Quixtar is a multi-level marketing or Network marketing company, founded on September 1, 1999. It is privately owned by the families of Rich DeVos and Jay Van Andel through Alticor which is the holding company for businesses including Amway, Quixtar, and a manufacturing and distribution company called Access Business Group. After the launch of Quixtar, it replaced the Amway business in United States, Canada and the Caribbean, with the Amway business continuing to operate in other countries around the world. Company officials confirmed in June of 2007 that, over the subsequent 18 to 24 months, the Quixtar name would be dissolved and the Amway name would be revived in North America, reuniting it with its sister Amway organizations around the globe ^[1].

Quixtar is also a member of the Direct Selling Association and the Better Business Bureau.

Rich DeVos and Jay Van Andel initially founded the Ja-Ri Corporation, a multi-level marketing distributorship for Nutrilite products, in 1949. Ja-Ri was incorporated in 1959, and changed its name to "Amway" in 1963. As of 2007, Amway operates in more than 80 countries around the world. In 1999, the founders of the Amway corporation launched a sister Internet-based company named Quixtar. The Alticor corporation owns both Amway and Quixtar, plus several other concerns. Quixtar replaced the North American business of Amway in 2001 after the majority of the distributors moved to Quixtar, with Amway operating in the rest of the world.

On June 13, 2007, it was confirmed by the Associated Press that over the next 18 to 24 months, the Quixtar business will be under global Amway brand in North America. According to Chairman Steve Van Andel and President Doug DeVos, "We are going through a global transformation of our business; this includes rethinking our global approach to products, training, brands, and how we operate in all the countries in which Alticor operates. As part of that, in 18 to 24 months, we're planning to begin using the Amway name in North America to unite our business opportunity under a single global brand."^[1]

Quixtar is the exclusive distributor of Alticor products in the United States and Canada, including Nutrilite dietary supplements, XS Energy Drinks, air and water purifiers ^[2] and Artistry cosmetics.

Quixtar also markets through their website products from partner stores whose list can be found at Quixtar website. Quixtar utilizes the Employee & Affiliates Purchase Program discount pricing structure for purchases from most of these third-party partner stores. Purchases from some of them ( generally called discount-only partner stores ) may not gain the P/V & B/V (measures of sales volumes, used for calculating bonuses to be paid) normally associated with an IBO's purchases.^[3]

Quixtar relies on person-to-person referral rather than advertisements for sale of products.^{[citation needed]} A large part of the marketing budget is spent on paying bonuses to distributors. IBOs were paid more than $370.1 million in bonuses and incentives in fiscal year 2006.[2]. Bonuses are paid for individual sales and sales generated by people one sponsors but not for sponsoring itself. ^[4][5] Quixtar is owned by same owners as the Amway business in the United States and Canada. In 2001, after the majority of Amway IBOs ("Independent Business Owners" is the term used by Quixtar for business owners who choose to participate in Quixtar business model to refer customers and other 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 from the Amway business model in many aspects, such as the way distribution is performed as well as the products and services offered through partner stores. Rather than ordering product from a distributor who delivers them in person, Quixtar customers can place orders online and have the products shipped to them directly.

The way to buy products at Quixtar's web site is with a referral number from an IBO. In addition Quixtar gives IBOs the option to create free personal website to help grow their business. Quixtar offers site pages that can be personalized to create Health, Beauty, Health & Beauty, and/or Gift & Incentive e-commerce site. The referring IBO then receives the retail/wholesale difference (usually 30%), and a percentage ("bonus") of the cost of the sold goods (from 3% up to 25% depending on total PV generated), 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 and/or to sell to customers through Quixtar.com and IBO personal e-commerce sites.

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's IBO organization is hierarchical, but an individual can earn more than those who bring them into the organization.^{[citation needed]} Pin levels are similar as in Amway. There are several major pin levels in the model ^{[6] [4]} denoting particular level of success in building their IBO business.

Quixtar IBOs earn income in different forms in various categories including IGP ( Immediate Gross Profit ), Performance Bonus, Leadership Bonus, and other Growth incentives. IGP is the profit made when customers of an IBO buy products and services from Quixtar at retail price. A majority of IBOs who make income in the beginning are in this category only ^{[citation needed]}. Performance bonus on a scale of 3% to 25% of the group volume ( total BV of the sale made by the group ) is paid if the PV level of the IBO is more than 100 PV in a month. Leadership bonus is paid at 4% of BV of each qualified leg who is at 25% or 7500 PV. Growth incentives are announced by Quixtar every year in the form of bonuses and paid trips at various levels. These bonuses are awarded to IBOs who are at Platinum or higher achievement levels.

The average annual Quixtar income for an IBO that qualified at the Platinum level in 2005 (0.1683% 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][8]

However Quixtar reports that the average income for an active Quixtar IBO in 2005 was $115 a month. It is documented in The Quixtar IBO Compensation Plan^[6] and on a Quixtar website.^[7]

As mentioned on IBO Registration form^[9], Based on an independent survey during 2001, “Active ” means an IBO attempted to make a retail sale, or presented the Independent Business Ownership Plan, or received bonus money, or attended a company or IBO meeting in the year 2000. Approximately 66% of all IBOs of record were found to be "Active"

The IBOAI (IBO Association International) [3] was founded with the goal of advising Quixtar of the interests of IBOs. It works through elected representatives from among the IBOs.

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 Business Support Materials. The "full" transparency only applies to the IBO's who are participants in the BSM income, for most groups this means Platinums and above, representing a very small percentage of IBO's. 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 [4] became the first Quixtar affiliated support organization to receive accredited status.

Forbes ranked Alticor, as the 27th largest privately owned company with estimated revenue of $7.29 billion ^[10]. In 2006, Internet Retailer ranked Quixtar.com as the number one site in the "health and beauty" category [5] 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.^[11]

Since 1999, IBOs powered by Quixtar have earned more than $2.2 billion in bonuses and other incentives by generating sales of more than $6.8 billion at www.quixtar.com, and another $500 million for Quixtar Partner Stores.

Quixtar-powered IBOs generated revenues of $1.118 billion for Quixtar for the fiscal year ended December 31, 2006, the fourth consecutive year in which the company surpassed the billion-dollar mark. IBOs also generated record $84.6 million in revenues for Quixtar’s Partner Stores in 2006.^[12]

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.^[13]

Author and leadership expert John C. Maxwell, who writes leadership books including The 21 Irrefutable Laws of Leadership, is known to support Quixtar affiliated organizations 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 organization 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]}

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."[6]. 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]

The Federal Trade Commission offers advice for potential MLM members to help them identify those which are likely to be pyramid schemes.^{[16] [17]}

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.

The FTC has required the information on average income to be provided to all prospective Quixtar business owners since the above 1979 FTC ruling clearing the Amway business model as legal. However, the order was violated with a 1986 ad campaign, resulting in a $100,000 fine ^[18].

In 1983, Rich DeVos, one of Amway's founders, made recordings which, among other things, communicated his displeasure with several issues regarding some of the high ranking distributors/IBO's. These recordings are entitled "Directly Speaking"^[19][20] and were addressed to Direct Distributors (now called Platinums), who are considered leaders with various responsibilities for their downline group. Rich DeVos expressed concern about the level of income on BSM's (tapes, CD's, books, and functions) compared to the income on Amway products that the high level distributors were making. He stated his legal team was concerned if the tool income exceeded 10% of their Amway income, but he could accept twice that amount.

A 1985 Forbes magazine article quoted Dexter Yager, an IBO, as stating that about 2/3 of his income is from BSM's.^[21]

In 2004, a TV news channel aired a controversial report, alleging that some high-level Quixtar IBOs make most of their money from selling motivational materials rather than Quixtar products. Quixtar declined to respond on TV camera accusing them of biased reporting, instead publishing an official Quixtar Response website^[22] where it showed '"Interviews Dateline Didn't Do"'. Quixtar also states on its response site that the TV channel declined their request to link to the site.

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 make profit or loss from their sale (like any other business).^[9] This is also publicized on Quixtar websites.^[23] Quixtar's rules of conduct also require the buy-back of BSMs upon request within a reasonable time frame, on commercially reasonable terms which should be communicated to the purchaser. ^[4]

Quixtar is currently involved in litigation with the tools businesses of Former Crown Distributor Kenny Stewart and Double Diamond Brig Hart.^[24] A class action lawsuit was filed in 2007 against Quixtar, Britt World Wide and World Wide Dream Builders in California, alleging that that the products business and the tools business are pyramid schemes^[25].

According to one Quixtar website, Eric Scheibeler is a former emerald IBO who has been extremely vocal in his criticism of Quixtar for years, ever since his failed efforts to sue Quixtar for millions of dollars. He accuses the company of fraud and filed a suit against Quixtar, which was referred to arbitration. He was terminated from Amway business in 1999. Quixtar Inc. and sister-company Amway Corp. filed a lawsuit against Mr. Scheibeler in February 2007 for defamation based on inflammatory comments made by him on the Web and in statements made to the news media.^[26]. On August 31, 2007 Mr. Scheibeler admitted in a Federal Court that he had lied when he said he'd uncovered billions of dollars in consumer fraud with the company and that he falsely said he and his family were threatened, that he had been offered money in exchange for his silence and that Quixtar did something to his Web site.^[27]

On August 9, 2007, a group including eight of the largest Quixtar distributors, including founders of the TEAM training organization filed a lawsuitseeking to enjoin Quixtar from enforcing its distributor contracts, including the non-competition and non-solicitation provisions. The plaintiffs allege that the company knowingly operates as a pyramid scheme, and prevents its distributors from leaving the organization through the aforementioned provisions. According to one plaintiff, the lawsuit is not seeking damages, but rather a judicial declaration that these "provisions are unenforceable so that distributors who choose to do so can extricate themselves from continued forced participation in Quixtar's illegal pyramid scheme and pursue legitimate business opportunities instead." The plaintiffs allege that Quixtar's products are significantly overpriced and that it is widely understood that distributors buy products mostly to earn commissions or bonuses. The complaint states, in fact, that only 3.4 percent of Quixtar's sales are made to customers outside of the Quixtar distributor network. Quixtar distributors are not instructed to sell their products in the open retail market, simply because it can not be done. According to the lawsuit, Quixtar distributors "are effectively trapped in Quixtar's system, forced to buy and consume outrageously priced products and recruit new victims as the only means of avoiding financial loss, because leaving Quixtar is rendered impossible by the non-competition and non-solicitation rules." The lawsuit was filed in federal district court, central district of California, western division.

On August 10, 2007, Quixtar terminated the businesses of fifteen of the plaintiffs involved in the lawsuit, and sought and received a temporary restraining order and preliminary order of injunction^[28] in a Michigan court preventing them from interfering with the LOS, soliciting IBOs for their new company, or disparaging Quixtar or the business in any way.

There are several lawsuits currently in litigation that have been filed by IBO's against Quixtar to prevent them from disparging their IBO business and their organizations ^{[citation needed]}.

Quixtar is a member in good standing of the Direct Selling Association and in full compliance with the organization's code of ethics.

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.^[29] 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 ^{[citation needed]}.

• Alticor
• Amway
• Britt World Wide
• Access Business Group
• Network TwentyOne
• TEAM

• Quixtar Inc's Official site
• Quixtar shoping portal

• MiBiz article about Quixtar corporate blogging and First Circle Initiative
• CNET article about Quixtar launch
• NY Times article about Quixtar launch
• eWeek - Quixtar: Cleaning Up
• Taipei Times article about Quixtar "Ditto" Program
• Cleveland Free Times about Quixtar's influence in the Midwest.

• FTC's Ruling on Illegal Pyramid Schemes
• BBB reliability report on Quixtar

• Western Michigan BBB Reliability Report