- 3 - issue. In September 1999, petitioners ceased their Amway activity and became involved in Quixtar, Inc., an Amway affiliate. Amway is widely known as a marketer and supplier of various personal and household products. Amway relies on distributors to purchase such products for personal consumption and for resale primarily to “downline”1 distributors and customers.2 In general, a distributor’s gross income is based on profit from retail sales, plus a “performance bonus” that is controlled by Amway and is influenced by the type and quantity of products the distributor purchases from Amway. Profit from retail sales is determined by the difference between the wholesale price, which is set by Amway, and the retail price, which is set by the distributor. On average, Amway’s suggested retail price for its products is approximately 25-30 percent above wholesale, but distributors are entitled to sell a product at whatever price they choose, even if a sale at that price produces a loss. 1 The term “downline” simply refers to one’s relative position in a particular distribution chain of Amway products. One becomes an “upline” distributor after successfully recruiting one or more downline distributors. 2 A customer purchases Amway products for personal consumption, but a distributor purchases Amway products intending to resell them to customers or other distributors.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011