Wednesday, June 28, 2006

Official Position on Quixtar

In the event there is any controversy, I wanted to write a post on my official position on Multi-level Marketing (MLM) in general and Quixtar in particular.

Problems with MLM.

First, we need to keep in mind that we are stewards of the resources that God has handed us. We have the obligation to handle our money well and use it in a way that honors God, and even multiplies wealth (Matthew 25:14-30). How you handle money will be a reflection of how you handle other kingdom matters. In order to keep the talk about money Biblical, there are also many warnings about hording money and having a single consuming desire for money, even if that money is pledged to God (1 Timothy 6:6-10; 17-19). In short, we should seek to do the best we can in our respective industries, not seeking to be wealthy, nor seeking to be in poverty. Now, we need to ask if MLM is good stewardship: No, it is not. In general, MLM is not a good stewardship because:

1. Cost of MLM products are generally much more expensive than that of competing products. There are some exceptions to this, but not many. The reason for this is that companies selling products tend to want to sell them, as such, they are sold for as little as they can, but in an MLM, a whole line of people need to pull profit out of the sale of that product. This will drive up the cost. In this respect, some companies manufacture and sell their own products; they seem to not be any less expensive. It is not good stewardship to pay more money than you need to for common household items.

2. Since the product sales to customers outside of the organization are generally lower, worthwhile amounts of money are not often made by marketing these overly-expensive products. Because of this trend, money is in growth of the network, so more emphasis is generally placed on recruitment over customer sales. This adds another point: While one person (the one with downline) may be making a large income, virtually all the other participants will not make worthwhile amounts of money. It is not good stewardship to spend time trying to build your own little way up at the expense of others who only have equal opportunity by repeating what you did, thus having a whole group of downline without profit.
3. Since the price of MLM products tends to be higher, there is a first barrier in selling product at all; the second barrier is the price: the markup on products for sale to customers is generally too small to make a significant profit.
4. Since most people do not make money in MLM, you will have a large amount of people who quit. This means that the time required to build and maintain a network far exceeds the reward for doing so. Reliv boasts to have one of the highest retention rates, but SEC 10K documentation reports the retention is a little over 50%. It is not good stewardship to use your time to rebuild a network with a small potential of monetary reward.

5. The stigma about MLM tends to drive people away from you thus risking your reputation. Remember that in the words of Jesus, if anything interferes with your reputation, it had better be the truth, not something else. MLM is often the social unacceptable joke to pop. Since I have been a critic of MLM, I have heard MLM references in Moody Presents [Unknown sermon], Adventures in Odyssey [All the Difference in the World], Renewing Your Mind [Wealth and Poverty], many movies, cartoons, etc. Some might call this discrimination, and it may be, but it is a fact that MLMers will tend to use social events of all kinds to recruit people, thus causing an annoyance to people.

6. Often times an MLM will be associated with an ‘educational system’ of some sort. In extreme cases, these are cults, in less extreme cases, they are simply bad for the Christian to be involved in. They are based on secular business motivation and self-help industry which is well rooted in Though Reform Psychology, a branch of ‘science’ that is antithetical to Christianity due to the core beliefs it teaches.

This being said, I do not consider MLM to be illegal, but it may be sinful. It is well known that the drive to build your group often leads to a growth in covetousness and a zeal that consumes the passion that we are supposed to reserve for Christ alone.

Problem with Quixtar

Now, outside of the listed opinions above, the only other reservation I have about Quixtar is that they have know about the abuse in the tools system since the 80’s, but have not taken action steps against the high level distributors that are responsible for that abuse. It is clear from the many testimonies that there are many people violating the Quixtar rules, many people are getting hurt, many people are going broke, yet the corporation appears to look the other way.

8 Comments:

Blogger Josh said...

Over 100 posts, man. I haven't been reading in awhile (distancing myself from the argument and trying in general not to anger people), but I don't seem to remember anyone refuting any of your posts. If there have been, I'd be interested to see what they said.

Wed Jul 05, 09:32:00 PM GMT-5  
Blogger xanadustc said...

Between this and Quixtar Blog which I have been writing on for a few months there was some confusion. Most critics of Quixtar are against the MOs. I simply don't think that MLM is a good idea from any standpoint, though my arguements are different. In MLM, I view it as a bad idea, but with the MPO's, I view those as deadly and to be avoided at all costs.

For people refuting my posts, go to the index and read the posts under the catagory "Kool-aide Drinking Critics"

Mon Jul 10, 09:25:00 AM GMT-5  
Blogger rara said...

I'm not crazy about MLM either, but I'm not sure I would call it sinful. The way one handles it or the particular organization one belongs to may lead to one sinning, but I don't think that is necessarily the case. Unwise, probably, but definitely sinful, I don't think so.

Mon Jul 10, 11:47:00 AM GMT-5  
Blogger sb said...

hello hello, good post, thought i share my 2cents. =)

i felt the same way, especially about the prices, since i'm a "dollar store" kinda guy, haha.

what i have found out is that, there's a difference between the various lines of products: retail line, professional line, and luxury line (then there's the ridiculously "can't believe it's legal to charge that" uber luxury line, hehe).

for example, Chanel is a luxury line where as Revlon is a retail ine. while there can be a debate on whether the products are actually better or if it's just a marketing scheme and it's just better packaging, in general, we all understand better quality is more pricy. for example, if you get grade F beef tacos from Taco Bell, it's going to be cheaper than a quality taco from a quality restaurant that uses grade A beef.

the profitability in all business is structured in a way so the line of distribution can make money. whether that be thru the "manufacturer-jobber-wholesaler-retailer (MJWR)" line or direct selling (DS) line, there are mutliple hands making money. in DS, you can actually "see" the people who are in the distribution, where as in MJWR, you don't visually "see" the wholesaler of the corner store in your neighborhood. for example, a lipstick at Sak's 5th Ave by Chanel might cost the same or less than the Artistry lipstick on Quixtar. is the consumer getting what he/she is paying for? yes. is the quality similiar for both? yes. Difference channel of distribution, but both having various entities profiting.

if the customer is getting value equal to the price they're paying, it's good business. and price is depended on market value. hence, some people drive couple of hundred miles to buy a car b/c it's cheaper in North Carolina than New York.

since Quixtar is focused on higher quality with the exclusives, it has higher prices than retail line products. it also has certain products where prices are lower or same even tho it's a higher quality product. best example is the energy drink. $2 market value, but a healthier product.

i recommend taking a scientific approach, with researching clinical tests, to find out about the value behind the various products. compare that to the same level of quality products available out in the market. you'll feel at the very least it's fair, if not amazed by what's provided thru Quixtar. have fun! =)

Mon Jul 10, 02:12:00 PM GMT-5  
Blogger xanadustc said...

good thoughts sb except that Quixtar tells you that the products are luxary...but are they really? I don't think so. I have heard this arguement before and my classic quote goes back to Dave Severn as he rants from stage about popcorn: "It comes from the same kind of cob!!!" The Critics Choice line is no better quality than any others, and in fact, is often lesser quality. I feel the same about many other products. I agree that there are a few exceptions, but not that many.

My point still stands, in general, the MLM industry still has higher prices with little change in quality. Another good example is Tolsom. In my experience in using many men's skin care lines, Tolsom was the least quality and yet the most expensive. The Shave gel had the quality of generic such that you could not even feel it work. Edge and Gillette on the other hand, you can feel it smoothing your face.

MLM will get you all emotional about your product so that you believe it is the best even contrary to logical reason.

Mon Jul 10, 02:55:00 PM GMT-5  
Blogger wild woman said...

You are so way off base you actually believe what you are writing...Tell us how many people have you won for Christ lately? Instead of judging and making up fault in others, why not do what you say you believe in? And what in the world could you have done in your Quixtar biz that would put you 25k in debt?( after paying off credit cards...you totally aren't a good businessman.)Keep your job, you deserve working for someone that that controls everything your life is about.

Sat Sep 22, 01:10:00 AM GMT-5  
Blogger wild woman said...

You are so way off base you actually believe what you are writing...Tell us how many people have you won for Christ lately? Instead of judging and making up fault in others, why not do what you say you believe in? And what in the world could you have done in your Quixtar biz that would put you 25k in debt?( after paying off credit cards...you totally aren't a good businessman.)Keep your job, you deserve working for someone that that controls everything your life is about.

Sat Sep 22, 01:11:00 AM GMT-5  
Blogger Danny & Stephanie said...

I own my own business and used ot do Quixtar as well. I do not do it today as I have found another very profitable company to promote. Are you interested in having a conversation. You sound like an interested person who knows how to analyze and evaluate busines opportunities. If you are interested, call me at 916-224-0766. Thank you.
Danny

Thu Feb 07, 01:43:00 PM GMT-5  

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