Saturday 28 May 2011

Surely the Amway bosses are winners all the time

First let us look at what Amway is gaining through enrollment. It is getting Rs. 995 entrance money (earlier it was Rs. 4,400)  and at least Rs. 2,000 through purchase of products.
Amway India says that it has 450,000 members in India in its affidavit. That means it has already pocketed a substantial amount. and every member has to pay a renewal fee of Rs. 995 every year which resulted in pocketing another substantial amount every year. This is what was pointed out by Andhra Pradesh High Court as easy and quick money.
Trivedi says that he has seen the judgement. Seeing one thing and reading and understanding is another thing.
Let us look at that part of the judgement.
"As pleaded by the petitioners themselves, out of Rs.4,400/- a substantial part, namely Rs.1,800/- is collected as subscription fee, license fee, business kit etc.  To qualify for earning commission a member has to earn the minimum monthly PV of 50 which he will get by selling products worth Rs.2,000/-.  Respondent No.6 in para-11(c) of his counter affidavit specifically pleaded that  “Amway” (First petitioner) would automatically get a business of the quantum of Rs.1080/- crores (4,50,000 x 2,000 x 12(months) ) per annum which would yield an astronomical profit and it cannot but be stated as “easy/quick money” without any service to the distributors/members irrespective of whether they sell the products or not, though the company may conveniently refer it as “turnover by sale of products”.  Significantly, this assertion made in the counter affidavit is not denied in the rejoinder of the petitioners. They have merely tried to explain the said allegation by offering certain justifications.  The petitioners have not specifically denied that the first petitioner would get a sum of Rs.1,080/- crores by ensuring that each distributor maintains the minimum sales level.  Even though the scheme per se does not stipulate that each distributor has to maintain the minimum required business level, prescription of minimum level of 50 PV to qualify for getting commission is sufficient inducement for the members to relentlessly strive for maintaining the PV level at or above the said minimum levels.  (Para 33). 
It is, thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme.  By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money.  On the part of the promoter by pushing each member to achieve the minimum sales worth Rs.2,000/- per month, (this sale includes enrollment of new members) he is assured of about 1000 crores per annum.  All this squarely satisfy the description of quick/easy money.  In addition to this, it is an admitted fact that each person in order to continue to be the distributor, shall pay renewal subscription fee of Rs.995/- per annum.  In para-11(b) of the counter affidavit on the admitted number of distributors of  4,50,000 this amount is calculated at about Rs.45 crores per annum.  These figures are not denied by the first petitioner in its rejoinder.  The plea of the first petitioner that there is no compulsion that a member shall renew his distributorship looks to us to be specious.  Once a person becomes a distributor in a scheme of this nature where the sops in the shape of commission are so luring, it would be very difficult for a member to withdraw from their membership to avoid payment of the annual renewal subscription fee. (Para 34).
It is, thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme.  By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money.  On the part of the promoter by pushing each member to achieve the minimum sales worth Rs.2,000/- per month, (this sale includes enrollment of new members) he is assured of about 1000 crores per annum.  All this squarely satisfy the description of quick/easy money.  In addition to this, it is an admitted fact that each person in order to continue to be the distributor, shall pay renewal subscription fee of Rs.995/- per annum.  In para-11(b) of the counter affidavit on the admitted number of distributors of  4,50,000 this amount is calculated at about Rs.45 crores per annum.  These figures are not denied by the first petitioner in its rejoinder.  The plea of the first petitioner that there is no compulsion that a member shall renew his distributorship looks to us to be specious.  Once a person becomes a distributor in a scheme of this nature where the sops in the shape of commission are so luring, it would be very difficult for a member to withdraw from their membership to avoid payment of the annual renewal subscription fee. (Para 34).
It could be safely said that Amway Bosses are the winners all the time and people are losers. Moreover, Trivedi says that he has been selling products worth Rs. 20,000-30,000 every month. Though it could not be said that he is lying but it is hard to believe that he could sell that amount of products every month. It could be believed after verification of his account with Amway India. However, Amway India never parts with it. So, there is no chance of verification.
Let us look at what the members gain through enrollment in the next post.
Trivedi! kindly do not feel that you are defeated in the argument. Please realise the fact and come out of it.

6 comments:

dtytrivedi said...

regarding your statement

"“Amway” (First petitioner) would automatically get a business of the quantum of Rs.1080/- crores (4,50,000 x 2,000 x 12(months) ) per annum which would yield an astronomical profit and it cannot but be stated as “easy/quick money” without any service to the distributors/members irrespective of whether they sell the products or not, though the company may conveniently refer it as “turnover by sale of products"

you are wrong my friend. Pls read the rule book in amway. Where it says that person who achieves level of 15% commission or more he/she has to do atleast retail effort of 50 pv in order to be eligible for commission if he doesn't then he won't get commission and bonus.

Besides this benefit is not first come basis. Because the income here is based on some of the following facts.

the case you mentioned in that case there are two factors that determine the income

1. his personal retail effort.

2. His business structure



1st point i have already mentioned it.

2nd point. If the person does turnover of 1080 crore (as you mentioned before) through his one downline then he would be qualified at max founder's platinum. And in founder's platinum is achieved when he/she is qualified for 21% (monthly turnover of 450,000 or more based on 1 pv = rs 45 during year 2006-2007) for 12 consecutive months.

And in this case his income at max would be Rs 100,000.

refer to the document
http://www.amway.in/Docs/reco_level.pdf

you would see that it is the 6th lowest pin level.

So it is the group structure which determines the income.

if he generates the 1080 crore turnover from 3 legs his max qualified pin would be founder's emrald

his max income in that case would be around 2.50 lacs per month.

Incase if he does the same with 6 legs then his max qualified pin would be founders diamond and his income would be around 5-10 lacs per month

please note that these are approximates of income and income excludes bonuses which company gives for its performance

dtytrivedi said...

so that proves the point that income is correlated with turnover upto certain extent. After that group structure determines the income

Shyam Sundar said...

Trivedi, this is not your English. ~Who is your ghost writer? Is that IBOFB aka Steadson.

am said...

Dear Shyam,

I have always seen you write well. You are also well in debate and giving appropriate. Thats gr8 about you which makes me your fan ( not ceiling fan or hand fan)
But at times it is also seen that when people publish facts and figures you do not reply with facts and figure rather skip this coviniently like a notorious fellow by making illogical comments.

Tell me if I am wrong !

Shyam Sundar said...

What facts you want my dear faceless, nameless and brainless fellow when the AP High Court judgement is crystal clear. Cheats keep on posting false statements but let the truth prevail. Apologists like you continue to support without any shame or guilt.

Shyam Sundar said...

Trivedi says that I am wrong. That was not my statement. It was the part of the judgement of AP High Court which depended upon the affidavit filed by Amway India in its writ petition. LoL.