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

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On the Road

Harkening back to their experience with Nutrilite when it alienated distributors, Rich and Jay were determined to protect the lines of sponsorship when a distributor recruited and trained another person to sell Amway products. Maintaining control over those lines was essential, the partners believed. They put in place a code of “Rules of Conduct” of the Amway Sales Plan, published in 1963 and revised multiple times over the years, to try to prevent distributors from abusing their selling and recruiting privileges. Distributors were warned against misrepresenting the ease of making money from the Plan and quoting dollar incomes. In 1979, when the Federal Trade Commission (FTC) issued its final order on the question of whether Amway was an illegal pyramid scheme, it detailed the rules:15

  • Cross-group selling rule. Amway distributors had to agree to sell at wholesale only to distributors they had sponsored and to buy only from their sponsor. The rule gave distributors an incentive to recruit others and to train and motivate them to sell products since the sponsor received income on the downline sales volume.
  • Retail store rule. Amway distributors could not sell in retail stores or set up displays or booths at fairs, home shows, or other special events. Sales of Amway products in fund-raising drives also were restricted. The reason behind the rule was to give Amway distributors incentives to provide services to consumers—to go into their homes—demonstrate and explain the ...

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