Friday 2 July 2010

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

A reader contacted us with a very, VERY long story about her car, a Hyundai, that broke down in Rustenberg in October last year. Quite sensibly she had the car towed to the Rustenberg Hyundai dealership for repairs. However that’s when things started to go wrong. Instead of just fixing the car they proceeded to claim to repair it and allowed her to drive it away only to have it breakdown within screaming distance of the dealership TWICE, they lost her crank shaft, fired some of their staff, waited for parts that couldn’t be found in South Africa, helped her run up an enormous phone bill, took a total of P20,000 from her and turned her hair grey.

OK, I confess I made up the bit about her hair but everything else happened.

To give you an idea of how complicated the story is let me tell you that the email she sent me showing all her correspondence with Hyundai South Africa contained almost 4,000 words.

Anyway, the situation right now is that after EIGHT MONTHS Hyundai in Rustenberg still have her car and they still haven’t fixed it.

I think that the time has come to escalate this to a higher level. The customer has already dealt unsuccessfully with the branch manager in Rustenberg and has contacted the Hyundai national customer care people but all to no avail.

My suggestion to her is that she should forget the pleasantries and email the Managing Director of Hyundai in South Africa, Alan Ross. His email address is [not published to prevent email spam].

Clearly she’s going to need to be very polite, to explain her problem in calm and measured terms and give him a reasonable chance to fix the situation. However that doesn’t mean she can’t assert herself, explain that she feels she’s been treated badly and that she knows she has a right to have this situation fixed.

She should also let him know that the “good name” of his company is being badly affected and that he has an incentive to fix this graciously and effectively. And QUICKLY!

Oh, one final thing. He might want to know that he’s now famous in Botswana.

Dear Consumer’s Voice #1

Hi, please let me know more about Amway and how advisable it is to engage in it. Thank you.

There’s nothing wrong with Amway, so long as you know what you’re getting into. The problem with Amway is that it is two different things rolled into one. The simplest part of their operation is that they sell things, a vast array of things from pasta to cosmetics. I’ve seen some criticism of the quality of the goods they sell and also their prices but that would be up to you to decide if you buy any of them from what they call their IBOs or “Independent Business Owners”. You would need to decide whether their prices and quality are good enough.

The other part of their business is the area that is much more suspicious: the “multi-level marketing” aspect. I must stress of course that Amway is NOT a pyramid scheme, honestly it’s not. However they do have a “pyramid-structured” business model. One of the very first things you will hear from the Amway IBO who approaches you is that they have a business proposition for you. They won’t say that they have some excellent products for you, no, it will be a chance to make money that they offer you.

They will try to sell you the idea of becoming an IBO yourself in the pyramid beneath the IBO that recruits you. Then every Amway product you sell will earn you a share of the profits. Critically, and this is the important bit, you will be encouraged to recruit other IBOs beneath you and to encourage them to recruit others beneath them. The person recruiting you will imply that you will earn lots of money from every product sale that is made beneath you, perhaps even multiple levels down.

Of course this sounds persuasive. It sounds like a way of earning easy money from the work of the people many layers beneath you.

The trouble is it’s simply not true. The mathematics don’t work. In order to make ANY money from the Amway pyramid you would need to recruit a staggeringly successful pyramid of people beneath you and there simply aren’t enough gullible fools around.

You’ll often hear from Amway IBOs who are trying to recruit you that Amway “has made more millionaires than any other company”. That’s just a lie. They never actually name any of these “millionaires” for the simple reason that they don’t actually exist.

Regardless of the mathematical theory I think it’s fair to judge Amway by their results. However Amway certainly won’t give them to you and me. Luckily they were forced to disclose them a couple of years ago in the UK when the British Companies Court tried to put Amway out of business. The truth that emerged is that virtually nobody makes money from being an Amway IBO. A few people at the very top of the pyramid have made lots of money but anyone new is so far down the pyramid that there’s no chance of making any money at all. The British data showed that the VAST majority lost money.

Please don’t waste your time and money joining Amway, or any other pyramid-structured selling mechanism. You will NOT make money, you will instead spend a small fortune buying the products, the marketing material, the compulsory training materials and you’ll just offend all the friends they insist you try to recruit.

For more on Amway see our other posts here, here, here and here.

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