Thursday, January 14, 2010

Amway: Because they won't let you do it your way

Before I beginning, I just want to say my inspiration for writing this entry is due to having read Russell Glasser’s excellent webpage discussing his own experiences with Amway. I highly suggest reading it if you want another perspective:

While out the other night for a friend’s 21st, I ran into an old friend as I was leaving. Now, this wasn’t just an old acquaintance that I saw every now and then, but someone I saw at least four times a week at the height of our friendship and could talk to them about anything during those times. If asked then, I would have said they were my best friend and that we would always be best friends. Anyway, the conversation that ensued went virtually as follows:

Me: “Hey, haven’t seen you in ages.”

Them: “Yeah, I know. What have you been up to?”

Me: “Just uni really. How about you?”

Them: “Oh, just the business.”

Me: “Oh yeah” *Awkward silence* “Anyway, I have to head off. Good seeing you.”

You might be wondering why two individuals who were as close as we were could now be so distant. What could possibly have happened that drove us apart? If you guessed Amway, you are right (though it was an obvious guess, being that is what this blog is about).

Before getting to how it destroyed our friendship (and other friendships of his too, from what I have heard) and why I left Amway, I will start from the beginning.

1987: On a mid-August night, my parents lay in bed together, as husband and wife often do.

Okay, too far back.

2007: I had just finished high school the previous year and was just about to start at university. While I was looking forward to the new experience that university had to offer, I wasn’t overly excited about my course. Throughout high school, I didn’t really have any aspirations in life and was looking for a job just to pay the bills. I had always had an interest in computers and games, so I figured game design would be a logical choice (in hindsight, I probably should have given it a little more thought). I was also working part-time at McDonalds, a job which I had a love-hate relationship with (loved the money, hated the work). This was the time at which I was friends with the above mentioned individual, who I shall refer to as Luke to keep his identity private (for those of you who knew me during that time and know who I am speaking of, I would ask you do the same).

Now, Luke had been telling me for awhile about the business he was starting up. For a long time, he never really went into any detail when I asked him what it was. One day, I was mentioning to him how I didn’t really want to have to work to live for the rest of my life and would rather just spend my time travelling and exploring the world (wouldn’t we all?). It was then that he suggested that I should get involved in his business. Of course, my first question was “but won’t that mean I am just working for you?”. To this he replied “no, I mean you can start your own”. This raised more questions than it really answered, so he told me I should come along to a meeting and hear all about it. Being my position in life at the time, I figured I had nothing to lose. I went with him over to a house of another ‘business owner’ Kate* (again, real name changed). It was here that they had David*, who was a lawyer and also in ‘the business’, explain it to me.

Being that this is the part where I had ‘the business’ (this was how they referred to it, rather than Amway) explained to me, I figure it would be a good point to explain it to those of you who are unfamiliar with it.

Amway is what is known as a Multi-Level-Marketing (MLM) business. You pay a yearly membership fee, and for that you can have access to a wide variety of products at a discounted rate (in reality, most products are more expensive than they would be retail, plus you pay for shipping). You also get a rebate of 3% every month on the products you have bought or sold to others (if you buy 100 points worth of products a month, that is). The real money (or so you are told) is in ‘sponsoring’ others to join the business. For every person you sponsor who buys and sells products, you get a cut of their rebate. So the more people you sponsor, the more money you get. Also, the more points generated in your ‘business’ (your purchases plus all those you have sponsored/who they have sponsored etc.), the larger your rebate becomes. The highest rebate attainable is 21%. If you maintain a rebate level of 21% for six months, you become what is known as a Diamond and you ‘breakaway’ from the person who sponsored you (in reality, they still get 4% of all the money that goes through your business). At the Diamond stage, it is said that individuals earn around $4000 a month. And once it gets to that stage, you just have to sit back and watch it increase.

Sounds impressive, no? $4000 a month or more for simply getting people to join your business and helping them to get people to join theirs. It is only when you realize where that money is coming from that it starts to become a little murky. Being that the significant majority of products bought are by the ‘independent business owner’s’ (IBO’s) of Amway (in fact, selling products to people who aren’t part of Amway is discouraged), all the money comes from the IBO’s themselves. Amway is best described as a ‘zero-sum game’: when everyone in the company adds up all the money they have made and lost through the business, the total sum is zero. A better way to look at it (thanks Russell) is as a game of poker you play with your friends: you all put in $10 to start the game. Some people walk away with more than $10, others with less. The point is that you can only make money if someone else loses money. This is exactly how Amway works. All the money that those Diamonds are making is coming from those on the bottom level. Sure, those at the bottom could one day become Diamonds and make it all back, but they would be taking money from others who are now at the bottom. This becomes a problem when you realize that the population of the Earth (or more accurately, the population who are able to even join Amway) is finite. Eventually, someone will be stuck at the bottom, unable to make their own way up the ladder.

Now as you can imagine, this wasn’t how it was presented to me. The real presentation was full of sugar-coating and sweet-talking. Add to that the extra ‘argument from authority’ given by David, who explained that he had gone over the whole business concept as a lawyer, concluding that it was both legal and moral, and I was sold. Looking back, I cringe that I accepted his conclusion simply because he was a lawyer, given that I can easily spot an argument from authority nowadays. Anyway, I was in like Flynn. I told them I wanted to join up. They were quite enthusiastic (and why wouldn’t they be? They just got another person who will make them all money). When they asked if I had anyone in mind that I could sponsor, I immediately thought of my parents. They suggest that when presenting it to them, I should avoid using the name ‘Amway’. When I asked why, they said it was because there had been some ‘negative press’ of the company a few years earlier and that my parents might remember it and reject ‘the business’ without listen to it. Being that I am openly honest with my parents about most things, I disregarded this advice and told them straight up. And being that I thought at the time that it was such a good concept, I couldn’t see why they would object to me being involved/not want to get involved themselves. Ah, to be young and naïve. When I told them, they were less than pleased that I was involved and didn’t want any part of it themselves. They didn’t, however, tell me that I should get involved; more that I should just not be disappointed if it doesn’t work out. In retrospect, I think this was the best move they could have taken, as I probably wouldn’t have listened and it would have made me more resistant to the later problems that I saw.

Despite the cautious advice from my parents, I joined up. Within a few months, I had already sponsored two people, one of whom had sponsored another. I figured it wasn’t long until I could sit back and watch as the money came pouring in. During this time, I came to develop a deeper understanding of what ‘the business’ actually entailed. My first real objection was when I discovered that it was a zero-sum business. So I came forward to David, being he was the lawyer and I thought the person who would be able to give me the most comprehensive answer. I asked him “if everyone in the world joined up, wouldn’t the people on the bottom just be essentially giving their money to the ones on top?”. After some crafty non-answers (“not everyone is going to join up” and “the people at the top worked (*cough*) to get there”), he eventually said “sure, but isn’t that how the world works at the moment? There are people on the bottom who do all the work and those on the top who get all the money”. At first, I had to agree with him, because that is how the world works. It was only later as I was driving home that I realized the absurdity of what he had said.

Firstly, and most simply, just because the world works like that doesn’t mean that everyone else does. I saw what he was saying as a virtual “I did it because my brother did it” type justification kids give when they misbehave. Secondly, while the world may indeed work like that, the difference is that in the real world, you can actually change your position. For example, a person from a less-than-well-off family could go to university, get a degree in business, start a company and make millions. Yes, this doesn’t happen often, but it can happen. The difference with Amway is that it can’t happen. You will always be in the position you are on the ‘chain’. Sure, you may get more people under you so you are actually making money, but they will be in the exact same position you were.

While this should have been more than enough to get me to rethink what I was involved with, I decided that, while I thought the concept was less perfect than I thought, I would continue for the moment. It was a few weeks later that the ‘last straw’ came up. You see, Amway is very into the whole ‘motivational’ angle. While I do definitely agree that having a positive attitude when approaching a task can make you more likely to success, all other things being equal, they take that concept and run a marathon with it. To them, having a positive attitude is the ONLY thing that is required to do well in ‘the business’. Now, I didn’t really have much of a problem with this (though I did have to fake a lot of outward emotions), but it was when they took that concept that was already over-stretched and decided to try to fly to the moon with it that I had a problem. I came over to Kate’s house one day for a group meeting as I often did and she told me that they had a video to show me. I asked what it was about and she said “it is the only video I needed to see to become a Diamond”. I was intrigued until a minute into the video when the title came up: ‘The Secret’.

Wait, what!?

For those of you who are unaware, The Secret is a new-age belief that the universe rewards positive thought. Want a car? Think positively about it and you will get a car. Wait, you didn’t get a car? Well, you didn’t think positively enough obviously. Not only is this worldview tantamount to victim-blaming (all those people in third-world countries just aren’t thinking positively enough), it is downright unfounded on anything in reality. The video contains a lot of people trying to make it sound scientific by using terms like ‘quantum mechanics’, ‘energy’ and other words that have meanings that are far removed from what these people believe they mean.

Now, I was already well-versed in what The Secret was and why it was intellectual onanism with no basis in reality. When I saw the title come up with ‘The Secret’, that was the final straw for me. I could almost describe it as having a veil lifted from my eyes. I finally saw Amway and ‘the business’ for what it really was: a scam. I left Kate’s that night knowing I would not longer be a part of such an organization. Unlike Russell, however, I chose not to take the ‘lone ranger’ approach and try to save people from Amway. I was and am convinced that, at some level, they know it is a scam, but justify it because of their own greed and poor comparisons like the one David made. I, instead, chose to just slip away. I stopped attending meetings, making excuses at first and eventually just not returning calls and messages.

And how did this affect my friendship with Luke? Well, at first I wanted to maintain the relationship we had. But as time went on and I was missing more and more meetings, he began to pester me into coming along. We could no longer hang out without him somehow bringing up ‘the business’ in conversation. It was all he seemed to care about. I also found that he was not the same person he was before he was involved with Amway. It was from this observation and retrospective analysis of others in ‘the business’ that I came to the conclusion that the organization is more or less a cult. Not only are members told not to associate with individuals who are negative of Amway, they lose the capacity to be critical of ‘the business’, even when the flaws are literally smacking them right in the face. I’m not saying that they are unintelligent people (and research shows that most people who get involved with cults are of normal intelligence), I am simply saying that our human urges to be social, to be accepted and to have as much money/items as we can for as little work as possible can be quite overpowering; enough to disable logical thought.

From viewing other blogs that have been critical of Amway, I am expecting at least some negative feedback from the ‘Amway drones’. Before you post saying how much money you are making in Amway/that I am a loser for not being able to make ‘the business’ work, please reread and try to absorb the message I have tried to convey. I never said that no one can make money in Amway, just that the money you make comes from those who are below you and eventually someone will be stuck at the bottom. In regards to my comments about Amway destroying relationships/that it fosters a cult mentality, take look at your friend network and whether it is predominated by other IBO's. Not everyone will see the same thing I did, but I know many out there feel the same as I do.

Anyway, I hope you all enjoyed my story/rant on my experience with Amway.

Lord Bishington.

1 comment:

  1. Hi Lord Bishington,

    Thanks for the nod and all the credits for helping you out! It's been, what, 14 years since I used this up-and-coming technology called "the internet" -- that will never reach anybody -- to write my first public-facing web page. Although I only rarely think about Amway these days, reading your story made it very easy to slip back into that mindset of looking at all the logical flaws in the Amway business model.

    I only get a trickle of mail these days, maybe one or two a week. I think Amway, while still being a political force to be reckoned with, has lost a lot of ground due to ease of online shopping, and freely available information from anywhere in the world.

    Anyway, glad you decided to ditch the place, and best of luck landing in a career doing something you would actually like.

    -- Russell