Health Sciences Usana, Inc. , or USANA , is a Utah-based multi-level marketing company that produces a variety of nutritional and dietary supplement products. Usana products, mostly manufactured in the company's West Valley City facility, are sold in 20 countries through an independent distributor network (referred to as "partners"). Usana is the 24th largest multi-level marketing company in the world. The company has sponsored and provided products for several athletic organizations. In 2007, some Usana executives were known to have made false statements in their resumes.
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Usana was founded by immunologist and microbiologist Myron Wentz. Usana, based in West Valley City, Utah, sells its products through multilevel marketing: recruiting distributors and profits from other distributors. Products are not available through retail channels, but can only be obtained through one of its independent distributors (referred to as "partners") or through direct orders through the company. By the end of 2014, the Company has 349,000 active partners and 81,000 "Option Customers" active in worldwide distribution networks. In 2012, 91% of product sales are purchased by partners In 2013, the products are marketed in the United States, Canada, Australia, New Zealand, UK, Netherlands, Japan, Hong Kong, Taiwan, South Korea, Singapore, Mexico, Malaysia, Philippines, France , Colombia and Thailand.
Beginning in 1993, Dallin A. Larsen served as vice president of sales at Usana (and later as consultant to Usana's president and special adviser to the board of directors) before establishing the MLM beverage company Monavie in 2005.
From 2004 to 2006, Usana was named on Forbes list of "200 Best Small Companies". In 2007, Usana was not included in the Forbes "200 Best Small Forces" list, and an article in a magazine citing industry and government experts who had raised questions about Usana's business practices and products, Usana responded by issuing a press release denying that the company has breached a $ 40 million loan agreement with Bank of America.
In 2007, Usana faced recurring controversy after several executives were known to have made the wrong statement about their qualifications. Executives include Denis Waitley, a member of the board of directors who had wrongly claimed to hold a master's degree from the Graduate School of the Navy; sales associate Ladd McNamara, who left the company's medical advisory board after it was discovered that his license for medical practice had been revoked; Vice President of Research and Development, Timothy Wood, who was found to have a doctorate in forestry, as opposed to biology as he claimed; and Executive Vice President and Chief Financial Officer Gilbert Fuller, who continued to use the CPA degree, even though his CPA license had expired 10 years before he joined Usana in 1996.
In August 2007, Usana announced that it had been notified by the Securities and Exchange Commission (SEC) that its shares would be removed from the NASDAQ because the company had failed to have financial information in its Q10-Quarter Form reviewed by an independent auditor. Usana reported this because their public accountant resigned and has not been replaced. In October 2007, Usana announced that NASDAQ had determined that they were obedient and their stock would continue to be listed.
On January 3, 2011, Usana completed the transfer of common shares from NASDAQ to the New York Stock Exchange.
On May 10, 2011, it was announced that 4 of Usana's executives (COO President and COO Fred, CFO Jeffrey A. Yates, EVP from Sales Mark H. Wilson, and VP of Finance Riley Timmer) unexpectedly resigned from their position in the company to pursue unspecified business opportunities.
In fiscal 2012, 2013, and 2014, Usana spent $ 4.7 million, $ 5.1 million, and $ 5.1 million, respectively, on product research and development activities, while earning $ 648 million, $ 718 million, and $ 790 million in total revenue over the same years, respectively. Thus, representing less than 1% of the company's annual revenue.
Maps USANA Health Sciences
Products
Usana produces three product lines: Usana Nutrition (Essentials, Optimizers, and Digestion/Detox nutritional supplements), Usana Diet & amp; Energy (Rearrange food replacement shocks, protein bars, and energy drinks Rev3), and SensÃÆ'Â © personal care (skin care, skin care, and hair & body care products). Usana produces 90% of its products at home, including all tablet nutritional supplements.
Some products from the Usana Nutrition range are listed on the Australian Register of Therapeutic Goods (ARTG). Some Usana products are certified for product labeling accuracy by NSF International in the "Dietary Supplements" category. Usana Essentials was tested in 2011 by ConsumerLab.com at Multivitamin and Multimineral Supplements Review of 38 leading multivitamin/multimineral products sold in the US and Canada. The Essentials passed the ConsumerLab test, which included testing selected index elements, their ability to break down in a US Pharmacopoeia guideline solution, a tin contamination threshold set in California Proposition 65, and meeting the requirements of the US Food and Drug Administration (FDA) labeling.
Commenting on the relatively high cost of the Usana supplement, Anthony Almada, Chief Scientist of the nutritional supplement industry consulting company, Imaginutrition, told Forbes The economic realities of Usana, and other multilevel marketing entities, mandated that their products were always have a strong uniqueness and convincing evidence of consumer relevance and excellence - can be achieved only through rigorous clinical trials - for their retail counterparts. "These comments are supported by natural health product specialists. Jean-Louis Brazier from the University of Montreal Pharmacy Faculty who examined Usana's products for the Radio-Canada consumer report showed La Facture . Brazier found that the price was two to three times the price of store-bought merchandise, and there was no evidence that Usana's products were of a better quality than their competitors.
John Cloud, senior writer for Time magazine, evaluated nutritional supplements in which he took the Usana pill regimen, protein bars, powdered beverages and psyllium fiber as recommended by the company's online evaluation. Cloud took a blood test before taking the product to determine the levels of calcium, protein, sodium, cholesterol, glucose, and other substances, and then tested again five months after taking a supplement regimen, which included 3,000 pills at a cost of $ 1,200. Follow-up tests reveal changes in only two values; a 75% increase in vitamin D levels (associated with Cloud-boosted vitamin D3 supplements) and an increase of 28 mg/dl density lipoproteins, which can not be accounted for. Cloud also experienced a placebo response in which the action of taking supplements made it feel stronger even though no physiological reasons were present. This response also led to a 10-lb weight gain, because her stronger beliefs caused her to make poorer dietary decisions - a phenomenon called "licensing effect".
Business model
Usana, a multilevel marketing company, sells its products primarily through non-employee distributors known as "sales partners" as well as over the Internet. Partners can be eligible to receive commissions based on the sale of their own products as well as through the sales made by the new distributors they recruit (referred to in terms of multilevel marketing as "downline"). The Usana compensation plan rewards the 'points' for sales volume. When a point reaches a predetermined number, the partner is paid. If the points do not reach the payment threshold, they will accumulate toward next week. The Company requires the association to purchase at least 100 product volumes (equivalent to about $ 110- $ 130) every four weeks in order to remain eligible for compensation. If this minimum is not maintained, the distributor loses accumulated but unpaid points. According to the documentation of the Usana company, 87% of colleagues failed to make enough of the commission to recover their eligible purchasing costs with 67% of all employees not making commissions; 72.2% of the company's commissions earned by 2.31% of the top associates. According to a 2011 article published by the Salt Lake City Tribune, the company's FY09 disclosure statement reveals that the company's average annual earnings of 165,710 counterparts, which included their new start, was $ 617, while "top-of-the-pyramid distributors earned flat $ 857,865 per year ".
The 2010 income disclosure statement defines "peers" as those who actively build a business, act as a wholesale buyer, or a new distributor. The SEC 10-K company submission in 2009 drew the distinction between peers and preferred customers. Partner is an independent distributor of Usana products who also purchase their products for personal use. The selected customer may purchase the product, at wholesale prices, strictly for personal use and not allowed to be resold or distributed. As of July 2011, the company has 222,000 active Associates and 68,000 preferred customers.
Usana colleagues are bound by distributor agreements, which prohibit distributors from making "misleading claims of income" to potential partners, and from making health claims for products. However, an investigative report broadcast by Radio-Canada in February 2009, which included recording hidden cameras from recruitment and other sessions, found that one group of colleagues appeared to violate company policy. The program contrasts information about the potential revenue presented at meetings and written materials with Canadian legal requirements for multi-level marketing schemes to provide clear, frequent and complete information about revenue from typical participants. In addition, the same group of colleagues filmed making recommendations for using USANA products to treat diseases including leukemia.
In 2008, two Canadian distributors Usana were given $ 7 million in compensation for damages related to their dismissal from the company. The Company has terminated its position in 2003 for believing that its distributors have violated company policies and procedures.
New Zealand government statistics expert for the Trade Commission, Dr. Murray H. Smith, who served as an expert witness in every case of a pyramid scheme proposed by the Commission before 10 years, argued in 2008 that very few Usana distributors tend to be rich, and stated "You can make a very strong argument that this can into a pyramid scheme. " When asked by the National Business Review to review the company's business structure and compensation plan, it is Smith's opinion, from an illegal statistical point of view, that the company exhibits a number of common characteristics in pyramid schemes including that most members earn back less than what they pay to participate; that those at the top of the structure are more likely to make more than those at the bottom of the structure; and as the company grows, it will be increasingly difficult to recruit others. Dr. Smith also recorded a significant turnover of the company in the distributor so it is necessary to continue to recruit.
Sponsors
Athletics
Usana has been a sponsor of various athletic organizations. Usana offers the "Underwriter Program" to select sponsored athletes. This program enables selected participants to enter into agreements with companies stipulating that, if an athlete enrolled in a positive test program for prohibited substances (included in the World Anti-Doping Agency regulations) as a result of taking Usana products, the company would provide athlete compensation up to twice the current annual income of up to $ 1 million USD.
Female Women's tennis
In 2006, Usana signed a co-sponsor agreement with a WTA tour and extended the agreement in 2011. As part of the agreement in 2011, Usana donated $ 1 to the Children's Hunger Fund for every ace printed at WTA tournaments starting at Wimbledon and continuing through the end of the season.
Usana Amphitheater
In 2003, Usana became the main sponsor of USANA Amphitheater, an outdoor amphitheater based in West Valley City, Utah with a seating capacity of 20,000. In May 2012, United Concerts announced an advanced naming rights partnership with USANA Health Sciences until March 2018.
Claim
On February 20, 2007, Barry Minkow, founder of the Fraud Discovery Institute, distributed a 500-page report to officials at the US Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI) and Internal Revenue Service (IRS)) accusing Usana of operating an illegal pyramid scheme. Usana retaliated with the lodging suit against Minkow and his company claimed defamation and stock manipulation.
According to an article published in San Diego Reader , Usana later became the subject of an investigation by the SEC. The SEC conducted an investigation into Usana's business practices in March 2007 and found no incriminating, concluding its investigation without recommended enforcement action. The company's old audit firm, Grant Thornton, resigned in July 2007 for disagreeing with Usana regarding the procedure for an independent investigation outside of the allegations. Due to not having an auditor, Usana was late with official government submission and did not comply with SEC and NASDAQ requirements.
On the day the Minkow report was released, Usana shares traded at $ 61.19 but in August share prices had fallen to less than $ 35. Minkow, admitted that he was pomping on Usana stocks, hopes to profit from falling share prices. However, in connection with Usana's lawsuit, news columnist Herb Greenberg commented that the criticism of Minkow "is a group of malarkey, he has the right to publish his research, as long as people know his position [on the exchange]." Minkow has revealed in a report that he is betting to get the stock down. Usana dropped a libel suit and in March 2008 US District Judge Tena Campbell dismissed four of the five claims brought by Usana against the ruling Minkow that Usana's claim violates California's anti-SLAPP law for suing Minkow for fair criticism. and that Usana did not show a reasonable probability of winning over the claim. The judge also cited two instances where Usana failed to disprove Minkow's claim that their products were too expensive and did not have better quality than other low-cost brands. The remainder of the share manipulation expense was completed in July 2008 when Usana and Minkow reached an undisclosed solution, including the removal of all materials related to Usana from the Fraud Discovery Institute website, related Chinese websites, and from YouTube. Minkow also agrees to never trade with Usana shares again. Separately from the settlement, the company paid $ 142,510 in lawyer fees to Minkow and his agency under orders from federal Judge Samuel Alba. Court documents show that Usana never pursues others whom they suspect as part of alleged stock manipulation or they do not ask for an order, their only way out in this case.
Minkow previously served a 7-year prison term beginning in 1987 for share fraud. Minkow has since returned to prison in 2011 for a securities fraud unrelated to Usana.
See also
- List of multi-level marketing companies
References
External links
- ASANA Troubled as a Stop Auditor. National Business Review; July 21, 2007
- USANA Defends Practice. National Business Review; August 3, 2007
- USANA Appoints a New Auditor. September 8, 2007
- Profile of Business Week, 2005
- Guerin Flashlight vs. Usana
- Chalk Ashes vs. Usana
- usana vs. Minkow
Source of the article : Wikipedia
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