OK, I think I’m tired of blogging about Amway now, so I’ll finish up with this post as conclusion.

As the “creating wealth” tract was turned to the last page, it had an image which contained two empty blocks. My evangelist filled in “Amway” and “NW21” into these blocks. Now the secret was out. It was revealed what this guy was selling all along! And somewhere deep down I remembered hearing about these two companies, and what I heard wasn’t good. So I understood why he was hiding the company he was presenting up to now. First had to convince me how poor I was and how quickly I can make money.

There was a second part, however: I could immediately call up the wikipage on Amway, note the recent court cases against them, note the sociological work comparing Amway to religious cults. Had I knew before the appointment what company I’ll be speaking to, I could have prepared for this. When he finished, I asked about some of this. Answers focused on how legal this company are, and on their 90-day money back guarantee.

I was told about the 8 couples in South Africa who made it to diamond level, which meant a R1.6 million a year income. This sound like a lot, but since they work with couples, it’s R800000 per person, and then you still need to deduct all your business expenses from this, since the R1.6 million isn’t profit, it’s income for the business. Suddenly the riches doesn’t even seem to be that much riches anyhow. Well, R1.6 is a lot of money, and probably more than I’d even earn, or really care to earn, but in the business world your not really noteworthy. Also, if only 8 couples could actually make it, then I can be sure that with my low commitment to marketing I will never make it. This is like telling a worker the CEO’s salary then he apply for a job. He know he’s never gonna get that salary, so why should this even motivate him?

The last thing that I found really really strange was the gender issues in the approach. The man invited only me, alone. But the whole interview was about how me and my wife can make this huge amount of money. No thought for the possibility that maybe we like to be independent people doing different stuff, and not even considering that if you want the both of us to buy into a business idea, then both need to be invited. And all the examples he used was about married couples running this Amway thing together. Some of my friends who attended similar events in the past confirm that this is always the case, and the Amway South Africa wiki also confirm this.

So with this I’d like to conclude: I have questions about the ethics, and I can understand that people would run businesses which is ethically questionable. I believe a time will come when Amway, as with similar schemes in the past, will be found illegal and end, but I can understand that people would want to make as much as possible from the scheme while it’s still  possible. However, not even in the church do we still work with the idea of “pastoring couples”. What is behind this strong emphasis on couples selling Amway? Forget the money. The feminist in me becomes a skeptic…

I’ve shared my invitation, the introduction, and the explanation which my Amway evangelist gave on how economics work. Now for the juicy part: pyramids 😉

I have to confess: the guy lost me in the next part of the conversation. This was where the system (which still had no name) was explained. At first it was quite easy to follow. He identified the problem with how things are working by pointing to “conventional distribution” and “personal franchise”. The conventional way would be that a manufacturer provides products to a wholesaler, which provides it to the retailer, from which you would buy it. Instead, the “creating wealth” tract suggested that I become a “prosumer”, which imply that I should buy directly from the manufacturer.

Now this kind of made some sense to me. Since I’m into all this ecology stuff, I buy into the idea that we should shorten the distance between the manufacturer and the user (although in ecology this would imply shortening the physical waste being created in the moving around of products, not necessarily shortening the hierarchy of distribution), and there is nothing new to idea that I should buy higher up in the hierarchy. That’s what the whole “straight from the wholesaler” thing is about, and even some “straight from the manufacturer” sales. However, if cutting out the middle-man was what “creating wealth” was about, then the next section of the tract should have been a list of manufacturers in and around Pretoria, with URLs for their online orders. And I know that you do find factories around Pretoria where you can buy straight from the manufacturer. What followed made one big mess of this, however. Also, if these products were so cheap, why not provide me with a pricelist? That would seem the obvious thing to do!

There was the promise that in my buying directly from the manufacturer, I will be saving 30%. Then the first picture of the hierarchy which I will be becoming part of appeared. I was not simply buying directly from the manufacturer or the wholesaler (as I would be doing when going to Pretoria West or Silverton), I was to become part of a team of consumers buying together so that I can earn 21% rebate on my money, and an extra 4% which I didn’t understand. So, 25% of 30% would only come when I’m part of this team of buyers.

Next, I started gathering that I won’t be ordering from any manufacturer directly. I mean, I wasn’t getting a list of addresses, giving me the power to drive over to a factory or a farm, and buy my milk or cookies, I was to order through some kind of network, which would package stuff for me and deliver to my home… suddenly this started sounding quite similar to the wholesaler and the retailer which I’m used to. And actually, I think we have a better deal! Cause when I want fresh products, I drive down to the local mom&pop fruit and vegetable shop down in Lynnwood road. Small little place, which sell fresh products which I would guess has a very short line in delivery. It doesn’t have any wrapping, and they don’t stock plastic bags. They are able to sell it to me real cheap, its fresh, and they employ enough people to guide me through the shop, to hand our a peach that I can taste when I walk in, to carry the box of vegetables to the car. Real nice place! I’ll recommend them as the economically en eco-friendly option.

The last straw was when they started drawing all these pictures of how I should be building teams of consumers under myself so that I can earn masses of income from their buying through me, or me earning money from their consumption, or something like that. Gone was the “directly from the manufacturer” part. For this product to reach my house, a whole ordering and delivering system was in place, packaging it, importing it (since I could gather by now that some of these products was not manufactured in South Africa), and finally, handing out profit and bonuses to people in some kind of hierarchy which I was to become part of.

However, the hierarchy was so complex I couldn’t quite follow the guy. He couldn’t tell me how many people would average a team.  What I could figure out afterwords was that if I build a network consuming R200000 of products which was part of this business which the guy was selling (still no mention of Amway or Network21), I will make R15000 per month, plus R75000 in bonus. Quite a profit I, the new middle man, could make if you would be willing to believe that I, and those I recruit, was actually buying directly from the manufacturer. But I’ll refrain from the calculations at this stage, since I’m simply telling a story.

(lastly, some google searches reveal that buying Amway would actually be more expensive. Can’t comment on that though, since I still haven’t received a price list).

Amway: going for the catch

November 2, 2010

This is the second part of my story on Amway. Part one, where I described the invitation, can be found here.

Friday came, and we were both on time. Like a good evangelist, he didn’t start out saying “Hi, I’m into Multi-level-marketing, and I want to recruit you”. If ever you had any evangelism training, you know that’s not how it works. Soften them up. Ask about work. Ask about life. Share something about yourself. So we played the game. I knew my coffee wasn’t being payed for so I can tell him what my first two years of church-work was like, and I was pretty sure we weren’t going to go into the detail of my studies in ethics (although even that were discussed), but I knew we had to dance the dance.

Then came the promise that he won’t be using a lot of my time, and out came the piece of paper, pen, and a small tract titled “Creating Wealth”. Still, I was unsure what he was selling, but the dance continued:

Question 1: If you and you’re wife were to have R10000-R15000 extra per month within 9 months from now, what would you be able to do with it?

Question 2: What has changed in your financial situation within the last 6 months, and what will be changing in the next 6 months?

I knew that these were the catch questions. Like any good evangelism technique, you have these questions which you can predict with 99% certainty what the answers would be, partly because everyone know what you are supposed to answer.

In this case, he just assumed that we’d want more money, and since no one in society ever says: “you know what, I’m really happy with my income and quality of life”, this is a pretty good assumption. And everybody would be able to find something which they hypothetically can do with more money, and if you can’t think of something, the “Creating Wealth” tract has some ideas (including, if all else fails: “Charity”).

My answer: We’d get rid of our study-debt. This was both true, but there is also a catch in this answer, since this imply that we don’t need more money indefinitely (like this exercise would prefer I indicate). So he pulled out some more answers from me, until he had “traveling” (which I didn’t really say, but OK, I can see how he interpreted my answers as “travel”), which was a nice one, since this would always require more money.

On the second question: Well, I said nothing changed in the past 6 months, which wasn’t really true, but for the sake of the dance we were dancing, this was the answer I was willing to give him. As for the coming 6 months? I hope I’ll have my Masters finished by that time. In response to that answer he wanted to know if that will help me financially, and I silently thought: you really don’t understand a thing do you? A masters degree costs money, is doesn’t pay, but it’s not about the money, it’s about learning, about the research, about the ability to think.

But the catch was over. He had on paper that I will have use for R10000-R15000, and that at my current rate of change I wans’t going to become rich. Assuming that I want to be rich (I mean, that’s what everybody want, isn’t it?), this established the foundation for the next step of the conversation: Teaching me about economics. You guess it: Kiyosaki.

Amway: the invitation

November 1, 2010

After my brief introduction to Amway on Friday, I’ve decided to write some personal reflections on the experience. This doesn’t claim to be any kind of analysis of Amway, although, I’d like to do that if time allows. Feel free to share your own Amway stories.

So I got this call last week, from a guy I kind of remember meeting, but only because he told me that we met at this specific place (it was a supposedly highly academic discussion of theology, which become more and more shocking as the story proceed). Nice guy, really nice guy, I’ll give him that, I think we might be friends if not for this white elephant which then suddenly entered the room.

He started out by asking me whether my plans is to be in ministry full-time for the rest of my life. That question has only one answer: No. Since I’m 26, and no one knows what the future of full-time church work in South Africa is going to be, and since I’m not in a full-time position at a church at the moment.

Next he said that since he met me, he wanted to discuss this business idea with me. He and some friends has this network in which they group people together to created assets which can then create a steady flow of income for them.

Now, I’m a skeptic when it comes to the rich who build up any kind of asset which will then create money without them having to do anything. A good friend summarized my own discomfort a while ago (she might reappear later in the story) when she said: money don’t work for you, other people work for you. I’m also highly skeptical when anyone phone me with any kind of business proposal. You see, I really don’t have capital on hand. I don’t get a large salary (I try and find the balance between being able to buy books and having the time to read them, no sense in having money to buy books and no time to read them), and I’m really not into any kind of business thing.

But I was intrigued by the invitation. My main motivation was academic in nature. My interest in ethics, specifically ethics and economy, drove me to find time for this appointment, since every red flag I had was already warning me that this will be a really interesting experience.

To test my gutt feel, I asked the caller what the name of their business was (I am the google junky, so I like to do my research before meetings such as this one), his answer? Something along the line of: “We don’t really have a name, it’s not really a business, more like a network of friends bla bla bla”. Ok, last red flag was waving! I just had to attend this meeting. So I made an appointment for Friday…