Quixtar is a multi-level marketing company, founded in 1999 by the owners of Amway . Quixtar is owned by Alticor which also owns Amway. It employs a compensation system similar to Amway's and is the marketing venture for products formerly marketed by Amway in the United States and Canada. Between 1999 and 2001, Quixtar took over the Amway business operations in the United States and Canada.

Contents

1 Business 2 Controversy 3 Litigation 4 External links 4.1 Criticism

Business

People can join as "Clients," "Members" or "Independent Business Owners" (IBOs). IBOs, pay a registration fee, and begin building their businesses through retail sales (to clients and members) and helping new business owners build businesses. Their earnings are based on their sales and the volume of sales and purchases of other IBOs recruited below them. The primary way to join and buy products at Quixtar's web site is with a referral number from an IBO. Quixtar sales for fiscal year 2003-2004 were over $1.1 billion with over $373 million paid out in bonuses and incentives.

Quixtar offers a wide range of products for its IBOs to purchase and sell as well as many products manufactured and marketed by third parties. Quixtar IBOs, members and clients can also access the Internet sites of Quixtar's many "partner stores" through the Quixtar website. However, Quixtar and its predecessor, Amway, have been controversial for years because of allegations that these companies are pyramid schemes. Critics claim that most of the products sold by Quixtar are to the IBOs themselves for personal consumption rather than to retail consumers who aren't enrolled as IBOs. As a result, according to the critics, Quixtar IBOs often spend more money than they make and can only offset those losses by recruiting a number of downline IBOs also spending more on Quixtar products and motivational and training materials than they make from Quixtar.

Controversy

There is also a great deal of controversy surrounding the "Amway/Quixtar Motivational Organizations" (AMOs or AQMOs) owned and operated by high level distributors. Critics describe this as the "business within the business" of selling motivational audiotapes, CDs, books, videos, website access, rallies, seminars, meetings and other promotional items (referred to in Quixtar as "tools" or "business support materials"/"BSM") to newer participants, from which the high level distributors make the majority of their income. All IBOs, however, are encouraged to accept an agreement as part of the registration process intended to make the new IBO aware that business support materials - books, tapes, CDs, informational literature, seminars, etc. - are purely optional and 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. Critics 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 business support materials.

Litigation

In a 1979 ruling, the Federal Trade Commission determined that Amway was not an illegal pyramid scheme because it enforced rules requiring distributors to sell to at least 10 retail customers per month and to sell 70% of the products to retail customers. Critics state that Quixtar does not enforce the retail sales rules. Quixtar maintains that the 70% rule is only meant to prevent product stockpiling to achieve certain bonuses.

External links

• Quixtar http://www.quixtar.com/
• Quixtar's Official Facts Site http://www.quixtarfacts.com/

Criticism

• Comprehensive archive of Quixtar information http://www.amquix.info/
• Dateline NBC's story about Quixtar http://msnbc.msn.com/id/4375477/
  • Quixtar's Response to Dateline Story http://www.quixtarresponse.com/
• One man's perceptions of Quixtar http://www.quixtarblog.com/