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"We don't
make any money before you do" Distributor Profit and Loss Sampling for 2004 |
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| One has to laugh at the rhetoric used in the business. The term above is
a classic quote in the business quoted by numerous diamonds, yet they are somehow to all
blind to the evidence around them. It would be interesting for a "concerned,
ethical(?) diamond to take a poll of their downline to see how extensive the losses are in
their organizations. It seems the only thing the diamonds are good at are
helping people lose a lot of money. At last I have finally come into contact with a tax preparer who has prepared numerous Quixtar distributor tax returns for several years. In order to preserve the confidentiality of each distributor, the tax preparer summarized the data of the 28 distributors and gave me average data for two groups, couples and singles. In none of the 28 cases, for silvers and below, did a distributor report a profit. None of the distributors had received tape or seminar income. There were no questionable deductions for home office, clothes, or baby sitting. The expenses listed here are only mileage and those out of pocket expenses that could be proved. Depending upon the type of vehicle driven, the actual transportation costs might vary from the legally allowed $0.375/mile. The couples' gross incomes ranged between $4,375 and $6,000, and the singles' incomes ranged between $1,200 and $2,780. The couples' net losses were twice those of the singles. The typical couple had cash losses of $10,452 in 2004. No doubt many couples cannot afford a net cash outflow of over $10,000/year and after a couple years they can expect to have an additional $20,000 to $30,000 in debt. These costs do not include the cost of buying the Quixtar products. To obtain 150 points per month the distributor must spend an additional $450 - $600/month. Despite the fact that distributors advertise the convenient home delivery of products and all the money one would save driving to the store, these distributors had mileage expenses that exceeded their Quixtar income. The singles averaged $2,843 in mileage expenses and had average Quixtar income of just $1,800. The couples had average mileage expenses of $5,625 and average Quixtar income of just $5,300. It seems Quixtar can't even pay enough to cover distributor's transportation expenses. Couples' system costs alone exceeded there Quixtar income by at least 25%. The couples ended up spending three times their Quixtar income to run the business. The singles spent four times their Quixtar income to run the business. In total the 28 distributors spent $372,608 in 2004 to have the privilege to distribute products for Quixtar and their upline, yet they had gross income of only $120,400 in gross income. This group of 28 distributors lost $152,208 with the Quixtar "opportunity". |
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| Income Average Quixtar 1099 Income Retail markup Total Income Expenses System - Seminars, open meetings, tapes Voice Mail Web Access Demo Products Meals Hotel Mileage (couples =15,000/yr, singles=7,850/yr) Total Costs Average Net Profit/(Loss) reported on tax return |
20 Couples |
8
Singles $1,800 $ 0 $1,800 $2,800 $ 120 $ 138 $ 450 $ 480 $ 365 $2,843 $7,196 ($5,396) |
The couples drove an average of 15,000 miles per year. Assuming they drive 50 miles per hour, the couples are spending an additional 600 hours a year that is uncompensated. The couples are driving at least 11.5 hours per week. This almost exceeds the time requirements many people estimate the business on the whole to take, which is commonly promoted to be 8-12 hours per week. On top of all this business loss, the IBO has to also spend dollars to achieve the minimum required to even get the small bonus meted out to them at levels below platinum.All distributor's should ask themselves the following questions: 1) How much money are they reporting as profit on their taxes? Remember, the definition of insanity is continuing to do the same thing over and over and expecting different results. |
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