If you are just interviewing or have been recently hired by a local Filter Queen distributor as a sales associate, you should definately take what I have to say in this report into consideration. I gain absolutely nothing by what I am writing and am not pursuing the company legally in any way. As a matter of fact, I am just as guilty as anyone in the company and it is my fiirst hand experience that gives me the ability to "out" what Filter Queen and HMI are really about. I spent 8 years working with the company and owned a distributorship in the midwest for 4 of them. In my tenure with the company I was taught how to effectively lie, cheat, steal and take advantage of employees and consumers alike. I am not proud of this and the least I can do is begin to be honest and attempt to explain how things really work. If you are considering working for the company or currently are, take the following things I write down to heart and ask your interviewer, sales manager or distributor to explain the things I have brought up. I can guarantee you with absolute certainty that there are no good answers for these questions.
1. You probably answered a "customer service" ad or something to that effect. That is absolutely false. The position is a "raw sales" position. You will not make money or advance whatsoever unless you can flatout produce 3-4 credit apporved transactiuons per week.
2. Most distributorships tell you in the interview that you will be paid for simply completing presentations. Typically you are promised around $1800 for completing 40 - 60 demonstrations in a given 30 day period. This is again a complete scam and is simply used to get you through the interview and excited about the job. LESS THAN 3% OF ASSOCIATES EVER RECEIVE PAY FOR COMPLETING DEMOS EVEN JUST ONCE, LET ALONE CONSISTENTLY. It is a commission job and chances are, the manager will have a sit down meeting with you your first week or so and give you a "profit sharing" promotion. It is not a promotion, it is their way of putting you on commission. ASk for a promise in writing that you will receive appointments every day and are guaranteed the salary.
3. The gas allowance you are offered is a joke and only counts to appointments that are actually home and let you do atleast a 90 minute demonstration. My office wa a fairly productive office and it took 4 appointments to get one done. Many times customers are not there or have been told that the demo only lasts 30 minutes. When this happens, the demo does not count.
4. You are not an employee of the distributor - you are an independent contractor and once you have signed the independent contractor agreement you have signed away everything. That agreement does nothing whatsoever to protect you. I am sure that your manager has told you that it saves you money in taxes but that is a joke. Ask an accountant about that one. It makes your taxes very confusing on a year to year basis and ultimately costs the same. The following are the real reasons you are an independent contractor.
- They can let you go and take back your gear at any time and for any reason which terminates your position.
- They are not required to supply you with any appointments. It says just that in the contract so if you get close to your monthly quota and are about to meet your salary requirement they can simply not give you anymore.
- They have no obligation to pay any of your taxes and quite franklly could care less if you do.
5. The distributors primary income is not from typical consumers. It is from the friends and families of its employees. The first thing you will be told to do is present the product to 10-15 of your friends and family your first weekend at work to get accustomed to presenting the product. They will also only allow you to show to people that are "creditworthy." This is because nearly 40% of transactions are to friends of associates and they don't want to waste time with your friends and family that don't have money. Your frineds and family will probably get a few hundred dollars off the inflated sticker price but you will only be receiving $50-$100 for each sale instead of the normal $400-$500 because you are "new." What has just happened is simple, the distributor took a few hundred dollars out of your commission and discounted it to your family member and still made the same profit.
6. The turnover rate is staggering. Trainers are taught to keep you happy through your training and friends and family weekend and as soon as your sales clear, it is feast or famine. THE AVERAGE DISTRIBUTOR WILL CONDUCT 40+ TRAININGS A YEAR. If every training averages 8 people, that is 320 new assoicates a year. Let me ask you this . . . if there are 300+ new recruits a year, why does the office only have 5-6 veteran assocites? The sad news is unless you are a cutthroat sales person willing to work 80 hours a week for maybe $2500 on a good month, YOU WILL FLAT OUT NOT MAKE IT. You will have simply wasted a couple weeks of your life and sold your friends and family something for an outrageous price that they could have gotten on EBAY for $200 bucks. (check it out)
7. Once training is complete and you are ready to start office appointments, it will be nothing like you thought. It is not a 9-5 job. You will be expected to work from the early morning until late at night and you better be ready to work on the weekends because that's when people are home. If you are lucky, you will be handed 2-3 appointments a day but as you will soon notice, just because you have an appointment slip in your hand it does not mean you have an appointment that will be completed. At the last National distributor meeting I attended the national figures were staggering. Less than 25% of scheduled appointments actually held up and the average associate was only completing 4-5 a week!
8. A good closer in the business will close 20% of actual appointments ran or roughly 5% of apopointments handed to them when you take into consideration the "no-shows." Of the sales that actually do happen, only about 75% of them will clear the credit check and that is if the office is in a nice neighborhood. Of the ones that actually do clear the credit check an additional 10%-15% of the customers will cancel. These numbers make it very difficult to make a living especially when you consider the hours you put in.
9. Most distributors will pay you $400-$600 on a sale but read the fine print in your profit sharing contract. You will only receive this if the customer has "a-line" credit which is about 75% of the customers that buy the machine, pass the credit check and do not cancel. If it is a b-line deal, you will only receive $50.00. An old trick of the trade is for a distributor to tell the associate that the deal went b-line when it actually didn't and then they keep your commission so if you sell in a real nice house and it goes "b-line" make sure to check it out. The other problem is that the big commission check only is received when the machine is sold at full price. As you will find out, any discounts come out of your check. That means of you give a customer $300 off, you actually gave them the $300 out of your check and the office made the full amount.
10. You will be told that the office has tons of appointments but the truth is they don't. As a matter of fact it is very common practice for the sales manager to "hide" the appointment book form the sales staff on a daily basis so they don't figure it out. Let's do some simple math. An average associate is going to want to complete atleast 4 appointments every day and the average office has about ten associates. That means that every day, 40 appointments should be completed by the sales staff. Lets also say that 50% of the appointments actually hold up (the real number is 25%) which means it would take 80 apoointments on the books every day for you to complete only four demos. Does your office have 80 appointments tomorrow? I bet it has 15-20. Even if you cannot get access to the appointment book to prove this consider this simple math. I bet you were told that the offfice closes 25% and if thats the case, a day of 40 office demos would result in 10 sales. Did your office sell 10 yersterday? I bet your office maybe sold 1 or 2 and with 15-20 appointments on the book, thats about right.
11. Have you ever wondered about the markup? Is it not weird to you that sometimes you will sell a system for $2500 and sometimes you will sell it for $1500? The markup is unreal and it has to be for these offices to even attempt to stay in business. I will make a lot of people mad by saying this but it should be public knowledge. A regional distributor pays $550 for a majestic and $292 for a defender. How much did your mom pay?
12. Will your office succeed and how is the health of HMI financially? Do some research on this topic. HMI as a company is doing horrific with some of its worst numbers in years. This is all public information so look it up. Not only is the manfacturer sucking wind but so are the local distributorships. 90% of offices fail in their first year and their are currently only 5-10 individuals that have had an office for more than three years. This is scary because since 2000, HMI has opened over 500 offices with 450+ failures and counting. How long has your office been in business? This can be proven simply by looking at all the posters of past achievers in the business that I know are hanging all over your office and then trying to match the names with the most current national standings. You know what you will quickly discover? Only a few of the names still exist. If thos people we're so good, then why are they out of the business?
If you have read this and are now concerned I am also going to quickly outlline some great questions for you to ask your ditributor, trainer or interviewer?
1. Am I guaranteed in writing that I will receive appointments every day?
2. Am I guaranteed any money if I do not sell anything?
3. Can I be let go for no reason whatsoever?
4. Do I have to come to the meeting everyday?
5. Why am I an independent contractor?
6. How many demos were completed by the office last month?
7. Can I see the sales report to prove that?
8. Why do we train every week?
9. Can I do training without a frineds and family weekend?
10. CAn I Listen to the marketers talk to the customers and actually hear what they promise.
11. How much do you pay for the free gifts and what do we tell the customers they are worth?
12. Would you mind if I contacted local agencies to verify that the company has paid all applicable taxes?
13. How come no one drug tests?
14. What makes someone qualified? Does anyone with friends and family qualify?
15. Can I see the payout sheet from the bank on my last second line deal?
16. How come discounts come out of my check and not yours?
I could have probably gone on and on about the daily scam that takes place and like I said earlier, I myself did all of these things at one point in my career and it is my duty to expose what is going on. I am more than confident that this will make many individuals mad and thatr there will be many responses to this calling me a liar for putting this on paper. Remember that I have no vented interest in the success or failure of these offices and I simply want to put the truth out there. It is up to you to decide what is best for the financial security of you and your family. However, if any of what I have said rings true, I would certainly look into it.
Lastly, if you are right now in the unfortunate situation of being screwed over by a local distributor, here are a few things that you can do to potentially be reimbursed and definately make it public what has happened to you. It was the constant barrage of these type of matters that made me get out of the business and realize what I was really doing.
1. Call the BBB and file a complaint. They won't do much but the distributor has to respond.
2. File a formal complaint with the Attrorney General. This is a business owners nightmare and the attorney general is an agency that can shut a business down. This can be done online and sometimes you will get lucky and a distributor will try to pay you off. I did countless times.
3. Contact all local radio and news stations and tell your story. They love this kind of stuff and there is at least one distributor a month that makes the news in a buyer beware type of story. There is nothing more embarassing than being on the 5:00 news
4. Contact Labor and Industries and explain that you were an Independent Contractor for a fraudulent company that didn't pay you hourly or salary even though you didn't meet the "7 steps for criteria" that an independent contractor needs to meet. Trust me, you don't.
5. Contact the IRS and explain what has happened. Be sure to tell them that you never had taxes taken out of your checks.
6. Contact the department of revenue if you have ever seen green cash come through the door. It is a well known joke within the inner distributor circle that cash deals go right in your pocket and off the books.
Thank you for your time reading this and I wish you the best of luck with wehatever you do. Before you commit your life to being a vacuum salesman, definately consider what I have said.
-EX FQ Distributor