One of our readers explains why Amway creates a pyramid of commissioned sales reps:
Amway products are overpriced
because the money you pay for them has to be distributed among all the various
shitheads in your up-line. Everybody gets a cut, especially your fat-assed
Platinum, and the Diamond above him.
For this reason the basic structure of Amway is that of an endless chain of
middlemen. When you buy that absurdly overpriced case of Perfect Water, you are
paying a group of persons who have a financial claim on you.
Now it is true that middlemen exist all over the world of buying and selling.
They usually function as distributors who get products out to the more remote
customers who aren’t reached by the original producer. This is a helpful
convenience, and naturally the middleman has a perfect right to get his cut of
the price. But Amway is totally different, and totally corrupt. Amway
deliberately creates a huge number of unnecessary middlemen whose entire
function is to be parasitical on their down-line!
If Amway were honest, it would simply sell its products in a normal retail
manner to customers. It would compete normally in the retail market with other
producers, and try to earn a market share based on product quality. It might
use some middlemen or franchises to get its products distributed more
effectively, but THAT’S ALL. It would not go to insane lengths to create a
totally absurd pyramid of buyers, sellers, and recruiters who pretend to be “Independent
Business Owners.”
The fact that Amway refuses to sell in the normal retail manner (and in fact
forbids its IBOs from doing any sort of normal retail selling) proves two
things:
1) Amway products are NOT competitive with other brands, and can’t gain a
normal market share. Amway would be clobbered by the cheaper and more effective
big brands if it tried.
2) The entire Amway racket is not about the products at all, but about the
recruitment of down-line that will make you a perpetual middleman who just
collects fees. That’s why you will never see an Amway IBO who simply sells you
the Amway products. He will ALWAYS insist on telling you about “the Plan.”
Amway has such a shitty scam business model. There are other businesses with direct distributors, but if they’re legitimate, they don’t pack the market with a bajillion of them. Amsoil is an example. No, they’re not related to Amway despite their name. 😂 They actually produce arguably the best synthetic motor oil in the world - verified by independent lab testing, They were the first in the world to manufacture synthetic oils for automobiles. A good number of professional car racers use their products. Their prices are higher because they make no compromises in their base oils or additives. You can buy it through a distributor, or you can just directly buy it on their website. Their oil isn’t for everyone; you can take it or leave it. It might be overkill for the average driver. It’s a niche product for auto enthusiasts and backyard mechanics. It didn’t make sense for them to distribute through big box stores because the stores won’t pay them for a top-tier product. But there’s no douchey up-line trying trying to corner you at mandatory cult meetings.
ReplyDeleteHi Andy. Yes Amway is a shitty scam business model except for the company owners. The IBO's that are getting scammed have no idea how businesses should be run and to have a business plan or if you're a commissioned sales rep then to figure out if you have a sales area to yourself or you're sharing it with many others.
DeleteAndy's comments about the Amsoil product are quite correct. It's a niche-market product, and therefore won't ever have a huge customer base. Ordinary car drivers don't need it, and stores generally won't stock it because the demand is so limited. It's probably best sold on-line, where interested customers will show up and order it without having to be "sold" on it by a salesman. Another product of that type is Mouse-Milk special lubricant for delicate machinery and complex tools. You won't find it in stores, and the best place to get it is on-line.
ReplyDeleteAmway has nothing like that. Its products are not special in any way, and only exist as a cover for the pyramid-scheme recruitment scam that is the heart of the Amway operation.
Anonymous - Amsoil aside - a real entrepreneur (not a fake Amway one) knows if they create a product or service that fits into a niche market where there might not be a big customer base but there's not a lot of competition either can create steady profits from a loyal customer base.
DeleteLOL - the only people who think Amway says special products are brainwashed Ambots.
This is a very important post of yours Anna. And I hope that people considering joining Amway or other MLMs read this as they will be pressured to buy their own stuff each and every month without fail.
ReplyDeleteBut first, why do I think this is an important post? Because it’s so simple to understand when you break down the philosophy behind pricing. And it’s funny. AMO uplines will preach to prospects and to their own downlines that the business is simple.
You are right about how everyone gets a cut. And the further down the line you are, the less that you make and the more the people above you make.
And one other thing to consider. The people on the IBOAI are the most influential families and AMO leaders in Amway which means they have the most say in hamstringing the Company into manipulating the PV and BV of products. And because of this, price is also manipulated in order to make sure they themselves are still well taken care of within an evaporating business model which relies heavily on mitigating churn.
And notice how some products only last a handful of months? That’s because enough of them aren’t being sold in order to fill the coffers of uplines.
It reminds me of the scene in Ocean’s Thirteen when Frank Catton is pitching ‘Nuff Said to Willie Bank. “When they win, Mr. Bank, we win.”
Anonymous - yes we have some amazing readers who share their stories or try to break down everything that is wrong with the stupid Amway plan and put it into simple terms that everyone who is not a brainwashed Ambot can understand. Yup and like you said at the end there. Every time a lowly Ambot at the bottom of the pyramid makes a sale - all of us in the upline make a little comission on that sale too. LOL can't say as how I notice some Amway products only last months. I don't keep up with their inventory of shitty overpriced products. I do remember that the Nutrilite vitamins were being pushed by the assholes in the Amway upline for Ambots to buy or find suckers to buy because that's where the highest PV was.
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