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Defending Quixtar, Selling Quixtar

A while ago a friend approached me with a "business opportunity", which ended up being that she wanted me to sign up to buy all my consumer goods from a company called "Quixtar". Somehow, I was going to become rich through this by paying slightly more, on average, for the products, siphoning off that difference to give to people "above" me in the signup-chain, and then doing the same to many more people.

Once I understood this was the basic structure, and indeed it is, it was easy to see that the business was unethical: The payments have a basic pyramid or matrix structure, and there are only so many people to sign up -- each person you signed up had it harder than you (and so on down the line) and someone must be stuck holding the hot potato of an unprofitable situation. All that violates the "do unto others" rule.

So I posted my experiences and observations, and incurred a lot of traffic an interest. And a few interesting debates have occurred.

I've noticed a pattern the behavior and responses of Quixtar's defenders. Sadly, these are probably arguments which could be used to sell any less-than-helpful arrangement.

So I think I'll mention them for two reasons: (a) If you are a sucker for arguments like these, perhaps a few words might help you see what's wrong with them. (b) If you would never fall for such arguments, you can laugh at how silly the logic they use is.

Pick yer poison...


"If Quixtar is so bad, how come nobody has sued them? How come the BBB doesn't put them out of business?"

Look, there's a difference between an unprofitable business opportunity and crime. There's also a difference between between what is illegal and what is merely immoral or unethical. Nobody is claiming Quixtar is illegal. Its critics merely aruge:

(a) On average, you'd typically do better, financially, to work a minimum wage job and donate most of it to charity. I mean, good heavens, $88/month average. C'mon folks.

(b) The pyramidal or matrix structure of payments is unethical.

True, Quixtar isn't illegal in the US. But it is in most other countries. That should give people pause.

Consider gambling. It's, sadly, not currently illegal. But that doesn't mean I somehow have to prove that casinos are being sued in order to show it's not a great investment. You're asking for a different criteria.

And the problem isn't primarily "Quixtar" per se anyway, though it's complicit. The main problem focused around the surrounding support companies. Who, incidentally, do get sued quite frequently. So I'd guess even if we thought not being sued was the ultimate test of a good business opportunity for you, Quixtar would still fail that. Badly.


"If Quixtar is so bad, why did X become their lawyer/director/whatever? If Quixtar is so bad, why did Y rate it as a profitable company?"

When you "sign up" for Quixtar, you're not getting stock in the company. You're not gaining a seat on their board of directors. You're not becoming their employee. You're becoming their customer, their consumer, their client, part of the fuel they consume, their next little cash cow.

It's sad so many can't see this situation, and defend it admantly. Probably because they're complicit in doing it to another, or just haven't realized how it all works yet.

At any rate, using the casio anology again, it's like asking someone to play craps because the guys who own the casino make a lot of money. Of course they do. But that's got nothing to do with the wisdom of becoming their next customer. The customer is not part of the casino. Likewise, Quixtar IBOs don't hold stock in the company -- their profits will remain tiny, or nonexistant, until they work to sign up a huge number of new Quixtar customers. But meanwhile Quixtar will be making great profits -- from them, if not also their new downlines -- whether they profit or not!


"Ask those Quixtar critics to show you their tax returns!"

Here's a group of people who want to sign you up for an allegedly profitable opportunity. Under such a situation, the burden is on them to show the average profit per participant, and back up implications that the people talking to you are raking it in. Yet, in my experience, they're very secretive about actual amounts and profits, and often overstate by not showing you the whole picture (they'll wave a check in front of you, but not say how much of it they have to turn around and pay out to people under them).

So they distract the future mark by demanding any critics of Quixtar show you all their financial information, and prove they are rich or profitable! Again, this is something Quixtar folks themselves -- people they allegedly want you to become -- won't do, in my experience! It would be funny if it weren't tragic.

The truth is that my income level, or the next guy's, has nothing to do with whether Quixtar is profitable. If you're trying to determine that, it is the average IBO's income you should be seeking.


"Our critics are losers!"

This is code for: "We can't actually answer or refute their arguments, so we're reduced to attacking them personally."

The weaker their case, the stronger the personal attack. And, if you examine the posts to this blog from those who sell Quixtar, you'll discover the vast majority attack their critics personally, rather than answer the questions being raised.

Sometimes, the purported motivation is jealousy: "Don't ask people around you if you should do Quixtar! They are jealous losers who don't want you to rise above the herd!"

Oh good heavens. If your friends were that negative you should have noticed it and dealt with the situation a long time before some Quixtar IBO pointed it out.

In reality, this is a very weak argument: If people were so jealous of others succeeding, they'd argue against every potential high-profit opportunity. They'd tell you not to go to dental school, or not to train in real estate; they'd try to stop you from getting that law degree, or urge you endlessly not to accept that inhertance from your rich aunt.

And that last point exposes the truth: In general, friends would rather have you be rich than poor. If they're lousy friends, they'd rather sponge off you. If they're good friends, they would rejoice with you in your good fortune.

An argument can be true regardless of who repeats it. The person behind the argument only becomes an issue when the argument is false, or when the person behind is being hypocritical by using it. (Such as with the previous argument.)

Also along these lines...


"This critic isn't an expert on helping you make a part-time income!"

Sure, but neither is the Quixtar IBO making the argument. An expert on such a matter would know about all the available opportunities -- not just one -- and be able to tell you what would match your skills, rather than giving you a one-size-fits-all kind of story, and only one possible opportunity. They would be able to tell you what was most likely to give you a high return for your investment -- not be afraid to admit the facts to you.

Looking to a Quixtar IBO as a guide to help you choose a part-time earning opportunity is a bit like looking to a luxury car salesman for retirement investment advice. He or she will more likely tell you what's in their best interest, not yours.

As far as I can see, most Quixtar critics don't have any profit motive at all for their advice. Some just want you to avoid their mistakes. The same cannot be said of the purported "expert advice" being offered by your friendly neighborhood Quixtar IBO.


"Look! X profited from Quixtar!"

Indeed, and Y won the lottery. And Z actually made a profit in Vegas. But those are the exceptions, not the rule.

The question isn't whether some people can win. The question is whether the business is ethical, and what your expected return will be. Further down this page is a table which indicates the odds of an IBO making even $65k/yr is a paltry 1 in 1,810! You can do much better selling real estate or cars, I'd suspect.

Call me a cynic, but I'm not convinced that one success story justifies the other 1,809 people who operated at a net loss or made a lot less in order to let that one person quit his or her day job.


"You'll never get ahead at work!"

You're not a loser because your boss earns more than you do. Unless you plan to be the richest man in the world, you'll always be a "loser" by this misleading criteria.

Many people do make a good living in the normal work world. Drive around and look at all the subdivisions and cars! True, companies may not take care of you well in your retirement -- but that doesn't mean that this other opportunity will either!

Don't fall for arguments based on envy or greed. Ask yourself honestly how your income is doing, and if you want to improve it, consider a wide variety of opportunities; consider how much you're likely to earn from each for each hour you invest.


"Quixtar is a win/win situation!"

No, it isn't. Each IBO has to sign up many "downlines" before their investement in product consumption, business meeting and event attendence, and marketing time is paid for at a reasonable wage. And, since the population doesn't grow faster than this "fan-out" process, it means each IBO has it harder than the one who signed him up. Eventually, someone gets stuck with a very bad situation where the pool of available participants is exhausted.

In essence, everyone is competing to sign up as many downlines as they can out of an ever-shrinking pool of possible participants. If you work twice as hard and sign up twelve people, those twelve come at the expense of another IBO who might later ask them. Since population growth is slow, it means that the pool of available IBOs is basicly static, overall, which means that one IBO profits only at another IBO's loss.

That's not a win/win situation, instead it's a zero-sum game.

But most of you knew that already.


"If it's so bad, how come more haven't been hurt?"

Sometimes this devolves into a challege to sue, or demands for negative information from the BBB. But again, consider gambling: Most gamblers lose money. If they didn't, the casinos wouldn't be so opulent and rich! Yet the BBB doesn't warn people against gambling. And people don't sue casinos. And most people don't take out ads publicly announcing when they've lost their shirt.

The reasons for this are simple, and should be nearly obvious: What casinos do is legal. Thus the BBB or lawsuits have no bearing. And most people don't like to admit it when they've been suckered. The same are both true of Quixtar and it's tangential companies. But a few ethical souls out there will speak up, and be called -- by the Quixtar-pushers -- losers.

So we have this two-faced approach. When the "losers" speak up, they're called losers and belittled. Other people are told not to listen to the experiences of the "losers" -- presumably on the smug, conceited assertion unless they were also a "loser" it wasn't going to happen to them. Then, the same group of people who just did the mocking will facetiously ask: "If this is so bad, how come we're not hearing from the losers!?!"

They certainly don't want to hear from the losers. And they perpetuallytell each IBO or prospect not to even talk to such losers, to avoid "negativity."

But the best way to be a winner, in my experience, is to learn from the mistakes of all the other "losers" who are willing to share their experiences with you -- not to avoid any contact with them. It's called "learning from other people's mistakes," and it's a good idea indeed.


Closing notes on free speech

Discussing what's wrong with Quixtar causes the potential pool of IBOs to shrink. To an existing IBO, or someone otherwise allied with Quixtar, this is anethma, since it eventually decreases their expected profit.

But, when you're outside Quixtar and view it as a trap for the unwary or uninformed, this is a good thing: It means more people won't have to learn the hard way, and can redirect their energies to other opportunities more likely to profit them and help them.

For this reason, information and free discussion is to Quixtar what salt is to a snail or light to a vampire. So it's no suprise there are lots of lawsuits and threats against those who publish such information.

The very fact that Quixtar and allies fear discussion so much should indicate, using Christian terms, that these are people of the "darkness", who want their deeds to be hidden, not exposed, and not people of the "light".

Comments

When was the last time you got a $2500 check from Wal-Mart just for shopping there? When was the last time the company you work for took you to a private island just for talking to people? Hmmm, sounds like a lot of you have a quitters attitude! Well, I'm glad I'm free

Posted by: avalancher34 on September 6, 2004 11:57 PM

Hi Tim,
I just read through the whole argument you put forward and I must say that I am a bit confused. I seems as thought you have just managed to do what I have tried to do unsucessfully for ages. That is to show up capitalism for what it really is. The scheme you described sounds much like the average corporation to me.

What I'm still unable to find is a real explantion of how the Quixtar system is really set up any why it is that an average person can not use this system to advance and make money.

Another thing what is ethical about selling cheap products made in third world counties by children, and making huge profits.

What do you figure the overall percentage of persons making 65K or over per annum, in most businesses across America?

Posted by: on October 19, 2004 06:43 PM

Tim,

Do you think the average monthly bonus check means much? There are IBOs who have been putting 20 hours a week and there are IBOs who spends 1 hour per week, and there are so many IBOs who are just consumer.

Do you think they should get all paid in equal?
There are almost 3 million IBOs in North America, and only 10s of thousands are actively building business.

I hope you don't think that Ph.D gets same salary as the people with high school degree. Do you agree?

You are saying it is illegal in most countries. But, this business is now being operated in 57 countries (mostly developed including EU, Japan, Hong Kong, China, South Korea, Austrailia, Canada, etc.). Do you still say it is illegal?

Tax Return? Every IBOs get 1099-MISC form at the end of the year stating all the income IBOs made for the fiscal year. It is being reported to IRS. Quixtar pays bonus check to individuals, not people do it as you mentioned. So, your comment is not true on this one.

Do you get cash back when you go to Wal-mart? There are so many IBOs who joined just because they like products and get some cash back.


Regarding the lawsuit, have you seen any company that has not been sued? Tell me if you know any big company doesn't have.

Posted by: on April 26, 2005 11:16 AM

There are IBOs who have been putting 20 hours a week and there are IBOs who spends 1 hour per week... Do you think they should get all paid in equal?

No. In general, I think people should not pursue this kind of business, where the main appeal is focused on wealth redistribution, not production. I think you either end up a loser or making many others a loser. I view that as unethical.

In general, I have no problem with people being paid differently for doing different amounts or types of work.


I hope you don't think that Ph.D gets same salary as the people with high school degree.

No, you're right: Sometimes the person with the high school diploma makes much more.


Do you still say it is illegal?

Given that there are 193 countries in the world, 57 is not a large fraction. Certainly many countries seem to have allowed more laxity in the laws which formerly prohibited schemes like Quixtar.

As I have not taken time to study the legal situation recently -- and why there is no Quixtar in those remaining 136 countries -- I would refrain from commenting either way -- other than to simply point out that legality is not a core issue, but ethics and profitability should be.


Tax Return? Every IBOs get 1099-MISC form at the end of the year stating all the income IBOs made for the fiscal year.

I'm not alleging that Quixtar is cheating the IRS. I'm saying that most IBOs who want people to sign up don't want to reveal how much they are making versus how much time they are putting in. Revealing one's tax returns is a common way of disclosing this information, frequently used by political figures.


Do you get cash back when you go to Wal-mart?

You seem to be the kind of person who thinks he "makes money" when the government issues him a tax refund. Money unspent in the first place is certainly money "made". Time saved is also a monetary savings, if you can get other work.

Quixtar IBOs typically have great trouble at looking and counting up at their true expenses.

Your question was already answered. Go read the first comment above, and my response to it. It's amazing: you all repeat the same questions, over, and over, sometimes almost word for word! -- without even looking to see if there's an answer to it.

Can't you even see when you're being brainwashed?


Regarding the lawsuit, have you seen any company that has not been sued?

IBOs are such robots. "Other companies have been sued!" So what? What has that got to do with anything?

Look, get it through your head: Just because a business is legal doesn't make it ethical (i.e. moral) or profitable. IBOs are programmed not to ask whether they're going to make money, or whether it's an ethical business model, and instead are programmed to keep mindlessly repeating that what they're doing is legal, or that other companies have been sued.

Look: I've never been sued. How bout I suggest that you take all your money and just send it to me. I promise you that, if I feel like it, I might send some back.

Great business proposition? Gonna do it? Why not? It's legal right? And I've never been sued, right?

Look: Try to get this. Your time is worth something. You're not -- as Quixtar would have you believe -- simply choosing between "trying" (Quixtar) and "not trying" (everything else), or "dreams" (Quixtar) and "no dreams" (everything else), or "security" (Quixtar) and "no security" (every other type of work in the world).

There are hundreds of ways to use your time, energy, and God-given skills. Quixtar is just one of those many options.

It's not Quixtar or no-Quixtar. It's Quixtar verses every other job or work option available. Versus selling hot tubs. Verses a paper or phone book delivery route. Versus mowing people's yards, or working part-time at a store or shipping center. Versus building cabinets or making custom kites. Or versus buying and fixing real estate, or even just working to improve your skills or time on the job at your current career. (Or even charity work.)

And your job is to figure out, if you're looking to make a profit, which of those is likely to pay the most for each hour you give to it.

And, it seems to me, Quixtar pays far less on average than most everything else you could do, offers less long-term security than even a job at McDonald's, and is less likely to make those "dreams" come true than most anything else I can think of, in my opinion.

Now, perhaps you don't agree. Good and fine! But at least get the questions right.

Sticking your arm in a spinning blender is legal, okay? Now go find something profitable and ethical to do.

Thank you.

Posted by: Tim (Random Observations) on April 26, 2005 12:42 PM

There are almost 3 million IBOs in North America,

Care to site ur resources? Mine says there were only 340, 000 in November 2004 in North America and there were 360,000 in 1977.

You are saying it is illegal in most countries. But, this business is now being operated in 57 countries (mostly developed including EU, Japan, Hong Kong, China, South Korea, Austrailia, Canada, etc.). Do you still say it is illegal?

Seriously, what is wrong with you? Murder, rape, fraud happen in 193 countries. I mean what is ur point?

China banned amway and opened to avon.

Tax Return? Every IBOs get 1099-MISC form at the end of the year stating all the income IBOs made for the fiscal year. It is being reported to IRS. Quixtar pays bonus check to individuals, not people do it as you mentioned. So, your comment is not true on this one.

Holly crap. I mean royal bull shit.

What about the "expenses" reported? majority reports loss and thus claim for expenses and save money. I don't know if IRS is too happy about that. They have went after many IBOs. Here is a sample for expense.

http://amquix.info/quixtar_profit_stats_04.html

Also, FYI, largest tax fine in Canada was paid by whom? Hint: old Quixtar. Yup, Amway!

http://www.amquix.info/aus/canada.htm
On November 10, 1983, before Chief Justice Evans of the Supreme Court of Ontario, the Amway Corporation and Amway of Canada Ltd. pleaded guilty to charges of criminal fraud and paid a C$25,000,000 fine, the largest ever imposed in Canada. The crime was tax evasion. The Canadian court upheld the government's claim that by means of fake and ficticious invoices and price lists and the creation of a dummy corporation, the Amway companies had defrauded Canada out of amounts in excess of C$28,000,000.

And

The conviction for defrauding Canada Customs was handed down in 1983. The book "Believe!", in which DeVos give the enthusiastic endorsement of integrity in business and of the unavoidability of ethical claims quoted above, was published in 1975. But this book was reissued in a "New Revised Tenth Anniversary Edition" in 1985, without any reference to the Canada Customs conviction. How can the president of a company which holds the distinction of having been fined "the largest sum that a Canadian court ever levied and one of the heaviest criminal penalties ever imposed against any corporation in the world" reissue a book two years later insisting on the indispensibility of honesty in business, without acknowledging his own complicity in such blatant dishonesty?

For a corporation to compromise ethical principles is by no means unique, or even surprising. But when the president of a corporation which has been subject to one of the largest criminal penalties in history reissues a book insisting on the indispensibility of ethical integrity in business, without acknowledging that crime, this confirms the worst barbs of cynics about the antithetical nature of business and ethics. For not only does such profession ring hollow in the light of the unacknowledged violation of these very principles in practice, but that failure of acknowledgement inevitably appears to confirm the suspicion that ethical profession is being used as window dressing in the interests of power and profit. The function of business ethics then is to divert attention from the real lack of concern with ethics in the single- minded pursuit of profit. This is the real challenge of the Amway case.

Do you get cash back when you go to Wal-mart? There are so many IBOs who joined just because they like products and get some cash back.

Give me $100, i'll give you $7.5 back.

Or buy makeup from me @ $70 a stick that is $15 in wal-mart, i'll give you $3.00 back.

Regarding the lawsuit, have you seen any company that has not been sued? Tell me if you know any big company doesn't have.

Read above. Reading first is a good habit. Then regarding legality:

The KKK is not illegal.

Satanism is not illegal.

Pornography is not illegal.

Also, more on this

I'll agree that the larger a company, the more legal hassles one would have to contend with. But the thing that strikes me is that when I think about a similar company like a Wal-Mart, or a K-Mart, or even a McDonald's (I use them for comparison because Amway/Quixtar loves comparing their business model to that of Ray Kroc's), there is one glaring difference in the lawsuits filed against them.

They don't center around the same thing.

With companies like the ones I mention above you will hear about any number of things that the general public sues them over. Slippery floors, scalding beverages, discrimination, health issues, and the list goes on.

With Amway/Quixtar the lawsuits all seem to come back to two things: Tools and corruption.

Wnat to talk about legality? Do you even know what does FTC considered in making an MLM legal? Do you know why amway was let go in 1979?

Easy answer: Retail to OUTSIDE customers. in 1979 case, many non-system IBOs numbers were presented to FTC to get away. Walter Bass downline, upline of Dexter Yager might be one of them.

How many retail do YOU do? Is it 70% of your personal volume? Do your downline do that? Yes, u r running a legal business. No, you are not following Quixtar rules!! Don't feel bad. Not many does :) Can't. Retail 1-on-1 is stupid model. With the prices Quixtar has, HARD. A person who can make 70% of his 300 PV via retail can do anything else!

Any way, read the links I posted. Ask ur upline just one question for me will you?

Upline: What is BSMAA and what does arbitration means? Why I have to sign it up?

Posted by: Imran on April 26, 2005 11:37 PM

I know all about Quixtar. A close family member of mine is a white collar crime expert and has written and published a few books on the subject. I have seen the Dateline report and understand what pyramid schemes are, how con men work and how to brainwash an individual as this is my field of study. I have a question. There is an unethical member of my community who tried to sell Quixtar to my 16 year old daughter while she was babysitting their grandchildren. The woman took my daughter and her 16 yr old friend out to a lunch (without my knowledge), told her she made 11 million dollars in the business and needed to get a hold of me (the mom)to sign her up because she is underage. This woman called me and tried to scare me into thinking that I just couldn't afford to put my 2 children through college without joining Quixtar (which I know is a pack of lies, then proceded to tell me where to meet her and when) I then informed her there will be no meeting of any kind. Question: Is it "legal" to pimp Quixstar to underage teens. I am going to call the secret service in my area anyway, but since you seemed to be an expert on this I was wondering if you would be kind enough to respond and if you had an opinion on the matter. I would like to see this woman stopped in some way shape or form as she did such a good job brainwashing my daughter it took a lot of convincing from me that she was just an unethical person and there was no million dollars at the end of the rainbow. As the mom, as the informed individual, as the knowledgable honest "non con artist"-I now look like the bad guy.

Posted by: L. Locket on July 14, 2005 09:43 PM

Can anyone tell me if the 180 return policy realy works and how can I return all the tapes and junk I bought.

Posted by: Cathy on February 28, 2006 07:14 PM

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