Tuesday, November 27, 2007

TEAM: Who damaged whom? (Chuck Goetschel's perspective on Fanista)

Original Source

Who damaged whom?
by Admin on Tue 27 Nov 2007 08:40 AM PST

I was on the plane flying home Tuesday, November 20, 2007 from mediation meeting with Quixtar attorneys, the person sitting in front of me was reading the New York Times and I found myself in shock by what I was seeing on the front page of the business section.. “No way!” I kept thinking once I was able to read the entire article. “Developed in secrecy over the last two years” the article explained, the new web business was finally launching. “Think of it as part Amazon (online retail), part My-Space (social network) and part Amway (direct pitch from somebody you know).” The products: “DVDs and CDs…and in the coming months it plans to add video games, digital downloads and books.” “More consumers shop online for books, DVDs and music than any other product, according to iCrossing.” The bottom line: Alticor (parent company of Amway/Quixtar) has decided to launch a competing multilevel business named Fanista. They are even attempting to promote a new coin name to the industry, “common interest commerce” to replace multi-level marketing. The big question is why wasn’t Fanista added to Amway/Quixtar rather than launched as a competitor? Once you answer that question, you will understand why I, along with five other IBOAI board members, said without change we could no longer support the Company. In my opinion, and supported by the Fanista launch, they are not leading with the best intentions of the independent business owners (IBOs) in mind.

In my previous paper, “The truth they don’t want you to know”, I talked about how it appeared to me that the Company was going to sell around the IBOs. Several web sites have been set up where the general public can purchase directly. New rules were being passed allowing products to be sold to the public through certain venues. And, great success has occurred in China where products are sold in stores yielding rumors that the “China model” will be seen elsewhere starting in India. However, I honestly never believed that the Company would go so far as to launch a competing multi-level business to Amway/Quixtar. Given Fanista is a direct competitor, it makes one wonder if Amway/Quixtar IBOs register, refer people and earn a profit from Fanista, are they in violation of the non-compete clause of their contract.? If they refer people to their Fanista community from their own or other lines of sponsorship of the Amway/Quixtar business, are they in violation of the non-solicitation clause of their contract? If IBOs can do these things, how is it not in violation of their contract? Is that part of the contract void only if the competing business is also owned by Alticor? And, if IBOs cannot participate, how is it ethically acceptable for the rest of the world to profit with Fanista while the IBOs that created Alticor’s wealth are left out?

Currently, I, along with Randy Haugen, Don Wilson, Orrin Woodward, Chris Brady and Billy Florence, am being sued for damages by the IBOAI board for breaking their confidentiality agreement. In the oath we agreed to “keep all things confidential.” However, we also agreed to “serve and protect” the IBOs. When the IBOAI board UNANIMOUSLY agreed and informed the Company that the “Amway Transformation” was going to be harmful to the IBOs but no change occurred to the direction being taken, then the only way to serve and protect the IBOs was to tell them the truth. I took that responsibility seriously to the point of loosing my business, my income and everything I had worked years to create. Everyone also agreed that we believed in the promise of Rich DeVos that the board gave people security. That is, he “guaranteed” the business owners that the Company would never make a change without the support of the board—our security was that nobody would ever “change the deal.” We all bought into his promise, promoted it, and it was never discounted by any leader or Corporate representative.

Specifically, Rich DeVos said, “…There is no other company in the world that ever set up an association like this one… Everything we do is done in consultation with your representatives who meet with us four times per year…We did that so you would feel secure when somebody like Jay or myself got fat and happy or something and tried to change the deal. And so we said before we even got it going, we set up a guarantee that we can’t change the deal. Because if we know we can’t, we won’t even think about trying…You have that assurance and that protection for your plan because a lot of you have been without it and they changed the deal just about the time you were to make it live for you! We wanted to make sure that didn’t happen to you.” (For the actual recording of Rich DeVos, either click on the following link or copy and paste it into your browser: http://www.musicwebtown.com/theiborebellion/playlists/114468/884361.mp3).

I know we on the board all believed in this promise. From my understanding, the June 2007 board meeting was the first time in board history that a unanimous vote was taken against the direction of the Company. I also believe that the August 2007 emergency board meeting was the first time in board history such a meeting was called. However, in the end, no promise was upheld as the Company marched forward unaffected. At the August board meeting, I believe when the pressure was put on each of us to individually state to Doug DeVos, Steve VanAndel and Jim Payne where we stood with everything, had we all maintained a firm posture that was in alignment with our unanimous negative vote against their agenda, we may have had a chance to stop it. It was sad to me to see the flip-flop personas of the remaining board members. I truly don’t mean to be critical of those remaining board members but our only chance was to stay strong and unified. How can they sign a document to the Company vehemently opposed to an Amway transformation one day and sign a document to IBOs thoroughly excited about it the next day? I am not one to say anything of negative nature of others, particularly people I would consider friends and business leaders, however, now that they chose to sue me and the other five for damages, it motivates me to open up. Whose business is damaged by whom? In my opinion, hundreds of thousands of IBOs will have a significantly worse business opportunity than they could have had because the remaining board members didn’t stand firm.

This situation reminds me of the story of when Henry David Thoreau was put in jail for not paying his taxes. He refused to pay his poll tax to a government that supported slavery. He said, "I cannot for an instant recognize . . . as my government [that] which is the slave's government also." While in jail (the non-documented story says), he was paid a visit by Ralph Waldo Emerson who asked Thoreau, “Why are you on that side of these bars?” To which Thoreau responded, “Why are you on THAT side?” The other board members want to sue us and silence us in jail and I question them why they are on that side?

As a final note for thought, if one isn’t convinced that firm pressure from the right source can’t evoke change, then take a look at some of the price reductions Amway of UK has made due to the pressure from the DTI. Although Alticor has expressed the DTI investigation as a training systems--business support materials (BSM) problem, the main root issue all along has been the lack of income people can make due to the pricing of products being too high (See London Times article regarding the current court case). Do you think this couldn’t happen in North America and elsewhere too?

BODY SERIES™ Concentrated Liquid Hand Soap 250 ml
UK price: £1.75 was Retail £7.95

BODY SERIES™ Fresh Scent Deodorant and Anti-Perspirant Spray 200ml/130 g
UK price: £2.95 was Retail £6.50

BODY SERIES™ 3-in-1 Bar Soap 6 bars - 150 g
UK price: £4.50 was Retail £12.25

SA8 SOLUTIONS™ Pre-Wash Spray 400ml
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L.O.C. ™ Mini Wipes 4 travel packs each with 24 wipes
UK price: £4.25 was Retail £10.90

GREEN MEADOWS™ Air Freshener 150 ml
UK price: £1.25 was Retail £4.30

PURSUE™ Toilet Bowl Cleaner 750ml
UK price: £2.45 was Retail £5.50

L.O.C. ™ Plus SEE SPRAY Glass Cleaner 500 ml
UK price: £1.45 was Retail £5.85

L.O.C. ™ Plus Soft Cleanser 500 ml
UK price: £1.35 was Retail £5.80

AMWAY™ Wax Furniture Polish 400 ml
UK price: £1.45 was Retail £6.65

BODY SERIES™ Concentrated Liquid Hand Soap Refill 1 Litre
UK price: £5.95 was Retail £26.40

We stood up to the Company to evoke change in the interest of all IBOs. We felt it was essential that the Company lower the prices as now has happened in the UK. We were concerned about the concept of the Company selling around the IBOs as it would be devastating to the individual business owner. Fanista is beyond what anyone ever imagined. We felt the Amway Transformation was going to take a very difficult business and make it a next to impossible business. That transformation is underway. The board, according to Rich DeVos, was the people’s security. It was designed such that the elected representatives would stand firm in their beliefs to the Company and the Company would listen. The board had a united opinion. After an emergency board meeting no change was happening. It was the final hour. We stayed firm with our convictions while the others claimed, “There is nothing we can do” and flipped over. I so wish they would have stood with us. Instead, their current lawsuit for damages against us is now in process. Who damaged whom? I hope all can be resolved soon.

2 comments:

Steve said...

Thanks Chuck. We too are amazed at the crazy things the corporation is doing. Unfortunately the business will never be what it use to be. We now sit on the sidelines of all of these lawsuits and wait for Team to come out on top with a business opportunity we can all be proud to promote.

I was talking to a former IBO yesterday about what was going on and his only comment was that he quit because he couldn't justify spending so much on the products when he was on a dollar store budget...PRICE once again cost me an IBO.

Hurting Inside said...

There are also more details on Fanista on my blog @

http://livesturnedupsidedown.blogspot.com/