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January 27, 2008
Kill The Wiki?
By QBlog in Blog News
Should the Quixtar Wiki be killed? As much as I'd love to see this collaborative website flourish I recognize that without regular attention and management, it's become a link-spam magnet and a bit of an embarrassment.
A quick glance at the recent changes reveals lots of activity but virtually all of it related to spammers and link bots.
So, my inclination is to kill the thing because I don't have the time to manage the site and nobody else is knocking down the door volunteering to manage it for me. However, if you think I should keep the site up please let me know why and maybe provide some solutions for the current spam problems.
I have thought of some tougher wiki software that does a better job of blocking out the spammers but the site is still left needing someone to populate it with content and frankly, that's a lot of work. But if there's someone who really wants to take this on then speak up and we'll work something out. There's certainly a need for a robust, data-driven independently run website out there about Quixtar, Amway and MLMs because it looks like Scott Larsen is still managing his unweildy AmQuix site with basic HTML and lots of free time.
January 22, 2008
Price vs. Value
By Truth in Quixtar
There has been quite a fuss lately over the prices of Quixtar products. Of course this has always been an issue, but has been put more in focus lately because of the whole Quixtar v. TEAM mess. The simple arguments are that Amway/Quixtar prices are too high, and of course the common theme for the defense is that the value of the product justifies the high prices.
Personally I can see both sides of this debate. I don't necessarily agree 100% with either side in this debate, but I think both sides make some pretty valid points. I was over on the Ada-Tudes blog and was reading the post by Ray Alexander titled "Not Wal-Mart and Never Want to Be". While reading this post and many of the comments that were left I got to thinking about a seminar I attended with my wife when she was an owner of a vacuum sales office.
After leaving Quixtar my wife started selling vacuums to make some extra money. Well she became quite good at it and eventually was asked to open her own office and manage dealers. She has since closed up her office and moved on to other things, but I will always remember this one speaker at a seminar that she invited me to go along to. I would also like to point out as a side note that this seminar was 100% free, even the lunch they provided.
The feature speaker was the vice-president of the company who manufactured the vacuums. He talked about selling value instead of a vacuum. That was a big topic since the dealers were selling a vacuum that costed $1800. His example showed that throughout the demonstration of the product you were building value, and the objective was to build more then $1800 worth of value before the demonstration was over. If a salesperson could do that they would meet less resistance from the customer when it came time to close the sale. In a nutshell he was saying to show the customer why the product is worth the price.
To demonstrate what he meant he pulled out a $100 bill and asked who would be willing to give him $10 for his $100 bill. Obviously everyone in the room would do what they had to in order to give him $10 for $100. That pretty much drove the point home. If a salesperson could build up $3000 worth of value in the product, closing the sale at $1800 was going to be easier.
So if you have read this far you are probably asking what this has to do with Quixtar. Well, can Quixtar products be built up in their value enough to be sold at their current prices? I mean let's face it, just telling a customer that the value of your product is superior isn't really going to get you far. Would retailing numbers look better if IBOs were better informed about the products so that they could build the value in them? Sometimes I think that is what Amway/Quixtar is trying to do with all the training that they are releasing via the web. So I see two sides to this entire argument and I guess it comes down to one question. Are the prices too high, or are IBOs just not able to build the value in the product before they try and sell it?
January 19, 2008
Couldn't do any worse
By Truth in Quixtar
Over on the Ada-tudes blog there was an article by Todd Krause which seemed to address some comments made on an earlier article he wrote about Quixtar sales. Anyway I found it a bit funny that he was addressing those who made statements to the effect that the corporation does not have the credibility to tell IBOs how to sell or build Quixtar/Amway businesses. Todd Krause agreed with the statements saying it was not their intention to go around IBO leaders.
Well in my opinion the corporation is doing more to teach IBOs how to sell a product then IBO leaders are. IBO leaders are concentrating on teaching IBOs how to sell a "system". One look at the numbers that only 3.4% of all Quixtar sales were sold to actual customers tells you how good the IBO leaders have been at teaching selling techniques. So I don't think the IBOs should concern themselves so much with where the teaching is coming from, 3.4% isn't exactly a high bar that has been set.
January 17, 2008
Gotta Love Technology
By Truth in Miscellaneous
I just saw an article on Fox News website about a Marine who was able to see his child born thanks to streaming video over a webcam. I thought it was a nice story to see. I know so many of those troops are not only in a high stress environment the likes of which many of us will never know, but many of them miss out on life back at home. Away from their young children missing some pretty special moments. I know it's not the same as being there, but it's pretty cool how technology can make moments like this happen.
January 15, 2008
Retailing in Quixtar Part 3 (10, 50, 100)
By Truth in Quixtar
For the final part of the Retailing in Quixtar series I am going to address the Quixtar rule that states an IBO must make at least one sale to 10 different people, sell 50PV worth of product, or sell $100 worth of product in order to get downline bonuses. This rule was referred to as the ten customer rule in the FTC v. Amway decision and here is what was written about it in the decision:
74. Amway's 'tencustomer' rule provides that distributors may not receive a performance bonus unless they prove a sale to each of ten different retail customers during each month. (RX 331, pp. 1B and 17B) The Direct Distributors have the primary responsibility for enforcing the tencustomer rule in their own group. (S. Bryant, Tr. 406162) The tencustomer rule was started by Amway about 1970. Prior to that, there was a 25 sales rule which required the distributor to make 25 retail sales a month without regard to the number of customers. (S. Bryant, Tr. 408586) The tencustomer rule is enforced by Amway and the Direct Distributors.
Rule Changes?
Now I will admit I don't know the whole history of this rule so I can only assume things have changed since the FTC v. Amway decision. One of the changes that I know of is that the website keeps track of these numbers when orders by customers are placed. This of course is a change that came with the new modern direct fulfillment as opposed to ordering and picking up from upline. But as far as the rule goes in addition to having one sale to ten different customers, an IBO can sell 50PV worth of products or $100 worth of product to get downline bonuses.
Can it be enforced?
As I pointed out in Part 2 of this series however there is a big difference between making a rule and enforcing it. I think what should matter here is not so much that a rule is in place but that it is actually being enforced, and works. The question should be does it truly encourage retailing as it says it does. Personally I remember many people talking about how they would simply purchase 50PV worth of product, check the option that they were buying it for a customer and they took care of it.
Sadly, in my opinion this is another rule that cannot be enforced and it is no wonder that there was only 3.4% of sales to actual customers. Personally I don't think there is really anyway Quixtar can make any rule that would "encourage" retail sales. If they wanted to encourage retail sales, they need to start making it more appealing to IBOs. The problem is that sponsoring new IBOs has been seen as the more appealing way to make money.
Thankfully Quixtar has at least started to look at ways to make retailing products more appealing and most important more profitable for IBOs. Also, there are signs of another step in the right direction with the new rule that allows sales at events. In the end however I don't think the concept of retailing products will be the most appealing to IBOs until Quixtar makes their prices more competitive, and I am talking about the retail price, not the wholesale. You can preach on quality until you are blue in the face and in the end that will only carry you so far.
January 11, 2008
How to consume more books
By Truth in Miscellaneous
One activity that I enjoyed doing while in Quixtar was the reading of the books. While I would have preferred to get the book I wanted rather then just the book they were sending out that month I still enjoyed the task of reading nonetheless. I have often been told that going to a bookstore with me is much like the age old story of men going shopping with their wives. But I believe that reading on a regular basis is one of the best things you can do. One of the recent posts on one of my favorite sites lifehack.org has tips on how to become a glutton of reading with listed benefits of reading and tips on how to read even more books this year.
January 7, 2008
Retailing in Quixtar Part 2 (70% Rule)
By Truth in Quixtar
Perhaps one of the most discussed rules in Amway/Quixtar is the 70% rule. Often it is referred to as the focus of the FTC v. Amway case from 1979. Often times however this rule is misunderstood. So with first things being first we need to understand the 70% rule. Currently the Quixtar rule referencing the 70% rule states:
4.18. Seventy Percent Rule: An IBO must sell, at a commercially reasonable price, at least 70% of the total amount of products he or she 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%, then such IBO may be paid that percentage of Performance Bonus measured by the amount of products that can be shown to have been actually sold, rather than the amount of products purchased, and recognized accordingly. For purposes of this Rule, products used for personal or family consumption or given out as samples are also considered as part of the sales volume.
However, this is not always how the rule was worded, and when you read how the rule was wrote before one can certainly understand why someone would think that an IBO needed to sell 70% of their volume before getting a bonus. Here is how the rule used to be worded:
4.18. Seventy Percent Rule: An IBO must sell at least 70% of the total amount of products pur-chased 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%, then 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.
Some supporters argue that this always included sales to downline, but that is not outlined in the rule so that was clearly speculation on their part. Besides, now that Quixtar is mostly direct fullfillment I don't see how you sell to your downline since everyone supposedly buys from themselves and teaches others to do the same. I have yet to be shown how you can purchase one item from yourself and your upline at the same time. With product pickup I can see how sales to downlines apply, but with direct fullfillment I see the 70% rule applying to personal circle volume only.
In reading the decision on the FTC v. Amway case I have to agree with the supporters that the 70% rule was recognized as a way to prevent inventory loading. I know the wording talks about sales, but it also states clearly what the rule was put in place to prevent:
The '70 percent rule' provides that '[every] distributor must sell at wholesale and/or retail at least 70% of the total amount of products he bought during a given month in order to receive the Performance Bonus due on all products bought . . ..' This rule prevents the accumulation of inventory at any level.
With the modern day direct fullfillment I have to agree again with the supporters that if an IBO is consuming their purchases or giving away samples that those acts do prevent inventory loading and therefore are in compliance with the 70% rule. The only problem with this rule is I don't see how Quixtar can possibly enforce it without some pretty extreme measures.
How do you know that an IBO actually consumed all of what they purchased that month? Short of doing home inspections it is impossible to know. In addition to that what is the difference between buying a ton of product to make a pin level and stocking it up in your house, and buying a ton of product to make a pin level and giving it away as samples. The way I see it they are the same thing. Once again short of home inspections by Quixtar this rule cannot possibly be enforced.
In the end the 70% rule simply cannot be enforced and is only on the books for the benefit of Quixtar so they can say they are in compliance with the FTC decision. I will say any IBO out there who is purchasing product just to make a pin level is crazy, but I wouldn't put it past anyone to do, or worse someone to "advise" their downline to do. To make it worse there is nothing Quixtar would be able to do about it. It seems the 70% rule is a perfect example that making a rule and enforcing a rule are two completely different things.
January 2, 2008
Retailing in Quixtar Part 1 (3.4%)
By Truth in Quixtar
I wanted to write a post about how the enforcement of the Amway/Quixtar retailing rules were a joke but found that stepping into that realm only seemed to open more doors to more issues. So in the interest of trying to keep the posts on this as brief as possible I decided to break it up into three parts.
In part 1 I will discuss the number 3.4% which is the number I got from the California lawsuit transcript. Just to give some background, DJ Poyfair, who is the counsel for the Plantiffs (Orrin Woodward, etc), was making a point about how the high prices were not justified by the high quality of the products and had this to say:
This network marketing company has outside sales of 3.4% of outside. That’s if you accept their definition of what constitutes outside retail sales.
Now, Poyfair was referring to the 70% rule from FTC v. Amway when bringing this up, and was trying to imply that the FTC said IBOs should be selling 70% of the products that they buy. I write this only to include proper context, I will save the 70% rule for Part 2.
The first thing that came to mind when I saw that only 3.4% of sales in Quixtar were outside sales, is that this is no real surprise. I don't think anyone could honestly say they expected such a number to be any higher. I think it speaks volumes to the fact that the focus is on sponsoring and very little focus has been placed on actually selling a product to a customer.
With those kinds of numbers I don't see how this can be taken seriously as a business. I have said it before that if IBOs had the numbers to show they were really a business, they wouldn't have to have rehearsed answers when showing the buisness plan. Try flashing the 3.4% next time you show the plan and I bet the person across the table gets up and leaves in about 3.4 seconds.
Of course as with any other fact that comes out about Amway/Quixtar there is a supporter there to try and put spin and sugar on it to make it sound better. The spin/sugar this time is that this number is only concluded by using the definition Quixtar uses for an outside sale. Ironically, that is the same definition that many would assume it is, a sale to an actual customer, not an IBO. The argument is that many people who are IBOs simply buy the products and don't sponsor or sell to others, therefore making them actually customers.
On the surface this seems valid and if one were to count those purchases as sales to customers the number would certainly rise. But, I see it as just another example of what is wrong with this business. Why should someone have to sign up as a business owner just so they can get a good price? Doesn't it make more sense to have your prices competitive in the first place so that you can make retail profit on top of your PV check? What other business model does someone have to sign-up as a business owner just to get good prices?
Frankly I think IBOs should be a bit peeved with Quixtar over the prices and compensation plan. Ty Tribble many times has showed examples of other MLM companies that have much better compensation plans as well as better prices on their products. Sitting on 3.4% Quixtar looks more like a Wholesale buyer's club then it does a business.
January 1, 2008
Happy New Year!
By Truth in Miscellaneous
I hope everyone had a safe and fun New Year's Eve, and I hope for everyone to have a great and prosperous 2008.