Global Sales and Rules August, 2012

Transcription

1 Global Sales and Rules August, 2012

2 Discussion Agenda 1. Introductory Overview 2. International Sponsoring vs. #2 Businesses Compared 3. Awards and Rewards Advantages to Building at Home Personal/Foster Sponsor vs. International Sponsor Benefits Plan Advantages to In-Market Builders Even at Emeralds and Up 1) Emerald and Diamond Bonuses 2) Emerald and Diamond Pins 3) Diamond Plus Bonus and Executive Diamond Pin 4) Volume for EBR and DBR 5) FAA Bonus 4. Amway s Position on International Sponsoring 5. Amway s Position on #2 Businesses 6. Process for International Sponsoring 7. Process for Setting up #2 Businesses 8. Summary

3 1. Introductory Overview Amway Sales Plan allows a distributor to build Amway business both at home market and internationally. A distributor engages in international business by sponsoring prospects in international markets to the business, via International Sponsoring, a mechanism pioneered by Amway in 1971 and enhanced in 1979.

4 International Business Options Two Options for an IBO to Conduct International Business 1. International Sponsoring: you sponsor a local resident in the international market into the business. 2. #2 Business (aka: Multiple Businesses): you set up another business of your own in the international market. Home Market International Market Home Market International Market A A1 YOU Foster Sponsor YOU Foster Sponsor B A2 YOU

5 Introductory Overview If done right, international business can generate additional rewards and awards for the International Sponsor, while bringing a new level of excitement and motivation to the home market. HOWEVER, due to extra costs, challenges, and risks for the IBO and potential issues for Amway associated with international business, it is highly important that you understand the below must-knows and precautions in this guide, before engaging in international business.

6 2. International Sponsoring vs. #2 Businesses Compared First off, let us understand the differences between International Sponsoring and #2 Businesses: Recommended Participant Relationship Sign-up Eligibility International Sponsoring At any award level Introduce someone you personally know in another market International Sponsor need not be eligible for signing up in another market. He can introduces anyone who is eligible. #2 Businesses (aka Multiple Businesses) At least Emeralds & above Set up a business of your own by internationally sponsoring yourself in another market International Sponsor himself must meet all eligibility for setting up a business in the international market. In some countries (China, Malaysia, Singapore, Thailand, Vietnam, Korea, Indonesia, etc.), foreigners are not allowed to operate a business

7 International Sponsoring vs. #2 Businesses Compared Roles & Responsibilities International Sponsoring Bring the prospect into the business. Help prospect locate a proper Foster Sponsor. Encourager. Stay in touch #2 Businesses (aka: Multiple Businesses) Business owner, Daily business operator, Trainer, Motivator, Execute all responsibilities of a Personal/Foster Sponsor to the downlines Requirements Be listed as International Sponsor on the IBO s application Set up business. Comply with laws/amway rules. Buy kit and complete application. Indicate Number 2 Business status. Renew business annually

8 International Sponsoring vs. #2 Businesses Compared Costs & Risks Awards & Rewards Benefits International Sponsoring Low can encourage from home market, with minimum international travel required No benefits to the International Sponsor till he becomes EBR at home market, except for 2% ILB. Once the International Sponsor become DD at home, he is eligible to count international Q legs for Emerald & up pin qualification and Emerald/Diamond bonuses. International Sponsor is eligible for 0.5 FAA point from an international leg per market. #2 Businesses (aka Multiple Businesses) High more frequent travels and foreign residency needed to be successful. Business set-up and operation tend to be costly, complex and time-consuming. Difficult to succeed due to cultural differences and language barriers. ROI tend to be lower than home business due to higher costs of operation The # 2 business is eligible for the same benefits as an in-market business. The #1 business at home market receives same Bonuses and Awards as the International Sponsor, except more FAA points up to 6 (a max of 3 only for ISD in Vietnam and Indonesia).

9 Awards and Rewards Advantages to Building at Home It is to a distributor s BEST BENEFIT to focus at home and build a solid home business before engaging in any international business activities. Amway Sales Plan by design encourages focus at home by offering rewards and awards to in-market sponsors at all levels. However, rewards and awards are not available to an international sponsor until he reaches Emerald or above (with exception of ILB).

10 Personal/Foster Sponsor vs. International Sponsor Benefits Chart

11 Home vs. International Market Benefits: An Example A quick example to illustrate the benefits differences: Home Market International Market C 2,000 PV A 1,000 PV B 4,000 PV D 3,000 PV X 10,000 PV A as the in-market sponsor is able to benefit from the pass-up volume from his downlines B, C & D at home market. So A has 10,000 group PV and is paid 21% Performance Bonus (PB) and qualifies for SP. X has 10,000 group PV and qualifies for 21% PB and SP. However, X s volume and qualification does not contribute to A s PB and SP/DD qualification. A at this point only benefits by receiving an ILB from X.

12 Plan Advantage to In-Market Builders Even at Emerald and Up Levels Even at Emerald and above levels, there are clear financial and award advantages to building at home. A closer look at those higher levels follows from both award and reward perspectives.

13 1). Emerald & Diamond Bonuses Only in-market (personally or foster sponsored) legs contribute to Emerald and Diamond bonus qualification. Diamond Bonus A Emerald Bonus A DD B C DD F G D E B C D

14 Emerald and Diamond Bonuses Internationally qualified legs can count toward Emerald and Diamond bonuses only when/if the qualification is achieved based on in-market (personally or foster) qualified legs first. Diamond Bonus A H A Emerald Bonus A DD B B C D C D DD E F G

15 2). Emerald and Diamond Pins A DD (aka Platinum) who personally, foster or internationally sponsors 3 or more qualified () legs is eligible for an Emerald pin. A DD A is qualified for an Emerald pin B C D

16 Emerald and Diamond Pins However, one must have a minimum of 3 in-market legs to be eligible for Diamond and above pin awards. Though A has 6Q legs, A is not a Diamond pin qualifier as he only has 2 in-market legs B C D A DD E F G

17 3). Diamond Plus Bonus & Executive Diamond Pin A DD (Platinum) must have 7 in-market legs to be eligible for the Diamond Plus Bonus. International qualified legs do NOT count toward the Diamond Plus Bonus qualification. B C A DD D E F H G A qualifies for Diamond Plus Bonus B A DD H A does NOT qualify for Diamond Plus Bonus because H is an international leg C D E F G

18 Diamond Plus Bonus & Executive Diamond Pin International qualified legs only count for the Executive Diamond pin qualification which requires 9 qualified personal, foster or international legs, 3 of which must be in-market (personal or foster). B A DD J C D E F G H I

19 4). Volume for EBR and DBR All in-market (personal and foster) qualified BV downline from the Emerald Bonus Recipient (EBR) or Diamond Bonus Recipient (DBR) contribute to the par value for the Emerald or Diamond bonus payment. A DD All qualified (21%) BV is added leg by leg to determine A s Emerald fund. B C D 21% 21% 21% 6 months 7 months 8 months E, G, H, I s volume becomes qualified when it passes up to their sponsor E 9% G F 21% H 15% I 3% 6%

20 Volume for EBR and DBR Though international qualified volume also contributes to EBR or DBR s bonuses, it is based on International Traceable Volume, which stops at the first Foster Sponsor. In other words, only a portion of the international volume in the leg contributes to the EBR or DBR. A Country 1 Country 2 DD B C D H 21% 21% 21% 21% E 21% F The International Traceable Volume from Country 2 for A s Emerald bonus only includes volume from E and H I 21% 21% G 21%

21 5). FAA Bonus Aside from a limit of 3 FAA points per local leg, there is no cap as to how many legs one can receive FAA points from home market. But there is a limit of 6 FAA points from a #2 business. Q12 1 Q12 1 Country 1 Q12 1 A #1 DBR Q12 1 A max of 6 FAA points is allowed from Country FAA Points total for A#1 Q12 1 Q12 1 Q12 1 Q12 1 A total of 10 FAA points generated in Country 2 but can only send over 5 to Country 1 Country 2 Q12 1 A#2 DBR Q12 1 DBR 3 DBR 3

22 FAA Bonus International qualified (non-#2 business) legs can only generate a max of 0.5 FAA points. Country 1 A DBR 0.5 FAA And there is a limit of 1 International Leg per Country. Country 1 A #1 Country FAA A #2 EBR Q12 1 Q12 1 Country 2 B DBR 10.5FAA Q12 1 DBR 3 EBR 1.5 DBR 3 B C DBR 0.5 FAA Total points from Country 2 = 1.5 points

23 4. Amway s Position on International Sponsoring International Sponsoring is an option with relatively lower cost and risk than the #2 Business option Minimum overseas travel required Can communicate electronically No costs associated with setting up and operating a foreign business International Sponsoring option can be pursued by distributors at any award levels if opportunity presents itself. Amway encourages the International Sponsoring option over #2 Business.

24 Rules and Requirements for International Sponsoring A prospect can be sponsored into the business ONLY in markets where Amway operates. Amway s Zero Tolerance Policy prohibits any activities in unauthorized markets. Refer to the Zero Tolerance Policy or contact Amway office for a listing of authorized markets. Blind prospecting is prohibited in all markets. The prospect must be someone known by the international sponsor. Sending literature and/or products from other markets to the international market is prohibited. Do not advertise for leads in any format in any markets. The internationally sponsored distributor must have an inmarket Foster Sponsor. Select a Foster Sponsor for the new distributor from your home LOS, if available. If not, contact local Amway office for a referral.

25 5. Amway s Position on #2 Businesses Amway discourages a distributor from setting up a #2 business as a non-citizen in another market due to: High costs (frequent international travel costs, time, foreign residency, attorney fees, licenses, taxes, other administrative costs) High risks (legal and regulatory challenges, cultural and language barriers) Lower success rate and ROI Of all #2 businesses globally, only 2%-3% in a year are able to achieve SP and up levels Same level of efforts spent at home market tend to generate higher level of success and profitability -- opportunity cost

26 Amway s Position on #2 Businesses In the best interest of the distributors as well as the Amway business, Amway strongly recommends: Distributors focus on building a solid business at home market before considering international business. Distributors use International Sponsoring option. #2 businesses may not be a smart option for many. Only Emeralds and up IBOs should consider establishing #2 businesses internationally. Those who decide to pursue a #2 business follow their original LOS at home market, if possible. Distributors who consider #2 businesses read this guide to understand the costs, benefits and risks and conduct a careful self-assessment before making the move.

27 Rules Governing #2 Businesses If you are Emerald or above, are eligible and decide to pursue a #2 business, you must abide by these rules: Comply with all laws and regulations of the local land and Amway s rules/policies in the local market as well as understand and respect local cultures and customs. Solicitation of other IBOs from outside your LOS or your personal group is a violation of Amway rules and is prohibited. Amway encourages you to follow your original LOS if at all possible. Exportation of products and literature across borders is a severe violation of the local law and Amway rules and is strictly prohibited. Advertising for prospects in the new market in any form is prohibited both in the new market and in your home market.

28 Setting Up #2 Businesses Your existing business must be the International Sponsor of the new business. Any additional #2 businesses are regarded as separate businesses for award & reward purposes and each must be renewed individually annually. Your #2 business must have a local Foster Sponsor, just like your home business must have a Personal Sponsor. You must indicate Multiple Business status on the application, or advise Amway of the status in writing, in order to ensure you will receive proper benefits generated.

29 #2 Business Linkage Options Two options for linking #2 businesses: 1. The home business serves as International Sponsor of all other businesses. 2. Any earlier established business serves as the International Sponsor of your subsequent businesses. Both are viable options. Option 1 has the advantage of allowing you to maximize higher award qualification at home market.

30 Business Linkage Option 1 The home business serves as International Sponsor. Country 1 Country 2 Country 3 Sponsor Foster Sponsor Foster Sponsor You A#1 You A#2 You A#3

31 Business Linkage Option 2 An established distributorship serves as the International Sponsor. Country 1 Country 2 Country 3 Sponsor Foster Sponsor Foster Sponsor You A#1 You A#2 You A#3

32 6. Process for International Sponsoring International Sponsoring Step 1. Contact an individual who you personally know and is eligible to become an Amway distributor in a country where Amway operates. Make sure that Amway operates in that country. Find out if the prospect is already a distributor in your home country or any other countries. If so, suggest he work with his LOS. Do not import/export any Amway products and literature into any countries regardless of Amway s presence. Step 2. Talk to the prospect about the Amway business in general terms and find out if he is interested in becoming an Amway distributor. If yes, provide the prospect with your name and ADA number at home market. Inform the prospect that he must have a Foster Sponsor.

33 Process for International Sponsoring International Sponsoring Step 3. Find a Foster Sponsor for the prospect in the target country. First, check with your LOS to find out if anyone has set up a business in the target country. If yes, contact the distributor and ask him to become a Foster Sponsor. If he agrees, then provide him the prospect s name and contact information. If not or if you choose not to ask the distributor to be a Foster Sponsor, then ask the prospect to contact the local Amway Office to request a Foster Sponsor. Step 4. The selected Foster Sponsor will contact the prospect, show the plan, and assist him in signing up in the country.

34 Process for International Sponsoring International Sponsoring Step 5. If the prospect decides to be Foster Sponsored by the local distributor, he will submit an application form to Amway. It is your responsibility to make sure that the prospect correctly fills your name and distributor number in the application form. This is extremely important! If the prospect decides not to be Foster Sponsored by the candidate, then repeat Step 3 to 5 until he finds a local distributor whom he really wants to work with. Once the prospect signs the application form, it becomes a contract with Amway and cannot be changed easily!

35 7. Process for Setting up #2 Businesses Step 1. You decide whether it is in your best interest to pursue a #2 Business in another country based on Amway s recommended conditions and criteria stated in this guide. Make sure that Amway operates in the target country. If not, stop any international activities. Make sure that you are eligible to set up a #2 business as a non-citizen. Note that Amway discourages distributors below Emerald level from pursuing a #2 business. If you are below Emerald level, consider the International Sponsoring option instead. Be advised that operating a #2 Business as a non-citizen is more costly and risky and less likely to succeed than building business at home. Be aware of restrictions: Do not import/export any Amway products into any countries. Do not solicit any distributors in your home country other than those who you personally sponsor to set up a #2 business in another country in your LOS. Do not advertise for leads. Do not use blind solicitations. #2 Businesses

36 Process for Setting up #2 Businesses Step 2. Find a Foster Sponsor for your #2 Business in the target country. Amway strongly recommends you follow your original LOS at home market if possible. First, check with your LOS at home market to find out if anyone has already set up a business in the target country. If yes, contact the distributor and ask him to become your Foster sponsor. If he agrees, provide him your name and contact information. If there is nobody in your LOS who has set up a business in the country or you choose not to ask that distributor to become your Foster Sponsor, then contact the local Amway office for a Foster Sponsor referral.

37 Process for Establishing #2 Businesses Step 3. Travel to the target country and meet with the local Foster Sponsor. The Foster Sponsor will show you the plan and assist you in becoming a distributor in the country. Step 4. If you decide to be Foster Sponsored by the local IBO, finally you submit an application form. It is your responsibility to make sure that you fill out the app correctly and indicate your #1 Business as Multiple Businesses. This is extremely important! If you decide not to be Foster Sponsored by the candidate, then repeat Steps 2 to 3 until you find the right Foster Sponsor. Work with your Foster Sponsor to assist your prospects to sign up and fill out their information in the application form correctly. Once the application forms are signed and submitted, they become binding contracts with Amway!

38 8. Summary 1. International business in general, esp. #2 Business, is more costly to establish and operate, more challenging and risky, and less likely to succeed than home business. 2. Amway Sales Plan by design offers more awards and rewards to in-market builders, to encourage distributors to focus at home. Therefore, it is more profitable to build at home. 3. Generally, Amway recommends the International Sponsoring option for all distributors. Only Emerald and up distributors are advisable to consider pursuing a #2 Business overseas after meeting the conditions in this guide. 4. Distributors who establish #2 Businesses overseas should follow original LOS at home market if possible. Solicitation of other distributors downlines to sign up under you is a rules violation and is prohibited.