Diamond Club and A Note on Self Consumption
Wednesday, February 28, 2007  by Todd Krause
Category: ,

Hi, I’m Todd Krause, Director of Sales for Quixtar.  Like Jim Payne, I’m new to blogging but am happy to be part of the Opportunity Zone and share some insights about this business with anyone who visits.

One of the truly great aspects of the Quixtar business is that Independent Business Owners (IBOs) earn income in direct proportion to the effort they apply to building their business. Some people register with Quixtar and set their goals to reach financial independence, while many others simply want to earn extra money each month for spending cash, to put toward a vacation, etc. No dream is too big or too small, all are welcome.

Quixtar’s Independent Business Owner Compensation Plan rewards IBOs for selling an array of high-quality products, and pays bonuses based on the sales of other IBOs they’ve registered. Quixtar provides extensive award and bonus incentives for business building achievements, from cash awards to business conferences in memorable locations. To be eligible for these incentives IBOs must be in compliance at all times with the Independent Business Ownership Plan and the IBO Rules of Conduct.

One of our most exciting business conferences took place this month in Hawaii. Each year, top IBO performers receive an invitation to the prestigious Diamond Club. Our forum return ed  this year to Maui for a five day program that revolved around strategic meetings, new product reviews, and a celebration of achievement.

A big focus of this year’s Diamond Club was discussion of First Circle, helping new IBOs become profitable sooner.  This is a shared priority for Quixtar and IBO leaders.  Jim Payne has told you a little about First Circle right here in Adatudes and will share more in the coming weeks .  

Of course we left a little time for golf, the spa, shopping, or just relaxing on the beach.

We are proud of IBO leaders who put so much of themselves into making our business a success. But more importantly, we are proud of all Quixtar IBOs who are defining success on their own terms by pursuing their dreams and goals through the Quixtar business.

I would like to take the opportunity to address questions from an earlier comment regarding the role of products purchased for personal use by Quixtar IBOs. Quixtar promotes a balanced business approach with IBOs and our First Circle initiative embodies this philosophy. By "balanced" we refer to a combined effort that includes self consumption, sponsoring, and retailing (selling product at suggested retail margin, not cost). All three elements need to be in place for an IBO to be as profitable as possible. Any IBO who promotes a self consumption only model clearly falls outside of our philosophy and rules.

The role of self consumption is to help IBOs familiarize themselves with the products that interest them and build their confidence so they can recommend (sell) them to others. Retail margin is an important part of our compensation plan because first, it gets a new IBO earning money right away while building their confidence in the business. Secondly, it provides a stable base of business as IBOs sponsor others and build an organization. We have many accounts from IBOs that some of their most productive downline IBOs started out as retail customers who eventually wanted to try the business opportunity for themselves.


Comments

Miia said:
February 28, 2007 6:30 PM | #

Great stuff Todd and I sure hope that they willing to consider making a change to the booth rule that is listed (limited) under the retailing rule.  

While I agree that there should be some limitations to the way we retail products, I also believe that a small change needs to be made to the rule.  Every weekend there are very inexpensive vendor fairs put together by direct distribution marketers.  While some distributors may bring product to sell, most use their booth as a way to display their products/catalogs to make new contact to book home parties.  Most don't sell products at these events because its difficult to haul in a large supply of products to sell and then remove any products that dont sell.

The current rule will allow this type of booth to be set up, but it must be in an event that is not set up for the purpose of making a sale (the rule list various examples).  I would like to see the rule to be modified where we can display our products/catalogs at a vendor fair BUT no sales would be allowed during the event. The IBO would call the contacts after the event to set up a time where a in-home event can be set up and sales can be made.

We have products that are fair superior to others in the market and we should be allowed to show off these products during events that are used by other direct marketing companies. If we are truly a product distribution company, we should be allowed other avenues to display our product which will lead to more sales & profitability for ALL IBO’s.

ibofightback said:
February 28, 2007 6:43 PM | #

Todd, just to play a little devil's advocate here. If someone likes the products and orders often, wouldn't it make sense for them to register as an IBO in order to get PV and potential discounts? And if they like the products and convenience of Quixtar, particularly at IBO pricing, wouldn't it make sense for them to tell their friends? Even if they had no desire to retail?

Now, since they don't qualify under the member/client volume rule they wouldn't qualify for downline bonuses, but they would qualify for higher rebates on their own shopping as their group volume increased.

In other words, if you like the products but have no interest in retailing, building a "personal consumption" type of network actually makes perfectly good sense. Indeed, in the scenario I gave you'd have to be a bit of an idiot to remain as a member/client, wouldn't you?

I'll add that I'm a fan of retailing (though I prefer to call it merchandising) for pretty much the reasons you mention, but I can't actually see any problem with the scenario above - with one proviso: expenses are kept under control.

It's also been mentioned in some other threads that many products that IBOs did find fairly easy to retail in the past, such as the SA8 and LOC range, are no longer as obviously price competitive. This means they're more difficult to market at RRP, so the obvious temptation is to drop the price to be more competitive, market at IBO price and try to profit through the volume rebates. Once you're no longer making the retail markup profit then the incentive to retail diminishes and the incentive to focus on network building increases. It's my belief that IBOs would be helped enormously if there were products whose RRP was more obviously competitive. Most *are* actually competitive now, but only after you spend a substantial amount of effort in educating the potential consumer of the benefits, or they're a premium product with a (smaller) premium market - such as Artistry and Nutrilite.

I believe the balance between the effort required to retail and the financial reward simply isn't there for many folk today. As I think's been stated by the corp - we need products IBOs *want* to sell.

Eric said:
March 1, 2007 12:39 AM | #

I agree with Miia,

To have such restrictive rulings has more than once hampered my ability to showcase products for potential clients and moreover the cost of setting up a one man "fair" would eliminate my business altogether. I am alone out here and my "upline or what ever the company calls them nowadays" are not people I can get ahold of nor do I wish to- hence my adamant call for no LOS and going to a system similar to the one operated by SMC but with the same high quality offered by Quixtar today.

Tex said:
March 1, 2007 8:10 AM | #

I think the reasoning behind not having presence at the direct marketing fairs boils down to two reasons:

1. Many of the companies are "fly by night" operations, and it would put Quixtar in the same light as the rest of them, and

2. It is not duplicatable. How many Quixtar IBO's would you allow at these fairs, and how would you make the decision who is allowed to attend?

Todd, let me know if I am off-base on this, if there are other reasons, or you are reconsidering a change to the rules.

ibofb,

I agree with your point regarding pricing. I made a suggestion on another thread some of the product lines that are not as popular, namely the detergent and cleaning line, could be used as "loss leaders" as an entry into the higher volume product lines, such Artistry and Nutrilite. It would be helpful to get some dialog from Q on this idea.

I think people are too much in a hurry these days (the "microwave" society we live in) to sit down and become educated regarding the benefits of the products, at least initially.

If we had some "gateway" product lines, then we could expand retail into other areas.

However, Q probably has to be careful with this approach, as their retail rules could come under criticism for this approach, with the charges the "loss leader" product lines meet the letter of the rules, but not the intent.  

Jeffrey said:
March 1, 2007 12:52 PM | #

My wife and I have specialized in the home care line for the 20+ years we have been in. No matter what, people still have to wash their clothes and clean their house. They might have someone come in once a week to clean, but they still need some basics around. This is a product line that sells month in and month out. It's not promoted enough.

I have repeatedly called Quixtar and said they need to quit dropping products. These low-sellers do need to be "loss leaders" as someone else said. When they drop those that are favorites of some people, the customer is forced to go to the store. Then they think, "Since I'm already here, I might as well get everything else." There goes another customer down the drain, thanks a lot Quixtar marketers.

With all due respect to Ray and Todd and everyone else in the marketing department, I believe these are positions that should be filled only by people that have been an IBO that has built to at least Platinum. There are things you will never know by being only on the backside.

How can I sell a complete laundry line now that Smashing White and Dry Chlorine Bleach is gone? It's like a big smile with 2 teeth missing. How can I compete for a Lavoris customer when the cinnamon oral rinse is gone? Slow mover? Yeah 50-1 I was told. And your point is? Bring it back. The reason people didn't buy it was because it was too hot but nobody was listening. It's just easier to have abandon ship mentality and drop it.

Same for the box drinks and the Harvest 12. Q kept the price sky high and priced themselves right out of the market. Marketing has said they were no longer moving. My local supermarket still has a full section of box drinks. Replaced by Seismic? Yuk. Colored water with 40 more calories than Active 8 boxes.

The Formucare line has been massacred. There's almost nothing left. Bring all that stuff back. We need to have a full array of products so we can go into someone's home and say, "We are your one-stop shopping portal."

I could rant and rave some more but I won't. Some people have thought that because I post so much, it's because I don't like the business. That's not true. I've looked. There's nothing else out there like this. I write because I care deeply about the future of this company, because it's my future. But sometimes I just feel like I'm talking to a stone wall to try to get some product things changed.

Tex said:
March 1, 2007 2:44 PM | #

Todd: By "balanced" we refer to a combined effort that includes self consumption, sponsoring, and retailing (selling product at suggested retail margin, not cost).

Tex said: Todd, you're not suggesting IBO's MUST sell at suggested retail, but instead the suggested retail is going to be so competitive we won't have to mark them down to IBO cost, correct?

If the above is correct, are you taking into account the cost of goods varies across the country, and what may be cost competitive at retail price in one part of the country may not be elsewhere?

Chris said:
March 1, 2007 10:15 PM | #

I'd like to address the pricing issues put on the table. For many years, I have worked in foodservice distribution--an EXTREMELY competitive business, where all the players essentially offer the same things in different packages and the name of the game is service and relationship. That being said, it is almost impossible to get in the door without talking price--so you have the chance to prove your service and develop the relationship. Given the parallels between these businesses, I am stymied by the all-or-nothing pricing approach Q uses. Why can't I give special pricing of my choosing--between cost and retail--on an item-by-item, category, or customer basis? If laundry products are sensitive, let me price them competitively and get the retail price I deserve for other items. We should also be able to set time-limits on pricing, so we can offer "Introductory" specials or "1-week-only" discounts on products or lines we want to grow. If our business is really ours, we can't have our hands tied when it comes to pricing options. Help us to go out there and make money while still offering competitive pricing when we need to without giving away the farm along with it!

Miia said:
March 1, 2007 11:19 PM | #

Tex said: Many of the companies are "fly by night" operations, and it would put Quixtar in the same light as the rest of them

Do you think that Avon, Mary Kay, Tupperware and Pamper Chef are fly-by-night organizations? I don’t think so.  They have been around for years and will continue to operate even after opening retail locations (Avon).  These vendor fairs are how a lot of these distributors build their business.

Tex said:  It is not duplicatable. How many Quixtar IBO's would you allow at these fairs, and how would you make the decision who is allowed to attend?

Its very duplicatable!  In any one event you can have 3-4 IBO’s displaying different product lines.  I also don’t feel that this is a valid argument because the rule currently allows an IBO to have a  booth, it just cant be at an event that promots selling.  Who can have a booth at an allowable event??  The first IBO that finds out about the event and puts the money down for the booth fee.  A vendor fair would be the same way.

In any town during any given weekend, there are hundreds of these vendor fairs going on in some form or fashion.  It takes very little effort for and IBO to find the date and location of a fair and to contact the orginzer to add a booth.  

I think that its time to catch up with the times.  We are no longer a door-to-door selling operation.  We need to allow new avenues for people to move our products.  I have lost IBO’s on my team to other direct distribution compines because they can make a profit, through retail sales, quicker then they can with Quixtar.  Our big hang up is that we sell a business opportunity and then try to sell a product and it should be that we sell a product and then promot the business opportunity once they love the products (and you can get them over the price objection).  

Jeffrey said:
March 2, 2007 2:37 AM | #

I need to apologize for my above post. It was a little too strong. My comment about the Seismic drinks was uncalled for. Sorry. It's just that the box drinks were so good. I have acid reflux that will stop a freight train and I could drink the Active 8 boxes but I just cannot drink the Seismic drinks. I know the product line has to keep up with the times, but sometimes I just feel if all the lines were promoted, or sold in smaller quantities (there I go again, but it needs to be said), I really think some things wouldn't get lost in the shuffle. The WYW magazine is usually always Artistry products. It's too ritzy-glitzy. Give us an overview of ALL the lines each month in the magazine, with head-to-head comparisons with the competition, and cost comparisons, both by the container size and for the concentrated items, on a per use basis. And more demos. People still like to see demos. We're hungry for this info so we can go sell again like we used to.

Ty said:
March 2, 2007 12:24 PM | #

I was recently told about a specific Emerald on the TEAM who's idea of retail sales is to donate 50PV in office supplies to a local charity.

So he spends $150 a month in order to "do" his retail sales, then he suggests that new people do the same thing.

Miia mentioned something else that I find interesting..

"Our big hang up is that we sell a business opportunity and then try to sell a product and it should be that we sell a product and then promot the business opportunity once they love the products (and you can get them over the price objection). "

A big problem is that people only love the products when they believe the products are going to help them acheive their goals and get to the diamond lifestyle.

I found over and over that once people "unplug" from the tools and training system, they stop buying products.

You can play around with statements about quality and concentration all you want, but there is a reason people must "answer objections" about the price of the products.

ibofightback said:
March 2, 2007 5:08 PM | #

If people are buying the products only because of the associated business opportunity, and that's how you are getting them to buy the products - then you are running an illegal pyramid. Case law is pretty clear on that fact.

Contrary to your experience Ty, I've had numerous folk in my business, myself included, "unplug" from the tools and training - and continue to buy products. When I went back to activity, I plugged in again.

But I have *always* bought the products because I wanted them, and I have always "recruited" people on the same basis.

Perhaps the reason why you are no longer a Quixtar IBO (for others - Ty is a former Quixtar IBO now promoting a competitor) isn't to do with the products/opportunity per se, but the way in which you (or the organization you were with) operated their business?

Brad said:
March 2, 2007 5:11 PM | #

"A big problem is that people only love the products when they believe the products are going to help them acheive their goals and get to the diamond lifestyle."

That is absolutely not my experience.  And I sell products at sugg retail price.  Even at that price I get calls from my customers to order products for them.

Tex said:
March 2, 2007 5:15 PM | #

Ty,

I'm surprised the Emerald didn't donate $100 in office supplies to a local charity, they would still meet the retail rule volume.

However, whether $100 or $150, I don't think this is the retail rule intent, as giving away something is not the same as selling. The presumption is the sale is at somewhere at or above IBO cost.

I'll have to admit I have never heard anything as blatent as giving away products to charity, but we were taught to lie on the site and claim 50 PV we didn't actually sell as sales. I think we are far from alone in receiving that teaching.

Regarding "quality and concentration", I think the First Circle project is going to address those issues. Thanks for helping us out though, it's always nice to get assistance from a competitor.

ibofightback said:
March 2, 2007 9:53 PM | #

Plus of course, according to rule 4.2.2 the member/client volume rule doesn't apply to platinums and above, so the emerald in question has no "obligation" to "do" his retail sales.

Ty said:
March 3, 2007 11:59 AM | #

I signed up for Amway in 1992 (at the age of 22), and went 1,000 PV in 3 months. I was active for 5 years (acheived 4,000 + PV) and then did a slow fade for the next 5 years.

So, I have been involved or following Amway/Quixtar for nearly 15 years and in that time I have not heard of a single person that bought Double X at the suggested retail price.

I don't think that is a result of a bad organization, team or system.

Allan said:
March 3, 2007 6:32 PM | #

Miia,

Although my perception of these booths is the same as Tex's, you make a good point. Why should you be prevented from ethical sales even though it is something I wouldn't want to be involved with.  You are after all, an Independant Business Owner.

ibofb,

While there is a logic that says it makes sense to be involved to purchase the products at IBO cost and receive any bonuese earned, some people simply don't want to belong to Quixtar or anything else.  I prefer to let people know what is available regarding this business but if they hesitate I would rather have a saisfied client then no volume and I am comfortable knowing that they know there is a route that has more benfits if they choose.

Ty:

An Emerald isn't required to meet the retail rule so anything he or she is donating is being donated because they wish to donate.  In any case spending time to explain this business and then not offering to sell them a product makes no sense but (sigh) I'll admit it probably happens.  Hopefully First Circle and the Pathways Jim Payne mentions on another blog lead us down the road to compelling products that better enable us to sell, merchandise, retail, whatever we call it.

Tex said:
March 3, 2007 8:53 PM | #

ibofb,

Here's the rule you referenced:

4.22.2. If such an IBO fails in any month to make said Member/Client sales and/or to produce proof of making such sales, then he or she may not retain or will be denied his or her Performance Bonus that Month on downline volume. It is the obligation of the IBO to self-report as appropriate with their method of reporting, by the official deadlines published by the Corporation, in order to qualify for his or her Performance Bonus on downline volume. This Rule shall apply to an IBO until he or she attains the status of Platinum unless the IBO is a currently qualified Platinum or above.

When I discussed this rule with the rules department, they said Platinums and above are still required to comply with the retail requirements, they just don't have to self report the volume.

I think there used to be some words to the effect at the Platinum level and above, the assumption is these pins need to put more emphasis into helping their group instead of retailing, but I believe these words have since been removed.

I could legitimately interpret the written rule either way, and it would be helpful if the rule was reworded to clarify.

I was also told the rules are being revised to clarify this and other issues, but that was several months ago, and I haven't seen the change.

I have suggested the rules department confirm this in this thread, or better yet, have their own thread and/or blog to answer these types of questions, perhaps this is being considered.

Ty,

Do you understand you can still make money when selling Double X at IBO cost?

There's a concept called PV/BV, and it is how you got paid for personal volume, retail volume (plus any markup, if any), and downline volume (assuming you had the required personal retail volume) when you were a 4000 pin. Unless you significantly exceeded the minimum retail requirements, you would have made MUCH more money from your downline volume than your self purchases or retail, unless you were one-legged.

ibofightback said:
March 3, 2007 9:48 PM | #

Allan - absolutely, I have plenty of clients :-). I just understand why that kind of model has developed. Personally, rules aside and entirely from a business perspective, I don't think people change much, the people setting goals and working are going to be the same people. What's easiest? Set those people a goal of doing doing 100PV through personal consumption, and have to find a whole heap of them to go platinum etc, or setting those same people a goal of 300PV from personal consumption + merchandising and having to find a lot less of them?

There's always a "balance", but a bunch of self-consumers is not it, IMO.

Ty said:
March 4, 2007 11:41 PM | #

Retail profit is a vital portion of the average persons Network Marketing income, without retail profits there is no possible way every Quixtar IBO can make money.

For Tex...

I understand how PV/BV works. (I don't need a 10 year - 1,000 pin trying to explain it to me...I went 1,000 with 6 bonus checks).

I don't think that Quixtar IBOs are selling their products at wholesale to customers out of the goodness of their hearts. They sell at wholesale beacause (for the most part) they can't sell at retail.

Let's also be clear about one other thing...you don't "make money" on your own purchases.

Tex said:
March 5, 2007 10:03 AM | #

Ty,

Who said every IBO needs to make money? Some IBO's choose to do less retail in the short term to build an organization that enables them to make more money in the long term. This is an individual IBO choice. "I" is for "Independent", remember?  

You may have gone 1,000 with 6 bonus checks, but you didn't say what your structure was at 4,000. Perhaps 5 of the 6 quit (which would be typical) and you were a one-legged 4,000 pin. Is this why you didn't answer the question directly?

I sell products at wholesale because in my area of the country the cost of living is below average. I would think someone in the northeast and west coast could sell at retail and be cost competitive, at least with some of the product  lines.

You do "make money" on your own purchases. It is a sliding scale from 3-25% on your own purchases, and provides the foundational PV/BV for retail sales and organization volume. I agree the purchases are similar to using coupons, but coupons do not give you the added benefit of getting more money from retail sales and organization volume. But thanks for more questions from a competitor to clarify the issue.

Piet said:
March 5, 2007 12:39 PM | #

Ty Said: I have not heard of a single person that bought Double X at the suggested retail price.

Piet Says: I don't know the US laws on price fixing, but as far as I understand the recommended retail price is just that, recommended. If it was not, you would be had up by whoever is responsible for competition (FTC?) so quick you won't know what happened.

Regards

Allan said:
March 5, 2007 2:08 PM | #

Absolutely, while self consumption is an element, just self consumption is not a balanced business.  Even though I naturally rebel at rules the Client rule is one that makes sense.  People need Clients and we need more products that can be retailed so people can "make money" with a balanced business.

Brad said:
March 5, 2007 2:41 PM | #

Ty,

My Q12 sells about 40% of his double X to customers at retail.  Personally, I give a "family discount" to those that used to be "members" and let them keep IBO Price.  Everyone else, it is retail price.  In return, I provide great personal service, discounts on shipping, and free samples, all of which costs less than the retail profit I make.  If they do not like the price of Double X, I offer Daily, at retail.

No problems so far :-)

Ty said:
March 5, 2007 4:37 PM | #

"Who said every IBO needs to make money?"

People sign up in Quixtar to make money. I know you don't make any (after 10 years) but it is really supposed to be a business.

If I remember right, I was paying 8 bonus checks as a 4,000., but thanks for checking.

I live in one of the most expensive cities in the U.S. and once again, over the last 15 years of following Amway/Quixtar, I have never met a person that sold a box of Double X at the retail price.  If you don't see that as a problem...good luck.

If the product is unique and priced fairly, people will want to buy it at the retail price. It's not rocket science.

Ty said:
March 5, 2007 4:43 PM | #

By the way, I am all for using your own products but I am also for maximizing the retail customer base so that average person involved is spending less than they are making.

Tex said:
March 5, 2007 6:12 PM | #

Ty,

You took that quote out of context. What I said was not every IBO wants or needs to make money in the short term, as they are not interested in a large retail business.

Thanks for answering the 4,000 question. Why did you quit, you were so close to Platinum?

See above, others are retailing Double X at retail. Maybe they just have "good luck".

What is "unique and fair" to one person is a rip-off to another.

If the tool prices were priced right, you would make a net income without developing a large retail customer base.

Also, most folks don't like to sell, so doing a lot of it is not attractive, and is not a business ownership model, it is a retail/salesperson model.

ibofightback said:
March 5, 2007 7:22 PM | #

Ty,

(a) I'm not in the US, but I have a number of full retail customers of Double X

(b) even the FTC in FTC v Amway acknowledged that many people join Amway to get discounts, not to make money Ty. Quixtar says the same on it's sites, DSA says the same about MLMs in general. To make a blanket claim that "people sign up in Quixtar to make money" is plain false.

Again, this perhaps reflects more about how you and/or the organization you worked with ran their Quixtar businesses rather than Quixtar per se.

Indeed, little to no merchandising seems to be a fairly common thread amongst the experiences reported by many of those who now occupy the position of "critic" on the internet. As reflected by the answers above, it's not however a universal trait.

Ty said:
March 6, 2007 11:15 AM | #

"To make a blanket claim that "people sign up in Quixtar to make money" is plain false."

ibofightback,

I always assumed that you are from Europe, not another planet.

Second, little or no merchandising was (is) taught throughout Quixtar.

Tex,

I resigned from Quixtar because I did not want to build a business where 90% + of my downline spend more money than they make. My resignation didn't have much to do with whether or not I have the ability to build a Quixtar business, in fact I went on to build a very profitable business (hundreds of people) with another company.

Jeffrey said:
March 6, 2007 1:20 PM | #

Ty, if it's really true that you built a successful business in another company, why do you spend so much time here? Do you have a vendetta against Quixtar and it's IBOs? If you've moved on, then truely move on and leave us alone. When I've left a job, I don't go back and hang around the front door and harass everybody that comes and goes. I congratulate you for achieving success in another company. BYE.

Tex said:
March 6, 2007 1:25 PM | #

Ty,

There are plenty of people who sign up to gain the convenience of having high quality products delivered, and sign up as IBO's to keep their options open. Or, just out of curiosity. With the new "stacking" technique that is being used more and more, this happens even more frequently. Why not sign up as an IBO and get bigger discounts on your products as depth is built below you?

You're right on the merchandising point, I have that experience and have noticed it in many other tool systems from blogs and by purchasing their tools online.

Did most of your IBO's lose money because of the tool costs?

Porkchopjim said:
March 6, 2007 8:33 PM | #

Might I again ask clarification of how an IBO 'makes money' off his own consumption.  I was always of the notion that IBOs only 'make money' when they sell products to someone else.

Tex's point is taken in that a degree of self consumption does indeed 'provide the foundational PV/BV' for 'organizational volume' if you build a 'Buy From Yourself and Teach Others to Do the Same' business.  Downline duplicates, and you get paid off downline self-consumption.  But personal self-consumption does not, in an of itself, generate income.

The only other scenario in which an increase in self-consumption could generate additional income would be if that self consumption pushed group volume into the next Performance Bonus Bracket – where you could increase the differential paid on downline volume.  But, not only is there a trade-off on how much you spend to buy the products to get that additional PV, that scenario depends entirely on having downline volume.

“I get paid to use my own products” is a common pitch associated with the Quixtar Business Opportunity.  Clarification of whether that is an accurate representation of the opportunity would be appreciated.

Brad said:
March 7, 2007 9:57 AM | #

PCJ,

It is clear that the corporation advocates a "balanced business" and makes no claims that a "buy from yourself and teach others to do the same" is the way this business should be built.

Tex's point is: say a customer loves the XS drink, or Artistry Moisture Rich Skin Care System (my biggest sellers right now) and they know that they can get IBO price as an IBO.  So, the registration is ~$45/yr, and this results in a savings of over $150 in a year, therefore, they are discounting their price by $105 by becoming an IBO.  They can further discount their price by brining volume through their business.  This comes to IBOFB's point that some customers sign up as IBOs because they want that price or make a little side money through sales, not necessisarly to go diamond.  Now, can an IBO just purchasing products and not building the business gain tax benefits and get away with it?  Not if they are audited.  And those IBOs need to know that.  But they do get their products cheaper.

“I get paid to use my own products” - This absolutely can be true.  You have two individuals, one drinking a Red Bull, one drinking and XS.  They are each approached with the question "What's that?  Where did you get it?" and "How can I get some?"  -- the Red Bull drinker passes the profit to the store he/she got it from while the IBO can provide this person with the product and receive part of the profits.  Therefore, he IS making money by using his own products.

As in any business, volume of products sold is the profit driver.  To sell products, an IBO needs to be at least familiar with them.  In most cases, and IBO can more easily sell those products which he uses and enjoy than those he does not purchase or does not enjoy.  Reason?  Positive endorsement and personal testimony.  That is the essence of this business and is why the “I get paid to use my own products”  is so common.

Tex said:
March 7, 2007 10:05 AM | #

Yes, the term "I get paid to use my own products" is an accurate (although partial) representation of the opportunity.

Thank you for your kind question.

Ty said:
March 7, 2007 10:44 AM | #

Most IBO's spend more than money than they make because of a lack of retail sales combined with expenses, including tools costs.

We can hope that the first circle project will help the newest person create more sales.

Jeffrey,

I write extensively about Network Marketing on my web site (MLM Blog), Quixtar is a Network Marketing company, so I follow it and write about it. Based on the fact that I had limited success with Quixtar but once I left I immediatly put together a large team with another company, you would think that my insight might be helpful (to some).

ibofightback said:
March 7, 2007 12:55 PM | #

“I get paid to use my own products”

I personally don't like this phrase, but really it's just a semantics things. If you use your own products you are effectively "a product of the product" which means you are promoting them through that use, which means you are (hopefully) generating interest amongst others to purchase and use those products, which you can earn income on. Hence you "get paid to use your own products"

Still a bit of a silly phrase though I think

Ano said:
March 7, 2007 1:06 PM | #

Q " Connections" is June 9th. I wonder how many systems will promote this? More info at Q site!

Ty said:
March 7, 2007 7:46 PM | #

I just wanted to say that I am pretty impressed with the way that Quixtar is allowing this discussion and aside from Tex (the 10 year 1,000 pin) trying to dominate the converstation, there is some good dialogue going on here.

It will be interesting to see if Q Connections is the beginning of a new Q training system.

Porkchopjim said:
March 7, 2007 8:28 PM | #

Let’s get specific.  I appreciate attempts to explain the phrase “I get paid to use my own products.”  That statement, by itself, implies that income – not rebates, discounts, or marketing benefits – is generated.  Profit.  From the act of self consumption.  Essentially, getting paid to buy Quixtar products.  Picky?  You bet.  Because you don’t generate income by buying Quixtar products, and you can’t be your own customer.

We are in close agreement, partially (Brad and IBOFightBack).

“I get paid to use my own products.”  That little phrase takes quite a bit of explaining.  But, that’s what makes it so versatile:

1.  I’m a new IBO.  Quixtar sends me a check based on the amount of goods I consume.  The more I buy, the bigger the check.  I get paid to use my own products.

2.  I’m not a new IBO.  I’m ready to build a business.  I’ll share this plan with friends of mine who become downline IBOs to me.  I don’t really care for retail, but I’ll do the minimum required.  That doesn’t generate a lot of business, so I’ll change my buying habits to build volume as an example to the newer members to both assist them in getting to know the products and process, as well as get them started on getting paid to use their own products.  I get paid when my downline uses their own products, which means I get paid to use my own products.

3.  I’m an IBO who joined to not only make a little money on the side, but enjoy owning my own business.  While using or consuming my own products adds to my business volume, I don’t actually profit from it.  But, part of my marketing strategy is exposing some of those products to potential customers or people who might be interested in the business.  I consume some of these products in view of those people, hoping it will start a conversation.  Because this is a business activity, I can deduct the cost of that product from my taxes as a business expense.  At tax time, I get paid to use my own products.

4.  I’m either a new or old IBO.  Doesn’t matter.  My personal volume is a mix of both retail to customers and personal use.  While I understand that the particular action of using my own product in and of itself does not ‘make money’ or generate ‘income,’  my personal use of products, besides the fact that I like them, helps me to get more familiar with them, and if someone sees me with it, it might just strike up a customer, business or just personal relationship.  I don’t get ‘paid’ to use my own products, but it’s part of my business strategy to try to build volume and income.

Which one of the above is closest?  What’s the spirit and intent?  

I have to hit one more thing:  volume of products sold is the profit driver.  Almost.  Volume and margin of products sold are the profit drivers.  IBOs get hung up on volume = profit.  That’s only part of it.  As with example 1 above – lots of volume, no profit.  Margin – the difference between goods bought and sold, either immediate retail or subsequent volume rebate (hopefully both!) – is where the money and profit comes from.

Miia said:
March 8, 2007 7:33 AM | #

So…what can Quixtar do to make it easier for the average IBO to retail a product?  Allow new avenues for marketing?  Have regionalized retail pricing or make it easier for us to set our own pricing on the site at each customer sign in (give someone a 10% discount off of retail…)?  I actually would like to see something of the later because where I’m located, in the Midwest, the retail prices on average are a tad higher then other products even on a cost per use basis.  I really like the ability to give a person my qhealth website that is provide by Quixtar and but it would be really great if I had the ability to offer different retail pricing. Today you only have two options: offer them the national retail price (I know we are offering a higher quality product, but most people make their buying decisions based off of what in the check book) or offer IBO price which means you lose ALL retail profit.

Now I know that I can set a different price for a product for each customer if I order the products for them and then have it shipped to their location.  That can get to be an administrative nightmare when you have several customers that want to purchase on a regular basis (I know, nice problem to have). Ordering for them also removes the ease of having the customer do their own shopping on the web.          

ibofightback said:
March 8, 2007 11:33 AM | #

Porkchopjim - Do you honestly believe *ANYBODY* is so stupid as to think they make money simply through buying stuff? Anybody at all? It's a marketing phrase. It's used to reflect the marketing potential of using your own products. That's all.

1. is absolutely ridiculous and only "critics" ever raise that as a meaning

2. implies having other people believe 1, so is also ridiculous.

3. is absurd also, since you can't claim tax benefits unless your actually running a business. Talking about products and not selling any of them does not constitute running a business

4. is the only one.

PCJ, I doubt you are so stupid as to believe 1,2 or 3, and I doubt you believe anyone else is that stupid. You know the answer, I suspect you're just being argumentative. This type of spurious post is one of the reasons I stopped spending time at qblog.

Jeffrey said:
March 8, 2007 4:13 PM | #

There is a couple things that Quixtar can do to make retailing easier. They are saying they are introducing too many products--25 in a year. That is low. There are some products that are so out of date, we cannot compete. Take the Body Series Anti-perspirant Deodorant Stick. It's twice the price as what's at the store. As good? Hardly. It's the worst product we have. It's too dry, so it breaks off in the holder before it's gone. It is not effective for all of us. It's not strong enough. It says it goes on clear. But it's white, so people who want CLEAR will not buy it. What is Quixtar waiting for to update it? The Apocolypse? It needs to be reformulated NOW. Make it clear. Give it some moisture. Then give us some complimentary products. Not everyone likes a stick or a roll-on. Give us back the spray. Are they very popular? No. Oh, well. Give it to us anyway. And give us a gel. I love the Mitchum Gel. I switch back and forth between the Body Series Roll-On (to be loyal) and the Mitchum Gel because it's nice to use--and it works.  Also, we need a maximum strength version. Some of us sweat a lot.

Second terrible product: Dish Drop Automatic. It is very inconvenient to dispense. Try lifing the big one to pour into a tablespoon. Right. I bought a container of Oxy-Clean Automatic Dishwasher Detergent from a Partner Store. It came in a small plastic square container with it's own scoop and a pop-off/snap-on lid. Very, very convenient, too. Twice as concentrated as the Dish Drops Automatic. I was so impressed with the container, I sent it to Quixtar's Marketing Department. Response? Nothing. No acknowledgement. Ever. I think they were offended that I didn't like the Q product. I finally had to start buying the Dish Drops again as the Partner Store quit carrying the Oxy-Clean. I still intensely dislike the Dish Drops but I'm using it. I cuss the container every time I have to use it. Q used to respond to things like this but they no longer do. Well, they sort of do: "Your comments are very important to us. We have forwarded them on to the appropirate department for review, blah, blah..."  :-l

Even the Pursue Bowl Cleaner is not up to competitor's standards. I have a janitorial business. Lysol has a twist cap. Ours has a cap that you have to remove. Very inconvenient. Lysol is effective against Rotavirus. Ours is not. Ours is twice the price. It's also way too runny. Very wasteful. Lysol is thick.

The marketing department says they are responsive to our needs but I don't see it. It is frustrating. Response, Todd? Hopefully, I'll be able to talk to you more in June.

One more time: Get rid of the case lots. I should be able to buy ONE Protein Shake, ONE jar of Peanut Butter, ONE four pack of toilet paper, ONE bottle of ketchup, even ONE Food Bar if I want to. They are now packaged for eaches, so why not?

Let's hear what everybody else thinks. While it's great to talk about this stuff, if the company is going to be unresponsive and not do anything, then we're all wasting our time. So let's hear from the marketing staff, too. I still think Q needs to bring in people from the field to work in that department. I'd gladly put my business on hold for 2 years and work for Q to see some major changes made.

Porkchopjim said:
March 8, 2007 9:06 PM | #

IBOFightBack/Insider:

“Do you honestly believe *ANYBODY* is so stupid as to think they make money simply through buying stuff? Anybody at all?”

People are going to start accusing us of working together!

Because:  

The ONLY description of ‘I get paid for using my own products’ that I made up 100% all by myself – was the last one.  The one you say is ‘the only one.’  Brad came close, but he didn’t quite get the gold star.  

Every other description – 1 through 3, has been presented by and IBO as an accurate representation of the Quixtar Business Model as they understand it, as it pertains to “I get paid to use my own products.”

In fact – in an abbreviated form here, but expanded in excruciating detail at other places  – number 2 is the first one described on this thread.  From an IBO with a reported 14 years of experience.  And notwithstanding a propensity to make things up – he didn’t make that up.  He was taught it, and lives it.

(Side note:  number 3 presupposes that the IBO actually runs a business.  He could retail 100%, have downline – I didn’t make that clear, because it doesn’t matter for that example.  It might actually be a claimable expense – but it’s still a rebate.)

Now, if Quixtar is concerned about getting its business opportunity accurately represented, and presented – then it should know that this is being done in their name.  And I don’t think I’m the first to let them know.

“I make money using my own products” is not just a ‘marketing’ term – it’s a business philosophy for quite a number of Quixtar IBOs.  Those IBOs do not get that idea all by themselves – it’s taught through their systems, as an accurate and viable route to financial success using the Quixtar Business Opportunity.

And, it stems from the idea that ‘volume equals profit.’  The easiest way to get volume is to buy it yourself.  If you do that, along with the minimum retail required to get the bonus off of downline volume, you are 100% within the operating rules of Quixtar.

Illegal?  Not currently – and probably not.  Efficient?  Most definitely not.  So again, if Quixtar is concerned about IBO profitability, this might be something else to look at.

And when Beth Dornan says:  “But the dollars in their pockets will come from selling products and getting the retail commission in addition to bonuses from overall volume,” – it’s got just a little taste of marketing to it, because it matters where that volume comes from and where the dollars started.

ibofightback said:
March 10, 2007 12:22 PM | #

PCJ, I can't find the post you are referring too, but nevertheless I stand by the statement. And the answer is apparent - you do indeed believe that those IBOs believe that by buying products, yet never sponsoring or getting clients and selling products at wholesale or retail, that by just buying stuff - they'll miraculously make money.

Well PCJ, I have a little more belief in people then that. Nobody believes that. Nobody is that stupid. Ask the IBO who you mention earlier - "so, you make money just buy buying stuff. You never need to sponsor other people, you never need to sell. And you'll get rich huh?"

They'll say the same thing I would say - "don't be absurd"

Tex said:
March 10, 2007 11:16 PM | #

pcj,

Here's are 3 examples to back up the "I get paid to consume my own products" statement.

1. When you use your products, others may see your products, such as an XS Energy drink. If they then buy XS Energy drinks from you, you can say the above statement is true. This is an example of visual and personal promotion.

2. If you use your own products, you can be much more effective in vouching for the high quality/value of the products. This is much easier to do than speaking with no personal experience. Again, you have made the above statement true. This is an example of experience and personal promotion.

3a. Let's say you sell 200 PV of products. Assuming no downline, this gets you a 3% bonus. If you then buy 100 PV of products for your own use, you get to the 6% level. Neglecting retail markup and assuming a 1:2 PV/BV ratio, in the first example you would get about $12 (3% of 400 BV). In the second example, you would get $36 (6% of 600 BV). So, buying those products for your own use meant you moved up in the bracket from 3 to 6%, and you were paid via a bonus check $24 for your own product use, or about 12% of your cost.  This is an example of personal use and retail profit.

3b. The same effect is true if you had 2 personal (width) downline IBO's each purchasing 100 PV worth of products, except they would each be payed  about $6 (3% of 200 BV) from the original total of $36, leaving you with $24 net profit, assuming you met the retail and 70% inventory rules with your purchases. This is an example of personal use, retail, and networking profit.

It is a very simple business.

Of course, for these examples I have neglected tool costs, which amount to several hundred dollars per month if you are "loyal", and would result in massive net losses.

Porkchopjim said:
March 11, 2007 6:14 PM | #

IBOFightBack,

The post in question is directly after Ty said ‘you don’t make money off your own purchases.’  

Only in my first example is your oversimplified reduction of the issue true…while you ignored the others, which all included sponsoring and selling.  

People do believe that they ‘earn money using their own products.’  There’s an example you ‘can’t find’ on this very page.  And no, they’re not that stupid.  Instead, they’re taught it.  Ignore it and deny it – even when it’s right here.  

ibofightback said:
March 12, 2007 4:07 PM | #

Porkchopjim - The phrase you put in quotes doesn't appear anywhere in this thread apart from where you just typed it.

But I'm guessing you're talking about a post from Tex. You could have just linked to it, that's what the # is for.

In any case, Tex said something similar but it was part of a sentence that included "provides the foundational PV/BV for retail sales and organization volume" - in other words, it "makes money" (which he also put in quotes) in conjunction with generating retail and wholesale volume.

How unlike you (not) to take something out of context and waste my time by not even correctly quoting where it was said or who it was said by so I could see what you were talking about.

Porkchopjim said:
March 12, 2007 8:33 PM | #

Tex,

In your first example, you made money by selling, not using.

In your second example, you didn’t make any money.  You just gained experience.

In you last example(s) – you spent (let’s say) $250 to make $24.

Anyway, if it’s that simple:

I know you are hesitant to release any information about your business, but with solid calculation like you have above, you should be able to indicate what percentage of your business profit you received last year from ‘using your own products.’  Not $, just a percent.

Don’t guess, it’s simple, remember?  If you say 100% - that means you didn’t sell anything.  So, let’s have a percentage and how you got to it.  Else, you’re just making things up.

Tex said:
March 13, 2007 10:33 AM | #

pcj,

1. I bought the product and made it visible to others. If they buy it as a result, I used the product to make money. I was paid (via retail sale) to use my own product. You are being far too analytical. Relax.

2. Experience leads to sales. Relax.

3. You're right, I will not release any information regarding my business. If you want to discuss the example that's fine, but I am not going to calculate the figure from my own business for you, Jim.

You say, "Else, you're just making things up", but I could make up figures and you would have no idea whether they were accurate or not. THAT'S why I used examples, so we can discuss how the numbers work, not the "Else, you're just making things up" routine.

I gave 3 examples (4, actually) of how you get paid to use your own products.  Real money. You've done nothing to refute the examples.

Porkchopjim said:
March 13, 2007 8:23 PM | #

Tex,

You responded as predicted.  But note:  example 1 – if you had not made a sale, you wouldn’t have ‘gotten paid’ to use your product…so, it’s the sale, not the use that made you money.  Example 2 – and this one kills me – you say ‘relax, it’s experience.’    You seem to have ignored the part where you had to buy over $200 of products (remember – you’re ‘using’ them, not selling them) to make $24.  Then you assert that you’ve shown in all examples that you made ‘real money’?  I don’t have to refute anything – you did it yourself.  Unless you know the ‘experience’ to ‘real money’ conversion rate?  That’s a prime example of making things up.   Plus, what’s the big deal about knowing all about the products so you can do personal testimonials with experience – when that’s talking like a salesman, and not a ‘business owner’ that does only the minimum retail at cost?  Seems like a waste of money, time and effort to me – getting to know all those products and then not sell them.

You are supposed to use your products to help you make money.  You 'make' no money just from using your products.

So, there’s no need in continuing as you’ve done more than enough.  Thanks!

Porkchopjim said:
March 13, 2007 8:24 PM | #

Insider –

My bad for wasting your time…I was unaware that you were still unable to recognize anything that may be detrimental to the business unless a critic says it.

‘Building a foundation’ isn’t ‘making money’.  Investing, maybe.  I get paid to invest in the stock market?  Not unless I’m a stock-broker, and the act of ‘investing’ itself pays me.  Not the same thing.

Again, picky?  You bet – because (if you’d look) that term ‘I get paid to use my own products’ isn’t just a golly-gee marketing phrase, it’s used as another reason to boost self-consumption because it’s ‘good’ for an IBO’s individual business.

But, I resign on this issue, and officially proclaim that I endorse the principle:  You can ‘get rich’ ‘just’ ‘by using your own products’ because ‘you get paid to do it.’  There.  It’s positive, and there are enough quotation marks to make even you happy.

Tex said:
March 14, 2007 12:01 PM | #

You responded as predicted.  But note:  example 1 – if you had not made a sale, you wouldn’t have ‘gotten paid’ to use your product…so, it’s the sale, not the use that made you money.  ----------------------------------------- I responded with facts and logic. If if you didn't have the product in your hand, the whole sales process with the customer wouldn't have started. That's not much different than saying "If you didn't make the sale, you wouldn't make money". Duh.

Example 2 – and this one kills me – you say ‘relax, it’s experience.’    You seem to have ignored the part where you had to buy over $200 of products (remember – you’re ‘using’ them, not selling them) to make $24.  Then you assert that you’ve shown in all examples that you made ‘real money’?  I don’t have to refute anything – you did it yourself.  ---------------------------------------- If it killed you, how can you keep typing? You seem to ignore the part where you don't get anything back from retail store XYZ, and the $24 is only the start of the growing profit, not the end point. You don't have to refute anything because there is nothing to refute.  As your volume grows, whether by customers, or IBO's in your group and their customers, you build on top of the foundational $24.

Unless you know the ‘experience’ to ‘real money’ conversion rate?  That’s a prime example of making things up.   ----------------------------------- That is different for every individual, some are naturally better at sales than others. However, EVERYONE can LEARN how to be better. I made up nothing.

Plus, what’s the big deal about knowing all about the products so you can do personal testimonials with experience – when that’s talking like a salesman, and not a ‘business owner’ that does only the minimum retail at cost?  ----------------------------------- I never said there are zero sales aspects to this business, only that you can emphasize business ownership, sales, or both. I also never said you must do the minimum sales or sell at IBO cost, that is an individual IBO decision.

Seems like a waste of money, time and effort to me – getting to know all those products and then not sell them. ------------------------------------ Perhaps that is because you have never been an IBO.

You are supposed to use your products to help you make money.  You 'make' no money just from using your products. ---------------------------------- What do you call the 3-25% BV volume bonus on personal purchases?

So, there’s no need in continuing as you’ve done more than enough.  Thanks! ------------------------------------------- You're welcome!

ibofightback said:
March 14, 2007 1:25 PM | #

It remains, nobody is stupid enough to think you make money just by buying stuff and doing nothing else. Using your own products however makes marketing them far simpler,  hence making you money, as Tex explained.

I'm yet to find anyone except yourself who struggles with that as a concept and takes the term literally, hence I personally struggle to consider the concept "detrimental to the business".

Joecool said:
March 14, 2007 3:38 PM | #

IB/IBOFB/insider

I know of some uplines that teach self consumption.  No selling required.  I recall a seminar where the diamond said even if you bought your 100 PV and threw it away. it would still be worth it because of the financial rewards that can be realized as a result

Although I'm sure this is not the norm, there are some uplines who teach it and it is how some IBOs get the idea that the business is run that way.      

rara said:
March 14, 2007 7:33 PM | #

Regarding self-consumption, while I was in BWW, the plan was described as: "Buy from yourself and teach others to do the same."  On the Quixtar Blog (www.webraw.com/quixtar), I posted portions of a phone script for dealing with prospects that was circulated by my platinum.  Here is one of the questions a prospect could ask and how we were to answer:

Q:Does this involve selling?

A:Why, do you like to sell?

Upline diamonds would say that we were not in a product business but a people business.  When retailing was mentioned, it was usually aimed at people who declined to become IBOs and as a way to generate income in order to afford more tools and functions.

None of my upline ever told me about the 50PV/10 customer/100PV member/client rule for receiving bonuses on downline volume.  I found that out  myself months and months after becoming an IBO.

The way the plan is shown emphasizes recruitment over retailing when circles of 100PV IBOs are drawn.  I have attended open meetings run by at least 3 different groups in BWW and it is always the same.

Needless to say, my experience in BWW indicates that retailing to customers outside the IBO network is not emphasized and the impression is given that selling is not required or important.

I would suggest that the corporation ensures that IBOs are informed of the importance of retailing in order to ensure that they are not involved in a product-based pyramid scheme (something I had no clue about until I quit BWW) and, more importantly, in order to make money.  The corp should see to it that LOA leaders be involved in accomplishing.  From reading comments on this site, it seems that non-system IBOs already run their business with retailing as a focus.

Tex said:
March 15, 2007 10:52 AM | #

rara,

What came after the "Why, do you like to sell?" on the script?

Allan said:
March 15, 2007 1:11 PM | #

Rara,

Some systems also teach their IBOs that retailing is an essential element.  I have heard the biggest pin in our organization repeatedly tell how the first 19 people he attempted to recruit said "no" and that if he hadn't made them customers he wouldn't be in this buisness today.  Our Core teaching clearly defines the 50PV/$100/10 Client rule.  There are numerous product focused Product Education Programs that are designed for IBOs and Clients alike.  At the same time, I have heard candid acknowledgement at functions that this "third leg of the stool" (consumption, downline, Client) needs to be enhanced to provide a more balanced business.  

We receive bonus income on volume achieved through consumption, downline, and Clients but we also receive income through the markup on Client sales.  We are taught that this is what a "balanced business" is.  

While I prefer to acquire Clients by first offering the business some prefer to acquire IBOs by first creating Clients and some just want to acquire clients and not sponsor anybody.  I see all three methods supported in our training material.

Joecool said:
March 15, 2007 7:17 PM | #

Tex, I think the script said:

"Great, you like to sell, this business is perfect for you".

Or if the prospect said they didn't like selling, the response was:

"Great, if you don't like selling, this business is perfect for you".

rara said:
March 15, 2007 7:48 PM | #

Tex,

I can't find the script at the moment (I copied the quotes from my transcription on the QBlog forum), so I am not exactly sure.  But I remember being taught that no matter the person's response (I can't stand selling OR I love sales, you would say, "Then you'll love this!"

Allan,

I am glad your system encourages retailing, but were you ever told that to prevent yourself from running a pyramid scheme, you had to sell to outside customers?  Does your system teach that self-consumption and sponsoring are the keys to success in the business?  (I am not saying that systems never mention retailing.)   I didn't even know the definition of a pyramid scheme until I quit BWW because in BWW, we were told that a pyramid was a system in which one couldn't make more money than the person above, and that therefore, our jobs were pyramids.  

Also, retail sales were encouraged primarily as a way to fund your "education" in the business.  We were given the impression that the real money was to be made in recruiting.  Ever heard, "I only need to find 6?"  

Very few CDs, if any, taught about retailing.  The few I listened to that had anything to do with products usually just extolled the quality of the products, but didn't necessarily focus on tips for retailing.  Most CDs were about dreams and the diamond lifestyle, stories about how big pins overcame odds, and other motivational speeches.  The CDs that spoke about business building focused on sponsoring new IBOs.  The emphasis was on sponsoring IBOs, and if the prospect didn't want to be an IBO, then you would try to make him a client, which is what your system seems to teach too.

May I ask roughly what percentage of the CDs you have that teach about retailing vs. sponsoring vs. motivation?  Thanks.

Tex said:
March 16, 2007 10:47 AM | #

The answer you gave them was designed to delay the selling discussion to the time when you could sit down with them, face to face, and explain the entire program.

I see nothing wrong with this.  

The problem arises when you show the plan and do not describe the selling requirements. It is very common to NOT show the selling requirements when showing the plan, and this should be changed in my opinion. The rules currently say you cannot deny that no selling is required, which is quite different than a requirement to state selling is required. You have to read the rules to find out retail is a requirement, and the rules are so painfully long many people don't read them, and many upline encourage their IBO's NOT to read them, as the upline will teach what they need to know.

rara said:
March 16, 2007 5:14 PM | #

Tex,

The question, "Does this involve selling," is a simple one that deserves a simple answer: Yes.  Selling *is* required to receive bonuses on downline volume, and I am sure that the person that would ask this kind of question would be one who is being prospected about the business opportunity.  Responding in the way we were taught is at best evasive and at worst wrong.  

If one wanted to delay the discussion, it would be more honest to say, "I will get to that later," although, why one wouldn't just answer the simple question, I don't know.  Perhaps it's because most people don't like selling, but most people love the idea of becoming wealthy.

On a comment on another thread  (http://adatudes.opportunityzone.com/2007/03/02/The-T-Word.aspx#1963), Mrs. Casey wrote: "The whole meeting was very confusing, and no real quesions were answered. "  Although she was specifically talking about the tools issue, her statement describes part of people's frustration with the way the plan is often shown.  Many IBOs are trained not to give straight answers to simple questions but to answer a question with a question.  People don't like this.  Most of us appreciate honesty.  When people find out that the IBOs prospecting them were not completely open, that turns them off and creates a lot of ill will, which can be easily avoided by being up front from the get-go.

Joecool said:
March 16, 2007 5:35 PM | #

Or a prospect signs up trusting their sponsor, then finds out the truth about the business and what's required, and they quit.

Miia said:
March 16, 2007 5:56 PM | #

Rara

Until recently my team was part of BWW and we were taught that when we show the plan, you disclose that retailing products is part of the marketing plan. The reason that we would do this is because it’s listed as the first way you can generate an income on the Quixtar 6-4-2 marketing plan that you hand out after you discuss the income potential with any prospective IBO (we are taught that it is required to give out this information and you should make sure your plan is consistent with the information you are handing out).

When I show the plan, I make it a point discus the advantages of having customers because every product they purchase also has a point value associated to it and those points will be count towards your monthly point accumulation for your bonus.  Then when I do my wrap I make the recommendation that even if you are not interested in the business, please book a web tour because we get paid by moving a product and I can almost guarantee that we have something on our site that they do not like to buy at the store and they can have it delivered to there home.  

The BWW systems (and many others) have taught the nine Eagle steps to build a successful business. Step number 2 covers personal circle which includes Client and Member volume. Step 3 specifically states that you develop Clients and Members (50PV minimum). I know…I know some of the other steps also covers the use of system tools so no need for anyone to comment on that part of it. 8)  So unless your team did not follow the BWW philosophy, the retailing requirement would have been disclosed during your GSR.  

This requirement is also disclosed on the Quixtar site.

Tex said:
March 16, 2007 8:43 PM | #

rara,

I disagree putting off the answer until the plan is shown is evasive or wrong.

Much of our selling comes from a result of showing the plan, not pulling our little red wagon down the street.

It is hard to explain this on the telephone, as the prospect hasn't been shown the plan yet, and we find it very difficult to show the plan over the telephone.

Some people would prefer a straight answer, but this number is much smaller than the number of plans you wouldn't end up showing if you just said "yes, you do have to sell".  

This is because it is true most people don't want to sell, and they would only be thinking of door to door or some other traditional selling technique as they were telling you "no thanks" on the telephone.  

If you say "I'll get to that later", it would probably be received by the prospect as evasive or a "yes, selling is required".  

What is being avoided is mainly hiding the tool costs and resulting profits. If it weren't for this issue, I can't think of a single issue that would have to be danced around.

However, I also think there are legitimate reasons for a new to refer questions to upline, to ensure the wrong information is not being told to the prospect.

Thus, answering a question with a question does serve a purpose of determining what the real concern may be, as well as helping refer the prospect to a knowledable upline.

Unfortunately, most of the upline that the prospects are being referred to are also involved with massive tool profits.

ibofightback said:
March 18, 2007 11:29 AM | #

Rara said - "I am glad your system encourages retailing, but were you ever told that to prevent yourself from running a pyramid scheme, you had to sell to outside customers?"

I would hope their upline didn't tell them that, since it is false. This is a myth perpetuated by the anti-MLM zealots  (note: Rara is a blogger on an anti-quixtar website).

...the FTC has even explicitly stated this is not the case in a letter to the DSA a few years ago. Legally, the definition of a pyramid scheme is clear - you get a payment (or defacto payment) for recruiting, something that doesn't happen in Quixtar.

The anti-MLM zealots hang their hopes on one case, where in an appeal court something along the lines of needing outside customers was mentioned. However, the case was referred back to the court, which it never reached due to a settlement. In other words, this assertion of needing "outside customers" was never made in a precedent-setting situation. All other cases (and there have been many) have relied on the so-called "Koscot test" and the sine qua non of a pyramid scheme - payment for recruiting.

... there is a legitimate issue here - Quixtar *rules* require selling to "outside customers" - the member/client volume rule. And if that's not being done, and IBOs are being told to ignore it or work around it - well, there's a problem...

Editor's Note: Portions of this comment have been omitted for violating Ada-tudes' comments policy.

Allan said:
March 18, 2007 8:21 PM | #

Rara,

Our system does "teach that self-consumption and sponsoring are keys to success in the business."   They also emphasis retail sales at the same time.

The reason given is different then what you heard, is fairly simple, and presented in one of those irritating but accurate assumptive questions?  "Why would you leave that money and PV on the table?" That is in reference to acquiring customers "through" the plan, which I prefer, but there is also training that helps others who would rather lead with product then "upgrade" that customer to an IBO at a later date.

Customers and their related volume are an integral part of our presentation about this business and are clearly defined.  Similar to Miia's explanation, customer volume is an equally essential part of our core teaching.  In addition, about 4 years ago, the leadership decided to eliminate a seminar segment about business building in general from our annual calendar, where the leadership spoke, and replace it with Quixtar Product Education Programs for IBOs and customers alike.

Yes, I have heard a phrase similar to 'you only need to find 6" but I have equally heard customers are an important element of this business.

Tex,

The issue started off as self consumption and naturally moved to customers.  You really are going to insert the issue you want discussed in every string with no regard to the topic just as your threatened Quixtar on another string.  Amazing!  I honestly thought you were blustering as I can't imagine the self-concept that would guide an individual to determine they will set the communication agenda for a global company and not allow other discussion topics to occur without interference if their primary issue is not front and center. I guess we can acknowledge that you are a man of your word.  

Tex said:
March 19, 2007 7:28 AM | #

I think there is a linkage between having non-IBO sales and getting a defacto payment for recruiting.

If you didn't have the retail rule, had no outside sales, and the products were overpriced, the case could be made you were receiving a defacto payment for recruiting.

This is because the product purchases, which are assumed to take place by the mere involvement in the business, would provide defacto payment for recruiting.

I was told by Q rules the primary reason for the retail rule is to show proof the products are not overpriced, thus breaking the logical linkage given above.

It would be useful for Q rules to confirm this logic on the blog.  

Editor's Note: The primary purpose for the Member Client Volume Rule and the 70% Rule are specificed in Todd Krause's original post on those rules. Please refer back to that.

Joecool said:
March 19, 2007 1:52 PM | #

ibofightback said:

March 18, 2007 11:29 AM | #

Rara said - "I am glad your system encourages retailing, but were you ever told that to prevent yourself from running a pyramid scheme, you had to sell to outside customers?"

I would hope their upline didn't tell them that, since it is false. This is a myth perpetuated by the anti-MLM zealots  (note: Rara is a blogger on an anti-quixtar website).

...the FTC has even explicitly stated this is not the case in a letter to the DSA a few years ago. Legally, the definition of a pyramid scheme is clear - you get a payment (or defacto payment) for recruiting, something that doesn't happen in Quixtar.

Joe says:  Regardless of the legalities, I have a problem with uplines pushing self consumption because selling to non IBOs can help an IBO with their bottom line - making a profit.

ibofightback said:
March 19, 2007 9:47 PM | #

Joecool said: Regardless of the legalities, I have a problem with uplines pushing self consumption because selling to non IBOs can help an IBO with their bottom line - making a profit.

Assuming you mean *just* pushing self consumption,  which I think you do, then I absolutely agree. It's not only against Quixtar rules, it's also in my opinion not very smart business.

Tex, I think you are correct. If you have legitimate sales of legitimate product at any kind of significant level to "non-participants" then your pretty much protected against pyramid allegations. Well, if you have any interest in what the law actually says, that is! :-)

rara said:
April 4, 2007 8:59 PM | #

IBOfightback,

I do not consider myself an anti-Quixtar blogger but an anti-system blogger.   I have problems with the company allowing/enabling tool abuses, but I am very open to seeing Quixtar correct the situations and have been quite positive sometimes.   I even wrote a very positive article (two posts, actually) about a certain type of IBO. You are a pro-Amway/Quixtar/Network21 blogger.  IF you are trying to imply that I am biased, you are too. Anyway, I haven't posted anywhere close to as many posts as you have.  I've posted probably less than 10 in the past 4 months.

Anyway, I found this on the ftc website, which I would argue is at least as credible as (I would even venture to say more credible than) the letter to the DSA (a pro-MLM body):

"Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes. In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors - not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate."  

The url is: http://www.ftc.gov/bcp/conline/pubs/alerts/pyrdalrt.htm

If the url is edited out, just go to the ftc website and search for  "pyramid".  My quote is from the the FTC brochure "Profits in Pyramid Schemes? Don't Bank On It".

From the above comment by the FTC, an MLM that sells most of its products to distributors instead of the public at large is an illegal pyramid scheme.  This is not exactly what I said, but it was the point I was trying to make.

I would suggest that IBOs read the RTC brochure to ensure that they are running an above-board business.

ibofightback said:
April 6, 2007 7:18 PM | #

Rara, we're all biased. Mine is well known, it's in my nick, it's on the link to my site if you click on my nick. Yours is not so well known to other readers.

In any case, you're an educated lady. I'm sure you know what "non sequitur" means. If not, I suggest you go look it up. Here's an example.

All cars are red.

That house is red.

Therefore that house is a car.

non sequitur - it doesn't follow.

In illegal pyramids most of the product sales are to distributors.

In Quixtar most of the products sales are to distributors.

Therefore, Quixtar is an illegal pyramid.

non sequitur - it doesn't follow. The conclusion does not follow from the premises.

This is a basic logical fallacy. Unfortunately I see this type of logical fallacy repeated often in arguments and discussion by people, and not just in the anti-mlm field, it pervades a lot of peoples thinking.

Still, I'd note your quote actually contradicts what you are trying to claim, namely - "In pyramids, commissions are based on the number of distributors recruited."

This doesn't apply in Quixtar, or the tools systems for that matter. Commissions are based on volume.

Let's try some logic again, this time without the fallacious thinking.

All cars are red.

That house is green.

Therefore that house is not a car.

Illegal pyramids base commissions on recruiting.

Quixtar does not base commissions on recruiting.

Therefore Quixtar is not an illegal pyramid.

It follows.

The fact remains, as given in the quote