2015 AMSOIL Update

If I get 7 posts in the next few days or weeks, that gets my average to a post a year for the past 7 years, which is much better than ZERO posts for 7 years :)

I got a call the other day from Sam about my AMSOIL business.  Since my last post on AMSOIL was in fact over EIGHT YEARS AGO, an update is certainly in order.

The Bad News

As many times as I have intended to, I have not become any more active with my AMSOIL business.  I read the monthly magazine to keep up on new products and potential customers.  I also keep in touch with the business accounts I have that sell AMSOIL.  I do have a couple of great ideas to grow the business both short-term and long-term but thus far they have remained only that - ideas.

I also helped a downline dealer work an AMSOIL corporate booth in Kansas City a few months ago.  Although it was certainly not as productive as previous events (where the dealers pay to have a booth), it was good experience for us both and got me thinking more about the business again.

The Good News

Despite my lack of effort in the business, my income has remained remarkably stable, mainly due to my business accounts (mechanics and service stations) and downline dealers.  Average monthly income has stayed in the $200-300 range.  If I would bother to increase my group sales 50%, my income would likely increase 100-200%, but as I mentioned in the previous post, I have so far lacked the motivation to do so.

AMSOIL remains a great company with great products, constantly innovating to improve the range of product offerings.  The fact that my income has not dropped over 8 years of neglect is a testament to the quality and "stickiness" of the AMSOIL product line.  Compare that to my NuSkin/Pharmanex business (now mostly purchases for myself, wife, and father-in-law), where 90%+ of customer sales and profits have disappeared over the same time frame, and you can see why I much prefer AMSOIL's model in network marketing / MLM for generating true passive income.  See - I don't completely hate passive income!

My first network marketing adventure - Part 2

So we needed to figure out how to get more customers or bigger customers.

We looked at what our sponsor did - a number of shows every year. You know, tradeshows, where vendors pay to have a booth and people pay (generally) to get in, and the only people guaranteed to make money are the ones putting on the show.

Well after a few tries (OK, probably 5 or 6), we got fairly good at converting shows into customers, but those customers would not always make that first order. We found that once customers made the first order, they generally stayed around for quite awhile because most people really like the products

We also got a few accounts (places that did oil changes or sold oil products) both through the shows and by just calling on local businesses. These accounts made a difference to the bottom line faster just because AMSOIL pays better (initially) for these type of accounts.

So we plugged away, doing 5-10 shows per year, spending some very long hours at some of those shows. (I especially remember the 10 straight days of 12-13 hour days at the Kansas State Fair.) We eventually determined that our effort was perhaps not yielding the rewards we were looking for, and we began to look for other opportunities (especially my business partner).

At the end of the day, we also realized that an LLC was not the greatest structure for a network marketing business, we split up the customer base (which was already largely done anyway), and we went our separate ways.

I still love AMSOIL products but I really don't market them aggressively. My wife's car is still covered in AMSOIL propaganda, but only because I am too lazy to try and take everything off.

Our checks now run $100-$350/month on an average of an hour or so of work. Nothing to set the world on fire, but the money on top of a great learning experience has been very nice.

Let me summarize some of the key points of my first network marketing business:

What I love about AMSOIL1) Fantastic products
2) Reasonably priced (much more benefit than other synthetic oils for just a little bit more)
3) Once customers start using AMSOIL, they keep using AMSOIL (goes back to #1 & 2)
4) Ability to earn money a lot of different ways (different account types, etc)

What I don't like as much about AMSOIL
1) The compensation is not competitive with other network marketing companies. Most of this stems from prices being too low - seriously, prices per quart of oil are only slightly higher than they were in the 1970s. People generally don't buy AMSOIL because of the low price, but AMSOIL (corporate) thinks they do. This does not leave enough compensation for dealers to make it competitive with other network marketing compensation plans.
2) AMSOIL is somewhat embarrassed to be a network marketing company. I don't know why this is, but they push direct sales to accounts rather than sponsoring other dealers into the bsuiness. I understand there is some stigma associated with network marketing, but you ought to embrace it if that is your distribution method.
3) Oil is complicated! Unlike other products (like nutritional juices, for example) where there are only one or two options, for synthetic oil and filters you have to look up the vehicle type in order to select from several different grades of oil and many different filter types. This is not convenient for either the dealer or the customers. The dealer has to be an expert, which hurts the duplicatability (is that a word?) of the business - and duplication is the foundation of network marketing (of course, see #2 above).

Lessons from my first Network Marketing Experience
1) Have products that you love! It is no fun learning about products and talking to people about their applications if you have no interest in the product itself. People also buy based upon emotion and justify with logic, so the emotions you convey are supremely important.
2) Have products that people buy more than once a year! There are a number of reasons for this. It is good to have relatively frequent contact with your customers. It is
3) Have higher-end products available for your best customers. Most businesses have more expensive, more profitable products for those customers who want the best or just more. With AMSOIL, that is very limited - there is better oil that costs $2/quart more retail or there is transmission fluid, grease, etc, but these generally last even longer than the synthetic motor oil.
4) Have distribution that matches your products. When AMSOIL was the first synthetic oil for cars and cost $5/quart in 1972, network marketing was the correct distribution method. In 2007 when it is selling for less than $6/quart and other synthetic oils are selling for more than $5/quart, I am not sure network marketing is the best method.

(By products, I of course mean products or services, depending on your particular business.)

Hopefully someone got some value out of that long story. It certainly helped me to verbalize some of my frustrations with AMSOIL's business model over the past few years as well as review all of the things I still like (which is why I still sell the products).

I do not recommend AMSOIL as a business for those looking to earn a "rockstar" passive income. I estimate the top earners in AMSOIL make in the $300,000-$1,000,000/year range, where top earners in other network marketing companies make 10x that.

On the other hand, $300k+/year ain't too shabby, and this could be a great business for someone passionate about cars and interested in becoming an expert on the products.

Stay tuned for "My second network marketing adventure...", coming in a future installment.


PS - If you want to go check out the AMSOIL products, use this link to go to my store. Unless you're analytical and love trying to figure things out for yourself, though, it is easier to call (816-896-6566 cell) or email (sfweller@yahoo.com) me for the best solution for your particular situation, even if it does not involve AMSOIL! After having been very active in the business for 3 years, I know more than anyone should know about motor oil and filters :)

My first network marketing adventure - Part 1

Just so it is clear during my discussions about network marketing - I am a proponent of it, I currently have a couple of network marketing businesses that produce small incomes, but I am not actively growing either business.

With that out of the way, let's talk about my first adventure with network marketing!

The year was 2003. A co-worker of mine had recently returned from a field assignment that had lasted about a year. When he got back, he was ready to start a side business.

I was just as excited as him, so we formed an LLC together. Only one problem - we had NO idea what we were going to do!

So we had a business, we had a bank account, and we even had business cards. We just didn't have a business plan or a way to make a profit. Small hitch, that.

So we first looked into rental real estate. We listened to some Carlton Sheets materials that we borrowed from someone else and read a few other books. We went to a few foreclosure auctions at the courthouse steps, but (thankfully) decided that real estate was not our first choice based upon what we knew then.

About the time we were deciding real estate was not for us, my business partner "stumbled" across a company called AMSOIL. The rest, as they say, is history.

He was looking for a bypass filter system filter system for his almost new Toyota Tacoma pickup (the same kind of filter system they use on steam turbines in power plants where they don't change oil - can you imagine a 15,000 gallon oil change?). The advantages of such a system would be extended engine life and not having to change the oil nearly as often, which he hated doing.

He found this company called "AMSOIL" that had these bypass filter systems as well as just a 25,000-mile, 1-year oil change. He called the local dealer to get a quote.

Well, the bypass system cost about $200 at the time, but you could pay $30 to become a dealer, which would drop the price of the system to about $150. That seems like a no-brainer.

So we decided to go out on a limb and pay $30 so that we could get the products (synthetic oil and filters) at better prices. (I should also mention that my wife and I were driving about 50,000 miles per year combined, so changing oil twice a year instead of 16 times a year REALLY appealed to me.)

As mechanical engineers, these products made A LOT of sense to us:

1) Generally cost less than regular oil changes over the course of a year (fewer oil changes),
2) Saved gas on top of that (1-4% better efficiency/performance),
3) Protected your engine better (so it lasts longer),
4) Are guaranteed for the longer service (yeah - if something breaks and it's the oil's fault, they pay for the engine repairs or replacement).
5) Reduced oil waste and gas consumption (I thank John Wachholz for my environmental awareness).

We figured if we thought this was cool, all of the other engineers we worked with would think it was cool as well.

As with many network marketing products, your friends and family don't always immediately join your excitement for the products that you are now marketing, and AMSOIL was no exception.

We got a few customers from work and family that started using it. And let's face it, a customer that switches to AMSOIL generates very little commission initially because they only need to buy product once a year! For me even now a customer that is only changing oil on two cars is worth about $8. Especially considering the time it took to get a sale, that is not a great wage.

So we needed to figure out how to get more customers or get larger customers (or both), and that is where I will pick up in Part 2...