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price of a particular product. Amway assigns a given point value
and business volume to each product it sells but may change these
figures at any time for any reason it chooses.4 Consequently, it
is difficult to predict a performance bonus on the basis of the
present point value and business volume of Amway products. The
performance bonus is calculated by multiplying a distributor’s
monthly business volume by a percentage that is listed in the
performance bonus schedule and corresponds to the distributor’s
monthly point value.5 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 1996. Petitioners had no prior experience with Amway
and no prior experience running a business. Before becoming
Amway distributors, petitioners received advice from other Away
distributors but did not seek the advice of independent business
consultants. During the course of their affiliation with Amway,
petitioners relied on the advice of certain celebrated upline
4 According to petitioners’ exhibits, the ratio of business
volume to point value ranges from 2.00 to 2.62.
5 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.
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Last modified: May 25, 2011