Alex Johnston (SFS ‘07) plans on taking next year off to pursue an exciting career in the budding “nutraceutical industry.” Then he plans on retiring.
“My parents made me promise that after I retire I’ll come back to my studies,” he says. But that doesn’t make it any easier for a budding millionaire to concentrate on school. “It’s hard with this opportunity on my shoulders all the time,” he says.
This opportunity would be Mannatech, a Texas-based supplement company that makes “glyconutrient technology, designed to provide the immune system with the nutrients it needs,” says Johnston. He is ebullient about Mannatech’s products, which range from pills to snack bars, and the shelf above his computer is filled with the company’s plastic bottles. He also keeps a PowerPoint presentation on his computer that trumpets the product’s new technology and the expanding market for healthcare products.
Johnston, who is from Seattle, first got involved with Mannatech about a year ago, when a friend of his introduced him to an investor involved with the company. Johnston sat down to talk with him.
“He said, ‘I’ve personally created over 40 millionaires in this business in the last 10 years, some of them as young as 19 years old.’ I said, ‘What business is this?’” And he was hooked.
Mannatech makes millionaires by following what Johnston calls the “network-based business model.” You find extremely enthusiastic people and offer them a commission to sell things to people they know. You may have known people trying to do this in high school, trying to sell knives to their friends’ parents.
But for Mannatech, Johnston isn’t selling the product. He’s selling the dream. The product itself-actually a whole range of supplements, for everything from allergy prevention to muscle building-is available from Mannatech’s website. Johnston isn’t running a retail operation out of his dorm in New South. He just finds prospective millionaires interested in Mannatech, and directs them to the website, where they can buy the “family pack,” $1,095 worth of Mannatech products that makes you eligible to become an “associate.”
Perhaps paradoxically, this seemingly expensive package is really a way to help people bear the costs of Mannatech supplements.
“It’s a way to get people who can’t afford the products to get involved by referring other people,” he says. When you refer people, you get a cut of the proceeds. As Mannatech’s website says, “in network marketing, the duplication of your initial efforts through the people you sponsor can multiply your rewards.” And what is the best way to get other people to sign up? Telling them about how much income they could generate by sponsoring other people. The system is what Stephen Barrett, an expert in this marketing approach, calls a “product-based pyramid scheme.”
Johnston’s sales pitch comes on strong, and he has had remarkable success at Georgetown, having gotten around 30 people to sign up, many of them for the “family pack.” Still, he says, most of the company’s consumers are only interested in the health benefits, not the money.
Andrew Loftin (MSB ‘07) has bought into Mannatech about a month ago. So far, he hasn’t made any money. “I’m looking to do a lot of work this summer,” he says.
So what are the health benefits, exactly? Johnston describes the product as a carbohydrate-based immune system supplement, designed to replace nutrients that food processing has removed from our diets. “They went all the way around the world to find the highest concentrations of these carbohydrates naturally,” Johnston explains. According to the National Council Against Health Fraud, the product is just aloe vera juice. Mannatech’s websites are full of “testimonies” from people who claim it has helped them overcome everything from rheumatoid arthritis to colon cancer to Gulf War syndrome.
Mannatech’s co-founder, Sam Castor, has run a questionable business before. His last company, Eagle Shield, offered systems for repelling insects and reducing home heating costs. In both instances, the Texas attorney general’s office refuted the company’s claims, and the firm was fined and eventually went bankrupt. Castor is “actually an amazing guy,” Johnston says.
Mannatech’s millionaires aren’t traditional millionaires, but actually “cash-flow millionaires,” a somewhat unique concept that describes a salesperson who has established enough customers that, assuming those customers keep buying Mannatech, the salesperson will keep earning commissions that are comparable to the interest income earned on $1 million. So the $1 million isn’t exactly there.
Still, Johnston is optimistic about his prospects. He’s going to Asia next year to work with “a lot of high-income professionals.” As a newly minted cash-flow millionaire, he then plans on retiring and returning to the School of Foreign Service to decide what he’s going to do with all his time. And he is certain Mannatech is the real deal. “I haven’t had a cold or a flu for over 12 months,” he says.
Last summer in Seattle, after being introduced to one of Mannatech’s investors, Johnston spent what remained of his summer marketing Mannatech to physicians. Back at Georgetown, he’s just working with students, a less influential (and profitable) group of customers. But he wouldn’t have it any other way.
“It’s only fair. It’s my obligation, my duty, to give every other young person out there this opportunity,” he says.
The company, he notes, is very Christian-oriented, and the sales model that Johnston has mastered has more than a touch of evangelism to it.
“It’s interesting,” he says. “It’s almost a spreading-the-word kind of thing.”
Bill Cleveland is a senior in the College and a contributing editor of The Georgetown Voice. He’d rather be a Cash Money Millionaire.
