Thursday, April 28, 2011

USANA's 2011 First Quarter Earnings - A look Into The Active Associate and Preferred Customer Trends

USANA's first quarter earnings release reveals major drop in active associate numbers from prior quarter. I do not recall any mention of any quarter to quarter information in any press release. I have put together a 2 year trend of Active Associates and Active Preferred Customers by region. What I notice is a downward spiral. USANA lost a total of 22,000 of their Active Total Customers (Associates and Preferred Customers), yet their stock price actually went up from $35.70 to a high of $38.50 and closing at $36.30... I will break down each of USANA's regions and discuss the various situations in each.

USANA's United States Active Associate and Preferred Customer Results
figure 1 - USANA US Active Associates
figure 2 - USANA US Active Preferred Customers

USANA's United States territory lost 2000 active associates and gained 2000 active preferred customers.

Seems clear to me where the US is trending. USANA constantly blames the bad economy in the US, yet there are several leading distributors who claim that a down economy is good for MLM business opportunities because more people are out looking for work and are more likely to join MLMs. USANA has also blamed this downward trend on the rampant recruiting in their Greater China territory. USANA claims that US distributors are focusing their attention on business in China, which is hogwash. USANA distributors cannot recruit Chinese Nationals into their downline. Chinese Nationals can only be recruited into BabyCare in a single level marketing compensation plan, which I believe will fail USANA miserably because the incentive to recruit an endless chain doesn't exist. Perhaps USANA is referring to the underground recruiting of Chinese Nationals into USANA's Hong Kong territory, which violates China's Direct Selling laws. I believe with the help of Utah's Attorney General Mark Shurtleff, USANA is above the law.

USANA's Canada Active Associate and Preferred Customer Results
figure 3 - USANA Canada Active Associates
figure 4 - USANA Canada Active Preferred Customers
USANA's Canada active associates and preferred customers remained unchanged.

Canada too has been suffering a decline in active associates and preferred customers. I guess this must be because of the bad economy in the United States. At least that is what USANA might claim. I believe USANA's reputation of being a recruiting scheme with over priced products that are almost impossible to resell have more to do with this decline than USANA would ever admit. Saturation has also kicked in.

USANA's Mexico Active Associate and Preferred Customer Results
figure 5 - USANA Mexico Active Associates
figure 6 - USANA Mexico Active Preferred Customers
USANA's Mexico territory lost 1000 active associates and 1000 active preferred customers.

I never thought Mexico was a serious territory for USANA. I think this territory has more to do with having Sanoviv there than having USANA associates running around recruiting each other. It was interesting though during the Swine Flu hysteria because USANA's "Poly C" was being marketed by many distributors as a preventative measure against the Swine Flu. I guess if people simply "believe" something will work, then it probably will - Placebo Effect. Perhaps USANA should simply produce a sugar pill, call it Usanebo™ and give their poor distributors a break and only charge them $0.99 for a 28 day supply.

USANA's S.E. Asia/Pacific Active Associate and Preferred Customer Results
figure 7 - USANA South East Asia / Pacific Active Associates
figure 8 - USANA South East Asia / Pacific Active Preferred Customers
USANA's South East Asia / Pacific territory lost 1000 active associates while active preferred customers remained unchanged.

This territory includes: Australia, New Zealand, Singapore, Malaysia, and the Philippines. Unfortunately, USANA no longer breaks down these territories individually. This is a shame because it gave a much more detailed view of how bad these territories are actually doing. USANA prefers to through around unspecified percentage growths and declines making it difficult to effectively analyze those territories. Either way, the declining trend of active associates is yet another sign of a saturated market, bad reputation and (cough) the bad economy in the United States. Seriously, the US economy has nothing to do with Australia and New Zealand's declining trends. I can only wonder why analysts don't question USANA on their answers. Instead, analysts simply accept whatever answer USANA gives, as if it satisfied the question. However, most of the time it paints an even more ambiguous picture. So far, USANA's latest quarterly report shows a continued decline of members.

USANA's Greater China Active Associate and Preferred Customer Results
figure 9 - USANA Greater China Active Associates
figure 10 - USANA Greater China Active Preferred Customers
USANA's Greater China territory lost 11,000 active associates and 8000 active preferred customers.

This territory includes: Hong Kong, Taiwan and Mainland China. Are the lemmings jumping overboard?  As I have written many times now, USANA has been recruiting people from Mainland China into their USANA Hong Kong territory. This is in violation of China's direct selling laws, but don't let that stop anyone. Chinese Nationals are not allowed to join MLM companies. USANA has finally come around and started to mention the recruitment of Chinese Nationals into USANA's Hong Kong territory. However, USANA has a very interesting way to define these distributors. USANA claims that they are simply people who joined solely so they can personally purchase and consume the product. Really! Why then did they not simply join as preferred customers? I believe USANA is full of crap.

These Chinese National USANA distributors joined so they can participate in the endless recruiting scheme in hopes to make money by recruiting other Chinese Nationals under them. Since everyone is forced to purchase USANA product to participate in USANA's compensation plan, distributors are essentially paid to recruit. Mainland China is a fresh market and that is why USANA witnessed an explosive growth in their Hong Kong territory over the past couple years.

Now we have a huge decline over the previous quarter. USANA claims it is because of the Chinese New Year, which lasts a couple weeks. If this is true, then it reveals how desperately associates must continue to recruit more associates into the endless chain just to maintain the same number of active associates! However, I believe it has more to do with the fact that most associates realizing they are never going to make a dime and how difficult it is to endlessly recruit people. With the product prices so high and having to import the product from the US, why waste their time and money in actually retailing any product. China has more vitamins brands than Carter has pills. Not to mention the skin care market in China.

And Babycare associates will learn quickly than making money retailing USANA product is not worth their time and energy. Since Babycare associates cannot recruit new associates into a downline (Single Level Marketing is China), there is no way for them to make money off the backs of hundreds below them. The USANA fad in China will wear off unless USANA brings down the distributors cost for the product by a substantial amount.

USANA's North Asia Active Associate and Preferred Customer Results
figure 11 - USANA North Asia Active Associates
figure 12 - USANA North Asia Active Preferred Customers
USANA's North Asia active associates and preferred customers remained unchanged.

This territory includes: Japan and South Korea. This is another joke of territories as was Mexico. Why USANA even bothers to publish these numbers is beyond me. We may see that the next quarterly release, Japan might go up 1000 associates. I believe this could be from USANA associates pushing the sale of potassium iodide as a preventative measure against the nuclear radiation caused by the earth quake and tsunami. But again the amount would be insignificant. This territory is saturated and not going to help USANA in the long run.
These are my opinions based on my research and analysis of USANA Health Sciences. As always, I welcome the harsh criticism. If there are errors, let me know as I finished writing this at 1:30 AM.

Wednesday, April 27, 2011

USANA's First Quarter Results for 2011 Reveal Falling Interest For USANA's Business Opportunity.

USANA released their First Quarter Earnings Statement and it shows that all over the world USANA's active associate numbers fell except China, which I believe cannot be trusted.

Year over year, USANA's active associate figures yield:
United States: from 56,000 to 49,000
Canada: from 25,000 to 24,000
Mexico: from 13,000 to 10,000
Southeast Asia/Pacific: from 44,000 to 40,000
North Asia: from 9000 to 8000
Greater China: from 57,000 to 82,000

USANA uses the excuse that the bad United States economy is responsible for the declining figures, but this decline is world wide. However, China is an exception. Hong Kong and mainland China numbers are sky rocketing, but as I have mentioned many times now, I belive this is because USANA is allowing illegal recruiting of mainland China persons into USANA's Hong Kong territory, which violates foreign laws. Not to mention mainland China is not a "USANA" territory. It is a Babycare territory. There is a difference.

I believe USANA stated last quarter that they expect the Hong Kong distributor numbers to start falling because a handful of USANA products are now sold through Babycare Ltd. This was due to the expectation that mainland Chinese distributors signed up as USANA associates in Hong Kong would leave USANA and sign up as a Babycare associate. Not only does this validate my claims that USANA has been recruiting mainland Chinese nationals as USANA associates in Hong Kong, but also raises a serious question: Those associates who left USANA's Hong Kong distributorship and signed up as Babycare associates, are they counted twice? The answer should be "NO", but it would not surprise me. Perhaps there are those that hold both a USANA distributorship as well as a Babycare distributorship; count them twice!

Of course this begs the question, where are the millions of retail customers that should come from having hundreds of thousands of USANA sales reps? Unfortunately, after distributors pay a premium price for the USANA inventory, why would anyone pay even more? Distributors pay $110 for a USANA Healthpak100 which only lasts 28 days which makes it a $3.93 per day multivitamin supplement. View the USANA Price List for yourself. Who in their right mind would fork out $1430 per year for vitamins, and that's the distributor's cost! And don't expect any ethical doctor or nutritionist to recommend such a product either. Since only USANA distributors can sell the product, the doctor or nutritionist would have to be a USANA distributor. In other words, some doctors peddle USANA product to the patient they would have to peddle the product to their patient, which violates their code of ethics.

Yet, USANA's Healthpak100 is one of their most commonly sold product. Why is that? Simple. USANA attaches sales points to each of their product. Most distributors have 1 business center and are required to personally purchase 100 sales volume points every 28 days. The Healthpak100 is 100 sales points, so only 1 product would have to be purchased. Plus, it is the best value for the number of sales points awarded. Purchasing other products and meeting the minimum 100 point requirement would usually put the order over 100 points, which further wastes the distributors money. So a 100 point product easy much easier to deal with. Sadly, USANA distributors also have to pay a pricey shipping and handling fee on top of it.

Knowing all this, it is obvious why there is a serious lack of retail customers. One can go down USANA's entire product line and see how over priced it is. More and more people in the United States are becoming aware of MultiLevel Marketing schemes like USANA and are distancing themselves from the cultish behavior. USANA has reached saturation in the United States and other areas, and without the shenanigans in the China region, USANA would have a single digit stock price.

These are my opinions and I welcome harsh criticism.

Wednesday, April 13, 2011

Don't be Fooled! Editorial Reviews on the Back Cover of The Healthy Home are USANA Affiliates

Who's who on the back cover of The Healthy Home?

On the back cover of Myron Wentz and Dave Wentz's latest book "The Healthy Home" are three editorial reviews. Lets take a look.

“Dave and Dr. Wentz have conspired to create an innovative and imaginative approach to living simply. As a physician, I would offer one bit of advice: heed the constructs, sentiments, and words written in this book. We cannot wait for the scientific method to verify the claims made. As individuals we must act now! We should follow our intuition and adhere to The Healthy Home.” - Peter W. Rugg, M.D., FACEP
Missing from Peter Rugg's title: USANA Scientific Advisory Council Chairperson, USANA distributor (ID# 3079662)

Interesting that Peter implies the book is full of unverified claims that the scientific method has yet to prove.

The Healthy Home is an amazing revelation of 'truths' on everyday products that parents use for their children. This book will empower parents to take measures to protect their children from toxins that may threaten the health of our future generations.” - Christine Wood, M.D., pediatrician and author of How to Get Kids to Eat Great & Love It
Missing from Christine Wood's title: USANA Scientific Advisory Council member, USANA Distributor (ID# 348)

Amazing revelation of 'truths' on everyday products, yet Peter Rugg implies the scientific method has not verified them yet. Can they really be called truths?

“I have met few individuals more generous, more approachable, and more caring than Dr. Wentz. He believes in true health and is seeking to discover its secrets with a passion that is as spiritual as it is scientific. In this brilliant collaboration with his son, Dave, we are able to witness the passage and expansion of simple truths from generation to generation.” - Denis Waitley, Ph.D., bestselling author of The Psychology of Winning
Missing from Denis Waitley's title: Former member of USANA's Board of Directors, chairman of USANA's Athletic Advisory Council, USANA Distributor (ID# 1069)

The problem with these editorial reviews is the fact each member is financially tied to the authors of the book. Interesting that Myron and Dave chose to leave off the fact these members not only worked with USANA, but each hold their own distributorship as well. Why was this conveniently left off the back cover? I believe it was so it gave the appearance of third party credibility. 

It reeks of the same problem that the Third Edition of the Comparative Guide to Nutritional Supplements has. Written by Lyle MacWilliam (who was also on USANA's Scientific Advisory Council), the book ranked vitamins and ranked USANA #1. On the back of its cover were all USANA affiliates giving their review without ever disclosing such USANA affiliation. In fact, Christine Wood and Denis Waitley were two of the editorial reviewers on that book as well!

Tuesday, April 12, 2011

USANA's Use of "The Healthy Home" Book as Entry Into Company Run Nation Wide Lottery May Violate State & Federal Laws

"The Healthy Home" hits 5 best seller lists during first couple weeks of book release. However, ...

Screenshot of USANA's website showing The Healthy Home
It appears USANA is currently violating both Utah State and Federal gambling laws. USANA's requirement for distributors to purchase Myron Wentz's book "The Healthy Home" in order to participate in a lottery to win an iPad may land USANA in a heap of trouble. State and Federal Regulators need to be made aware of this potential crime currently taking place. The lottery runs from March 27, 2011 to April 15, 2011.

According to PRNewsWire, USANA has made the Best Sellers list for The New York Times, USA Today, L.A. Times, Publisher's Weekly, and for the book's extraordinary sales.

According to Utah State Laws for gambling
     76-10-1102.   Gambling.
     (1) A person is guilty of gambling if he:
     (a) participates in gambling;
     (b) knowingly permits any gambling to be played, conducted, or dealt upon or in any real or personal property owned, rented, or under the control of the actor, whether in whole or in part; or
     (c) knowingly allows the use of any video gaming device that is:
     (i) in any business establishment or public place; and
     (ii) accessible for use by any person within the establishment or public place.
     (2) Gambling is a class B misdemeanor, provided, however, that any person who is twice convicted under this section shall be guilty of a class A misdemeanor.

According to Federal Laws regarding lotteries:
    * The federal lottery statutes made it illegal to transport lottery materials across state lines, or ship them to other countries
    * The Interstate Wagering Amendment of 1994 made it illegal to procure a ticket for someone in a different state than that in which the lottery was held

Let this also be a reminder to the general public that Myron and Dave Wentz's book "The Healthy Home" made it to several Best Sellers lists solely because they used their book as $13.19 raffle tickets for USANA distributors and USANA preferred customers to purchase and have the right to participate in a company run lottery to give away 3 iPads. The "general public" as Dave Wentz calls it, has virtually nothing to do with the sales of his book.

Sunday, April 10, 2011

Myron Wentz's “The Healthy Home” makes NY Times best seller list by being sold as raffle tickets in lottery drawing held by USANA.

nullMyron Wentz (founder of USANA) and his son Dave Wentz (CEO of USANA) authored a book called “The Healthy Home” which was released on March 22, 2011. Their book made it to number 7 on the NY Times best selling book list for “Hard Cover Advise and Misc”. What is not mentioned on any press releases is the fact the book is being sold as raffle tickets to win an iPad in a lottery operated by the authors.

USANA is currently running a lottery drawing exclusively for their distributors and preferred customers to win iPads. In order to participate in this lottery drawing, the USANA distributor or preferred customer must purchase Myron Wentz's new book “The Healthy Home” from for $13.19. Distributors can enter as many times as they wish, but are advised to do so during different weeks of the contest to help bolster the book's best seller rankings.

USANA explains this contest in a document on their Ask Andy website which is used by their distributors to access important information regarding USANA: (A copy of this document is provided in full at the bottom of this blog entry)
"Here’s how it works—Purchase a copy of The Healthy Home on between March 27 and April 15 and e-mail a copy of your electronic receipt to Not only will you receive a special Healthy Home pin at USANA’s 2011 International Convention, but your name will also be put into one of three special drawings for a chance to win one of three iPads!

* Week 1: March 27–April 2 (we need to sell 1,000 copies of the book this week)
* Week 2: April 2–9 (we need to sell 1,500 copies this week)
* Week 3: April 10–15 (we need to sell 2,500 copies this week)


Q. Who can participate in the drawing?
A. This drawing is only for USANA Associates or Preferred Customers living in the United States."

Distributors interested in participating in the lottery to win a $500 iPad only need to purchase a $13.19 raffle ticket from called “The Healthy Home”.

Amazingly, USANA's CEO Dave Wentz made the following statement regarding their position on the NY Times Best Seller list in the following article:
"The response to our book has been incredible," says Dave Wentz. "Although the book was released less than three weeks ago, we have gotten calls from reporters and TV and radio stations from all over North America. We have received over 3,000 'likes' on Facebook in a short time and gotten a lot of great feedback from our readers. Clearly, the topics we address in The Healthy Home are a huge interest to the general public." (my emphasis in bold)

What GENERAL PUBLIC is Dave Wentz referring to? Dave knows that the book is primarily being sold to USANA distributors who purchase the book in hopes of winning a $500 iPad in a lottery drawing. The general public has nothing to do with the purchases of The Healthy Home. Clearly, the statement made by Dave regarding "interest to the general public" was an attempt to mislead the general public.

I believe the authors are conducting a highly unethical method to appear on Best Seller lists. It would be very interesting to find out what Amazon thinks about this lottery system. Also, what about the other outlets that sell the book? What do they think about the fact the authors are holding this lottery exclusively with

Below is USANA's Lottery Information found on their Ask Andy website: Contest

The Healthy Home launched with a bang, but we're not done. Our sights are set at the top of the best-seller lists, and we need your help. Purchas at, and you could win an iPad!
Buy Copies of The Healthy Home at by April 15

Participate in USANA’s efforts to help make The Healthy Home a best seller and you could win an iPad!
The Healthy Home launched on March 22 with incredible success, but the journey is just beginning. To make this book a truly powerful vehicle for spreading Dr. Wentz’ vision and for building your business, we need to make it a best seller. To do so, we need you! And in case you need a little extra incentive, we’ll be awarding incredible prizes to those who help.

To become a best seller, we’ll need to sell a certain number of copies of The Healthy Home on within the next three weeks.

Here’s how it works—Purchase a copy of The Healthy Home on between March 27 and April 15 and e-mail a copy of your electronic receipt to Not only will you receive a special Healthy Home pin at USANA’s 2011 International Convention, but your name will also be put into one of three special drawings for a chance to win one of three iPads!

There will be an iPad drawing at the end of each of the three weeks during which will be reporting sales of The Healthy Home for possible inclusion on the top best-seller lists. 

  • Week 1: March 27–April 2 (we need to sell 1,000 copies of the book this week) 
  • Week 2: April 2–9 (we need to sell 1,500 copies this week)  
  • Week 3: April 10–15 (we need to sell 2,500 copies this week)
    The number of books we need to sell is not impossible. We can do it, and any help from you will make a big difference. So talk to your Preferred Customers (because they can participate, too), talk to your downlines, and talk to your uplines—spread the word and create a strategy to determine the best week for each of you to make your purchases. And if you plan on purchasing more than one copy of the book from, buy them one at a time and during different weeks to help bolster our chances of making the best-seller list and your chances of winning an iPad.

    Together, we can make a difference. Many of you have already bought copies of The Healthy Home, and your efforts are reflected in the early success of the book. But with a little more help—even the purchase of just one more copy through by April 15—you can help make The Healthy Home an even greater sales tool than it already is. Let’s spread the vision of Dr. Wentz to the world together.


    Q. Who can participate in the drawing?
    A. This drawing is only for USANA Associates or Preferred Customers living in the United States.

    Q. What do I win?
    A. Anyone who purchases a copy of The Healthy Home from between March 27 and April 15 will receive a special Healthy Home pin at USANA’s 2011 International Convention. The name of each entrant will also be placed in a drawing for one of three iPads.

    Q. Can I enter the drawing multiple times?
    A. Yes, as long as you have more than one receipt. Multiple copies of the book shown on a single receipt will only be entered into the drawing once. Therefore, it is important that you purchase each copy of The Healthy Home separately during this period.

    Q. Where do I send my receipt?
    A. E-mail an electronic copy of your receipt from to

    1. This is an individual-based promotion.
    2. Participants must reside in the United States.
    3. Only one Healthy Home pin and/or iPad will be awarded per distributorship.
    4. No purchase necessary. Participants can be entered into the drawing by mailing a postcard with their name and Associate or Preferred Customer identification number to the following address:

      Healthy Home Contest
      c/o USANA Health Sciences
      3838 W. Parkway Blvd.
      Salt Lake City, UT 84120
    5. Employees of USANA and their family members may not participate in this promotion.
    6. Any manipulation of this promotion, i.e., sponsorship manipulation, downline purchasing (placing a sales order in a Business Center other than where the sale was generated), forgery of receipts, etc., will result in disqualification from this promotion, in addition to any sanctions under the Associate Agreement.
    7. By entering, each entrant accepts and agrees to be bound by these rules and by the decisions of USANA, which shall be final and binding in all respects.
    8. Taxes, if applicable, are the sole responsibility of the prize winner. The fair market value of all prizes will be reported to the IRS pursuant to IRS regulations.
    9. Prizes are non-negotiable and cannot be redeemed for cash.
    10. No substitutions or transfer of prizes is permitted. USANA reserves the right to substitute a prize for one of equal or greater value in the event that an advertised prize is unavailable.
    11. USANA is not responsible for lost, late, or misdirected online entries or transactions for incorrect, inaccurate, or incomplete entry information whether caused by a contestant, equipment, or technical malfunction or for any human error, technical error, or malfunctions. USANA reserves the right to halt or modify the promotion at any time during the promotion period if events beyond their control compromise the promotion's fairness or integrity.
    12. USANA, in its sole discretion, may disqualify any entrant from participating in the promotion, refuse to award prizes, and require the return of any prizes if entrant engages in any conduct USANA deems to be improper, unfair, or otherwise adverse to the operation of the promotion or detrimental to other entrants. Such improper conduct includes, but is not limited to, falsifying personal information required during the promotion.
    13. USANA reserves the right to modify these rules for clarification purposes without materially affecting the terms and conditions of the promotion.
    14. This promotion may not be used for any form of gambling.
    15. If for any reason the Internet portion of the program is not capable of running as planned, including infection by computer virus, bugs, tampering, unauthorized intervention, fraud, technical failures, or any other causes beyond the control of USANA which corrupt or affect the administration, security, fairness, integrity, or proper conduct of this promotion, USANA reserves the right, at its sole discretion, to disqualify any individual who tampers with the entry process, and to cancel, terminate, modify, or suspend the promotion.
    16. USANA assumes no responsibility for any error, omission, interruption, deletion, defect, delay in operation or transmission, communications line failure, theft or destruction, or unauthorized access to, or alteration of, entries or transactions.
    17. USANA is not responsible for any problems or technical malfunction of any telephone network or lines, computer on-line systems, servers, or providers, computer equipment, software, failure of any e-mail entry or transaction to be received on account of technical problems or traffic congestion on the Internet or at any website, or any combination thereof, including any injury or damage to participant's or any other person's computer related to, or resulting from, participation or downloading any materials in this promotion.
    18. USANA reserves the right to use names, images, and likenesses of promotion winners for printed and online media to market USANA products and promotions.