Finally, USANA Receives FDA certification for Pharmaceutical Good Manufacturing Practices.

 I have criticized USANA for many years for not seeking certification to back their claim that they adhere to "Pharmaceutical GMP". But after 19 years, USANA finally gets the certification and can now use this fact to bolster their product's manufacturing quality. The certification was done by none other than the United States Food and Drugs Administration. Finally, USANA does something right.

Now if they can fix their compensation plan to eliminate the pyramid scheme in which 99% of associates who joined the business opportunity with the intent to make money actually end up losing money. Those with no intent to make money sign up as preferred customers. All associates are required to continually purchase over $100 worth of product every 28 days in order to participate in the business venture. Those mandatory purchases pay out commission to the upline associates. However, the associate making those purchases receive no commission even if they retail the product. This is why I believe USANA is a pyramid scheme.

The FTC made the following statement regarding pyramid schemes:

"...a multi-level compensation system funded primarily by payments made for the right to participate in the venture is an illegal pyramid scheme." - Staff Advisory Opinion - Pyramid Scheme Analysis

Now one of USANA's very top associates who claims to have made over $4 million as a USANA distributor recently made the following statement when explaining to team members whether they should join as distributors or non-distributors:

"Our recommendation, unless you plan to make a lot of retail sales (which most Associates don’t, because of the USANA PC Program), would be to enroll as a non-Distributor Associate, since you would be charged sales tax on the lower, Wholesale, rather than Retail, prices of taxable items for your location." - Distributor or Non-Distributor Associate - by Pete and Dora Zdanis

So like I have pointed out many times, USANA's distributors cannot retail the product because the preferred customers get it at the same price the distributors do. Here we have a top USANA distributor who has been with the company for 18 years (since the beginning) admitting that most associates don't make a lot of retail sales because of the preferred customer program. USANA has 213,000 ACTIVE associates and 70,000 ACTIVE preferred customers. Since there are 3 associates for every 1 preferred customer, it doesn't take a genius to come to the conclusion that very little marketing of USANA products goes on beyond the associates.

I bring this up to make my point that USANA's commissions are funded primarily by their associates' required 4 week purchases which are made for the right to participate in the venture and be commission eligible. The FTC stated that commissions funded primarily by these required payments is illegal pyramid scheme. I believe USANA can do it legitimately by doing one of two things.

1) Either stop FORCING associates to purchase over $100 worth of products every 4 weeks in order to be commission eligible (you lose any sales points built by preferred customers or downline associates if you fail to make these purchases)

OR

2) Stop paying commission to upline distributors from the FORCED purchases made by their downline distributors in order to fulfill business obligations. The associates are buying product from USANA, not each and every upline distributor above them.

Of Course, USANA will never consider doing either one of my suggestions because it would collapse the pyramid scheme and the company would go out of business in less than 3 months. This is because the only distributors who would continue to make product purchases would be those who actually want to product and not because it is a required business obligation.

So how about it USANA, would you like to make the next step in the right direction?