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.
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