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TEAM EORO Approach… Same Old Approach

November 11, 2008

Orrin Woodward has a new post on his site titled Anaheim Seminar – Each One Reach One Explosion! in which he is excited over the attendance at a recent Southern California seminar. Note how Woodward places such emphasis on bringing new people in.

This is what happens when groups get extra tickets and promote to the new depth that is built. Activity leads to depth, depth leads to numbers, and numbers leads to long lasting volume!

I remember my upline leaders were always promoting the next function, saying things like, “Missing this function will set your business back six months!” or “Attending the next function will lay the groundwork for incredible growth!” Looks like nothing has changed.

The only thing this EORO approach is doing is bringing in more money into Woodward’s TEAM coffers. How much were tickets anyhow? If people were to get something substantive out of the seminar, maybe it would be worth the entrance fee. Just motivation, however? No, thank you. Sure, they might pay lip service on how to sell MonaVie, but really, how hard is it to sell a single product? At least with the Amway/Quixtar business, you could make the argument that you need some training in order to sell the thousands of products available to them, but with MonaVie there’s really only one thing to sell!

Of course, MonaVie distributors need lots of motivation to sell the $40 juice… to themselves. How much of MonaVie is actually retailed to non-distributors anyway? Is it anything like that of Amway/Quixtar core-line products? To me, it looks like TEAM is “teaching” a variant of the Buy From Yourself And Teach Others To Do The Same (BFYATODS) model, and we all know how well that works.

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85 Comments
  1. Porkchopjim permalink
    November 11, 2008 2:47 pm

    I’ve actually seen MonaVie juice sold in retail stores. Well, not actually sold, but for sale anyway.

    I’ve seen XS for sale in one location: an ‘honor system’ fridge at a muffler shop. At least that IBO made an effort, and had a decent chance, of 10 customers buying (or at least stealing) something every month.

    The REAL information is in the CDs, of course…which are recordings of the ‘seminars’ resold to the people who attended the first time around.

    Well, if it weren’t for those ‘seminars’ – cutting edge ‘functional drink’ science would never get to see the light of day. Proof? Try to find some yourself! Proponents here of dubious nutritional advice have a hard time themselves.

  2. November 11, 2008 3:23 pm

    There’s plenty of information for those with an interest.

    If all you’re trying to do is criticize, and not find common ground, you can do that as well.

    Proponents here of dubious interest have a hard time themselves.

  3. Porkchopjim permalink
    November 12, 2008 8:14 am

    Common ground would not include assisting you in establishing your own tool kingdom.

    It would also not include trying to defend the dubious quality products for the price.

    It also doesn’t include telling people that they make a profit buying products from themselves.

    It certainly doesn’t include any consideration of ‘valuable information’ that has yet to be disclosed on any of the thousands of ‘training’ recordings that exist.

  4. November 12, 2008 8:31 am

    I don’t need any assistance with “establishing” my own “tool kingdom.” LOL

    I don’t need any help “defending” quality products for the price, I’ve stated many times I find some of the prices good, others okay, and still others too high. Someone else may put a particular product in a different category, and that’s okay with me. LOL

    I don’t need any help with describing how an IBO pays less in net cost compared to even a wholesale cost customer, because IBO’s do make a (small) profit buying products for themselves, via the PV/BV. LOL

    I don’t need any help with explaining how the recordings multiply time effectiveness, I’ve discussed the “valuable information on the recordings many times, but if you don’t get it, it’s no fault of mine. LOL

  5. Joecool permalink
    November 12, 2008 11:45 am

    What tex has a hard tome doing, is finding blogs and forums that will allow him to post comments. LOL

    Being that MV has only one (1) product, why would anyone need more than one function or instructional CD to learn about the product and how to sell it? Why would you need any information if your focus is on “buying from yourself”?

  6. November 12, 2008 11:54 am

    Uh-oh, looks like Costco is a scam/cult:

    http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/5-best-and-worst-costco-deals.aspx

    jc,

    I don’t mind being “banned” from any blog or forum that can’t handle the truth. Why should I waste my time at those places?

    If all you think it takes is one function and one CD, why are the largest groups ones that recognize it isn’t that simple?

  7. Porkchopjim permalink
    November 12, 2008 12:40 pm

    Well, you asked Mr. DeVos for help to establish your ‘tool kingdom.’ Guess you’re either lying to me now or lied to him then.

    You only have to defend the prices to yourself.

    IBOs make no profit buying from themselves. A rebate is not profit. If the world only had overpriced Amway products, you might end up with more money left over compared to a regular customer – but that’s still not profit, and there are more than Amway products to be had.

    The recordings multiply tool income. Sitting around on a 3-5 hour a week ‘system’ where 3 hours of it is listening to useless tapes is not effective time management.

    While you’ve discussed (i.e. – claimed) there is ‘valuable information’ – you’ve never described it, nor provided anything other than your beliefs.

  8. Joecool permalink
    November 12, 2008 2:08 pm

    Tex, you weren’t banned for posting the truth. You were banned by various forums and blogs for pushing your agenda on someone elses’s blog instead of writing your own. You were also banned for personal attacks and trolling – taking things off topic.

    Heck, I believe you were banned here but Amthrax allowed you to post – when you do so respectfully and on topic.

    One function or tape should be sufficient to sell MV. How much instruction do you need to sell one (1) product? How mush information do you need if you self consume that one (1) product?

    BTW, how’s the weather in Plano?

  9. Porkchopjim permalink
    November 12, 2008 2:56 pm

    If all you think it takes is one function and one CD, why are the largest groups ones that recognize it isn’t that simple?

    Because the intent of getting you to join is to buy lots of CDs and functions. It has nothing to do with whatever product is used to cover the scam.

  10. Gina permalink
    November 12, 2008 3:20 pm

    Unless those bonuses for PV, BV and all that come in and completely cover the monthly expense for buying the products and then still have some left over then it is not a profit.

  11. mike permalink
    November 12, 2008 4:42 pm

    Gina, I guess that would be like going to Wal-Mart and buying something that is overpriced with a special rebate.

    A month later they send you a check for the rebate. So basically they get to hold your money for a month, while you think you are getting a great deal.

  12. November 12, 2008 5:01 pm

    mike, that is how it would be IF you are thinking ONLY about buying products for your own use, and IGNORING customer and downline volume bonus money.

  13. Gina permalink
    November 12, 2008 7:55 pm

    Yeah, hold your money for a month and then don’t even pay you interest.

  14. mike permalink
    November 12, 2008 11:37 pm

    I wonder if they even have a tape about keeping a postive cash flow.

    The only type of flows that I heard about was tools.

  15. November 13, 2008 5:56 am

    mike,

    I agree with you completely regarding positive cash flow. I have NEVER heard the words “positive cash flow” or “net profit” on a single tape, CD, or any type of “business” meeting.

  16. Porkchopjim permalink
    November 13, 2008 7:47 am

    Tex – Mike didn’t ignore it, he’s got it 100% correct. There is no profit buying things from yourself.

    The only true profit comes from selling downline and to customers, which has no impact on any ‘profit from buying from yourself’ no matter how hard you think there is.

  17. November 13, 2008 8:02 am

    Here’s another way of looking at the profit issue; I define profit as any difference between what a wholesale customer (IBO cost) pays and what an IBO gets back.

    This includes the 3-25% personal use PV/BV and customer BV/PVretail markup volume, which depends on your total volume, and downline volume bonus, which depends on both total volume and structure.

    It’s really quite a simple concept, and not worthy of debating for years and years.

    If you want to use a different definition, fine. But the above is my definition.

  18. Gina permalink
    November 13, 2008 9:08 am

    I guess we could all go around in ife making up our own definition for words, but where would that get us? Example…officer stops a car speeding. Officer says “do you know what the speed limit on this road is” and the driver says…”my definition of limit differs from yours. I define limit as more of a suggestion.”
    So Tex just illistrated the flaw with many IBO’s. They have removed themselves from reality. Nevermind that the entire world has the same basic business practices, IBO’s will go ahead dismiss those and make up their own.
    Here is a good thing to try….go to the bank to get an approval for a loan using your business and its profits…using Tex’s definition of profits…and see how well that goes.

  19. Porkchopjim permalink
    November 13, 2008 9:30 am

    There is only one way of looking at the profit issue. Your definition is incorrect. The ONLY profit comes from downline and customer sales. Getting additional savings for things you purchase yourself is not profit:

    Customer: -$25 for XS purchase (hypothetical). Total = -$25.

    Tex: -$25 for XS purchase, +$3 rebate. Total = -$22.

    How is -$22 profit? It’s not.

    But – Tex will say – he has $25 worth of XS for only $22! Here’s where Tex gets lost: that is only true IF he sells that XS to someone else for $25. If he uses it himself – it’s not worth $25. It’s only worth $22.

    How can I say that? Because if Tex were to return his XS to Amway and it was TRULY worth $25, he’d get $25 back. He won’t. He’ll only get $22 back from Amway. (He gets docked the PV/BV because that item no longer is ‘sold’ – so he might actually get $25, but they’ll take the other $3 next month).

    Simple – Texie: there is NO PROFIT unless you sell the item to someone else.

    And if you can’t even get the most basic business ‘definition’ correct – profit – well, that’s just more proof of how good your 15 years of valuable ‘Amway’ training you bought so much of.

  20. November 13, 2008 9:59 am

    Gina,

    What is wrong with the definition? You used a lot of words, but none of them pointed out a problem with my definition.

    pcj,

    The profit is not the $22, it’s the $3. It’s small compared to the customer and downline profit levels, so why are you making such a big deal out of a small amount of money?

  21. November 13, 2008 10:09 am

    There are 3 ways to get into your own business:

    1. Start a business. Suitable for a person with lots of capital, a big risk appetite in case it fails & with prior experience (hence no need for hand-holding guidance).

    2. Buy a business. eg. McDonald’s. Subway. Burger King. Suitable for a person with lots of capital but low risk appetite & no prior experience. (That is what he is paying so much money for – the prior experience of the other franchisees aka the training system – otherwise why pay a million to set up a shop to sell just “one” product – hamburgers?)

    3. Join a business. eg. Network21 Corp. TEAM Inc. BWW etc. These companies teach an individual how to duplicate commitment from person to person, instead of franchising shop-to-shop. Suitable for a person with low capital, low risk appetite & no prior experience. (that is what he is mainly paying for – the prior experience of all the business owners before him) Usually, these companies are tied into a brand name such as Nutrilite, Artistry or MonaVie.

    In the case of TEAM, one is buying more than just CDs on how to sell a fruit juice. One is also buying CDs on personal growth, leadership and self-development.

  22. Joecool permalink
    November 13, 2008 10:29 am

    If you don’t “start” or “buy” a business, aren’t you just an employee? You can’t just join a business. If you could, I would “join” Walmart.

    Another fallacy is that you always need a lot of money to start a business. One of the ways IBOs try to bait prospects into joining.

  23. November 13, 2008 11:48 am

    Hi Joecool,

    You mentioned that needing a lot of money to start a business is a fallacy.. of course it is, until a startup realises that because it started with small capital, it is an uphill climb to main street and especially if it is competing against the big guys in its industry.

    An Amway business is still a business in a legal definition (independent contractor), just like an insurance business is also a business in a legal definition, just not the same type/scope of business as one where a person has to invest in huge capital and do lots of sales, marketing and advertising. (ie. Option #1 – “Start your own business. It is the best, if you can stomach the capital requirements and therefore the costly risk of failure”)

  24. Porkchopjim permalink
    November 13, 2008 12:25 pm

    The profit is not the $22, it’s the $3. It’s small compared to the customer and downline profit levels, so why are you making such a big deal out of a small amount of money?

    The profit is MINUS $22. Negative $22. $22 dollars you don’t have anymore. $22 spent. $22 gone.

    In this example, there IS NO downline and customer volume. Even if there was – you buying products does not increase your ‘profit’ at all.

    (One Exception: if you can ‘purchase your pin’ for less money that you can get from downline and customer volume due to a level increase – then and only then does ‘buying your own products’ make you a profit.)

    Whay am I so upset about such a small amount of money? I’m not.

    I’m upset that after 15 years of Amway training and no less than $30K spent on ‘tools’ and functions over that 15 years you STILL DON’T KNOW WHAT ‘PROFIT’ is.

    And PS – comparing yourself to the ‘customer’ and saying that you ‘made’ three dollars compared to him is not ‘profit.’ Profit is not measured against anything other than what you start and end with.

    You’re right – it’s not hard, but it’s apparently too hard for you.

    And Rykel: a ‘business’ that doesn’t do lots of sales, marketing, advertising or even provide a service isn’t much of a business.

  25. Joecool permalink
    November 13, 2008 12:45 pm

    Buy from yourself is not a business. Period. How people fail to see that boggles my mind.

    If I pay $22 for a case of XS, or pay $25 and get back $3, the net result is that I have spent $22. You are only fooling yourself if you pay $25 for a case of XS, drink it yourself and then put your $3 rebate in the bank. The net result is the same.

    The only way you actually generate a profir is if you sell that same XS to a customer for $25 and keep the $3 profit, plus some rebate. Or, if you get enough downline suckers to buy the XS so you get a cut of their rebates.

    Great Story on Tex:

    http://quixtarandamwayinformation.blogspot.com/

  26. Gina permalink
    November 13, 2008 1:36 pm

    So if I get $3 in the mail from Will’s Widget World because I spent $25 on a widget there, are you saying that those $3 I got back is profit?
    You are right Tex I did use a lot of words. All of which have concrete definitions, but it seems that if you didn’t understand it may be because you have your own definitions for many other words in the English language so I will elaborate. One can not make up their own definitions to words. The world functions and has based itself on those pesky definitions found in dictionaries. If your definition is not found in a published dictionary then it is invalid, useless, worthless, and meaningless. Doesn’t matter how many other IBO’s may share your definition or how you may feel the rest of the world is insane for not recognizing your definition, the fact remains that it isn’t recognized therefore is inexistant.
    My 3 year old thinks our dog is a horse. She calls him a horse, she believes he is a horse and in her mind the definition of what we call a dog is a horse….does that mean my dog is a horse?

  27. November 13, 2008 1:52 pm

    jc, you don’t need a lot of money to start a business. Amway is an example. However, the LCK’s rip you off after you get in, that’s why I developed my own, nearly free tool system.

    pcj, the $22 isn’t thrown away, it is used to purchase products, in your example XS Energy drink. That’s not profit or loss, it’s a purchase. The $3 more you get paid is the profit a customer never gets paid.

    I’m upset that after 4 years of getting schooled on various blogs, you STILL DON’T KNOW WHAT ‘PROFIT’ is.

    jc, not if the customer pays $25 and gets nothing back.

    Gina, if another person pays $25 and doesn’t get $3 in the mail from Will’s Widget World because they are considered a customer and not an IBO, yes.

  28. Porkchopjim permalink
    November 13, 2008 3:08 pm

    that’s why I developed my own, nearly free tool system.

    Don’t forget completely useless and unused.

    The $3 more you get paid is the profit a customer never gets paid.

    You ARE a customer at that point, Tex. You only got a better price. The difference between the two is not profit.

    Once you drink your XS – you are still $22 in the hole, not $3 above it.

    I buy a soda at 7-11 for $2.

    I buy that same soda at Megaworld for $1.50. Instant rebate – instant Texprofit of $.50?

    I buy a membership at Costco and buy that same soda for $.50. Instant $1.50 rebate, and instant Texprofit of $1.50?

    It’s the same thing, isn’t it, Tex?

    NOTICE in each case, I have less money than I started out with. In some cases $2 less, in some cases only $.50 less.

    Less money is NOT profit.

    Here’s how profit works:

    I start with $2.

    I buy a soda at 7-11 for $2 and sell it for $2. No profit.

    I buy a soda at Megaworld for $1.50 and sell it for $2. $.50 profit.

    I buy a soda at Costco for $.50 and sell it for $2. $1.50 profit.

    In the first case – I have $2 left. No profit. But, that’s still more money than my rebate example, isn’t it?

    In the second and third cases, I have $2.50 and $3.50 – more than $2! Profit!

    You catching on yet, after 15 years of being wrong?

    Only in Tex’s ‘almost free’ tool kingdom does less money equal ‘profit.’

  29. mike permalink
    November 13, 2008 3:36 pm

    Let me state this as simple as possible.

    Profit is made when you make a return on what you sell. Let say it cost you $10 for a product, you sell it for $15, you make a profit of $5. We all agree with that, as well as another example of profit is buying something that is a benefit for the cost, If I buy a product that does for me, what I expect or better, for the price I paid, then I made a profit.

    In the Amway business, the cost of an product may be more than the wholesale list price, there is, shipping, tax, time, paperwork, shipping containers, gas, etc..as well as the cost of tools, all that is the cost of doing business.

    Tex states that tools should be cheaper or free, but there will still be a cost, which has to be included in the purchase of product, regardless if it is for personal, customer or downline.

    If your only expense is gas and your car, that has to be subtracted from and money made from customer/downline sales.

    Even in PCJ example of buying/selling a bottle of soda, he has to include the cost to get that bottle, and the time to sell it.

    So although he may make a gross profit of .50, and lets assume he spent 2.00 on gas, he has a net lost of -$1.50

  30. Gina permalink
    November 13, 2008 3:51 pm

    sorry Tex but that does not equate to profit. It equates to a savings of $3. Savings and profit are two very different things even if you choose to ignore the standard, acceptable, used and published definitions of both words.
    This reminds me of that Shel Silverstein poem of how the kids dad gave him $1 and he traded it for 2 quarters because 2 is more than one, so he traded those 2 quarters for 4 dimes because 4 is more than 2 and so on until he had 10 pennies. He was so proud of what he had accomplished so he ran back to his dad to show him and noticed that his dad got tears in his eyes. For the kid the tears were that of joy and pride in his son. LOL!!!! If I can find it on the internet I will post a link.

  31. Gina permalink
    November 13, 2008 4:03 pm

    I found it!! A little humor is needed now and then so here you all go…
    http://www.fi.edu/pieces/knox/smart.htm

    “Smart” by Shel Silverstein

    My dad gave me one dollar bill
    ‘Cause I’m his smartest son,
    And I swapped it for two shiny quarters
    ‘Cause two is more than one!

    And then I took the quarters
    And traded them to Lou
    For three dimes — I guess he don’t know
    That three is more than two!

    Just then, along came old blind Bates
    And just ’cause he can’t see
    He gave me four nickels for my three dimes,
    And four is more than three!

    And I took the nickels to Hiram Coombs
    Down at the seed-feed store,
    And the fool gave me five pennies for them,
    And five is more than four!

    And then I went and showed my dad,
    And he got red in the cheeks
    And closed his eyes and shook his head–
    Too proud of me to speak!

  32. November 13, 2008 4:14 pm

    pcj,

    If it stopped at that level, it would be the same thing. But the self consumption is only a small part of a much bigger picture. I’m okay with calling it a rebate, as I said above.

    mike,

    I agree there will always be overhead, the goal is to minimize the overhead to get to a net profit position sooner (lower PV level) and not have a group of lying cowards bragging about their “success”, which is based on the tool scam lie.

    Gina,

    A dollar is a dollar. If you want to call personal consumption PV/BV bonus a rebate that can range from 3-25%, go for it. I already stated this above, as well as many times previously.

  33. Porkchopjim permalink
    November 13, 2008 4:17 pm

    Mike,

    I wasn’t trying to confuse Tex with all those additional costs. We can’t get him over the hump of understanding that you don’t make any profit just buying something, nevermind more advanced concepts of determining what something actually is worth.

    Gina – that’s a PERFECT poem!

  34. Porkchopjim permalink
    November 13, 2008 7:16 pm

    It’s a ‘much bigger picture’ that allows you to consider rebates as profit? Texgarbage. You’ve been wrong for 15 years on this very simple concept that has keep you delusional: you can not profit, at all, just buying something. From yourself or from someone else.

    Your ‘bigger picture’ is your little circles that will propel you to ‘walking the beaches’ because you’ve convinced your downline to consume at least 100PV of their own junk so they get a rebate check that you tell them is ‘profit’ – an outright lie (even if you don’t think so) – so you can skim from their volume.

    I don’t CARE if you are ‘OK’ with calling it a rebate, because THAT’s what it is.

    I am, however, OK with you continuing to call it ‘profit’ because that’s one of the best warnings against your ‘almost free’ tool system I can imagine.

  35. November 13, 2008 7:43 pm

    pcj, how many times do I have to state I don’t care if you call personal PV/BV as a rebate or profit?

    The much bigger picture is the amount of profit that comes from customer and downline volume compared to personal PV/BV volume.

    I was being scammed for 12 years, and I have plenty of company.

    I have been right for 3 years, and not being scammed.

    Again, please don’t tell my customers I can’t profit, because one of them bought $140 of products just the other day.

    I don’t care if they call their personal consumption bonus a rebate or profit, it’s the same exact amount of money, unlike Gina’s lame analogy.

    Fine, you call it a rebate, I’ll call it profit. Again, it’s the SAME amount of money, and is NOT a major amount of money compared to the other sources mentioned above.

    I’m glad you’re okay with me calling it profit, because I couldn’t care less what you think, as you don’t think very often. LOL

  36. mike permalink
    November 14, 2008 12:41 am

    The topic of this post is that to even consider making a profit in the Amway business, one has to “lie” to get anyone to get anything done in the Amway business.

    The really big lie is “People need the Amway products.” They don’t, just like they don’t “NEED” a bunch of other stuff. To sell the products, they created customers out of their saleforce.

    I work retail, it is better for me to buy from my store. I get a discount on some items, and a bonus depending on overall sales and performance.

    However, that it a very small percentage of what I sell. Nor am I required to “buy from my store” to make the bonus. Nor do I have to attend a meeting to make the business work, or listen to tapes, to do a better job. (I do have to take courses to learn new skills, but I am paid to take them.)

    If I want to make more money, I have the chance to do so. It will require that I work harder, and take on more responsiblity, learn new skills and require more time.

    But I don’t have to spend more to get to that level.

  37. November 14, 2008 5:21 am

    The differences you point out are because you are an employee, not a business owner.

  38. Joecool permalink
    November 14, 2008 10:52 am

    Tex is also an employee. Business owners don’t think buying their own stuff is a business.

  39. Porkchopjim permalink
    November 14, 2008 11:17 am

    pcj, how many times do I have to state I don’t care if you call personal PV/BV as a rebate or profit?

    How many times do I (and everyone else)have to point out that your personal PV check is NOT profit?

    You have it wrong to begin with – why should you care what I call it?

    The much bigger picture is the amount of profit that comes from customer and downline volume compared to personal PV/BV volume.

    The ONLY profit comes from downline and customer volume.

    I have been right for 3 years, and not being scammed.

    You continue to be a cultist moron. You just don’t know any better – because of the ‘valuable training’ you’ve had for the last 15 years.

    Again, please don’t tell my customers I can’t profit

    And WHEN did I say that? Never.

    That’s five times you’ve deliberately tried to change what people have said on this and the last post.

    Funny how that always seems to happen when you paint yourself in a corner. Are you incapable of being honest? Is that one of the traits Amway has instilled in you?

    Fine, you call it a rebate, I’ll call it profit. Again, it’s the SAME amount of money,

    Call it profit and cement your title as a fool. The AMOUNT has nothing to do with it. The SOURCE has everything to do with it. Even a three year old knows that if you take money from one pocket in put in in another – he hasn’t ‘made’ any money. What’s your excuse?

    I’m glad you’re okay with me calling it profit, because I couldn’t care less what you think, as you don’t think very often.

    I love it when Tex calls someone stupid.

  40. November 14, 2008 11:44 am

    I already said I don’t care what you call it, I simply clarified what I call it and why.

    Under your definition, the only profit does come from customers and downline, because YOU call personal PV/BV a rebate.

    You’ve said many times all I have is my personal volume, which is absolutely FALSE. That’s five hundred times you’ve deliberately tried to change what I have said on this and many other posts. Funny how that always seems to happen when you paint yourself in a corner. Are you incapable of being honest? Is that one of the traits bed-pan changing has instilled in you?

    If I get money back a customer doesn’t get back, I call it profit. Even a three year old knows that.

    I love it when pcjimmy calls someone stupid.

  41. mike permalink
    November 14, 2008 3:04 pm

    The concept of being an IBO is an illusion. No IBO owns their “own business” the only benefit of being a Amway sales person is that you get paid on performance and sales.

    So the more you sale the more you make, just like any other saleman in the workforce….however you are not required to do anything other than pay a yearly fee.

    Any expenses come out of your pocket, from either your sales or money from another source, and that would be negative profit.

  42. Gina permalink
    November 14, 2008 4:42 pm

    So it’s not reality that defines profit, it’s the title you are given within Quixtar that decides whether or not it’s profit? Interesting.

  43. November 15, 2008 6:06 am

    Gina,

    One of the reasons I prefer the word “profit” to “rebate” is because it varies from 3-25% of BV. Any rebate I am familiar with is fixed, not variable and dependent on your downline volume.

    It’s money back, available to IBO’s and not customers. As I’ve said many times, call it whatever you want, I call it profit. Unlike your story, we’re not talking about changing the amount of money, we’re talking about a label.

  44. Porkchopjim permalink
    November 15, 2008 7:55 am

    You’ve said many times all I have is my personal volume, which is absolutely FALSE. That’s five hundred times you’ve deliberately tried to change what I have said on this and many other posts.

    No – that’s now SIX times that you’ve changed what I’VE said.

    Plus, you have to steal my words because you have none of your own? Your 10,000 tapes/CDs and books don’t cover ‘profit’? Guess not.

    What I’ve said 500 times is that your personal volume, REGARDLESS OF ANY CUSTOMER OR DOWNLINE VOLUME, provides you with NO PROFIT at all.

    So once again you are being dishonest – just like your cult tells you to do when you get caught saying false things. What’s one more lie, I guess?

    And I KNOW you call it profit when you save on purchases what you consume yourself. That’s why I can say you are completely wrong and do not understand what profit is. You do not get to make up your own definitions – which you are trying to do – because it fully Texposes the degree of business retardation that you have. We’ll go back to talking about your multitude of ‘black friends’ laughing as they stand over your sholder watching you type racist insults if you’d like to discuss some of the other retardations you suffer from.

    It is no different than some of the other cult members who sell their products to themselves at full retail price so they can claim that their business makes a profit. And before Tex goes all “oh I forgot to read what he said so I can avoid the painful truth” (which he will) – the price you sell to yourself to begin with – retail or IBO cost – makes no difference when you pretend to profit from yourself.

    And I’m not kidding about the full retail price sales to themselves – some of those valuable ‘training systems’ instruct cultists to do that so they can claim that profit from their business pays for their training…when it’s just money from their own pockets.

  45. November 15, 2008 8:38 am

    Okay, now it’s six hundred times you’ve deliberately tried to change what I have said on this and many other posts. You’re making the assumption I care what you said, not a good assumption.

    I’ve heard the same issue about IBO’s buying at retail and counting the difference as profit. My LOS/LOA never did that, but I agree that is totally “cooking the books.” However, the PV/BV discussion is different, because it isn’t available to customers and is variable.

    Gina,

    Would you agree the personal PV/BV “rebate” applies ONLY to the first 3%, not the remaining 6-25% profit that occurs when the volume grows from customers and downline? This assumes the IBO buys less than 300 PV, buying 300 PV or more would put them in the 6% bracket.

  46. November 15, 2008 12:29 pm

    Gina,

    Here’s an example: For discussion purposes, every IBO consumes/sells 100 PV/$300 BV, which costs about $300. Let’s say your volume, near the end of the month, is at 3,900 PV. This puts you in the 18% bracket, which means your personal PV/BV will result in a rebate/profit/money back/cash/check/deposit, whichever term you want to use (the dollars are the same, regardless of the label) of $54. This means $54-$9 (your 3% “rebate”) = $45 of profit, and $9 of “rebate”, correct?

    But, let’s say you didn’t order your 100 PV/$300 BV yet, and you have 3 legs, each doing 1,300 PV/$3,900 BV. This means each group is in the 12% bracket and the group gets paid $468. With your 100 PV/$300 BV, you are now in the 21% bracket, you are paid $1,116 ($2,520- 3X $468).

    Now, if you purchased 99PV/$297BV, you would still be in the 18% bracket, which means you would instead be paid $755.46 ($2,159.46 -3X$468), or $360.54 less. In this example, not spending 1 PV/$3 BV (about $3) resulted in giving up more profit than your products cost.

    Although an extreme example, it illustrates the concept of an IBO buying something not always being “just” a purchase, with “just” a rebate, whether you want to use the 3% ($9)or the amount up to 25% ($75) of personal PV/BV.

    In this example, spending an extra $3 has an over 10,000% return.

  47. Gina permalink
    November 15, 2008 4:28 pm

    It doesn’t matter how, what percent or to whom that rebate changes…it is still a rebate. In order for there to be a profit you would need to (for example purposes only) buy a product for $30, which you then get a rebate of $5, you in turn sell that same product to a retail customer for $35. For this example we will keep it simple and not figure any expenses, so that would then leave you with a profit of $10. The difference is moving the product you purchased from your own personal use to selling the product to a retail customer. If you look you will see that in reality you make MORE profit if you do not pretend that your rebate is already a profit….but then again it does require that the product be sold for more than you purchased it and not be used personally. It doesn’t matter how that rebate may increase or how much other product you needed to purchase in order to see that increase, it is always a rebate until the products are sold at a higher price than that which you paid, including the rebate you received.

    And rebates can and do fluctuate. Whirlpool appliances does it many times a year, just as an example, there are other companies as well. Buy 1 get a rebate of x%, buy 2 and get xx%, buy 3 and get xxx% and so on.

  48. November 15, 2008 6:51 pm

    Gina,

    I don’t sell products at a higher price than I buy them for, I rely on the PV/BV for profit. There are some places in the country where the retail pricing is more competitive with local store pricing, I don’t live in those places and I’m not interested in becoming a “super-salesperson” by selling huge volumes of products at retail prices.

    Do you understand the concept of PV/BV, and/or the example I illustrated, above?

    In your example, the same amount of dollars end up in your pocket regardless what you call it, rebate, profit, or rocks.

    I just pointed out MLM can result in VERY different profit outcomes than your simple example, but you TOTALLY ignored it. It appears to me you don’t understand how MLM works.

    The fluctuating rebates you mentioned don’t come anywhere CLOSE to 10,000% return, do they?

  49. Porkchopjim permalink
    November 16, 2008 7:40 am

    Okay, now it’s six hundred times you’ve deliberately tried to change what I have said on this and many other posts.

    Proven wrong, but it’s more character reference for you thanks to the Tex Transparency Initiative.

    You’re making the assumption I care what you said, not a good assumption.

    Proven wrong – you can’t shut up about it.

    I’ve heard the same issue about IBO’s buying at retail and counting the difference as profit. My LOS/LOA never did that, but I agree that is totally “cooking the books.” However, the PV/BV discussion is different, because it isn’t available to customers and is variable.

    The PV/BV is exactly the same. Customers can resell items marked up to themselves just like you can – they’re just not stupid (else they’d become IBOs). PV/BV is not something magical, and because it is variable has nothing to do with anything.

    I don’t sell products at a higher price than I buy them for, I rely on the PV/BV for profit.

    AND – THAT is Tex’s #1 problem! He doesn’t understand how his ‘business’ works! After 15 years of tapes and seminars.

    Tex – do you know what “The Cost of Goods Sold” is? Doesn’t that basic business principle apply to Amway?

    Now – look at your retarded statement again and appreciate its dumbness.

    I noticed that you had to use my example of buying a pin to justify your entire concept – when it’s an isolated instance and NOT how you claim your ‘PV/BV’ bonus works.

  50. November 16, 2008 1:55 pm

    Proven wrong, but it’s more character reference for you thanks to the pcj bed-pan changing initiative. LOL

    Now – look at your retarded statement again and appreciate its dumbness. LOL

    Oh, I could “shut up,” but I’m having too much fun! LOL

    Now – look at your retarded statement again and appreciate its dumbness. LOL

    The PV/BV is different, because it isn’t available to customers. Put on your bed-pan hat, click your heels 3 times, and try again. LOL

    I never said PV/BV was “magical,” just that customers don’t participate in it and it is variable, which has EVERYTHING to do with everything. LOL

    Now – look at your retarded statement again and appreciate its dumbness. LOL

    I know how it works, there’s 2 sources of profit, personal/group/customer PV/BV and my PERSONAL customer markup. If I’m not looking for a huge PERSONAL customer base and the cost of living is lower in my area, why go to the trouble of trying to sell at retail prices? LOL

    Now – look at your retarded statement again and appreciate its dumbness. LOL

    I know what “The Cost of Goods Sold” means. It definitely applies to Amway, but most other businesses don’t have PV/BV. LOL

    Now – look at your retarded statement again and appreciate its dumbness. LOL

    I didn’t use your example, and didn’t buy a pin to justify anything, the example proved buying a product is not a simple rebate. LOL

    Now – look at your retarded statement again and appreciate its dumbness.

  51. Gina permalink
    November 16, 2008 9:20 pm

    “I don’t sell products at a higher price than I buy them for, I rely on the PV/BV for profit.”

    That isn’t even logical. Do you sell any products to customers…people who are not IBO’s? It would seem by relying on your downlines PV/BV you are supporting the whole self-consuming pyramid problem.

    In order for any money to be considered profit it would need to be in excess of your expenses no matter where you get it.

    “I just pointed out MLM can result in VERY different profit outcomes than your simple example, but you TOTALLY ignored it. It appears to me you don’t understand how MLM works.”

    I didn’t ignore anything. You are. You can not make up your own definitions. All you did was point out that many IBO’s aren’t interested in selling but instead recruiting people who will self-consume products so that they can “make” money from them thus making it a self-consumption pyramid.
    How very convenient for you to resort to the classic tapespeak of “you don’t understand MLM. First, part of Amway’s thing is that anyone can do this. Even you have said how simple it is but yet when someone starts poking holes in your illogical statements it’s “you don’t understand.” Second, What is it you think is so difficult to understand? The fact that you rely not on sales but downlines consumption for money and call it a business? The fact that you have made up your own definitions to words to suit your needs…or is that taught by Amway?

    You didn’t prove anything other than you don’t consider even what you spend on products much less other standard expenses. So you get $45 back on $300 YOU SPENT…means you are still in the hole $255. So now, if you are lucky enough to have 3 legs that actually do 3900PV you potentially get $1116…you forgot to subtract the $300 you spent on your product, $816. Does that stay all with you or do you have to pass it on? Lets say it stays with you. You have $816 to cover expenses, time and the cost of newbie recruiting….for other IBO’s there is also the tools. Then you also have to get to having 3 legs and maintain those 3 legs….good luck, but say you are able….that would eat up even more of that $816. That would put you more in the hole.

    Oh and I never said that no one can make money from MLM…I say that it is difficult and time consuming to make less money than many expected. Quixtar/Amway makes it more difficult with the whole tools issue. And it certainly doesn’t help that they have clearly encouraged IBO’s to remove themselves from reality and create their own definitions for words.

    “In your example, the same amount of dollars end up in your pocket regardless what you call it, rebate, profit, or rocks.”

    This doesn’t even make sense. Do you not understand the concept of business and profit? In my example you get $10 additional money in your pocket, as opposed to keeping $5 in your pocket to begin with using your PV/BV is profit theory. In your world that $5 dollars is profit, in the real world it is just keeping money in your pocket that was there to begin with. In the real world, selling products for more than they were purchased for leads to a profitable business, in your world selling products for more than they were purchased for isn’t.

    “The fluctuating rebates you mentioned don’t come anywhere CLOSE to 10,000% return, do they?”

    Return and rebate???? You must have made up your own definitions on those words as well but OK. You don’t get 10,000% “return” on your “rebates” do you. It’s near impossible. Most people in the real world don’t go around looking to buy products that offer a rebate in order to get a “return”. Rebates just give the buyer a price advantage. In reality offering a rebate is like running a sale. Many rebates though can be offered on top of a sale price thus, further reducing the price, making it a better sale. The only return would come if you sold that item to someone else for more than what was paid. See….right back to the whole concept of selling for more than purchased. No matter how you try to distort reality, you still need to sell for more to make money. Do we need to start detailing expenses?

  52. November 16, 2008 10:53 pm

    Gina,

    This would probably be a lot easier to discuss on the telephone, if you’re interested. Just visit my site and provide a couple of days/times this week, and we can call a conference number. However, I will attempt to explain on this blog as well.

    “I don’t sell products at a higher price than I buy them for, I rely on the PV/BV for profit.” That isn’t even logical. Do you sell any products to customers…people who are not IBO’s? It would seem by relying on your downlines PV/BV you are supporting the whole self-consuming pyramid problem. —- Of course it’s logical, IF you understand PV/BV is essentially a “rebate” (you and pcj seem to relate to that word for some reason) that is built into the price an IBO or customer pays, even if the customer pays IBO cost with ZERO markup. Whoever pays for the item also pays for the PV/BV, which is then given back to the IBO’s depending on their volume and structure. Yes, I do sell to people who are not IBO’s, I mentioned to pcj recently one of my customers recently purchased about $140 worth of products. There are BOTH retailing and self consumption involved..

    In order for any money to be considered profit it would need to be in excess of your expenses no matter where you get it. —- Wrong. Any money that comes back is gross profit, any money in excess of expenses is net profit.

    “I just pointed out MLM can result in VERY different profit outcomes than your simple example, but you TOTALLY ignored it. It appears to me you don’t understand how MLM works.” I didn’t ignore anything. You are. You can not make up your own definitions. All you did was point out that many IBO’s aren’t interested in selling but instead recruiting people who will self-consume products so that they can “make” money from them thus making it a self-consumption pyramid. —- Again, you do NOT understand how MLM works. You just provided further proof.

    How very convenient for you to resort to the classic tapespeak of “you don’t understand MLM. —- The only thing “classic” is your demonstrated misunderstanding.

    First, part of Amway’s thing is that anyone can do this. Even you have said how simple it is but yet when someone starts poking holes in your illogical statements it’s “you don’t understand.” —- That’s because you PROVED again you don’t understand.

    Second, What is it you think is so difficult to understand? —- I don’t think it’s difficult at all to understand, but it’s also clear you DON’T understand.

    The fact that you rely not on sales but downlines consumption for money and call it a business? —- See above, you just did it again, not understanding what was stated.

    The fact that you have made up your own definitions to words to suit your needs…or is that taught by Amway? —- Which “definitions” are we talking about? What is a rebate and what is profit? You still haven’t answered the question of when YOU consider the money back a rebate (3%?) and when YOU consider it profit (6-25%?). At this point, I’m pretty sure you don’t understand enough to even answer the question.

    You didn’t prove anything other than you don’t consider even what you spend on products much less other standard expenses. —- Product purchases for personal use are not expenses, they are buying stuff from your own outlet versus a store. If personal product purchases were expenses (they’re not), they would be tax deductible (they’re not). Of course there are other expenses, but we weren’t discussing these at this time. This is actually my pet peeve, the LCK’s raise expenses far above what they should be via the tool scam, make a killing with the profit, and most IBO’s below Platinum are operating at a net loss.

    So you get $45 back on $300 YOU SPENT…means you are still in the hole $255. —- It also means I spent $45 less than a customer would spend, even if they purchased the products at my cost. Of course I’m “in the hole” $255, but I have products that were purchased at a pretty good discount, and that before considering any other offsets from customers and downline volume bonuses.

    So now, if you are lucky enough to have 3 legs that actually do 3900PV you potentially get $1116…you forgot to subtract the $300 you spent on your product, $816. —- First of all, it isn’t “luck”, it’s work. I didn’t “forget” it, I would have bought the products anyway. If I went to a store instead of buying them from Amway, would you STILL subtract the $300? Not me.

    Does that stay all with you or do you have to pass it on? —- I already explained what is kept and what is passed on, the $1,116 is the amount kept. I clearly showed that in the math, above. Have you ever seen the marketing plan?

    Lets say it stays with you. —- Let’s not just say it, it does.

    You have $816 to cover expenses, time and the cost of newbie recruiting….for other IBO’s there is also the tools. —- $1,116, and you’re right, that is the gross profit, and other expenses must be subtracted to get to net profit. See above for tools discussion. I have reduced tool cost to about 2-3% of what the LCK’s systems cost. That means 97-98% LESS.

    Then you also have to get to having 3 legs and maintain those 3 legs….good luck, but say you are able….that would eat up even more of that $816. That would put you more in the hole. —- Again, it’s $1,116, and what “hole” are you speaking of?

    Oh and I never said that no one can make money from MLM…I say that it is difficult and time consuming to make less money than many expected. —- How would you know how difficult or time consuming it is, have you ever done it, without a tool scam? Also, “many” expect to finish any number of ventures because they thought they were easier, less timing consuming, etc., than they “expected”, because their expectations were in error. This is true of jobs, college, relationships, you name it.

    Quixtar/Amway makes it more difficult with the whole tools issue. —- BINGO! We agree 100% on that one.

    And it certainly doesn’t help that they have clearly encouraged IBO’s to remove themselves from reality and create their own definitions for words. —- WRONG. That was MY definition, and I stand by it. Now it’s YOUR turn to answer the 3% versus 6-25% question.

    “In your example, the same amount of dollars end up in your pocket regardless what you call it, rebate, profit, or rocks.” This doesn’t even make sense. Do you not understand the concept of business and profit? —- Yes, I do.

    In my example you get $10 additional money in your pocket, as opposed to keeping $5 in your pocket to begin with using your PV/BV is profit theory. —- In your example, you are thinking of retail markup ONLY, in my example, I was considering PV/BV, which it appears you don’t understand.

    In your world that $5 dollars is profit, in the real world it is just keeping money in your pocket that was there to begin with. —- I am comparing what an IBO spends compared to a WHOLESALE customer, and the IBO pays less.

    In the real world, selling products for more than they were purchased for leads to a profitable business, in your world selling products for more than they were purchased for isn’t. —- In the MLM world, selling products for the same they would cost an IBO leads to profit based on PV/BV. It is every bit as real as money made via markup.

    “The fluctuating rebates you mentioned don’t come anywhere CLOSE to 10,000% return, do they?” Return and rebate???? You must have made up your own definitions on those words as well but OK. —- No, I just illustrated how much more powerful an MLM purchase CAN be.

    You don’t get 10,000% “return” on your “rebates” do you. —- In the example I provided, that is EXACTLY what happens. I ALREADY admitted it is an extreme example, but is used to illustrate a concept, not guarantee a level of return on every single purchase.

    It’s near impossible. —- Agreed, but it was meant to illustrate a concept, not imply a specific outcome for every situation.

    Most people in the real world don’t go around looking to buy products that offer a rebate in order to get a “return”. —- What’s your point? Most people are broke, too.

    Rebates just give the buyer a price advantage. —- Agreed.

    In reality offering a rebate is like running a sale. Agreed, although many rebates are of the mail-in variety, and the companies know only a certain percentage will do the necessary paperwork to get the rebate, so it turns out to be a much better deal for the retailer than the average consumer. Some companies don’t even process and repay the earned rebates.

    Many rebates though can be offered on top of a sale price thus, further reducing the price, making it a better sale. —- Agreed, but what does this have to do with MLM?

    The only return would come if you sold that item to someone else for more than what was paid. —- Not if you consider the PV?BV, which is essentially and “unseen” rebate that the customer doesn’t see, but ends up in the IBO’s pocket.

    See….right back to the whole concept of selling for more than purchased. —- See… right back the whole concept of you not understanding PV/BV.

    No matter how you try to distort reality, you still need to sell for more to make money. Do we need to start detailing expenses? —- No matter how much you try to not understand PV/BV, you still make money from PV/BV. No, I think I have the expenses taken care of, thank you very much for asking, however.

  53. November 18, 2008 12:25 am

    This is just a random piece of information regarding the performance bonus money in the 3% – 25% schedule:

    I am in the 25% bracket, meaning, in addition to other bonus money, I receive 25% on my own personal consumption BV (BV, for those new to the show is about the same $$ that I pay at IBO cost for a product).

    People call this money many things. Some call it a ‘rebate’. I do not call it a rebate. Why? Because I’m TAXED on that money.

    I get a 1099 from Quixtar/Amway Global, and they don’t say, “Hey Bridgett, we know that about $2,000 of your bonus money for 2008 was 25% of the BV you and your family bought for your own personal use, so we aren’t gonna issue you a 1099 for those dollars.”

    I (my business, actually) have to pay taxes on my *entire* bonus money. I cannot separate out what is generated by my own personal use (the business owner’s household spending).

    So while people are gettin’ all bent out of shape and using examples of someone doing 100 PV/300BV for their *entire* business every month, and are in the 3% bracket, they’re paying taxes on 100 bucks for self-consumption while I’m (my business is) paying taxes on $2,000 for self-consumption (of the business owners’).

    In my business, my bonus check for ALL volume created, is a PROFIT.

    Just a different perspective.

  54. Porkchopjim permalink
    November 18, 2008 8:14 am

    I get a 1099 from Quixtar/Amway Global, and they don’t say, “Hey Bridgett, we know that about $2,000 of your bonus money for 2008 was 25% of the BV you and your family bought for your own personal use, so we aren’t gonna issue you a 1099 for those dollars.”

    Of course Amway doesn’t know that – you , the business owner, are responsible for that.

    If you don’t know how much you actually make in profit (bonus money from downline and customer sales) and how much is due to personal consumption (which affects the portion of ‘cost of goods sold’ to yourself – which is a lower price because of the rebate than what you resell to others – and should not show a profit for your business on that portion of it and therefore is not subject to tax)…then you actually do NOT know how much your ‘business’ makes.

    And you are inflating what your ‘business’ actually makes – which may make you feel better, but it’s an illusion (nice way of saying lie).

    And you are overpaying on your taxes.

    You most certainly CAN separate out what is for personal use. You are supposed to. You’re not taught that in your ‘training’?

    You are also hosing your downline with this foolishness.

    If you want to keep claiming it is a ‘business’ – then IBOs should start running it like one.

  55. Gina permalink
    November 18, 2008 9:01 am

    It is amazing just how little about business IBO’s really know. Put down the motivational hogwash and pick up an actual business book.

    Taxed on personal consumption through the business…that is one of the utmost ignorant things I have heard in a long time. Anything to make you feel better about spending all that money. Why can’t IBO’s just learn to keep a P/L? Really they are very simple. You’d be surprised at how much it can help your “business”.

  56. Porkchopjim permalink
    November 18, 2008 9:23 am

    Side note:

    Insider went round and round on one of the Oz blogs that there was NO WAY IBOs were stupid enough to think that they make money just buying their own products.

    I regretfully informed him that they weren’t stupid – they were taught that, and it’s not isolated. Which, of course, got me a sniff and dismiss.

    And here are two prime examples – one who won’t ever know any better (Tex), and one who should know better (Bridgett). And that’s NOT a hit on Bridgett: she is doing exactly what she has been taught – with the end result of making her business look like it’s doing better than it is, and costing her money by overpaying on taxes.

  57. November 18, 2008 9:40 am

    PCJ,
    Just to clarify, I am *not* talking about an IBO cost/Retail differential. I am talking about the Performance Bonus money.

    When you use the term “cost of goods sold”, that, I’m assuming you are referring to Part III of a Schedule C tax form.

    This part is filled out if one carries an inventory of goods, yes?

    This is where you indicate your business purchases minus the cost of items withdrawn for personal use (this is line 36 of the Schedule C for 2007).

    What if you have no inventory? What if everything is shipped directly to your customers from Quixtar/Amway Global?

    Where would you subtract out that $$ you received on your personal BV?

    Tell me. I’m all ears. Really, I’m not kidding.

  58. Joecool permalink
    November 18, 2008 10:43 am

    The reason why Bridgett’s “rebate” is taxed is because it’s not entirely her rebate. Due to the pyramiding effect, Bridgett gets to receive her downline’s rebates, up to 22%. That is why it’s taxable income.

    It’s also why “do the work and get paid” is not necessarily true. Donwline IBOs, some of whom you may or may not know, some of whom you may or may not have helped are contributing to your bonus and why the system is a pyramid.

    Those who may achieve a level of success only benefit from the efforts of their downline. You can only succeed long term by recruiting and retaining faithful downline who don’t mind suffering losses on your behalf.

  59. November 18, 2008 11:22 am

    Joecool,

    Why are you assuming that the only volume I run is personal use and downline volume?

    Why can’t I be running all my volume outside my personal use, in retail?

    Do you know that there are IBOs who actually do this? Particularly with the Ribbon Gift Albums.

    So what do you say to those IBOs, who are in high Performance Bonus Bracket, not because they’ve sponsored anyone, but becaus the do a lot of retail?

    If all that retail is shipped directly to the customers, and you have no inventory, then where do you subract out the Performance Bonus money you make on your personal BV?

    I really would like to know, because if you don’t legally have to pay taxes on that money, you shouldn’t.

  60. Joecool permalink
    November 18, 2008 1:03 pm

    Bridgett, I don’t doubt that there may be some groups that run retail sales. I have no issues with those groups. It’s the way the business is meant to be run. But most groups teach sponsoring as a means to grow your volume. You are with WWDB I believe and they used to an still teach (to my knowledge) buy from youself and get others to copy. My former upline told us not to sell, but to sponsor. I believe there are still branches in WWDB that does this. I wonder why some WWDB folks still do call in and pick up?

    Quixtar’s own numbers reveal something. 3.4% of items are sold to non IBOs. There is evidence that groups still teach buy from yourself. Therefore one can easily conclude that retail groups are not that common. The theme of much BSM is to show the plan, core, sponsor people. Thus, IBOs are doing what they are taught. Buy their own stuff and rabidly recruit others.

    The issue of rebate or bonus should be clarified with quixtar. Many IBOs call it a kickback or rebate when in fact it might be a sales commission which would then be taxable. It would also mean you are a commissioned salesperson.

  61. November 18, 2008 1:44 pm

    So back to my question: If the $2,000 I receive annually in my Performance Bonus checks (remember, not on a IBO cost/Retail differential) on my own purchases is a “rebate” or a “kickback”, then why do I pay taxes on it?

    I’m hearing from the “critics” online that I’m “overpaying in taxes”, that I “should know better” and that I’m “hosing my downline with foolishness”.

    So please, tell me, how do I legally not pay taxes, i.e. how do I get the Government to see it your way and tell them this is not income (profit), but a “rebate”, a “kickback”, like if I bought a pack of batteries, cut out the UPC label, filled out the form, mailed it in, and waited 8-12 weeks from my rebate check?

  62. Joecool permalink
    November 18, 2008 3:18 pm

    Bridgett, yuo missed the answer which was in my last response:

    “The issue of rebate or bonus should be clarified with quixtar”

    “when in fact it might be a sales commission which would then be taxable. It would also mean you are a commissioned salesperson”

    I’m not sure who you refer to as a “critic” who is saying you are overpaying your taxes, but it’s not me.

  63. November 18, 2008 3:24 pm

    This has developed into a very interesting thread. I can see it both ways — that the check that comes back from Amway Global is either a (1) rebate or (2) a profit/performance bonus.

    Bridgett – what line item is the money listed on your 1099? Non-employee compensation? Royalties?

    The bonus money in each product is factored into the price of the product. So, as you rise higher and higher in the performance schedule, you can access higher and higher percentages of each product’s bonus.

    That said, I can also understand how others would call this a rebate, since it’s coming straight out of the product price and back into your pocket.

  64. Joecool permalink
    November 18, 2008 3:48 pm

    Amthrax, it would be box #7 on the 1099 as nonemployee compensation. So technically, IBOs are independent commissioned sales persons.

    I would have to say that independent business owner does not describe the situation as accurately as as indepedent commissioned sales person.

  65. Porkchopjim permalink
    November 18, 2008 5:13 pm

    Bridgett,

    You have to break up your accounting into two different sections: what you did, and what your downline did.

    You’ll need to attach a sheet showing the breakout of your 1099-MISC from AG, because that only reflects what AG thinks is your net income, not your gross income as it does not include product prices that were part of the transaction:

    Total amount as listed from AG should not include what you and your customers paid for products…it’s only your cut that gets credited to you = customer online purchases (retail mark-up and PV/BV cost savings), your business orders (same as online but includes your personal use), and your downline orders (PV/BV cut, use doesn’t matter). You should know the first and second, that will give you the third. Beware if they slip in an additional performance bonus – you’ll have to list that separate also.

    The first number will be: online retail business net income. This numbers again should not include the price of the product – you have to figure that out and add that in (later).

    The second number will be: home retail business net income (again no product price).

    The last number will be: wholesale business pass-through net income. It would be best to know the product price, but I don’t think necessary.

    Now, you can figure out what trade discount you got on your retail business purchases: say you bought $600 for yourself and customers you sell products to in person – for this example, that’s 300BV. You used $200 for yourself. At your bonus, you got back 25% of BV, or $75 making your cost of goods purchased $525. Your portion of that (own use) is $175 after $25 off. The portion you sold to customers was $350 after $50 off.
    Do the same thing for those items bought from your online retail store – your cost of goods will be the difference between what online customers paid and what AG sent you.

    For your home retail business: gross income is how much you sold the $350 worth of products to customers for, total price.

    For your online retail business: same thing.

    Now, you can fill out line 1 of the schedule C:

    Start with: Home retail gross profit + online retail gross income + wholesale business net income. Label each accordingly on your explanation sheet.

    Subtract: $25 for “trade discount on personal use items.”

    Line 1 gross income: ‘Start with’ minus $25. That’s $25 you won’t pay tax on.

    Now you can do your ‘cost of goods sold’ which will be home retail ($325) plus online retail ($xxx).

    That’s the number you subtract from ‘gross income’ to get ‘net profit’ – which does not include your personal use items.

    Your records will have to reflect those items that you pulled for personal use ($ cost to you is sufficient).

  66. Porkchopjim permalink
    November 18, 2008 5:17 pm

    P.S. – I’m the critic saying she is overpaying on taxes.

    Volume discounts given to businesses don’t count against their profit – they only count against what they paid for their products. Items pulled for personal use are annotated, but don’t count against any business income. You either have to subtract them throughout the entire process (as my example above) or include them and pay your business what the ‘cost’ was only. No profit, no loss.

  67. November 18, 2008 6:11 pm

    PCJ,

    The only products I PAY Amway Global for, is for my own personal consumption.

    I order products and I use them myself.

    These products do NOT run through my business, accounting-wise, just like the products my customers and my downline do not run through my business accounting-wise.

    In other words, I do not have an inventory–even if it would be a three-day inventory in which I would get the products people (downline and customers) order and then sell them within a short period of time, as well as “pull” any for personal use.

    Simply put, I do not have ANY “cost of goods sold” because I am not DIRECTLY selling anyone products.

    People buy directly from AG/Q, and then AG/Q cuts me a check. Right now to an individual (my husband), however, soon to an S Corp.

    So since I have no inventory, there is nothing to pull from it, and there is no Cost of Goods Sold.

    Because there is nothing to subtract on Line 4 (COST OF GOODS SOLD) which would reduce my Gross Receipts or Sale” from Line 1, Line 7 (Gross Income) of Part I of my Schedule C is the same number as Line 5 (Gross Profit) which is the same as Line 1 (Gross Receipts or Sales) which is the $$ amount on my 1099 from AG/Q.

  68. November 18, 2008 6:19 pm

    And joecool, I don’t give a rip what they call me. Just as long as the check clears. 🙂

  69. November 18, 2008 8:05 pm

    It must be pretty damn cold down hades way, which is causing all sorts of icing problems on the pigs wings, ’cause I agree with PCJ and Gina.

    Rebates on personal purchases shouldn’t be taxed as income, though whether it’s worth the extra effort accounting for it is another story. This was simpler to see in pre-direct fulfillment days, but if you think of yourself as a customer of your business, which is the IRS considers a legitimate way of accounting for personal use, then the rebate is going to the customer (you) simply as a discount on the product sale – in one hand, out the other.

  70. November 18, 2008 8:58 pm

    IBOFB,

    I am asking HOW to *legally* not pay the taxes. Trust me when I say that I am all for not giving the Government one red cent that I don’t have to.

    The Schedule C is not set up the way you and PCJ and Gina would like.

    Why?

    Because when I talk to 2 IRS agents, 2 Quixtar tax people, and 2 tax advisors (one being a CPA), they don’t see it as a rebate. They see the money as profit my business generated, not a rebate on my household’s purchases.

    Maybe because they don’t distinguish who’s using the product. If that same amount of product were being used by my neighbor, I’d get that amount of performance bonus money. They don’t see it as a discount (like the difference between Retail and IBO Cost). They see is as a PERFORMANCE bonus.

  71. Porkchopjim permalink
    November 18, 2008 10:00 pm

    Bridgett,

    I had to leave some of the detail out of my explanation – else it would have been just too long. Apparently not long enough?

    We’ll get a couple of terms straight: inventory, as I used it above and how the IRS uses it for taxes, is what you carry from one year to another when figuring the cost of goods sold. You have no inventory. That’s not a problem.

    Despite your assertions otherwise, you do in fact sell those products to both your customers who order online and your downline who order directly from AG. For a brief fraction of a second, you own that product – which you buy from your upline and sell it without even seeing it. That is how you can claim a volume cost difference – which AG uses PV/BV to track. The item never needs to be seen by you for you to ‘own’ it and sell it almost immediately. The PV/BV allows AG to keep track of the margin and cuts all that ‘cost of goods’ calculations for them…but they’re still necessary for you.

    The Quixtar tax guide also tells you to figure your cost of goods sold to determine the profit you have made on sales. It specifically addresses two ways of accounting for things you use from your own store: take it out beforehand, or pay cost. Either way, all of the numbers add up for accountability and the IRS is not cheated out of any taxes on profits or losses on deductions (because you can not use them as deductions, either, for self-use).

    What the Quixtar tax guide is not good at doing is making it clear how to convert your ‘net income statement’ from AG into the most tax advantage for you…because as you can see, it’s not overly simple, but it’s not really hard, either, if you are keeping track of things.

    If your neighbor buys the product – it’s profit for you. If you use it (or buy it from yourself) – the tax laws allow you to do that without paying anything on that transaction.

    The schedule C is set up exactly the way it is supposed to be. The AG 1099-MISC is what is causing you headaches, and I’ve explained how to untangle that. In fact, in your case, it’s easier: you do not have to figure any costs of goods sold as everything that you order directly is for self use. The check from Quixtar is your true net profit for retail customers and downline volume plus your discount on personal products…and you are allowed to subtract the amount of savings you got on your own products from that net profit because you didn’t resell that portion.

    Ask your tax guys again how to treat ‘trade discounts’ for items pulled for personal use – and see if they don’t change their answer. You have a fairly simple situation, and you’re paying taxes you don’t need to.

  72. November 18, 2008 11:08 pm

    “trade discounts’.

    Okay.

    Thanks!

    🙂

  73. Gina permalink
    November 18, 2008 11:50 pm

    “Because when I talk to 2 IRS agents, 2 Quixtar tax people, and 2 tax advisors (one being a CPA), they don’t see it as a rebate. They see the money as profit my business generated, not a rebate on my household’s purchases.”

    Sorry I am throwing the BS flag on this one. Would this be the same CPA that didn’t get to filling your taxes until recently??? No CPA will ever say that your personal purchases is business (see below). And I am guessing those IRS agents weren’t really agents either. Secretary maybe??? Funny though how 2 IRS agents weren’t enough so you had to go to 2 Quixtar tax people and when that wasn’t enough you went to 2 tax advisers, one being a CPA. What? The Pope was unavailable that day?

    “Maybe because they don’t distinguish who’s using the product.”

    That is because Amway doesn’t distinguish this….you are supposed to. It’s not Amway’s or the IRS’s responsibility to then track the cost of goods sold to income to expenses to either a profit, loss or a wash.

    Maybe the issue is that it isn’t clear what exactly a 1099 is. All it is, is an information report. It takes the responsibility off Amway/Quixtar from paying taxes and puts the responsibility on the IBO’s…essentially contractors at this point. It is then the contractors responsibility to pay taxes on the money paid. Amway/Quixtar reports what they paid to each individual IBO to the IRS, the IBO reports what they were paid, and the IBO then needs to pay taxes using the schedule c.

    The schedule C is to report profits or losses to a business. The income reported on the 1099 does not automatically mean profit or loss. The IBO needs to make the calculations considering income, expenses, cost of goods sold (not necessarily physical inventory), vehicle, and other expenses…again leading us back to the importance of a P/L. One would pay taxes on the profit and get a deduction on the losses…didn’t the CPA tell you that? Please note that you are too deduct from these calculations anything going to personal use. This would include the rebate, because when it is applied to personal use, that is all it is.

    Here is a link that describes it well.

    http://turbotax.intuit.com/tax-tools/schedule_c_reporting_business_income_and_deductions_turbotax/article

    Please note…
    “Next, report how much you spent to buy merchandise, but don’t include the value of anything withdrawn from sale or for your personal use.”

    You may also be interested in this site…
    http://money.cnn.com/galleries/2008/fsb/0802/gallery.audit_red_flags.fsb/index.html

    I particularly like #2…”Low Revenues, the IRS may suspect your “Business” is actually a hobby, in which case you aren’t due any deductions.”

    And #7…”Too much fun, high deductions for travel, car, cellphones or entertainment suggest you might be having too much fun and trying to claim it as a business expense.”

  74. November 19, 2008 1:27 am

    Gina,

    With all due respect, your kind of mean.

    PJC, understanding the Amway business model, was able to answer my question, and I appreciate it.

    So while I thank you for “schooling” me on Schedule Cs, my husband and I have been filing Schedule Cs for our other non-Amway business for nine years now.

    There are nuances with the Amway business model that do not follow traditional business, as evident by PJC’s explanation that “in theory” all products flow through all businesses in order to “capture” the BV in all business all the way up to Rich & Jay’s business so that all the bonuses–

    Performance Bonues, Platinum Plus, Platinum Elite, Ruby,Q-3, Q-6, Q12, Leadership, Emerald, Diamond,EDC, DD, TD, Crown, CAM, FAA, etc.

    –are calculated and credited properly.

    If I were never an IBO, not knowing first-hand some of the things an IBO is talking about, I guess I wouldn’t be so quick to assume that that IBO is an idiot or liar when they are earnestly attempting to figure something out and are willing to humble themselves to a critic.

    Thank you again, PCJ, for taking the time to help me. I do appreciate it.”Trade Discounts” is the term I will inquire about.

    Good day to you all.

    I’m done with this thread.

  75. Porkchopjim permalink
    November 19, 2008 5:32 am

    The IRS is rather famous for giving out bad information – every couple of years they do quality checks and I think the last time they found that the 1-800-whatamIsupposedtodowithmytaxes people answering the phone gave the wrong information 60% of the time.

    And Gina’s points are valid, and AG doesn’t help with their 1099-MISC set up the way it is – nothing ‘wrong’ with it, just not terribly useful for IBOs – especially new ones.

  76. Gina permalink
    November 19, 2008 9:13 am

    “Gina,
    With all due respect, your kind of mean.”

    With all due respect you are condescending, belittling and pompous…your point?
    I guess people like you would take the valid information presented and try to rub it off as nothing more than insulting. Hard to get by in the real world when you have spent so much time surrounding yourself with people who thinks your poop smells of roses. What? Didn’t like that someone can see through your blatant lies that you clearly present so that others think that we have no clue what we are talking about because after all you took all the necessary precautions so how dare we??? Truth hurts, that’s your problem here. Welcome to the REAL business world…can’t hack it then… Adio!!

    So let me get this right…credible information is presented that clearly shows that you are wrong about claiming your personal use and the cost of goods sold and suddenly your “opportunity” becomes more complex thus somehow negating the way that ALL businesses NEED to report their income? Ummm OK.

    You’re done with this thread because you can’t dispute reality so back to surrounding yourself with those who will hang on your every useless word. Seems to be a pattern, but this time you forgot to mention something about spending time with your lovely family and how we are all winners!!!

    On a side note…why is it IBO’s, especially those who can not claim any success as such and clearly have no basic knowledge of business, always supposedly have others businesses and throw that out as an excuse when they can’t actually dispute the facts? Is this one of those “tools” teachings?

  77. Joecool permalink
    November 19, 2008 10:53 am

    If Bridgett is in the 25% bracket, I assume she is a platinum. What year/month did your name appear in achieve magazine?

    IBOfightback posted issues of achieve magazine on Amway Wiki.

  78. November 20, 2008 4:07 pm

    Gina,
    I’m back to point something out:

    This topic had NOTHING to do with me writing off personal consumption items as expenses on my taxes.

    In fact, PCJ was saying that I was OVERPAYING on my taxes.

    He was saying that the $2,000 I was receiving in my Performance Bonus money ON THE BV from my personal consumption was non-taxable.

    That’s what this ENTIRE discussion was about, Gina–that IBOs ARE PAYING TAXES ON MONEY THAT THEY AREN’T SUPPOSED TO (according to Porkchopjim).

    You’ve proven my point, Gina from the last time we “chatted”: You are not interested in any meaningful conversation and just want to fight.

    Or, maybe you just can’t read for comprehension?

    If so, here’s a website which could help you. http://www.literacy.uconn.edu/compre.htm

  79. November 20, 2008 4:30 pm

    And Gina,

    Do even know what “BV” is? Do you have any clue as to how bonuses are paid? Has the Amway Sales & Marketing Plan ever been explained to you?

    I would think, based on your responses to me, that the answer to all three of those questions is “NO”.

    Why don’t you have one of your buddies “school” you. You’ll have much more credibility if you actually know WTF you are talking about.

  80. Gina permalink
    November 20, 2008 5:39 pm

    LOL…hang on Bridgett ’cause this is going to sting…

    First, Sherlock, no I have never been an IBO. Did you figure that out using your keen sense and Wit or just gather the open information I have posted throughout various blogs? If it were a snake it would have bitten you, but anything to make things look good for you. But to answer your three questions…yes, yes, and very unfortunately yes. Want more of my back ground…just let me know.

    Second, Thanks for the link but clearly you haven’t used it quite as much as you should be. My points made above do not say anything about “write offs” of personal use product on expenses but instead state clearly (to most competent readers) that to calculate your cost of goods sold, which again, my literary challenged friend, does not necessarily include inventory, and is applied to the schedule c which allows you to pay taxes on profit and get deductions on loses. By including your personal purchases into these calculations you would be in effect OVERPAYING IN TAXES. So, I was saying the EXACT same thing PCJ was, but was using standard business terms and even provided a link. My apologies, I thought you were of the intelligence where it didn’t need to be spelled out, guess you proved me wrong!!!! Next time I will explain how business works in the 3 year olds version just for you. But hey, I understand the obvious reading challenges you are having so if you need me to explain further how it translates to you are OVERPAYING IN TAXES, then just let me know.

    Why don’t you go have your “buddies” “school” you in basic elementary reading comprehension because what slight glimmer of creditability you may have had has just flown the coop. Or were you just pretending to not understand basic grammar to come in here and fight?

    Oh, and I am not worried about how much creditbility you think I have or project. My company thus far has a YTD GP of $2.2 mil….and what’s yours? Any time you want to compare P/L’s, you just let me know. ;0)

  81. Gina permalink
    November 20, 2008 5:47 pm

    I realized that it may not be obvious to someone with your challenges, Bridgett, so let me add that when taking into account what is spent on personal products that would include calculating the “bonus”, “rebate”, “supper-duper money back”, what ever you choose to call it, because it isn’t money being made from sales, which is taxable…again meaning YOU ARE OVERPAYING ON TAXES.

  82. Joecool permalink
    November 20, 2008 6:26 pm

    Hey Bridgett, what month and year do you appear in achieve magazine? You seem to have missed that point. You weren’t in the issues posted by IBOFB.

  83. November 21, 2008 1:08 am

    Hey joecool,

    The issues only go back to January 2008, because that’s when Amway started to create them in PDFs. I’m not in any of those.

    And, just as an FYI, I posted the last four on AmwayWiki, while IBOFB posted the first six (not that I need to take credit, but just so you know that there are other contributors than solely IBOFB).
    ******************

    porkchopjim,

    Q/AG doesn’t like to give out any tax info/advice ’cause of liability issues.

    *******************

    And Gina,

    You’re a meanie. Were you picked on in school?

    **********

    Ciao, y’all 🙂

  84. Gina permalink
    November 21, 2008 7:57 am

    LOL…So Bridgett came to “point something out”….She certainly did point something out…her very own problem with basic comprehension. So I respond to her accusation of illiteracy and show how I didn’t misunderstand and I am the “meanie” (I don’t generally hear intelligent adults say this, but maybe in Bridgetts circle things are different)???? LOL. Bravissima Bridgett, you did in fact point something out….not what you thought you were though.

    Obviously if one would ask if another was picked on in school, there are a few things at work. 1) Bridgett is newly out of high school (personally don’t think so), 2) Life for Bridgett was so much better for her back when she was in school and still dwells on those days (likely) 3) Bridgett herself was in fact picked on terribly in school, which would explain her condescending nature and lack of reason before speaking or in this case writing.
    Either way….very mature and business owner like don’t you think? Many of my fellow business owners, GM’s, CEO’s, CFO’s. ect, always resort to saying “you’re a meanie!!!” accompanied by the foot stomping,of course, when they are faced with hard, indisputable facts that they previously denied. But I guess it makes sense that someone who has surrounded themselves with people who refuse to believe anything outside of their world, refuse to address any negativity and who lack logic and basic reasoning would say that someone who presented facts was being mean.

    It’s ok Bridgett, its not your fault. You aren’t capable of understanding basic business because you have been taught not to and you resort to childish immaturity because you have been taught to…or is it because you lack friends in your own age group thus losing basic people skills? It’s not your fault you thought you had found an error in my fact presentation and equated it to a literacy problem when in fact the problem was yours alone. I hope you don’t carry this blatant business ignorance to your “other” businesses.

    You still didn’t address the issue of P/L’s. Lets compare….my traditional business, to yours. What’s the problem? You are in the 25% bracket, right? You have other businesses, right? Clearly you must be successful, ready to walk those beaches. If there is anything that will give one credibility while destroying the others it would be comparing P/L’s….you up for it???? And despite your teaching, P/L’s are not private, so don’t throw out that pile of BS.

    ” porkchopjim,
    Q/AG doesn’t like to give out any tax info/advice ’cause of liability issues.”

    Sorry PCJ, but I need to point this out…
    This is an interesting statement Bridgett makes. I wonder if it is factual? What makes this very interesting is the fact that she did say this just a few posts back…
    “Because when I talk to 2 IRS agents, 2 Quixtar tax people…”
    If Quixtar/Amway doesn’t give out tax advice, then this statement here is very misleading. Done on purpose??? Care to explain Bridgett…considering my reading comprehension problem and all, it would seem that you were trying to say that you spoke to 2 Quixtar tax people, but then say that Quixtar doesn’t give tax advice.

    O e quando vuoi imparare l’uso corretto d’italiano, fammi sapere. ;0) Ciao ciao

  85. November 21, 2008 9:53 am

    I’m going to close down this thread for the time being, and I thank everyone for sharing their comments.

Comments are closed.

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