Amway IBOs get all their products free plus extra cash!

Amway critics just love to quote various government mandated statistics that Amway publishes, but thanks to some help from The truth about Amway we have once again foiled the efforts of would be detractors, with FACTS. For example, for some years now Amway in North America has published the statistic, based on a 2005 survey, that the average “active” IBO makes $115/mth. $115/mth doesn’t exactly sound like it will lead you to the land of your dreams does it?

So, of course, Amway critics cite that as “proof” that it’s a bad business opportunity and most people make little or no money. Indeed they’ll often go on to mention “expenses” and claim it means most IBOs lose money.

Well, there’s a saying you’ve probably heard – lies, damn lies, and statistics.

I love statistics. Used properly they can tell you a lot. Used improperly they can mislead you badly. In a former career I used to do statistical analysis, and my curiosity was peaked one day when I read a newspaper article that claimed that (in the state I lived) “in half of all fatal accidents where the driver tested positive to marijuana, the driver was not wearing a seat belt” . The article went on to theorize about careless behavior brought on by the drug use.

At the time I happened to be working in alcohol & other drug research with regard to road safety, and I had the entire accident statistics database sitting on my computer. I also knew it was a rather odd statistic, since authorities almost never did blood tests for marijuana in fatal accidents.

So I looked it up.

There were exactly two fatal accidents recorded where the driver tested positive to marijuana. One of them (half!) wasn’t wearing a seat belt.

Lies, damn lies, and statistics.

The article was 100% truthful in it’s reporting of the statistics, but what they reported told you almost nothing at all.

The same with the Amway average monthly income statistics. Average is only a useful statistic if you’ve got a group that is of decent size and fairly “homogeneous”, that is, they’re much the same. The Amway statistic includes all “active” IBOs, which is defined as -

An “active” IBO is one who attempted to make a retail sale, or presented the Amway Global IBO Compensation Plan, or received bonus money, or attended a company or IBO meeting during the year.

That’s it. If you ask your brother, once, in a whole year, if he wants to buy a can of XS … and he says no! … you’re active! $115/mth is a pretty good income for that, isn’t it? Or how about if you and your spouse are both in to health and each buy Nutrilite Double X and Omega 3 …. you’ll have bought more than 100 points of products, and qualify for a 3% rebate! Congratulations, you’re now “active”. Amway critics think it’s scandolous that you only earn $115/mth for doing your shopping!

Of course, that’s not what’s going on at all is it?

Lies, damn lies, and statistics.

The reality is that the group the “average” is calculated from includes all sorts of people. It includes people that joined Amway 50 years ago and have built global empires. It includes people that joined a few weeks ago and went to one meeting. It includes people who just joined to shop and get member pricing. The average tells you nothing at all, and anyone who pretends it does is either ignorant or actively trying to mislead you.

But just for the heck of it, I thought I’d do the same …. so let’s have some fun with numbers!

First, let’s try to see who this group is. Based on the definition of “active”, the toughest criteria is that they actually earned a bonus, right? So, being cautious …

• The average income of IBOs who earned a bonus was (at least) $115/mth

A couple of years ago in a lawsuit against Quixtar in California, it was revealed that -

• 12.9% of IBOs receive a bonus on downline volume

In other words, anyone else receiving a bonus did so purely as a rebate on their own purchases (including for retail sale). The same source indicates that -

• only 50% of IBOs place an order in the first 3 months after joining

Virtually none of the rest ever order or renew. So that 12.9% must come out of the 50% of IBOs who at least place an order. That means that for roughly 74% of IBOs any bonus earned is purely a rebate on their own shopping.

74%! Clearly that’s a pretty large majority – so in other words, this “active” group earning $115/mth is primarily made up of people simply shopping for themselves! $115/mth just for shopping … pretty good huh?

But let’s continue …. Amway used to publish some statistics internally called “The Platinum Index”, and a leaked 2004 Platinum Index revealed that -

• The average monthly purchase per IBO was $104

Putting this altogether -

• The “average” IBO is simply a “wholesale shopper”
• The “average” IBO purchases $104 a month
• The “average” IBO gets $115 a month in bonus

Clearly, we can conclude from this that -

Amway IBOs get all their products free plus extra cash!

Lies, damn lies, and statistics.