Saturday, March 19, 2011

The Illusion Of Profit?

One of the things taught by WWDB leaders at major functions, and on standing orders was how IBOs could make quick profits. It was to "buy from yourself", but to pay your business full retail. So the IBO markup went into your business account as a profit, along with your bonus checks. Nice, so you take your own money and move it into a separate account and you have a quick profit.

At one time, I was fooled into this thought process. It gave me the illusion that my business account covered some of the costs of doing business. In reality, my business was losing money until I reached about the 4000 PV level, at which time my business was about break even. Some IBOs figured ths out, but uplines justified it by claiming that our dreams should overcome any obstacles, or that we are getting detail-itis. One other thing we were told was that the money will be there when you build it big enough, but that the business was more than money. We now had lifelong friends and were becoming nicer and better people.

I encourage IBOs to take a hard look at their real profits and losses. See if your prospects of turning a net profit are good or not. Make your decisions based on facts, and not on emotions and dreams. Analyze your monthly results. Determine if the "system" is actually helping you or if it's just draining your bank account like it does for most IBOs. Do not fall for the illusion of profit.


  1. Most who read this will think "I'd be too smart to fall for that," and the truth is that most people are. It's not about intelligence or lack thereof; it's about wishful thinking. Wanting to believe that you can become financially independent, and wanting to believe these allegedly succesful people can help you achieve your dreams, dresses you with a particularly distorted pair of lenses.

    Taking a step back, one who's been in such an organization, can objectively report just how fallacious it all was.

  2. Belief must be backed by faith. Faith without works is dead.

  3. Hi Lucy, did you know that Amway is a business and not a religion?

  4. BAHAHAHAHAHA you got 'em GOOD, joe!

  5. I see this with my friend that just became an IBO. He is buying things at full price to "invest" in his business and when he gets his check in the mail for $10 for the $300 he just spent, he claims it as profit, When I say I don't see any profit in that, they say I need to change my thinking.

    Amway is a very scary "business" that I am just going to stay away from.

  6. I have a BA in Accounting and an MBA. Here's the quick formula for determining business profit:

    Gross Revenue(Gross Sales)
    minus Cost of Goods sold (what products cost you wholesale)
    Equals Gross Margin, NOT Net Profit. You still need to deduct EXPENSES as follows:

    Gross Margin
    Minus Expenses such as advertising, office space, gas/mileage, promotions, postage, etc.

    Equals Gross Profit before taxes

    Minus Taxes
    Equals Profit after taxes, AKA Net Profit.

    Whoever disagrees with this standard formula has no understanding of business or financial management.
    "There are no wealthy financial illiterates"
    Nuf said.