- 4 -
terminated the activity for lack of profit. In late 1995,
petitioners were introduced to Amway a fourth time by friends of
Mrs. Landrum. This fourth Amway experience is the subject of the
present controversy.
Petitioners understood the Amway structure and compensation
technique throughout the years in issue. Mr. Landrum summarized
it in terms of a 6-4-2 illustration. He explained that the Amway
participant should purchase his own household products from
Amway. If he buys $100 of merchandise monthly, he receives a
bonus. He then recruits six other persons to use $100 of Amway
merchandise monthly, and consequently the initial Amway
participant receives appropriate bonus amounts with respect to
those six persons. He is “upline” from them, and they are
“downline” from him. If each of the six downline recruits then
enlists four subrecruits, each of whom uses $100 of products
monthly, the initial Amway participant receives bonus as to usage
from this larger group (1 + 6 + 24 for a total of 31). Finally,
in this illustration, if each of the 24 subrecruits persuades two
additional people to participate in Amway and purchase $100 of
product monthly, the group relevant to the computation of the
initial Amway participant’s monthly bonus will be expanded to an
even larger number (1 + 6 + 24 + 48 for a total of 79). In the
6-4-2 illustration, if each participant continues to purchase
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011