Are you taking the USANA supplement and now considering USANA as a business? Or maybe someone wants you to join their team with the USANA business opportunity? Easy money right? Just invite a few friends or family to start making money! Sounds too good to be true. Well keep reading below and find out if USANA is a scam.
History of USANA
Founded in 1992 by immunologist and microbiologist Myron Wentz. It became a publicly traded on the New York Stock Exchange in 1996. It has been a rapidly growing company that has expanded to countries around the world. In 2018, USANA had net sales of $1.1 Billion.
Here are a few awards the company has won over the years
- The Healthy Home, by USANA Founder Dr. Myron Wentz and USANA CEO Dave Wentz, hits No. 2 on the New York Times Best Sellers List, May 2011
- Winner of 32 Utah Best of State Awards since 2003
- Winner of six International Business Stevie Awards, Management Team, Customer Service Department, International Convention
- Magazine: Best Places to Work, five wins since 2009
- Recognized with the Outstanding Enterprise Award for Best Nutritional Supplement by Hong Kong’sCapital Magazine, 2013
- NutriSearch Comparative Guide to Nutritional Supplements, Consumer Edition Editor’s Choice and NutriSearch Gold Medal of Achievement™ winner, 2013
- Recipient of six Australian Business Awards since 2010
- USANA becomes an FDA-registered facility, 2011
- Communicator Awards since 2009: USANA Magazine—Special Edition, Social Media at USANA International Convention in Salt Lake City, Utah, Blog—What’s Up, USANA
- Forbes.com names USANA CEO Dave Wentz One of America’s Most Powerful CEOs 40 and Under, 2009
- Dr. Myron Wentz receives the Albert Einstein Award for Outstanding Achievement in the Life Sciences, 2007
- Voted “#1 Distributor’s Choice” for Best Network Marketing Company byMLM Insider for 16 consecutive years
- Named Utah Manufacturer of the Year by the Utah Manufacturing Association, 2013
USANA Company Information
- Company name: USANA Health Sciences Inc.
- New York Stock Exchange: USNA
- Headquarters: 3838 West Parkway Boulevard, Salt Lake City, UT 84120
- Founder/Chairman: Myron Wentz, Ph.d.
- CEO: Kevin G. Guest
- Countries: Hong Kong, Japan, Korea, Taiwan, Australia, Malaysia, Philippines, New Zealand, Singapore, Thailand, Indonesia, Netherlands, United Kingdom, France, Belgium, United States, Puerto Rico, Caribbean, Canada, Mexico, Columbia, Germany, Spain, Romania, Italy
- Phone (Continental U.S.): 1-888-950-9595
- Email: CustomerService@USANA.com
- Website: https://www.usana.com
USANA has a variety of products supplements and healthy living. They have a variety of vitamins, healthy food options, skin care, business products for the association as well as promotional gear.
On the USANA website, they have the Dr Oz show and a variety of athletes from around the world promoting the USANA products. Always remember that these people are being paid to promote these products but hopefully they have good enough ethics not to be promoting bad products.
These products are available on Amazon. Either present or past associates are selling on Amazon.
Again remember that USANA associates have a financial incentive to give good reviews on these products. Even with this consideration, the reviews on Amazon are very good. There are a lot of good reviews for every couple of bad reviews. This gives me some confidence that these may be some quality products.
Here are a few examples of the USANA products. There are many more than what is listed here.
USANA Business Opportunity
The following video is an USANA hype video. It tells you a lot about the business.
USANNA is a supplement company that sells its products with multi-level marketing(MLM). The MLM business model has some inherent issues for the people that join them. We’ll discuss those issues in the following sections.
USANA Compensation Plan
USANA uses a binary compensation plan and here is a link to the USANA compensation pan.
Here is a video from USANA describing their compensation plan. Below I’ll describe the compensation plan along with some problems with this plan. Then I’ll discuss the USANA Income disclosure.
6 Ways To Earn With USANA
This is a standard practice in any business. You buy the product at a discounted (wholesale) price and you sell it to a customer at a higher retail price. You get to keep the difference in prices.
Sounds good doesn’t it. I would be surprised if anyone in USANA is making money with retail sales. First problem is that the discounted price is already higher than most products on the market. So, you are going to have difficulty selling at the event higher retail prices.
Second problem is when the customer learns they can become a preferred customer at no cost to them and receive the discounted price why would they buy at the higher retail price. Either you or another USANA associate will offer them the preferred customer status so you can meet your weekly sales volume quotas.
With these 2 problems, I doubt there at many retails sales happening with USANA products.
USANA uses a binary system to calculate its sales commissions for the associates. The above video does a pretty good job of explaining the binary system. If you are confused after watching the video, well that is the intent of these systems. MLMs don’t use straight forward sales commission systems that most people understand.
First, you have a minimum sales quota that you must meet in order to qualify for a commission. If you don’t meet the minimum, you lose all the sales volume to include any carry over. The use of a minimum sales quota is a common practice in sales. But many other business types allow the rollover of the sales volume into the next period of time.
Why is this important? When you rollover the sales volume, you never lose sales commissions. With the USANA system, you lose all the sales commissions if you don’t meet the minimum and you start over at zero.
Second, the binary system reduces the amount of commissions that you’ll receive. The video sells that fact that the binary system promotes team work and it’s good for you as an USANA associate. The binary system is good for USANA and not so good for you. With the binary system, they split your team in two. Both sides of your team has to qualify or you lose all your commissions. Especially, when starting out this makes it make difficult to qualify for commissions.
Once you grow your business so both sides are able to qualify, then they pay you based on the lower side. They rollover (or hold hostage) the additional sales volume of the higher side. Of course, they spin this to say you and your up line will help the lower side to increase their sales volume.
The reality is that the rollover is at risk. If either side of your team should fail to qualify then you lose that rollover.
The binary system is filled with traps where you can lose the commissions.
Lifetime matching bonus
You can receive a matching commission of up to 15% if one of your recruited associates meets certain requirements within the first 8 weeks of joining USANA. The website with the requirements did not work for me. Don’t know why. Maybe it’s a back office.
You need to achieve your sales volume minimum in order to receive this bonus as well.
The compensation plan says there are incentives to include luxury travel, prizes and extra cash that you can win. These really are not something you can earn but you can win. Plus the plan provides no information on what it takes to win or qualify for these incentives. It doesn’t even tell you what are the incentives. I don’t see the purpose of including this in the compensation plan.
Great there’s another bonus. Like the incentives, it’s very vague. So, it does say that you need to achieve a certain rank in order to receive this bonus. It’ll be safe to assume you need to go up a few ranks before you qualify.
The bonus is paid based on the total USANA group sales volume and they give an example from 2012. It’s a large number so it looks impressive. Yet, we don’t know how many people this was split between or what it took to qualify to be one of hose recipients.
Great, another bonus. This time they are much more specific on who will earn this bonus. Only the top 40 income earners in USANA will get this bonus. In 2017, USANA had 38,239 associates so the top 40 is a very elite group.
Again this is a percentage of the total USANA group sales volume and the example given is $1 million. So that was divided up among the 40 top earners.
2017 USANA Income Disclosure
Here is the link to the USANA Income Disclosure:
The income disclosure has some very interesting statements.
Let’s start with the preferred customer.
The preferred customer gets the same discounted price as the associate and they have access to the auto-ship discount as well. There is no cost to become a preferred customer.
The associate gets the same discounts as the preferred customer but with the ability to earn commissions on any sales they make on the USANA products.
There is a small fee of $29.95 to purchase the welcome kit in order to become an associate.
Why are people becoming an USANA associate?
According to the USANA “People become Associates for various reasons. Most Associates join simply to improve their health and purchase products at a discount. Some Associates join and sell out products part-time to friends and family to earn some extra money.”
I will have to disagree with USANA. You can get the products at the discounted price as a preferred customer. There is no reason to become an USANA associate if your only interest is to get the discounted price.
In my opinion, most associates join USANA because the entry fee is so low and they hope to make some extra money by selling the product. I would agree with them that most are not looking to sell full-time. I would disagree that most simply wanted the discount, they didn’t need to become an associate to get the discount.
When you go to the second page of the disclosure, you’ll see that 53.45% of the associates did not earn any money in 2017.
Why did so many not earn any money?
USANA wants you to believe these people only wanted the discount. Then why did they pay the $29.95 to become an associate when they could have gotten the discount for free as a preferred customer.
My opinion is that most of these people joined hoping to make a little bit of money but they had no understanding of the USANA binary system and the minimum sales quotas. So what few sales they did make to family and friends, they did not make the minimum sales volume and lost any potential sales commission earned.
Since they never intended to be full-time sales, they give up on the sales and recruiting part and continue to buy their products at the discounted price.
These are the same people that complain that USANA and MLMs are scams. When they were recruited, they were sold on the fact that they could easily earn a part-time income by selling the product or recruiting a few family members and/or friends. The reality sets in when they realize the amount of work needed just to meet the minimum sales volume to qualify for their commissions.
Complaints and Legal Issues
Considering the amount of time USANA has been around, their size and the fact that they are a MLM. It’s really surprising that I didn’t find much on USANA.
I can’t write a review about USANA and not touch on the Barry Minkow investigation.
Back in 2007, Barry Minkow was an investigator that published a 500-page report about USANA. He made claims of fraud and that USANA was operating a pyramid scheme. This kicked off some Securities and Exchange commission probe as well as an FBI investigation into USANA. There were also some lawsuits filed against USANA. – source Forbes
Mr. Minkow had some credibility issues. First, he was a felony for committing fraud. Second, shortly before the release of his report he places some put options on the USANA stocks. With put options, he would make money if the USANA stock price was to drop. Of course when the investigations started the stock prices plummeted.
In the end after all the investigations, nothing has happened to USANA. The company continues to grow and expand around the world.
Is USANA a Scam?
USANA is a Multi-level Marketing company with what seems to be high quality products. When it comes to MLM, this company is about as legit as you can get. I still don’t think a MLM is a good business opportunity. As seen in the compensation plan, there are flaws for people trying to make money. As seen in the income disclosure, most people don’t make money with USANA.
There are a select few with the sales skills, work ethic and desire to move up the MLM ranks to be able to make money in this industry. The vast majority should save their money and find another alternative.
In today’s world there are many alternatives to making money. Anyone with a computer or smartphone can find ways to make money. In the age of the internet, there has been so many ways created that any person earn money. Like any business, it’s going to take an effort. You may need to learn some new skills. You will need to work at it on a consistent basis over a period of time. If you are looking to get rich quick, you should just move on. You’ll be disappointed with USANA or any alternative I give you. If you want my #1 recommendation for earning money then check this review.