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Trinkets, Etc.
C. Amway
In August 1994, petitioners began to operate an Amway
distributorship under the name of Meyer Enterprises. Petitioners
began the Amway activity after being recruited as “downline”
distributors by an “upline” distributor.
Amway is a supplier of household and personal use products
that are sold by individuals (distributors) through direct
marketing. An Amway distributor purchases Amway products for
resale to both customers and “downline” distributors, as well as
for personal use.
At least in theory, Amway distributors generate receipts by
selling Amway products directly to customers and by recruiting
new distributors. The new recruits become “downline”
distributors of the sponsoring distributor and a part of his or
her organization.4 In turn, each “downline” distributor is
encouraged to sponsor additional new distributors, all of whom
become a part of the initial distributor’s organization.5 Amway
does not assign exclusive geographical territories to any
distributor, nor does Amway impose a minimum sales quota on any
distributor.
4 The sponsoring distributor is referred to as the “upline”
distributor.
5 The process of recruiting new distributors is often
referred to as “building the legs” of a distributor's network.
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