(FORTUNE Magazine) – Like any middle-class couple in these giddy times, my wife and I are suckers for an offer hinting at dot-com riches. So when a Dallas lawyer we'd met two years earlier asked whether she and her lawyer husband could talk to us about a promising Internet "startup," we bit. During a well-canned 45-minute pitch, the couple spoke about enlisting friends and family to buy consumer products from an online outfit called Quixtar. We'd get a piece of anything they bought. And as their friends shopped, we'd get a commission too. My wife and I felt a growing sense of discomfort. Why, this all sounded like Amway.

Turns out, it is Amway, or at least Amway's foray into e-commerce. And our friends weren't the only ones downplaying Quixtar's distinctly uncool heritage. If you're not a devotee of such workaday goods as SA8 laundry detergent, Glister toothpaste, and Modern Magic Meals, you might not even notice the connection. It takes some deep clicking on the Quixtar Website (look under "Privacy Policy") to locate an acknowledgment that the billionaire Michigan families who own Amway are behind it all. And the dreamy yuppie models kayaking and cuddling in the site's graphics are a far cry from the middle-aged Amway reps bending ears about L.O.C. Multi-Purpose Cleaner.

Yet it is on Quixtar, just five months old, that the DeVos and Van Andel families are betting the future of their $5 billion, privately held direct-sales empire. After 40 years of growth, it seems Amway has hit a wall. Worldwide sales are down almost 30% over the past two years. So the company is moving to the Web. And in an attempt to distance itself from its dowdy and controversial image, it has launched Quixtar as a separate business.

While Quixtar show-cases Amway products on its site, it also sells an array of general consumer goods. Quixtar embraces Amway's trademark "multilevel" marketing channel, where self-employed distributors profit by recruiting both new customers and new reps. But in both categories it is chasing a younger, more affluent audience. While Quixtar is exploiting Amway's strengths--including an enormous manufacturing and distribution structure--it is also trying to create something new, says Amway chief operating officer Doug DeVos, youngest son of the company's co-founder. DeVos says he expects Quixtar, already claiming revenues of more than $2 million a week, to be "half of our business" in one to three years.

That won't happen easily. It's a "difficult inevitability," says Jupiter Communications analyst Michael May, motivated by a desire to retain its sales force, eager for its own Web riches. (Amway is letting its reps sell through Amway, Quixtar, or both.) Amway has always relied on its reps to use personal relationships to pitch its proprietary merchandise, whose stiff sticker prices can require a hard sell. But "that pushing doesn't work as well online," says May. "It's a lot easier to delete an e-mail than to slam the door in someone's face."

This reality, says May, will require aggressive promotion of Amway's brands--perhaps through media advertising, which Amway has generally avoided--and reconsideration of its entire pricing structure. While Quixtar's shopping-club structure offers incentives, its regular prices for both Amway products (a tube of Glister toothpaste goes for $4.20) and other goods (a VHS copy of A Bug's Life, $15.96 at Kbkids.com, is $26.99 at Quixtar) remain daunting. DeVos readily acknowledges that Amway will have to confront such issues head-on. Only then will it become clear whether the company can do as well selling in cyberspace as it does around the water cooler.

--Peter Elkind