Friday, August 31, 2007

QUIXTAR: What Makes Quixtar Legal

Original Source

What Makes Quixtar Legal
Friday, August 31, 2007 by Gary VanderVen
Category: Transparency, Rules, Quixtar Philosophy

I’m Quixtar’s Director of Business Conduct and Rules and, while I’ve followed the spirited dialog on the Opportunity Zone and other Quixtar-related blogs for some time, I haven’t yet been compelled to jump into the conversation.

Until now.

There has been, of course, a tremendous amount of talk about Quixtar lately, both online and offline. Some have questioned the very legality of the Quixtar business opportunity and have even accused us of being a pyramid scheme.

While no one associated with Quixtar – especially me – likes to hear such allegations, there is value in discussing them because it gives us the opportunity to point out why they’re patently false.

Pyramid schemes are illegal – let’s get that straight right off the bat. There is no such thing as a legal pyramid scheme. So anytime you refer to Quixtar or any other business as a pyramid scheme or as “like a pyramid,” you’re implying that it’s illegal.

Neither Quixtar nor any other legal and legitimate business opportunity should be confused with pyramid schemes. Quixtar Independent Business Owners (IBOs) earn income based on the same sales and marketing plan that has been legally and successfully used by its sister company, Amway Corp., for the past 45 years.

Using Quixtar’s Independent Business Owner Compensation Plan, each IBO sets his own goals and decides how much time and effort to invest. In fact, a key advantage of the Quixtar Plan is that every IBO has the opportunity to reach levels equal to or greater than his sponsoring IBO. Success is as individual as each Independent Business Owner.

There are four key elements that make the Quixtar Plan legal and a model of integrity:

1. Sales-based compensation. Compensation in the Quixtar Plan is based on sales of products and services to consumers. An IBO who sponsors other IBOs earns income based on his own sales and on sales made by the IBOs he sponsors. Quixtar has various rules to assure that compensation is based on product sales.

2. No “headhunting fee.” An IBO is never compensated for merely sponsoring another IBO.

3. No purchase requirements. There are absolutely no minimum product purchases that an IBO must make.

4. Buyback rights. If an IBO wishes to discontinue his business, any currently marketable and unused inventory will be bought back, upon request, by either the sponsoring IBO or Quixtar.

This plan has been cited in many Federal and State courts and agencies as the legal and viable way to operate a business with a tiered compensation plan. With Quixtar, entrepreneurs can feel confident they’re partnering with a credible, successful business organization.

4 comments:

Tom Morris said...

1. Sales-based compensation. Compensation in the Quixtar Plan is based on sales of products and services to consumers. An IBO who sponsors other IBOs earns income based on his own sales and on sales made by the IBOs he sponsors. Quixtar has various rules to assure that compensation is based on product sales.

This is the one I think they are having a problem with. How many sales are actual non-IBO sales? I heard about 3%. Even if it is double, or triple, that it is still a buying club that you make money off your friends buying really high priced items.

I tell you what. I will sell $90 paper clips, and have a sales plan similar to Quixtar. Since no one except those hoping to make money will buy the paper clips, that makes it a pyramid. I know this example is exaggerated, but it makes it much more apparent. (Plus I keep $30 for every paper clip instead of the DeVos and VanAndel families).

rdy4battle said...

Refering to the sentence "Each IBO sets his own goals and decides how much time and effort to invest". From what I have seen of the new rules that go into effect on Sept. 1st all new IBO's must have 50pv of documented retail sales 3 of their first 4 months. That sounds like sales quota's to me.

North of 49 said...

So, lets see what the end-results are likely to be:
1. The California lawsuit eventually goes to court, but not in time to save the Michigan senatorial race from going down in flames.
2. The Federal court ruling goes in favor of TEAM but is challenged by Quixtar, which ties up another 9-15 months in courts.
3. Members of TEAM don't wait for the dust to settle. They no longer accept the QUixtar Rules of Business as being valid & set up a sucessful competative, fairly priced direct sales organization which is managed by a revolving board of Diamond IBO's.
4. Many of the products in the QUixtar inventory, which are independantly manufactured, start to appear with a different Brand Name in the TEAM system. (Does anyone actually think a manufacturer is going to continue to tie his fortunes to a sinking ship?)
5. The average +/- 300PV IBO suddenly starts to become more prosperous with the market advantage he has with competatively priced products & a loyalty based business model.
6. Just like the 1776 American Revolution, this revolution will grow as more IBO groups abandon Quixtar to join TEAM.

From an observer's stand-point, this certainly seems truely like "The American Way".

Anonymous said...

Well Tom, if the sales-based compensation works so well, how come less than 4% of Quixtar's sales are non-IBO consumption?

Where's the FTC in all this? They set the level at 10% in thier rulings. Why aren't they looking into the real numbers?

Why doesn't Quixtar enforce their own rules of 50bv or $100 in sales to customers each month?

C'mon Q! A SELF-REPORTING click a box! THAT is not enforcement and it's been going on for several years now.

Do they really think the FTC will be fooled?

btw, check out a blog called saveusdickdevos.blogspot.com. Man, there's some good info there!