What Quixtar and Amway Doesn’t Want You to Know About Their Business
November 20, 2007 By
1. Because of FTC Regulations, Quixtar is required to report how much each of their individual business operators (IBOs) make. In 2005, the mean average income from Quixtar for each IBO was only $115 per month. The real figure is much lower because Quixtar only counted IBOs in which they considered “active” by some arbitrary measure. This number does also not factor in any expenses that the employee may have paid for such as motivational materials or advertising.
2. Many high level Quixtar IBOs make much more on selling promotional and motivational materials to their down-line than they actually do by selling Quixtar products. Dateline NBC uncovered this interesting bit of information in 2004.
3. 66% of Quixtar IBO’s drop out the first year. Some Quixtar IBOs will be quick to tell you that this is because not everyone is cut to be in sales. However if it were such a lucrative and worthwhile opportunity, wouldn’t more people find success in it?
4. Quixtar & Amway are the exact same company. Quixtar was created in 1999 by the same two men which founded Amway in 1959. Amway’s image was so tarnished from years of FTC investigations and public criticisms that the company had to start over under a new name.
5. Quixtar IBOs use deceptive marketing techniques. People in the business who are trying to create a down line are taught to use vague and deceptive means in order to lure potential IBOs into business meetings. There are many personal stories which you can read online about very bad experience people have had with Quixtar IBOs using deceptive marketing techniques to recruit them.
6. Products which Quixtar sells and markets are consistently more expensive than their big box store alternatives. For every consumable item that Quixtar sells, there is a comparable product which can be bought cheaper at WalMart or CostCo. With Quixtar products, you have to pay in profit to the Quixtar company, a percentage for the IBO, as well as shipping. These added cost are built into the prices of Quixtar products, which will always make them more expensive than their big box store alternatives.
7. Quixtar does not release any information about effective hourly wages. Quixtar tells us that the average IBO only makes $115 a month on the system, yet releases nothing about how long people work to get that $115. Some people could be working for just a few dollars an hour, or less!
8. Quixtar admitted that they have been “Google Bombing”, or making specific changes to their website so that they would be more prominently featured in search results. This is considered to be inappropriate business practices by most technology users.
9. Quixtar is a pyramid scheme. Although the FTC ruled in 1979 that Amway was not technically a pyramid scheme because there were no direct payments made for recruiting new sellers, Quixtar IBOs and Amway Sellers are given a higher percentage of sales when they recruit more people. Quixtar IBOs are encouraged to recruit more Quixtar IBOs because they have a financial intensive to do so.
10. It’s all about recruiting. The only way to make large sums of money through Quixtar over long periods is to have a very large and successful down line. There are whole companies dedicated to creating large Quixtar down lines, they often refer to themselves as teams. These companies often sell their IBOs on motivational materials which often make the companies more than the actual sales of Quixtar products.
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November 20th, 2007 at 6:40 pm
Wow, what a bunch of facts and falsehoods mixed in with rubbish. Let’s take it point by point.
1. Yes, the FTC requires “average income”. What isn’t revealed in that figure is that the “average IBO” does next to no work.$115/mth is pretty good money for doing nothing don’t you think? Of course, in reality the income is much higher for those who do the work and lower for those who don’t. Isn’t this what you would expect?
2. I’d call it “some”, not “many”. Dateline didn’t uncover it, I was told about it long before Dateline did a “secret expose”. How much different folk earn from “tools” (called BSM or Business Support Materials) can vary greatly depending the “tool company” they’re working with. An executive with possibly the worlds largest BSM company told me that very very few of the leaders who use their system would make more from BSM sales than their business, and that mostly because of some odd international business rules. For other organizations, such as the one highlighted on Dateline, it might be different. There are dozens and dozens of such companies. These days most groups are upfront about tool profit - it’s no secret, and new accreditation standards require it to be all above board.
3. According to an affidavit in a recent court case revealed the first year renewal rate for Quixtar is actually 30.5% - a 70% “drop-out” rate. What was also revealed was that only 50% of folk who register ever even place an order for products, and only 1 in 8 actually sponsor anyone else into the business. In other words, hardly anyone even [i]tries[/i] to make money. What’s more, their “dropping out” has very little effect on the business since they weren’t doing anything or generating any sales volume anyway. Again, this is no secret, I was told it nearly a decade ago and most sensible people incorporate this knowledge in their business building strategies.
4. Quixtar and Amway are not the exact same companies. They are different companies. Having said that, in the time since Quixtar was launched, Amway affiliates around the world have adopted much the same model Quixtar was using, so in the next 18 months or so Quixtar will be getting merged back into the global Amway business. Again, no secret, it’s all over the (public) Corporate blogs.
5. Given the millions of folk involved over the years, is it any surprise some are deceitful? And this is a secret? Indeed, given the literally millions of folk who have been involved, the number of “horror stories” you read about on the net are actually remarkably small (though even one is too many of course). Interestingly enough, the great majority of these stories all seem to be generated from experiences with the same group of folk working with A/Q, and there’s very little complaints about other groups. Perhaps it’s the groups working with Quixtar, not Quixtar? I’ve certainly never been taught to be dishonest or deceitful - to the contrary.
6. This is false, or at least highly misleading. Many Quixtar products are indeed expensive - but you won’t find any “comparable” in CostCo or WalMart. The two major brands, comprising over 2/3 of Quixtars volume are Nutrilite and Artistry. You won’t find anything like Nutrilite in CostCo or WalMart, and Artistry is designed to compete with (and independently judged as such) high end cosmetics such as Estee Lauder. Again, not the “big box” type of products.
7. Quixtar doesn’t know this information and it would vary enormously from IBO to IBO. What’s more, as anybody building any type of business would tell you, building a new business isn’t an “hourly rate” type of thing. Typically you have to put in several years of hard work for not much reward before you start to develop significant profit. Same goes for building a Quixtar business. If you want the security of an “hourly rate”, then I wouldn’t recommend starting any type of business - it’s not for you.
8. False, Quixtar made no such admission, in fact they explicitly stated they hadn’t done anything that would be called “google bombing”. Making changes to a website to make it more search engine friendly is not “google bombing”. Google bombing is when you create meaningless websites all linked to eachother to try and up a pages rankings. Some Quixtar IBO leaders absolutely did this, but it was (a) pretty lame and (b) most of those leaders have actually since had their contract terminated.
9. This is completely and utterly false. Quixtar IBOs are absolutely not given a “higher percentage of sales” for recruiting more people. Indeed, for any given volume of sales, the great majority of time the percentage you earn decreases as their are more people in the organization. The payments are entirely based on sales volume, not recruiting. There is an “incentive to recruit” for the same reason their is an “incentive to recruit” more sales staff in any business - it can increase your sales volume.
10. It’s not “all about recruiting”. It’s all about creating product volume. Recruiting other folk is just a way of doing that, a strategy to increase volume - though note that you also have to share the profit. There are folk earning literally thousands of dollars a month who have recruited no one - but obviously to do so they must work a lot more hours. Most folk take the strategy of sharing the work and sharing the profit.
November 21st, 2007 at 11:00 am
Quixtar IS Amway, get your facts straight. Just because you come on the blog and simply say these facts aren’t true doesn’t make you correct. It sounds like you’re defending Quixtar/Amway because you’ve been suckered in. How does it feel? I know IBO’s and they TELL PEOPLE THAT QUIXTAR IS AMWAY. Please explain.
November 21st, 2007 at 12:19 pm
I’m a Quixtar IBO today and I do believe that Quixtar IS a pyramid scheme. But I am not the Pharaoh.. unfortunately. I probably would be making a lot more money.
No… the real Pharaoh is the Devos and Van Andel families themselves. A product is marked up 3x the amount before it even gets to the IBO as a “wholesale cost”. This is called the “Jay Factor”. Jay Van Andel insists that his cut be 3x the amount.
That’s why you only seeing 3% of the people actually making sales to other people other than consuming for themselves and getting their points that way. The products are just too darn expensive. But… the families ALWAYS make their money, because all they have to do is convince the IBOs that they should consume their own products. After all, if you owned a general store, you wouldn’t shop at your competition’s place would you? Even if it was more expensive? (The angle they feed us to keep volume up).
The people in the field are fighting for the profits that can only be made by building a group through bonuses.
So your friend, brother or sister in law should not be vilified, teased or berated for wanting to better themselves, wanting more money to help their family. Instead… focus that vitriol on the broken system that IS AMWAY/QUIXTAR.
And yes… they are the same company. Quixtar is going away. The Amway brand is coming back. Ridiculous. I’d hate to be trying to build the Amway business now with all that crap on the web.
I’ve stopped actively recruiting. But I will find some networking business that is viable. Network marketing IS a great concept. But I don’t think a legitimate MLM exists … YET.
When it does… it will be main stream and a new economy will be created.
November 21st, 2007 at 1:11 pm
No, Quixtar is not Amway, not yet anyway, as I explained in the post. They are absolutely not the same company. Quixtar is registered in Virginia and Amway in Michigan just for a start - completely different corporate entities, ie different companies. Perhaps we just are speaking a different language as to what “the same company” means. I’m an entrepreneur and I own a number of businesses. Something being “the same company” is a very explicit claim and is verifiably false - you don’t have to believe me, you can check with various state company registers.
January 9th, 2008 at 5:01 pm
As far as I know Quixtar and Amway, they both are a part of Alticor family of companies, based at different locations. I would say they are siblings and not entirely different entities altogether.
Please visit http://www.youngentrepreneursociety.com/, you may find a few details there.
Sam
March 4th, 2008 at 11:32 am
Quixtar is Amway. Although they may have seperate registered corporations, they both fall under Alticor. Quixtar and Amway both sell the same stuff, they use the same product brochures, amway ibo’s became quixtar ibo’s.
They’re the same. Anyone who denies it is lying or is grossly misinformed like ibofightback.
Re: The $115 a month. That’s active IBO’s. So IBOfightback is wrong again. If you did nothing, you are not counted. I believe I read on another blog that most IBO’s make only $8 a month anyway because most IBO’s who get a bonus are without downline so they get $8 as a bonus on their 100 pv personal use.