Amway Australia - A Call for Transparency

Another extremely interesting blog post has been made by Orrin Woodward (ex-Quixtar Diamond) on his blog, see here:

http://orrinwoodward.blogharbor.com/blog/_archives/2008/6/19/3752893.html

Some very enlightening comments have been made, particularly those from current Australian IBO's. And in particluar this comment, which we've reposted below:

"Re: Amway Australia Leadership Challenge

by Anonymous on Fri 20 Jun 2008 09:27 PM EDT Permanent Link

Hi Orrin.

I am the person who wrote the original article "outing" Amway Australia. I am very curious to see what has been said by others in response.

I would like to comment on IBO Fightback's comment.

In my original post I requested that people contact Amway Australia Management. You can ring them on 02 9843 2000. Ask for Amway Legal or the acting CEO, Mr Coldwell. (The previous CEO, Peter Williams resigned in April 2008 - did someone see the writing on the wall - under his guidance Amway Australia is sliding backwards, fast)

Why believe the data on Amway Wiki? How does IBO Fightback verify the comments on Amway Wiki???

I am not interested in the comments by a website - that website is no more valid than me saying 78% of Amway Diamonds in Australia re-qualify every year & make an average income of $375,000.

Just as a side issue, Amway Australia will not pay you a Diamond bonus if you have international legs. The SIP (Sales Incentive Performance) bonuses are paid on Australian legs. How many people are Diamonds in the Australian market - IE: they have 6 qualified - in country legs?

So again I repeat my original post: "Get the transparent facts". (I have one additional question to ad to the list) Before you go on building the Amway Australia business find out the following:

1. How many Diamonds qualified between 1985-2007 have re-qualified more than once. How many Emeralds, How many Saphires, How many Rubies? - this goes to the heart of the issue - is the business model sustainable?

2. What is the turnover rate on average for a Diamond group?

3. What is the average income made by a Qualified Diamond in Australia? How many years did the average Diamond take to achieve this income.

4. What is the Amway Australia sales volume for each year 1985 - 2007? In real $.

Lets stop the internet chat in its tracks. I am not asking anyone to believe or verify my questions with "further fake data" - I want all current, former & intending IBO's with Amway Australia to become aware or the THE TRANSPARENT FACTS.

Email, ring or arrange a meeting with Amway Australia management. Go and get these very simple & worthwhile questions answered. Then post the answers on Amway Wiki - then post them here.

Post the names of all those who are currently qualified & all of the names for each year: 1985-2007 who qualified. Amway want IBO's to be transparent - well now we want them to be just as transparent. Their own website says "money, time & lifestyle" let them prove it.

I challenge someone else to do this investigative work & report back. That way someone cannot claim that I am faking the results , just to prove my version of reality.

I am so confident that the results of this investigation - that I will let an outsider investigate my claims & report back.

The claims will be catastrophic - as I said originally - once you have the THE TRANSPARENT FACTS FROM AMWAY AUSTRALIA - YOU WOULD HAVE TO BE AN IDIOT TO KEEP BUILDING IT.

If any commentator is confident that my questions will be answered with data that reflects Amway Australia as a positive, profitable & successful business experience - then I will issue a retraction.

My article is written out of deep concern for Amway IBO's & those intending to sign up in Amway. I am an insider - I know what has gone on behind the scenes, I know who is not re-qualified even at the Diamond, Emerald, Saphire & platinum levels. I have been on many, many, many Australian Leadership Seminars with Amway Australia.

I have sat around & chatted with key leaders in Amway Australia. I have deep concern that people are filled with a "fake" promise of long term success, by those who still hold out hop that they can make significant money. This is the only reason many people buy Amway product - PV.

I am looking forward to seeing THE TRANSPARENT FACTS. I challenge all commentators to contact Amway Australia report back to this website."

We are pleased that the spotlight has somewhat now been turned on to Australian Amway business and that IBO's are having their say. Our reply to the abovementioned comment pretty much sums it up.

"Thank you Anon for speaking out and revealing your truth as how you see Amway Australia. The Australian public and in particular, the Australian IBO's (current and potential) have been kept in the dark for far too long as to the state of the Amway business here.

We, at our blog have also been calling for true transparency in regards to Yearly Sales Numbers, Numbers of IBO's, Average Earnings, Retention/Attrition rates etc. We agree too, that how can anyone perform their due diligence as to whether the Amway "business opportunity" is a viable (and profitable) venture to commit to without such vital information.

For any current or potential Australian IBO's out there reading this, we also implore you to find out the cold hard facts from Amway Australia. We also invite you to submit your comments, stories, results of your research and any other information to our blog as well.

Thank you Orrin for taking an interest and concern in the goings on of Amway Australia and bringing it to attention via your blog. Silence, secrecy, deception, unaccountability and lack of transparency and information has reigned supreme here, we hope that with further dialogue and input from the public continues, so that the Truth can finally see the light of day".

For Potential Amway IBO's

The majority of the info in this post has been copied from the Potential IBO? page on our website. We have amended it some places and also added additional comments and information which reflects our current thoughts and opinions, unlike the fairly neutral original website page.

If you've been prospected to look at, or have been presented with the "business opportunity", most likely by someone that you already know, then this page is for you. You may be unclear as to what the opportunity is, how it works exactly and what is involved. You may be feeling undecided, confused or sceptical. You may be interested or really excited about the opportunity. You may even be feeling a mixture of the above. If you have been sold by "the dream" and are downright raring to go and all "fired up", then we hope this page brings you a reality check.

The first reality check is, if your business opportunity is called "IDA" or "Network 21" then you should have also been told that they are independant training and motivation organisations set up by high level AMWAY IBO's (Diamonds and above). If you have been told that "it's not Amway" or "they're just our supplier", like we were, then you have not been told the truth. Red flag number 1!

You are being presented with a "business opportunity" that like any other MLM, will require you to invest a significant amount of time, money and effort into. Do not delude yourself believing otherwise. So the decision to join should not be made lightly. It is recommended that you take the time to perform your due diligence by researching the business and the opportunity thoroughly before you undertake such a commitment. There are ample sites on the net, which covers the good, the bad and the ugly side of Amway. Empower yourself with as much knowledge as possible by considering all the cons and pros.

If your sponsor/upline has advised you not to research the business on the internet or ignore the negative stuff that's out there on the net or from loved ones, well hello to red flag number 2!

To further assist with your research, below is a suggested list of things you may want to consider and do as well as questions to ask your sponsor and their upline.

THINGS TO CONSIDER AND DO:

* Obtain samples of the products and try them yourself. Determine whether they are of value (price, performance, quality & quantity) to you and whether you will be happy to use, promote and sell the products to others. We're assuming here that you've been told about what products are available, if that's not the case and there is little or no mention about them, consider that red flag number 3.

* Take into account that alot of products must be purchased in bulk and Amway does not sell perishable goods (fresh fruit & vegetables, meat, dairy products etc) so you will need to purchase these products as you would normally do. Will purchasing through Amway really be convenient and save you time? We don't think so, but hey that's just our opinion ( see here: http://ozamwayvictims.blogspot.com/2007/12/trouble-with-buying-through-amway-part.html and http://ozamwayvictims.blogspot.com/2008_01_01_archive.html )

* Obtain a Amway Catalogue and perform your own price study/product comparisons. Note down the products that are comparible to what you'd normally buy and work out how much PV/BV and rebates/bonus you would achieve by redirecting your spending to those products (take shipping fees into account). Will you be saving any money? Until you sponsor others underneath you, then you will not make money simply by buying from yourself, you may save some money if you spend enough to qualify for a rebate check, but that's what it is, a rebate of money that has come out of your own pocket, it is not income.

* Do a detailed household budget, if you have not already done so. Consider all the costs of running an Amway business. Find out what all the expenses are involved in being IBO eg. phone, fuel, stationery, samples, seminars, books, cd's etc. Now factor in and adjust your current household budget to include the normal regular Amway business expenses that will be required regardless if profits are made or not. Can you comfortably afford to run an Amway business?

* The plan is commonly presented as working anywhere from 8 -12hrs per week, however in reality this appears to be an understated figure. The minimum amount of time required to be considered to be "working the business" is more like 15-20 hours. Do you have the time required to spend on the business each week? Showing the plan, meetings, opens, seminars etc are mostly conducted in the evenings and/or weekends. Will these interfere or require adjustments to any existing work, family, social, sporting or community commitments? Oh! and if you have been told that by working 10-12 hrs per week you'll earn $50,000 plus within 12-18 months, then consider that red flag number 4. So, ask for proof as to how many IBO's have actually accomplished that.

* Determine any taxation requirements (ABN number/GST registration) for your Amway business. Investigate if there are any taxation implications that may effect your other sources of income. Seek independant taxation/accounting advice. Familiarise yourself with the ATOs' (Australian Taxation Office) position regarding the Amway business, which is here:

http://www.ato.gov.au/corporate/content.asp?doc=/content/1770.htm&page=6. It's a lengthy document, see table of contents on the right hand side. If you've been told about any tax benefits by having an Amway business, it is against the Rules of Conduct for one (and red flag number 5), and two, if you read the ATO document, you will soon clearly see what the ATO classifies as a business.

* Are you willing to sell? Do you have sales skills or experience and if not are you willing to learn? Let's be clear on this, Selling is required in order to make any money and selling to retail customers is the best way to make money. At the very least, you will be selling "the opportunity" to others, so if you were told that "no-selling is required" (again, like we were) then quite frankly you were being lied to and up comes red flag number 6.

* How was the opportunity "sold" to you, in other words how were you prospected? Did your sponsor tell you that it was Amway or did they use "business opportunity", "new e-commerce business" or some other vague description? Did you ask "Is this Amway?" and get told "No" (red flag number 7). Will you feel comfortable in selling the opportunity to others using these, what we can consider to be very deceptive methods? Consider how you felt and the questions or concerns you had about it, it's more than likely the people you prospect will feel the same. Were your questions answered openly and honestly and consider how your concerns were addressed?

* Will you be comfortable in promoting the business to your family and friends and recruiting them as customers or IBO's? Be aware that many many people will say "no" so can you deal with a lot of rejection? Generally you will be required to make a list of at least 100 people to prospect. Are you willing to out of the blue contact old high school friends or workmates that you have not spoken to for years to pitch them the business? Are you willing to cold call and prospect strangers if you run out of prospects on your list?

* Obtain a copy of the Amway Business Compendium (Rules). Read it thoroughly and understand the rules, rights and obligations of being an IBO. Technically, we believe that it should be provided to you with your starter kit and you should not sign the IBO application until you have had ample time to do so. Contact Amway if you are unclear of anything contained therein.

* Verify any information or income projections you have been presented with. Contact Amway Head Office to verify information, confirm income claims and anything else that your unclear of.

* Some people do make money in network marketing businesses, but as stated earlier, it takes a lot of hard work and often over a long period of time. Most people however, make little or no money in MLM's. If your looking for a way in generating extra income, then we think it is prudent to investigate and compare other alternative ways (part-time/casual employment, other online businesses like Ebay or other MLM's (be careful, many of them are dodgy) that may give you better returns for your time, money and effort?


QUESTIONS TO ASK YOUR SPONSOR and THIER UPLINES:

Below are questions that we would personally ask a sponsor and their uplines in order for us to make an informed decision. We think it prudent for you do the same.

1. Can l have some samples and product catalogues so that I can do my own price study comparisons before l decide to join or not?

2. How long have you been in the business? What is your pin level? How many IBO's have you sponsored? What is the renewal rate of IBOs in your group?

3. What is the average PV/IBO in your group? What is the average profit for the IBO's in your group?

4. How many IBO's are currently in this area? How many of these are actively building the business?

5. What training is provided so l can sell the products? What forms of advertising and marketing is allowable to help me sell the products and/or attract new IBO's?

6. How many retail customers do you have and what is their average monthly spend amount?

7. Do l have to buy CD's, books and attend seminars etc to run an Amway business? If not, what other training and support will you provide?

8. What are the normal and customary monthly expenses of running an Amway business? What are the normal and customary expenses of being in your "system"?

9. Can I earn a commission on selling tapes/cd's or books? At what level can I commission and how much is it?

10. Can I earn a commission on ticket sales to meetings, conferences and seminars? At what level can l earn commission and how much?

11. How often are the meetings, conferences and seminars held? What do they entail (product training, sales techniques, motivation) Are they compulsory?

12. What is your success ratio in converting prospects to customers or IBO's? (ie. how many people need to be prospected in order for one to sign up?)

13. If l run out of people that l personally know to prospect, what are the other methods are used in attracting new customers/IBO's?

14. How many hours per week do you spend working on all aspects of your business? Attending and travelling to meetings, showing plans, phone calls, processing orders and bookwork?

15. What is your average net profit each month? Can I see your income & expense (profit and loss) records for your Amway business?

17. What are the best things about the business? What are the downsides to the business?


Performing your due diligence is not only just plain good common sense but absolutely vital when deciding whether to invest your time, money and effort into any business venture. This one ain't no exception. Forget all the "dream" stuff and treat this with a business focus (income, expenses, time) and demand proof of any income claims. If your sponsor and/or uplines do not answer your questions to your satisfaction, or get offended/refuse to do so, or divert your attention back to the dream stuff, then that should clearly tell you something!

We hope that our suggestions assist you in making an informed decision and enable you to proceed in whatever direction you decide to take, with more confidence and clarity.

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.