Amway North America
Amway North America is an American worldwide multi-level marketing company, founded 1959 in Ada, Michigan, United States. It is privately owned by the families of Richard DeVos and Jay Van Andel through Alticor which is the holding company for businesses including Amway, Amway Global, Fulton Innovation, Amway Hotel Corporation, Hatteras Yachts, and manufacturing and logistics company Access Business Group. After the launch of Amway Global, it replaced the Amway business in the United States, Canada and the Caribbean, with the Amway business continuing to operate in other countries around the world. On May 1, 2009, Quixtar made the name change to Amway Global and fused the various different entities of the parent company.
Amway Global is a member of the Direct Selling Association and the Better Business Bureau.
History
and Jay Van Andel initially founded the Ja-Ri Corporation, a multi-level marketing distributorship for Nutrilite products, in 1949. Ja-Ri was incorporated in 1959 and changed its name to "Amway" in 1963., Amway operates in more than 100 countries around the world. In 1999, the founders of the Amway corporation launched a sister Internet-based company named Quixtar. The Alticor corporation owns both Amway and Quixtar, plus several other concerns. Quixtar replaced the North American business of Amway in 2001 after the majority of the distributors moved to Quixtar, with Amway operating in the rest of the world.The move unified the various Amway companies worldwide. "We're now reintroducing our brands in North America, moving away from Quixtar and going back to the Amway name," said Steve Lieberman, managing director of Amway Global. "We decided there were a number of roads we had to go down in order to recreate awareness for a brand that, quite frankly, a lot of people felt had gone away."
Products
Quixtar is the exclusive distributor of Alticor products in the United States and Canada, including Nutrilite dietary supplements, XS Energy Drinks, personal care, home care, air and water purifiers and Artistry cosmetics.Business model
Quixtar relies primarily on person-to-person referral rather than advertisements for the sale of products; however, Quixtar announced the launch of a multimillion-dollar ad campaign in 2012. A large part of the marketing budget is spent on paying bonuses to distributors. Independent Business Owners were paid more than $370.1 million in bonuses and incentives in the fiscal year 2006. Bonuses are paid for individual sales and sales generated by people one sponsor but not for sponsoring itself.In 2001, after the majority of Amway IBOs had transferred to the new company, Quixtar completely replaced Amway as the marketing venture for Amway/Alticor products in North American regions. The Quixtar business model differs from the earlier Amway business model in many aspects, such as the way distribution is performed as well as the products and services offered through partner stores. Rather than ordering a product from a distributor who delivers them in person, Quixtar customers can place orders online and have the products shipped to them directly. In mid-2007, however, Quixtar announced they were phasing back in the Amway name over two years and discarding the Quixtar name. Along with the re-branding campaign, Amway Global is investing over 580 million dollars into both increased compensation for IBOs and extensive advertising of the new brand name.
Individuals may buy products through Quixtar's web site with a referral number from an IBO. Quixtar also gives IBOs the option to create free personal websites that can be personalized to focus on health, beauty, health and beauty, and/or gift and incentive products. The referring IBO then receives the retail/wholesale profit, and a percentage of the cost of the sold goods, with Quixtar-exclusive products yielding a higher bonus per dollar in Point Value and Business Value. Quixtar offers a wide range of products for its IBOs to purchase for personal use and/or to sell to customers through Quixtar.com and IBO personal e-commerce sites.
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's sales and the volume of sales and purchases of IBOs registered by them.
Income of Quixtar IBOs
Quixtar IBOs earn income in different forms in various categories, including IGP, Performance Bonus, Leadership Bonus, and other Growth incentives. IGP is the profit made when customers of an IBO buy products and services from Quixtar at retail price. Performance bonus on a scale of 3% to 25% of the group volume is paid if the PV level of the IBO is more than 100 PV in a month. The leadership bonus is paid at 4% of BV of each qualifying leg, which is at 25% or 7500 PV. Growth incentives are announced by Quixtar every year in the form of bonuses and paid trips at various levels. These bonuses are awarded to IBOs who are at Platinum or higher achievement levels.Quixtar reports that the average income for an "active" Quixtar IBO in 2005 was $115 a month, as documented in The Quixtar IBO Compensation Plan and on a Quixtar website. The average annual Quixtar income for an IBO that qualified at the Platinum level in 2005 was $47,472 and for a Diamond it was $146,995. The largest single annual bonus for a Diamond was $1,083,421.
This said, according to Inter@ctive Week, "The commissions aren't all that great, even though they can add up to greater than 50 percent of the cost of the goods sold. If privately held Amway generated $6 billion in sales in 1998 as estimated, then each of its 1 million distributors would have pulled in, on average, only $6,000. It's nice extra income, but a livelihood only for the most talented, hardworking or aggressive. Or, for those with a large personal family tree.
That's because this form of marketing relies on what Ken McDonald, regional vice president at Amway North America, calls "high touch." This is what amounts to the need for agents or distributors to reach out and touch people they personally know, in order to make a sale. Almost all Amway sales start with face-to-face contact between people familiar with each other".
An "active" IBO is qualified on the IBO Registration form: ''Based on an independent survey during 2001, “Active” means an 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. Approximately 66% of all IBOs of record were found to be "Active."''
IBO Association International
The IBO Association International was founded in 1959 as the American Way Association with the goal of "serving the common interests of Independent Business Owners throughout North America." Members are served by an 18-member Board of Directors who are supported by seven full-time staff. The Association's board members are "elected by its voting members".Accreditation
In 2006, Quixtar, in partnership with the IBOAI launched the "Quixtar Accreditation" program in order to address concerns about the companies that provide Business Support Materials to Quixtar IBOs. North American Diamonds and their associated training companies 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 Business Support Materials. The "full" transparency only applies to the IBO's who are participants in the BSM income, for most groups this means Platinums and above, representing a very small percentage of IBO's. 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 2006 "eFinity" became the first Quixtar affiliated support organization to receive accredited status.Sales and ranking
ranked Alticor, as America's 27th largest privately owned company with estimated revenue of $7.29 billion. In 2006, Internet Retailer ranked Quixtar.com as the number one site in the "health and beauty" category and 18th largest e-commerce site overall.Quixtar-powered IBOs generated revenues of $1.118 billion for Quixtar for the fiscal year ended December 31, 2006, the fourth consecutive year in which the company surpassed the billion-dollar mark. IBOs also generated record $84.6 million in revenues for Quixtar’s Partner Stores in 2006.
Promotion
Athletes who have promoted Quixtar or its products include Jamaican Olympic sprinter Asafa Powell, American pole vaulter Jennifer Stuczynski, American Olympic sprinter Sanya Richards, U.S. Olympian Shaun White, Cinematographer Wes Anderson, Chinese Olympic hurdler Liu Xiang; Brazilian soccer player Ronaldinho, heavyweight boxer Evander Holyfield, and Heisman Trophy winner Ron Dayne. Tim Foley, a member of the undefeated 1972 Miami Dolphins, is a Quixtar Founders Crown Ambassador.Author John C. Maxwell, who writes leadership books including The 21 Irrefutable Laws of Leadership, co-authored Becoming a Person of Influence with Jim Dornan, Quixtar Founders Crown Ambassador and founder of Quixtar support organization Network TwentyOne. Orrin Woodward and Chris Brady, both former IBOAI board members for Quixtar, co-authored the #1 bestseller, Launching a Leadership Revolution. Both Woodward and Brady were terminated by Quixtar and participated in a class action lawsuit against Quixtar alleging that Quixtar operated as an illegal recruitment scheme.
As a guest speaker at the Quixtar LIVE! conference in 2003, Phil McGraw reportedly described Quixtar as "one of the greatest success stories in American business history." In a 2006 settlement involving a class-action lawsuit brought against McGraw and his Shape-Up diet products, plaintiffs received a share of $6.0 million in Quixtar-brand Nutrilite vitamins and $4.5 million in cash.