As promised, here are some comments about the Amway UK IBO sanctions:

I am assuming at this point that you have read about the Amway UK IBO sanctions. If you haven’t read about them, click the link above and then come back and post your opinions.

Amway UK is a small market for Alticor, (Amway/Quixtar’s parent company) so the monetary affect of these sanctions is not huge on the overall volume of the company.

My personal opinion is that this is a shot over the bow of Quixtar in the U.S. This is about Alticor showing the IBO Leaders (Britt, Winters, Puryear, Woodward, Yager, etc) that the company is serious about cleaning up the training and tools mess.

If the old school tools boys don’t clean up their act, it is now apparent that the company will step in and clean house.

But…(you knew that was coming, didn’t you?)

But, Quixtar is not nearly as lucrative as an opportunity if you remove the tools income that begins in many cases at the Platinum level. I would even go as far as saying that the tools income is what keeps Amway/Quixtar leaders from leaving for a different company with a better compensation plan.

Quixtar pays out roughly 30% back to it’s IBO base, yet the average of the top 30 companies in the industry is roughly 37% payout. Why would IBO Leaders stick around Amway/Quixtar for years when there is more money to be made elsewhere?  It’s all about the secondary business of books, CDs, seminars, voice mail, and web sites, collectively know as the tools business. Take away the tools business and Quixtar Leaders are paid 20%  (a conservative number) less than leaders in other companies for the same volume.

The IBO leaders are in a bit of a bind. They clean up their act or the leaders keep on trucking and Quixtar comes in and cleans up. Either way the leaders stand to lose a lot of money.

Will all of this be better for the individual Amway/Quixtar IBO? Probably. Would the individual Quixtar IBO be better off by finding a new opportunity at this point? Probably. I would be willing to bet that BIG TIME IBO leaders are already looking around at other opportunities.

I said this about USANA and it applies to Quixtar at this point as well. The company will survive all of this, but it will get worse for the typical IBO before it gets better.

Update: I re-read the letter and noticed that this UK action is in response to “serious concerns raised” by the Department of Trade and Industry (DTI). That has me wondering whether Amway would have done anything if not for a pending crackdown by the DTI.

Your comments and theories are welcome…

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This letter was posted at the Quixtar Blog by Dave Robison of On The Road with Dave fame (my comments coming shortly in a seperate post - stay tuned you might be surprised at my take on this):

Letter: from Ben Woodward Branch Manager Amway UK UK/ROI IBO
Communication

May 4, 2007

To: UK/ROI IBO Leader
From: Ben Woodward, Branch Manager, Amway UK

RE: Significant change to Amway’s mode of operations in UK/Republic of Ireland.

This letter is to inform you of significant changes to the way Amway will conduct its business in the UK and Republic of Ireland. These changes are effective immediately. While these changes may cause short-term challenges for some of our IBOs, we strongly believe the changes will make our long-term business in the UK/RoI stronger.

Effective Immediately: 4 May 07.
Amway will prohibit the production, sale or promotion of BSM that are not authorized and distributed by Amway; this includes websites. This includes any BSM (books, tapes, meetings, CD’s, websites) that have been already been approved by Amway UK/RoI. They are now considered unauthorized for use.

All meetings for which an entry fee is charged are suspended until Amway has approved, in writing, the meeting and its content;

Amway has imposed a moratorium on sponsoring new IBOs for at least 60 days and until current IBOs are re-trained and re-qualified; We are evaluating all costs associated with joining Amway;

We are also sanctioning a number of IBOs based on contract violations that have come to our attention.

Failure to comply with the above mentioned points 1 to 3 will lead to a suspension and/or termination of the respective IBO contract. Please also note that Amway is in no way limited to these sanctions, but can impose further corrective or punitive measures.

In addition, the company is announcing a thorough review of its business practices globally with the goal of ensuring a consistent, rigorously enforced set of rules and regulations governs its relationships with IBOs and consumers.

That global audit has begun, and we expect it to be completed in June, and will share the results with you later this summer.

These are important steps, but in some ways, they are not surprising ones. Many of you know that for the past 10 years, Amway has been moving to exert more control over the way we do business globally.

In newer markets that has meant, for example, outright bans or tight
restrictions on the sale of non-company BSMs and the requirement of a more consistent, approved messaging and branding by IBOs about the Amway business opportunity.

While most changes in other markets have been carried out gradually around the world according to our timetable, we need to move more quickly here. This is in response to serious concerns raised about Amway by the Department of Trade and Industry (DTI) following the receipt of complaints about BSMs and misrepresentation of the business to prospective IBOs.

At this time, we can not specify when sponsoring will be allowed to resume. We will continue to communicate with key international and local IBO leadership to update them on developments of a new operational mode in UK and Republic of Ireland.

Enquiries
For example, if any IBO has a planned meeting for which tickets have been sold (that is required to be cancelled and ticket purchases refunded), or they have unsold inventory of BSM, or have unsold Starter kits, or have completed applications not yet submitted to Amway, they may contact the dedicated enquiry telephone number – 01908-629400 (press option 4).

In the following weeks, we will seek to meet with you personally to discuss the implications of this policy change and respond to any questions you may have. Meanwhile, please feel free to call me at 01908-629404.

Amway has been in the UK/RoI for more than 30 years, and today is a strong, growing £13 million business with more than 100 staff and 30,000 IBOs. We are entering into a challenging period of time.

But we believe in this business, we believe in our values and we believe in our IBOs. We are committed to making the changes we need to make in order to ensure the continued growth and success of Amway in the UK/RoI.

BEN WOODWARD
Branch Manager UK / RoI

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The Star:

KUALA LUMPUR: Amway (M) Holdings Bhd expects new products launched this year to boost revenue by RM57mil for its financial year ending Dec 31.

Amway posted RM723.7mil revenue and a net profit of RM80.6mil for its 16-month financial year from Sept 1, 2005 to Dec 31, 2006. It changed its financial year to align it with US-based holding company, Alticor Global Holdings Inc.

Executive director Paul Yee said four new products had been launched earlier this year and 10 more would be introduced before year-end.

“We are confident the 14 new products will increase sales by RM57mil based on the track record of previously launched products,” he said after the company AGM yesterday.

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Bangkok Post:

Amway (Thailand) Co, the country’s largest direct sales firm, is aiming to double its sales in 2012 to 20 billion baht.

Preecha Prakobkit, the company’s managing director, said the target would be in line with its US parent firm’s goal to double its business at the same time.

To achieve its target, Amway plans to adopt three main strategies to generate growth. They include focusing on customers, boosting performance, and innovation.

Mr Preecha said the company would study consumer needs to develop new products that fit their demands.

It also encourages interested individuals to contact Amway for business opportunities and products.

Celebrating Amway Thailand’s 20th anniversary yesterday, from left: managing director Preecha Prakobkit; Somrit Chunharat, distribution division director; Kittawat Ritteerawee, business relations director; and Chumpol Chayopratham, information systems division director. — WISIT THAMNGERN

Sales in the first quarter remained unchanged from last year due to the poor economy, Mr Preecha said. Therefore, the company expects sales this year to reach 9.71 billion baht, on par with the previous year’s figure.

To cope with the gloomy economic situation, the company will increase its advertising and promotional spending by 20% to as much as 100 million baht. It will push fast-moving items and introduce new products every month to spur consumer demand.

It plans to stage the Amway Expo and Convention 2007 for national direct sales businesses from May 12-13 at Challenger Hall, Muang Thong Thani. It expects to attract more than 60,000 visitors during the two-day event.

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ADA, Mich. (FV Newswire) - Sun infused and sweetly subtle, ARTISTRY® Lustre Trend Colour Collection provides endless options to creating an effortless glow. Available exclusively through Quixtar Inc., this new Trend Colour Collection promises a season of new beginnings.

About Quixtar Inc.
Quixtar Inc., a subsidiary of Alticor Inc., is a business opportunity company that offers entrepreneurs the ability to have a web-based business of their own. Through Quixtar’s Independent Business Owner Compensation Plan, individuals are rewarded for product sales resulting from their business-building efforts.
Quixtar’s health and beauty focus has helped it achieve the #1 rank in this online category, according to Internet Retailer magazine (2006). Our brands are backed by extensive research, with more than 526 patents worldwide plus state-of-the-art manufacturing and distribution.
Since 1999, Independent Business Owners (IBOs) powered by Quixtar have generated $5.3 billion in sales at www.quixtar.com plus more than $396 million for Partner Stores, earning more than $1.72 billion in bonuses and other incentives.

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“A recent survey shows that 83 percent of companies use gift certificates or cards in their incentive programs.” – Fred Harteis.

GRAND RAPIDS, Mich., April 13, 2007 – Sixty-seven percent of employers spend between $25 and $150 on gift cards or certificates according to a recent survey by Incentive Magazine. Nearly 70 percent of survey respondents thought that gift cards or certificates were as or more effective than cash. “This is great news for our members, Quixtar Independent Business Owners (IBOs), who are building their gift and incentive businesses,” says Fred Harteis of the Independent Business Owners Association International (IBOAI).

The Ribbon Gift and Incentive Program is an easy, convenient way for businesses and individuals to give the gift of choice. “It’s also a great way for Independent Business Owners to capture their share of the $253 billion gift and incentive industry,” adds Fred Harteis.

“Whether you’re a Human Resource Manager looking for a way to reward employees, a real estate agent seeking a special way to thank your clients, or a mom who is at a loss as to what to get her picky teenager for his birthday, the Ribbon Gift and Incentive program has what you’re looking for,” notes Fred Harteis.

“The Ribbon Gift and Incentive Program starts with a collection of 21 gift cards and albums filled with name brand products ranging in value from $25 - $750. Collections are organized by themes targeting a variety of age and interest groups, so there is always something for everyone,” says Harteis. “There are seven general gift collection albums offering an impressive array of name-brand products from electronics, to kitchen appliances, to home décor and more.”

“Eleven specialty gift collections are designed specifically for particular interests, lifestyles and events, such as a new baby or a wedding. This collection includes two name-brand exclusive albums, the Ghirardelli® collection for chocolate lovers and the Cuisinart® collection of kitchen gifts and appliances,” continues Fred Harteis. “And three vacation package collections provide recipients accommodations at popular destinations across the U.S., Canada and Mexico.”

“The gift recipient can choose their gift by reviewing the gift options in their gift album or viewing selections online. Once they’ve selected their gift, the recipient logs onto www.ordermygift.com and follows the easy step-by-step instructions to order his or her gift, which is then mailed directly to his or her home free of charge,” explains Harteis.

“Ribbon Gift & Incentive program is available exclusively from our association members, Quixtar Independent Business Owners,” says Fred Harteis.

About the IBOAI

“The official Trade Association, IBOAI is dedicated to serving and protecting the interests of Quixtar powered Independent Business Owners (IBOs) throughout North America,” says Fred Harties of IBOAI. Governed by a Board of Directors, the IBOAI:

• Protects the best interests of IBOs and serves as an advocate in IBO issues.

• Promotes and protects the integrity of the Independent Business Ownership Plan.

• Ensures that the business opportunity today is as good or better for future generations.

• Acts as an advisory group to Quixtar Inc. and Quixtar Canada Corp.

The 2007 IBOA Board of Directors Executive Committee includes Jim Janz, Chairman, Don Wilson, Vice Chairman, Bob Andrews, Brad Duncan, Kanti Gala, Randy Haugen, Bill Hawkins, and Kathy Victor. Governance and Oversight Committee includes Jody Victor and Billy Florence.

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globeandmail:

“Dozens of companies, most of them U.S.-based, now offer direct-to-consumer genetic tests. Some predict a customer’s risk for such ailments as heart disease, osteoporosis and cystic fibrosis. Pharmacogenetic tests are used to recommend medicines and dosages. Nutrigenetic tests, such as the one used by Ms. Dyck, use genetic information to tailor diet and exercise programs.

Right now, Canadian regulators have little authority over these tests. Only a small part of the service - the collection kits containing the inner-cheek swab materials - falls under Health Canada legislation. Once the cheek is swabbed and the sample is mailed back to the United States, testing falls under U.S. guidelines. And even if the lab and the tests are up to par, it’s still up to the consumer to discern whether genetic testing companies are making legitimate claims.

A year ago, one of the industry’s major players set up shop in Canada. Quixtar Inc. of Grand Rapids, Mich., has sold 10,000 of its two genetic tests to Canadians since opening up a distributor in London, Ont., says Lise Beland, the company’s senior health-product marketer.

Its heart health genetic test, which predicts risk of cardiovascular disease, accounts for 60 per cent of sales and costs about $245 per test. A general nutrition genetic test costs about $135 and recommends vitamins and supplements, which are also sold by Quixtar.”

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“Quixtar Independent Business Owners can now offer their clients the best in health products for pets through a new partnership with 1-800-PetMeds.” – Billy Florence

GRAND RAPIDS, Mich., April 29, 2007 – Retail sales of pet supplies in the U.S. will exceed $11 billion by 2009 according to a report by market research publisher, Packaged Facts. “Thousands of our members, Quixtar Independent Business Owners (IBOS), are building their businesses by focusing on health and nutrition products for families, including the family pet,” says Jody Victor of the Independent Business Owners Association International (IBOAI).

“With the recent launch of new Nutripet® dry cat and dog foods to our new partnership with 1-800-PetMeds, IBOs have what every pet needs to life a healthy lifestyle,” notes Billy Florence.

1-800-PetMeds is revolutionizing the distribution of pet medications by delivering satisfaction, savings and convenience directly to customers. Founded in 1996, 1-800-PetMeds strives to help customers save time and money, while empowering them to choose the best products for their pets. PetHealth101 (www.pethealth101.com) is sponsored by 1-800PetMeds as a resource for pet behavior, illnesses and medications.

“Through this new partner store relationship, Quixtar IBOs will earn income based on purchases made at 1-800-PetMeds by themselves and others they’ve registered with Quixtar, the leading online health and beauty retailer,” adds Jody Victor.

“This partnership provides our members one more way to tap into the growing pet supply market,” says Florence.

“The Partner Stores program is another great way that Quixtar provides outstanding products that support the efforts of IBOs in the U.S. and Canada,” says Jody Victor.

About the IBOAI

“The official Trade Association, IBOAI is dedicated to serving and protecting the interests of Quixtar powered Independent Business Owners (IBOs) throughout North America,” says Jody Victor of IBOAI. Governed by a Board of Directors, the IBOAI:

• Protects the best interests of IBOs and serves as an advocate in IBO issues.

• Promotes and protects the integrity of the Independent Business Ownership Plan.

• Ensures that the business opportunity today is as good or better for future generations.

• Acts as an advisory group to Quixtar Inc. and Quixtar Canada Corp.

The 2007 IBOA Board of Directors Executive Committee includes Jim Janz, Chairman, Don Wilson, Vice Chairman, Bob Andrews, Brad Duncan, Kanti Gala, Randy Haugen, Bill Hawkins, and Kathy Victor. Governance and Oversight Committee includes Jody Victor and Billy Florence.

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