Amway/Quixtar Fiscal Year 2000/2001 Results
Alticor/Amway/Quixtar spokesmen have released statements about the companies' performance during the fiscal year that ended August 31, 2001.
Doug DeVos, in an Amvox message to Quixtar Emeralds and above, congratulated them for sales of $751 million. (These are sales at "suggested retail," an imaginary number.) He then went on to say,
"But, best of all -- most importantly -- Independent Business Owners powered by Quixtar earned $230 million in bonuses and incentives last year. That's up 62 percent. . . But for us, the $230 million payout to you is a much better indicator of success, because when you succeed, we succeed."
We are interested, not in how successful corporate Amway/Quixtar/Alticor are, but in how well the deal works for members. Last year, we calculated the average bonus per member, based on 500,000 members and total bonuses paid of $23.83 per IBO per month.
This year, the company did not release information about numbers of members, other than to claim 3.3 million worldwide, with the largest increases being in Korea, China and India. Giving Quixtar the benefit of the doubt, and presuming 600,000 IBOs, this would mean annual sales of about $1252 per member, or about $104/month, slightly higher than our estimate of $86.33 per month for the previous fiscal year. Bonuses paid back to IBOs would be about $383.33 annually, or $31.92 per month. If we are estimating member numbers reasonably accurately, this would represent a slight improvement over last year's figures, but still hardly indicates any great money-making ability on the part of the IBOs. And, of course, the majority of this average figure will have been paid to the top 1/10th of 1% of all IBOs.
The official Alticor press releases claims sales increases of 6.8% company-wide, to $4.1 billion. This includes sales from Quixtar, Amway, and Access Business Group, the manufacturing and logistics provider to Amway, Quixtar and other businesses. Third-party services accounted for $85 million in revenues for Access.
Changes in Reporting for Next Year
Alticor also noted some significant changes in financial reporting for next year: sales will be actual sales, rather than the imaginary "sales at estimated retail" which has been used for a number of years. The total Alticor sales figure will include revenue from Access, the Amway Grand Plaza Hotel, and other entities. Since Alticor and all of its subsidiaries are still privately owned by the DeVos and Van Andel families, any public financial reporting is strictly voluntary, and, unlike public companies, they do not need to produce audited accounts.
Given these changes in reporting, and the inclusion of non-Amway/Quixtar revenues in the total, it will become even more difficult to estimate average IBO bonuses in future years.
Outside Directors Appointed, Family Members Step Down
For the first time, the Board of Directors includes non-family members: three outside Directors have been appointed. They are Judson Green, Emmanuel Kampouris, and James McClung.
Notable by her absence from the Board is founding family member Nan Van Andel, who was ousted last year from her position as Vice President of Creative Resources. She had worked in a vice-presidential capacity for Amway for 16 years. She was followed a short while later by her brother, Dave Van Andel, who remains on the Board. Doug DeVos, while still serving as COO of Quixtar and Amway, no longer sits on the Board. Company founders Rich DeVos and Jay Van Andel are still Directors.
