Analysis of an open meeting
stacking concept

I had the opportunity to attend a Quixtar open meeting. Typical of all Amway/Quixtar open meetings I've attended, it started 15-20 minutes late. The speaker laid out the stacking method of building your business with a first leg that is 50 people deep and a second leg 15 people deep (1-50,1-15). The speaker stated when you have this structure you will make $2,000-$3,000/month. This structure is much different from the standard 6-4-2 or 9-4-2 model used in other Amway/Quixtar "Lines-of-sponsorship".

Calculations
If each and every IBO in the stacked (1-50,1-15) model had 100PV and the BV/PV ratio was 2.5, this example would earn only $6061/month not the $2k-$3k claimed. Leg one would earn him just $250 in bonuses, leg two would earn him $300, and his personal purchases would earn him $57.5.  (See Amway Basics for bonus calculation method)

Quixtar reported in 2002 that the average IBO had only 38.5 PV per month or just 38.5% of the example above. The Quixtar average PV of 38.5 results in a bonus, for the 1-50,1-15 model, that is less than or equal to $3652/month. This is just 18% of what the speaker claims the model should make (i.e. $2,000 minimum). The speaker did not mention the compensation plan for sales of tapes, books and seminars so I am unable to estimate what these amounts might be.

In data sent to me by a 2500 PV IBO, the average IBO in the group of 94 IBOs had just 26.5PV. This is just 70% of the overall Quixtar average. 77% of the IBOs in this group had no purchases for the month exceeding 2 PV. Applying this data to the stacked model, the model would earn just $226.343, or 11% of the minimum $2,000 per month the speaker claimed. In another group of 198 IBOs, has just 1,400 PV or an average PV of just 7.5PV.

How could a stacked IBO earn $2k-$3k/month which the speaker stated?
Even at a very generous 140PV/IBO, which is 10 PV less than this team’s ideal 150 PV/IBO, and almost 4 times higher than the Quixtar IBO average, this IBO would earn $17964/month when including the $10,000/year Q-12 bonus. If the IBO did not qualify for the Q-12 bonus his average income would be below $9624/month

If we increase the sales per IBO to 150 PV then something remarkable happens. The 50 person leg goes "direct" breaking away from the group since it is 7,500PV. As a result, the IBO's income plummets 68% because a majority of the volume has left his group due to "breaking a new direct". This IBO doesn't have 2,500PV in side volume (width) to collect any portion of the 4% leadership bonus. The IBO ends up collecting 25% on his personal 150PV and 10% of the downline 5625 BV, for a total of $6565/month down from $1796/month.

Groups teaching building depth as the key to stability but if you play with the various bonus scenarios, as I did here, you can see that the stacking depth method lacks profitability/IBO as well. It can be easily proven that the income potential of the 1-50,1-15 model shown by the speaker is exaggerated. You can play with this handy  excel spreadsheet and see the profitability of various structures.

The speaker stated how he hoped to one day be making $2k-$3k extra per month from the business. Looks like he will be waiting quite a while with the 1-50,1-15 model. The exaggerated income claim and the failure to state that the SA4400 says the average IBO earns just $115/month might also be a violation of Quixtar rules.

8.3.5. May use only those earnings and/or bonus representations based on their own personal experiences, provided that they at the same time disclose the average profits, earnings and sales figures and percentages as published from time to time by the Corporation.

The Average Monthly Gross Income for "Active" IBOs was $115.

Calculations:
1.
100PV average per IBO
Total PV is 6600 (5000 + 1500 + 100), bonus level = 23%
Leg 1 5000PV x (.23 $/BV - .21 $/BV) x 2.5 BV/PV = $250
Leg 2 1500PV x (.23 $/BV - .15 $/BV) x 2.5 BV/PV = $300
Personal .23 x 100 x 2.5 = $57.5
Total Bonus = $607.5

2. 38.5PV Quixtar average per IBO
Total PV is 2541 (66 x 38.5), bonus level = 18%
Leg 1 1925PV x (.18 $/BV - .15 $/BV) x 2.5 BV/PV = $144
Leg 2 578PV x (.18 $/BV - .06 $/BV) x 2.5 BV/PV = $173.25
Personal .18 x 38.5 x 2.5 = $45
Total Bonus = $362.25

3. 26.5PV Quixtar average per IBO
Total PV is 1749 (66 x 26.5), bonus level = 15%
Leg 1 1325 PV x (.15 $/BV - .12 $/BV) x 2.5 BV/PV = $ 99.40
Leg 2 397.5 PV x (.15 $/BV - .06 $/BV) x 2.5 BV/PV = $ 89.44
Personal .15 x 26.5 x 2.5 = $ 37.5
Total Bonus = $ 226.34

4. 140PV Quixtar average per IBO
Total PV is 9240 (66 x 140), bonus level = 25%
Leg 1 7000 PV x (.25 $/BV - .23 $/BV) x 2.5 BV/PV = $ 350
Leg 2 2100 PV x (.25 $/BV - .15 $/BV) x 2.5 BV/PV = $ 525
Personal .25 x 140 x 2.5 = $ 87.50
Q12 Bonus $10,000/12 = $ 833
Total Bonus = $ 1796

5. 150PV Quixtar average per IBO
Total PV is 9240 (66 x 140), bonus level = 25%
Leg 1 7500 PV x (.25 $/BV - .25 $/BV) x 2.5 BV/PV = $ 0
Leg 2 2250 PV x (.25 $/BV - .15 $/BV) x 2.5 BV/PV = $ 562.5
Leadership bonus = $0 since leg 2 PV <2500PV
Personal .25 x 150 x 2.5 = $ 93.75
Total Bonus = $ 656.25

 

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