USANA Review – Is USANA A Pyramid Scheme

Coffee Talk

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Welcome!

In this mlm business Coffee Talk, we’re going to review USANA.

We will discuss these issues, USANA mlm business opportunity, and the question, “Is USANA a pyramid scheme?”

When you ask, “Is USANA a pyramid scheme?”

I think you mean, “Is USANA a scam?”

Pyramid schemes are scams!

If USANA is a pyramid scheme, then USANA is a scam.

In our previous Coffee Talk, MLM vs Affiliate Marketing, we have discussed the FTC guideline regarding a legit mlm vs a pyramid scheme.

Truth… the FTC guideline offers a legal definition of a legit mlm operation.

But… this legal definition doesn’t tell us anything about USANA mlm home-based business opportunity?

Is USANA business profitable? Or Can you make money with USANA?

Why do we start a business?

We start a business to make money and gain financial freedom.

Therefore, before investing in USANA, we need to know more than, “Is USANA a scam?”

We want to find out,

  • How to become a USANA distributor?
  • How much does it cost to join USANA?
  • Can you make money with USANA? And
  • Whether USANA mlm business opportunity is profitable?

What we want is to build a profitable business… This is the way to make money and recover our investments with USANA.

If you are looking to launch this home-based business, you must read this USANA Review to understand the risks and rewards associated with this business opportunity.

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USANA Review Summary

Business name:
USANA
 

Direct Competitors:
Shaklee, Herbalife, YOR Health, Mannatech, Arbonne, Juice Plus+, Scentsy, Immunotec

Annual Revenue:
$1.2 Billion

Business Opportunity:
Multilevel-Marketing (MLM)

Initial Investments:
$29.95 – $1,250.00

Business Earnings Estimate: 
The majority of USANA associates earned $20.83 per month or $250 annually.

  • USANA is an mlm company founded in 1993. The company produces and sells Nutritionals & Dietary supplements, and skincare products.
  • Less than 1% of USANA associates, business owners, make a profit. The USANA associate income is $205 a year before taxes and expenses.
  • The way to make money with USANA is by recruiting others. You must be super talented with Face-To-Face selling to build a successful business with USANA.
  • Less than 1% of USANA distributors make a decent income with this mlm business.
  • If you cannot sell face-to-face, then you should not join the USANA mlm business.

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What Is USANA?

USANA was founded in 1993 immunologist and microbiologist Myron Wentz based in West Valley, Utah.

USANA is an mlm company manufacturing and distributing their own products, including USANA Nutritionals, USANA Diet & Energy, and Sensé personal care.

Several of USANA executives were discovered to have made false statements regarding their qualifications:

  • Denis Waitley, a board of directors, does not hold a master’s degree from the Naval Postgraduate School.
  • Ladd McNamara, the USANA’s medical advisory, his license to practice medicine had been revoked.
  • Vice President of Research and Development, Timothy Wood, has a doctorate in forestry, not in biology.
  • Gilbert Fuller, the Executive Vice President, and Chief Financial Officer, his CPA license had expired 10 years before he joined USANA in 1996.

The company has sponsored several athletic organizations, such as the Women Tennis Association, The USA Nordic Athletes, The Olympic Teams, and more.

USANA annual sales revenue reached $1.2 Billion dollars in 2017.

According to USANA, the company sells and distributes its products through an mlm network of 38,239 associates in the United States.

However, USANA earnings disclosure reported that only 0.52%, 199 associates out of 38,239, earned a monthly income of $1,666.67 in 2017, before taxes and expenses.

Based on the information available to the public, we can conclude:

  • You can only purchase USANA products through a distributor.
  • USANA is an mlm company.
  • USANA operates like a pyramid scheme, or a scam, with a few at the top, less than 1% of associates, earned the most.
  • Many USANA associates do not make money with USANA, and
  • USANA business is highly competitive and very risky.

The USANA home business opportunity doesn’t seem to be a good investment.

Before investing with USANA, it’s smart to compare with other home-based business opportunities…

You can use My Writing Business to make a comparison.

How To Become A USANA Distributor?

First, let look at how you can join USANA.

There are two options to become a USANA member:

  • Preferred Customer is free to join, and you receive a 10% discount. Another 10% discount is awarded if Preferred Customer signup for the monthly Autoship program.
  • Become a USANA associate to receive a 10% discount, join the monthly Autoship for an additional 10% discount. As an associate, you have the opportunity to sell USANA products and sponsor others to join USANA.

This USANA Review is the discussion about becoming a USANA associate, starting a business with USANA.

The Process To Join USANA

You need a sponsor to join USANA either as a Preferred Customer of as an Associate.

You cannot join by visiting the company website. You must know a USANA distributor or search for one on the internet.

Once you have completed the application and purchased a welcome kit, you’re now a USANA associate.

But, before you can earn commissions, you must sell or recruit others to join USANA.

How Much Does It Cost to Join USANA?

The initial cost to join USANA as an associate is $29.95 for a Welcome Kits.

But to launch a USANA Business Center, you have to generate 200 points in Personal Sale Volume (PSV). This means you have to purchase products from USANA.

According to the USANA price list, 200 points are approximately $235.

Then the cost to open one USANA business center is $264.95 ($235 + 29.95).

USANA allows the associate to open up to 3 Business Center.

After opening the first one, the additional 2 Business Center each required 100 points.

So, the investment breakdowns: (100 points is about $117.50)

  • Opening 2 UNSAN Business Centers cost $382.45, and
  • Open 3 USANA Business Centers cost $499.95.

You have the option to open 3 Business Centers, but it’s not required.

You can achieve the required points by either purchase products, or

One of the USANA Enrollment Packs from $ $305 to $1,250.

USANA review basic business pack

USANA review professional pack

Your USANA sponsor is likely persuaded you to purchase the most expensive Enrollment Pack to launch all 3 Business Centers and boost earnings with USANA… But,

I honestly don’t believe it makes a difference unless you can sell or recruit people into your organization.

Besides the initial investments above, there are additional operating costs associated with the USANA business.

In this USANA Review, we will discuss the two biggest operating costs:

1. Time Investment To Build the USANA business

The time investment is varied. But, to build a successful USANA mlm business, you need to invest over 80 hours per week into building the business.

If we use the minimum wage of $7.25 per hours, this means a USANA associate must invest at least $580 per week, $2,320 per month.

2. USANA Hidden Operating Costs – “Monthly Purchase Requirement”

To earn commissions from downline, mlm companies require members to stay “Active”.

Active means you have to purchase products from the company.

USANA requires all associates to generate 100 points ($117.50) each month in Personal Sales Volume (PSV) for each Business center to consider “Active.”

USANA active associate

If you have 2 or more Business Center, the PSV increase to 200 points. This means you have to spend $235 per month on products to stay active.

I refer to this PSV requirement as, “Pay and Play!” If you fail to acquire the PSV points, you receive NO commissions.

Most associates purchase USANA products every month to remain active.

I call this hidden cost because most mlm companies do not disclose the requirement to new associates.

Associates usually discover the costs after making the first sale.

So, the real investments to launch a USANA Business Center is more than the enrollment costs… This is minimal.

The single biggest investment is meeting the monthly 100 points requirements. This can cost a USANA associate thousands of dollars over the years.

The monthly personal sales volume requirement is the reason why many investors do not make money with mlm business opportunities.

This monthly expense destroys your chance of making a profit, because you don’t earn commissions unless you purchase products from the company, even in the month you make no sale.

There are other business opportunities, like affiliate marketing, pay commissions on every sale with no sales volume requirement!

Do you know the reason behind the 100 Points?

  • First to sell USANA products, and
  • Second to meet the FTC guideline as a legit mlm business.

Without product sales, USANA is a pyramid scheme, a scam.

I believe the majority of USANA products is consumed by the associates.

I personally view all mlm businesses, including USANA as a pyramid scheme based on their compensation plans, where only a few at the top earned the most.

This takes us to the question, how to make money with USANA?

To find out the way a USANA associate makes money, we need to study

USANA Compensation Plan

All mlm compensation plans are designed with a high level of confusion and difficult to determine actual commissions.

The USANA compensation plan is considered the most confusing and difficult to earn because it’s a binary system. You must build two teams to make money with USANA.

If you don’t understand the USANA compensation plan, this should be normal, because everyone will have a different interpretation of this compensation plan.

I’ll provide you a quick overview of the USANA compensation plan. If you want to see it in detail, just download a copy to study later.

Just so you should know, this section of our USANA Review will be boring.

However, the USANA compensation plan is the key factor in determining your profitability as an associate.

We have to analyze it if we want to evaluate USANA.

The USANA compensation plan says an associate had 6 ways to earn.

But, like all mlm compensation, you only have 2 options to make money with USANA:

  • Earnings from selling products, and
  • Earnings from recruiting others.

Before you can earn $1 commissions with USANA, you must be qualified. You must:

  • Maintain 100 points of Personal Sales Volume each month for 1 Business Center, and 200 points for 2 or more.
  • You must recruit at least 2 persons, both must be “Active”, and
  • All the minimum Organization Sales Volume for each Business Center is 250 points, 125 points on the left and 125 points on the right, to earn a 20% commission.

Your earning is determined based on meeting the conditions above.

A USANA associate earns nothing if they fail to meet these requirements.

Now, let us look at the first way to earn,

Selling USANA Products

This is where you buy wholesale for retail.

I’ll assume you’re a USANA associate with Autoship. This allows you to purchase products at a 20% discount.

If you can sell at USANA suggest retail prices, your earning is the difference between the wholesale prices and the retail prices.

How do we know if we can sell USANA products for profit?

We’ll do simple market research.

You can use either eBay or Amazon to determine the market price for USANA products.

Why I am not using USANA suggest retail price?

Because no one will pay at that inflated price! The only way to sell USANA products on the market is by offering at the market price.

I use eBay because this is a place where you can find the cheapest price for anything.

A quick search on eBay and I found USANA HealthPak 100 56 packs, buy now price, for $90 with free shipping.

USANA retail price the same item for $130.

USANA product review

Do you think you can sell this product at $130 on the market?

If we take 20% on the $130, your wholesale price is $104 for this HealthPak.

How can you make a profit when the market only willing to pay $90?

This will be a challenge for a USANA associate.

Recruiting Earnings

We will discuss the major ways to earn from recruiting others.

If you like to know all the recruiting bonuses, I suggest getting a copy of the USANA compensation plan.

The USANA compensation plan doesn’t pay an associate for recruiting.

You earn commissions by recruiting two associates into your organization, and they must open 1 Business Center.

Remember, the 200 points requirements for opening a USAN Business Center?

But, you must recruit 2 to earn 20%.

However, the 20% commission is determined using the Group Volume of the lower leg.

The commission is 40 points (200 x 20%).

The USANA compensation plan pays points, not real dollars. You must convert points to local currency to determine earnings.

I am telling you, it’s very difficult to determine the exact dollars of your commissions.

What if you have 3 Business Centers (BC)?

You add up the Group Volume from all 3 to calculate commissions.

Here’s how it’s done:

  • BC1 (200) + BC2 (200) + BC3 (200) = 600 points total
  • 600 x 20% = 120 points earned.

What happens if one of your group fails to meet the 125 points for the month?

The points will roll over to the next commission cycle.

This means a USANA associate could potentially earn nothing for the month under this binary compensation plan.

Do you know why?

Well, let say your right-hand side group did well for the month and accumulated 1,000 points, BUT…

Your left-hand group only managed to earn 100 points.

You earn ZERO commission for the month because one group did not meet the 125 points requirements.

Under the USANA compensation plan, associates are required to build two separate organizations, left and right, to earn commissions.

It’s very difficult to earn commissions because you have to do double works compared to a unilevel compensation plan. The USANA compensation plan is designed for this purpose.

We have stated above, there are many ways to explain the USANA compensation plan, and I can assure you, none of them is 100% right.

But, we don’t have to fully understand the USANA compensation plan, Because…

The compensation plan only tells us how to make money with USANA.

It doesn’t answer the question, “Can you make money with USANA?”

Then how can we find this out?

We look at the USANA earnings disclosure statement. This disclosure tells us the earnings for all USANA associates in the prior year.

Actual earning helps us analyze future profits.

A good home-based business must generate profits!

Then, why we discuss the USANA compensation plan?

Understand the compensation plan, preparing us for the following discussing,

Can You Make Money With USANA?

Most associates would answer this question by directing you to the USANA compensation plan.

Do you know why they do this?

Well, that’s the way they were told when joining USANA.

Using the compensation plan, USANA is selling you a dream, not a real business.

Are you investing in a dream or a business?

Here’s what I mean,

  • The USANA compensation plan offers the POTENTIAL EARNING, a guess or an estimate.
  • The USANA Earnings disclosure statement contains ACTUAL COMMISSIONS, associates’ earnings.

As a business review writer, I look to the actual commissions/earnings to advise clients on an investment. Potential earning is just a guess, an estimate.

Are you investing based on a guess?

If your answer is NO, then let discuss USANA earnings statement.

Looking at the USANA earning disclosure statement below, we learn:

USANA earnings disclosure

Associates Actual Earnings

Of the 38,239 active associates, those that maintain the monthly 100 points Personal Sales Volume, spending $117.50, more than half did not make money.

Only 3.90%, or 1,492 associates, earned enough commissions to cover product purchases.

Less than 1%, 0.52%, earned a decent annual income.

Even worse, a small group (0.19%), 72 associates, earned $100K or more.

USANA top earners make up only 0.07% or 26 associates.

Let me ask you this, what is the chance you can become a USANA top earner?

I can tell you that your chance is almost ZERO!

Well, we forgot one important item, operating expenses.

All the incomes disclosed by USANA are before taxes and expenses.

They are not business profits.

Don’t you want to know the profits?

Then, we need to take out operating expenses.

If we deduct expenses, let see what happens:

Recalling our earlier monthly estimated operating expenses, minimum $2,437.30, or $29,250 for the year.

To make a profit as a USANA associate, you must earn $30,000 or more.

From the earnings disclosure statement, we have approximately 0.92% of active associates achieve profits.

We can conclude that over 98% of USANA associates loss money investing in this business opportunity.

Is this a good business to start?

USANA business is very competitive.

To make money with USANA, you have to reach the top 1%. This is not easy.

Do you understand, why USANA provides people with a copy of the compensation plan when asked, “Can I make money with USANA?”

Who’s going to invest if they know the business failure rate is over 90%?

So, then…

Is USANA A Scam?

Yes, the chance of making money with USAN is less than 1%, but this doesn’t make USANA a scam.

Why?

Because USANA mlm business is an investment opportunity.

Every investment has a certain level of risk, which means there a possibility of losing your money.

USANA is a competitive and risky investment.

USANA associates chose to take on the highest level of business risk when they decide to invest. So, you cannot call USANA a scam.

Calling USANA a scam would mean; all business investments are scams.

Risk is a part of every startup business.

Before you start a business, it’s your responsibility to research and learn all the risks before investing.

Reading this USANA Review is a good way to help you evaluate this mlm opportunity.

You should never start a business when you know the failure rate is over 90%. If you do, then…

You cannot turn around and call USANA a scam.

Many entrepreneurs hire a professional financial analyst to evaluate every business deal before they invest.

As a Business Review Writer, I have evaluated hundreds of businesses to help investors managing the investment risks…

That’s all we can do, managing risks.

To me, USANA is not a scam. It’s just a very risky business.

However, when it comes to a pyramid scheme…

I’ll share with you

My View Regarding ‘Is USANA a pyramid scheme?’

I personally think all mlms are a pyramid scheme.

But, USANA will deny they are a pyramid scheme.

Allow me to explain, why USANA is a pyramid scheme?

Looks at their earnings disclosure statement,

Do you notice a pyramid shape?

Yes, the largest commissions were paid to a few at the top.

0.07% earned thousands and millions while over 99% of USANA associates struggle to stay alive.

Look at the picture below, what do you see?

USANA pyramid scheme

Doesn’t this look like a pyramid scheme?

Yes, the more people you recruit into your USANA team, the more money you earn.

The 100 points Personal Sales Volume is the monthly fee to become a member of a pyramid scheme.

Under this mlm compensation plan, USANA is rewarding associates that recruit the most people, not selling products.

Recruiting is how you get promoted and make money with USANA!

Isn’t this a pyramid scheme?

Well, you don’t have to agree with me. It’s not important

Even if USANA is not a pyramid scheme, your chance of making money with USANA is less than 1%. This is based on USANA earnings disclosure.

Or, should I say, “the failure rate of USANA mlm business is greater than 98%”.

So, Is USANA Worth It?

Would you invest, if USANA tells you the chance of making profits and achieve your dream is less than 1%?

Well, we learn this from the USANA earnings disclosure statement, but no one cared to look.

Never invest in a business opportunity unless is profitable.

You can determine profitability by carefully analyzing the financial information, especially the earnings disclosure, not the compensation plan.

USANA is a very risky investment.

Do you know why you want to start a home-based business?

To earn extra money from home, to be your own boss, or to achieve financial freedom?

And to make money, we invest in a PROFITABLE business!

There are much better and less risky home-based business opportunities. I recommend you look at Affiliate Marketing.

As an affiliate marketer, there’s NO traveling around town to attend late-night meetings and NO face-to-face sales or recruits.

The best part, you are working on the computer in your own home or anywhere you like.

Affiliate marketing is one of the most powerful work from home business opportunity to earn passive income. I recommend you read, MLM vs. Affiliate Marketing to learn.

Have you ever considered the risk of the USANA going out of business?

Not many people talk about this business risk when investing in an mlm opportunity.

What happens if USANA going out of business?

Every USANA associates are out of business on the same day.

This means USANA associates are not the owner of their own business.

Is this what you want?

If you want to be an owner of a lucrative and profitable business that generates six-figure passive income, then…

You should read my #1 recommended online business opportunity.

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Can you see?

From our USANA Review, your chance of achieving financial success as a USANA associate is low, less than 1%.

Even if USANA is not a pyramid scheme!

Are you still investing?

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