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However, the order was violated with a 1986 ad campaign, resulting in a $100,000 fine [http://www.ftc.gov/opa/predawn/F86/amway.htm].
However, the order was violated with a 1986 ad campaign, resulting in a $100,000 fine [http://www.ftc.gov/opa/predawn/F86/amway.htm].
It is documented in ''The Quixtar IBO Compensation Plan''<ref>''The Quixtar IBO Compensation Plan'' [http://www.quixtarfacts.com/digitalassets/pdfs/us-en/SA4400.pdf (PDF)] from ''quixtarfacts.com''</ref> and on a Quixtar website <ref name=IBOstats>[http://www.thisbiznow.com/quixtar/ibo_statistics.html IBO Statistics] from ''thisbiznow.com''</ref>. The "average income" is calculated using all "active" IBOs, which in a 2001 survey represented 66% of all recorded IBOs.
It is documented in ''The Quixtar IBO Compensation Plan''<ref>''The Quixtar IBO Compensation Plan'' [http://www.quixtarfacts.com/digitalassets/pdfs/us-en/SA4400.pdf (PDF)] from ''quixtarfacts.com''</ref> and on a Quixtar website <ref name=IBOstats>[http://www.thisbiznow.com/quixtar/ibo_statistics.html IBO Statistics] from ''thisbiznow.com''</ref>. The "average income" is calculated using all "active" IBOs, which in a 2001 survey represented 66% of all recorded IBOs.
An active IBO is defined as any IBO who attempted to make even one retail sale, or presented the Independent Business Ownership Plan at least once, received any bonus money (even just as rebates from their own shopping) or attended a company or IBO meeting at least once in the previous year. The average Quixtar income for an IBO that qualified at the ''Platinum'' level in 2005 (.1683% of IBOs) was $47,472 and for a ''Diamond'' (.0120% of IBOs) it was $146,995. The largest single bonus (in addition to monthly incomes) for a Diamond was $1,083,421. <ref>http://www.quixtarfacts.com/us-en/Opportunity/success.html</ref><ref name=IBOstats/>
An active IBO is defined as any IBO who attempted to make even one retail sale, or presented the Independent Business Ownership Plan at least once, received any bonus money (even just as rebates from their own shopping) or attended a company or IBO meeting at least once in the previous year. The average annual Quixtar income for an IBO that qualified at the ''Platinum'' level in 2005 (.1683% of IBOs) was $47,472 and for a ''Diamond'' (.0120% of IBOs) it was $146,995. The largest single annual bonus (in addition to monthly incomes) for a Diamond was $1,083,421. <ref>http://www.quixtarfacts.com/us-en/Opportunity/success.html</ref><ref name=IBOstats/>


==Business Support Materials & Controversy==
==Business Support Materials & Controversy==

Revision as of 13:23, 31 January 2007

Quixtar
Company typePrivate
IndustryMulti-level marketing
Founded1999
HeadquartersAda, Michigan
Key people
Steve Van Andel
Doug DeVos
Jim Payne
Websitewww.quixtar.com

Quixtar is a multi-level marketing company, founded on September 1, 1999. It is the successor to Amway in the United States, Canada, and the Caribbean. It is privately owned by the families of Rich DeVos and Jay Van Andel through the Alticor holding company, which is also the parent of Amway.

In 2006, Internet Retailer ranked Quixtar.com as the number one site in the "health and beauty" category [1] and 18th largest e-commerce site (for revenue) overall. In a survey of the top 40 e-commerce sites, ForSeeResults ranked Quixtar.com equal 5th for customer satisfaction. [1] Total Quixtar sales for fiscal year 2005 were $1.058 billion, slightly down on the previous year. Web generated sales of $753 million were up less than 1% from sales of $748 million in fiscal 2004. $76 million in revenue were generated for Quixtar’s Partner Stores, a record. [2].[3]

Quixtar is also a member of the Better Business Bureau. The BBB Reliability Report for Quixtar can be found here.


Products

Quixtar is the exclusive distributor of Amway/Alticor products, including Nutrilite dietary supplements, XS Energy Drinks and Artistry cosmetics.

Quixtar also markets through their website products from partner stores such as Dell, Circuit City, Barnes and Noble, Bass Pro Shops, Disney Store, Office Depot, Avis, PacSun, Floragift, etc. Quixtar utilizes the Employee & Affiliates Purchase Program discount pricing structure for purchases from most of these third-party partner stores and purchases from most of them do not gain the P/V & B/V normally associated with an IBO's purchases.

Business model

Quixtar is the successor to the Amway business in the United States and Canada. In 2001, after the majority of Amway IBOs had transferred to the new company, Quixtar completely replaced Amway as the marketing venture for Amway/Alticor products in North American regions. The Quixtar business model differs in many aspects from Amway. Quixtar has removed some of the most disliked aspects of Amway's business model such as the way distribution is performed. Rather than ordering product from a distributor who delivers them in person, Quixtar customers place orders online and have the products shipped to them directly. This new method has altered the Amway business model by allowing IBOs to stop spending time distributing and allowing them to focus their energies on building their business, which is developing communities of other IBOs.

The way to become an IBO and buy products at Quixtar's web site is with a referral number from another IBO. The referring IBO then receives a small percentage ("bonus") of the cost of the purchased goods, with Quixtar-exclusive products yielding a higher bonus per dollar in PV/BV Point Value and Business Value. Quixtar offers a wide range of products for its IBOs to purchase for personal use or to sell to customers through Quixtar.com.

Formerly, people could join Quixtar as "Clients", "Members" or IBOs. "Clients" would pay retail price for products and services from Quixtar.com, "Members" would pay a reduced price but would not have the ability to receive bonuses from Quixtar. As of July 2006, Quixtar eliminated the "Members" option, and "Clients" are now referred to as "Customers". IBOs pay a registration fee and build their businesses through retail sales to customers, referring business to Quixtar.com, and by helping other IBOs build similar businesses. Their earnings are based on their business' sales and the volume of sales and purchases of IBOs registered by them.

The structure of a Quixtar organization is hierarchical. Pin levels are the same as in Amway. There are several major pin levels in the model - Silver, Gold, Platinum, Ruby, Emerald, Diamond, Executive Diamond, Double Diamond, Triple Diamond, Crown, Crown Ambassador. Each level denotes a particular level of success in building their IBO business.

In the 1979 ruling In re. Amway Corp., the Federal Trade Commission determined that Quixtar predecessor Amway was not an illegal pyramid scheme because no payments were made for recruitment. In addition, Amway (and later Quixtar) rules required distributors to sell to at least 10 retail customers per month, or have $100 in product sales, or a total of 50PV from customer purchases in order to qualify for bonuses on downline volume. Quixtar IBOs are required to report this customer volume on Quixtar.com or they do not receive bonuses on downline volume. Furthermore, an IBO must also personally sell or use at least 70% of the products personally purchased each month. [4] The FTC established that these rules help prevent inventory loading and other potential abuses of the marketing model.

Quixtar reports that the average income for an active Quixtar IBO in 2005 was $115 a month. The FTC has required this information to be provided to all prospective Quixtar business owners since the 1979 FTC ruling clearing the Amway business model as legal (see litigation below). However, the order was violated with a 1986 ad campaign, resulting in a $100,000 fine [2]. It is documented in The Quixtar IBO Compensation Plan[5] and on a Quixtar website [6]. The "average income" is calculated using all "active" IBOs, which in a 2001 survey represented 66% of all recorded IBOs. An active IBO is defined as any IBO who attempted to make even one retail sale, or presented the Independent Business Ownership Plan at least once, received any bonus money (even just as rebates from their own shopping) or attended a company or IBO meeting at least once in the previous year. The average annual Quixtar income for an IBO that qualified at the Platinum level in 2005 (.1683% of IBOs) was $47,472 and for a Diamond (.0120% of IBOs) it was $146,995. The largest single annual bonus (in addition to monthly incomes) for a Diamond was $1,083,421. [7][6]

Business Support Materials & Controversy

In 2004, Dateline NBC aired a report alleging that some high-level Quixtar IBOs make most of their money from selling motivational materials rather than Quixtar products. [8] Quixtar declined to respond on camera, instead publishing an official Quixtar Response website.[9] Quixtar states on its response site that Dateline declined their request to link to the site.

Much of the controversy highlighted by Dateline is in regard to some of the affiliated companies that support Quixtar IBOs rather than the Quixtar company or business opportunity itself. These companies, dubbed Amway/Quixtar Motivational Organizations (AMOs or AQMOs) by critics, supply Professional Development Programs (PDPs) and Business Support Materials (BSM or tools) to IBOs. The companies are generally owned and operated by successful, high level IBOs, separate from their Quixtar Independent Businesses and the Quixtar Corporation. Bill Britt, the owner of the support company highlighted in the report, and other high level IBOs in his organization declined to be interviewed on-camera. Their lawyer stated in a letter to Dateline that the amount of income made from tools was not available.

During the registration process for a new IBO, Quixtar contracts clearly inform prospective IBOs that BSM are optional and that the producers and sellers of the BSM may be profiting from their sale. This is also publicized on Quixtar websites.[10] Quixtar also requires the buy-back of any defective or unwanted BSM for a reasonable price and within a reasonable time frame. In a video posted on the Quixtar Facts website, Quixtar acknowledges that some IBOs earn more from the training companies they have founded than from Quixtar (see video 3)

In 2006, Quixtar, in partnership with the IBOAI (IBO Association International) launched the "Quixtar Accreditation" program in order to address concerns about the companies that provide BSM to Quixtar IBOs. North American Diamonds (high-level IBOs) and their associated training companies may apply to Quixtar to be accredited by the corporation. Among other things, accreditation specifically states that promotion of particular religious or political viewpoints is unacceptable. Additionally, accredited programs must agree to a range of other guidelines, including full transparency in any compensation paid for "tools". Accreditation lasts two years and is enforced through reviews of materials and surveys of IBOs. The full guidelines are listed in the IBO Communications Platform. In April of 2006 eFinity became the first Quixtar affiliated support organization to receive accredited status.

Quixtar is currently involved in litigation with the tools businesses of Former Crown Distributor Kenny Stewart and Double Diamond Brig Hart.[11]

Quixtar has several other IBO's that question the merrit of the company and are seeking legal action. One individual, Eric Scheibeler, who achieved the success level of Emerald has authored a free E-Book entitled Merchants of Deception where he tells of his first-hand experiences as an Amway-Quixtar IBO. In this book Eric Scheibeler claims that the company is guilty of global fraud that systematically destroys every aspect of each individual IBO through mind control.

Promotion

Athletes who have promoted Quixtar or its products include Jamaican sprinter Asafa Powell, heavyweight boxer Evander Holyfield and the NFL player Emmitt Smith[citation needed]. Tim Foley, a member of the undefeated 1972 Miami Dolphins, is a Quixtar Founders Crown Ambassador.[12]

Author and leadership expert John C. Maxwell, who writes leadership books including The 21 Irrefutable Laws of Leadership, is known to support Quixtar support organisations such as Worldwide DreamBuilders [citation needed] and co-authored a book, Becoming a Person of Influence, with Jim Dornan, Quixtar Founders Crown Ambassador and founder of Quixtar support organisation Network TwentyOne. Paul Harvey, a radio broadcaster, known for his 'The rest of the story' tagline, has long been associated with the Quixtar program that is advertised on his show.[citation needed]

In the summer of 2004, some Quixtar leaders allegedly launched a Web initiative designed to make their web pages more prominent in search results, aka Google Bombing. Quixtar denies wrongdoing and states that its practices are in accordance with search engine rules.[13]. Many of the comments and websites that are claimed to be part of a Google Bomb by Quixtar are actually attributed to IBO leaders who do not officially speak for, or make public relations decisions for the Quixtar Corporation.

As a guest speaker at the Quixtar LIVE! conference in 2003, Dr Phillip McGraw reportedly described Quixtar as "one of the greatest success stories in American business history."[3]. In a 2006 settlement involving a class-action lawsuit brought against McGraw and his Shape-Up diet products, plaintiffs could receive a share of $6.0 million in Quixtar-brand Nutrilite vitamins and $4.5 million in cash. [14] [15]

References

Corporate Sites

In the news

Other sources