All good multi-level marketing companies have one thing in common: They fail to disclose enough information to allow consumers and regulators to determine if they are in the business of recruiting or selling products. They disclose just enough facts and figures to make it appear that they are being transparent. But they hide enough information that no one could ever determine definitively if they are running pyramid schemes.
MLMs cleverly avoid the pyramid scheme issue by making it impossible to determine the level of retail sales of products to consumers. The companies effectively use the technique of plausible deniability: They purposely do not track retail sales, so when the business model is challenged with the assertion that few retail sales occur (and therefore they are recruiting schemes), executives can claim that they know no such thing!
Usana Watchdog has released a report on Usana Health Sciences, challenging the company’s failure to reveal meaningful facts and figures that would allow consumers and law enforcement to determine whether the company is running an illegal pyramid scheme. Continue reading
Guest Post by USANA Watch Dog
USANA has found a way to possibly expand its multilevel marketing opportunity into every country in the world, including unauthorized regions such as mainland China.
An internal USANA document shows virtually no limit to the number of distributors who can sign up using the same home address as well as the same credit card:
- With project upgrade complete IT has been able to help this situation with two new enhancements.
- First, as of January 26th the online enrollment system will not accept any address as a home address if that address has already been used by more than 15 other active associates. Continue reading
Usana Watch Dog has been busy compiling more data about the Usana Health Sciences “business model” for distributors. He writes about what I already know from my years of research into multi-level marketing schemes: Nearly everyone loses money in these schemes, and those who do make living are almost always those at the top of the pyramid. 99% of the people lose money so that a fraction of 1% at the top can make the big money. That, my friends, is no legitimate business model.
Our friend Usana Watch Dog has compared the 2006 data compiled by Usana on their distributors to the data he was able to manually extract from what Usana currently publishes. You can see from the 2006 data that the vast majority of the distributors who are receiving commission checks are “sharers” or “believers,” and they were earning an average of about $200 per year. Incidentally, this $200 is not even enough to cover the minimum purchases the distributors are required to make in order to continue to be eligible to receive a commission check. Continue reading