Quixtar Goes On Warpath Against Bloggers

(CBS/AP)  Direct-marketing firm Quixtar Inc., a sister company of Amway Corp., has sued 30 people who anonymously posted what it considers disparaging remarks about Quixtar in blogs and online forums and in YouTube.com videos.

In the lawsuit filed this past week in Ottawa County Circuit Court, Quixtar seeks an injunction and damages of more than $25,000 against the posters, identified only as John Does.

Quixtar develops and manufactures nutrition, beauty and cleaning products that are marketed in the United States and Canada through a tiered selling system, hiring entrepreneurs to sell its products. Parent company Alticor Inc. uses the Quixtar name for its U.S. and Canadian direct sales unit and sells products throughout the rest of the world as Amway Corp.

Among the products Quixtar representatives sell are Nutrilite vitamin, mineral and dietary supplements, Artistry skin care and cosmetics, XS energy drinks, and air and water purifiers.

Alticor, a $6.3 billion company based in Ada, Michigan, announced in June that it will start phasing out the Quixtar name and rebuilding its Amway brand in the U.S. and Canada.

Quixtar wants the court to approve subpoenas of various online companies to allow it to figure out who posted the materials, which also include videos posted on YouTube.com.

In one video the lawsuit cites, a man wearing a shirt that says "Property of Quixtar" rants about the company. In another, a man points out products at a grocery store priced much lower than comparable Quixtar products.

Quixtar believes the videos and other postings are part of an organized effort by former distributors who unsuccessfully sued Alticor and are under court order not to disparage the company or disclose proprietary information, according to the lawsuit.

Quixtar plans to ask for permission to subpoena various online companies to figure out who posted the materials, spokesman Rob Zeiger said.

According to the Grand Rapids Press, an Alticor representative said the court action was merely to identify anyone who might be associating with those under court order, rather than expressing their own personal opinions.

Zeiger told the paper that his company was not interested in pursuing people not associated with the former employees, and would even reimburse their legal fees if there was no connection. "An individual who is expressing their own opinion, we don't have a problem with that," he said. "They're not doing anything wrong."

The move comes a week after a federal judge in Los Angeles dismissed a suit brought against Quixtar by a group of independent business owners (IBOs) terminated by the company, who had claimed that the Michigan company is "an illegal pyramid scheme."

[spartan4l1fe]

*Please note that I got that from WoodTV8 - I want to give credit to them for sharing the truth.

[spartan4l1fe]

Taking all rumors away, here is what was said under oath.
On the stand, Woodward denied he was breaking Quixtar''s rules, and his lawyers provided a 2003 letter from Quixtar praising him for his business practices: "By growing right, you create a solid business foundation upon which you can continue to build."

He said he never heard anything different until he was fired in August.

Guess Quixtar didn''t have a good reason to ''fire'' him other than he and others wanted to resign because Quixtar was not lowering their prices, even though they said for over two years that they were ''working on it,'' but never showed any proof of that.
So much for the ''building the business wrong'' argument.

[spartan4l1fe]

PerryCBS1 - Please quote where you are getting your 2% figure from. I do not believe that is a pre-August 9th figure. I know that my downline has almost completely stopped buying waiting for all this to end. That 2% figure is current, that is how much business has been lost by Quixtar in the current month. You see, I didn''t know what would happen, so I kept buying in September, then, when I made my decision that I needed to leave the ''Big Q'' I didn''t buy anything for the month of October. Every month I personally bought hundreds of PV worth of product, not to mention the PV that flowed thru my business. All that is almost completely dried up now, due to Quixtar calling us property, and the negitive PR there legal dept is creating. So there''s your 2% compared to my 40%.
Also, Quixtar does not do 6 - 7 billion in sales. That is Alticor, who own Amway and Bussiness Access Group. Quixtar does just over 1 billion in sales. Same as Amway in North America in 1981! 26 years, no growth. Great business model!

[spartan4l1fe]

PerryCBS1-
Your right. There is a percentage of people that don''t look at price when they buy a product. That is how K-Mart got to be such a big company... oh, wait... That was Wal-Mart, the one who came in with the less expensive products and passed that on to the customers. It is totally fine if you would like to have a business that caters to the high end. You will get some volume in your business. However, that is not what the TEAM wants. We don''t want to be ''just another MLM'' we want to be the BEST MLM out there, and that means having a competing price and product in comparrison to other corporate businesses, not just MLM''s that sell their ''go-go'' juice for $200 a month ''cause it''s the best product out there. The TEAM sees the trends, the future is not about who has the best high price products, it is about who builds the biggest community, to drive down the price of products.

[perrycbs1]

Thanks jaina_heart:

I too belive that several of the product lines cannot be matched in the "normal" market place at any price. The Amway Mfr plants focus on high quality products; and in many cases these high quality products also turn out to be a good value too.

There is a large segment of the US population who does not buy the cheapest products around for a variety of reasons (and quality being one key factor). Just look at all the retail stores to see many examples. Tiffany does not sell the best cut most brilliant diamonds. They do sell better than average cut diamonds (cut referring to the geometric proportions to maximize brilliance; not the shape). But, people pay very high markups to get a Tiffany diamond.

[perrycbs1]

You are correct that TEAM tools in the past that were approved.

Here is my theory of what happened:

Amway/Quixtar has allowed individuals & organizations to develop their own tools for decades; as long as they were approved. Different organizations teach different approaches to building the business. So, presenting a new approach would likely be approved.

However, in the end the proof is in the results: The information I found on the web says TEAM built to about 10% of all North American IBOs, but had much lower average PV per IBO (and one source cited TEAM with only about 2% of North American Sales).

That means that the organization was very good on recruitment but very poor on sales.

A key distinction between legal and illegal is the ratio of sales per IBO.

Quixtar claims that if TEAM had continued that it would bring the Quixtar system under legal and regulatory review. If those numbers are even close to accurate (10% of people, 2% of sales) I suspect this would be a true statement.

Quixtar claims that they worked for months to get TEAM to change their approach and materials; but that TEAM refused. TEAM has to my knowledge not refuted that claim.

In essence; I believe that Quixtar realized that the previously approved materials and methods did not produce clearly legal business result, and decertified them. The fact that TEAM then sued in California and used their own TEAM materials to claim they were an illegal pyramid really demonstrates the point.

[jaina_heart]

I would love to see where you all get your research from...
I grew up with Amway and Quixtar products and have yet to find comparable products in what you all would call the "normal" market. A lot of the negative remarks comes from people who either do not get facts or just don''t like this style of marketing. You can look at IBO''s (Independent Business Owners) as franchisers when it comes to Quixtar and Amway.

BTW if a court orders previous employees not to say anything about the company, the company has every right to find out if these "anonymous" bloggers are those (or related to them) that have the court order against them.

[ov442]

Did you all know that the very wealthy Mr. Prince - CEO/founder of blackwater is the brother in law to the family that owns Amway and the Billionaire/Political donor and influential corporate fellow Richard DeVoss?
Wherever there is scandal, corporations taking as much advantage of the consumer as possible, you''ll see heavily involved republicans or actually running the operation.
Nice christian conservative values there.
"lets build our empire on the backs of poor people, and fool them into thinking they can be successful with our model, then later in life we''ll donate a bunch of the unneeded tax-deductible profits from our empire so we can put our name on stuff just like the Rockefellers did in the early 20th century."

Whooopeee!

[andor3]

"... a court order not to say and do certain things that would slander Quixtar. "

truth is the classic and irrefutable defense against a slander allegation. And there is plenty of truth in the Quixtar allegations. I had a friend ask me for advice on joining, and after ten minutes of research on ther Internet it was clear this was not an organization that benefited the majority of its members, in fact many end up spending rather than earning cash.

There is nothing wrong with spreading the truth and true experiences. So this organization has to use lawyers to quell negative press and change its name. That alone tells you a lot!

[monette8]

PerryCBS1.. I heard the Quixtar Lawyer tell a Judge that all IBO''s are owned by Quixtar and can be terminated at will. The Judge asked, what did these people do that is against the rules that you are threating to terminate them with letters? The QA attorney answered, "we are not sure, we are investigating to find out." The rules were 90 pages in Aug. 2007 but looks like to me if you print all the rules today it will be 144 pages. If you are truly wanting to be honest with your prospects, they should be able to read all the rules before signing an application to become an IBO. So guess you have not sponsored anyone in a couple of years. Yes, Team''s tools were approved, so was Chuck Goetschel''s. I also thought we had exclusive products we could sell to customers, they could only get from us as an IBO. Have you checked EBay lately? Also several other sites. The company I fought so hard to build and promote to a successful pin over almost 40 years is not the company it has become today. If was so small and so bad, why didn''t Quixtar just let them go? This is not good for any of us!