Questions and Answers '" IBO Facts '" IBOAI

1. What are the chances someone can start from scratch and become a Diamond?
2. Why are recorded media, books, and meetings common in this business?
3. Do recorded media, books, and meetings offer value as well as a money-back guarantee?

4. Are prices for products offered by Amway competitive?
5. How is product pricing determined?
6. What makes the Amway North America Independent Business Ownership Plan legal while some businesses

perceived to be similar are illegal?

7. Should a business dispute occur with another IBO, what options do they have?
8. I've heard rumors that I have to 'follow the system' (listen, read, and attend) to get help from my upline. Is

there any truth to that?

9. I heard some Emeralds and Diamonds have quit their business. Is that true?
10. What about Amway North America lawsuits and legal disputes?
11. What is the difference between "the system" and "the business"?
12. Is one IBO organization or group better than another?
13. How much money can I really earn? How fast?
14. Do higher level IBOs make money from the sale of recorded media, books, and tickets?
15. Am I "in Amway North America" or am I really an "Independent Business Owner"?
16. To whom do you sell products '" retail customers or other IBOs?
17. When I search for Amway on the Internet, I find some negative stuff. What's up with that?
18. Is the business plan today as valid as it was 20 or 30 years ago?
19. Am I required to hold certain beliefs to be accepted?
20. Odd as it may sound, I've heard some rumors that Amway is a cult. Is there anything to that?
21. Why do the Rules of Conduct for IBOs powered by Amway North America require that disputes be submitted

to an arbitrator rather than the courts?

22. As an IBO, may I use social media for my business?
23. What are Alticor and Access Business Group?
24. What's the difference between a 'pyramid' and a legitimate MLM?

Question 1

What are the chances someone can start from scratch and become a Diamond?

The chances are the same for everyone who starts this kind of independent business. That's because the Independent Business Ownership Plan is structured to provide an even playing field for everyone.

However, whether an IBO (Independent Business Owner) reaches the Diamond level depends ultimately on whether he or she wants to build a business to that particular level. Every IBO has personal reasons to become a business owner and, thus, has personal goals for his or her business.

For example:

• Some IBOs may simply want to earn extra income for a limited time.
• Others may want to generate a modest ongoing income.
• Still others may hope to build a large, full-time business.

As with any business, hard work is necessary to build an independent business powered by Amway North America, and that requires time and commitment, especially in the beginning.

The fact is, this business offers tremendous flexibility. IBOs powered by Amway can start immediately and work at home. They can operate their business when they want, at their own pace, on their own schedule, and according to the goals they have set for themselves. The choice of when, where, and how much time to devote to their independent business is theirs alone.

Question 2

Why are recorded media, books, and meetings common in this business?

The majority of IBOs have never built a business before and rely on the information communicated through 'support materials' to help gain the skills necessary to help achieve success.

Every industry has what are sometimes called Professional Development Programs or PDPs. Amway is no exception. They often include the use of recorded media, books, and meetings, which in our case are developed by experienced IBOs to guide newer, less experienced IBOs in a business 'powered by Amway North America.' They are also a source of motivation for new IBOs.

PDPs may also include books and recorded media developed by non-IBOs who are accomplished sales superstars, like Og Mandino and Napoleon Hill.

IBO PDPs are a proven way to attain knowledge, gain skills, and improve performance in today's business world. Ours are user-friendly, tailored to this business, and come in many formats: video, audio, digital, print, and interpersonal education programs. They help provide:

• Effective business-building techniques
• Interpersonal and communication skills
• Valuable leadership principles

• Time management expertise

Did you realize that PDPs are everywhere, not just in businesses powered by Amway? For example:

• Teachers, doctors, mechanics, and countless other professionals rely on training and motivation to learn industry

trends, stay focused, and keep skills up-to-date.

• The Training and Development Organizations Directory actually lists more than 2,600 institutes, firms, and other

agencies that conduct professional training or produce training materials.

See our separate section on Support Materials.

Question 3

Do recorded media, books, and meetings offer value as well as a money-back guarantee?

Professional Development Programs (PDPs) have been found to be of substantial value to many IBOs (Independent Business Owners). They offer the sharing of hands-on knowledge from those who have already built successful businesses.

The latest motivational bestsellers are moving and inspiring, but they can't teach you about building a Web-based business powered by Amway North America. The objective of a PDP is to help IBOs develop successful and profitable independent businesses.

As for cost, compare the prices charged for PDPs to the prices of similar materials and events from other training and motivation organizations. We believe you will find Business Support Materials offered by Approved Providers to be of great value and are of reasonable price.

What's more, all aspects of PDP-use are covered under a generous buy-back provision.

See our separate section on Support Materials.

Question 4

Are prices for products offered by Amway competitive?

Amway continually looks at the question of product pricing because, like any company, it wants to be competitive in the market. What they have found is, what the consumer really wants is value, and a lot more goes into figuring value than simply price.

For instance, most cleaners you buy off the store shelf are 'ready-to-use:' You take it home, open the bottle, and squirt some cleaner on dirt and wash it away. One product fits all cleaning jobs. To be competitive, Amway has had to figure out what was more valuable than ready-to-use. Research over the years has shown that versatility and lasting product offer more value. So many of the cleaners offered through Amway are concentrated to last longer and offer more cleaning options. When you concentrate the cleaner you can charge more per bottle because it gives more value. In many cases, the cost-per-use of a bottle of cleaner from Amway works out to be cheaper than the ready-to-use at its price-per-bottle. That certainly makes Amway price-competitive.

Another way to add value is to provide unique features and benefits, do what a competitive product can do and then do even more. Or do what a competitive product will do, but not do something unwanted that a competitive product does. For instance, Amway offered a powdered chlorine bleach when everyone else sold it in liquid form because if you spill the container, a liquid can damage fabrics in a way that a dry powder won't. In those instances, Amway can be competitive because their product is unique.

In general, products from Amway are price-competitive and good value for the money. Research shows that some products are less expensive than their counterparts, others are more expensive, and most are competitively priced.

• Products that are more expensive usually have greater features and benefits over competitive products.

• Many products are highly concentrated, meaning a single purchase lasts longer. On a cost-per-use basis, these

products are priced very competitively.

• Product is delivered directly to the consumer and backed by a generous Satisfaction Guarantee.

Question 5

How is product pricing determined?

Amway uses many criteria to determine product pricing. Criteria may include market data such as what competitors charge for products in the same category, uniqueness of the brand, and consumer trends '" pretty much what any company would use to determine pricing. Suffice it to say, Amway wants to be competitive and prices its products accordingly. (Please also see the answers to the previous question.)

Question 6

What makes the Amway North America Independent Business Ownership Plan legal while some businesses perceived to be similar are illegal?

The Independent Business Ownership Plan is based on a proven plan that has stood the test of time, with over 50 years of successful operation.

In 1979, the U.S. Federal Trade Commission found that this plan is not illegal but is in fact a legal business opportunity. Unlike illegal business plans, Amway does not':

• charge a large, required initial fee, investment, or purchase of inventory.

• pay bonuses unless products are sold, nor does it pay bonuses for the mere act of recruiting another person into the

business.

• require IBOs (Independent Business Owners) to stock and maintain large, expensive inventories. There are no minimum

order requirements. In fact, Amway prohibits 'front-end loading.'

The IBOAI and Amway encourage anyone looking to participate in this business to carefully scrutinize the IBO Plan and ask any questions they have. We all want the business opportunity to be completely transparent '" no surprises.

The more you see and know, the more impressed you will be.

Question 7

Should a business dispute occur with another IBO, what options do they have?

Safeguards are in place in the event IBOs (Independent Business Owners) are unable to resolve their business disputes. The Rules of Conduct for IBOs defines the specific Dispute Resolution process. As an association representing the interests of all IBOs, the IBOAI also participates in the resolution process. Everyone has a voice.

Question 8

I've heard rumors that I have to 'follow the system' (listen, read, and attend) to get help from my upline. Is there any truth to that?

This is not true. System participation is optional. The IBO (Independent Business Owner) Rules of Conduct stipulate the responsibilities and obligations of all sponsors to train and supply IBOs they have registered as well as to offer the option of system participation. A system is simply a track for those seeking a proven, duplicatable approach to business development.

Question 9

I heard some Emeralds and Diamonds have quit their business. Is that true?

It is not inconceivable that an IBO (Independent Business Owner) who has achieved Emerald or Diamond status has quit his or her business. This can happen for a variety of reasons, from wanting to pursue other interests to not paying attention to business. That's the entrepreneurial nature of business. It happens in all professions, including doctors, lawyers, teachers, CEOs (Chief Executive Officers), CFOs (Chief Financial Officers), and actors, to name just a few. Some people just want a change, others want to find a less stressful career, and some find that after a time their career isn't what they thought it would be. Those are actually reasons a lot of professionals build an Amway powered business as an alternative.

Question 10

What about Amway lawsuits and legal disputes?

Many successful businesses today have gone through the experience of getting sued, unfortunately, and the bigger and more successful you are, the more you're targeted. In most areas of the U.S., anyone with $50-$100 can file a lawsuit and even get media attention for it, even if the facts of the case are bogus. If you ever have questions about allegations made in an Amway-related lawsuit, please let the IBOAI know, or contact Amway. We are confident that either can provide information that will set your mind at ease.

Question 11

What is the difference between "the system" and "the business"?

'The business' is the opportunity offered to individuals to start their own independent business by contractual affiliation with Amway North America. This includes participation in the Independent Business Ownership Plan to receive bonuses and a comprehensive line of products and services to market.

'The System' offers business-building and motivation techniques that are easy to use and reproduce through Personal Development Programs (PDPs) tailored to help support Independent Business Owners' businesses. System options are offered through your AP (Approved Provider).

Question 12

Is one IBO organization or group better than another?

This business is comprised of numerous IBO (Independent Business Owner) organizations, who sometimes differ in style, personality, and approach to building an independent business. However, while groups and organizations may differ in some ways, none are considered to be 'better' than another. All IBOs and their respective organizations operate under the same Independent Business Ownership Plan and Rules of Conduct.

The IBOAI and Amway North America urge you to talk to IBOs already in the IBO organization you have contact with and carefully assess that group to see if it is a good 'fit' for you.

Question 13

How much money can I really earn? How fast?

This business lets you be your own boss, set your own hours and working conditions, and earn based on how much effort and passion you put into it. Some IBOs have a simple goal of making extra income, while others make it their whole, and often very profitable, career. It's up to you. Your only limitations are self-imposed.

Question 14

Do higher level IBOs make money from the sale of recorded media, books, and tickets?

Yes, IBOs (Independent Business Owners) can earn money from the sale of recorded media, books, and tickets. IBO leaders are successful managers of large businesses. Some leaders have thousands of other IBOs in their organization, spread across North America. As business leaders and managers, they have the responsibility to educate and motivate these other Independent Business Owners. What they offer are professional development materials focused specifically on their business.

In addition, Approved Providers pay for the production facilities, equipment, technicians, accountants, assistants, and other employees necessary to produce such training, leadership development, and motivational materials. They incur the expenses and, of course, realize profits or losses from their efforts, as with any other business. When profits exist they are often shared with others and used as promotional incentives.

It is important to note that professional development and education is an international multibillion-dollar business. Authors such as Dr. Stephen Covey (The 7 Habits of Highly Effective People) earn incomes from the sale of books and other materials and conducting seminars. Bookstores everywhere offer hundreds of 'how-to' books, and recorded media on a variety of topics. Producing and selling books, recorded media, and meetings is nothing new to the business world.

See our separate section on Support Materials.

Question 15

Am I "in Amway North America" or am I really an "Independent Business Owner"?

Independent Business Owners (IBOs) are just that: independent. They are not 'in Amway' but powered by (or affiliated with) Amway North America, utilizing its Independent Business Ownership Plan as the platform for their businesses. As with any industry, there are rules and regulations that IBOs must observe.

Question 16

To whom do you sell products - retail customers or other IBOs?

Both! This unique marketing plan allows for multiple income streams. As an IBO, you purchase products at IBO cost. When you sell products to a 'retail customer' you earn the 'margin' on the difference between your cost and the retail price that you set and you accumulate points toward Performance Bonuses paid monthly. When you sell products to another IBO, there is no 'margin' but you and your IBO partner accumulate points toward your monthly volume.

Question 17

When I search for Amway on the Internet, I find some negative stuff. What's up with that?

The Internet is a giant bulletin board open to anyone who wants to post a message and, because it's largely unregulated, it's easy for anyone to post opinions, spread rumors, tell lies, or even build entire websites devoted to whatever topic he or she desires.

Because this is so, very few major American companies don't have critics online. And because negative comments are often reprinted on other sites '" few of which do their homework or simply don't care '" it often appears that there is far more criticism than actually exists. Remember, negative people say negative things. Those who fail and lack basic integrity are seldom encouragers.

The bottom line is: Do your homework. Remember how inaccurate rumors are, online or off. And ask the IBOAI or Amway about anything that concerns you. Want to succeed? Ask a successful person.

Question 18

Is the business plan today as valid as it was 20 or 30 years ago?

Absolutely. The Independent Business Ownership Plan, with its roots in the basic elements of free enterprise, is a proven business concept. Originating half a century ago, this business plan has been continually refined and enhanced to meet the needs of entrepreneurs. Now, with the significant addition of the Internet, the IBO Plan's efficiency and effectiveness in ordering, communications, cutting edge products, and business operation has been elevated to a new level. Now is the best time ever.

Question 19

Am I required to hold certain beliefs to be accepted?

No. Respect for every individual is a foundational value of this business. This has always been an equal opportunity business, open to people of all walks of life, varying religious convictions, political affiliations, nationalities, ethnic backgrounds and racial origins.

Question 20

Odd as it may sound, I've heard some rumors that Amway is a cult. Is there anything to that?

Nothing could be further from the truth. IBOs are indeed independent. Leadership and accomplishment are respected and rewarded. Yes, we follow leadership principles and encourage each other. We attempt to limit the negative input and amplify the positive, because negative influences can weigh you down while positive ones can strengthen you. We like each other, work together, and build with teamwork. Diversity and freedom are in our DNA. We want to see our fellow IBOs do well, to succeed and prosper " that isn't being a cult, that's being human.

Question 21

Why do the Rules of Conduct for IBOs powered by Amway North America require that disputes be submitted to an arbitrator rather than the courts?

Amway North America adopted the arbitration rule for the benefit of IBOs. Most other companies have also adopted this method of dispute resolution.

Cases going to arbitration are heard more quickly and at considerably lower cost to those involved in the dispute. If the same matter were tried in the courts, an initial decision probably would not be rendered for close to a year, and that decision could be appealed to a higher court, taking upwards of another year or more. In arbitration, by contrast, a matter is generally heard within a few months and a decision rendered within a few days after the hearing. And there is no appeal!

Rule 11.3.3 says an IBO may file an arbitration demand with either JAMS or AAA and the arbitration will be commenced and conducted according to the JAMS or AAA (whichever is ultimately chosen) commercial arbitration rules and Rules of Conduct in effect on the date the arbitration is filed. The Arbitrators are totally independent, experienced, highly qualified and impartial.

Here is how it works:

• A highly qualified, impartial arbitrator is selected by the agency to hear each case.

• Rules normally followed in the courts are generally followed in all arbitration hearings.

• The arbitrator considers all the evidence, including the testimony of witnesses.

• Then this arbitrator renders a judgment based only on the evidence produced at the hearing.

• If Amway is a party to the dispute, Amway is just as bound by the judgment as is any IBO. The position

of Amway is treated no more favorably than that of an opposing IBO.

• IBOs can take comfort in the fact that the procedures are designed to protect their independent businesses.

Critics have suggested that JAMS judges are chosen for bias toward Amway or the Board. They complain that judges are given an orientation on the business before hearing a case. The plain truth is that judges are chosen only based on their ability to listen fairly to a case and given an orientation only so that they understand the basics of the business. You want a judge to understand what witnesses are talking about when they are discussing a case. What is 'PV/BV'? What is an 'upline'? And so on.

Please see the Rules of Conduct (section 11.3) for full details on the arbitration process.

Question 22

As an IBO, may I use social media for my business?

Yes you may. You must always comply with the Rules of Conduct (see online or the Business Reference Guide) and you should consult with your upline and LOS to see if they have advice for operating in this new environment. The IBOAI offers a comprehensive overview on social media in our Social Media Resource Center for IBOs on our main IBOAI website - please take a look.

Question 23

What are Alticor and Access Business Group?

Alticor Corporate Enterprises is a sister company to Amway and responsible for non-direct selling businesses such as stakes purchased in Metagenics and eCoupled technology. It was originally the holding company for all the other Amway-related businesses.

Access Business Group is responsible for Amway Corporate manufacturing, logistics, research and development, print services, facilities management, and contract manufacturing efforts. Access Business Group is basically the manufacturing side of the business that supports IBO businesses around the world.

Question 24

What's the difference between a 'pyramid' and a legitimate MLM?

A pyramid looks a lot like a multi-level marketing (MLM) business, but it's really very different. A pyramid focuses on selling memberships while a true multi-level marketing business focuses on selling products and increasing sales and income by increasing (though not selling) memberships. Amway North America (formerly Quixtar) is an example of a multi-level marketing business and not a pyramid.

In the early days of multi-level marketing, the business model was sometimes called a 'pyramid.' However, in those days unethical entrepreneurs became involved who chose to operate illegally and the MLM industry gained a bad name through association.

Today, there are still unethical entrepreneurs taking advantage of their association with legitimate businesses. The FTC regards them as 'pyramids' and not legitimate MLMs. Amway prides itself on being one of the good guys. Its Rules of Conduct and Code of Ethics, which help guard against unscrupulous people, are a standard for the industry. Amway and the IBOA International work diligently to educate and protect IBOs and their downline from unethical schemes.

After lengthy study, the FTC regards Amway as an MLM business, not a pyramid.

On the contrary, an MLM is a business model that multiplies the earning potential of individual entrepreneurs by encouraging them to sponsor additional individuals under them, all who sell products to consumers. It is totally different from a pyramid scheme.

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