30% of their total revenue. As a result, if you shift 100 PV in items, or around $300 in sales, Amway will give out approximately $100 in bonuses. You, as a new 100 PV IBO, would receive approximately $10, and your uplines, some of whom are unaware of your existence, would split the remaining $90 in incentives among themselves. In reality, it is not as simple as "performing the task and being paid." You are completing the tasks so that your upline can be compensated. Additionally, upline encourages you to purchase materials (functions and other tools) that are designed to persuade you that you are getting a good bargain on your investment.
There's also something extremely important to consider. In what other profession would you get compensated at such a low rate (just 3 percent)? I can only think of real estate, but your sales are likely to be in the hundreds of thousands of dollars when it comes to real estate. In almost any other sales-related career, you will receive a far larger percentage of the sale than 3 percent. You can get a greater incentive or commission by moving more volume, but you will also earn more money because you will be exploiting those who produce 100 PV and receive only $10 in compensation. To put it another way, your revenues come from the pockets of your downline.
Even after taking into account the unfair remuneration, you must evaluate the cost of the instruments you will need. The majority of uplines advertise tools (cds, voicemail, and functions) as being essential to an IBO's success in the business. Some uplines are more aggressive in their use of the instruments than others. However, because the cost of tools is typically greater than an IBO's incentive, the purchase of tools will frequently be the principal source of financial losses for IBOs. In the United States, it is highly usual for monthly tool purchases to exceed $200 per month on average, and only a very small percentage of IBOs will ever reach a level in the Amway reward plan that allows them to earn enough to just break even. In addition, it appears that the tools are not functional. There is no unbiased evidence to imply that tools are associated with IBO success in any way, shape, or form.
Because of Amway's tarnished reputation and its unjust reward model, the company's IBO retention rate is low. Many independent business owners (IBOs) join but do little or nothing, and many IBOs do not even make it through a full year before giving up. As a result, IBOs begin to realise that building a downline is practically impossible, and as a result, generating greater volume is nearly impossible, even for persons with exceptional abilities. If you are a new IBO or a potential, I encourage you to sit down and truly look at the numbers, taking into consideration the cost of tools and other expenses. There are other methods to make a dollar; but, I do not believe that Amway is the most efficient way to accomplish so.
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