USANA Health Sciences: A Bad Case of MLM?

Last week, Barry Minkow (infamous for the 1980s ZZZ Best Scandal) and his Fraud Discovery Institute released a 500-page report on USANA Health Sciences, Inc. (USNA).

The report alleged that the nutritional supplements, personal care products, and vitamin network marketer’s business model was founded on an untenable multi-level marketing [MLM] scheme, whereby no less than 85% of current distributors were losing money and no less than 74% of distributors failed within the first year.

On March 15, 2006, USANA filed a lawsuit against the Fraud Discovery Institute and Barry Minkow for defamation. In a public statement, the Company said, “USANA believes this is a campaign to manipulate USANA's stock price that is being orchestrated by an individual who served 7 years in prison for stock fraud…. According to reporting in the March 15, 2007 edition of The Wall Street Journal, Mr. Minkow bought 'put' options on USANA's shares in a bet the price will fall."

After doing our own due diligence, the 10Q Detective walked away skeptical, too—the dearth of transparency in the vitamin marketer’s regulatory filings raises serious concerns as to the legitimacy of USANA’s business model and the MLM ‘business’ opportunity itself: Associate Compensation Plan and Benefits.

According to USANA’s website, the only requirement necessary to become an ‘active’ Associate and “begin to earn a lucrative income through an innovative marketing program,” is either to (a) Complete an Associate Application form and purchase a Business Development System or (b) order USANA products that total 150 points.

According to the Pay Plan, a minimum of 250 volume points (weekly) are necessary to earn 40 in commissions; 5,000 volume points would earn the Associate $1,000 in commissions.

[Ed. note. Products are assigned a sales volume point value that is independent of the product’s price.] Management says that it is “committed to providing a highly competitive compensation plan to attract and retain Associates who constitute [its] sales force. [We] believe the USANA Associate compensation plan is one of the most financially rewarding in the network marketing industry. Associate incentives totaled $146.3 million, or 40.1% of net sales for the Direct Selling segment in 2006.”

The Company might want to talk down this marketing point, for the promise of exponential income growth belies reality—the average income for North American Associates in 2005 was $802.62.

Which makes us curious as to what USANA’s quarterly churn—or dropout rate—was for Associates? Albeit material—as distributors account for 86% of annual sales—this turnover number was not disclosed in any regulatory filings.

Operating results could be adversely affected if our existing and new business opportunities and products do not generate sufficient economic incentive or interest to retain existing Associates and to attract new Associates. – 2006 10-K filing

The Company is quick to disclose, however, that in fiscal years 2005 and 2006, USANA experienced a 16.7% and 15.0% increase in active Associates during each year, respectively!

According to Robert L. FitzPatrick, founder and president of Pyramid Scheme Alert: “To obscure their dismal numbers, some MLMs classify their distributors as "active" and "inactive." The Active group includes only recent participants and those still buying products or receiving rebates. Payout and retention statistics are then disclosed only on the "active" group.

Unknown, too, is how many of the Associates are—in actuality—Preferred Customers: in other words, what percent of goods purchased by the Associates are truly sold to ‘non-distributor’ customers? MLM are legal forms of business only under certain rigid conditions set forth by the FTC and state Attorneys General. Mr. FitzPatrick alleges, “

Many MLMs are currently in gross violation of these guidelines and operate only because they have not been prosecuted. Recent court rulings are using a 70% rule to determine an MLM's legality. At least 70% of all goods sold by the MLM company must be purchased by non-distributors.

As of December 30, 2006, USANA had 153,000 active, independent distributors, known as Associates, who accounted for 86% of the Company’s $374.2 million in net sales in fiscal 2006.

The retail sales business (Preferred Customers) accounted for 14% of purchases during fiscal year 2006.

Barry Minkow raises a legitimate query: Would not retailing to Preferred customers be the most desirable to USANA, in that they do not involve the expense of commissions or incentives to Associates? [Ed. note. Offset by advertising costs?]

The Company counts as active only those Associates and Preferred Customers who have purchased product from USANA at any time during the most recent three-month period.

Business Model

USANA’s networking sales model does offer scalable benefits, including: USANA’s business model does not require a company-employed sales force to sell its products;

The Company experiences minimal incremental cost to add a new Associate in the markets where it operates;

Commissions paid to Associates are tied to sales performance; and, Since payment is required at the time an Associate purchases product, the Company has virtually no receivables.

USANA has a monthly product subscription program known as “Autoship,” which provides a stream of recurring revenue. For the year ended December 30, 2006, approximately 52% of net sales in the Direct Selling segment came from the Autoship program.

The Company does permit new Associates a 30-day return policy only on their first order.

During fiscal years 2005 and 2006, returns as a percentage of net sales were 1.5% ($943,000) and 1.6% ($947,000), respectively. These product return numbers include both retail customer and new Associate returns. Undisclosed, however, was what percent of these returns were related to new Associates and/or monthly autoships belonging to older Associates (engaged to USANA for more than 30-days)?

The 10Q Detective did not note any red flags here, however, for these product return numbers were in line with other leading companies in the nutritional network marketing and nutritional product industry, including Herbalife, Inc. (HLF)- 1.0% of sales, NBTY, Inc. (NTY)-1.7% of sales, and Schiff Nutrition International, Inc. (WNI)-1.2% of sales

Stability of USANA’s networking business model is debatable, too, for the bulk of top-dollar commissions are reserved for the 3% of distributors, called directors, at the top of the pyramid. The earnings of these highly paid diamond and gold directors skew the average income of ALL Associates. The mean income of ALL distributors is probably less than $802 per annum.

[According to Minkow, this jeweled 3% earns 70% of aggregate commissions.]

Dr. Jon Taylor, Consumer Awareness Institute, says, “MLM—or Network Marketing Programs—are one of the most problematic of business models, in part, because the pyramid shape—or ‘relative vertical equality’—shape of the compensation system leads to extreme horizontal inequality in payout(s) over the entire network of distributors (i.e. huge payouts to a tiny percentage of participants, while the vast majority wind up losing the money and effort they invested over a period of time).”

At the 7th Annual Fraud Conference of the Association of Certified Fraud Specialists in San Francisco (September 27, 2006), Robert L. FitzPatrick said:

Far from a direct selling company operating in an open market, the MLM is a closed system with fixed prices and a built-in ratio of losers to winners. 99% will always lose in this closed system.

USANA, refutes such [Minkow’s] allegations, saying:

The claim by Mr. Minkow that USANA will 'run out of distributors' is false, misleading, and without any basis. The fact is that many professionally-managed multi-level marketing and direct selling companies have operated for decades. USANA's business model is dependent on consumption of its nutritional products, not the recruitment of associates.

While the recruitment of distributors is not sufficient—in of itself—to guarantee the future viability of USANA, distributors are necessary for the profitability of the vitamin maker—as they account for 86% of net sales.

Barry Minkow was more brusque in his comments:

Because 86% of USANA’s direct selling revenues come from distributors who ultimately buy into [their] “story,” it is both material and appears to constitute a significant misrepresentation [of the facts].

Granted, this is a brash comment, but was it necessary for USANA management to engage in ‘ad hominem’ attacks on Minkow, calling him a “convicted felon….out for nothing more than personal profit.”

In our view, USANA’s mudslinging only lends credence to Minkow’s allegations of predatory sales tactics.

USANA says that its “USANA business associates are under no obligation to purchase any amount of products beyond a $20 starter kit.” (A starter kit includes a detailed manual, including company policies and procedures.) This statement is somewhat misleading, for it is only the electronic format of the kit that it sells for $20. The actual cost is approximately $49 per starter kit.

If Associates wish to “continue to distribute products,” they must pay an annual “renewal” fee. The Company recognizes the annual renewal fee as deferred revenue, and it is recorded in ‘other current liabilities,’ recording the fees as income on a straight-line basis over a twelve-month period. At year-end 2006, deferred revenue—including prepayments for unshipped goods—were $3.1 million, up $1.2 from fiscal 2005.

Excluding the positive impact of foreign currency fluctuations, consolidated net sales increased 14.8% to $374.2 million in fiscal 2006, attributed to an increase in the number of active Associates.

Research & Development Issues

[USANA] scientists are continually reviewing the latest published research on nutrition, attending scientific conferences, and working in collaboration with a number of outside research institutions and researchers to identify new product possibilities and opportunities to reformulate existing products.

In fiscal 2006, USANA expended less than one-percent, or $3.2 million, of net sales on R&D, up 0.10% from fiscal 2005!

USANA introduced just one new product (line extension) in fiscal 2006, an Optimizer supplement, TenX Antioxidant Blast, which is a dietary supplement fruit bar fortified with important antioxidants, including quercetin and the Company’s patented olive-fruit extract, Olivol.

In addition, for all of USANA’s purported R&D efforts, the Company owns just two patents, issued in 2002! These patents are process patents and relate to the method of extracting an antioxidant from olives and the waste products of olive oil production.

Product Claims & Regulatory Issues

Numerous governmental agencies in the United States regulate the manufacturing, packaging, labeling, advertising, promoting, distributing, and the selling of nutrition, health, beauty, and weight management products. In the United States, the Federal Trade Commission [FTC] under the FTC Act regulates advertisement of USANA’s products, and where such advertising is considered to be product labeling by the FDA, under the Food, Drug, and Cosmetic Act [FDC] and regulations promulgated under that act.

USANA products are also subject to regulation by, among others, the Consumer Product Safety Commission, the US Department of Agriculture, and the Environmental Protection Agency.

Among other health claims made by USANA, the new TENX bar is advertised by the Company as being ten times more powerful than any other juice on the market. The Fraud Discovery Institute had this product tested by independent third-party labs to determine whether or not this potency claim was true in a replicable test.

[Ed. Note. Minkow publicly stated that the intention of this—and lab tests done on other products—was not to accuse USANA of deliberately not putting enough of the active ingredients in their products, but rather to test their products in order to corroborate or refute potency claims.]

The Company makes these potency claims at weekly ‘opportunity’ meetings to potential distributors.

The Fraud Discovery Institute reported—among other findings—that test results showed that TENX was just over two times stronger than eight ounces of Langers Grape Juice Plus—nowhere near ten times stronger.

In fairness to USANA, a review of FDA Enforcement Activities, including warning letters sent to vitamin supplement makers, indicates that the Company has no history of regulatory problems with the FDA.

Nonetheless, an important consideration raised by Minkow and the Fraud Discovery Institute—if potency claims are called into doubt—what does this portend for USANA’s premium pricing strategy?

Other Investment Considerations

Currently, a significant portion of net segment sales are concentrated in the North America region, representing 67.5% of net sales in 2006; however, management believes that over time the Asia Pacific region will continue to account for an increasing proportion of total net segment sales.

On January 8, 2007, USANA commenced operations in Malaysia, and will include this country as part of its Asia Pacific region in 2007 (19.2% of sales in fiscal 2006).

China will not be part of this growth equation: On December 1, 2005, China announced the adoption of new regulations governing direct selling. Single-level compensation models are permissible under the new regulations; however, these regulations prohibit multi-level compensation models as practiced by USANA.

Valuation Analysis

Recent insider trading activity is neutral. Founder, Chairman & CEO Myron W. Wentz did sell 170,000 shares—at $60.98—back on February 12, 2007; however, given that Messer. Wentz beneficially owns about 46% of the company stock, or about 8.2 million shares, attaching any material significance to these two trades is meaningless.

For fiscal 2007, management expects net sales to increase 15% to 17% and share-net to climb 17% to 20%, or in the $2.57 -- $2.64 range, attributable to improved gross margins and a lower proportion of its net sales coming from the Contract Manufacturing segment.

A bewilderment of lie and half-truths? The Contract Manufacturing Segment contributed only $9.3 million, or 2.5%, to consolidated net sales during the year ended December 30, 2006. How much in future savings can possibly be wrung out from this segment?

At the current share price, USANA is selling for about 19 times forward 2007 earnings’ estimate, which is near the lower-end of its three-year historic P/E multiple (16x – 24x).

Any good news could panic the short-sellers to cover their open positions, causing a short-squeeze. According to short-squeeze.com, as of late February 2007, short interest was currently about 24% of the float, and would take almost 11 days to cover.

Given USANA’s fundamental outlook, the current 20 percent pullback in its share price might be a good inflection point—if one believes that the Company’s MLM business model is sound.

To the contrary, Barry Minkow’s asserts that “if new distributors knew about failure and collapse rates, the inability to resell hopelessly overpriced products and that most of the money paid in commissions goes to the top 3% of the Usana distributors, Usana's ability to attract new distributors would be materially adversely affected.

The 10Q Detective agrees that any changes to its business model—such as more retail sales exposure—would be disastrous to margins and earnings momentum.

In our view, however, Barry Minkow’s tenet that people’s ability to interpret ‘failure and collapse rates’ is well-intentioned, but based on a faulty premise—that we can learn from others’ mistakes. To wit: MLM, network marketing, dinner party—or whatever you want to coin the phrase—schemes and scams has been around for decades. Why?

“Work is a necessary evil to be avoided” – Mark Twain.

There is a catalyst that has the shorts salivating. Just aired from the Company’s ditty bag: The Company disclosed on March 19 that the SEC has begun an informal inquiry over the recent allegations on possible fraud and the legitimacy of the company's business model.

The 10Q Detective is neutral on the prospects of USANA, with a slight downside bias.

In our view, however, the options market has already discounted any profit potential in the downward bias in the share price. The asking price for July 50 puts is $5.50—representing all time premium.

Editor David J Phillips does not hold financial interests in any of the companies mentioned in this posting. The 10Q Detective has a Full Disclosure policy.

Comments

[terrihamel]

Re: your comment that "the promise of exponential income growth belies reality—the average income for North American Associates in 2005 was $802.62". I joined USANA as a distributor in 1998, after becoming interested in its products. Although I did initially consider developing a business, I was too busy teaching to spend the time necessary to do so. Having now retired from teaching, I have begun to work at developing my own USANA business group. I spent almost a decade consuming USANA's products (we are forbidden by law and company policy from making anecdotal comments regarding, for example, such things as consistently obtaining outstanding results from personal use, such as significantly reduced duration and intensity of colds, et cetera, which might suggest that the high quality of the product's patented components could have had anything to do with such a claim, so I will refrain from commenting on my reasons for paying more for a supplement that actually fully dissolves in your system than I would have for the bedpan bullets you can pick up at any drugstore). As someone who initially intended to develop a business, but did not do so, I am among the many who helped to bring the average income down to fewer than one thousand dollars. The upside of this is that I was never asked to relinquish my distributorship for lack of productivity. Now you tell me this: wouldn't it truly have been a pyramid scheme had I been making money all these years, even though I wasn't doing the business? I take USANA's products for the same reason that you drive what you do, instead of the kind of vehicle that has more vertical miles than horizontal ones. Mr. Phillips, you need to sit down and have a chat with Dr. Wentz and his management team. You literally don't know what you're missing, in more ways than one.
Sincerely,
Terri Estes
[e-mail]...

[terrihamel]

Barry Minkow is a convicted felon: his potency allegations are false. Anyone can launch a lawsuit based on spurious allegations. USANA is countersuing and will be vindicated.
wwwTERRIHAMELdotUSANAd...

[terrihamel]

USANA: Straight Up

If you're not aware of the recent 'controversy' surrounding USANA Health Sciences, you've been missing an interesting series of articles. I am writing here as someone who has been taking the products for nearly a decade, so I'm not unbiased. I've recovered my costs in marketing USANA vitamins to friends and family, but have yet to make a serious stab at the business. I don't know if having consumed their products is supposed to disqualify me from making comments or asking questions, but I'm going to take a stab at it anyway. In spite of the fact that I'm not a stock analyst, self-proclaimed or otherwise, I'd like to share my perspective from an 'inside' point of view. I'll keep it simple, so even the most intelligent can grasp it. Don't look for technical brilliance, but I think it's a story worth hearing.

I'm a teacher. If you know anything about schools, they're germ factories. For a variety of reasons, genetic and otherwise, I've never had a strong constitution. Plainly put, I used to catch everything the kids brought into the building, and then some. One day I was visiting my older sister, and noticed a product catalog for a nutritional supplementation company sitting on her coffee table. Everything in it was footnoted and referenced back to long-term, placebo-controlled, double-blind studies published in mainstream medical journals. Having completed six years of university, I was curious, and asked her about it. She told me flat out that the people next door, who had left her the catalog, were pushing a pyramid scheme. I nodded knowingly, having no idea what that was supposed to be, waited until they left the house, hightailed it over to the neighbors' place and banged on the door.

They were happy to see me (you probably guessed that already). I sat down with them for over an hour as they told me their story. Their daughter had been suffering from a certain health problem that traditional medicine hadn't been able to help. Someone told them about the products. Their daughter took them and, over the course of several months, her health dramatically improved. Causation or correlation? I didn't care. What was there to lose? Not my health, that was for sure. There was one catch, however. These people wouldn't sell me any product. They wanted me to sign up with them in their business.

Big mistake. I've since learned that this goes against on of the most important aspects of building a network marketing business, which is to have a solid base of preferred customers (these people were not following the company's compliance protocol: USANA is relentless in emphasizing the importance of bringing in loyal product users. I wanted the product badly enough, however, that I signed up with them to get my initial order. Once it arrived, I quit... but I had my vitamins).

Within a matter of weeks, taking the product religiously, I experienced a profound change in my health. Colds didn't seem to stick. I slept better and had more energy. Did taking the product cause, or merely correlate with, the changes in my health? Who cared? All I knew was that I wasn't getting sick all the time.

Then I ran out of vitamins. Not only did I run out but, before too long, I was catching colds again. Seriously. By this time, I'd twigged onto the fact that ordinary people could actually sell this stuff. Now I was curious about the whole enchilada. I somehow ended up in Vancouver, British Columbia at a marketing seminar led by one Michael Oliver (google away for more). I sat in the back of the room with a bucket of school assignments and starting grading them as he began to speak. Fifteen minutes later I put up my hand and told the group that I was putting the bucket away. I'm sure there were people in the room who thought I was a plant. The fact was that his seminar was complete devoid of hype. I'm proud to say that Michael Oliver eventually became a deeply respected friend, but that's another story.

Six months later, I chose a different person with whom to sign up. Any teacher can explain why I never did get around to building much of a business. Evenings and weekends were recovery time. I loved my job, as well as my students, but I simply didn't have time for anything else. Ironically, I now realize that, during those years of taking the product each month but doing little to sell it, I was one of thousands who were dragging down the company's distributor earnings ratio. You see, I qualified as an associate but, as far as USANA's computers knew, I might as well have been out there trying to build a business and failing miserably (if it was truly a pyramid scheme, I might have been raking in some money simply through my position on the totem pole). The truth was that I wasn't getting paid (much) because I wasn't doing the business (much).

Last year I moved from Canada to the United States, having met (at the 1999 USANA convention, of all places) and married the man who became my best friend, a wonderful American whose story closely parallels mine. I've recently been training with some of the most successful people in USANA (it's free, and available to all associates), and I'm planning on giving the business a serious go this time. But I'm under no illusions that anyone's going to do this for me. "If it's to be, it's up to me." (I understand that some people, having ignored USANA's Business Development System and tried to reinvent the wheel, haven't done so well and are now jumping on the lawsuit bandwagon).

One thing: I've yet to read a posting where one of your analysts, citing the allegations of Barry Minkow (a convicted felon, no less) has approached USANA's founder, Dr. Myron Wentz, for his response to such allegations as, for example, the alleged inaccuracies in product labeling. It's curious, given that Dr. Wentz's ongoing work continues to be published in mainstream medical journals, that your commentators are relying on the words of a convicted felon rather than going to the source and asking for documentation. That would require a bit more work, but don't you think it makes sense (particularly when you learn that USANA is affiliated with the Linus Pauling Institute, that Dr. Wentz just picked up the Albert Einstein award in Jerusalem, and that the company has garnered numerous other accolades of which they could rightfully boast)?

But then, I'm not a stock analyst. Nonetheless, I still think a teacher should be allowed to express an opinion. And stories are the backbone of life.

Terri

CatchingWaves@excite.c...

[levcommunique]

Terri,

First of all, I'd like to apologize for any spelling or grammatical error in my comment here. I come from Malaysia and English is not my first language.

Anyway, in regards to your comment, "I was one of thousands who were dragging down the company's distributor earnings ratio"... I am one of them too. Now is the saddest moment to those people that are really touched by USANA's products.

I am one of many persons who open three business centers (BCs) as a USANA associate, but never really run the business. I have my own reason to do that. To open 3 BCs, all I need to do was to buy 14 sets of Essentials and RM99 (USD29) for distributor kits (planner, catalogue, etc). But prior to that, I already know that the Essentials' expiration period will last more than 14 months. So I figure, rather than buying one Essentials for one month and only have 1 BC, I'd just buy 14 of them, get 3 BCs and consume them myself before they expire. Bottomline, it only takes me USD29 to open 3 BCs because I don't throw away the Essentials. I consume them all myself.

And now that I've consumed the nutritions for 3 months, I experience improvement in my health condition. But the thing is, my 3 BCs are still idle. Still not looking for prospects. But I am still enjoying the products and happy enough because I am going to consume it anyway. The 3 BCs are merely like a bonus to me, waiting for me to run it.

Well I guess this is the dark side of capital business. Maybe network marketing company shouldn't be public listed anyway. As the share price goes up & ripe, there will be people like Mr Minkows, who knows where to find USANA's competitors & cheated distributors, and use them to support his points. As the share price goes down, he smiles because he already bought 'put' options on USANA's stock. But the thing is, unfortunately, USANA did also make 'unreasonable mistakes' on the credibility of it's big management personnels like Dr Dennis Waitley, Dr Timothy Woods, Dr McNamara and a couple more. That one is tough... really really tough... *sigh*

Rahman

[info]

My feeling is "where there is smoke there is fire." There are people who are getting hurt. We, however, are involved with a TEAM, COMPANY and BUSINESS where people are safe and products are purchased and used by real people. We do not take orders, collect monies or deliver products! As one of my partners says, "I just introduce people to something REAL and GOOD and WHOLESOME and HONEST." Michael www.ToxicPreventionSpe...

[danielN]

I live in New Zealand at the moment and I agree with most others here, I did join the business but I really did not do much other than just recovering the money i spent on buying the business centres(3BC). Once i recovered the initial investment, i only consume the products, probably making me as one of the 'losing money' associates. But i really am happy with taking the one of the best products that's available (seriously, i do know what Mr Phillips is talking about, but i don't care if there isn't enough ingredients, i don't care the supplements only contain 2 times stronger than other stuff, it still is one of the best! and what comes first before all the money in the world? my health! so i want the BEST for my body) It was just my humble opinion and thanks for reading. :)

[USANAvitaminsDistributor]

I have been a Usana Distributor or Distribuidor Usana vitamins for about two years now, i ran my usana business internationally in mexico, canada, uk, taiwan, australia, singapore and malaysia.
Like any business it requires work, marketing and dedication. i am making a decent income and will retire soon from my 8 to 5 job.

This is a great opportunity because the usana nutritional products are of the highest quality. the mercedez benz of nutrition.. you get what you pay- always!

for more usana product and opportunity info:
wealthclub.usana.com

[aaronloybiz]

There are a few fundamental problems with they way Minkow compares.

For his comparism on products, it's like taking an 2.0L Mercedes and comparing with a 2.0L Hyundai. Obviously we know which one is more expensive. Following Minkow's arguements, Mercedes is overpriced, because both are cars, both have 4 wheels, a steering wheel, windows and such.

And for business. The attrition rate is the same for ALL MANNER OF BUSINESSES, be it traditional or MLM. 9/10 Failure rate is a norm. Morever, there are no indications of a GUARANTEED success. As with anything, the full potential is highlighted and it is obviously attainable, because people have done so.

And it's as if it isn't far to pay the more successful individuals more money then those who are 1.new and 2. not as successful. It's the way the world works. Any business, Any job, Any industry, the more successful you are, the more you earn. Sue the CEOs of traditional business for earning 10-1000x the salary or their normal employee? Bullsh*t.

And joining an MLM company is starting a REAL business. Many people forget that because it is so easy to join. Well, in a real business, you need to put in effort to get results right? Minkow's interviewees, from they way I see them, expect their business to magically flourish without effort whatsoever. That's their problem, not the company's. An opportunity was provided but not acted upon.

businessbugger.blogspo...

[User 126096]

I am a Usana associate and I am extremely annoyed with Barry Minkow, and anyone who writes comments about Network Marketing in negative form. Because of this company, I have formed a very successful Usana business with TEAM members in my downline who have done well, also. Becasue of this business, we have become close friends. It brings people together, to do something good, spreading the news about a health lifestyle and creating a stream of income to fit one'ss needs. I am not financially free by any means, but the residual income I earn every month, due to my OWN HARD WORK and WORKING TO BUILD A BUSINESS gives me the comfort I worked hard for. 92% of people who join companies like this fail because they don't work it. They don't have the mentality to be a business owner. This is not a get-rich-quick scheme! I worked my business 14 hours a week for 1.5 years before I started having success. If it was sooooooo easy to be financially rewarded, the percentage rate would be a success of 92%.

If you associate yourself with good, honest people who truly care about helping others which is what this is suppossed to be about....then it works and it does. Usana has cancelled associate memberships of people who have been quote behaving unethically.!

People who make negative comments about the network marketing industry need to better educate themselves. There are bad apples in EVERY business! It does not mean that whole thing is bad. If you eat a meal at a bad restaurant, does that mean all restaurants are bad? If you meet a few bad people, does that mean all people are bad?

A second reason for the point requirement is all real businesses have start up costs and overhead to operate the business. Our autoship every four weeks is part of our overhead to operate the business. The good news is you get to eat your overhead.

Berry Minkow is a man of low character and a convicted felon. He spent 8 years in prison for defrauding a lot of people out of $26,000,000 dollars in a stock investment scheme for a carpet cleaning business that he started in California.

As you know he bought "put" options before releasing a bunch of half truths and some outright lies about Usana Health Sciences to the Wall Street Journal. He was paid by a third party to gather and release this information. As a result of his actions, Usana is suing Berry Minkow for defamation and his attempt to manipulate stock prices for his own personal gain. Funny how people never seem to change. Once a crook, always a crook.

Dr. Wentz's has dedicated his entire life to science and helping people overcome sickness and disease. He developed over 40 viral test kits that are used in hospitals and doctors offices all over the world, including the first portable test kit for Epstein-Barr Virus which made him internationally famous in the scientific medical community.

He built the premier health and healing center in the world in Baja California called Sanoviv and brought in some of the best doctors from around the world to staff it. He built a medical center for diagnosis and prevention of disease in Africa with money out of his own pocket. He is building a second such facility in Cambodia with his own money because he sees a need. He has personally donated hundreds of thousands of his own dollars to the Children's Hunger Fund. He donated 10 million dollars to the University he graduated from. He recently won the Albert Einstein Award for outstanding achievement in the life sciences for his vision and commitment to the critical advancement of vital life-saving and life-enhancing technology to benefit mankind. He has never drawn a pay check from Usana. How many CEO's do you know who fall into that category? The bottom line, Dr. Wentz is a real man of global vision dedicated to helping others.

When you compare Dr. Myron Wentz and Usana to Berry Minkow, which one would you want to be associated with and follow?

Have some more sense, all of you and research both sides of the story. Better yet, ask a real Usana associate.

[elva]

I'm a fan of USANA. It's a good company with great products. My whole family has been taking USANA products for 3 years. I do trust the company and its products no matter what.

hsb.usana.com

[User 187047]

I'm always annoyed by anyone who talks positive about MLM. Thus I found a great blog that voices my opinions in a very clear manner. Sorry. but I'm not good at writing our my thoughts. Read the blog I linked to to read more. He's a great guy:
www.moblog.com.sg/blog...