One criticism about the Amway business is that it is a “get-rich-quick” scheme and geared toward those with an easy-money mentality.
But an accurate understanding of the business model, particularly its compensation plan, shows that to be a misconception.
Do some people become Independent Business owners (IBOs) because they think it’s a path to easy riches? Sure, just like any other business, particularly in the world of multi-level marketing where simple and potentially swift are confused with easy and virtually overnight.
But reality sinks in and when it’s clear that it takes work, as with just about anything else short of a Powerball lottery ticket, those people either change their view or drop out of the business.
That “flushing out” process is something that Ron Puryear, the founder of World Wide DreamBuilders (WWDB), has frequently mentioned as one of the great things about the business: it’s just hard enough to weed out those easy-money types.
At the same time, the Amway business, especially when you have guidance from successful mentors such as WWDB’s Terry and Linda Felber, Matt and Sandee Tsuruda, and Bob and Shelly Kummer, is just simple enough to be accessible to just about anyone with a work ethic and the willingness to develop self-discipline.
As WWDB’s Dave Severn has taught so passionately, the biggest leaders are first the best followers whose self-discipline enables them to effectively lead themselves first.
The Amway business works by duplication as you train people, who see your example and then follow the same steps that you demonstrated as you provide guidance to ensure that they are doing it effectively.
That dynamic reminds me of my work, nearly 20 years ago, as a server at Leona’s, an Italian chain restaurant located throughout the Chicago area. For my training, I started by following a wait-staff person around and seeing what he or she did. I would help them out, but wouldn’t get paid for this phase.
After doing that a couple times, I became the lead server as the experienced server shadowed me and gave me feedback on what I was doing right or wrong. Because I was taking up their stations, they would get to keep all the tips that came from those customers.
Once fully trained, I would then get my own station and be on my own. The similarities with the Amway business, though, go only so far.
One way in which it differs is when a sponsor helps a new IBO, whether showing the business plan or retailing products via grand openings, a skin care or nutritional clinic, or an event booth. In those instances, any profits generated are kept by the new IBO—even if the sponsor is the one making it all happen.
And the Amway plan is unlike the long-term financial outlook at the restaurant. At Leona’s, those people who trained me did not make any profit from the tables I waited on beyond my brief training period. Once someone is trained in the Amway business, the sponsor (or trainer, to use the restaurant analogy) continues to benefit by earning income on a percentage of sales generated.
And here is an important distinction that sometimes isn’t very well understood: income for the sponsor does not come out of the new IBO’s pocket, but from the Amway Corporation, which rewards the sponsor for a training job well done.
My sponsor has not showed the business opportunity or helped me retail in my business in over a decade. But in those first few months of training and directly supporting me, she invested a lot of time and effort in training me and training me to train others.
And today, as my business “leg” continues to generate sales volume, she continues to receive money from the Amway Corporation, month after month, because of her efforts years ago.
Duplicate the process enough times and train enough other “servers,” to refer back to the restaurant metaphor, and that is how people make significant income in the Amway business.