Quixtar - The Wholesale Buying Club?

I was reading the latest issue of Networking Times and ran across a very interesting article by Dawn Siebold.

Ms. Siebold Writes:

"Too often, you'll see cases where a network organization employs a method of operation I call "The Buying Club Strategy," an approach based on creating an endless loop of people sponsoring people who teach others to sponsor people who teach others to sponsor people.... In other words, the only people actually buying products are the distributors themselves. Under such a program, an unscrupulous company could overcharge for products, because they know their loyal distributor base will buy them at almost any price. "

(emphasis added)

She goes on to write how ridiculous comparing this to a McDonald's Franchise is:

"Looking at it from the perspective of the MacDonald's (sic) model quickly reveals the fundamental flaw in the model. This would be the equivalent of buying a MacDonald's franchise, paying, say, $3 (wholesale) for a hamburger patty, then never opening your doors to the public. Instead, you simply buy your food from MacDonald's (sic) Corporation...and eat it yourself--and focus on trying to recruit others who will open their own locations for a commission. A ridiculous scenario, I know...and it's really no less ridiculous to expect a network marketing strategy based solely on sponsoring, without growing a customer base, to work out in the long run."

Ms. Siebold goes on to talk about "The Model That Works", and later says:

By the way, before we go on, it makes sense to stop and ask yourself, "Do I have a product or service that passes these two tests in the open (that is, non-distributor) market: 1) quality; and 2) price?"

If your answer to either test is "No"--that is, if the only people who would buy your product or service are other distributors--then it may be time to examine honestly the viability of this business strategy. Growth based on big bonuses for startup packages, or even on repeat volumes generated purely by business-builders and their business-builders, simply isn't likely to last.

(emphasis added)

The article goes directly against what is being taught in most Quixtar groups today. I wish I could post the entire article, but Networking Times has this article as subscriber only. I would highly recommend going to Barnes and Noble or Borders and picking up a copy of the January 2004 issue of Networking Times. Ms. Siebold's article alone is worth the cover price.