Analysis of Quixtar Statistics

"I feel that if you are not skeptical, you are a fool. I feel that the best business people in the world are the most skeptical people in the world, because they want factual information. They don't want a bunch of hype. Fair?" Bo Short Emerald Distributor

  • In a package sent to me by a former Britt distributor, I found his "show the plan book". In it contained the following slide. This is a very interesting slide. It attempts to provide a "credible" document loaded with facts and statistics about Quixtar incomes. I will lead you through an easy analysis of the numbers to see if they even stand up to simple cross checks. A note from Quixtar confirms that some of the data were given to the IBOA by Amway/Quixtar.

    Many IBO site visitors have written me claiming Platinum distributors make on average of $62k/year. I am sure they received their information form slides like this below.

    Back ground on Income claims from the FTC:

    The TL424 with 1996 official data from Amway Scan of original document.

    From Britt WorldWide

    Scan of original the Britt document

    We'd like to make a Point with you...

    $900,000

    ...Get the point?

     

    Average

    Yearly Income

    For IBOs

    powered

    by Quixtar

    Q-12 Qualifiers $62,537
    Emeralds $73,793
    Founder's Emeralds $87,881
    Diamonds $136,322
    Founder's Diamonds $173,105
    EDC & p $442,186
    Founder's EDC & up $977,334

    The average monthly gross income for "active" IBOs was $88.

    Approximately 41% of all IBOs were found to be active.

    The following are approximate percentages of "active" IBOs who achieved these levels of success in the year in which they were surveyed.

    Q-12 Qualifiers -.13417%; Emeralds - .0348%; Founder's Emeralds - .01691%; Diamonds - .00771%; Founder's Diamonds - .00107%; EDC & up - .00449%; Founders EDC & up - .00096%

    Based upon an Independent Survey in 1994-1995, "active" means an IBO attempted to make a retail sale, or presented the Independent Business Ownership Plan, or received bonus money, or attended a company or IBO meeting in the month surveyed. "Gross Income" means the amount received from retail sales, minus the cost of goods sold, plus the amount of Performance bonus retained. There may be significant business expense, mostly discretionary, that may be greater in relation to income in the first years of operation.

    Subsequent slides in the presentation had the following:

    Data/Facts (A Q-12 is a platinum distributor who maintained 7500PV for 12 months.)

    There are some glaring contradictions in the Britt Worldwide material concerning Q-12's.

    1. Q-12 Contradictions

    So what do their data really say? Does that average Q-12 Platinum earn $62,537/year? Do the Q-12's that earn $62,537 per year comprise only.1347% of active IBOs? Which one is it? It cannot be both, if the numbers are correct. It would seem the Britt Worldwide claims are pretty shaky. Their numbers cannot stand up to these simple crosschecks.

    The same problem exists for all of the other levels as well. The table below breaks down each example made in the Britt table.

    From Britt Worldwide

    % of Active IBOs

    (from Britt data)

    Average Income

    (From Britt data)

    # of IBOs

    (calculated)

    Pay Outs ($'s)

    (calculated)

    # of IBOs in downline (active/total) (calculated)

    Q12 Platinum

    0.1347%

    $62,537

    220.9

    $13,814,924

    742 / 1,810

    Emeralds

    0.0348%

    $73,793

    57.1

    $4,211,514

    2874 / 7,009

    Founders Emeralds

    0.0169%

    $87,881

    27.7

    $2,435,710

    5719/ 14,432

    Diamonds

    0.00771%

    $136,322

    12.6

    $1,723,710

    12,970 / 31,635

    Founders Diamonds

    0.00107%

    $173,105

    1.8

    $303,765

    93,458 / 227,946

    EDC & up

    0.00449%

    $442,186

    7.4

    $3,256,081

    22,271 / 54,321

    Founders EDC and up

    0.00096%

    $977,334

    1.6

    $1,538,715

    104,166 / 254,065

    Quixtar IBOs

    400,000

    Total Pay outs $27,284,418

    (20% of Actual Quixtar reported 2000 Pay out)

    Active Quixtar IBOs

    41% (164,000)

    Actual Quixtar Pay out $143,000,000

    We can also cross check the Britt Worldwide income numbers, ignoring their percentages and using reasonable group size assumptions. The crosscheck will see if the claimed pay outs using reasonable group sizes are what was actually paid out by Quixtar. The assumption is that each IBO does 55PV/month, and there is 136 IBOs per Q-12 distributorship.

    Income from Britt Worldwide - IBO counts from calculations

    % of Active IBOs (55PV/IBO)

    Average Income (from Britt data)

    # of Qualifying IBOs

    Pay Outs ($'s)

    (calculated)

    Downline Active IBOs Needed

    Minimum Downline IBOs Needed @55PV/IBO

    Q12

    1.7934%

    $62,537

    2941.2

    $183,932,353

    56

    136

    Emeralds

    0.8943%

    $73,793

    1466.7

    $108,229,733

    112

    273

    Founders Emeralds

    0.4483%

    $87,881

    735.3

    $64,618,382

    223

    544

    Diamonds

    0.5110%

    $136,322

    838.1

    $114,250,819

    196

    477

    Founders Diamonds

    0.2562%

    $173,105

    420.2

    $72,733,193

    390

    952

    EDC & up

    0.3577%

    $442,186

    586.7

    $259,415,787

    280

    682

    Founders EDC and up

    0.1793%

    $977,334

    294.1

    $287,451,176

    558

    1360

    Quixtar IBOs

    400,000

    Active Quixtar IBOs = 41% of IBOs Total Pay outs $1,090,631,444

    1. Pay out discrepancies

    Quixtar reported it paid out $143 Million in fiscal year 2000. This is public knowledge from their press releases.

    It would appear that the "average" income claimed for various levels of achievement in these slides by Britt Worldwide cannot be possible even with unreasonable assumptions. The "average" Quixtar paid income at various levels of achievement must be significantly less than what is claimed by Britt Worldwide in their material.

    Other discrepancies

    Were you misled by these deceptive income claims? Write the FTC about it.

    Fill out a survey at: http://www.mlmsurvivor.com/ftcletter.htm

    I wrote Quixtar on 11/23/00 for clarification of the Britt Worldwide "facts". Let's see what they say.

    From: http://www.ftc.gov/opa/predawn/F86/amway.htm

    "A 1979 Commission decision resolved FTC charges that Amway's claims about the amount of money distributors are likely to earn had the capacity to deceive potential distributors. The order accompanying that decision prohibits Amway from misrepresenting the amount of profit, earnings or sales its distributors are likely to achieve. The order also requires that whenever Amway makes above-average earnings or sales claims, it must also disclose clearly and conspicuously either the average earnings of all distributors or the percent of distributors who actually earn the amount claimed. "

    "Under the consent decree, Amway is prohibited from making claims about above-average distributor earnings or sales unless it makes the required disclosures about actual earnings or sales. This consent decree is for settlement purposes only and does not constitute an admission by the company that it violated the law. "

     It would seem that distributors are allowed to make outrageous claims of above average distributor earnings as long as next to it is the boiler plate "$88/month" for active IBOs. Which is most likely outdate and 20% too high.

    If the slide's percentages are correct and are for "active" IBOs, it suggests the following:

    Other Data from Amway Quixtar

    In a copy of the CSA4400W from a Canadian site visitor the following data were found ending Aug 31/1998.

    Q-12 Platinums earned an average gross yearly income from Amway of $61,320 $CA, and does not represent net earnings.. On average these distributors personally sponsored 16 people, each of those brought an average of 12 IBOs to the business. .112% of all North American IBOs qualified at Q-12 platinum. 16 IBOs x 12 IBOs = 192

    Q-12 Diamonds earned an average gross yearly income from Amway of $608,306 $CA, and does not represent net earnings. On average these distributors personally sponsored 37 IBOs. The 31 other non-platinum IBOs sponsored on average 10 IBOs to the business. 65 IBOs in North America qualified as Q-12 diamonds. .006% of all North American IBOs qualified as Q-12 diamond. 6 x 192 IBOs + 31 IBOs x 10 IBOs = 1462 IBOs

    Conclusions:

    Assuming 65 Q-12 diamonds and .006% diamonds the North American IBO count ending 8/31/98 was 1,083,333.

    Assuming .112% Q-12 platinums there would be 1213 qualifying platinums. A Q-12 group averaged about 892 IBOs. 

    The average monthly gross income for active IBOs in Canada was $173. An IBO who had at least on year prior in the business and earned at least $100 in the time between Sep 1, 1995 and August 31, 1996.

    The TL 424 (1996 data from Amway)

    Bonus

    Average (monthly)

    Maximum (monthly)

    Performance Bonus (25%)

    $ 908

    $ 47,720

    Leadership Bonus (4%)

    $ 1,044

    $ 15,810

    Depth Bonus (1%)

    $ 1,486

    $ 16,834

    Ruby Bonus

    $ 696

    $ 2,230

    Annual Bonuses

    Average (annual)

    Maximum (annual)

    Q-12 Bonus

    $ 10,000

    $ 10,000

    Emerald Bonus

    $ 10,837

    $ 698,761

    Diamond Bonus

    $ 41,476

    $ 782,746

    Executive Diamond Bonus

    $ 34,559

    $ 236,854

     

     

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