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Amway/Quixtar Series: Tools

8

Now I will attempt to tackle what is arguably the most heated topic in and out of Quixtar: the tools system.

What are Tools in Quixtar?

Essentially, tools are the emotionally fueled training materials made specifically to motivate IBOs to succeed in the business. Tools come in book form as well as audio media, which used to be audio tapes, but now are primarily in compact disc form. I asked my fellow furniture store employee how often he orders new CDs and books from Quixtar. He told me he gets (and listens to) two CDs every week at a cost of $7.00 each and one book every two weeks. I think the cost of the books vary, but if memory serves me right, they run from $10 to $12. Easy math tells us that this is an investment of roughly $78 every month (eight CDs at $7 each and two books at $11 each). I will do my research so that down the road a bit I will be able to post the typical expenses an IBO must pay to remain active in the Quixtar business.

Are Tools Required?

Most working people have been employed, at some point, by a company who requires their employees to be trained on a regular basis. This is just good business sense. It keeps the employees up to date on the latest company news, changes, policies, techniques, goals, and so on. Also common is that this training material is required, and provided at no charge to the employee. The company pays for the material because it is seen as vital to the future success of the business. Here’s where Quixtar is different.

Ask any Quixtar IBO if the tools are mandatory, and they will answer “Of course not, they are optional! Tools are optional, but so is success.” Then, from my experience, ask that same IBO if they buy the tools, and get ready for a spiel something along the following lines.

Well, I see it this way. If I can learn how to run my business from the people who got rich in the same business, I’m going to do it! The way to succeed in life is to find people who have succeeded, and copy everything that they did. So yeah, of course I get all the tools I can get my hands on!

The reason most people will say this is because it’s a widely used trained response. Chances are they will mention Michael Dell and his “3 C’s of e-commerce.” The name-dropping practiced in Quixtar is yet another issue I’ll address in another post later on.

I learned from Eric Scheibeler’s book how the purchase of tools is presented to IBOs. It really comes down to peer pressure. Being an active IBO in Quixtar is very much being part of an extremely tightly knit family. Typically, IBOs have become alienated by their family and friends due to constant pressure to buy their products and/or join Quixtar. Once they realize most people just don’t “get it,” they grow close to their business associates. In addition to this family-like bond is the image of caring about the business. Large portions of most meetings, as I understand it, are devoted to the use of tools to become more successful. Here’s their psychological breakdown of why you really should be buying all the tools:

  • You decide to not purchase tools for a month or two, so…
  • You obviously don’t want to succeed as much as those in your upline who are freely giving their time to help you out and even worse, you are showing your downline that they don’t have to care either, so…
  • You must not really care about Quixtar, since you’ll be essentially telling your downline that they can stop trying too, so…
  • You won’t be making any money because your downline will be following your poor example of not caring, so…
  • Your family will not be able to spend time together because they’ll need to find some other means of trying to make money in the J-O-B world, so…
  • You must not care about your family and their wellbeing, so…
  • Why are we still friends with someone who doesn’t even love their own family?

Might sound a little extreme, right? Well, as rough as it is, as a member of the tightly knit Quixtar family of active IBOs, failing to order tools is failing to care. Failing to care is as good as giving up to them, so you’d better be buying those tools buddy.

Do You Really Need Constant Training?

With two CDs each week and a book every other week, all Quixtar IBOs that I’ve known can almost always be seen with a book and/or a CD or two nearby. At the furniture store, an employee there is an IBO and received permission to wear one earbud in his ear throughout the day so he could be listening to his material while doing his J-O-B. There is an endless supply of material, and to keep up, most of the free time each IBO has is spent absorbing the content contained within the tools system. Just think about this for a minute. When was the last time you read or studied a single topic for at least two or three hours a day for at least a couple of weeks?

I don’t know that I’ve devoted that kind of focus to any topic lately, but the most vivid example that comes to my mind is with a certain video game (called Rise of the Dragon, it was awesome!) for the Sega CD that I played with a friend (taking turns, it was a one player game) in my teenage years. We must have played that game for 14 hours straight until we beat it. We stayed up most of the night, only catching a couple hours of sleep before our parents dragged us to church. I remember that my mind was so affected that hearing people speak was as if I was seeing them in the game. This game gave options of how to answer people the character was talking to, and in church, it seemed as though each person was selecting their words from an option box floating near their head. It was wild stuff.

Now I realize that is a very extreme example of how the brain can react to constant exposure to something, but it illustrates where I’m headed with this. With that much constant exposure to anything, your mind begins to change the way it works. Regardless of how ridiculous the material you intake is, it will begin to make sense to you. You will begin to think like those people who have presented the material in those tools. Why is this important to note? Well, I know it’s a buzzword, but for lack of a better way to explain it, that’s how brainwashing is accomplished. Brainwashing doesn’t need to seem radical. In this case, it’s taking the idea of a very sketchy business plan and planting it deeply into the roots of your brain with the belief that it is the only way you can achieve your personal goals! Even if you began with doubts of Quixtar, once you begin surrounding yourself with pro-Quixtar material, your vision will become heavily altered by what the material tells you. That’s just how our brains work. If I listened to speeches on how wireless extension cords are a possibility constantly, and read books about it, I’d begin to go against my logic and really think this could happen!

Why Tools are Emphasized

Okay, I hope it is beginning to become more clear why tools are such a hot topic. They can turn any average Jane or Joe into a gung-ho Quixtar junkie. So gaining devoted Quixtar participants may seem to be the focus of pushing tools so much. Well, that’s half of the answer. What’s the other half? As I’m sure you’ve noticed by now, there is a financial matter in question here. Mass production costs much less than $7 per CD and $10 per book, so somebody is turning a profit. Who is it though? This is the heart of the matter. I honestly don’t know the origins of the tools system, but here’s what I do know.

Many IBOs have discovered that the real money in Quixtar is in selling tools to their downline. Since the waning sales are getting worse with each new recruit, and therefore, IBOs are financially hurting even after recruiting hundreds of people in their downlines, a way to make money comes to light. Why not sell tools to your own downline? There are a number of ways that IBOs can make a huge profit from the sales of tools to their downline. Even to go as far as Dexter Yaeger (a diamond in Scheibeler’s former upline) and start a company that exists solely to produce tools to be sold to Quixtar IBOs. I have read reports that the profit margins on tools is up around 85%, where product sales profit margins are at 35%. Seems pretty clear how to make money as an IBO, now doesn’t it?

The Controversy

As a new Quixtar recruit, you will hear nothing of the tools system, other than how great it is, and that you should sign up so you can start growing your business right away. I know I would immediately question who is making money from the tools sales, because tools are ordered through your own upline. I’m paying good money for this stuff, but I’m in a business where income is supposedly shared amongst the business owners, so I’d see this as a gap that needs explanation. Here’s where Quixtar’s brilliant psychology comes into play. It is a very don’t-ask-don’t-tell society. People don’t share specific numbers with each other about their own business. It’s great to boast about your success and what you’ve been able to buy (or go into great deals of debt to cling to) to motivate your downline, but never ever ask your upline about their income. It’s disrespectful and asking those questions shows signs of doubt and unbelief. That’s not the kind of attitude to have for success. So just buy the tools and ask no questions.

It may sound ridiculous just reading this, but the unwritten rules of Quixtar are very strongly respected and really can’t be broken without serious consequences. You don’t ask about who is getting what money. Worry about your own business and downline and focus on becoming a success from your own work. If you aren’t making money, you need to ask yourself what you’re doing wrong. Just look at your upline and all the wealth they obviously have, thus proving that the system works. Make sure orders for tools are in so you will succeed through the efforts of your downline as well as your own. Ordering tools will show that you care and will encourage your downline to order tools.

With all of the ordering of tools, those selling the tools make plenty of money, so it only makes sense to continue to provide tools to be sold to the downline and continue to focus on the tools system in the seminars.

Conclusion

We can now see how the tools system is really the lifeblood of Quixtar. Without it, motivation levels would plummet, the few rich IBOs would lose their primary income, IBOs would think for themselves, and Quixtar would fail as a business.

This is becoming quite a chore, hence the slow time between posts. Once again, I’ll encourage readers to download the free book with a very detailed account of a former Quixtar IBO and his personal experience in the business:

Free Book Download Link: Merchants of Deception

Amway/Quixtar Series: A Poor Business Model

9

This post will discuss just the business model in Quixtar as it is presented in a showing of “The Plan.” This is the primary reason I declined the first invitation I received to check out Amway in 1998.

The Plan

If you are unaware, it basically is supposed to work as follows. Any products sold by you to anybody (including yourself) will earn you, the IBO (Independent Business Owner – more on this loophole later) a small commission on the sale of the product. In addition to commission from your own sales, you will receive another commission (smaller, but still a commission) from all sales completed by your “downline,” which consists of the IBOs that you recruited to Quixtar. With no further thinking, this may sound like a fine plan, and it exists in other situations with great success (examples will come in a later post about other affiliate programs).

Now is where red flags went up for me, and for some reason, a lot of people don’t see the problem here. The products sold are supposedly things we all use every day. Here is a link to their products on their own website. Personally, I don’t use energy drinks, expensive filtration systems, or makeup (mostly because I’m a non-goth/emo guy). I know they used to sell laundry detergent in very concentrated form as well as other actual everyday products. The consumable products are typically sold in concentrated form, or bulk quantity. I think they may still have more everyday products, I’m not sure, but that’s not all that relevant to my point.

My point is simply the basic business principle of supply and demand. Quixtar presents all kinds of supply, but for products with little demand. And to make matters worse, they invite everybody to try and sell those products. Now we’ll do some chicken scratch figures here for a little analysis. We’ll use optimistic numbers for a best-case-scenario.

The Proposed Potential

Say that I get signed on with Quixtar. I show the plan 10 times a week and manage to get one new IBO per week on average. With each person I meet, I try to sell products to them as well as get them to join the cause, if you will. Perhaps I sell $60 of products to half of the people I meet with. This puts me at $300 in sales per week. I really don’t know what the commission scale is like, but let’s say they start at 10% (being optimistic here). That puts me grossing $30 per week from my own efforts. Now, if all of my downline members produce the same numbers, and I make 5% commission on those sales, that makes me an additional $15 per week from each of them. Now, if all the sales kept up, and all of the recruited IBOs kept up pace, this income would grow exponentially and it wouldn’t take too long for me to be pretty well off. Then, naturally, those below me would gradually become wealthy…right? Well, in a perfect consumerville world, this would work great. But we live in the real world.

The Reality of the Plan

So many factors knock this business plan down to make it become terribly ineffective. First off, let’s look at supply and demand. Could I sell $300 of products to my contacts every week? Maybe now and then, but people can only buy bulk and concentrated products every once in a while. Most people prefer buying from a one stop place like Wal Mart, or whatever market place they are used to shopping from. So naturally, this number will vary greatly week to week. Now, with each additional IBO I recruit, I lose a potential customer, as well as some of the common contacts I have with that IBO. That’s just human nature, some people will prefer to buy from someone else for any number of reasons. Another realistic problem is that the people who feel inclined to buy through Quixtar may also feel like trying to sell as well. That means they are the people joining. As you might now see, with Alticor’s huge inventory, local supply is essentially rising and rising, while the demand (per capita) is dropping at the same rate. So I still make some commission from their sales, but slightly less. You can see here that as my downline grows, my commissions struggle to grow due to the fact that more sales are coming from further down the line than from my own efforts. I believe it is this realization, among with many other factors (such as earning higher commission percentages based on total downline sales), that pushes IBOs to turn into mad recruiters, but that’s for another post.

So we’ve started out thinking of an endless, exponentially growing income that has no way to shrink in size over time. We’ve ended up with a commission structure that keeps shrinking due to our efforts to make more money by bringing more people into the fold. I’d begin to feel like a dog chasing its own tail.

A Typical Business Model Example

To change it up a bit, and introduce more of the model, I’ll approach the supply and demand problem from another perspective. I recently worked at a large furniture store. The store employs sales people to sell their inventory to customers. The sales people earn a commission from all of their sales and become successful when they gain a decent sized client basis with a group of customers returning to use their services. They make a decent living, only a handful of them make “the big bucks” but most are comfortable with their pay. The store only employs enough sales people to handle the customer load that the store carries. Naturally, the company spends a fair amount of money to train the sales people, as well as provide them with the means and equipment necessary to effectively sell furniture.

Applying Quixtar’s Model to the Store

Now let’s say that as they made a sale, each sales person offered a similar sales position to the customer. If every week, one sales person brought on one new associate, we’re looking at a 100% growth rate each week. Start with 30, then 60, then 120, then 240 after just one month.

————
I’m going to throw this in, even though with logic applied, this could be the one equation that puts a stop to anybody thinking of joining Quixtar. I’m a bit of a math guy, so why not throw some actual math in here? At a growth rate that Quixtar promotes to its IBOs (basically get as many people in your downline as you can), the growth quickly gets out of hand. And for this example, I’m going to use 1 new recruit per person per month, instead of week. Okay, here goes, starting with 30 IBOs:

Months Number of IBOs
1 30
2 60
3 120
4 240
5 480
6 960
7 1,920
8 3,840
9 7,680
10 15,360
11 30,720
12 61,440
13 122,880
14 245,760
15 491,520
16 983,040
17 1,966,080
18 3,932,160
19 7,864,320
20 15,728,640
21 31,457,280
22 62,914,560
23 125,829,120
24 251,658,240
25 503,316,480
26 1,006,632,960
27 2,013,265,920
28 4,026,531,840
29 8,053,063,680

I stopped after 29 months, because by that time, with constant growth of one new recruit per IBO per month, the number of IBOs exceeds the current population of the entire Earth by more than one billion people. Even if this was one new IBO per year per person, after 30 years, the whole world would be involved in Quixtar, and society would utterly fail.
————

Okay, back to the matter at hand. Now we’ve got 240 people who can sell furniture to their friends, walk in customers, or even themselves, and make a commission from the sale. Even though it’s a large furniture store with lots of inventory, it’s going to be a great struggle for every one of those sales people (with increasing competition each week) to make even a few sales.

How is this Plan for the Store Ownership?

We’ll stop there for a minute, and look at this plan not from the sales person’s perspective, but from the employer’s eyes. If they had to come up with training materials, insurance plans, desks, work schedules, and all the typical things provided to maintain effective sales people, it’s going to cost a fortune and really, be unattainable. However, let’s say they changed things up a bit so they could turn a profit, now that they’ve got an entire portion of the community trying to sell their furniture.

First off, let’s make all the sales people not employees, but every last one of them will be an owner of their own furniture business. Of course, that will just be a legal description, since we will continue to provide all the inventory and means to run our business, which is actually what they are claiming as their own business. This will free us up from providing an insurance plan, materials to perform business such as desks, office space, phone systems, and so on. We’ll still handle payroll because we are still making good money from each sale, while paying commissions to all the sales people. But we have a problem. The sales people aren’t going to do so well if they aren’t trained and motivated properly. Well, now that the sales people are technically not employed by us, we can actually sell them the training material. If they were employees, selling training material would be ridiculous (and possibly illegal, I’m not too sure on that one), but we can surely sell material to independent business owners! Now, we can’t require the training materials because each sales person “runs their own business,” so let’s hold rallies with motivational speakers who will get them excited to see the latest training materials so they can sell more and start making money! So now it looks like our only costs are that of a warehouse, but we are making the money of a warehouse and a store with hundreds, even thousands of sales people! If any of the sales people fall out, it’s no problem to us, we don’t have to pay severance or any type of 401k or anything. And finally, why not charge each sales person a recurring fee to be able to sell our products, because hey, why not?

Alright, true, that was much less detailed than it would really be, but hopefully you see where I’m going with this. That is roughly how Alticor (the parent company of Amway/Quixtar) makes money off of this plan, while each IBO struggles. It’s really an ingenious business plan for Alticor, since they don’t support their sales people at all, and any money going to to those sales people comes from income already generated by that particular person. They really can’t lose.

A Little Psychological Twist

I’m going to talk psychology later on, but I want to put a bit of it in here because it relates very much to this business model. Quixtar IBOs are constantly told that standard jobs, referred to as J-O-B (Just Over Broke), are set up for failure. Yes, they discredit the business model that so many companies have employed to become large enough to support thousands of families across the globe. IBOs are told that in a typical 9-5 job, all their efforts are only going to make the boss more wealthy. You work your butt off while your boss sits back in his chair and reaps the rewards of all your hard work. You have to be in at a set time each day while he’s out playing golf. They basically fuel hatred for the standard boss.

Now, when I look at the differences between standard business models and that of Quixtar, it seems the other way around to me. It sounds like Alticor is making all kinds of money from the efforts of the sales people, who are in turn very limited as to how much they can make. In addition to Alticor making money from your efforts, each person in your upline (those above you in recruitment) is making money from each of your sales. I understand that standard bosses could end up making more money from your efforts if a business does well due to your hard work, but it’s much less direct than how those above you make more money from your work in Quixtar. It’s laid out right before them that everyone above them will gain financially from their own efforts. Quixtar tells their IBOs exactly what is happening to them in Quixtar, but twists it so each IBO believes that it is not them in this horrible trap of making others more money, but the every day employee who is stuck.

Conclusion: A Poor Business Model

I hope this accurately and effectively teaches people about how the Quixtar business model works from the standpoint of making a living from being an IBO alone. To me, the likelihood of success is so minimal that I’ve never had to think twice about taking part in such an organization. Feel free to comment away. I realize I haven’t presented this without bias, but I’ve given my most honest opinion of how I see the effectiveness of the Quixtar business plan.

Amway/Quixtar Series Intro

2

Okay, here goes. As I mentioned before, I recently got a lot of my thoughts on Amway/Quixtar out there in a MySpace forum. I call it Amway/Quixtar because the company used to be known as Amway, but then changed to Quixtar when online ordering was made available to the members. Word is that they are dropping the Quixtar name over the next year and transitioning back to Amway. I could go into why that is, but that doesn’t really matter for now.

In the said forums, I grouped my thoughts and observations into 8 categories to start, then posted 4 more times following that. I’ll put at least the first 8 on here, and I’ll take it from there. This being the intro to the series of posts, I’ll explain a bit of why I’m doing this. I’ve known at least 10 people over the past decade who are actively involved in Amway. Every time I’ve had it explained to me, I get confused over why anybody would want to take part in what sounds like such a poor business plan. All of these people seem to be really fired up about the whole thing regardless of any criticism they face. With those factors combined with all the vague, obviously misleading information (or lack thereof) I’ve received from participating members, I became very curious as to what this is all about.

So I began to research. I came across many web sites (mostly very poorly designed) with very pro-Amway content as well as many with very anti-Amway content. I was after an explanation as neutral as I could find, realizing it may not be possible with such a heated topic. In September of 2005, I eventually found a gem that opened my eyes. Eric Scheibeler actively participated in Amway/Quixtar for around 10 years (if my memory serves correctly, I’ll try to get the facts better as time goes on). He worked as hard as he could and did everything he was told over that time to try to get the dream life that was promised him by his associates. Long story short, he finally realized it was a lost cause, did some research, and was blown away by his findings.

After leaving Amway/Quixtar, Scheibeler refused to accept any money from Amway to remain silent about what he found. He went on to author a book entitled Merchants of Deception which presents his experience with Amway/Quixtar, his exit, and the after effects of his actions. I read the book (around 300 pages) in only 10 days or so, and I’m not a fast reader; I just couldn’t stop. I feel that he did his best to be as unbiased as he could, presenting the facts as honestly as he could. Obviously, he is upset with the business, and that shows a bit in the reading, but I felt that he kept the material as straight forward as he could.

My reading of his book completely blew me away and made me realize that Amway/Quixtar gives dishonest people power to take advantage of people who are hopeful for a better way of life. Even honest people end up in a position where they unknowingly take advantage of sympathetic friends and relatives, eventually ruining those relationships for years and years. I felt that I should do my best to share what I’ve learned about the business to those around me so they don’t fall into this financial nightmare. Until now I’ve only posted a couple small things on here about it, but those posts have received some hits, and I figure with a full series on the topic, I may be able to help people research the whole thing for themselves before making a decision they’ll go on to regret.

So that’s why I’m doing all of this. I hope to give people a place to read up on this new opportunity they’ve just found out about so they have a better basis to make a decision upon. If you want to read the experience of a former member of Amway/Quixtar, I strongly suggest reading Eric’s book. That will give you a better understanding of all of this than I can give you, but for those who want to take less time, you can read my stuff. You can download the entire book free of charge at its website, which is linked to below. My only complaint is that the book, as far as I know, isn’t actually in print in hard copy, so to read it, you’ll either have to do so on your computer, or print it all out.

Free Book Download Link: Merchants of Deception

Team Freedom

4

Now, this isn’t particularly an Amway/Quixtar post, but I put it in here because it’s an MLM thing. I was driving home tonight at 12:30am from a friend’s house. I came to an intersection near the Dixie Center to find a group of men in suits, every one in a red tie, crossing the street. Further up the street I saw more well dressed people (all the men had red ties) making the late night walk back to their hotels. I figured it must be some kind of Quixtar convention. Upon further research, it appears that it’s a 4-day Team Freedom convention.

I did a little searching, and from my findings, it looks to be a pre-paid legal services group. Now, from the little I’ve seen and dealt with from these pre-paid legal groups, it seems like a fully functioning MLM Ponzi scheme. So naturally, all the men wearing “power ties” isn’t a surprise. One funny thing I noticed is that this here calendar shows the scheduled meeting time is 8am – 2pm. That means that this 6 hour meeting went 10 hours over the set time! 10 hours! I’ve heard of Quixtar meetings lasting til 2am at times, and apparently those ridiculously long winded meetings are spread across the entire MLM world.

Now, one last bit here. For a couple weeks, I’ve been tossing an idea around. I took part in a little forum I found on the INTERNET about Quixtar. I planned on posting my input here on BillyStyle. I’m still not sure if I really want all that negativity on here, but I think I’ll go through with it over the next week. Being that these MLM schemes are such a sneaky trap, I feel it necessary to do what I can to warn people. And the couple times I’ve posted about MLM garbage, I’ve received a fair amount of traffic, so I know people read it. Anyway, if that’s not your bag, sorry for the next group of posts I’m going to put up.

Quixtar Strikes Again!

10

Oh man, I’m a bit on the angry side right now. I’ll keep this part short. I was at the office working on an advertising campaign for my mortgage job when this happened. I’d been there for a few hours after a full work day at the Blvd. My old roommate pops up on MSN and starts rambling about a business opportunity. I had no time for small talk, so I cut to the chase. The following is what ensued (note that my “bunshole” (pardon my French) comment didn’t go through because I lost my connection just at that moment, divine intervention perhaps?):

Read the rest of this entry »

It’s About Time for My First Quixtar Post

7

I’m as anti-Quixtar as they come – at least as far as someone who has never been involved with it can be. I’ve met a number of people involved in Quixtar and became curious as to what the attraction, obsession, and craze with it was all about. It was obvious up front to me that it is a horrible business plan, so I figured there must be something else drawing these people in. Well, I could go on forever about it, but I’ll just post this great video for now:

Quixtar Can’t Hide