The crux of the Amway business is for an IBO to redirect their household spending to Amway and teach others to do the same, also commonly known to as BFYTODS (Buy From Yourself and Teach Others to Do the Same). By doing so, IBO’s can earn bonuses on the amount they spend and of those who they recruit. Amway IBO’s should also be retailing these products to consumers (non-IBO’s) at retail prices. However from our experience with the IDA system, little or no emphasis on this is made, in fact, we were told that there was “no selling” involved. After seeing the retail prices on some everyday household and grocery items, it is no wonder the IBO’s don’t focus on retailing. The pricing on most items do not offer enough incentive and value for a consumer to buy them.
But it’s not only the prices that are unappealing, in our opinion, there are many other factors that make buying from Amway as a customer a very unattractive proposition. These are: Buying in Bulk, Inconvenience, Non-Perishable Items Only, and Limited Range. We’ll discuss each of these factors in detail, as well as the Pricing issue in separate upcoming blog posts.
Today, we’ll look at the Buying In Bulk.
Like most people, we do a weekly supermarket trip, many grocery shop fortnightly whilst there would be a very small percentage, if at all, who shop monthly. We buy what we need when we need it. Almost always, if a particular product is on special by a significant amount (eg. half price) and if it’s a non-perishable item, then we’ll buy one or two extra. We figure that we’re not much different from the average household and assume that the majority of people shop this way too.
The trouble with buying from Amway is that a great majority of grocery products are sold in bulk. Take the tissues for example. You can’t buy one box, you have to buy 16 of them (16 x 200pk @ $29.94). Yep, 16 of them! Now we’re lucky to go through one box per month (more in winter) so that’s what we buy, one per month. We have no need to buy 16 boxes in one hit and we wouldn’t have any room to store them all anyway. To us, it makes no sense to buy a years supply of tissues and especially when the cost per box ($1.87) is no cheaper than a 224pk of Sorbent or Kleenex tissues on special.
Next product is the San Remo Pasta. You get 12 x 500gm packets ($22.56). Again, we have no need for 12 packets of pasta. Now our household loves pasta, but even so, we probably only have one sometimes two pasta dishes every week. So on average we’d consume 6 packs per month. With Amway, this would mean we’d have to buy two months supply. Apart from the storage issue again, there is more often than not, a decent brand of pasta on special every week or so anyway, for less than Amway’s price ($1.88). Moreover, pasta is pasta, they all pretty much contain the same few ingredients whatever the brand and whatever they type. We have differing types of pasta each week, spaghetti, fettuccine, spirals, penne etc. and we often buy these at .69c per pack. To buy a dozen packs of the same pasta that would take 2 months for us to consume and to pay over $14 more for it, does not make sense at all.
And finally, we have the Fountain Tomato Sauce. Forget about a 500ml, or 1 litre bottle, in Amway you have to buy 4 litre bottles. The only time we’ve ever seen the 4 litre sauce bottles is at places where large groups of people are eating (public sausage sizzles, the footy & fete’s etc). Now we’re as Aussie as anyone and love our harry horse, but not that much! A 500ml bottle lasts us for about a month or so. It’d be ludicrous for us to buy an 8 month supply of the stuff, eeww just the thought of squirting 6 month old sauce our sausage rolls is making us feel nauseous.
If the majority of people preferred buying the majority of their groceries in bulk, then there’d be Cash’n’Carry type outlets everywhere and supermarkets would be few and far between. In reality of course, the opposite is true. So the Amway IBO’s are virtually the only ones who purchase their groceries this way and only because they have that incentive to buy enough so as to hit that minimum 100pv level each month, and earn a measly 3% rebate back. Question is, if a lot of the products last for more than a month, 2 months or even 6-12 months, then what do IBO’s buy in each of the following months so as to hit 100pv?
Our guess is that, they buy the stuff that can be used within a month, products with the highest pv/bv attached to them and/or like our family member IBO’s are doing, buying products that they don’t need or have never bought prior to joining Amway. Not to mention, also stockpiling on products they already have. Absolute stupidity.
In our next blog post, we’ll discuss whether buying through Amway is really as convenient and time-saving as the IBO's proclaim it to be.
Showing posts with label recruit. Show all posts
Showing posts with label recruit. Show all posts
Monday, December 17, 2007
Saturday, October 13, 2007
Amway's Reputation
Mention the word "Amway" to anyone who has walked the earth for more than a few decades and you'll find that in the majority of cases, the two words that will likely to be heard in reply are "scam" or "pyramid scheme". Whether those opinions are based on personal experience or through the experience or on the words of others, it's clear that the Amway name has the stigma of disrepute amongst the minds of the masses.
Being a word-of-mouth business where the continual recruitment of more people is required in order for one to succeed, one would think that no-one would join Amway with the reputation that it has. But people do join and lot's of them, though that number has declined over the last several years.
According to Amway's figures, there are approximately 80,000 registered IBO's in Australia and New Zealand combined today. Considering that the number of IBO's in Australia alone in the year 2000 (when Amway went online) was 100,000, this illustrates a significant decline overall, however, what is more significant is the number of IBO's that have joined and resigned within that period. Amway has a staggeringly high attrition rate, reported to be as high as 65% within the first year.
What is the reason for the such appalling retention rate of IBO's? Why do the majority of IBO's quit? One would think that if the majority of IBO's were successfully making money then there would be a continual annual growth of IBO numbers and lower attrition rates. As can be seen from the above statistics, this is not the case. So why aren't the vast majority of IBO's making money? Is it because they are not "working the business" properly? Perhaps. Is it due to lack of skills or effort? Perhaps. Are they themselves to blame for their failure in the business? Perhaps. Or is it the failure of the Amway business model itself that is largely to blame? Definitely. Whatever the reasons are, the labels of "it doesn't work" "scam" and "pyramid scheme" ensue and thanks to the growth and accessability of the internet, these thoughts and opinions are now also expressed publicly for all the world to see. The more people that join and subsequently fail in the Amway business and who share their experiences, the more that Amway's reputation generally takes a hiding.
Who suffers the most from the bad reputation? Yep, it is the IBO's who are trying to recruit new IBO's. So much so that the word "Amway" is rarely mentioned up-front to prospects. Instead the "curiousity approach" is taken where the terms "business opportunity", "e-commerce business" or the name of their associated AMO system is used in order for the IBO to have a chance in generating any interest. However, inevitably the "Is this Amway?" question often comes up. It is the single biggest objection an IBO faces when pitching the business. An objection that the majority of IBO's attempt to overcome by skirting around or downplaying the true importance, role or connection of Amway in their business. More often than not even this tactic does not work as the mere mention of the word Amway is enough to scare the majority of prospects away. Such is the power of a bad reputation. Easy to get and difficult to shake off.
So this is just our opinion on Amway's reputation. Do you agree or disagree? What are your perceptions and opinions about Amway?..... We'd like to know! Feel free to leave your comment here and/or visit our website at www.ozamwayvictims.com where you can share your experiences, thoughts and opinions and read what others fellow Australians have to say.
Being a word-of-mouth business where the continual recruitment of more people is required in order for one to succeed, one would think that no-one would join Amway with the reputation that it has. But people do join and lot's of them, though that number has declined over the last several years.
According to Amway's figures, there are approximately 80,000 registered IBO's in Australia and New Zealand combined today. Considering that the number of IBO's in Australia alone in the year 2000 (when Amway went online) was 100,000, this illustrates a significant decline overall, however, what is more significant is the number of IBO's that have joined and resigned within that period. Amway has a staggeringly high attrition rate, reported to be as high as 65% within the first year.
What is the reason for the such appalling retention rate of IBO's? Why do the majority of IBO's quit? One would think that if the majority of IBO's were successfully making money then there would be a continual annual growth of IBO numbers and lower attrition rates. As can be seen from the above statistics, this is not the case. So why aren't the vast majority of IBO's making money? Is it because they are not "working the business" properly? Perhaps. Is it due to lack of skills or effort? Perhaps. Are they themselves to blame for their failure in the business? Perhaps. Or is it the failure of the Amway business model itself that is largely to blame? Definitely. Whatever the reasons are, the labels of "it doesn't work" "scam" and "pyramid scheme" ensue and thanks to the growth and accessability of the internet, these thoughts and opinions are now also expressed publicly for all the world to see. The more people that join and subsequently fail in the Amway business and who share their experiences, the more that Amway's reputation generally takes a hiding.
Who suffers the most from the bad reputation? Yep, it is the IBO's who are trying to recruit new IBO's. So much so that the word "Amway" is rarely mentioned up-front to prospects. Instead the "curiousity approach" is taken where the terms "business opportunity", "e-commerce business" or the name of their associated AMO system is used in order for the IBO to have a chance in generating any interest. However, inevitably the "Is this Amway?" question often comes up. It is the single biggest objection an IBO faces when pitching the business. An objection that the majority of IBO's attempt to overcome by skirting around or downplaying the true importance, role or connection of Amway in their business. More often than not even this tactic does not work as the mere mention of the word Amway is enough to scare the majority of prospects away. Such is the power of a bad reputation. Easy to get and difficult to shake off.
So this is just our opinion on Amway's reputation. Do you agree or disagree? What are your perceptions and opinions about Amway?..... We'd like to know! Feel free to leave your comment here and/or visit our website at www.ozamwayvictims.com where you can share your experiences, thoughts and opinions and read what others fellow Australians have to say.
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