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Tuesday, August 17, 2021

You Can't Buy Yourself To Profitability!

 I've been engaged in an extended dispute with a WWDB IBO who has been brainwashed. His explanation is apparent; he believes that purchasing from himself is a sound business strategy, as evidenced by his conviction. WWDB leaders appear to favour the purchase from yourself model because most people do not enjoy selling their goods and services. So it appears to be a harmless practise to simply purchase from yourself and encourage others to do the same, or to mimic you. In this approach, an IBO can still meet their de facto 100 PV target without feeling compelled to promote Amway products they are uncomfortable with.

However, how do you make money when you buy your own stuff? According to the Amway IBO, it is simple. He buys in bulk from Amway, then sells his products at retail prices, pocketing the difference. As a result, he believes it to be a decent profit. After getting myself up off the floor, I inquired as to why he didn't simply purchase 200,000 PV or whatever it takes to go platinum or diamond. Without a doubt, I'm speaking figuratively, but the Amway IBO doesn't respond and instead begins labelling me a broke loser. It appears that when Amway representatives run out of topics to dispute, they resort to personal insults.

So let's look at a real-life example, but for the purpose of simplicity, I'm going to utilise round numbers to make it obvious and easy to understand. Consider the following scenario: an IBO has $10. He purchases an energy drink from Amway (named XS) at a wholesale price of $2 a can for use in his business. He has a can of XS to drink and $8 in change in his possession. Are you still with me? So, let's assume an Amway Independent Business Owner (IBO) purchases from Amway wholesale and charges himself retail. He starts with $10 and spends it for a can of XS, which costs $2. He, on the other hand, charges himself the full retail price of $4. As a result, this IBO has a can of XS and $6 in his possession, as well as a $2 profit that is taxable income. Which of the following scenarios is preferable for you? In the first situation, it's simple because you have a can of XS and $8 on hand. In my second scenario, you also have a can of XS and $8 in your possession. However, $2 of that $8 is subject to taxation.

When you purchase anything from yourself, any "profit" you make is merely the transfer of money from one pocket to another. It is true that you have no profits if you do not have any real outside clients. As a result, the "purchase from oneself" argument is completely absurd. Can you think of a scenario in which a store's sales force is responsible for the majority of its sales volume? Only in Amway, which explains why the great majority of Amway independent business owners (IBOs) make either nothing or lose money. Customers are the lifeblood of physical stores. In the case of Amway, it appears that their clients are the Amway independent business owners themselves.

The bottom line is that no store or business can buy its way into profitability, and if you believe you can, you are deluding yourself and your fellow business owners.

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