Quixtar Ranked #1 Again

Thursday, May 31, 2007  by Jim Payne
Category: Announcements, Quixtar Strategy

Did you see the recent announcement about Quixtar being ranked #1 in online health and beauty sales for the fourth consecutive year?! WOW! Congratulations to all Quixtar IBOs and employees for making this possible. Of Quixtar's $1.118 billion revenue in 2006, $880 million was generated online, up 10% from 2005 online sales.

We will continue to focus on health and beauty and we are developing new programs to help more IBOs make more money sooner, especially the newest IBO. We plan to increase our awareness and selling skills of our Nutrilite and Artistry Brands to create stronger pathways to profitability for all IBOs. These efforts include product portfolio enhancements, additional training, and improvements to the compensation plan. We believe these efforts will help maximize the partnership with IBOs that is so critical to our success.

Comments

Tex said:
May 31, 2007 1:14 PM | #

Long time, no new post. Got any schedule estimate for the above initiatives?

The Big Apple said:
June 1, 2007 1:33 AM | #

It is great to be #1 in health and beauty, but let's not forget about laundry and cleaning.  Both are top qualtiy lines, necessities of life, and they can be easier for a new IBO to sell than the higher priced H & B lines.

Tex said:
June 1, 2007 2:11 PM | #

The Big Apple,

I agree, I even suggested the laundry and cleaning product prices could be reduced to use them as "loss leaders" (not a loss, just less profit) for A/Q, to help us get our foot in the door, so to speak.

The Big Apple said:
June 1, 2007 10:41 PM | #

Tex,

Reducing the Corporate profitability of the laundry and cleaning products would very likely backfire.  The reason why a customers will walk right past competitors' products in the store and call or go online to order ours is quality.  Maintaining quality leadership requires research and development.  With a finite pot of corporate money available for R&D, prioritization of where that money goes becomes a return on investment decision.  Lowered profit could very likely mean that the laundry line would not get the ongoing development required to be competitive.

For IBOs (that sell), they will likely focus their efforts on selling products that make them the most money, from a standpoint of both gross profit and performance bonus earned.  That happens with a combination of profitability of the individual product and how much of that product is sold.  Reduced profitability could likely result in less effort to selling the product by the IBOs, thus lowering the volume instead of raising it.

It will be interesting to see the results of Quixtar lowering the price of Nutrilite Daily.

ibofightback said:
June 2, 2007 9:04 AM | #

I agree. With Health & Beauty you are often selling a product the customer has not used before - so it's a new expense for them. With the fabulous LOC and SA8 ranges, it's moving the consumer from using one product to another - which can often be an easier sell if the product is obviously better and cheaper. Once upon time that difference *was* obvious with the SA8/LOC range, now it's still there but not so obvious.

Once folk have started using those products, it's easier to start inviting them to health & beauty type clinics, and educate them about the importance of products like Nutrilite and Artistry.

Health & Beauty are great areas and growing trends, but they require more education and, until otherwise educated, are part of peoples "discretionary spending". I know Rich & Jay started with Nutrilite, but at that time they were fairly unique, now we can educate someone about the need for nutrition, but they'll go buy centrum, we have to go the extra effort to get them to understand the extra worth in Nutrilite.

I fell in love with Amway products when I was about 9, when my mother bought some see spray lens cleaner for my glasses. It literally changed how I saw the world! An easy sell and I've been a fan of Amway products ever since.

Tex said:
June 2, 2007 9:19 PM | #

The Big Apple,

I think it is an easier story to tell about Artistry and Nutrilite being premier quality products with premium prices.

It is much more difficult to tell the same story with cleaning products, which have more competition, especially price competition, at the grocery and discount stores, such as Walmart and Target. These stores didn't even exist when Amway got started, at least on a national level, and I don't think A/Q has kept up with the competition over the years.

By A/Q's admission, they want to emphasize the Health and Beauty/Nutrition lines, so the cleaning products become a "back seat" source of profit.

I agree with ibofb's point, it is a natural progression to start a customer out on the easier to understand cleaning products, especially if they are competitively priced, and then use the relationship opportunity to educate on the other lines.

If this works, A/Q will have plenty of profit to continue to improve the cleaning products, they don't have to get the R&D dollars from the same line of products profit.  

Quality and price, together with an outstanding product reputation, is an unbeatable combination.

ibofightback said:
June 3, 2007 10:40 AM | #

Big Apple - I'd note that the corp is in the process of launching a new cosmetics range in India which is apparently going to cost 1/3 the cost of artistry, so obviously there's some room for price innovation.

With the focus on first circle, we need some products that are easy for a new IBO to sell. There's quite a lot of education needed to sell artistry and nutrilite.

Piet Strydom said:
June 4, 2007 11:26 AM | #

Congratulations Quixtar!

Kim said:
June 4, 2007 11:47 PM | #

I have to agree with the "Big Apple", "IBOfightback" and disagree with "Tex". As a single person it took me about a year to use a jug of SA8. I would have spent 3 to 4 times that much with "store bought" products. Now I see the value of what I purchased but wish Quixtar would make smaller sizes to bring people like me back to the "well" more often.

Tex said:
June 5, 2007 9:41 AM | #

Kim,

I think if you reread the posts you will find ibofb and me are in agreement.

I have no issue with smaller sizes for single folks, but why would bringing the price down be a bad thing for you, whether personal use or, even more significantly, to get more customers?

Jeffrey said:
June 5, 2007 1:58 PM | #

When I show the plan or am setting up a new customer, I always show cost comparisons. A good one in the home care line is SA8 Solutions All Fabric Bleach vs. Clorox 2. At wholesale we are 15 cents per load less expensive than they are. At retail, you save ten cents per load using ours. (I use regular grocery store chains to get my prices--not Wal-Mart because I don't like going there.) Our 2.6 lb. box contains 40 loads and their 30.3 oz. box contains only 8 loads. Even as our "friends" in Cincinnati roll out their "ultra" concentrated products over the summer, according to an article in the Wall Street Journal, their prices are going to stay the same. It will be a smaller container but the number of uses will be the same, so they'll still be more expensive on a per-use basis.  

At the 3:1 dilution rate, our L.O.C. Plus Glass Cleaner is cheaper than Windex. The glass cleaners have to be compared on a per ounce basis, rather than a per use basis. But the main selling point I use for the glass cleaner is that ours does not have ammonia in it, so you don't have that horrible smell to contend with. I use it in my janitorial business and it's a great product.

I jumped for joy when Q came out with the 1.6 oz. box of SA8 Bioquest and the 50 oz. SA8 Liquid. I've already sold several of the smaller sizes. I don't think I would have made those sales if we didn't have those smaller sizes.

G said:
June 5, 2007 3:52 PM | #

Kim,

That is what our entire "Incredible Edible's" line is for. Along with Zsenso and Kahve and Artistry and Nutrilite and Glister. These are daily,weekly,monthly consumables.  These lines are phenomenal and needed every month on DITTO. Sure I'd love a few price reductions but why would you want a little box of soap. It's been done. Sales didn't warrant it further. Monthly DITTO is our teams focus . Good luck. Hope I helped.

ibofightback said:
June 5, 2007 6:38 PM | #

I should ad that my comments are coming from someone who isn't a Quixtar IBO, so doesn't have XS to market :-)

The Big Apple said:
June 8, 2007 1:13 AM | #

Loyalty is very high with my laundry customers.  And it crosses all kinds of demographic lines.  On top of the performance of the product, my wealthier customers like that they're getting a "special" product that isn't sold in stores.  They feel special.  

My lower-middle income customers like that it saves them from having to rewash, take to the dry cleaners, or throw away stained clothing.  They see the SA8 line as a cost savings for them.  

And of course, those inbetween just like the product for what it is.  A cut above what they can buy in the store.

Part of a customer's satisfaction is expectations fulfilled.  The expectation comes from how the product was presented to them.  Was it price or performance that was the main selling point.  Price is the weakest thing to sell on.  Those Wal-Mart and Costco customers will buy our products if they're sold on product performance and service.  

It's our job to point out those benefits so the customer will try our product.  Then, we have to make sure they can reorder it easily.  The product isn't sold until the customer reorders it.  The first time, they were trying it..

Sometime after the customer reorders, they may be ready to go on Ditto.  But then, many of my customers like to keep control of their ordering and call me, the Corp., or go online.  That's okay with me.  I just want them to be able to reorder easily

A repeat customer is money in the bank!  I can deposit that, and I can recruit with that!!

G said:
June 8, 2007 12:29 PM | #

"Biggy"

I like your style.  Meet your customer where they are at. That can never be said enough.

Product performance and service definitely set us *IBO's* apart from the pack.

Excellent post.  Keep firing, I'm taking notes.. :)

Joel and Jeanna Romein said:
June 9, 2007 3:23 PM | #

Hey Jim,

We're here at Connections!!!  Thanks for the great opportunity, and THANKS for the sample of XS Black Cherry!!

This rocks!

ibofightback said:
June 11, 2007 6:13 PM | #

Biggy - you're absolutely correct. My concern however is with *new* IBOs. We need something that's easy for them to market and sell. The cleaning range used to be a much easier sell as it was soooo much better than the competition. Now the competition has more concentrated and more environmentally friendly products with cheaper per wash pricings. Amway's products still win, and once you get a convert they can be a convert for life - but it's a harder sell for the new IBO than it used to be.

The Big Apple said:
June 13, 2007 12:09 AM | #

ibofb,

Yes, I think many manufacturers in many industries are having to deal more with closer product parity.

Laundry and cleaning products may be harder to sell now, but that's a great reason for teaching IBOs how to sell, and on quality, not price.  On the other hand, show me another manufacturer who has a laundry system.  Nothing comes close to Pre-Wash, and All Fab. Bleach is still in a class by itself.

Nutrilite takes a belief level and training, therefore a longer time to be able to begin selling.  Artistry is great to start with for the women, or a capable man who is comfortable taking about skin care.

I'm a strong believer in the laundry line.  It's a strong performer and worth the price.

Josh said:
June 14, 2007 3:24 AM | #

Jim,

If there is any truth to a letter I read about changing the name of Quixtar back to Amway....

I want to say I am against it!  It makes ZERO sense to do this IMO.

What could possibly be the benefit of doing so?

Editor's Note:
For more information on this issue, please see Beth's announcement on the Inside Quixtar blog. http://insidequixtar.opportunityzone.com/default.aspx

Katie Pearsall
Editor -- Opportunity Zone

David said:
August 15, 2007 12:54 AM | #

Quixtar #1...shows that Quixtar is a good business... a name change to Amway will not make it more #1.  Remeber what research did for Coca Cola and New Coke. All research said that nobody liked Coke and they would all like New Coke.  Well you know the rest of the story.

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