Quixtar/Alticor Results 2006

Alticor, the parent company to Amway and Quixtar reported a slight sales decline for 2006.   Altirocr reported just over $6.3 billions in sales compared to $6.4 billion in 2005.  It was reported that the Asian market represents over 70% of Alticor's sales now. 

Quixtar reported a 2.2% sales increase, which did not even keep pace with 2.5% CPI inflation index from 2005-2006.

Amway's sales in the hot China market dropped 23% after the Chinese government disallowed the Amway pyramided compensation scheme in China.   Apparently the allure to the business opportunity in China was more related to recruiting new distributors than actually retailing products.  Chinese distributors are trying to get around the rules by registering as US Distributors under Quixtar and exporting the US purchased products to China for retail sale. 

Quixtar is quick to brag about its 4 year sales streak over $1 billion, but neglects to highlights its stagnated sales growth, and the fact that it inherited a huge portion of its sales from the former North American Amway business.  Prior to the Quixtar assumption of the North American business, Amway North America was also a billion dollar business.  For fiscal year 2003 Quixtar reported sales of $1.035 billion.  Sales three years later of $1.118 billion (8% increase over 2003) did not even keep pace with the CPI of 9.6% over the same time period    Growth is critical to the participants of any pyramid scheme.   If the new participants cannot eventually make money fast enough from the scheme, they will be more likely to quit the scheme.   

Quixtar reported partner store sales recorded a new record of   $84.6 million, or just $14.6 million higher than 7 years earlier.  The Quixtar partner store sales growth rate since the year 2000 is just under 2.7% per year; hardly beating the CPI inflation index.   

IBO's (a euphemism for distributor) pay-out increased to 30.8% from 30.4%  of sales (Quixtar + Partner Stores) in 2005.

Distributors earned $24.9 million more than in 2005.  Quixtar reported gross pay outs to IBOs  increased from $345.1 million in 2005 to $370 million in 2006.   Quixtar still reports that the typical IBO earned $115/month; even though that data is from a survey from distributor's businesses seven years ago.  Quixtar did however make public that 380,400 IBOs shared in the 2004 pay out of $373 million or just $82/month. Quixtar did not release the number of distributors who received bonuses in 2006.   In 2005 released that 370,000 distributors participated in the $345 million in bonuses, or just $78/month.

After 7 years, WWDB's DuncanBrad Duncan's and PuryearRon Puryear's prediction that Quixtar will be a $100 billion company in 5 years is still far from view. Despite completely cannibalizing the sales from the North American Amway business opportunity, Quixtar just surpassed 1% of that prediction and has yet to surpass Amway's 1997 North American sales peak.  If Quixtar keeps the 2006 sales growth rate of 2.2%, Quixtar can expect to reach the $100 billion sales mark sometime around the year 2214!

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