Wednesday, October 17, 2007

Amway Is Imploding!
A while ago, on my main blog, I asked the question: is Amway imploding? Since then, I have done much research and I have compelling reasons to believe that it is. There are many causes of this forthcoming meltdown. Here are just a few of the reasons:

Over the past quarter century, Amway's products has become less competitive
Amway's products are overpriced (click here, here, here, and here). This situation has increased over the past 25 year since the advent of warehouse stores and competitive pricing over the internet. Amway distributors pay high prices for Amway products because they view it as the price they have to pay for the elusive goal of becoming rich. Because the prices are so high, most distributors do not retail the products to others nor do they continue to consume the products once they almost inevitably fail to become rich through Amway and quit the business. This is not just a problem for the obvious reasons but it also opens speculation that Amway is an internal consumption pyramid.


For the past ten years, Amway and its Kingpin distributors have had decreasing information control over lower level and potential distributors

As cult expert Steven Hassan has pointed out, predatory groups depend upon the monopolization of information as well as a situation in which there is an imbalance between the amount of information the cult has on its victims and the amount of information that cult victims and potential victims have about the cult and its leaders.

That's what makes the Internet so dangerous for Amway and the kingpin distributors. People who know the score have created web pages that inform prospective and new Amway victims about the nature of the organization and the kingpin organization (the blogger Google bomb helped to bring these sites to the top of many search engines). Alticor's attempt to intimidate anti-Amway blogs will certainly backfire.

The Media
Amway is a faith-based corporation in that people who enter have to convince themselves that they will succeed despite the overwhelmingly evidence that there is little or no chance of making a living from Amway, much less becoming wealthy (only one person per 100,000 who joined in 1999-2000 attained an income over $90,000 a year). I have learned from several sources that recent stories in the national media such as the Dateline NBC story have made it difficult to recruit new pigeons (Listen to Quixtar kingpin Larry Winters vent against NBC at a recent rally).

Saturation
Amway has reached a near-saturation level in North America. Amway apologists point out that the company is nowhere near saturation because fewer than one percent of the United States population is involved as distributors. This is sophistry. Amway has reached near-saturation because there are a dwindling number of people who are receptive to the Amway "opportunity." Reasons for this: 1)There are many former Amway IBO's out there who know that there is an infinitesimally small chance of making it in the business. They know and their family and friends know it; 2) Those distributors out there often engage in activities that raise questions to prospective distributor. Everyone I know has a story about an Amway person they knew--few are positive; 3) Because the culture of Amway is overwhelmingly dominionist and right-wing, it turns off at least half of the population; 4) Amway has a bad reputation. Whenever I bring up the subject of Amway and ask people what they think about it, they respond without exception with negative comments like, "They're pushy people who never make money" and "It's just a pyramid scheme." Quick note: The Amway Statistics Page has more about saturation.

The Unraveling of the Tools Scam
Amway has one of the stingiest compensation plans. Eventually many of the more established Amway distributors created motivational systems (rallies, books, tapes) that they sold to their downline as a second source of income. What happened was that many of these kingpins began making more from selling these "tools" than from the Amway business itself.

This has led to some problems: 1) the tools business is an illegal pyramid (somethings that Amway was forced to acknowledge in internal memos); 2) It has led to a paradoxical and ethically-questionable situation in which make the majority of their money from a system that tells people that the best opportunity out there is Amway; 3)This has led to many disgruntled former distributors who were saddled with attics full of books and tapes--Amway co-founder Richard DeVos tried to address this problem but failed); 4) The tools scandal has led to negative media attention, namely the Dateline NBC story; 5) Reforms in which the kingpin distributors will no longer be allowed to profit from the tools business will only hasten the mass exodus from Amway.

The Tipping Point is Imminent
For these and other reasons, Amway is in trouble. The Orrin Woodward fiasco is just the beginning. Expect other mass desertions to happen soon. Let's hope that a free fall occurs soon.

8 comments:

john said...

Amway is great I just started and I am exited.These products will sell.they are far supirior to any store products.
They are concentrated so they go far for less price.Im weeks or months i will make my furtune.Yes i can.
ps the people are great positve motivators yes we can!!!!!

Anonymous said...

Originally we got involved in the business because we just wanted to replace our incomes and be free. We wanted to have some time to go camping and do the normal things people do with their free time.

As we got going along a little further in the business, we really bought into the fact that this was a cause to help people. For many years that’s exactly how we felt. This was our cause. We were sold out to the people; we were sold out to creating a platform for them to succeed upon as they got started in their own business. Most of our leaders felt the same way. We’ve seen so many people’s lives change for the better.

We experienced success beyond what we could have imagined. We were really rolling. We were either the fastest growing group in America or one of them. We broke five Diamond legs. Many leaders in the group were breaking Emerald’s and Diamond’s. It had changed lives substantially. It was a true success story that was amazing for many people. Our numbers peaked in 1995; we were turning out almost 35,000 people at monthly seminars.

At about that same time, the negative on the Internet and the product prices started to be a problem. Most of the negative information on the Internet was focused, at that time, upon product pricing. It was hard to refute. Originally, when we first got in, the per-use aspect of the products made it okay, it wasn’t such a hard sale. But the prices just seemed to continue to drift upward.

We got hit with the Procter & Gamble lawsuit, and there was a lot of confusion in the organization and the groups. The negative online started becoming a bigger problem. The price of products became a problem, we slowly started going backwards.

In the mid to late nineties, I was privy to several conversations with the company wherein we told them they needed lower priced products and they needed to do something about the negative on the Internet. They always said they were "working on it," but they just didn’t ever do anything about it.

Around 1998/1999, most of us were very frustrated with the Amway business. We started to get to a point where we didn’t believe we were doing the right thing for the new people getting started. Overall the numbers were going down, which meant when people were getting in they had less chance of succeeding than we did when we got started. It is much more difficult when numbers are going down versus going up. Nobody seemed to have the answers on how to turn it around.

I am not sure exactly about all of the details of how Quixtar came into being, who did each little piece, but we decided we needed something that was not connected to Amway, and we needed something to align with the Internet. We came up with what we thought would be the perfect business. As we started into it, working with the company, we got one or two things out of a list of about ten that we thought would be necessary to really have a successful business.

NONE of us wanted to have a company associated with Amway in any way. We were told it was a sister company and was disconnected. They said it would be structured in a way so that we could say to people that it isn’t Amway and it would be true, that this new opportunity was not Amway in any way.

From the very beginning in 1982, one of the things that attracted us to the business was Rich DeVos saying on one of his tapes that they would never change the business even 1% without the Board approving it. We went along for a long time thinking the board would stand up and represent us and be our safety net if the people at the company ever tried to change the deal.

What we have seen happen, which most people are not aware of, is that every year the company is changing the rules. Very few people know what the changes are every year, but every year when they renew they agree to all of the new rules, now there are 95 pages of them! I would say that less than one tenth of one percent of the people knows about this.

Over the last five or six years, they have totally changed the business model to where we are no longer independent business owners, we are more like employees. They have actually stated recently in the Texas court that they own our downline. Not only have we figured out that we are no longer independent, but we also have figured out that the board has no power whatsoever over the company. The board has always been an advisory group but now the company has chosen not to have the board approve decisions they are making. They made the decision to change it to Amway and did not run it by the board until after the decision was made. Every person on the board was upset about this change. When the board published their thoughts the company got upset and said they would either not renew their contract or they would now start to renew it one month at a time. If the company will make a decision of this magnitude, what will they do next? We sold people on the idea that the board was a protection. I am very sorry, but that is definitely not true anymore. People need to know that since many people based their future on this fact alone. That was always what we believed would prevent something like this huge change from happening.

From 1995 when we started going backwards, up until June of 2006, I had gotten to the point over the last few years that I couldn’t represent the business. I couldn’t show the plan, because I didn’t believe it was the right to get people involved in something that I didn’t believe was the right thing for them to do. So I quit showing the plan a few years ago, and when we would go speak to our groups or other groups, we would totally focus on getting people to believe in themselves that they could do whatever they wanted to do in their lives. We did all we knew how to give people confidence in themselves. We tried to build their self-esteem, but we could not get ourselves to tell them to go build the business. It’s not a very good thing to live through to watch what happens when your best leaders cannot make progress. It’s worse to watch them go backwards and have to go back and get jobs after being free for a while. It’s terrible for them to tell their children that their dreams are not going to come true and all the things they talked about are not going to happen now. The whole thing started to get ugly. We watched many relationships get hurt between friends, leaders, and couples. Many times when we would go speak to other organizations the leaders would ask if we had any answers. The Diamonds would try to do their very best to help their groups but they were also hurting inside. We saw many Diamonds go above and beyond to help their people.

Then in the summer of 2006, through a series of events, after listening to the Brady’s speak at a function in June, I got the impression that they believed in what they were saying, and I knew they had had some growth, but didn’t know much about their organization. We didn’t know their techniques, methods, or philosophy. As Valorie and I sat and listened to Chris and Terri we were amazed that they knew so much about leadership. We finally figured out that they were a learning organization. We had never seen a team before that put so much emphasis on learning leadership. Then I hooked up with Orrin Woodward in August 2006, and we spent a day and a half together. Most of the conversation with Orrin was him asking how we were doing. At the end of the second day I was the one asking the questions because I was figuring out that Team was growing and had many people becoming successful. I started trying to get the information out of him. I asked him if it was possible for us to buy some of the Team tools. He said we could talk about it. I just couldn’t get it out of my mind that if we could get it to grow the impact it would have on the Emeralds; this would be a God-send for all my Emeralds who had had to go back and get jobs. We had over a hundred and some Emeralds, and most of them have had to go back and get jobs. I also got very excited about the possibility that a new person would have a great opportunity to become successful. We had several meetings with Orrin and the Team leaders and finally they decided that they would allow us to use their well thought out system. I knew after spending time with Team leaders, we wanted to be part of it. I had never seen anything like it before. The Team system was fair to everybody because there were no special deals. Orrin and Chris were on the same pay scale that all people were on even though they spent much of their time continuing to improve it. They didn’t take any extra money for doing it. So we partnered up with Team, and IMMEDIATELY we leveled off from going backwards, the organization as a whole started growing and moving forward, we hadn’t seen hope in people’s eyes like that for a long time. This was the most confidence and excitement we had seen in people for twelve or thirteen years. Most people could make progress because of the way the system was designed. So naturally when you can make progress you get very excited about making your dreams come true.

Valorie and I had dedicated our life to this thing as many of our leaders had. We had worked six or seven days a week for fifteen years. There were several years in a row where the longest period of time that Valorie and I were actually at our home was three days in a row. We were constantly on the road, we did meetings in every state in the U.S.; we put everything we had into this. We sacrificed time with our kids and put our entire life into this thing. And we were extremely blessed by many, many great leaders showing up in our organization. And many of them did the same thing that Valorie and I did. They were totally sold out to it. It became our life.

So finally, we get hooked up with the Team, with Orrin and Chris, and got things turned around. We started moving in a positive direction, and we just got things cooking when all of a sudden the company decides that they are going to have a total change in their business model. They are going to change their name back to Amway, they are going to put new requirements on us to retail even more overpriced products, they are going to give people who build width extra bonuses, that will hurt those who build depth, and I and many others reached the conclusion this model will not work for us. There are many things that I think are a problem with the new model. To start with nobody I have talked to so far wants to be in Amway. Especially after telling them they aren’t in Amway for seven years. It is very hard to understand why the names change when almost every builder in the field is against it.

Not for any amount of money am I going to lead a group of people down a road that I don’t think is the best thing for them to do. I have to believe when I show the plan to somebody that it is the best thing they should do for their own life or I can’t do it. I am not going to do that for money if it’s not the right thing to do for the new person. I could have laid back and done nothing but collected my checks and watch it die a slow death. I would have made the most money if I played it that way. The other choice is to do something else.

So eventually it comes to a head after the emergency Board meeting in July, and we decide that we have to leave, because we know for us the model isn’t going to work over the next 18-24 months. I don’t want to be in a position where I am standing up telling people they should do this when I don’t think they should. So we decided we would go have a negotiation meeting with the company, as they had told Orrin he could do, and see if they would give us a choice and let us go. Instead of having to set out six months, we were hoping they’d be a little lenient on us and let us go with a little shorter amount of time.

I told every one of them in that meeting on August 9th that I appreciated them, and I appreciated the relationship, and told them I just couldn’t put my heart in it. We were in the business for 25 years and we had developed great working relationships with most of the people that were in the meeting. I had a good relationship with most of them. They had been very good to me over the years. I wasn’t yelling or raising my voice. We had what I thought was a very good conversation. I was very sure that Rob and Jim were willing to talk about an amicable separation. Jim Payne and Rob Davidson both said that they understood. Jim Payne said, "I don’t think you can take everyone with you, but let’s talks about it and see what we can do." Rob Davidson said, "Hey, I understand. If you can’t put your heart in it and don’t want to do it, we understand. If I couldn’t put my heart into my job here, then I would be worthless here. So I understand."

I thought I was going into a meeting to negotiate us leaving in an amicable way where we could agree on both sides to make statements where neither side would be hurt. There was never a time during the meeting where we said or did anything out of line or unprofessional. What shocked me the most was that after 25 years of being loyal to this company, when they came back in, it’s almost like they had it preplanned, they knew what they were going to do, they just walked in and terminated Orrin and Chris because they said Orrin and Chris were not willing to fix things. At this point they already knew that all three of us wanted to leave the business so there was nothing to discuss on fixing things. They wouldn’t even discuss any of the points we had come up with about having an amicable separation.

The next thing I know, they are telling untruths about what went on in the meeting. What totally shocked me was they accused us of having an MLM put together, and that Orrin promised to solicit IBO’s in other groups, they said that Orrin was trash talking them, all things that weren’t true in any way. They made allegations with absolutely no proof whatsoever. I am shocked at how they have handled this. Calling or emailing people and giving them 24 hours to decide if they are going to be part of TEAM, which is a training system, or if they are going to choose Quixtar with no training system? This caught our team totally off guard. That doesn’t even make sense, first of all. Secondly, some of these are people who have been in the business for 25 years. They’ve been loyal. They know absolutely nothing about what is going on. Give them an ultimatum! Devastate their business! Affect their family’s income! They couldn’t have planned it worse than how they’ve handled this. How can their behavior ever be considered right? How does a company justify treating people that way?

Here’s the crazy thing. ALL they had to do was come back in that meeting and say, "Guys, we just don’t think we can bend the rules in any way; you’ve got to abide by the non-compete in the contract in full." Instead, they did it a different way. I think they have shown that they don’t care about the people at all.

This whole thing didn’t just happen one crazy day. The great people on the board have been working on many important issues for many years. It is sad that as the Wal-Mart effect took place where business’s had to reduce their prices to be competitive, that this company would not do that. The Families held on to their margins and would never let go. The MAC committee worked many hours tirelessly for years. The entire board worked on pricing for years. We got nothing. I reached a point where I couldn’t live with it anymore. If the only thing I wanted was money I could have just spun the whole story and spent the next 18-24 months trying to convince people that is was going to work and everything was going to be ok. That way I could have received my end of year bonus’s and $500,000 check for Founders Diamond in two years. Val and I would have done fine. I just could not do it. No matter how much money I could have made, I just couldn’t do it. Some people think we all of a sudden we just went crazy and lost our minds. No, I just got pushed over the edge of what is right and what is wrong and had to do what I thought was right.

There comes a time in a man or a woman’s life where you have to make the hard decisions. When you do, half of the people think you are crazy and the other half think you are right. You will need to make those decisions for yourself and your family when your time comes. It was a great ride for the first half of the trip and not so good over the last half. I do believe the future is bright. My one hope that I want to leave anybody that reads this is that I want you to know that inside of you are the seeds of greatness. God blessed you with special gifts that only you have. Learn what those gifts are. Val and I know that you can do anything in the world that you choose to do. You have to focus and always believe in yourself. Never beat yourself up for your past performance. Just keep on keeping on striving to make your dreams come true. We know you are going to do something great in your future. You can accomplish all you want and then some. Never give up on yourself. You know that it is better to go to bed tired knowing you give it your all than to go to bed lazy because you are striving for nothing. Keep on dreaming, it’s worth it. You are on your way to being the best. You will go beyond where you thought you could. We are proud of you for standing up against mediocrity and claiming yourself to be A DREAMER!! Yes, that is what you are and never ever forget it. Don’t let the fog take it away from you. You are the real deal my friend.

May God bless you and always be there for you,

Randy Haugen

john said...

John again,you must ahve confidence in this business and great leaders to motivate and I do.
i plan to draw the circles and present the oppurtunity to Barack & Michelle,maybe oppera too.
Also plan to sponser Barny Frank and others ,dont steal my dream as my sponser says.maybe I can make congress my downline.

amway info clik said...

At the end of the day Amway is just a vehcle and yes convinsing people to join amway is no easy feat. But What is out there thats been around for the past 50 years. It takes time and delayed gratification. investment vehcles like property and shares out lay a far greater risk than amway. Ive been in amway for the past year and Lost more money in shares and property.

IBO said...

The success in 'Amway' depend on once FAITH. The 'success' ratio is always less than the 'failure' in every field of life. The reasons for "failure" are most of the times similar everywhere i.e low self-image, no commitment, unable to communicate properly, lack of knowledge, not willing to learn, no goals in life, no dreams, etc. Amway is not different in that sense.

Always check for facts and figures and not the 'opinions' of others. Someone can not 'fool' people for 50 years over 80 countries. Always Focus on the brighter side if you really want to see the brighter future and success in this business.

Tex said...

Randy Haugen is nothing but a tool scammer, and the Amway tool scam is the biggest problem, by FAR. Read about it on my blog, I suggest you start here: http://tiny.cc/D5oJh and forward the information to everyone you know, so they don't get scammed.

Anonymous said...

Many people will have their MLM experience. Some of them quite educated & smart.

I keep hoping that the internet will systematically kill MLM in its tracks. Doesn't matter which of the Ponzi companies you are with, Amway, Primerica, WFG, Arbonne, etc., they are all the same. A few people at the top of the point of the pyramid will forever reap their harvest from the backs of the people who come in with no chance of making it.

But we do have some simple weapons we can use. 1: register your telephone numbers with the Federal DNC, and report any Ponzi company scammer that calls you. 2: write to your state representatives calling for reform to stop the pyramid activities of these companies.

If you make it hard enough for them, the system will eventually break down on its own.

Anonymous said...

notice these obvious fake testimonials??? they read just like sales pitches, the same ones used over and over. talk to any real business people about amway, and you will get laughed at.