Marketing Amway products - losers far out number gainers?

You are right. I start running at the site of any friend or relative who comes with an Amway product! Regarding overpricing, I think, it could be like a typical American thinking: "something pricey must be premium". Or, the very model of MLM is built on getting the maximum money right from the gullible first time "salesman"!

Are there REALLY such network marketing lines?

Trying to do business with old pals who meet after years and years is downright selfish and cheap behavior!

During one of such meets, one of the erstwhile classmate of mine (an Engineer, mind you) who had never ever been friendly with most of the classmates during college days was present -- and his only purpose was to catch clients as an Insurance Agent! I could not understand why he ended up as an insurance agent.

Though most of us did not show any interest towards him during the meeting, he made it a point to call almost all of us later trying to sell some insurance schemes. When I did not show interest, he narrated very pathetic personal calamities in his life that made him to take up this line of survival. I had to yield to him finally.

It is really good that you never personally burnt your fingers in the Amway business.

sob stories are one way of getting business I guess.
If you have seen an old Tamil fim'Poojaikku vandha malar' the comedy sequence was by veteran comedians Nagesh and Manorama and here he was an insurance agent.It was hilarious and some of the dialogues were very witty.

Yes! You are right about the cult type of thing. I think they recruit honey- tongued and very professional "idea sellers" to catch hold of gullible persons and hoodwink them into believing "rags to riches stories" with a lure of making money sooner or later without doing anything!

One of my erstwhile colleagues, who got hooked to Amway, later turned to become one of their successful "counselors". One day he came to me saying he wanted to talk about "life and what it holds for the future". He said his intent was to make a new revelation about my life to ME! He never talked about Amway products, but talked about my goals and aspirations for life, the need for financial security for the future in these troubled times, the duty as a parent for building a strong financial security for my children etc.

I was fortunately smart enough to derail him in all his attempts to corner me into "believing in what he believed". Ultimately, he left my place with disappointment writ large on his face!

*should be able to sell to 100,000 people, not 100 people
fixing the typo

You have made a detailed and interesting analysis!

But I am not sure of market saturation. The need for a toothpaste or a shampoo will keep growing in line with the growth of population. People will have to keep repeatedly buying them too. So, the market grows; it may also grow in hitherto unexplored areas. But you are right from the point that the salespersons may far outnumber this natural growth too.

But whether, a new, virtually unbranded (and hence not-so-familiar)product, which is too pricey - disproportionately above the much touted merits (which are yet to be experienced by a new user), can continue to keep selling like a typical branded and familiar product is the question.

I doubt very much whether a person who "is forced to buy" a Amway tooth paste or a liquid cleaner, due to compulsions of a friend or a relative, will keep on buying the product after the first time usage.

That's why I feel Amway survives to benefit a few sitting pretty at the top at the cost of a majority of gullible one-time users and one time salesmen!

Yes, it's true that population growth, company expanding into new markets etc does happen. In that case, what a normal company does is that it expands it's sales department and recruits an additonal x number of sales rep each year (for population growth), or it sets x number of sales rep to recruit. An MLM doesn't. It just keeps recruiting and recruiting.

My point was that it wouldn't have mattered if the MLM wasn't selling a new, unbranded, pricey product. A new, unbranded, pricey product just pushes the point at which market saturation is reached forward. MLMs are built to overrecruit massively. It's an inherent flaw of their design. If a newly recruited sales rep of a MLM selling, say Coca-Cola, sold at the same prices at normal retail outlets were to buy a carton from the MLM to sell after the point of market staturation had been reached, he would find it next to impossible to sell to anyone. If he likes Coca-Cola, then he becomes a repeat sales customer. If he doesn't, then he becomes a "one-time user and one-time salesman" If it were a crappy, overpriced drink that he was selling for an MLM instead, then skip the "repeat customer f he likes it" part and jump directly to "one-time user and one-time salesman"

You are right. There are certain people who are good at sales, good at facing irate customers and can bear slammed doors. But not all.

As you rightly said, Amway seem to survive by the strength of some very well trained salesmen who catch hold of people to join the marketing stream.

You have told about your country. In my country (India), it looks Amway is growing. We have such a big population here that they can go on exploiting people for any number of years!

I will be really interested to know the status of Amway in the USA and other western countries!

Aha! This is the type of response I was waiting for!I have no questions about Amway's success as a business house and their presence in multiple countries and their reeking in profits.

I am only questioning the "trick of the trade" where they grow by the individual failure and money loss of 80% of the eager beavers who join lured by the shrill, high pitched and "sky is the limit for success" stories reeled by so called "positive thinking" hired agents of the firm.

A company, sure of its product quality and marketability, shall recruit sales persons, PAY THEM SALARY, and then sell the products through them. If the salesman fails, he is out. IF the product refuses to sell, the company is out.

But in Amway model, every gullible person is brainwashed to believe that he can be a great success in life, a package of products-to-sell (the true quality of which, he has no experience) is thrust upon him and he has to pay the money first, before trying to take it to the streets and sell it!

It means the company HAS ALREADY MADE ITS PROFITS even before selling the item to the end user!!

Yes! There are 5 to 10% people who are basically smart and intelligent salesmen; there may be 5 to 10% people who have gullible contacts under them and they can shove those products down the throats of such people and earn money. (For example, an influential purchase manager in a company can "hint" to his vendors to "buy" the items from his brother-in-law who is an Amway agent. His vendors cannot say no to him; If they say no, the Purchase Manager may play with their business with his firm).

Most of the remaining people will have to go and trouble their friends and relatives with products of "much touted" but not-clearly-perceived merits, which are disproportionately costlier when compared to other familiar, off the shelf, branded products. Some may buy from them out of compassion. Some may frown at them.

Sensitive people, who are not used to slammed doors, will soon understand the futility of trying to sell these products; they will start cursing themselves and with no other option, either they will start using the products themselves or shove them into shelf and try to forget the whole episode as a wrong move made in their life.

It is my estimation that at least 80% of the people end up this way.

As Iakulchen has already explained in his earlier reply, there are simply too many salesmen who lose because the market is simply over-saturated with salesmen; but the company gains because every salesman has already paid for the product!!

In the conventional business model, there will be distributing agent- a firm - not an individual; they will get credit terms for stocking and selling. If they fail to sell, they will not pay in bulk and the original company loses in bulk!

Amway is present in so many countries! Why not? When one country gets over-saturated, they look for gullible people in the next country and the business goes on and on!

That is precisely the point of my disucssion. Amway is meant for serving a cozy few at the cost of a vast majority of gullible losers! And this is unethical.

cvrajan,

Tsk! Tsk! I just cannot help but to shake my head to you here.

You mention that there is a market saturation, well please ask yourself here what percentage of the population, where you are (INDIA) is using Amway products. How many in your family and relatives are using Amway products? Please clearly define saturation here. Also, what saturation are you talking about when there are still high achievers and successes coming out from all over the world, India included?

Also, I felt that you are just being self opinionated that people who fail in their ventures are brain washed and gullible. I just marvel at your understanding and analytic here. Oh, I sure do not blame you here, because like all failures you just picture Amway's representatives to be door to door salesman and saleswoman. Well, do continue to dwell on this paradigm and by all means too, after all it is your free choice.

I think in all fairness, every direct selling business be it Amway, Nuskin and etc., do have their plus points and a successful methodology which is tested and proven. It is just not simply looking for buyers to fit with sellers, because for those who have this mindset and is still doing it then they will only find failure knocking on their doors. Oh, by the way and no offense here, every business conducted at the end of the day is about profit margins and don't harp on it that Amway is prospering from failures because there would never be any continuity and sustainability of profits at all. FYI the Alticor Inc's sales for the year ended Dec. 31, 2008 was U$8.2 billion and if I may quote from Investing Businessweek.com "Alticor Inc. reported sales results for the year ended December 31, 2008. For the year, the company reported sales of more than $8.2 billion, a 15% increase over the $7.1 billion reported in 2007. Two-thirds of the company's 58 affiliates recorded sales increases in 2008, including strong growth in the China, Russia and India markets. "

The article could not be clearer here about India, ain't it? India saturated? I doubt it.

Cheers.

Hi Skysuccess,

Yes, Yes! India is a very very fertile ground for Amway because of our population! I have already said about this in one of my earlier replies.

I was looking for some supportive information on my conviction/ opinion about Amway, and I stumbled upon precisely one such info, which quotes exhaustively from an "ex-insider" of Amway!

Please read this link:

http://www.helium.com/items/989787-quixtar-explained-why-its-a-scam

By the way, except for pointing out about market saturation, are you in a position to dispute the moral aspects of the whole business, which I am more critical about?

cvrajan,

Let me add some more references to your blog article and see for yourself if Amway is conning or it is some individuals trying to misconstrue facts.

In Pursuit of The Almighty Dollar
http://www.msnbc.msn.com/id/4375477/

Federal complaint against Amway-Quixtar
http://www.msnbc.com/modules/tvnews/dtl_amwaypdfs/fed_complaint_amway-quixtar.pdf

Amway-Quixtar answer to federal complaint
http://www.msnbc.com/modules/tvnews/dtl_amwaypdfs/amway-quixtar_answer.pdf

Amyway-Quixtar suggestions
http://www.msnbc.com/modules/tvnews/dtl_amwaypdfs/amway-quixtar_suggestions.pdf

Amway Breaks Payment Covenant Forces Emerald IBO into Bankruptcy
http://www.amquix.info/scheibeler.html

Amway Breaks Payment Covenant Forces Emerald IBO into Bankruptcy (deposition excerpts)
http://www.amquix.info/lawsuits/scheibeler_deposition.html

Have a nice day.

P.S.

Everything You Want To Know About Amway
http://www.thetruthaboutamway.com/

Hoping to give an objective view of the whole picture.