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January 20, 2004
I'm not too smart
By QBlog in
There are two Quixtar rules that seem to create a lot of confusion. Orrin Woodward authored a clarification of sorts (complete text here) which explains:
The 50 PV Member/Client rule ensures that Team of Destiny IBOs are creating Member/Client volume on a monthly basis. And the 70% buying rule protects Team of Destiny IBOs from inventory loading, i.e., stocking their basements full of product simply to attain higher pin levels.Scott Larsen wrote a rebuttal titled "TOD Explains Two Rules." In the rebuttal Scott points out that:
Orrin's explanation of the seventy percent rule is contrary to the plain language of the rule. It specifically says that seventy percent of the products must be sold. Nowhere does it suggest that this can be satisfied by your own purchases or those of your downline.I guess confusion creeps in when trying to define the word "sold." Maybe buying products for your own consumption is a sale? Maybe not. Maybe there's some other interpretation of the rule? I'm still confused.
In the actual "article" Orrin states that:
The second rule (Rule 2) protects IBOs from stocking their basement full of product to hit new pin levels. The Seventy Percent Rule ensures that no more than 30% of products bought by IBOs are retained for future buyers. The leaders of the TOD are very supportive of this rule because it protects a new IBO from spending money on products he cannot move or use. An example of this rule in action would be if a person was at 4000 points and wanted to go 7500 points. If he stretched the 3500 points and didn't have any IBOs, Members, or Clients to whom he could move the merchandise that month, he would be in violation of the Seventy Percent Rule. (4000 / 7500) = 53% which is less than 70%.Being a diligent fact-checker I decided to take a look at the Quixtar Business Compendium (pdf document) to see exactly what Quixtar has to say about the "70% buying rule."
4.18. (Page 55) Seventy Percent Rule: An IBO must sell at least 70% of the total amount of products purchased during a given month in order to receive the Performance Bonus or recognition due on all the products purchased; if the IBO fails to sell at least 70%, the such IBO may be paid that percentage of Performance Bonus measured by the amount of products actually sold, rather than the amount of products purchased, and recognized accordingly.Well, honestly I'm still confused. Reading the Quixtar rules it looks like selling 70% of your products is pretty important. I'm not sure that falling short of the 70% means the business is illegal but it should certainly affect your bonus total. However, what I find interesting is that in Amway vs. FTC the 70% rule is explained in this manner:
4.18.1. Performance Bonuses are intended to be earned on sales volume. However, since the Business Volume during a particular month will, under normal circumstances, approximately equal the sales volume, or retail value, of the products an IBO sells during that month, and since it is cumbersome to administer the payment of Performance Bonuses on the basis of products actually sold (which would involve knowing the product inventory of every IBO), the payment of Performance Bonuses is for convenience based on monthly Business Volume rather than on a monthly sales volume.
To ensure that distributors do not attempt to secure the performance bonus solely on the basis of purchases, Amway requires that, to receive a performance bonus, distributors must resell at least 70% of the products they have purchased each month. The 70% rule has been in existence since the beginning of Amway. Amway enforces the 70% rule.Now, call me stupid but it looks like there are three different interpretations of this little rule. Does this look correct?
I admit, all this legalese gets a bit confusing and so maybe I missed something that's clearly obvious. Maybe Orrin is right on and I just don't understand what he's saying? Maybe Scott Larsen is correct in questioning the legality of what TOD is promoting? I really don't know. But the more I read all of this the more I'm convinced that the confusion revolves around the definition of the word "sell." I guess the word means different things to different people. According to Ron Mitchell (of the Quixtar Business Rules Department as stated by SamT) TOD is in full compliance with respect to the Quixtar rules in both their practices and teachings. Ron explains in a letter to Orrin Woodward that
specifically, the Rule requires that an IBO sell at least 70% of the products purchased monthly to downline IBOs, members and clients. For purposes of this Rule, products used for personal consumption, given out as samples or used for demonstration would be considered part of the sales volume and not part of the 30% an IBO is allowed to inventory.So Ron seems to be saying that the 70% product sales can actually be free samples and personal consumption. And that's where I just don't quite follow. And that's where I guess we need to figure out what the word "sell" really means. As I read the Quixtar rule it clearly says "an IBO must sell at least 70% of the total amount of products purchased during a given month." Maybe someone can explain this to me. After all, I'm not too smart.
Comments
Quixtar certainly interprets the rule differently than the FTC would.
As long as the FTC does not call Quixtar in on its misinterpretation, they will say what they want.
Read the Equinox court case. It is clear what the 70% rule really means.
Their interpretation conforms with their past practices, not with the intent of the rule found in the Equinox case.
Scott
maybe orrin is just an illegal,, no good for nothing fag...
This all seems a little confusing, I admit. But the reason Orrins statement, and Quixtar rules differ, Is because Team of Destiny is seperate from Qiuxtar. These are two totally different systems. Quixtar is only a few get rich. TOD uses the Quixtar stores but runs a better system.
"specifically, the Rule requires that an IBO sell at least 70% of the products purchased monthly to downline IBOs, members and clients. For purposes of this Rule, products used for personal consumption, given out as samples or used for demonstration would be considered part of the sales volume and not part of the 30% an IBO is allowed to inventory."
By this definition from Ron, all DOWNLINE VOLUME counts towards the 70%. For example, if you had only one IBO downline from you that purchased exactly as much as you did. Then you would have "sold" 50% of your total volume. The term "sold" means "volume generated through your business". If you have more than a couple of people downline from you then it actually becomes difficult to break this rule (unless you've got money to burn and do as Orrin says not to do by stocking up on tons of items for later sale... just to earn a bonus sooner).
To make the bonus system actually work better for you... it's a good idea to have a few friends, family, or associates to actually buy a few things from you. This increases your volume and thus your bonus. But to say that you must go out and actively sell to other people 70% of what you PERSONALLY purchased is not correct.
The wording that Quixtar uses in its rules can be rather confusing to someone on the outside. But for those of us who use it and benefit from it, we understand.
And Glenn is correct in saying the ToD has a better system, because we do! Personally, to me it seems sad that the Team of Destiny gets cricticized along with Quixtar just becuase we use their service. If half of the people who make negative comments about the ToD and Quixtar actually spent some time with someone in the organization they would see the difference rather quickly. In just 3 months of time in the business... my wife and I have had enough money come back from bonuses to pay for the investment, and then some. This is WELL ABOVE Quixtar's average for "active" IBOs.
See where dishonesty gets you? Rather than trying to lie for justification, Orrin should just flat out admit that the 70% rule is a stupid rule and he doesn't follow it because it's stupid.
Posted by: Dwighty | January 21, 2004 8:55 AM