Tex said:
Saturday, February 03, 2007 #

Has Doug DeVos stated the decade long flat sales period has ended with the blazing 2.2% growth? How much did product prices increase between 2005 and 2006? If it was 2.2% or greater, a case can be made the business went backwards.

RS said:
Sunday, February 04, 2007 #

this is how stupid TEX can get. Why does he not ask about "increase in price" from walmart, or ask for a "increase in pay" corresponding to inflation , from his boss. Good luck TEX !!

Tex said:
Monday, February 05, 2007 #

I do look at both Walmart and my pay, they are both more than 2.2%. What's your point?

Kia said:
Monday, February 05, 2007 #

Thanks Tex. IBO payout, by the way, went up more than 5% in 2006. Our overall growth of 2.2%, meanwhile, reflects growth in some IBO organizations even though there's shrinkage in others. We're not going to grow the same way Amway has in some of the new markets(such as Russia or, in recent years, China) but there are plenty of opportunities for us here. Some of that will require new responses to the marketplace, including how we approach product pricing (creating more entry level products) and working with IBO leaders on their BSM businesses.  So, thanks for your continued input.

By the way, I'm curious, why do you go by Tex here and "curious" at Beth's blog?

Tex said:
Monday, February 05, 2007 #

Raising the IBO profit is a good thing, I try to give credit when/where it is due. I don't even mind the increase going to higher level pins in the form of incentive bonuses (is this true?), as long as there are plans to reduce/come clean on tool profits.   Even though you didn't answer either one of my questions, I will answer yours. I was originally "Curious" on Bruce Anderson's blog (when it was available). That name was already being used on qblog when I started posting there after Anderson's site was shut down, so I started using "Tex". Beth's site came along during that transition time, so I used "Curious" with her, but most of my posts on qblog and Insider's site have been with the Tex name, so I have mainly transitioned to that name. Think of it as "The Blogger Formerly Known as Curious", just like Prince.  :-)    

Eric said:
Thursday, February 08, 2007 #

What about the regular meetings  with Randy Bancino, you, David  Ellyatt,  Jody Victor, Orrin Woodward and others as part of the Web Reputation Task  Force? What types of strategies were discussed then?

Kia said:
Friday, February 09, 2007 #

Eric: What are you talking about? Are you talking about the "google bomb" posting?  Let's try to keep the discussions on the right strings.

Yes, Eric, there were (and are) teams that work in coordination to pursue best practices for our Web properties, including what information we share and how well it's optimized and used by the field.

My understanding of "google bombing" is that it involves the creation of thousands of links (through a grassroots movement) that artificially moves up a particular web property as a top result for a particular search term.  

For starters, critics interlink and create "juice" for each other that keeps them high on search results. I don't think efforts by Quixtar and its key stakeholders (i.e., affiliated companies, IBOs, employees) to create better cooperation in use of linking terminology should be considered google bombing.  

Again, if 10,000 IBOs had gone out and actually executed a supposed campaign to move up Quixtar properties through all of their links, you might have an argument that we google bombed.  I don't think that happened (and if 10,000 IBOs actually did go out and do that at some leader's behest, it didn't work!).  

YL said:
Tuesday, February 13, 2007 #

I was wondering why no one has said anything about this line within the press release: "This is the first year Quixtar has announced sales since switching to a fiscal year ending Dec. 31." I had to read it about 3 or 4 times when I saw it. I asked my upline Q-12 about it. I called the corporation and talked to a young lady there. No one knew what I was talking about. The only thing the woman from Quixtar could tell me was that it must have to do with IBO renewals but not the fiscal year itself, but the line clearly states that the fiscal year has changed!

If this really is true, it would totally change how people qualify this year, so I am extremely interested to find out what the real story is. Anybody?

ibofightback said:
Tuesday, February 13, 2007 #

YL - the qualification year for IBOs has not changed, this is a corporate change following Alticor's change to a calendar year financial year.

Kia - interesting what you say about "entry level products". My first exposure to Amway products was nearly 30 years ago as a kid, then later I was briefly an IBO in my late teens. One thing I remember was the definite per-use price savings in products like SA8. With competitors increasing their concentrations over the years, that price advantage has diminished, and we have to work harder promoting the quality. I've no idea the internal profit margins for the company on different products, but I would think that universally needed consumables with excellent reputations would be a great product area to use as a customer leadin - even if as a loss-leader for the corporation. Get people using the SA8/LOC/Dish Drops range because of fantastic quality and great price competitiveness and then lead them in to the profit centers of Health & Beauty. Without the obvious price competitiveness our initial target market is more limited. A common issue that seems to arise on blogs from former-IBOs is that they went from buying so so products at price $X before becoming an IBO, then started by great products at price $XX after becoming IBOs - supporting this business etc. Inevitably this causes financial stress, making it harder to continue as IBOs and a more bitter former-IBO for those that leave the business. A range of obviously more affordable products for this group of people is IMO better both for themselves and for attracting retail clients.

Kia said:
Wednesday, February 14, 2007 #

Thanks IBOFB.  You are correct that traditionally the home cleaning products were essential in attracting new customers and giving new IBOs products they could retail.  Growing up in Canada, my aunt and uncle were Amway IBOs (and still are in the business in their '70s).  My mom was one of their regular customers, so we always had Dish Drops under the sink and LOC on top of the washer (not to mention the scary Tonga soap on a rope in the shower).  

Today, however, the emphasis is really on Health and Beauty which, combined, represent more than two thirds of our sales. When we talk about more entry-level products, we're talking about items that will introduce consumers to H&B and lead them to our Nutrilite and Artistry flagship brands.  

Tex said:
Wednesday, February 14, 2007 #

All the more reason to make the cleaning products "loss leaders", since it wouldn't hurt the bottom line as much, and act as a lead-in to the H&B categories, right?

ibofightback said:
Tuesday, February 20, 2007 #

Tex,

Yes, that's my thinking as well. The money is in H&B, so they're not the kind of products you want to either be (a) dropping the price of or (b) dropping quality of to be able to drop the price. As was mentioned by another poster on Adatudes, the cleaning range used to be a very easy sell. They can be used to get people in the store, so to speak. They're also a fast learning curve for new IBOs to retail. In both health & beauty you need quite a lot of training and experience before you can confidently talk about them to others - and *anyone* can promote them. The obviously unfit, unhealthy IBO has a tough time promoting health products (though that becomes an advantage in the other direction once they get healthy!). Men have a tougher time promoting cosmetics and skin care. But we all wash clothes occasionally. We all clean dishes occasionally. We all clean windows occasionally.

But then, I don't run a >$6billion company, so what would I know :-)

Kia said:
Wednesday, February 21, 2007 #

In a lot of retail environments, a "loss leader" can be very effective to help generate larger sales.  I don't know how much Marketing is looking to slash margins on some of the "attention-grabbing" products we want IBOs to use to get the retailing ball rolling, but I can only imagine that a "loss leader" approach would only be considered when there's enough retail activity to justify the losses incurred by this type of strategy. Otherwise there's no "leader" to it ... just "loss."

I know, it's a chicken/egg conversation.  I agree with the concept that there are lots of products effectively used to retail and introduce the business to others.  As I've said in previous comments, my mom used SA8 and LOC from when I was a small child until she passed away a few years ago.  My aunt still counts my dad as one of her customers for cleaning products, as well as Nutrilite Daily.  

I'm not sure that the company (or IBOs) need to lose money on those products for them to be effective in our retailing efforts. Just my opinion.

ibofightback said:
Wednesday, February 21, 2007 #

Well, that's one of the areas where we are talking from a bit of a position of ignorance. While we might know sales data and IBO payouts etc, as a private company we actually have no idea of the profitability of Quixtar itself and what margins there are on various products. What we do know is that in SA8/LOC type product ranges, the competition has dropped prices and increased quality significantly. I own some other companies and I have a product we sell at cost in order to attract customers for an associated product. One of our competitors is now offering the same product at around 60% of their cost price for the same reason. It's a difficult question to establish whether matching them is worth it or not. I suspect that we will lose customers to them if we don't, so we're probably going to give it a go as a trial "special" to see what overall effect it has.

BTW, I too have been using the products since I was about 9 yrs old and have always loved them. My mother still uses the Amway Cookware she bought from a distributor something like 30 years ago. That's the kind of thing that gives us and our brand a good name. More of it! :-)

Kia said:
Thursday, February 22, 2007 #

Thanks IBOFB ... good insights.

Steve said:
Monday, March 12, 2007 #

Hi Kia.  Does the new fiscal year mean that the qualification period for Platinum is now January 1 to December 31, or is it still September to August?  Thank you very much.

Steve said:
Monday, March 12, 2007 #

P.S:  IBOFB, WRT requalification periods, I see your answer to YL above but I'm still wondering.  

Here is what is posted online on Quixtar under Business Rules of Conduct:  

5.4.1. Requalification: To attain and retain the

title and privileges of an IBO at the Platinum

level or above, an IBO must initially qualify and

then requalify each fiscal year (January 1 to

December 31). The requirements of qualification

and requalification are specified in the Business

Reference Guide.  

Any feedback would be appreciated.  Thanks.

Kia said:
Tuesday, March 13, 2007 #

I'm sorry, I should have confirmed what IBOFB stated. The new fiscal year applies to the corporation, which made the switch for accounting reasons. The company's fiscal reporting does not change the IBOs' performance year, which continues to be Sept. 1-Aug. 31.  

.

I don't know if that will ever change, but it's certainly not out of the realm of possibility. At this point, however, I don't think it will since our business calendar is built around that time period (Achievers and Diamond Club events, for instance, are booked years in advance).  

Steve said:
Tuesday, March 13, 2007 #

Thanks Kia.  The current wording on Page A-5 of the Business Reference Guide online says:

"To requalify for the title and privileges of a

Platinum, each fiscal year (January 1–December

31) you must achieve at least 6 Platinum months

within the fiscal year."

It uses the term "fiscal year" twice in the same sentence and defines it by putting the dates in parentheses.

Everyone I've talked to who reads this seems to be reading it the same way.  Maybe it could be rewritten to contrast "qualification period" with "fiscal year"?

Kia said:
Tuesday, March 13, 2007 #

I'll pass along the feedback, although for current understanding, the corporate fiscal year should not be confused with the IBOs' fiscal year. Although, as you've pointed out, it already has been confused that way. Sounds like we need to do additional communications on this.