Amway or the highway

Amway is an interesting company, and like any corporation, there is a focus on their supplying goods/services with the intent to generate a profit for the company owners and stakeholders. I'm writing this as I was recently contacted by an ex-colleague who I hadn't been in touch with for years. Out of the blue they called to invite me to join in generating residual income.

Now Amway's approach is essentially to make members into stakeholders. The amount of stake that you have is dependent on essentially the revenue that you directly or indirectly generate for the corporation. The basic premise is simple and not a problem on face value. The issue though is on how they go about their business.

Firstly, you can only buy from Amway if you are a member. There is a basic annual membership fee, and in many ways, this is not different from a number of wholesalers or "Cash and Carry" stores. This membership provides you access to their buying their goods. (If you want to see what they sell and some prices you can check out the Australian site here https://www.amway.com.au/).

Increasing sales and market share is where things get interesting. Amway leverages MLM (Multi-Level Marketing, see http://en.wikipedia.org/wiki/Multi-level_marketing), so rather than putting money into advertising to the general community, instead they offer incentives to members for them to recruit new members and shoppers.

The incentives work on the following returns:

• For purchases you make, you get a percentage back.
• For members that you have recruited, you also get a percentage of the purchases they make.
• If your recruits then bring in new members, you also get a percentage of the purchases they make, and so on.

The percentage you receive of the purchases, reduces the more you are removed (in recruitment layer terms) from the member who made that purchase.

If you didn't already know about these schemes, then you can probably already see the problems; that for online shopping the discounts are reduced due to all the extra people who have to get paid commissions, and the people who want to use this as an income source now have ulterior motives when talking to people about Amway specifically recruiting.

A number of years ago, a Whirlpool forum user posted a basic guide for the number of sales needed to create a $400 / week income. You can see it in this Whirlpool link http://whrl.pl/Rck5QR . Essentially the combined total of purchases that I, and the members I've recuited, need to make in a week to earn $375 is about $20,000. This is not easy to achieve, considering that the regular purchase items from their website number 77. That's correct, 77 items fall under the category of groceries, and none of those are perishable items like dairy, fruit, vegetables or meat. The rest of the shopping categories are cosmetics, nutritional pharmaceuticals, and some basic home appliances and cleaning chemicals.


To give you a comparison, Coles "specials category" had 1,311 items alone. That's just the "specials and discounts" section, not including the rest of their regular full price items. Everything you can get in store, you are also able to buy online and have delivered.

Amway is not cheaper than your general supermarket brands, and considering that you now have to wait for that to be delivered while you also still have to go to the store to get your regular stuff (or pay a separate delivery fee for your regular shopping)? Not convenient. If you like the Amway products for yourself, that's well and good, but remember that you're also paying almost $100 per year for the privilege so you need to be making some good savings over equivalent quality brands for this to be worthwhile.

Of course Amway wants more sales, as they are a business after all, so there is the offer for you to make money by bringing in new members and encouraging them to buy. This is where Amway's reputation, and that of MLM schemes in general, have run into real trouble because of the conduct and behaviour of people trying to get new members in.

Because the system is not consumer focused, i.e. there aren't significant savings and you can't get all the things you want, then the pressure falls on the member to cajole or hook people into becoming members. This is where the sales pitch falls on the lure of riches, rather than any merit of the products or the system itself.

Amway has been around for more than 50 years, so the stuff above is already something you probably know. If a friend starts to talk to you about Amway, then be polite but firm; you don't need this in your life.

But if you really think you'd like to get into sales and make some good money, then go into an industry that properly rewards the effort you'll be putting in and consider finance brokering, real estate, vehicles, insurance, or travel.

Actually, no. Don't go into vehicle sales...

Scoundrels

Alot depends on the yard manager, but many of the larger caryards will keep a pool of umbrellas for that "extra mile" of customer service. This is because when it rains there are still alot of people who come into the yard with an umbrella of their own. Providing one for their use will not only make them more comfortable, but provides a convenient excuse for the salesperson to approach the customer uninvited and endeavour to work their way into a sale.

However, you will always get points where the customer insists on browsing alone for a bit longer, but wants to continue to avail themself of the umbrella. That's still good, because they'll come back to the office to drop it off, giving us a second line into probing for opportunities to make that sale.

Don't get annoyed, you're in the yard because you want a new car, right?

Anyway, what gets me, is that there are some people who don't bring the umbrella back. They keep it. And when I'm out and about, away from the yards and I see a person using one of those umbrellas, it burns me up.

It also means that the cheapskate yard I was at stopped providing umbrellas so I had to begin bringing my own. Believe me, I watched those ones like a hawk.

Sliding off the face

Ouch sorry for the extended absence. I always wonder how bloggers could just 'drop off' for several weeks, even months. And then when they say they're getting back on the wagon, much like I am hoping to say here, they then fall off again a week later.

Well I think I understand it a bit better now. Maybe it was writer's block that turned into a little bit of apathy, maybe it was just life. But hope to be getting back into routine again.

Milk tea

I've only started thinking about it in recent months, despite all the years that I've drunk regular breakfast tea with milk. I don't add much, just enough to colour it to a dark brown. But I do like my tea strong, so often I'll leave the tea bag in the entire time that I'm drinking it.

But I'd recently only started thinking about how milk affects the brewing (steeping) of the tea when we ran out of milk at work, so I had to drink tea black a few times. Now, leaving the teabag in for more than a few minutes resulted in very strong and bitter tea.

I'm a bit confused as to how this works, as a quick Google search turned up results saying that milk in itself does not stop the tea brewing. It's only the cooling effect of the milk dropping the water temperature and hence slowing the rate of brewing.

But I don't add much milk, and I've had cups of tea where the bag has remained in for over 30min and it is still no where near as strong as 5min of black tea. So I didn't really get an answer to my question from the internet, but I did learn that apparently milk is reducing any health benefits of the tea, so I'm supposed to be drinking black.

I guess that is kind of an answer.

Like a dog

Every now and then I remember why dogs love sticking their heads out of car windows. Although the whole looking into the wind thing does confound me a bit.

One of my friends used to drive trucks for a recycling company, and this was way before wheelie bins were around. Both the recycling and garbage were collected by different trucks that used runners who would grab the stuff from the curb, throw it into the truck and move on. Essentially the truck would just be slowly driven down the street while one or two runners would race between curb and truck constantly.

I joined my friend for laughs for a few months. Every friday morning we'd have to be at the depo by 4am to collect the trucks, squeeze into the cabin as we drove down to the start or our route, then the next 5 hours would cover a couple of suburbs. During the route, as a runner, we didn't go back in the cab, we'd either be hurling bundles of recycling into the truck, or seated on the rear step with a firm grip on a rail while the truck hurtled around to the next section of the route.

Halfway through the route, peak hour for the masses would start, and there was weird thrill in sitting on the back of a 5 tonne truck, the cold morning air whipping by and the ground just barely out of reach, while everyone else was bleary eyed and preparing to face traffic.

Oddly, I had an office job in those days as well, and the recycling gig was just for fun. So when the shift was done, I had to shuffle into the office to finish my friday and make up the lost hours.

Still miss those mornings though.

Trash and Treasure continued

Ok, so continuing with my attempts to sell stuff since last weekend, I have now had 5 people contact me making enquiries, and this includes the fellow who bought the lenses from me last weekend.

In every case, none of them volunteered their name. In all of their communications, whether by phone or SMS, they all defaulted to being anonymous. What is with that? Can anyone explain to me the culture today? I only got the name of the guy who bought the lenses when I outright asked him what his name was.

It isn't like I want proof of ID, I just think the fundamentals of etiquette are getting lost. They also aren't using 'please' or 'thank you' any more either. That all just seems weird to me.

... and makes me less inclined to entertain discounts as well.

Trash and treasure

Been clearing out some old junk from the spare room, last weekend. Came across a small pile of camera lenses that I'd accumulated when we'd gotten our DSLR. Back then I had visions of utilising a small arsenal of lenses for different settings to achieve perfect pictures. But well... that didn't happen. I'm just not motivated enough to lug all that equipment around these days.

So decided that rather than throw the unused lenses in the bin, I'd try my luck on Gumtree. Within an hour of listing, all 3 sold. Had me a little astonished, so I'm trying to sell some old exercise gear, but that has been online now for 4 days and no buyers.

Just goes to show that some of my junk is still junk.

Selling for a reason

Owning a supermarket is fairly good business. Sure, there are factors to consider to ensure that the store is accessible and is not in a location where competition is excessive, or the population density very low. But people need to eat, and the vast majority can't eat out every day, so they'll be visiting a supermarket reasonably often.

An ex work colleague now runs one, and he tells me that it isn't all easy money. Between shoplifting, outright break-ins, managing a moderate sized staff of low-skilled labour, the extended trading hours, 7 day trading, and not always being closed on public holidays, means you end up being faced with some potentially costly challenges. At the end of the day though, you can find it to be a good revenue stream if you have the commitment and mental resilience.

Oddly though, not every supermarket is guaranteed, and this became obvious to me today when I was wandering through the one near my work. It used to be a Coles outlet, but certain segments of their range constantly had items which were being discounted because they weren't turning over fast enough. Eventually Coles had enough and about 2 months ago, sold off that outlet and it was picked up by IGA. The IGA is now struggling a little as I see their stock changing slightly to try and work out what the local demographic wants. Bakery and dairy seem to be amongst the toughest segments, and I'm curious as to whether the new owner is now regretting their purchase.

Seeing as I'm grumpy enough with a 9-6 desk job in airconditioning, I'd be more unbearable if I had to deal with that aggravation. So no self-employment for me...