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QuixtarQuixtar is a multi-level marketing company, founded in 1999 by the owners of Amway . Quixtar is owned by Alticor which also owns Amway. It employs a compensation system similar to Amway's and is the marketing venture for products such as Nutrilite vitamins, XS Energy drinks and Artistry cosmetics in the United States and Canada. Between 1999 and 2001, Quixtar took over the Amway business operations in the United States and Canada. Business People can join as "Clients," "Members" or "Independent Business Owners" (IBOs). IBOs pay a registration fee, and begin building their businesses through retail sales (to clients and members) and helping new business owners build businesses. Their earnings are based on their 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 as well as many products manufactured and marketed by third parties. Quixtar IBOs, members and clients can also access the Internet sites of Quixtar's many "partner stores" through the Quixtar website. Controversy However, 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 the IBOs themselves for personal consumption rather than to retail consumers who aren't enrolled as IBOs. Buying products from Quixtar gives IBOs points and they are paid back on the number of points that they generate from personal consumption. It is claimed to be a business oppurtunity and hence an existing IBO can help others to get an IBO number and divert their buying habit from other stores to Quixtar. Thus the business grows as more number of people join the group. The share of profit is based on the leverage that an IBO has. The business skills of the IBOs are honed by business support material and tools sold or provided by select distributors within the higher ranks of the organization. It is claimed that the support material can be of help to an IBO if he wants to build a big business, however undercover investigations like one done by MSNBC Dateline in 2003-04 suggest that most the money being earned by these distributors was coming from the hidden "tools" business rather than through selling the products of Quixtar. In 2005, what would go down as perhaps the biggest train wreck in public relations history occurred. Quixtar orchestrated an attempt to drown out sites reporting deceptive practices and negative opinions. The "Quixtar Web Initiative" was flagged as Google bombing, a flagrant violation of Google's Quality Guidelines. 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 retail 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. Independent Media TV has reported that the paperwork involved in an endless stream of lawsuits filed against Amway, Quixtar, and its distributors over the past 2 decades would probably fill a 10 story office building. The complaints and discovery documents filed in these actions outline 20 years of fraud perpetrated on millions of unwitting and vulnerable recruits all over the world. External links Criticism Resources
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