On May 7, 2004 , I happened to watch a TV program entitled Inside Story Of Business That Attracts People With Promise Of Easy Money.. It was told by Chris Hansen, a correspondent for NBC's award winning news magazine Dateline NBC .
It chronicled the recruiting methods of an Amway company spin-off named "Quixtar." Dateline "donned" their producer Tim Sandler, with a hidden camera and proceeded to attend a recruitment meeting, held somewhere in my home state of New Jersey . He was met at the door by one of the company pitchmen named Greg Federicks.
Greg Fredericks: "If you're somewhat serious, all I mean by somewhat serious-if you invest maybe, say, 10 to 15 hours a week in your business. This is your own business-you could generate in the next 12 to 18 months, an extra quarter of a million!"
Tim Sandler [Dateline Producer]: "I'm sorry. How Much?"
Greg Fredericks: "A quarter million."
Tim Sandler: "You're making more than $250,000-quarter of a million?"
Greg Federicks: "Umm hmm."
Greg Federicks: " I owe nobody nothing. You know, today I'm looking at a million dollar home, and a thousand dollar Rolex just for kicks. And I just got a brand new Lincoln Navigator sitting in front paid for cash. So things are good."
According to the Dateline report, Frederick 's informed the producer that in order to make real money you have to follow the Quixtar program in addition to buying a "bevy" of motivational tapes from people at the top of the Amway/Quixtar food chain. In addition, attending Amway seminars and staying away from negative influences is required in order to be successful.
Federicks also suggested that they attend a "Spring Leadership Program" in Greenville , SC. It was a fourteen hour bus ride from New Jersey to South Carolina . When everyone had boarded the bus, and just before they left, there was a call to prayer by Fredricks:
"Lord, we ask you for a spirit of openess so that we might go down to Greenville , South Carolina , Lord, and that we might be changed. In Jesus's mighty name we say, Amen."
After the long bus ride to South Carolina, the cargo of the faithful was packed into an arena that contained about 15,000 people. I thought at one point that I was back in 1977, attending a Lynard Skynard concert. My first instinct was to shout for another chorus of "Free Bird" while "flicking my bic" lighter in the darkened epicenter.
Closer inspection revealed that each participant was holding a candle, and the outcry was "Freedom. Flush that stinking job!"
Amway seminars can generate an incredible amount of motivational electricity that is hard to disconnect. It is understandable why those who are experiencing finanical difficulties can be drawn to the "mantra" of multi-level marketing.
With a mix of religious furvor and the motivational skills of an Anthony Robbins seminar, the upper level orators within the Quixtar organization entered the arena like rock stars, sharing their sage advice with the Quixtar faithful.
In addition to waxing poetically about the positive aspects of the Quixtar plan, they also emphasized that you need God in your life in order to succeed in the business. With God's help and a strong work ethic, you are only 365 days away from financial freedom, no longer bound by the shackles of wage slavery.
However, I didn't know much about running a business. Working for hourly wages was my only well known path to compensation. I had a friend who was a small business owner. I asked him why he choose his particular enterprise, and what the profitability was.
While I did not get much of answer to my original question, he quickly replied that he had just the opportunity I needed for financial independence. With just a part time effort, I would be making thousands of dollars in a short amount of time.
When I asked him what it was, he mentioned that he couldn't explain it to me with any detail right now. I would have to come to his house at a later date for a meeting with a few other people that will also be exposed to this financial plan.
Needless to say I was "jazzed!"
I could not wait to start making money beyond just the scope of my job. When I arrived at my friends house, there were several people gathered in his living room. There was also a featured speaker pacing the floor, who, we were told, would relate this money making plan to all of us.
According to the "man with the plan," we could create an incredible financial windfall with just an investment of 15 to 20 hours a week introducing this success blueprint to friends, family, co-workers, or the public at large.
For close to an hour and a half, he went over all of the positive apsects of this money generating juggarnaut, with flow charts that he drew on white easel. I finally found out at the end of his presentation that Amway was the company who was offering this sweet escape to financial bliss.
What exactly was Amway? Amway had been around since the 1950's and sells everything from vitamins, detergent, general merchandise, as well as a private label natural products and vitamin supplement line.
The "plan" requires you to recruit people from every walk of life, and develop a sales force that markets Amway products. Anytime one of your recruits sells Amway merchandise you make a comission from their sales efforts.
The people you recruit, in turn, recruit other people. The more people you have in your "downline" that are actively selling Amway products, the more commissions you make. Before you know it, I would be making tons of cash from my "Army of Amway" salesmen.
I thought for sure that this was the financial vehicle I was looking for. Once I explained to people about the mutually beneficial financial relationship that can occur from getting involved with Amway, they would jump at the chance to get involved! Right?
Wrong! Little did I know that the road to Amway riches could be extremely bumpy....
I was told that when I approached a potential recruit that it would not be a good idea to tell them it was Amway right off the bat. The reason being, is that people have a general misunderstanding of the business and judge it's money making ability harshly. When they finally see the "plan" in action they will change their mind about becoming a distributor.
If anyone asked me about the opportunity, I was to respond by saying that: "I can explain it to you now, but I am having a few people over my house and I would able to explain it more in detail then. This is an opportunity that I am sure that you will be interested in."
Gee, that sounded familiar!
There were other excuses that my Amway sponsor would suggest, but that was the only one I was comfortable with using. You really could not explain the concept on the spot, or with any specificity.
I knew that people had some objections to Amway, and it was not unreasonable for them to have harsh opinions about business concepts that they did not fully understand. My thinking at the time was that I wasn't taking anyone's money, just a few hours of their time.
I also thought that once people had a chance to see the Amway opportunity on full display all of the misconceptions about the business would be put set aside and only boundless optimism would spring forth.
However, my ideals did not reflect reality...
By not revealing what the concept was, or exactly what they were getting themselves into, I immediately cast negative aspersions upon myself. Most people just refused to take me up on the offer and the ones who did, were disappointed and angry when they realized they were attending an Amway meeting.
After about three months I was starting to get discouraged. I didn't recruit a single person. My sponsor told me that I should attend seminars to keep me motivated. I did attend a few meetings, and, like most people that go to Amway rallies today I was "instantly energized".
The featured speakers were uplifting and everyone had a positive attitude. There was even a wheel chair bound young man who became a successful direct distributor. I figured that I was just feeling sorry for myself. The fault was to be found in my own lack of work ethic. I was not working the plan hard enough, or talking to enough people about the plan.
I didn't fully grasp the reigns of success.
I am the failure, not the Amway plan!
So, with renewed vigor I set out to recruit as many people that I could. With my sponsor by my side I scoured the landscape for new recruits. I was reluctant to find prospects at my place of employment, but I did it anyway.
I got a few of my fellow co-workers to attend some of the rallies that were located in the town we all lived. However, once again, they were "less than impressed" with the Amway pep rally and more then skeptical of the "plan."
Three months turned into six. Six months became a year. And still, not one person was on board my Amway opportunity train. I felt that is was time to "pack it in". I told my sponsor that I was not very comfortable with what I was doing. Once again, he suggested that maybe I should go to more rallies, and buy more tapes.
I politely declined. In restrospect, I think that he was more than happy to cut me loose. After one year of his help, I produced nothing for his down line, nor did I increase his bottom line. I was disappointed that I had let both of us down. However, I had a feeling that I was doing the right thing despite my dismal performance.
After seeing the Dateline NBC story, it reminded me that some of the same practices that were part of the organization when I was a brief participant, are still part of it's business philosophy in present day. Even though Amway/Quixtar promotes self-reliance and the idea that you can become an Independent Business Owner (IBO), you are more "dependent" then "independent."
New recruits are sometimes pushed by their sponsors to buy tapes, commonly referred to as "Business Support Materials" or BSM's. Attending Amway rallies featuring the positive pontification of Amway's top earners is encouraged and considered by some to be mandatory in order to be successful.
In my experience, Amway's BSM's were less then instructive. Most trade or business support materials provide specific details on how you can improve your overall methods and tactics within a particular industry.
Of tapes that I listened to, only a few contained a modicum of instruction pertaining to improving sales techniques or how to positively encourage new recruits to participate in the Amway plan. While inspiring, most tapes and instructional material was nothing more then motivational rants from Amway's major players.
Some of the same speakers I heard 20 years ago during my tenure at Amway, Bill Brit, and Dexter Yager, truck driver turned Amway devotee, are still the "puveyors of positive pontification" at Amway conventions today. I understand that company leaders and those at the head of the pack are a much needed commodity for motivating the masses.
They are at the top of the Amway/Quixtar food chain and have benefited from hard work and creative oratory that they masterfully use to transfix and motivate people into selling the Amway product line. But, had they really been that successful selling Amway products, or was it something else?
I came to realize, and as the Dateline NBC piece mentioned, that the BSM, or "Business Support Materials," (tape and books being sold at Quixtar seminars) generate a substantial amount of income for most of these "Amway Gods". A good portion of their money comes from what they are saying, rather than what they're doing.
Other than selling "charisma" and a dream, most of the Amway higharchy either had money, or owned thriving businesses before they got involved with the company. I noticed that my sponsor had two ice cream trucks that required long hours during the summer months. If he was so successful with Amway, why would he need to work so hard?
I once asked a direct distributor that if I am not making any money from the Amway/Quixtar business, how could I convince other people to join an organization that really hasn't made me successful, or even a steady income.
He replied by saying: "Fake it till you make it!" In other words, tell people that you are doing well, even though you weren't doing anything at all! I would assume that sentiment is still woven into the fabric of the Quixtar recruiting philosophy.
The "problem with products" is also another stumbling block when trying to sell the Amway/Quixtar opportunity. Still in use today is a detergent product named "SA8 Concentrated Laundry Detergent." If my memory services me correctly, a ten pound box (1983 prices) cost around eight or nine dollars.
It was very hard to get people to understand that a concentrated laundry product could actually save them money in the long run. Intitially, you would spend more on the detergent, but you could do more laundry with less product.
Getting the general public to grasp that concept was an uphill battle. People could not justify spending eight or nine dollars for a box of detergent when you could spend two dollars for a box of Tide.
Amway products were just too expensive in the minds of most. They could not understand why they should pay two, or in some cases three times the price for general merchandise products that they could get cheaper in their neighborhood grocery store. In turn, this kept people away from getting involved with Amway/Quixtar line.
In addition to the perceived value of the merchandise, keeping people motivated to go out and recruit others to join the organization was another hurdle that was hard to overcome. Going to seminars and listening to tapes is a great way to stay positive.
However, movitational speeches and encouraging words have a limited shelf life. You need more seminars to help you overcome the rejection that you will ultimately experience when you are recruiting prospects.
My sponsor had an incredible time keeping people movtivated even within our small circle of Amway participants. We usually drove to seminars that were no more than about two hours from where we lived. No "busloads" of the faithful traveling to rallies in other states. We would take turns driving.
As time dragged on, there seemed to be more and more room in both are cars. Pretty soon it was just my sponsor, myself, and sometimes his wife. The negativity that surrounded Amway and the constant up hill battle to keep people motivated and recruiting started to take it's toll on me, and eventually my sponsor.
"NOTHING HAPPENS UNTIL SOMEBODY SELLS SOMETHING!"
Despite the "No Selling" credo that was touted as one of the advantages of Amway, this perception is false. When you are shown the "plan" there is a suggestion that you really don't have to do much selling. Just recruit other people to sell for you, and then collect commissions from sales people in you developed in your "downline".
The one exception to this rule is if you achieve "direct distributor" status. You then have to carry a certain amount of product and supply it for other Amway recruits and members.
Someone has to sell something or nothing happens. In order for an individual to make money from the Amway/Quixtar model, your down line has to have "deep legs," and they need to be selling a lot of product in order for you to make large commissions.
Also, if you do become successful in the business and start to accumulate a substantial amount of commissions, eventually, you will have to help other people sell the plan to their potential downline. Those that helped you get involved with business, will expect you, in turn, to eventually help them give presentations of the Amway plan to new prospects.
My sponsor had over 100 people in his down line and he only made (as he later admitted) around 80 to 100 dollars a month. If no one sold anything that month, he would get nothing at all.
If you took the high number (100 dollars per month) then it would fall in line with the average yearly income of most newly minted Amway/Quixtar distributors at about 1200 dollars a year. Not the 250,000 part-time income opportunity that Fredricks and other recruiters might claim.
Defections are another negative aspect of the Amyway/Quixtar business model. This happened to my sponsor. A rival Amway distributor convinced some of his downline to defect. If memory serves me correctly, about twenty people switched downlines. With only 100 people in his organization, this was a devastating blow to an already small group of Amway salesmen.
This type of "line" jumping was common some twenty years ago. Since then, I don't know if there are any stop gap measures in place to prevent people from joining a rival Amway sponsor. If no changes have been made, then you are constantly trying to recruit people into your downline, with no guarantee that they will even stay with you.
"IS THE AMWAY BUSINESS A CULT?"
It has been suggested that the Amway/Quixtar business is a "cult." I would say that the "Heaven's Gate" consortium of UFO cultists started by a man named Marshall Applewhite, referred to as "Doe" by his disciples, was definitely a cult.
In 1997, the Hale Bopp comet made a rare appearance within our galaxy. The Heaven's Gate community was convinced that a spaceship was contained in the tail of the Comet, and that all of their members needed to hitch a ride.
But nobody rides for free. To pay for your intergallactic taxi ride to "spiritual nirvana", you needed to shed your earthly container. Over 30 of it's members committed suicide in the belief that their souls would be wisked away by the "Hale-Bopp" express.
IN NO WAY does the Amway/Quixtar business come close to that kind of "outer limits" thinking. In the time that I was involved with Amway the message was always the same..
Limit your exposure to negative opinions or influences. Attend seminars and buy tapes to help keep you motivated and recruiting new members. While people were devoted to Amway, I never witnessed any extreme cult like worship of the Amway business.
Tales of people who spent enormous amounts of money on Amway tapes and seminars are purely anecdotal and I personally never knew anyone who engaged in such reckless spending.
There is however a "if you are not with us, you are against" us type of mentality...
The income claims that are presented by Amway recruiters and the emphasis that you have to "get right with God" in order to be successful in the Amway/Quixtar business can be a powerful combination of money and faith.
For those who are susceptible to "group think" or have a financial, spiritual, or interpersonal relationship void in their life, it is possible among some individuals that get involved in the business to develop a "cult like" mentality.
Amway can fill all these voids and take on the role of friend, family, and religion. Anyone who challenges the faith could can be branded as a "negative influence" and pushed aside. However, the opposite of unbridled devotion is true as well.
Once people realize that it takes longer than a "part-time" commitment to make the business work, as well as realizing the struggles it takes to maintain a profitably downline, the seeds of doubt are usually planted. The drop-out rate for most Multi Level Marketing "newbies" is over 90%.
"WHAT'S OLD IS NEW AGAIN!"
Even though Amway is now Quixtar the name change hasn't done anything to improve the core business practices of Amway sponsors and upper level management. The name change might only be an indication that the negative publicity surrounding the Amway brand has probably reached critical mass. If their business practices remain the same, a negative reputation of Quixtar will follow as well.
Are all Multi-Level Marketing companies and marketing practices the same?
I can't answer that with any certainty, and I would be speaking without education if I did. Not every company will mirror the Amway/Quixtar model. It is up to all of us to perform our own "due diligence" before we get involved with any Multi-Level marketing company or direct sales opportunity.
I wondered as I watched the Dateline NBC cameras pan over the sea of faces packed into that stadium in the Greenville , South Carolina .
How many people will spend the next few months, or years, scouring the landscape for fresh recruits for their Amway army? How much will they spend on tapes and seminars? Can they overcome the negativity and rejection that comes with recruiting for their downline?
I can only hope that the prayers said at each and every Amway rally, shows them the way, the truth, and the light..
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