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Revision as of 23:51, 29 July 2005

Quixtar is a multi-level marketing company, founded in 1999 by the owners of Amway. Quixtar is owned by Alticor which also owns Amway. Quixtar took over the Amway business operations in the United States, Canada and the Caribbean between 1999 and 2001, replacing Amway as the marketing venture for products such as Nutrilite vitamins, XS Energy drinks and Artistry cosmetics in those North American regions.

Business

People can join Quixtar as "Clients," "Members" or "Independent Business Owners" (IBOs). IBOs pay a registration fee and build their businesses through retail sales (to clients and members) and by helping other IBOs build similar businesses. Their earnings are based on sales and the volume of sales and purchases of other IBOs recruited below them. The primary way to join and buy products at Quixtar's web site is with a referral number from an IBO. Quixtar sales for fiscal year 2003-2004 were over $1.1 billion with over $373 million paid out in bonuses and incentives.

Quixtar offers a wide range of products for its IBOs to purchase and sell through the Quixtar.com website.

Quixtar's exclusive products include Nutrilite, a vitamin/supplement line; Artistry, a cosmetic line; and XS, an energy drink.

In 2005 Quixtar was ranked the 14th largest ecommerce site, in terms of revenue, by Internet Retailer and in the same survey the number one site in the health and beauty category.

Controversy

Quixtar and its predecessor Amway have been controversial for years because of allegations that these companies are pyramid schemes. Critics claim that most of the products sold by Quixtar are to its network of IBOs for personal consumption rather than to retail customers. Because there is no mechanism in place to distinguish personal consumption from retail sales many IBOs practice the "buy from yourself and teach others to do the same" method of multi-level marketing. The sales made through the Quixtar website does allow the IBO to distinguish personal consumption and retail sales but it is a flawed system in the sense that the IBO can label the goods purchased for personal use to retail sales at their individual descretion. This will ensure that they (the IBOs) get a larger monthly check from Quixtar. By this loophole, Quixtar IBOs can by pass the 1979 Federal Trade Commission Ruling. See Litigation below.

There is also a great deal of controversy surrounding the "Amway/Quixtar Motivational Organizations" (AMOs or AQMOs) owned and operated by high level distributors. Quixtar and the AMOs claim that the business skills of IBOs are honed by the business support materials, or "tools," that are sold by the motivational organizations, and that the support material can be of help to an IBO if he wants to build a big business. Furthermore, during the registration process, IBOs are required to accept an agreement that is intended to make the new distributor aware that the business support materials - books, tapes, CDs, informational literature, seminars, etc. - are purely optional and that requires the above-mentioned AMO/AQMO's (also known as LOA, or Line Of Affiliation) to buy back any defective or unwanted business support materials within a reasonable time frame.

Critics, however, charge that many of the AQMOs do not provide reasonable terms for refunds and can exert pressure to induce participants into purchasing large amounts of these business support materials and to attend costly motivational seminars. Moreover, the sale of the motivational tools to IBOs down the line is described as the "business within the business" of Quixtar from which the high level distributors make the majority of their income. Undercover investigations (like one done by MSNBC Dateline in 2003-04) also suggest that most the money being earned by the top-level distributors was coming from the hidden "tools" business rather than through selling the products of Quixtar.

Information Control

In the summer of 2004, Quixtar launched a sophisticated Web initiative designed to manipulate search results. The "Web Reputation Task Force" tried to influence search engines in such a way that links to sites critical of the Quixtar business would be replaced by links to sites Quixtar controlled. The Task Force's primary tactic was a form of Google bombing that vigorously exploited blogs.

On several occasions, users operating from IP addresses belonging to Alticor, Quixtar's parent company, have made changes to Misplaced Pages entries for Quixtar, Amway, and Google bomb in order to remove information pertaining to the company's Google bombing attempt. The changes were quickly reversed; however, such practices serve as an example of the company's constant attempts to suppress criticism of its business.

Many critics of MLMs and Network Marketing, have created both positve and negative websites against a successful company. It is up to a user to make a choice on who to trust based on experience and success in any business. Anybody can write whatever they want on the internet. The choice is yours. Talk to a successful person you get positive feedback. Talk to a unsuccesful person you get negegative feedback.

Litigation

In a 1979 ruling, the Federal Trade Commission determined that Amway was not an illegal pyramid scheme because it enforced rules requiring distributors to sell to at least 10 retail customers per month and to sell 70% of the products to customers. Critics state that Quixtar does not enforce the retail sales rules. Quixtar maintains that the 70% rule is only meant to prevent product stockpiling to achieve certain bonuses.

External links

• Quixtar
• Archive of Quixtar information
• Quixtar's Official Facts Site
• Quixtar Blog - One man's perceptions of Quixtar
• Dateline NBC's story about Quixtar
• Quixtar's Response to Dateline Story

• Multi-level marketing