Amway Global Ada-tudes: A View from the Top : Member Client Volume & 70% Rules

Member Client Volume & 70% Rules

Friday, March 09, 2007 by Todd Krause
Category: Balanced Business, Rules

Hello from sunny Ada! It is great to see the discussion generated by Ada-tudes and I wanted to help clarify the comments I have seen lately regarding MCVR, or the Member Client Volume Rule, with some information from the Quixtar Business Conduct and Rules Department …

Many times people confuse the 70% Rule and the Member/Client Volume Rule. These two rules, however, serve two completely different purposes.

The Member/Client Volume Rule (which we now refer to as the Customer Volume Requirement) is in place to assure product sales are taking place. This rule says that in order to obtain the right to earn a performance bonus on downline volume in a given month, an IBO must either a) make at least one sale to 10 different customers; or b) have at least 50 PV in sales to any number of customers; or c) have sales of $100 at IBO cost.

The 70% Rule helps prevent IBOs from inventorying large amounts of product in order to reach a higher pin level or bonus award. This rule states that an IBO must either sell or use at least 70% of the products they purchase each month. IBOs may inventory or donate a maximum of 30% of products they purchase each month.

We talked earlier about IBOs being focused on a balanced business which includes retailing products. These rules help maintain that balance.

Again, thank you for your comments. We are always open to constructive dialogue because we believe in this business and want to strengthen the understanding of it and make the opportunity even better for every IBO.

Comments

ib said: March 10, 2007 5:19 PM | #

Todd,

One area of confusion in this arises through different use of the word "retailing". A retail sale is a sale made to an end consumer. A wholesale sale is a sale made for the purpose of resale. Often however people use the term "retail" and "wholesale" as synonyms for "retail pricing" and "wholesale pricing". The price you purchase something at has no influence on whether something is sold wholesale or retail - it's what the purchaser will do with the product after they purchased it.

Thus, if an IBO sells a product to their downline, and that downline is not operating as a business and can thus not claim to "resell" the product to the business proprietors (themselves) or to another customer, and that downline then consumes the product, then that sale is technically a retail sale for the selling IBO - it was a sale made to the final consumer.

A retail sale is a sale made to the consumer - technically it doesn't matter whether that consumer is an IBO or not.

Quixtar, and earlier, Amway rules and materials appear to use "retail" primarily in reference to people who are not IBOs. The intended meaning of the rule is a little clearer since the "retail sales rule" became the "Member/Client Volume Rule" but it's still something that should be further clarified and the term "retail" not used inappropriately

Tex said: March 10, 2007 6:17 PM | #

I would add products purchased for personal use, such as a case of 4 months worth of Double X, count as part of the 70%, correct?

Tex said: March 10, 2007 10:46 PM | #

ib (aka ibofb/insider),

As I have explained to you on other blogs, you are using a narrow, "dictionary" term for the word "retail" and "wholesale". Haven't you seen stores that advertise selling their items at "wholesale prices"? Does this mean you are required to resell them after they are purchased, or if you want the items, you must send someone there to buy the items for you and then resell them to you? Of course this is silly, just like your post.

The retail rules in the context of the 50 PV/10 customers/$100 retail rule means a sale to a non-IBO, and the price can be IBO price (wholesale), at suggested retail price (retail), or anything in between (the item could even be sold below IBO cost or above retail in some limited circumstances).

How do you prove an IBO is "not operating as a business"? If you are an IBO, you CANNOT count as a retail sale for another IBO.

Todd, please back this up so ibofb will finally learn the facts. He has goofed up this one for a very long time. He also didn't understand the 70% rule before, although I think he has that one straightened out, finally. He has a rare ability to make the simple complex.

Porkchopjim said: March 11, 2007 5:58 PM | #

“A retail sale is a sale made to the consumer - technically it doesn't matter whether that consumer is an IBO or not.”

Technically is does matter. For FTC vs. Amway 1979, the findings plainly defined any sale between two distributors as a wholesale transaction. Whether that end distributor resold that item to another distributor, retail customer, or consumed that item did not matter. The transaction that got that particular product to that distributor was a ‘wholesale’ transaction. It’s not a price issue.

If a sale to an IBO who used that product themselves (the end consumer) is, technically, a ‘retail’ sale – then Quixtar would not need the rules that specifically define what retail sales are: sales to customers who are not IBOs. An IBO can not be a ‘customer’ of their own IB or any other IB.

That IBOs buy and consume their own products is not an issue. That some IBOs join merely to get the benefit of IBO price – and the volume discounts – is not an issue either. The retail sales rule, 70% rule and buy-back rules were what the FTC considered adequate at the time to show that Quixtar encouraged retail sales – and those sales specifically defined as sales to non-distributors.

Attempting to redefine ‘retail’ as a sale to an IBO who consumes their own products is an incorrect use of the term as it applies to Quixtar and IBOs.

The difficulty with the 70% rule as Quixtar has it currently defined is that any portion of that 70% that must be resold can be satisfied through self-consumption. Any manner of activities could be considered self-consumption, which may allow IBOs to ‘secure performance bonus solely on the basis of purchases,’ which was what the FTC finding saw the rule as helping to prevent. If the original definition of ‘resell’ as it pertained to the 70% rule included self consumption, that particular matter has not been specifically, nor implicitly defined. The expansion of the activity ‘resell’ to include self-consumption appears to have been done by Quixtar alone.

Tex said: March 11, 2007 9:11 PM | #

pcj: The expansion of the activity ‘resell’ to include self-consumption appears to have been done by Quixtar alone.

Tex: I am not sure if the inventory was a much an expansion as it was a rule clarification. Perhaps Todd or another Q employee can address this issue.

anonymous Ruby said: March 12, 2007 3:40 AM | #

Hi,

I'm concerned about repercussions from sending this, so I'm sending it anonymously.

I've been in the business over 10 years, and have built the business to Ruby, so I do understand more than just the basics. That all said, here goes.

It pains me to no end to see Quixtar continue to shoot itself in the foot. Rich and Jay's dream has turned into a nightmare, and it's so sad to see that happen!

I'd like to give some feedback about "our" business with the hope to make it better, not to hurt anyone.

1. I think it's wrong that Quixtar let's Internet browsers and visitors signup at Quixtar.com without having a sponsor.

Before you jump to conclusions, hear me out please. Yes, I know that you assign this visitor to a Platinum in their area. I've had such referrals sent to me, so I know how that works.

Here's the rub though. The non-Platinum IBO is competing with Quixtar because not only do they not get the referral, but they can't market themselves on the Internet either.

But they see that Quixtar does, so they feel like they're competing with Quixtar for Internet surfers. Then, as they learn the rules, they find out it's even worse than that because Quixtar won't even let them market online.

This not only leaves the non-Platinum IBO completely out of the Internet market, it makes them feel like they're competing with Quixtar itself, and they feel screwed. I think they're right!

I've had more than one prospective IBO tell me they wouldn't get in the Quixtar business because they'd be competing with Quixtar for IBOs. And I've had them quit over this issue, too.

Imagine you're a non-Platinum IBO. You can't market online, yet you know that Quixtar is. How do you feel about that?

2. The biggest negative about Quixtar is the so-called 'tool business'. It's built up such a bad reputation and created so many very, very ticked off people over the years that it's the single biggest obstacle to building this business.

I for one, wish that Rich DeVos would have followed through with his Directly Speaking talk back in 1983. The emphasis was, and still is on the tool business, not the Quixtar business. And it gets worse every year.

People who know the industry know this, and that's the source of the majority of the negative about Quixtar and Amway. People want freedom, not restrictions and "rules" that favor an elite controlling group.

We both know that this is THE source of why an IBO can't market their business on the Internet. Please, spare me all the standard replies about why an IBO can't market online. I've heard all the canned reasons before, and I don't believe them.

The reason IBOs can't market online is because the system IBOs feel it would cut into their profits and they've got enough say-so over Quixtar owners that the DeVos and Van Andels have sold out to them, or bowed down, whatever.

It's sad, too, because I think it wouldn't hurt them. More IBOs would be a good thing. The system could market their tools to them and IBOs would eventually WANT to buy them.

And, "No!!" that's not the way it is in today's Quixtar world. If you think it is, you're wrong, wrong, wrong!

3. If Quixtar would let the IBOs put up their own sites, not a polished, Quixtar generated sterile site like the Retail sites available from Quixtar to IBOs, but a real site that's obviously a personally created site, then the above issues would START to be resolved.

It would take years to overcome the negative image, years, but at least it'd be a start.

This would flood the Internet with positive sites, and would be WAY MORE effective than Quixtar's media blitz to shore up Quixtar's image.

Many a prospect has told me, "There must not be many people building Quixtar." Surprised, I ask, "Why do you say that?"

Their response? "Because I don't see anyone's sites." The reason they think that way is because it's a common thought to believe that a Quixtar IBO would market thier site online. And since there aren't any such sites by IBOs, there must not be any IBOs in the business.

Imagine how the feel when they find out why there aren't any IBO owned sites!!!

And the Quixtar image building campaign? Ha!!!

People see right through that corporate marketing. As a matter of fact, it only serves to highlight that there's an image problem in the first place.

Look at the public's response to *** DeVos' running for Governor of Michigan. People don't like Quixtar - and it's not because of Quixtar, it's because of the tools business.

Accept that, and please, do something about it - at the source, not through another marketing campaign.

Look also at what the new owner of Shaklee has been able to do with that business. They've overcome their "old business" image by letting their distributors market online. Quixtar's IBOs can't do that. Again, why not? Hello. Is anyone getting this?

Answer: probably don't want to get it, right? Why?: Because the tools system owners have Quixtar by the throat!

If Quixtar would unleash all IBOs, and follow that up with an official announcement that they're going to unleash their IBOs from the shackles of the "Rules of Conduct" and turn loose the creative juices of the entrepreneurial spirit, and then actually do that, Quixtar could finally take it's place as THE premier business opportunity.

Rich and Jay had a great business model, but the tools business has smothered and crippled it SEVERELY!

Why not unleash Quixtar's IBOs? And for heavens sake, if it's ever done, which I doubt it ever will be, put someone new in charge of it. They'll need to be someone with total anonominity. Untouchable by the big boys and girls.

I respectfully request that you try to understand why I have not used my name. I believe this would be detrimental to me and be misunderstood by my upline.

I am suggesting this with a spirit of helping and I believe that it would be win-win-win, i.e. not just for IBOs and Quixtar, but even for the tools business owners.

People need education. Tools and upline systems and support are absolutely needed. But they need to be totally optional.

Although it's gotten much better in the 10+ years I've been in Amway/Quixtar, there is still an unspoken rule - you don't attend everything and buy the tools, you're on your own.

And please hear me loud and clear on this - you can't make that change - PERIOD - so don't try.

The only way to change it is to allow an IBO to build his/her business WITHOUT stifling "rules".

The very idea that we can't market products and the opportunity without checking with Quixtar Rules of Conduct first is obsurdly authoritative. It's ran off many IBOs.

I know. I've watched newbies put up sites. I've emailed them and asked them questions. Invariably they assuemd that they could build their business. After all, they're "Independent" business owners, right? Well, no, they aren't.

And I've watched many of these folks as they've had the Quixtar police come down on them and make them pull their site off line.

Followup calls reveal that not only have they left the business, but they're bitter and can't believe what a farse it is.

I can only imagine what they tell anyone about "Quixtar"!

What a shame! Here we are, trying to build our business, and Quixtar itself is our biggest obstacle - turning would-be IBOs into Quixtar haters.

It's about the craziest, stupidest thing I've ever seen in my business career. I've struggled over whether to send this email or not because of the possible negative effect on me, and because I think it'd fall on deft ears.

Or, more likely, defensive ears, but I thought I'd try.

Think about this. I think I would be hurting myself if people knew I even wrote this. That's sad, really, but it's a REAL concern.

I have a great upline, and I don't want to hurt them, but they also rely heavily on their tools business, and they would see this a threat, even though I think it would help them in the long run. It would help everyone, like I said earlier.

Furhermore, I don't think Quixtar owners have the guts to make these changes. But I know if they don't, Quixtar will NEVER become all it could be.

What a shame to smother Rich and Jay's creation.

Anonymous Ruby

P.S. I bet this doesn't get posted here. And if I'm right, that will just prove that I've hit more than just a nerve of truth. And if I'm wrong, then halleluyah, we just might be going somewhere forward here. If that's the case, I'll be very excited and hopeful for all of our futures!

ibofightback said: March 12, 2007 9:27 AM | #

PCJ -

Please quote the "definition" of retail sale as given in FTC vs Amway. Good luck.

Please quote the "defition" of retail sales as given in Quixtar rules. Good luck.

I'm not "redefining" anything. These definitions of retail and wholesale are the ones used throughout tax and business law throughout the United States and elsewhere. There is a problem of usage where "retail selling" and "selling at retail price" are both called "retail".

I would note though that the FTC vs Amway cases explictly stated

"The buyback rule, the 70% rule, and the tencustomer rule encourage retail sales to **consumers**."

Note the use of the word consumers. The FTC used "consumers" again and again. I'm aware from our previous discussions that some critics consider that an IBO drinking XS bought from Quixtar is not consuming it, but I'm unaware of any legal authority that has the same rather strange perspective on "consume".

ibofightback said: March 12, 2007 9:44 AM | #

The difficulty with the 70% rule as Quixtar has it currently defined is that any portion of that 70% that must be resold can be satisfied through self-consumption.

You may see a "difficulty" with that. Nobody of consequence does. As Todd pointed out, the 70% rule is about preventing inventory loading. If an IBO is legitimately consuming the stuff then inventory loading has been prevented.

may allow IBOs to ‘secure performance bonus solely on the basis of purchases,’

No, this isn't true. You can't just buy stuff. If you just bought the stuff you'd be in violation of the 70% rule. You need to have legitimate consumers. Consumption is an additional step *after* buying. Furthermore, the Customer Volume Rule is obviously targetted towards requiring IBOs to have non-IBO customers, though IMO it needs to be reworded slightly as per my concerns regarding "retail" above.

ibofightback said: March 12, 2007 10:02 AM | #

They didn't make a wholesale sale. Same applies for IBOs.

That's my entire point. I obviously didn't explain it very well, my apologies.

If however you purchase and receive the products, and then resell them to a a downline IBO, that *is* included in the 70%, as I'm sure Todd can confirm.

ibofightback said: March 12, 2007 10:21 AM | #

Anonymous Ruby - I believe the "no internet marketing" was sensible at one stage. The internet was essentially considered the equivalent of a retail store. Allowing "retail store" sales makes for a less even playing field. These days however, the internet is open, and it's cheap. You can get an online store up and running for almost nothing, and then you can put an effort into internet marketing, again for almost nothing. It's as level a playing field as anything in the offline world. I think some restrictions need to remain in place, in order to overall protect brand image, but otherwise we are in agreement on this matter.

I do however disagree with one of your claims - "you don't attend everything and buy the tools, you're on your own". That may be the way it works in the organization you work with, but I've experienced the exact opposite to this, both as a downline who went "off system" and as an upline who has had people go "off system". Don't make the mistake of assuming your experience is universal.

Now, I'm not a betting man, but I would think I'd have a damn good chance of successfully guessing which "system" you are a part of. Virtually all of the complaints on the 'net of this variety seem to come from the same system and it's off-shoots. Blame Quixtar for not doing something about it, but don't say it's a "quixtar" thing - it's not.

Tex said: March 12, 2007 10:37 AM | #

anonamous Ruby,

Thanks for your input, I think you are the highest active pin I have seen posting on ANY blog in a very long time. Why doesn't your upline post here? We have IBO's and Q, why not the higher pins?

It is interesting you are concerned about your identity becoming known, that speaks very loudly.

I don't understand the connection you make between the tool profit and Q rules. They are separate issues, in my opinion. I know the rules allow the tool profits, but I think it is the other rules you are having an issue with, correct me if I am wrong.

I agree the tool profits are the largest reason the business has a reputation problem. I think the higher pins would take a huge income hit if the problem was fixed.

What is your understanding regarding how much of the tool income for Platinums, Rubies, Emeralds, and Diamonds is, compared to A/Q income? Do your IBO's and prospects know of these facts?

The rules are somewhat restrictive, but turning IBO's loose would probably cause more problems than it would solve. Perhaps more choices of personal sites is in order, but I think you are underestimating the problems that would occur if they let all IBO's do whatever they wanted with their own sites.

How many prospects are referred to you in an average year? How many Platinums and above would you estimate are in your area? Don't you have the option of registering the prospect under one of your IBO's instead of a personal IBO?

Anonymous said: March 12, 2007 11:08 AM | #

This is a responses to the anonymous Rudy.

I am an IBO and have been for over a year, yet I have been around the business my entire life. So I have a few things to respond on what you've said

1. To you first response, For one thing there is not a great deal of internet browsers who fall upon the site and ask for more information that actually follow through, but its great if they do. Secondly the reason why they would send this information to platinums and above is that they understand how to go about the situation, if they sent out emails to every IBO what do you think would happen if youve been around the business so long, the majority of the people wouldnt even know how to go about it.

2. Like you stated people do need the training. And i will disagree with you on the point that you said the tools arent optional becuase they are, Agian as you said people need training, when you recommend they need to get on the tools to start learning the process this is true, I dont know anyone that has been able to build the business without the help of the systems side of the business. Another point that you said was that IBOs wouldnt get the attention they should if there not on the tools, the main reason for this is that you are going to spend the time with people that are teachable and motivated and want to learn how to develop their business, not sit around and complain about nonsense.

3. People get in this business to develop a business of their own, your right. But lets be honest here, first of all the time that goes into creating a site and maintaining it would take hours away from productive time, time people dont want to spend fidiling around with the computers, secondly it takes alot of knowledge to know how to devolop sites, espiecally to the extent that thay are presented in a professional manor. The one thing i dont get is that if your a Ruby in the business you understand that being on the computer and ordering takes very minimal time, so why would people want to waste their time creating a site. Your business is grown by being out with the people, not sitting infront of the computer, you should understand that, so I cant even see where your coming from at all in your 3rd point. On top of that the point of having the exclusive products is that you cant get them anywhere else, it would kill all the IBOs hard work if you could throw the products up everywhere, I'm astonished at some of the points you've broughten up espiecially since your a Ruby. It really is astonishing

Tex said: March 12, 2007 11:40 AM | #

Tex - as I explictly point out, the confusion is between saying "retail" and "retail pricing". As you state, stores advertise as selling at "wholesale prices". If they are selling to someone who is not going to resell it, then they have made a *retail* sale at wholesale pricing. They didn't make a wholesale sale. Same applies for IBOs. -------------------------------------------- An IBO retail sale is defined as a sale to a non-IBO, regardless of price. You cannot make a retail sale to an IBO, simple as that.

That's my entire point. I obviously didn't explain it very well, my apologies. ------------------------------------------- I don't know if I agree with your "entire point" or not, see above.

Regarding the 70% rule, I did not "not understand it". Sales to downline distributors *are* included in the 70%. The difference is that today most sales to downline go via direct fulfillment rather than an IBO purchasing them and explicitly reselling them to their downline IBO. Including sales to downline IBOs that are processed via direct fulfillment do nothing to prevent inventory loading, so Quixtar has clarified that - quite sensibly IMO. --------------------------------------- "Sales" (volume would be a better term to use) to downline do not, and never have, counted towards the 70% rule. I asked Q rules this question, and they stated the 70% is ONLY for PERSONAL purchases for personal use and inventory. The direct fulfillment change has NOT changed the rule.

If however you purchase and receive the products, and then resell them to a a downline IBO, that *is* included in the 70%, as I'm sure Todd can confirm. --------------------------------------------- There is much less reason to do this, given direct fulfillment.

It is reasonable that if the products were bought with the specific intent to sell to downline when purchased, they could be considered as part of the 70%.

However, if they were bought to build up the general inventory with the remote possibility of selling to downline, these would be considered part of the 30%. I also look forward to Todd's input on this issue.

The Customer Volume Rule (aka Member/Client Volume Rule aka Ten Customer Rule aka Retail Sales Rule) is a separate beast altogether, and there we are in agreement, not disagreement. Quixtar *intends* the rule to apply to customers. My point is that a "retail sale" and a sale to a non-IBO customer are technically not synonymous. Despite PorkChopJim's assertions, Quixtar does not, to the best of my knowledge, anywhere define a "retail sale" as a sale only to non-IBOs. Thus we need to look outside Quixtar for it's definition. And laws (and even the dictionary) are very clear - it's a sale not for the purpose of resale. A frontline IBO purchasing something directly from you for their own use clearly fits this description. ------------------------------------------------- I have discussed with with Q rules, and agree the terms could be more clearly defined. This was several months ago, and Q should have cleared up the language by now, in my opinion. If you are talking about an IBO buying from your inventory, I agree it could be considered a retail sale. However, if they buy from the Q site, it is not.

Confusion potentially arises because a business can sell to it's proprietors - in this case the IBO, and it would thus be a retail sale for the IBOship. In many cases however, IBOs are not running businesses. As the FTC pointed out in the 70's, many people simply prefer to "shop at wholesale" - that is, "shop at wholesale *pricing*". They are not operating businesses. The IRS has quite clear guidelines on whether someone is operating as a business or not. I suggest you read their "guidelines for direct sellers". I believe it's linked to from www.iboai.com. ---------------------------------------------- Todd/Q rules, we need your input on this. I believe an IBO cannot be considered a customer in relation to the retail rules. I think this would be a very complex matter to keep track of, to the point of being unenforceable, what is the answer?

Miia said: March 12, 2007 12:43 PM | #

Anonymous Ruby,

Thank you, thank you, thank you for having the courage to post your message! It’s nice to have someone who is above the platinum level and is probably in some form benefiting from the sales of tools through your Diamonds LLC tool business, post a message as powerful as this. In the back of my mind, I wonder if Quixtar didn’t start this blog site as a way to put pressure on the groups that are in control of the tool systems (this is just my own conclusion/belief).

From my own experiences, when I council with my up-line, I’m told that my primary focus should be on those that are “systematized” then fill in with the rest if I have time. While that’s what I’m told, I don’t follow their recommendation. I believe that anyone that is willing to put forth the effort and has the desire to build a Quixtar business should get my attention regardless of their tool flow.

ibofightback said: March 12, 2007 3:41 PM | #

Tex said "An IBO retail sale is defined as a sale to a non-IBO, regardless of price."

Where is that defined? That's my whole point - it's not defined. If Quixtar wants to define it that way, that's fine, but they haven't.

Tex said: March 12, 2007 4:33 PM | #

Miia,

I am not so sure anonamous Ruby (aR) was exactly "courageous", he/she merely told the truth, and understandedly not telling their name. We should give aR credit for "coming forward", however.

There should be thousands of other Platinums expressing similar views posting on this blog.

aR's post is more like looking for a volunteer, and everyone except one person takes a step back. aR didn't step back.

Hopefully aR would agree with this assessment, and it reflects on every Platinum and above who hasn't posted here, at least not yet.

If there was a way they could network with other like-minded IBO's in their group and crossline, and provide MASSIVE input regarding this issue to Q, THAT would be courageous.

Also, disregard ibofb's comment that the tool profit issue does not apply to their group. From all indications, it does. They may not be as "militaristic" about the tools, but this does not mean most of their higher pin income isn't from tools. They merely noticed the other groups got in trouble for overemphasizing tool usage, and toned it down a bit. Their tools cost about the same as the rest of them. So, unless the production costs are significantly different, they make about the same on the tools as the rest of them.

I contacted the tool system ibofb uses, and they were very uncooperative, and I didn't even get far enough to ask about the tool profits, just asked about tool content, how many for the given price, etc. They told me to contact my upline, and when I told them my upline belonged to a different tool system, dead silence.

The same dead silence I get from asking ibofb repeatedly how he simultaneously says he doesn't care how much the higher pins make on tools AND if they make a lot on tools and say and/or imply most of the money is from A/Q, this is wrong. Stone cold silence, it is all over this blog and other blogs.

So much for the rule about IBO's being able to get their tools from whatever source they want. It's a very closed market, and one that obviously discourages competition.

I believe Q reached the point where the pain (loss of growth) of the various blogs criticizing them exceeded the pressure from the higher pins to not take action.

In 1983, the pressure from the latter was greater (not to mention the percentage of US/Canada business being more), and the fact we didn't have the internet to effectively communicate the stories, lawsuits, etc.

Porkchopjim said: March 12, 2007 8:24 PM | #

IBOFightBack:

Got me. There is no specific definition of what a ‘retail sale’ is in either FTC vs. Amway or the Quixtar rules.

And, I’ll be magnanimous and grant you the ‘retail sales’ to consuming IBOs if you can find anything in Quixtar’s rules or FTC vs. Amway that says a sale from one distributor to another is a ‘retail’ sale, under any circumstances.

But, what I can give you is what is NOT a retail sale – a sale from an IBO to a sponsored IBO.

Let’s take FTC vs. Amway:

Your status as a ‘distributor’ (now IBO) trumps your status as a ‘consumer.’ That status of ‘distributor’ defines the purchasing and selling relationship within the Amway/Quixtar business. Plus, that status is valid whether you actually run a business or just sign as a distributor to buy products at IBO cost.

The FTC clearly identifies a difference between ‘consumer’ and ‘distributor who consumes their own product.’ Two different things.

“Under the Amway Plan, each distributor is eligible to receive a monthly 'Performance Bonus' which is based on the total amount of Amway products he purchased that month for resale, both to consumers and to his sponsored distributors.”

Consumers and sponsored distributors – two different entities.

But, surely the recognize sales to consuming distributors as ‘retail sales to consumers’, no? Ummm – no. See how the FTC ‘thinks’ the Amway compensation plan works:

“…the Direct Distributor would net a 25 cents Bonus on each dollar of Business Volume representing retail sales made by him to consumers, and a 10 cents Bonus on each dollar of Business Volume representing wholesale sales made by him to his sponsored distributors.”

Retail sales to consumers, wholesale sales to sponsored distributors.

Are they once again confusing ‘retail pricing’ with ‘retail sales’? Doesn’t seem to be:

“FN27 We note that this figure is not 'retail sales', but Business Volume - that is, the retail value of the products purchased for resale to consumers and sponsored distributors, and for distributor home consumption, which was stated before, constitutes a large portion of all sales of Amway products.”

Consumers, and distributor home consumption - two different things.

OK – lets look at Quixtar’s rules:

Quixtar plainly says that IBOs can not be customers of their own IBs, nor customers of any other IB. And customers is defined as ‘retail customers.’ I can only assume that you’re looking for something like “IBOs CAN be ‘retail purchasers’ – and I guess if that’s not explicitly prohibited, then it must be OK. Sorry, no. Passive retail? I'll take credit for that term - cause I just made it up.

So, while you try to inject a definition that doesn’t exist, you simultaneously ignore the ones that are there – not to mention you contradict yourself from your own site.

Your status as a distributor/IBO is what dictates how you purchase your products – wholesale. What you do with them afterwards is irrelevant to the original sale and does not change the status of that sale from ‘wholesale’ to ‘retail’ – even if it was to the ultimate consumer.

BTW:

The 70% ‘self-consumption rule’: “…may allow IBOs to ‘secure performance bonus solely on the basis of purchases,’

”No, this isn't true. You can't just buy stuff. “

No, you’re right. In order to meet the letter of the law, you either have to consume it yourself, or give it away as a ‘sample.’ No chance of just buying your performance bonus with that rule. You either have to use it or give it away. Bonus, if you give it away as a ‘sample’ – you can tax write that off. All 100% within the rules. Changing the original 'resell' to include those activites certainly has no impact on what the FTC thought it was preventing: inventory loading, where IBOs secured performance bonus solely on the basis of purchases.

Tex said: March 13, 2007 9:51 AM | #

Tex said "An IBO retail sale is defined as a sale to a non-IBO, regardless of price." Where is that defined? That's my whole point - it's not defined. If Quixtar wants to define it that way, that's fine, but they haven't. ----------------------------------------- The point is it is clearly implied by the wording of the rules, complies with the laws of "simplicity" and "intent" (rather than the roundabout logic and ineffectiveness that otherwise results), and is confirmed via discussions with the rules department.

As I have said before, they agreed it could be worded better, and this was several months ago, so the clarifying changes are overdue, in my opinion.

Regarding 70% rule and "downline sales" and whether they have "ever counted" or not, that depends upon whether you're including Amway in Quixtar's history or not. I quote from FTC v Amway - " 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 . . ..' ". Note that wholesale sales are included. This is actually explicty stated in some international Amway markets. Again, it's about inventory loading. If you buy stuff and bury it in the backyard, it's a problem. If you buy it and sell it at retail (to a consumer) or wholesale (to another IBO for resale) then the problem of inventory loading is avoided. ----------------------------------------- I agree with the above, as long as your downline's orders are not counted in the 70%, as they never have been. A/Q has never considered downline orders to be included in the "he bought" definition above, as the upline was merely acting as a distributor in these cases for the purpose of the 70% definition. Otherwise, if you were at 6,000 PV you could order 1,500 PV of products and go silver, which is not the intent of the rules.

Now, let me state again, it's pretty obvious given the "retail sales rule" was called a "Member/Client Volume Rule" that Quixtar intends the rule *not* to apply to sales to other IBOs, whether retail sales or wholesale sales. What I'm trying to point out is the lack of clear definition - something you say the rules department agrees is a problem. --------------------------------------------- Yes, the dead horse is truly dead, ibofb. Let's get Todd or someone to chime in as I requested originally, and get the rules department to clarify the rules wording.

Tex said: March 13, 2007 11:39 AM | #

pcj said: In order to meet the letter of the law, you either have to consume it yourself, or give it away as a ‘sample.’ ----------------------------------------- You could also sell it.

ibofightback said: March 13, 2007 6:39 PM | #

Tex said - "I agree with the above, as long as your downline's orders are not counted in the 70%, as they never have been. "

Not true Tex, at least for Quixtar's Amway predecessor. Remember, once upon a time not that long ago only "Directs" could actually "order" from the corp. Everyone else purchased from their upline. Sales to downline distributors thus helped prevent inventory loading.

PCJ - we've done this to death elsewhere, I'm not going to go through it again here. Your side of the arguement is essentially a semantics one - "they said "and" so therefore they can't overlap" and then pretends that products mysteriously disappear rather than get consumed. Elsewhere you again make claims about what "quixtar plainly says" and then provide nothing to back it up. I'm not wasting my time chasing your myths any more.

My position in this is based on numerous states laws, draft federal laws, and even a run of the mill dictionary. If we go back to my original comment on this, what I was saying is the rules as they stand are *not* explicit on this, and they should be. Once that's solved this whole discussion becomes moot.

T said: March 14, 2007 10:45 AM | #

Fellas, ladies, gents:

This is probably 4 pages worth of arguments and discussions on a RULE that is ridiculously easy to abide. I mean seriously?? 50 points, $100 is this really worth this much??? I fully understand the importance of clarification but come 'on now. LOL Our product line is a "GOLDMINE". With ANY serious effort, "retailing" in any form should be able to support your basic business costs alone AND turn a nice profit to be able to go out and build your organization BIG.

I'm a little all over here. I apologize for that. As far as aR's comments, some are valid, some are not, the rest is a mute point.

The PDP's are necessary on many levels. The origins, I personally believe, had the very best intentions and BIG money made things very very complicated. Q NEEDS to continue to do more . I absolutely agree and believe they are on the path, ever so hesitantly but forward still. It is up to us, (IBO"S) to keep these issues on the forefront. God bless and have fun.

Tex said: March 14, 2007 11:00 AM | #

Tex said - "I agree with the above, as long as your downline's orders are not counted in the 70%, as they never have been. " Not true Tex, at least for Quixtar's Amway predecessor. Remember, once upon a time not that long ago only "Directs" could actually "order" from the corp. Everyone else purchased from their upline. Sales to downline distributors thus helped prevent inventory loading. ----------------------------------- It is true, even for Amway. I was around during that time, product pickup, etc. This is the EXACT question I asked the rules department a few months ago, whether the rule applied to downline orders (both Amway AND Quixtar timeframes) and they said NO. In other words, downline orders do not even enter into the 70% equation, only each IBO's own orders for personal use, immediate sales, samples, and inventory (long term sales). Most "sales" to downline were merely fulfilling orders, not a "sale". The rule wording and intent of the rule DID NOT CHANGE as a result of Q and direct fulfillment coming along.

The other problem is upline does not teach the rules, making these misunderstandings even more widespread. I don't see the 70% rule, especially since Q and direct fulfillment came along, but the retail rule is still being ignored, abused, etc.

We can keep going back and forth on this, but I really wish Todd or somebody from Quixtar would step in and explain the rule. If I am wrong, I will admit it. How about you?

ibofb, you haven't explained the 6,000 PV example, above with your incorrect intereptation of the 70% rule. Also, your incorrect interpretation of the retail sales rule results in the rule making no sense either. At some time you have to come to grips with facts and reality, and I hope Q rules steps in and clears this up. After all, it is their blog, and I think they need to have more of a presence, especially with these types of discussions.

Tex - Nice job, somebody says something you don't agree with so you just tell others to ignore it. You have a problem with business people making profit providing products at fair market rates. I don't, simple as that. ------------------------------------- I don't know where you referenced this from, but I don't tell anyone to ignore anything without a reason to back it up, unlike your above statement. What is the "fair market rate" when you have a virtual monopoly on the customers? What is the "fair market rate" among the higher pins and the rest of the IBO's, who they call, and encourage us to call them, "teammates" and "business partners"? Don't you think a fellow "teammate" or "business partner" has the need to know how much money is being made from the tools their "teammate" and "business partner" is selling them? It's called honesty. I have a problem with dishonesty, simple as that.

Anonymous said: March 14, 2007 2:23 PM | #

Regarding the "roll up" Performance Bonuses that are included in the Platinum Performance Bonus: It is stated: "It is your responsibility to determine if the IBO is entitled to receive such bonus under the Independent Business Ownership Plan and Rules of Conduct." These roll-up bonuses bypass the upline IBOs who are entitled to receive them and go straight to the Platinum. When I asked why Quixtar didnʻt include these bonuses in the upline IBO bonus instead of being included in the Platinumʻs bonus, I was told that the IBOAI wanted to have the ability to deduct money owed from these amounts. I was told by a system Diamond who serves on the IBOAI that it was additional money for the Platinum. I have talked to many Platinums who do not pay these roll up bonuses to the entitled IBOs, but keep it for themselves. Isnʻt this stealing?

I have always paid these bonuses to the entitled IBOs. If the upline doesnʻt have an "M" beside their name on the bonus statement, I know that they have met the qualifications to receive this bonus, and I pay them.

ibofightback said: March 14, 2007 7:23 PM | #

Tex - re 70% rule, either you misunderstood what they said or they are wrong, simple as that. I gave you the quote from FTC v Amway which explicitly included wholesale sales. Here's the same rule from Amway UK, where they fortunately make it very clear.

-----------------

Rule 8.A An IBO must sell to his Sponsored IBOs and/or sell to Retail Clients in any given month at least 70% of the total volume of Amway Products and Services he holds for resale to Retail Clients or for supply to his Personally Sponsored IBOs in order to receive a Performance Bonus for that month calculated on all Products and/or Services acquired; and receive the recognition due. If an IBO fails to comply with this 70% Rule, his Performance Bonus may be paid based on the amount of Amway Products and Services actually sold, rather than the amount of Amway Products and Services acquired, and recognised accordingly.

-----------------

RE "Otherwise, if you were at 6,000 PV you could order 1,500 PV of products and go silver, which is not the intent of the rules. "

So, you order and receive 7500PV worth of goods, and sell 80% of it downline. You're in compliance with the 70% rule. Assuming you're in compliance with other rules, then of course you are a silver.

In any case, we're in agreement that it's not relevant to Quixtar today, and we're also in agreement that "upline" is pretty bad at teaching this rule and the member/client volume rule. We are also in agreement about the intent and purpose of the member/client volume rule. I'm just pointing out the fact that, without a separate Quixtar-specific definition of "retail sale", which as PCJ discovered does not exist, then the normal definitions should apply. It's quite obvious to me that having an IBO doing 50PV of personal volume, and calling themselves a "client" of that IBOship is not the intent of the rule. To emphasise the possibility further, consider the situation of an IBOship as a legal person (eg a corporation). Take any IBO and make their IBOship a corporation with them as owner. As owner of that corporation purchasing from that corporation is a fully separate legal person and is in all respects a customer of that corporation. If an IBO managed to avoid arbitration and get Q* to court on this issue, Q* wouldn't even have a snowballs chance in hell of claiming that person is not legally a customer of the corporation and doesn't fulfill the rule. Even without incorporation, a properly run t/a operation would also IMO fulfil the rule legally.

But as T said - enough. We're in agreement on the overall purpose. We're in agreement on a lack of teaching and we're in agreement on a lack of enforcement. We're basically arguing hypotheticals so let's wrap this one up!

On another note - Lehua! Beth and others have indicated the opportunityzone is expanding and there are some "private" areas under test that may go public. I see that Lehua links to a user profile page.

Intriguing! Care to spill any beans Lehua? :-)

Tex said: March 14, 2007 9:27 PM | #

Lehua,

This is an interesting point. Since we are now paid via directly from Q, one would think the bonus could be paid to the next qualifying upline instead of the Platinum.

I don't fully understand the explanation regarding the IBOAI, perhaps you could restate it using different words.

I certainly consider what you identified as stealing, and the rules should be changed regardless of whether Q is paying IBO's or the Platinums are.

There are now several VERY good questions on this blog Q needs to respond to in order to in order to make this blog reach its potential. Otherwise, the other blogs will take control back and correctly cite the unresponsiveness on this blog.

Porkchopjim said: March 14, 2007 9:48 PM | #

Got me again. I admit I have repeatedly claimed that tripling your intake of vitamins in order to get PV is not ‘consuming’ vitamins. They disappear magically. Yup. That’s the best you have? Claim I made I statement I didn’t make? OK.

Your Quixtar information that you can’t find is under Definitions for Rules of Conduct, para 2.5, 3.11 and 4.2.3. IBOs can’t be retail customers.

Now, as far as the FTC – there are other people that think the same way I do:

“Again, the FTC directly talks not about "non-participants" but about "consumers". Note also they confirm my position that an IBO purchasing from their sponsor is participating in a wholesale transaction.”

Some may say they got that idea from me. I would use that fancy hyper-link thingy, but I can’t, so I’ll just have everyone click your name to your website and look in the ‘Scott Larsen…” rant in the critics section. No charge for that plug.

Suddenly, here, they are conducting ‘retail’ transactions. Which is it? Now, the FTC doesn’t talk about ‘non-participants’ – but they do talk about distributors and ‘consumers.’

“The commission was clearly aware that even then a large portion of the volume was within the network. And yet, despite this, at no point did the Commission address the issue of sales to non-participants,”

False. That is covered under the ‘retail sales 10 customer rule.’ That they didn’t use the term ‘non-participant’ doesn’t mean they included distributors as part of the 10 customers.

So – it is semantics in a way: I say that my status as IBO (distributor) provides me with a defined transaction relationship with my upline as ‘wholesale’ – solely. You contend that the FTC considers distributors and consumers to be one in the same. I’m pretty sure that’s not it.

And since you appear to be merely arguing against me here while saying much the same thing I’m saying elsewhere – well, we’ll just let others ponder that.

Now, agreed that this could all be cleared up with a couple of words from our sponsors - but it looks like we shouldn't hold our breath.

Editor's Note:

A portion of this comment has been omitted for violating the civil discourse aspect of Ada-tudes Comments Policy.

Anna Bryce
Managing Editor -- Quixtar Opportunity Zone

Tex said: March 15, 2007 10:48 AM | #

ibofb cited this rule, from Amway UK: Rule 8.A An IBO must sell to his Sponsored IBOs and/or sell to Retail Clients in any given month at least 70% of the total volume of Amway Products and Services he holds for resale to Retail Clients or for supply to his Personally Sponsored IBOs in order to receive a Performance Bonus for that month calculated on all Products and/or Services acquired; and receive the recognition due. If an IBO fails to comply with this 70% Rule, his Performance Bonus may be paid based on the amount of Amway Products and Services actually sold, rather than the amount of Amway Products and Services acquired, and recognised accordingly. -------------------------------------------- This still does not prove downline ordered volume counts as part of the 70% equation. Look at the words "he holds". This could mean downline IBO orders, or it could mean inventory. When I talked with Q rules, they said it meant inventory, NOT downline IBO orders.

Anna, you are doing a terrific job of screening out inappropriate posts, can you do ANYTHING to get a corporate response to this issue?

Tex said: "Otherwise, if you were at 6,000 PV you could order 1,500 PV of products and go silver, which is not the intent of the rules. " So, you order and receive 7500PV worth of goods, and sell 80% of it downline. You're in compliance with the 70% rule. Assuming you're in compliance with other rules, then of course you are a silver. ---------------------------------------- That's the point, you shouldn't be able to order 1,500 PV of products to "buy" your silver pin. This is assuming you DON'T retail (sell to non-IBO's) 70% of the 1500 PV.

Anna, PLEASE help with this, as ibofb is off track on this issue as well.

ibofb: In any case, we're in agreement that it's not relevant to Quixtar today, ------------------------------------------------- No, we're NOT in agreement, unless you are only talking about the fact there is less of a need for this rule because the lesser need to have an inventory. As far as what products count as part of the 70%, we are NOT in agreement.

ibofb: and we're also in agreement that "upline" is pretty bad at teaching this rule and the member/client volume rule. -------------------------------------- We do agree here, and I would add that Q has also been negligent. For a business that has been around for almost half a century, one would think the rules would be much clearer, unless they weren't taken seriously to begin with.

ibofb: We are also in agreement about the intent and purpose of the member/client volume rule. I'm just pointing out the fact that, without a separate Quixtar-specific definition of "retail sale", which as PCJ discovered does not exist, then the normal definitions should apply. --------------------------------------- I also disagree "the normal definitions should apply", as there are plenty of hints, indirect references, intents, etc., in the rules that should point you towards talking with the rules department before you turn to your dictionary. EVERY business, and other organizations for that matter, have different definitions for common words than the dictionary.

ibofb: It's quite obvious to me that having an IBO doing 50PV of personal volume, and calling themselves a "client" of that IBOship is not the intent of the rule. To emphasise the possibility further, consider the situation of an IBOship as a legal person (eg a corporation). Take any IBO and make their IBOship a corporation with them as owner. As owner of that corporation purchasing from that corporation is a fully separate legal person and is in all respects a customer of that corporation. If an IBO managed to avoid arbitration and get Q* to court on this issue, Q* wouldn't even have a snowballs chance in hell of claiming that person is not legally a customer of the corporation and doesn't fulfill the rule. Even without incorporation, a properly run t/a operation would also IMO fulfil the rule legally. ------------------------------------------- You have to get approval to set yourself up as a corporation or LLC, and I would be willing to bet there will be a clause that you couldn't do as stated above.

ibofb: But as T said - enough. We're in agreement on the overall purpose. We're in agreement on a lack of teaching and we're in agreement on a lack of enforcement. We're basically arguing hypotheticals so let's wrap this one up! ------------------------------------------- Amen, now we need Q to step in and set the record straight.

Anonymous 3 said: March 15, 2007 11:16 AM | #

I agree with the first anonymous poster about the limitations that are imposed on IBOs by Quixtar rules and regulations. I am a new IBO and I have to say we got into this business to make money and run it as OUR business while promoting the excellent products of Quixtar. I DID not get into this business to simply use system tools so that someone else can profit from the work I put out. I got into this business with the understanding that I could have a happy blend of using the system and creating customer volume. How am I supposed to create customer volume if I am not allowed to set up my own website that would sell the Quixtar products and market it thereby building my customer volume. I feel this a very unfair imposition and limitation, and don't see where the benefit is for me.

Like the Anonymous poster stated, it puts a bad taste in your mouth and gives Quixtar a negative image. People want to know that there is a mutual desire for both entities to succeed (Quixtar and the IBO).

It does not take a lot of time to set up a personalized website (like another poster stated), nor does it take away from you doing what you need to develop the systems side of your business. I was told by my upline to concentrate on the systems because there were so many rules limiting setting up personal websites and I just have to say, if I can't make money doing my own marketing for my own business, then it's not really my own business is it?

I'm going to stay the year and see if the policy changes, otherwise I will leave and go with a company that REALLY wants to help me succeed. Thank you.

ibofightback said: March 15, 2007 4:02 PM | #

Tex - we are in agreement, downline orders under Quixtar direct fulfillment are NOT part of the 70%

PCJ -

2.5 is the definition of the term "client", not a definition of "retail sale"

3.11 makes no reference to what a "retail sale" is

4.2.3 makes no reference to what a "retail sale" is

I suggest you also go look up what "non sequitur" means.

As for the rest, a wholesale sale is a sale made for the purpose of resale. That's all that needs to be known. The FTC has nowhere redefined it. Quixtar has nowhere redefined it. You apparently have. Sorry, but I don't consider you an authority.

Tell me PCJ - if an IBO buys Double X from their sponsor (or Quixtar for that matter) for their own use, according to you it's a "wholesale sale". Does that mean retail sales tax doesn't apply, since you claim there has been no retail sale?

Anna Bryce said: March 15, 2007 5:49 PM | #

Regarding numerous questions above, following is feedback from Quixtar Rules:

Q. Donations count toward the 70%?

A. Nope.

***

Q. Platinums still must comply with the retail requirements but don't have to self-report?

A. Rules does not require Platinums and above to meet the requirements of this rule.

***

Q. Do sales to downline count as retail sales?

A. No. Sales to downline IBOs do not count as retail sales and would not enable an IBO to comply with the Customer Volume Requirement Rule. Product sales to downline IBOs would, however, be counted toward the sales necessary to comply with the 70% rule.

***

Q. Does self-consumption count as part of the 70%?

A. Self-consumption can count towards the 70% rule.

***

Q. Does it matter if the sale price is IBO cost or Suggested Retail?

A. The price at which products are sold is up to the selling IBO and is not dictated by Quixtar.

***

Q. Is the wording of the rule going to be modified? If so, when? If not, why not?

A. We review and modify our rules from time to time. I'm not sure whether there are any plans at this point in time to do so with this rule.

***

Regarding the discussion on "roll up" of Performance Bonuses and the accusations that Platinums don't pay out the roll-up bonuses to the entitled IBOs in their groups: The bonuses are paid to the upline Platinum and it is their obligation under the Rules to ensure bonuses are paid to the IBOs that are entitled to receive them. If an IBO failed to comply with the Rules and the portion of their performance bonus based on downline sales is sent to the Platinum, it should be paid to the next upline IBO that has met the requirements of this Rule.

While this is the general Rule and standard, enforcement of the Rules require a very fact-specific analysis to determine if a violation has occurred. Those suspecting that a violation has occurred should report the specifics of the violation in writing to Quixtar's Rules Department.

[Posted by Robin for Anna, who is on vacation this weekend. Responses provided by Rules. We will work with them to respond directly to these in the future. Right, BC&R? ;-) ]

Tex said: March 15, 2007 8:21 PM | #

Anna (or BC&R),

Thanks, have a good vacation.

Regarding the Q/A below, is there any distinction between a sale made to downline and an order made by downline, or are these considered to be identical for the purposes of the 70% rule?

Also, has this rule changed since the Amway days when orders were submitted via the upline Direct, whereas now direct fulfillment is in place?

Jeffrey said: March 16, 2007 12:20 AM | #

Two different months last year, one of my personal IBOs didn't report their customer sales. They are around 1200 PV. My Platinum got their bonus, but according to the above post, I was the next upline that DID meet the customer volume requirement so I should have gotten their bonus on downline volume. I didn't get it. Did my Platinum break a rule by not paying it to me, or is it OK for him to keep it? I make sure I ALWAYS meet the customer volume requirement. Also, many times, this same downline IBO will buy 300 PV about 10 minutes to 12 on the last night of month to hit 1500 PV. When they do this, I always take a hit on my bonus unless I also buy a bracket. Are they in violation for doing this too? I do not like buying a bracket because I have always felt it was "artificial volume." I would really like clarification on this. I think I'm being cheated by both upline and downline. It doesn't surprise me with my Platinum, though, because the guy has a real hard time with rules and truth, unless of course, it's to his benefit. Someone from Quixtar, please respond.

Anna Bryce said: March 16, 2007 8:50 AM | #

QUIXTAR FOLLOW UP: In the above response, we should have provided email address to report potential abuses. That email address is abuse@quixtar.com.

Tex said: March 16, 2007 8:57 AM | #

Jeffrey,

I think the first part is abuse, the second one is not.

Your downline didn't do anything wrong, and it is up to you to either discuss this with them to order earlier, or anticipate they will order to put yourself in the higher bracket.

There is nothing wrong with "buying a bracket", as long as the 70% rule is followed. In fact, it is being a smart businessperson in my opinion.

You are in business to make money, as long as you follow the rules.

Porkchopjim said: March 16, 2007 9:12 PM | #

IBOFightBack,

I’m shocked that you’ve once again made things up and attributed them to me. Shocked.

I originally said Quixtar plainly says that an IBO cannot be a retail customer of an IB – and then gave the references. You seem to ‘think’ I suddenly found the ‘retail sale’ definition – when that wasn’t what was referenced. At all. Also – it’s the definition of a ‘customer’ – not a ‘client’ – it you’d take a moment to read them.

I need not look up the meaning of ‘non sequitur’ because you demonstrate it explicitly in your responses. Why is that?

As for the ‘retail sales tax’ – I don’t know, you tell me. But, here’s what FTC vs. Amway said:

“Amway collects retail sales taxes at the time of sale to Amway Direct Distributors and pays the state governments.”

So, according to your justification, state governments consider sales from Amway to Directs as retail sales! I’m sure that’s news to Amway!

Quixtar, as Amway did before, collects the tax based on recommended retail sales price when they sell the product on behalf of the IBO. If the IBO self-consumes that product, or sells it at a different price than the suggested retail, that IBO can claim a return of (or pay additional) that portion of the tax that was applied to the difference.

Uncle Sugar and sons will get their tax. To avoid the problem of non-payment of tax on consumed wholesale goods, as well as to simplify the IBO’s business, Quixtar collects that tax up front.

Now, for the rest:

I see Quixtar hasn’t provided anything to counter your claims – as they still have not defined what a ‘retail sale’ is.

They did, however, AGAIN say that a sale from an IBO to a downline IBO is NOT a retail sale.

Just like I said. And just like you said on your website.

Still wondering why you say one thing here about wholesale to IBOs and another all-together on your website. And I ask this because you are acting in an either official or unofficial capacity as the ‘truth’ about how to conduct this business…but you give conflicting information. The truth should not have more than one reality from the same source. It shouldn’t need a ‘disclaimer’, and you shouldn’t do harm when pretending to do good.

Eric said: March 18, 2007 6:50 PM | #

Pcj,

I agree Quixtar did not define a retail sale but instead defined what it wasn't. (sigh..) If you wade through the answer it becomes apparent that a retail sale is a sale to anyone who is not a downline IBO. The selling price is not an issue as IBOs can determine what price they want to sell the product.

Kurt said: March 20, 2007 11:52 AM | #

Anna,

You say the Platinum must pay back money to any downline who both meets the Customer rule and is in the LOS between the Platinum and the IBO who didn't meet the rule.

Where does it say that the Platinum must redirect money they receive for any downline who doesn't meet the Customer rule?

Anna Bryce said: March 21, 2007 3:11 PM | #

Jeffrey, Regarding your 3/16 comment beginning "Two different months last year ..." here is a response from Quixtar's Business Conduct & Rules Department:

In order to properly investigate the issues mentioned in your post, we would ask that you submit the specifics of your complaint to bcr.department@quixtar.com. This way we can adhere to the confidentiality required in the Rules while we work towards resolution. If there are abuses we will follow the Rules of Conduct and enforce our rules but we need your help to do so. Thank you!

Anna Bryce
Managing Editor -- Opportunity Zone

Tex said: March 26, 2007 4:10 PM | #

Anna,

Please see my March 15, 2007 8:21 PM entry, this question has not yet been answered. Thanks.

Tex's Original Question:

... is there any distinction between a sale made to downline and an order made by downline, or are these considered to be identical for the purposes of the 70% rule?

Also, has this rule changed since the Amway days when orders were submitted via the upline Direct, whereas now direct fulfillment is in place?

Quixtar Rules' Response:

Yes there is a distinction and no, they are not identical. The 70% Rule pertains to products YOU purchased. If a downline orders a product from you rather than directly from the Corporation, then that volume would count towards your compliance to the 70% rule. If the downline orders directly from the Corporation, that order has no bearing on your compliance to the rule.

This rule has not changed. The only difference would be that in the direct fulfillment world, the upline Platinum (then Direct) is not a conduit for the products, therefore they do not have to document the movement of volume ordered from Quixtar by downline IBOs.

Anna Bryce
Managing Editor -- Opportunity Zone

Frank Lee said: April 2, 2007 9:35 AM | #

Why is anyone splitting hairs on this concept? The intent is obviously to require sales to customers who are not in the business. Otherwise you are running a pyramid.

Selling retail to real customers is smart business and is way more profitable than building networks alone.

I don't see why people are stuck in the rut of this not being a sales business. Of course it is, whether you are selling the concept or selling product. Stop lying to yourselves and others.

da said: April 18, 2007 7:10 PM | #

As a Platinum, why is it okay to borrow (non-existent) volume from the next month to hit a bonus level in the existing month, but you are not allowed to move excess volume from the existing month to the next month?

Anna Bryce said: April 19, 2007 2:14 PM | #

da,

Please see the response below from Quixtar Sales (updated for clarification):

Quixtar business qualifications are based on the volume totals generated each month. IBOs are strongly encouraged to manage and track their progress towards their individual goals. Quixtar has several programs in place that aid IBOs with tracking and maintaining monthly qualification goals.

The Topping-Up program is available to all qualified Silver Producers and above if they are within 5% of a qualification goal. All adjustments are counted against the personal PV of the IBO receiving the Topping-Up adjustment. Topping-Up is much like overdraft protection with your bank account since IBOs should always strive to exceed their individual business goals each and every month.

Quixtar allows any IBO to have the option of moving an order placed during the final three days of the month into the following month. This option allows IBOs who have reached their individual business goal in the current month the option of moving additional, personal volume into the next business month.

Tex said: April 20, 2007 8:22 AM | #

I didn't see the "Topping-Up" program described in the Quixtar Compendium. What other rules are there that we don't know about? If you want transparency, this would be a great place to start.

Does Topping-Up allow you to "borrow" PV from the future month only?

I also couldn't find the option of any IBO being able to move an order into the future month in the Quixtar Compendium, either. Again, what other flexibilities do we have that are not in the rules?

da said: April 30, 2007 1:02 PM | #

Based on your response to my April 18 question: If "every" IBO can transfer volume, how can a Platinum control their monthly PV qualification?

Also, in response to Tex April 20 - Based on my experience, there seem to be many "flexibilities" and are at the discretion/interpretation of an assigned (@ the Platinum level) Quixtar Sales Advisor.

Editor's Response Posted by Anna Bryce:

da,

I apologize for the delay in getting back to you on this. It took me longer than it should have to track down some information, but here it is from Quixtar Sales ...

There are rules that control how volume can be transferred between IBOs. It has to be connected to a monthly product order between those IBOs. For example, one IBO might place an order for product that includes items for one or more downline IBOs. When those IBOs receive the product, the upline would transfer the volume to the correct IBO to track the volume correctly.

Topping up isn't a rule, rather a program like QBI (Quixtar Business Incentives). You also won't see QBI in the Business Reference Manual since it is a program that compliments the bonus plan. Topping up is discussed in detail with new Platinums at the new Platinum Conference they attend in Ada. It only covers IBOs tracking towards qualification and the volume is always deducted against the following month.

I hope this answers your questions!

Tex said: May 7, 2007 6:31 PM | #

Anna,

You can't find QBI in the Reference Manual, but you can find it on the Q site.

You can't find topping, or any other secret program, in the reference manual or on the Q site.

The question remains, what other programs are being hidden from IBO's?

Don't you see a lack in transparency issue?

Why hide topping or other programs from IBO's?

I think topping is a great program, wish I knew about it before.

da said: May 10, 2007 7:01 PM | #

My question on April 30 has not been answered. Again, the question is, IF EVERY IBO CAN TRANSFER VOLUME, HOW CAN A PLATINUM CONTROL THEIR MONTHLY PV QUALIFICATION?

Also, in order to qualify QBI, you must have 7500 PV 12 out of 12 months. Without control of our monthly volume, why can't a volume total of 90,000 PV for the year be used for the 12 QBI months? That way, if there is a shortage/overage in any month, it wouldn't affect the qualification.

FYI-We have been qualified Platinums for 15 years.

Editor's Response Published by Anna Bryce:

Da,

I'm sorry that the information provided did not answer your question. I checked again with Quixtar Sales and they recommended that perhaps the best way to answer your question would be to quote the rule:

4.25. IBO Plan Manipulation: No IBO shall manipulate the IBO Plan or sales volume, in any way which results in the payment of bonuses or other awards and recognition that have not been earned in accordance with the terms of the IBO Plan and/or the Business Reference Guide.

This means that IBO volume has to follow certain rules and IBOs can't transfer volume at will. It has to be connected to monthly orders and in the world of direct fulfillment, the need to transfer volume has been greatly reduced.

As for the 12 Month Consistency bonus, the objective is to promote consistent qualification all 12 months of the year. There is an allowance for Founders Platinum qualification with 10 months and 108,000 PV which follows a global standard.

IBOs with more questions about either of these levels can contact their Sales Advisor for more details.

da said: May 29, 2007 4:28 PM | #

Anna-

Referring to the last line of your post to me on May 10:

1) What is a Sales Advisor (role, job function, etc.)?

2) How will everyone reading this blog know the answer to questions if not answered on the blog?

3) Should I be posting under TRANSPARENCY section?

Also, have not seen a response to Tex's post dated May 7?

Anna Bryce said: May 31, 2007 5:50 PM | #

Da,

Sales Advisors work in Quixtar's Sales Department and their primary function is to serve as business consultants to Quixtar IBOs, supporting them as they build their businesses and helping them get the most benefit from the Quixtar IBO Compensation Plan.

We do make every effort to answer in Ada-tudes questions that are asked in Ada-tudes. Occasionally, some questions are better handled in other forums. For example, we recommend that those with concerns about specific Rules violations address those with our Rules department. And if someone has specific questions about the compensation plan and about building their Quixtar business, their Sales Advisor is an excellent resource.

As for Tex's May 7 comment, I felt the comment prior to that actually addressed his concern. Topping up is not a rule, it's a program, and it's explained to new Platinums when they attend New Platinum Conference.

Thanks!

Anna

joe kavadas said: August 22, 2008 5:11 PM | #

i am looking to join Q/A for the 3rd time.

I found team that doesnt charge for audios

and focuses on marketing products.

but....

In order to show a simple duplicatable way to validate the plan and the retail customer rule,

I have the following suggestions.

1. the customer rule as it stands is effective and reasonable. $100 sold to anyone else is fair.

2. 100pv per ibo is what should be shown as a quickstart to qualify for bonuses & QBI. (50/50)

by using a 100 pv model, ibos can qualify now. with one or two clients, and then grow their customer list over time....as they teach downline ibos to validate 100pv, they will be able to increase their personal volume to 200pv, by exposing folks to quality health and skin care products, adding a couple new clients, and potential niche marketing, more consumption.

in other words 100pv is the first goal.

if you had a team of folks validating 100pv,

the ibos who have been in longer will eventually do 200pv as they grow their team.

validating 50 retail pv w/in 30 days is good enough

Comments (required)
Name (required) First and last names are encouraged in keeping with the spirit of transparency and openness in which Opportunity Zone was created.
Your URL (optional)
Email (required- never displayed)
Remember Me?
Comments policy: Please note that comments are moderated. All comments are welcome as long as they are on topic, respectful, and do not advertise competing products or businesses. We reserve the right to remove without warning any and all offensive, unlawful, defamatory, or libelous comments, as well as any personal attacks or offensive language.