Welcome information seekers! This site presents common sense business analysis and realistic views of the Amway business. Quixtar has changed its name back to Amway (Amway Global!), since the Quixtar name became quickly tarnished in its short 9 year life. If you are looking at Amway as a way to make some money, you will want to take some time to understand how it works and what the typical pitfalls are. This site is here to give you information that your sponsor usually will not give you. It will also spark your curiosity to ask better questions so you can make an informed decision.
You should perform a higher level of due diligence compared to other business investments. You will not only be risking your time and money, but that of your friends you recruit. Don't risk your time, money and reputation on inadequate research.
For me, the Amway Global business is a fascinating combination of economics, misinformation, and group psychology that form America's most popular commercial cult. The book about Amway titled the "cult of free enterprise" is justly named so.
The heart of the Amway Global / Quixtar debate lies with motivational tapes, books and seminars sold by the top distributors. After a little study of the business, it is apparent the real reason to be in Quixtar is not to sell Amway Global products but to sell the more profitable motivational materials (tools).
Quixtar is the reincarnation of Amway North American. Amway Global is the reincarnation of Quixtar. Many of the inefficient and time consuming distribution and payment methods from Amway have been eliminated with Quixtar. However, the prospecting methods and information control are all still very much Amway. Prospects are still presented an over simplified business plan where they can easily earn thousands of dollars per month working just 8-12 hours per week by just teaching others how to shop for themselves at Amway Global. Talking to prospects about "selling" is usually taboo in the business.
The typical Amway/Quixtar dream is to "retire" from a day job with unlimited time and financial freedom. For those wanting to achieve this dream with the "2-5 year plan", the business becomes a way of life consuming every spare moment of time, and their complete mental attention. Unfortunately the 2-5 year plan is nothing more than an elusive dream and most participants will lose time with their families, and thousands of dollars a year. For many, the Amway dream turns into a personal financial nightmare as distributors spend thousands of dollars on their upline's optional but necessary support system of motivational conferences and tapes.
The general public does not take time to understand the poor overall economics of Quixtar's "buy from your self" product merchandising plan. Federal Trade Commission pyramiding regulations require companies like Amway/Quixtar and their Lines of Affiliation to sell a majority of their volume to non-distributors to avoid being an illegal pyramid scheme. In reality most distributors have no customers besides themselves. An active Quixtar distributor could spend a couple of thousand dollars and hundreds of hours per year to promote a business model that has just a few thousand dollars of sales, with most sales to the distributor himself. When you add up the actual cost of time used to promote this scheme and compare it to the volume of product sold, it is has to be the world's least efficient product marketing method. Distributors are taught "If the dream is big enough, the facts don't count". The facts make little difference to most distributors since they are taught to believe their dream is possible for anyone willing to just work hard enough and recruit enough people to the pyramid.
Because of the complexity of the Quixtar pyramided compensation plan and distributor's lack of knowledge of how it works, high level distributors use the "carrot on the stick" approach to get their downlines to voluntarily work for below minimum wages recruiting others to the scheme in exchange for hoping to one day make the big money themselves. The six figure income is just around the corner for the little guy and all he has to do is work just a little harder and show a few more plans to become "financially free". Most distributors don't know the average qualifying diamond only grosses $150,000/year from Quixtar and not the millions implied from their speeches, and that is before their business expenses are subtracted. The millions of course come from their motivational systems where they help many of their downlines to lose thousands of dollars per year.
Quixtar releases very few income statistics about the business. Rightly so, since it would be embarrassing for Quixtar to publish the facts that contradict the popular income myths and exaggerations circulating in the various lines of sponsorship. What little Quixtar does publish is that the average distributor earning a bonus made $78/month, before expenses. Even if the typical active Quixtar distributor spent just 10 hours per week working his business, he would earn just $1.90/hour for his effort before expenses are included, or $0,95/hour for couples. The typical system related expenses can range from $175 - $250/month and this does not include product purchases. More over, most distributors will not even earn enough from Quixtar to pay their mileage deductions for their cars. No doubt the vast majority of distributors are losing money in the business. Only by retailing products efficiently to customers or by creating their own army of under compensated, money losing distributors will a distributor manage to make an efficient wage.
One must turn outside the world of business -
to religion and
Because the Quixtar prices are so high, it is difficult to get retail customers, so distributors end up buying most of the products. It is their duty as a Quixtar business owner. Quixtar's 66% first year drop out rate and IBOs low average personal consumption only proves that the typical family cannot find much value shopping at Quixtar even with the "wholesale" prices.
I like to call the Amway / Quixtar business "Americas most respected fraudulent marketing scheme". This is because the vast majority of people see Amway as an American free enterprise success story, but few people know about the scheme's dark secrets. The vast majority of the public, politicians, Amway/Quixtar's suppliers and Partner Stores, have no idea of the 20 year systematic fraud and collusion between the Amway Corporation and the king pin distributors of the IBOA. This has resulted in hundreds of millions, if not billions, of dollars in losses from innocent, hardworking people from their "free enterprise" business opportunity based upon false information, exaggerations, lies and popular myths.
"Recruits are brainwashed into spending a fortune on peripherals while consuming Amway products. They either lose their shirts or begin making money by getting enough people underneath to do the same." Don Gregory speechwriter for Co-founder Jay Van Andel Forbes March 25, 1985
The business has strayed far afield from the original intentions of its founders as being a way for the little guy to make a little extra money by retailing products. Instead, it has turned into a symbiotic relationship between the corporation and a few king pin distributors supporting each others interests to take the little guy's money with cult tactic training materials and overpriced products.
The relationship between the corporation and its top king pin distributors is unique. The Corporation could not survive without the misinformation and false income claims spread by the kingpin's systems introducing people to Amway/Quixtar products business. At the same time, the king pin's motivation businesses could not survive without the legitimacy, political and legal support provided by the billion dollar Alticor/Quixtar/Amway Corporations."I was taught and therefore taught that the system was put in place to assist people in building their "Amway" business. This is as far from the truth today as you can get as when you are making 80% of your income off of the system, it is totally reversed, Amway is in place so people can sell their system!" Don Lorencz: Former Diamond Direct Distributor
Other Lorencz Quotes
Distributors advertise a jackpot payoff of time and financial independence just by building communities of Quixtar consumers. However, the financially independent multi-millionaires are really the kingpin distributors bilking their downline with high pressure sales techniques for their tape and seminar systems. These systems are technically illegal pyramid schemes since they sell most of their products within their own groups who hope to one day make money from these materials as well.
The tapes and seminars, otherwise know as "tools", brainwash distributors as to why the tapes and seminars are so "valuable", and why a distributor's success hinges on continuing to consume them. You should also get your downlines to consume them so that your success is further assured.
The contents of the tapes explain why a distributor's success hinges on getting distributors to all the major motivational seminars. The major motivational seminars are used to convince distributors to sign up for all the various standing order motivational tape programs. The main purpose of the system is really to just get you to spend more money on the system itself, and line the pockets of the IBOA members. It is a vicious circle of promotion and all for items that have repetitive information. It is unbelievable how many tapes say the same things, just in different ways. Product education is rarely mentioned on tapes.
The basic education is that recruiting more people to the system, rather than moving product for Quixtar, is the key to success. Most lines of sponsorship measure success by how many people are on there systems and not their Quixtar volume. It is no coincidence that the tools are promoted harder than the Quixtar product. The tools have much better profit margins, approaching 85%. The Quixtar products have a 32% profit margin.
The system is designed primarily to reproduce and promote itself. Listen to a few of their tapes and go to a few of their meetings and you can see this for yourself. The whole circle of exploitation reminds me of Dr. Seuss's the Star belly sneetches. Site visitors have told me how addicting the tapes can be and how only after a few weeks of not listening to tapes can one again think rationally.
In the end, low level distributors are just cannon fodder for the king pin's and IBOA's tools systems. It is unimportant to the king pin distributors that most IBOs will buy very little Quixtar products, and that many are losing thousands of dollars per year in the business. The real money is in selling the "secrets to financial freedom" contained in the motivation and business training systems. Low level distributors are taught first to recruit others to the system before they are ever taught to merchandise products. The game is to build the business as fast as possible, selling the new recruits as many non refundable tapes and seminar tickets, before they wake up and see how the scam really works. It usually takes about three years before distributors realize that the real money is in the tools business and not the Quixtar products business. Quixtar is happy to play the game with the king pins since Quixtar will sell some products along the way. See all the system tools for sale on Ebay. See what was sold for how little on Ebay.
"Tools are optional, but so is
"Tools in Amway organizations are a major source of income. The Amway pay plan is one of the worst in the industry so tools help make up the difference."Former Amway Crown - Leonard Hall
The majority of people in the business are decent, and hardworking people. Most however don't know they have been duped by the "charismatic con men" who are the peddlers of the feel-good cult motivational systems. Many hard working people have been enticed into the business with false information, lies and the very popular "Ama-myths". After they receive enough programming from the "system", participants' values and ethics change significantly. Distributor are taught that the "facts don't matter". These people turn into the "purple Kool-aid" drinkers who are the front line soldiers, promoting the infallible systems of success, which are also fleecing them for thousands of dollars a year. The systems employed by the king pin distributors utilize the same mind control tactics used by cults to keep their members under their control. This is even documented in an Amway internal memo. There is much literature on this subject by cult experts.
There is no doubt in my mind that the "compassionate capitalist" families who own the Amway / Quixtar Corporations and the king pin distributors know they are fleecing their flock of honest, hard working distributors, and all in the good name of free enterprise. The Corporation made a pact with the devil in the 1980's when its own future was threatened by its failed attempt to reign in the abuses in the tools' systems.
"The tool and function business generates enormous profits. Simply put, the money is not in the Amway business; it is in the hype of the Amway business." - from law suit filed by Crown Kenny Stewart, Double Diamond Brig Hart and Diamond C. Schmitz
I can strongly recommend that you approach the business with a critical eye and with extreme skepticism. Be careful and keep your guard up when you speak with the charismatic diamond leaders. They are experts at avoiding the hard questions, answering questions with questions, and psychological manipulation. Only by maintaining a logical and rational mentality will you be able to see through the hype, deception, and lies.
In no case give them a list of name of people you know until you are sure you know what the business is really about. The business is build on personal referrals. If you give them a names list they will make contact using your name as endorsement of them or the business, even before you know what it is about. Many site visitors have regretted getting their friends involved in the business and feel responsible for their friends' financial losses.
The links to the left starting at the top will give you a complete introduction to the business so you know better what to watch out for.
"Decisions of the kind the executive has
to make, are not made well by acciamation. They are made well only if based on the clash
of conflicting views; the dialog between different points of view; the choice between
"Information is the fuel we use to keep our minds working properly. Deny a person the information he requires to make sound judgments, and he will be incapable of doing so."
Steve Hassan, Combating Cult Mind Control
I understand the need to be practical and look
at this business from a business perspective. That's the flaw . . . and that's where most
of the world has gotten it all wrong. This isn't a business. This isn't a company. This is
an ideology, a mindset, a culture, a philosophy and a way of life. Why do you think the
"cult" charges are so prevalent? Those are only a symptom of the larger issue.
It's "communism" wrapped in the blanket of free enterprise. It's a fundamentally
flawed way of living painted with Christian symbology. It's the wrong dressed up to look
like the right.