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Amway Forever: The Amazing Story of a Global Business Phenomenon by Kathryn A. Jones

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The Plan

Here’s how the Plan worked: Distributors were encouraged to sell at retail to persons they knew or were referred to rather than selling door-to-door. Anyone wanting to become an authorized Amway distributor had to be sponsored by another Amway distributor and fill out an application for the right to sell Amway products. A new Amway distributor was not required to buy inventory, but was asked to purchase a $15.60 sales kit containing product information, sales aids, and literature. An optional product kit, containing sample Amway products for demonstration, could be purchased for an additional $25.65. Amway said neither the company nor sponsoring distributors made a profit on the sales kit. If a distributor decided to leave the business, he or she could get a refund on the price of the sales and product kits. The new salespeople sponsored by an Amway distributor became part of that distributor’s “personal group,” or “downline.” They, in turn, could build their own personal groups, building the personal group of the first sponsoring distributor.

Under the Plan, distributors earned income several ways. One way was through the “basic discount,” meaning the difference between the price paid by the distributor for the product and the price charged by the distributor at retail. Distributors did not make any profit selling products to their sponsored distributors because they were sold at the same price the sponsoring distributor paid. Most distributors averaged 30 percent of ...

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