SOME MORE DEBUNKING OF THE "PRIVATE FRANCHISING" ;-)) CONCEIT....

A reader, SNOTURKY, and I have been having a running debate about this "Private Franchising" ;-)) conceit, that Quixtar/Amway IBOs use. I kind of lost my patience ;-) with him, on my last post, MORE DEBUNKING..., and to be perfectly honest, I was fairly condescending.... Snoturky said as much, in his comments, which I am posting here. I would like to offer my SINCERE APOLOGIES!

BUT, having said that, I STILL maintain that this Quixtar/Amway model is inherently unethical, and unprofitable for most people. So, without much further ado, here are Snoturky's comments and my rebuttal. Again, Snoturky's comments are in red, and mine are in blue and black.

• This is becoming increasingly troublesome, as you are starting to become condescending and disrespectful. I will not continue this discussion if this does not stop immediately. May I also request that you please stop writing in all caps and bold? It does not change it's meaning to me, and I'm sure I'm not the only one that thinks it is very iritating.
• >>>>Wouldn't you agree, Mr.Snoturky? Oh, I forgot, it was ;-)) Mr.Principle.
• Speaking of principle... We need to talk more about it. Your entire argument has been avoiding it and focusing on specific people or situations.
• Let us escape from all of these specific examples and talk only of principle. Anyone can tailor a specific example to justify anyone's opinion.
• You say that no one would pay the prices that are put on the products. First of all, whether or not you would pay the price of a specific product has nothing to do with whether or not another person would. Just because you do not see any value in 1 product versus another, does not mean that other people don't. So you really need to drop that - You don't know if people would buy them or not. I can tell you for sure that they do - several non-IBO's at full retail, and several at discounted price. If you were right about nobody ever wanting to buy them, this business would have been gone a long time ago. However, since we are not talking about specifics, but only principles, we will leave that portion out of the argument.
• Also, your argument about being a commodity does not hold water. If they are all the same, why are there so many different laundry detergents, cleaners, etc., all at different prices in any given store? The expensive ones would go out of business according to you.
• Can you believe that an extremely profitable business exists, where people put water and sugar into containers and sell them for several hundred percent more than production cost? Who would buy that over-priced stuff???
• Ever heard of Red Bull? It costs about twice as much as the one I stated above, and you get around half as much. Amazingly profitable business.
• Can you believe that people get paid millions of dollars to play games? (Football, baseball, ...)
• The point is, that some businesses that you don't think should work, do. Some products that you don't think should sell, do.
• The most basic explaination of the business:
• A person owns distributive rights to some products. He is able to sell them to other people, and is able to grant other people distribution rights. He gets royalities from those he sets up as distributors. He must sell a certain amount of product to non-distributors in order to make a profit.
• Remember what I said - There are plenty of IBO's that don't have a single down-line. They make all of their money from customers choosing to purchase his products over all of the other products and prices out there.
• All of the other stuff you try to throw in there is opinion or circumstantial stuff that does not effect the model itself.
• There is one thing that is making me angry and I have to address it:
• >>>>Boy, who is this Saintly ;-)) Upline of yours? I am dying ;-)) to meet him! Heck, I am half tempted to run away and join ;-)) your Quixtar cult - obviously I would be signing up under you.... Do the Diamonds in your LineOfSponsorship know what he is ;-) doing? Trust me, don't let word reach your Diamond, he will be very ;-)) displeased. And, by no means, should this information reach the low-level IBOs in the other LOS' because they will all quit their LOS and run to sign up underneath you - and that would make their ;-)) Diamonds mad at you....
• You are making me really mad by making accusation about my friends and me, without even knowing us! That's not called arguing. That's called flaming - when someone has no real argument and just tries to take cheap shots.
• I will have you know that my diamond does the exact same thing as my upline did for me, and I do for my downlines. Both of them are Christians (most of the team are) and are generous people.
• >>>>Is it just me, or do other people find it strange that every single Quixtar IBO who visits these critical sites, claims that THEIR LOS is as virtuous ;-)) as Mother Teresa??
• Let's see... could it be because THEY ARE? Is it possible that maybe, you don't know everyone, and that you are making un-fair generalizations and accustaions? Is there a slight possibility that everyone in the business is not a crooked terrible person?
• At first, it seemed as though you were going to be someone who really knew how to argue fairly and be subjective. You are starting to disappoint me.

This is becoming increasingly troublesome, as you are starting to become condescending and disrespectful. I will not continue this discussion if this does not stop immediately. At first, it seemed as though you were going to be someone who really knew how to argue fairly and be subjective. You are starting to disappoint me.

Like I said in my comments on my MORE DEBUNKING..... post, I agree. I was condescending. Was it meant to make a personal attack on you? Absolutely not. But when you have listened to, and read comment after comment after comment, by Quixtar/Amway apologists on the critical websites, where they almost NEVER address the specific criticism, but attack the messenger, or make vague analogies that have no substance, or talk about something totally irrelevant..... You tend to have a short fuse.... Sometimes it feels like you have to be condescending to get the message across....

I mean, you definitely sound like a very intelligent guy, BUT you seem to not even try to use that god-given intelligence! You seem to be hell-bent on trying to prove that this 'business' is similar to a real franchise, when clearly it is NOT. You haven't addressed a single one of holes that I poked in the whole 'Private Franchising' analogy, on my MORE DEBUNKING.... post.

Here are some of the issues that I brought up earlier, but you did not care to address:

• So far, I have NOT heard a SINGLE CD/Tape that provided CONCRETE INFORMATION/TRAINING to run this so-called business. SAME with Seminars/Rallies/Meetings. And I have been to quite a few of each. Can YOU show us ONE?
• ONE EXAMPLE of Concrete Information/Training?

• McDonald's Franchisees have to go to Hamburger University ONLY ONCE, and the cost of the training is ONLY A FRACTION OF THE SALES FOR A STORE.

• You DON'T need hundreds of CDs to explain "THE PLAN". IF the business were TRULY LEGITIMATE (in the sense that ALL the participants would be able to make money, not just the top level IBOs who are making money off of the SO-CALLED SYSTEM), then you WOULD NOT NEED SO MUCH MOTIVATION. You wouldn't have to listen to the same thing over and over and over again, and pretend that you are getting 'Training'. Showing the "PLAN" alone would be sufficient to convince a prospect to sign up.

• PLUS, McDonald's/TacoBell WOULD NEVER, NEVER, EVER GIVE INDIVIDUAL FRANCHISEES A CUT OF THE TRAINING SYSTEM COSTS!!!!
• What about this System CONFLICT OF INTEREST? Consider this. If ALL the NEW IBOs are informed that top-level IBOs DO MAKE MOST OF THEIR INCOME FROM THE SO-CALLED TOOLS/SYSTEM, NOT QUIXTAR/AMWAY BONUSES, do you think they would blindly use the System without questioning?? And, YOU DO KNOW THAT FACT ABOUT SYSTEM INCOME, DON'T YOU?? How do you address that?

• Ray Kroc/McDonald's Coprn. is the FranchisOR. Now, let's assume that you OWN a McDonald's store. You/McDonald's-Store-Owner are the FranchisEE. The FranchisOR, i.e. Ray-Kroc/McDonald's-Coprn. grants you, the FranchisEE, Franchise Rights and collects a royalty, off of your sales.
• McDonald's Coprn., i.e. the FranchisOR, also makes sure that there won't be any Competing FranchisEEs, within a specific geographic region around your store. i.e. McDonald's Corpn., the FranchisOR will make sure that there will NOT be any unhealthy competition between you and another FranchisEE, and thus your business can survive and prosper.
  

And read this thread, the disclosures required by the law, for a FranchisOR. Would Quixtar be considered a LEGAL FranchisOR without these disclosures?

http://mlmlaw.blogspot.com/2005/08/how-to-be-real-small-business-owner.html

Would the Quixtar Corpn. say that they are a FranchisOR ? IF THE CORPORATION DID SAY THAT, DON'T YOU THINK THAT WOULD BE ILLEGAL?

SO, DO YOU NOW ACCEPT THAT THIS SO-CALLED 'BUSINESS' HAS NOTHING TO DO WITH FRANCHISING?

If you still insist on calling this a 'Franchise', how am I supposed to respond? Tear my hair out in frustration? Honestly, that is how I feel.... Like I said, your 'overall' articulation, seems to indicate that you are a pretty intelligent guy - BUT you seem to be insistent on NOT thinking for yourself! You spout the same, lame, 'Private Franchising' conceit, and other 'Tapespeak' like "think like a business owner, not a consumer". When I see an Intelligent Guy like you, drinking the 'System-Kool-Aid', and tying himself in knots to justify a scam, I kind of feel that a sarcastic tone, a condescending tone, is the ONLY way to get the message across!!!

May I also request that you please stop writing in all caps and bold? It does not change it's meaning to me, and I'm sure I'm not the only one that thinks it is very iritating.

Like I mentioned earlier, I am a man on a mission..... When I used bold letters, or capitalization, I am merely trying to emphasize that particular word/phrase/sentence in a whole paragraph, so that the reader walks away with that image in their mind, hopefully well-entrenched. But I will definitely try ;-) to tone it down a little - I will give you that ;-) much.

Think of it this way. The italics - I am trying to emphasize. The bold - I am trying to shout ;-) a little. The big font - I am shouting pretty loudly. The large font - I am screaming ;-) in your ears.

>>>>Wouldn't you agree, Mr.Snoturky? Oh, I forgot, it was ;-)) Mr.Principle.

Speaking of principle... We need to talk more about it. Your entire argument has been avoiding it and focusing on specific people or situations. Let us escape from all of these specific examples and talk only of principle. Anyone can tailor a specific example to justify anyone's opinion.

Oh, boy, here we go again!!! How do you expect me not to be condescending? Have you even read any of my posts? Almost every one of my posts, is about general, broad principles rather than any specific example.

My second post, HOW I GOT INTO THIS...., was about the ETHICS (or the LACK thereof) of forcing people to buy OVERPRICED COMMODITY PRODUCTS so that you can make a commission off of their purchases. It was also about my contention that it IS UNETHICAL for a few people to profit off of the loss of many people - which is a virtual certainty because the majority of the people will be left holding the bag, at the bottom of the pyramid. Thirdly, I contend that the majority of the Tools/System King-Pins, DISTORT the Scriptures, for their own material gain; and in the process have wrecked many homes, friendships, and finances. This argument would be the SAME, if these problems existed in any other MLM, too.

My third post, "PRIVATE FRANCHISE"?? YEAH, ;-)) RIGHT!, was aimed mainly at a broad debunking of the Private Franchising CONCEIT that is used by Amway/Quixtar IBOs. That this so-called 'business' is NOT a Franchise. That a TRUE FRANCHISE has RETAIL SALES to consumers who are not in the same business. My second contention was that REAL TRAINING for franchisees usually happens only once, and that the costs are a very small fraction of their sales. My third contention was that REAL TRAINING for real franchisees, is exactly that - REAL TRAINING! That there is NO CONFLICT OF INTEREST, because the Franchisor is primarily in the business of making money by getting a cut of the ACTUAL RETAIL SALES OF THE PRODUCTS/SERVICES by the Franchisee. That the Franchisor does not try to rip off the franchisees by shoving down the Franchisees' throats, a SCAM, disguised as a so-called 'Training System', that is TOTALLY WORTHLESS! Mind you, these arguments are the same, whether you consider a McDONALD'S, a WENDY's, a HOLIDAY-INN, or a HOWARD-JOHNSON! i.e. THESE ARGUMENTS ARE NOT SPECIFIC, BUT A BROAD EXPLANATION OF THE FRANCHISING CONCEPT.

One of my SPECIFIC arguments was to counter a specific example that you brought up - "That the Quixtar/Amway Corpn./the-business-model itself is legitimate, irrespective of the actions of a few people". I countered by giving a SPECIFIC argument, that these abuses were NOT ISOLATED, and that they had been continuing with knowledge and complicity of the corporation's owners for over 25 YEARS.

My fourth post, MORE DEBUNKING OF...., was basically a more in-depth exposition of the broad, general principles I explained on my third post. Secondly, I made the broad, general contention that, since the Amway/Quixtar Plan is sold to prospects on the promise of Residual Income, one should only consider repeat Monthly-Consumables, in the calculation of the so-called 'Residual Income' (which is a myth, but I will get to that later). And that, since these monthly consumables are basically COMMODITY PRODUCTS, and ARE OVERPRICED, it would be UNETHICAL, to sell this FLAWED BUSINESS MODEL (that an artificial loyalty to Quixtar Products is created in the hope of getting that so-called 'Residual Income') to somebody.

My fifth post, "INSIDER"s OBSESSION...., was primarily aimed at a broad, general exposition of the 'Retail Sales Rule', and its importance in determining the legality or the lack thereof, of ALL Multi-Level Marketing Schemes, including Quixtar/Amway.

NOW, SNOTURKY, can you show me how my "entire argument has been avoiding it and focusing on specific people or situations". Can you tell me how I "tailored a specific example to justify anyone's opinion" ?

You say that no one would pay the prices that are put on the products. First of all, whether or not you would pay the price of a specific product has nothing to do with whether or not another person would. Just because you do not see any value in 1 product versus another, does not mean that other people don't. So you really need to drop that - You don't know if people would buy them or not. I can tell you for sure that they do - several non-IBO's at full retail, and several at discounted price. If you were right about nobody ever wanting to buy them, this business would have been gone a long time ago. However, since we are not talking about specifics, but only principles, we will leave that portion out of the argument.

I kinda feel sorry for you ;-).... but you just put your foot into your mouth again... How are prices/economic-value of products sold by the MLM, NOT a general principle to consider in evaluating an MLM????!!!!

Secondly you accuse me (WRONGLY, as I just proved above) of using specific examples to twist something out of context, and then you do EXACTLY THAT!! Listen to your statement - "First of all, whether or not you would pay the price of a specific product has nothing to do with whether or not another person would. Just because you do not see any value in 1 product versus another, does not mean that other people don't."

When did I ever say, that MY acceptance/rejection of the ECONOMIC-VALUE of Quixtar's products is the deciding factor???

What I said (I am REALLY tempted ;-) to be condescending here, but I am holding my tongue) was this.

Okay, buddy, let me try to get this through your head. "Your Opinion" and the "Opinions of people I know" don't mean jack in the Real World. The REAL test is - IS there broad acceptance of the product in the marketplace outside of the Quixtar IBOworld? What is the drop-out rate of new IBOs, greater than 67% right? IF the Quixtar Products were such great quality and they were cheaper, how come these IBOs didn't stay on as 'Members' to take advantage of these products??? Quixtar IBOs trot out this argument ONLY when they are Quixtar IBOs, they don't even look back once they have quit the business.

Now, tell me, how can I continue to be patient with you? CLEARLY, you are an Intelligent guy, but you are trying so hard to justify this scam, that you are tripping over yourself.

Here are the latest Quixtar Statistics, from the Corporation's data itself.

Quixtar Q12 Business Statistics reported in August 2004 and October 2002

• 1. 67.8% of IBOs who registered in 2003, did not renew in 2004.
• 2. The average IBO had just 0.23 members and clients registered.
• 3. Only 18.4% of IBOs registered even one person.
• 4. The average IBO had 38.5 PV/month. (100PV is shown in the plan)
• 5. 65.6% of IBOs never once attained 100 personal PV in the previous 11 months.
• 6. 21.5% of IBOs had a ditto delivery profile
• 7. Only 1.9% of Members and Clients had ditto delivery profiles.
• 8. The average PV point cost $2.70.

Look at the first statistic. Why do those 67.8% IBOs drop out? Why don't they stay on as IBOs, or even as 'Members' (it's cheaper at $20), to take advantage of all the great products and the great values ;-)) ? See the second statistic - the average IBO had only 0.23 members and clients registered. And remember, 'Members' can buy the products at the same price as IBOs. Clearly, only clients can be considered 'Retail Customers', since they are the only people off of which you are making a 'Retail Profit'. So, assuming only half of that 0.23, are clients, the average IBO had only 0.11 clients. See the fourth statistic - the average IBO had only 38.5 PV/month. And, see the fifth, and in my opinion, the most DAMNING STATISTIC - 65.6% of IBOs never ONCE attained 100 personal PV in the previous 11 months.

And, these statistics have been REMARKABLY consistent over the years. Some Critic estimated, using the Quixtar numbers, that over 5 million people must have joined and quit Amway/Quixtar, over the last 25 or so years. 5 MILLION DROPOUTS!!!! Don't you think that is a significant, BROAD rejection of the economic-value of Amway/Quixtar products in the market-place outside of the people involved in the business??

Allow me to quote the great Scott Larsen:

"What are all these statistics of low average IBO sales, and high turnover really saying? It says to me that the typical consumer can't find enough deals or superior value through Quixtar to shift their buying habits from where they currently shop."

Also, your argument about being a commodity does not hold water. If they are all the same, why are there so many different laundry detergents, cleaners, etc., all at different prices in any given store? The expensive ones would go out of business according to you.Can you believe that an extremely profitable business exists, where people put water and sugar into containers and sell them for several hundred percent more than production cost? Who would buy that over-priced stuff???Ever heard of Red Bull? It costs about twice as much as the one I stated above, and you get around half as much. Amazingly profitable business.

Yes there are many brands of deodorant, tooth-paste, toilet-paper etc. out there. BUT, the price differences are insignificant, one brand is usually NOT 30-40% higher-priced. Think about 'Russet-Potatoes'. Everybody would agree it is a commodity, right. Does that mean, there's only ONE farmer producing potatoes? No. But if any farmer tries to charge a 30-40% premium for his produce, he would go out of business, right?

Again, I am not disputing that SOME Amway/Quixtar Products might be better value for the money. But since we are talking about the so-called 'Residual Income', we need to focus only on 'repeat, monthly consumables'. And is that 'basket of goods' better value for the money, than the other choices available in the general retail market? Clearly, as I proved above, the Quixtar Corporation's Statistics themselves say,

LOUDLY AND CLEARLY - NO!!!!

Can you believe that people get paid millions of dollars to play games? (Football, baseball, ...)The point is, that some businesses that you don't think should work, do. Some products that you don't think should sell, do.

Again, I hate to repeat this, and I am getting a little tired of repeating myself.... But, I NEVER SAID ANYTHING OF THE SORT! Please, please, read my posts.

The most basic explaination of the business:A person owns distributive rights to some products. He is able to sell them to other people, and is able to grant other people distribution rights. He gets royalities from those he sets up as distributors. He must sell a certain amount of product to non-distributors in order to make a profit.

Yes, but HOW is it a Franchise? I HAVE CLEARLY EXPLAINED ABOVE, THAT THIS IS NOT A FRANCHISE!!!! This is another one of those deceptions that is used to gain credibility by association.

It used to be, they were called Amway 'Salesmen'. Then, after a whole host of bad publicity, they became Amway 'Distributors'. When it morphed into Quixtar, they became 'Independent Business Owners' (IBOs) ;-)).... Now, they are 'Private Franchisors' ;-)) ????

The BEST term for this industry is clearly MULTI-LEVEL-MARKETING. PERIOD. But, when the MLM term got such a bad rap, they then started calling it NETWORK-MARKETING. Then it became AFFILIATE-MARKETING.

And then, some genuis ;-)) figured out a new term to use, to exploit some borrowed glory - 'Private Franchising'. Quite a stretch ;-)), that. But, hey, wear a suit and tie, have a few Ambot/Quixbots also wear similar attire, rent a small conference room in a Hotel, and have an 'Open Meeting'. Then talk about McDonald's or some other Respectable/Legitimate Franchise, and say that your little scam is exactly like McDonald's. Voila! Instant respectability!

If the new prospects sitting there, don't have any background in business, or if they are wearing the 'Residual Income' Blinders, they will get suckered in!

That's the idea, right??

Remember what I said - There are plenty of IBO's that don't have a single down-line. They make all of their money from customers choosing to purchase his products over all of the other products and prices out there.

I am not going to repeat myself. I think I have already clearly proved that the marketplace, the vast majority of people outside the business DO NOT find Quixtar/Amway products a compelling economic value.

All of the other stuff you try to throw in there is opinion or circumstantial stuff that does not effect the model itself.

?????????!!!!!!!!!! And you expect me to be, NOT CONDESCENDING????!!!

There is one thing that is making me angry and I have to address it:

>>>>Boy, who is this Saintly ;-)) Upline of yours? I am dying ;-)) to meet him! Heck, I am half tempted to run away and join ;-)) your Quixtar cult - obviously I would be signing up under you.... Do the Diamonds in your LineOfSponsorship know what he is ;-) doing? Trust me, don't let word reach your Diamond, he will be very ;-)) displeased. And, by no means, should this information reach the low-level IBOs in the other LOS' because they will all quit their LOS and run to sign up underneath you - and that would make their ;-)) Diamonds mad at you....

I will have you know that my diamond does the exact same thing as my upline did for me, and I do for my downlines. Both of them are Christians (most of the team are) and are generous people.

>>>>Is it just me, or do other people find it strange that every single Quixtar IBO who visits these critical web-sites, claims that THEIR LOS is as virtuous ;-)) as Mother Teresa??

Let's see... could it be because THEY ARE? Is it possible that maybe, you don't know everyone, and that you are making un-fair generalizations and accustaions? Is there a slight possibility that everyone in the business is not a crooked terrible person?

Okay, Snoturky, I APOLOGIZE, I agree I was out of line, in that I made assumptions about you and your friends without knowing you. But consider this, see where I am coming from:

I live in a large metropolis, one of the biggest cities in the US. As I mentioned in the comments section on my second post, I have been prospected, on average, once every two months. EVERY SINGLE TIME, I saw the same curiosity approach, the same lies, the same half-truths, the same deceptions..... And that has consistently been my experience, for the last 5 years or so. And the evidence on the Critical Websites overwhelmingly suggests this is the norm, rather than the exception.

Can you blame me for being a little trigger-happy?? But, like I said, I am willing to give you and your team the benefit of doubt.

BUT, don't YOU have a problem with these crooked guys 'ruining' your 'business'?? Don't you think it is unfair for honest people like you, to be maligned, and lumped in the same category with these crooks, for no fault of yours? What have you done about it?

Have you complained to the Quixtar Corporation about it? And even if you do, what do you think are your chances that the Quixtar Corporation will do something about it? Good luck!! The corporation's owners have known about it for 25 YEARS, but STILL HAVEN'T DONE ANYTHING ABOUT IT!!!

NEVERTHELESS, I have two suggestions for you.

Write a detailed letter to the Corporation, expressing your unhappiness. Tell other IBOs to do the same. I won't guarantee ;-) you that the world will change, but see what happens. I myself, am writing a complaint about my experiences at the two 'Open Meetings' that I attended recently. I will be posting a copy of that letter here. Why don't you do the same, post a copy of your letter here, after you send it to Quixtar?

ALSO, How about you and your team join the 'QUIXTAR BACKBONE PROJECT', initiated by Eric Janssen of QBlog??

THERE ARE MORE OF THEM OUT THERE ;-))....

Check another guy out there, with a misssion ;-)) .....

http://worldwidedreamstealers.com/page/4/

For those new to Quixtar/Amway terminology (this post is also specifically for Senthil Kumar who asked me a question on my APPARENTLY THERE.... post), 'Dreaming' is a big part of the 'Motivational System' that is thrust upon the Quixtar/Amway IBO/Distributors. People are asked to 'visualize' the kind of homes/cars/boats etc. they want to buy, the kind of money they want to give to charity, the kind of life-style they want to lead etc..... The idea is that, if they get caught up in their dreams, they won't ask too many questions, or do any due diligence, and will sign up for the business. And of course, these scam-artists who prey on people will keep 'encouraging' people to keep 'dreaming' after signing up also, so that they will keep spending money on a worthless 'Training System'; and line their own pockets with the profits from the so-called 'Training System'. One of these 'System' King-Pins runs an organization called WORLD-WIDE-DREAMBUILDERS... ;-)) No Kidding! This is one of the many Motivational Organizations that promote the so-called 'Training System', and have become the target of so many critics. I can't for the life of me, imagine how a sane person would say that they actually ran a business that had a name like this. What do they say when they are asked what business they are in? "Oh, we build Dreams". ??? ;-)) ;-))

Whenever a Critic tries to talk an Amway/Quixtar IBO out of the business, they will respond with, "Why are you stealing my dream"? Anybody who is a critic is automatically a Dream-Stealer ;-)), in their books.

By the way, this is not the complete detailed post that I promised Kumar, it will be posted shortly.

GUESS WHO'S BEEN VISITING ;-))......

The Mother-Ship, Amway/Quixtar Corporation, i.e. ALTICOR Corporation visited recently. Click on the 'SITE-METER' link, right above the 'SUGGESTED READING'. It will take you to information about all visitors. Click on the 'By Location' link, on the 'Recent Visitors' Tab. Then click on the number under the 'detail' tab. It will show you the IP Address. You want to check out the Ada, Michigan, visitor, obviously.

APPARENTLY THERE ARE OTHER ;-)) GUYS OUT THERE LIKE ME.....

Check this out.....

http://groups.google.com/group/alt.business.multi-level/msg/8843ba00a292aa8c?q=quixtar%202003%20group:alt.business.multi-level.*&hl=en&lr=&ie=UTF-8&rnum=10

"INSIDER"s OBSESSION ;-) WITH THE "RETAIL SALES RULE"

There's a Quixtar/Amway apologist, who goes by "INSIDER", whose main job seems to be, to visit all the Critical Websites, and furiously ;-) post comments trying to prove (and ;-)) failing miserably) that the FTC's Retail Sales Rule is a myth. It seems to me that he has posted on almost every single critical website, where the Retail Sales Rule is discussed.

I have a THEORY about why he is doing this.

But, first a little background on this Retail Sales Rule. Chain-Letters, Pyramid-Schemes, and other Ponzi-Schemes are ILLEGAL and UNETHICAL, right? Well, some genius ;-) thought he figured out a way to circumvent this by introducing a PRODUCT into the mix. Thereby give it a veneer of legality. It is precisely to combat this disguising of a Chain-Letter-Scheme as a product-based pyramid, that the FTC established the Retail Sales Rule. and the Courts repeatedly agreed with the FTC in the prosecutions of different MLM schemes. i.e. THAT THE PRODUCTS OF A LEGAL MULTI-LEVEL-MARKETING COMPANY MUST BE PRIMARILY SOLD TO END-CONSUMERS WHO ARE NOT PARTICIPANTS IN THE MLM SCHEME.

Now, back to my theory. Lots of MLM companies that were shut down by the FTC, were prosecuted on the basis of this Retail Sales Rule. Amazingly, one company has gotten away with flagrant violations of this Rule. AND, they have been doing it for over 25 years. AMWAY, now known as QUIXTAR. With the proliferation of the internet during the mid-90s, the critics got a new medium (which was not only cheap, but also provided a vast world-wide audience) to broadcast their criticisms. This resulted in the creation of many websites critical of Amway. The first one, I believe, being the AUS website, by Sidney Schwartz. Then there was Ashley Wilkes, whose website was gutted by legal bills, fighting the Amway Corp.'s Legal Might. John Hoagland, Jeff Probandt, Russell Glasser, Ruth Carter...... the critics just kept coming. Finally, I believe, it was Scott Larsen's website, www.amquix.info that broke the dam. Amway/Quixtar, inspite of its best efforts could not silence its critics anymore. And I think, even the Amway/Quixtar Corp. owners have realized that their investment in political-payoffs can NOT buy them regulatory protection anymore, that the tide is finally turning. It used to be, they wrapped themselves in the 'Flag' and 'Christianity', and they brushed off critics as 'Liberals', and 'Communists'. And most Evangelical/Conservative Christians broadly held the view that it was a legitimate business, and that Amway/Quixtar Distributors are generally honest 'Christian' people. Now that so much information is available, even Conservative, Christians like Tim, Xandaustc, and Me are criticizing Amway/Quixtar. And the Retail Sales Rule has been thoroughly explained by a Lawyer also, who is a critic.

When the lay-person outside of the Quixtar Business, starts referring to the Retail Sales Rule, it puts the Amway/Quixtar Corpn. in a very uncomfortable position. It is this very Retail Sales Rule, that Amway had in its 'Business Conduct & Rules' requirements, that saved its skin when Amway was prosecuted by the FTC in 1979. So, it seems the Amway/Quixtar Coprn., decided to change the rules, so that its Distributors/IBOs wouldn't be in violation of its own rules.

Strange coincidence, but at the same time, "INSIDER" is going around furiously trying to prove that the Retail Sales Rule is a myth. Anybody care to hazard a guess, what this guy's relationship with ;-)) Quixtar is??

Here's one ;-)) of the many comments regarding the Retail Sales Rule that this guy has posted. It was on Eric Jansen's QUIXTAR BLOG, under the No More Pretending Post. I have posted his comments in Red, and my rebuttal in Blue.

• 
  sigh ... why does this myth still perpetuate??? The rule is a 70% sales rule, NOT a 70% retail sales rule. If you have NO retail sales, but still have more than 70% of your volume downline, then you are in compliance with the 70% rule. The myth started because it was just one of a whole facet of things the FTC looked at back in 74-79 and they said that this rule encourages retail sales. This is completely true. If you are a new IBO, then you do not qualify for a bonus unless you have downline or retail sales. Doing retails sales is the easiest way to qualify for a bonus when you start. It encourages retail sales. Note however this is NOT a definition the FTC uses to define pyramids.
• Posted by: insider at November 28, 2005 12:55 PM

Boy, this 'INSIDER' guy just doesn't get it, does he? He seems to be single-handedly ;-)) trying to change, TENS of COURT DECISIONS, STATUTES and ESTABLISHED CASE LAW. And he seems to decide for HIMSELF what were the conditions, the FTC established to identify an illegal pyramid scheme!

Let me try to explain the the fundamental logic behind the courts & the FTC insisting on MLM companies having "RETAIL SALES TO AN END CONSUMER OUTSIDE THE BUSINESS" as a condition for legality.

Take a chain-letter scheme. EVERYONE would agree that it is inherently exploitative, unethical, and illegal, right? Now SUBSTITUTE an OVERPRICED PRODUCT as a SHILL in the scheme. For e.g., if it is a $100 chain-letter scheme, instead of the participants paying $100 to participate in the chain-letter scheme, they are told to buy $100.75 Snickers Bars. The Snickers Bars cost only $0.75, but they are being sold to the participants for $100.75 instead. This $100 OVERPRICING, or PRICE DIFFERENTIAL basically enables the chain-letter scheme to operate as a PRODUCT-BASED PYRAMID SCHEME, with a thin veneer of SUPPOSED legality! Think about it, a $100 Snickers Bar has NO ECONOMIC VALUE in the REAL WORLD. Nobody would buy it! The participants in the scheme WOULD NOT BE ABLE TO RETAIL IT! The participants in this chain-letter sheme buy it, ONLY BECAUSE THEY HOPE TO PROFIT OFF OF OTHER PEOPLE GETTING INTO THE PYRAMID BELOW THEM! But, a LOT OF PEOPLE WILL BE LEFT HOLDING THE BAG AT THE BOTTOM OF THE PYRAMID BECAUSE THE POPULATION OF THE EARTH IS FINITE, AND BECAUSE A LOT OF PEOPLE WILL RECOGNIZE IT AS A SCAM AT SOME POINT IN THE PYRAMID'S GROWTH AND THUS IT WILL COLLAPSE! Just like any Chain-Letter/Ponzi Scheme would.

This is the LOGICAL BASIS for the courts' decisions in dozens of cases where MLM schemes were prosecuted, that THE EXISTENCE/LACK OF RETAIL SALES IS THE TEST OF THE LEGALITY OF THE SCHEME.

Read these threads, look at the court decisions, make up your own mind. So, INSIDER, is this a clear enough exposition for you now, or you still don't get it?

http://mlmlaw.blogspot.com/2005/11/what-happened-in-1979.html

http://mlmlaw.blogspot.com/2004/08/single-most-important-word-in-mlm.html

http://mlmlaw.blogspot.com/2005/01/lets-talk-about-seventy-percent-rule.html

http://mlmlaw.blogspot.com/2005/11/quixtar-bets-farm.html

http://amquix.info/quixtar_pyramid_rebuttal.html

Posted by: perceptive at December 3, 2005 06:46 PM

There's one more flaw in 'INSIDER's comments, that Imran Aziz of the QuixtarSucks Blog, pointed out. I will post his comment here in Green.

So I do 300 PV on personal volume, I shouldn't get a bonus? Posted by: Imran at November 28, 2005 04:30 PM

This 'INSIDER' guy has a comment on my blog also ;-)), under my HOW I GOT INTO THIS.... post. Like I said, desperate, desperate ;-)).....

MORE DEBUNKING OF THE PRIVATE FRANCHISE ;-)) CONCEIT....

A reader, SNOTURKY, sent in his comments on my second post, HOW I GOT INTO THIS, basically spouting the same lame 'Private Franchise' conceit that Quixtar IBOs use all the time. I posted a rebuttal to his comments. This exchange is basically the gist of my third post, "PRIVATE FRANCHISE"?? YEAH, ;-)) RIGHT!. He sent some additional comments as a response to my rebuttal, which I am posting here alongwith my comments. My comments are in BLUE, and BLACK. SNOTURKY's comments are in RED.


What happens if there are NO CUSTOMERS who buy the food, BECAUSE THE PRICES ARE TOO HIGH, OR IT DOESN'T REPRESENT GOOD VALUE FOR MONEY?

Yes, I would agree that if a business is not moving any product or no one is interested in their service, that the business is failing and should shut down. Like I said before, no one guarantees that you will be successful. Or no one should, anyways...

Snoturky, you are MISSING THE POINT! I am NOT suggesting that there should be any guarantees about success. The point I am trying to make is that there IS a virtual GUARANTEE that the Quixtar IBO WILL NOT BE ABLE TO RETAIL PRODUCTS, BECAUSE THE Quixtar PRODUCTS ARE OVERPRICED AND DON'T REPRESENT GOOD VALUE FOR MONEY. Thus the lower level IBOs will lose money, period.

Is this so hard to understand??!!! I am making a SPECIFIC point, and you keep bringing up generalities.

But, with Quixtar, the SO-CALLED training SYSTEM [I can't help doubling over in laughter every time I hear about the ;-) SYSTEM] that is forced upon the IBOs, THE COSTS INVARIABLY EXCEED THEIR SALES COMMISSIONS/BONUSES.

Training systems being force upon IBO's is news to be. I've been in for quite a while and I have not purchased a single training tool. I have listened to some, but I have purchased any.

Groannnnn..... I am tired of individual IBOs protesting that they have never been forced to buy any Tools or use the System. Read the feedback section of www.amquix.info. Read the feedback section on Russell Glasser's website. Read the AUS link on amquix.info. Read John Hoagland's website. Read Imran Aziz's blog. Anecdote after anecdote after anecdote!! It is strongly implied that you can't succeed without the system, and that if you really want to be on the fast-track to success, you have to go all-out in using the system - CORE, so to speak.

Plus, I myself have been to quite a few 'Open Meetings' as well as 'Seminars', and every single time, I saw the same thing. INCREDIBLE HYPE about the System.

The SO-CALLED TRAINING SYSTEM/TOOLS INVARIABLY DO NOT PROVIDE ANY INFORMATION AT ALL ABOUT RUNNING THE BUSINESS! I have listened to hundreds of tapes and CDs and they are usually HYPE about where this business is HEADED, or HYPE about how GOOD the SYSTEM is, or HYPE about how a job is not good for financial security, or that you SHOULD use the SYTEM IF YOU HAVE TO SUCCEED.

I will not deny that some of the training is not exactly "training," but is meant only to make a comparison between (the potential of)this business and others. In a traditional business, you are in direct competition with your boss. He wants to squeeze the most amount of work out of you as possible, and pay you the least he can get away with. You want to do the least amount of work you can get away with and get paid the most you can get for it.Summarizing above - No, not all of the training is helpful in building a bussiness. Is all of the advice that has ever been given to you sound advice? The real reason why there are so many CD's that are based on the subject matter that you discussed is because anyone can record a CD and it is not reviewed by anyone for content before it is published.I would love to see more CD's that teach you how to think like a business owner and not a consumer, and that actually give directly helpful information.

Oh Boy..... Not that "think like a business owner and not a consumer" tapespeak AGAIN??!!! WHAT the heck does THAT MEAN??? Sounds like something Kiyosaki would say - meaningless slogans like "Don't work for money, make money work for you"... ;-)) I will get to dissecting this bit of 'Tapespeak' in just a minute, but before that let me get back to the rest of Snoturky's statements.

So, Snoturky, you DO ADMIT that the majority of Tapes/CDs are NOT REALLY "TRAINING", but JUST HYPE. THANK YOU!!! This is the FIRST TIME I have heard a Quixtar IBO admitting this. At least you are honest about that. Now let me turn this around. So far, I have NOT heard a SINGLE CD/Tape that provided CONCRETE INFORMATION/TRAINING to run this so-called business. SAME with Seminars/Rallies/Meetings. And I have been to quite a few of each. Can YOU show us ONE?

ONE EXAMPLE of Concrete Information/Training?

Here's the thing. You DON'T need hundreds of CDs to explain "THE PLAN". I am guessing you would counter that motivation is an essential part of the business. Even Rich Devos said on his DirectlySpeakingTapes, that good, honest motivation is an essential part of the business. BUT, here's the problem, in my opinion. IF the business were TRULY LEGITIMATE (in the sense that ALL the participants would be able to make money, not just the top level IBOs who are making money off of the SO-CALLED SYSTEM), then you WOULD NOT NEED SO MUCH MOTIVATION. Showing the "PLAN" alone would be sufficient to convince a prospect to sign up.

What about the System CONFLICTS OF INTEREST? Consider this. If ALL the NEW IBOs are informed that top-level IBOs DO MAKE MOST OF THEIR INCOME FROM THE SO-CALLED TOOLS/SYSTEM, NOT QUIXTAR/AMWAY BONUSES, do you think they would blindly use the System without questioning?? And, YOU DO KNOW THAT FACT ABOUT SYSTEM INCOME, DON'T YOU?? How do you address that?

Here's a suggestion.

CREATE MP3 RECORDINGS OF THE SO-CALLED TRAINING/SYSTEM CDs. CREATE MPEG FILES OF THE LIFE-STYLE VIDEOS CREATED BY THE DIAMONDS. Put these recordings on a website. Charge all IBOs a nominal fee of $5/mnth for unlimited access to this website. Give them the freedom to burn their own CDs and use it to listen in their cars when they are traveling. CREATE A LIST OF RECOMMENDED BOOKS FOR READING ON THE WEBSITE. LET THE INDIVIDUAL IBOs PLACE REQUESTS FOR THE SPECIFIC BOOKS THEY WANT TO BUY FOR THE MONTH. After these requests are placed, the exact same no. of books are ordered by QUIXTAR CORPORATION at a bulk discount rate, and proof of purchase/price is shown to the IBOs. The total purchase price divided by the no. of books becomes the PRICE THAT WILL BE CHARGED TO THE IBOs. A nominal 10% will be added to the price for administrative costs. WEEKLY OPEN MEETINGS? How about all the local IBOs EACH do their own search and submit their proposal to find out which IBO found the cheapest venue. Naturally, the cheapest place becomes the venue for the Open Meeting, with all the IBOs splitting the cost of the venue equally.

YEAH RIGHT, THAT'S GOING TO HAPPEN ;-)) ;-)).....

NOW, just for fun ;-)), let's consider a HYPOTHETICAL SCENARIO. All the Tool/System King-pins decide to get over a new leaf (yeah sure, that's ;-D going to happen... but hey we can dream), and they do everything that I mentioned in the above paragraph. They start providing professional sales-training materials, CD/Tapes, Videos etc. Teaches you how to present yourself - firm handshake, direct eye-contact, good posture..... Teaches you how to make a fluent, effective presentation of the plan.

BUT.....

HOW do you overcome the objections that will be raised by the FUNDAMENTALLY FLAWED business model of Quixtar?

You are ASKING people to BUY OVERPRICED COMMODITY PRODUCTS and asking them to TEACH OTHERS TO DO THE SAME. IF those people are thinking clearly, and IF they are ethical, they WILL decide that it is UNETHICAL TO TELL OTHER PEOPLE TO BUY OVERPRICED COMMODITY PRODUCTS SO THAT YOU CAN GET A COMMISSION OFF OF THEIR PURCHASE. And that it IS UNETHICAL TO LEAVE A LOT OF PEOPLE AT THE BOTTOM OF THE PYRAMID HOLDING THE BAG, FOR A FEW PEOPLE TO PROFIT OFF OF THE LOSSES OF MANY.

I REST MY CASE......

Now, getting back to the "think like a business owner and not a consumer" tapespeak. What Quixbots/Ambots usually imply by this statement is that, a business owner would always only buy from his own business. AND, that it makes business and economic sense.

NOTHING could be farther from the truth. Consider the owner of a McDonald's Franchise. Let's say he considers that ALL burgers are burgers, that they are a 'commodity' - that a burger from McDonals' tastes the same as a burger from Wendy's. If so, his only consideration as regards to where he would eat a burger, would be price. Let's say, the variable costs of all the ingredients of a McDonald's Burger (i.e. the cost he would pay the McDonald's Corp. Approved Vendor, for the ingredients required to make a Burger) is $0.75. Now, let's say the variable costs of making the burger (the utilites consumed in making a burger, the time/payroll/employee costs consumed in making a burger) at his McDonald's store is $0.50. So, his TOTAL VARIABLE COST for the McDonald's Burger would be $1.25. Now, let's say, Wendy's sells the Burger for $0.99.

So, if he ate the burger at his own store, i.e. McDonald's he would be out of pocket $1.25. But, if he ate the burger at Wendy's, he would be out of pocket $0.99.

Guess WHERE the owner of the McDonald's would eat? BINGO! Give yourself an A ;-)) if you guessed, Wendy's.

The point? Monthly consumables like, soap, laundry detergent, deodorant, toothpaste, toilet-paper, shaving cream, vitamins etc. are COMMODITIES. i.e. One Brand of the product is perceived as no different from another brand.

That is to say, they are PRICE SENSITIVE. People base their decision on which brand to buy, purely on the price. So, since these Quixtar Consumables ARE overpriced, consumers OUTSIDE OF THE QUIXTAR BUSINESS wouldn't buy it.

AND REMEMBER, this business is presented as a way of making RESIDUAL INCOME! i.e. Your downline keeps consuming products every month and you keep getting a commission/bonus from Quixtar. So, it would be LOGICAL to CONSIDER ONLY regular MONTHLY CONSUMABLES in the calculation of the BONUSES/RESIDUAL INCOME, right?

BUT, the conceit (another one that drives me nuts) that Quixtar IBOs use, with the "think like a business owner and not a consumer" statement, is that Quixtar Consumables are Higher Quality (i.e. NOT commodities), and therefore a higher price is justified, and that a Business Owner would always buy from his own business, irrespective of price.

I think I can say with a fair degree of confidence, that I DEMOLISHED both of those conceits. Wouldn't you agree, Mr.Snoturky? Oh, I forgot, it was ;-)) Mr.Principle.

One of those CDs that he gave me has that famous quote, 98% of people are either dead or broke by age 65

I've never heard that statistic, but I will not argue with you about its validity. My first reaction is to agree with you on that one.

So, YOU are essentially in AGREEMENT with me, that the use of such an outdated statistic (80 years old) is not only deceptive, but just plain stupid?

Secondly, he WILL LOSE MONEY, BECAUSE HE WILL BE BRAINWASHED INTO USING A SO-CALLED TRAINING SYSTEM THAT IS TOTALLY WORTHLESS, AND WILL COST MORE THAN HIS SALES BONUSES.

I do not brainwash anyone. If I wanted someone to listen to a certain training CD, I would not make the purchase it, I would loan it to them. I would not want a starting downline to have those additional costs, just as my upline did with me - he would loan me CD's so I would not have to buy them myself.

Boy, who is this Saintly ;-)) Upline of yours? I am dying ;-)) to meet him! Heck, I am half tempted to run away and join ;-)) your Quixtar cult - obviously I would be signing up under you.... Do the Diamonds in your LineOfSponsorship know what he is ;-) doing? Trust me, don't let word reach your Diamond, he will be very ;-)) displeased. And, by no means, should this information reach the low-level IBOs in the other LOS' because they will all quit their LOS and run to sign up underneath you - and that would make their ;-)) Diamonds mad at you....

Is it just me, or do other people find it strange that every single Quixtar IBO who visits these critical sites, claims that THEIR LOS is as virtuous ;-)) as Mother Teresa??

QUIXTAR PRODUCTS CAN NOT BE RETAILED SUCCESSFULLY BECAUSE THEY ARE OVERPRICED!!

That seems to be pretty much the root of your argument. Rightfully so, I suppose, since a business is only as good as its product or service. This is only your opinion, however, and I will explain later on how even if they cost more, that it is no problem. Read next--

"even if they cost more, that it is no problem" - What's with this "even if "? Make up your mind, do Quixtar Products cost more or not?? Truth is, they ARE. And, it IS UNETHICAL to tell somebody to buy OVERPRICED COMMODITY PRODUCTS, so that you can get a commission off of their purchases. Keep in mind, Mr.Principle, the KEY WORD here is COMMODITY products! i.e. Products DIFFERENTIATED ONLY BY PRICE, NOT BY QUALITY. i.e. The Market/Consumers do NOT PERCEIVE/CARE ABOUT a SUPPOSED difference in quality between different brands.

It's funny how at first you say, "truth is that higher quality stuff costs more". Seems to me you are implying/agreeing ;-) that Quixtar products do cost more. THEN you turn around and say, "I have done a few comparisons myself quite a while ago and have found that most of the stuff is cheaper". So, what is it? Are Quixtar Products HIGHER QUALITY or are they CHEAPER???

I seem to have contradicted myself. Allow me to clarify:It is my personal opinion (for the things that I have used) and the opinions of people that I know that use the products, that they are superior in quality to anything I/they have ever used. Some things, such as probably the cosmetics, are more expensive. (Keep in mind that we are in first place by far for online cosmetic sales, despite thier price) Other things, like the laundry system and cleaning supplies, I have found to be cheaper. You cannot simply look at the size of the bottle and the price. You have to consider the concentration, the amount needed per use; there is a convenience factor as well. Would you rather have a 20 lb. box of tide or a 6.6 lb box of SA8 for approx. the same amount of washes?I have a lot of retail customers, by the way. They love the products (which is why they choose to purchase them instead of from a store) and have no issues with the price. I will copy my latest member order:
Nutrilite® Double X® Vitamin/ Mineral/ Phytonutrient – 31-day Refill * 2 = $103.30

Nutrilite® Ocean Essentials® Balanced Health * 2 = $43.10

Nutrilite® Concentrated Fruits and Vegetables – Tablets * 2 = $65.00

Freedom® Fuel Additive * 1 = $11.45total producst price = $211.40

That probably shouldn't mean a lot to you since it's all vitamins and health stuff, because the prices on those across the market vary a great deal.

"It is my personal opinion (for the things that I have used) and the opinions of people that I know that use the products, that they are superior in quality to anything I/they have ever used." Okay, buddy, let me try to get this through your head. "Your Opinion" and the "Opinions of people I know" don't mean jack in the Real World. The REAL test is - Is there broad acceptance of the product in the marketplace outside of the Quixtar IBOworld? What is the drop-out rate of new IBOs, greater than 67% right? IF the Quixtar Products were such great quality and they were cheaper, how come these IBOs didn't stay on as Members to take advantage of these products??? Quixtar IBOs trot out this argument ONLY when they are Quixtar IBOs, they don't even look back once they have quit the business.

And yes, there are MULTIPLE price studies on the critical websites, which have taken into account the concentration factor, and STILL find Quixtar Products to be OVERPRICED.

Also, here's a newsflash, buddy. Signing up somebody as a Member, doesn't automatically qualify their purchase as retail sales. BECAUSE Members can buy the products AT THE SAME PRICE AS IBOs. SO WHERE'S YOUR RETAIL PROFIT????

Nutrilite® Double X® Vitamin/ Mineral/ Phytonutrient – 31-day Refill * 2 = $103.30

$52.00 for a 31-day supply of Vitamins???? Good heavens! Man, you gotta be outta yer mind!!!! You can buy a 450-ct Multi-vitamin for $9-75. Oh, by the way, you still have to deduct $52.00 from your monthly total, because it's only $52 for a 31-day supply.

Nutrilite® Ocean Essentials® Balanced Health * 2 = $43.10

$43.10?? For Snake-Oil ;-)) ????? You gotta be kidding me, right!!?? And I see *2 - does that mean it's a 2-mnth supply? In that case, don't you think the monthly total should be $21.50??

Nutrilite® Concentrated Fruits and Vegetables – Tablets * 2 = $65.00
$65.00?????? For MORE Snake-Oil??? This isn't even funny anymore! Again I see the *2 - is it a 2-mnth supply again? So, in this case also, the monthly total is actually reduced by $32.50, right.

So, the monthly total, EVEN AT THESE INSANE PRICES, is ACTUALLY $106, not $211..... AM I RIGHT??

Am I the only one who thinks that, either, your so-called 'Member' is cuckoo, OR you just made up this fictitious 'Member'?????

And, are you saying that this is REPEAT ORDERS, every month?? Can you prove that by posting an ACTUAL SCREEN CAPTURE OF YOUR QUIXTAR PAGE??

What about the AVERAGE PV in your group? Or the AVERAGE PV in your Platinum's group? Care to show us a screen capture of that???

>>>>TELLING SOMEONE ELSE TO BUY OVERPRICED PRODUCTS SO THAT I CAN GET A COMMISSION IS UNETHICAL!!!

Do you have any concept of business at all? All products are "over-priced." Computer software, is a prime example. The newest games can cost $40 to $60 each. Then comes the similarily-priced expansion and sequels. A year later, they'll be selling all 3 in a single box for $15. Still makin a profit? You bet.

Read my rebuttal above. The Quixtar Business model is sold to prospects on the Promise Of Residual Income. And that promise is predicated upon Repeat Purchases every month by your down-line. Those repeat purchases happen to be monthly consumables. And these monthly consumables are nothing but COMMODITY PRODUCTS. NO RATIONAL person will pay a premium price for a commodity product. The ONLY reason Quixtar IBOs buy these overpriced products is that, they want their down-line to emulate them, which is their key to earning bonuses from Quixtar.

So you think that making money "off of other people" is bad? The all jobs are evil. I have no problem selling a product to someone where I make a commission from their purchase. That is the way all business in the world works. They have a choice to buy it or not. If it is a higher price than my competitors, they can pay it or buy another product.

No, I DID NOT say making money "off of other people" is bad. I said, making money by deceiving other people to buy overpriced products is unethical. Yes, people do have a choice. But if people in Quixtar exercised their choice rationally, they would not buy Quixtar Products because they are overpriced. BUT, IF they did that, they WOULD NOT BE ABLE TO TELL THEIR DOWNLINE TO PURCHASE QUIXTAR PRODUCTS, WHICH IS ESSENTIAL TO THEIR EARNING A BONUS, AND IN THE LONG-TERM GENERATING RESIDUAL INCOME. Repeat this argument down each layer of IBO, down to the last level.

Quixtar IBOs are repeatedly told to be 100% loyal to Quixtar Products. Remember your own "think like a business owner and not a consumer" statement? WHAT are you implying by the statement? That Quixtar IBOs SHOULD NOT EXERCISE CHOICE, and SHOULD BUY ONLY FROM QUIXTAR, right?

You are comparing apples to oranges. Pretend you walk into a Holiday Inn express and find out that you can get a single room for $45 for a night. Then you walk down the street to a Radison where they price a single room at $135. Would you tell them, "What?! I can get a room at the Holiday Inn down the street for only 45 bucks! This is an outrage!" No, of course you wouldn't. Holiday Inn is a cheap, value-priced stay. Radison is an expensive quality stay. Different business models.Quixtar's business model is not Target's business model. Target's business is super-discount store. Mediocre products, low customer service for a low price. Quixtar choses high quality products at a (sometimes) slightly higher price (although they produce all of the products themselves, so they are able to sell them competively and still make much more than other cmopanies) and give superior customer service. You have 180 days to decide if you like the laundry soap you bought. Did you use 90% of the box? That's too bad, they are going to give you all you money back anyways AND pay to ship that 10% back to them.

You are comparing apples to oranges. NO, YOU ARE DEAD WRONG! I AM NOT!

I will say this sloooowly, again, so you can understand.... Monthly consumables like, soap, laundry detergent, deodorant, toothpaste, toilet-paper, shaving cream, vitamins etc. are COMMODITIES. i.e. One Brand of the product is PERCEIVED as NO DIFFERENT from another brand. The Market/Consumers do NOT PERCEIVE/CARE ABOUT a SUPPOSED difference in quality between different brands.

NO RATIONAL person will pay a PREMIUM PRICE for a COMMODITY PRODUCT!!!!!

Okay, now let's consider your HolidayInn vs. Radisson example. I agree consumers would not decide which one to choose based on the price. BECAUSE they are NOT COMMODITY PRODUCTS/SERVICES. Consider another example.

Do you know the difference between Quartz Watches and Mechanical Watches? If not, let me explain the difference.

Quartz Watches are operated by an electronic mechanism which is powered by a battery. The power source that drives the movement of the watch hands, is electric/electronic. It is distinguished by a 'ticking' of the 'seconds' hand. The 'seconds' hand 'ticks' from one second-marker on the watch to the next second-marker, quickly at the end of each second elapsed. It is not a continuous movement, but a tick-stop-tick-stop kind of movement. They are very cheap to produce and are mass manufactured in the hundreds of thousands in China, Japan etc. Quartz watches therefore tend to be cheap. BUT, they are the MOST accurate in terms of keeping time.
Mechanical watches are operated by the 'kinetic' energy that is imparted by the movement of your wrist to the 'rotor' inside the watch. Consider a flat metal circular disc. Now draw a line from the center of the disc to its circumference. Draw another line, say, about 45 degrees apart from the center of the disc to its circumference. The region defined between these two lines and the circumference of the disc is called a 'sector'. Now if you cut this 'sector' out of the disc, it would look exactly like a 'rotor' inside a mechanical/automatic watch. This sector/rotor is pivoted at the center of the movement inside the watch. Because of the greater mass of the rotor at the circumference relative to its mass at the center where it is pivoted, depending on the position of your wrist, the rotor will rotate due to the gravitational force acting on it. It is this rotating motion that 'winds' a spring inside the movement. And it is the 'un-winding' of this spring that provides the motion to the 'hands' of the watch. The 'seconds' hand moves in a smooth 'sweeping' fashion, unlike the tick-tock movement in a Quartz watch. If you look at a movement like this, it looks pretty complicated. Lots of moving parts. Also, this kind of watch has to be assembled manually by an experienced watchmaker, because of the tiny nature of the parts/components/screws/gears/springs etc. Naturally, because this process is not automated, and not like mass-production, the cost of producing these watches tend to be higher than Quartz watches. Plus the cost of components is also higher. BUT Mechanical watches tend to be LESS accurate than Quartz watches when it comes to keeping time.

This 'Craftsmanship' conceit , and the idea that a Mechanical watch is more expensive to manufacture, is what Swiss Watch Manufacturers use, to charge premium prices for their watches. But, consider this. The mass manufacturing of the components for mechanical watches has reduced the price of components significantly over the years. Seiko (Japan), also makes Mechanical Watches. You can buy them for around $200. And, what is the price of one of the cheapest Rolex models, the 'Submariner'? Around $4,000. Do the people buying Rolexes, know that they are essentially buying a very overpriced watch? SURE, they do. I myself have three of them. Here's the thing. Swiss Watches like Rolex are marketed as 'luxury', premium products for rich folks. Most people buy a Rolex and other Swiss watches for its 'show-off-value'. To show that they have 'arrived'. Some people buy it because they like mechanical watches (take a look inside a mechanical watch, it's a thing of beauty). Another thing is that Swiss Watch Manufacturers make VERY HANDSOME looking watches. No other country comes even close, when it comes to DESIGN of watches, in my opinion. To ME, this, alongwith the mental image of all those mechanical parts moving in perfect mechanical harmony ;-), is the appeal. Do you buy an expensive Swiss Watch to 'keep time'? Heck no ;-), that is just a secondary function. And it doesn't do that very well either. Although mechanical movements have improved in terms of accuracy, Quartz watches are still the most accurate.

If you just wanted a utilitarian watch to keep accurate time, you would buy a cheap Timex (a commodity product). When you want a 'Premium Product' with all the associated imagery, you buy a Swiss watch.

BOTTOMLINE, LET ME REPEAT THIS AGAIN. Monthly consumables like, soap, laundry detergent, deodorant, toothpaste, toilet-paper, shaving cream, vitamins etc. are COMMODITIES. i.e. One Brand of the product is PERCEIVED as NO DIFFERENT from another brand. The Market/Consumers do NOT PERCEIVE/CARE ABOUT a SUPPOSED difference in quality between different brands. QUIXTAR CONSUMABLES are ALSO COMMODITY PRODUCTS.

NO RATIONAL person will pay a premium price for a commodity product!!!!!

Newsflash, Mr.Principle! ALL Franchises SELL/RETAIL a specific product, they DON'T prospect a customer to sell him another franchise. That's the TRUE DEFINITION OF A FRANCHISE.

Ever heard of Ray Kroc? He went around looking for people that wanted to own a restaurant. He set them up with their very own restaurant, and only asked for 2% of their monthly earnings. That was called McDonald's. They very definition of a franchise is granting another person distribution rights of a company's goods or services. That means that you do not own a franchise at all until you have given someone sales rights.

First, I made a typo, when I wrote that statement. The correct word, should have been FranchisEE, instead of FranchisE.

Now. Snoturky, I am going to speak sloooooowly again, so you can understand.

Repeat after me, Ray Kroc/McDonald's Coprn. is the FranchisOR. Repeat two or three times. Memorize it.

Now, let's assume that you OWN a McDonald's store.

Now, repeat after me, you/McDonald's-Store-Owner are the FranchisEE. Repeat two or three times. Memorize it.

The FranchisOR, i.e. Ray-Kroc/McDonald's-Coprn. grants you, the FranchisEE, Franchise Rights and collects a royalty, off of your sales. McDonald's Coprn., i.e. the FranchisOR, also makes sure that there won't be any Competing FranchisEEs, within a specific geographic region around your store. i.e. McDonald's Corpn., the FranchisOR will make sure that there will NOT be any unhealthy competition between you and another FranchisEE, and thus your business can survive and prosper.

You, as a FranchisEE, do NOT have any right to grant /sell Franchise Rights to a customer who walks into your store. i.e. YOU can not decide who else gets to become a FranchisEE. If you do not sell any hamburgers, i.e. make retail sales, you will go out of business!!

SEE THE DIFFERENCE???? If you still don't get it, you are beyond help ;-) buddy.

Just as a side note - You shouldn't post in caps so much. I understand that it's easy to write in all caps when one is frustrated, but it's very distracting to read and does not speak well about the writer. :)

Okay, I am posting in Caps, because I am trying to EMPHASIZE that particular word/phrase/sentence. Sometimes, I want a few words or sentences to stand out in a whole paragraph, so that the reader walks away with that image in their mind, hopefully well-entrenched. Remember, I am a man on a :-)) mission, right?? It's not because of frustration, ALTHOUGH, I have to admit, sometimes it is INDEED frustrating when I have to write pages and pages to explain a SIMPLE concept ;-).

THE DEBATE CONTINUES........

"PRIVATE FRANCHISE"?? YEAH, ;-)) RIGHT!

A reader (SNOTURKY) posted some interesting comments on my previous post, HOW I GOT INTO THIS.... . In my rebuttal to that comment of his, I got a chance to get into the whole 'Private Franchise' Conceit, that Quixtar IBOs frequently use when presenting the plan. Quixtar/Amway IBOs are taught to use a lot of analogies that on the surface look valid, but have no substantive validity. This 'Private Franchising' analogy is one that they use a lot, especially to justify the use of the System. Of all the conceits that Quixtar/Amway IBOs use, this is the one that ticks me off the most - because the analogy is TOTALLY BASELESS. I am posting SNOTURKY's comments and my rebuttal here, and I will let you, the reader decide... SNOTURKY sent a second counter-rebuttal to my rebuttal, which I will post along with my rebuttal to that, on the next post.

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  SNOTURKY -> I agree with your principles, but I don't think you understand the business completely.It is a simple franchise, it just looks funny because it doesn't cost a million to open and upkeep. Compare it to Taco Bell. I could own a Taco Bell, or several if I wanted to. I could sell one of my Taco Bell's to someone else, and take a cut of their sales, whether they buy the tacos or their customers do. Same Idea.I'm sure you'll say that if everyone owns a Taco Bell, no one can make any money. Yup, that's absolutely right... and no different than any other business on Earth. That is also why they have a requirement to have certain sales to non-owning customers every month.Now you're going to tell me that some people aren't honest about whether they meet those reqs or not.You are trying to claim that the business is illegal because some people who use it do unethical or illegal things.Better outlaw knives because someone might use one illegally.I do not necesarilly agree with what certain people in the business do, what they have told people to do, or what they have said about the business, but I can say this - The business itself is totally legitimate.The easiest way to sum up the business model is this:Pretend that you have a choice to shop at Target or K-Mart. Target is just Target, but K-Mart will give you a % savings based upon the amount of money you spend there. And what's more, is that your friend can do it to. He will get his savings, but you'll get a referal fee as well.You can talk about the products all you want, but the truth is that higher quality stuff costs more. I have done a few comparisons myself quite a while ago and have found that most of the stuff is cheaper, not to mention far better.All the business is asking you to do is to change your buying habits and drive business to the internet. You buy everything you from your own company. Don't penny pinch. If you are complaining because you could spend all the time it takes to hop in you car, spend gas, put wear on your car, fight traffic, waste money on spontaneous buying, wait in line, haul groceries to the car, drive home, haul them into the house, and save 12 cents, then this. or any business, is not for you. You have to think like a business owner, not a consumer.Quixtar, nor anyone, guarantess that you will make money from only buying stuff. In no business in the world can you make money without providing a good or service. It is up to you to find customers in order to start making money.Also consider this: Could you make a successful Quixtar business without ever signing up a single IBO? Of course you can. Then you are not a franchise owner, but a product marketer. Some people do that.

SNOTURKY -> I agree with your principles, but I don't think you understand the business completely.

PERCEPTIVE -> GLAD to know that you agree with my principles. I presume you are referring to CHRISTIAN principles, and I presume I don't have to explain what they are? So, IF I prove to you that the Quixtar Business is inherently UNETHICAL, you WILL QUIT the business, right? And you WILL TELL all the other people that you have RECRUITED, to QUIT? Promise me that?

SNOTURKY -> It is a simple franchise, it just looks funny because it doesn't cost a million to open and upkeep. Compare it to Taco Bell. I could own a Taco Bell, or several if I wanted to. I could sell one of my Taco Bell's to someone else, and take a cut of their sales, whether they buy the tacos or their customers do. Same Idea.

PERCEPTIVE -> Okay, so you sell one of your Taco Bells to someone else, and take a cut of their sales - I guess you are referring to a partnership here? Now what happens if you and that guy (the two OWNERS of this Taco Bell franchise) are the only ones who consume the Tacos sold at this franchise? What happens if there are NO CUSTOMERS who buy the food, BECAUSE THE PRICES ARE TOO HIGH, OR IT DOESN'T REPRESENT GOOD VALUE FOR MONEY? The business would SHUT DOWN, right? Okay. Now, what if YOU KNEW that the PRICES ARE TOO HIGH AND IT'S NOT GOOD VALUE FOR MONEY, I.E. CUSTOMERS OUTSIDE OF THE BUSINESS WOULDN'T BUY IT (as IS the case with Quixtar)? And, let's say, INSPITE OF KNOWING THIS TRUTH, YOU DID NOT TELL THE POTENTIAL BUYER OF THE FRANCHISE, THIS UNCOMFORTABLE TRUTH, AND HE ENDS UP BUYING THE FRANCHISE AND LOSING MONEY. Would you agree with me, that WHAT YOU DID HERE WAS UNETHICAL? Let's take this further. Quixtar/Amway IBOs constantly talk about McDonald's Franchisees having to go Hamburger University for training, and compare the SYSTEM to that. Here's the DIFFERENCE. McDonald's Franchisees have to go to Hamburger University ONLY ONCE, and the cost of the training is ONLY A FRACTION OF THE SALES FOR A STORE. Sure, they will have ongoing updates to their training when new products or systems are introduced, but again, the COSTS ARE A VERY VERY SMALL FRACTION OF THEIR SALES. But, with Quixtar, the SO-CALLED training SYSTEM [I can't help doubling over in laughter every time I hear about the ;-) SYSTEM] that is forced upon the IBOs, THE COSTS INVARIABLY EXCEED THEIR SALES COMMISSIONS/BONUSES. PLUS, McDonald's/TacoBell WOULD NEVER NEVER EVER GIVE INDIVIDUAL FRANCHISEES A CUT OF THE TRAINING SYSTEM COSTS!!!! I am sure you will counter with the argument that these costs are an investment, and that eventually their sales bonuses will exceed the cost of the system. But HERE's the rub. The SO-CALLED TRAINING SYSTEM/TOOLS INVARIABLY DO NOT PROVIDE ANY INFORMATION AT ALL ABOUT RUNNING THE BUSINESS! I have listened to dozens of tapes and CDs and they are usually HYPE about where this business is HEADED, or HYPE about how GOOD the SYSTEM is, or HYPE about how a job is not good for financial security, or that you SHOULD use the SYTEM IF YOU HAVE TO SUCCEED. The second kind of CD/Tape, can be summarized in THREE SENTENCES - JOB, NOT GOOD, NO SECURITY. CONVENTIONAL BUSINESS TOO RISKY. ONE BUSINESS GOOD, THE AMWAY/QUIXTAR BUSINESS. ;-)) LOL!! No kidding! I have listened to dozens of tapes whose message can be summarized to essentially those three sentences! And each of these THREE sentences are usually supported by UNSUBSTANTIATED/UNLIKELY ANECDOTES, OUTDATED STATISTICS, BLATANT FALSEHOODS, HALF-TRUTHS etc. I am being prospected by a guy (decent Christian guy, but totally deluded) right now, who is in the DexterYager System, and he gave me some CDs to listen to. I am reeling him in slowly, I am going to buy him and his wife a nice lunch this Sunday after church, and then poke holes in his whole presentation and then try to DE-CULTIFY ;-)) him. One of those CDs that he gave me has that famous quote, 98% of people are either dead or broke by age 65 - I will let the readers read this link and decide for themselves, the accuracy of that statement. http://amquix.info/amway_retirement_legend.html

SYSTEM, MY FOOT! Gimme a break!!

So, to SUMMARIZE, the Taco Bell Franchise that you sold to another guy and that you are taking a cut off of the sales - the Guy who bought the franchise WILL LOSE MONEY, BECAUSE THE PRODUCTS ARE NOT GOOD VALUE FOR MONEY, AND HE CAN'T RETAIL THE PRODUCTS TO CONSUMERS WHO ARE NOT IN THE BUSINESS. Secondly, he WILL LOSE MONEY, BECAUSE HE WILL BE BRAINWASHED INTO USING A SO-CALLED TRAINING SYSTEM THAT IS TOTALLY WORTHLESS, AND WILL COST MORE THAN HIS SALES BONUSES. Thirdly, YOU HAVEN'T TOLD HIM THAT YOU HAVE A CONFLICT OF INTEREST BECAUSE YOU WILL ALSO GET (WHEN YOU REACH DIRECT) A CUT OF THE COST OF THE TRAINING SYSTEM!!

So, IT WOULD BE UNETHICAL FOR YOU TO SELL THIS FRANCHISE TO HIM, RIGHT? And, YOU BEING THE PRINCIPLED, CHRISTIAN GUY, YOU ARE GOING TO STOP DOING THIS RIGHT? And, ALSO INFORM YOUR OTHER RECRUITS ABOUT THE TRUTH?

SNOTURKY -> I'm sure you'll say that if everyone owns a Taco Bell, no one can make any money. Yup, that's absolutely right... and no different than any other business on Earth. That is also why they have a requirement to have certain sales to non-owning customers every month.Now you're going to tell me that some people aren't honest about whether they meet those reqs or not. You are trying to claim that the business is illegal because some people who use it do unethical or illegal things. Better outlaw knives because someone might use one illegally.

PERCEPTIVE -> GREAT! So, you DO ADMIT that RETAILING is the ONLY way to PROFITABILITY! But, here's the problem - QUIXTAR PRODUCTS CAN NOT BE RETAILED SUCCESSFULLY BECAUSE THEY ARE OVERPRICED!! If any reader doesn't agree with me, he/she can become a member for $20 for a year, and do a price comparison themselves. Or go through all the links on the above post, which have price comparisons. Also, tangentially you brought up the problem of OVERSATURATION and UNHEALTHY COMPETITION in a specific market. Tim, on the RandomObservations Blog did a FANTASTIC job of addressing this issue. I will let the readers read this thread and make up their minds. Readers might also want to click on the 'Quixtar' link on his blog under the 'Topics' section and read all his posts. MARVELOUS EXPOSITION of the economics of this so-called 'business'.

SNOTURKY -> I do not necesarilly agree with what certain people in the business do, what they have told people to do, or what they have said about the business, but I can say this - The business itself is totally legitimate.

PERCEPTIVE -> Okay, let's see. RICH DEVOS (after clicking on the link, scroll down about half-way to read what he had to say), one of the FOUNDERS of the company himself, talked in his DirectlySpeakingTapes (you can listen to it at www.amquix.info) about all the abuses, deceptions, income misrepresentations, system-money, conflicts of interest, cult-like-tactics etc. ALMOST 25 YEARS AGO. THEY WERE AWARE OF IT 25 YEARS AGO, AND THEY WERE AWARE THAT IT WAS NOT AN ISOLATED PROBLEM BUT IT WAS A BROAD SYSTEMIC PROBLEM!! HE SAID THEY WOULD CRACK DOWN ON IT, BUT DIDN'T!! AND THE PROBLEMS, CONTINUE TO THIS DAY! THE VERY SAME, EXACT PROBLEMS!!! We are NOT talking about the isolated IBO doing something unethical! THIS IS A SYSTEMATIC PROBLEM THAT HAS CONTINUED, WITH THE KNOWLEDGE AND COMPLICITY OF THE AMWAY/QUIXTAR CORPORATION'S OWNERS, FOR 25 YEARS!!!!!!!!!!

SOME LEGITIMACY, THAT!!!

SNOTURKY -> You can talk about the products all you want, but the truth is that higher quality stuff costs more. I have done a few comparisons myself quite a while ago and have found that most of the stuff is cheaper, not to mention far better.

PERCEPTIVE -> Higher ;-)) Quality? Do you have any independent studies/reports to support that contention? If so, PLEASE do tell us about it. Although I won't be holding my breath.

It's funny how at first you say, "truth is that higher quality stuff costs more". Seems to me you are implying/agreeing ;-) that Quixtar products do cost more. THEN you turn around and say, "I have done a few comparisons myself quite a while ago and have found that most of the stuff is cheaper". So, what is it? Are Quixtar Products HIGHER QUALITY or are they CHEAPER??? CARE TO POST YOUR PRICE COMPARISON HERE?

SNOTURKY -> Pretend that you have a choice to shop at Target or K-Mart. Target is just Target, but K-Mart will give you a % savings based upon the amount of money you spend there. And what's more, is that your friend can do it to. He will get his savings, but you'll get a referal fee as well.

PERCEPTIVE -> Yes, but, K-Mart products ARE COMPETITIVELY-PRICED!! So, it is easy to refer somebody else to buy from there, and even if you didn't, you still get good value for the money on the product that YOU purchased. Again, I REPEAT, QUIXTAR PRODUCTS ARE OVERPRICED!!!

SNOTURKY -> All the business is asking you to do is to change your buying habits and drive business to the internet. You buy everything you from your own company. Don't penny pinch. If you are complaining because you could spend all the time it takes to hop in you car, spend gas, put wear on your car, fight traffic, waste money on spontaneous buying, wait in line, haul groceries to the car, drive home, haul them into the house, and save 12 cents, then this. or any business, is not for you. You have to think like a business owner, not a consumer.

PERCEPTIVE -> Oh boy, here we go again! The ESSENCE/THRUST of my post above, ITSELF, is my rebuttal to this! But I will explain again. QUIXTAR PRODUCTS ARE WAY OVERPRICED! YOU ARE NOT PENNY-PINCHING WHEN YOU COMPARE PRICES WITH OTHER RETAIL STORES LIKE WAL-MART. YOU ARE JUST BEING SMART!!! TELLING SOMEONE ELSE TO BUY OVERPRICED PRODUCTS SO THAT I CAN GET A COMMISSION IS UNETHICAL!!!!!

Better yet, why don't we do this. You cut and paste your total purchases for your own use through Quixtar for the last 12 months here. JUST YOUR SHOPPING CART. None of your identity/c.c. related data. Show us how you spend $250/mnth, and show us how you do a 100 PV every month. Hold on, let me up the ante a little. If you are a Platinum, show us your TREE, the people in your down-line, how many people you have underneath you, and how much is the AVERAGE PV in that group. OR, if you are NOT Platinum yet ;-), why don't you ask your Platinum to post that information here? HE WILL, BELIEVE ;-)) ME!! 'wink' 'wink'

SNOTURKY -> Also consider this: Could you make a successful Quixtar business without ever signing up a single IBO? Of course you can. Then you are not a franchise owner, but a product marketer. Some people do that.

PERCEPTIVE -> Newsflash, Mr.Principle! ALL Franchises SELL/RETAIL a specific product, they DON'T prospect a customer to sell him another franchise. That's the TRUE DEFINITION OF A FRANCHISE.

QUICK NOTE TO THE READER. IN THAT LAST PARAGRAPH (Newsflash, Mr. Principle!........OF A FRANCHISE.) THE CORRECT WORD SHOULD HAVE BEEN 'FRANCHISEE'. KEY POINT, IN MY REBUTTAL, TO THE REBUTTAL THAT SNOTURKY SENT, IN RESPONSE TO THIS. I will be posting it shortly.