USANA Health Sciences It's a pyramid scheme! The business model is a barrier for success. Salt Lake City Utah

USANA's compensation plan is mathematically designed so only a few percent of distributors can ever make a profit. While USANA has several thousands of distributors making a lot of money, there are several hundred thousand distributors losing money. This is because USANA's binary compensation plan is designed as a bonafide pyramid scheme. Distributors can only make money as long as they recruit other distributors, who then recruit their own distributors, and so on.

It has absolutely nothing to do with marketing a product. It is only about recruiting others in the business opportunity. The product only exists to act as a "token" to participate in the pyramid scheme. All participating distributors are required to purchase between $107 to $242 worth of product every four weeks (13 times a year). Those distributors that have a large downline make money from everyone making these required purchases. This scheme works with ANY product because it isn't about the product. The product sells itself because the distributors are forced to buy it to collect their own commissions.

My suggestion to anyone even considering joining this company is to avoid it at all costs. You will spend a lot of time and money, and all you get out of it is an empty wallet and some depression (seriously).

Many people go in with the attitude that "yeah, I can make tons and DO NOTHING"...well, in order to well in Usana and all other Network Marketing companies, your business is what you put in it. It requires a lot of energy and motivation to make money and for people that enjoy working with other people, it's easy to work and stay motivated. Too bad you were expecting something for nothing!

BullDog,

It is comical that Len Clements tells you that the reason you didn't make any money in USANA is because YOU failed. He dismisses the fact that the compensation plan is structured so that AT LEAST 90% of current distributors at any given time CANNOT make enough money to cover the 4 week required participation fee (100/200 Personal Sales Volume). So unless you make more than $1300 a year, you cannot even begin to break even. The name of the game is to recruit new distributors and not actually selling the overpriced product. Recruiting distributors is all that is needed because every distributor is FORCED to purchase inventory every 4-weeks if they want to be "Commission Qualified". This is a dirty scam.

You see, Len Clements can claim that you are just a failure, but he won't tell you that he was given a free distributor position in USANA a couple months ago for his defense of USANA's pyramid allegations. He was given a 15 year old account that once belonged to a Silver Director. The account has close to 150 distributors already in the downline (how many did you say you were able to recruit Bulldog???) The previous owner had left the account years prior, so there is no possible way this deal abides any "Transfer of Distributorship" policy. Only those in USANA's inner circle have rights to these secret undisclosed give-aways.

So Bulldog, do you see where you went wrong? If you would have been given a free pre-existing distributor account with hundreds of people already in your downline, then you would have been able to be successful. You know, sort of like Len Clements!

All of the allegations you have cited, which were all part of the FDI report created by Barry Minkow, have been reviewed by both the SEC and a federal judge in a shareholder lawsuit and have been found to have no merit. The FDI report initiated a 10 month SEC "informal inquiry" of Usana which concluded last year with the SEC finding absolutely nothing even worthy of an upgrade to "formal investigation". The inquiry was dropped with the SEC taking no action what-so-ever.

Furthermore, the federal judge in the shareholder suit - which also was based on the FDI report - specifically cited several of the the allegations made by Minkow, and was summarily dismissed because, again, they were found to have no merit. As just one example specific to your list of alleged "lies" made by Usana corporate, then CFO Gilbert Fuller simply neglected to place [ret.] after his CPA title.

Furthermore, if you diligently worked Usana for "7-8 years" and only made $700, this begs the obvious question, why didn't you quit after, say, 3 years? Or 5? Also, if you failed so badly with access to the identical tools, products, resources, training, and pay plan as the many who have succeeded (many of which joined several years after Usana launched), doesn't this suggest the failure was yours, not Usana's?

Finally, you claim you were a shareholder which was "equally unsatisfactory" to your experience as a distributor. However, you also state you "managed to get out before the bottom fell out". Well, since the "bottom fell out" right after Minkow's report was published in March of 2007, and assuming you held the stock while you were a rep, then this means you MUST have held their stock at some point between then and January of 2002, a period when their stock rose from about $1.25 to a high of over $60.00, and was at $58.77 the day before the fall. Therefor, it was mathematically impossible for you to not have made significant profits from your Usana stock unless you were a day trader - or were short. This makes your entire post suspect.

Len .

I was a Distributor for 7-8 years and made a whopping $700. I was not successful in finding one person to join USANA. I used all the tools. People started avoiding me. I could not sell the products because they are inflated in price to pay the upline.

I was a stockholder too and that was an equally unsatisfactory situation. The stock was manipulated by persons both inside the company and outside. The owners were selling large quantities of stock and then buying it back. I managed to get out before the bottom fell out.

Several people associated with the company lied about their credentials:

In 2007, Usana faced repeated controversy as a number of their executives were discovered to have made false statements regarding their certification.

Denis Waitley, a member of the board of directors, resigned from his post after it was discovered that he did not have a Master's degree from the Naval Postgraduate School in Monterey, California. In addition to this USANA informed the Wall Street Journal that they were unable to verify Waitley's Ph.D. from the unaccredited La Jolla University.
http://en.wikipedia.org/wiki/Usana

Ladd McNamara, a Usana sales associate, quit the company's medical advisory board after it was discovered his license to practice medicine had been revoked by the State Medical Board of Ohio in May of 2007. McNamara was required to tell the Ohio Medical Board that he had surrendered his license in Georgia when he renewed his license in Ohio in 2006. Instead, Ohio learned that information elsewhere.
http://en.wikipedia.org/wiki/Usana

The Vice President of Research and Development, Timothy Wood, was forced to change his rsum to list his doctorate from Yale University as being in forestry, as opposed to the doctorate in biology he claimed.
http://en.wikipedia.org/wiki/Usana

Most recently Usana's Executive Vice President and chief financial officer, Gilbert Fuller, reported biographical information that showed him as a CPA, despite his license having lapsed in 1986; his license expired due to his "failure to pay renewal fees". Mr. Fuller received his CPA license in 1970, and remained active until 1986. While it is not required of a CFO to be a CPA, use of the CPA title while inactive is considered unlawful by the by-laws of the Utah Association of Public Accountants.
http://en.wikipedia.org/wiki/Usana

It is hard to have faith in a company that has so few leaders with true ethics.

I have also heard that the founder has renounced his US citizenship and is placing his money in banks in Liechtenstein.

As for the claim to be #1 in Network Marketing, the company actively tells distributors to vote for USANA to flood the statistics.

I decided to quit making my upline, whoever that is (mine quit and no one told me) richer so they could flaunt their big cars and big houses in my face. I found that you can find same quality products locally at your GNC store at better prices.

the Usana products are the best - we're using the vitamins and wouldn't live without them. If every-one signed up 2 people one on each side you would make money. the system they use has been voted as one of the best and fairest methods of network marketing. We all network market with different product - like recomending a good movie to a friend or a new product we've tried but these don't pay you any money. Usana has decided instead of just selling the product in stores they would give others the opportunity to make an income from it.
Better health is going to be THE biggest thing in the following years - just look at the news - obesity, diabetes, cancer - the list goes on. there is no cure - only prevention - I believe usana is part of the answer.
Roz - Darwin - Australia

This report does not say anything specific about USANA Health Sciences, and just makes negative comments about the network marketing industry as a whole. the author even admits that USANA has superior products, but goes on to say that it is a "pyramid scheme" and as such should be avoided. According to the author the pyramid business structure has proven to be an ineffective business model.

I would like to challenge that statement. If it is ineffective why has USANA posted 15 consecutive quarters of record profits? To move away from USANA, how is it that companies such as Mary Kay have been in business for generations?

USANA has been listed as a hot growth company by Business Week and has been in Forbes Magazines list of 200 best companies. (not the first time for either of those honors, by the way)

Pyramid structures have been around ever since more than two people have done business together. Major corporations are all pyramids (president, VP's management, workers.) Our government is also a pyramid - President, Congress, we the people. The "scheme" comes into play when products are an after thought.
USANA's products are cutting edge and have been independently rated as first tier in North America. The products effectiveness and quality are above question. They have been endorsed and used by Olympic athletes as well as many professionals and are manufactured to pharmaceutical grade standards.

Conclusion: Blanket statements regarding network marketing should not be used to sling mud at particular companies. Do your homework before passing judgment.

Virtually all anti-Usana propaganda on the net today, and specifically Mike's comments here on 5/17, are derived entirely from a report published in March of 2007 by Barry Minkow, an ex-con (for fraud) and short seller of Usana stock. Every one of the comments in Mike's post are taken, almost verbatim, from Minkow's report.

There is no possible way to offer a rebuttal to all of these comments in the limited space allowed here. It would take literally over 100 pages. I know, because I've spend the last several months researching Minkow's allegations against Usana, and compiling a great deal of compelling material that completely refutes his claims -- and these published Rebuttal Reports are, in total, over 100 pages.

I hope the moderators of this site will allow this link to these Rebuttal Reports because, again, it only takes a few dozen words for Mike to present his (Minkow's) allegations, but they cannot possibly be fairly and effectively refuted in this same limited space.

Please find the truth here: http://www.marketwaveinc.com/articles.asp

Note: I am not a Usana distributor or employee, nor do I have any financial interest in Usana Health Sciences.

Len Clements

I am an independant Usana distributor that is very inactive. I have not done a thing with the training, training tools, upline help or anything. I am on autoship and love the products, so I am included in the percentages given above.

I consume and give the products to my family and grandchildren. I am a very active senior who holds a full time job which is keeping me very busy (and that I happen to love) and have not had the time to invest in my Usana business since joining the company, only five months ago. So, I am not making money (my fault) -but I am healthy, happy and will make money when my current situation changes.

Take it from an "Insider" who is honest! And, we are the #1 network marketing company with the #1 nutritional supplements.

-74% of distributers fail within the first 12months-

-70% of compensation went to the top 3% of distributers at the company-

-87% of current distrubers are loosing money-

-There is no 75% direct to customer savings on products-

"Usana charges associates $40 for a 28-day supply of its top-selling multivitamin,usana essentials, more than double the retail price of other premium vitamins. A premium vitamin from competitor gnc corp., the Ultra mega green multivitamin, sells for %17 for a 28-day supply"
The Wall Street Journal

This has all the makings of a major wall street scandle as the companies stock is plumeting and over 10 lawsuits and have now been filed.

Everyday more ugly truth's about this company are exposed.

-74% of distributers fail within the first 12months-

-70% of compensation went to the top 3% of distributers at the company-

-87% of current distrubers are loosing money-

-There is no 75% direct to customer savings on products-

"Usana charges associates $40 for a 28-day supply of its top-selling multivitamin,usana essentials, more than double the retail price of other premium vitamins. A premium vitamin from competitor gnc corp., the Ultra mega green multivitamin, sells for %17 for a 28-day supply"
The Wall Street Journal

This has all the makings of a major wall street scandle as the companies stock is plumeting and over 10 lawsuits and have now been filed.

Everyday more ugly truth's about this company are exposed.

-74% of distributers fail within the first 12months-

-70% of compensation went to the top 3% of distributers at the company-

-87% of current distrubers are loosing money-

-There is no 75% direct to customer savings on products-

"Usana charges associates $40 for a 28-day supply of its top-selling multivitamin,usana essentials, more than double the retail price of other premium vitamins. A premium vitamin from competitor gnc corp., the Ultra mega green multivitamin, sells for %17 for a 28-day supply"
The Wall Street Journal

This has all the makings of a major wall street scandle as the companies stock is plumeting and over 10 lawsuits and have now been filed.

Everyday more ugly truth's about this company are exposed.

-74% of distributers fail within the first 12months-

-70% of compensation went to the top 3% of distributers at the company-

-87% of current distrubers are loosing money-

-There is no 75% direct to customer savings on products-

"Usana charges associates $40 for a 28-day supply of its top-selling multivitamin,usana essentials, more than double the retail price of other premium vitamins. A premium vitamin from competitor gnc corp., the Ultra mega green multivitamin, sells for %17 for a 28-day supply"
The Wall Street Journal

This has all the makings of a major wall street scandle as the companies stock is plumeting and over 10 lawsuits and have now been filed.

Everyday more ugly truth's about this company are exposed.

I have been an independant Usana Associate for over a year and a half now. I have, as with any new business, put in long hours and additional funds for sales tools, etc. My initial start up expense was almost all in products that I then comsumed. The support I have gotten locally, regionally, and at the corporate levels is the very best. Checks are coming into my account from the income that my business is generating.

Big corporations like IBM, and AT&T, etc. are adding the same business model that Usana uses.

I also own stock in the company, USNA, which has doubled in value since I purchased it.

There is no downside to this company from where I sit. I would strongly recommend it to anyone wanting to be self-employed and that is willing to work hard to have their own business with a top notch company!

I have been an independant Usana Associate for over a year and a half now. I have, as with any new business, put in long hours and additional funds for sales tools, etc. My initial start up expense was almost all in products that I then comsumed. The support I have gotten locally, regionally, and at the corporate levels is the very best. Checks are coming into my account from the income that my business is generating.

Big corporations like IBM, and AT&T, etc. are adding the same business model that Usana uses.

I also own stock in the company, USNA, which has doubled in value since I purchased it.

There is no downside to this company from where I sit. I would strongly recommend it to anyone wanting to be self-employed and that is willing to work hard to have their own business with a top notch company!

I have been an independant Usana Associate for over a year and a half now. I have, as with any new business, put in long hours and additional funds for sales tools, etc. My initial start up expense was almost all in products that I then comsumed. The support I have gotten locally, regionally, and at the corporate levels is the very best. Checks are coming into my account from the income that my business is generating.

Big corporations like IBM, and AT&T, etc. are adding the same business model that Usana uses.

I also own stock in the company, USNA, which has doubled in value since I purchased it.

There is no downside to this company from where I sit. I would strongly recommend it to anyone wanting to be self-employed and that is willing to work hard to have their own business with a top notch company!

I have been an independant Usana Associate for over a year and a half now. I have, as with any new business, put in long hours and additional funds for sales tools, etc. My initial start up expense was almost all in products that I then comsumed. The support I have gotten locally, regionally, and at the corporate levels is the very best. Checks are coming into my account from the income that my business is generating.

Big corporations like IBM, and AT&T, etc. are adding the same business model that Usana uses.

I also own stock in the company, USNA, which has doubled in value since I purchased it.

There is no downside to this company from where I sit. I would strongly recommend it to anyone wanting to be self-employed and that is willing to work hard to have their own business with a top notch company!

Dear Karyn,

I am sorry you had fallen on hard times and had to lose your commissions for the weeks you were not able to purchase your autoship requirement. But please remember, this is a business. You are not an employee of this company, you are(or were) an independent business owner. In fairness to the company, everyone who signs up and purchases an independent business is expected to read the rules and regulations before entering into an agreement. I did and I know the rules.

If a person starts this or any other business there are costs involved to keep the business going such as rent, postage, wages if you are an employer, etc. In this case, I view it as an autoship points requirement. Additionally, you had the opportunity to start with a lower start up package with a much lower start up cost. Or start with 1 business center and develop enough customers to then purchase and sustain 3 business centers.

How far upline did you go to ask for help in getting suggestions on how to keep your business alive? Basically, I have just a few retail customers who cover my autoship obligation to keep my business centers going. I refer to this as my "rent". With these high quality products, it wasn't that difficult to do that.

Karyn, this truly is a great opportunity. It sounds like you needed help in building your business. How much help did you have from your upline? What steps did you take to do everything in your power to not let it go? You had a dream when you purchased your business, correct?

Rather than blaming the company, what did you do to keep your own dream alive? When you purchased your business, were you truly committed to making it work, or did you allow it to just fade out? Forgive me for being a bit harsh but I have seen too many people get involved in a business and (not contact enough people in this case)or do the necessary things to make it work. How many people did you approach and just simply share either the plan or the products in a week's time?

Remember, just because you didn't make your autoship, you don't lose the distributorship, just the commissions for that week. Have you already voluntarily cancelled your indep. business? I hope not, because with focussed vision, I believe you still can make it work!

Best of success to you!

Dear Karyn,

I am sorry you had fallen on hard times and had to lose your commissions for the weeks you were not able to purchase your autoship requirement. But please remember, this is a business. You are not an employee of this company, you are(or were) an independent business owner. In fairness to the company, everyone who signs up and purchases an independent business is expected to read the rules and regulations before entering into an agreement. I did and I know the rules.

If a person starts this or any other business there are costs involved to keep the business going such as rent, postage, wages if you are an employer, etc. In this case, I view it as an autoship points requirement. Additionally, you had the opportunity to start with a lower start up package with a much lower start up cost. Or start with 1 business center and develop enough customers to then purchase and sustain 3 business centers.

How far upline did you go to ask for help in getting suggestions on how to keep your business alive? Basically, I have just a few retail customers who cover my autoship obligation to keep my business centers going. I refer to this as my "rent". With these high quality products, it wasn't that difficult to do that.

Karyn, this truly is a great opportunity. It sounds like you needed help in building your business. How much help did you have from your upline? What steps did you take to do everything in your power to not let it go? You had a dream when you purchased your business, correct?

Rather than blaming the company, what did you do to keep your own dream alive? When you purchased your business, were you truly committed to making it work, or did you allow it to just fade out? Forgive me for being a bit harsh but I have seen too many people get involved in a business and (not contact enough people in this case)or do the necessary things to make it work. How many people did you approach and just simply share either the plan or the products in a week's time?

Remember, just because you didn't make your autoship, you don't lose the distributorship, just the commissions for that week. Have you already voluntarily cancelled your indep. business? I hope not, because with focussed vision, I believe you still can make it work!

Best of success to you!

Dear Karyn,

I am sorry you had fallen on hard times and had to lose your commissions for the weeks you were not able to purchase your autoship requirement. But please remember, this is a business. You are not an employee of this company, you are(or were) an independent business owner. In fairness to the company, everyone who signs up and purchases an independent business is expected to read the rules and regulations before entering into an agreement. I did and I know the rules.

If a person starts this or any other business there are costs involved to keep the business going such as rent, postage, wages if you are an employer, etc. In this case, I view it as an autoship points requirement. Additionally, you had the opportunity to start with a lower start up package with a much lower start up cost. Or start with 1 business center and develop enough customers to then purchase and sustain 3 business centers.

How far upline did you go to ask for help in getting suggestions on how to keep your business alive? Basically, I have just a few retail customers who cover my autoship obligation to keep my business centers going. I refer to this as my "rent". With these high quality products, it wasn't that difficult to do that.

Karyn, this truly is a great opportunity. It sounds like you needed help in building your business. How much help did you have from your upline? What steps did you take to do everything in your power to not let it go? You had a dream when you purchased your business, correct?

Rather than blaming the company, what did you do to keep your own dream alive? When you purchased your business, were you truly committed to making it work, or did you allow it to just fade out? Forgive me for being a bit harsh but I have seen too many people get involved in a business and (not contact enough people in this case)or do the necessary things to make it work. How many people did you approach and just simply share either the plan or the products in a week's time?

Remember, just because you didn't make your autoship, you don't lose the distributorship, just the commissions for that week. Have you already voluntarily cancelled your indep. business? I hope not, because with focussed vision, I believe you still can make it work!

Best of success to you!

Dear Karyn,

I am sorry you had fallen on hard times and had to lose your commissions for the weeks you were not able to purchase your autoship requirement. But please remember, this is a business. You are not an employee of this company, you are(or were) an independent business owner. In fairness to the company, everyone who signs up and purchases an independent business is expected to read the rules and regulations before entering into an agreement. I did and I know the rules.

If a person starts this or any other business there are costs involved to keep the business going such as rent, postage, wages if you are an employer, etc. In this case, I view it as an autoship points requirement. Additionally, you had the opportunity to start with a lower start up package with a much lower start up cost. Or start with 1 business center and develop enough customers to then purchase and sustain 3 business centers.

How far upline did you go to ask for help in getting suggestions on how to keep your business alive? Basically, I have just a few retail customers who cover my autoship obligation to keep my business centers going. I refer to this as my "rent". With these high quality products, it wasn't that difficult to do that.

Karyn, this truly is a great opportunity. It sounds like you needed help in building your business. How much help did you have from your upline? What steps did you take to do everything in your power to not let it go? You had a dream when you purchased your business, correct?

Rather than blaming the company, what did you do to keep your own dream alive? When you purchased your business, were you truly committed to making it work, or did you allow it to just fade out? Forgive me for being a bit harsh but I have seen too many people get involved in a business and (not contact enough people in this case)or do the necessary things to make it work. How many people did you approach and just simply share either the plan or the products in a week's time?

Remember, just because you didn't make your autoship, you don't lose the distributorship, just the commissions for that week. Have you already voluntarily cancelled your indep. business? I hope not, because with focussed vision, I believe you still can make it work!

Best of success to you!

I am a past USANA representative, Why in the world did I give up such a great opportunity? because when I fell on hard times, couldnt afford my autoship, all the work I did to build my downline fell apart, no autoship, no commissions, with usana its that simple.

This is the thanks I got for spending over $1200.00 to purchase an independant business center.

NEVER again will I trust companies that want money upfront and make you enroll in autoship programs, they are a scheme to get the little guy to keep the head honchos in money and make the little guy do all the legwork.

Usana Health Sciences is a 12 year old solid company publicly traded on the Nasdaq under the symbol USNA. Its revenues for 2004 were near$272M US.

While there have been unscrupulous companies that have come and gone using network marketing to distribute their products or services, Usana is at the total opposite end of that.

Usana is not a pyramid scheme. A pyramid scheme is usually defined as a system of signing people up with no products involved and the people at the top make money while the people at the bottom do not. With this company, I know people who have started their businesses long after others and make more than some who simply haven't worked to build their business. Everyone has an opportunity to succeed if they want to.

Usana only pays people when products are sold. Period. They chose network marketing as their method of distribution because they would rather pay "individuals" for educating others on the effectiveness of top quality nutritional and skin care products through word of mouth rather than pay the high costs of advertising to "Madison Avenue" advertising companies.

Usana doesn't claim to be the #1 network marketing company, rather it has been voted #1 by 2 different media publications in the network marketing industry. The company has surpassed half a billion dollars in commissions paid out to its independent associates since inception. It has been voted "Best in State" for the 2nd year in a row out of 100 companies manufacturing nutritional products in the state of Utah. It has given 3 quarters of a million dollars to the Childrens Hunger Fund just to name a few highlights in 2004.

I am very proud to be an independent associate with this company! It has nothing but top quality management, scientists, staff, products and their chosen method to pay their independent associates. I suggest that the facts be straight about a company before using it as a scapegoat for disapproval of network marketing. Network marketing is a viable method of distribution for many high quality companies in many different industries. It takes effort and a positive attitude in this or any other sales industry to be successful.