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

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Expansion

Building an ever-larger army of distributors was critical to Amway’s long-term growth. But as the company entered its second decade of business, Jay and Rich became concerned that some Amway distributors focused too much on recruiting and not enough on selling products. In 1970, they sent a warning to distributors, telling them they each had to make 10 customer retail sales each month. “You’re not going to make it unless the guy below you makes it,” they said.7 Amway also tried to encourage retail sales by buying back—or having a top-line distributor buy back—unused products from lower-level distributors or those who wanted to get out of the business. Amway also paid a performance bonus to distributors who resold at least 70 percent of such products each month. That edict became known as the “70 percent rule.”8

Despite the problem with some overzealous distributors, Jay and Rich remained optimistic about Amway’s business prospects, and they were ready for their next adventure: overseas expansion. Amway’s retail sales in the United States and Canada had been meteoric, skyrocketing from $4 million in 1963 to more than $100 million by the early 1970s. The company employed 1,500 people and had signed up 150,000 independent distributors. But the founders harbored even greater expectations. At Amway’s international convention in 1972, Jay told the crowd: “It’s time to get moving. There are millions of potential customers and distributors out there who need Amway. We’ve only ...

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