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other sales materials promoting Cell Tech and its products, (2) a
mailing list of potential customers, and (3) mailing envelopes in
which to enclose the cassette tapes and sales materials.
From June 1995 through most of 1996, petitioner mailed Cell
Tech sales material packages to potential customers. About 2
percent of the people to whom he mailed materials purchased
products from him during that time.
Petitioner planned to increase the quantity of the products
he sold and the number of sales representatives he recruited. He
tested products, evaluated potential companies, and tried to
identify the most efficient method of selling products.
Petitioner also bought and read books and periodicals about
direct marketing in general and specific companies for which he
became or was considering becoming a sales representative.
Petitioner kept records of his customer base, his mailings and
whether they resulted in sales or recruits, and his income and
expense receipts for his marketing activity.
By late 1996, petitioner had become dissatisfied with being
a Cell Tech representative. In late 1996 and in 1997, the
positive response to petitioner’s Cell Tech mailings declined to
less than .5 percent, and many of his customers stopped buying
Cell Tech products. Petitioner concluded that it was not
productive for him to continue mailing Cell Tech materials. He
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