YOUR IBOAI wants to keep secrets from you!

It seems whoever is in charge of the IBOA, they are rather upset with the recent class action filing by the five former IBOAI board members.  According to the IBOAI complaint, the former board members revealed IBOAI top secret and confidential information in their class action complaint.  

Basically the double top secret IBOA information confirmed what a lot of people have known for a long time, and that is the Quixtar product line is very expensive and difficult to sell at retail prices!   I guess it is just embarrassing for the IBOAI that they had all the market research data, but could do nothing to improve the situation for the distributors they are tasked to represent.  Did the IBOAI want to keep their distributors in the dark about the retail marketability of the Quixtar products forever?

After I read the complaint, I was wondering how the remaining 15 board members, all geographically dispersed  could quickly come to a conclusion and file this complaint against the five other board members.  I am wondering who is authorized to speak for a "board" made up of numerous people.  The complaint has a blank to be signed by Jody Victor as being chairman of the Hearing and Dispute committee for the IBOA.  It is however strange that Mr. Victor is not listed as a 2007 IBOAI board member on the IBOAI webpage about the board members.   Are there non-board member board members now?  Maybe someone can clear that up for me.

Now this is YOUR board of directors and they would like the following important market information to be kept secret from you Amway/Quixtar distributors, the people they are tasked to represent.    I would ask, as I have always asked, who is the board representing?  The good of the distributors?   The corporation?   The non board member board members?

Let's take a look at the secrets your board, which was tasked to represent you, did not want you as distributors to know.

Here is what the IBOAI complaint states:

"18.  The California Case contains allegations in paragraphs 43, 48, 50, 51, 64, 65, 66, 94 and 96, among others, that disclose confidential information and trade secrets (the "Confidential Information"), which the Defendants could only have learned as a result of their membership and activities on the IBOAI Board."

Here your IBOAI board does not dispute that these are not facts.   The IBOA confirms these are trade secrets, top secret information, which should be kept a secret from you,  the people the IBOAI is tasked to represent!  Here is what the class action states, and which the IBOAI does not dispute as not being factual.

43. Quixtar only exists on the backs of its distributors.     Quixtar's prices have increased so much in relation to ordinary retail prices that its products cannot be sold to outside consumers.   In fact, a 2006 report prepared by Quixtar states that only 3.4% of its total volume comes from those who do not participate in Quixtar's compensation plan.

48.  In April of 2000, the IBOA conducted a "Confidential Competitive Analysis" of the Quixtar products.  The IBOAI compared the Quixtar products with three competitive market leaders in each type of product and a cost per unit measurement was established to fairly compare the products.      In almost every item, the Quixtar products were substantially overpriced in comparison to the three industry leaders.  

50.  Quixtar's Second-in-Charge Randy Bancino commissioned an analysis and report from McKinsey Consultants regarding whether Quixtar products were overpriced and not sellable.   The McKinsey Report was prepared 2005, and its findings were presented to the entire IBOAI Board with various Quixtar representatives.    The McKinsey Report showed that there were very few retail customers buying Quixtar products, and that hardly anyone was selling Quixtar products at retail   

51. On February 27, 2007, a member of the IBOAI, sent a lengthy email to the chairman f the IBOAI Board, stating that the founding families were unapologetically profiting from the failed efforts of the IBOs.

64.  In March of 2004, Claire Zevalkink, Quixtar's head of marketing, explained Quixtar's product pricing constraints and recognized the complaints about product pricing have been heard:

"I think you'll be pleased to hear that we have re-examined the XS Sports drink pricing.  We agree with the concern raised in Biz Ops that the drink in particular is a sore point if not priced more competitively, especially as we come to recognize the role this XS sports nutrition category can play in prospecting with new IBOs.

65.  The founding families require a margin widely referenced as the "Jay Factor," so name after founder, Jay Van Andel, the person responsible for building into the Quixtar system margin requirements as to volume requirements.  It is widely known that the founding families' cut is prioritized above the retail price.  Quixtar executives acknowledge that the Jay Factor is currently: cost x 3 = IBO or "wholesale" price. 

66.  Access manufactures all Quixtar products.  Access is owned by Alticor, as are Amway and Quixtar.   Alticor is owned by the founding families.  the Jay Factor, the profit margin required by the founding families, is actually built into the pricing of the products at the manufacturing level.  Rather than allowing Quixtar to determine a viable retail price for the products it sells, Alticor and/or the founding families determine the retail prices by roughly tripling Access's production costs for the products that Alticor requires Quixtar to retail. 

94  Quixtar does not enforce the FTC's ten customer rule or its own retail sales rule.  In an email to Billy Florence the other IBOAI Board Members, Sherri Brewer, a Quixtar employee, outlines Quixtar's position on the rule:

One of the first items on your agenda for Monday is discussion of the Retail Sales Rule.   We have had numerous discussion with Jody and Billy on this but wanted to bring everyone up to date.    These discussion lead to a review of several options.  We used the attached grid to analyze the effect of various options.

Numbers to remember:

Out of approximately 1,000,000 IBOs, 687,000 don't sponsor
234,000 sponsor but don't receive a bonus from downline
129,000 receive a bonus from downline volume....

If you follow the left hand side of the grid, we are attempting to measure impact on:

the 129,000
the 1 million less 129,000
Quixtar (programming difficulty/expense)
legal/Regulatory/Image Risk

The options referred to by Ms. Brewer include
1) Status Quo
2) Assume compliance with purchase of 50PV
3) Assume compliance with purchase of 50PV + xx (average consumption)
4) IBOs with bonus from downline must comply with RSR
5) provisional IBO
6) Assume compliance for those with bonus from downline +50 PV in purchases
7) Everyone complies w/RSR

From the email, Quixtar was leaning toward option four, that "IBOs with bonus from downline must comply with RSR".  The FTC in Amway had option seven mind: "Everyone complies w/RSR."

96  President Doug DeVos himself has state at the IBOAI Board meetings that "Quixtar is an internal consumption company." no a retail sales company.

It seems YOUR IBOAI, whoever is running it, is obviously wanting to keep important market information from the common distributor.  It also seems odd that the question of what constitutes retail sales and how the RSR rule should be interpreted is still being discussed almost 30 years after Amway and FTC.

Last but not least from the IBOAI complaint:

24. The IBOAI is advised and reasonably believes that these Defendants and others acting in concert with them are currently planning to disclose additional Confidential Information that will have a severe, adverse effect on the IBOs that remain within the IBOAI, resulting in significant losses of revenue on the part of those IBOs.

The truth will set you free, even if the IBOA does not want you to have it. 

Well it is up to you to decide. Does the IBOAI represent YOU, the distributor, or really someone else?