Amway Diamonds and their “tools”

May 17, 2009

After all these months I am still responding to the points that Tex has been making. This is my last post on this subject, before moving on. I haven’t been arguing with Tex, although he may think that, I am just offering explanations about how it happened. Actually, I agree with most of what he says, especially with what it has become.

I recently sat with one of the most famous diamonds and he was rationalizing his life of selling tapes by saying that what he tells the people is that “these tapes are good for you, they will build your life,” which is true.  He just doesn’t talk about how they relate to the business because while they will indeed build the business, the business may not offer as much money as the tapes. He knew that the tapes had bought his mansion, not his networking business.  So I think his conscience was bothered by that.

Now, in fairness, some network companies need CD’s badly and should be promoting them much, much more.  Their people are suffering for ways to build their businesses and a good system would solve it. And the difference is that if they build their businesses they will make money off of them because they have products that have a compelling narrative.  In Amway, we had a diversity of products, and that was our narrative and what we tried to sell.  I think if we had linked the tape bonuses to qualification in the business it would have solved a lot of problems.

Today we are experiencing a strong reaction to these types of extremes.  And Amway is cleaning it all up.

So here we go… my last answers to Tex’s comments, there is much, much more that he raises, I am just ready to move onto other things.

Tex: You don’t address whether ANY IBO’s below [Platinum level] were making a net profit with all of these tapes, books, functions, etc. THAT is my main point. It involves tool PRICES and system PRACTICES (unnecessary long distance travel in particular).

Well, in our group, I think we started giving a break at “Silver.”  We considered a break for everyone but it was so small at the lower levels that it wasn’t an incentive to anyone and diluted the power for a person who had made it to “Silver” or “Direct.”

As to distant groups?  Five of my six diamond legs came from groups that were more than 1000 miles from home.  In fact, they stretched from Seattle to Orlando.  I found out-of-town groups much more expensive but easier to grow and less high maintenance.  Even while I am retired from Amway and no longer an IBO, some of these groups are still going.

There is a whole science to starting out-of-town groups and they are expensive to get going but within a year or two they can be very low maintenance, self sufficient groups.  But I could never conceive of a way to build them without CD’s or tapes.

Tex: [ You talk of losing money.] How was money lost? Wouldn’t they sell them for at least the cost of producing the tapes?

Well, you had to buy and maintain the machinery.  It was always breaking down and so you were always buying new slaves or new machines.  There was no four year service plans from Best Buy back then.  You had to hire someone by the hour to do it and you usually had to do it yourself or have your kids because it was only hourly work and you were on the road sometimes.  You had to print and affix your own labels, which was a chore.

And even when tape duplicating companies started appearing you had the bookkeeping for all the different accounts and some never paid, which means you lost all of your profit and sometimes went in the hole.  What can you do?  You can’t kick them out. If you complain to the company they say, “That’s your problem, not ours.”  So sure, sometimes you lost money.

My White House experience

Let me give you an example.  I served on senior staff at the White House and my business was put in a blind management trust.  I couldn’t even contact my downline.  While I worked at the White House lawyers divided my group between Dexter Yager in the east, Bill Britt in the midwest and Jim Dornan in the west.  When I finally left the White House my Yager groups were very small, my Britt groups had transferred out, picked clean by the Diamond who had been assigned to “protect” them for me.  But my west coast groups had survived.

Now, Dexter was mad at me during this time.  I had gotten into “stacking,” it was something like the methods of today’s MonaVie and Dex had warned that it would not last and it would eventually destroy my group, that the newest people would be hurt. But I didn’t listen to him and I needed something to help my leaders survive and “stacking” creates excitement, you get a big group fast, even if the money only goes to the top.  No one in my group was making any money.  My business was collapsing.  In fairness to Amway, no one was retailing.  And frankly that was not so easy.  So stacking, or turning my Amway business into a hybrid binary caused some enthusiasm, at least for awhile.

But all of that is a different story. When I came out of the White House, with Dex upset at me, and my groups under Jim Dornan in the west surviving, I plugged into him.  Well, one of my Emeralds started to quickly run up a debt.  He was buying the tapes from me and selling downline to his group but he wasn’t paying me.  You don’t know what to do.  You love the people you are working for in your downline and they need the tapes to survive and build their groups.  And you care for the Emerald, who may be broke and making house payments.  And he thinks you are rich, that you don’t need the money, and he keeps promising that he finally has the money.  If you cut off the tapes you lose the whole group.  Well the debt climbed to almost $40,000. You ask how someone can lose money on the tapes?

Eventually, I could have gotten some of that back.  He would have had to pay something.  My new leader, Jim Dornan would have held his feet to the fire. We could have by-passed the Emerald and he would have lost his leadership.  But the Emerald went to Jim and cried on his shoulder.  This is a classic story, this happens all the time.  And the Emerald said, “Doug was in the White House, and now he is thinking about congress and he is too busy to help me.  We need to be transferred to another diamond.”  So a very big group was transferred, my tape money from the groups was cut in half.  And the debt of the Emerald was forgotten.  I was left holding the bag.

Tex: I think the “rules” in those days were based on favoritism; specifically, how hard the IBO pushed the tool system.

Sounds to me like you were in a very bad group with leadership that was greedy and not really smart. But again, I would want to hear it from their perspective too.  I never had any pressure at all.  Dex never pushed tapes on me.  In fact for a long time he gave them to me free but he started charging me for them, saying that it was bad for me to get them free.  And he was right.  I didn’t even listen to them until I had to pay for them.  You should never just give something away without a plan.  You can’t just go to Calcutta and throw money off of a rooftop.  You have to have follow up and responsibility or it is all a waste and can even do harm and make people dependent.

Tex: The question isn’t whether the tapes (or other parts of the tool system mentioned above) worked, it was whether the tail was wagging the dog, and whether the pre-Platinum IBO’s made a net profit.

Well, sadly, they did not.  And you are right that the tail was wagging the dog.  But again, did the fault lie with the selling of tapes?  Or the plan and the type of products and the price of those products?  At least the tapes kept people trying.

Tex: [You say you told everybody, everything up front.] What exactly did you tell them?

I told them that the suggested plan called for retailing the products.  I had learned from Jody Victor to do this and not immediately assume that they would not retail.  Of course, very few did retail. Like almost zero. And there was a danger in promoting it because when they tried and saw how hard it was you lost all credibility.  That’s why many would “dis” retailing from the beginning, not because they didn’t want it to happen but because they knew that no one really would do it and they had more credibility to say so up front.

Then, I would say that there was income from tapes and educational products at silver and above.   So they knew that it would be a lot of work.  And many still stayed with it, believing that they could get to the higher levels.  And I was one of those who did, and I am very, very grateful for what I experienced and grateful to the company and for my friends.

To start at the begining of this series read Doug Wead Amway Adventure

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Tools or products?

April 23, 2009

As to the whole networking issue of selling products or tools, which refers to the CD’s and books? The answer is that a good network needs both. While there are some companies that boast a good payout on product sales, their leaders will not retain their networks if they have no system in place, no CD’s and functions to encourage and teach. Their people will come in the front door and walk out the back.

Below are some responses to my ongoing correspondence with Tex. It touches on this subject. If you are new to this series you should start at the begining, Doug Wead Amway Adventure, and then work your way back to this point.

This means you are no longer an IBO, or you are still an IBO, but inactive?

I am no longer an IBO. My whole life in recent years has been studying and writing about American history. As far as netwokring goes, I am just someone who enjoys some of the more remarkable rags to riches stories. And enjoys learning about networking and what works and what doesn’t.

[Referring to those who operate at a loss at the pre-Platinum levels because they have decided that they cannot sell the product at retail, or they don’t want to.] – You need to define “they.” Is it the upline or the new IBO? Many prospects are told they don’t have to retail, and most people, by nature, don’t want to be a “salesperson.”

It is clearly defined as written. “They are operating at the pre-Platinum levels.” “They” would be anyone who is pre-Platiunm, that is, a person who has not yet reached the Platiunm level. The fact that they do not want to be a “salesperson” is not the fault of the tool business. The company likely knows this and still lays out its plan and sets its prices as it choses.

[This is the problem that Eric Scheibeler raises, saying that the likely incomes at these entry levels are wrong.] – I don’t understand what you’re getting at, please expand.

Well, Eric can speak for himself, but the issue raised, as I understand it, is that the price of the products, combined with the compensation plan and the rules, corporate and governmental, make it difficult for one in Amway to make a profit at these lower levels. If this is the case then it has nothing to do with the tools and is a separate issue for the company to address. It is not your upline’s fault.

But lack of retail is DEFINITELY the fault of the tool business (or more accurately, the people who profit from the tool systems)… Customers don’t buy tools, IBO’s do. Why would your upline want you to “waste” your valuable time with selling to customers, which make THEM pennies? The upline would much rather you use your limited time to sponsor new IBO’s, as they make FAR more money when those IBO’s buy the tools.

And why do you see this as a fault of your upline? Some might argue that this was a fault with the company as it functioned a few years ago and a fault that it has been addressing and correcting both from the corporate and the field but it is not a fault of your upline.

If you, Tex, were a successful upline in those days and your dearest friend came to you and wanted to get in, you would pull him aside and say to him something similar to what your despised upline told you. Namely, it is in your interest to build a big network as quickly as possible. You would likely say this to your friend, not because you saw your friend as fodder for the tool business, but because you knew, and you would openly tell him, that there is more money with the tools. You would want him to fullfill all the sales requirements but to move on as quickly as possible.

Perhaps you are angry at your upline for hiding his tape income from you and you felt used when you discovered it and perhaps your upline was a bad person, a selfish jerk and greedy and someone who didn’t care about you but what he was teaching you was not only apparently in HIS inerest it was also in YOURS. At least it seemed to be at the time. It is probably what you would have told your own brother or dearest friend. The only difference is that you would have told your brother “why” and your upline didn’t do that for you.

And, of course, if your brother said, “No, I don’t care, I want to sell.” You would have supported his decision.

Now, some of this is a moot point since the company is remaking itself to allow for easier retail. (You can look at Jim Dornan and Network 21 to see how streamlined and effective the new retailing can be.)

I am not against the tool CONTENT, I am against the distorted and false profit model the current prices and practices with tools create. And tapes are only PART of the equation, there are also books (remember the 80% discount you mentioned?), various meetings, voice mail, websites, etc.

Good point. I agree. My solution was to tell everything to the people I was sponsoring. This was in the 1970’s, long before Al Gore invented the internet. But it just seemed stupid to hide this from people.

Did you ever try to get the required support, by rule, without using the tools? I did, and went from “best buddy” to TOTALLY ignored after going off standing order tools. People are TAUGHT not to help those not “feeding the beast” the tool scam represents. There is some sense to this approach, as those looking to learn new things are easier to train. However, it is CLEARLY against the Amway written rules.

Dex was pretty patient with me. He did not force the tapes on me. I picked it up from watching other groups grow and hearing new diamonds rave about how they helped.

But after experiencing my own growth I remember having that sense myself. Why waste time with someone who isn’t listening to the tapes because if they aren’t willing to invest that much time and expense, why should I have to take the time to tell them everything? This gets especially tough when your group grows. You run out of time and depend on the tapes.

BTW, if you were wiling and wanting to go out and sell product, you were very special indeed. In those days it was pretty hard to find someone willing to do what you were willing to do. I wouldn’t call them cowardly, lying uplines, I would call then “stupid,” cowardly, lying uplines. But there are two sides to every story and I don’t know how they would explain what happended.

Last in the seris. Amway diamonds and their tools.

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