"Your income can match your dreams!" This statement is frequently used by the Amway Corporation and Amway distributors throughout the world. Can one really earn large profits and purchase the luxury items that are displayed in Amway's literature such as yachts, expensive automobiles and extended vacations?
Before I answer this question, let's just find out what it is like to dream. One leader who has thousands upon thousands of distributors in his organization can show us how. He will be explaining in great detail how to escape the New England snow.
Can you picture us now? Relaxing and tomorrow the snow is still four feet high and so we go out to the local air port to get on a private jet. We walk up the steps that's got red carpet down the stairway. It says, "Welcome Aboard" and it's got your name on it. You walk into the private lear jet and you turn to the pilot. "Is everything ready?" "Yep."
You and all the kids get aboard. "Let's go to Florida. Take off for Florida."
Two hours from now you are landing at Miami International Airport. You step down out of the plane. Maybe you had a little snack aboard because your pilots know what you like to eat. You walk out of the plane and up pulls a big black Cadillac limousine. The chaffeur gets out, opens the doors and says, "Step in Mr. and Mrs. John Doe."
You get in. He drives you over maybe to the local yacht club. You walk aboard your private yacht. Maybe it's a hundred feet long, crew of eight, red carpeting coming in. They pull up the gang plank, start the engines, and you take off. And you're cutting through those waves, and maybe those waves are a foot or two high, and you are just breaking the waves. And now it's 90 degrees. The sun's beating down. You go up to the upper deck, and you put your bathing suit on. You lay up there, and you are relaxing. You just feel those little bits of perspiration. Those large drops of water are all over your body. They just start to form from that sun which is drawing the water out of your system.
And you just feel our body's getting a little bit red here and there from the beautiful sun, and a beautiful breeze is coming across. You can feel the body heat, but the breeze is there to make it so cool. Where shall we go? Oh, just take a cruise out aways. Relax. Maybe you lay there for awhile and then your wife says, "Honey the chef has got dinner prepared." So you walk down the circular stairs, walking in your swimsuit into the main dining room which is very elegant. They're all dressed up with their white uniforms with all the gold braid and everything on them cause they got jobs!
The chef says, "I cooked your favorite," and he names this big fancy meal.
And your wife says, "Great."
And you say, "Make me a hamburger."
You sit there and eat and relax. Maybe you go up to the front of the yacht. You put your hand out there and feel the water just breezing by. You feel a little ocean spray. And it just feels so refreshing. You might just take your finger and taste the salt water.
Maybe you sit up there with your wife and put your arm around her. You look over in her eyes and say, "Darlin', I love you. Do you believe this is happening to us? You and I? Remember back home? Probably five feet of snow now. It's hard to believe. Just three years ago we were broke. Remember that rotted out old car we had? You were afraid to wash it because you might find out there wasn't a body under the dirt and the rust? But now here we are... Remember how our friends laughed at us? They said, 'You're going to sell soap? You're going to be in Amway? Oh, those poor people.' "
Sometimes this type of story would go on and on. Evidently, many people in the business believe it is possible to achieve this level of success. As one can see, this person is very successful in painting a fantasy in the minds of his followers. But now let's come back to reality is it really possible for one to achieve this much success in this business?
I remember talking to a young boy at a seminar. He was telling me that someday his parents were going to be "millionaires."
Let's pretend that Amway decided to be benevolent about this whole thing, and they attempted to fulfill everyone's "new found dream" of becoming a millionaire. We know that the corporation reports retail sales in excess of $1.4 billion in 1981. This information is from the 1981 Amway Annual Report, which includes all subsidaries and affiliates. Obviously, there are substantial expenses, including cost of merchandise, operating expenses and taxes. The net profit would probably be only as mall fraction of the $1.4 billion. We cannot use the actual net profit figure for l981 because those figures are not available. Interestingly enough the l981 Amway Annual Report has a very limited amount of financial information. It contains no financial statements or accountants' reports.
For the sake of discussion and in an effort to give the corporation the benefit of the doubt, let's presume the net profit after expenses and taxes equaled 25 percent of the gross retail sales, or approximately $350 million. We also know there were one million distributors according to their manual in this same year. Therefore, the company, if it retained no profits whatsoever, could create only 350 millionaires. But what about the other poor individuals? You know, the other 999,650 distributors? Don't they receive anything for their efforts?
Let's say that the company exclaimed, "Oops, we've made a big mistake! We're going to have to be more democratic about this. In order to fulfill the dreams of a greater portion of the distributors' force, we'll just create 'thousandaires!' Simple as that!"
Now if we have 10,000 distributors earning $35,000 per year that would equal the $350 million. There would still be the corporation and the other 990,000 distributors left penniless. By itself, it's a great deal of money, but $350 million is not very much money when you are dividing it up among a large corporation as well as one million distributors. So, if the average active distributor only sells $454 per month in business volume, who then is making the larger profits?
The illustrations just cited were used only to make a point. However, let's be realistic concerning this issue. In the April 1982 issue of Reader's Digest, it stated that approximately 275 individuals in Amway earned in excess of $100,000 and that only 11 earned in excess of $200,000. We really are talking about a very small number of people in the distributors' organization earning the big money.
Mr. and Mrs. Ken Johnson of Norfolk, Virginia, at one time were Amway Diamond Directs. They verified that there were approximately 6O Diamonds in Amway in 1970. They sold their business in the early 1970's in order to build their own direct distributor business, which proudly claims to pay larger profits than Amway. During an interview Mrs.Johnson told me, "We pay six times as much as Amway on one-fourth of the volume." She also pointed out the reason she and her husband left Amway was because there just wasn't enough money in the business for the field people. "We didn't feel it was fair to keep telling everyone they could make it. Besides, the Amway name, as far as we were concerned, was well overworked."
Using the ratio that the Johnsons gave me, I calculated that there should be approximately 450 Diamonds in Amway today. Gary Hardy, a Diamond from Bellevue, Washington, told me in a phone conversation that there are approximately 400 in the Diamond level and above today. Let's give Amway the benefit of the doubt and say there are a thousand Diamonds. That's still a very small percentage above Direct Distributor
Amway had been contacted concerning the approximate number of distributors at the various levels. They said that they were unable to give us this kind of information. When one considers that there is a total of one million distributors, what are one's chances of becoming a Diamond? I don't want to say "slim" because that would not be fair. Some just do make it!
Maybe a person doesn't want to be a Diamond I How about one just becoming a Direct Distributor? The only information Amway would disclose concerning levels of achievement was that there were approximately 24,000 persons in 1981 at the level of Direct Distributor or higher. There is sporadic information on levels of achievement published but nothing in its entirety.
Did you know that a Direct Distributor when he achieves the 7,500 point level earns approximately $1,000 per month before paying expenses? In order to achieve this income, the Direct and his downlines have to move approximately $13,000 worth of products each month. How many people does he need in his organization? Well, if one is using Amway's $454 average business volume per distributor, a person would need approximately 30 people in his organization. That may not sound like many, but remember, every single one of these downlines would have to be moving over $400 B.V (business volume) per month. In addition to this, the FTC report said that the annual turnover rate for the average distributor is 50 percent per year. Is someone telling people this business is easy? It's a tough row to hoe!
All of these figures remind me of a story my banker related. She was very close to a couple named Terry and Mark, who lived in Oregon and had just started in Amway. Terry was due to give birth to a child during the same week a rally was scheduled in Spokane, Washington. She had told everyone she was going, due date or not. Her husband said he would attend the rally even if she were in the hospital. Her mother tried to discourage Terry from making the four-hour trip. "What would you do if you went into labor?" her mother asked. Undoubtedly, her mother was totally heartbroken, but she sighed.
In relief when her daughter finally gave birth to the baby a week before the event. That didn't stop this highly motivated couple. They went to the rally anyway and took along their week old infant.
Mark was so confident that he quit his job in order to pursue his Amway "Dream." Shortly after he had left his relatively high paying position, he discovered that he was unable to support his family. The Amway business did not create the profits he had expected. This young family had to start all over again, greatly disillusioned.
Before one accepts and believes any dream, he should ask a few questions first. How much is the dream going to cost? What are the chances of making the dream a reality? What are the "odds for success?" Then get specific answers!
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