News About Quixtar/ Amway's 'E-Commerce' Internet Strategy

Recently, Amway announced they (as a corporation) would start an aggressive Internet marketing strategy. A few months ago, they allowed distributors to sell products and sponsor people over the Internet. In years past, the Internet was considered a "retail outlet", and was off-limits to distributors. Additionally, the idea of duplication was hindered by the fact that not everyone had a home computer and/ or Internet access.

Ever since Amway announced its new policy, I have started to receive numerous e-mails from people asking me about this "new Amway." The e-mails range from "This guy claimed it was not Amway, but a new business," to "He said he could make money just by people clicking on his website." On this page, I hope to clear up some misconceptions and expose just what this "new Amway" really is. On some of the following articles, I have added my own comments in green and important points are in red.


To start, here is Amway's policies on Internet activity:

Ms. Bobbe Cook
BSM Administration
Amway Corporation

Distributor Prospecting/Customer Product Sales Web Site Bulletin

The World Wide Web has developed in recent years into a mainstream/global network of commerce and communications. This offers business people unlimited potential to conduct transactions and network with others with speed and convenience that could not have been imagined a few years ago. To enable Amway distributors to take advantage of the explosion of opportunities on the Web, Amway has developed the following requirements for distributors wishing to communicate with prospects and customers using this technology within a specified market.

Distributors should keep in mind that nothing on the Internet is 100 percent secure, and should take the utmost precautions when handling sensitive customer information such as names, addresses, and credit card numbers.

Distributors must also take precautions to be in compliance with all of the Amway Distributors Rules of Conduct. Issues which may be brought to apply would be the Import/Export rule, Cross Group Selling rule, and the BSM rule.

Prospecting

Distributors may not present the Plan or solicit participation in the Plan on the Internet in a public site, chatroom, newsgroup or any other location generally accessible on the Web. Solicitation via broadcast e-mail or "spamming" (ie. sending of unsolicited messages) is not allowed. Initial contact must be made with a prospect via one-to-one contact, following the Sponsoring Guidelines found in the Rules of Conduct. [And how is this going to be enforced? The public can send their complaints to bcrdepartment@amway.com, but can they expect disciplinary action from Amway? As seen with their non-enforcement of their own 10 customer rule, is it safe to say that Amway probably won't enforce this rule either? Should the public look forward to e-mails proclaiming "Make money with Quixtar now! And we're not Amway!"?] This could include personal contact, individual e-mail contact, private chat rooms or other one-on-one communication technologies. However, distributors may maintain a web site for their prospects, provided the following requirements are met before the web site is posted:

  1. The contents of the web site, and all revisions thereto, must be reviewed in accordance with the BSM Rule for the specified and intended market. This includes, but is not limited to text, photos, video and audio aspects.
  2. Distributors must disclose any linked web sites during the content review process.
  3. Reviewed sites must be designated "content reviewed" and display their review number.
  4. The entire web site must be pass code protected utilizing a passcode that is not easily determined by individuals seeking to enter the site who have not been personally invited.
  5. Distributors may give out their pass code to prospective distributors only in face to face or other one-to-one contact situations.
  6. To ensure that one-to-one contact, which is a hallmark of the Amway business, is maintained, distributors may not broadcast, post, or in any other way mass communicate their pass code to the public or segments thereof. The pass code must be changed at reasonable intervals.
  7. The pass code page may only contain information needed for sign-in purposes, for example "Welcome. Please enter you password."
  8. The web site must comply with all Amway Distributors Rules of Conduct.

Customer Product Sales

Amway has a responsibility to ensure what is said about its products is accurate and that its trademarks are used correctly. Therefore, the following requirements must be met before a distributor may post a customer Amway web site.

  1. The contents of the web site must have been reviewed in accordance with the BSM Rule and the Advertising Rules for the intended market. Further, all pricing issues must be in compliance with the intended market's applicable regulations.
  2. Each customer must be initially enrolled through one-to-one contact and have a unique password and user id.
  3. To ensure that the one-to-one contact of the Amway business is maintained, distributors may not broadcast, post, or mass communicate pass codes to the public or segments thereof.
  4. Pass code page may only contain information needed for sign-in purposes, for example "Welcome. Please enter your password."
  5. Distributors must clearly and conspicuously state that they are independent business persons and products are not being ordered directly from Amway.
  6. Distributors are responsible for all security issues, including but not limited to, the confidentiality of customer credit card numbers associated with their web sites.
  7. Distributors may not sell AMWAY products to customers outside their home market. [And what exactly is a "home market" on the global World Wide Web? Is it the distributor's city, state, or country? Will Amway going to enforce this rule? How?]
  8. Distributors must use only the AMWAY product information provided by Amway for product descriptions and use all appropriate trademark and copyright designations.
  9. No products other than those offered by Amway to its distributors in the intended market may be sold on these sites.
  10. The web site must comply with all Rules of Conduct of Amway distributors.

Here is an e-mail I received about Amway and the Internet:

November 4, 1998

From: (a very reliable source)
To: John Hoagland

The net cop for Amway is one lone woman (Bobbe Cook) who "counsels" with her 13-year old nephew on the vagaries of the Internet. She is the sole person responsible for policing the distributor force when it comes to Web issues.


Here is an Amvox message about Amway's new strategy. Note that the speaker claims that there will be the ability to "filter out all those 'bad-guy' Web sites." There is no specific mention of what a "bad-guy" site is, but I have the very strong feeling that they will block ANYTHING that they consider "negative"-- including this very site!


Amvox Leadership Hotline
Transcript on E-commerce
message date: January 21, 1999

Hi everybody, this is Ken McDonald with a message to Emeralds and above. The topic today is e-commerce.

Beginning on September 1, 1999, we're taking this business into a whole new realm with the launch of an exciting new e-commerce opportunity. Many of you have heard about this, and many of you think you know all about it. But we want to make sure you have all the right information, so we're going to start sending you these e-commerce updates on a regular basis. And today's message will probably be in two pages because there's a fair amount I want to tell you, and I'm going to focus on three things: the economy, why we are positioned perfectly, and some of the details of the upcoming e-commerce business.

First, let's take a look at the marketplace with five amazing statistics about Internet commerce.

  • In 1998, in the U.S. alone, online sales were 4 1/2 billion dollars, and that's triple the amount from the year before. [And this figure is relatively close to Amway's "sales" of $5.7 billion.]
  • Researchers predict that online shopping is going to increase by 800 percent to 35 billion dollars by the year 2003, which is just around the corner.
  • More than 17 million people in North America have already made purchases online. By the end of this year, that number will more than double to 36 million people.
  • And this past holiday shopping season was a milestone in retail commerce across North America. Why? Because sales at traditional stores were just so-so, while sales at shopping sites on the Web more than tripled.
  • We, and especially you, are perfectly positioned to leverage the dynamic business power of the Internet. Traditional e-commerce entrepreneurs have a bunch of constraints that are similar to traditional retailers. They've got to worry about things like huge investments and programming, and then warehousing and staffing and a full-time commitment. But we're breaking the mold once again, and we're going to enable anyone with an online PC to start and build a Web-based business of their own. We'll build the technology, and you guys invented the personal touch in business, and together you're going to have a high-tech, high-touch opportunity that is second to none anywhere out there.

    What I'm going to do now is give you just a few tidbits about this business, and as we get more developed, we'll send more out to you.

    First thing we want to tell you is that this e-commerce venture is envisioned as a new company with a new name, but it will be linked to Amway in three basic ways. [Are they changing the name "Amway" because it has been taking such a beating recently- from the loss in revenue to the corporate lay-offs to the losses in China to the online critics?] One, it's being started by the DeVos and Van Andel families. Two, it will share a similar compensation plan that includes additional revenue streams. And, three, in addition to hundreds of new top-quality brands, it will feature many of the high-quality brands that are manufactured by Amway and that are well known for their high-consumer loyalty-brands like Nutrilite, Artistry, and SA8.

    We told you that we envision it as a separate company with a separate name. We told you that the launch date for this new venture is September 1, 1999. But we haven't told you the name of it yet. That's because we don't know. You'd think it would be easy coming up with a name, but it's not. We are going through the trademark registration process on several names. It's not enough just to get the domain name, the name of the Web site. In order to protect this business for you folks for the future, we need to have trademark registration in the appropriate categories for every name we pick in order to do business in all of the different ways we want to do business. So we are working on it, and as soon as we get the name of our new e-commerce opportunity, we'll let you know.

    We have assembled a highly skilled Web development team - the Internet Business Group. They have the expertise and the experience necessary to design and build this e-commerce venture, and they're working hand-in-glove with many respected external technology resources as well. In fact, to make this e-commerce opportunity as exciting as possible, we are working with multiple, major technology firms. We have entered into confidentiality agreements with these folks, and we are working on the rest of our contracts with them, but they have hit the ground running with us, and we will be making official public announcements about the alliances with these major technology partners in the future, and I'm going to be sure to let you know before we go public. In fact, we're going to do a total communications campaign that includes Diamond Club, where we're going to talk about e-commerce to the leadership.

    Participants in this new e-commerce venture are going to be able to access four different categories of products. They'll be able to access quality Amway-manufactured products, catalog merchandise, and services. But, in addition, we will be partnering with many well-known stores and brands that provide online ordering capability, quality distribution, and high-level customer service. We currently envision 12 to 100 of these merchant partners with smaller amounts of PV/BV compensation flowing upline. We're also planning to offer a family-friendly Internet service provider that will filter out all those "bad-guy" Web sites you want to keep from invading your family's PC. [Since the speaker makes no specific mention of which sites will be filtered, is it safe to assume that ANY site that is "negative" to Amway will be filtered? To me, this sounds like it could be a violation of people's right to choose.. or at least a violation of civil or constitutional rights.]

    So to sum it all up, this new e-commerce venture will not be just another me-too virtual mall with a confusing number of stores. It's going to be a unique digital destination with all kinds of exciting features, including exclusive products, select shopping partners, "way-cool" benefits for members, valuable business management services and, most importantly, an enhanced opportunity for independent business owners.

    Well that's a bite-sized, or maybe I ought to say megabyte-sized review of where we're headed with e-commerce. We are moving at warp speed here at Amway and working with some of the major distributor leaders out there to build this new opportunity, and we'll continue to send you updates to make sure you're up to speed with everything that's happening.

    Thanks for listening, everybody, and I'll be talking to you again real soon

    Here is an e-mail I received from an Amway-critic:

    January 29, 1999

    From: (a critic)
    To: John Hoagland

    What's "groundbreaking" about [this strategy] is that distributors are prevented from doing what every other Internet business does and will do: make it as easy as possible for customers to find them. For example, if I'm interested in buying Product A and I want to compare features and prices before [parting with my hard-earned cash], I can do so by searching the 'net for the various vendors who sell Product A. Except, of course, if Amway is one of those vendors; in that case I'd have to have first been prospected and given the ["secret" password] so I can visit some distributor's site and get this simple information. With all the products readily and easily available on the 'net, why would anyone bother with Amway?

    If what we're hearing about Amway's "i-mall" so far is true, then all it boils down to is this: In addition to cold contacting prospects and handing them a catalog of overpriced products, Amway is now offering distributors the option of cold contacting prospects and handing them the password to a web site with the same information as is in the catalog. Whoop-de-doo.

    Here is a second e-mail I received from an Amway-critic:

    January 30, 1999

    From: (a critic)
    To: John Hoagland

    As far as being a "whole new way to do business", I would first look and see what they will do different from existing Internet retailers. Amway in itself is "a whole new way to doing business". Doing Amway on the Internet only brings Amway into the new market trend. Amway just seems to be a few years behind, again. But, that is typical if you look at Amway's business history. In the 1980's they finally decided to expand into catalog sales, only after several other catalog sales outlets had been in business for many years. Amway is a trend-follower now, and not a trend[-setter], as in the 60's with the MLM concept.

    I [suggest looking] at what Amway was in the past and how it is conforming to the market now. Previously you could have an Amway catalog with your distributor number on it. If someone found the catalog and ordered through it, you got the approximate 17% retail markup [in the form of a bonus check]. Sounds easy and simple doesn't it? It sounded pretty cool in the '80's. "Here's my catalog, order from this 1-800 number whenever you want - very cool, very easy." A whole new way to do business, in the early 1980's. Now reality. Very few non-distributors ordered product from the catalogs. Retail sales by distributors is very low. 90% [of the products moved] is self consumed, so it is in effect just a bunch of people selling the stuff to themselves, and splitting up the rebates. Non-distributors don't buy from the catalogs, since they can get better deals at the local discount store. If Amway had great prices, their sales and sales growth would be greater in the US. Ask Amway for US sales and sales growth numbers. [I tried,] they won't give them to me. I'm sure Wal-Mart's growth rate walks all over Amway's US sales growth. Several studies confirm that there is always a better deal at discount stores. You can find links to these studies [at] The Amway distributors little white lie.

    Now enter the Amway Internet. "Here's my URL, and password.. order with your Visa number anytime you want" -- very cool, very easy. Sit home and collect your 17% markup on non-core Amway products. "A whole new way to do business in the new millennium". Now what changed? Has Amway lowered its costs to compete with the discount stores? Has Amway lowered costs to complete with the overhead structure of Internet retailers? Amway claims to have the cost structure of an Internet retailer, but studies show their prices are still higher than discount stores. How can they lower costs without reducing [either] their profit margin or the money given back to distributors? The Internet retailers are trying to reduce costs by removing layers and non-value added operations. Amway is still hanging on to its multi-level rebate and bonus structure, while the Internet companies wring more cost out of the distribution system. This will make Amway even less competitive.

    Will non-distributors shop at the Amway Internet store? No, as long as Amway prices are not competitive. The Internet makes it much easier to compare prices, to boot. No more running from store to store. Shoppers will more quickly find out Amway is not competitive since the information is so much easier to accumulate on the [World Wide Web].

    Distributors have a vested interest to buy from their own store. They get points, small rebates, and the dream of being on top one day- that is more important than getting the best price.

    Amway may see a little growth spurt with this Internet thing. [That is,] until people get over the hype and learn the truth that Amway is not competitive on price. Sure they can always carry a niche market, but they will not be the hot growth machine like Wal-Mart was or is.

    Competition rules. Once the hype is over, Amway Internet is [just] the same old Amway as before.


    March 3, 1999

    From: (a very reliable source)
    To: John Hoagland

    Family Matters Message from
    DAVE VAN ANDEL
    February 26, 1999
    REGARDING: ANNOUNCEMENTS AT DIAMOND CLUB

    ...

    The business we're building today is so that more people will come to our opportunity. A big focus of excitement and attention at Diamond Club was the launch this September 1 of the new Internet-based business opportunity. We announced the name, and if you haven't heard it by now, and I'd be surprised if you haven't -- the name is quick star spelled Q U I X T A R. Come September, www.quixtar.com will be the one digital destination for a unique offering of e-commerce, member benefits, business ownership, and management services.

    When Dad and Rich started Amway, one of their big ideas was that anyone could start a business without a huge investment in property and equipment or inventory. Well that's still a big idea. Quixtar will offer an exciting opportunity for anyone in North America to start their own Internet based business without the need to make a huge investment in programming, warehousing, distribution or product development. And Quixtar is just part of what we're building.

    ...


    March 12, 1999

    From: (a very reliable source)
    To: John Hoagland

    Family Matters
    Message from
    DAVE VAN ANDEL
    March 12, 1999
    REGARDING: QUIXTAR OWNERSHIP

    Hello everybody, this is Dave VanAndel with a very important message going out to all Leadership. We just finished up a historic week of ADA Board meetings here in Grand Rapids. Once again, your Board worked tirelessly on your behalf. Great progress was made on many of the details for both Quixtar and the IMC model--independent business owner, member and client.

    One of the most important outcomes of this week involves the positioning of Quixtar. I am please to announce that Quixtar, Incorporated is a Delaware corporation, owned by the DeVos and Van Andel families. Quixtar, Inc. is a sister company to Amway Corporation. It will not be owned by Amway, but rather by our two families. It will be run by the second generation of DeVos and Van Andel's. Quixtar is a new business model designed specifically for the Internet--a new way to reach your goals in the new millennium.

    On behalf of both families let me say that I am once again, proud of the ADA Board for their vision and leadership. Yesterday, the Executive Committee signed a historic document--The Manifesto For the New Millennium. This Manifesto reaffirms the partnership of Amway, Quixtar and your Board. It emphasizes the importance of opportunities for all individuals in North America to be touched by our business in the new millennium, whether as a client, a member or as an independent business owner. It also expresses the belief of the Board that the Quixtar name and reputation be protected through whatever rules or enforcement actions are necessary.

    We stand at the dawn of a new millennium with opportunity like never before. The Amway opportunity has thrived for 40 years here and around the world. And now in North America we are creating an entirely new business and an entirely new business model. Quixtar will change our business, our industry and the way business is done on the Internet forever!

    Let me extend my congratulations to all of you and especially to the members of your ADA Board. Your Board officers, President Paul Miller, Vice President Billy Florence and Secretary/Treasurer Jody Victor, made history this week and I was proud to work with them to secure the future of our business for generations to come. Thanks a lot everybody, we will talk to you again soon.


    March 19, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Transcript on E-commerce
    message date: March 4, 1999

    Hello, future Diamonds and Diamonds of North America. This is Paul Miller, President of your Board, speaking on behalf of your 30 elected Board members.

    As you know, the name of the new North American e-commerce opportunity called Quixtar was announced last week at Diamond Club amid a lot of excitement, but please listen closely. We must present this properly, and we need everyone's help.

    First, it's important we portray Quixtar in an accurate way - that it's an entirely new business model designed specifically for the Internet; that Quixtar is backed by the global resources of Amway Corporation and the Founding Families, using the proven, time-tested Sales and Marketing Plan; that the top-quality products found in the Amway business will be available, along with new, exciting, store brand names.

    The second point: Independent Business Owners may maintain a Web site for use with prospects, provided that it meets the following criteria.

    The entire Web site must be pass-code protected; this is very important. The pass-code page may only contain the information needed for signing purposes. For example: "Welcome, please enter your password."

    To ensure that one-to-one contact to the Amway business is maintained, distributors may not broadcast, post, or mass-communicate pass codes to the public or to segments of the public.

    Web sites for prospects must be content-reviewed by Amway Corporation, and no Web site may depict the Amway Sales and Marketing Plan or income depictions without written authorization from Amway Corporation.

    Amway's trademarks, trade names, and service marks-including the Quixtar name-may not appear on a Web site without Amway authorization.

    Amway will give the sites under 24 hours to remove the site or pass-code protect it. Amway will also request that the site be submitted for content review to ensure its full compliance.

    Your ADA Board has asked Amway to take the strongest possible action, from a two- to five-year suspension up to termination, against any distributorship responsible for the improper Web sites. You may call (616) 787-6712 and ask for Bulletin number 17 to help you understand this a little bit better.

    The last point: In the Internet world, there's a practice called spamming. Spamming is when someone sends out unsolicited e-mail advertising, quite often to a huge distribution list. It's kind of like electronic junk mail. In fact, many states have passed laws against spamming and have levied significant fines, as much as many thousands of dollars, against those found guilty of spamming. Please call about violations to Business Conduct & Rules at (616) 787-6712, fax (616) 787-7896, or e-mail at bcrdepartment@amway.com. We need your help to keep this Quixtar program pure. Thanks for all your help and what you do.


    April 3, 1999

    From: (a very reliable source)
    To: John Hoagland

    From ABN:
    Transcript on E-commerce
    message date: March 26, 1999

    Hi everybody, this is Ken McDonald with a message for all Emeralds and above - an extremely critical message about the future of your business.

    You've all heard the phrase "do the right thing," and that's what the vast majority of folks in your organization are doing. But, unfortunately, there's a growing number of instances where Amway business owners are doing the wrong thing. In fact, these things either violate our Rules of Conduct, are illegal, or both.

    So effective Monday, March 29... that's three days from now... a zero-tolerance policy goes into effect. These violations will be cause for suspension from sponsoring for at least six months. So look at the calendar - that means that anybody who's suspended will not be able to participate in the opening of Quixtar.

    What are the violations I'm talking about? There are three. The first one is spamming. Just what is spamming? Spamming is sending unsolicited e-mail to a stranger. If they didn't ask for it, if people didn't give an e-mail address and they receive it, it is unsolicited, and some Amway IBOs are spamming to get new people in the business.

    What does this mean to you and your downlines? Well, first, spamming violates Rule 103 of the Rules of Conduct. Second, it's against the law in some parts of the U.S. and Canada, and people have been fined thousands of dollars for spamming. Third, spamming can seriously jeopardize the reputation and potential for Quixtar. And, fourth, a number of Internet service providers -ISPs - have actually shut off access to Amway-related Web sites like countdown9199. They're blocking the public from seeing these sites because some Amway IBOs have been spamming. [And this is what a "zero-tolerance policy" should be- ISP's need to block access to/ from sites that are known "homes" for spammers. Perhaps if even distributors spam enough people, every ISP will block access to all Amway-related sites!] So beginning Monday, spamming will be a cause for immediate suspension from sponsoring for a minimum of six months!

    The second violation is making income representations. Neither your downlines nor their Web sites may make income representations on the Web. That's solely the job of the brochure that's called The Amway Business Review - the SA-4400. So if any Amway IBO makes income representations on the Web, they will be subject to suspension from sponsoring for at least six months.

    Violation number three is signing up anyone into the business today. Why? Well, because there is no business yet. doesn't start until September 1, so to sign someone up or make them believe that they are now a independent business owner is not only wrong, it's unethical, because a person can't be part of something that doesn't exist. So prior to the launch date of - 9/1/99 - no one may sponsor, register, or preregister people into the business. This also means they can't stamp a red "" or "e-commerce" or "Internet" or something like that on an Amway app. But they may - and many of them are - sponsoring people as Amway independent business owners, who will then be able to designate as their primary business on September 1.

    So let me recap. Effective Monday, March 29, our zero-tolerance policy goes into effect. Anyone found to be, one, spamming; two, making income representations on the Web; or three, signing up someone as a independent business owner prior to 9/1 will be suspended from sponsoring for at least six months.

    Your ADA Board has asked us to send every IBO in North America a mailing that includes this kind of information. We'll also include a fact sheet so everyone will have the latest information on what will be all about on 9/1/99. In fact, your ADA Board-President Paul Miller, Vice President Billy Florence, and Secretary/Treasurer, Jody Victor - totally endorse and support these actions by Amway; and they, the Board, are taking a vital leadership position in protecting the name and opportunity for all of you.

    Although this is not the cheeriest of AMVOX messages, I do want to say that most of the people out there are doing an incredible job of bringing people into this business. In fact, the first half of March, sponsoring is up 45 percent in the U.S. and Canada. But it's absolutely mandatory that they bring people into this business in the right way and do the right thing.

    So I would appreciate it if you could pass this message down line so that everyone is informed of our new zero-tolerance policy. Thank you so much, everyone, for all of your leadership, and for everything you're doing to share this great opportunity with people all across the U.S. and Canada.

    [Again, we will have to wait and see if Amway actually enforces these rules on its distributors. To be honest, I will be very surprised if Amway suspends a distributor's ability to sponsor brand-new people into the business for violating these rules. I am also assuming that uplines will find ways around the "suspension"- if 'John' is suspended for spamming, just put his new people under his existing downline, 'Joe' (who isn't suspended).]

    March 19, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Transcript on E-commerce
    message date: April 1, 1999

    Hi everyone, this is Ken McDonald with a message to all Emeralds and above. This is a follow-up to an AMVOX message I sent you a few days ago.

    In that message, I told you about some serious challenges we're having concerning three Rules of Conduct violations. Number one - spamming, number two - income representations on the Internet, and number three - signing up people today in Quixtar. I told you that effective Monday, March 29, any independent business owner who does any of those three things will be immediately suspended from sponsoring for a minimum of six months.

    Your ADA Board supports this zero-tolerance policy, and these leaders also urge that we send a mailing on Internet rules to every Independent Business Owner (IBO) in North America. In this mailing, you'll see a list of Top 10 Rules for Quixtar and the Internet - rules that IBOs need to follow. Right now, I want to quickly run through that Top 10 list for you to give you an advance notice, and we'll have the list posted on ABN as well.

    The first three rules are the ones I just mentioned.

    Rule number one - no spamming! Spamming is when somebody sends out unsolicited e-mail to total strangers who did not give you their e-mail addresses. In this case, some IBOs are spamming to try to get new IBOs or new clients.

    Rule number two - IBO Web sites must not contain any income representations.

    Rule number three - Prior to the Quixtar launch date of September 1, 1999, IBOs may not sponsor, register, or pre-register people into the Quixtar business, because that business does not exist until September 1. However, you may sponsor people as Amway IBOs who can then designate Quixtar as their primary business on September 1.

    Rule number four: The Websites of IBOs must be pass-code or password-protected.

    Rule number five - Only Amway-approved product information may be used on IBO Web sites.

    Rule number six - The contents of an IBO site and any revisions, must be reviewed by Business Conduct & Rules at Amway.

    Rule number seven - IBO Web sites must comply with all the Amway Rules of Conduct.

    Rule number eight - Under no circumstances may IBOs use Quixtar, Amway, or any other name, trademark or service mark that is owned by Amway or Quixtar in their Web address - which is the www.something or other .com, you have to type in to go to a Web site. Also, no variations in the spelling of those names - such as spelling Quixtar in a different way - can be used either.

    Rule number nine - All rules for BSM's, trademarks, and copyrights must be followed for any materials that contain information about Amway or Quixtar.

    And Rule number ten - Personal Home Pages, which are non-passcode-protected sites, may not recruit, advertise, or sell products.

    Well that's the Top 10 List of rules to remember about doing business on the Internet. In fact, we are so serious about this, we have set up two new e-mail addresses where your downlines and you can pass along information about violations that you may come across. Those new e-mail addresses are abuse@amway.com and abuse@quixtar.com. If we get information about violations, we can follow up with the folks who are doing something wrong and make sure it gets fixed.

    Now just one final thing - please ask your downlines not to pass on crazy rumors about this celebrity or that well-known businessman supposedly getting involved in the Quixtar business. [Such as the rumors about how Clint Eastwood or Meg Ryan are Amway distributors.]We've already heard some absolutely ridiculous reports and, of course, they're not true.

    We are all thrilled about the upcoming changes to this business and how strong the business trends are now thanks to all of your hard work. And as you know, it is absolutely critical that everyone follows the rules of the Internet as well as our own Rules of Conduct. Your ADA Board supports this policy, and they and I urge you to pass this AMVOX down to the folks in your organization. So thanks for everything all of you are doing to bring more people into this business, it's just incredible now. And thanks for making sure your organization is doing it in the right way. Talk to you soon everybody.


    June 25, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Transcript on E-commerce
    message date: June 18, 1999

    Hi everybody, this is Ken McDonald on the Leadership Hotline with a Quixtar news update.

    Many of you have called and asked for information on partner stores, and that's what I'd like to talk about. Can I give you some names? No, not yet, but I do want to give you the details behind the selection process, our three key "must haves" so we can hook up with a partner store.

    First, the partner store must have an e-commerce site selling high-quality, family-friendly goods and services directly to the customer. I know that sounds simple, but it's surprising how many name-brand stores or brands out there don't have an e-commerce site.

    Second, and this is the most important. In order to protect the integrity of the line of sponsorship, the partner stores must be willing to track and report individual sales by name, IBO number, and transaction. This is absolutely critical, because IBOs will receive PV and BV on every partner store transaction. And, also, as we mentioned before, members receive credits redeemable to all kinds of cool merchandise found on a special spot on the Quixtar site.

    The third must have, is the partner store must be willing to compensate us a reasonable percentage, like say 10 percent or so, for volume that flows through quixtar.com. This cash compensation is what turns into the PV and BV for IBOs on the Quixtar credits for members.

    What's exciting is that we're finding there's a whole new breed of companies out there on the Internet. They're called pureplays. They are hot new companies that are doing business just on the Web. They get it and they're doing it well, and these are some of the names we'll be sharing with you in the future as we prepare for the launch. Many might be new to you if you're not a frequent Web shopper, but all of them are dedicated, as we are, to helping you help your folks build their PV and BV.

    Now, before I give you the categories of the partner stores, I do need to stop a false rumor that's been circulating about a supposed partner. It is not true that we are negotiating with a store by the name of Nordstrom. In fact, because IBOs are spreading this untrue rumor, there may never be a business relationship between Quixtar and Nordstroms. [Does this mean that if people spread false rumors about Amway's relationship with corporations, those corporations won't "partner" with Amway? Hmmm... maybe there's something to this idea.] So if you hear this particular rumor, or similar reports that mention the names of other supposed partner stores, please squash the rumors on the spot.

    We have not released any names, we may not even release any names before 9.1.99, and it's critical for the success of Quixtar that IBOs do not spread these kind of unfounded rumors or participate in this kind of false advertising. I thank all of you in advance for helping us to do the right thing here.

    ...


    July 17, 1999

    Here is a message regarding Microsoft's "partnership" with Amway/ Quixtar (which was forwarded to me by a reader). Note that Microsoft's "official" relationship is that of a "consultant" to Quixtar and a "partner" to Fry Multimedia, NOT a "partner" to Quixtar. As usual, Amway/ Quixtar is just a "customer"- there is no "partnership" at all.

    From: Nikki Mundie
    Cc: RAPID RESPONSE
    Subject: RE: Quixtar/Microsoft Partnership

    The Rapid Response Team received your email yesterday regarding the Quixtar/Microsoft relationship. I hope that the information that I have provided answers your question of what Microsoft's role is in this relationship.

    Microsoft Corp., specifically Microsoft Consulting Services, is a consultant to the Amway development staff. Microsoft is supporting its partner, Fry Multimedia and Amway, as the customer/client, through the completion of the e-commerce project for Quixtar. Microsoft is providing the technical platform, development tools, consulting, and direct support for web-based components of the project.

    Fry Multimedia, Inc., a full-service interactive agency with headquarters in Ann Arbor, Mich., is working with Quixtar's Internet Business Group to develop the technical back-end. Fry is a proven commercial site builder and Microsoft Certified Solution Provider, having developed numerous e-commerce sites such as the well-received destinations for Crate & Barrel, Godiva Chocolatier, Eddie Bauer, MSN Shopping and 1-800-FLOWERS.

    If you have any other questions please contact me.

    Sincerely,
    Nikki Mundie
    Rapid Response Team
    Waggener Edstrom
    425.637.9097


    July 17, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Transcript on E-commerce
    message date: July 9, 1999

    Hi everybody, this is Ken McDonald with another update on QUIXTAR. Well there are so many exciting things about QUIXTAR, but maybe the most exciting is the place where you and your organization gets the most PV, it's called "QUIXTAR Exclusives." Now this isn't your run-of-the-mill ordering engine. This is the ultimate shopping experience, providing customized solutions and information and product recommendations.

    In QUIXTAR Exclusives, the very best of our core line products are highlighted in three categories: My Home, My Health, and My Self. You'll find brands like SA8?, Water Treatment System, MAGNA BLOC?, QUEEN? Cookware, ARTISTRY?, and NUTRILITE? highlighted in these three categories. [And remember, just because there are Amway products does not mean this is an "Amway business."]

    Now you won't find every Amway product highlighted on QUIXTAR, only the best of the best of the best, but IBOs, Members, and Clients, will be able to get other products through a product search if they know the name, the stock number, or even the type of product.

    ...

    There is so much more in QUIXTAR Exclusives, but the point is this, we've elevated Web shopping, we have reinvented Web shopping. It's no longer merely a convenience. Now it will be fun, informative, and a truly unique experience, and that's our goal with QUIXTAR Exclusives. [Web shopping will be "fun, informative, and... unique"?? Now, that is innovative. It's too bad other e-commerce companies discovered the idea years ago.] It's all about choices and about finding better solutions for better living. This site is designed to generate volume, and lots of it for you, and that's our goal with everything we're doing here with QUIXTAR, and we appreciate all the information we get from you folks. We appreciate the help we get from the ADA Board and other major line of sponsorship leaders, but mostly we appreciate your leadership and going out there and in sharing this business opportunity and in making QUIXTAR fit your way of doing business. In building your downline into becoming independent business owners who can choose to build a business affiliated with QUIXTAR. The special spin that you put on building the business is what makes it unique. The special teaching that you provide your downline, the connection that you have with your downline is what is going to make us a success. [Read: keep reading the books, buying the tapes and attending the functions as your upline tells you.] So thanks again, all of you, for absolutely everything you're doing. We'll talk to you later.


    July 17, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Transcript on E-commerce
    message date: July 14, 1999

    This is Ken McDonald with another QUIXTAR update. We keep hearing more about all kinds of new Internet businesses. And we're going to see a lot of them come and go as e-commerce takes hold.

    QUIXTAR is ahead of the game and has advantages in many ways. One of the big advantages that speaks well for our future is its relationship with Amway and the solid infrastructure this provides QUIXTAR. This may be a cyberspace business, but there's a lot of brick-and-mortar, technology, and people behind it.

    In fact, here are just six examples that you can pass along to promote the fact that -even as a new venture- QUIXTAR is already a very solid business due to its relationship with Amway.

    One - QUIXTAR draws on the support of Amway, a multi-billion-dollar global corporation with extensive resources and 12,000 employees, including about 6,000 in North America.

    Two - QUIXTAR, like Amway, is owned by two of the most successful entrepreneurial families in the world. [The two families would be the DeVos' and the VanAndel's.]

    Three - It is using a proven compensation plan, product development and fulfillment methods, and network of independent Business Owners across the U.S. and Canada.

    Four - It has access to Amway's manufacturing plants at a mile-long business complex in Ada, and the Nutrilite facilities in Buena Park, California. In 1997, the Michigan facilities produced some 235 million units of cosmetics, liquid, powder, and aerosol products plus their plastic or corrugated containers and shipping cartons. The Nutrilite facilities annually produce 3.6 billion vitamin tablets for sale in 39 countries and 40 million nutritional food bars. Nutrilite is one of the world's largest manufacturers of branded vitamin tablets in the world.

    Five - It will offer Brand-name products developed by Amway's staff of 760 professionals and support staff worldwide. These brands include ARTISTRY? - one of the top-10 selling brands of its kind in the world. Amway holds 368 patents worldwide with 347 pending.

    Six - It will utilize Amway's North American Product fulfillment and distribution, including eleven service centers, including a 640,000-square-foot computerized center in Michigan that fulfills orders for the 426-page PERSONAL SHOPPERS? Catalog.

    [Given these six categories, is Quixtar, then, the same thing as Amway? If a person wants to be completely honest, the answer would have to be "yes." But, legally, distributors can say, "It's not Amway, it's Quixtar!"]

    There're many more examples, but these are some of the big ones.

    I also have some important information about QUIXTAR and IMC for offshore markets within the North American Business Region. IMC is the business structure that stands for Independent Business Owner, Member, and Client. So, in addition to the U.S. and Canada, QUIXTAR and IMC also will be available in Puerto Rico, the U.S. Virgin Islands, Guam, and the Pacific Islands of American Samoa, Federal States of Micronesia, Marshall, Northern Mariana, Palau, and Wake.

    In Haiti and the Dominican Republic, as well as in other Caribbean and Pacific Rim Islands authorized under the Sales and Marketing Plan, everyone in the business as of Sept. 1 will be considered an IBO Neither QUIXTAR nor the Member category will be available in these areas.

    The six examples I shared earlier are examples of the strength of the business you've been building. It's solid and ready to support your future. That's it for now.


    August 5, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Transcript on E-commerce

    Hi, everybody. This is Ken McDonald with two important messages about QUIXTAR. I'll send them separately. This first one is about the Beta Test. [They only have a month to go and Quixtar is only at the Beta stage?? For non-computer people, a Beta version of software is the stage that is 2, 3, or more versions before 'final release'. Most software companies have their software in the Beta stage about a year or so before release. Who knows, maybe Quixtar WON'T be lauched Sept.1.]

    Well, we're one month away from one of the biggest launches in Internet history! You wouldn't believe all the activity going on here! In fact, it's pretty much "twenty-four seven" - that means twenty-four hours around the clock, seven days a week. We're bringing in food for these people, and we're even dragging in cots for them to sleep on as they build and tweak QUIXTAR.

    All in all, it's pretty darn exciting - but we're not done yet! And one of the most important parts of the building process will begin at the end of this week. And that's the QUIXTAR Beta Test.

    What is beta testing? Well, it's what any good web site does to make sure it works. It's the Q-A - the quality assurance. It's to make sure the links are all in the right places, and that when you click on something, you go where you want to go. And to make certain that all the behind-the-scenes programming does what it's supposed to do.

    Our beta-testers are about 675 IBOs - a variety of people from different levels in the business who we've worked with in the past on other web sites that we've launched, and also major leaders in the business. [Which means, in all probability, that these people are not getting paid for the hours that they work.] These folks will work closely with us to check out different aspects of the site. In addition, if you've accessed ABN anytime up through June 25, you'll also be able to test out the site in the second wave of beta testing . Just watch ABN for specifics. And right now, this test is for U.S. only, not Canada. We'll have more information about Canada soon.

    Right now we feel real confident about the strength of the QUIXTAR site - that it's solid and ready for the test. But remember this is a: test. If you log on to the site, make sure you remember this is not the final QUIXTAR. It will be close, but not all the i's are dotted and t's crossed. You're going to see a few "under construction" pages as well.

    Thus, the site is a work in progress, and we'll continue to fine-tune the content and the functionality based on the input of the beta-testers. Thus, here are the three things to keep in mind if you're participating in the test:

    Number one - This is a test, and everything is not finished. So if you see something that doesn't read or look quite right, don't worry - we'll fix it. But if you have any input or suggestions, send them to us by e-mail at beta@quixtar.com. And please realize there may be a few bumps in the road, particularly in the early days of QUIXTAR, but that's the nice thing about the Web. We'll all work through this together, and we can fix it overnight.

    Number two - While the vast majority of QUIXTAR has been built and is functional, not all the areas will be operational during the test. For example, IBO sign-up and the Partner Stores section will not be operational until 9-1-99. The areas you will have access to are all functional and live. This means, for instance, the orders you place will be real orders, and product will be shipped to you. Please keep this in mind as you test the site.

    And point number three - The QUIXTAR test site is confidential. It's only for the IBOs participating in the beta test. That new prospect that you've got on the string that looks really sharp - who knows! Could be a spy for the competition. [I don't think they are so much worried about competition as they are worried about us 'anti' sites. I would guess that, if their competetors (such as P&G) wanted to do an online-shopping site, they would have done so long ago. But they are probably worried that 'some people' may see the site in its test stage and criticize it before it has a chance to fully "take off."] Well I don't know if I'd go that far, but it's always best to be cautious. This is just for us. Let's keep this in house during the test. And just a reminder as to the timeframe of the test.

    ...

    First - if you want to see the Webevent, you have to register first at the following URL: http://webevent.broadcast.com/quixtar/launchevent. Note that there's an automatic link to this registration site through ABN. And the Family Matters message with all the details is also posted on ABN in the QUIXTAR Update section.

    Second - because this is a Webevent, it is designed to be viewed on a PC. It is not designed for large meetings. [So, please, don't hook up a projector to your PC so the whole room can see the "Webevent".]

    Third - since this is a very high-tech Webevent, this cannot be viewed on WebTV. [So now they're going to 'block' all of the WebTV Amway-defenders from participating! How's that for discrimination? And chances are good that some of these people who wanted to be on the Internet bought their WebTV unit through the Amway catalogs... and now they can't participate in this "Webevent"??]

    ...

    Well, that's it for now - but, quite frankly, it's quite a bit! We have less than a month to go. We are turnin' and burnin' and keeping the lights on all night at the Mother Ship. ["Mother Ship"?? Everyone repeat after me, "Amway is not a cult."] But as you've just heard, the next few weeks are going to be incredibly exciting.

    ...


    August 13, 1999

    From: (a very reliable source)
    To: John Hoagland

    AMVOX Leadership Hotline
    Merchant Partners/Webevent
    message date: August 9, 1999

    Hi, everybody. This is Ken McDonald with an exciting update on Quixtar Partner Stores.

    Well, when we set out to create the ultimate Web site, one of our goals was to assemble a variety of Partner Stores to help bring an added level of excitement to Quixtar - and help you attract even more Clients, Members, and future IBOs to your Internet-based business.

    And of course the most important thing these Partner Stores have to do is track individual volume by Member number and IBO number - that's how you get the PV you deserve. So let's talk about who some of our new Partner Stores are.

    The first Partner Store is one of the most famous technology companies of all time - IBM. That's right - IBM, the standard by which state-of-the-art computer products are measured. Like Quixtar, IBM helps make lives easier as we all drive toward an "e" lifestyle. And it's pretty exciting to have IBM as a Partner Store with Quixtar.

    We've also attracted one of the leading names in men's fashions. Paul Fredrick Menstyle is the source for upscale men's clothing accessories. The Paul Fredrick site is as impressive as this line of fine men's clothing.

    The next Partner Store is a company that some of you are already familiar with, and that is Ocean Essentials, a pioneer in the creation of natural health products from the sea. It's backed by the science to show the impact that ocean-based ingredients have on health concerns. Every Ocean Essentials nutritional supplement is pure, consistent, concentrated, and effective. And it's the richest Partner Store on the Quixtar site. That's right, you will earn full BV and associated PV on net revenue with Ocean Essentials, and you'll get 7.5 percent cash back! On 9.1.99, Ocean Essentials will be available at the U.S. Quixtar site, and we hope to add OE to the Canada Quixtar site in the near future. So check out the Ocean Essentials web site now - that's www.oceanessentials.com and get some cool facts about this before you start buying and recommending Ocean Essentials through Quixtar on 9.1.99.

    Another cool partner store is Landscape USA. They offer landscaping, irrigation, and gardening information and supplies, plus tutorials, technical help, and weekly tips. You really need to see this site - it's one of the coolest ones out there on the web.

    And let's continue name-dropping with our last big name for now - that's Apple - Apple Computer. Apple has designed a special Web site called i-space that has been developed exclusively for Quixtar to offer Apple computers. Apple has defined everything that's hip and edgy in the computer industry. Heard of the iMac? It's one of the biggest-selling computers in the world!

    So these five companies - IBM, Paul Fredrick Menstyle, Ocean Essentials, Landscape USA, and Apple - give you a glimpse and a good indication of some of the Partner Stores. We've got some of the big names, and we're also going to have a lot of boutique shops coming up. So we'll tell you more as we keep going along. Right now the idea is to make sure that we have the best list of Partner Stores and cut the best deals so you benefit the most.

    These stores won't be open on Quixtar until 9.1.99. And you and your IBOs, Members, and Clients must link to them through Quixtar for you to earn PV/BV.

    Now, here's one more recommendation on the Web Event, on Tuesday, August 24 at 9:01 p.m. Eastern Time. Thousands of IBOs are registering for this Web Event every day. I've also heard that every corporate phone number at the mother ship has logged calls about the Web Event. It's created that much excitement!

    So here's the URL again for those of you who still need to register: http://webevent.broadcast.com/quixtar/launchevent. There's a link on ABN, so you can go there, click, and register. The Web Event is definitely a must-see.

    Remember because this is a Web-based event, it's designed to be viewed on a personal computer, not WebTV. [Again they 'block' all of the WebTV Amway-defenders from participating! How's that for discrimination?] And this is not meant for large meetings, so it's best if you limit your audience to the number of people who can comfortably sit around a computer screen. [So, again, please, don't hook up a projector to your PC so the whole room can see the "Webevent".]

    Well there's a whole lot more I'm going to share with you, so I'll continue to be in touch with you between now and 9.1.99. So keep spreading the good word and the excitement. Keep sharing this business with people as you've been doing. Your success is going to be one of the biggest success stories.


    August 13, 1999

    Here is information I received about the Internet Service Provider (ISP) that Amway/ Quixtar's "promoting" to its distributors/ IBO's:

    Filtered or Non-Filtered access is established ONLY during QuixNet registration. Once you have made your selection, your ongoing QuixNet service will be supported accordingly. If you decide to reverse your decision, you must contact QuixNet Customer Support.

    Internet filtering is a process which identifies and blocks access to objectionable materials on the Internet. QuixNet offers the most advanced technology and filtering methods by providing powerful server based filtering, a truly premium Internet filtering service for the whole family.

    Unlike common filtering software running on individual computers, this filter works at the server level, blocking access to inappropriate content before it reaches your computer. Server-based filtering cannot be disabled by savvy teenagers, and is automatically updated each day to block the hundreds of new sites containing pornography and other objectionable material.

    The filtering service is maintained by a large, trained review staff which monitors the Web to identify objectionable content, but which does not block useful material. QuixNet subscribers may submit questionable Web sites for review and possible removal, from within their own Web browser.

    The combination of advanced technology, intelligent review and subscriber feedback make QuixNet's filtering the most powerful and effective Internet filtering solution available today, and insures QuixNet subscribers a safe and productive Internet experience.

    Listed below is a complete list of the categories selected to be blocked by the system administrator of the QuixNet.

    Primary
    Adults Only:

    Material labeled by its author or publisher as being strictly for adults. (Examples: "Adults only", "You must be 18 to visit this site", "Registration is allowed only for people 18 or older", "You must be of legal drinking age to visit this site") [I can understand blocking children from accessing this information, but what if you are a "consenting adult"? Some of the sites may be in bad taste, but why should a legal adult be blocked from viewing the information? Sign #1 that this blocking software is restricting the free flow of information.]

    Hate/Discrimination:

    Advocating discrimination against others based on race, religion, gender, nationality, or sexual orientation.

    Illegal:

    Advocating, promoting, or giving advice on carrying out acts widely considered illegal. This includes lock-picking, bomb-making, fraud, breaching computer security ("hacking"), phone service theft ("phreaking"), pirating software, or evading law enforcement.

    Murder/Suicide:

    Information on committing murder or suicide. [What about a site about "recovering from the suicide of a loved one"? Will these kinds of "self-help" sites be blocked?]

    Nudity:

    Bare or visible genitalia, pubic hair, buttocks, female breasts, etc. (See also Swimsuits, Lingerie, Sex and Pornography)

    Pornography:

    Material intended to be sexually arousing or erotic. (See also Sex and Nudity)

    Sex:

    Images or descriptions of sexual activity. Any sexual merchandise. Sexual fetishism. (See also Pornography and Nudity)

    Violence:

    Graphic images or written descriptions of wanton violence or grave injury (mutilation, maiming, dismemberment, etc.). Includes graphically violent games.

    Secondary Group
    Alcohol:

    Advocating or promoting recreational use of alcohol. (See also Adults Only)

    Chat:

    Chat sites, services that allow short messages to be sent to others immediately in real time. Downloadable chat software. (See also Moderated) [Chat sites won't be allowed? Sign #3 that this blocking software is restricting the free flow of information.]

    Drugs:

    Advocating or promoting recreational use of any controlled substance. (Also see Illegal)

    Free Pages:

    Sites where home page space is offered for free. These sites historically have done nothing to prevent capricious abuse of their services by users who post offensive content under multiple pseudonyms, making them difficult to track. Individual pages that have been reviewed by N2H2 on such sites are removed from this category, but filed under other categories as necessary. [That means any sites at the following locations (and more) will be blocked: Netscape, Yahoo, Tripod, GeoCities, AOL, etc. And when you think about it, most ISP's give their users free home pages. Does this mean every "free home page" will be blocked!! Sign #4 that this blocking software is restricting the free flow of information.]

    Gambling:

    Gambling services, or information relevant primarily to gambling. [Again, if you are a legal adult, why should you be blocked from seeing these sites? Is someone afraid that distributors/ IBO's will "gamble" away money that should be used for buying tools? Sign #2 that this blocking software is restricting the free flow of information.]

    Tasteless/Gross:

    Bodily functions. Tasteless humor. Graphic medical photos. Some extreme forms of body modification (cutting, branding, genital piercing).

    Lingerie:

    Models in lingerie (except those that qualify for Nudity).

    Message/Bulletin Boards:

    Sites that permit semi-permanent messages to be posted and read by others. (See also Moderated) [See the note above about Chat Sites and the restriction of information.]

    Personal Information:

    Sites that gather personal information (name, address, credit card number, etc.). [Let's see, this probably includes almost all online "shopping" sites... in other words, anyone who could be a potential Quixtar competitor. Sign #5 that this blocking software is restricting the free flow of information/ freedom of choice.]

    Profanity:

    Crude, vulgar, or obscene language or gestures.

    School Cheating Information:

    Any site that promotes plagiarism or similar cheating among students (such as by offering term papers, exam keys, etc.).

    Tobacco:

    Advocating or promoting recreational use of tobacco. (See also Adults Only)

    Weapons:

    Information on use of weapons, weapon collecting, or weapon making. [Sites promoting the safe use of weapons and weapons collecting are against their rules also? What about people who collect items like Japanese Samurai swords? Oh, I almost forgot- distributors/ IBO's are encouraged not to have this kind of outside interest, so this won't really apply anyway.]

    Exceptions
    The categories below are used to allow access to sites that may be otherwise blocked by one of the other categories above.

    Education:

    Material under another category (such as Sex, Nudity, or Violence) that has educational value (such as classic literature, history, sex education, etc.). [And as, always, this is a very fine line. Who decides if a peice of "literature" or "art" can be allowed? The same people making the other rules?]

    For Kids:

    Sites that are designed specifically for kids.

    Moderated:

    A "Message/Bulletin Board" or "Chat" site that prevents offensive material from being posted.

    Special Rules
    Below are special rules that the proxy uses. These are not necessarily based on the content of the page but will help prevent inappropriate ads and links to inappropriate sites from being displayed for your users.

    Block URLs Based on Key Words Contained in the URL:

    This feature blocks based on key words in the url itself. URLs that contain words such as "xxx" are blocked.

    Block Search Engine Results Based on Key Words:

    This feature does not block the use of any search engines but blocks search engine results based on a comprehensive list of terms such as "porn" and "xxx". This rule does not block any other pages based on these key words, only search result pages. [Translated: if you search for "'Amway", you will get Amway's Corporate page. If you search for "Amway + cult" (which should bring up this site), you will get "--That site is blocked. Search result not shown--". So much for "impartial search results" and allowing people to "get all the information." Sign #6 that this blocking software is restricting the free flow of information.]


    September 2, 1999

    From: (a very reliable source)
    To: John Hoagland

    From The Washington Post:

    Amway's Virtual Mall Falters on Debut

    By Leslie Walker

    Washington Post Staff Writer

    Thursday, September 2, 1999; 12:30 p.m. EDT

    The elaborate virtual mall created by Amway's new sister company, Quixtar, is limping along on the Internet today.

    Since its debut at 4:30 p.m. yesterday, the site has been largely inaccessible or returning error messages. The glitches have persisted today despite the company's claims that Microsoft Corp., which designed the site's hosting system, built the systems with even more capacity than Microsoft built for its own mega-sites on the Web.

    Quixtar officials said site traffic has been huge; even its placeholder promotional pages logged some 20 million page views during the 12 hours that preceded yesterday's launch.

    "We are working through normal start-up problems," Randy Bancino, Quixtar's Internet group manager, said this morning. "We knocked down a few overnight and are working on more this morning. "

    More than 450,000 people had pre-registered to participate in the virtual mall that replicates Amway's multi-level marketing and compensation plan. And while some people seemed disappointed that they had not been able to access the site, others shrugged off the delays.

    "I haven't been able to get very far into it, but I'm still excited," said Reginal Tarver, a District man who signed up several months ago and has since recruited four friends. "We kind of anticipated the traffic because it is the first day and everybody wanted to see who all the vendors are."

    Ken McDonald, senior vice president in charge of Amway's North American operations, was sitting in Quixtar's operations center this morning monitoring the site's shaky debut. In a telephone interview, he said he had no second thoughts about its ambitious design, despite the glitches. He added that thousands of dollars worth of products have been sold already, so clearly some customers are getting through.

    He said Quixtar, by promoting the launch date for months, deliberately started with a traffic spike rather than the gradual ramp-up favored by most sites. "We drove a big honking stake in the ground," McDonald said. "We built an incredibly robust site with 15,000 pages and 100,000 links. So we have unprecedented traffic."

    McDonald said Quixtar will persist with its plan to offer graphically heavy pages filled with complex calculators, databases and slow-loading multimedia applications: "We set out to be on the leading edge and show people what can be done on the Web. We are going to do it and then some."


    September 7, 1999

    Read what one critic has to say about Quixnet's filters by clicking here.


    September 25, 1999

    Click here to read ZDNet's evaluation of Quixtar's site: ZDNet's 10 Worst E-Commerce Sites: Quixtar

    Here is what they say:

    Details:
    An effective home page tells customers what site they're on and what they can do there. Quixtar's, however, creates a bad customer experience by failing to give visitors this basic information.

    People who don't like waiting long for nothing -- and that's just about everyone -- will resent Quixtar's home page. Customers must first wait as the Flash-enhanced page slowly loads. When the page finally does load, it doesn't help customers figure out what Quixtar is. Just saying "Welcome" doesn't explain why customers should spend time on the site. Instead, Quixtar provides links to information on becoming a "Quixtar Client," a "Quixtar Member" and a "Quixtar-Affiliated Independent Business Owner." But what's the difference between a client and a member? Quixtar touts its "Store for More" and "Exclusive Stores," but what kind of stores are these? What can customers buy there? Clothing? Furniture? Hamsters? The page doesn't say. And what is Quixtar, by the way?

    Quixtar is clear about the one thing that is perhaps the most irrelevant to customers: how hard the Web development team has been working. A full paragraph of text at the center top of the page trumpets the fact that "over one hundred developers" have "accomplished some amazing things" with the site while working at "breakneck pace." Customers, however, don't care about how great the design team is -- they care about using the site to shop or sell.

    Quixtar should improve its home page by clearly stating what the site is, who its affiliated merchants are and what customers gain by signing up. Quixtar should also remove the irrelevant and excessive praise of its design team. Perhaps then customers will actually want to join, and Quixtar can be a success.


    October 7, 1999

    From The Grand Rapids Press:

    CHAOTIC QUIXTAR
    Scott Leith The Grand Rapids Press

    10/03/1999
    The Grand Rapids Press
    Page F1
    (Copyright 1999)

    QUIXTAR Online marketplace has growing pains

    Amway finds first weeks in cyberspace a little bumpy

    Amway 's Randy Bancino

    "I'd give it a C+ right now, and that's even after forgiving them for the 10 broken links I encountered while on the site." JAMES McQUIVEY senior analyst for online retailing at Forrester Research in Cambridge, Mass.

    Slow, frustrating and trouble-filled.

    That's what I'll remember from my first month of experience with Amway's version of e-commerce.

    Quixtar (pronounced quick-star) is the Web site meant tohurtle Amway onto the Internet. But for me, the journey came to a halt time after time.

    At first, it was nearly impossible to get on Quixtar at all. Later, Quixtar's order-taking process failed, keeping me from spending money with Amway .

    They have heard about these troubles at Amway 's headquarters in Ada, of course, and not just from me. As of last week, however, many glitches were fixed, including the worst ones. But Quixtar is still a long way from perfect.

    Amway officials say they are making improvements -- and making millions in sales. They blame most of the early problems on heavy demand.

    "We had no idea it would be this big," said Ken McDonald, a senior vice president.

    While that may be good for the corporation, I was interested in what Quixtar means for everyday users. Here are some of the things I found:

    -- Quixtar is complicated. The site has about 15,000 pages, and it can take a long time to find what you want. In some cases, product descriptions were vague; in others, the site was so wordy I didn't want to take the time to read it.

    -- It took me two weeks to register as a client, thanks to technical glitches. And you must register with Quixtar to buy. My client number was very long -- 11 digits, more than a Social Security number -- and there was a password on top of that. Most e-commerce sites don't require registration at all.

    -- Despite many tries, seventeen days passed before I could order anything. Even then, my first order was through a Quixtar "Partner Store" called Paul Fredrick MenStyle. It was 27 days before I could order any items from Quixtar itself because of technical problems.

    -- Quixtar was slow at first, though it was much speedier after the first week or so.

    -- Customer service was unreachable, despite my many attempts on several days. On some occasions, a recording at Amway 's 800 number told me to hang up and call back. One time, I was put on hold for 10 minutes before I gave up.

    -- Success finally came Sept. 24. I received my first product via Quixtar (a tie from Paul Fredrick), more than three weeks after the site's launch. Another product I ordered (a box of laundry soap) showed up Sept. 29, but it was a day late.

    Views differ wildly.

    "I'd give it a C+ right now, and that's even after forgiving them for the 10 broken links I encountered while on the site," said James McQuivey, senior analyst for online retailing at Forrester Research in Cambridge, Mass.

    "Other major reasons for the site's score include its very limited product selection in some of the major categories, like bedroom or even electronics."

    McQuivey's opinion is one of the more even-handed ones I've found. If you check chat sites like www.deja.com, you'll find that views differ wildly when it comes Quixtar. That's usually the case with Amway , a sometimes controversial multi-level marketer with a legion of distributors.

    From all those remarks, it's clear that the early weeks of Quixtar were scarred with persistent technical problems for many.

    This is important, even if the troubles get fixed, because Quixtar is partly meant to build a new audience for Amway . And first impressions are hard to live down.

    True, the vast majority of Quixtar users are IBOs (independent business owners), which is what Amway calls its distributors. These folks tend to be loyal, and many are willing to cope with the problems.

    But Amway cofounder Rich DeVos told me the company needs to do more than just reach its distributors. He believes Quixtar should attract people who haven't been buying Amway products and don't want to get involved as distributors.

    But, to me, Quixtar felt more like a "buyer's club" for IBOs, which is how one online critic described it.

    Where do I go?

    In Ada, those in charge of Quixtar say the site needs to be more accessible to everyday surfers. "We will streamline the shopping experience over time," said Randy Bancino, who heads information systems for Amway in North America.

    They could start with the home page -- the front door to the Web site. It's a little confusing.

    It doesn't help that Quixtar has several branches to choose from, including ones dubbed "Income Options" and "My Quixtar." These are vague -- or simply bewildering -- if you just want to find a product. Elsewhere, the site has references to IBOs and other Amwayisms that might seem foreign to casual users.

    Amway doesn't have a hip image, but Quixtar is meant to make the company seem less stodgy. Quixtar doesn't mention its connection to Amway , for one thing, and the site is decorated with photos of 20- and 30-somethings.

    So Quixtar would seem to be targeted at me -- a 30-year-old who uses computers almost every day.

    For my tryout, I decided to buy two products from two major parts of the site:

    -- A box of SA8 laundry detergent, which is a "Quixtar Exclusive" and one of Amway 's signature products.

    -- Something from one of Quixtar's "Partner Stores," which include IBM, Bass Pro Shops, Landscape USA.com and others. I ended up with a tie from a nationally known men's clothing store: Paul Fredrick MenStyle.

    As a comparison, I also spent some time on www.crateandbarrel.com, which was developed by Fry Multimedia Inc. of Ann Arbor, a company that was hired to work on Quixtar.

    Crate & Barrel, an Illinois-based housewares and furniture store, has a simple site that requires no registration. Products are divided into clear categories, and ordering is a few clicks away. On Quixtar, I had to go through seven screens to select the box of detergent, and that was only when I knew exactly what I wanted.

    The most memorable e-commerce sites I've visited were easy to understand and simple to use. I'd include Amazon.com and eBay on the list. Locally, Herman Miller for the Home and Bissell also have practical sites.

    Amway 's Bancino said Quixtar will become more user-friendly as it evolves.

    "It's too many clicks to get something in your basket to check out," he said. But Quixtar offers thousands of products, which means it won't be easy to simplify the site.

    As for prices, I didn't consider Quixtar a bargain. Under Quixtar's "Store for Home" section, a Panasonic Plain Paper Fax was listed for $149.99. At Staples.com, I found one for $10 less.

    A 6.6-pound box of SA8 laundry detergent, which is supposed to do about 100 loads, was priced at $20.80, not including shipping.

    And the price for next-day delivery via UPS was a whopper: $26.55 for the detergent, giving me a grand total of $48.60 with tax. Delivery in two to five days is $5.

    It's true that better prices are available by registering as a Quixtar "member" or IBO. The same box of SA8, for example, is almost 17 percent cheaper if you are a member. But being a member is a notch above the "client" level, and many surfers might be unwilling to take that step.

    Not all about selling

    Quixtar has worked for many users, despite the technical problems that kept me from buying for so long. But I'm not sure that my experience was an oddity.

    Overall, I either used -- or tried to use -- Quixtar more than 100 times starting Sept. 1.

    There are good points about the site. To Amway 's credit, it isn't one big sales pitch. In fact, you only get the Quixtar advertisement if you click on "Income Options."

    If you register as a client, you can also request that you not be contacted by a Quixtar distributor.

    I didn't make that request, but no one called. This was puzzling, given one of Quixtar's selling points is the "high tech, high touch" model. That is, customers like me are supposed to be more inclined to use Quixtar after having contact with a distributor. And that distributor might convince someone to become a member or IBO.

    Quixtar isn't entirely about selling, either.

    Connections offer things like maps, weather forecasts and news headlines (weather is under "My Quixtar," by the way). But then, these are available in many other places.

    I'll keep trying Quixtar to see how it evolves. The question is whether thousands of potential new customers will be patient enough to do the same. If they aren't, Quixtar could end up being just the same old Amway.

    EDITOR'S NOTE

    Amway Corp. launched its huge e-commerce venture -- dubbed Quixtar -- on Sept. 1. The site is meant to take Amway Corp.'s direct- selling concept into cyberspace. But Amway also hopes to attract the kind of customers who have never dealt with the company. This is Press reporter Scott Leith's account of how www.quixtar.com worked during its first weeks of operation.


    November 20, 1999

    Recently, an abbreviated copy of Quixtar's "Zero Tolerance Policy" (as it applies to IBO websites) was sent to me. (Statements in bold are my own added emphasis.)

    In accordance with the Quixtar corporations rules and conduct Zero Tolerance Policy adopted in July of 1999 and detailed in BULLETIN NO. 17 INDEPENDENT BUSINESS OWNER'S WEB SITES. Web sites that are operated by IBOs that are found to be in violation of [any of] these rules face an immediate suspension for six months. It has been reported by the corporation that as of 11-21-99 over 1,000 IBOs have already been identified as violating these rules and have been suspended. Violations of these rules may be reported to:

    Mr. Trey Bruneau Rules Administrator Business Conduct and Rules at :Trey_Bruneau@quixtar.com

    or to the Quixtar headquarters at: abuse@quixtar.com

    The following is a small review of 20 key points issued in Bulletin 17. This Bulletin should be referred to in it's entirety for accuracy;

    Any IBO that;
    1) Does not state that the web site has been "content reviewed" by the corporation.
    2) Uses the corporation logo or trademark without stating the site has been "content reviewed" by the corporation.
    3) Uses the corporation trademark (name) or variation in a meta tag or any other web site locator. Meta Tags of any kind, IBO personal home pages shall not be searchable on any web search engine.
    4) Uses the corporation trademark (name) or variation in the URL of the web site.
    5) Uses web URLs or e-mail addresses that are deceptive or misleading (e.g., Ezmoney.com, Retirenow@USA.com, Nosellingrequired.com).
    6) Send unsolicited e-mails (spamming) to individuals that they have no pre-existing relationship with.
    7) Web sites that contain any income representation or sales plan depictions.
    8) Features any hyper links other than official corporate web sites, IBO association international, an authorized line of sponsorship web site.
    9) Makes any guarantee of success.
    10) Is not pass code protected.
    11) Disseminating the pass code and URL address prior to receiving final authorization from the corporations content review process.
    12) Any depiction or representation of the IBO plan.
    13) Presentation or offering of non corporate products or business materials.
    14) Presentation or sale of prospecting or IBO Plan training materials.
    15) Any site that states or implies that that one can build a successful business solely by sponsoring other IBOs or otherwise de-emphasizing product sales.
    16) Offers sales of any corporate product without prior content review by the corporation.
    17) Posting of an IBO number that would provide a casual web viewer access.
    18) Any web site that broadcasts, posts or mass communicates to the public or segment thereof an IBO number or pass code.
    19) Any site that sells products outside the United States or Canada.
    20) Any personal IBO site that presents or sells business support materials. Also note. The Quixtar corporation has filed sworn statements to the auction web site E-Bay informing them that auction sales that use the word "Quixtar" is an infringement of their copyright or trademark protection. Numerous auctions have been closed due to this action but new auctions continue to be listed. The corporation has also stated that they will address the use of the word "Amway" as well. Any auction found on this or any other auction site using these words in the description of items for auction / sale should be reported to Mr. Trey Bruneau for his immediate action.


    For more more in-depth information on Quixtar, please go to: MLM Survivors Homepage- Amway and Quixtar.



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