Rules
Part of Network marketing strategy: what to keep and what to drop
Documented network marketing strategy cases, compared side by side
Documented network marketing cases from Amway, Herbalife, Nu Skin and USANA, compared side by side on disclosures, retail demand and distributor retention evidence.
What to take away
- All four companies publish annual income disclosure statements. None of the four publishes a distributor retention or attrition rate.
- Herbalife's 2016 FTC consent order required at least two-thirds of its US volume to come from retail and preferred customers rather than distributors.
- Amway separates sales to distributors from customer sales. Nu Skin and USANA publish kit pricing but little on retail demand.
- Rank math decides the payoutvolume threshold, qualified legs and payment date matter more than the headline percentage.
- Copy the method, not the result.
Four cases, four disclosure habits
Amway is the oldest of the four and holds the longest public record on retail versus distributor volume. Herbalife is the case that produced a federal consent order. Nu Skin is the case where product claims outran the compliance file. USANA publishes the most explicit rank and payout detail.
Rows below reflect the documents each company had published when this page went live. Check the date stamp on every source file. Our guide to FTC income disclosure rules for US reps explains what each field means.
Four Cases Compared
Amway
- Model
- Multilevel
- Category
- Independent business
- Why listed
- Retail vs distributor record
- Pricing
- Entry renewal published
Herbalife
- Model
- Multilevel
- Category
- Nutrition wellness
- Why listed
- 2016 FTC settlement
- Pricing
- Kit preferred published
Nu Skin
- Model
- Multilevel
- Category
- Personal care
- Why listed
- Claim enforcement history
- Pricing
- Kit pricing published
USANA
- Model
- Multilevel
- Category
- Supplements
- Why listed
- Rank payout data
- Pricing
- Kit autoship published
| Company | Income disclosure statement | Retail versus distributor split | Retention rate published | Payout timing in the plan document |
|---|---|---|---|---|
| Amway | Annual, earnings reported by level | Sales to distributors reported separately from customer sales | No | Performance bonus on monthly point value, paid after the month closes |
| Herbalife | Annual, earnings reported by rank | 2016 FTC order sets a two-thirds retail and preferred customer floor for US volume | No | Monthly royalty and production bonus |
| Nu Skin | Annual, earnings reported by rank | Kit and autoship purchases dominate reported volume | No | Monthly commission cycle |
| USANA | Annual, earnings reported by rank and business center | Autoship and preferred customer pricing published, retail demand not separated | No | Weekly commission cycle plus monthly leadership bonus |
Confirm each cycle against the plan version you hold. Plans change, and old summaries stay online for years.
What the income disclosures actually show
All four statements share one shape. A large share of participants sit in the lowest earning bracket. A small top group, typically under one percent of participants, collects the bulk of reported payout. Verify that pattern in the current document rather than quoting it back.
The median earner, not the top line, is the number worth comparing. Where a company publishes only an average, the top group pulls that average above what a new distributor should expect.
Statements differ in their definitions, so compare field by field. Reading US income disclosure statements walks through the fields to copy and the ones to discount.
Retail demand versus distributor purchases
A distributor who buys at wholesale is making a business purchase, and that volume can climb while real customer demand falls.
The Herbalife case shows the gap. The FTC required proof that most US volume came from people outside the distributor base. The FTC Act is the authority behind that order and behind any later one.
A distributor buying product is a business expense, not retail demand. If the company will not publish the split, treat its retail figure as unknown.
US distributors are independent contractors, not employees, so those purchases are business inputs, as the IRS contractor test sets out. Canadian distributors report the same costs on Form T2125.
Retention is the figure none of them publishes
All four report counts of active distributors. None reports a retention or attrition rate. Each defines active differently, usually as a purchase inside a set period, so a clean four-way comparison is impossible from public documents.
Build a proxy instead.
- Copy the exact wording of the active distributor definition, with the document date.
- Record the active count for three consecutive years.
- Note any change to the definition in the same row.
- Label the result a proxy, never a retention rate.
Worked comparisons sit in network marketing strategy examples, where each case is pulled apart on the same fields.
Payout timelines and rank qualification math
USANA publishes a weekly commission cycle alongside a monthly leadership bonus. Amway calculates a performance bonus on monthly point value and pays it after the month closes. Date the plan file you quote.
Rank qualification is where plans diverge. Expect a volume threshold, a minimum number of qualified legs or business centers, and a deadline inside the month. Carryover rules decide whether a near miss survives.
What you can copy, and what you cannot
Copy the method. A case is usable when you can name the population, the dates, the measure and the limit. Everything else is marketing.
- Dated income disclosure statement for the case company
- Retail versus distributor split, or written confirmation that none is published
- Plan document version stating volume, legs and payment date
- Your own three-month result on the same measure
- A stop rule if the case rests on an income promise
If you are deciding whether to keep a plan at all, the network marketing strategy file holds the charter, scope and version history.
