The Foundation and Operation from the Famous 70% Rule Described
The 70% rule stems from the 1979 Federal trade commission Amway decision by which an administrative law judge recognized that Amway’s 70% rule assisted prevent inventory loading (it’s not a retailing rule). Essentially, the Amway rule provided: during the time of ordering with a distributor, don’t order more inventory unless of course you’ve offered or personally used a minimum of 70% of the items you’ve formerly purchased. This is among the Amway “safe harbor” rules that you’ll see within the guidelines of leading network marketing companies.
For more information on the network marketing industry visit www.mlmlegal.com and www.mlmattorney.com.
The 70% rule derives from the 1979 FTC Amway decision in
which an administrative law judge recognized that Amway’s 70%
rule helped prevent inventory loading (it is not a retailing rule).
Basically, the Amway rule provided: at the time of ordering by a
distributor, don’t order more inventory unless you have sold or
personally used at least 70% of what you have previously
ordered. This is one of the Amway “safe harbor” rules that you
will see in the policies of leading direct selling companies.
For more information on the network marketing industry visit
www.mlmlegal.com and www.mlmattorney.com.
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View the entire article at: http://mlmattorney.com/blog/2014/08/12/the-origin-and-
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