- 5 - bonus schedule and corresponds to the distributor’s monthly point value.4 This percentage ranges from 3 to 25 percent and increases in steps as a function of point value. Petitioners’ Amway activities may be summarized as follows. Petitioners were recruited by an upline distributor of Amway products in 1995. They had no prior experience with Amway and no prior experience running a business. Before becoming Amway distributors, petitioners received advice from other Amway distributors but did not solicit business advice from those outside the Amway community; nor did petitioners seek independent business advice during the course of their affiliation with Amway. During the years in issue, petitioners spent little time or effort attempting to sell Amway products; instead they intended to develop a network of distributors. Consequently, their potential for profit depended almost entirely on Amway’s performance bonus program and the sales efforts of their downline distributors. Recruiting productive downline distributors, therefore, was the key to petitioners’ profit potential. In this 4 For example, assume that, in a given month, a distributor accumulates a point value of 1,000 and a business volume of $2,500. According to Amway’s performance bonus schedule, at a point value of 1,000, the performance bonus equals 12 percent of business volume. Thus, in this example, the gross performance bonus is $300 (i.e., $2,500 x 0.12). To determine the distributor’s net performance bonus, this amount must be reduced by the dollar amount of bonuses owed to downline distributors.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011