The Problem with Quixtar & Amway.
One Wednesday afternoon I was doing some homework as is a common occurrence and my room-mate asked me if I would be interested in going to a business opportunity presentation that one of my previous roommates had bought into. I can’t say I thought our previous room-mate was a terribly bright person, and wondered what multi-level-marketing system he had bought into. It turns out it was America’s favorite modern multi-level marketing company, Quixtar.
Quixtar is a multi-level-marketing company in which people can become an independent business owner (IBO), and have the opportunity to resell Quixtar marketed products and receive a percentage of all of their gross sales. IBO’s can also recruit new IBO’s and make a percentage of the income their referrals make. Independent business owners also receive a percentage of purchases that they make through Quixtar’s website.
In theory the business idea sounds reasonable, but when we look deeper, we see some troubling information. My previous room-mate who had bought into Quixtar suddenly began buying products from Quixtar which he had never gotten before. Why would he suddenly start to buy energy drinks and nutrition supplements? He received a commission on every sale, including to himself. He now had more opportunities to buy products and unconsciously bought products that he otherwise normally would not have bought because he got a commission on them. It took him a while to realize this, but eventually it went through his head.Quixtar IBO’s often spend a lot more money than they make on Quixtar products than they actually receive in commissions, because IBO’s have an incentive to buy stuff they normally would not. With any reasonable business proposition, you should be at least making some money, not paying them for products you don’t really need just so you get a commission.
Another major bone of contention with the company is that the market is very oversaturated. It’s nearly impossible to refer new IBO’s because everyone has already heard about it. This means more than likely either the person you want to refer is not interested because they know they won’t make any reasonable amount of money with it, or they have already been referred.
So what do you get for all of your hard work and sales? The average Quixtar IBO made $115 a month in 2005. The median income is probably much lower, since there were a few very large bonuses of nearly $1,000,000 which skew that number upward. The typical Quixtar IBO probably makes more like $75 a month.
In late 2004, Dateline reported that a lot of high level Quixtar IBO’s made the majority of their money selling promotional and motivational materials rather than actual Quixtar products. If Quixtar was such a profitable business, wouldn’t they be selling Quixtar products rather than motivational materials to sell those products?
There are just too many issues with Quixtar to make it a worthwhile business adventure. IBO’s end up working very hard and long hours and end up getting paid not very much money in the end. Starting a business with a solid business plan is definitely a great idea, but Quixtar is not the way to go.
posted by Matthew Paulson @ 7:07 PM
8 Comments:
Matt i can't belive you would say such things about such a great company.
I stumbled across this and thought it funny that your blog is "Information for people who want to be millionaires". Give me a break. I know for a fact that some of your info, no truly financially independent millionaire would follow or agree with. Quixtar may have some drawbacks, but what company doesn't? Quixtar may be simple but not easy...hard work never killed anyone. Why are you not recommending Quixtar when people do/can make money. Let them know its not a get rich scheme and it will take work. If they aren't willing to work then they shouldn't do it. Tell them it is a great business, great business model...some make it big, some don't. Some people go to college, some graduate, some don't. There isn't any business out there that guarantees 100% of everyone will be a success. Neither does Quixtar. Doesn't mean Quixtar doesn't work and doesn't mean it isn't a great company. Do you shop at Wal-Mart? Do you know it is the #1 trashed company on the internet. If you believe everything online then you and no one else should ever step foot in a Wal-Mart. I don't believe everything I read online, I shop at Quixtar and like the experience & products. I also shop at Wal-Mart, mainly for the prices...not the experience. Do your research and stay unbiased in your recommendations.
Lets face it, Amway/Quixtar is a scam. The chance of going diamond is 1/15000 chance. The Diamond who makes over $100,000 depends on his/her downlines to buy tools and attend functions. BTW, it is cheaper to buy tools on Ebay. Why pay $5 to $6 for a useless tape.
I have been on both sides of this as I was involved when Amway went to Quixtar, then we got out. I think they lost a lot of us, when all of the sudden it was ok to use our credit cards to buy consumable goods...??? I can see where it doesn't make sense to spend $ on things you won't or don't use. But who doesn't do laundry, wash dishes & shower? I was sold on the idea of "shopping from my own store" I haven't bought off of Quixtar.com in a while & I can honestly say that I would, in a heartbeat, go back to buying the laundry soap, vitamins & the toothpaste! Of course I'm not even sure they still have all that!!! All in all, we found the MLM part of the business to be very unrewarding & far too much work for the very little pay out. We left when got the feeling of being controlled, being told when it was ok to have kids, move, buy a new pair of pants... Every decision we made was based on growing our business & we really suffered (it was ok to spend $400 to get to a business function, but we weren't supposed to incur debt???!!!). So if I could go back to being a WHOLESALE customer I'd do it, but keep me out of the "business." BTW, I think that the "kit" fee would not be worth it for me to go back!
As Manager of Public Relations for Quixtar, I felt I needed to respond to this post. Matt did a little research and came to some quick conclusions, but as anonymous states, there's always a broader story that should be heard before anyone makes a quick decision.
First, if you join Quixtar with the immediate goal of getting rich/becoming a millionaire, you are likely to be disappointed. Not because it's not possible with a Quixtar business, but because your short-term expectations are out of line with what the business can provide immediately.
Quixtar helps hundreds of thousands of people earn a part-time income for their part-time effort. Many of them do desire a full-time income and are working their way toward that. Often, that involves learning from those who already have done so. That leads to the marketing by successful IBOs of their own training programs (the same way leaders in any industry capitalize on their expertise through books or speaking engagements). Further, if their systems were not successful, the market for them would eventually dry up (which, by the way, has happened at different times to different IBO leaders).
The key to short-term, smaller goal successes for a newer IBO is to have a balanced business that includes a mix of retailing product (where you earn retail mark-up), personal use of the product (not just for the bonus income you can earn, but also to learn about and understand why our products are superior) and recruitment of others who will do the same.
Yes, there is no guarantee. But one of the key understandings needs to be that nobody earns more off your personal efforts than yourself. People who don't do the work get by-passed by Quixtar's compensation system.
Finally, I wish your statement were true that "everybody knows Quixtar" because our research shows that market awareness is still low. That means there are many valuable prospects out there (especially as the Quixtar business skews younger every year due to its health and beauty focus).
I hope you and your readers do consider Quixtar further ... check out ThisBizNow.com for more information about the Quixtar business and why others have enjoyed their experiences with Quixtar. -- Robin Luymes
If it sounds too good to be true it probably is. I have a friend involved with Quixtar and she comes back from sales conventions spouting sayings and slogans like she has been brain-washed. It scares me a little. These people aren't allowed to think for themselves, it appears almost cult-like.
okay okay.
Like the author of this original blog, i can concur with his experiences. I had a roommate/friend who became a Quixtar member. To me, if he likes what he is doing; its okay. Just don't force your ambitions to me. However, after I repeatedly turn down his offer, he gives me a website explaining how great Quixtar is.
I am furious! My roommate's recruiter and him keeps pushing me. I am a student: I have no money and I'm here for my degree. I already pay enough money to sit and listen to somebody preaching to me everyday of the week (which I know will do me good, i've seen results of an education). I am a living proof of an education!
I decided to research on my own & I found more evidence to support my own convictions.
Before you start preaching to me.
Please get an education, a well paying job and most importantly a nest egg; then blow your money.
We were Amway distributors long before Amway was rebranded as Quixtar. We were 3 deep and 10 wide and acheived this in only a year. I listened to taped, went to all the major functions and quickly became a brain washed robot spending money we could'nt afford to spend on functions, tapes and over priced and poor quality product. The bottom line was that we spent much much more than we made on functions and tapes. At the time we entered the business the internet was in its infancy so I could not gather the FACTS from the net that people can today in order to make an educated decision when joining. If you do the research you will find that your chances of making money in this business are next to nill.
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