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Amway / Quixtar can work for anybody! Right?

Recently, I had a comment entered on The Quixtar Business Meeting article which just breaks my heart. The post is one of the most candid pro-Quixtar posts I've seen, but what "Tracy" admits is heartbreaking.

Click above and scroll down to read it all, but here are some excerpts:

Quixtar is an investment in your future. No, you will not make tons of money right away. Yes, you will struggle getting used to the ideas of buying from yourself and have trouble with the money side of it...

The great thing about it is that if done correctly you will have a passive residual income flowing in for the rest of your life. But in order to do so you must convince others to struggle for a while... the program can work for anyone if followed by a committed person for a period of time.

I just want to be able to pay our bills and eventually buy a nice house. Our friends went through it, I watched them struggle for 3 years, but now they are bringing in $3000 a month from Quixtar, which isn't that much for some but for us and htem that is a big step up...

Ohh, and if you are like me and need a support system you may think about joining the Team of Destiny. That way you'll always have someone to call when you get frustrated...

You can hear both her frustration and her determination. I'm not sure if she's aware what she's doing to other people, but I give her the benefit of the doubt; she didn't leave her e-mail address, but I'm writing this for her, wherever she is.

For hope, she looks to her friends have gone before, and put in a lot of effort, and now, finally, will receive a bit of income:

  • Six man years of part-time effort (3 years, 2 people)
  • Now earning $18,000 per year per person
  • Deduct probably $3-10K expense per year over three years (about $10-30,000)...

Not impressive. Maybe breaking even now or soon, almost certainly less than a minimum wage job done over the same period. That might be generous, and the expenses much higher, since Tracy admits she's "buying from herself", a hint she's may have bought more than she needs "from herself" in order to keep up her monthy PV. (If so, Quixtar may be a bit closer to the beginning of breakdown stage than I expected.)

Tracy admits the profits aren't great, and that it's darned hard work (I believe her), but it's that residual they want. Just imagine -- income in the future without working. I'm going to keep struggling...

But what guarantee is there the residual will stay the same if those you signed up drop out and stop buying Quixtar products?

Questions of return on investment aside, one might ask whether the Quixtar "plan" -- though not necessarily the people showing it -- is ethical.

I believe it is not, and would like to use a statement Tracy made as a springboard for illustrating why. Like many other Quixtar IBOs, Tracy said:

... the program can work for anyone if followed by a committed person for a period of time.

If, by "the program", she means "the plan", and not the "benefits" alleged from buying all your products from Quixtar, then I'd have to say this is simply untrue, and you don't have to have ten years' experience with Quixtar to prove it.

To illustrate why, let's look at a little scenario, if you'll be so patient, dear reader. In doing so, I think you'll be able to see how core part of "the Quixtar plan" works, and we'll even, amazingly, be able to see, from this little tiny model, precisely why you see different things happening in Quixtar.

Ready? Great, then grab your hat and travel with me, to a little utopian town in the middle of nowhere...

"The Plan" comes to "Q-Town"

Q-Town is a small place -- just 100 folks above age 18. None of them have ever heard of Quixtar or Amway. But they're all potential "winners" who would sign up for Quixtar once told about it. And they're all smart, industrious folks, who score above the national average in terms of intelligence, sales acumen, and willingness to work. Great people those Q-tonians!

At first, just one Qtonian is a Quixtar IBO. She talks to six people. Those six talk to six more. Now we have 43 people in Quixtar (1+6+36), with 57 converts remaining! Wow! Things are going great!

Now those last 36 IBOs start to talk to the 57 who remain. Plans are shown. But, oh, oh -- each can only sign up, on average, 1.6 more converts! And after than, things come to a screeching halt.

At this point, the first person has 99 downlines, and she achieved this amazing success with comparatively little effort! Undoubtedly, should this spread beyond Q-Town (we'll consider that later), her true story will be retold many times! But among the other 99, we have, on average only about 1.6 downlines.

If this network were to "collapse", it would do so from the bottom up, as each upline received less value from the product being bought at the bottom. Slowing this effect would benefit those at the top: the each additional month someone stays in, the more profit the top people make.

So there will be a strong motivation, strongest at the top, but still fairly strong as we go down the chain, to keep people in for each additional month possible.

Analysis

This is, again, not a real-life model, but ask: In this unrealistic little town, did the smartest, hardest-working people win?

No, of course not. To the contrary, those in first had the easiest time locating potential converts -- and thus probably did the least work. Those in last had the slimmest pickings -- and thus probably did the most work. If one person worked harder, and did better, and attracted more people, then it was always at the expense of another IBO -- one currently active, or one would could come later.

Could this work for "anyone" in Q-Town? No. If everyone worked 50% or 100% harder, the situation would be the same. There must be some losers, because that's how the winners win. It's built into the system, whether the people doing it realize it or not.

Lessons learned:

  • Early successes are easier; later is harder
  • Effort only makes a difference among IBOs of the same "generation", marketing the plan at the same time -- you're competing against them
  • Increasing effort is always required; each person you sign up will have it harder, on average, than you will
  • It is in the best financial interest of those "at the top" to do things to keep people encouraged and "in" as long as possible

Predicted practices to optimize income for top Q-Town IBOs:

  • Present early success stories to entice later potential IBOs (never mind that each month there are less candidates)
  • Slow the dropout rate:
    • Cheer them on, use motivational materials
    • Provide support groups
    • Keep people from talking to those who might "discourage" them
    • Hold "dreams" out in front of them, like a carrot
  • If you can design the system to be hard to understand, that will mean it will take longer for people to figure out what's happening: obscurity will be a benefit
  • Provide other, inexpensive, intangible benefits:
    • Encourage them to make friends within the networks
    • Provide fun activities
    • Make sure they incur an emotional cost to leave

And indeed, you can see how closely this model matches the real way Quixtar works. That's not a coincidence.

We can see, in this scenario, why support groups and encouragement are provided: not because the top IBOs just love those at the bottom, but because they is a strong financial incentive to keep each member in for as many months as possible. Even adding one month to your average dropout time increases net revenue at the top enormously (in this case, 99-product-months).

Likewise, some of the "cultlike" aspects of Quixtar -- "all my best friends are here" -- are necessary for financial reasons: they help discourage people from "dropping out" or stop consuming product. This isn't an accident, and it's not done for charity. It's a necessary part of the business model which maximizes profits.

This includes the "self-help" things. All that stuff is good, and there's nothing wrong with wanting to improve yourself. But there are cheaper (or more profitable, if you really want to get into sales) ways of acheiving the same effect than consuming unwanted Quixtar product, and doing lots of sales calls for them while you do the self-improvement work.

Next Stop: Realburg

What I'm saying is clearly true in Q-Town, but what happens when you add real life assumptions? Let's do that...

Not everyone is interested in Quixtar!

Realburg is much bigger than Q-Town. It has 2000 people, yet only 1 in 20 are interested in becoming Quixtar IBOs. (The rest won't sign up beause they're "unmotivated losers", or know about what happened with "Amway", or have some other reason.) This means Realburg also has 100 potential IBOs, just like Q-Town.

How does this change things?

For one, the increased population makes the Quixtar "dream" actually easier to sell! If you think people get greedy when they think of 100 potential downlines, imagine how the sales pitch works on a potential convert when you tell him about the (roughly) 2,000 people in town just waiting to generate residual points for him!

Another way this helps Quixtar is it helps to obscure how big the "real" market for Quixtar is: Back at Q-Town, if all 57 of the final would-be IBOs were invited, at once, to the same Quixtar business meeting, would have they have signed up? No way! They would have noticed all 100 people in town were already involved, and realized there wasn't anything left.

Yet, in Realburg, if they somehow could invite the last 57 potential converts to the same business meeting, they'd sign up in a heartbeat. Why, there are still 4,943 people left in this town! (Or so it seems!)

There's a third, suprising, way this benefits the top IBOs: It makes it harder to sign people up!

Remember, money is ultimately made from selling products.

Back in Q-Town, everyone signed up very quickly. If you talked to three non-IBOs a week, the first six would have been signed up in only two weeks, and all three generations would have taken about 6 weeks.

But look at Realburg: Only 1 out of 20 showings, at first, gets a signup. That means it takes a person about 3.5 weeks -- about a month -- to get their first signup. That means about 6 months for each person to sign up six people, at least at first. Three generations, then, will take about 2.5 years (60 weeks) -- or longer, because the going gets so slow at the end.

That's a huge benefit to the people at the top -- more than 20 times as much product will be sold to the same number of IBOs!

Prediction: Realburg Quixtar shouldn't advertise

Given what we just learned, imagine what would happen if the first IBO in Quixtar advertised and managed, somehow, to sign up all 99 other potential converts within a very short period of time. She'd be great, right?

Wrong! She'd make a lot less money! Those hundred people would all start calling people. Within 1 month -- no leads for them. Within two months -- no leads for them. Perhaps by six months they've all given up! That means that each IBO only consumed 0.5 years of product -- about one-fifth of the 2.5 years before the IBOs above got their "six people" signed up using word-of-mouth!

So again, the real reason Quixtar doesn't advertise isn't because they "respect their IBOs' effort" or any such thing. It's because the top IBOs will maximize their profit:

Getting the word out s-l-o-w-l-y will be an effective strategy necessary for wringing every last dime out of your bottom IBOs. You want prospecting rates to be fast enough to keep the IBO interested (getting "hits") and consuming product, but not so fast that you sign up the available pool of suckers potential bottom-level IBOs too quickly.

Realburg is not alone

Q-Town was in the middle of nowhere. But people in Realburg can travel and communicate outside the city once "saturation" is reached and every would-be IBO has signed up. Does this negate my core objections -- that everyone cannot win?

No, it just means that we need to consider the whole country, or perhaps the whole world. Increasing the total available population doesn't change whether the winners win by creating "loser IBOs".

But what it does mean is that the winners can win even bigger and that far more will become losers -- there will be more levels from the "bottom" to the "top", the top people will have more downlines, and many more people will participate and see no profit.

In real life, people are born and they die

Imagine both Q-Town and Realburg have a population growth rate of 1% (one new person added each year per hundred) and that people die on average at age 68, meaning there's 50 years available to be a Quixtar IBO once you turn 18.

Back in Q-Town, if we could get everyone to stay in Quixtar once they signed up, two old IBOs would kick off every year, on average. It also means that about 3 new people would turn 18 each year.

Would that satify those last 57 IBOs who had nobody to market to? Would "the plan" work for them once we considered this?

No! Of course not! You'll have 57 people fighting to sign up the 3 new kids who come of age each year!

But how about Realburg? Each year, 2 IBOs (out of the 100) still die, but, with the larger population, we have 60 new potential IBOs turning 18! Wow! That's 60 new people for the 57 who couldn't sign anyone up! How encouraging!

Ooops -- we forgot something: In Realburg, only 1 of 20 people want to do Quixtar. Oh well, that makes ... ah ... 3 will become IBOs, out those 60 new propects. Just like in Q-Town. But it does mean the 57 "bottom" Realburg IBOs did a lot more work to sift through those 60 kids than their peers in Q-Town, but, sadly, with the same end result.

But not for the top IBOs -- they sold a lot more product while that prospecting dragged on.

Final Note: Amway, Quixtar and Buying Product

In a simple pyramid scheme, money is tranferred from the "bottom" of the pyramid to the "top" by a direct, initial payment. For example: "Mail $5 to the person at the top of this list, cross their name off, add your name to the bottom of this, and send this to six 'friends'." Such schemes are illegal in the US.

Quixtar (Amway) works a little different: This transfer happens when the people at the bottom buy product. This both exempts it from the letter of the law (it is now a "residual"), and maximizes profit by ensuring the transfer goes on, and on, and on. The longer the partcipation, the more damaging to the inevitable "losers", and the better for the 'winner' IBOs.

This feature is what dictates Quixtar's distinct features, and differentiates it from normal "pyramid schemes" -- this "time" element explains Quixtar's marketing techique, emphasis on keeping interest, extending out the buying cycle, offering new products, and establishing bonds of friendship within the group, and, in fact, why it becomes almost like a cult or religion:

People will find it hard to leave a cultlike structure, and religions can encourage sustained altruism ("good" behavior not in the individual's best interest). These features can then be co-opted to keep the IBOs "believing" in Quixtar, saying in, experiencing loss, and purchasing more product.

Conclusion

No matter what your assumptions are, it's obvious there's only a limited number of people on the planet who will be open to being a Quixtar IBO. And a birth rate of 1% (as in the US) or even many times higher, almost certainly isn't enough to sustain the growth rate most people need to keep interest in the "plan" part of Quixtar.

Unless we all learn to pop out babies faster than "the plan" needs new people to sustain itself -- i.e. we've all got to produce six potential little Quixtar IBOs per couple over the amount of time an IBO will wait before giving up -- saturation will be reached again, as it was by Amway before.

Therefore, we are looking at a system which produces a few impressive success stories by transferring wealth from "loser IBOs" who arrive later to the "winner IBOs" who have come before. Each potential "loser IBO" that works harder to become a winner makes it that much more difficult for their peers, and everyone other IBO they will eventually sponsor.

So the Quixtar "plan" is, in my estimation, not an ethical system, because it ultimately violates the rule -- in the end -- of doing unto others what you would have done to you. The harder you push on, the more people you're ultimately responsible for suckering in the end.

Tracy, get out while you can.

And don't do it to others.

Comments

Have you ever run a business before? Have you ever looked at running a business?

Posted by: on June 3, 2004 05:20 PM

Anyone with a smidgen of business acumen will see that the premise in this exposition is far off base.

I don't see the rationale for this information. All I'd encourage you to do is read some more and study some "successful" people for a change.

Whoever learned how to swim from someone who is scared of the water? That is what you are doing here....

I wrote the last comment, but forgot to put my name.

Well, good luck to you all that like to bad mouth others. I wish you success in whatever it is you are doing with your life.

Posted by: Pablo A. on June 3, 2004 05:26 PM

I Agree with most of what you put forward, but I am also sure that you can see how narrow your analysis really is.

I Think that once and for all that this system should be seen for what it is. Another business system, which will be suited for some and not others. The arguement about ethics is almost a strange one in the business arena.

I also agree that it does not help that those participating in Quixtar seem to take your observations so personal. It is a fact that the more persons added to the network the more difficult it becomes for those newly introduced.

One note though: I know a Quixtar couple who out performed their sponsor. infact, they managed also to have one of the persons they sponsored do the same. How is this possible and does this fit entirely with your uni-model?

How ever you look at most business opportunities you will see good and bad. The thing is to financially educate yourself. Just reading post on the internet is perhaps not the best way to make informed decisions about your financial future.

Posted by: T Jemmott on October 19, 2004 07:24 PM

Well its clear from your statements your view of business “saturation” are Wildly Exaggerated.

“The Plan” leaves “Q-Town” and enters “The Real World”

Human population entered the 20th century with 1.6 billion people and left the century with 6.1 billion.

Of the 6.1 billion people 00.000491803279% have a Business utilizing Quixtar.

Note non active: The people who entered the business, have retired and are no longer actively expanding their business, also factor people simply enjoying products not actively looking to build a business but just shop online.

Note: Many Business owners have children that have their own Business utilizing Quixtar. Business owners mentored and sponsored by people other then their parents.

It would take a Substantial amount time (hundreds/thousands yrs) before the growth of Quixtar’s Business Program would ever catch up to the exponential growth of Human population, (minus factor) the growing number of non-active Businesses.

Compared to the average persons chances of corporate success(3%), Quixtar provides an amazing opportunity to any who are willing to take up the challenge of owning their own Business.

When reviewing the opportunity be aware of the credibility of your sources.
Also be aware of your chances of success with the average 40-45yr “Job Plan“, how is it working for you?
Seek out Credible sources of Business information like Fortune Magazine, Better Business Bureau, the New York Times etc.

Posted by: Jonny w. on May 4, 2005 01:24 PM

Seek out Credible sources of Business information like Fortune Magazine, Better Business Bureau, the New York Times

Yeah. Lets! Care to paste some online links with 'credible' source of info saying some thing 'positive' about Quixtar?

There was another IBO just a few days ago claiming similar thing, 'credible sources' and answered here.

Saturation. hmmm, u r counting only those ppl who become an IBO. Major mega bull crap. Try screaming the word Quixtar or Amway in a mall :)

Only 0.5% of population ever joined any MLM. Stats. And even this is going doing, given the fact that ppl are more cautious of miraculous snake oil MLMs, and Wal-mart etc. are kicking butt with prices. Even sears / bay are doing great with the shopping experience.

Also, if Quixtar / Amway is not saturated, what is this then?

360 K IBOs in North America in 1977
340 K IBOs in North America in 2004

http://mlmlaw.blogspot.com/2004/09/zero-population-growth.html

Point is:

1) Only few ppl even consider listening an MLM pitch. Much fewer of them will join. Just like not every body is engineer. So counting whole world population is BS

2) With the secret meeting and other things that MLM do, it creates a real bad name, making it harder to sponsor ppl. Why else they changed their name from Amway to Quixtar? Companies pay so much for brand recognition.

3) When no body could be recruited, existing folks make less money or their hope to make money dies. They also quit causing a ripple effect toward the top.

4) On other hand. when a lot of sponsoring is happening, it gains media attention and many blogs, news article and shows like dateline. Such stuff damages MLM growth a lot. Look at Amway and P & G. Amway is 2 year older than P & G yet P & G is MUCH bigger than Amway.

There are many other factors as well. I remember when hearing an MLM pitch first time (Excel), I smelled some thing rotten. I was new in North America and didn't even know that pyramid is illegal. Yet I know that I'm not going waste my time in an experiment that is not giving me any immediate return. I used my qualifications and skills and doing fine, and that's what I recommend to every one.

Also, I read in a Quixtar book "Power of Focus". It said, "Every person has some skills that came to them naturally and they don't have to put much effort utilizing that skill. It's far easier and satisfactory to utilize those gifts rather than trying to do some thing that is not your personality"

Bingo! How many ppl like to be used car sales man, telemarketers? One who do, how many of them want to become an IBO? Those are ur market. And not a growing market.....kinda static though according to the site I posted.

Posted by: Imran Aziz on May 4, 2005 02:08 PM

Quixtar is a great way to start out if your looking to start your own bussiness.It saves you money and at the same time makes you money.You can have tax write offs to any expense you put into your company.For example,lets say you went to florida to talk to some people about the bussiness,you take first class and you stay in a hotel and you go out to eat.You can write all that off!!Take a look its guarnteed money back and its 175 to get started and you get40 point right away and have lots of support.Dont be fooled by people who think every oppurnity is a scam!!!Those people dont under stand this type of thing dosent come knocking on your door every day!

Posted by: justin d on May 25, 2005 04:12 PM

Justin,

Please stop drinking the cool-aid and start thinking for yourself.

Quixtar is a great way to start out if your looking to start your own bussiness.

Quixtar isn't even a business, Justin. You're being convinced to buy an overpriced line of products and join a pyramid scheme. Initially, all you do is pay in. Even later, the average IBO makes a fraction of minimum wage -- before expenses. That typically works out to be a loss, if you factor in the money they put into product and tools (etc.), and the time they spent.

Look, you didn't even take the time to read the posting above. I can see you carefully consider all the data before jumping into things.


It saves you money and at the same time makes you money.

Except that it doesn't, and at the same time, it doesn't. You're buying products, Justin. That's not a form of making money. And you'll be spending way more for each, on average, than you ever will have before.

Get it straight: You're simply becoming a consumer of a line of products and tools; Quixtar and the AMOs will make a healthy profit from all the cash you send them.


You can have tax write offs to any expense you put into your company... For example,lets say you went to florida to talk to some people about the bussiness, you take first class and you stay in a hotel and you go out to eat. You can write all that off!!

No: Only if you spend a good fraction of your time there doing business. And what's the point of spending money in order to save it? That's like buying a $30,000 car you don't need because, if you act now, you could save $5,000.

Taking first class? Staying in expensive hotels? Oh yes, I can see how well you'll do in business if racking up high costs up front is what you think of as "good advice."


Take a look its guarnteed money back...

You should really try to do some research into how good that "guarantee" is before you start giving everyone else advice.

This is like the guy who just read the back of his box of breakfast cereal and thus suddenly starts thinking he's a nutritionist, and giving everyone else advice.

Only in this case, it came off a tape.


Dont be fooled by people who think every oppurnity is a scam!!!

I've never met such a person.

I have a different idea: Don't be fooled by people who think, apparently, nothing is a scam.


Those people dont under stand this type of thing dosent come knocking on your door every day!

Oh yes it does. Believe me, this is hardly an exclusive club -- and, by the looks of it, it's running out of steam now.

Yes, by all means: Quixly, buy every Quixtar product you can! Send them alllll your money! Rush into it immediately! Don't do research! Don't think! Because soon....

It'll go under again, just like Amway did, and then you'll missed out on that lovely credit card debt and squandered time that could have been yours. And that would be terrible to miss!

Posted by: Tim (Random Observations) on May 25, 2005 05:48 PM

wow, i'm amazed at the lack of intelligence (and proper spelling and grammar - i know, i don't capitalize so i'm a hypocrite) on BOTH sides of this argument. first, a little background - i have a degree in chemical engineering and graduated first in my class. just saying this so you know i'm not an idiot.

Your comment: "You're buying products, Justin. That's not a form of making money. And you'll be spending way more for each, on average, than you ever will have before. Get it straight: You're simply becoming a consumer of a line of products and tools; Quixtar and the AMOs will make a healthy profit from all the cash you send them."


Answer: Yes, much like WalMart, McDonald's, Walgreens, Starbucks, etc. will make a healthy profit from all the cash you send them. The only difference here is that by buying Quixtar products, I'm not paying for advertisements. Quixtar never claimed to be a non-profit company - yes, they make money. if you don't like that, then grow up - it's business.
Second, my wife and I have tracked our product spending over the past several months, and we are NOT spending any additional money on Q products vs. what we spent before at other stores/restaraunts/etc. In fact, we're at the 12% bonus level, therefore getting 12% more back that we EVER did at those other places. oh, and our personal use (as a couple) is at 250PV, without spending any EXTRA money over what we used to spend...

And on the saturation idea, do your real world numbers mr. calculator... we are actually falling behind population growth, not overcoming it as you like to suggest. saturation is a complete myth. why are we falling behind? because 1) not a large percentage of people are seriously building a Q business and 2) a lot of those who are use horribly vague and ineffective presentations. my sponsorship rate is over 50% (and climbing)... learn how to show a plan, and even the ones who don't become involved will have a positive idea of what Q does.

And on the pyramid thing... geez, this one is so annoying... EVERY company pays a small cut the people who are responsible for getting a product or service into your hands. here, some of those steps have simply been replaced by other active IBO's. what we do is no different in concept than when an engineering firm owner hires 10 engineers (or contracts them) to go work on projects. he tell them "i'll pay you x% of each project you complete" and he keeps the rest... the only real difference is that Q is a completely level playing field for everyone who gets in, whereas the owner of the engineering firm is always making the most amount of money... that's right, we're MORE FAIR and BETTER than most business payout structures. i create volume personally and contract out the rest. i pay people who create volume for me, they can do the exact same, and because of this they can pass me tomorrow! this can happen because if the volume that leg creates is greater than my entire group volume (minus leg A) then he makes more money than i do!!!! and don't say "well there's always someone at the bottom," because the de-saturation that is happening proves that they are either at the bottom by choice or because they are incapable of showing the plan to someone.

so why don't you try to go shut down walmart, starbucks, target, microsoft, etc. for their pyramid schemes? in reality, they are MUCH more like one than we are.

Posted by: robb on May 28, 2005 07:13 PM

robb,

wow, i'm amazed at the lack of intelligence...

Those who live in glass houses...


first, a little background - i have a degree in chemical engineering and graduated first in my class. just saying this so you know i'm not an idiot.

No, that assures me of nothing of the sort. I happen to have two, almost three degrees in engineering (one postgraduate) from one of the country's top engineering schools, but I almost never trot that out: an argument is determined by its own merits, not by the author's claim to be a really intelligent person.

There is a vast difference between intelligence and wisdom. I've known some really bright people who couldn't think their way out of a paper bag.


Tim: You're buying products, Justin. That's not a form of making money...

robb: Yes, much like WalMart, McDonald's, Walgreens, Starbucks, etc. will make a healthy profit from all the cash you send them. The only difference here is that by buying Quixtar products, I'm not paying for advertisements...

Incorrect, Mr. Intelligent: you're also paying for an inefficient system of shipping, alleged "quality" most will never need or use (and often can't detect), and an upline payment. Further, you're buying products in a competition-free environment, where products will never be undercut by a competing offering. That incurs costs as well.

Finally, you are wrong even about your actual statement: You are paying for advertising. What do you think you think an IBO is doing when he hangs out at Borders and approaches people, one by one, pretending to be friendly, and then suggesting a "great new business opportunity" he knows of? What do you think the time put showing the plan translates into? -- as well as time spent honing that "skill", or helping others do so?

That's advertising, Einstein, and it's being done in the most inefficient way possible. Thus the consumer is paying a far higher price for it than if the company had just taken out a TV ad and passed the costs along.

People always end up thinking they're getting something for nothing. DUH! Your time is worth something. Start counting it. You should already have an estimate of how much your time is worth (i.e. how much you would have been expected to earn per hour in other ventures) and be counting that, and subtracting it, as part of your costs.

You undoubtedly aren't.


Quixtar never claimed to be a non-profit company - yes, they make money. if you don't like that, then grow up - it's business.

There's nothing wrong with making money: You seem to be putting arguments in my mouth I never made.

My point is that IBOs get the roles confused and think they are McDonald's or they are Walmart. They are not -- they much are more like the consumers of these products.

You are not starting your own "business". You are (a) buying products, and (b) doing a pyramid-shaped upline payment -- just like with a chain letter -- every time you purchase product.

There's no problem if you only intend to buy products. Then just compare prices of products on that basis and tell me how wonderful they are (as Imran suggests, above) and how you would be glad to buy them even if you knew you'd never sign up a single downline.

But the argument never ends there (and that's not the reason the IBO is buying Quixtar products anyway). It's always: "Well, I'm going make money by signing people up!" But then they're arguing a pyramid-shaped growth scheme is what provides the alleged benefit, not purported savings over store-bought products.

The IBO has two mutually contradictory mindsets in place, and is taught to switch between them without ever noticing the conflict, retreating to the opposite one each time the other is challenged. Very difficult to get them to stop and evaluate each part independently, on its own merits.


Second, my wife and I have tracked our product spending over the past several months, and we are NOT spending any additional money on Q products vs. what we spent before at other stores/restaraunts/etc.

If you ate out before and now always stay home and cook, you're comparing apples to oranges, and neglecting the loss of the convenience the restaurant gave you.

IBOs often cannot spot their actual costs.

Love to see the details.


In fact, we're at the 12% bonus level, therefore getting 12% more back that we EVER did at those other places.

Try to understand this: You are paying MORE for those products, in aggregate, for what you're getting. That money you got back -- plus the additional payments your upline received -- came out of your pocket.

Think: Where does that rebate, and the payment to your upline, and his upline, etc. come from? The atmosphere? No, it is a necessary addition to the cost of the products you purchase. As is the "rebate" you receive back.

Subtract your rebate and demonstrate how you are "saving" money, as Imran suggests, by posting your typical shopping cart.


And on the saturation idea, do your real world numbers mr. calculator... we are actually falling behind population growth, not overcoming it as you like to suggest. saturation is a complete myth.

Sigh. Ignorance, I can stand. Arrogance, when right, is understandable too. It's just the combination of stunning ignorance plus arrogance in one neat package which I find exasperating.

Look: How many people are you expected to sign up this year in order for you to start "growing" the business? The population growth rate here in the US is about 0.1%. What this means, bright boy, is that if you're expected to sign up more than 1/1000th of a person each year to be profitable, then Quixtar needs to grow FASTER than the population growth rate. (And thus saturation is inevitable.)

Duh.


why are we falling behind?

And if you're "falling behind" it means you're admitting the business is "collapsing" already, and that the average new IBO should expect to sign up FEWER people each year than the population growth rate of 0.1%.

It's amazing to see you make such arguments without even noticing what your words mean.


... because 1) not a large percentage of people are seriously building a Q business

All you're are saying is that not everyone is cut out to be a Quixtar IBO. Sure, great, then just reduce the available population to a fraction of the US. So you have a smaller market than you thought. Wow, great argument. And that certainly proves saturation isn't happening. (Not.)

(It's like arguing: "Well, you showed saturation will happen in a town of 100. But I'd argue there are only 30 potential IBOs among those!" Forgive me for not being horribly impressed at such logic -- the end result is essentially the same. Dittos when you scale it up.)


... and 2) a lot of those who are use horribly vague and ineffective presentations.

I.e. you (plural) train your people poorly, or have such poor methodology that you sign up, and make promises to a lot of people who are inherantly unfit for the business.

Who needs to insult your business model? You yourself do a pretty good job at explaining what's wrong with it.


... my sponsorship rate is over 50% (and climbing)...

Over 50% of what? Per what? You sponsor half the people you talk to? Great. You're more efficient at causing harm than the next IBO. Good for you.


... learn how to show a plan, and even the ones who don't become involved will have a positive idea of what Q does.

Until they find out the average IBO only "makes" $115/month (after expenses, could be a huge loss), and think about what must inevitably occur if the model is played out.

Or aren't those little details you'd care to share with them? Care to tell them that less than 1 in 200 IBOs even make as little as $15k annually -- before expenses? (Good grief, 6% of the population are millionaires, while less than 0.5% of IBOs make even $15k or more.)

Which is more important -- that they have a "positive" impression about Quixtar or an "accurate" one? Unless you tell them such things, there is no way to argue you're giving them all the data they would want to know.

But I'm sure you'll be giving them all the data you would want them to know...


And on the pyramid thing... geez, this one is so annoying... EVERY company pays a small cut the people who are responsible for getting a product or service into your hands.

Yes, geez, it IS annoying to have to re-explain this: EVERY company does not pay its sales people mostly for ... signing up more sales people. EVERY company does not sell it's product mostly to ... it's own sales people!

Can't you see those obvious differences?


what we do is no different in concept than when an engineering firm owner hires 10 engineers (or contracts them) to go work on projects. he tell them "i'll pay you x% of each project you complete" and he keeps the rest...

No, what you do is completely different "in concept" in that you'll never create a novel product.

To work within your broken model: You're not being "incented" to design a new product. You're being motivated to sign up more engineers, who will sign up more engineers, who will sign up more engineers... none of whom will create anything.


the only real difference is that Q is a completely level playing field for everyone who gets in, whereas the owner of the engineering firm is always making the most amount of money...

Did you even READ the article above, or do you just say random things without thinking?

Look: THINK, just try to THINK. Go read the example above, again: The first person in a town to sign up has it very EASY. The last potential IBOs in that town to sign up have it HARD, since all the nearby IBOs have been signed up already.

That is NOT a level playing field. That is a system where the first people in (high-level IBOs) are almost guaranteed a handsome profit even if quite lazy, and the last people in (naive, low-level IBOs like yourself who can't figure out how it works) are almost certain to fail.

Worse, in larger populations, lowest-level IBOs don't fail quickly -- they just keep working harder and harder for a gradually diminishing return, as the "successes" slowly trickle in -- but too slowly to keep them from actually being profitable. (Since IBOs don't generally account for their time, they have no clear idea how many downlines they need to sponsor per time unit invested in order to make a profit.)

It's a perverse system: the "hardest working" low-level IBOs will put in the most effort before they finally figure out what they're actually earning (or losing) per hour and throw in the towel.


that's right, we're MORE FAIR and BETTER than most business payout structures.

You're so cute. And yes, you are a hypocrite. You write "he tell them", and "we're more ... better" while complaining about other peoples' grammar.

Look, it's "we're fairer and better", robb, or "more fair and good", if you prefer that construction. (Not that I care one ounce -- I make plenty of typos too -- but you seem to take some deep pride in it and think it would indicate [your own] low intelligence.)

And no, you're not: Your model is deceptive, unprofitable, unethical, and inherantly unsound, and you haven't yet put forth a single sound argument to the contrary.


i create volume personally and contract out the rest.

You mindlessly repeat things other people told you to say, while ignoring your expected rate of return, odds of success, true costs, and how your fundamental business model works.


i pay people who create volume for me, they can do the exact same, and because of this they can pass me tomorrow! ...

Who cares if they can pass you? The model is still inherantly unsound because it depends on growing at an exponential rate for IBO profit. That's unsustainable, and it doesn't matter precisely how the internal payments are structured. None of that changes the fundamental nature of the beast.

Look at a chain letter: If I mail out more copies of it than the guy above me, I theoretically could make more money than he does. But, so what? None of that stops it from being a lousy chain letter!


so why don't you try to go shut down walmart, starbucks, target, microsoft, etc. for their pyramid schemes? in reality, they are MUCH more like one than we are.

You have no idea what a pyramid scheme actually is, do you, and what makes it different from legitimate businesses? I don't know whether to pity you or scorn you, given your magnificent hubris.

Yes, last time I bought from McDonalds, they put far more effort into trying to sell me on becoming a franchisee than buying their products, with no concern at all for how many franchisees there were already in my area. So did Target. So did Microsoft.

Oh, wait, they didn't.

Yes, I can see what "pyramid schemes" they are, when compared to Quixtar. McDonald's strictly limits the number of franchisees per area. Walmart is limited to only ONE entity (itself). Yet Quixtar tells you you'll make more money by endlessly signing up an unlimited number of franchisees than by selling products to an external customer (which the other examples you gave do).

I can totally see how right you are. Sure put me in my place! Pardon me while I bow to your brilliance.


And who's trying to shut down Quixtar?

I'm just trying to do my part to inform people about the nature of the beast, to make sure that thoughtful, ethical people, who want to do the right thing and would change their mind if they had all the data, have that chance -- leaving only the kind of people who can't possibly consider they might be wrong.

It's still sad to see such people hurt themselves -- pride is a killer -- but at least it's their own choice, a self-inflicted wound, made in spite others' attempt to fill in the surely-unthinkable gaps in their knowlege. But I'll still hope for better for their would-be victims.

It's up to you to sort out which kind you are.

Posted by: Tim (Random Observations) on May 29, 2005 06:43 PM

wow... it's like those people who maintain the world is flat decided to take up a new hobby. if these poor souls cannot see the cliff they aren't just walking toward, but have already fallen off of... well, perhaps prayer would be more effective than blogging. it's hard to believe that the fundamental flaws which are so obvious to any openminded person can be so deliberately ignored due to sheer stubborness and pride. the fact is, these quixtar people CREATE NOTHING!!!! THEY CONTRIBUTE NOTHING TO THE ECONOMY AND ENCOURAGE MORE POEPLE TO DO THE SAME. an civil engineer builds a bridge for people to commute on, an architecht builds buildings to house people, a farmer grows food to feed people, a police officer patrols the streets to keep us safe, a firefighter puts out fires and rescues those in need, a doctor helps people who are sick, a teacher teaches others something new and fulfilling, a chef cooks food for those of us who go to resturants, an auto machanic fixes our vehicles when they breakdown, a janitor cleans our facilities and puts things back in order, a landscaper keeps up the appearance of our yards and public parks....

what does a quixtar IBO produce? nothing. they simply peddle a flawed business model to unsuspecting, often down-and-out people who only want to live a better life.

to those of you diehard quixtar defenders, seriously take a step back an look at the big picture. and i mean the BIG picture...
when u are on your death bed and look back upon your life, is quixtar IBO what you are going to want to see?

please, do something more worthwhile with your lives than support this corrupted hillbilly wal-mart wannabe pyramid scheme.

ask yourselves this: how much shit have you purchased while doing quixtar? how much coaching and training material have u spent your hard earned money on? you do realize that the head hanchos at quixtar make the majority of their money off these training manuals and audio tapes. even they don't make money off the actual products!!!!

MY GOD PEOPLE!!! WHAT DON'T YOU SEE HERE?

best,
mike

p.s. i am a police officer in boulder colorado with a degree in political science from the university of colorado.

Posted by: mike on September 13, 2005 06:47 AM

I have a meeting scheduled this friday to speak with a "platinum" IBO about joining. I really just want to sign up for discounts on what they sell. She seems very sincere, and told me that there had been abuses in the system that her and her husband were determined to steer clear of. From what I gathered, she was concerned about members exploitning their spiritual beliefs to promote the business. She is a christian, but only mentioned this after it came up in the conversation. One thing that really bothers me is some quixtar people I know who quit attending services at my church because their "business" took them out of town so much--I now think that this was due to the meetings they attended. They used to be in leadership at my church, but after quixtar, I never saw them again. I was going to sign up with them once-- my friend was very attractive, and she showed up at a quixtar meeting they had invited me and my husband to attend. She showed up with a very attractive prospect who hung on her through the entire meeting, looking at her legs, and drooling-- it was disgusting. Her husband was all into the presentation, and completely oblivious to it all. I had a very nice non-confrontational talk with her about being careful to keep friendships with men from looking wrong, being wrong-- anyway, I was to sign up the next day, but after holding her accountable, I never heard from her again. The reason I mention all of this, is because the women who's number I got from the 800 quixtar number, the women who is coming over this friday, mentioned something about spiritual abuse and adultery that had happened to people in the group. Any information on this ? I'm guessing that maybe some key people fell int infidelity or something. I don't want to rub in this groups shortcomings during the meeting (every group has problems ) I just want to be informed. I love my husband alot, and I don't know if the business will require him to travel alot, away from home--I have 3 kids, 2 are babies, so travel is not something I could do alot of myself. one more thing--this lady who's coming over, when I asked her about my limitations as far as promoting quixtar, she mentioned the ethics of it, and said that some ibos had not been passing down bonuses to people and had to be called on it. She was very candid with me on the strenghts and weaknesses of the company-- she ought to be--I told her I was going to go all over the web before we have our first meeting! What questions should I be asking her

Posted by: Sue Melin on September 14, 2005 10:45 AM

^^^Think: Where does that rebate, and the payment to your upline, and his upline, etc. come from? The atmosphere? No, it is a necessary addition to the cost of the products you purchase. As is the "rebate" you receive back.
^^^^
First off I am not an IBO, I was researching for a friend that I thought might have been making a mistake. The business model seems fine. As far as where the money comes from, Ill have to explain that one to you.
Walmart began to make a huge profit, from cutting out 2 steps in the traditional exchange of products from manufacturing to the consumer. Able to offer slightly lower prices, and saving the rest as profitability. (are you with me so far). Advirtising is one the the largest operating costs in a business, as well as your store front, your employees, power for the store, land for your store to be built on (taxes, and or payments) not to mention inventory costs.
Online stores have a difficult time even though they cut out most of theses costs. Because they have trouble creating customer loyalty.
There are 3 things you need to make an online business work. content, commerce, and community.
online businesses do the first two great however, community remains elusive. companies like Bass Pro shop benefit a few ways by being carried by TEAM. Bass Pro shop pays TEAM to offer their products on the "portal" that everyone subscribes to and buys from. This payment can be comparable to add fees. We'll say a company has to spend 10million in advirtising to hit 200 thousand people on the site. Not all of these people will buy. Traditional advirtising is better associated with a traditional store. well say half buy. Thats 10 million spent on 100,000 people. Where as the 10 million they spend with TEAM will produce everyone that enters that portal is there with the intent to buy. well say 90% buy. This is a significantly higher return on investment for the company than with traditional adds. The rebates are kicked back to the IBOs from this initial advirtisement money. If you look at this section of the business its kind of like paying for a sams club membership. At sams club the price is not that much lower than at walmart, but you have to pay for the privlage of lower prices right? With this being said, to make money you need to sponsor people. Someone has already touched on saturation so I will not bother. It benefits Bass Pro Shop for someone to be sponsored, after all now they sell more product. It benefits TEAM to have more people sponsored, after all they make more money in carrier fees. And it benefits the IBO to sponsor someone because they get higher PV flowing through their section of the business than without that person. And it benefits the person being sponsored as well. They will now earn rebates on products they already buy from these stores, without having to travel to the stores. and they can shop in their underwear if they want to. They also have the advatage of being able to sponsor someone else to help their own PV and eventualy through the rebates "THE COMPANY" NOT THE IBOs PAY to the sponsors make some money. There is nothing immorat about it. I Personally know someone who has been in for 4 years, and they make enough he retired from being an electrician at 25 years old. and now only works 6 hours a week. And hardly ever gets up before 10. BTW what time to you get up for work?

I hope this helps you!

Posted by: kallan on October 2, 2005 03:50 PM

mostly because people usually find quixtar associated with "systems" that are trying to take advantage of people. They recruit you and leave you to hang on their own, instead of helping you. Wouldn't it be to the advantage of the upline to help you properly if they wanted to generate a passive income? I would think so .. If you properly train your downline to do exactly what you are doing the way you do it, and to help them do that with other people. don't you think they would have a better success rate? I don't advocate MLM nor do I dismiss it. If you dig deep enough in it there is something that will work. I think that most if MLM goes about what they do the wrong way. Your question is kind of like saying why do people run the other way when they hear "partylite" (the quixtar of candles). Because they recruit you and leave you on your own. The only difference is with partylite most people don't loose much money. However, the same pricipals apply.
Here is a workable MLM format.
1.) start a commerce site and contract with large chain stores looking to raise profits.
2.) Start shopping the site almost exclusively with a numbered system to keep track of volume.
3.) Rebate based on the volume you yourself spend
4.) also rebate on the volume of people you have directly sponsored and the volume of the people these people directly sponsor and on down this line.
5.) Recruit people to change their shopping habbits, charge the entry fee to their numbered account. Begin recieveing rebate checks when they eventually exceed this amount.
6.) Set up a system of learning with meeting from the best in the area, and a book on tape system. (BTW) who cares if the training materials make someone else profit if the system really does work right?
7.) give bonuses to each Pin level as they achieve a new level.

This system will force people to help their downline find the people they need. You will end up working more than a normal MLM, but you will also see a high success rate. eventually people begin to hear good things about the name, and don't run scared when being prospected. and there is potential for even more profit. Making it easier for people to begin to make money when they don't have to overcome the traditional objections to MLM. the only thing is MLM is to difficult to quality controll. Eventually someone wants something for nothing and stop helping their downline. the system begins to break down. The reputation changes and becomes in the mind of people "quixtar2" MLM by design is a flawed system. But if you work together enough it can be held together long enough for alot of people to make money, and if done right no one has to get hurt in the process.

Posted by: kallan on October 9, 2005 10:09 AM

so with all this debate over quixtar being "good" or "evil". Can anyone suggest any companies out there that DO work?...and why?

Posted by: damien on November 18, 2005 05:50 PM

I was an IBO for 5 months and during those 5 months, I remained a true IBO when in the company of other IBOs. In my free time (which wasn't much after showing the plan and cold contacting), I would try and calculate the actual amount of time I would take to make a lot of money. I didn't have the mind to question my upline about the basic flaws in the so called "plan" that used to be repeated 6 times a day. I wouldn't say there's no money in Quixtar - people have made money but then I believ, it wasn't ethical. New people weren't told the entire truth at joining time (of course they wudn't join if they knew the entire truth). I had placed quite a lot of trust in my upline and I found out the actual working of the system - not through his words but through my research and thinking. And trust me, you cannot blame any IBO if he/she is unwilling to listen to anything negative about Quixtar. I have actually fought with my parents, my fiancee and my cousins just for believing a couple of strangers I met on a train. But now, I am ready to eat my words - I am willing to testify that people are misled into this system. If money can hush up U'r conscience, this might be a good avenue - of course, even then, be ready for atleast 5-6 years of dedicated effort - no matter how much U lose during these years - hoping U will make up all that some time in the future. And this is one fact - no one can deny this - "A successful Quixtar IBO has to work harder than any body else". Working 10-15 hrs a week is b#!!$#!^. You have to put in 7-80 hrs a week. Showing the plan might take only 20 minutes. 12-15 plans is 4-5 hrs a week. But then travelling will take up a hell lot of time. You would be amazed/impressed/crazed to see IBOs driving from Boston to NJ (a 6 hrs drive) on a week day just to show the plan. Now that's the kind of belief they have in Quixtar. So don't even waste time trying to change the mind of an IBO - the only person that can do it- is himself. Leave it to them - if they succeed (the percentage of which is extremely minimal but definitely not 0) well and good, else, too bad that they didn't try and listen to other experienced ex-IBOs.

Posted by: Sandy on February 14, 2006 05:42 PM

Tim

I think you missed Robb's point. He stated that he doesn't spend any extra money. Yes, he is probably not going out as much, diverting his food budget for outings into his food budget from Quixtar. I know that is what I was taught.

As a matter of fact, I have been "in" for five years, and the money I spent on my own products was completely funded by my business.

Here's the kicker for you: I have less than 20 people in my organization "downline" from me, and they don't purchase insane amounts of volume!
My point is it works. Yes, there is an initial investment, and a loss of money, just like with any business.

I like how you said that there is no competition for the Amway product line, too. Fact is, if you look through the partner stores, you can purchase laundry soap, energy drinks, ect that are NOT Amway products. The reason I don't buy them is because their point value is a lot lower...

One more point on pricing:

I used Tide before I became an IBO, and was told that SA8 was better quality. Who cares? I save money by purchasing and using SA8, and here are the numbers to prove it!
A box of Tide lasts me 3 months and averages about $5 per box.
A box of SA8 lasts me 18 months and costs about $23 retail.
If I continued to use Tide, I would spend $30, which is a savings of $7. That's over 18 months, though, and everyone I have heard complain about pricing only looked at the upfront cost, not how much it costs per usage or how long does the box last...
Heard someone say that the energy drink was overpriced too. Problem is that Quixtar named Red Bull as XS's competitor, and therefore it is priced the same. The only time that I've seen Red Bull lower priced is when it was on sale, and thanks to my wholesale license, I was able to MATCH their price!

Posted by: Creylish on February 20, 2006 03:14 PM

Creylish,

Kudos for you for making a sensible, polite counter-argument.


I think you missed Robb's point. He stated that he doesn't spend any extra money. Yes, he is probably not going out as much, diverting his food budget for outings into his food budget from Quixtar.

As I re-read my response, it seems I acknowledged his point, and made a counter-point, which you don't seem to have acknowledged: whether the same amount of money is being spent, he is undoubtedly getting less value for his investment.

Look, let's say I stop going out for dinner for $15 a meal in the evenings, and instead just ate two $6 powerbars. I would be "saving money" right? But my point to robb (and other readers, like yourself) was that absolute amounts of money being spent aren't the measure of success -- instead look at value received for each dollar spent, and return on each unit of time and money "invested" compared to other opportunities.


As a matter of fact, I have been "in" for five years, and the money I spent on my own products was completely funded by my business.

Huh? This sounds meaningless, since the alleged "business" is simply buying products and convincing others to do so. The "funding" would need to include paying yourself for your time at a competitive rate (for example, compared to $10-$12 hour at WalMart) and covering all expenses such as trips, gas, tapes, etc.

So are you claiming you've always been in the black when all these expenses are considered, based just on the amount of money you allege saved by purchasing Quixtar products?

I'd love to see some honest details!


Here's the kicker for you: I have less than 20 people in my organization "downline" from me, and they don't purchase insane amounts of volume!

I'm not sure why this is supposed to be a "kicker" of some kind. You seem to just be saying you won't make much because you have a low point value. Pardon me while I faint in astonishment. ;-)

Look, I could care less if someone got into Quixtar simply because they loved the products, and just preferred them to whatever is available otherwise. That arrangement has zero downlines, and even lower volume than you're suggesting.

My issue is with "the plan", in which people think they're going to make money by signing up other people, and don't accurate count their expenses -- and thus fail to see they're often actually doing a lot of work, and sometimes buying inferior products, to lose money.


My point is it works.

I keep hearing this, but I'm yet to see evidence for the argument. Particularly, what do you mean by "works"? My definition is very simple: a business opportunity "works" for the average participant when he or she makes as much, or more, than they would in a competing opportunity.

Judging by this standard, and using even a very low-profit alternate opportunity such as McDonald's as a comparison, Quixtar definitely does not work, as their own stats indicate the average IBOs makes a tiny fraction of minimum wage -- and, worse, anecdotal evidence indicates most long-term IBOs come out with losses.

If you have an arrangement which does better than this, again, I'd like to hear the details.


I like how you said that there is no competition for the Amway product line, too. Fact is, if you look through the partner stores, you can purchase laundry soap, energy drinks, ect [sic] that are NOT Amway products. The reason I don't buy them is because their point value is a lot lower...

Right. They are thus made artificially more expensive in order to give Amway products an advantage. That's not what we'd normally call "competition", any more than a fight rigged by administering drugs to one boxer. You're showing your economic naivete here.

And you just admitted that buy based on this "rigging", not necessarily on which brand of product you'd otherwise prefer, if a penalty did not exist. So you make my point, not contradict it.


A box of Tide lasts me 3 months and averages about $5 per box.
A box of SA8 lasts me 18 months and costs about $23 retail.

And how much for shipping? The two costs you're mentioning are already mighty close -- only saving $7 every eighteen months, or less than 40 cents a month. Shipping probably cuts further into that, or might even push it over.

Hey, there are clearly cases where Quixtar products are just fine, or a reasonable trade-offs. (Many people say the simply love XS energy drink, for example. If you like it, then that's a pretty good justification.)

But my point is not that such exceptions don't exist, but rather that overall you MUST pay more because you have to cover (a) an inefficient shipping/distribution system, (b) your upline payments, and (c) IBOs always forget to factor in the time they invest in Quixtar, and it's worth per hour at market rates, in the true cost of their "business" and products.

IBOs don't rebut these points when I make them. They simply change the topic. (Would you like to prove yourself an exception? Be my guest!)

Minor, non-critical point about this specific example: I tend to get more out of a box of Tide (or a generic equivalent) than most people, for a simple reason utilized also by Quixtar: most people, following the instructions, put about 3-6 times as much detergent in as they'll need to clean their clothes. So my own numbers would come out much more strongly in favor of supermarket Tide.

By the same token, I could repackage Tide and sell it exactly as Quixtar sells SA8: Just up the price 25% and tell people to use half or a third as much, and I'd make a killing. Quixtar pretty much does the same thing.

But again, the point isn't whether you can find one or two positive examples: the point is the overall picture. The classic problem IBOs seem to exhibit is that they don't look at the whole picture -- including overall pricing, not just their one favorite example -- and including their time. Again, you don't seem to be providing any evidence to the contrary.

Until you wish to tell me how much you're spending on the total shopping bill, and getting what for it, and how much time you're spending on this, and how much you're "making" back, then all these little examples are interesting, but they don't add up to a picture of someone making a healthy profit. Just a bunch of unconnected stories about products someone kind of likes, or how he don't spend too much more on (or slightly less) Quixtar products, and a backhanded admission that Quixtar pretty much stomps out competition by rigging the game.

That's hardly the stuff of a robust business success story. It's more like the scattered arguments of someone who isn't doing good accouting.

And thats, sadly, not terribly uncommon among IBOs. Love to see evidence to the contrary, Creylish.

Best to you regardless... - Tim

Posted by: Tim (Random Observations) on February 27, 2006 11:25 PM

Thanks for the kudos, and the lengthy post. :-) I am going to attempt to answer our point(s), but forgive me if I miss a couple. Restate them, and I will continue to assist.

I went through 16 products, and had to adjust both sides of the savings to be sure my numbers were accurate. If I purchased those products at FULL Quixtar RETAIL prices, I save $59.52, which would more than pay for a wholesale license, and would increase my savings. At the full retail price, I do not pay shipping, nor do I ask my retail customers to pay that, either.

As for comparing the Quixtar business with McDonald's... It depends on if you are saying a steady employee or business owner of the store. That would make a big difference, and would need to be considered. If I were the McD's employee, then I come and go on my scheduled shifts (sometimes), and get paid a check every two weeks at close to minimum wage. That counted in the same field as a "business" of any type I feel is rediculous. As the owner, the first thing is the cost for their teaching. Aproximately one million dollars, and the time that you have to spend in their classes learning how to do everything from mop the floors to ordering more french fries. I have read recently that you can earn $24,000 per month from a successful McD's franchise. If you have better numbers, point me to them. That's over fourty-one months just to pay off the initial cost. On top of that, the gentleman who owns three franchises in our area says he spends over 80 hours a week working...

I call adding point value to a product as competition. If Tide offered the same points as SA8, I would still go with SA8 because I like the product. If Tide offered twice the points, then I would have to consider changing my purchase...

As for my company being in the black. This year. Not before. What I was saying above (maybe used the wrong words), is that since late 2003, I have not used money from my job income to purchase the highest pv Quixtar products. Clearing the second month in 2006 now, the business is clearing a mighty profit of $2.84 (after expenses for a training class out of town).

As for my time... I don't count much of it because it's occuring while I am doing something else! Just like I don't count my work hours while driving to and from work... On that note, I spend about an hour, maybe two, per week supplying my retail clients with their products, and last month I interviewed about twelve people for my team (about twenty minutes each). So I spent a little over four hours last month. Hardly what I could consider a major investment. Especially when all I missed out on was sitting around getting brainwashed by my TV, allowing the comercial writers to rig the game on their products...

I also have never heard of "upline payments" and would like further elaboration.

Posted by: creylish on March 2, 2006 03:55 PM

There are many cynical people in this world who work toward squashing others dreams. As we travel through life we have to focus on ourselves and try to do the best that we can to help others.
Now if you really take an insightful look at what the world of quixtar is doing you would have to agree that it has changed people's lives for the better. Not only has it created millions for had working people, It has helped many people outside of the organization. There is no denieghing that these people really do care about others and want to help them suceed and change their lives for the better.
I have known several people that were sucessful at this venture. They are people of integrity. As I have watched my friends in the business become more and more sucessful I am sure that I wa foolish to not get involved. I would rather have worked hard and happy and free them to be at the dead end job that I have now. It seems to me that all of there work has paid off. To tell you the truth, I am mad at myself for not following them to freedom.
My friends just recently went on a trip to Hawaii that was all expense paid, While just three years ago they were barely able to pay there bills. I want that kind of sucess. I want people to look up to me the way that people look up to them. People work hard all of there lives and they never have the same sucess that my friends have now. Tell me why it is not worth the time and effort for three short years? I was fearful three years ago when they approached me. I did not believe in them or myself, but now I realize that I could be going on free vacations and have a family if I had just followed them when they first offered it to me.
So, please quite squashing peoples dreams! If I had not listened to the horror stories of poeple like you I could have everything that I ever wanted right now. I guess we live and learn from our experiences. And if you were coureous, I am going to join my friends, now that I have seen them make something out of themselves I am going to do the same.

Posted by: Bee Bee on March 2, 2006 04:51 PM

Normally, I tend to delete posts which fail to respond to ANY of the points raised in the article as a violation of the comment rules: For example "Bee Bee"'s horribly mispelled post. Especially in cases where the person also makes wild claims (the trip, I'll get to that in a minute), personal attacks (BB's opponents are cynical people who WANT to hurt people), and fail to leave ANY evidence for their claims -- not even an e-mail address.

This is, after all, not a forum for posting all the same old tired claims for Quixtar repeatedly: "It makes millions! You'll be rich!"

But every once in a while it's nice to let one through, to point out to people what's going on here.

First, we are presumably to believe that Bee Bee's friends just got an "all expenses paid" trip to Hawaii. Really? I thought they were making millions now! Why would you buy a trip for someone who's already a millionaire???

And surely BB wouldn't mind leaving the *name* of this real-life success story, right? Surely, they get up in front of Quixtar IBOs each week to talk about their tremendous wealth, right? Why wouldn't they want to go public with this story?

But, heh, BB won't even leave his or her OWN contact info!

Also, let's just pretend, for the sake of argument, that this couple DID become incredibly wealthy through Quixtar in just three years. I've never heard of even one single documented case of that, but hey, we'll be charitable.

So, um, how did they do it? Well, about half the active IBOs in Quixtar drop out each year. Over three years, that means 7/8ths of the IBOs they'd signed up would have dropped out after having put in a lot of time and effort: over a year on average.

Each of those would have lost quite a bit of money. So these people would be ROLLING in it, after only three years, and having lost 7/8ths of their IBOS? I have a friend who's been in it like five years now, and has signed up over 500 downlines. She's still working a crappy job.

So I assume these people would then have had to sign up at least 10 times as many: maybe 5000 downlines -- in three years. That's like, um, 5 downlines a day, but hey, we're being REALLY charitable here.

So, um this couple would have created something like 4,400 losers in order to get their little vacation. Yeah -- that's really ethical.

Look, "Bee Bee" -- there is a difference between "dreams" and "Quixtar". You seem to argue that materialistic "dreams" -- e.g. a desire for an expensive sports car, or a summer home or whatever -- are the same as Quixtar. That they are IMPOSSIBLE outside Quixtar, so if you oppose Quixtar, you oppose whatever financial goals people might have.

Well, that's a lie plain and simple. I oppose Quixtar because the stats are plain and simple: People aren't going to improve their lot in life using a scam which pays only $115 a month on average. I tell you the truth: I oppose it, in all honesty, because I believe the average person will have a MUCH GREATER chance of improving their income if they DON'T get involved in a "system" which pays back less than minimum wage, on average.

How can you, in good conscience, argue otherwise? Don't YOU want people to do what will pay them, on average, the most for their efforts? Then why are you trying to lead them into something which has such a terrible average return???

And yes, there are some nice and well-meaning people in Quixtar. I believe many of them don't understand, though. Some eventually figure out what's going on and go public in forums like this to warn people. You would do well to heed their warnings: they do it because they CARE for you and others, not because, as you keep insisting, because they want to HURT you. Quite the opposite.

I'm not being cynical, my friend, you are. "Dreams" are not simply material goods -- the kinds of "dreams" God wants us to have can't be bought with money -- listen to Jesus when he says:

"[S]tore up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also." (Matt 6:20-21)

Quixtar's tripe about "dreams" actively tries to undermine Jesus, by programming people to put their HEARTS on things down here -- and then cynically tell them that's only possible if keep buying, buying, buying more Quixtar goods!

Nor can income ONLY be made through Quixtar -- as you imply, when you argue that opposing Quixtar is the same as opposing these materalistic "dreams" you want people to have. I believe it's possible to oppose Quixtar out of good motives, where you can only see bad ones.

And I'm not so cynical as to pretend it's okay to go to Hawaii for free if you have to create 7 out of 8 failures to do it! Nor that it's fine to make outlandish claims without providing even the tiniest shred of evidence for them! Nor that anyone who disagrees with you, or warns them about your business is trying to hurt others!

How can you be so blatantly unethical??? I just don't understand. Doesn't this bother you conscience to act this way?

Readers: Is this how you want to end up? Spinning tall tales (with glaring inconsistences) on some stranger's blog in order to defend your career choice? Trying to teach people to disobey Jesus regarding where your heart should be? Saying everyone who disagrees with you has bad motives and wants to hurt people???

Posted by: Tim (Random Observations) on March 3, 2006 12:38 AM

The term to describe saturation in MLM is Psychological Saturation - I did the numbers years ago where I live and quit and 15 years later the business has remained in a state of no growth. Assume a market of 100,000. Take out the children and those over 55, you are down to about 40,000 people. Now most people build it a a couple, so divide in 2 to 20,000. Then based on long experience, at best 1 in 20 will join, we are down to 10,000. Now again 1 in 20 really have what it takes to build any sort of group and you are down to 500 people. It take about 200+ to go direct and 1000 + to feel secure.

So in a town of 100,000 we have room for 2 - 3 directs who make a basic wage. The real problem for the 500 active people who keep hitting the same small group of 18-55 active motivated people over an over - they quickly feel that even though 95,000 are not in yet the small target market is saturated so the lose heart - rightly so. Now the next town is exzctly the same and so on. 15 year ago I was told there would be hundreds of Diamonds coming out of my region - we have had none and the number of directs is the same as 15 years ago.

In the meantime all that has been achieved is to make thousands of people dissatisfied with their lives and left with the pain of broken dreams and wasted time with their families. It all cost me a year of wasted evenings and about $4,000 in travel and quite a lot of mental pain. Thankfully I was young with no kids - many other missed 2 to 3 years with their families in the incredibly time consuming chase to find and keep people. Remember your time is multiplied just like the money supposedly is - if you are a good leader hundreds of people become dependent on you - that is not freedom is binds you in chains.

Posted by: c wood on March 18, 2006 07:59 PM

Realburg goes nationwide: Forgive me if this is a repeat of someone else's post. I copied and pasted from Excel, so I hope it displays reasonably well in this text box.

Below is a little math I did after another meeting with the IBO who got us involved - "Shawn." He mentioned 80 downlines would get him to a certain level - I forget which. This is a 7900% growth rate.

He claimed the 7900% growth rate required for X level of success would not ever catch up to the 1% per year population growth in the U.S.

He also mentioned he gives the presentation 20 times per month and successfully recruits 4 a month. So it takes him longer than a year to get there. Therefore, the first set below is just interesting. I doubt each IBO gets so many as 80 per year. Or that all ensuing recruits become productive.


296,410,404 U.S. pop in 2005, according to U.S. Census Bureau. If 20% of these (based on Shawn's success rate) will ultimately say yes to Q, then:

59282080.8 people will say yes to Quixtar

Each figure on left equals number above it minus the number of people who said yes in that year and so are no longer in the pool of available IBO recruits.

59282000.8 80 1 year
59275600.8 6400 2 years Those 80 people each get 80 more
58763600.8 512000 3 years Those 6400 people each get 80 more
17803600.8 40960000 4 years Those 512,000 people each get 80 more
-3258996399 3276800000 5th year Those 41 million people run completely out of potential IBOs in less than 5 years. How long has Quixtar been around? 1999: 7 years?

But it didn't start with 1 person, probably, since a lot of Amway folks transferred over.

Say it started with 200 people - an underestimate I feel sure. And say they are not so successful as 80 people per year. Say they can do a dismal 1 person per year.

59282080.8 people will say yes
59281880.8 200
59281480.8 400 1 year
59280680.8 800 2 years
59279080.8 1600 3 years
59275880.8 3200 4 years
59269480.8 6400 5 years
59256680.8 12800 6 years
59231080.8 25600 7 years
59179880.8 51200 8
59077480.8 102400 9
58872680.8 204800 10
58463080.8 409600 11
57643880.8 819200 12
56005480.8 1638400 13
52728680.8 3276800 14
46175080.8 6553600 15
33067880.8 13107200 16
6853480.8 26214400 17
-45575319.2 52428800 18th year

Will IBO recruiters be recommending that each new person only get one person per year, to make this last for 18 years?


What happens if most people are lazy but some try very hard? Perhaps only one out of 100 IBOs is as dedicated as Shawn and gets 48 per year, two more out of that 100 get 20 each. Seventeen more get 10 each. Including the original 100, then the number of IBOs is 358% (or a 258% growth rate) of the previous year's number. Yet only 20% of IBOs are doing anything at all.

59282080.8 people will say yes
59281880.8 200
59281164.8 716 1 year
59278601.52 2563.28 2 years
59269424.98 9176.5424 3 years
59236572.96 32852.02179 4 years
59118962.72 117610.238 5 years
58697918.07 421044.6521 6 years
57190578.21 1507339.855 7 years You are here
51794301.53 5396276.679 8
32475631.02 19318670.51 9
-30116861.44 62592492.46 10 Less than 10 years it goes bust


281,421,906 U.S. Population in 2000
296,410,404 U.S. Population in 2005
14,988,498 difference
5.33% population growth over 5 years - about 1% per year, which I admit I did not include in my calculations above, it being so small compared to a 258% growth rate.

Posted by: Jo on July 22, 2006 09:09 PM

Thanks Tim. :-)

Joe: true, one could imagine factors that would make this break down sooner.

Possible it is happening already. See $28 million decrease in IBO bonuses between 2004 and 2005:

(2004)
http://www.quixtarnewsroom.com/quixtar_sales_records.html

(2005)
http://quixtarnewsroom.com/2005_annual_sales.html

Interesting, since most sales are made to a population of IBOs which, if IBOs were seeing any financial success, should be growing exponentially.

Fiscal year ends August 31st. Should be interesting to see what figures come out for 2006. Maybe it was a temporary result of economic downturn. All the rapidly multiplying IBOs were tightening their belts down to a couple of inches. Were we having a downturn in '04-'05? (One we weren't having in '03-'04?) I thought things were generally looking up in the U.S. economic picture.

Incidentally, www.ThisBizNow.com reveals the number of IBOs who received bonuses in 2005. It does no such thing for 2004. I called the PR department to ask, just out of curiosity, and found that this is not a figure they "normally track and release." I'm pretty sure the accountants know exactly whom they've been sending checks to, but, alas, an IBO (which I was when I called) may not share in this knowledge. Anyway, they wouldn't tell me.

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