IT TAKES A LICKIN
ANDKEEPS ON TICKIN
In King and Robinson’s book, they state, “Look at virtuallyany aspect of the rise and development of network marketing and you will see Amway’s fingerprint.”
In thelate 1970s, the Federal Trade Commission began looking atAmway’s business model to determine whether it wasoperating as an illegal pyramid scheme.
The case wasdecided in Amway’s favor and became the backbone of thenetwork marketing industry. The FTC determined Amwaywas not a pyramid scheme because they had policies in place that encouraged retail salesand prevented distributor abuse. These policies adopted by Amway became known as
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[Retail sales rules] could go unenforced, or even if they were ostensibly enforced, could be circumvented by distributors, who may have an incentive to ‘certify’ their sales in order to qualify for higher bonuses.
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