It's Not About One Issue

Monday, July 09, 2007  by Jim Payne
Category: Quixtar Strategy, Balanced Business, Business Support Materials, Quixtar Philosophy

Some great posts on Ada-tudes regarding QBI -- thanks to all.

QBI means Quixtar Business "Incentives." Part of our transformation goals is not only to increase sales volume but also IBO profitability across the board. Our commitment for this additional QBI money is for two years. We will then re-evaluate the results against our goals and decide to modify, continue, or rethink our incentives based upon the results. Frankly, my hope is this QBI generates so much success that we don't have to change anything. 

I would have preferred to wait to post the QBI incentives until all the details were worked out but inaccurate discussions were beginning to occur and I thought it would be best to get the correct information out even if all the details were not worked out. Obviously, inaccurate discussions are still occurring but now they are mostly around the "requirements" to qualify for this new money. There have been discussions about requirements, guidelines, goals, etc, but these are not finalized and will not be until we have further discussions with IBOAI (Independent Business Owners Association International). When any criteria or guidelines are established, they will first appear on our web site. I've already posted one correction this month and do not want to do another, if possible. Please look for a flyer later this summer providing an overview of these changes and stay tuned to the Quixtar Business Incentives section on http://www.quixtar.com/About/ for more information as it becomes available.

Finally, in reading the posts, I was reminded of a commitment some months ago by a blogger who is participating in this string that he would insert his issue of "tool profits" into every string if we didn't change the format of our blog to keep his issue up front. We didn't change our format, as he already had a place to discuss his issue and he kept his commitment again with my post on QBI. Please know there is no "one issue" that if fixed would make everything right. If there was one issue, we wouldn't need a business transformation. We would just tweak the one issue and keep doing what we are doing.

This has been a FABULOUS business for almost 50 years and has impacted positively the lives of thousand and thousands of people. But the business IS almost 50 years old. If we are going to continue to impact people positively for the next 50 years, we must do a thorough examination of all aspects of our business ... products, pricing, brands, distribution, training, IBO profitability, IBO/consumer/prospect experience, reputation, etc, etc, etc. Too many issues to list in one post but topics we have been talking about over the past months in this blog. Personally, my life would be a lot simpler if there were only "one issue."

Our commitment, this blog, our life and our legacy is ALL about an overall business transformation so the generations that come behind us can continue to use this business to achieve whatever their goals may be in life. It will not be easy, but nobody ever said doing the right thing was going to be easy.

It is an exciting time to be part of this business right now but I firmly believe that the future will even be better, brighter, and bigger.   

Comments

Jeffrey said:
July 9, 2007 7:10 PM | #

One of the things that really bothers me is that A/Q has a "no compete" rule. We cannot be in another competing business. This makes sense to a point because it may cause confusion with downline IBOs and can divert the attention of an IBO trying to build his/her business. I have even considered joining Fuller Brush so I can offer their entire line to my customers, but I think that would be a rule violation, so I haven't. But, A/Q is in violation of one of their own rules. If there is a no compete rule for us, it should also apply to the company. Access proudly proclaims they develop and manufacture products for "third party" companies that are available out in the marketplace. Several years back on a tour convention, we walked through a warehouse to get to the next phase of the tour and passed literally thousands of cases of Brand-X mouthwash. I was dumbfounded. I did, however, wait until I got back in the car to vent my feelings. It wasn't pretty. Recently, Alticor bought Laura Mercier cosmetics; an absolute direct competitor to Artistry. This makes no sense to me. All this does is make the company less dependent on IBOs. I know that the company has probably done it to create stability for the employees so there is no fear of layoffs. But Steve and Doug need to go back and listen to Rich DeVos on his "Ten Points That Make Amway Special" tape: "This company has no other customers but YOU! (IBOs.) We have no other source of income but YOU!" During this transformation, the company needs to divest itself of any outside businesses and third party contractual agreements and focus on one thing: the success and profitability of the Amway Independent Business Owner.

Tex said:
July 9, 2007 8:00 PM | #

Jim,

I never claimed the tool profits were the only issue, but I insist they are far and above the BIGGEST issue.

If you (or anyone else) would like to debate THAT issue, I would be happy to defend my position on this or the tool profit ("The "T" word") thread.

rdknyvr said:
July 9, 2007 10:11 PM | #

Jeffrey,

QUIXTAR Independent Business Owner... Amway IBO is still 24 months away!!! I hope!!! Never would be even better :) Aside from that, I trust all is going well for you. :)

Tex said:
July 9, 2007 10:30 PM | #

Jim,

In addition, everything you are doing is in coordination (hopefully) to a future reduction in the tool profits.

So don't try to imply your moves have NOTHING to do with the tool profit issue, because we know it does.

At least you're doing something about it. Three decades late, and apparently only in response to the UK and Russian regulators (and probably other blogs), but you can't turn back time. I for one am therefore not going to go overboard with the delight you have seen from others. For me, it's about time you acted.

I know, and you know, that you can never completely replace the entire tool profit, the tool business is THAT lucrative.

However, you CAN dampen the blow, and that's a good move. Now it's the uplines' turn to do their part, reduce prices and come clean on the tool profit.

Have you read "The Cluetrain Manifesto"? I hope you pick it up and read it, because I have always found the tagline "A view from the top" rather pompous, and even more so since reading the book (that's a suggestion to read the book and reconsider the tagline, by the way).

I can only hope you are half as hard on the upline when it comes to tool profits as you are with those of us who have hammered on the tool profit issue, not because we enjoy being a broken record, but because it is THAT important of an issue.

Talking down to us is NOT doing you any favors.

Jeffrey,

No need to get upset over the mouthwash, just mention the brand and get the facts in the open. Amway should openly respond they have broadened their product line and then use some of the profit to bring down the prices for the core products, loosen the non-compete rule, or live with the noise that will be created as a result. The Rich DeVos statement is a position from decades ago, things change over time, and nobody ever said the rules that apply to us apply equally to Amway.

The Big Apple said:
July 9, 2007 11:30 PM | #

Jeffery,

The factories have made products for other companies on a contract basis for years and years.  It keeps the factories running when they've finished making our products.  They aren't selling our formulas, but those of the company for whom they're making the product.  

It goes the other direction, too.  ABG sources some products from outside, and those factories don't make product exclusively for us.  

It's just part of the reality in manufacturing.  If ABG didn't use their machinery to make the outside products, they would not be able to make our products.  Top notch factories like ours are very efficient!  : )

JaHn3tiC said:
July 10, 2007 1:16 PM | #

To Jim Payne:

I agree with you that it’s really unfortunate that we have these continuous “tool profits” clashes. Tex (and the others) make sweeping statements like how “tool profits” are ruining Q/A. It too often seems like Q/A keeps quiet and says nothing until people like Tex get really LOUD. Then Q/A posts something like you posted. Your post basically says, “No Tex you’re wrong. Tool profits is not a big issue.” Unfortunately, this doesn’t fundamentally answer the anti-tool people’s concerns.

I wish you would more fully defend your position because just telling someone they are wrong is not helpful. Tex clearly feels “tool profits” are a HUGE issue. Isn’t there some way you can set him straight or at least engage in a more informative dialogue?

I’m just curious if you guys really do consider this an issue? There are SO MANY RUMORS out there from the years. Rumors about Rich trying to change things but then the top pins threatening to quit so Q/A backed down. It would be nice if you could squash these rumors. When a rumor starts you must destroy it immediately by telling people why it’s false. You can’t just say the rumor is false, because for better or for worse, people like Tex make MUCH MORE NOISE than you do.

To Tex:

You said earlier: “So don't try to imply your moves have NOTHING to do with the tool profit issue, because we know it does.”

How do you know what Jim “knows?” You seem to imply that he is hiding stuff and the truth is he knows you are right. All I know for certain is you are obsessed with “tool profits” but you have not to my knowledge displayed any data on the five (I think there’s about five) major systems in North America. So do you think its right to judge all systems, even the ones you have never been part of? Have you seen the financials of the top Emeralds and Diamonds in these other systems? I doubt it. So can you really make such sweeping statements?

You said earlier, “There is a lot of evidence Emeralds typically make anywhere between 2 and 10 times more from tools than Amway.”

I say, SHOW US THE EVIDENCE. In my LOA, I’ve never ever EVER heard of an Emerald making even two times (and ten times is crazy insane to say) the profit from tools. Where is this “a lot of evidence?”

So why do you come to the Quixtar blogs and imply that all LOAs are making large amounts from tools? Where is your data? Maybe the LOA you know about makes a ton of money from tools and is deceptive. Does that make my LOA guilty as well? Or is it you WANT to lump them all together regardless of the truth?

Show me if I’m wrong. Otherwise, stop making blanket statements not supported by facts. And don’t just say, “The facts are out there.” I’ve read just about everything on just about all the anti-Q sites. I’ve read the Blakey report, Eric’s stuff, the Team in Focus documents, the Amway Japan SEC filing, and the few available court documents out there from divorces and lawsuits. None of it was “earth shattering.” So please provide proof.

Anyway, I for one thank you Jim for the changes you are making at Q/A. The new compensation stuff is going to be awesome, and it will make Q/A much more attractive to new and old IBOs.

Jeffrey said:
July 10, 2007 2:17 PM | #

It's not OK when a bunch of our products are on back order, like they have been the past few weeks. Bar soap? Come on. If a casual customer comes in to buy their L.O.C. and their Family Bar Soap and the bar soap is on back order, guess what? They'll just pick up some Spink-and-Spank all purpose cleaner at the store. I have to remove back orders from my orders because if they are shipped separately, then UPS brings them and they won't leave the stuff if I'm not home. I'm sure I don't have all the facts, and I know back orders can be a fact of life because of supplier problems with ingredients, but it still bugs me.

And the A name is coming, so I'm going to use it. When I show the plan, I'm going to say the A word from here on out. It gets it out of the way right from the start. I'll keep you posted on what happens. I really don't think anyone is going to faint when I say it. If they do, I know CPR.

Tex said:
July 10, 2007 3:27 PM | #

JaHn3tiC,

When you don't get straight answers from Jim, you have to consider why this is so. I maintain it is related to what Rich DeVos said about tool profits in 1983, and has NEVER been addressed.

Jim is simply talking "corporate speak". He probably needs to continue to do that, but that doesn't mean we can't say the plain and simple truth.

There are a number of court cases, direct statements, evidence of not requalifying at various levels yet maintaining incredible lifestyles, all pointing in the same direction regarding tool profits. How much does your upline charge for CD's, web site, books, and functions (Opens, monthly seminars, major functions)? Unless there are SIGNIFICANT differences between your prices and the other 4 major tool systems in North America, they are making similar outrageous tool profits. They may split them up a little differently, but the point is this: Why is it MY responsibility to describe the tool profits more accurately, how about some transparency from those making the money, and tell US how much they make? Wouldn't this be an appropriate action for a "teammate" and "business partner" to take?

ibofightback said:
July 10, 2007 5:37 PM | #

Here's a thought Tex - if organization A sells their "tools" at the same price as organization B, but organization A splits the "profits" amongst platinums and above, and organization B splits it between Emeralds and above, and not even all emeralds - how does that affect the individuals level of profit?

G_W said:
July 10, 2007 7:58 PM | #

I think Jim has a really valid point in observing that there is no single issue that can be fixed to "make everything right" … we should never get so caught up in the flaws that this business (and every business) has that we miss all the really great stuff.  

I'm kind of a news junkie, and I remember reading just a few months ago a story in the Associated Press that noted that "90 percent of U.S. corporations are engaged in some type of litigation, according to research by the law firm Fulbright & Jaworski. The average company bigger than $1 billion is wrestling with 147 lawsuits" (I found this story linked on Wired.com) – Anyway, Amway/Quixtar obviously isn't the first big company to suffer image problems or have a lot of people really angry at them.

I also happen to agree with JaHn3tic though – that Quixtar would be much better served by increased disclosure and transparency about the whole tool issue and how they deal with the bad actors. We're in no more trouble than any big corporation in America.

A final note – in other (non Quixtar/Amways) blogs that I participate on, when someone tries to hijack a thread, the community knows to type things like "dear hijacker, please see my response to your post in the appropriate thread … and now, back on topic…"

I for one, would be delighted to avoid having these tool discussions clutter every thread here, but I don't know where I should direct my responses?

Where is this "place to discuss his issue" that Jim refered too? I think Tex raises some really valid points that I'd like to see discussed more fully… in the appropriate place. But where is that place? Maybe this would be a good oportunity to have a new section in the Opportunity Zone that deals with senstive/controversial/hot topics? "Sound-Off" perhaps? Or "Clearing the Air" ? Personally, I'd love something like that to focus these kind of discussions and provide a forum for Q/A to collect their responses to various controversies.

Thanks!

Editor's Note Published by Anna Bryce:

There is a "T Word" post on this blog that we intended to be the thread for Tools discussions. While the editors of this blog try as hard as we can to not publish comments that are not on topic to a particular thread, the task becomes difficult when commentators repeatedly submit comments that weave certain topics, such as tools, closely with others. We walk a fine line between keeping posts civil and on-topic without restricting freedom of expression.

Your suggestion for commentators to respond by saying something like "see my response at the T Word post" and then submitting the thorough response there is an excellent one that will help us all to stay focused.

Josh said:
July 10, 2007 11:53 PM | #

Tex,

As stated before, YOU need to provide the proof.  Because YOU are bringing up the accusations.  The burden of proof is then on YOU.  Innocent until proven guilty.  Not guilty by what some guy says on a blog that brings ZERO proof to the table.  

The only proof you may have is YOUR own experience.  What do you consider "ridiculous" profits?  You have to have a number in mind.  It can't just be a percentage.  What if, for example, a person makes 25 bucks from Q* but gets 30 bucks in tool profits (I know it doesn't typically happen)?  Is that then ridiculous?

Dan Telfer said:
July 11, 2007 2:39 AM | #

Just a note to say that I check the blogs every couple of days but have very little time to respond to the topics. I love the up-to-date info and the personal stories from the employees.

Almost all the negative issues that are brought up do not seem to be a challenge in the organization we are involved with. So I'll spend my time building the business and visiting the new grand daughter.

Keep up the great work!!!!

Tex said:
July 11, 2007 8:20 AM | #

ibofb,

That is a question I have addressed on several occasions. Assuming their development costs are about the same, the one that splits the money with Platinums will have less money to pay Emeralds and above.  

The key here is organization A and B should be identified, and the amount of money that is split up should be identified as well.

I am not aware of a major organization that does not pay the Platinums, are you? If so, name it and back up your "theory" with the evidence.

Tex said:
July 11, 2007 8:31 AM | #

G W,

You have to go to the back pages to find the thread, which is why I suggested, some time ago, to keep the more important threads on the front page.

So far, this suggestion has been ignored, even though it would largely solve the problem.

Hopefully it won't take several decades to follow up and fix THIS obvious issue.

I believe the reason Amway isn't cooperating is because they believe they can allow a few people to vent and that is "good enough". Sounds like the original 30 year old tool issue, doesn't it? Problem is we're now communicating on internet time, and the implications of this strategy are far different than when they swept the tool profit issue under the rug after clearly being aware of the problem and announcing it in 1983 via the "Directly Speaking" recordings.

Tex said:
July 11, 2007 10:07 AM | #

Josh,

I already have provided plenty of proof, it is now time for the upline to come clean with the complete picture. To deny there is significant evidence available on various web sites, ALL pointing in the same direction, is simply sticking your head in the sand.

Go and google Amway Anderson, Amway Morrison, Amway Stewart, Amway Haugen, Amway Lorencz, Amway Scheibeler, Amway class action lawsuit, and visit sites like amquix.info. Although I don't agree with most of the analysis on amquix.info, but he has posted many original documents that you can read and draw your own conclusions. I've already drawn my conclusions, the folks above (and many others) are on a tool profit frenzy that has caused these many lawsuits, resulting in many losing their businesses, and then coming clean with the tool profits.

$30 or $55 isn't going to change your lifestyle, so it isn't a good example. Do you what Rich DeVos suggested in 1983? I can go with that percentage, or even a higher one, as long as it is out in the open.

Another interesting aspect of my tool comments is people DO get tired of hearing about this critical issue over and over, but they can't prove me wrong OR show how the tool profit is not involved in the issue being discussed, such as this thread.

The claim is there is not one issue, but in a way there is one issue, tool profits, which simply have many tentacles. Amway is merely trying to placate the upline with added profits from Amway to offset the loss in tool profits which WILL occur for this business to move forward.

JaHn3tiC said:
July 11, 2007 12:33 PM | #

Hi Tex,

I understand the corporation’s need to be careful what they say. Regardless, I hope Jim will take this opportunity to address my comments. Kia, on his blog, stated that the tools issue is a priority. I wish Jim would have at least acknowledged this…

About the “T word” thread, I agree with you that it is silly to require people to go back pages and pages to an old thread. That’s pretty much “sweeping it under the rug.” I like your idea of sort of “pinning” the importance threads on the front page.

I also agree that it is unreasonable to ask you to provide hard data on tool profits because you don’t have access to that. Very few do.

I'll have to research the details of my LOA. I'll get back to you with data. I personally would really like to fully disclose with names and numbers the structure of all the systems. I don't like the fact that we can't use details. I understand that I can't just say, "No my system is great and fair and honest." It needs to be backed with proof...in my opinion.

But I sincerely want to know what your solution to this problem would be. Pretend you’re Doug Devos. What do you do? It’s something I’ve been thinking about for some time. It’s a really delicate issue because Amway needs the big systems, because for better or for worse they create volume.

I’d appreciate it if you’d think about my question and respond back with sort of an “action plan” similar to what Kia has said Q/A is working on. If you provide a detailed plan perhaps Q/A will learn from it and we can make a difference. Thanks.

Josh said:
July 11, 2007 1:07 PM | #

Jim,

I know you are addressing a lot of issues and new products, etc. etc.

The name change is the issue at hand.  If you take everything else you are doing behind the scenes except the name change, IBOs are whole heartedly embracing it and very appreciative.

Chuck Lia, I believe it was had a GREAT idea.  Those people who post on here, yourself, Beth, Kia, and others who think personally the name change is a good thing, should go out a build the business for a set period of time (6 months) as Quixtar IBOs then take another 6 months and build it as Amway IBOs.  You can call it personal field research.  

Or at the very least, shadow a willing IBO in the same experiment.

What do you think??

ibofightback said:
July 11, 2007 1:30 PM | #

Tex, Scheibeler talks about being stunned, as an emerald almost diamond, to find out there was "profit in tools". Some platinums on this and the amway blog forum say they didn't find out about tool rebates until later. So apparently there are differences

Big Will said:
July 11, 2007 2:31 PM | #

Mr. Payne,

I'm a 25 year old IBO been in Business with you for 5 years and at the 4000PV level.

I'd like to think you and all at Quixtar for the great improvements you are doing at the Cooperation. The new QBI is pushing more and more money to the lower pins it will create growth for everyone. Still not a big fan of the name change coming hope You and the IBOI board will find common ground May be not use Quixtar of Amway name and start fresh with a complete make over.

As for the Tool system. I think it is the systems right to charge people and to reward those that are willing to train and cut CD's and put on Functions to help me grow a strong a profitable business. So much cheaper than having to go to a Robert Kyasiki, John Maxwell, or Tom Roberts conference to learn leadership skills. Cost of the books is no greater and in some cases cheaper than if I bought in stores. It also allow me and my upline to monitor how is really growing and changing so we know at what level we can teach to that individual IBO I see nothing wrong and I am not even at a level where I would tap into that income yet. The Systems have helped me and my group to become better leaders and more unified as a team.

Thanks again for the Great opportunity and Business It's so much better and rewarding than my job.

Jeffrey said:
July 11, 2007 3:53 PM | #

Here is some insight I've had on the tool systems: In my LOS, it was "Once a Platinum and above, always a Platinum and above." My personal sponsors did not re-qualify Platinum for a three year period, yet they were always on stage at the end of each rally. I about gagged every time they did that because the upline Diamond would ga-ga all over them about what high achievers they were. But even when I was running 2500 PV, I would have to show proof that I was above 1000 PV to go to Leadership meetings.

Another thing about the cost of tool production: My main janitorial account is a media company. They do commercials for companies, they edit films, they design and host websites, they do about anything that has to do with media and communications. In fact, one of the producers of the upcoming film, "The Final Season" is a co-owner and a customer of mine. Anyway, they buy blank DVDs and CDs in bulk. The cost for a single one is just a few cents. If someone brought in a tape of a speech made at a rally and wanted it put on a CD and wanted 1000 copies, the cost would probably be around $200. Then the IBO (probably a Diamond) turns around and sells those CDs for $7.00 each. The profit for the Diamond would be around $6800. THAT'S what Tex is talking about and it needs to stop NOW because 9 times out of 10 there is no actual business training from the speech that would actually help someone take their business from where it's at and take it to Platinum in 3 to 6 months.

Tex said:
July 11, 2007 4:15 PM | #

JaHn3tiC,

My plan would probably be similar to what Amway is currently doing, sweeten the pot a bit and then require tool profits to be disclosed. By doing it in this sequence, Amway is showing a willingness to "go first", and the upline can reduce tool costs more without losing out on income, as some of it is coming from the new QBI money pot. However, there are costs for everything, I wonder where the $270 Million of money is coming from  ($200 for advertising, $70 for QBI). Is Amway taking less of a profit, making the products more expensive, or a combination?  

This problem has been made worse by waiting for 30 years to fix it, and waiting until the stuff hits the fan in the UK and Russia over tools.

I think if I was Doug, I would have said 24 years ago, "Dad, you better clean up this tool profit mess you talked about in the "Directly Speaking" recordings, or I will disown you and NEVER work for the company you and Jay started in 1959."

ibofb,

I also traded e-mails with Eric, and he was quite cooperative until I asked him how much tool profit HE made, and suddenly the e-mails stopped. You draw your conclusion from that, I already have.

As for the Platinums, what do you mean by "later"?

Big Will,

Approximately how much net profit do you and your personally sponsored IBO's make, and how much PV does each of them have?

Wonderiing said:
July 11, 2007 5:07 PM | #

OK - so I met with my local team to announce the name change and a plan of action. For example, what do you say when they ask, "Is it Amway?” ?Response, "Well, almost ... ?"

I went in with a game plan, but this is not the place for that information. But this is the place to note that I had 3 new IBOs at this meeting, under the age of 26 that said "I was ready to quit, until you mentioned your plan of action." The other two had similar comments. I spent several hours getting input and hearing concerns from this team, my team, my group, my business (get the idea Jim!).

As a Founders Platinum (for 7 years running), I think it’s important to keep in mind why your in this crazy business. Is it to make an extra $100.00 per month from "10 good customers"? Is it to reach out and help others to make an extra $100.00 per month from "10 good customers"? Do you even remember why you got in this business? Have you become callus to the negative threads here on this blog? Will you let the pseudo-IBOs take you down with them? Will you let the big factory guy move your cheese, again!

WAKE UP!

There are plenty of enemies in this world; let’s not make one another ememies.

The corporation has made a decision!

Now, what are you going to do about it? Sit here and whine and complain with the pseudo-not even in the business-IBO wanna bees. Your better than that.

Don’t buy into this negative!

Go reach out to the millions of Americans who need you in their life, make a difference, change, grow and succeed in spite of them all. Get busy and prepare for what lies ahead, 2 years from now, 10 years from now.

Will you be prepared the next time the corporation makes a decision?

I will.

Mike said:
July 11, 2007 6:08 PM | #

Jeffery,

Your not buying a "CD" or "DVD" your buying the information contained within. If you do not see value, then don't buy it.

There are a small group of you on this blog that just complain and cry about all that is wrong...grow up and act like adults!

You are in control of your decisions. Tip, the world is not perfect or fair and Amway is no different.

Go create the environment that you wish to do business in and stop looking for others to spoon feed you to success.

Mike.

Jeffrey said:
July 11, 2007 6:11 PM | #

Someone asked me last night, "Is it Amway?" I said, "Yes, Amway manufactures some of our basic product lines and they handle the compensation." He said, "Oh." So I had gotten all nervous and hot and bothered for nothing.

Wondering said:
July 11, 2007 6:16 PM | #

Jeffrey:

Lets be fair. There is more overhead involved. Its not just the CD, the sleeve, the fees to process, edit, approve, stuff, etc. Also, there is some risk involved.

So lets say that it costs $2.00. Now, traditional business works on a "key" system - typically triple key. 33% maufacture, 33% Distribution, 33% Retail. Sound familiar? That is $2.00 + $2.00 + $2.00 and is $6.00. Now if your product is "expensive" or "exclusive" then you charge a premium (sounding even more familiar) ... lets say $7.00

As a jeweler in real life, everything is triple key (except at mall ... 5 times cost). Why? Malls are expensive.

XS Can = $.66 XS + $.66 Q + $.67 IBO

LOC 33.8fl oz = $2.85 A + $2.85 ?premium? + $2.85 IBO / Retail

So lets analyze all products and all companies and all capitalism while we are at it. If you want fair profits then move to a socialist country! If you want fair pricing then you are in the right place - its called supply and demand.

If people do not want a product then the product will die, whether its XS, LOC or a CD.

I am looking forward to the new products coming - to see if there really is a retail profit - or are we still in a premium "exclusive" market.

Pat & Suzanne said:
July 11, 2007 6:58 PM | #

Hi Jim,

First, we want you to know that we still feel this business is the greatest opportunity available, worldwide.  But, we do have some concerns with the direction A/Q is heading in the next 18-24 months and a blunt as we will be,  we feel it's necessary to have our say.

We have been IBO's for  25 + years, full time for over 20 of these years, who has achieved as high as the Diamond level.  We have built our business successfully in many markets from Asia and Europe as well as North America.  We have developed many success full people in our organizations with many Platinum's and some up to the Emerald level.

With that, we think we have earned the right to be heard about our concerns and opinions.  We have been thinking long and hard whether to react to some of the plans proposed or just go about building our business.  But we also feel that to not say anything may give you, the rest of the senior management staff, and the policy board a sense that we are in approval of these plans.  

We definitely don't want you to be left with this impression.  We are pretty adamant that, in our opinion, some of these changes are down right dangerous and completely ill conceived.

However, we are NOT on the IBOAI board, nor do we have direct access to senior Quixtar Management people, or the DeVos or VanAndel families.  Saying that, we feel that not everybody, especially the DeVos & Van Andel's, have taken into account the ramifications of some planned moves that will have serious effects to the many of us in the field who are working hard to build our businesses.

We know the IBOAI is frustrated with this planned move to re-introduce the A name in North America, but they seemed to have lost any ability to get the policy board to come to any sense of reason.

The new enhancements to the bonus payments are great!  Always appreciated by the business person to be paid more....not a problem.  Our biggest concern is to revert back to the Amway name in North America.  We think this is an un-necessary handicap that will be created in the field... and for what purpose?  

The consultants (who get paid whether their ideas are good or not) maintain that the Q name is less know than the A name.  But is that a good or bad thing?  They say it is easier to rectify a bad name than increase the exposure of a new name (remember they get paid for whatever they suggest right or wrong) OK!  but did they go about and try to recruit people with the A name??? I don't think so... they just asked about recognition... what about reaction to the A name... any findings on that.... or did they even ask?

After 25+ years, here's what we do know;  we have never built our business by running around telling everybody how great A is... that didn't work in the 70's, 80's, 90's and we sure don't think it's going to somehow miraculously start working in 2009.  It's doesn't work in Europe nor Asia (Jim, you were in Europe for years, you know as well as we do that the A name has as much an image problem there as anywhere)

So, what's the purpose for trying to ram the Amway name down the throats of a market place who doesn't want it, by a IBO force that's frustrated by it, to placate a few who feel it's their mission to make the world accept it?  

Jim, this is all we do.  We have done well with Amway and Quixtar.  It so far has provided a great living for our family.  Over the years, we have successfully worked through government attacks (70's), bad press attacks (80's) and even the negative web sites (90's).  What we can't fathom is why we now have to be subjected to being set up by the founders and family to be the whipping post for their agenda.   This is NOT the Amway spirit that  we joined many years ago... This is not the way we  remember Rich DeVos.  We remember a Rich who talked about "Compassionate Capitalism", looking for a way to help everybody through business, always try to find the  win win solution.  Where does this move fit into that spirit.  All we see is a "mean spirited" attitude in this issue.  No logic, no reasoning, just mean.

We just hope that Rich understands that while he may be able to take a few hundred million dollar hit.... we can't, and while we don't have a solution to what we would eventually call this great opportunity we sure would ask for some prudence and caution by everybody.

We can't believe that the senior management staff or the DeVos/VanAndel family doesn't recognize there is a huge problem with the Amway name being re-launched in North America.  

But may we suggest, as many of your blog contributors have suggested, would be to have a 6 month trial where they go into the 'real' world and just try to build this business.  Have them make some approaches, do some meetings and present the plan.  Make sure they call and ask if the prospect wants to see the "New Amway".

Then come back in 6 months and let us know what they feel about their "consultants' advice and their planned forced "re-introduction" of the New Amway.

We've been dealing with it for 25+ years.

We love this business for what I felt it represented... but we don't feel that is should become a weapon to placate an individuals misguided agenda.. even if he is the owner.

We said we would be blunt, and it is.. but make no mistake, Jim, whether said or not... this is the feeling of a lot of your best "customers".

Big Will said:
July 12, 2007 9:51 AM | #

Tex,

I Don't have the exact figures with net profit with retail because of Direct Deposit I don't have to deal with cutting checks (Thank God) I can give you an pretty close estimate based on PV level from last month. I currently have 5 legs receiving PV checks Leg 1) is at 4000 PV makes about $1,200.00 Leg 2) is at 600PV makes about $130.00 a month Leg 3) is at 300PV and makes about $50.00 4) 100PV makes about $15.00 Leg5) 100PV makes about $15.00 a month. I am at the 4000PV level and make about $600.00 a month. This is for just the personally sponsored person not there entire group. I have been part of the Business for 5 years but almost 3.5 years I have done little to nothing personally to build the Business because of some personal issues. I have attended every weekly meeting and Functions and also get weekly CD’s and books that I enjoy greatly. It has not only giving me extra money but also made me better at my Job because of what I have learned from my leaders and the System. through this opprotunity I have become completely debt free and have not had to go into debt to build my buisness.

ibofightback said:
July 12, 2007 11:35 AM | #

Pat & Suzanne said -

But may we suggest, as many of your blog contributors have suggested, would be to have a 6 month trial where they go into the 'real' world and just try to build this business.  Have them make some approaches, do some meetings and present the plan.  Make sure they call and ask if the prospect wants to see the "New Amway".

I think this is an excellent suggestion. What do you say, corp.?

I think this is an excellent suggestion. What do you say, corp.?

Tex said:
July 12, 2007 11:49 AM | #

Mike,

People like Jeffrey and myself are acting like adults, that is why we are exercising our First Amendment rights and demanding the truth regarding tool profits. What part of the truth are you afraid of, an adult wouldn't be afraid?

Wondering,

The issue with CD's (and the rest of the tools, for that matter) is the target market, the IBO's, are essentially a "captive" market.  So your analogy to LOC doesn't work, because we pay for distribution (shipping), there are essentially no marketing costs, and the third that is for profit ALL goes to the upline, unlike an Amay product purchase.

Pat & Suzanne,

Which LOA/LOS are you associated with? What is your current pin level? How much are you paid for the various tools, including CD's, voice mail system, books, Opens, web sites, monthly seminars, major functions, etc?

Jeffrey said:
July 12, 2007 3:36 PM | #

My point, besides the absurd profit margin which we know exists, is that usually the CDs and DVDs do not provide the training that's necessary to actually move the business forward. I never, ever heard this from my upline: "Decide what you want, decide when you want it, make a time commitment, make a list off 100 to 200 names, work up a script to use when contacting and practice it until it is comfortable, set a goal for the number of customers and IBOs for the first month, then re-evaluate your progress at the end of the month, and work to get 100% loyal by replacing products in your home." It was all piece-meal. Anytime I had a question, it was, "Are you on standing order CD? Do you have tickets to the next major function? Did you find a CD on the list that talkes about that?" So I would order it and it would only gloss over it.

My point is: You don't need 5 major functions a year at $500 to $1000 a pop and you don't need 350 CDs to build this business. Most Diamonds have gotten filthy rich playing on people's naivety.

If my sponsor had set me down a bazillion years ago when I was first getting started and helped me get started properly by using the above example, and also said, "I will work with you until you have achieved your first $500 bonus" I very well could be a Diamond today instead of achieving Silver Producer, then falling back and being at 1700 PV and starting over.

Being on the system in my LOS was contingent with my upline sponsor or Diamond working with me. That's a bunch of baloney. It's still true. About three months ago I asked my upline Diamond's secretary when he was going to be in town. She slobbered all over herself and never did answer me. I'll bet she would have told me if I had ordered a boatload of tools.

Many Emeralds, Diamonds, and above, when it comes to tools, and exactly how to build this business, need to learn the same thing the politicians need to learn: how to tell the truth.

Yes, there are many ways to build the business. But a new person needs to be led. Only when an upline is leading his people, does he earn the right to be called a "leader."

I'm not whining either and I'm not a socialist. I just don't like being gouged and lied to. Now, I'm going to go out right now and generate some new PV.

Harvey said:
July 12, 2007 6:26 PM | #

Obviously Tex feels that the company should not pay Emerald or Diamond bonuses because he does not qualify for them.  Only Emeralds and above get Emerald bonuses and only Diamonds and above get Diamond bonuses. I guess he doesn't feel that he will ever qualify for tools money either.

Someone also mentioned that they had to purchase tools in order to be recognized as CORE at functions.  In case you don't know, the function is a part of the tools system.  If not for tool money there would be no function for recognization.

I'm all for tool money as long as I can participate when I am quaified. I am participating now at Platinum and am looking for a bigger piece of the pie at Emerald and above.

Tex said:
July 13, 2007 10:44 AM | #

Harvey,

Obviously you are wrong. I have no issue with the Amway Emerald and Diamond bonuses, these bonuses are laid on the table as a goal, unlike the tool profits, which are not openly discussed with prospects and IBO's.

The issue about tools being part of recognition is that you will not be edified unless you put the big bucks tool profits in your upline's pockets. What if the tools created far less profit (lower prices) and the same recognition was in place? I would have no issue with not getting recognized for this scenario, as using the tools means you are able and willing to learn without your upline doing all the work, but they wouldn't be distorting the business model so much it doesn't compare to what we show in the Amway marketing plan.

You will probably be very disappointed, Harvey, because huge changes are occurring that will significantly reduce what you get at Emerald and above from tools, although it will be partially offset by the increased Amway bonuses. How does that make you feel, you paid into a system and won't get out very much?

Wondering said:
July 13, 2007 12:40 PM | #

Tex,

I appreciate your thoughts, but your economics are too generalized, as are all your comments. Ever notice that you only play off others comments, never adding your own original ideas? You only respond. Also, you’re on every blog! Who are you and why are you on this blog?

Let’s do a check up on where we are coming from so that our readers can better evaluate the "weight" of the writer's comments.

I have 2 business degrees (BA in Economics is one, BA in Management the other) and a MA in product design. I also have 3 successful traditional businesses outside of Quixtar. I mentioned being a Jeweler (Certified Goldsmith, Diamond Setter). I am also a certified Web Master. I served as a Hospital Corpsman in the USNR. My corporate consulting clients have included over the last 15 years IBM, EPA, CISCO, NORTEL, UNC, NCSU, and the City of Fayetteville just to name a few. I am not bragging, just setting the stage.

My success in life is in large part due to the Tool System. I can not recall one instance when the corporation helped me with my business other than to provide product availability. They did not come get me when I was stranded 90 minutes from home with a flat tire. I did not see them when my car was towed from the interstate to another city in a second incident. They did not give me a key to their home, so if I was in town and needed a place to stay, I could let myself in. Where were they when I was stressed over losing my first real job out of school? No, they did not call me at 2 am to talk to a young troubled single guy just trying to get by. When my belief was at its lowest, the big corporation did not call me and say, “I got me one!” When I was frustrated and struggling, I did not hear them exclaim, with tears, “Thank you, thank you for being you, this team has changed my life.” Who at the corporation is it that is so appreciative of the impact that has been made in their life, that they named their daughter after me?

Listen up IBOs. Let’s get a little perspective here. Who is it that is tearing down? And who is it that is building up? Who is coming here looking for solutions? And who is here to point at all the flaws?

Who are these people and why are they here? Do they have anything invested (and I don’t mean financial)? What is at stake for them? Have they given someone their word that they would help them no matter what? Do they really have anything on the line?

Let’s read on to see if they are willing to share who they are and where they are in life. Let’s see if they are worth listening too!

The Big Apple said:
July 13, 2007 2:36 PM | #

This is the Quixtar/Amway business.  A Quixtar sponsor has the obligation to supply, train, and motivate those they sponsor.  To introduce parameters and prerequisites from another business, which is what the "tools system" is, is absolutely wrong!

The tools system is a separate business that is being run alongside the Quixtar business.  This is a prime example of the tail wagging the dog.  People aren't recruited into a tools system business; they're recruited into the Quixtar business.  No one told them before they got in about the tools system costs that they're expected to pay after they're in.

Listen to the speeches.  How much of each speech talks products and customers?  How much of each talks about the tools system, how great the Diamonds are, and how you should be at the next function?  

Which business are the tools promoting?  The Quixtar business or the tools system business?

I challenge you to go back and listen to a bunch of speeches or recall team meeting, etc., with an ear towards teaching the basics about moving products.  After all, that's what all the Quixtar profits and bonuses are about: moving the products and services Quixtar provides.

You’ll probably find that what the speeches talk about is moving tools system products and services: CDs, books, hotel meetings, team meetings, major functions.  

If you are a sub-platinum, do you get paid for all the selling of tools you do for the System?  

It's great, this tool business!  The Platinums get a little bit, the Emeralds and Diamonds get a lot, while the people really doing the selling, probably the 12%-21%ers who are doing the work of filling the seats and pumping the  books and CDs get nothing.  Fantastic!  Free labor for the Emeralds and Diamonds.

What a business!

And what percentage of those sub-Platinums ever make it high enough to begin making money?  Not too many you say?  

And why did the give up and drop out?  Did I hear you say they weren't making any money?

So why weren't they making any money?  Oh, I see, no retail sales, so their only profit was retained Performance Bonus (not much of that below 15%), and lots of expenses at, what was that?  Oh yes, attending functions and buying tools.

So here it is in a nutshell.  Recruit them, get them to work for you but don't pay them, get them to spend all their profit and more buying what you don't pay them to sell, and when they've run out of money, "next!"

I couldn't sleep at night if I knew I was using people like that.

I know it's not all the Systems (Josh), but it's too many of them.  And I know we need educational materials, just effective ones of the right kind, and distributed with business practices that don't use people.

You fight on, Tex.  Just remember those Dale Carnegie lessons from “How to Win Friends . . .”

Tex said:
July 13, 2007 7:34 PM | #

Wondering,

I have done a lot of research, and compared what I found with my own experiences, and they are in line with each other. If you really appreciated my thoughts, you would understand I am telling the facts and the truth. My "economics" are not too generalized, neither are my comments. Ever notice that I have never been successfully challenged? I don't only play off others comments, I simply set the record straight. I have also added my own original ideas, not just respond respond. Also, I'm on every blog! I am the truth, and I am on here to ensure others know the truth, whether they like it, or agree with it, or not.

I am not concerned about your background, I am concerned about the truth. The truth doesn't care who you are or your background, and I'm not going to attempt to impress you or anyone else with my background, because it doesn't matter.

Save the emotional heartstring pulling for another time, I couldn't care less about your personal stories about the help you've received from other IBO's, because at the end of the day, millions of IBO's have been taken advantage of, period.

Listen up IBOs. Let’s get a little perspective here.

Q: Who is it that is tearing down? A: You support those who are/were tearing down the financial wellness of millions IBO current and former IBO's throuogh overpriced tools that make up the vast majority of their profit, and is a loss to most IBO's.

Q: And who is it that is building up? A: I am building up the facts.

Q: Who is coming here looking for solutions? A: I am, by advocating lower tool profits, or at the very least, ensuring all prospects and IBO's are aware of these profits, so they know what they're paying for when they buy tools. It's called honesty, are you interested in the honesty solution?

Q: And who is here to point at all the flaws? A: Flaws, you make it sound like an extra or missing stitch in a piece of clothing. It's not a "flaw", it's a massive rip, tear, and stain on this business.

Q: Who are these people and why are they here? A: We are the truth, and we are here to ensure others also know the truth. The truth will set you free, remember?

Q: Do they have anything invested (and I don’t mean financial)? A: Yes, including financial.

Q: What is at stake for them? A: How about a dozen years of my life getting ripped off, spending time in a "flawed" business, and sponsoring many others into the same situation, thankfully most of them didn't "stick", so their loss is much less. And that's only me, multiply that experience by a few hundred thousand, and you'll have an idea of why I'm here.

Q: Have they given someone their word that they would help them no matter what? A: Sure have, but it's hard to operate in an immoral and unethical environment and deliver on this promise.

Q: Do they really have anything on the line? A: Hopefully the above is sufficient. If not, let me know, okay?

Q: Let’s read on to see if they are willing to share who they are and where they are in life. Let’s see if they are worth listening too! A: That's who I am, and I am far from alone. The correct spelling is "...worth listening to." One "o", not two. There's your English lesson for the day, so I think I'm worth listening to, how 'bout you?

Harvey said:
July 13, 2007 7:37 PM | #

Thanks Wondering, you've put it into perpspective. I  have an MBA and many years of business experience.

Actually Tex I am wondering how far you live from your upline.  My upline is 2000 miles away and came here it think twice.   I would not have a successful business without the System.  In fact, we were getting ready to quit when they announced that they would be having function in our area.

As far as the income from tools is concerned, I want to say that "I want to be my own GrandPa."  You act as thought the upline is some fixed entity that only exsists to collect money from tools.  You seem to fail to reaize that you can become the upline making the money from tools.  It's an even playing field. You can then take the shots from the people unable or unwilling to reach that level and resent your income.

BTW, our LOS has been telling prospect that they can be eligible for tool money when they qualify.

Another interesting point that was recently raised is that I spend most of my time building my team using the system tools (CDs, Books, DVD, Functions none of which is supplied by Quixtar) and very little time showing people how to access Quixtar and use and sell products (I leave that to Quixtar).  I help grow the team and get paid to do it.

If Quixtar supplies the tools to grow my business and replaces the income from the System then so be it.  Just don't expect me to work as hard growing the team without any tools or compensation.

Anyway, just some additional thoughts. Great discussion.

ibofightback said:
July 13, 2007 8:06 PM | #

Jeffrey said he'd never heard anything like the following from his upline, and that this is what they should be saying -

"Decide what you want, decide when you want it, make a time commitment, make a list off 100 to 200 names, work up a script to use when contacting and practice it until it is comfortable, set a goal for the number of customers and IBOs for the first month, then re-evaluate your progress at the end of the month, and work to get 100% loyal by replacing products in your home."

Excellent advice, Jeffrey. I wish my upline said something like that - oh .... wait ... they did! And so do I with every new IBO I get started.

And I'm part of a "system". And apparently in my LOS we've "systematised" something different to what you have, because what you described is pretty much our system in a nutshell.

Eric S said:
July 15, 2007 2:51 AM | #

Wondering,

You are engaging a "one trick pony" when you say that the tools benefited you Tex isn't going to listen.he is only concerned about the money some one makes and has a singular goal to reduce or eliminate it The fact that many of us have learned fron and benefited from these tools are a factor he ignores.

Pat, to your point about Amway, I'll admit the idea of a test is fascinating but it seems if we are going to rebrand to Amway we have to do it. Wouldn't the confusion of an indecsion be more destructive to an organization then a definitive decision?

I too had many questions about the logic of the decision to rebrand to Amway but if the company is going to spend $200M on a brand and if they do it well then Amway it is. I know we have said for years that we don't need media advertsing but it is a different market today and we are being asked to focus on the First Circle profitibility by Alticor and our LOS. People buy brands they recognize. We know the quality of Nutrilite and Artistry but the marketplace doesn't. If this money produces that recognition then we can jointly make it not only work but work better then ever.

Greg said:
July 16, 2007 3:00 AM | #

ibofb july 12,

You say we should try using the Amway approach for 6 mo's and see what happens. Try using the Quixtar approach now... there is no difference.  It wasn't more than a few months after 9-1-99 and I started getting the same objections using Quixtar as I did with the Amway approach.

I was a founders platinum my second year and went on to put over 80 on my front line.  And, I did this without a system. The name of the company hasn't made any difference in my sponsoring.  The negative image caused  by some systems has however been the single most difficult objection to deal with.

Some systems again, are teaching IBO's the same "beat around the bush" approaches they used with Amway.  The results are the same.  At some point prospects figure out it's Quixtar, and no matter what spin is used, they finally realize it really is Amway after all.  Now they really feel deceived. To make things worse, as soon as one deceptive approach stops working panic sets in and the system leadership tries to come up with another approach. At some point, only the most skilled IBO's are able to handle the objections and continue to sponsor.

We had a chance for a fresh start with Quixtar, but deceptive approaches, tool abuse and stacking practices were allowed to infect the new name.  The company is aware of Quixtars deteriorating image and figures they might just as well go back to Amway and make a stand.  It's now clear a new name won't shed the old baggage. I just hope the company is savvy enough not to allow the same quilty individuals and their abusive and deceptive practices to sabotage the success of Amway II.

What we really need is a total attitude and behavior change along with the name change. We need to be cautious of flaunting our incomes/lifestyles if we expect customers or former IBO's to pay $74.75($51.65 cost) for a box XX or $2.00/can for XS. We need to get rid of pin level arrogance. I'm not saying all the higher pins are like this, but what have you, as an IBO, witnessed at many large functions or heard on a cd. At times it has been pretty obnoxious. It's no wonder so many people resent our success. Instead, I believe we need  to come across as humble, gracious and  thankful to our clients and IBO's. Where have we seen these attributes before. Bingo! Rich and Jay !

People are watching...there is nowhere to hide!

Mike said:
July 16, 2007 11:27 AM | #

Greg,

Congratulations on your success. I do have a couple of questions...

1. do you use your own "system" for teaching and training or have you plugged into others to train?

2. how has your group "stuck" not using a system? and has is duplicated and grown in depth?

Thanks.

Mike

Eric S said:
July 16, 2007 4:00 PM | #

Greg,

Reading your post I imagine some will be challenged but commenting as a participate in a large system I think your points are valid.  Even though I don't experience the system issues you mention I know they effect us all.  The biggest appreciation I have of your post, is the word "some".  Most of the posts I read assume their issues are global issues.  They are analagous  to "I saw a drunken sailor so the whole Navy is drunk".

Now if you can solve the $75 price on XX I will nominate you for blogger of the year.

Jeffrey said:
July 16, 2007 4:39 PM | #

Bravo, Greg. I couldn't have said it better myself.

As far as pricing goes on the XS Energy Drink, here in Des Moines, Red Bull is $1.99 a can if you buy it individually, of $1.87 a can if you buy a 4-pack, so we're cost competitive. Where we are not competitive, is that we don't offer a 4-pack for our energy drinks. Now that we have 12 variations (including the caffeine-free), now would be a great time to offer a variety pack case, maybe a "one-shot" for a limited time to see how it goes.

JaHn3tiC said:
July 16, 2007 7:00 PM | #

Wondering,

Thank you for your comments. I’m glad you shared your personal experiences because it shows that systems do have a major and important role. Since Tex won’t apologize, I’ll say I’m sorry for his behavior. At least he could be civil, but remember everyone he’s been off standing order for years now. So there’s proof right there of the importance of tools! :) Ha, that’s funny, good work me!

The Big Apple,

You have very good points as well. There is no doubt the tool system is a big business. And the process you describe about getting people in, selling the system, and then flushing them out does happen a lot. But I don’t know if it is purposeful and intentional because all direct selling companies have MASSIVE turnover, don’t they? It may just be part of the “circle of MLM life.”

Still, I think some systems are wising up and are promoting retail sales and moving product much more these days. …At least my LOA is.

Greg,

Well said. You are particularly right about the flaunting of the wealth and opulence. Every major system that I know does this. If you go around showing yachts and sports cars, the average IBO is going to be quickly disillusioned when they have a hard time even reaching 100 PV.

That’s one thing I don’t understand. There is a big push for making the first circle work yet most (or all perhaps) major LOAs (even mine, sadly) still present this glamour lifestyle to new IBOs. It’s just an observation of mine…

On costs, I think XS is fairly competitive, but XX is ridiculously expensive. I compared it to another very high quality brand multi-vitamin/mineral/phytonutrient and XX not only has less content (sad but true) but is 9 TIMES more expensive at retail and 6 TIMES more expensive at wholesale. :)

Tex said:

“Save the emotional heartstring pulling for another time, I couldn't care less about your personal stories about the help you've received from other IBO's, because at the end of the day, millions of IBO's have been taken advantage of, period.”

I say to Tex:

Now do you really think your statement above is an effective way to reach people with your message? You may speak the truth, but that same Bible you quote from about “the truth will set you free” also says we should “speak the truth in love.”

Seriously, this is the sort of thing my LOA teaches, the power of words. And seriously, knowing how to speak effectively and positively is crucial in any sales business, MLM or not. And my LOA teaches in their starter CDs that they recommend all new IBOs listen to so they do this business right to not hide anything from IBOs but tell them all the costs of the system so they aren’t surprised. So once again, not all LOAs are taking advantage of millions. However, great multitudes perhaps have taken advantage of some great LOA’s resources in order to become more “well adjusted” human beings. At least that’s what I’ve been brainwashed into believing. :)

Tex said:
July 16, 2007 9:34 PM | #

Harvey,

How far away do I live from my sponsor? Not far enough. What does the distance from my sponsor have to do with the cost of CD's, books, the web site, the voice mail, the Open meetings, the seminars, and the major functions? How does the distance impact how much they make from the tool profits?

Why would I want to rise in a current system and rip off many others, lie about the tool profits and be too cowardly to admit how much I made on tools? Are you serious?

You don't have to do away with the tools, just lower the prices, which will result in less profit. Amway doesn't have to "take over" the whole thing, just require the upline to be honest about the tool profits. Simple stuff.

Eric S,

The tools have benefited me as well, but that doesn't mean the pricing is correct, just like selling water for $10/gallon is okay after a hurricane passes through.

Which system are you a part of, and how are you doing things that don't deserve the criticisms Greg mentioned?

ibofightback said:
July 17, 2007 10:23 AM | #

Greg,

The "6 months" trial was actually as suggested by Pat&Suzanne above for Quixtar execs to do, not for IBOs. :-) I think that would be valuable for them to do not just for research as to the name change! I believe McDonald's execs have to do some work at the front counter occasionally just to keep in touch with the masses, so to speak.

As for your other points, I absolutely agree. I am involved with one of the larger systems (though not so large in the US) and have never experienced the flaunting of wealth or obnoxiousness or "pin level arrogance" that you and others describe. Throw in the whole "deception" routine and you'll obviously get disillusioned folk. As my upline would say - "100% predictable".

Harvey said:
July 17, 2007 12:08 PM | #

Tex,

Once upon a time I was a new IBO and was systematically ripped off, lied to and generally abused by the system all the way to strong Q-12 Platinum.  Because of all of the abuse we have a strong team,  my wife retired and we have a strong future.

Maybe I should do the same to my downline. Rip them off all the way to Platinum and above just to make me richer.  :-)  

What I spent on tools is based on perceived value and obviously my perceived value of the tool is way beyond what I paid.

Years ago our upline talked about the tool system on a tape.  He said that until he offered a profit on the distribution of tapes the (Directs) Platinums would not be bothered.  That was before there was a system and the value of the tools in terms of growth was unknown.

Profit motive is a powerful incentive and in my opinion, without a strong profit motive the tools system would not exist.  I also feel that without the tool system, Quixtar would not be the force it is today.

Anyway Tex I don't think I am going to respond to you anymore because it is a worthless activity.  I would suggest you find another network marketing company that meets your requirements, does not rely on tools and creates all of its profit on retail.  There are many out there.

Piet Strydom said:
July 17, 2007 12:21 PM | #

Wondering's comment on cost of production for tools refers.

What also needs to be added in there is the cost of distribution of the CDs. Even though the chain is very efficient, you still need offices in each country you operate, people to staff them, etc.

Having spent a number of years auditing, and also in big business, it is amazing to see the difference between the factory gate price, and the retail price. Distribution is expensive.

And I can hear the comments coming about web distribution and MP3's - yes that will improve things, but will not replace the monthly CDs and book that I get for quite a while still. If ever.

Different formats satisfy different needs.

Greg said:
July 17, 2007 2:25 PM | #

Mike,

I had my best growth early on when we used all Amway tapes, videos etc. The combination of the "blow em away" demo's and the great follow-up tapes from Rich and Jay were a very effective combo for sponsoring and getting customers. I ran into trouble when somecone convinced me we needed to be part of a system.

The stacking and other phony aspects of some systems made them look more successful than they really were. That, plus the fact that A/Q stopped the regionals, annual meeting and other support we depended on, made me easy pray to try a system.  For me, this was a very bad decision, but A/Q left me no choice. I lost a lot of people while we were with 2 different systems over a 15 year period.  BSM expenses and the time commitment of meetings somewhere almost every week that were manditory to be considered a TEAM PLAYER, proved  to be a lethal cocktail for my group. I fianlly left, but not  soon enough.

Without a system I went ruby, in addition, I had 2 platinum legs and 1 silver. Almost Emerad!  Today we would have been Saphire. I'm  pretty sure had A/Q not  pulled the rug out from under me, we would have had a great  shot at diamond. We qualified at the founders level every year for over 25 years and we did it all without systems or ever using a curiosity or deceptive appraoch.  And like I said in my other post, I had over 80 front line after just a few years. If you can put that kind of front line in, you don't need to stack. But most people are affraid to talk to stranger, so building only a few legs sounds very appealing.  But you make no money...enter tools income!

I'm ready to rebuild and it's great to see that Amway is boldly proclaiming that so many deceptive and ilegal practices some systems use are going to be stopped. People like myself, that just can't imagine ever using a sytsem again, are excited that Amway will give us another option for support that we haven't had for 25 years.  

With Amway solidly behind us, the I in IBO has real meaning again! It may take awhile for Amway II to take hold, but the journey will be fun again!

Josh said:
July 17, 2007 4:10 PM | #

JaHntic,

A couple quick thoughts regarding your post about flaunting lifestyle.

1) Being obnoxious about a lifestyle is one thing, being realistic is another.

What I mean is, if everyone Diamond or higher decided to show a lifestyle of driving Volvos and having a mediocre house that would have disillussioned me more.  People have to know that a great lifestyle is available for those that want it and simply showing a bank statement will not do this.

2) I agree with you however, that if all you see is that kind of lifestyle over and over it would become obnoxious.  

In my LOA, they will take a couple hours and parade people across the stage at varying levels of the business (some growth, some financial).  Many who they stop and interview or even give them the microphone for a couple minutes.  These people will usually say what they make monthly from Quixtar.  They also word it "I receive $$$ in Quixtar money"

Anyway, I think it is necessary to show great lifestyles in proportion to their Q* income.  Some people need to see it, simply to enhance their dreams and realize what is really possible.

Tex said:
July 17, 2007 10:57 PM | #

Harvey,

Have you looked at the overall businss model? How many people in your group are operating at a net loss because of the tool cost? How many have dropped out because they couldn't afford the tools? How much do you tell prospects and IBO's in your group the emeralds and above make on tools?  Why isn't the profit on the tapes the increased products that are moved?

I never said it was impossible to succeed, but do you realize the business has been stagnant in North America for over a decade?

I am not against the tools, I am against the massive hidden tool profits.

I am glad you are no longer going to respond to my posts, that means I will get in the last word for the new site visitors to see. Most of them won't go back to the beginning of a long thread, they will only check out what has been written most recently, and that will be my posts, not yours.

I also am not going to go to any other MLM, I am here to clean up this one, and fix the problem Rich DeVos identified 24 years ago on the "Directly Speaking" recordings, the excessive tool profits.

Piet,

Distribution isn't expensive when you have a captive customer and they pay for the tool shipment costs. Let's say the distribution costs are expensive, then the upline would have "fessed up" a long time ago, to prove us "critics" wrong. They haven't done that because they can't show we are wrong.

Josh,

How come they don't parade across stage and say how much tool money they made?

Ben said:
July 17, 2007 11:09 PM | #

Tex,

Why don't you just start your own system?

Chuck said:
July 17, 2007 11:12 PM | #

Piet,

Take out 80% of the disbursements to the tool system Platinums and above and I'll bet the cost of distribution will drop incredibly....

Buy your LOA's recommended book online at B & N (a Partner Store) and I'll bet your cost will drop as well....

MP3s should cost virtually nothing to distribute, just a simple download and easily made available online....

Put the first eight new IBO training talks on one mp3 CD for $10 covering everything he/she REALLY needs to get started....

How much have I saved the new IBO so far?

Chuck

Jeffrey said:
July 18, 2007 7:14 AM | #

My experience with my upline's system: When we did not use the system, we had the greatest growth. When we used the system, we had the greatest losses with people getting fed up and quitting.

I look forward to the day that A/Q totally takes over the training and the systems are a thing of the past.

Greg said:
July 18, 2007 10:48 AM | #

Josh

Everyone knows there can be great income from this business if it is built properly.  There is a problem when some high profile IBO's talk about all the money and toys and them sometime later they aren't in the business anymore.  We lose credibility when this happens. I've been around long enough and  have seen this happened a lot.

Now days going on and on about all the money is met with nothing but a big yawn.

Take a cue from the company, there are a lot of things we need to change about ourselves when it comes to actions and words as they relate to the business. One of the issues in the UK was not being realistic about actual Amway income.  The company and various gov's around  the world know what the real A/Q incomes are. We just need to be more professional ALL the time.    

People are watching!

Josh said:
July 18, 2007 3:06 PM | #

Greg,

You are not catching my statement.  Just because you greet success with a "yawn", doesn't mean the next guy will do the same.  Many people age 20-30 do see the big flashy things as a bore...I agree.  What they don't see as a bore is a way to get out of their massive school debt, help their families financially (my personal goal), charities.  Even if this is just a 1000-2000 bucks extra.  This generation is more about the intangibles than any other generation in history.  Why?  Because many of them have or had the tangibles in life.

Showing success is not about having jets, ferraris, enormous houses, etc.  It is about affording first class tickets, paying cash for a new car (moderate, Lexus, Infiniti), paying down your existing mortgage or moving into a slightly larger home.  Being able to afford a nice trip with your wife and kids.  This is the kind of lifestyle I see at the Diamond level.  Very reasonable, and very achievable.

People are watching...I am one of them!

Tex,

They don't say what their tool profits are because they are usually sub platinum, so they do not receive tool profit.  The point they do make is that is it possible and very real to make decent from Q*.  Regardless of outside costs, whatever they may be.

Tex said:
July 18, 2007 4:16 PM | #

Ben,

I did, but if the overall mess isn't cleaned up, the whole business would likely fail, then where does that leave me?

Also, why can't anyone be concerned about other IBO's getting ripped off?

Why is the conversation ALWAYS me me me?

I was talking with a former Diamond today, and they said they paid outside speakers up to $50,000 for a function talk, and $2.50 for EVERY tape/CD sold. Guess who paid for these speakers, through ticket prices and the tapes? Hint: It wasn't your upline.

Piet Strydom said:
July 19, 2007 7:36 AM | #

Tex, I've promised you i'll ignore you in future, but just a reminder that I am still reading, and will keep you in line, as you keep on using arguments that I have already refuted.

If the business is stagnant in North America, but exploding across the rest of the world, then the difference is not "tool systems" because the systems are used across the world. And yes, we do have internet in the rest of the world - you earlier suggested we are less aware in the rest of the world!

Your own last post, is extremely misleading - rather than saying what the most is that they pay outside people, why not give what the system owners paid to IBO's that speak? I thought that was where your pain came in? Or are you on a new tack again?

I've listened to e.g. Dr Ross Walker at a seminar - he on his own was nearly worth the WES ticket that I paid. $2.50 I will gladly pay for a CD to a person that will help me get somewhere. And if I don't want the CD, I won't buy it.

And then I have also seen you posting that you have presented "evidence" of the tool scam. I have previously explained to you that depositions in unheard court cases does not constitute evidence. The one blog that you quote, is many years old by now, as is the tapes from Rich. They addressed certain tool systems, not all of them. There are tool systems out there that do rip of their people, and then there are others that are awesome.

And lastly, can you please specify what you are exactly unhappy about? Sometimes you complain about the profits that IBO's make from tools, sometimes you complain about the prices of the tools. And now you complain about the prices paid to external speakers?

The external speakers are surely priced by market supply and demand, which is what you have asked for on numerous occasions. And IBOfightback has demonstrated to you that external products/seminars are much more expensive than system seminars.

Tex said:
July 19, 2007 7:39 AM | #

Josh,

The "intangibles" you mentioned above are only scaled down "tangibles". Read it again.

I know those below Platinum don't make tool profits, that's part of the problem.

Those below Platinum are doing the "bidding" (promoting) of the tools they don't even make a profit on, which cleverly enables the upline to not to have to promote the tools nearly as much as they otherwise would.  

This insulates the upline from the criticism regarding the tool profits, but the profits are still there.

Your last statement doesn't occur until most IBO's get to Platinum and above.

Is that how you were shown the plan, work like a dog until you get to Platinum, because the tool costs will suck you dry until that point?

How can you say "regardless of outside costs", because these costs determine how big your business must be to turn a net profit?  

Think about it, and not just from your own perspective, but also from the perspective of every IBO in your group.

Piet Strydom said:
July 19, 2007 11:38 AM | #

To Chuck:

I don't include tool profit in my argument, I just pointed out that you need to add distribution costs to reproduction costs. SO your comment is invalid.

Barnes and Noble isn't available in my country, further, the prices we pay for books from our system IS competitive with other outlets. I don't know exact numbers, because the books that I have bought I have not seen available in shops in the first place. So no change in cost there...

And as I said in my original post, it will be a while before CD's (Red book format) will be replaced with MP3's. I do not know any person that owns an MP3 CD player. So it is not going to help me much to give them MP3 CDs.

So unfortunately you haven't saved the IBO anything.

However, one way to save all your money is not to join!! So you pay your moneys, you take your choices. And as has been repeatedly pointed out, it is all optional.

I have asked on another Amway blog for examples of people that have built large, stable businesses without making use of tools and systems. The only response was that there was somebody in a system that had a reduced emphasis.

Oh and then all the original IBO's, which build their businesses in the sixties and seventies, taking years to reach big levels, and who are now training people to reach diamond in as little as 2-5 years. (yes, they do exist).

Josh said:
July 19, 2007 12:10 PM | #

Tex,

True, scaled down tangibles, but other things as well I didn't mention.  Many of which you scoff at because it doesn't generate money or constitute a business in your mind. (example: better marriage, better communication, better productivity at work or regular business, better friendships, forgivness of family members, raising other's standard of living, seeing others grow and change for the better)  Those are just a few things of real intangibles.  Which others and myself have said before.  Most times it is immediately answered by yourself as "oh this is a business" and " don't give me that wishy washy stuff" (those are not direct quotes but very close).  For people like myself, this stuff matters, as much if not more than just the money.  Contrary to your belief it does have a direct impact on your income, long term.

As far as your outside speakers are concerned, you should be happy about that.  Why? Because that is 50k not going into the hands of the "evil" uplines.

Usually there is a good reason why people will pay 50k for someone to do a talk.  Ask all the companies that hire outside speakers.  Clinton still gets 100k per talk (even graduation speeches).

Tex said:
July 19, 2007 1:01 PM | #

Piet,

Thanks for keeping me "in line". You may have "refuted" my points, but you haven't been able to refute my facts or logic.

The business has been around in North America longer, so the nature of the problem is more entrenched. I am also not convinced other countries use the tools as much, nor am I convinced they have the same prices, as I found cassettes for $2.50 each in the Phillippines a while back. I realize the rest of the world has the internet, but do they use the English portions as much as we do, or have similar facts in other languages? All of these would make the rest of the world less aware of the problem.

I was a little surprised by both the $50,000 and especially the $2.50 per tape, as the $50K seemed a bit much, and I had no idea they also got a per tape bonus. I didn't ask about how much the inside speakers made, we didn't talk about that, as I am in the middle of conducting a potential business deal with them, so I don't want to come across as accusatory with them. I do have other sources however, so I will update if I can get this information.

I made it clear the numbers refer to an outside speaker and was the upper level paid, would you prefer I said ALL speakers get paid in that mannner? I confined the numbers to a specific example, and you react like I said it applied to ALL speakers.

Get a grip, Piet. You can't have it both ways, by insisting I put bounds on my information, then complaining when I do it.

I'm glad you think you got a good deal, I wonder what most IBO's would say about that if they knew the whole story, and we haven't even touched the inside speakers.

My evidence isn't confined to depositions in untried court cases, it also includes ACTUAL court cases and direct statements by former Emeralds and above. They are ALL consistent, which strengthens the believability of all of them.

The blog and tapes may be old, but they are still accurate. What tool systems did they address? Name them, Piet. I am sure you consider your tool system as the "awesome" category, right?

The profits and prices are related. Lesser price equals less profit, greater price equals greater profit. Do you understand that?

I wasn't "complaining" about what the outside speakers are paid, just putting the facts on the table. I believe inside speakers make similar profits, how about you?

ibofb has demonstrated SOME external products/seminars are more expensive than system seminars. Others I have seen are free, and normally travel around the country instead of requiring me to travel across the country. Big difference. Big, huge, difference.

But I do appreciate you aren't completely ignoring me, how else could I set you and others straight?

Chuck said:
July 19, 2007 3:24 PM | #

Piet asked Tex:

"And lastly, can you please specify what you are exactly unhappy about? Sometimes you complain about the profits that IBO's make from tools, sometimes you complain about the prices of the tools. And now you complain about the prices paid to external speakers?"

Piet, allow me to respond for Tex.  Do you not see how interconnected these issues are?  If not, let me lay it out for you.  It is the high prices of tools that enable the payment of high royalties on the purchase of tools to the Platinums and above.  The substantial payments made to speakers at functions have a direct and significant impact on the price of the tickets to attend those function.  Lower speaker fees, lower ticket prices.  

The challenge today is that we have one heck of a "good ol' boy network."  You pay me a fortune to come speak at your function and I'll pay you a fortune to come speak at mine.  (Or in the system, we'll keep it all in the family.)  A few IBO leaders earn big, the vast majority of IBOs pay big.  I wonder how many people would be excited about paying for their WES tickets if they discovered that the speakers are being paid $50K and that $6 of every $8 CD is going to enhance their upline leaders' lifestyles, the same leaders that are pressuring and pushing them to buy those tools?  All the while the pre-Platinum IBO falls farther and farther behind in his quest to reach some reasonable level of profitability.

All we've ever said is disclose what portion of the cost of various tools goes to the upline leadership.  If they make $1 per CD at Platinum, $1.50 at Emerald, and $2 at Diamond, disclose it.  Also disclose what portion of literature and book tools is paid at each level and what speakers are paid at different functions based on their pin levels.  I don't care how much the leaders earn in total profits.  I just want IBOs to be able to make an informed decision about whether they believe they are getting what they pay for, whether they believe tools are priced appropriately for what they receive, and whether or not the pressure being placed on them to buys tickets and tools is done to serve the IBO's best interests or instead the personal financial interests of their upline leaders.  Doesn't seem very complicated to me.

As the saying goes, "The simple things in life often confuse the wise."

Chuck      

Josh said:
July 19, 2007 4:32 PM | #

Chuck,

Let me simplify it even more, because you seem to be wise.

An IBO making an informed decision is not based on what an upline makes on the tools.  It is based on the cost of that cd which is 8 bucks (your example).  The informed IBO is told, hey you spent 8 bucks on this one cd, do you feel you received 8 bucks worth of knowledge.  Oh and you don't have to answer that question right now, you can give me an answer in 6 months.  That is the proper education of a new IBO.  It has ZERO to do with who is profitting (although I do agree it should be told that people make money from the sale of these CDs).  It doesn't need to broken down as you state.  To spin the argument any other way is deception.  Same goes for any other tool.  It is what the individual perceives the value of each individual tool.  Then make a determination if that tool is worth what that individual paid for it.  

If you produce a quality product people will buy, but then continue to buy if they find it helpful (ie giving to prospects) and if they find it helpful, they will promote it to others as being helpful, and so on and so on.  If it is not worth promoting (which there have been several I have come across), you do not promote them, thus no one buys them, and thus no one profits from them.

Besides informing them with another set of numbers on top of the Q* compensation will only tend to confuse a prospect.  Simply knowing they have the potential for extra income once their Q* business is successful is sufficient enough.

Tex said:
July 19, 2007 6:42 PM | #

Josh,

I don't disagree with the other intangibles you mentioned, and have experienced them myself. The point is you described tangible, not intangible benefits.

But those are side benefits, not the main idea of a BUSINESS. For the upline, they are a distraction while they get rich on YOUR tool money, by keeping the IBO's emotionally involved while doing so.  

I also don't mind paying outside speakers for their talks, but since I am a "teammate" and "business partner", I should know the rough terms, and especially the terms of upline speakers and their associated fees.

You also did a very poor job of answering (zero) the last 2 questions, above.

Chuck,

You stated it perfectly, nothing to add (although I did respond previously, it hasn't been posted yet).

Piet Strydom said:
July 20, 2007 3:28 AM | #

Chuck said: I just want IBOs to be able to make an informed decision about whether they believe they are getting what they pay for, whether they believe tools are priced appropriately for what they receive, and whether or not the pressure being placed on them to buys tickets and tools is done to serve the IBO's best interests or instead the personal financial interests of their upline leaders.

Piet says: For me it is simple: I look at the price of the CD, and I decide whether it is worth it. I must therefore be very "unwise".

Whether that is good or bad, I am not certain.

Having said that, more disclosure of the right information might not be a bad thing