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selling products. Petitioners spent approximately 15 to 20 hours
weekly “prospecting, contacting, and showing the plan, and
attending local meetings”. In 1999-2000, petitioners had
approximately 5 downline distributors. Petitioners believed the
key to succeeding in Amway was “to meet [people] * * * and get
them into this business” and that “the profit comes when you have
enough people, when you’ve registered enough people”.
Mrs. Ollett testified that she would prepare sample baskets
and regularly spoke with customers and prospects about ordering
Amway products, but petitioners admit that approximately 70-75
percent of their sales were from products purchased by them for
their own personal use. The Olletts purchased most of their
ordinary household products through their distributorship,
including soap, shampoo, deodorant, dish-washing liquid,
detergent, facial products, food items such as health food bars
and energy drinks, a water treatment system, and clothing such as
men’s socks, slacks, and sport shirts.4
Between 1996 and 2000 petitioners reported the following
losses from their Amway distributorship on Schedule C, Profit or
4 As Mrs. Ollett put it: “I’m not going to give
Wal-Mart -- make Ms. Wal-Mart wealthy when I can buy it from
myself. It’s my store. I wouldn’t buy it from anywhere else.”
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Last modified: May 25, 2011