Friday, November 05, 2010

David Steadson.....Wrong Again

I have been having exchanges with Amway's Caped Crusader, IBOFB. I know he tries to put spin control on everything Amway, but this last go round sent it right over the top.

At Corporate Frauds Watch in a comment thread on a post about signing up other IBO's as opposed to actually retailing, he first of all says that being an IBO doesn't make you a business owner......Yeah. I'll let you think about that for a while.

He says this presumably to set up his next unintelligent statement, to wit:

"If we ignore the fact that, virtually by definition, if you are selling to another Amway business then it's likely a wholesale sale, if your selling to an Amway IBO who is not operating a business, then "retailing" to them is clearly covered by "selling products"

Uh-Huh. So he's saying that someone who isn't actively building a business but buys products can be considered a retail sale to his upline. In spite of the fact that they are IBO's.

This sounded like B.S. to me, so I emailed Karen O'Neil and asked her what she thought of that. Here's her answer:


I believe your question refers to Rule 4.22, the Customer Volume Rule. The answer is no. Only sales to non-IBOs can qualify as retail sales under Rule 4.22.

Karen O'Neill
Rules Administration"

So this tells you how intelligent David Steadson is even when he tries to sound smart. Where is this going to end? I mean sincerely, Amway has more problems BECAUSE of what this guy is doing. Not to mention the fact that Amway themselves seem to have had enough of IBOFB's antics and have created a website for people to have real answers for questions about Amway.

This is a step in the right direction. A website run by the corporation for genuine questions about the Amway business will do far more than David Steadson and his ilk responding to Google Alerts all over the web and just pissing people off with their diatribe. If Amway is truly wanting to move forward after the Pokorny Suit, then they need to stop having childish antics, such a IBOFB's promoting of Amway.

Amway paid a lot of money in the lawsuit, and to me, it seems to clearly say that they accept responsibility for their lack of direction on how to deal with what are (in my opinion) the issues of Amway:

1. Lack of retailability with Amway products due to unreasonably high prices
2. Lack of control over the Tools Business

I like to think Amway is going to get real here soon. I really do.

Their first step should be to reel in people damaging their brand even more. Not me, and not other critics. We talk about our experiences, and I think they're all legitimate.

What I find most entertaining about this is the fact that IBOFB initially thought the lawsuit was poorly done and didn't have a chance of surviving.

Looks like Amway disagreed. That's all that really matters, isn't it?

Go build your Amway business David. Your little social engineering project has failed. Anyone can see that.

Amway has had to change. It's slow, but I believe this is going to make it happen. It's not because of Steadson's efforts.

It's in spite of them.


Blogger IBOFB said...

As well as a coward, you're an idiot. As Karen O'Neill clearly points out, it's not a retail sale under Rule 4.22

You want to extand that and have us believe that Amway not only can tell Federal and State authorities what is and is not a business, but that they also get to define what is or is not a retail sale for the purposes of a court case?

It's amazing how Amway critics like to claim I'm "brainwashed", but here you are giving Amway omnipotence it doesn't have.

An IBO purchasing for personal use is making a retail purchase. The law is extremely clear on this matter. Just as clearly, this type of retail sale does not count for Amway's retail sales rule.

We've been through this discussion before, you've heard all of this before, you continue to maintain the same fiction. As well as being a coward, you're either dishonest, an idiot, or all three.

I tend towards the latter.

05 November, 2010 18:02  
Blogger Joecool said...

I don't think you're brainwashed. I think you're being dishonest on purpose. :-)

05 November, 2010 22:33  
Anonymous Tex said...


For the umpteenth time, there is a specialized definition of "retail sale" in the Amway rules, to ensure the products are being sold to those who do not have a financial benefit in buying the products, i.e., non-IBOs. IDIOT.

05 November, 2010 22:49  
Blogger IBOFB said...

Tex, for the umpteenth time ... who #%&@!$ cares what the Amway rule says? I'm not talking about the Amway rules.

The final sale to an end user is a retail sale. Whether it counts towards Amway's retail sales rule, which is a different think, is completely irrelevant.

06 November, 2010 03:42  
Blogger Tex said...


YOU are the only one who is NOT talking about rule 4.22. Go away, you flaming IDIOT! LOL

07 November, 2010 08:05  
Anonymous MichMan said...

Aren't Amway rules intended to keep Amway operating within the law? (scratching head)

Rocket, if you are and idiot for believing that retail sales to non-participants are necessary to keep this business from becoming an illegal pyramid, you are in good company.

Rich DeVos has stated the same thing. He has stated that the Buy From Yourself and Teach Others To Do The Same puts Amway in the position of becoming an illegal pyramid.

When this fact has been pointed out to IBOFB, he has stated: "Rich DeVos is clearly wrong on this."

Rich DeVos founded the largest multi-level company in the world. He ran it for over 40 years. Rich is the past president of the Direct Selling Association. He has received the best legal counsel that money can buy.

Yet, apparently he too is an idiot for believing that retail sales to non-participants are necessary to keep the business legal.

07 November, 2010 11:08  
Blogger rocket said...

This is simply why David Steadson/IBOFB cannot possibly be taken seriously.

The rules CLEARLY state that products from your business to downline are NOT retail sales.

How would one then differentiate between volume & retail sales? The should be and Amway is trying to make this differentiation.

People like IBOFB are part of the problem in this particular argument.

But that's OK! Unlike David Steadson/IBOFB, I willingly allow open discussion on my comments.

The fact that he doesn't says more about him and his courage of convictions than anything he could ever say about me.

I like people who prove my point for me.

07 November, 2010 12:43  
Blogger rocket said...

I still don't know where I've ever said Amway Amway could dictate to Federal or state (or Provincial for that matter) authorities what is and what isn't a business.

I guess everyone who thinks IBO stands for Independent Business Owner (Including the IBOAI) is also wrong.

Good thing we have David Steadson here to make sure we have the Truth About Amway!

07 November, 2010 12:48  
Blogger Tex said...

Even though ibofb was the ONLY person who was NOT using the retail term in association with rule 4.22 (AND he knew the rest of us were), he DOES have a point that the FTC has been unclear more recently on whether such sales are mandatory to make a business legal:

07 November, 2010 14:08  
Blogger Tex said...


We already know what the dictionary definitions of retail and wholesale are, you are harping on that with the intent of taking the discussion off the intended topic, rule 4.22 and the need to sell to non-IBOs in order to demonstrate a legitimate market demand exists for the products. IDIOT.

07 November, 2010 17:52  
Blogger Tex said...


We care what the rules say because that is the intended context of the question, you fucking IDIOT!!!

07 November, 2010 17:54  
Anonymous MichMan said...

For the record, this is from the FTC website. No doubt that this is one reason why Amway's rules exist requiring retail sales.:

What is a Pyramid Scheme and What is Legitimate Marketing?

"They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public....

There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales....

A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.


07 November, 2010 20:41  
Anonymous MichMan said...

continued from the FTC website....

If a plan purports to sell a product or service, check to see whether its price is inflated, whether new members must buy costly inventory, or whether members make most "sales" to other members rather than the general public. If any of these conditions exist, the purported "sale" of the product or service may just mask a pyramid scheme that promotes an endless chain of recruiting

07 November, 2010 20:53  
Blogger Tex said...


That document is from a speech given in 1998, the one I referenced is in direct response to the retail issue from 2004, that's why I said it is "unclear."

I'm not saying you're wrong, I am saying the FTC has been unclear about the retail (and yes ibofb, I am AGAIN referring to the sales to non-IBO in accordance with rule 4.22, IDIOT!) issue.

08 November, 2010 04:56  
Blogger Tex said...

This comment has been removed by the author.

08 November, 2010 04:56  
Anonymous MichMan said...

Yes, we are talking about Amway's rules. But the reason for Amway's rules requiring retail sales is to keep the Amway business legal.

ibofb claims that "the law is extremely clear" that "purchasing for personal use is a retail purchase."

This is clearly wrong. The law is NOT clear. The FTC's own website today tells consumers that the lack of retail sales is a "red flag."

Countless Attorneys General from around the nation agree that the lack of retail sales is a red flag.

Here is what the Michigan Attorney General has to say about this:

Even when a multi-level plan does not violate Michigan's Pyramid Promotion Act, the marketing of the plan may violate Michigan's Consumer Protection Act, if the acts, methods, or practices are unfair, unconscionable, or deceptive.

Multi-level marketing is a lawful and legitimate business method that uses a network of independent representatives to sell consumer products. Commissions should only be paid on the sale of goods or services to non-participant end-user consumers.

Pyramid schemes claim to be in the business of selling products to consumers in order to look like a multi-level marketing company. However, little or no effort is made to actually market the product. Instead, money is made in typical pyramid fashion . . . from recruiting other people to market the program.

Because pyramid schemes rely on recruitment of new members to bring in money, the schemes often collapse when the pool of potential recruits dries up.

Be skeptical of plans that claim you will make money through continued growth of your "downline" -- the commissions on sales made by new distributors you recruit -- rather than through your own sales of products.

What seems clear to me is that Amway's rule is made to comply with the law, at both the federal and state levels.

Law enforcement officials frown on the "wholesale buying club" mlms. As the Michigan Attorney General asks- What happens when the pool of recruits dries up? What kind of business opportunity is left?

08 November, 2010 07:38  
Blogger Tex said...

You're making fruit salad, by mixing apples and oranges. I'm not arguing what state attorneys generals positions are, I'm saying the FTC guidance is unclear and inconsistent.

I find the Michigan AG's opinion almost useless, as they are not willing to ENFORCE their opinions, even though I served the facts on a silver platter to them:

08 November, 2010 09:42  
Anonymous MichMan said...

ibofb is the one who brought up the "federal and state" laws.

He says this regarding federal and state laws: "An IBO purchasing for personal use is making a retail purchase. The law is extremely clear on this matter. Just as clearly, this type of retail sale does not count for Amway's retail sales rule."

Here is the 9th Circuit Court's opinion (covering Western nine states including California) on personal use:

"There must be
evidence that the program’s safeguards are enforced and actually serve to . . .
encourage retail sales....a sale (for personal use to a participant) cannot satisfy the requirement that sales be to "ultimate users"
of a product

There is a gray area. The law is NOT "extremely clear" on this issue.

If anything, federal law, state laws and case law tilts away from IBOFB's opinion.

Amway's rule is to play it safe and to make sure all distributors are operating legally in all 50 states.

This is not difficult people.

08 November, 2010 10:11  
Blogger Tex said...

ibofb brings up "federal and state laws" because he knows each state is different from the others, and it is his most common technique, to introduce confusion to a discussion.

I noticed you didn't respond to my other point, that the Michigan AG may have a law and an opinion, but until the opinion is enforced, it is virtually meaningless.

08 November, 2010 10:55  
Anonymous MichMan said...

Any law is meaningless if it is not enforced, whether it regulates speed limits, illegal immigration or mlm retail requirements.

08 November, 2010 11:50  
Blogger Tex said...

I didn't complain to the Michigan AG about the relatively minor retail issue, I complained about the ma$$ive Amway Tool Scam issue.

08 November, 2010 11:56  
Blogger Neelesh Kshirsagar said...

you are absolutely right buddy
i my self took the distributorship recently .
i kept a goal of doing 100pv every month
Every month i purchase my personel pv which i require and left out pv i share with my friends and family.
i duplicate the same in my downlines.

09 November, 2010 02:28  
Blogger Joecool said...

I think IBOFB's mistake is in thinking that an IBO is not an IBO if they are not building a business. Then they become customers. Karen's email clearly says however, non IBOs.

Who ya gonna believe? An Amway employee from the rules department or IBOFB/Steadson?

15 November, 2010 16:54  
Blogger Tex said...

I think ibofb would LIKE an IBO not building a downline to be considered a customer, then he mixes up these thoughts when he posts, intentionally causing confusion.

16 November, 2010 01:26  

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