Original Source
Friday, August 31, 2007
QUIXTAR TRAINING MANUAL EXPOSED
More breaking news from the demented world of Quixtar. Do I have a real copy of Quixtar's training manual? Well no, but I am sure what I have found is right on par with the same character and integrity that is currently in play with Quixtar's Legal department. Apparently all those highly educated attorney's at the big Q have spent some time doing criminal defense work! Why you say? We all know all the great stories of the world's dumbest criminal's. Apparently the attorneys at Quixsand represented some of those fine folks,.... because it has either rubbed off on them or the whole negative association thing has manifested itself.
For all the world to see, Quixtar Legal appears to be orchestrating it's own show, " The World's Dumbest Attorney's...... Powered by Quixtar." These brilliant, deep thinkers, are currently engaged in one of the MOST OBVIOUS cases of CYA (cover your ass) that I have ever seen. If you are a Platinum or above maybe you have noticed the sudden surge of UNEXPLAINABLE customer orders. I use the word SURGE because I think Quixtar is trying to falsify one customer for every new soldier President Bush has recently deployed to Iraq. If you don't understand let me splain... that's explain for those of you in Quixtar Legal.
Platinum's and above are eligible to receive customers. On occasion potential customers call Quixtar looking for products. The customers are simply referred to a Platinum or above. The potential customer is typically geographically close to the IBO receiving the referral. The IBO, generally, after being provided contact information for the customer, calls or emails the customer to take the order. Some Platinum's and above have NEVER received a referral from Quixtar while others have gotten a handful. There is obviously no way for me to have all the figures. However, from all the information I can gather, the referral rate is some where around one customer per year... if that!
So that brings us to present day Quixtar. A company clearly feeling vulnerable on the issue of the inability of its IBO's to retail products effectively. Can you say PYRAMID? In recent weeks, the unexplainable surge of customers assigned to TEAM IBO's has been substantial. Could this just be a coincidence? I don't think so. These customers are doing things never seen before. THEY ARE BUYING AT RETAIL PRICES WITHOUT EVER TALKING TO THE IBO THEY WERE REFERRED TO! This is in stark contrast to some referrals that never buy anything when they are told what the prices are, and they come to their senses. So not only are the customers now being referred, but many times the first indication an IBO gets of a new customer is the $200 order appearing on their computer screen.
You might ask, who are these customers? In trying to follow up on all these apparent eager beavers, willing to over pay for products, what we find is quite alarming. What we find are bogus email addresses, bogus names, or worse yet no contact information at all. Yes, that's what I said, no contact information at all. How can that be considered a customer referral? What's great is that even with no information these customers are reportedly buying stuff, even without providing a ship address. In one instance, the supposed customer said she had never heard of Quixtar and asked how we got her information. Needless to say she said she never placed an order either.
As I stated, we are witnessing one of the most pathetically obvious attempts of CYA in history. As Quixtar Legal attempts to shield itself from what certainly will bring this company to its knees, it has resorted to dishonesty and deceit. Again for you in Quixtar Legal, that means you are LYING. You should have learned a long time ago, one lie always leads to another. The only other explanation would be that you are so arrogant that you would actually think all the IBO's, commonly referred to as "Property" in your office, would believe your fake customer fiasco. So I have taken the liberty to attached your training manual for OPERATION FICTITIOUS CUSTOMERS. Found at the gaudy site www.askmen.com, it has all the elements of your current operating standards. (see attached manual below--- How to: Cover Your Ass)
By Miles Harvey
Every other Wednesday
Photo at top; credit to istockphoto.com
Learning how to cover your ass is a great skill
In order to survive in the wild, animals rely on finely-tuned senses, remarkable agility and, in some cases, cool stuff like claws and body armor. These skills and attributes can also serve the modern man well in his pursuit of life, love and success in the dog-kill-dog-and-steal-his-wallet world of today. But he also needs an additional skill to thrive, one that even the most highly evolved wild creature lacks: the ability to cover his ass.
Be it professionally or in relationships, deftly covering up, spinning or minimizing one’s mistakes can be the difference between dining on steak at the top or digging around the dumpster for discarded cat food at the bottom. Any modern survival guide absolutely must have a chapter on this invaluable skill.
We’ll save you a trip down to the bookstore and provide you with everything you’ll need to keep your backside unscathed. And all it cost you was the 13 calories you burned by clicking through.
Always operate in groups
There is a reason fish swim in schools -- their individual chances of getting picked off by toothy predators are reduced. So whether you are working on a project at work or planning a buddy’s stag, it is usually better to be part of a group.
Not only will you have less responsibility (read: stuff to do), you’ll also greatly reduce your share of the blame should things go south. There’s no single point of accountability to fault, and you should escape relatively unscathed -- unless you really screwed up, in which case you’d better start surrounding yourself with as many other fish as soon as you can.
Like everything in life (except shortbread), it's all about moderation. Swim with the pack too often, and you’ll fade into the background and miss opportunities for it, but stick out like a seal in shark infested water and you're going to get eaten alive.
Always have an alibi
Certain situations that might require an alibi, so always have one in your back pocket just in case the need arises. That might sound a bit disingenuous, but often a white lie is the best way to defuse an unsavory situation before it all goes to hell in a hand basket.
Sneaking out of work for a job interview? Make sure you haven’t used the ol’ dentist excuse for a while. Breaking plans with your girl to go golfing with buddies? You’d better make your excuse believable, and get your buddies to corroborate. Girls love to turn into Columbo and poke holes in stories when they smell a rat. And Lord help you when she finds the scorecard and ball marker in your grass-stained khakis. My advice to you is; fight the urge to run and confess to nothing!
Anticipate failure, and plan for it
In Driver’s Ed., they tell us to always leave an out -- be it space in front or a gap in the lane next to you -- as a way to escape should things go wrong. This same logic should apply in everyday situations, not just on the road. If you are working on a project and it becomes clear that things just aren’t going to work out, start planning your "escape" early. This proactive reasoning will give you a chance to craft a viable plan rather than reacting off the cuff and risking further failure and embarrassment.
You need to learn to smell failure before you start doing anything. The guy above you probably can, that’s why he’s asked you to do the crappy job for him. Instead of following through with it, find someone else to take the shot for you. You not only avoid the inevitable failure, you also get major points from superiors for showing the gumption to delegate -- that’s management material!
Keeping records and acceptance are both acceptable ass-covering techniques...
Always have backup logic
Sure, this helps you cover your ass, but it is also a sound practice to use all the time. When making important decisions that essentially put their necks on the line, most people have a solid rationale for doing so. But really smart (and successful) people will have an alternate explanation just in case their original line of reasoning falls on deaf ears. Some call it spinning yarn or twisting reality. Others call it good business fundamentals (especially those in politics.) Use this kind of pragmatic thinking, and you’ll be amazed at how you can come out of rotten situations looking like a golden child.
Accept what you’ve got coming to you
Sometimes, if things don’t work out the way they are supposed to, you’re better off accepting whatever punishment is coming and making it clear to your superiors (be they your boss or your girlfriend) that you learned a valuable lesson and will not make the same mistake again. Being gracious and humble at a time like this can distance you from the frazzled masses spinning their wheels in damage-control mode.
Once you’ve fingered yourself as the culprit, you set up an opportunity to right the wrong and instantly reverse your fortunes in the eyes of your bosses and colleagues. With your girlfriend, it starts with flowers and humility. Professionally, it starts with organizing the team around you and getting sh*t done. Luckily, your coworkers will undoubtedly admire you for "falling on the sword" and will work twice as hard to ensure you succeed with your neck on the line. Except for the lazy guy in IT... he’ll probably continue to show up late and keep disappearing for hours on end.
Keep records
Unless you are an unscrupulous accountant, keeping detailed records can often cover your ass very effectively when the monkey throws the turd, so to speak. People attempting to save their own hides will often panic and start denying and blaming everyone around them. But keeping a copy of the e-mail you sent them or saving the phone message they drunkenly left will keep you clean and make their lives even more difficult. It’s really fun to watch them squirm.
Of course, the drawback is that when it is you that has neglected to read the e-mail or return the call, your "catalog of evidence" becomes one big ball of karmic irony. And with the Big Brother-esque powers of the average IT department, a big ball that can’t be destroyed. All this is motivation to actually pay attention to the details in tasks or at least start reading books on computer hacking.
get your butt off the line
Not having to cover your ass means never having to step out from the crowd and take a chance. You can remain huddled in with the masses and accept mediocrity in exchange for never having to exercise a bit of pragmatic thinking or planning. Or, you could grow a couple, grab the bull and try to make something great happen!
And when you fail at that (you will from time to time, unless you’re Tiger Woods or the guy that makes Peanut Butter Cup gelato down at Mario’s Iced Creamery), you can use what you learned in this article to lessen the impact. Failing that, you can cross the bridges you never burned and take advantage of the opportunities waiting you on the other side. Call that friend from college who is in IT recruiting or e-mail the cute girl you met at the conference and start crafting an escape plan. Networking isn’t something you do on your couch with a remote -- it’s a crucial step in covering your ass and moving up to better things.
Posted by The IBO Rebellion at 11:43 PM
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.
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.
QUIXTAR: Just gone - Orrin?
Original Source
August 31st, 2007…
Just gone - Orrin?
The following comes from a complaint Ron Simmons filed in court in Texas today. Haven’t had time to PDF it yet. The interesting part reads:
“The Woodwards and Bradys at one time operated a business support training business that functions and exists entirely independently from Quixtar, namely TEAM. The Woodwards and Bradys have resigned their positions from TEAM.”
News to us. Anyone else?
August 31st, 2007…
Just gone - Orrin?
The following comes from a complaint Ron Simmons filed in court in Texas today. Haven’t had time to PDF it yet. The interesting part reads:
“The Woodwards and Bradys at one time operated a business support training business that functions and exists entirely independently from Quixtar, namely TEAM. The Woodwards and Bradys have resigned their positions from TEAM.”
News to us. Anyone else?
Hornet's Nest on Pricing
It appears that adatudes is trying to respond to my post on pricing. Here are some quotes from their blog posting (shown in a previous posting here).
This "target market" is disappearing. We used to live in a one-income society. It now takes two incomes to live the average lifestyle. It is continuing to get worse. People cannot possibly think about getting the best, when they are more worried about making mortgage payments. For IBOs, its ok, because we are working towards being in the top 5%, but most of our customer have little hope of that, unless they are already there (and are thus only 5% of the population).
No argument there. Nutrilite has great vitamins. The best. However, it is priced well higher than its competitors. When things get tight, people will switch to Centrum in a heartbeat. And customers, even worse.
Since I don't wear makeup, I can't comment on this much. I imagine it is the same thing as Nutrilite. Its the best, but when things get tough, this will be one of the first things to go, unless it is your main source of PV. The big difference with Artistry is that it has competition that is priced in the same range.
This is the real price advantage, and quite a bargain. This is the real Amway. The success of yesterday. The problem is, they last so dang long, that you will be using your first box of SA-8 for the next couple of years. Not really repeat business towards your 100PV each month. This is where all my customers come in. They buy the cleaning products. The problem is, they contact me every year or two to replenish. To have 10 customers a month, I would need around 2,000 real customers, who would purchase cleaning products about once a year or two.
Here, Amway is competitive. Not a great deal, but not overly expensive either. However, this is the exception. The reason so many IBOs are so focused on XS, is because it has good PV, a decent price and is consumable, you can use it every month. From what I understand. Alticor specifically focused on making this product line competitive in the market, but they don't seem willing to do the same with any of the other product lines.
Notice they did not say anything about price. You buy an expensive air filter and then are on the hook for two expensive filters about once a year.
Wait, didn't they say earlier that When comparing apples to apples...? They are comparing an under the sink unit with pitchers, bottled water and faucet filters. Why don't they talk about cost and compare with other under the sink models? How about the average life time of the enclosures for the water filters? You also are on the hook for an expensive filter replacement once a year.
I don't think they are actually the leading online retailer of health and beauty products since no one retails. I heard somewhere that only about 3% of sales are "retail" sales.
In other words, the market has decided that are products are too pricey unless you have hope that you might get a kick-back. That's why 3% of our sales are to the 5% that have money to burn.
These and other Quixtar brands are premium priced and designed for a specific target market seeking prestige, quality and performance.
This "target market" is disappearing. We used to live in a one-income society. It now takes two incomes to live the average lifestyle. It is continuing to get worse. People cannot possibly think about getting the best, when they are more worried about making mortgage payments. For IBOs, its ok, because we are working towards being in the top 5%, but most of our customer have little hope of that, unless they are already there (and are thus only 5% of the population).
NUTRILITE products are the world's leading brand of vitamins, minerals, and dietary supplements.* With total quality control of its plant concentrates from seed to tablet, NUTRILITE is the only global vitamin and mineral brand to grow, harvest, and process plants on its own certified organic farms.** NUTRILITE supplements often deliver more key phytonutrients per serving than the competition.
No argument there. Nutrilite has great vitamins. The best. However, it is priced well higher than its competitors. When things get tight, people will switch to Centrum in a heartbeat. And customers, even worse.
The ARTISTRY brand's high-quality formulas, elegant packaging, and technologically advanced product innovation have placed ARTISTRY among the world's top five largest-selling prestige brands of facial skin care and colour cosmetics.*** It's priced competitively with others in this distinguished group, which includes well-known brands like Clinique®, Lancôme®, Estée Lauder®, and Chanel®.
Since I don't wear makeup, I can't comment on this much. I imagine it is the same thing as Nutrilite. Its the best, but when things get tough, this will be one of the first things to go, unless it is your main source of PV. The big difference with Artistry is that it has competition that is priced in the same range.
Home brands like L.O.C.® Multi-Purpose Cleaner and the SA8® laundry system are often priced lower than the competition on a cost-per-use basis. When comparing apples to apples, home products meet or beat the competition on product performance, cost, or both.
This is the real price advantage, and quite a bargain. This is the real Amway. The success of yesterday. The problem is, they last so dang long, that you will be using your first box of SA-8 for the next couple of years. Not really repeat business towards your 100PV each month. This is where all my customers come in. They buy the cleaning products. The problem is, they contact me every year or two to replenish. To have 10 customers a month, I would need around 2,000 real customers, who would purchase cleaning products about once a year or two.
XS™ Power Nutrition products include sports drinks, protein shakes, energy bars and energy drinks that have all of the “energy,” and none of the sugar of other energy drinks. XS products are priced very competitively with many other sports nutrition brands.
Here, Amway is competitive. Not a great deal, but not overly expensive either. However, this is the exception. The reason so many IBOs are so focused on XS, is because it has good PV, a decent price and is consumable, you can use it every month. From what I understand. Alticor specifically focused on making this product line competitive in the market, but they don't seem willing to do the same with any of the other product lines.
The ATMOSPHERE™ Air Purifier, as seen by the 44 million viewers of ABC’s hit TV Show “Extreme Makeover Home Edition,” purifies with advanced technology that automatically monitors the quality of the air in your home - effectively removing up to 99.99% of the contaminant and pollutant particles that are drawn through the system, down to sizes as small as .01 microns.
Notice they did not say anything about price. You buy an expensive air filter and then are on the hook for two expensive filters about once a year.
The eSpring® Water Purifier effectively removes greater than 140 health-effect contaminants and destroys more than 99.95% of bacteria, viruses and cysts with a patented dual technology filter cartridge. It is more cost effective over time and consistently outperforms bottled water, pitcher filters and faucet filters.
Wait, didn't they say earlier that When comparing apples to apples...? They are comparing an under the sink unit with pitchers, bottled water and faucet filters. Why don't they talk about cost and compare with other under the sink models? How about the average life time of the enclosures for the water filters? You also are on the hook for an expensive filter replacement once a year.
Thanks to the value provided by our products and by the IBOs who sell them, Quixtar is the leading online retailer of health and beauty products, according to Internet Retailer magazine* for the fourth consecutive year. That means we sell more health and beauty products online than Avon, Sephora, Clinique and anyone else.
I don't think they are actually the leading online retailer of health and beauty products since no one retails. I heard somewhere that only about 3% of sales are "retail" sales.
Ultimately, the market decides the value of the products sold by any given company. Quixtar's product pricing reflects the high esteem with which our products are held.
In other words, the market has decided that are products are too pricey unless you have hope that you might get a kick-back. That's why 3% of our sales are to the 5% that have money to burn.
QUIXTAR: IBO Independence
Original Source
IBO Independence
Friday, August 31, 2007 by Todd Krause
Happy Labor Day to everyone out there in the field. Today is not like the Fourth of July where we celebrate the freedoms earned for us more than 200 years ago, but it is a day we can celebrate labor and the freedoms we have to work hard to achieve our goals.
You know, we live in a great country that provides all of us many freedoms. America has become the destination of choice for immigrants from around the world because you are free to worship, free to own land, and free to pursue your passions. The United States and Canada also have laws that their citizens must respect, so we're not completely free, are we? I mean, we're free to live the way we want so long as we obey the laws of our land.
The same is true for the Quixtar business. You are independent and free to build your business your way, provided you do so within the parameters set by your contract with Quixtar including the Quixtar Rules of Conduct. These are not onerous rules, by the way. Really, it's just common sense. If you're doing something that hurts the reputation of our business, it's probably against our rules. If you're doing something that gives you an unfair advantage over other IBOs, it's probably against the rules.
Your independence does allow for you to bring your creativity to your business. It does allow for you to focus on one Quixtar product area over another. It does allow for you to set your own hours. There are no quotas to meet. There is no "boss" to report to daily or weekly. You are in business for yourself, supported by Quixtar. AND, if you choose, supported by other IBOs and their authorized training methodologies. You are not merely a sales representative, because you can focus on sponsoring as much as you want -- provided you do it correctly and that retail selling remains the primary part of your overall balanced business.
You are independent in our business, but there are rules in your contract that are intended to protect everyone and help ensure that the confidence in and integrity of the business continues for generations to come.
IBO Independence
Friday, August 31, 2007 by Todd Krause
Happy Labor Day to everyone out there in the field. Today is not like the Fourth of July where we celebrate the freedoms earned for us more than 200 years ago, but it is a day we can celebrate labor and the freedoms we have to work hard to achieve our goals.
You know, we live in a great country that provides all of us many freedoms. America has become the destination of choice for immigrants from around the world because you are free to worship, free to own land, and free to pursue your passions. The United States and Canada also have laws that their citizens must respect, so we're not completely free, are we? I mean, we're free to live the way we want so long as we obey the laws of our land.
The same is true for the Quixtar business. You are independent and free to build your business your way, provided you do so within the parameters set by your contract with Quixtar including the Quixtar Rules of Conduct. These are not onerous rules, by the way. Really, it's just common sense. If you're doing something that hurts the reputation of our business, it's probably against our rules. If you're doing something that gives you an unfair advantage over other IBOs, it's probably against the rules.
Your independence does allow for you to bring your creativity to your business. It does allow for you to focus on one Quixtar product area over another. It does allow for you to set your own hours. There are no quotas to meet. There is no "boss" to report to daily or weekly. You are in business for yourself, supported by Quixtar. AND, if you choose, supported by other IBOs and their authorized training methodologies. You are not merely a sales representative, because you can focus on sponsoring as much as you want -- provided you do it correctly and that retail selling remains the primary part of your overall balanced business.
You are independent in our business, but there are rules in your contract that are intended to protect everyone and help ensure that the confidence in and integrity of the business continues for generations to come.
Thursday, August 30, 2007
TEAM: Team Product Availability
Team Product Availability
We at the Team office would like to attempt to clear up any of the confusion regarding the latest court orders coming out of Grand Rapids and what impact they have upon tool availability for you, the Independent Business Owner.
The court order specifically allows Quixtar to authorize and de-authorize certain training materials, according to the terms of the contract. The two major areas covered under this stipulation in the contract are "Prospecting Materials" and "IBO Plan Training Materials." Accordingly, you will see some books, CDs, and DVDs on the Special Order Tool list that will not currently be available.
The standing order series CDs and books and DVDs will continue, as will all other Special Order tools that are not covered under the authorization provided for in Quixtar's contract.
As an Independent Business Owner participating in the Team consortium, you can expect that we will continue to provide the same high quality, efficient and timely training you have come to rely upon. Our goal is to support you in the best way possible to help you function the most efficiently and effectively as the owner of your own independent business.
Sincerely,
Team Executive Staff
We at the Team office would like to attempt to clear up any of the confusion regarding the latest court orders coming out of Grand Rapids and what impact they have upon tool availability for you, the Independent Business Owner.
The court order specifically allows Quixtar to authorize and de-authorize certain training materials, according to the terms of the contract. The two major areas covered under this stipulation in the contract are "Prospecting Materials" and "IBO Plan Training Materials." Accordingly, you will see some books, CDs, and DVDs on the Special Order Tool list that will not currently be available.
The standing order series CDs and books and DVDs will continue, as will all other Special Order tools that are not covered under the authorization provided for in Quixtar's contract.
As an Independent Business Owner participating in the Team consortium, you can expect that we will continue to provide the same high quality, efficient and timely training you have come to rely upon. Our goal is to support you in the best way possible to help you function the most efficiently and effectively as the owner of your own independent business.
Sincerely,
Team Executive Staff
FREETHEIBO: New Exclusive FreeTheIBO Interview
Original Source
New Exclusive FreeTheIBO Interview : Aug 30
by moderator01 on Thu Aug 30, 2007 1:48 pm
Hello forum members, I’m ‘Inquiring Mind (IM)’, and this is an FreetheIBO forum exclusive interview
It’s our pleasure to welcome to the freetheibo forum, the Spokesperson for freetheibo (SP IBO Freedom). Welcome SP. On behalf of many IBO’s seeking freedom, want to extend my personal appreciation for you making time for this and giving us ‘spin free’ answers to some tough questions.
Answer SP IBO Freedom: My pleasure.
Question IM: What’s all the fuss really about?
Answer SP IBO Freedom: It’s a contract dispute between several leading IBOs and Quitar’s legal department.
Question IM: Who are the IBOs that are involved?
Answer SP IBO Freedom: Six IBOAI board members, including two officers, and several other former board members, some of the company’s top performers, and many lower-level IBOs.
Question IM: So is it true to say that this is really just a contract dispute?
Answer SP IBO Freedom: These IBOs want people to have a choice. Quixtar wants to lock them in.
Question IM: What are the IBOs claiming about the product prices?
Answer SP IBO Freedom: The prices are too high for customers. As a result, there are very few retail sales. In fact, the corporation showed last year that sales to retail customers were only 3.4%.
Question IM:: What does the amount of retail sales have to do with the dispute?
Answer SP IBO Freedom: Without retail sales, the company lives off sales to plan participants. This is known as a “consumption model” and has legal risks. This is what the IBOs are claiming needs fixing.
Question IM:: What should all the other IBOs out there be doing?
Answer SP IBO Freedom: Business as usual. There’s nothing to panic about. This is a Contract dispute over pricing. The goal is putting pressure on company to amend its ways. We’re trying to get a world class product pricing scheme for all of us, which would benefit everyone, and make the business valid and legal.
Question IM: Why should IBOs keep bringing people into an illegal pyramid scheme?
Answer SP IBO Freedom: First of all, they are alleging that, it hasn’t been proven yet. But more importantly, these brave IBOs are fighting for better prices and a contract that doesn’t lock people into a situation where they are in legal risk. This is an effort to provide the freedom to make business choices.
Question IM: Most of these IBOs could have just walked away. Why are they going through all of this?
Answer SP IBO Freedom: Because they are all convicted to the point of risking their own personal peace and prosperity to make sure the new IBO getting in the business has the same chance to succeed that they had.
Question IM:: If you could ask Quixtar to do one thing, what would it be?
Answer SP IBO Freedom: To stop hurting those who are standing up and telling the truth.
Question IM:: Quixtar alleges that these IBOs are actually competing with the Quixtar business by running their training business. What do you say to this?
Answer SP IBO Freedom: Simply not true. As proof, during the first fourteen days after the legal fight began, over 1000 new IBOs have been brought into the Quixtar business. These new IBOs are ordering Quixtar products and sponsoring others into the Quixtar business. Doesn’t sound like competition to me.
Question IM:: What about the claim made by Quixtar’s lawyer in court that they are just putting people into Quixtar until they can start their own thing?
Answer SP IBO Freedom: Quixtar has provided absolutely zero proof of this allegation. In fact, in their “termination papers” to Orrin and Chris they say they terminated them because of an “anticipatory breach”. This is incredible! They actually terminated two of their biggest leaders without due process because of something they ANTICIPATED them doing!
And here we are, several weeks later, and still no proof of their wild accusation has been shown. The truth is, Quixtar assumed there was a competing MLM and hammered away legally based upon this assumption.
After several days, they found out there in fact was no competing MLM, so they had to switch strategies and say the TE AM was competing with them. Once again, Quixtar has absolutely zero proof.
Question IM:: IBOs in your forum are going crazy about being called “property”. What is that all about?
Answer SP IBO Freedom: Quixtar lawyer actually called them that in court last Wednesday. Said they are “Quixtar’s property!”
Question IM:: What do you think most IBOs participating on your forum are feeling right now?
Answer SP IBO Freedom: Scared. They can’t believe that the company they loved and trusted can terminate them without any due process whatsoever. They also don’t appreciate being threatened in emails that they declare a pledge of allegiance to Quixtar or be suspended.
Question IM: What do you think is the most surprising thing that has happened through all of this?
Answer SP IBO Freedom: The unprofessional snide tone of Quixtar’s official communications, both in their emails to IBOs, on their corporate websites and forums, and to members of the press.
Question IM: What affect do you think this is having?
Answer SP IBO Freedom: In my opinion Quixtar is killing any trust they had with their field. If they don’t amend their behavior, they won’t have anybody left who believes anything they say.
Question IM: What affect do you think this will have on Dick DeVos’s bid for the Michigan gubernatorial race?
Answer SP IBO Freedom: Well, let’s be really careful there. This is not a political issue. Many IBOs, including those directly involved with this case, are supporters of DeVos and his political aspirations. Remember, this is a contract dispute between IBOs and Quixtar’s legal staff, nothing more.
Question IM:: What are these brave IBOs, as you call them, really saying?
Answer SP IBO Freedom: They just want Quixtar to give people a choice about their own future. Quixtar has a right to operate their business however they want to, within the law. But they don’t have the right to lock people into it.
Question IM: So just give people a choice?
Answer SP IBO Freedom: Yep, it’s that simple.
IM: Thank you.
moderator01
Posts: 11
New Exclusive FreeTheIBO Interview : Aug 30
by moderator01 on Thu Aug 30, 2007 1:48 pm
Hello forum members, I’m ‘Inquiring Mind (IM)’, and this is an FreetheIBO forum exclusive interview
It’s our pleasure to welcome to the freetheibo forum, the Spokesperson for freetheibo (SP IBO Freedom). Welcome SP. On behalf of many IBO’s seeking freedom, want to extend my personal appreciation for you making time for this and giving us ‘spin free’ answers to some tough questions.
Answer SP IBO Freedom: My pleasure.
Question IM: What’s all the fuss really about?
Answer SP IBO Freedom: It’s a contract dispute between several leading IBOs and Quitar’s legal department.
Question IM: Who are the IBOs that are involved?
Answer SP IBO Freedom: Six IBOAI board members, including two officers, and several other former board members, some of the company’s top performers, and many lower-level IBOs.
Question IM: So is it true to say that this is really just a contract dispute?
Answer SP IBO Freedom: These IBOs want people to have a choice. Quixtar wants to lock them in.
Question IM: What are the IBOs claiming about the product prices?
Answer SP IBO Freedom: The prices are too high for customers. As a result, there are very few retail sales. In fact, the corporation showed last year that sales to retail customers were only 3.4%.
Question IM:: What does the amount of retail sales have to do with the dispute?
Answer SP IBO Freedom: Without retail sales, the company lives off sales to plan participants. This is known as a “consumption model” and has legal risks. This is what the IBOs are claiming needs fixing.
Question IM:: What should all the other IBOs out there be doing?
Answer SP IBO Freedom: Business as usual. There’s nothing to panic about. This is a Contract dispute over pricing. The goal is putting pressure on company to amend its ways. We’re trying to get a world class product pricing scheme for all of us, which would benefit everyone, and make the business valid and legal.
Question IM: Why should IBOs keep bringing people into an illegal pyramid scheme?
Answer SP IBO Freedom: First of all, they are alleging that, it hasn’t been proven yet. But more importantly, these brave IBOs are fighting for better prices and a contract that doesn’t lock people into a situation where they are in legal risk. This is an effort to provide the freedom to make business choices.
Question IM: Most of these IBOs could have just walked away. Why are they going through all of this?
Answer SP IBO Freedom: Because they are all convicted to the point of risking their own personal peace and prosperity to make sure the new IBO getting in the business has the same chance to succeed that they had.
Question IM:: If you could ask Quixtar to do one thing, what would it be?
Answer SP IBO Freedom: To stop hurting those who are standing up and telling the truth.
Question IM:: Quixtar alleges that these IBOs are actually competing with the Quixtar business by running their training business. What do you say to this?
Answer SP IBO Freedom: Simply not true. As proof, during the first fourteen days after the legal fight began, over 1000 new IBOs have been brought into the Quixtar business. These new IBOs are ordering Quixtar products and sponsoring others into the Quixtar business. Doesn’t sound like competition to me.
Question IM:: What about the claim made by Quixtar’s lawyer in court that they are just putting people into Quixtar until they can start their own thing?
Answer SP IBO Freedom: Quixtar has provided absolutely zero proof of this allegation. In fact, in their “termination papers” to Orrin and Chris they say they terminated them because of an “anticipatory breach”. This is incredible! They actually terminated two of their biggest leaders without due process because of something they ANTICIPATED them doing!
And here we are, several weeks later, and still no proof of their wild accusation has been shown. The truth is, Quixtar assumed there was a competing MLM and hammered away legally based upon this assumption.
After several days, they found out there in fact was no competing MLM, so they had to switch strategies and say the TE AM was competing with them. Once again, Quixtar has absolutely zero proof.
Question IM:: IBOs in your forum are going crazy about being called “property”. What is that all about?
Answer SP IBO Freedom: Quixtar lawyer actually called them that in court last Wednesday. Said they are “Quixtar’s property!”
Question IM:: What do you think most IBOs participating on your forum are feeling right now?
Answer SP IBO Freedom: Scared. They can’t believe that the company they loved and trusted can terminate them without any due process whatsoever. They also don’t appreciate being threatened in emails that they declare a pledge of allegiance to Quixtar or be suspended.
Question IM: What do you think is the most surprising thing that has happened through all of this?
Answer SP IBO Freedom: The unprofessional snide tone of Quixtar’s official communications, both in their emails to IBOs, on their corporate websites and forums, and to members of the press.
Question IM: What affect do you think this is having?
Answer SP IBO Freedom: In my opinion Quixtar is killing any trust they had with their field. If they don’t amend their behavior, they won’t have anybody left who believes anything they say.
Question IM: What affect do you think this will have on Dick DeVos’s bid for the Michigan gubernatorial race?
Answer SP IBO Freedom: Well, let’s be really careful there. This is not a political issue. Many IBOs, including those directly involved with this case, are supporters of DeVos and his political aspirations. Remember, this is a contract dispute between IBOs and Quixtar’s legal staff, nothing more.
Question IM:: What are these brave IBOs, as you call them, really saying?
Answer SP IBO Freedom: They just want Quixtar to give people a choice about their own future. Quixtar has a right to operate their business however they want to, within the law. But they don’t have the right to lock people into it.
Question IM: So just give people a choice?
Answer SP IBO Freedom: Yep, it’s that simple.
IM: Thank you.
New Exclusive FreeTheIBO Interview : Aug 30
by moderator01 on Thu Aug 30, 2007 1:48 pm
Hello forum members, I’m ‘Inquiring Mind (IM)’, and this is an FreetheIBO forum exclusive interview
It’s our pleasure to welcome to the freetheibo forum, the Spokesperson for freetheibo (SP IBO Freedom). Welcome SP. On behalf of many IBO’s seeking freedom, want to extend my personal appreciation for you making time for this and giving us ‘spin free’ answers to some tough questions.
Answer SP IBO Freedom: My pleasure.
Question IM: What’s all the fuss really about?
Answer SP IBO Freedom: It’s a contract dispute between several leading IBOs and Quitar’s legal department.
Question IM: Who are the IBOs that are involved?
Answer SP IBO Freedom: Six IBOAI board members, including two officers, and several other former board members, some of the company’s top performers, and many lower-level IBOs.
Question IM: So is it true to say that this is really just a contract dispute?
Answer SP IBO Freedom: These IBOs want people to have a choice. Quixtar wants to lock them in.
Question IM: What are the IBOs claiming about the product prices?
Answer SP IBO Freedom: The prices are too high for customers. As a result, there are very few retail sales. In fact, the corporation showed last year that sales to retail customers were only 3.4%.
Question IM:: What does the amount of retail sales have to do with the dispute?
Answer SP IBO Freedom: Without retail sales, the company lives off sales to plan participants. This is known as a “consumption model” and has legal risks. This is what the IBOs are claiming needs fixing.
Question IM:: What should all the other IBOs out there be doing?
Answer SP IBO Freedom: Business as usual. There’s nothing to panic about. This is a Contract dispute over pricing. The goal is putting pressure on company to amend its ways. We’re trying to get a world class product pricing scheme for all of us, which would benefit everyone, and make the business valid and legal.
Question IM: Why should IBOs keep bringing people into an illegal pyramid scheme?
Answer SP IBO Freedom: First of all, they are alleging that, it hasn’t been proven yet. But more importantly, these brave IBOs are fighting for better prices and a contract that doesn’t lock people into a situation where they are in legal risk. This is an effort to provide the freedom to make business choices.
Question IM: Most of these IBOs could have just walked away. Why are they going through all of this?
Answer SP IBO Freedom: Because they are all convicted to the point of risking their own personal peace and prosperity to make sure the new IBO getting in the business has the same chance to succeed that they had.
Question IM:: If you could ask Quixtar to do one thing, what would it be?
Answer SP IBO Freedom: To stop hurting those who are standing up and telling the truth.
Question IM:: Quixtar alleges that these IBOs are actually competing with the Quixtar business by running their training business. What do you say to this?
Answer SP IBO Freedom: Simply not true. As proof, during the first fourteen days after the legal fight began, over 1000 new IBOs have been brought into the Quixtar business. These new IBOs are ordering Quixtar products and sponsoring others into the Quixtar business. Doesn’t sound like competition to me.
Question IM:: What about the claim made by Quixtar’s lawyer in court that they are just putting people into Quixtar until they can start their own thing?
Answer SP IBO Freedom: Quixtar has provided absolutely zero proof of this allegation. In fact, in their “termination papers” to Orrin and Chris they say they terminated them because of an “anticipatory breach”. This is incredible! They actually terminated two of their biggest leaders without due process because of something they ANTICIPATED them doing!
And here we are, several weeks later, and still no proof of their wild accusation has been shown. The truth is, Quixtar assumed there was a competing MLM and hammered away legally based upon this assumption.
After several days, they found out there in fact was no competing MLM, so they had to switch strategies and say the TE AM was competing with them. Once again, Quixtar has absolutely zero proof.
Question IM:: IBOs in your forum are going crazy about being called “property”. What is that all about?
Answer SP IBO Freedom: Quixtar lawyer actually called them that in court last Wednesday. Said they are “Quixtar’s property!”
Question IM:: What do you think most IBOs participating on your forum are feeling right now?
Answer SP IBO Freedom: Scared. They can’t believe that the company they loved and trusted can terminate them without any due process whatsoever. They also don’t appreciate being threatened in emails that they declare a pledge of allegiance to Quixtar or be suspended.
Question IM: What do you think is the most surprising thing that has happened through all of this?
Answer SP IBO Freedom: The unprofessional snide tone of Quixtar’s official communications, both in their emails to IBOs, on their corporate websites and forums, and to members of the press.
Question IM: What affect do you think this is having?
Answer SP IBO Freedom: In my opinion Quixtar is killing any trust they had with their field. If they don’t amend their behavior, they won’t have anybody left who believes anything they say.
Question IM: What affect do you think this will have on Dick DeVos’s bid for the Michigan gubernatorial race?
Answer SP IBO Freedom: Well, let’s be really careful there. This is not a political issue. Many IBOs, including those directly involved with this case, are supporters of DeVos and his political aspirations. Remember, this is a contract dispute between IBOs and Quixtar’s legal staff, nothing more.
Question IM:: What are these brave IBOs, as you call them, really saying?
Answer SP IBO Freedom: They just want Quixtar to give people a choice about their own future. Quixtar has a right to operate their business however they want to, within the law. But they don’t have the right to lock people into it.
Question IM: So just give people a choice?
Answer SP IBO Freedom: Yep, it’s that simple.
IM: Thank you.
moderator01
Posts: 11
New Exclusive FreeTheIBO Interview : Aug 30
by moderator01 on Thu Aug 30, 2007 1:48 pm
Hello forum members, I’m ‘Inquiring Mind (IM)’, and this is an FreetheIBO forum exclusive interview
It’s our pleasure to welcome to the freetheibo forum, the Spokesperson for freetheibo (SP IBO Freedom). Welcome SP. On behalf of many IBO’s seeking freedom, want to extend my personal appreciation for you making time for this and giving us ‘spin free’ answers to some tough questions.
Answer SP IBO Freedom: My pleasure.
Question IM: What’s all the fuss really about?
Answer SP IBO Freedom: It’s a contract dispute between several leading IBOs and Quitar’s legal department.
Question IM: Who are the IBOs that are involved?
Answer SP IBO Freedom: Six IBOAI board members, including two officers, and several other former board members, some of the company’s top performers, and many lower-level IBOs.
Question IM: So is it true to say that this is really just a contract dispute?
Answer SP IBO Freedom: These IBOs want people to have a choice. Quixtar wants to lock them in.
Question IM: What are the IBOs claiming about the product prices?
Answer SP IBO Freedom: The prices are too high for customers. As a result, there are very few retail sales. In fact, the corporation showed last year that sales to retail customers were only 3.4%.
Question IM:: What does the amount of retail sales have to do with the dispute?
Answer SP IBO Freedom: Without retail sales, the company lives off sales to plan participants. This is known as a “consumption model” and has legal risks. This is what the IBOs are claiming needs fixing.
Question IM:: What should all the other IBOs out there be doing?
Answer SP IBO Freedom: Business as usual. There’s nothing to panic about. This is a Contract dispute over pricing. The goal is putting pressure on company to amend its ways. We’re trying to get a world class product pricing scheme for all of us, which would benefit everyone, and make the business valid and legal.
Question IM: Why should IBOs keep bringing people into an illegal pyramid scheme?
Answer SP IBO Freedom: First of all, they are alleging that, it hasn’t been proven yet. But more importantly, these brave IBOs are fighting for better prices and a contract that doesn’t lock people into a situation where they are in legal risk. This is an effort to provide the freedom to make business choices.
Question IM: Most of these IBOs could have just walked away. Why are they going through all of this?
Answer SP IBO Freedom: Because they are all convicted to the point of risking their own personal peace and prosperity to make sure the new IBO getting in the business has the same chance to succeed that they had.
Question IM:: If you could ask Quixtar to do one thing, what would it be?
Answer SP IBO Freedom: To stop hurting those who are standing up and telling the truth.
Question IM:: Quixtar alleges that these IBOs are actually competing with the Quixtar business by running their training business. What do you say to this?
Answer SP IBO Freedom: Simply not true. As proof, during the first fourteen days after the legal fight began, over 1000 new IBOs have been brought into the Quixtar business. These new IBOs are ordering Quixtar products and sponsoring others into the Quixtar business. Doesn’t sound like competition to me.
Question IM:: What about the claim made by Quixtar’s lawyer in court that they are just putting people into Quixtar until they can start their own thing?
Answer SP IBO Freedom: Quixtar has provided absolutely zero proof of this allegation. In fact, in their “termination papers” to Orrin and Chris they say they terminated them because of an “anticipatory breach”. This is incredible! They actually terminated two of their biggest leaders without due process because of something they ANTICIPATED them doing!
And here we are, several weeks later, and still no proof of their wild accusation has been shown. The truth is, Quixtar assumed there was a competing MLM and hammered away legally based upon this assumption.
After several days, they found out there in fact was no competing MLM, so they had to switch strategies and say the TE AM was competing with them. Once again, Quixtar has absolutely zero proof.
Question IM:: IBOs in your forum are going crazy about being called “property”. What is that all about?
Answer SP IBO Freedom: Quixtar lawyer actually called them that in court last Wednesday. Said they are “Quixtar’s property!”
Question IM:: What do you think most IBOs participating on your forum are feeling right now?
Answer SP IBO Freedom: Scared. They can’t believe that the company they loved and trusted can terminate them without any due process whatsoever. They also don’t appreciate being threatened in emails that they declare a pledge of allegiance to Quixtar or be suspended.
Question IM: What do you think is the most surprising thing that has happened through all of this?
Answer SP IBO Freedom: The unprofessional snide tone of Quixtar’s official communications, both in their emails to IBOs, on their corporate websites and forums, and to members of the press.
Question IM: What affect do you think this is having?
Answer SP IBO Freedom: In my opinion Quixtar is killing any trust they had with their field. If they don’t amend their behavior, they won’t have anybody left who believes anything they say.
Question IM: What affect do you think this will have on Dick DeVos’s bid for the Michigan gubernatorial race?
Answer SP IBO Freedom: Well, let’s be really careful there. This is not a political issue. Many IBOs, including those directly involved with this case, are supporters of DeVos and his political aspirations. Remember, this is a contract dispute between IBOs and Quixtar’s legal staff, nothing more.
Question IM:: What are these brave IBOs, as you call them, really saying?
Answer SP IBO Freedom: They just want Quixtar to give people a choice about their own future. Quixtar has a right to operate their business however they want to, within the law. But they don’t have the right to lock people into it.
Question IM: So just give people a choice?
Answer SP IBO Freedom: Yep, it’s that simple.
IM: Thank you.
QUIXTAR: Not Wal-Mart and Never Want to Be
Original Source
Not Wal-Mart and Never Want to Be
Friday, August 31, 2007 by Ray Alexander
Category: Quixtar Strategy, Products, Quixtar Philosophy
Many questions have been raised recently about the price of Quixtar’s products. Specifically, some have wondered how Quixtar Independent Business Owners can possibly compete with the Wal-Marts and Costcos of the world, given the premium price of many of our exclusive products.
I think it’s important to understand that many of our brands, especially ARTISTRY® skin care and cosmetics and NUTRILITE® vitamins and supplements, are high-quality products intended to compete in the marketplace on the value and performance they provide – not on the basis of being the cheapest moisturizer or multivitamin you can find. In other words. People pay more for a Volvo than a Volkswagen because they view Volvo as providing more value. The same applies to our exclusive brands like ARTISTRY and NUTRILITE. These and other Quixtar brands are premium priced and designed for a specific target market seeking prestige, quality and performance.
Price comparisons on our products should take into consideration that Quixtar's exclusive brands are:
• supported by world-class research and development
• contain the highest- quality ingredients, and often feature attributes not available in other products
• backed by the latest technology, a state-of-the-art distribution system, and more than 600 worldwide patents
• sustained by seven manufacturing facilities and five distribution centers
You won’t find value propositions like these on the shelves of your corner discount store:
• NUTRILITE products are the world's leading brand of vitamins, minerals, and dietary supplements.* With total quality control of its plant concentrates from seed to tablet, NUTRILITE is the only global vitamin and mineral brand to grow, harvest, and process plants on its own certified organic farms.** NUTRILITE supplements often deliver more key phytonutrients per serving than the competition.
• The ARTISTRY brand's high-quality formulas, elegant packaging, and technologically advanced product innovation have placed ARTISTRY among the world's top five largest-selling prestige brands of facial skin care and colour cosmetics.*** It's priced competitively with others in this distinguished group, which includes well-known brands like Clinique®, Lancôme®, Estée Lauder®, and Chanel®.
• Home brands like L.O.C.® Multi-Purpose Cleaner and the SA8® laundry system are often priced lower than the competition on a cost-per-use basis. When comparing apples to apples, home products meet or beat the competition on product performance, cost, or both.
• XS™ Power Nutrition products include sports drinks, protein shakes, energy bars and energy drinks that have all of the “energy,” and none of the sugar of other energy drinks. XS products are priced very competitively with many other sports nutrition brands.
• The ATMOSPHERE™ Air Purifier, as seen by the 44 million viewers of ABC’s hit TV Show “Extreme Makeover Home Edition,” purifies with advanced technology that automatically monitors the quality of the air in your home - effectively removing up to 99.99% of the contaminant and pollutant particles that are drawn through the system, down to sizes as small as .01 microns.
• The eSpring® Water Purifier effectively removes greater than 140 health-effect contaminants and destroys more than 99.95% of bacteria, viruses and cysts with a patented dual technology filter cartridge. It is more cost effective over time and consistently outperforms bottled water, pitcher filters and faucet filters.
These products not only deliver unsurpassed performance and value, they come with the personalized attention, product knowledge, and customer service provided by Quixtar IBOs. Those who argue that we must compete on product price alone are completely ignoring the value that IBOs bring to the sale. IBOs are knowledgeable product experts who work by a customer’s side to make recommendations based on needs, explain features and benefits, answer questions, or help check out. This level of service is not to be found at the big box discount store, but is part of what Quixtar customers pay for when they choose one of our products over one that they could buy cheaper from a store shelf.
Thanks to the value provided by our products and by the IBOs who sell them, Quixtar is the leading online retailer of health and beauty products, according to Internet Retailer magazine* for the fourth consecutive year. That means we sell more health and beauty products online than Avon, Sephora, Clinique and anyone else.
We stand behind the quality of all our products and guarantee customer satisfaction. If for any reason a customer tries a product and is not completely satisfied, they can return it within 180 days of purchase for an exchange or refund of the product price and applicable tax.
Ultimately, the market decides the value of the products sold by any given company. Quixtar's product pricing reflects the high esteem with which our products are held.
*Based on 2006 sales. **Based on a survey of global vitamin and dietary supplement brands conducted by Euromonitor International. ***Based on a 2006 Euromonitor Consultancy study of global retail sales.
Not Wal-Mart and Never Want to Be
Friday, August 31, 2007 by Ray Alexander
Category: Quixtar Strategy, Products, Quixtar Philosophy
Many questions have been raised recently about the price of Quixtar’s products. Specifically, some have wondered how Quixtar Independent Business Owners can possibly compete with the Wal-Marts and Costcos of the world, given the premium price of many of our exclusive products.
I think it’s important to understand that many of our brands, especially ARTISTRY® skin care and cosmetics and NUTRILITE® vitamins and supplements, are high-quality products intended to compete in the marketplace on the value and performance they provide – not on the basis of being the cheapest moisturizer or multivitamin you can find. In other words. People pay more for a Volvo than a Volkswagen because they view Volvo as providing more value. The same applies to our exclusive brands like ARTISTRY and NUTRILITE. These and other Quixtar brands are premium priced and designed for a specific target market seeking prestige, quality and performance.
Price comparisons on our products should take into consideration that Quixtar's exclusive brands are:
• supported by world-class research and development
• contain the highest- quality ingredients, and often feature attributes not available in other products
• backed by the latest technology, a state-of-the-art distribution system, and more than 600 worldwide patents
• sustained by seven manufacturing facilities and five distribution centers
You won’t find value propositions like these on the shelves of your corner discount store:
• NUTRILITE products are the world's leading brand of vitamins, minerals, and dietary supplements.* With total quality control of its plant concentrates from seed to tablet, NUTRILITE is the only global vitamin and mineral brand to grow, harvest, and process plants on its own certified organic farms.** NUTRILITE supplements often deliver more key phytonutrients per serving than the competition.
• The ARTISTRY brand's high-quality formulas, elegant packaging, and technologically advanced product innovation have placed ARTISTRY among the world's top five largest-selling prestige brands of facial skin care and colour cosmetics.*** It's priced competitively with others in this distinguished group, which includes well-known brands like Clinique®, Lancôme®, Estée Lauder®, and Chanel®.
• Home brands like L.O.C.® Multi-Purpose Cleaner and the SA8® laundry system are often priced lower than the competition on a cost-per-use basis. When comparing apples to apples, home products meet or beat the competition on product performance, cost, or both.
• XS™ Power Nutrition products include sports drinks, protein shakes, energy bars and energy drinks that have all of the “energy,” and none of the sugar of other energy drinks. XS products are priced very competitively with many other sports nutrition brands.
• The ATMOSPHERE™ Air Purifier, as seen by the 44 million viewers of ABC’s hit TV Show “Extreme Makeover Home Edition,” purifies with advanced technology that automatically monitors the quality of the air in your home - effectively removing up to 99.99% of the contaminant and pollutant particles that are drawn through the system, down to sizes as small as .01 microns.
• The eSpring® Water Purifier effectively removes greater than 140 health-effect contaminants and destroys more than 99.95% of bacteria, viruses and cysts with a patented dual technology filter cartridge. It is more cost effective over time and consistently outperforms bottled water, pitcher filters and faucet filters.
These products not only deliver unsurpassed performance and value, they come with the personalized attention, product knowledge, and customer service provided by Quixtar IBOs. Those who argue that we must compete on product price alone are completely ignoring the value that IBOs bring to the sale. IBOs are knowledgeable product experts who work by a customer’s side to make recommendations based on needs, explain features and benefits, answer questions, or help check out. This level of service is not to be found at the big box discount store, but is part of what Quixtar customers pay for when they choose one of our products over one that they could buy cheaper from a store shelf.
Thanks to the value provided by our products and by the IBOs who sell them, Quixtar is the leading online retailer of health and beauty products, according to Internet Retailer magazine* for the fourth consecutive year. That means we sell more health and beauty products online than Avon, Sephora, Clinique and anyone else.
We stand behind the quality of all our products and guarantee customer satisfaction. If for any reason a customer tries a product and is not completely satisfied, they can return it within 180 days of purchase for an exchange or refund of the product price and applicable tax.
Ultimately, the market decides the value of the products sold by any given company. Quixtar's product pricing reflects the high esteem with which our products are held.
*Based on 2006 sales. **Based on a survey of global vitamin and dietary supplement brands conducted by Euromonitor International. ***Based on a 2006 Euromonitor Consultancy study of global retail sales.
IBOREBELLION: BEHIND THE WALLS OF QUIXTAR part 2
Original Source
Thursday, August 30, 2007
BEHIND THE WALLS OF QUIXTAR part 2
Well, as I stated I have been talking to many CWPF's (Close Warm Personal Friends) from behind the walls of Alticor / Quixtar. The information I have been able to gather is really quite telling. I do want to make one thing perfectly clear. The persons I have met with speak very highly of Quixtar as an employer. However, they don't live in a vacuum and know of the current spat with TEAM leaders Woodward and Brady. Everyone I have spoke to are not surprised Quixtar is aggressively defending its position on the matter, but they are surprised at how nasty Q has been. This is where I am getting mixed signals as to what might really be going on. There are three theories currently buzzing around Q. Two of these are parallel in nature and the third is something completely out there. So let focus on what seems to be consistent among my contacts.
The primary focus of rumors, surrounds the Quixtar Legal Department. Some have called this department "rogue." They made it very clear Quixtar Legal is running the show. Legal has a long leash and is using it. Some talked about how legal is flexing its muscles in all areas of Quixtar. Legal clearly is involving itself in areas it has not been very active before. The question no one seems to know is who is driving this and what is the overall reason for this change. This is where things get a bit dicey. Some suggest that there just seems to be a bit too much testosterone in legal. I don't know who the comment was specifically addressed to, I didn't ask at the time and wished I would have followed up with another question. However, knowing that Quixtar attorney Ed Bardelli has been handing much of the litigation against Woodward and Brady, testosterone isn't the problem.
Some feel as though the company is being sabotaged from within. When I tried to clarify these statements all I got was that a lot of "poor" decisions were being made that could have long term consequences to Alticor. Since the conversation was still on Legal I took it as though these were decisions from that department. Now I am not big into conspiracy theories but one person went as far as to implicate Proctor and Gamble in some of the disruptions within the company. This person basically questioned the loyalty of key personal in Quixtar.
There is no doubt a lot of interesting developments exist both inside and outside of the Alticor / Quixtar world. I was very disappointed that not one of my CWPF's could really focus on one bad guy as the driver of the current goings on. Well I should say one bad guy from inside of the corporate Quixtar. There was one name that surfaced from outside the walls but will leave him for now as I really have no idea how credible that is. However, probably the most important thing gleaned from these meetings and conversations was that none of these people believed that the Devos and VanAndle families really knew what was currently happening inside the family business. Could that really be true? I will report back from behind the walls of Quixtar when there is more........
Thursday, August 30, 2007
BEHIND THE WALLS OF QUIXTAR part 2
Well, as I stated I have been talking to many CWPF's (Close Warm Personal Friends) from behind the walls of Alticor / Quixtar. The information I have been able to gather is really quite telling. I do want to make one thing perfectly clear. The persons I have met with speak very highly of Quixtar as an employer. However, they don't live in a vacuum and know of the current spat with TEAM leaders Woodward and Brady. Everyone I have spoke to are not surprised Quixtar is aggressively defending its position on the matter, but they are surprised at how nasty Q has been. This is where I am getting mixed signals as to what might really be going on. There are three theories currently buzzing around Q. Two of these are parallel in nature and the third is something completely out there. So let focus on what seems to be consistent among my contacts.
The primary focus of rumors, surrounds the Quixtar Legal Department. Some have called this department "rogue." They made it very clear Quixtar Legal is running the show. Legal has a long leash and is using it. Some talked about how legal is flexing its muscles in all areas of Quixtar. Legal clearly is involving itself in areas it has not been very active before. The question no one seems to know is who is driving this and what is the overall reason for this change. This is where things get a bit dicey. Some suggest that there just seems to be a bit too much testosterone in legal. I don't know who the comment was specifically addressed to, I didn't ask at the time and wished I would have followed up with another question. However, knowing that Quixtar attorney Ed Bardelli has been handing much of the litigation against Woodward and Brady, testosterone isn't the problem.
Some feel as though the company is being sabotaged from within. When I tried to clarify these statements all I got was that a lot of "poor" decisions were being made that could have long term consequences to Alticor. Since the conversation was still on Legal I took it as though these were decisions from that department. Now I am not big into conspiracy theories but one person went as far as to implicate Proctor and Gamble in some of the disruptions within the company. This person basically questioned the loyalty of key personal in Quixtar.
There is no doubt a lot of interesting developments exist both inside and outside of the Alticor / Quixtar world. I was very disappointed that not one of my CWPF's could really focus on one bad guy as the driver of the current goings on. Well I should say one bad guy from inside of the corporate Quixtar. There was one name that surfaced from outside the walls but will leave him for now as I really have no idea how credible that is. However, probably the most important thing gleaned from these meetings and conversations was that none of these people believed that the Devos and VanAndle families really knew what was currently happening inside the family business. Could that really be true? I will report back from behind the walls of Quixtar when there is more........
Wednesday, August 29, 2007
QUIXTAR: Clarification
Original Source
August 29th, 2007…
Clarification
The news yesterday was pretty simple. The Kent County Circuit Court issued a couple clarifications of its rulings from last week. The judge did not change his rulings, just clarified a few sentences.
So, no surprises from where we sat; we thought the rulings were pretty clear in the first place. The TEAM legal team remains oh-for-three — losing every time a judge has heard arguments on the merits.
But of course, that did not stop their class-action spin machine from trying to turn a minor legal procedure into some kind of PR landslide. Irksome.
Allow a little lawyer-to-lawyer communication to cut through the clutter. TEAM’s lawyer is D.J. Poyfair. Mike Mohr is our general counsel.
Dear Mr. Poyfair,
Please stop spinning.
Let’s look at some of the facts and context that you left out of your misleading press release issued late yesterday regarding Judge Sullivan’s most recent Order.
Quixtar agreed with Judge Sullivan’s clarification. You might not know that, since you were not there.
Quixtar IBOs STILL CANNOT promote or sell TEAM materials and functions. TEAM is still under injunction (par. 1-3 of the Order) and still cannot use Line of Sponsorship or IBO information to promote and sell materials that are now banned for use in the Quixtar business.
Why would you leave this critical information out of your PR, Mr. Poyfair? Does it matter to you that leaving this information out exposes innocent IBOs to the risk of serious contract violations?
And, Mr. Poyfair, why did you leave out the other “clarification” that judge Sullivan put in his Order yesterday? New paragraph 5 of the order reads:
“Defendants shall return any and all information compiled by Quixtar that discloses or relates to all or part of the specific arrangement of sponsorship within the Quixtar business, including IBO lists, sponsorship trees, and all IBO or Independant Business information generated therefrom.”
Just tell the truth, Mr. Poyfair. Clarify that spin. Advise your clients to stop selling through our IBOs and return our data.
Mike Mohr
August 29th, 2007…
Clarification
The news yesterday was pretty simple. The Kent County Circuit Court issued a couple clarifications of its rulings from last week. The judge did not change his rulings, just clarified a few sentences.
So, no surprises from where we sat; we thought the rulings were pretty clear in the first place. The TEAM legal team remains oh-for-three — losing every time a judge has heard arguments on the merits.
But of course, that did not stop their class-action spin machine from trying to turn a minor legal procedure into some kind of PR landslide. Irksome.
Allow a little lawyer-to-lawyer communication to cut through the clutter. TEAM’s lawyer is D.J. Poyfair. Mike Mohr is our general counsel.
Dear Mr. Poyfair,
Please stop spinning.
Let’s look at some of the facts and context that you left out of your misleading press release issued late yesterday regarding Judge Sullivan’s most recent Order.
Quixtar agreed with Judge Sullivan’s clarification. You might not know that, since you were not there.
Quixtar IBOs STILL CANNOT promote or sell TEAM materials and functions. TEAM is still under injunction (par. 1-3 of the Order) and still cannot use Line of Sponsorship or IBO information to promote and sell materials that are now banned for use in the Quixtar business.
Why would you leave this critical information out of your PR, Mr. Poyfair? Does it matter to you that leaving this information out exposes innocent IBOs to the risk of serious contract violations?
And, Mr. Poyfair, why did you leave out the other “clarification” that judge Sullivan put in his Order yesterday? New paragraph 5 of the order reads:
“Defendants shall return any and all information compiled by Quixtar that discloses or relates to all or part of the specific arrangement of sponsorship within the Quixtar business, including IBO lists, sponsorship trees, and all IBO or Independant Business information generated therefrom.”
Just tell the truth, Mr. Poyfair. Clarify that spin. Advise your clients to stop selling through our IBOs and return our data.
Mike Mohr
QUIXTAR: More Facts, Less Spin
Original Source
More Facts, Less Spin
Wednesday, August 29, 2007 by Beth Dornan
Category: Announcements
Interesting news came out of the Kent County Circuit Court yesterday, where Judge Sullivan clarified his rulings in Quixtar's favor last week. We agreed with the clarifications, yet this did not prevent Team's legal team from declaring victory in a news release. Check out the Alticor Media Blog post including an open letter from Mike Mohr, our general counsel, to D.J. Poyfair, Team's lawyer.
More Facts, Less Spin
Wednesday, August 29, 2007 by Beth Dornan
Category: Announcements
Interesting news came out of the Kent County Circuit Court yesterday, where Judge Sullivan clarified his rulings in Quixtar's favor last week. We agreed with the clarifications, yet this did not prevent Team's legal team from declaring victory in a news release. Check out the Alticor Media Blog post including an open letter from Mike Mohr, our general counsel, to D.J. Poyfair, Team's lawyer.
QUIXTAR: Keep it real, keep it civil
Original Source
Keep it real, keep it civil
Wednesday, August 29, 2007
Due to all the legal activities going on, we haven't been able to say too much here in the Opportunity Zone lately. There's lots I wish we could talk about, but we certainly wouldn't want to say or do things that hurt our legal position. Check out the Alticor media blog post today for the latest news.
For just over three years now I've been blogging here at the REAL Quixtar Blog. The Opportunity Zone is now six months old, and I've been fascinated by the commentary all of you have generated about this issue and others in this forum. There obviously are many different experiences in our business that color our perceptions of who is right and wrong on all the issues related to our business. I think the more we share our real experiences, the better. I'm not a big fan of people repeatedly posting and reposting comments made by another individual. I'm more interested in what YOU have to say and what YOUR personal experience has been.
I'm also concerned about the increased frequency of people calling each other names in posts they submit to this site (and to Ada-tudes). I try to have a light hand on the reins when moderating comments, but every once in awhile you'll note that I edit a comment or don't post a comment at all because it insults or attacks a person, rather than that person's ideas. That's my biggest advice to anyone commenting here: disagree with ideas or conclusions others have drawn, but don't disrespect each other. I won't post your comment if you call somebody "stupid," an "idiot," or an "outright cowardly liar."
After six months of open blogging here in the Opportunity Zone, I am really proud of the (mostly) civil discourse that has blossomed here. The Team issue has brought many more people into the O'Zone to talk about what's going on, but I hope these same people find enough value in all of the blogs here to come back when we've moved on to tamer topics. Thanks to all of you for making the first six months of the Opportunity Zone so awesome!
Keep it real, keep it civil
Wednesday, August 29, 2007
Due to all the legal activities going on, we haven't been able to say too much here in the Opportunity Zone lately. There's lots I wish we could talk about, but we certainly wouldn't want to say or do things that hurt our legal position. Check out the Alticor media blog post today for the latest news.
For just over three years now I've been blogging here at the REAL Quixtar Blog. The Opportunity Zone is now six months old, and I've been fascinated by the commentary all of you have generated about this issue and others in this forum. There obviously are many different experiences in our business that color our perceptions of who is right and wrong on all the issues related to our business. I think the more we share our real experiences, the better. I'm not a big fan of people repeatedly posting and reposting comments made by another individual. I'm more interested in what YOU have to say and what YOUR personal experience has been.
I'm also concerned about the increased frequency of people calling each other names in posts they submit to this site (and to Ada-tudes). I try to have a light hand on the reins when moderating comments, but every once in awhile you'll note that I edit a comment or don't post a comment at all because it insults or attacks a person, rather than that person's ideas. That's my biggest advice to anyone commenting here: disagree with ideas or conclusions others have drawn, but don't disrespect each other. I won't post your comment if you call somebody "stupid," an "idiot," or an "outright cowardly liar."
After six months of open blogging here in the Opportunity Zone, I am really proud of the (mostly) civil discourse that has blossomed here. The Team issue has brought many more people into the O'Zone to talk about what's going on, but I hope these same people find enough value in all of the blogs here to come back when we've moved on to tamer topics. Thanks to all of you for making the first six months of the Opportunity Zone so awesome!
Tuesday, August 28, 2007
TEAM: Judge Issues Clarification on Quixtar's Victory
Original Source
Judge Issues Clarification After Ex-Distributors
Represented by Shughart, Thomson & Kilroy Question
Quixtar’s Interpretation of Friday’s Injunction
Updated Scorecard of Lawsuit Victories:
Distributors 12, Quixtar 3
LOS ANGELES--(BUSINESS WIRE)--The group of top ex-Quixtar, Inc. distributors announced that the Grand Rapids, Mich., judge today issued an amended order of his Temporary Restraining Order (TRO) ruling last Friday. In response to the group’s request for a clarification of the order, the judge ruled that the injunction issued Friday does not preclude the holding of any Team leadership, educational and motivational meetings.
The group had sought the clarification in response to Quixtar’s email notification to approximately 75,000 Independent Business Owners (IBOs) who participate in Team meetings. In the email, Quixtar informed the IBOs that they would be in violation of a court order if they continued their Team participation. Team (Together Everyone Achieves More) is a leadership, educational and motivational organization owned primarily by Orrin Woodward and Chris Brady, two of the plaintiffs in the California federal suit.
D.J. Poyfair, attorney for Denver-based Shughart, Thomson & Kilroy, the firm representing the former distributors in the original federal lawsuit, noted that the ex-distributors to date have prevailed in 12 of 15 matters where court rulings have been made.
“Though Quixtar has a 3-12 litigation record, it continues to boast loudly in release after release that it has crushed its opponent—if a football coach claimed having a successful season after winning only 3 of 15 games he would be laughed out of town,” said Mr. Poyfair. “It is only within the wacky world of Quixtar’s spin machine that it can claim a winning record in the face of facts that clearly state otherwise.”
About Woodward et al. v. Quixtar, Inc.
On August 9, 2007, a group including eight of the largest Quixtar distributors filed a lawsuit seeking 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. On August 10, 2007, the group sought a preliminary and permanent injunction restraining Quixtar from enforcing or attempting to enforce the non-competition and non-solicitation provisions. More information regarding Woodward v. Quixtar, including relevant court documents, is available at www.FreeTheIBO.com.
Judge Issues Clarification After Ex-Distributors
Represented by Shughart, Thomson & Kilroy Question
Quixtar’s Interpretation of Friday’s Injunction
Updated Scorecard of Lawsuit Victories:
Distributors 12, Quixtar 3
LOS ANGELES--(BUSINESS WIRE)--The group of top ex-Quixtar, Inc. distributors announced that the Grand Rapids, Mich., judge today issued an amended order of his Temporary Restraining Order (TRO) ruling last Friday. In response to the group’s request for a clarification of the order, the judge ruled that the injunction issued Friday does not preclude the holding of any Team leadership, educational and motivational meetings.
The group had sought the clarification in response to Quixtar’s email notification to approximately 75,000 Independent Business Owners (IBOs) who participate in Team meetings. In the email, Quixtar informed the IBOs that they would be in violation of a court order if they continued their Team participation. Team (Together Everyone Achieves More) is a leadership, educational and motivational organization owned primarily by Orrin Woodward and Chris Brady, two of the plaintiffs in the California federal suit.
D.J. Poyfair, attorney for Denver-based Shughart, Thomson & Kilroy, the firm representing the former distributors in the original federal lawsuit, noted that the ex-distributors to date have prevailed in 12 of 15 matters where court rulings have been made.
“Though Quixtar has a 3-12 litigation record, it continues to boast loudly in release after release that it has crushed its opponent—if a football coach claimed having a successful season after winning only 3 of 15 games he would be laughed out of town,” said Mr. Poyfair. “It is only within the wacky world of Quixtar’s spin machine that it can claim a winning record in the face of facts that clearly state otherwise.”
About Woodward et al. v. Quixtar, Inc.
On August 9, 2007, a group including eight of the largest Quixtar distributors filed a lawsuit seeking 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. On August 10, 2007, the group sought a preliminary and permanent injunction restraining Quixtar from enforcing or attempting to enforce the non-competition and non-solicitation provisions. More information regarding Woodward v. Quixtar, including relevant court documents, is available at www.FreeTheIBO.com.
IBOREBELLION: BEHIND THE WALLS OF QUIXTAR part 2
Original Source
[NOTE] Usually we only post official statements from the two sides, but this looks interesting.
Tuesday, August 28, 2007
BEHIND THE WALLS OF QUIXTAR
Just giving you the heads up on a breaking story from behind the corporate walls of Quixtar / Alticor. I have been in contact with many CWPF (CLOSE WARM PERSONAL FRIENDS) from inside the operation at Alticor headquarters. Lets just say that all is not well! There are some big rumblings going on. I will have more for you in the next 48 hours as I attempt to confirm some of the information I have gathered.
[NOTE] Usually we only post official statements from the two sides, but this looks interesting.
Tuesday, August 28, 2007
BEHIND THE WALLS OF QUIXTAR
Just giving you the heads up on a breaking story from behind the corporate walls of Quixtar / Alticor. I have been in contact with many CWPF (CLOSE WARM PERSONAL FRIENDS) from inside the operation at Alticor headquarters. Lets just say that all is not well! There are some big rumblings going on. I will have more for you in the next 48 hours as I attempt to confirm some of the information I have gathered.
TEAM: Timeline of Events
Original Source
Timeline of Events
2007
2006
2005
2004
2001
2000
Late 1990s
Mid-Late 1990s
1999
1997/1998
1997
1996
1995
1994
1993
Late 1980s
1982
Early 1980s
1979
1974
1959
Timeline of Events
- August 28
- Group of ex-Quixtar distributors announce that, contrary to statements issued by Quixtar on 8/24/07, the judge today ruled in favor of the distributors allowing continued participation in Team meetings
- Quixtar forced to retract its premature claim of “complete defeat” for the distributors in the case
- To date, the number of TROs granted heavily favors the distributors over Quixtar, 11-3
- August 24
- Quixtar granted one temporary restraining order in the company’s backyard of Grand Rapids, Michigan
- Quixtar claims victory in second temporary restraining order hearing in Grand Rapids, which supposedly prohibited approximately 75,000 Quixtar IBOs from attending Team meetings
- Plaintiffs reassert confidence in the strength of their initial lawsuit by citing the 10 TROs that have been granted to date against Quixtar
- August 23
- The hearing at the Kent County Courthouse from 8/22/07 resumed at 8:30 a.m.
- August 22
- The continuation of the hearing that took place on 8/22/07 at the Kent County Courthouse occurred
- Judge Paul Sullivan listened to arguments for more than three hours
- Outside the courthouse, a predominantly male crowd of hundreds of distributors dressed in dark suits and red ties protested in support of the plaintiffs, wearing stickers proclaiming, “Burned by QUIXTAR!”
- Arguments will resume at 8:30 a.m. on 8/23/07
- August 20
- About 200 Quixtar IBOs from around the state of Michigan assembled outside the Kent County Courthouse while eight Michigan plaintiffs named in the lawsuit requested a temporary restraining order against Quixtar
- The judge made no ruling on the requested restraining order
- Another hearing with all parties is scheduled for 8/22/07
- Quixtar agreed not to take any action against the IBOs pending the outcome of the hearing on 8/22/07
- August 16
- The law firm representing the plaintiffs, Shughart, Thomson and Kilroy, says Harteis’ withdrawal from lawsuit came as a “surprise”
- August 15
- Press release sent out correcting inaccurate statements made by Quixtar on 8/10/07 about termination of distributors
- August 13
- IBOAI files complaint for temporary restraining order and preliminary injunction relief against plaintiffs for a breach of fiduciary duty, breach of contraction and violation of MUTSA
- IBOAI alleges that plaintiffs violated the provisions of the Confidentiality Agreement by disclosing confidential information from their membership and activities on the IBOAI Board in the public domain
- August 10
- Initial press release sent out
- Injunction filed later in the day to stop Quixtar from enforcing the non-competition and non-solicitation rules that entrap distributors and prevent them from exiting the pyramid scheme
- Preliminary injunction hearing expected to be held in the next two weeks in Los Angeles, CA
- Quixtar releases statement falsely claiming the company terminated Orrin Woodward, Chris Brady and 13 other distributors before lawsuit was filed
- After complaint was filed, the attorney of one of the plaintiffs announced that his client Fred. Harteis will no long participate in the lawsuit despite being involved in several conversations in the previous weeks concerning the state of the current Quixtar business
- August 9
- Complaint filed by group including eight of the largest distributors of Quixtar filed in federal district court, central district of California, western division
- Class-action lawsuit against Quixtar seeking a declaration that all distributor contracts with Quixtar, and the non-competition and non-solicitation provisions in particular, are unenforceable due to illegality and/or frustration of purpose
- June
- IBOAI requests results of “Learning Lab” once again
- Quixtar’s response is, “what Learning Lab?”
- Program has not succeeded in its stated goal of creating a successful selling model as of yet
- March
- Quixtar informs IBOAI that there are still no results of “Learning Lab” program
- February
- Quixtar informs IBOAI that there are no results of “Learning Lab” program
- Quixtar promises to reveal results the next month
- February 27
- Member of IBOAI sends lengthy email to Chairman of the IBOAI Board, stating that the founding families were unapologetically profiting from failed efforts of the IBOs
- The founding families hear and ignore the complaints
- To confirm that the founding families, and top tiers of the pyramid, fully understood the problems with Quixtar’s product pricing, Orrin Woodward, an IBOAI Board member, sends follow-up letter to Doug DeVos explaining that even the wholesale prices are too high and not competitive
- Early
- Legal and Ethics Committee meeting, including Rob Davidson and Sharon Grider, General Counsel for Quixtar
- Begin discussion of product pricing
- Discussion becomes heated when Rob Davidson explodes, “I got it, I got it, the prices are too expensive! So what are you going to do about it?”
- President Doug DeVos and Chairman Steve Van Andel hold private executive meeting
- DeVos concedes that Quixtar and its distributions have known for years that Quixtar needed to take responsibility and lower product prices to be competitive
- DeVos announces that a new committee was formed to find 15 to 20 inexpensive, saleable, marketable products to sell through Quixtar
- DeVos announces that Quixtar would have new retail products in the health and beauty product lines that he promised would be great sellers
- October
- Results of “Learning Lab” due
- Quixtar states that results are still inconclusive and promises results in February, 2007
- Summer
- Quixtar begins program called, “Learning Lab,” to take group of motivated leaders and given them special training about how to sell the Quixtar products to bona fide customers
- Goal is to prove the retailability of the products and to create a successful selling model
- April 3
- Orrin Woodward emails Rob Davidson, Quixtar’s Vice President of Sales and Marketing and Second-in-Charge, and states that the team is “going crazy” with XS and Protein Bars due to competitive price and value
- Email states that company needs more competitively priced products
- Rob Davidson responds, “We will own the pricing issues of products…”
- February 11
- Orrin Woodward sends letter to all IBOAI Board Members stating that everyone, including Quixtar, knows Quixtar’s products are overpriced by at least 15%
- January
- When Florence was the outgoing President of the IBOAI, he has a conversation with Jim Payne, Quixtar’s Managing Director and First-in-Charge, to underscore the reality that the IBOs needed saleable products because Quixtar’s current product line was not selling due to pricing
- Payne states that “this is not the business we are in” and that Quixtar was not in “the retail business”
- Payne tells Florence that Quixtar would never be able to compete in the retail market because the multi-level marketing system required higher margins
- Florence responds to Payne that if this was the case, then Quixtar was operating an illegal pyramid scheme
- Payne changes the subject
- December
- Achievers Q-12 event in Dallas, TX
- Billy Florence, then-President of the IBOAI, talks for an hour to Doug DeVos, President of Alticor and member of the founding families, in the ballroom of the event
- Florence informs DeVos that Quixtar needs to lower product prices
- Earlier that day, Florence had accompanied Don Wilson and David Vanderveen to Wal-Mart to look at prices
- Vanderveen states that Quixtar products had a 3 to 1 markup over manufacturing costs
- Florence explains to DeVos that the IBOs could not retail a product already priced significantly higher than comparable retail products
- DeVos confirms that 35% of product pricing is required to cover “field expense” (all of the IBO payments, bonuses and trips paid by Quixtar)
- Florence offers that the IBOs could be persuaded to receive smaller bonuses, with a reduced PV per item, to help create retail saleability if the founding families would also reduce their margins
- Devos tells Florence that he would have to look into the matter and revisit the margins required by the founding families
- No action was ever taken, presumably because the Jay Factor is fixed
- May
- IBOAI recommends that Quixtar bring in a group of young IBOs (20s-30s) to discuss pricing issues
- This demographic consistently complained about Quixtar product prices
- Quixtar sets up presentation so IBOs could see screen of options and then press a button to register and compute their choices
- Results show that people of this age group typically spent less in one product category than the cost of one Quixtar product in the same category
- Quixtar acknowledges results to the IBOAI and promised, “We’re working on it.”
- Plaintiff David Brandy enters into Quixtar uniform distributor contract
- Quixtar’s Second-in-Charge, Randy Bancino, commissions an analysis and report from McKinsey Consultants regarding whether Quixtar products were overpriced and not sellable
- Findings of the “McKinsey Report” presented to entire IBOAI Board and other Quixtar representatives
- Report shows that there are very few retail customers buying Quixtar products, and that hardly anyone was selling the Quixtar products at retail
- March
- Claire Zevalkink, Quixtar’s head of marketing, explains Quixtar’s product pricing constraints
- Recognizes that the complaints about product pricing have been heard
- Quixtar acknowledges that product prices could be greatly reduced, and Quixtar’s profit margin will still be positive
- Many IBOs choosing Quixtar over Amway
- Company elects to shut down Amway operations in U.S.
- Quixtar becomes operational version of Amway in U.S.
- Plaintiff Kirk Birtles enters into Quixtar uniform distributor contract
- Plaintiff Aron Radosa enters into Quixtar uniform distributor contract
- Plaintiff Benjamin L. Dickie enters into Quixtar uniform distributor contract
- April
- IBOAI conducts “Confidential Competitive Analysis” of Quixtar products
- In almost every item, Quixtar products substantially overpriced in comparison to three industry leaders
- In response, Quixtar promised to “work on it”
- Retail prices of Amway’s products have increased substantially in relationship to the consumer marketplace, while trends in retailing are lowering retail margins and prices for consumers
- Concentration and uniqueness of Amway’s products lost as the market begins developing broader arrays of products to match demand
- Amway’s products become increasingly difficult to retail
- Quixtar distributors personally consume products or discard those they did not use (“internal consumption”)
- Amway’s products are almost completely non-sellable
- Amway launches sister company, Quixtar, the e-commerce company
- Amway touts Quixtar as its chance to make a second, and this time good, first impression on the network marketing industry in the U.S.
- Access Business Group, LLC (“Access”) created as the manufacturer of the products sold by Quixtar and Amway
- Alticor Inc. (“Alticor”) created as the parent holding company of Quixtar, Amway and Access
- Plaintiff Tim Marks enters into Quixtar uniform distributor contract
- Diamond Meeting of the Company Internet Services
- Price discussion ensues regarding price of Amway dog food
- Amway representative says company does not look at marketplace to determine what a competitive retail price should be
- Products are priced at the IBO cost
- IBOs attempting to resell the dog food would have to sell it at cost, foregoing any profit, to be competitive
- IBOs complain to Quixtar that products are not sellable
- Ninth Circuit revisits the rules on pyramid schemes in the Omnitrition case
- Court holds that Omnitrition operates as an illegal pyramid scheme because distributors had to purchase and convince three other recruits to purchase a certain amount of product in order to advance or receive any benefit from the system
- Quixtar has a similar structure
- Distributors can only earn money when they self-consume Quixtar’s products and when they recruit new IBOs to do the same
- IBOAI begins pressuring Amway to start an e-commerce business
- IBOAI threatens to start up an e-commerce business with or without Amway
- Amway embraces the threat and takes over the project to create an Internet-based retail business
- Amway wants to incorporate the e-commerce business into the Amway distributor business, but the IBOA believes that Amway’s reputation had so disintegrated that a new business necessitated a new name
- Publication places both Richard DeVos and Jay Van Andel in the top 10 wealthiest Americans (worth $4.5 billion each)
- Plaintiff Orrin Woodward enters into Quixtar uniform distributor contract
- New COO of Amway, Tom Eggleston, renegotiates contract with the ADA board
- Reunites the board with Amway, while still allowing it to be independent representative of the distributors
- Amway ADA evolves into the Quixtar IBOAI (Independent Business Owners Association International Board)
- Amway’s reputation begins its considerable decline
- “60 Minutes” and “Phil Donahue” run broadcasts disparaging the Amway business model as fraudulent
- One long-time IBO comments that he lost half of his business in the eight months following these broadcasts
- Founding families become disenchanted with Amway Distributor Association (ADA) when they denied the right to hand-pick members of the board
- DeVos and Van Andel abandon the board and Amway severs its ties
- ADA becomes antagonistic toward Amway, which is forced to fund itself for the first time since inception
- Founding Van Andel and DeVos families derived so much wealth from Amway that they were listed in Forbes’ list of the wealthiest Americans
- Forbes.com lists Richard DeVos as the 73rd richest person in America, with a net worth of $3.5 billion derived from Alticor
- Federal Trade Commission (FTC) begins looking at Amway’s business model to determine whether it was operating as an illegal pyramid scheme
- Because the company was still producing products capable of being sold in the retail market, the FTC rules that Amway was not a pyramid scheme
1974
- Amway’s retail sales reach $210 million
- Plaintiff Billy Florence enters into Quixtar uniform distributor contract
- Amway founded by Jay Van Andel and Richard DeVos
Monday, August 27, 2007
QUIXTAR: IBOAI's Contract with Quixtar
Original Source
IBOAI's Contract with Quixtar
[The following addresses the multiple questions and misinformation about the IBOAI's contract with Quixtar.]
Our contract is exactly as it has been since 1994. Negotiations are ongoing as to the contract, which renews every two years. The goal is to make sure that the IBOAI Board, the Corporation and the families continue to partner in the best interest of all IBOs, regardless of their LOS or LOA.
IBOAI's Contract with Quixtar
[The following addresses the multiple questions and misinformation about the IBOAI's contract with Quixtar.]
Our contract is exactly as it has been since 1994. Negotiations are ongoing as to the contract, which renews every two years. The goal is to make sure that the IBOAI Board, the Corporation and the families continue to partner in the best interest of all IBOs, regardless of their LOS or LOA.
We WANT to Compete with Walmart
Many people have posted comments on various postings on this site relating how they love the exclusive products (mostly the old Amway products), but can no longer afford to use them.
Personally, I regularly use Double X (as well as most of the other supplements), SA-8 (as well as most of the laundry products), XS, shampoo and deoderant. I love the products. I just don't know if I love them *that* much, given the price differential.
The first tape I ever heard from a "system" was "From Air Force Recruiter to People Builder" (DY60) by Ron & Toby Hale. I remember Dexter Yager once said "Sell to the classes, live with the masses. Sell to the masses, live with the classes." My mentor has stated recently that Quixtar has come to be an opportunity for the middle class and above. These points come together. Could a Ron & Toby Hale make it in the business today? They retailed like crazy. Much more difficult today to do the same.
Quixtar did sales of $901 million in 2002 (found here). Impressive if it didn't have a 40 year history behind it. However, just 5 years later they did $1.118 billion in 2007 (found in this PDF document). That is a 24% increase over 5 years, or about 4.4% per year. Given that the inflation rate over the same years (Quixtar tends to raise their prices with inflation) was around 3% (found here). That means an average of 1.5% growth per year during the majority of Quixtar's existence.
Walmart, by contrast, did $10.2 billion in 2002 (found here) and
$17.6 billion in 2007 (found here). That is a 72.5% increase over the same period, or 11.5% per year average. Not only is the growth rate higher, the number of dollars are higher.
Quixtar says they are not trying to compete with Walmart. Who are they trying to compete with? Other euqally expensive stores that are going out of business? Wouldn't it be wise to try to compete with a business that has great growth and great revenue than trying to chase a dinosaur (didn't the dinosaurs become extinct?).
Orrin and Chris, please give us something that can compete with Walmart.
UPDATE: Analysis of Quixtar's numbers
Personally, I regularly use Double X (as well as most of the other supplements), SA-8 (as well as most of the laundry products), XS, shampoo and deoderant. I love the products. I just don't know if I love them *that* much, given the price differential.
The first tape I ever heard from a "system" was "From Air Force Recruiter to People Builder" (DY60) by Ron & Toby Hale. I remember Dexter Yager once said "Sell to the classes, live with the masses. Sell to the masses, live with the classes." My mentor has stated recently that Quixtar has come to be an opportunity for the middle class and above. These points come together. Could a Ron & Toby Hale make it in the business today? They retailed like crazy. Much more difficult today to do the same.
Quixtar did sales of $901 million in 2002 (found here). Impressive if it didn't have a 40 year history behind it. However, just 5 years later they did $1.118 billion in 2007 (found in this PDF document). That is a 24% increase over 5 years, or about 4.4% per year. Given that the inflation rate over the same years (Quixtar tends to raise their prices with inflation) was around 3% (found here). That means an average of 1.5% growth per year during the majority of Quixtar's existence.
Walmart, by contrast, did $10.2 billion in 2002 (found here) and
$17.6 billion in 2007 (found here). That is a 72.5% increase over the same period, or 11.5% per year average. Not only is the growth rate higher, the number of dollars are higher.
Quixtar says they are not trying to compete with Walmart. Who are they trying to compete with? Other euqally expensive stores that are going out of business? Wouldn't it be wise to try to compete with a business that has great growth and great revenue than trying to chase a dinosaur (didn't the dinosaurs become extinct?).
Orrin and Chris, please give us something that can compete with Walmart.
UPDATE: Analysis of Quixtar's numbers
Sunday, August 26, 2007
QUIXTAR: About Products
Original Source
About Products
We would like to comment about the product issue that has been coming up.
Contrary to the myth that Quixtar's products are all priced too high, the majority of the products are priced very competitively to national brands in their same category.
Most IBO's do not wish to market discount store quality products. That has never been our business model. In particular we find that the Artistry line is priced well and a very profitable line.
In addition to that, Quixtar has lowered the quantity of the Nutrilite Daily from 180 to 90, and lowered the price to make it even more competitive. They introduced the blister paks of Rhodiola and Carb Blocker also as part of their First Circle Program.
In September a new line called "Simply Nutrilite" is launching with exciting new health & fitness products with extremely good pricing.
In November some equally exciting Artistry skin care and cosmetics will be launched, also with great pricing.
And even more great news is that shipping will be free starting September 1st for all customer coreline purchases over $75.00. New IBO's, during their first full 3 months in the business, will also receive free shipping for coreline purchases over $75.00.
This is all a direct result of the IBOAI's collaboration with Quixtar.
About Products
We would like to comment about the product issue that has been coming up.
Contrary to the myth that Quixtar's products are all priced too high, the majority of the products are priced very competitively to national brands in their same category.
Most IBO's do not wish to market discount store quality products. That has never been our business model. In particular we find that the Artistry line is priced well and a very profitable line.
In addition to that, Quixtar has lowered the quantity of the Nutrilite Daily from 180 to 90, and lowered the price to make it even more competitive. They introduced the blister paks of Rhodiola and Carb Blocker also as part of their First Circle Program.
In September a new line called "Simply Nutrilite" is launching with exciting new health & fitness products with extremely good pricing.
In November some equally exciting Artistry skin care and cosmetics will be launched, also with great pricing.
And even more great news is that shipping will be free starting September 1st for all customer coreline purchases over $75.00. New IBO's, during their first full 3 months in the business, will also receive free shipping for coreline purchases over $75.00.
This is all a direct result of the IBOAI's collaboration with Quixtar.
TEAM: Quixtar Crows Too Soon About Court Rulings, Says Poyfair
Original Source
Quixtar Crows Too Soon About Court Rulings, Says Poyfair
David is taking on Goliath and winning in courts across the country. Following a ruling in Michigan's Kent County Circuit Court, Friday, Quixtar representatives expressed their satisfaction in the press and on their corporate blogs. They even went so far as to assault the character of one of their former Independent Business Owners (IBOs) in an official corporate posting, says attorney D.J. Poyfair. What they aren't saying is that the company came out on the other side of the same issue in courts all across the country. In fact, according to court records and a Los Angeles newspaper, three Michigan Circuit Courts have granted Temporary Restraining Orders (TROs) against Quixtar on behalf of IBOs who are afraid of the corporate giant. Nationally, the picture for Quixtar was even worse. TROs were granted to protect IBOs in five other states, and two of them in federal courts, according to court records.
Grand Rapids, Michigan (PRWEB) August 26, 2007 -- "Home town Davids are standing up to Goliath and winning in state and Federal Court rooms across the country," says D.J. Poyfair, attorney representing the plaintiffs in the class action lawsuit (Case 07-05194). Following a ruling in Michigan's Kent County 17th Circuit Court yesterday, (Case 07--CZ) Quixtar representatives expressed their satisfaction in the press and on their corporate blogs. "They even went so far as to assault the character of one of their former Independent Business Owners (IBOs) in an official corporate site posting," notes Poyfair.
What they aren't saying, however, is that the company came out on the other side of the same issue in courts all across the country. In fact, Business Wire reports that three Michigan Circuit Courts have granted Temporary Restraining Orders (TROs) against Quixtar on behalf of IBOs who are afraid of the corporate giant. Nationally, the picture for Quixtar was even worse. According to court records, TROs were granted to protect IBOs in five other states, and two of them in federal courts.
"We are concerned about retaliation," said Mike Gowen, one IBO among hundreds standing on the Kent County Courthouse steps during proceedings on Thursday, who won a TRO against Quixtar (Case 07-722348CK) . "Quixtar is coming after my personal business because they are being sued by several former high-level distributors that I am affiliated with." Mr. Gowen was referring to a case filed in California federal court two weeks ago, where several high level Quixtar business leaders filed a class action lawsuit (Case CV07-05194) alleging Quixtar is operating a pyramid scheme. In response to that filing, Quixtar terminated the 15 Plaintiffs. Their next move was to send threatening emails to every business owner demanding that they sign a pledge of allegiance to Quixtar or risk termination -- copy of this document is located on freetheibo.com. Carol Ralston, a single mother, another recipient of the email, who has built a successful business right in the Grand Rapids area, said, "How can they threaten to terminate me for something someone else supposedly did? I have worked hard to build my business and it's my sole source of income. What kind of a company treats people this way?"
About Business Owners et al. v. Quixtar, Inc. (Case 07-05194)
On August 9, 2007, a group including eight of the largest Quixtar distributors filed a lawsuit seeking 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. On August 10, 2007, the group sought a preliminary and permanent injunction restraining Quixtar from enforcing or attempting to enforce the non-competition and non-solicitation provisions. Hearings are set to begin on September 12, 2007.
More information regarding Quixtar, the lawsuits, including relevant court documents and timeline, is available at FreeTheIBO.com. Free The IBO was created as a source for information by Shughart, Thompson & Kilroy, firm representing the plaintiffs on the lawsuit, for those involved with the company and litigation, as well as for the media and general public alike.
Quixtar Crows Too Soon About Court Rulings, Says Poyfair
David is taking on Goliath and winning in courts across the country. Following a ruling in Michigan's Kent County Circuit Court, Friday, Quixtar representatives expressed their satisfaction in the press and on their corporate blogs. They even went so far as to assault the character of one of their former Independent Business Owners (IBOs) in an official corporate posting, says attorney D.J. Poyfair. What they aren't saying is that the company came out on the other side of the same issue in courts all across the country. In fact, according to court records and a Los Angeles newspaper, three Michigan Circuit Courts have granted Temporary Restraining Orders (TROs) against Quixtar on behalf of IBOs who are afraid of the corporate giant. Nationally, the picture for Quixtar was even worse. TROs were granted to protect IBOs in five other states, and two of them in federal courts, according to court records.
Grand Rapids, Michigan (PRWEB) August 26, 2007 -- "Home town Davids are standing up to Goliath and winning in state and Federal Court rooms across the country," says D.J. Poyfair, attorney representing the plaintiffs in the class action lawsuit (Case 07-05194). Following a ruling in Michigan's Kent County 17th Circuit Court yesterday, (Case 07--CZ) Quixtar representatives expressed their satisfaction in the press and on their corporate blogs. "They even went so far as to assault the character of one of their former Independent Business Owners (IBOs) in an official corporate site posting," notes Poyfair.
What they aren't saying, however, is that the company came out on the other side of the same issue in courts all across the country. In fact, Business Wire reports that three Michigan Circuit Courts have granted Temporary Restraining Orders (TROs) against Quixtar on behalf of IBOs who are afraid of the corporate giant. Nationally, the picture for Quixtar was even worse. According to court records, TROs were granted to protect IBOs in five other states, and two of them in federal courts.
"We are concerned about retaliation," said Mike Gowen, one IBO among hundreds standing on the Kent County Courthouse steps during proceedings on Thursday, who won a TRO against Quixtar (Case 07-722348CK) . "Quixtar is coming after my personal business because they are being sued by several former high-level distributors that I am affiliated with." Mr. Gowen was referring to a case filed in California federal court two weeks ago, where several high level Quixtar business leaders filed a class action lawsuit (Case CV07-05194) alleging Quixtar is operating a pyramid scheme. In response to that filing, Quixtar terminated the 15 Plaintiffs. Their next move was to send threatening emails to every business owner demanding that they sign a pledge of allegiance to Quixtar or risk termination -- copy of this document is located on freetheibo.com. Carol Ralston, a single mother, another recipient of the email, who has built a successful business right in the Grand Rapids area, said, "How can they threaten to terminate me for something someone else supposedly did? I have worked hard to build my business and it's my sole source of income. What kind of a company treats people this way?"
About Business Owners et al. v. Quixtar, Inc. (Case 07-05194)
On August 9, 2007, a group including eight of the largest Quixtar distributors filed a lawsuit seeking 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. On August 10, 2007, the group sought a preliminary and permanent injunction restraining Quixtar from enforcing or attempting to enforce the non-competition and non-solicitation provisions. Hearings are set to begin on September 12, 2007.
More information regarding Quixtar, the lawsuits, including relevant court documents and timeline, is available at FreeTheIBO.com. Free The IBO was created as a source for information by Shughart, Thompson & Kilroy, firm representing the plaintiffs on the lawsuit, for those involved with the company and litigation, as well as for the media and general public alike.
Friday, August 24, 2007
TEAM: Team Update, Friday August 24th, 2007
Team Update, Friday August 24th, 2007
In the United States District Court for the Easter District of Texas, U.S. magistrate judge Don D. Bush entered a temporary restraining order stating in part that
". . . defendant, Quixtar, and defendant's respective officers, managers, trustees, agents, servants, employees, attorneys, confederates, and all other persons in active concert or participation with them, are hereby restrained and enjoined immediately from, directly or indirectly:
In addition to this ruling on behalf of certain IBOs in Texas, several other Temporary Restraining Order (TRO's) protecting other IBOs have been granted throughout the country, including an additional county in Texas, three counties in Michigan, Georgia, Pennsylvania, South Carolina, New Hampshire.
In Western Michigan's Kent County, a judge issued a court order today that said in part all parties should follow the contractual provisions. Following the contract was never disputed by Orrin and Chris. Interpretation of the judge's order in full detail is still being handled by attorneys. As to Sullivan's opinion he says, "the entry of such an injunction is not a final decision on the merits of this case and shouldn't be interpreted as the Court's opinion as to what the ultimate decision will be."
The TEAM will continue to host meetings and sell materials within the terms of the Quixtar Rules of Conduct. Rule 7.1 and 7.2 states that prospect and IBO plan material needs to be authorized by Quixtar. Out of respect for the Kent County court order, the TEAM will not be selling any such material. All materials not so covered by the Quixtar authorization will still be available.
In the United States District Court for the Easter District of Texas, U.S. magistrate judge Don D. Bush entered a temporary restraining order stating in part that
". . . defendant, Quixtar, and defendant's respective officers, managers, trustees, agents, servants, employees, attorneys, confederates, and all other persons in active concert or participation with them, are hereby restrained and enjoined immediately from, directly or indirectly:
- Interfering with Plaintiff's Team business support system;
- Sending verbal, written, or electronic communications to business associates and upline or down-line business partners of Plaintiff's related to violations of the rules of conduct, use of Team materials and attendance at Team meetings and conferences, and threats to suspend or terminate any Quixtar distributor's business based on Team materials;
- Terminating or threatening to terminate the distributorships or businesses of Plaintiff's and other IBOs who use Team materials forwarded by Plaintiffs;
- Disparaging the Team approach;
- Taking any adverse action against Plaintiffs pending disposition of this order;
- Refusing to pay any bonus to Plaintiffs that may be due in the ordinary course of business;
- Interfering with or prohibiting, in any way, the operation of the Team as a business support system for Plaintiffs or taking any action to shut down or interfere with the Team's business"
In addition to this ruling on behalf of certain IBOs in Texas, several other Temporary Restraining Order (TRO's) protecting other IBOs have been granted throughout the country, including an additional county in Texas, three counties in Michigan, Georgia, Pennsylvania, South Carolina, New Hampshire.
In Western Michigan's Kent County, a judge issued a court order today that said in part all parties should follow the contractual provisions. Following the contract was never disputed by Orrin and Chris. Interpretation of the judge's order in full detail is still being handled by attorneys. As to Sullivan's opinion he says, "the entry of such an injunction is not a final decision on the merits of this case and shouldn't be interpreted as the Court's opinion as to what the ultimate decision will be."
The TEAM will continue to host meetings and sell materials within the terms of the Quixtar Rules of Conduct. Rule 7.1 and 7.2 states that prospect and IBO plan material needs to be authorized by Quixtar. Out of respect for the Kent County court order, the TEAM will not be selling any such material. All materials not so covered by the Quixtar authorization will still be available.
QUIXTAR: Order, from the court
Original Source
August 24th, 2007…
Order, from the court
You can post a comment or trackback from your own site.
Quixtar and our IBOs won in court today.
Three times.
The court told Orrin Woodward and the other TEAM members that we terminated last week that they cannot ignore contracts.
The court told him that he could not help himself to confidential information from our company and the trade organization that has suspended them.
The court told him that our rules matter.
The court did not find merit in Mr. Woodward’s arguments that rules do not apply to him. And obviously, we could not agree more.
We are happy to stand up for playing by the rules. We are happy to stand up for ethical business dealings. We are proud to stand up for every IBO in the world who believes in those things, too.
August 24th, 2007…
Order, from the court
You can post a comment or trackback from your own site.
Quixtar and our IBOs won in court today.
Three times.
The court told Orrin Woodward and the other TEAM members that we terminated last week that they cannot ignore contracts.
The court told him that he could not help himself to confidential information from our company and the trade organization that has suspended them.
The court told him that our rules matter.
The court did not find merit in Mr. Woodward’s arguments that rules do not apply to him. And obviously, we could not agree more.
We are happy to stand up for playing by the rules. We are happy to stand up for ethical business dealings. We are proud to stand up for every IBO in the world who believes in those things, too.
QUIXTAR: Latest
Original Source
August 24th, 2007…
Latest
You can post a comment or trackback from your own site.
The following is an official press release issued today by Alticor:
Complete defeat for Woodward and other terminated TEAM distributors in Quixtar court battle
Judge says dismissed IBOs cannot use company and trade group info; Quixtar allowed to enforce its rules of conduct
ADA, Mich.—Three Michigan court rulings today left dismissed distributor Orrin Woodward and his Team organization without a single legal victory, as a judge ruled that he and a group of terminated distributors cannot misuse the business information of Quixtar, the company that dismissed them last week.
In ruling on three motions related to the terminations, Judge Paul Sullivan of Kent County Circuit Court took the following actions:
Issued a preliminary injunction preventing Woodward and his company, Team, from using Quixtar business data to recruit Quixtar IBOs as Team builds a competing business;
Issued a second injunction ordering Woodward and other terminated distributors to return confidential documents and data they had taken from their former trade association, which has suspended them; and
Denied an injunction request from others who sought to prevent Quixtar from enforcing its rules of conduct.
“These legal defeats to Orrin Woodward represent a victory for hundreds of thousands of Quixtar independent business owners who are building their businesses the right way, selling quality products and introducing consumers to the Quixtar business opportunity,” said Quixtar Executive Vice President Jim Payne.
Since his termination, Woodward has engaged in a campaign of PR spamming, engaging a class-action law firm and filing numerous duplicative lawsuits around the country. The company said it would defend itself against Woodward’s abuse of the legal system.
“After these defeats, Mr. Woodward’s credibility is down to zero,” said Quixtar spokesman Rob Zeiger. “Woodward has ignored our rules, abused the legal process, defied the court, and misled the people who believed in him.
“We stand by our main point: Terminating Orrin Woodward and ridding Quixtar of his abusive business practices was absolutely the right thing to do.”
###
A copy of this press release can also be found on PR Newswire.
August 24th, 2007…
Latest
You can post a comment or trackback from your own site.
The following is an official press release issued today by Alticor:
Complete defeat for Woodward and other terminated TEAM distributors in Quixtar court battle
Judge says dismissed IBOs cannot use company and trade group info; Quixtar allowed to enforce its rules of conduct
ADA, Mich.—Three Michigan court rulings today left dismissed distributor Orrin Woodward and his Team organization without a single legal victory, as a judge ruled that he and a group of terminated distributors cannot misuse the business information of Quixtar, the company that dismissed them last week.
In ruling on three motions related to the terminations, Judge Paul Sullivan of Kent County Circuit Court took the following actions:
Issued a preliminary injunction preventing Woodward and his company, Team, from using Quixtar business data to recruit Quixtar IBOs as Team builds a competing business;
Issued a second injunction ordering Woodward and other terminated distributors to return confidential documents and data they had taken from their former trade association, which has suspended them; and
Denied an injunction request from others who sought to prevent Quixtar from enforcing its rules of conduct.
“These legal defeats to Orrin Woodward represent a victory for hundreds of thousands of Quixtar independent business owners who are building their businesses the right way, selling quality products and introducing consumers to the Quixtar business opportunity,” said Quixtar Executive Vice President Jim Payne.
Since his termination, Woodward has engaged in a campaign of PR spamming, engaging a class-action law firm and filing numerous duplicative lawsuits around the country. The company said it would defend itself against Woodward’s abuse of the legal system.
“After these defeats, Mr. Woodward’s credibility is down to zero,” said Quixtar spokesman Rob Zeiger. “Woodward has ignored our rules, abused the legal process, defied the court, and misled the people who believed in him.
“We stand by our main point: Terminating Orrin Woodward and ridding Quixtar of his abusive business practices was absolutely the right thing to do.”
###
A copy of this press release can also be found on PR Newswire.
It's Time To Get Back To Work
I've been kind of holding my breath, waiting for the lawsuits to show direction of what the future will hold for us. I was talking with my mentor, and he pointed out that it could take a very long time to really see what the fall out is from this.
I'd suggest we all have a chat with our mentor about what tweaks we need to do, and then get back to work doing what we do best, building Teams and living Dreams. Let's have fun, make money and make a difference! Don't let this hiccup (I think that is all it will be when all is said and done) slow down your progress.
I'd suggest we all have a chat with our mentor about what tweaks we need to do, and then get back to work doing what we do best, building Teams and living Dreams. Let's have fun, make money and make a difference! Don't let this hiccup (I think that is all it will be when all is said and done) slow down your progress.
Wednesday, August 22, 2007
The Power of Community
A friend of mine help me set up Google Analytics with this blog, so I could see how much traffic was coming to the blog. I said sure. More out of curiosity than anything. Well, my friend was amazed (as I was). Yesterday there were over 1100 visits to this blog. This blog has only been up for less than a week.
Here are some interesting observations from the information Analytics reports.
I think this shows that Content and Commerce are not as big a deal as Community. The Team community has a lot of power. With only word of mouth, they can direct large traffic flow on the internet. I had heard about the affect of community and the value of it on the internet way back in 1999, but to actually see it is amazing.
Lesson Learned: Quixtar, it appears you may be quickly loosing an extremely valuable community. The more hostile you become, the more people will look for Team's leadership.
Here are some interesting observations from the information Analytics reports.
- 54% of the people visiting did not click on a link to get to the blog. They either had a bookmark, typed in the address or copied the address and pasted it in.
- Blogs and News Sites that led people here by clicking on a link were (in order): theiborebellion.blogspot.com, technorati.com, digg.com, media.alticorblogs.com, adatudes.opportunityzone.com
- There were a surprising number of webmail links (people got an email with the address and clicked on the link in the email).
- Less than 10% found the site via a search engine, like Google.
- The majority of visitors were from Michigan, from the following cities (in order): Detroit, Flint, Southfield, Grand Rapids, Bay City, Allendale, Kalamazoo, Waterford, Rochester, New Haven, Ada, Birmingham, Macomb, Dearborn Heights, Saginaw, Battle Creek, Troy, Walled Lake, Pontiac, Hanover, Shelby, Lansing, Muskegon, Royal Oak, Ypsilanti, Westland, Charlotte, Warren, Flat Rock, Clinton, Monroe, East Lansing, Grandville, Ann Arbor, Traverse City, Fowlerville, Franklin, Bloomfield Hills, Flushing, Jackson, Romeo, Mount Morris, Rockford, Midland, Grawn, Rockwood, Zeeland, Scottville, Fraser, Livonia, Canton, Vernon
- It was really fun to see all the cities in Michigan I've heard about on the CDs
I think this shows that Content and Commerce are not as big a deal as Community. The Team community has a lot of power. With only word of mouth, they can direct large traffic flow on the internet. I had heard about the affect of community and the value of it on the internet way back in 1999, but to actually see it is amazing.
Lesson Learned: Quixtar, it appears you may be quickly loosing an extremely valuable community. The more hostile you become, the more people will look for Team's leadership.
Tuesday, August 21, 2007
TEAM: Board Member Chuck Goetschel Speaks!
Original Source
Board Member Chuck Goetschel Speaks!
The TRUTH They Don’t Want You to Know by Chuck Goetschel
What do you do when you learn that what you have been promoting isn’t working? Do you simply complain about it? Do you keep telling everyone that the good times are coming? Or, do you do something about it?
Let me complicate it: What if you learn the supporting facts of this business failure after you’ve invested 17 years of your personal life, and your parents have invested over 35 years? What if you find yourself financially dependent upon the business income; the basis of which was built years ago? What do you do? This is the story of where I found myself and why I chose to do what I have done.
First, some facts: In 1982 Amway of N America did $1 Billion in volume (interestingly, so did Wal-Mart). Twenty-five years later, Amway/Quixtar of N America recorded approximately $1.1 Billion in volume. Considering inflation, the relative volume has plummeted over the past 25 years; most significantly in the last ten. Currently, out of 10,000 people that register in this business, only 833 will remain after three years. That is, 91.6% of people will be gone within 36 months of registering. From 1999-2000, 600,000 English speaking people as a first language registered in the business in North America. By end of 2005, of those registered business owners, only six have achieved the Founders Emerald level (in 2005, the average income was less than $90,000/year) or above. That is, 1/100,000 achieved an income of $90,000/year or more. Nearly 50 years of community building for Amway/Quixtar and the qualified Diamonds in North America fit in one ballroom with tables. These are the facts. Perhaps, you relate to them. How’s it working for you?
In addition to these horrifying statistics, the business is riddled with litigation including very significant court cases threatening the very existence of the company in the US, England and India. The core issue in these cases is the same core issue behind the current failure of the business—over-priced products. Everything stems from this root problem. A very unfortunate domino effect resulted in one negative thing leading to the next till now we find ourselves in the current situation.
After years of attempting to correct this within Quixtar, it finally became apparent that if there was ever to truly be change, then a more dramatic stance would need to be taken. As much as I felt like David stepping up to the plate to meet Goliath, the time had come to take a stand for what I believe in.
How did we get here?
When I registered in Nov 1989 and really started building my business in May of 1990, things were different. The big box stores had been building in acceptance but the Super Wal-Mart’s hadn’t appeared yet. Furthermore, the internet was not used yet for commerce so there were no consumer options there. A product could be higher in price and still sell because consumers didn’t have many of options. However, the big box stores continued to grow in numbers and acceptance. The Super Wal-Marts launched and in 1994 internet commerce began. As a result, the world of shopping changed quickly. The Wal-Mart business model drove prices down. The internet gave us a world of options without leaving our chair. Entire web sites were developed to search the web and find the best prices for various products. As a result, competition dramatically increased. Suddenly in order to sell products in this world, clear value had to exist. Businesses that survived responded to this pressure. Businesses that didn’t respond or couldn’t respond, failed. One exception to this the Amway/Quixtar business.
While the rest of retail business struggled to survive through this sudden increase in competition, Amway/Quixtar continued to increase product prices more in alignment with inflation than with the changing market economy. This caused the prices to get further and further from the consumer’s “good deal” perception as it was easily noticed that they weren’t keeping up with what was available in the marketplace.
So, why was Amway/Quixtar able to survive when others businesses who didn’t respond to the market failed? The products in the business were still purchased by the business owners for personal use in order to achieve bonuses. The primary reason the FTC looks for retail sales in our business is to validate the price a product is selling for. If the public is not buying our product but the people within the network are buying it, then something is wrong. In such a case the people in the network are buying the product not on the merits of product value but rather for a compensation bonus. The FTC declares such an operation a pyramid. Therefore, a legitimate business opportunity can slowly and unnoticeably slide into a pyramid status.
The Dominos begin—one fall causing the next…
Pricing-Width-Failure:
A person has a dream to make money and registers into the business. They quickly realize that the prices are too high to successfully retail the products. Consequently, they look to the compensation plan for profit. Since the compensation plan is predominately a width-focused compensation plan, a focus on sponsoring in width is the only remaining way to initially profit. This leads to the philosophy of “get wide and see who the hungry ones are. Register 9-12 and you’ll find your three.” The other “less-hungry” ones fall out as they are not able to retail products, and without anyone registered below them they see no reason not to quit. With this ratio of fallout/failure, a negative image grows. With a negative image (made very obvious by certain websites), it becomes even harder to sponsor people while continuing to be near impossible to retail the products. This reinforces the fallout, adds to the negative image and the cycle continues.
Failure-Lawsuits:
Eventually, after enough failure occurs, business analysis is done and lawsuits are filed. This is the current situation of the Amway/Quixtar business. Currently, the DTI in England has a court date scheduled to determine whether Amway in England represents a legitimate business opportunity primarily due to the fact that most people are not making money, retail sales are not occurring and people are spending money on training. If people spend money on training but still are not able to retail the products, then the opportunity is questionable. Amway of India is in court over similar challenges. A class action lawsuit seeking significant damages has been filed in California (Porkony vs. Quixtar) over the same challenges as well.
The continued erosion of the product pricing over the years has put this business in a legally vulnerable place, since a network without retail sales is deemed illegal. Currently, Quixtar’s retail volume is approximately only 3% of its total volume. Members of the IBOAI board have diligently worked with the company to change this situation. However, ironically, although they are the ones working the hardest to change the situation, they now find themselves with the greatest legal liability given their high level of knowledge and business influence.
Lawsuits-Lawyers in Charge - A Reputation Focus:
As a result of all the lawsuits that threaten the very existence of the business, Amway/Quixtar attorneys are now running the show. Their perspective is their legal position, and their decision making process runs towards whatever makes the business more secure. Although this sounds great initially (and to a certain extent it is), the general reality is that the greater an institution’s regulations, the less an individual’s freedom. For example, although some laws are very valuable, each law limits our freedom. With no laws we would have ultimate freedom (along with ultimate chaos—imagine no driving laws?). With the other extreme of all law we would eventually have no freedom (and yes, no chaos). The new rules with Amway/Quixtar will limit even more freedom and make it even more difficult within an already difficult business. And, unfortunately given their current legal vulnerability, they need to. Consequently, the company’s primary focuses is to tighten things legally and attempt to improve upon reputation. Their key question is, “Is it better for the reputation?” If it is, then it will be the course of action. Unfortunately, not all reputation decisions lead to better results—especially for the new person.
Reputation Focus-Amway Business Transformation-Increased IBO Difficulty:
In order for the attorneys to secure the business, they continue their movement towards whatever will decrease risk and improve reputation. As a result, on September 1, 2007 the “Business Transformation” to a global Amway will begin. Although I agree with the idea of decreasing risk, the transformation unfortunately will be to the detriment of the IBOs’ desired results. This will make a very difficult business even harder. Consider the upcoming changes:
Quixtar name change to Amway
It is a shame that the DeVos and VanAndel families made this decision without any communication with the field, including the IBOAI board. This name change creates obvious challenges to growing one’s business. It is a hurdle that was placed in the in front of already struggling people. Furthermore, the name change dramatically hurts the trust between the field and the company—not a good thing. For the past eight years IBOs have been telling people that this is not Amway; that it is an independent corporation being a subsidiary of Alticor Corp and a sister company to Amway. Many were told Quixtar is just Amway online and we were all taught to point out that Quixtar is actually a unique business model designed specifically for the internet. Although it takes many aspects of the Amway business and incorporated them, it is its own unique business. With Quixtar now folding back into Amway, it makes everyone look like a liar. How do you tell those people that you actually are in Amway online? What do you tell those people who asked, “Is this Amway?” before registering, and you said, “No?” Now they are in Amway. These uncomfortable and frankly unnecessary situations the IBOs will find themselves in will be difficult. The feelings will not be good. And, the trust with the owners for suddenly “changing the deal” is definitely damaged.
Why would this decision be made? Most all business owners are against it and the IBOAI board unanimously voted against it. So, then why did they do it? I believe their answer has a few platforms. First of all, it makes for a simpler business from a world wide perspective with the use of one name—Amway. It will eliminate the possibility of anyone misinterpreting what the relationship of the business is to Amway once it just is Amway. This clarity is good for risk and reputation even though it may be very damaging to IBO results. However, when asked why the name change, the company will regularly recite their research that yielded two findings.
The first finding is that the Amway brand name is better known by far in N. America than the Quixtar name. This, of course, is no surprise, nor is the fact that the better known Amway name comes with a much lower approval rating by the public. That is, Amway not only has a higher “Awareness” factor, it also has a much higher “Bewareness” factor. However, their research tells them that it is better to start with a high awareness factor name like Amway, even with the negative reputation, than to build the awareness factor of a lesser known Quixtar name. Personally, that makes sense to me if it were just a product that the company wanted to sell. However, when it is a business that we are going to build involving friends and family, the conversion is much more complex. Why would I choose a business with a negative reputation as my business of choice when I have other businesses (perhaps lesser known names) that I could choose? The company’s goal is to end up with such a great reputation that you can just walk up to someone and ask if they want to see the Amway business plan and people would be positive. A great thought, but currently it is light-years away from that point, if it’s even possible. Further, it isn’t necessary. The original concept of Quixtar was to have a fresh start, to try again to do it right—new business format (online), new name, and a new result! Even the company’s research said that it would be devastating to go back to the Amway name before making changes to dramatically improve the business model.
The second finding their research discovered is that the more they advertised Amway in the state of Michigan, the slightly better approval ratings Dick DeVos received during his campaign for the Governor of Michigan. In fact, I was told that if they had been running the advertising longer, it might have made the difference in winning the election. I can see where advertising can contribute to persuading the general public during an election. However, I certainly don’t want to believe that the name change with which most everyone disagrees, and the timing of which consultants warn about, could really have anything to do with votes towards future elections.
New Mandatory Leave behind brochure (New SA4400)
Starting September 1, 2007 all IBOs will be required to give prospects a new brochure that will replace the current SA4400. Although it is a nice piece, it fully describes the return to the Amway name by 2009. (I agree this should be disclosed since it is coming). Even though the official name change is a matter of months away, the necessary dialog about it effectively makes it happen now. At a board meeting I asked the company about the situation since their own studies showed that it would be “devastating prior to major business improvements.” I asked what they expected the business owners to do during this potentially “devastating time?” I was told: “They will need to be patient”. Patient for how long? Two years? Five years? Ten years? Forever? What a difficult position that puts the people in!
The brochure also does a great job promoting the training and support provided by the Amway/Quixtar company yet referred to the IBO training system more like a warning on a pack of cigarettes.
New IBO Amway/Quixtar Orientation & First 120 day requirements
Starting September 1, 2007 all new IBOs will be required to review an Amway/Quixtar Orientation which currently explains to new IBOs the history of Amway, the focus on product sales and the philosophy of building the business around finding others who want to sell products with you. Of course this philosophy takes us right back to the original product pricing problem. In addition, new IBOs are required to sell 50 PV of products to documented customers three of their first four months in the business in order to receive various benefits. Also, it appears that Platinums will need a specific percentage of their new IBOs (probably 10%) to achieve this in order to receive their year-end bonuses. This unfortunately will cause the Platinums to have to become more of sales team managers, likely to put excessive pressure on new IBOs’ sales performance. This will dramatically change the chemistry of the field from how it operates today.
In coming months all new IBOs will have a specifically monitored first 90-120 days upon their registration. The details are being finalized but if it is to follow suit with other countries, we can expect several things including a limitation of what business support materials a new IBO can purchase. These limitations could include what information a new IBO can review, whether they are corporate or field produced, as well as the amount one could spend on them. Given that most new IBOs who quit in their first year do so within the first 90-120 days of their registration, this is by far our most coveted time with our new people. To have the company involved and making decisions defining the new IBOs experience during this period is alarming to say the least. All of the business effort that leads up to the registration of a new IBO, and therefore the growth of the entire team, can be totally lost if the company exercises something with an adverse effect during this period. This program is flirting with disaster at the point of all business growth. From the Company’s viewpoint, having control over this period decreases their legal risk as they can document their early emphasis on sales. It also bodes well for net incomes of the new IBO if they choose to limit the new IBO’s expenses; good for the Company’s reputation. However, without products that are retailable, this process will only magnify failure to a new IBO.
New “Stacking” Policy
Starting September 1, 2007 this new policy takes effect. The implementation of this policy is a dramatic representation of a corporate agenda without apparent IBOAI board input. I was on the legal and ethics conference call with the company discussing this policy, and after 2 ½ hours of explaining IBO’s concerns to the company, it was as if the call never happened. Without further contact with the board, the company sent an email to the field explaining their new policy. Personally, I believe that people should have a choice to build in width or depth as makes most sense for an individual’s business. “Stacking,” as the Company commonly refers to it, is simply the process of registering someone directly below someone they don’t know before seeing the business.
There are many examples where someone may not know their sponsor but it would make sense to sponsor them. Example 1 – A person lives in CA and registers a friend in Florida. They cannot fly out to Florida regularly so they register a CA neighbor under the Florida business owner. These people don’t know one another, but now the original business owner can help their Florida friend by driving depth in CA. Since this wouldn’t be permissible, the Florida person is left on their own without this help. Example 2 – A person is as wide as they want to be but they know someone that wants to register into the business. Since the person with the contact doesn’t want to start any new legs, they register the new person in depth. However, the contact and their sponsor wouldn’t know each other before hand, so this wouldn’t be permissible. Example 3—The Corporation sends me a new person “lead”, which they do from time to time, so I can register them. But, I don’t know them, do I? Example 4 – People don’t renew and now someone is registered by someone they don’t know. Obviously, they aren’t in violation but that seems to be how it is written. These are random examples of situations that would lead to sponsoring someone without a previous relationship.
A team-approach strategy to depth is a strategic focus of combining team resources and talents to successfully drive depth while apprenticing new IBOs. From all my research and after directly questioning the legal team at the Corporation, there isn’t a legal risk with team approach to depth. It doesn’t violate pyramid or security laws. So, why did the company send out an email stating, “…our complaint history confirms that the absence of a relationship [between an IBO and their sponsor] often is accompanied by high-risk representations that trigger pyramid and securities law issues.”? Their concern is not the actual registration of people who don’t know one another, but rather forcing someone to register people in depth when they don’t want to, or prospecting people with promises of rewards without effort. Obviously, if someone forces an individual to register people in a place that they don’t want to, then there could be an issue—customer allocation laws. If someone prospects people by suggesting team approach will allow them to register, do nothing and still make money, that could also be an issue—pyramid concerns. However, neither of these practices are a part of the team approach to depth.
Most of the “complaints” the Company is referring to are from people calling in wondering who the person is that they just sponsored. They wonder because they receive an email from the company notifying them of the new person and the responsibilities of being their sponsor. Typically, their confusion and fears of responsibilities are not actually a complaint but rather an inquiry. This inquiry could easily be promoted positively since their business just grew because of the efforts of someone in their business support team. How awesome is that? Instead, the company records it as a complaint and the new sponsor feels confused and often concerned with the responsibility to “train, supply and motivate” as the rules state.
Years ago, a sponsor had to supply all the products to their IBOs and pay bonus checks. Today products are ordered online and bonuses are paid by the Company. In addition, the training and motivation are typically done by an education system and specialists in the business support team. Times have changed. Think about it, how much does your sponsor train, supply and motivate you? It is arguable that the business has never really depended upon the relationship between and IBO and their sponsor, but it clearly does not today. Relationships are vital for success but not necessarily with one’s sponsor. In fact, the team approach to depth actually allows the new person to build more relationships and receive more support as they inherit a larger support team than they would have naturally received. That is, the people between you and the one who sponsors your original contact is an additional support team of people who have an invested interest in the new IBOs’ success.
Finally, the new policy is the first policy or rule that I’m aware of where someone who has done nothing wrong can be penalized. For example, say business owner A is crossline from you within the same Platinumship and they violate this policy. The first time this happens, everyone new in the Platinumship may be called and questioned. No one will be allowed to sponsor until a re-training has occurred. In this example, you would also have to pay the consequence for business owner A’s actions. How is that right when business owner A is neither in your upline or your downline? You just happen to fall within an unlucky Platinumship. Furthermore, the Platinum may lose bonuses and/or be terminated for something they didn’t do. Because someone unwittingly violates this policy or because one simply doesn’t understand who their “sponsor” is, innocent people will be hurt.
As a side note, I also found it interesting, given such dramatic consequences to violating this policy, how loosely it is defined. On the conference call, Billy Florence repeatedly asked the Company to define “to know” one’s sponsor. Since the entire policy revolves around knowing one’s sponsor, Billy’s question seemed like a good one to me. Does a phone call constitute knowing someone? Does it take a face-to-face meeting? Is it a matter of a certain amount of time with someone? The Company never answered Billy’s question and now has a policy that can have a changing meaning at their discretion. Given the policy’s consequences, that’s a scary realization.
This policy is directly targeted to discourage the team approach depth philosophy to building the business. However, since the team approach has produced most of the results in the business since 1999 (five of the six Anglo business owners who achieved Founders Emerald or above) and since it doesn’t seem to create any legal risk to the business, why would it be targeted? Team approach has shown to yield a lower average income at Platinum than the traditional width approach. Given that so many more people achieve Platinum with team approach, the average income statistics are being brought down. This is not good for reputation. It is a shame that the company statistics don’t include the fact that with team approach it takes about half the time to achieve the Platinum level when compared with the traditional approach. Team approach also resulted in the majority of recent higher awards as noted above. Too bad the statistic shared isn’t the total income over time earned by an IBO. It should be. If that were the case, the reputation focus would lead the company to promote team approach.
Mandatory Contracts between tool companies and Amway/Quixtar
Currently there is heavy discussion regarding the implementation of a contract between the tool companies and Amway/Quixtar. This contract would most likely give Amway/Quixtar the position of licensing the tool companies—and controlling/dictating what business support materials (BSMs) (books, tapes, CD’s, meetings, websites) could be produced as well as to whom they could be offered. Just as with any business, the more governmental restrictions that are applied, the more difficult it becomes for the business to prosper. I’ve always believed in balance—some regulations are healthy but not too many. The global Amway business will be in total control of all aspects of BSMs. Unfortunately, since the company’s perspective is coming from their legal and corporate marketing offices rather than from IBOs in the field who are actually building the business, the content will most likely change dramatically. Although it would be good from a legal perspective, it could be devastating from the IBO perspective. The best way to predict what will happen in N. America is to look at Amway’s actions in other countries. Here are some excerpts from a letter from Ben Woodward, Amway Branch Manager UK.
Effective immediately, Amway will prohibit the production, sale, or promotion of BSM that are not authorized and distributed by Amway; this includes any BSM that have already been approved by Amway. They are now considered unauthorized for use. Any meetings for which an entry fee is charged are suspended until Amway has approved, in writing, the meeting and its content…Failure to comply with the above will lead to a suspension and/or termination of the respective IBO contract. Please also note that Amway is in no way limited to these sanctions, but can impose further corrective or punitive measures…These are important steps, but in some ways, they are not surprising ones. Many of you know that for the past 10 years, Amway has been moving to exert more control over the way we do business globally.
Note: For the complete document, refer to: http://www.webraw.com/quixtar/archives/2007/05you_wanted_changes.php
Mandatory Accreditation for QBI Bonuses
It was announced that the new Quixtar Business Incentives (QBI) that are being offered will only be awarded to accredited teams. This was a surprise to many, because previously it was contractually stated that accreditation was optional. When this was brought to the Company’s attention they responded with, “It is optional. You only need to complete it if you want to receive your QBI bonuses.” Jim Payne responded simply with, “Contracts change.” Like the name change back to Amway, unilaterally changing an optional program to a mandatory program damages trust.
In addition, accreditation is a concern for IBO leaders as many of its upcoming requirements are very unclear. A couple of examples: What restrictions will apply from the contract that will be required between Amway/Quixtar and the tool companies? A big question mark hangs on defining the changes Amway/Quixtar wants to make to business support materials. Next, what will need to be taught regarding the positioning of the business? That is, will a person need to lead dialog with prospects using the Amway name? “Do you want to come to an Amway meeting?” Given the focus on reputation, the curiosity approach (inviting people to a meeting without sharing the business name) wouldn’t appear to have a long shelf life remaining. Some of these unknowns could have a dramatic effect on the results obtained in the business as a team conforms to the new accreditation requirements.
Given the trust concerns established with the Corporation, the vagueness of what future accreditation looks like, statements like ‘other requirements and restrictions apply’ listed on the QBI awards brochure, and hearing stories from diamonds in Australia saying that many of the diamonds who qualified for 6-figure year-end bonuses didn’t receive them last year due to various restrictions, there is grave concern and uncertainty about the reality of QBI awards coming to fruition.
Amway advertising after Business Transformation
Two hundred million dollars is a lot of money. However, it is not enough to change the poor reputation of Amway through advertising. In a recent IBOAI board meeting, Doug DeVos and Steve VanAndel acknowledged that it would take a lot more than $200 million—and allowed that there was probably no amount of money capable of changing the Amway reputation through advertising. In fact, if the advertising happened now, people would see a broken business model and it would only re-confirm their poor perception. Consequently, the Company’s plan is to “change IBO behavior in order to transform the business.” Once the business is transformed, then advertising can begin. The biggest behavior change desired, as it should be, is more retail sales. However, doesn’t that bring us back to the core product pricing issue? Mike Mohr said, “You can’t have competitive retail pricing and support an MLM structure!” If that is so, than this may be a long transformation! The MLM structure and an excessive owner margin.
New rule allowing certain establishments to sell to the public directly
Some leaders are concerned that the Company is moving towards selling directly to the public and going around the IBOs. They currently have websites set up selling to the public directly (although they are still awarding the PV to random IBOs). They have also recently purchased companies such as Gurwich Products which sell products directly to the public in competition with Amway/Quixtar products. I mentioned to Doug DeVos and Steve VanAndel that it seems this business is heading towards becoming an Avon type business. They didn’t make any comment to my Avon reference. Avon’s recent business transformation included the initiation of selling products directly to the public, around their distributors. A new rule is also currently being incorporated that allows certain retail establishments to sell products directly to the public—interestingly, the Amway Arena and VanAndel Arena will both qualify to do direct sales under the new rule.
My Personal Journey
At a Diamond Club several years ago, I was informed that over 1,000 people didn’t renew that year in my business. Even though my team had registered a great deal more than that yielding a net increase in the team size, I was still devastated by the thought of over 1,000 people on my team losing their hope in the business. As I thought more about it I decided that I needed to go on a quest to increase retention. Even Rich DeVos said long ago, “We are in the business of keeping people in the business till they realize the business they are in.” I realized the obvious—that people who had something valuable to lose wouldn’t quit. That value could come from solid relationships, great value in the products and customers, and/or a team of registered business owners in depth. Having someone registered in depth gives someone something to lose and consequently can be an encouragement to stay in the business.
It was then that I decided to call Orrin Woodward. We had been casual friends for several years, enjoying Peter Island, BVI together. I knew he and Chris Brady had been having phenomenal growth with a team depth program. Orrin was gracious and shared his thoughts and insights. I began the implementation of the team approach to depth and we had more IBO success stories result the following year than had happened in a long time. Even my own business qualified as a Founders Diamondship for the first time.
Accreditation was soon brought to the table and I eagerly choose to participate. I was continuing my quest to improve things for the new IBO and felt accreditation would help the new IBO have confidence in the value of our training system. I knew that our system already had many aspects of balance that the Company was looking for, including product training and an emphasis on retail. I had personally made sure that a great deal of our material had been reviewed by Quixtar legal and received a “content reviewed” stamp of approval. Consequently, I was confident I could complete this program without much change to our system. I also wanted to add a level of security to the IBOs on my team. I had been hit with a lawsuit claiming bad business practices citing things such as a missing refund policy on our website and tickets, not reading the proper disclaimer prior to beginning Hotel Open meetings, etc. In addition, the suit claimed that most of the money was made by the BSM business and not through Quixtar; retail sales weren’t happening; nor was Quixtar enforcing the retail rule. I knew that accreditation would bring to light any of these issues of which I was unaware or upon which I could improve, and bring our team to a squeaky-clean status. More importantly, I knew that those considering filing a lawsuit may choose IBOs that are not part of an accredited team over those that are a part of an accredited team; hence, more security for IBOs on our team. After over a year of effort, we became Quixtar’s second accredited team.
As time continued, I realized our system needed to continue to improve. The work effort necessary to grow the business became excessive. People needed better results. Once again, product pricing led the domino effect of challenges that everyone was facing. As a result, I contacted Orrin Woodward again and spoke to him about my thoughts. He was open and we dialoged business philosophy, ethical and moral principles, as well as the vision for the future. We talked about accreditation and the desire to build a business that would stand the test of time. We agreed that the greatest reward of the business, and indeed our greatest strength, was helping people with personal growth. We all have so many stories of people who claim that their success in some work outside of the business came from what they learned through their association with the training system. I kept thinking, wouldn’t it be awesome if these people could apply their new personal growth to the Amway/Quixtar business rather than something else? However, this repeating scenario confirms that the training systems are working well but the Amway/Quixtar business operates at too high of an effort level for success.
As a result of understanding what we do best in our business is to find and develop leaders, Orrin Woodward and Chris Brady have built the best leadership development program that exists today. One’s results from this training can be applied to anything, and within this business it has yielded new IBOs with the majority of results in the Amway/Quixtar business since 1999.
Over time, and particularly while serving together on the IBOAI board the past couple of years, I have really gotten to know the Orrin Woodward that most of the world doesn’t know. Orrin Woodward is a man of character and integrity. He is also a great thinker and a brilliant systems designer. He is one of the most well-read individuals that I have ever met. His decision making process always is based upon specific, solid principle. He is also very misunderstood. When he believes something is right in principle, he will move forward with his belief with unwavering fortitude. Others will often see this without understanding the thinking that is driving his decisions, and just label him as stubborn or rebellious.
I spoke with Orrin for the following year until it came to a point that I knew the best thing for our IBOs would be to be a part of his leadership development program and be a part of his vision to grow a team to 1 million IBOs. Of course this meant initially leaving my system behind, including our accreditation status. I knew that the quality and consistency of Orrin’s information combined with the leverage created through teamwork would far outweigh any part of my system including its accreditation. Orrin and I agreed on the principles of accreditation and after fully reviewing the TEAM system it was obvious to me that it was based on sound principles. Being on the legal committee of the IBOAI board, as well as being one of the few who had completed the accreditation program, I have a very good grasp of the rules. In fact, members of the Corporate legal team have often commented that I could “write the manual” when it comes to understanding the rules as they are applied to BSMs. Consequently, Orrin asked if I would head-up, along with Ron Simmons, CEO of Legacy Inc., the enormous project of getting TEAM accredited. I accepted and began working with Amway/Quixtar again on the accreditation process.
After launching my efforts with Amway/Quixtar, I clarified that the main point to work through was the positioning of the business. Amway/Quixtar wants their name mentioned anytime the TEAM name is mentioned. However, this is not a rule or law that currently exists but rather an opinion that has arisen with the new legal team in charge. Previous managing director of N. America, Ken McDonald had put in writing the Company’s stance on positioning and it wasn’t to force the Amway/Quixtar name to come out in front or even simultaneously with the TEAM name. But, yes, once again, things change.
With the company’s focus on reputation, they argue that saying the Amway/Quixtar name up-front eliminates any potential misunderstandings. However, I would argue just the opposite. People have preconceptions of what the words Amway or Quixtar mean to them. Some people still believe today that Amway is a door-to-door soap sales business. So, to say a company name prematurely may, in fact, be misleading them by triggering reference to their own inaccurate understandings. When I mentioned this to lead attorney Mike Mohr he said, “I don’t understand what you are talking about. My brain doesn’t work that way.”
Further, say Amway/Quixtar to a prospect and you can start a stop-watch to time how quickly they do a Google search and find a plethora of negative website reading. Therefore, if the goal is to grow the team by allowing someone to make a decision based on accurate information, wouldn’t it make sense to educate the prospect and build a trusting relationship with them first rather than prematurely flashing a name up that kills any chance of moving forward? Currently, those leading with Quixtar/Amway (or even simultaneously) have experienced devastating failure. Yes, it looks good on the legal paper, but we have yet to find one English-speaking as a first language team in N. America that is currently growing that uses this approach.
I don’t want to deceive anyone. I won’t. Yet, discernment of disclosure is a necessary process to produce the best results. Why haven’t you told your five-year old how babies are really made? I’m sure you have said something on the subject but you have discerned that disclosing too much information at the present time may not be your wisest choice. Obviously this is an extreme example and not exactly applicable in context, but the point is, there are times when some discernment of what to disclose must be considered for best results. Don’t get me wrong, TEAM would love to lead with the Amway/Quixtar name. However the Company would first need to clean-up people’s inaccurate misconceptions as well as its reputation online. This will become a larger issue as all teams come to understand the Company’s non-negotiable stance on this topic.
The other area of positioning that needed resolving for accreditation was that Amway/Quixtar feels TEAM is being positioned as the business opportunity and not Amway/Quixtar. The truth is there is really more than one opportunity interlinked. We have always said that we are not “in” Amway/Quixtar but rather we are Independent Business Owners (IBOs) who are “powered by Quixtar.” Personally, I always felt “powered by” was a bit strong since I have not felt power from the Company as much as I have felt it from other sources, but, nevertheless, there is an established independence of the individual from the Company and the reality is that they do have multiple opportunities available to them.
We have continually requested that the Company allow us to share the income opportunity of the system openly. They have denied us that ability citing that being transparent with the potential system income is wrong, as it could be considered “enticement” to register in the Amway/Quixtar business. Meanwhile on many websites and blogs throughout the internet, the IBO leaders are being painted as crooks by not being open about their system businesses. How ironic is that?
In fact, Ron Simmons as recently as June 5, 2007 emailed the Company attorney Gary VanderVen, requesting that at least on Company blogs they share the truth that the Company “has prohibited IBOs from being transparent about system income.” Orrin and Chris Brady attempted to start this process through their explanations in a book and online and, even without disclosing incomes, were threatened with suspension by the Corporation. Orrin and Chris disclosed that there are really multiple sources of income: Amway/Quixtar products, sales of ticket events and BSMs, and speaking at events. Each of these is based on a compensation plan where any individual can achieve the same or more income than anyone in the upline business support team.
An analogy they used was a car dealership. Say you wanted to sell new cars and started a business doing so creating income. As people wanted to trade-in their cars to buy a new one, you found yourself additionally in the used-car sales business, now with a second income. Next, people came in with their car wanting service so you start a service business—income number three. The service business needs parts so you start a parts businesss—income number four. Certainly, there is nothing wrong with these other sources of income. If you made more income in your service business than in selling new cars (your original business) is there anything morally wrong with that? Is your primary business selling new cars or are you just in the car business with multiple businesses interlinked? Finally, what if someone was considering starting a new car sales business and you were to share your knowledge of it with them? Should you not share the other interlinked businesses in the discussion even though they may never get to that point?
Open disclosure on this topic is a large battle between the field leadership and the Corporation. I believe the Amway/Quixtar reputation suffers less when this knowledge is hidden. They can then discredit the IBO leadership rather than allow the public to learn the truth of how little profit margin remains in the Amway/Quixtar products after the DeVos and VanAndel families take their cut. However, as the Company takes over the BSM business with their new contracts, this will be a moot point, as they will have the power to regulate pricing and profits on BSMs as well.
For the record, the Company stopped communicating with me about TEAM’s accreditation. My last email on the subject was sent to attorney Sharon Grider on June 4, 2007 (with copies to both Beth Hines and Gary VanderVen) requesting direction on the next step regarding “meeting content and positioning.” I never received a response. Only days after that email, I was at the June IBOAI board meeting when the bomb was dropped on us about the name change to Amway and the Business Transformation.
As I began to put it all together and realized the crisis point had come, I knew something had to happen NOW! Amway/Quixtar had slipped into a pyramid status as the products became non-retailable. After years of hearing nothing but “we’re working on it” regarding their promises to provide retailable products, it became obvious that it wasn’t going to change. I know for certain that the Company heard our persistent requests the day I witnessed Rob Davidson, Director of Sales, in a board meeting slam his fist on the conference table, stand up and yell at Don Wilson, “We get it Don! You need those 10-15 retailable products. We’ve dropped the ball on it!” I couldn’t figure out why he was so mad at Don. Don wasn’t the one who kept dropping the ball.
It finally became obvious that either they were lying (they weren’t really working on it) or they were totally incompetent (no results after supposed years of effort). As nice as I try to always be, that unfortunately was the case. There is so much pending litigation against the Company that the attorneys are now at the helm of the ship charting its direction. The resulting Amway Business Transformation has so many unknowns and the Company’s heavy-handed first steps toward implementation have already broken so much trust, nobody is confident that they know what it will look like.
Finally, the IBOAI board, that most everyone believed had significant power, clearly displayed its lack of influence during this crucial time. In fact, as a direct result of the IBOAI board sharing its disapproval with the Company regarding the name change to Amway and casting a unanimous vote of no-confidence regarding the upcoming Amway Business Transformation, the Company responded by canceling the Board’s contract with the company; turning it to a month-to-month contract! That’s right. The IBOAI board was the one thing almost all of us were led to believe provided the IBOs any security. It was the field’s voice and most believed it allowed us to “keep the Company from changing the deal on us.” That certainly was an urban legend. The board voiced an opinion and the Company cut it off at the legs by taking it to a month-to-month contract.
Furthermore, I realized that many “leaders” who knew this information were not going to do anything about it. I heard people who represented thousands of Independent Business Owners (IBOs) commonly say, “I can spin it.” Each time I would think I know I could, but I know that I wouldn’t—ever! I listened to these leaders whose thinking was all about holding on to what they have. However, I listened to others like Randy Haugen say, “If it’s not good for the new IBO than I don’t care what it is for me, I won’t do it.” I heard leaders say, “Well, what can we do? We have no options. We have no power.” Others in private said, “Nobody has ever successfully gone up against the company.”
Don’t get me wrong, it’s not like I didn’t understand those folks who want to hold on to their success, spin the situation to a positive perspective to everyone, be hopeful and continue business as usual. Like Randy Haugen, I just couldn’t do it. Do I want to lose everything I have worked for through this process? Of course not. However, I don’t want success based on the churning of other people’s failure. In fact, when speaking with lead Amway/Quixtar attorney Mike Mohr about my concerns, he told me that he hoped we could work it out since there is a lot of money on the table for me. I know he meant it encouragingly. I was aware that I have one of only four systems that has been accredited and I regularly qualify as a Founders Diamond—the combination of which should result in a new QBI bonus of $500,000.00. However, I responded to him saying that if I didn’t believe that the new IBO starting today could ever achieve with the New Amway what I have achieved with the previous business, then the money felt more like a buy-off than a bonus.
My moral dilemma began; do I stand up to the Giant regarding this disaster and put it all on the line, or do I let things just continue as they may and let my life stay simple? It became apparent that the necessary price changes weren’t coming. The “Amway business transformation” wasn’t going to make it easier for an IBO to succeed, and trust with the DeVos and VanAndel families as well as with Corporate management was gone.
I just couldn’t promote something I didn’t believe in, nor could I leave people unaware of the facts just because I’m set and the company is intimidating. As a result, I was compelled to step up to the plate and make a change. I was willing to put it all on the line because I believe so much in truly leading people to something that they can succeed with. I keep thinking of all the people who need their business to work—they’re counting on it!
I understood the current condition of the business and why it was this way. I also understood who was in charge, what their objective was, and the general direction the business was headed. I knew that the IBOAI board had no teeth and was barely alive. I knew that most people who knew what I knew wouldn’t say anything but would rather just “make the best of it.” I knew that it would expose those making the decisions as well as those who would “spin” those decisions. I realized by sharing the truth that some people would be hurt and leave the business. I knew that I would potentially receive a great deal of abuse by those who were unhappy with my sharing this information.
I realized that some people would wonder how we had been promoting the business yet now announce its flaws; knowing they don’t understand how we always have believed in the business concept which we promoted and were diligently working behind the scenes to invoke disparately needed change within the Company all the while believing positive change was coming. The bottom line is I knew that my life would be a lot simpler if I just stayed quiet. However, I knew that I was asked to be on the IBOAI board to protect and serve the IBOs, and I knew for the new people to have a chance of achieving their dreams I had to expose the truth and invoke change.
I was really hopeful that the Company would come to a peaceful resolution. I was hopeful that it could just be talked through and avoid anything public or mean. However, that wasn’t to happen. When we suggested rolling back the non-compete rule to simply give people a choice to either move forward with this new business transformation or to choose another opportunity, Quixtar attorney Mike Mohr said, “Why in today’s competitive environment would I open the door and let our crown jewels leave?”
This rule (Rule 6.5) was implemented just three years ago; 45 years after Amway started. Simply put, this rule doesn’t allow someone in this business to be in another competing MLM marketers out of our Quixtar camp since the rule would not allow IBOs to register with another MLM business. However, the wall more significantly keeps IBOs trapped inside the Quixtar camp giving the Quixtar Corporation the ability to do whatever they want with their trapped audience.
If the company won’t change, than at least give people a chance to choose a different opportunity. If this business is really so great then nobody would want to do anything else and it would have been a non-issue. The fact that the idea of giving people an option is such a big deal to the Company shows me that they understand that given their freedom, people will go elsewhere. The freedom to leave should always be available. That freedom allows competition to bring the best performance out of each company and keep the focus on what’s best for the new business owner.
Unfortunately, the Corporation won’t allow such options to exist. They effectively have become the ultimate “Hotel California” where “You can check out anytime you like, but you may never leave.” Our lawsuit is not requesting any damages or retribution. The suit is simply a request to the court system to let free enterprise freely operate once again.
As a final note, life has its irony. How interesting is it that approximately 50 years ago, Rich DeVos and Jay VanAndel found themselves in a similar situation with the MLM business they were sponsored in, called Nutrilite. They couldn’t amicably resolve some company decisions that they believed were wrong, so they and some others left and formed Amway!
Board Member Chuck Goetschel Speaks!
The TRUTH They Don’t Want You to Know by Chuck Goetschel
What do you do when you learn that what you have been promoting isn’t working? Do you simply complain about it? Do you keep telling everyone that the good times are coming? Or, do you do something about it?
Let me complicate it: What if you learn the supporting facts of this business failure after you’ve invested 17 years of your personal life, and your parents have invested over 35 years? What if you find yourself financially dependent upon the business income; the basis of which was built years ago? What do you do? This is the story of where I found myself and why I chose to do what I have done.
First, some facts: In 1982 Amway of N America did $1 Billion in volume (interestingly, so did Wal-Mart). Twenty-five years later, Amway/Quixtar of N America recorded approximately $1.1 Billion in volume. Considering inflation, the relative volume has plummeted over the past 25 years; most significantly in the last ten. Currently, out of 10,000 people that register in this business, only 833 will remain after three years. That is, 91.6% of people will be gone within 36 months of registering. From 1999-2000, 600,000 English speaking people as a first language registered in the business in North America. By end of 2005, of those registered business owners, only six have achieved the Founders Emerald level (in 2005, the average income was less than $90,000/year) or above. That is, 1/100,000 achieved an income of $90,000/year or more. Nearly 50 years of community building for Amway/Quixtar and the qualified Diamonds in North America fit in one ballroom with tables. These are the facts. Perhaps, you relate to them. How’s it working for you?
In addition to these horrifying statistics, the business is riddled with litigation including very significant court cases threatening the very existence of the company in the US, England and India. The core issue in these cases is the same core issue behind the current failure of the business—over-priced products. Everything stems from this root problem. A very unfortunate domino effect resulted in one negative thing leading to the next till now we find ourselves in the current situation.
After years of attempting to correct this within Quixtar, it finally became apparent that if there was ever to truly be change, then a more dramatic stance would need to be taken. As much as I felt like David stepping up to the plate to meet Goliath, the time had come to take a stand for what I believe in.
How did we get here?
When I registered in Nov 1989 and really started building my business in May of 1990, things were different. The big box stores had been building in acceptance but the Super Wal-Mart’s hadn’t appeared yet. Furthermore, the internet was not used yet for commerce so there were no consumer options there. A product could be higher in price and still sell because consumers didn’t have many of options. However, the big box stores continued to grow in numbers and acceptance. The Super Wal-Marts launched and in 1994 internet commerce began. As a result, the world of shopping changed quickly. The Wal-Mart business model drove prices down. The internet gave us a world of options without leaving our chair. Entire web sites were developed to search the web and find the best prices for various products. As a result, competition dramatically increased. Suddenly in order to sell products in this world, clear value had to exist. Businesses that survived responded to this pressure. Businesses that didn’t respond or couldn’t respond, failed. One exception to this the Amway/Quixtar business.
While the rest of retail business struggled to survive through this sudden increase in competition, Amway/Quixtar continued to increase product prices more in alignment with inflation than with the changing market economy. This caused the prices to get further and further from the consumer’s “good deal” perception as it was easily noticed that they weren’t keeping up with what was available in the marketplace.
So, why was Amway/Quixtar able to survive when others businesses who didn’t respond to the market failed? The products in the business were still purchased by the business owners for personal use in order to achieve bonuses. The primary reason the FTC looks for retail sales in our business is to validate the price a product is selling for. If the public is not buying our product but the people within the network are buying it, then something is wrong. In such a case the people in the network are buying the product not on the merits of product value but rather for a compensation bonus. The FTC declares such an operation a pyramid. Therefore, a legitimate business opportunity can slowly and unnoticeably slide into a pyramid status.
The Dominos begin—one fall causing the next…
Pricing-Width-Failure:
A person has a dream to make money and registers into the business. They quickly realize that the prices are too high to successfully retail the products. Consequently, they look to the compensation plan for profit. Since the compensation plan is predominately a width-focused compensation plan, a focus on sponsoring in width is the only remaining way to initially profit. This leads to the philosophy of “get wide and see who the hungry ones are. Register 9-12 and you’ll find your three.” The other “less-hungry” ones fall out as they are not able to retail products, and without anyone registered below them they see no reason not to quit. With this ratio of fallout/failure, a negative image grows. With a negative image (made very obvious by certain websites), it becomes even harder to sponsor people while continuing to be near impossible to retail the products. This reinforces the fallout, adds to the negative image and the cycle continues.
Failure-Lawsuits:
Eventually, after enough failure occurs, business analysis is done and lawsuits are filed. This is the current situation of the Amway/Quixtar business. Currently, the DTI in England has a court date scheduled to determine whether Amway in England represents a legitimate business opportunity primarily due to the fact that most people are not making money, retail sales are not occurring and people are spending money on training. If people spend money on training but still are not able to retail the products, then the opportunity is questionable. Amway of India is in court over similar challenges. A class action lawsuit seeking significant damages has been filed in California (Porkony vs. Quixtar) over the same challenges as well.
The continued erosion of the product pricing over the years has put this business in a legally vulnerable place, since a network without retail sales is deemed illegal. Currently, Quixtar’s retail volume is approximately only 3% of its total volume. Members of the IBOAI board have diligently worked with the company to change this situation. However, ironically, although they are the ones working the hardest to change the situation, they now find themselves with the greatest legal liability given their high level of knowledge and business influence.
Lawsuits-Lawyers in Charge - A Reputation Focus:
As a result of all the lawsuits that threaten the very existence of the business, Amway/Quixtar attorneys are now running the show. Their perspective is their legal position, and their decision making process runs towards whatever makes the business more secure. Although this sounds great initially (and to a certain extent it is), the general reality is that the greater an institution’s regulations, the less an individual’s freedom. For example, although some laws are very valuable, each law limits our freedom. With no laws we would have ultimate freedom (along with ultimate chaos—imagine no driving laws?). With the other extreme of all law we would eventually have no freedom (and yes, no chaos). The new rules with Amway/Quixtar will limit even more freedom and make it even more difficult within an already difficult business. And, unfortunately given their current legal vulnerability, they need to. Consequently, the company’s primary focuses is to tighten things legally and attempt to improve upon reputation. Their key question is, “Is it better for the reputation?” If it is, then it will be the course of action. Unfortunately, not all reputation decisions lead to better results—especially for the new person.
Reputation Focus-Amway Business Transformation-Increased IBO Difficulty:
In order for the attorneys to secure the business, they continue their movement towards whatever will decrease risk and improve reputation. As a result, on September 1, 2007 the “Business Transformation” to a global Amway will begin. Although I agree with the idea of decreasing risk, the transformation unfortunately will be to the detriment of the IBOs’ desired results. This will make a very difficult business even harder. Consider the upcoming changes:
Quixtar name change to Amway
It is a shame that the DeVos and VanAndel families made this decision without any communication with the field, including the IBOAI board. This name change creates obvious challenges to growing one’s business. It is a hurdle that was placed in the in front of already struggling people. Furthermore, the name change dramatically hurts the trust between the field and the company—not a good thing. For the past eight years IBOs have been telling people that this is not Amway; that it is an independent corporation being a subsidiary of Alticor Corp and a sister company to Amway. Many were told Quixtar is just Amway online and we were all taught to point out that Quixtar is actually a unique business model designed specifically for the internet. Although it takes many aspects of the Amway business and incorporated them, it is its own unique business. With Quixtar now folding back into Amway, it makes everyone look like a liar. How do you tell those people that you actually are in Amway online? What do you tell those people who asked, “Is this Amway?” before registering, and you said, “No?” Now they are in Amway. These uncomfortable and frankly unnecessary situations the IBOs will find themselves in will be difficult. The feelings will not be good. And, the trust with the owners for suddenly “changing the deal” is definitely damaged.
Why would this decision be made? Most all business owners are against it and the IBOAI board unanimously voted against it. So, then why did they do it? I believe their answer has a few platforms. First of all, it makes for a simpler business from a world wide perspective with the use of one name—Amway. It will eliminate the possibility of anyone misinterpreting what the relationship of the business is to Amway once it just is Amway. This clarity is good for risk and reputation even though it may be very damaging to IBO results. However, when asked why the name change, the company will regularly recite their research that yielded two findings.
The first finding is that the Amway brand name is better known by far in N. America than the Quixtar name. This, of course, is no surprise, nor is the fact that the better known Amway name comes with a much lower approval rating by the public. That is, Amway not only has a higher “Awareness” factor, it also has a much higher “Bewareness” factor. However, their research tells them that it is better to start with a high awareness factor name like Amway, even with the negative reputation, than to build the awareness factor of a lesser known Quixtar name. Personally, that makes sense to me if it were just a product that the company wanted to sell. However, when it is a business that we are going to build involving friends and family, the conversion is much more complex. Why would I choose a business with a negative reputation as my business of choice when I have other businesses (perhaps lesser known names) that I could choose? The company’s goal is to end up with such a great reputation that you can just walk up to someone and ask if they want to see the Amway business plan and people would be positive. A great thought, but currently it is light-years away from that point, if it’s even possible. Further, it isn’t necessary. The original concept of Quixtar was to have a fresh start, to try again to do it right—new business format (online), new name, and a new result! Even the company’s research said that it would be devastating to go back to the Amway name before making changes to dramatically improve the business model.
The second finding their research discovered is that the more they advertised Amway in the state of Michigan, the slightly better approval ratings Dick DeVos received during his campaign for the Governor of Michigan. In fact, I was told that if they had been running the advertising longer, it might have made the difference in winning the election. I can see where advertising can contribute to persuading the general public during an election. However, I certainly don’t want to believe that the name change with which most everyone disagrees, and the timing of which consultants warn about, could really have anything to do with votes towards future elections.
New Mandatory Leave behind brochure (New SA4400)
Starting September 1, 2007 all IBOs will be required to give prospects a new brochure that will replace the current SA4400. Although it is a nice piece, it fully describes the return to the Amway name by 2009. (I agree this should be disclosed since it is coming). Even though the official name change is a matter of months away, the necessary dialog about it effectively makes it happen now. At a board meeting I asked the company about the situation since their own studies showed that it would be “devastating prior to major business improvements.” I asked what they expected the business owners to do during this potentially “devastating time?” I was told: “They will need to be patient”. Patient for how long? Two years? Five years? Ten years? Forever? What a difficult position that puts the people in!
The brochure also does a great job promoting the training and support provided by the Amway/Quixtar company yet referred to the IBO training system more like a warning on a pack of cigarettes.
New IBO Amway/Quixtar Orientation & First 120 day requirements
Starting September 1, 2007 all new IBOs will be required to review an Amway/Quixtar Orientation which currently explains to new IBOs the history of Amway, the focus on product sales and the philosophy of building the business around finding others who want to sell products with you. Of course this philosophy takes us right back to the original product pricing problem. In addition, new IBOs are required to sell 50 PV of products to documented customers three of their first four months in the business in order to receive various benefits. Also, it appears that Platinums will need a specific percentage of their new IBOs (probably 10%) to achieve this in order to receive their year-end bonuses. This unfortunately will cause the Platinums to have to become more of sales team managers, likely to put excessive pressure on new IBOs’ sales performance. This will dramatically change the chemistry of the field from how it operates today.
In coming months all new IBOs will have a specifically monitored first 90-120 days upon their registration. The details are being finalized but if it is to follow suit with other countries, we can expect several things including a limitation of what business support materials a new IBO can purchase. These limitations could include what information a new IBO can review, whether they are corporate or field produced, as well as the amount one could spend on them. Given that most new IBOs who quit in their first year do so within the first 90-120 days of their registration, this is by far our most coveted time with our new people. To have the company involved and making decisions defining the new IBOs experience during this period is alarming to say the least. All of the business effort that leads up to the registration of a new IBO, and therefore the growth of the entire team, can be totally lost if the company exercises something with an adverse effect during this period. This program is flirting with disaster at the point of all business growth. From the Company’s viewpoint, having control over this period decreases their legal risk as they can document their early emphasis on sales. It also bodes well for net incomes of the new IBO if they choose to limit the new IBO’s expenses; good for the Company’s reputation. However, without products that are retailable, this process will only magnify failure to a new IBO.
New “Stacking” Policy
Starting September 1, 2007 this new policy takes effect. The implementation of this policy is a dramatic representation of a corporate agenda without apparent IBOAI board input. I was on the legal and ethics conference call with the company discussing this policy, and after 2 ½ hours of explaining IBO’s concerns to the company, it was as if the call never happened. Without further contact with the board, the company sent an email to the field explaining their new policy. Personally, I believe that people should have a choice to build in width or depth as makes most sense for an individual’s business. “Stacking,” as the Company commonly refers to it, is simply the process of registering someone directly below someone they don’t know before seeing the business.
There are many examples where someone may not know their sponsor but it would make sense to sponsor them. Example 1 – A person lives in CA and registers a friend in Florida. They cannot fly out to Florida regularly so they register a CA neighbor under the Florida business owner. These people don’t know one another, but now the original business owner can help their Florida friend by driving depth in CA. Since this wouldn’t be permissible, the Florida person is left on their own without this help. Example 2 – A person is as wide as they want to be but they know someone that wants to register into the business. Since the person with the contact doesn’t want to start any new legs, they register the new person in depth. However, the contact and their sponsor wouldn’t know each other before hand, so this wouldn’t be permissible. Example 3—The Corporation sends me a new person “lead”, which they do from time to time, so I can register them. But, I don’t know them, do I? Example 4 – People don’t renew and now someone is registered by someone they don’t know. Obviously, they aren’t in violation but that seems to be how it is written. These are random examples of situations that would lead to sponsoring someone without a previous relationship.
A team-approach strategy to depth is a strategic focus of combining team resources and talents to successfully drive depth while apprenticing new IBOs. From all my research and after directly questioning the legal team at the Corporation, there isn’t a legal risk with team approach to depth. It doesn’t violate pyramid or security laws. So, why did the company send out an email stating, “…our complaint history confirms that the absence of a relationship [between an IBO and their sponsor] often is accompanied by high-risk representations that trigger pyramid and securities law issues.”? Their concern is not the actual registration of people who don’t know one another, but rather forcing someone to register people in depth when they don’t want to, or prospecting people with promises of rewards without effort. Obviously, if someone forces an individual to register people in a place that they don’t want to, then there could be an issue—customer allocation laws. If someone prospects people by suggesting team approach will allow them to register, do nothing and still make money, that could also be an issue—pyramid concerns. However, neither of these practices are a part of the team approach to depth.
Most of the “complaints” the Company is referring to are from people calling in wondering who the person is that they just sponsored. They wonder because they receive an email from the company notifying them of the new person and the responsibilities of being their sponsor. Typically, their confusion and fears of responsibilities are not actually a complaint but rather an inquiry. This inquiry could easily be promoted positively since their business just grew because of the efforts of someone in their business support team. How awesome is that? Instead, the company records it as a complaint and the new sponsor feels confused and often concerned with the responsibility to “train, supply and motivate” as the rules state.
Years ago, a sponsor had to supply all the products to their IBOs and pay bonus checks. Today products are ordered online and bonuses are paid by the Company. In addition, the training and motivation are typically done by an education system and specialists in the business support team. Times have changed. Think about it, how much does your sponsor train, supply and motivate you? It is arguable that the business has never really depended upon the relationship between and IBO and their sponsor, but it clearly does not today. Relationships are vital for success but not necessarily with one’s sponsor. In fact, the team approach to depth actually allows the new person to build more relationships and receive more support as they inherit a larger support team than they would have naturally received. That is, the people between you and the one who sponsors your original contact is an additional support team of people who have an invested interest in the new IBOs’ success.
Finally, the new policy is the first policy or rule that I’m aware of where someone who has done nothing wrong can be penalized. For example, say business owner A is crossline from you within the same Platinumship and they violate this policy. The first time this happens, everyone new in the Platinumship may be called and questioned. No one will be allowed to sponsor until a re-training has occurred. In this example, you would also have to pay the consequence for business owner A’s actions. How is that right when business owner A is neither in your upline or your downline? You just happen to fall within an unlucky Platinumship. Furthermore, the Platinum may lose bonuses and/or be terminated for something they didn’t do. Because someone unwittingly violates this policy or because one simply doesn’t understand who their “sponsor” is, innocent people will be hurt.
As a side note, I also found it interesting, given such dramatic consequences to violating this policy, how loosely it is defined. On the conference call, Billy Florence repeatedly asked the Company to define “to know” one’s sponsor. Since the entire policy revolves around knowing one’s sponsor, Billy’s question seemed like a good one to me. Does a phone call constitute knowing someone? Does it take a face-to-face meeting? Is it a matter of a certain amount of time with someone? The Company never answered Billy’s question and now has a policy that can have a changing meaning at their discretion. Given the policy’s consequences, that’s a scary realization.
This policy is directly targeted to discourage the team approach depth philosophy to building the business. However, since the team approach has produced most of the results in the business since 1999 (five of the six Anglo business owners who achieved Founders Emerald or above) and since it doesn’t seem to create any legal risk to the business, why would it be targeted? Team approach has shown to yield a lower average income at Platinum than the traditional width approach. Given that so many more people achieve Platinum with team approach, the average income statistics are being brought down. This is not good for reputation. It is a shame that the company statistics don’t include the fact that with team approach it takes about half the time to achieve the Platinum level when compared with the traditional approach. Team approach also resulted in the majority of recent higher awards as noted above. Too bad the statistic shared isn’t the total income over time earned by an IBO. It should be. If that were the case, the reputation focus would lead the company to promote team approach.
Mandatory Contracts between tool companies and Amway/Quixtar
Currently there is heavy discussion regarding the implementation of a contract between the tool companies and Amway/Quixtar. This contract would most likely give Amway/Quixtar the position of licensing the tool companies—and controlling/dictating what business support materials (BSMs) (books, tapes, CD’s, meetings, websites) could be produced as well as to whom they could be offered. Just as with any business, the more governmental restrictions that are applied, the more difficult it becomes for the business to prosper. I’ve always believed in balance—some regulations are healthy but not too many. The global Amway business will be in total control of all aspects of BSMs. Unfortunately, since the company’s perspective is coming from their legal and corporate marketing offices rather than from IBOs in the field who are actually building the business, the content will most likely change dramatically. Although it would be good from a legal perspective, it could be devastating from the IBO perspective. The best way to predict what will happen in N. America is to look at Amway’s actions in other countries. Here are some excerpts from a letter from Ben Woodward, Amway Branch Manager UK.
Effective immediately, Amway will prohibit the production, sale, or promotion of BSM that are not authorized and distributed by Amway; this includes any BSM that have already been approved by Amway. They are now considered unauthorized for use. Any meetings for which an entry fee is charged are suspended until Amway has approved, in writing, the meeting and its content…Failure to comply with the above will lead to a suspension and/or termination of the respective IBO contract. Please also note that Amway is in no way limited to these sanctions, but can impose further corrective or punitive measures…These are important steps, but in some ways, they are not surprising ones. Many of you know that for the past 10 years, Amway has been moving to exert more control over the way we do business globally.
Note: For the complete document, refer to: http://www.webraw.com/quixtar/archives/2007/05you_wanted_changes.php
Mandatory Accreditation for QBI Bonuses
It was announced that the new Quixtar Business Incentives (QBI) that are being offered will only be awarded to accredited teams. This was a surprise to many, because previously it was contractually stated that accreditation was optional. When this was brought to the Company’s attention they responded with, “It is optional. You only need to complete it if you want to receive your QBI bonuses.” Jim Payne responded simply with, “Contracts change.” Like the name change back to Amway, unilaterally changing an optional program to a mandatory program damages trust.
In addition, accreditation is a concern for IBO leaders as many of its upcoming requirements are very unclear. A couple of examples: What restrictions will apply from the contract that will be required between Amway/Quixtar and the tool companies? A big question mark hangs on defining the changes Amway/Quixtar wants to make to business support materials. Next, what will need to be taught regarding the positioning of the business? That is, will a person need to lead dialog with prospects using the Amway name? “Do you want to come to an Amway meeting?” Given the focus on reputation, the curiosity approach (inviting people to a meeting without sharing the business name) wouldn’t appear to have a long shelf life remaining. Some of these unknowns could have a dramatic effect on the results obtained in the business as a team conforms to the new accreditation requirements.
Given the trust concerns established with the Corporation, the vagueness of what future accreditation looks like, statements like ‘other requirements and restrictions apply’ listed on the QBI awards brochure, and hearing stories from diamonds in Australia saying that many of the diamonds who qualified for 6-figure year-end bonuses didn’t receive them last year due to various restrictions, there is grave concern and uncertainty about the reality of QBI awards coming to fruition.
Amway advertising after Business Transformation
Two hundred million dollars is a lot of money. However, it is not enough to change the poor reputation of Amway through advertising. In a recent IBOAI board meeting, Doug DeVos and Steve VanAndel acknowledged that it would take a lot more than $200 million—and allowed that there was probably no amount of money capable of changing the Amway reputation through advertising. In fact, if the advertising happened now, people would see a broken business model and it would only re-confirm their poor perception. Consequently, the Company’s plan is to “change IBO behavior in order to transform the business.” Once the business is transformed, then advertising can begin. The biggest behavior change desired, as it should be, is more retail sales. However, doesn’t that bring us back to the core product pricing issue? Mike Mohr said, “You can’t have competitive retail pricing and support an MLM structure!” If that is so, than this may be a long transformation! The MLM structure and an excessive owner margin.
New rule allowing certain establishments to sell to the public directly
Some leaders are concerned that the Company is moving towards selling directly to the public and going around the IBOs. They currently have websites set up selling to the public directly (although they are still awarding the PV to random IBOs). They have also recently purchased companies such as Gurwich Products which sell products directly to the public in competition with Amway/Quixtar products. I mentioned to Doug DeVos and Steve VanAndel that it seems this business is heading towards becoming an Avon type business. They didn’t make any comment to my Avon reference. Avon’s recent business transformation included the initiation of selling products directly to the public, around their distributors. A new rule is also currently being incorporated that allows certain retail establishments to sell products directly to the public—interestingly, the Amway Arena and VanAndel Arena will both qualify to do direct sales under the new rule.
My Personal Journey
At a Diamond Club several years ago, I was informed that over 1,000 people didn’t renew that year in my business. Even though my team had registered a great deal more than that yielding a net increase in the team size, I was still devastated by the thought of over 1,000 people on my team losing their hope in the business. As I thought more about it I decided that I needed to go on a quest to increase retention. Even Rich DeVos said long ago, “We are in the business of keeping people in the business till they realize the business they are in.” I realized the obvious—that people who had something valuable to lose wouldn’t quit. That value could come from solid relationships, great value in the products and customers, and/or a team of registered business owners in depth. Having someone registered in depth gives someone something to lose and consequently can be an encouragement to stay in the business.
It was then that I decided to call Orrin Woodward. We had been casual friends for several years, enjoying Peter Island, BVI together. I knew he and Chris Brady had been having phenomenal growth with a team depth program. Orrin was gracious and shared his thoughts and insights. I began the implementation of the team approach to depth and we had more IBO success stories result the following year than had happened in a long time. Even my own business qualified as a Founders Diamondship for the first time.
Accreditation was soon brought to the table and I eagerly choose to participate. I was continuing my quest to improve things for the new IBO and felt accreditation would help the new IBO have confidence in the value of our training system. I knew that our system already had many aspects of balance that the Company was looking for, including product training and an emphasis on retail. I had personally made sure that a great deal of our material had been reviewed by Quixtar legal and received a “content reviewed” stamp of approval. Consequently, I was confident I could complete this program without much change to our system. I also wanted to add a level of security to the IBOs on my team. I had been hit with a lawsuit claiming bad business practices citing things such as a missing refund policy on our website and tickets, not reading the proper disclaimer prior to beginning Hotel Open meetings, etc. In addition, the suit claimed that most of the money was made by the BSM business and not through Quixtar; retail sales weren’t happening; nor was Quixtar enforcing the retail rule. I knew that accreditation would bring to light any of these issues of which I was unaware or upon which I could improve, and bring our team to a squeaky-clean status. More importantly, I knew that those considering filing a lawsuit may choose IBOs that are not part of an accredited team over those that are a part of an accredited team; hence, more security for IBOs on our team. After over a year of effort, we became Quixtar’s second accredited team.
As time continued, I realized our system needed to continue to improve. The work effort necessary to grow the business became excessive. People needed better results. Once again, product pricing led the domino effect of challenges that everyone was facing. As a result, I contacted Orrin Woodward again and spoke to him about my thoughts. He was open and we dialoged business philosophy, ethical and moral principles, as well as the vision for the future. We talked about accreditation and the desire to build a business that would stand the test of time. We agreed that the greatest reward of the business, and indeed our greatest strength, was helping people with personal growth. We all have so many stories of people who claim that their success in some work outside of the business came from what they learned through their association with the training system. I kept thinking, wouldn’t it be awesome if these people could apply their new personal growth to the Amway/Quixtar business rather than something else? However, this repeating scenario confirms that the training systems are working well but the Amway/Quixtar business operates at too high of an effort level for success.
As a result of understanding what we do best in our business is to find and develop leaders, Orrin Woodward and Chris Brady have built the best leadership development program that exists today. One’s results from this training can be applied to anything, and within this business it has yielded new IBOs with the majority of results in the Amway/Quixtar business since 1999.
Over time, and particularly while serving together on the IBOAI board the past couple of years, I have really gotten to know the Orrin Woodward that most of the world doesn’t know. Orrin Woodward is a man of character and integrity. He is also a great thinker and a brilliant systems designer. He is one of the most well-read individuals that I have ever met. His decision making process always is based upon specific, solid principle. He is also very misunderstood. When he believes something is right in principle, he will move forward with his belief with unwavering fortitude. Others will often see this without understanding the thinking that is driving his decisions, and just label him as stubborn or rebellious.
I spoke with Orrin for the following year until it came to a point that I knew the best thing for our IBOs would be to be a part of his leadership development program and be a part of his vision to grow a team to 1 million IBOs. Of course this meant initially leaving my system behind, including our accreditation status. I knew that the quality and consistency of Orrin’s information combined with the leverage created through teamwork would far outweigh any part of my system including its accreditation. Orrin and I agreed on the principles of accreditation and after fully reviewing the TEAM system it was obvious to me that it was based on sound principles. Being on the legal committee of the IBOAI board, as well as being one of the few who had completed the accreditation program, I have a very good grasp of the rules. In fact, members of the Corporate legal team have often commented that I could “write the manual” when it comes to understanding the rules as they are applied to BSMs. Consequently, Orrin asked if I would head-up, along with Ron Simmons, CEO of Legacy Inc., the enormous project of getting TEAM accredited. I accepted and began working with Amway/Quixtar again on the accreditation process.
After launching my efforts with Amway/Quixtar, I clarified that the main point to work through was the positioning of the business. Amway/Quixtar wants their name mentioned anytime the TEAM name is mentioned. However, this is not a rule or law that currently exists but rather an opinion that has arisen with the new legal team in charge. Previous managing director of N. America, Ken McDonald had put in writing the Company’s stance on positioning and it wasn’t to force the Amway/Quixtar name to come out in front or even simultaneously with the TEAM name. But, yes, once again, things change.
With the company’s focus on reputation, they argue that saying the Amway/Quixtar name up-front eliminates any potential misunderstandings. However, I would argue just the opposite. People have preconceptions of what the words Amway or Quixtar mean to them. Some people still believe today that Amway is a door-to-door soap sales business. So, to say a company name prematurely may, in fact, be misleading them by triggering reference to their own inaccurate understandings. When I mentioned this to lead attorney Mike Mohr he said, “I don’t understand what you are talking about. My brain doesn’t work that way.”
Further, say Amway/Quixtar to a prospect and you can start a stop-watch to time how quickly they do a Google search and find a plethora of negative website reading. Therefore, if the goal is to grow the team by allowing someone to make a decision based on accurate information, wouldn’t it make sense to educate the prospect and build a trusting relationship with them first rather than prematurely flashing a name up that kills any chance of moving forward? Currently, those leading with Quixtar/Amway (or even simultaneously) have experienced devastating failure. Yes, it looks good on the legal paper, but we have yet to find one English-speaking as a first language team in N. America that is currently growing that uses this approach.
I don’t want to deceive anyone. I won’t. Yet, discernment of disclosure is a necessary process to produce the best results. Why haven’t you told your five-year old how babies are really made? I’m sure you have said something on the subject but you have discerned that disclosing too much information at the present time may not be your wisest choice. Obviously this is an extreme example and not exactly applicable in context, but the point is, there are times when some discernment of what to disclose must be considered for best results. Don’t get me wrong, TEAM would love to lead with the Amway/Quixtar name. However the Company would first need to clean-up people’s inaccurate misconceptions as well as its reputation online. This will become a larger issue as all teams come to understand the Company’s non-negotiable stance on this topic.
The other area of positioning that needed resolving for accreditation was that Amway/Quixtar feels TEAM is being positioned as the business opportunity and not Amway/Quixtar. The truth is there is really more than one opportunity interlinked. We have always said that we are not “in” Amway/Quixtar but rather we are Independent Business Owners (IBOs) who are “powered by Quixtar.” Personally, I always felt “powered by” was a bit strong since I have not felt power from the Company as much as I have felt it from other sources, but, nevertheless, there is an established independence of the individual from the Company and the reality is that they do have multiple opportunities available to them.
We have continually requested that the Company allow us to share the income opportunity of the system openly. They have denied us that ability citing that being transparent with the potential system income is wrong, as it could be considered “enticement” to register in the Amway/Quixtar business. Meanwhile on many websites and blogs throughout the internet, the IBO leaders are being painted as crooks by not being open about their system businesses. How ironic is that?
In fact, Ron Simmons as recently as June 5, 2007 emailed the Company attorney Gary VanderVen, requesting that at least on Company blogs they share the truth that the Company “has prohibited IBOs from being transparent about system income.” Orrin and Chris Brady attempted to start this process through their explanations in a book and online and, even without disclosing incomes, were threatened with suspension by the Corporation. Orrin and Chris disclosed that there are really multiple sources of income: Amway/Quixtar products, sales of ticket events and BSMs, and speaking at events. Each of these is based on a compensation plan where any individual can achieve the same or more income than anyone in the upline business support team.
An analogy they used was a car dealership. Say you wanted to sell new cars and started a business doing so creating income. As people wanted to trade-in their cars to buy a new one, you found yourself additionally in the used-car sales business, now with a second income. Next, people came in with their car wanting service so you start a service business—income number three. The service business needs parts so you start a parts businesss—income number four. Certainly, there is nothing wrong with these other sources of income. If you made more income in your service business than in selling new cars (your original business) is there anything morally wrong with that? Is your primary business selling new cars or are you just in the car business with multiple businesses interlinked? Finally, what if someone was considering starting a new car sales business and you were to share your knowledge of it with them? Should you not share the other interlinked businesses in the discussion even though they may never get to that point?
Open disclosure on this topic is a large battle between the field leadership and the Corporation. I believe the Amway/Quixtar reputation suffers less when this knowledge is hidden. They can then discredit the IBO leadership rather than allow the public to learn the truth of how little profit margin remains in the Amway/Quixtar products after the DeVos and VanAndel families take their cut. However, as the Company takes over the BSM business with their new contracts, this will be a moot point, as they will have the power to regulate pricing and profits on BSMs as well.
For the record, the Company stopped communicating with me about TEAM’s accreditation. My last email on the subject was sent to attorney Sharon Grider on June 4, 2007 (with copies to both Beth Hines and Gary VanderVen) requesting direction on the next step regarding “meeting content and positioning.” I never received a response. Only days after that email, I was at the June IBOAI board meeting when the bomb was dropped on us about the name change to Amway and the Business Transformation.
As I began to put it all together and realized the crisis point had come, I knew something had to happen NOW! Amway/Quixtar had slipped into a pyramid status as the products became non-retailable. After years of hearing nothing but “we’re working on it” regarding their promises to provide retailable products, it became obvious that it wasn’t going to change. I know for certain that the Company heard our persistent requests the day I witnessed Rob Davidson, Director of Sales, in a board meeting slam his fist on the conference table, stand up and yell at Don Wilson, “We get it Don! You need those 10-15 retailable products. We’ve dropped the ball on it!” I couldn’t figure out why he was so mad at Don. Don wasn’t the one who kept dropping the ball.
It finally became obvious that either they were lying (they weren’t really working on it) or they were totally incompetent (no results after supposed years of effort). As nice as I try to always be, that unfortunately was the case. There is so much pending litigation against the Company that the attorneys are now at the helm of the ship charting its direction. The resulting Amway Business Transformation has so many unknowns and the Company’s heavy-handed first steps toward implementation have already broken so much trust, nobody is confident that they know what it will look like.
Finally, the IBOAI board, that most everyone believed had significant power, clearly displayed its lack of influence during this crucial time. In fact, as a direct result of the IBOAI board sharing its disapproval with the Company regarding the name change to Amway and casting a unanimous vote of no-confidence regarding the upcoming Amway Business Transformation, the Company responded by canceling the Board’s contract with the company; turning it to a month-to-month contract! That’s right. The IBOAI board was the one thing almost all of us were led to believe provided the IBOs any security. It was the field’s voice and most believed it allowed us to “keep the Company from changing the deal on us.” That certainly was an urban legend. The board voiced an opinion and the Company cut it off at the legs by taking it to a month-to-month contract.
Furthermore, I realized that many “leaders” who knew this information were not going to do anything about it. I heard people who represented thousands of Independent Business Owners (IBOs) commonly say, “I can spin it.” Each time I would think I know I could, but I know that I wouldn’t—ever! I listened to these leaders whose thinking was all about holding on to what they have. However, I listened to others like Randy Haugen say, “If it’s not good for the new IBO than I don’t care what it is for me, I won’t do it.” I heard leaders say, “Well, what can we do? We have no options. We have no power.” Others in private said, “Nobody has ever successfully gone up against the company.”
Don’t get me wrong, it’s not like I didn’t understand those folks who want to hold on to their success, spin the situation to a positive perspective to everyone, be hopeful and continue business as usual. Like Randy Haugen, I just couldn’t do it. Do I want to lose everything I have worked for through this process? Of course not. However, I don’t want success based on the churning of other people’s failure. In fact, when speaking with lead Amway/Quixtar attorney Mike Mohr about my concerns, he told me that he hoped we could work it out since there is a lot of money on the table for me. I know he meant it encouragingly. I was aware that I have one of only four systems that has been accredited and I regularly qualify as a Founders Diamond—the combination of which should result in a new QBI bonus of $500,000.00. However, I responded to him saying that if I didn’t believe that the new IBO starting today could ever achieve with the New Amway what I have achieved with the previous business, then the money felt more like a buy-off than a bonus.
My moral dilemma began; do I stand up to the Giant regarding this disaster and put it all on the line, or do I let things just continue as they may and let my life stay simple? It became apparent that the necessary price changes weren’t coming. The “Amway business transformation” wasn’t going to make it easier for an IBO to succeed, and trust with the DeVos and VanAndel families as well as with Corporate management was gone.
I just couldn’t promote something I didn’t believe in, nor could I leave people unaware of the facts just because I’m set and the company is intimidating. As a result, I was compelled to step up to the plate and make a change. I was willing to put it all on the line because I believe so much in truly leading people to something that they can succeed with. I keep thinking of all the people who need their business to work—they’re counting on it!
I understood the current condition of the business and why it was this way. I also understood who was in charge, what their objective was, and the general direction the business was headed. I knew that the IBOAI board had no teeth and was barely alive. I knew that most people who knew what I knew wouldn’t say anything but would rather just “make the best of it.” I knew that it would expose those making the decisions as well as those who would “spin” those decisions. I realized by sharing the truth that some people would be hurt and leave the business. I knew that I would potentially receive a great deal of abuse by those who were unhappy with my sharing this information.
I realized that some people would wonder how we had been promoting the business yet now announce its flaws; knowing they don’t understand how we always have believed in the business concept which we promoted and were diligently working behind the scenes to invoke disparately needed change within the Company all the while believing positive change was coming. The bottom line is I knew that my life would be a lot simpler if I just stayed quiet. However, I knew that I was asked to be on the IBOAI board to protect and serve the IBOs, and I knew for the new people to have a chance of achieving their dreams I had to expose the truth and invoke change.
I was really hopeful that the Company would come to a peaceful resolution. I was hopeful that it could just be talked through and avoid anything public or mean. However, that wasn’t to happen. When we suggested rolling back the non-compete rule to simply give people a choice to either move forward with this new business transformation or to choose another opportunity, Quixtar attorney Mike Mohr said, “Why in today’s competitive environment would I open the door and let our crown jewels leave?”
This rule (Rule 6.5) was implemented just three years ago; 45 years after Amway started. Simply put, this rule doesn’t allow someone in this business to be in another competing MLM marketers out of our Quixtar camp since the rule would not allow IBOs to register with another MLM business. However, the wall more significantly keeps IBOs trapped inside the Quixtar camp giving the Quixtar Corporation the ability to do whatever they want with their trapped audience.
If the company won’t change, than at least give people a chance to choose a different opportunity. If this business is really so great then nobody would want to do anything else and it would have been a non-issue. The fact that the idea of giving people an option is such a big deal to the Company shows me that they understand that given their freedom, people will go elsewhere. The freedom to leave should always be available. That freedom allows competition to bring the best performance out of each company and keep the focus on what’s best for the new business owner.
Unfortunately, the Corporation won’t allow such options to exist. They effectively have become the ultimate “Hotel California” where “You can check out anytime you like, but you may never leave.” Our lawsuit is not requesting any damages or retribution. The suit is simply a request to the court system to let free enterprise freely operate once again.
As a final note, life has its irony. How interesting is it that approximately 50 years ago, Rich DeVos and Jay VanAndel found themselves in a similar situation with the MLM business they were sponsored in, called Nutrilite. They couldn’t amicably resolve some company decisions that they believed were wrong, so they and some others left and formed Amway!
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