Newsgroups: alt.business.multi-level

In alt.business.multi-level, rjn@FC.HP.COM (Bob Niland) writes:

> New questions:

> * How much of Amway's total revenue is returned to the Distributor
>   organization, expressed as a percentage of the gross wholesale?

65-67%     Amway did approx  $4 Billion in volume in 1992.  That's
	   over $2.6 Billion paid out as bonuses.  Awesome!

> * Are bonuses paid only on consumable products, or are they also paid on
>   sales and business aids?  How about on enrollment fees?

Some sales aids are products and do contribute to your bonus.  However,
most sales and business aids (ie, product flyers) do not.

> * Since retail selling is required, how do you decide when to sell to
>   someone and when to try to recruit them (since if you recruit them, you'll
>   have to find a new retail customer to replace them)?

The vast majority of the time I give people the opportunity to sign up by
showing them the business plan.  Then I offer 3 entries levels:  Big
business (in which you sponsor others), small business (in which you
buy for personal use and maybe sell a little), and as a retail customer.
The decision to show someone the business is a judgment call - I try to
decide by getting to know them - do they have a need?  are they willing
to work?  would I enjoy working with them?

> * An email respondent tells me that with respect to the $7500-for-six-months
>   requirement for "Direct", the $7500 is "BV".  What does that translate to
>   in terms of wholesale price paid by a non-direct, and in terms of ultimate
>   suggested retail price?  Presumably these prices are all based on
>   case-lots, as well, since "eaches" are 5% more.

Direct is 7500PV (not BV) that equals about 15,000BV.   Bonus percentage
is determined by PV, but the percentage is paid on BV.   So, at 7500PV
you qualify for 25% bonus - you are paid 25% of $15,000.


> >> * How many products are in the traditional branded product line?

> > 400 to 500.

> I get the impression then, that Amway presentations are likely to focus on the
> business plan, since it is unlikely that any Distributor would have extensive
> personal experience with more than a few dozen products.

Presentations usually show the Big business alternative - in which you
are building a network of distributors - sponsoring other people.

> >> * Does Amway REQUIRE its distributors to sell products to
> >> non-enrolled customers, or can you succeed in the business just
> >> by buying product for your own use, as well as enrolling others
> >> and supplying inventory to them?

> > Amway asks that its distributors follow the law.  The FTC for various
> > reasons requires that product be sold at retail...

> Can you quote chapter and verse on this (like a Consent Decree casenumber)?
> This doesn't sound correct (since I am aware of sales-optional MLMs).

Not sure, but all I have heard/read indicates that if you operate your 
MLM as (retail) sales optional, then you cannot be paid a bonus based
on volume.  In essence you are only participating in a wholesale
buying club.  (I may be wrong though - read _Promises_to_Keep_)
  
> > We all pay the same wholesale price. There is however, a bonus schedule
> > based on volume. At the end of the month, depending on where your volume
> > is, you'll get 0 to 25% more.

> > To become a direct, you must qualify at 7500PV for 6 months out of the
> > fiscal year. The first time you can count months in a previous fiscal
> > year provided you reach it every month for 6 months in a row at least
> > 5 months before the new fiscal year.

> This suggests that if you do the $7500BV for the first six months, you don't
> actually get to buy "direct" until the next fiscal.  Is this true, or do you
> get to go direct as soon as you have reached the sixth 7500 in an FY?

Would a direct please comment - I'm not sure, but who cares?  When you are
at 7400PV you are not buying direct - even if you had to wait - no big deal.
I'll bet you get to buy direct as soon as you qualify direct.

> > If you get cheated, it will only be once because you'll stop dealing with
> > the person who cheated you. 

> Can a distributor just arbitrarily disconnect from their sponsor?  If not,
> what is the re-enlistment waiting period?

Very complicated process to change lines of sponsorship.  A think the 
waiting period is 6 months, but if you have sponsored other people then
those people cannot be re-sponsored by you for 2 years - something like
that - its documented by Amway.

> > In fact, nearly all Amway products are available as eaches to directs
> > and authorized warehouse distributors (like we are).

> What's an "authorized warehouse distributor"?

Your direct can authorize people in their downline to order directly 
from any of the local warehouses.  Your direct will probably not do
this until you show consistent high volume for a period of time.

Newsgroups: alt.business.multi-level