This is a claim that comes up again and again and again by the critics. But what is it based on? Is it true?
- IBOs earned $345 million in bonuses and incentives in fiscal 2005, bringing their six-year total to more than $1.72 billion.
- More than 370,000 Independent Business Owners received a bonus in FY 2005.
- The average bonus and cash payments earned by a Diamond IBO in 2005 were $146,995.*
- The average bonus and cash payments earned by an Emerald in 2005 were $72,241.*
- The average bonus and cash payments earned by a Q12 Platinum, an
IBO who qualifies at the Platinum level all 12 months of the year, were
- The largest annual bonus earned by a Diamond IBO in 25 was $1,830,421.
- The largest annual bonus earned by an Emerald IBO in 25 was $688,869.
In the footnotes you find –
*The following are approximate percentages of Direct Fulfillment
IBOs of record in North America who achieved the illustrated levels of
success in the calendar year ending August 31, 25: Diamond .0012%;
Emerald .0032%; Q-12 Platinum .1683%.
So, in any given year, around 1 in 476 IBOs qualify as Q-12 Platinum, Emerald, or Diamond where they are earning an average bonus of at least US$47,000/yr.
Is this success or failure? Well, first we have to ask some basic questions –
- What is success?
- What is failure?
- Who gets to decide?
What is success?
dictionary.com has as it’s first definition of success –
The achievement of something desired, planned, or attempted
What is failure?
as it’s first definition of failure, dictionary.com has –
The condition or fact of not achieving the desired end or ends
Who gets to decide?
I’d note that both definitions talk about “something desired” – ie success or failure depends on whether the desired goal has been achieved. But what are the goals of people who become IBOs? Do they all have a goal to be a Q-12 platinum? I’m sure they’d like to be a Q-12 Platinum – who wouldn’t want an extra $47,000/yr?
But what is their goal?
In a recent submission to the FTC in response to some proposed rule changes, Quixtar had this to say about IBOs –
The flexibility of the Quixtar opportunity attracts an extraordinarily diverse variety of people, who approach the business in many different ways. For example, some individuals register with Quixtar to buy products at the wholesale or discount price given to IBOs, choosing not to participate in the sale of products or the recruitment of other persons to become IBOs. Other IBOs enter the business to help meet short-term financial goals, such as making the down payment on a new car, replacing a worn out appliance, or earning extra money for holiday gifts. In many cases, the IBO is a stay-at-home mother who works a few hours a week to improve the financial situation of her family. Other times, both husband and wife may work outside the home but sell Quixtar products to make up for their inadequate income. Still others, many of them parents of young children or stay-at-home parents who do not wish to return to the 9-5 workforce, are seeking a steady source of extra income with flexible working hours. In many cases, individuals also join Quixtar to increase their social contact with colleagues, which often results in respectful treatment and recognition of the IBOs efforts. In other situations, IBOs may decide to pursue the Quixtar business full-time, and often build large sales organizations overtime and earning, substantial incomes.
IBOs have lots of individual reasons for joining. An IBO who joined just to buy products at IBO price has succeeded just by receiving their first order! For many others, we have no idea what their goal is – but it’s fairly obvious they’d probably be happy with something a lot less than being a Q-12 platinum.
We don’t get to decide who is “successful” or not. The only person who can do that is the IBO themselves.
But is it possible to come up with something more substantial? How many IBOs that try to reach platinum actually do so?
In any given year, 1 in 476 IBOs are at least Q-12 platinum.
But, according to thisbiznow.com,
Approximately 66% of all IBOs of record were found to be “active”
“Active” means an IBO
attempted to make a retail sale, or presented the Independent Business
Ownership Plan, or received bonus money, or attended a company or IBO
meeting in the year 2.
So, at most only 66% of those 476 IBOs did anything at all towards trying to build a business. I think it’s reasonable to assume that not doing anything at all is indication that perhaps they had no goal to develop a business, and likely joined just to shop. Even if they had a desire to be a Q-12 platinum if they did nothing at all to achieve that, can we really consider it “failure”? If you enter a race and then don’t show up at the start line, you haven’t failed, you haven’t even started the race!
So, in any given year, 1 in 314 “active” IBOs are Q-12 platinums. But if look at that definition of “active” – even receiving a bonus makes you considered “active”. An IBO that registers just to shop, and orders enought stuff to get 3% back on their shopping, is considered “active”! As we discussed, someone in that situation is a success, not a failure. How can we refine the data more?
Well, fortunately the companies that support and train IBOs keep statistics on activity levels. Here is a document from WWDB with some of their statistics, and here is a similar document from Network TwentyOne in Australia. Some of the figures are slightly different, but what we are interested in his the percentages.
From the Network TwentyOne document we can ascertain that -
- In any given month, around 5% of IBOs are showing the plan 15 times or more
- In any given month, around 3% of IBOs are subscribed to “CEP”, ie a monthly CD education program
- In any given month, 2% of IBOs are attending seminars (assuming couples and ignoring prospects)
- In any given month, around 35% of IBOs are subscribed to “standing order”, ie a monthly tape/CD education program.
- In any given month, around 23% of IBOs are attending seminars (assuming couples and ignoring prospects)
- 1 in 476 IBOs qualify as Q-12 platinums
- 1 in 314 IBOs who do anything, even get a bonus on their own shopping, qualify as Q-12 platinums
- 1 in 95 IBOs who are on tape/cd programs or attend a seminar, even in just one month, qualify as Q-12 platinums
- 1 in 24 IBOs who showed 15 plans a month, even if just for one month, are Q-12 platinums
Does anybody seriously suggest “success” is going to take just one month? Of course not. So what’s the success rate of people who actually do the work for 6-12 months, as is suggested? Unfortunately I can’t find any precise statistics on this, but I have seen an interesting “survey” done a few times at seminars.
The speaker, asked everyone in the audience to stand up who had been “core” the previous month. Core essentially means they’re learning from the education program and doing the work. Less than one third of the audience stood up. He then progressively asked people to sit down until all that was left standing was IBOs who had been core every month for the last 6 months, and those he invited up on to stage.
He then asked each IBO what level they were at. All but two were at silver producer or above, and those two were damn close. This experiment I’ve seen done multiple times, always with similar results.
Easily more than 9% of IBOs who had done the work and were on the education program and done the work for the previous 6 months were on track to be Q-12 platinums
99% failure rate or >90% success rate?
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