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December 8, 2004
Kick Start Your Pyramid?
By QBlog in
What's a Pyramid Scheme?
A Pyramid Scheme can be difficult to identify but is generally characterized as a system selling goods where commissions are paid to recruit new sellers. Consumer advocates and government agencies advise us to avoid such "businesses" which is why Quixtar's latest promotion has me scratching my head in confusion.
Kick Start Recruiting
Kick Start is Quixtar's effort to "help IBOs build immediate volume in their businesses." It works by rewarding every IBO for recruiting new folks who then purchase 50 PV worth of products in their first month (PV, or Point Value, is roughly $2 per point). That sounds a lot like a Pyramid Scheme to me but let's not jump to conclusions before reviewing all the facts.
The 50 PV requirement is obviously an important aspect of this promotion because it represents product purchases and means that the promotion's rewards are not merely headhunting fees. In fact, it's so important that Quixtar created a special "Product Bundle" page that helps new recruits quickly meet that 50 PV minimum. Each "Product Bundle" (shampoo, vitamins, beauty products, etc.) is at least 50 PV and costs between $115 and $145 for IBOs. Keen!
The Rewards
So what about those rewards? Well, Quixtar is offering some really nice prizes for signing up those new recruits. Things like:
- $1,000 BV for all Platinums...
- A VIP trip to Quixtar...
- Free trips to California...
- $500 Gift & Incentive album...
- And more...
While the Kick Start prizes aren't exactly cash commissions they do represent an interesting recruitment incentive. This promotion sends a very clear message (at least to me) about the importance of recruiting in Quixtar. And while I can't definitively say that Kick Start qualifies as a Pyramid Scheme I will point out that nothing in the promotion's documentation (that I've seen) mentions selling products to non-IBOs (either by the sponsoring IBO or the new recruit). That's very curious since Quixtar's own rules (pdf) require such sales.
Comments
Quixtar own rules also prohibit product purchases as a part of signup. Funny, I wonder how many IBOs are promoting these 50 PV kits as a part of sign up now!
You kidding right...or do you want to give the impression that you found something of substance here. Forget the fact the the Federal Trade Commission do not recognize this company as running a pyramid scheme or probably you are faster than the regulators and this will slip them.
Offering an incentive for increasing business is a pyramid?. There is an exchange of products for money before any rewards are given. If you find this to be a scheme then the whole idea of paying incentives on any business you didn't personaly create would be a pyramid too.
Its amazing to me is that you guys cry whats there for the new ibo's not just kinpins and an aditional incentive is here for new IBO's to platinum and critic you that too.
When we show the Business plan a person sees that they can make money from selling(its a business) the more you sell the more you make, the more your team sells the more you make and as you pointed out its in their rules section. So your concern is that they didn't mention it again in this promotion.
The IBO's signing would in most cases already have 19.65 p.v with intro pack or more if they choose another sign up kit. If they got the 50p.v bundle they would still have to report the member client volume before getting paid on any downline volume. You are so busy reading in between the lines that you are not even seeing the lines.
Quixtar is choosing to give free shipping to the new and the sponsoring IBO. Which to me encourages the sponsoring IBO to promote the products to the new IBOs even more.Quixtar also recognizes that the IBO's will be the one creating that product awareness so it makes since to reward them.
There is a big incentive to develop clients...its called RETAIL PROFIT and p.v/b.v that transelate into money.Quixtar using the same scale as Amway has not changed that scale but rather added more bonuses.
As one looks at it he says its a image thing, but I say they are just trying to increase buiness and network by increasing incentives for people to show the plan more and sponsor people. This didn't take away from creating clients.
You don't have to keep scratching your head...just learn the business model and understand that the pyramid thing is TiRED now!
Sorry, but I got about as far as "You kidding right...or do you want to give the impression..." and all I read was blah, blah,blah...eyes glazing over...falling asleep...
I have a suggestion. Why not encourage retail profits for your pseudo-Independent Business Owners by providing products that provide value to their customers in the form of competetive pricing?
The easiest way to prove that Quixtar does not have competetive pricing would be to not allow any more sponsoring or recruiting. How quickly to you think Quixtar would just simply fade away?
pj, did you replace "Chris"? Are you now the Quixtar plant sent to keep tabs on all us surly Quixtar critics?
Cris/pj/Qrush (whoever you are) please feel free to respond with a page and a half rebuttal designed to bury desenting view points of Quixtar.
Whether the kickstart bonus is a headhunting fee, I'll leave to the regulator. I believe it is.
What would had been good is to simply remove the "IBO" provision and allow the bonus for all new Clients, Members & IBO.
The other provision I would put in, modeled after the same provision that saved Amway, is that you may not receive kick-start bonus on IBO unless you're also receiving bonuses from 10 new member-clients.
As for the "Quixtar own rules also prohibit product purchases as a part of signup.", please reread the rule. The rule prohibit requiring the purchase of a "kit" as a condition to signup. This is targeted against the AMO abuse of requiring the purchase of $150 "cd-starter package". The Quixtar product purchase is already part of the sign up, though the IBO have the option to deselect the product purchase. The operative words is "require as a condition to sign up".
To make this response a page-and-a-half, I'll state my reason why I believe it's a headhunting fee. The hh provision is to prevent IBO from exerting undue pressure on prospects to buy stuff. See inventory loading. The prospect should be allow to make the purchasing decision on his own. By placing incentive to push prospect to buy within 3 months is to tell the IBO to pressure prospects. Even if this is not headhunting per se, it's still bad policy.
Chris=pj, just as Hartman=df.
(does that mean I am speaking in the 4th person???)
Chris is so unoriginal and uninspired, he's resorted to copying the tactics of his critics!
it's funny how people refer to quixtar as a "pyramid". Look at where you are employed. I work for a law firm, and we've got the partners, then under them we've got associates, then under them we've got paralegals, then secrataries, then office clerks. Now that looks like a "pyramid" to me too!!
The monumental difference, jh, is where the money comes from. A pyramid shape itself is not illegal, as your law firm's structure points out. What is illegal, however, is a closed system, where the only people purchasing are the salespeople themselves.
Take your firm, for example. Say they don't do any personal injury and only provide services that cannot end in monetary rewards for their clientele. Therefore, the people using your firm's services, i.e. the clients, have no way to make money by suing anyone. Now, say the only people who use your firm's services are the employees themselves, so that the only money the firm is taking in comes from the pockets of the employees. In this closed system, is it possible for the employees to be making money?
Mathematically, only a few could profit, while the majority are spending way more then they make. Why? Because the only money the firm could pay in salaries would originate from the employees themselves, and if the firm takes money for their own profit, by mathematical definition, the employees of your firm cannot make more money, since the money available for salary is less then what they paid for in the firm's services. Think a closed poker game where every player pays $105 to play. If the house takes just $5 as a fee, the sum of every player's winnings would be -$5 multiplied by the number of players, and as a group, the players would be playing a negative sum game. While one player might win big, everyone at the table, as a whole, will have lost money.
The above is what we are describing when we talk about illegal MLM pyramids. A better term might be "closed buyer's clubs", but since the FTC uses "pyramid scheme" and most people are familiar with the term "Ponzi scheme" which often take the shape of pyramids, pyramid is the word that gets used the most. And in reality, the group doesn't necessarily even have to resemble a pyramid in shape for the group to be an illegal pyramid. All it needs is to have little or no outside retail sales, just like your law firm charges clients that are not employees in order to make money and pay you.
I seriously doubt that jh works at a law firm. I'm willing to bet that the only thing he does all day is post pro-Q crap all over the internet. It unfortunate that this is what things have come too, the QMO's are pathetic. They cannot defend against the hard questions, so they try to bury the critics, good luck Q, but it's never going to happen, youve pissed off and screwed over too many people. The web will be your undoing.
You can't use the "kick start" program to prospect the suspects.Otherwords once you get someone registered you do all you can to pressure them to buy all that stuff thats so great.Also they will be getting pumped all the hype about the winter conference in January were they will see the kingpins.Gee what a way to bring in 2005!
TOD => Depth
This bonus is favoring width builders instead od depth builders.
Whats going on?
I will say this one thing. Notice where the best part of the bonuses go........
To the Platinums.
Hmmmm..............seems like they aren't the ones who really need to be incentivized. It should be focused on benefitting the non-Platinum IBO, as it is they - the rank and file - who really do the biggest building and compromise the bulk of the business 'purchases'.
Also, if they really promoted a method to incentivize the rank and file IBO, the Platinum's would benefit as a direct result anyway.
Quit giving then the benefits for all of the hard work find new IBO that the rank and file actually do.
Just my take,
Cliff
Why the sudden "push"? From the recent postings from IBOs (Chris, PJ, etc.) I thought people were seeking them?
Hmmm...more BS? I would have never thunk it!
the idea worked and was good in the 50's and 60's.
It does not work in our current economy and has not for many years.
The money is from the system.
Im 45 , been in for years, 25 wide and 45 deep!
im real ,
this business model is Not.
bill
My husband met a guy at the airport who managed to get himself invited over to our house for a "business presentation." Ha! After ten minutes tops, my husbo & I locked eyes and smirked...Amway! Pyramid Scheme! Greed-driven cult-like "seminars!" Sure enough, after they (guy & his wife/partner) left, we googled the key words and BINGO! Amway popped up in conjuction w/Quixtar etc. What I find most pathetic about these people is that they totally underestimate the power of the internet to inform. Though we were turned off just by talking w/the couple, we still took the time to research his schpeil...I wonder how many suckers fail to educate themselves before sinking money in these kind of things. Caveat Emptor! AND...let the sellers beware as well! If it seems too good to be true, it probably is.
Im not a Q person, but it looks like to me that this quixtar company is still around. Anyone have the reason why it has stayed around for a few years now? Just a thought???
Someone will correct me (I hope) if I am wrong, here, but I believe that a bonus coming from the company, as opposed to coming from the new recruit, does not constitute a headhunting fee.
The problem, of course, is that IBOs should be going out to find CUSTOMERS at a much faster rate than IBO recruits in order to avoid creating a pyramid scheme. It does appear that Quixtar is promoting pyramid-building.
In the past, Quixtar seems to have tried to distance itself from the recruiting aspect of the business, which was generally more closely associated with the AMOs. instead, the corporation seemed to be wishing to align itself with an image of being a product-sales company. While this Kick Start program doesn't appear to be a departure from the reality of Quixtar's goals, it does seem to represent a shift in how the corporation wishes to be perceived.
PW
Posted by: PW | December 9, 2004 12:27 AM