Thank you!
I want to say “Thank you!” to all my readers! In the video below, I talk about the pending Burnlounge decision and what it could mean for the network marketing industry. I also talk about the need to root out irresponsible companies in order to save the reputation of the industry. Take care!
Defining the Gray_full Version
Tags: amway, endless chain, melaleuca, network marketing, pyramid scheme, usana
April 20th, 2009 at 3:11 pm
I’ll read the entire ebook soon, although I have read the pieces. Did you make any changes along the way, other than typo corrections?
I look forward to the Burnlounge decision, and particularly what the impact may be for the Amway business.
I also agree there needs to be more retail to prove the value of the products, which could be priced below, at, or above similar general market available products.
However, in the case of Amway, there are so many products available, a situation could easily develop where SOME of the products can be sold, yet many of the products do not have the value. Contrast this with Pampered Chef, with a much smaller range of products. Or taken even further, Mona Vie.
Back to Amway, if the higher PV/BV products are not marketable, the retail requirement could be met, yet most of the products result in an internal-only consumption pattern.
Amway has had 2 recent releases of IBO wholesale price reductions, which also include PV/BV reductions, and essentially flat retail prices. The reductions are on the order of about 15-17% average, a big step in the right direction, even if it is less PV/BV and does not impact retail prices significantly, as I sell at IBO price anyway.
April 20th, 2009 at 10:08 pm
Thanks for taking the time to put this together, Kevin. The article is very well prepared. It was a bit long, but I got your point. And I like what you said in the video, however, the whole point of the Direct Selling Association is to police the industry. Do you think their efforts are failing?
April 21st, 2009 at 7:07 am
The DSA is failing BIG TIME. I have a personal experience with them pretending to care, then they turned their back on me.
Remember this: Companies like Amway pay the DSA to exist, which means these companies pay their salaries. Guess who the DSA supports?
April 21st, 2009 at 9:52 am
A couple of more points regarding the tool scam:
1. Amway told me they never told the upline not to release tool profit information, what they told the upline is they can’t talk about the resulting lifestyle that came from the tools without disclosing some (undefined) portion came from the tools. The upline in general hasn’t figured out of way of doing the latter in a palatable manner, so they simply say they were told they can’t discuss tool profits at all. You can see an exception to this on my site, where I am “roasting” Bill Britt (by the way, he’s well done!): “http://texsquixtarblog.blogspot.com/2009/01/tex-reviews-two-amway-tapes.html”
2. Also, this whole issue flies in the face of being an IBO (Independent Business Owner), doesn’t it? What is so independent about being told you can’t talk about the primary source of your profit, the tools? All the talk about owning your own business is poppycock. With this policy, Amway has painted the upline into a corner, but they didn’t realize they were standing right next to them when all the wet paint was on the floor.
April 21st, 2009 at 9:55 am
By the way, there probably isn’t a single Open meeting or Seminar, let alone Major Function, where #1 above isn’t broken. The mere mention of being “retired” from your job is plenty to break the above directive.
April 21st, 2009 at 10:39 am
Also, I doubt Amway held a gun to the uplines’ head and dictated they had to charge enough for tools to ensure the resulting profit was several times more than their Amway profit.
April 21st, 2009 at 1:05 pm
Anon, in my view, the DSA does fail in this regard. They’ve stated on their blog (direct selling 411) that the DSA’s job is to keep direct selling companies in business. They’re advocates for the companies, not for consumers.
April 21st, 2009 at 3:56 pm
Tex, as for profits from the sales of support materials, I agree that disclosure of those profits is important. But the million dollar question: how much of those profits do you disclose? If Bill Britt talks about flying around on a private jet, does he need to disclaim that the plane was purchased with tool income or amway income? Or is a broad disclaimer at the end sufficient? What say you?
April 22nd, 2009 at 7:02 am
IBO’s are often referred to as “business partners” and “teammates”, or if these specific words are not used, the culture of the various groups imply this relationship. This is how the upline teaches IBO’s to talk about them when showing the marketing plan to prospects, and you hear it on tapes/CDs, at seminars, etc. In fact, the former Amway group and now Mona Vie group is named TEAM, and there are others with similar implied meanings. It’s impossible for me to accept a business partner or teammate who doesn’t provide proper disclosure of the basic profit mechanisms. So to answer your question directly, Bill should disclose the average Emerald and above Amway and tool profit. I think it would be silly, if not impossible, to state this particular house came from Amway money, and this jet came from tool money, for example. If he made outside investments that had a significant impact on his ability to buy $52 million jets, 5 homes, and a 200′ yacht (all of which he stated in my recently posted commentary of his last “Britt School” tape series in 2000), he should also state this as well.
I view this as similar to someone looking at buying a McDonald’s restaurant, and talking to a current franchise owner who just won the lottery. The McDonald’s restaurant business worked out well for him, as he shows the prospective owner his lottery lifestyle without mentioning he won the lottery. It would be lying by deception, and so is the tool scam. In fact, in this example, the tool scam is worse, because at least the McDonald’s owner got his money from another source, not the back pocket of the prospective owner!