Quixtar
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Quixtar
Forum:
http://www.thetruthaboutquixtar.com/index.php/component/option,com_jo
omlaboard/Itemid,28/
Facts:
http://www.thetruthaboutquixtar.com/index.php/content/blogcategory/0/
37/
Critical Website: http://amquix.info/
Critical Website: http://www.webraw.com/quixtar/
Myths About Quixtar:
http://www.thetruthaboutquixtar.com/index.php/content/blogcategory/19
/26/
Federal Complaint:
http://www.msnbc.com/modules/tvnews/dtl_amwaypdfs/fed_complaint_amway
-quixtar.pdf
Response: http://www.msnbc.com/modules/tvnews/dtl_amwaypdfs/amway-
quixtar_answer.pdf
Quixtar Suggestions:
http://www.msnbc.com/modules/tvnews/dtl_amwaypdfs/amway-
quixtar_suggestions.pdf
Positive Website: http://www.thisbiznow.com/
Positive Website: http://www.thetruthaboutquixtar.com/


-

Quixtar
Type Private
Founded 1999
Headquarters Ada, Michigan
Key people Steve Van Andel / Doug DeVos / Jim Payne
Industry Multi-level marketing
Website: http://www.quixtar.com
*
Quixtar members are to be considered legitimate end users of their
products, and since no money is earned for recruiting new people
into the company, Quixtar is not a pyramid scheme.
*
Quixtar is a $1 billion company and the number one online health and
beauty retailer. Hundreds of thousands of entrepreneurs have earned
more than $1.7 billion in bonuses and other incentives since 1999.
*
Supporters/Endorsements
** Asafa Powell (Jamaican Olympic
Sprinter/http://en.wikipedia.org/wiki/Asafa_Powell
** Evander Hollyfield (Heavyweight Boxer)
** Emmitt Smith (Former Dallas Cowboy Football Player)
** Tim Foley (Former Miami Dolphins Football Player)
** Dr. Phil McGraw (TV Host)
*
Barnes & Noble.com
(http://www.thisbiznow.com/quixtar/partnerships.html)
"The business opportunity with Quixtar is an amazing one."
*
Federal Trade Commission, Consumer Response Center
1-877-382-4357
• Federal Bureau of Investigation
Contact an FBI field office in your region
• Internal Revenue Service
1-800-829-0433
• National Association of Attorneys General
202-326-6000

-


Quixtar is a multi-level marketing company, founded in 1999 by the
families of Richard DeVos and Jay Van Andel. Quixtar is now owned by
Alticor, which also owns Amway. While Access Business Group (also
owned by Alticor, Inc.) took over the Amway infrastructure in North
America, Quixtar still services "Independent Business Owners" (or
IBOs) operating in the Amway business model in the United States,
Canada and the Caribbean. It completely replaced Amway in 2001 as
the marketing venture for products such as Nutrilite dietary
supplements, XS Energy Drinks and Artistry cosmetics in those North
American regions.

Business
Formerly, people could join Quixtar as "Clients", "Members" or
IBOs. "Clients" would pay retail price for products and services
from Quixtar.com, "Members" would pay a reduced price but would not
have the ability to receive bonuses from Quixtar. As of July 2006,
Quixtar eliminated the "Members" option, and "Clients" are now
referred to as "Customers". IBOs pay a registration fee and build
their businesses through retail sales to customers, referring
business to Quixtar.com, and by helping other IBOs build similar
businesses. Their earnings are based on their business' sales and
the volume of sales and purchases of IBOs registered by them.

The structure of a Quixtar organization is hierarchical. Pin levels
are the same as in Amway. There are several major pin levels in the
model - Silver, Gold, Platinum, Ruby, Emerald, Diamond, Executive
Diamond, Double Diamond, Triple Diamond, Crown, Crown Ambassador.
Each level denotes a particular level of success in building their
IBO business.

The primary way to join and buy products at Quixtar's web site is
with a referral number from an IBO. The buyer is able to purchase
Quixtar's exclusive products as well as products from partner stores
such as Dell, Circuit City, Barnes and Noble, Disney Store, Office
Depot, Avis, PacSun or Floragift on the Quixtar web site. (One can
also purchase from these vendors at their own web sites, typically
at the same retail price. Quixtar IBOs often receive discounts.) The
referring IBO then receives a small percentage ("bonus") of the cost
of the purchased goods, with Quixtar-exclusive products yielding a
higher bonus per dollar in PV/BV Point Value and Business Value.
Quixtar offers a wide range of products for its IBOs to purchase for
personal use or to sell to customers through Quixtar.com.

In 2005 Internet Retailer ranked Quixtar as the number one site in
the health and beauty category. It was ranked 14th largest e-
commerce site (for revenue) in the same survey. Quixtar sales for
fiscal year 2003-2004 were over $1.1 billion with over $373 million
paid out in bonuses and incentives.


Controversy
Quixtar and its predecessor Amway have been controversial for years
because of allegations that these companies are pyramid schemes
despite the 1979 FTC ruling (93 F.T.C. 618 (1979)) that legitimized
the Amway business.

Critics claim that most of the products sold by Quixtar are to its
network of IBOs for personal consumption rather than to retail
customers.

They claim that many IBOs practice the "buy from yourself and teach
others to do the same" method of multi-level marketing. However, in
order to receive any earnings on their organization's sales beyond
their own and their personal customers' use, Quixtar IBOs are
required to sell either $100 of product to customers, 50 PV of
product to customers (PV are a conversion of dollars to points,
contributing towards the earnings bonus scale for IBOs), or sell to
10 customers in a given month.

Furthermore, in a 2004 response to an inquiry by the Direct Selling
Association, the FTC stated "In fact, the amount of internal
consumption in any multi-level compensation business does not
determine whether or not the FTC will consider the plan a pyramid
scheme. . .In contrast, a multi-level compensation system funded
primarily by payments made for the right to participate in the
venture is an illegal pyramid scheme."

In other words, Amway and Quixtar members are to be considered
legitimate end users of their products, and since no money is earned
for recruiting new people into the company, Quixtar is not a pyramid
scheme. Many Quixtar leaders emphasize combatting this perception
(and at the same time building a more profitable business) by
offering those not interested in the business the opportunity to
become customers.

There is also a great deal of controversy surrounding
the "Amway/Quixtar Motivational Organizations" (AMOs or AQMOs) owned
and operated by high level distributors. Quixtar and the AMOs, such
as WorldWide Dream Builders and The Team (QMO), claim that the
business skills of IBOs are honed by the business support materials
(BSM), or "tools", that are sold by the motivational organizations,
and that the support material can be of help to an IBO if he wants
to build a big business.

Furthermore, during the registration process, IBOs are required to
accept an agreement that is intended to make the new distributor
aware that the BSMs - books, tapes, CDs, informational literature,
seminars, etc. - are purely optional and that requires the above-
mentioned AMO/AQMO's (also known as LOA, or Line Of Affiliation) to
buy back any defective or unwanted business support materials within
a reasonable time frame. New IBOs are also made aware that the
producers of these "BSMs" are likely to make money selling them.

Critics, however, charge that many of the AQMOs do not provide
reasonable terms for refunds and can exert pressure to induce
participants into purchasing large amounts of these BSMs and to
attend motivational seminars.

The sale of the motivational tools to IBOs down the line is
described as the "business within the business," of Quixtar from
which the high-level distributors allegedly make the majority of
their income. Undercover investigations (like one done by MSNBC
Dateline in 2003-04) also suggest that much of the money being
earned by the high-level distributors in some organizations was
coming from the "tools" business rather than by selling the products
of Quixtar.

However, many argue that this is no different than successful
athletes, entrepreneurs, and stockbrokers selling their experience
and techniques through books, websites, or training systems. Most
IBO support companies, such as The Team (QMO) line of sponsorship,
founded by Orrin Woodward and Chris Brady, offer profit sharing of
tool money, with those achieving the Platinum level and above.

Though Quixtar representatives declined to appear on the MSNBC
special, the company did publish an official "Quixtar Response"
website.

Supporters claim that the Quixtar business model is the standard
that the FTC uses as far as a legal network marketing business.

Critics claim that although legal according to the FTC, the business
practices that some AQMO's teach are unethical and immoral. This one
point has been a focus of debate between its critics and supporters
for the past 25 years.

Response to criticisms
Quixtar, in partnership with the IBOAI (IBO Association
International) launched the "Quixtar Accreditation" program in order
to address directly many of issues that have caused controversy.
North American Diamonds (high-level IBOs) and their associated
training programs may apply to Quixtar to be accredited by the
corporation.

Among other things, accreditation specifically states that promotion
of particular religious or political viewpoints is unacceptable.
Additionally, accredited programs must agree to a range of other
guidelines, including full transparency in any compensation paid
for "tools".

Accreditation lasts two years and is enforced through reviews of
materials and surveys of IBOs. The full guidelines are listed in the
IBO Communications Platform.In April of 2006 eFinity became the
first Quixtar affiliated support organization to receive fully
accredited status.

Litigation
In the 1979 ruling In re. Amway Corp., the Federal Trade Commission
determined that Amway was not an illegal pyramid scheme because no
payments were made for recruitment. In addition, it enforced rules
requiring distributors to sell to at least 10 retail customers per
month and to sell 70% of the products purchased each month either to
customers or other distributors, thus preventing inventory loading
and other potential abuses of the marketing model. Critics claim
that Quixtar does not properly enforce these rules.

Endorsements
In April 2006, Asafa Powell was announced as global brand
spokesperson for Nutrilite. According to a press release from
Quixtar, Powell began taking Nutrilite supplements three months
before he broke the 100 m world record, and credits it with helping
him overcome low energy levels during 2005. [1] Other sports stars
to promote Quixtar include heavyweight boxer Evander Holyfield and
the NFL player Emmitt Smith. Tim Foley, a member of the undefeated
1972 Miami Dolphins, is a Quixtar Crown Ambassador.

Author and leadership expert John C. Maxwell, who writes leadership
books including The 21 Irrefutable Laws of Leadership, is known to
support Quixtar support organisations such as Worldwide
DreamBuilders [2] and co-authored a book, Becoming a Person of
Influence, with Jim Dornan, Quixtar Crown Ambassador and founder of
Quixtar support organisation Network TwentyOne. Paul Harvey, a radio
broadcaster, known for his 'The rest of the story' tagline, has long
been associated with the Quixtar program that is advertised on his
show.

As a guest speaker at the Quixtar LIVE! conference in 2003, Dr
Phillip McGraw reportedly described Quixtar as "one of the greatest
success stories in American business history."[3]

========

MYTH: The majority lose money
Written by IBOFightBack
Thursday, 10 August 2006
http://www.thetruthaboutquixtar.com/index.php/content/view/14/26/


Critics of network marketing, and Amway and Quixtar in particular,
often make the claim that while some people may make money in
networking, it's at the expense of the majority who lose money. Now,
assuming you are not talking about an illegal pyramid scheme, where
you actually make money by recruiting people rather than product
sales, how can you lose money? The only way is if your business
expenses are greater than your business income.

According to www.thisbiznow.com, surveys of Quixtar IBOs in 2001
found that "only 66% of all IBOs IBO attempted to make a retail
sale, or presented the Independent Business Ownership Plan, or
received bonus money, or attended a company or IBO meeting in the
year 2000."

So, 34% never even attended a single meeting or did anything towards
operating a business. That's 34% you can be pretty sure had no
expenses at all.

Furthermore, have a look at this document. It's a scan
of "parameters" from WWDB, one of the Quixtar affiliated training
companies, or PDPs. The PDPs keep track of various business
statistics. You can see for example that a "healthy, growing" 4000PV
Quixtar business typically has 50-70 registered IBOs, of those,
between 9 and 20 are on any subscription tape/cd program, and there
are 25-30 people on seminars. Given many of these are couples,
that's probably 10-20 IBOships. So, only around 10 out of 50, or 20%
of all IBOs in a "healthy, growing" Quixtar business are attending
training seminars or subscribing to tape/CD programs, the two major
expenses.


=

MYTH: The odds of success are better at Vegas
Written by IBOFightBack
Thursday, 10 August 2006
http://www.thetruthaboutquixtar.com/index.php/content/view/19/26/


This myth claims that by looking at the percentage of IBOs that
reach a certain level of achievement in their business, and
comparing that percentage to the "odds" of winning at various games
of chance - well, you're better off heading to Vegas! But is this
true?

I'll answer this with an extract from a superb article, Anti-MLM
Zealots by Len Clements of MarketWave. In this extract he is talking
about Dr. Jon Taylor of the bogus "pyramid scheme alert"
organisation -

In yet another example of Taylor's gross lack of objectivity, he
states, "It is interesting to compare the odds of success of MLM
schemes with legalized gambling in Nevada. It appears that on
average one could do better at most any of the gaming tables or slot
machines...".

Once again we have an anti-MLM zealot (previously it was Robert
FitzPatrick) suggesting our successes are somehow a game of chance.
It's interesting to note how one's "odds" of success in MLM seem to
increase the longer they commit to it, the more they study it, and
the harder they work at it.

Taylor provides charts, graphs and numerous footnotes to create the
illusion of substance to his findings. But when held up the light it
reveals itself to be nothing more than gussied up garbage math. In
one case he provides a chart showing the odds of turning a profit in
a "no product" pyramid scheme, a single bet on a roulette wheel, and
an MLM opportunity.

He claims the percent who lose money in a classic pyramid scheme is
90.4% (9.6% make a profit), but 99.95% lose money in MLM. If we
follow the asterisks to the fine print, we discover that his 9.6%
figure came from a news report of a scheme called "The Original
Dinner Party" and Robert FitzPatrick's experience with the "Airplane
Game" over 20 years ago. That's it.

Another asterisk leads us to where Taylor arrived at his so often
cited "99.9% fail" figure. He picked six MLM companies (out of
thousands) and analyzed "internal reports" along with SEC and FTC
filings, even though only one is a public company in the United
States. He also factored in "reports from ex-distributors." But
apparently his findings were still not to his liking, so he had
to "correct" what he refers to as "deceptive data."

First, he didn't care for the way MLM companies only report the
earnings of those who are "active." Adding back in all those who
made no money because they didn't do anything to earn it (signed up,
bought a kit, and quit) would certainly increase his "failure"
percentage.

Next, he had to factor in each distributor's average annual
expenses. How he arrived at this number is not stated, nor does he
even reveal the number he chose to use – because there's only one
way he could have arrived at it.

He made it up.

For someone who demands such statistical facts and verification from
us, it's both ironic and hypocritical of Taylor to pull flimsy,
baseless, claims such as this out of thin air. His "99.9% fail"
mantra is based on nothing more than a grossly bias guess. (source)

=======


Soap and hope model criticized
Only those at top get rich, some say
BY JOHN GALLAGHER
http://www.freep.com/apps/pbcs.dll/article?
AID=/20060924/NEWS06/609240588/


Almost from the time Dick DeVos' father, Rich, cofounded Amway in
1959, the firm's system of recruiting independent sales people to
sell products has sparked controversy.

Numerous supporters, including former Presidents Gerald Ford and
Ronald Reagan, have extolled Amway as a model of American
entrepreneurs at their best.

The company's products have been well-reviewed by Consumer Reports
magazine, which has rated Alticor's cleaning products as being above
average in effectiveness.

But the company, now known as Alticor, and its Internet-based
subsidiary Quixtar, long ago became the butt of jokes for late-night
TV comics and on the Internet. Consumer advocates and some
government regulators say the company's distribution system -- known
as multilevel marketing -- enriches only those at the top.

About 2 in 1,000 distributors will make $47,000 a year, according to
the company's literature. And expenses run high.

Recruits pay about $270 to sign up and for various training
materials and products. Their so-called upline distributors, who
recruited them, strongly encourage them to buy motivational tapes
and books and to attend seminars. The motivational-tools business,
as it's known, is a revenue stream in itself for upper-level
distributors.

The company's recruitment material makes clear, in small print, that
these tools are not required, but several former distributors said
their recruiters told them that they could not succeed without the
materials.

As a result of these expenses, many distributors lost money overall.

Joanne Behnke, a Livonia native, and her husband, Mike, worked as
Quixtar distributors for six months in 2002 while living near
Atlanta.

She said they lost $3,000 before dropping out. Her older brother,
Paul Bortell of Plymouth, who recruited them, dropped out after more
than four years, in which he estimated he lost, on average, about
$4,000 each year.

Mike McKenna of Livonia, who said he lost money for three years as a
distributor before dropping out, said he was pressured to buy at
least a dozen motivational tapes a month, one success-oriented book
a month and tickets to weekly motivational meetings and at least one
special monthly seminar.

"If you're not successful, it was always, 'You have to spend more
and get more materials to become successful. That's your problem,' "
McKenna said last month.

Company data from 2005 obtained by the Free Press show that about
72% of distributors drop out during their first year, and 96% are
gone within five years.

Some distributors who remain active in the system say they are happy
in the business.

"We're in this for life," Kathy Eiden of Plymouth said this
month. "I like the product, I like the convenience of being able to
shop in my pajamas at 2 in the morning and not having to go to the
store if I don't want to."

Dick DeVos' brother, Doug DeVos, who took over Alticor as president
after Dick DeVos left, said the company doesn't promise riches to
all.

"If they're willing to do the work, they can be very successful," he
said late last month.

But the promise of wealth for part-time work appears to remain at
the core of recruitment. At a weekly recruiting and motivational
meeting held in Southfield in late August, speaker after speaker
told the audience that "anybody can do this business," that "it's
about having the lifestyle you want" and that after quitting a
regular job, the only stressful question remaining was what time to
play golf.

Dick DeVos seemed to promise an equally optimistic outcome during a
1998 speech to an Amway group in California.

"I am willing to bet you, you will never have a better opportunity
presented to you than what this business offers. I will guarantee
that," he said. "This is the best opportunity that's going to come
across in your lifetime."

==========================

The False Profit: There's No "i" In Team. But There Is One
In "pyramid."
By James Renner
http://www.freetimes.com/story/4101


DOUG BIEDRON owned a gift shop until he started selling dreams. That
was another life. Now, his business is people. The audience murmurs
as he walks into the conference room. At first glance, the 50-odd
people do not appear to fit into any single demographic. There are
men and women, white and black, young and old, all dressed as if
they're in a church rather than some hotel.

Biedron — in a gray suit and red tie, with what remains of his dark
hair slicked back — steps confidently to a dry-erase board at the
front of the room. The audience rises in ovation. Eventually, he
waves them down. When he talks, his voice is nasally, filled with a
greasy Parma twang.

"I want to tell you about TEAM," he says. "What they've done is
create a new business on the Internet. All I ask is that you keep an
open mind."

And so begins the Tuesday-night meeting. Like church, it's a weekly
deal. The speakers rotate. If it wasn't Biedron, it would have been
one of his partners; Bob Meter, perhaps. Or a 27-year-old from
Youngstown named Phil Simon. Doesn't matter, though; the pitch is
always the same.

"How many of you understand the Internet is a baby that is growing?"
asks Biedron. He waits for several hands to raise, nods, then
continues. "Basically, they say the Internet is going to generate $7
trillion in e-commerce."

The congregation murmurs loudly.

"If time and money were no object, what would you do? What kind of
car would you drive?"

"I'd hire a guy to drive for me," shouts a man in the crowd.
Laughter.

Biedron draws shapes on the dry-erase board. Circles, long
rectangles, but no triangles. He explains how Internet companies
lack loyal customers; how TEAM was formed to drive groups of people
to these Internet sites; how buying in volume saves everyone money;
how TEAM will make you "financially free."

"You will make two to three thousand a month if you put the energy
into this system," he says. "It's only going to cost you around
$250. The worst that can happen is you get a 25 percent rebate on
everything you buy."

Actually, it can get worse.

TEAM WAS FOUNDED in 1999 by Michigan opportunists Orrin Woodward and
Chris Brady. The name stands for "Together Everyone Achieves More."
It's a bit of a misnomer.

TEAM is a group that buys products from Quixtar.com. Toothpaste,
shoes, TVs; you name it, they got it. Quixtar is owned by Alticor,
which also owns Amway, the granddaddy of all pyramid-shaped
businesses.

The invitation-only TEAM meetings are generally held in hotel
conference rooms. A local TEAM leader pitches the concept for an
hour. Anyone who wants to learn more is given a "starter kit" that
includes two motivational CDs and Woodward and Brady's book, Leading
the Consumer Rebellion.

Those who become members can start buying products they would
normally purchase at Tops or Wal-Mart from Quixtar instead. Because
Quixtar is buying directly from manufacturers in bulk, it can "cut
out the overhead." However, most of these items are substantially
marked up. For instance, a family spending $300 on household goods
might spend $350 buying the same products through Quixtar.

In one of the CDs, Woodward justifies this as just a part of a two-
year business plan. "In that two years, spending $50 a month, you
have accumulated $1,200," he says in manic staccato sentences
recorded at some live convention-center rally. "You've invested
$1,200 over two years for the right to make an extra six or seven
thousand dollars a month."

The promise of making money hand-over-fist is subtext to everything.
And here's how you do that: sign up everyone you know as a TEAM
member.

TEAM mentors, or "uplines," are assigned to new recruits. They sit
down with newbies and comb through their address books, lists of
friends, and names of family members. Invites go out to as many as
possible. Because in order to earn a lot of money as a TEAM member,
they need more TEAM members to sign up below them. The more business
they drive through their personal account (assigned when they become
a Quixtar independent business owner, or IBO), the more rebates they
receive from purchases. After enough people sign up through them,
IBOs start receiving bonus checks from Quixtar. Reaching Platinum
status earns them a check for $2,500.

Technically, TEAM is not a pyramid scheme, according to federal and
state guidelines. Robin Luymes, manager of PR for Quixtar,
explains: "A pyramid scheme is based on the exchange of money
without products. No money is exchanged in our business until
products are purchased. Your income is purely derived from the
movement of product."

Still, Woodward admits to having found a loophole to speed things
up.

"It got to the point where, if I have to buy these products and bury
them in my backyard, I'll do it for two years," he tells a live
audience on CD-71. "I'm not saying do bury them, but it made sense
to me."

The Ohio Attorney General's office has received complaints. In 2000,
a woman reported being asked by employees of the Ohio Bureau of
Workers Compensation to sign up with Quixtar during a business
meeting. In 2001, a Shelby man complained about losing $260 to a
Quixtar pitchman; he asked the AG's office for help keeping the
persistent salesman away. "And they better not mess with me, because
in a righteous, Bible-approved way, I will deal with them," he
wrote. The latest complaint, from August 2005, is aimed directly at
TEAM members.

Orrin Woodward did not return calls. His assistant said he was too
busy snowmobiling with his children. Those at the top of TEAM's
structure have it pretty good. And that lifestyle is very attractive
to those still struggling in the bottom tier.

HEINZ WERNER is a member of Cleveland's branch of TEAM. Typical of
most members, he once owned his own business — a tanning salon — but
fell into financial trouble. He's thirtysomething, wears a sharp
suit, and mimics many of his TEAM leader's points during idle
conversation. He's still really excited at the prospect of becoming
financially free, even if that goal remains slightly out of reach
after nearly three years in the program.

"Right now, the income I receive [from Quixtar] is enough for me to
break even," he says. "It covers all the meetings, seminars, CDs and
books. I'm probably less than a year away from making Platinum."

Besides the bonus check, Platinum members also get to divvy up the
weekly meeting fees. Werner can almost smell the money he's about to
rake in.

"Get on the TEAM, even if you don't know how it works yet," he
says. "It took Wal-Mart 20 years to reach $1 billion in sales. It
took us five years. We're going to kick Wal-Mart's butt. Are you
going to watch it happen, or are you going to make it happen?"

Those sales figures come from Quixtar, and are suspect at best. And
at least at Wal-Mart, workers are guaranteed minimum wage. Even TEAM
leaders are struggling to get that much.

"I'm not financially free," says Bob Meter, who organizes many of
the weekly meetings around Cuyahoga County. He's been in the program
for over two years and is considered one of the more motivated local
leaders. "But I'm about to see some big results."

Not that money matters, he says. "What they didn't tell me was how
it would help my relationship with my wife and kids. It's a
Christian-based organization, you know?"

Scott Larsen, a longtime Amway watcher, wrote about TEAM's affinity
for Christians on his Web page. Until Orrin Woodward sued and forced
him to shut the site down. Due to the court settlement, he cannot
speak about TEAM. But he can rant all he wants about Quixtar.

"There's definitely a right-wing religious base," he says. "I
believe they prey on these people because they have too much trust.
They win their trust more easily." (Larsen's original essays are on
Carnegie Mellon University's Web site, www.cmu.edu. Search "pyramid
scheme.")

While many Cleveland members are Christians, they apparently do not
promote the love-thy-neighbor doctrine outside of meetings. The desk
clerk at the Hampton Inn in Middleberg Heights remembers them as
pompous bullies. "They were always mean, real rude," she says. "Then
they just left."

TEAM Cleveland doesn't stay in one location for long. In the past
year, they have bounced from a room at Ohio Wesleyan University's
Independence campus to Middleberg Heights, to a conference center
off I-77. Next Tuesday at 8 p.m., you'll find them at the Westlake
Holiday Inn

AT A COFFEE SHOP in North Royalton, Doug Biedron defends his
burgeoning business, even though no one in Cleveland seems to be
making money at this.

"We're not a pyramid," he says. "Call the Better Business Bureau,
call the Federal Trade Commission. We're governed by them."

Then he switches back to sales mode. "Not everyone in this business
is going to make money, but I'll help you as far as you want to go.
Look, I'm a Christian. Have you ever read the Bible? This world
revolves around people, so how many do you want to go out and help?
I love dealing with people."

Cleveland, he says, is on the verge of being taken over by TEAM. "It
has exploded here. That's all I can tell you. There were six people
in my first meeting, now there are sometimes a hundred. It works
because it's so duplicatable."

But that's not really a word.

"Yeah, technically," he replies. "But `ain't' wasn't a word either.
Is now."


==============================================

In pursuit of the almighty dollar
Dateline investigation: Inside story of business that attracts
people with promise of easy money
By Chris Hansen
NBC News
http://msnbc.msn.com/id/4375477/


Thousands of true believers gathered in celebration at arenas across
the country, all convinced they've found the true path to success,
to wealth beyond their wildest dreams. The promises are golden,
fueling dream they do -- of luxury homes, fancy cars, yachts and
private planes. So who are all these people and what are they so
worked up about?

The people are distributors for a company called Quixtar, which says
it's had $3 billion in sales since 1999. They say the company's
special formula for success has made them rich. But their main
purpose here is to tell all these thousands of other distributors
that they can do it, too.

All they have to do is sell everything from the company's own line
of vitamins and cosmetics to name brand appliances and electronics.
For that they'll get a percentage of the sales. And if they recruit
a ton of other people to do the same they'll get a percentage of the
orders placed by everyone they recruit.

The more people they recruit, the richer they can get. And richer,
and richer and richer. Sound too good to be true? We thought it did.
In fact, it sounded a lot like another company that made news
several years back. Amway, a hugely successful business that came
under government scrutiny, was fined and ordered to stop making
unrealistic promises about income to its distributors.

To find out what Quixtar was up to, we took our hidden cameras to a
recruitment meeting in New Jersey -- one of hundreds held around the
country each week, and where hundreds of thousands of Quixtar
faithful get their start. The first thing we hear is how easy it is
to make it in Quixtar.

Greg Fredericks: "If you're somewhat serious, all I mean by somewhat
serious -- if you invest maybe, say, 10 to 15 hours a week in your
business. This is your own business -- you could generate in the
next 12 to 18 months, an extra quarter of a million."

Tim Sandler [Dateline producer]: "I'm sorry. How much?"

Fredericks: "A quarter million."

Sandler: "You're making more than $250,000 -- quarter of a million?"

Fredericks: "Umm hmm."

The recruiter, Greg Fredericks, sure gets our attention when he says
he himself has made it big on the Quixtar plan.

Fredericks: "I owe nobody nothing. You know, today I'm looking at a
million dollar home, a thousand dollar Rolex just for kicks. And I
just got a brand new Lincoln Navigator sitting out front paid for
cash. So things are good."

And he says those kinds of riches are ours for the taking. And on
top of getting rich, we'd also be able to make our own hours and
spend more time with our family. So at another meeting, after paying
$200 for a starter kit, we sign up and are officially introduced to
the Fredericks team.

The first step is to think positive.

Fredericks: "So I don't put anything into my head that's going to
cause me to be thinking outside my positive role."

That means, no TV, no reading newspapers.

The second – and perhaps most important – step, is we're told to buy
motivational books and tapes from top Quixtar distributors.

Fredericks: "Reading. I would recommend you start reading. Do 15
minutes to about a half hour a day."



Those books and tapes are going to cost us, but one of Fredericks's
associates says they hold the key to our success. Still, it's not
just buying the books and tapes, which can go for about $60 a month.
We're also urged to spend money on seminars for about another $50 a
month. And within days of becoming Quixtar distributors, we're told
of one big event we shouldn't miss.

Fredericks: "This is going to be the function of the year."

A few hundred dollars later, we find ourselves on a bus ride -- a 14
hour bus ride from New Jersey to South Carolina for something
called "Spring Leadership Weekend." To Fredericks and others it's
not just a business trip, it's a pilgrimage.

Fredericks: "Lord, we ask you for a spirit of openness so that we
might go down to Greenville, South Carolina, Lord, and that we might
be changed. In Jesus's might name we say, Amen."

Group: "Amen."

Fredericks: "Let's have a great weekend."

At the arena in South Carolina, people have been sleeping outside,
like teenagers at a rock concert. When we arrive the next day it's
not long before the crowd swells and we're part of a fevered rush to
get inside -- 15,000 pack the arena as we thrill to a carefully
choreographed show that promises money and everything that comes
with it. We're urged by those successful Quixtar distributors on
stage to dream big like they do.

The excitement builds with each success story. One man says he once
ran a car wash. His vision of financial freedom moves the crowd to a
chant we hear over and over again.

Crowd: "Freedom! Flush that stinking job!"

The speakers are treated like superstars, all living testaments to
what happens when you follow the Quixtar plan. But there's one who's
become an icon. If Quixtar is a religion, one man is its pope. His
name is Bill Britt, and legend has it he's worth millions, all
because of Quixtar.

Bill Britt: "I got into this business for five reasons. Good
reasons. The first one was money. The second reason I got in was for
money. In fact, that's what all five reasons were."

So devoted are the followers, many in the crowd with us become sleep
deprived, afraid to miss out on advice that will make them
millionaires. Such devotion is hard to fathom, but we see just how
far it goes on the last night of the weekend, when a single candle
is lit. Soon the dark arena becomes a tabernacle, a shrine to the
Quixtar dream.

For some, there is a solemn and tearful promise to their leaders.
But are the leaders keeping their promises to the faithful? What the
thousands lighting candles in this arena don't realize is that 99.9
percent of them will not only never get rich from Quixtar, but they
won't even come close.

The freedom to flush that stinking job--that's the promise. And
that's exactly what Eric Scheibeler did.

Eric Scheibeler: "I thought if I could create a six figure income
and spend time with my family, I'd do anything for that."

Scheibeler, at the time a federal auditor, had heard the stories and
seen the videos. He signed up, and after a few years working part
time in the business, he ceremoniously shot his own alarm clock. He
triumphantly quit his day job. And with a limo waiting it was party
time as he walked into the welcoming arms of his family and friends
in the business.

Chris Hansen: "Goodbye boss, hello family."

Scheibeler: "That's right. Exactly. It seemed to be the American
dream."

But instead of a life of leisure and more time with his family, he
says he worked day and night, buying the tapes, attending the
rallies. Still, he made nowhere near the six figure salary he
thought he would. In fact, in his best year he made $34,000 and even
that didn't last.

Hansen: "What do you have today?"

Scheibeler: "We're destitute, financially. We'll change that. But
financially we have nothing as a specific result of this."

We heard it again and again. People who worked the Quixtar plan,
only to suffer in the end.

Vicki Mack: "It's hurt us. It's hurt a lot of people."

Vicki and Lindy Mack say they not only didn't make money, they lost
more than $35,000 over a five year period. Much of it on books,
tapes, and traveling to rallies.

Hansen: "That by the way, is like a year at Harvard."

Vicki Mack: "No kidding. I know that. We know that."

So why, despite the promises, did the Macks and thousands of others
end up on the losing end of the Quixtar dream? One man says it's
because it's based on a lie. And he should know. His name is Bo
Short, and for a time, he was selling the dream himself as one of
Quixtar's brightest stars. But he says, he began to realize he was
part of a mass deception.

Hansen: "You see these videos of these attractive couples driving
Porches and Ferraris. Panoramic shots of palatial mansions."

Bo Short: "They're beautiful. Right."

Hansen: "Is that actually achievable by selling Quixtar products?"

Short: "Based on my experiences, no."

Hansen: "How are people getting all of this stuff then?"

Short: "There is another business."

And it's a business that is completely separate from Quixtar, a
hidden business that most recruits don't realize exists. Short says
many of those high-level distributors singing the praises of Quixtar
on stage are actually making most of their money by selling
motivational books, tapes and seminars -- not Quixtar's cosmetics,
soaps and electronics.

Hansen: "This was the dirty little secret."

Short: "That's exactly what it was, absolutely."

Hansen: "That's not what you hear at the conventions."

Short: "No, and that's not what you're told in somebody's living
room when you see it either."

In fact, about 20 high level distributors are part of an exclusive
club, one that those hundreds of thousands of other distributors
don't get to join. For years only a privileged few, including Bill
Britt, have run hugely profitable businesses, selling all those
books, tapes and seminars -- things the rank and file distributors
can't sell themselves, but are told over and over again they need to
buy in order to succeed.

Hansen: "Why are the recruits told to listen to the tapes and read
the books over and over and over again?"

Short: "Because it creates a dependency and it creates a habit that
keeps you bound to that business."

Vicki Mack knows all about that. Even though she's a medical doctor,
a pediatrician with a thriving practice, she found herself slaving
away in the pursuit of new Quixtar recruits. After all, new recruits
mean new sales and new sales mean more money.

Vicki Mack: "We'd be out, just even hanging out at McDonald's at the
play places talking to parents."

Hansen: "At McDonalds?"

Vicki Mack: "Yeah."

Hansen: "Now you graduated from Berkeley."

Mack: "Uh-huh."

Hansen: "Went to medical school."

Mack: "Uh-huh."

Hansen: "Making a very fine salary as a pediatrician."

Mack: "Yeah."

Hansen: "And yet you're in a mall at a McDonald's on a Saturday
trying to sell this thing."

Mack: "Yeah."

None of this surprises Bo Short. Not the commitment of time and
money, not the emotion as we saw at the rally we attended.

Hansen: "There's a man with tears."

Short: "There are probably many people with tears. And not all of
those tears are because they're committed to it. Many of those tears
are because they have worked diligently and are not any closer."

Hansen: "If this is not a legitimate business opportunity, then in
reality, in your opinion, what is it?"

Lindy Mack: "I would use the word scam."

Vicki Mack: "That's what I was thinking too."

Bo Short says, when he and several other high level distributors
began to suspect the same thing, they confronted the company's
managing director, Ken McDonald.

Short: "I said, 'Ken, I believe that people are stealing money and
you're letting it happen.' And he didn't respond… And I remember
looking at him a few minutes later. I said, 'Ken, kick some of them
out. Show people you're serious.' And he looked at me and
said, 'What would happen to the business?'"

Short says the company acknowledged it had been aware of the problem
for decades. How could that be? Remember when we said Quixtar
sounded a little like Amway--a company which drew the ire of the
federal government several years back for making false promises to
recruits? Well it turns out Quixtar isn't just like Amway -- it was
Amway. Quixtar is just its new incarnation with many of the same
players.

Eric Scheibeler and the Macks began as Amway distributors. And many
of those same high-level Quixtar distributors also began with Amway.
So did Bo Short, who says he decided to walk away from the business
and all the money that came with it.

Hansen: "You were a poster boy for this outfit. You were on the
company yacht. Are you now turning around and biting the hand that
fed you?"

Short: "I don't care if anyone thinks I'm biting anyone's hand that
fed me. I'm telling the truth."

Quixtar declined to be interviewed on camera. But its managing
director, Ken McDonald says in a letter that Short's recollection of
events is "misleading" and he questions Short's "motivation" for
speaking out. Short does run a small direct marketing firm himself
and Quixtar considers him a potential competitor.

Quixtar also says it "prohibits" its independent distributors from
making exaggerated claims about income. As for the company's income,
most of that comes from the sale of products, not from tapes and
books and tickets to rallies. In its contracts, the company
discloses that some distributors do make money from those sales but
that buying those materials is "strictly
voluntary."

As for Bill Britt and some of the other top-level distributors we
saw on stage, they also declined our request for an on-camera
interview. But their lawyer told us in a letter that the income
claims we heard are "not promoted or endorsed" by Britt and those
other top distributors. He also wrote that buying the books and
tapes is "voluntary"... and that how much they make from those
sales "is not available."

So how much does an average Quixtar distributor really make? Well,
only about $1,400 per year. What's the source for that figure? It's
Quixtar itself. You can find it in the fine print of the company's
own registration materials. That's $248,600 less than what our
recruiter, Greg Fredericks, said we could make.

We caught up with him at one of his recruitment meetings.

Hansen: "We're doing a story on Quixtar and Quixtar distributors."

Fredericks: "Okay."

Hansen: "And these folks here work with me."

Fredericks: "Oh, great."

Hansen: " And we wanted to ask you a couple of questions."

Fredericks: "Sure."

First we reminded him about the money he said we could make.

Hansen: "Are you really making..."

Fredericks: "I'm not disclosing that."

Hansen: "A quarter million dollars by working merely 15, 16 hours a
week?

Fredericks: "[affirms] But I'm not going to disclose to you my
information as far as my personal income."

But what he did let slip when he didn't know the camera was rolling
was that one of the elite distributors we saw on stage is making
most of his money from the motivation business.

Fredericks: "Probably three quarters of it."

Sandler: "And that's from seminars -- holding seminars?"

Fredericks: "Seminars, rallies, functions, motivational tools,
tapes, books, speaking engagements, appearances."

But he didn't seem to remember saying that.

Fredericks: "I don't know where that number came from. You're
mentioning a number, three quarters of what his income is..."

Hansen: "That's what you said, not what I said."

Fredericks: "Did I say that?"

And that's about all he had to say. Later we found something else
about Fredericks. Back in the mid 90s, he was arrested and charged
with possession of crack cocaine and is still wanted by police to
face charges in North Carolina.

What about others involved in Quixtar? Both the FBI and the criminal
division of the IRS are making separate inquiries into at least two
top distributors not focused on in this report. In the meantime,
hundreds of thousands of true believers are drawn into Quixtar every
year, dazzled by the promise of the good life. But unless things
change, says Bo Short, it's a broken promise that will leave broken
hearts.

Short: "I think people are being hurt. Because understand, the
majority of people in the audience believe, or desperately,
desperately want to believe this. And they sit there with their
hearts in it. What about them?"

Some former high-level distributors have filed a lawsuit against
Quixtar in federal court, accusing the company of antitrust
violations and conspiracy. Quixtar disputes the allegations and says
it hopes the matter will be resolved through arbitration.

-

Dateline : Quixtar Response to Dateline NBC
Dateline got it wrong.
http://www.quixtarresponse.com/


After a year of investigative reporting, the Dateline story on
Quixtar boiled down to the complaints of three former Quixtar
Independent Business Owners (IBOs) – one of whom is a competitor –
and ignored the hundreds of thousands of IBOs powered by Quixtar who
are achieving their goals.

Quixtar may not be perfect, but we do a lot of things right,
including our commitment to consumer protection. Quixtar rules
prohibit statements that misrepresent the income potential
represented by a Quixtar-powered business, and potential Quixtar
IBOs are provided with average earnings information.

The Dateline show examined the training and support provided by
Quixtar IBO leaders and the income they derive from those materials.
As Quixtar informs all new IBOs, these materials are optional and
covered by satisfaction guarantees. Quixtar also notifies IBOs that
others earn income from these materials. In the end, individuals
must decide for themselves if they find these materials of value.

Quixtar offers an opportunity, not a guarantee. In fact, research
shows that most people get in Quixtar to make a little extra income,
not attain great wealth. Our business works when Quixtar IBOs
achieve their goals. If this business doesn't work for them, Quixtar
would not have achieved this level of success.

History of the Dateline Quixtar Story
In June 2003, Quixtar learned that the TV show, Dateline NBC, was
doing an investigative story on the business opportunity and
Independent Business Owners (IBOs) powered by Quixtar.
We learned that two Dateline producers had registered as Quixtar
IBOs and for months had been conducting undercover research for the
Dateline story, which included using a hidden camera to videotape
meetings and conversations with Quixtar IBOs. The Dateline producers
did not identify themselves as working for Dateline, instead
feigning interest in building a business powered by Quixtar. In late
June, Quixtar was contacted by one of the Dateline producers,
seeking response to a handful of questions. In the months since,
correspondence with the Dateline producer continued to unveil, bit
by bit, issues that might be part of the Dateline Quixtar story.


How we responded to Dateline
To ensure fairness, balance, and accuracy, Quixtar sought to
cooperate with Dateline in the development of the story. However,
Dateline's deceit in registering producers as Quixtar IBOs under
false pretenses created suspicion on Quixtar's part that the story
would not be a realistic depiction of its business. In addition,
much of Dateline's "reporting" appeared to be lifted directly from
the Web site of a Quixtar critic, who boasted online of his
involvement in Dateline NBC's story.

Quixtar's management team also considered Dateline's record,
including the infamous broadcast in which Dateline NBC rigged truck
crashes. In late 1992, General Motors sued Dateline for defamation –
the first defamation suit GM had ever filed. Dateline NBC apologized
and admitted that using sparking devices to trigger a fire was a bad
idea.

So, while Quixtar provided comprehensive written responses to
Dateline in the hopes of creating greater awareness and
understanding, it did not grant an interview. It was, and remains,
our belief that Quixtar's perspective would be taken out of context
to support Dateline's story line, regardless of the facts.

Dateline NBC has stated that because it provided the opportunity to
be interviewed, and because they showed specific portions of letters
Quixtar sent to them, they are not obligated to include a link to
this response site at the Web site where the transcript of their
story is shared publicly. And, despite Dateline claims of fair and
balanced journalism, they continue to link to the Web site of the
aforementioned Quixtar critic.


The nature of TV news magazines
Despite its claim to be a legitimate news program, Dateline NBC
needs to create an audience to generate advertising revenues and so,
in the process, leans toward a tabloid news style with "explosive"
stories and celebrity profiles. A story about Quixtar's IBOs and the
nature of our business doesn't seem to fit Dateline's type of story,
unless you dwell on isolated incidents that do not reflect the
experience of the vast majority of people who rely on their Quixtar-
powered businesses to achieve their goals.


Responsible journalism and business
Quixtar does not deny Dateline NBC's right to air a story if the
reporting is fair and balanced and if any opinions and criticisms
shared are well-founded and placed in the proper perspective.
Unfortunately, this story did not meet these benchmarks of
responsible journalism.

Moreover, despite the misperceptions created by this story, neither
Dateline NBC nor anyone else can deny Quixtar IBOs their right to
free enterprise and to pursue their goals through Quixtar-powered
businesses or through the legitimate sales aids and training
programs some Quixtar IBOs purchase and market.