Most people won't get their money back

 

One evening last May, about 450 people squeezed into a ballroom at Auckland’s Crowne Plaza hotel where a young woman was explaining how to achieve “true health and true wealth” by selling products from Usana Health Sciences, a US-based vitamin company with thousands of distributors in New Zealand.

“Close your eyes and think about your childhood dreams,” she said.

“Sing out your dreams.”

There was an awkward moment, but then people started calling out visions of racecars, airplanes, fancy homes.

The woman, a Usana distributor, started flipping through a series of PowerPoint diagrams and talking about how Usana’s unique compensation plan can help people achieve their dreams.

All you have to do to qualify for your own Usana business, she said, is buy an initial minimum amount of Usana business tools and health products, and then buy a certain quota of Usana products every month after that.

And that’s the catch.

click to view According to Usana corporate documents, most of the company’s distributors don’t make enough commissions to recover the cost of their qualifying purchases from Usana. In fact, most of the company’s distributors don’t make any commissions at all.

This information was obviously crucial to the hundreds of people in the Crowne Plaza ballroom who were deciding whether or not to become Usana distributors.

But the woman addressing them didn’t mention it. Maybe she was not aware of it.

Nor did she mention any of the following facts:

--In the US, Usana is being investigated by both the FBI and the US Securities and Exchange Commission (SEC), which regulates companies listed on the US stock market.

--Since the Wall Street Journal reported the FBI and SEC investigations in March, Usana’s stock price on the Nasdaq has plummeted from nearly $US60 to the mid $US40 range.

--Usana shareholders have recently filed three class action lawsuits, claiming that the company “failed to disclose…material adverse facts” including that it “operated as a pyramid scheme.”

In the US, Usana blamed its financial setbacks on what it calls “a series of false and defamatory statements” against it.

But at several recent Usana recruitment meetings attended by NBR in New Zealand, no one mentioned any of this. On the contrary, the speakers at these meetings said Usana’s stock was soaring. If you’re thinking of joining Usana, they said, “your timing couldn’t be better.”

Until last autumn, Usana’s performance had been dazzling, with a market value of about $US1 billion, stock prices that had increased more than 1600 per cent in 18 quarters and sales in 14 countries including New Zealand.With 50 per cent of the shares, Dr Myron Wentz, the company’s founder and CEO, was worth hundreds of millions of dollars. Forbes picked Usana as one of America’s 200 Best Small Companies in 2004, 2005 and 2006.

Usana is a multilevel marketing company, or MLM, a rapidly expanding industry whose distributors work from home and make commissions based not only on their own sales but on sales by other distributors they recruit into the company. Usana distributors follow a “binary compensation plan,” in which one person recruits two others, those two recruit four others, those four recruit eight others, and so on.

According to several recruiting presentations NBR attended in New Zealand, each new Usana distributor must buy a minimum of about $445 worth of the company’s business tools and health products, then continue to buy $290 worth of its health products every month thereafter in order to qualify for commissions.

Usana’s critics say these monthly qualifying purchases are the reason so many of its distributors fail to make a return on their investments.

But Usana Executive Vice President of Operations Fred Cooper said most of the company’s distributors don’t think of themselves as failing — they’re happy to get $290 a month worth of Usana products for their own use, whether or not they sell anything. In fact, Mr Cooper said Usana’s research indicated that most of its distributors are “not interested in commissions.”

In New Zealand, however, Usana distributors seem to be very interested in making commissions. “WORKING HARD WON’T MAKE YOU RICH,” say advertisements for recent Usana recruitment meetings in Tauranga and Wellington. “Learn how you can fire your boss in the next 3-5 years…so you can live the lifestyle of your dreams.” And though the ads promise to explain how to improve your health with Usana products, they also say you “really can use this knowledge to become wealthy.”

But according to government statistician Murray H Smith, very few Usana distributors are likely to become wealthy. In fact, he said, “you can make a very strong argument that this could be a pyramid scheme.”

Dr Smith’s opinion counts in these matters. He’s been an expert witness in every one of the Commerce Commission’s cases against pyramid schemes during the last 10 years. NBR asked him to review Usana’s business structure and compensation plan, and— although he was careful to state that he was qualified to make only statistical judgments and not legal judgments—he said Usana showed some of the characteristics that commonly occur in pyramid schemes:

--At any given instant, most members will not have made enough money to recoup what they've paid to participate in the company;

--The people at the top of the company structure are more likely to make money than the people at the bottom of the structure; and

--As more people join the company over time it will become harder for the majority at the bottom of the company structure to recruit others. Those people tend to become discouraged and drop out.

What Dr Smith found is supported by Usana’s company documents, which show:

--87 per cent of commission-earning distributors did not make enough to recoup the cost of their monthly qualifying purchases;

--The top 7.7 per cent of Usana’s commission-earning distributors made 72.2 per cent of the company’s commissions; and

--The company has a “significant turnover” in its distributors every year according to its 2006 SEC filings, and so it “must continually recruit” new distributors.

The bottom line, Dr Smith said, is that the vast majority of Usana distributors end up paying more to qualify for commissions than they actually make in commissions. “Most people,” he said, “won’t get their money back.”

Usana’s Vice President Mr Cooper said that many of the distributors who fail or drop out simply haven’t worked hard enough. He also pointed out that all distributors get something for their money— a monthly shipment of Usana health products. If they don’t like the products, he said, Usana has a generous return policy.

That may not help a lot of distributors whose businesses have failed, however. Since Usana urges distributors to take the vitamins they have to buy each month, they’re not likely to have any products to return.

As to whether Usana is a pyramid scheme, the company has forcefully denied any such suggestions in press releases in the US.
Although some of its shareholders— and in a recent court filing, some of its distributors— have accused Usana of being a pyramid scheme, no court or regulatory agency has yet taken a position or made a finding on the issue.

NBR cannot say whether the allegations that Usana is a pyramid scheme are true or not. What we can say is that, in the Usana recruitment meetings we observed, audience members were never told that these court cases and investigations existed, or that they might pose a threat to the company’s future.

Usana spokesman Joe Poulos brushed off the arguments about pyramid schemes, saying the concept doesn’t even apply to Usana.
“The company sells vitamins,” he said.
“In a pyramid scheme there’s no product.”

click hereBut that’s not true in New Zealand, according to Stuart Wallace of the Commerce Commission’s Fair Trading Branch. Mr Wallace has investigated numerous pyramid schemes—including companies that sold products, he said.

And he said New Zealand courts have shut those companies down and convicted their promoters.

Mr Wallace said New Zealand courts consider a number of factors in pyramid scheme cases.

But a “critical point” he said, “is whether [a company] is primarily a scheme to recruit other members or to sell products.”

He added, “To what degree are their products sold to real customers, retail customers?”

Usana does not keep records of retail sales. But according to its 2006 SEC filings, the company makes 86 per cent of its net sales to its own distributors and 14 per cent to what it calls “preferred customers,” who buy products at wholesale prices.

In New Zealand and Australia — which Usana reports as one market— Usana has three times as many distributors as preferred customers.

click hereMr Wallace said that he could not discuss Usana specifically. But he also said that in his experience, New Zealand courts had judged pyramid schemes not only by how they paid their participants, but also by whether they had misled participants about how much money they could make.

He also said that such schemes often attract recruits with claims about passive, or residual, income— income you don’t have to work for.

“The two things tend to go hand in glove,” he said.

“If you’re claiming you can make thousands while you’re out playing golf, then that is probably an unfair scheme.”

Many of Usana’s promotional materials seem to fit this description.

“I don’t even have to be there to earn it!” says the speaker on a Usana promotional CD that was handed out at a recent recruitment meeting in Wellington. “We went on a cruise a while ago. We were gone for 10 days and when we got back there were two checks waiting for us—big ones—and we hadn’t done anything that week but play.”

At some point in their presentations, most Usana speakers are careful to say they can’t promise anything, and that it takes time and work to build a successful Usana business.

But they also say that any distributor who follows Usana’s plan can benefit from “the magic of residual income.”

“If you understand this concept, you’ll make a fortune,” says the speaker on the Usana promotional CD.

“In one to five years you could retire with residual income of $50,000, $100,000, even $250,000 a year.”

You don’t even have to be alive to make money with Usana, according to one New Zealand-based website:

“Imagine receiving an income of $100,000 plus for the rest of your life…And when you die? Will it on to your children—what a legacy to leave them!”

Usana’s troubles began when the company came to the attention of Barry Minkow, a former conman who spent seven and a half years in prison for perpetrating a multi-million dollar fraud in the 1980s. Since his release from prison in 1995, Minkow has worked with the FBI and SEC on numerous investigations, including the case of New Zealand’s biggest-ever fraudster, Derek Turner. (see article NBR July 7, “It takes a thief to catch a thief,”)click to view

In late February, Minkow sent the FBI and the SEC a lengthy report claiming Usana was a pyramid scheme that cheated most of its distributors out of their money.

With a theatrical air, he also told the FBI, the SEC and several reporters that he’d bought “put” options on the company’s shares, so that he would make money if their price fell.

Usana shot back with a defamation lawsuit against Minkow, accusing him of driving down the company’s stock to enrich himself and others.

“What’s mindboggling to me is that Barry Minkow has admitted he’s short-selling the stock,” Mr Poulos said.

“You have this felon who’s credited as one of the biggest fraudsters of the last century… shorting the stock and going around saying negative and misleading things about the company.”

Minkow said Usana’s accusations are “a joke” because he hasn’t made a penny on his put options—he bought them too early. He said he doesn’t even have a paying client for the case because his client backed out.

Nevertheless, he has continued his efforts against Usana.

Soon after Usana filed suit against him, he made a series of videos on YouTube in which he interviewed several failed Usana distributors, including Steve Estes, a blind man who claimed to have lost his life savings to Usana.

“If I had known then what I know now,” Mr Estes said, “I would have run like the wind after the first Usana convention.”

Minkow also turned up some embarrassing facts about Usana’s executives, including Usana board member Denis Waitley who was falsely claiming to have a master’s degree, and Usana medical advisory board member Ladd McNamara who was falsely claiming to have a medical license after it had been revoked in two states.Both subsequently stepped down from their positions at Usana.

Mr Poulos said both men made harmless mistakes that had not affected Usana’s operations.Denis Waitley

“The most important point is that the company continues to grow sales year after year,” he said. He suggested that Usana’s quarterly report, which is due on July 17 in the US, will confirm that. He added, “New Zealand is a great market for Usana.”

Ladd McNamaraIndeed, Usana’s operations in New Zealand keep humming along as if nothing was happening across the Pacific. Usana’s recruitment speakers and promotional materials here still talk about Denis Waitley and Ladd McNamara as though they’d never left their positions at the company. Hundreds of Kiwis show up every month to Usana recruitment meetings. And according to its latest SEC filing, the ranks of “active” Usana distributors in New Zealand and Australia are 18,000 and growing.

The company did not report numbers of “inactive” distributors— those who had quit making their qualifying purchases of Usana products.

As for the Commerce Commission, Mr Wallace said that it was not currently investigating Usana. “But obviously,” he added, “if there was a ruling in the US one way or the other we would follow it with interest.”

 

How we reported our figures: --We started with Usana’s SEC filings including its most recent 10-K, 10-Q and its 2006 North American Average Earnings Chart.

--We spoke to Usana’s executive vice president of operations Fred Cooper, who confirmed that the North American Average Earnings Chart is accurate and that it applies in roughly the same way to Usana’s operations worldwide.

--Mr. Cooper also confirmed that 67 per cent of all distributors did not make any commissions—that’s why the Chart shows only 33 per cent participating.

--Mr. Cooper said that a fair portrayal of Usana’s business should deal only with the figures for commission-making distributors. So we followed his guidance and calculated the following figures using only the number of commission-making distributors.

--87 per cent of commission-earning Usana distributors don’t make enough money to recover the cost of their monthly qualifying purchases from the company

--72.2 per cent of all Usana’s commissions are earned by 7.7 per cent of commission-earning distributors.

--Mr. Cooper did not argue with these numbers, but he said that Usana believed most of the company’s distributors were “not interested in commissions” and were happy to get their monthly qualifying purchases of vitamins for their own use. We reported that in the story. 

Auditor at troubled Usana quits
Usana defends practices
Forbes is Usana's latest critic
Troubled Usana faces new stock woes
Usana appoints new auditor

--------------------------------------------

Usana Response

Joseph Poulos, spokesman for Usana Health Sciences, has sent the following response:

To clarify statements made in the story regarding the company’s earnings on July 17:

I informed you that the company would report earnings on July 17th, stating clearly that regardless of whether earnings would be positive or negative, it was a material company event that you should be aware of and might want to include in the article.

I never suggested that the quarterly earnings report would confirm that the company continues to grow sales year after year.

This statement is false. As a footnote to this whole conversation, USANA’s publicly announced guidance does in fact indicate continued financial growth in sales and earnings. Joseph Poulos Vice President Financial Communications & IR Edelman

UPDATED 2008: USANA Health Sciences, Inc. (NASDAQ: USNA) announced today that a California State court has dismissed the distributor class action suit, Johnson v. USANA, filed in 2007 against the company and certain of its officers, distributors and directors. The Plaintiffs agreed to request that the court dismiss the case with prejudice after plaintiffs reviewed recent evidence and determined there was no longer any merit to maintaining a class action lawsuit.

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60 Comments & Questions

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Great information. I recently had a Usana distributor call us and try to fix a meeting to get us join the bandwagon.

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I could care a less about usana, but someone came to see me today and show me there products as well as the business. So I got on here and googled the negative side of the story, only to find, they have a better success rate than the rest of the world. You may or may not realise less than 5% of people control more than 95% of the worlds wealth. Here by the writers own admission 7% of usana distributors make money, thats 2% more than the average, are you for them or against them? I wonder?

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It's too bad that USANA is set up as a MLM company. Their supplements are quite good. I started taking them more than a year ago and noticed a significant improvement in my health within a couple weeks. There is no need people to sell the "residual income" angle. The products are good enough to sell on their own merits.

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That is exactly what I brought up in one of their meeting that an old friend dragged me into. I asked the director, one of the head guys name is Duke (So. California), that if the products were so great how come they didn't just sell them to distributors in which they could make a lot more sales and he completely avoided the subject. It's because the company isn't based on sales it's based on recruiting. The more people they can get to "work" for them the more they sell because those people have to but the vitamins. And only the people at the top, the directors they call them, make any money. I was out when he told me that being a doctor I wouldn't make enough money to live comfortable or even another job making $100,000. They suck you in and talk like they know a lot about the product but they don't even know what half of the stuff they are taking does. It seemed to me all they knew is that free radicals are bad and blame every disease on a persons dies. Therefore, take these pills and you will be cured. I've been there and seen how everyone is; there favorite words are "true, true". I don't deny the vitamins work, though I don't think supplements ate the way to go anyways. I just don't like how the whole thing is run.

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There is currently no government regulation of dietary supplements (i.e. FDA doesn't regulate). Why? No idea, but the problem is not USANA but the government. And yes, as a result, anyone can claim to make "vitamins" - with sawdust or what not and there's no way to regulate.

However, that's exactly the reason why people should buy USANA products - because they have voluntarily chosen to produce its products with pharmaceutical manufacturing standards and their quality is second-to-none.

It's also have been independently verified by NSF and its vitamins are consistently ranked #1 by many top doctors and nutritional experts in the "NutriSearch Comparative Guide to Nutritional Supplements." http://www.amazon.com/NutriSearch-Comparative-Guide-Nutritional-Suppleme...

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You become a USANA distributor because of the benefit of Autoship. Autoship lets you organise your monthly product order which is delivered to your door, but at a lower cost compared to retail or prefer customer price.

So naturally, it is the best interest for consumers of USANA products to become a distributor for a mere $20 to get this saving!

If this article can't even identify this fact, how true are the claims in writen here?

And USANA products do improve your health, significantly!

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Thanks very much. I'll need to study this article well. It's quite difficult to convince my friends why this kind of sales structure is evil.

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Usana products are highly advanced and I have been taking them for 7 years and will never stop. Use your brains - if you work hard at anything you will achieve. If you sit around and do nothing, you will get nothing. Many Kiwis are lazy and just sit and hope....However if you get off your butt, out of your comfort zone and learn, then you have more chance to succeed. By the way, Minkow's case has been dismissed.

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First of all I am so greatful to ba apart of usana, their products are great and have a strong business plan. I think that alot of people are very closed minded and uneducated about this business. Maybe if their going to call this a scam and evil thay should look at all the corporate companys that provide jobs and you will find that the people at the top make lots of money and the people at the bottom are earning very little and are being told what hours to work and when to have a break, that sounds more evil to me.

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First of all, please check your spelling before you post it in order to avoid confusion. Employees at corporate companies do NOT have to purchase any certain amount of the products from the companies. Does that sound evil, too?
As one of the distributors, my father is spending thousands of dollars purchasing the USANA product every month, but he never showed us how much he had actually earned from it. He even couldn't pay the bills on time.
According to USANA, a director gets paied $1000 per week. It has been 3 months since my brother turned director. So, how much should he have made? And he is still unwilling to pay for the parking permit and other fees that we share. I am the only who pays for all those daily needs, man!

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What you are saying here doesnt make sense. I am sure your brother will be paid money if he truely turned to be director as that is the rule of USANA. You cannot say your brother didnt make money just becuase he doesnt want to share your family bill. Maybe your brother is too mean or because of many other matters...

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God will punish you for joining this .

Work hard for your money 60 hours a week and pay your taxes so that people can benifit from your hard work.

God loves hard workers.

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Nonsense - If you think you can make money from network marketing without working hard you are wrong. I have been in Network Marketing for 20+ years and I work very hard and have been very successful. where do you get the 60 hours from? God says to work six days and the seventh is a day of rest. God will not punish anyone for joining a Network Marketing company. Most people that are involved in NWM are good decent people some are not, same as any organization.

NWM is not for everyone, that is your choice and we respect you for your views.

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Baby Jesus, your still living back in the days of baby jesus, back when people worked 12 hours a day and broke their back before they turned 35. Just because something appears different or that one person says its bad, doesn't make it that way does it.
Come on down to the real world baby jesus, learn before you speak

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haha i like your post...its ignorant people like you that make others rich. all you are doing is working harder for someone else's benefit. thanks!

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Nothing in this world will give u free , is included the air and water.
We join to any company in this world , work hard and work smart to get promote to higher position in tmr , and a day the company fire you and ask u to get out from he office , is this a pyramid style ? u work like a cow but your boss earn those big money!
Just like open a shop , we need to pay rental , bill , employee fee , license , advertisement fee ,,,,etc , even we are close the shop today , same like Usana's business , u need to spend a amount to keep active your business , some more , what u pay for it is a high quality supplement that you can consume it to maintain your health .
Remember and keep in mind , those people who are success in their industry are those people who really doing their work and keep the positive thinking , learn from those success person because they are the person who earn more money than us , not those who are failed in their life and keep blame the country , the world , the company , the system ....etc

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I believe Usana's structure has potential, you certainly need to pay something to maintain your business, if you decide to open one, Bills fees, whatever. with Usana you pay for the product, which you can use for yourself. Imagine yourself opening, lets say, a restaurant, working 80 hours a week in the kitchen, certainly not good for your health. I just got started with Usana and I am 21 years old

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I think it's unfair to present only half of the story and expect people to act on it. If you were actually on the outlook for general society's well-being, perhaps put all of the facts up there so that the people you are "on the outlook" for can make an evaluation for themselves. I am not standing up for USANA or against it, I am just saying, if you really wanted to convince people - and I mean intellects, not just your ordinary bystanders and followers - put up a better argument by evaluating ALL of the facts, not just everything that overshadows USANA in a bad light. Your article provided a lot of key points - are they good enough I wonder? Perhaps the writer herself has gotten into a bad company and scammed by others herself! I find it interesting that Mr. Minkow himself was involved with an illegal scam before - earning himself 7 years in prison - could it be that he is just unhappy that his prison cell was not shared by others? Maybe he is just looking for ways to make a case out of it. I would also like to ask Mr. Estes how exactly did he build his business?

There are way too many loopholes in this argument and I'd be interested in seeng a more balanced perspective.. if not, then it's not exactly a source to be relied on, is it?

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How come these productd can be sold without independant verification - I'm thinking FDA here? For all I know the pills could be filled with sawdust.

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If you took the time to investigate the true benefits of taking Usana products you would realise how good they are. I am sure taking sawdust would not have done anything for my osteoarthritis. However taking Usana products certainly has made a huge improvement, and I know of many other people with serious illness who have benefitted from taking Usana. The products have been independantly verified - and proven that they are the best available in marketplace. You should get your facts straight before you shoot off.

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Hey, i jst read a short comment and found it quite humorous.

Question is why is it not FDA represented.

FDA stands for Food and Drug Administration. Nutritional supplements do not come under Food nor Drugs. Thats mainly why.

if you're concerned about the contents of the products and whether it does indeed contain what it claims to contain. Slowly but surely the products are being approved by "consumerlab.com" one at a time. Consumerlab is an independent source that tests the potency and label claims of Supplements.

hope that helps you sweetie =)

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During their case against Minkow they had 4 of their charges completely thrown out. They even failed to prove that their product was any better than low cost store brands. They had one charge they could have proceeded with but instead of doing that they settled. Why? Because Minkow was right!

They offer him a settlement which puts some money in his pocket and he promises to back off. If USANA was really clean Minkow would be in jail now. Open your eyes people, there's nothing fantastic about their products. Research their claims and their sources and you'll see it for what it really is - a pyramid scheme.

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Whether ANY network scheme is a pyramid or not is a pointless argument. I have worked for 3 companies- an airline, a food industry and an engineering contracting business, and they all fit the requirements to qualify as a pyramid. On the top is CEO on a million$+, widening out to a small team of senior managers on a little less, a bigger team of middle managers on less income again, right down to numerous staff on below average incomes (and these are the people who REALLY run the place, determine quality, production volume, fix things in emergecies etc as well as do as they are told, work the hours they are told and have very little say over how much they earn.) Most of these conventional companies could be run perfectly well from middle management down. Take a look at how transient the big noters are, they flick from company to company frequently contributing little but unnessary change. So- what percentage of people in these businesses make huge incomes? 10-20% maybe?

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We just joined USANA a few days ago, and have no false expectations about retiring by age 35!!! Anyone who has common sense knows that few people benefit financially from MLM, we simply joined because we liked what we heard about the products and wanted a simple, healthy way to get fit. There is no reason to bash USANA or it's structure, just use the brain God gave you. If it was that easy to become super rich off the company, wouldn't everyone be doing it?!? Just like their public statments indicated, most people join USANA to use their products, not as a career. People need to get a life and stop attacking each other!!!

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I will be forever greatful that I am part of Usana. I would not be here today if I had listen to the convential doctors and stopped taking my Usana supplements. In 07 I was told that I had Cancer in my liver while the patholigist took their time in trying to decided what type of cancer, I spoke to a Doctor in NZ who beleived in the Usana Suppliements, and he told me what Usana suppliements to take and how many of each one, My condition improved greatly much to the surprize on the oncoligist and he noted what I had done and mentioned it in his first letter he wrote to my GP. So I will never stop taking my Usana suppliements, my out come is very good and the doctors don't expect my cancer to come back. Usana is a very succesfull company and with being succesfull, comes the people who try their best to ruin that success. My husband and I are successfull and we have people who are jelous of what we do and have done and they trying the best to wreck our lives with lies about us, we are taking one person to court and the rest have a letter from the police telling them that what they are doing is harasment, unfortunatly for them we don't lie and don't react personally to them and we have all the correct facts. This is what is happening to Usana it is just sour grapes.

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I had been buying Usana products for about 6 months for myself and my wifes own personal use before I decided to become an independant associate. My diet is fairly poor and sometimes I have fast food due to working 12 hour night shifts, but with Usana supplements I have never felt better , I no longer feel tired.

The only required purchase to become a Distributor Associate is a Business Development System (Starter Kit) $99.00 NZD or the electronic version (e-BDS) $19.95 NZD. Then you can re sell product to others.

The binary compensation plan ( this is the network marketing part of Usana ) is purely optional.
To activate a business centre (BC) in the plan you will need to sell/buy about $365 worth of product. Then inorder to recieve commission each week you have to sell about $239.00 which so happens to be the price of the USANA’s HealthPak 100™ .

This start up cost by the way is a business expense which is fully tax deductable .

Now the office in my house is approx 25% of my house floorplan, I can now get 25% of my power cost, the interest on my morgage, rates and even 50% of my telephone phone costs .

I run a logbook for my car for 3 months so I can work out what percentage was used for business . If I use my car 50% for business I will claim back 50% of my petrol costs . Depreciation a nice business benefit too.

But what can the average worker without a home business get? NOTHING !

See I can build this business at my own pace knowing I will be getting my money back , but hey don't believe me , go ask your local accountant who will tell you all this information for free.

If you are interested in further information go to my website which has some useful links to information about tax advantages and also about Usana .

http://unlimitedfreedom.usana.com/mystory_en.cfm

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I'm proud to say that I've been involoved with USANA now for over 3 years! My experience with this company has only been positive so it's very disapointing to see such a misleading article printed about what I consider to be an exceptional company. There is no substance to this article at all and I encourage anyone reading this to go out and do more reasearch to find out the truth. The article talks about convicted criminal Barry Minlow and his allegations about USANA which naturally would spark an FBI investigation however what the NBR doesn't report is that these allegations have been dismissed by a US High Court and the FBI investigations closed. Why? Look at what the NBR failed to correctly report on when it comes to USANA's credibility and integrity.

USANA founder Dr. M Wentz recently won the Albert Einstein Award for his outstanding achievement in life sciences, USANA's product have been given the only five star rating by the 'Comparative Guide to Nutritional Supplements' a study that comapres over 1500 nutritional products, it's a public traded company on the NASDAQ (USNA), it's been repeatedly listed on FORBES top 20 companies, and top 10 companies on Business Week Magazine and been voted the best network marketing company from 1997 - 2008 by the MLM insider and it has paid over half a billion dollars in commissions to associates since it's operation begain in 1992. Have a look at what Tim Sales has to say about the industry of network marketing on youtube.

Anyone knows that in order to have a great business you need to have a great product that is in demand. USANA is proud of it's reputation in manufacturing world class health and wellness products, it's also proud of it's first class compensation plan. Lets be honest though this is not a get rish quick scheme! Like anything in life you have to get off your butt to make a dollar. When it comes to buying a monthly autoship well think about like this - if you're buying a similar product from the supermarket why not just redirct your spending and buy it from your own business? To own a traditional business you invest thousands of dallars however I can't think of a better business where there are very low start up costs, you're marketing a product that is in high demand (health and wellness industry) you can work it part time, you can benefit from having tax advantages, you can get paid weekly if you're prepared to treat USANA like a business and you helping people to maintain and improve both their physical and finacial health. Not everyone has to join USANA to get benefit from the products USANA has a perferred customer programme which allows people to buy the products when they need them and the product gets sent to them directly from USANA

USANA is changing lives it's helped change my health for the better and through treating my USANA business like a business concsitantly doing 3-5 hours per week I've created a fantastic second weekly stream of income working this business part time along side my full time job and as a young person USANA has now given me more choices in life and made me feel very excited about the future.

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Well maybe the products are ood but what guarantee do you have that you'll actually get money. For all we know you could be in a cult and you don't even realize it because they sucked every brain cell you had.

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The products are good, not MAYBE!... guarantee earn money?? do the company or employer that you are working for right now 'guarantee' you to get money??

who knows you'll be retrenched next week!

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In a pyramid, the top level distributors can get infinity increase in profits while the bottom level gets nothing. However, USANA is not a pyramid (but Binary), because the payout level for USANA distributors is capped at $1000USD per week per business center regardless which level you are at. Therefore The top level distributors have to construct new business centers like the enter-levels to increase their profits. It's the easy-doing binary stucture of USANA has confused most of people with pyramid. Consider USANA has the highest quality products (recently scored 97.5), Direct Sale is the only way to provide customers the best products. Currently available products in shops would have to consider to minimize their production cost to make profit, therefore they have to sacrifice the quality. There is no free lunch. Many distributors fail USANA because they believe their downlines would do everything for them, and not even have the simplest knowledge about building a business: budget, cashflow and marketing strategies, etc. and so as their innocent downlines.

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I'm shocked to see NBR to publish this article. This simply shows how sad and pathetic New Zealand is in terms of business journalism.

Why?

There is a huge number of mistakes in this article.

1. has the product quality been researched and mentioned? - NO

2. the figure on starting a business with USANA is wrong

3. has the tax benefits associated with USANA business been researched and mentioned? - NO

4. has the full extend of the lawsuit and the plaintiff Barry Minkow been researched and mentioned? - NO, by the way, Barry Minkow is a fraud

5. if USANA is a true paramid scheme, why hasn't the authorities dealt with it? - because it's a publically traded legitimate company doing honest business

In New Zealand, we don't have a lot of things because we are so far away from the rest of the world, but I've always thought we are a country of integrity and honesty. It saddens me greatly to see this "National Business Review", a medium which should convey accurate and reliable information, publishing such disgracefully poorly researched article and NOT CORRECTING IT SUBSEQUENTLY.

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Can someone independent and experts in nutritionals field answer my few questions about USANA? 1. Is it save to consume? Is it their products better then other products? Recently i joined USANA and i learned about it from my friend. She has been telling USANA success stories to me about half years (only when i saw her) At first i don't really pay any attention until recently because my wife having some difficulty to conceive. So i give it a try.

But i still have some doubt so i go online to collect more information to convince myself. Until now i still can't find any concrete info can convince me this product is the best of the best. Maybe i look at the wrong website. So i need some professional opinion. Someone independent and not related to USANA.

I don't care about making money. My main purpose to join is because i want my wife have a good health and solve the conceive problem. I don't mind paying high price for this product but i want to know this product is really good.

Thank you for someone who can offer some valueable advice

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jason i understand where your coming from i was the same at first. we were very lucky however to have someone who has been very successful in this business who knows his stuff. i can answer any questions you have with proof, research etc: anything u require so if your still interested in hearing what i know in order to settle your doubts say so and i will email you to get your details so we can discuss it.

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My previous comment "First of all, please check" is made in regard of "Usana - Great Business" by David.

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This was posted last July 14 2007 - 12:00am -- I think NBR needs to update this or post another regarding Usana. I see so many 'violent' reactions from the users and part of the Usana company.

Anyway, being posted on 2007 -- a lot has happened since and weren't able to be stated here. But it's a good post although it can use some more info -- just to balance the story. Perspective, insight. Thank you for those who commented here as well (I just wish they're legitimate).

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The fallacy of self-proclaimed expertise! Where is the clinical experience! These people call themselves researchers but all I am hearing is opinions. Where is the peer reviews?!?There is no clear scientific evidence that these products work.

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but yeah i totally agress

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I used the products for some time but did not see any difference in my overall health. It wasn't until I met with a nutritionist that I realize supplements are not regulated so they can put anything they want on them.

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I have been approached to join Usana. I have never been in business before and have really no idea. I have read good and bad about Usana. I am 21, do I take my chances and go for it or earn my money the traditional way. Please help me!

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OK Im just trying to assess where you are at with this opportunity. It sounds like you have some reservations about your ability, are not sure whether the company is credible and are afraid to go where the majority of others wont. These are all doubts - doubts about yourself and the company. The doubts about the company need to be addressed by the person who approached you. The doubts about yourself need to be addressed by you. If you cant bring yourself to address and overcome all of these doubts then dont do it. I hear what you're saying because Ive experienced personal doubts and doubts about the company as well - but Ive overcome all of them and am joining up next week. ONE LAST THING - make sure the person that approached you is supporting and coaching you and helping you every step of the way because thats their job - demand it from them - your entitled to it. Take control and go for it:)

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why dont u approached your nearest usana distributor and let them explain to you the exact reason why you shouldnt start a conventional business ...!
i can tell you why..
by the way, in usana, there's nothing to loose..!
email me if you want to know!!
drpaulchan@usana.com

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People are so freaking lazy! You cant fail at a perfomance based business, its called QUTTING! Go listen to Tim Sales at firstclassmlm.com

Its those lazy people that think this is a sign up and start seeing money scheme that quit and cry about it and then go angry blog to the rest of the world that usana is a scam blah blah blah! Im 21 years old and I have learned to do something most people will never learn how to do and thats leverage a team!
and if you think thats a horrible and evil concept then dont ever ever go to a traditional job again! because thats a real pyramid scheme! You as the employee will never make more then the CEO of the comapany but you do the most work. You get told when you can take a break, you have to ask permission to go somewhere with your family, beg to raise the price of how much your worth and you think because your a good little employee you have job security? Yeah thats why thousands and thousands of good people are losing thier jobs to companies they have been loyal to for years! lol wake up people! honestly i think the older generation is so close minded because change scares them! A closed mind is the most expensive thing you will ever own.

ok im done ranting but its dumb articles like this that steal away the dreams of some people. DREAM KILLERS!!!

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Its so true in everything in life that you can't please everyone!

a lot of "hater" posts consists mainly of two objections.
1) overpriced products
2) underpaid distributors.

people are complaining about money not filtering down to distributors, so i guess all this money must be going into some black hole on the P&L and BS. check how much Dr. Wentz got remunerated / annum, and check out how much the companies net profit is.

the other group of people are complaining that the product is too expensive and that distributors shouldn't be remunerated so much.

as with everything, in life. i think the packages some of these CEO's of banks and finance companies are a great example. irrespective of whether their 8 figure package is fitting. They do have to cop a lot of abuse about it. And come crunch time its their heads on the chopping board. i hear japanese execs go as far as killing themselves if the company fails. I definitely don't encourage this behavior but it does show the amount of responsibility and burden on the shoulders of such high posts.

Well i'm sorry but my family works very hard to be where we are. as does everyone else who succeeds in the business. i have NEVER EVER seen my mum for the four years she had been in the business, complain or blame other people for not doing well in a certain aspect. when she is turned down or "fails" in a venture, instead of going online to complain about it, she sits down and tries to rectify where she could have improved.

If you listen to some of the entrepreneurs testimonials, some are nothing short of amazing. I gave my mum relentless grief when she first started doing what i recognized as a "pyramid scheme". Yet she persevered through my and other family and friends' abuse and lack of faith. we are quite successful now. But only because of my parents' perseverance.

If i was put into the same situation as my parents, i don't think i could have done the same. more because i am not as mature nor experienced as my parents. After being involved in the business for a few months, i have done a lot of growing up. and really realized what a sheltered life i was living.

i really do wish everyone who ventures into USANA the best of luck. its very important to try and not be negative about it all. because when no one has faith in you, you really do need to be a strong believer of urself. and do things in the right method.

Realistically no one is stupid. so don't try and lie or fool anyone. You'll end up the fool. Jst be honest and persevere. this will take you very far.

- =)

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I just went to a meeting tonight, and I have to say that anyone who believes this bunk is anything but a pyramid scheme has no business sense and deserves to be ripped off. Multi-level Marketing is just a devious way of saying pyramid scheme. The people trying to recruit us seemed like zombies that could only repeat "Wow! True, true, cool!" and the people getting suckered into it were weak-minded losers.

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I have been invited as a guest to a meeting tommorow night in ponsonby, auckland. I have been researching the company and its products and i do not know weather to join or not. I think the prices are far too high, and in this recession we are in , who is going to pay $55 (-taken from a trademe listing-) for 14 snack bars? If i were to join the compay id be more interested in selling the skincare products as they last longer.

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Usana is a pyramid scheme, they tried to get me to join and explained how i could earn a lot of money by making more people join and that I'd get a cut from their profits, top dog gets all.

Whoever sits there and tries to defend usana and their BS i would love to hear your story of how you became rich, please do share!

Funny how one of the main recruiters in Auckland was publicly taken down, aka Kevin

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I find it very hard to believe that the little ones profit from this business plan. If you understand how a pyramid scheme works, you will realise that eventually you will run out of people to join your "business centres". And the last people in the world to join don't earn a single dime... Because everyone else in the world won't join you, because they're busy making money off of you.
So if that doesn't sound like a pyramid scheme to you I don't know what is.

I've worked hard all my life and I can assure you, there is absolutely nothing wrong with a good sound job as long as you love it.

My mother and father worked their way up to the top right from the very bottom. And they don't regret a single thing in their career, because at the end of the day it's not the money they're after once they bought the house paid all the bills and went for trips all around the world. It's the satisfaction they derived from knowing the company they worked for through and through. They know every aspect of their jobs.

I've just got off from a call with Kevin Goodwin. After some careful questioning and play along I am most shocked to hear these words come out of his mouth. "You don't have to do a thing to make the money" he elaborates with "When the people you recruit, recruits people under them YOU generate the points."
I asked him about selling to customers, his answer was very sketchy indeed. He says "If you were to sell the products at retail customers are not going to buy it. Because they can get it cheaper from somebody else at wholesale." He actually made that approach look like it was a bad idea. After asking how everyone in my downline was to make money he replied. "They will make money if they have someone else in their downline. And so on and so on."

So from that little bit, I the one who started a "business centre" is in actual fact placed under someone elses business centre under the pretense that I am building my own. And anyone I recruit helps me and the one who recruited me aka "Kevin Goodwin" and whoever recruited him and so on and so on. So at the end of the day I who started this "business centre" did not really sell anything to anyone but the promise of making money.

How ashamed I would be even to think of doing that to anyone. You see you don't start a business at all, a business involves selling a product and/or service what you are really selling is a business plan. How thick can we as human beings get?
The "business plan" is really a clever name to disguise what this really is.
Why would he discourage me from wanting to sell face to face to customers if we really are selling it to them. Because fellow human beings WE are the "customers". Use some basic common sense! The last one to jump on board can not make any money without someone in their downline!

In the way only a kid could describe it...

"The last one there is the rotten egg"

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If you don't work on it and just complaining all day here, of course it will not work for you. My friend runs a restaurant, and joined USANA 2 month ago, and she works hard on it as a part-time job and has earned over $2500 commission so far. You are right, the last one got the rotten egg, but you will never see it in your lifetime. There are over 60 billion people in the world.

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Last one is the rotten egg....look at the world population and tell me this - what is the main reason people die? Look at the stats and you'll find that its health related/diseases. And no matter what happens, life is going to go on and people will need to take care of their health.

As for the credibility - check out youtube and the report done by Today Tonight in Australia where brand name vitamnis were tested and compared to USANA. Results speak for themselves.

As for pyramid scheme - look at any business structure (with CEO and managers below and workers below that) and draw a line on the right and left side starting from the CEO and then draw a straight line to connect the ends of the right and left lines - what do you get?!?!?! A triangle AKA pyramid!! Have a good think about business structures before commenting please.

Also USANA mention the minimum spend required and the fact that if your downlines are not active then it wont work. I have seen it happen - one lady sponsored my colleague and assumed she is going to get paid. however she didn't build her second downline - guess what USANA specifies that an unbalanced line with no spend = $zilch. My colleague on the other hand built his downlines and is working full time on USANA - HARD WORK like your parents did.

Think before writing matey...

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I am a qualified health professional, and Independent associate of Usana Health Sciences.

I can say hand on heart, that the products and the business works, but only if you work it.

It is important to look the founder's vision:
"I dream of a world from pain and suffering, a world free from disease... live life to it's fullest in happiness and health"

What an inspirational dream to be part of. Yes it is difficult, yes people will say no, but persistence pays off in a big way. The amount of tax advantages distributors get, more than pay for their products.

If you treat it like a business and share the vision with compassion not greed, it is a winner!

To learn more, check out my website: www.unlimited.usana.com

Jaydn

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Is PT Barnum a director of USANA? Like all pyramid schemes, this one will also collapse.

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'Most people wont get their money back'
Do you think you will get your money back if you purchase grocery from the market, or buy a car? You pay, you get the goods.
At least with Usana you buy the product, it is in reality proven possible to get it back.

Usana is a big contribution to the world, to the people to maintain good health and to improve performance. This is kindness from Dr Wentz.
People intend to destroy Usana produce negative effect to the world.

What Company you work for is not a pyramid? How much money you make if you are at the top or near the top of the company. While the at the bottom people dont even make enough to sustain their lives in some countries. Think about the workers at the bottom of the company of China. How much do they earn? Why do you think things are made in China?

and why trust a criminal Minkow?

All gratitude goes to Dr Wentz

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I agree with this article

new view:

http://www.marlonrosario.com/

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Sounds just like an insurance company i used to be an agent for... these crooks get you into the scam promising financial independence but all you ever end up with is car/hotel and insurance bills.

A majority of the the agents lose money and sadly are promised an opprtunity to create their own financial future - the catch however like USANA is dependant upon you finding others usually your friends and family to join you on the quest.....

Best case scenario is you will make it and at best make $150 NZD per annum,

Worst case you lose all of your life savings, all of your friends, you are away fronm your family so the relationships suffer and what started out as the solution to your biggest problems in life has become just that - Sad part is if you are a good person and tend to see the good in others you will proablby fall for some sort of sales pitch similar to this one from someone you know, love and trust ...

If you do however you have nobody to blame but yourself .... just say no .... to USANA , AMWAY, Combined insurance .... otherwise you will pay for it.

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Have u been to their office in Albany?
1.Why all of staff never even talk a word about their products?
2.Does anyone know who is the real top dog in this biz?what he/she is doing now?
3.Remember,it's biz,what you earned,USANA won't pay you,only those people who join into USANA because of you.They are your relative,friends,etc.

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i dnt knw what to say .. but its not abt biz or sumthing . what abt the products is it good for health.or not. health is wealth. no matter how much we spend on the products if its really come out good for people. well im not the biz holder or wana join .. ima customer who want a good products.. well ..dnt knw who is right n who is wrong..

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I love USANA's products. I take the "My Health Pack " daily I love the skincare products as well as the Reset program and I love the Rev 3 energy drink. If the products are “good enough for Olympian and pro athletes then the products are good enough for me. By the way I am just a product user I do not do the business. I hope that they stay in business along long time.

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USANA products are great. It's one of the few Nutritional Supplement companies that pharmaceutical grade food supplements.

About who's earning and who's not, come on this is business. If you exerted time and effort, you'd get what you worked for. If you are a distributor who is just waiting things to happen,...Sorry for you, no commissions baby... =)

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The article Helen wrote is inaccurate and it's a pitty that Helen did not bother checking all the facts and court documents that have always been available to public. Barry Minkow' s report about USANA was all lies. It was written 3 years ago and it was just a matter of time for the truth about Minkow to come out.
We know now 3 years later that USANA was completely exonarated. We also know that Minkow shorted USANA stock plus got $400K from another fraudster.
I can't understand why Helen did not report on these important facts.
Anyway we now know that Barry Minkow is NOT a fraud buster. He has just been convicted for fraud himself. http://www.laweekly.com/2011-01-06/news/barry-minkow-s-new-scandal/
and
http://www.laweekly.com/2010-10-14/news/barry-minkow-2-0/

What goes around, comes around. Barry has been busted.

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Oh no another sad story of how someone didn't make any money in network marketing.
People are retarded. They think they can join a business and be rich in a few weeks. This is a long term deal people. It's funny I've made money in USANA and so have the people I around. It's the rest of the bunch who quit after a month and call foul. why don't you open a franchise and try to get your money back then? Sink or swim.
USANA gives you 30 days to get your money back. The world is full of quitters and cry babies. Go back to your jobs!!!
This is why only 3% of people make money in this industry. Look into a career in the insurance industry or any commission type job it's the same deal! Bottom line people are lazy.

Learn how the 3% make money in this industry
http://www.newagenetworkmarketing.info

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