
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 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? 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 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 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 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 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 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 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 |