Quixtar

» see quixtar.com as it lived, on the wayback machine

~ the goodbye ~

Quixtar opened for business on 1 September 1999, at the exact peak of the period when putting a company on the internet was assumed to change what the company was. It was owned by Alticor of Ada, Michigan, which also owned Amway, and it sold Amway's products through Amway's distributors under a name Amway had gone out of its way to make sound like nothing in particular.

The mechanism was the same one Amway had been running since 1959. An Independent Business Owner recruited more IBOs, and commission on everything any of them bought flowed up the line they had joined through. What Quixtar changed was where the order went. Instead of a catalog and a paper form, the IBO and their customers ordered from a website, and the site did the volume tracking and the bonus arithmetic that had previously eaten most of a distributor's evening.

It worked well enough that the parent company folded the original into it. By 2001 the majority of Amway's North American distributors had moved across, and Amway North America effectively stopped existing as a separate operation. In 2006 Quixtar reported $1.118 billion in revenue, which put it among the larger e-commerce businesses in the United States at a time when almost nobody outside the network had heard the name.

Then Alticor changed its mind about the whole premise. In June 2007 it announced that the Quixtar brand would be phased out over the following 18 to 24 months in favor of a single worldwide Amway identity. The switch completed on 1 May 2009, timed to land on Amway's fiftieth anniversary, and Quixtar became Amway Global.

~ the chronicle ~

~ the site nobody could find ~

Quixtar spent its first eight years running almost no consumer advertising, which for a dot-com of that vintage is an unusual fact on its own. It did not need any. Customers arrived carried by a relative or a colleague who had a referral code and a direct reason to want them ordering through it.

That gave it an economic shape nothing else in the 1999 cohort had. Pets.com and Value America and the rest burned their funding buying strangers, and most of them died of it. Quixtar's acquisition cost was carried by hundreds of thousands of unpaid people who were recruiting on their own time in the hope of a bonus, and it turned a profit doing so while the rest of the category was posting losses.

~ what the arithmetic looked like from below ~

The other side of that number is the one Quixtar published itself. Average monthly gross income for an active IBO in 2005 was $115, or $1,380 across a year, before whatever that person had spent on products and on the training materials sold to them by people further up their line.

A class action filed in 2007 alleged the operation functioned as a pyramid scheme and that the real money was in those materials rather than in soap. Amway settled in November 2010 for $56 million in cash and product, with commitments to change the business model that the plaintiffs valued at around $100 million in total. The settlement came a year and a half after the Quixtar name had already been retired, so it landed on Amway Global.

~ the name they were hiding ~

The reason Quixtar existed in the first place was that by 1999 the word Amway carried thirty years of American accumulated baggage, and a new brand let the same business be introduced to a new decade without any of it. The reason Quixtar stopped existing is that a decade later Alticor decided the recognition was worth more than the distance, and that operating under two names in North America while running under one everywhere else was costing more than it saved.

Everywhere else is the part worth noting from here. Amway Türkiye was established in July 1994 and traded under the Amway name from the start, as did the operations across Eastern Europe that opened in the same stretch of years. Quixtar was a North American brand for a North American reputation problem, and the rest of the world went through that whole decade without ever seeing the word.

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