Tuesday, September 20, 2016

Amway Partner Store CONditioning

Today is an unordinary day for the blog, because I have to explain a particular CONditioning issue with IBO's from Amway. This blog, again, is not meant to target specific MLM's as a whole, but there may be pertinent issues that need to be explained. This particular issue involves IBO's claiming Amway is legitimate BECAUSE of the partner stores. These stores include most major retailers that people shop at on a regular basis such as Apple, Target, Microsoft, Sears, and many many more. My goal is to give understanding on why these stores partnered up with Amway, and help to prevent people from being misled into thinking that this gives Amway credibility.

First of all, when running a business your objective is to provide a good or service. There are no successful businesses that only spend money buying and consuming products instead of selling products (hopefully I am stating the obvious). The Amway business is simple. You spend money to buy a membership with Amway, and then you spend money on their products at a wholesale price, that you are then supposed to sell to customers at a retail price. This is what makes an Amway IBO a distributor. You are distributing their products, and then they are paying you a percentage to sell their products.

Now for the confusing part...You can also make money based on the sales to OTHER distributors you have brought into the organization. They call this building a team, and it entails going out and recruiting new members to also sell the Amway products. You get paid on their PURCHASES of products, not on their sales, because Amway pays you a commission based on the amount of money spent with Amway. This is where the pyramid like structure develops. Your main focus now is to ensure that the downline keeps making monthly orders, because that is where your money is being made, rather than helping them to move the product to customers so that your downline is making money.

Eventually, you start to hear pitches similar to this: Instead of buying groceries from your regular store that give you nothing in return, you can buy from YOUR store and make money. They have now completely transformed the business from selling a good or service to making you a glorified residual customer that is only concerned with purchasing and then teaching others to purchase. This is only successful, because of the way Amway pays you a commission based on dollars spent, and not products sold. This style of generating revenue based on the money spent by your downline is not sustainable, because it takes many people buying products before someone can earn money, and there will always be more people spending money instead of making money. This leads to a very high turn over rate.

I'm sure people are wondering why I spent so much time on this, since the topic is about the Amway partner stores, and not the Amway business as a whole. I can now get to the root of the topic, but keep the previous two paragraphs in mind when I explain this part.

Most Amway IBO's believe they are starting a business, but they are getting confused with buying versus selling products. This confusion gets magnified when it comes to the partner stores as IBOs are not selling products, but rather purchasing for their own use or consumption. YOU ARE NOT A DISTRIBUTOR OF PRODUCTS FOR THE PARTNER STORES. The partner stores are using Amway distributors as a solid customer base to sell more of their products. Amway then rewards you by giving some money back in the form of PV at the end of the month (I will provide a link at the bottom of the page). IBO's are glorified customers, and they are given access to more products to purchase for themselves which makes more money for Amway.

This does not make Amway more credible or legitimate. This is an extra revenue stream for Amway, and should be treated as such by the IBO's. Major companies utilize different marketing techniques such as commercials, signs, coupons, and mailers. Amway is just another form of marketing for them to sell their goods to a large devoted customer base.

Please refer to this link for a direct description of the Amway partner stores from Amway http://www.amway.com/Support/Ordering-Product-Support/Shopping-Partner-Stores-Services.

Also, please refer to the FTC's rules for MLM at this link: https://www.ftc.gov/tips-advice/business-center/guidance/multilevel-marketing.

The main paragraph to look at and understand is, 

"Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s probably not. It could be a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money."

***UPDATE 10/21/16***

More IBO's have been speaking up about Amway's partnership with blue chip companies, and continue to mention companies that don't make their own products, but rather are retail distributors for other companies. Examples of these include Best Buy, Sears, Macy's, Home Depot, Amazon, Bass Pro Shops and many many more. I understand some of the companies listed above manufacture their own line of products, but the vast majority of their products sold are created by other entities. How can you partner with companies that are not the manufacturer and expect to get the best prices? For that matter, if you are trying to be a distributor of products, why would you go through another distributor to get the products instead of going to the manufacturer? Adding more middlemen in your chain will only decrease the ability to make a profit, if your intent is even to sell the products rather than consume them.

Amway already has an issue with too much competition in the field, because people are more focused on adding downline instead of retailing products. With partner stores, it is the same haphazard situation where IBO's are not able to retail the products for their businesses, because they have added in two extra middlemen before they get the products. First, the partner store gets the REAL wholesale price from the manufacturer because they buy in bulk, and then they sell the products to Amway for less than they would to retail customers, because they too buy in bulk. Finally, they sell the products to IBO's for full retail and give them a small amount of money back at the end of the month. This is not beneficial at all to building a business.

If you have a story involving abuses from your upline and would like me to share it on this blog as a guest post, then please e-mail me and I will be more than happy to post it! Your stories are not as unique as you may think, and your stories are some of the most impactful resources we have to fight MLMs. I will keep your anonymity upon request.

6 comments:

  1. This part of their scheme was not lost on me at all. For some reason it was lost on my boyfriend. If they were a scam how could they have best buy etc. on their list of partners?? I've never seen a commercial or flyer that said best buy! Now partnered with Amway! Lol I wouldn't announce that either.
    I really wish this whole damn thing would be shut down. It's absolutely vile.
    Keep doing what you're doing as these blogs were absolutely invaluable in convincing my boyfriend to escape before it was too late, so thank you. Much support from small town Canada!

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    1. Thank you for the support! I'm glad you were able to survive Amway's grasp with your boyfriend. This particular lie about the partner stores has had a lot of success in manipulating people to believe in the Amway dream, and it was time this myth got dispelled. It's bad enough they trick people by acting as though they care, but to utilize the credibility of good wholesome companies in the pursuit of deceiving others is beyond reprehensible.

      I hope nothing for the best for you and your boyfriend, and hopefully he will try to follow his dreams of being an entrepreneur via a different path! Good luck!

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    2. Part of the problem is the use of the barbarous verb "to partner." It's a silly, made-up term that really means nothing at all. And yet Amway freaks say it constantly, like a mantra.

      The rhetorical purpose of the verb is obvious. Saying that you "partner" with a big company like Microsoft or Sears is a surreptitious way to let the prestige of that business rub off onto Amway. As usual, it's all part of the Amway "make-believe" game of pretending that your two-bit buying club is actually linked to Fortune-500 heavy hitters.

      The real truth is this: these big companies are merely letting Amway sell some of their products to their captive customer base of IBOs. But saying that these companies are "partnering" with Amway sounds great, as if you were marrying into the royal family.

      If Macy's lets me sweep up the street in front of their main entrance, am I "partnering" with Macy's? Am I joined with that store on an equal footing?

      This garbage about "partnering" is so damned typical of Amway's hallucinatory approach to reality. Take something small and insignificant, and hype it into a megalomaniacal claim to importance and prestige.

      I had a friend who was a bit dotty and eccentric. One day she got a cheaply xeroxed form letter from some small outfit in California inviting her to submit a possible treatment for a screenplay. (It was nothing but a come-on to purchase something). The postmark on the letter was "Hollywood." She waved that letter around for months, screaming "Look! Look! I got an offer from HOLLYWOOD!!!"
      I didn't tell her that probably twenty thousand other dopes probably got the same form letter.

      Her enthusiasm over something basically trivial is exactly parallel to Amway's bug-eyed frenzy over "partnering" with big stores.

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    3. Anonymous,

      That's really funny that you brought up the letter your friend got. I too had an experience like that with one of my wife's friends. She too was a bit eccentric and posted on Facebook about becoming a "sponsored athlete". She had never been athletic, and had recently lost some weight but also helped her pictures out with Photoshop. I looked into the posting closely and noticed that she had signed up for an MLM called Fireline (I am going to link the recruitment letter at the bottom of this post). I politely asked her to take the post down, because it was a scam and she already had a girl asking to try the products. We had a long discussion about how it was the exact same as her experience with Herbalife, and that nobody is simply a "sponsored athlete", without the focus on a particular activity.

      Here is the letter she received as it was chain mailed out to MANY people. One person decided to put it up online because they found it to be ridiculous. Enjoy!

      https://www.reddit.com/r/Weakpots/comments/2xo1am/the_worst_recruiting_email_ive_ever_gotten/

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  2. David Steadson is still actively defending Amway:


    http://www.dailynebraskan.com/news/amway-helps-college-students-make-money-although-some-are-skeptic/article_301eeace-91e1-11e7-b894-17c081ce6229.html

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  3. They aren't "partners" with Amway in the true sense of the word. They simply allow Amway IBOs to sell their stuff. And if Amway IBOs don't sell anything, they don't get paid anything.

    These "partner" stores don't promote any Amway products.

    It's just a lame way to try and legitimize Amway.

    But FYI, Amway was also "partners" with Enron and WorldCom at one time.

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