The FTC states the following:
"Modern pyramid schemes generally do not blatantly base commissions on the outright payment of fees, but instead try to disguise these payments to appear as if they are based on the sale of goods or services. The most common means employed to achieve this goal is to require a certain level of monthly purchases to qualify for commissions." - Pyramid Scheme Analysis
USANA does exactly this. USANA makes most of its net revenue from the required 100/200 Personal Sales Volume that business associates are forced to purchase every four weeks if they want to "qualify for commissions". If USANA did not have this forced inventory purchase, then USANA would go out of business in less than three months.
If USANA claims that the business associates purchase the product because they want it for personal use, then prove it by eliminating the four week required personal purchases in order to qualify for commission.
That is exactly what happens at Usana. Mr. Marketwave even posted on the Yahoo message board for Usana that if Usana couldn't recruit, it would fail.
ReplyDeleteThat is not true of Avon or Mary Kay or buyer's clubs. They can just go out and sell more product.
In Usana's case, almost all the product is sold to the new recruits.
MarketWave wrote in the USNA Yahoo message board on May 2, 2007 at 3:34 PM
ReplyDelete"Would Usana survive if all recruiting of new distributors were to stop today?
Of course they would not."
You are right Emily, even those who defend USANA understand that without the ability to continually recruit new distributors, USANA would collapse and go out of business.
You have taken my statement completely out of context and are outright lying about what I said.
ReplyDeleteFortunately, about as many people are reading this blog as are reading the Usana Yahoo board.
No one :-)
Well, besides the two of you.
MWave,
ReplyDeleteThen, feel free to clarify the statement.
If distributors are able to retail USANA product for a profit and sign up preferred customers, then distributors should be successful and stick with the business, right? But you know as well as I that the main channel for moving product is to sell a business opportunity to someone, presenting it as a way they can earn an income, and then force them to purchase inventory to participate in the opportunity.
So answer this: Would Usana survive if all recruiting of new distributors were to stop today? It's a simple yes or no question.