Recently, my brother's friend called him up and asked to meet with him about a business opportunity. I told him to run if the meeting involved the words "IBO" and "Quixtar." Sure enough it did. Why my aversion to Quixtar? I've looked into the company before and I believe it's a scam.
Here's the problems I have with Quixtar.
Being a Quixtar IBO ("independent business owner") means selling primarily Quixtar's line of products. From the look of it, they appear to be overpriced name brand knock-offs. Take for example their toothpaste, Glister
. A 6.75 oz tube costs $4.70. A comparable Colgate product will run you about $3.00. Is Glister ADA approved? I doubt it. To be fair, it's true that the Quixtar website carries name brand products, but I've yet to see any great deals.
My real problem with Quixtar is a that it is a pyramid scheme. Now it doesn't exactly meet the FTC criteria for pyramids, businesses that "generally ignore the marketing and selling of products and services, and concentrate on the commissions you could earn just for recruiting new distributors," because they do have products that they sell to outside, non-members. However, spend any amount of time around an IBO and you'll realize where the real money-making comes from: recruiting. Quixtar (having been started by the founders of Amway) is a multi-level marketing company. In other words, as a recruiting IBO, you get commission on what those you recruit sell, and on your recruit's recruits, and so on. The way to succeed is to get people under you who then recruit people under them. That way you get commission on everything the IBO's beneath you spend. And spend they will. I don't have the research on this to back it up, but I suspect that the large percentage of Quixtar's revenue comes from money spent by recruits rather than outside customers, making it more and more like a pyramid scheme where revenue is generated within the company.
But there's another aspect in which Quixtar is even more pyramid-ish. It appears that for the top-earning distributors make their millions not from product sales, but from motivational materials sold within the company. IBO's are told they need these CDs, seminars, and books to succeed, and the limited experience I've had with IBO's seems to suggest they're buying in to it. Company insiders revealed this fact in a Dateline investigation
Just for fun, here's my favorite part of the recruitment literature that my brother received. The caption reads, "Today, even a high paying job can leave you with little time, and no security. True lifestyle comes from having both time and money, with the security of knowing that you control your own destiny." I was previously unaware that "true lifestyle" existed. The graph shows what "true lifestyle" looks like.
A bar graph to measure time, $, and security, complete with lines to show the numeric value of each of these bars. Except that there are no numeric values listed on the Y axis. It seems a pretty desperate attempt to make it look "scientific" or legitimate.
Now I'm not saying that you can't make money in Quixtar. You can. (Although according to the fine print of the recruitment literature, the average active IBO makes only $115 dollars. And that average is limited only to the 66% of IBO's who are trying to succeed, hence "active.") I'm just saying that Quixtar isn't a legitimate business in my opinion.