Action Suit by Quixtar Diamonds and IBOA
|Quixtar now has its hands in a bloody civil war and it has come out slinging
mud on the Alticor Media Blog. Interesting to note is that the links to the
Quixtar Media blog have been removed from the Alticor website. Maybe in light of the
pending civil war, which will tell the realities of the Amway/Quixtar pyramid scheme,
Amway has decided to accelerate the dropping of the Quixtar name from use and go back to
the Amway name sooner than expected.
In a unprecedented parting of ways, a group of Quixtar Diamonds and IBOA Board members have filed a class action law suit against Quixtar claiming that Quixtar operates an illegal pyramid scheme. Quixtar either started the war or retaliated against the several diamonds by terminating their distributorships. It seems things came to a head and both sides came out punching. Quixtar/Alticor claims the distributors have been long time offenders of various rules, which for unknown reasons, the corporation just now decided to start to enforce. The distributors now claim that the Quixtar is an illegal pyramid scheme, which they unknowingly helped promote.
It is my opinion that Quixtar terminated them once they knew their loyalty was no longer to the Amway/Quixtar corporation, and that the corporation's future profits from these groups were no longer worth holding on to. It is my opinion that the corporation has always turned a blind eye to any distributors who break the rules as long as those distributors are helping to keep excessive profits flowing to the billionaire founding families by their group's self consumption of the overpriced Amway products.
It is amazing that the gist of the suit summarizes what sites like this and others have been saying for years. Basically that the corporation and the lines of sponsorships were symbiotic business relationships that needed each other to push their own individual pyramid schemes on their unsuspecting downlines. The IBOA kingpins reaped millions in profits from the tools business and Quixtar reaped millions in above normal profits as brain washed IBOs mindlessly purchased the overpriced Quixtar products so that they could make their 100 or 150 PV "sales" goal. Distributors stocked their shelves with XS energy drinks, nutrition bars, coffee and any other product that minimized the dollar expenditure to collect their 100 points.
I put up my website over 9 years ago with the title "The Amway Distributors Little White Lies". The site at that time focused on the "Save 30% lie" I heard in the Florence downline. Billy Florence, amazing enough, is one of the Diamonds behind the Class Action Lawsuit.. The Class Action complaint now claims that the corporation is extorting tremendous profits from the sale of overprice Amway products to its distributors for their self consumption. The complaint claims that only 3.6% Quixtar's products is only sold to people outside of those participating in Quixtar's pyramided compensation scheme.
The suit claims the the business cannot be a legitimate retail organization since the Amway prices are so high, few people but distributors will buy the products. The suit makes the same conclusion that I have made, and that is the corporation is in a position to be a monopolistic price setter to their self consuming distributor organization. The corporation probably has no incentive to lower prices and increase volume, since their own profits would probably fall.
The suit inadvertently confirms the symbiotic relationship of the tools systems and Quixtar. I cannot state it any better than what the suit says:
It is interesting to observe that the corporation has long hinted that the moral authority to criticize the business was given to the critics about the support system tools scam, and how the corporation was out to clean up that portion of the business. Now the tools systems people say the business should be cleaned up first from the overprices products side. In really both sides needed to clean up their own businesses. The common guy in the business was just feeding both of the scams. It is interesting how they point the finger at each other when in fact they can not exist without each other. They could not have not gotten as successful as they were without each other. Without the mind controlling system materials of tapes, CD's and motivational seminars, Quixtar distributors will have no incentive to buy the expensive Amway products. On the other hand, distributors have no need for the motivational systems if there is not some sort of quasi legitimate business behind it.
Now that Quixtar's own top leaders and IBOA board members realize that they were promoting an illegal pyramid scheme all this time, when will the Quixtar and Alticor employees realize they too have also promoting a pyramid scheme? The excess profits, from the overpriced products, were made on he backs of hundreds of thousands of distributors who lost money trying make money in what told to them to be a legitimate business, but was really a covert product pyramid scheme. Are Quixtar's bonuses to the top managers and public relations people so large that they too have set their morals at the door and let Alticor's greed get the best of them? The whole situation reminds me of the movie "The Firm" where outwardly nice and caring people really checked their morals, ethics and compassion at the door in favor of monetary benefits.
Don't the people at the Alticor and their Blog get it? The corporation was in bed with these very same distributors for years and it was a nice and cozy relationship as long as everybody made money on the back of those poor distributors looking for a way to realize the promoted false dream of unlimited income and financial independence. The Kingpins tools profits have been reduced over the years by the critics exposing the scam, and now they realize the income from Quixtar and the illegal "buy from yourself" business model is not financially viable. Quixtar looked the other way for years at the supposed rule abuses as those same groups pushed hundreds of millions of dollars of overpriced products on their downline.
What is amazing is that Quixtar now comes out and criticizes the "stacking
method" employed by the terminated distributors, yet the corporation embraced this
method by sanctioning a "custom
SA-4400" specifically outlining this method for the Florence
organization (Team DCI)! This document also
shows another Quixtar
The company sent the following letter out to Quixtar IBOs announcing the termination of the high level IBOs.:
So on one hand while the corporation was benefiting from the stacking method and actually approving it with their "custom SA-4400" they then about face and say it is a rules violation so they can sack a bunch of high level distributors who were fed up with Quixtar's stubborn stand on high prices.
The corporation's actions are louder than words. They have long known about the rules violations of the distributors but only decide to terminate the distributors when the corporation can no longer profit from them. How come the distributors were not terminated years ago when it was really obvious what they were doing? Simple, the corporation was making too much money off them to care. The people doing the stacking were the corporation's golden boys. They were featured as the best and brightest in the business since they were bringing in the new growth. The managers and employees at Quixtar are fighting a two edged sword. If the corporation is like any red-blooded American corporation, then the managers and public relation's peoples bonuses are based upon the operating results of the business. If the corporation's managers oust the people bringing the majority of new sales growth, then their bonuses at the end of the year will be lower. It is simple greed and lack of character. The Alticor employees are also in on the scam. The managers have nice perks, great salaries and probably super bonuses and they get to keep them as long as the business keeps churning out the profits for the billionaire DeVos and VanAndel families. So they all know deep down the business is actually an inefficient and uneconomic distribution method, where the majority of distributors are losing money, but as long as they make money on it in the name of giving people "free enterprise" it is ok to do it. Yup, that is truly "compassionate capitalism", Rich, Doug, and Dick.
Wouldn't it be great if the managers of the Alticor/Amway/Quixtar business got their bonuses based upon how much net profit the distributors made? Of course the corporations desire to maximize their profits, conflicts with the distributor's goal to maximize their net profit. I suggest that all the managers and employees of Alticor watch the movies "The Firm", "Boiler Room", and "Believe". Then they might realize what they are actually a part of.
Well, back to the complaint. There are lots of great quotes about Quixtar prices.
I also contend if the support systems disappear then the business will also collapse.
My own price studies from Amway times revealed I would spend about 40% more on the products from Amway.
The complaint then goes on to list the other pyramid case precedents which I have long had on this site, and which Quixtar distributors have said were not applicable to their business. It is amazing that a group of high level distributors who a few years previously would have debated that those some precedents were not applicable to the Quixtar business.
I suggest you read the complain yourself It is amazing. All these statements are coming from the mouths of high level distributors. One would have never hear such thing before.
The comments in this suit are a great vindication and proof to what I have been writing for years.