Monday, August 08, 2005

Why Amway changed its name to Quixtar?

Why would a company with 30 years of brand recognition change its name? Same plan, same business model, same lines of IBOs, same products. Then why change the name? Just because it's moving online? A lot of business moved online. They didn't change their name.

QBlog explained it very well, as quoted below. I have the same question, why Randy Haugen is so much favourite of Quixtar corp that he is awarded business of other ppl when they lose arbitration? He screwed them big time, yet he's rewarded big time?

The Baboon Brief :: View topic - JUST RECEIVED A THREAT

To put it simply, Randy Haugen is the reason Quixtar exists today. Without Randy's stupid mistake (being recorded as he spread the P&G Satanism rumor) we'd still be calling the business Amway in North America.

Here's what happened.
  1. Rumors start up in the 1980s about P&G being a bunch of Satanists. Coincidentally, P&G was the "boogeyman" that Amway reps used in their recruitment pitches. "You don't want your money for soap going to P&G when you could be spending it on your business." As an aside, what company has replaced P&G as the "monolithic corporate boogeyman" in Quixtar recruitment pitches today?

  2. There was no clear evidence that Amway started the Satanism rumor but for years P&G suspected that Amway was behind it and both companies "worked" together to stop the rumor.

  3. Randy Haugen sent an AmVox message clearly spreading the Satanism rumor in the late 1990s (check the date on that). Now P&G had their proof and the lawsuits began. Remember that discovery and expert opinion are often part of such lawsuits.

  4. At about the same time, Sydney Schwartz and Ashley Wilkes were running sites and participating in discussion boards that were not only critical of Amway but started taking a close look at the tool businesses. Remember that until the late '90s and early 2000, there was no system-wide admission that tool money constituted any portion of the leadership revenue. It was all described as "covering costs" with a very modest kickback.

  5. As the P&G lawsuit progressed, information became publicly available that proved what Schwartz and Wilkes had been saying all along -- The real money is in the tools, not Amway.

  6. Two important documents came out of the P&G lawsuits:
    1. Blakey Report and
    2. Postma Memo.

  7. Others dissatisfied with Amway were now beginning to turn to the Internet to tell their story (Jeff Probant for example) and people like Schwartz and Wilkes gained credibility as their information was detailed and factual. Amway realized it had a problem and began an aggressive campaign to shut down the growing numbers of websites through legal manipulation and intimidation. Some of that worked but as you know, once something hits the Internet it can't be removed... ever!

  8. Amway starts to see a significant decline in revenue and the so-called kingpins demand action. There had been talk about tapping into the "e-commerce" boom and this seemed like the perfect opportunity to make a clean break from the Amway baggage and reinvent the business. Around the same time the BSMAA was drafted and shoved down the IBOs throats to provide protection to the tool distributors as more and more of the rank and file became aware of the real money involved with tools.
There are some details missing, feel free to fill them in. The main point is that Randy Haugen started a chain reaction that resulted in the formation of Quixtar (at least in part), the drafting of the BSMAA and an overall admission that the tool business is where the real money comes from. If Randy had never made those recorded comments P&G would never have had the ammo to sue Amway and much of the documentation and admission would never have surfaced to give Schwartz and Wilkes the data they needed to give their sites credibility.

So, thank you Randy.

What's amazed me is that after such a boneheaded act, Randy is still very much in the fold. A business that seemingly discards its trouble-makers with ease (anyone remember Team in Focus?) has held onto Randy Haugen through thick and thin. Why? My only guess is that he's personally protected by Dexter or Britt.

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5 Comments:

At 3/18/2007 09:36:00 PM, Anonymous Anonymous said...

I heard that Haugen lost this law suit! Is that true?

 
At 3/19/2007 08:05:00 PM, Anonymous Anonymous said...

yes

some discussion here -
Get the Facts - the Truth About Amway and Quixtar

 
At 5/02/2009 04:57:00 PM, Anonymous Anonymous said...

Originally we got involved in the business because we just wanted to replace our incomes and be free. We wanted to have some time to go camping and do the normal things people do with their free time.

As we got going along a little further in the business, we really bought into the fact that this was a cause to help people. For many years that’s exactly how we felt. This was our cause. We were sold out to the people; we were sold out to creating a platform for them to succeed upon as they got started in their own business. Most of our leaders felt the same way. We’ve seen so many people’s lives change for the better.

We experienced success beyond what we could have imagined. We were really rolling. We were either the fastest growing group in America or one of them. We broke five Diamond legs. Many leaders in the group were breaking Emerald’s and Diamond’s. It had changed lives substantially. It was a true success story that was amazing for many people. Our numbers peaked in 1995; we were turning out almost 35,000 people at monthly seminars.

At about that same time, the negative on the Internet and the product prices started to be a problem. Most of the negative information on the Internet was focused, at that time, upon product pricing. It was hard to refute. Originally, when we first got in, the per-use aspect of the products made it okay, it wasn’t such a hard sale. But the prices just seemed to continue to drift upward.

We got hit with the Procter & Gamble lawsuit, and there was a lot of confusion in the organization and the groups. The negative online started becoming a bigger problem. The price of products became a problem, we slowly started going backwards.

In the mid to late nineties, I was privy to several conversations with the company wherein we told them they needed lower priced products and they needed to do something about the negative on the Internet. They always said they were "working on it," but they just didn’t ever do anything about it.

Around 1998/1999, most of us were very frustrated with the Amway business. We started to get to a point where we didn’t believe we were doing the right thing for the new people getting started. Overall the numbers were going down, which meant when people were getting in they had less chance of succeeding than we did when we got started. It is much more difficult when numbers are going down versus going up. Nobody seemed to have the answers on how to turn it around.

I am not sure exactly about all of the details of how Quixtar came into being, who did each little piece, but we decided we needed something that was not connected to Amway, and we needed something to align with the Internet. We came up with what we thought would be the perfect business. As we started into it, working with the company, we got one or two things out of a list of about ten that we thought would be necessary to really have a successful business.

NONE of us wanted to have a company associated with Amway in any way. We were told it was a sister company and was disconnected. They said it would be structured in a way so that we could say to people that it isn’t Amway and it would be true, that this new opportunity was not Amway in any way.

From the very beginning in 1982, one of the things that attracted us to the business was Rich DeVos saying on one of his tapes that they would never change the business even 1% without the Board approving it. We went along for a long time thinking the board would stand up and represent us and be our safety net if the people at the company ever tried to change the deal.

What we have seen happen, which most people are not aware of, is that every year the company is changing the rules. Very few people know what the changes are every year, but every year when they renew they agree to all of the new rules, now there are 95 pages of them! I would say that less than one tenth of one percent of the people knows about this.

Over the last five or six years, they have totally changed the business model to where we are no longer independent business owners, we are more like employees. They have actually stated recently in the Texas court that they own our downline. Not only have we figured out that we are no longer independent, but we also have figured out that the board has no power whatsoever over the company. The board has always been an advisory group but now the company has chosen not to have the board approve decisions they are making. They made the decision to change it to Amway and did not run it by the board until after the decision was made. Every person on the board was upset about this change. When the board published their thoughts the company got upset and said they would either not renew their contract or they would now start to renew it one month at a time. If the company will make a decision of this magnitude, what will they do next? We sold people on the idea that the board was a protection. I am very sorry, but that is definitely not true anymore. People need to know that since many people based their future on this fact alone. That was always what we believed would prevent something like this huge change from happening.

From 1995 when we started going backwards, up until June of 2006, I had gotten to the point over the last few years that I couldn’t represent the business. I couldn’t show the plan, because I didn’t believe it was the right to get people involved in something that I didn’t believe was the right thing for them to do. So I quit showing the plan a few years ago, and when we would go speak to our groups or other groups, we would totally focus on getting people to believe in themselves that they could do whatever they wanted to do in their lives. We did all we knew how to give people confidence in themselves. We tried to build their self-esteem, but we could not get ourselves to tell them to go build the business. It’s not a very good thing to live through to watch what happens when your best leaders cannot make progress. It’s worse to watch them go backwards and have to go back and get jobs after being free for a while. It’s terrible for them to tell their children that their dreams are not going to come true and all the things they talked about are not going to happen now. The whole thing started to get ugly. We watched many relationships get hurt between friends, leaders, and couples. Many times when we would go speak to other organizations the leaders would ask if we had any answers. The Diamonds would try to do their very best to help their groups but they were also hurting inside. We saw many Diamonds go above and beyond to help their people.

Then in the summer of 2006, through a series of events, after listening to the Brady’s speak at a function in June, I got the impression that they believed in what they were saying, and I knew they had had some growth, but didn’t know much about their organization. We didn’t know their techniques, methods, or philosophy. As Valorie and I sat and listened to Chris and Terri we were amazed that they knew so much about leadership. We finally figured out that they were a learning organization. We had never seen a team before that put so much emphasis on learning leadership. Then I hooked up with Orrin Woodward in August 2006, and we spent a day and a half together. Most of the conversation with Orrin was him asking how we were doing. At the end of the second day I was the one asking the questions because I was figuring out that Team was growing and had many people becoming successful. I started trying to get the information out of him. I asked him if it was possible for us to buy some of the Team tools. He said we could talk about it. I just couldn’t get it out of my mind that if we could get it to grow the impact it would have on the Emeralds; this would be a God-send for all my Emeralds who had had to go back and get jobs. We had over a hundred and some Emeralds, and most of them have had to go back and get jobs. I also got very excited about the possibility that a new person would have a great opportunity to become successful. We had several meetings with Orrin and the Team leaders and finally they decided that they would allow us to use their well thought out system. I knew after spending time with Team leaders, we wanted to be part of it. I had never seen anything like it before. The Team system was fair to everybody because there were no special deals. Orrin and Chris were on the same pay scale that all people were on even though they spent much of their time continuing to improve it. They didn’t take any extra money for doing it. So we partnered up with Team, and IMMEDIATELY we leveled off from going backwards, the organization as a whole started growing and moving forward, we hadn’t seen hope in people’s eyes like that for a long time. This was the most confidence and excitement we had seen in people for twelve or thirteen years. Most people could make progress because of the way the system was designed. So naturally when you can make progress you get very excited about making your dreams come true.

Valorie and I had dedicated our life to this thing as many of our leaders had. We had worked six or seven days a week for fifteen years. There were several years in a row where the longest period of time that Valorie and I were actually at our home was three days in a row. We were constantly on the road, we did meetings in every state in the U.S.; we put everything we had into this. We sacrificed time with our kids and put our entire life into this thing. And we were extremely blessed by many, many great leaders showing up in our organization. And many of them did the same thing that Valorie and I did. They were totally sold out to it. It became our life.

So finally, we get hooked up with the Team, with Orrin and Chris, and got things turned around. We started moving in a positive direction, and we just got things cooking when all of a sudden the company decides that they are going to have a total change in their business model. They are going to change their name back to Amway, they are going to put new requirements on us to retail even more overpriced products, they are going to give people who build width extra bonuses, that will hurt those who build depth, and I and many others reached the conclusion this model will not work for us. There are many things that I think are a problem with the new model. To start with nobody I have talked to so far wants to be in Amway. Especially after telling them they aren’t in Amway for seven years. It is very hard to understand why the names change when almost every builder in the field is against it.

Not for any amount of money am I going to lead a group of people down a road that I don’t think is the best thing for them to do. I have to believe when I show the plan to somebody that it is the best thing they should do for their own life or I can’t do it. I am not going to do that for money if it’s not the right thing to do for the new person. I could have laid back and done nothing but collected my checks and watch it die a slow death. I would have made the most money if I played it that way. The other choice is to do something else.

So eventually it comes to a head after the emergency Board meeting in July, and we decide that we have to leave, because we know for us the model isn’t going to work over the next 18-24 months. I don’t want to be in a position where I am standing up telling people they should do this when I don’t think they should. So we decided we would go have a negotiation meeting with the company, as they had told Orrin he could do, and see if they would give us a choice and let us go. Instead of having to set out six months, we were hoping they’d be a little lenient on us and let us go with a little shorter amount of time.

I told every one of them in that meeting on August 9th that I appreciated them, and I appreciated the relationship, and told them I just couldn’t put my heart in it. We were in the business for 25 years and we had developed great working relationships with most of the people that were in the meeting. I had a good relationship with most of them. They had been very good to me over the years. I wasn’t yelling or raising my voice. We had what I thought was a very good conversation. I was very sure that Rob and Jim were willing to talk about an amicable separation. Jim Payne and Rob Davidson both said that they understood. Jim Payne said, "I don’t think you can take everyone with you, but let’s talks about it and see what we can do." Rob Davidson said, "Hey, I understand. If you can’t put your heart in it and don’t want to do it, we understand. If I couldn’t put my heart into my job here, then I would be worthless here. So I understand."

I thought I was going into a meeting to negotiate us leaving in an amicable way where we could agree on both sides to make statements where neither side would be hurt. There was never a time during the meeting where we said or did anything out of line or unprofessional. What shocked me the most was that after 25 years of being loyal to this company, when they came back in, it’s almost like they had it preplanned, they knew what they were going to do, they just walked in and terminated Orrin and Chris because they said Orrin and Chris were not willing to fix things. At this point they already knew that all three of us wanted to leave the business so there was nothing to discuss on fixing things. They wouldn’t even discuss any of the points we had come up with about having an amicable separation.

The next thing I know, they are telling untruths about what went on in the meeting. What totally shocked me was they accused us of having an MLM put together, and that Orrin promised to solicit IBO’s in other groups, they said that Orrin was trash talking them, all things that weren’t true in any way. They made allegations with absolutely no proof whatsoever. I am shocked at how they have handled this. Calling or emailing people and giving them 24 hours to decide if they are going to be part of TEAM, which is a training system, or if they are going to choose Quixtar with no training system? This caught our team totally off guard. That doesn’t even make sense, first of all. Secondly, some of these are people who have been in the business for 25 years. They’ve been loyal. They know absolutely nothing about what is going on. Give them an ultimatum! Devastate their business! Affect their family’s income! They couldn’t have planned it worse than how they’ve handled this. How can their behavior ever be considered right? How does a company justify treating people that way?

Here’s the crazy thing. ALL they had to do was come back in that meeting and say, "Guys, we just don’t think we can bend the rules in any way; you’ve got to abide by the non-compete in the contract in full." Instead, they did it a different way. I think they have shown that they don’t care about the people at all.

This whole thing didn’t just happen one crazy day. The great people on the board have been working on many important issues for many years. It is sad that as the Wal-Mart effect took place where business’s had to reduce their prices to be competitive, that this company would not do that. The Families held on to their margins and would never let go. The MAC committee worked many hours tirelessly for years. The entire board worked on pricing for years. We got nothing. I reached a point where I couldn’t live with it anymore. If the only thing I wanted was money I could have just spun the whole story and spent the next 18-24 months trying to convince people that is was going to work and everything was going to be ok. That way I could have received my end of year bonus’s and $500,000 check for Founders Diamond in two years. Val and I would have done fine. I just could not do it. No matter how much money I could have made, I just couldn’t do it. Some people think we all of a sudden we just went crazy and lost our minds. No, I just got pushed over the edge of what is right and what is wrong and had to do what I thought was right.

There comes a time in a man or a woman’s life where you have to make the hard decisions. When you do, half of the people think you are crazy and the other half think you are right. You will need to make those decisions for yourself and your family when your time comes. It was a great ride for the first half of the trip and not so good over the last half. I do believe the future is bright. My one hope that I want to leave anybody that reads this is that I want you to know that inside of you are the seeds of greatness. God blessed you with special gifts that only you have. Learn what those gifts are. Val and I know that you can do anything in the world that you choose to do. You have to focus and always believe in yourself. Never beat yourself up for your past performance. Just keep on keeping on striving to make your dreams come true. We know you are going to do something great in your future. You can accomplish all you want and then some. Never give up on yourself. You know that it is better to go to bed tired knowing you give it your all than to go to bed lazy because you are striving for nothing. Keep on dreaming, it’s worth it. You are on your way to being the best. You will go beyond where you thought you could. We are proud of you for standing up against mediocrity and claiming yourself to be A DREAMER!! Yes, that is what you are and never ever forget it. Don’t let the fog take it away from you. You are the real deal my friend.

May God bless you and always be there for you,

Randy Haugen

 
At 6/28/2009 06:23:00 PM, Anonymous amywayvictim said...

I lost hundreds of dollars when I was on amway until I realize that this was not going to work for me because for example they said on wallmart I dont get paid to buy their products and on amway I get paid for each product I purchase(yeah right) so if at walmart the toothpaste cost: $3.95 a piece and on awmway: $4.95 a piece, they said they return about 50 cents for each product is probably the over paid for the product I give them. I did the math and so I quit amway

 
At 12/04/2009 08:45:00 AM, Anonymous Anonymous said...

we got into Amway, worked it very intently for about five years.

Upon attaining the level of DD we were informed that there was a "bonus" paid on the BSMs we then experienced an epiphany.

Against my better judgment we continued to quietly participate in the tool scheme and be rewarded by tool volume profits until we became emeralds with three solid legs. At that time we stopped participation in everything specifically because of the less than above board and occult (as in hidden from view) tool business philosphys of our upline. Frankly I was of the opinion that we should be forthcoming about the profits to be made in what is clearly an otherwise good idea for training and motivation, all necessary elements to any successful program. I also believed that were simply some people who would never succeed at this no matter how much you motivated them and were better utilized as wholesale consumers and be treated kindly and befriended until such a time as they either developed socially or were sparked by real life events into working towards compatible goals on their own. For these observations and candidly expressed viewpoints we were accused of being elitists and voted down within our upline organization therefore we opted out at that time. they also quit paying us bonuses on tool volume from our now usurped groups, two of which the upline groomed and the third was repeatedly sabotaged to prevent us from maintaining emerald qualification.

When we discerned the intent of our upline with regard to our business we switched strategies and worked within the third group on a personal basis with an emphasis towards friendship and product consumption also incorporating a modest sales program which worked well.

I would be disingenuous if I did not admit that without the systematic training and motivation provided by "the system" as it was referred to at the time we more than likely would not have attained the level of emerald.

Today we enjoy a modest retirement from our combined labor in and out of the world of Amway with the Amway bonuses being an important part of that strategy. Furthermore to this date we have not needed to return to work in Amway and my wife has basically replaced her income from a job with six years of work performed twenty two years ago. I still work in my conventional business but with greatly reduced economic pressure and lots of discretionary time at our disposal.

Amway is a great way to develop a second or even third career if you like people and you don't have to lie about anything, even the business support side of the package.

I believe that were we to ever start working again (towards diamond as an example) I would readily embrace the motivational business but would insist upon transparent disclosure to even the prospects. I'm certain that a saavy prospect would immediately grasp the implication for rapid group growth and profit earning potential that the BSM truly does offer. I don't think there is anything to be apologetic about provided that participation is not coerced in any manner.

 

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