USANA's second quarter earnings will be released Tuesday July 24, 2012 and a follow up conference call will take place on Wednesday at 11:00 AM. I have a few very simple and important questions analysts or shareholders should ask USANA during the conference call for the second quarter earnings release. It is in the best interest of the shareholders that USANA answer the following questions.
1) How much (or percentage) of the distributor incentives was the result of active associates purchasing the minimum requirement every 28 days in order to be commission eligible? (VERY IMPORTANT QUESTION)
2) Of the distributors that USANA considers "Full Time" (Gold Directors and up), ON AVERAGE how much (or percentage) of the commission paid to them comes from preferred customers and how much (or percentage) comes from downline distributors? (VERY IMPORTANT QUESTION)
3) How many active associates and preferred customers are in each of USANA's territories? (Australia, New Zealand, South Korea, Japan, Malaysia, Philippines, Hong Kong, Mainland China, United States, Canada, Mexico, etc...) Please break it down by territory and not region.
4) How many distributors either renewed their distributor membership or purchased a Business Development System (BDS) in the last 12 months? (Will tell shareholders how many TOTAL distributors USANA has)
5) What percentage of USANA's net revenue was the result of product being retailed to customers outside distributor membership program? (If there are no retail sales, then why are associates being lured into the distributorship?)
Questions 1 & 2 are extremely important and shareholders and analysts should demand an answer to them. Its about time USANA explain where the commission comes from that pays tens of millions of dollars to their Full-Time (Gold Directors and up) distributors while leaving the remaining 99% of distributors profitless.
I challenge at least one of these USANA analysts to ask the above questions.
Scott Van Winkle - Canaccord Genuity, Research Division
Rommel T. Dionisio - Wedbush Securities Inc., Research Division
John P. San Marco - Janney Montgomery Scott LLC, Research Division
Frank A. Camma - Sidoti & Company, LLC
Timothy Ramey - D.A. Davidson & Co.
Per Osland (ph) – Jefferies & Company
Mimi Noel - Sidoti & Company
Doug Lane - Jefferies & Company
Diederik Basch – Canaccord Adams
Madeline Miller -- D.A. Davidson & Company
(Updated July 26, 2012)
Of course important questions like the ones I proposed above do not get answered and USANA continues to hide falling distributor numbers in many of their territories. Beginning last quarter, USANA decided to stop disclosing United States, Canada, and Mexico distributor numbers and instead just grouped them all together. Okay, not a big deal. However, USANA now includes their newest territories from EUROPE in the North American distributor numbers. For those that don't know, the United States and Europe are separated by about 3000 miles of ocean. So it is completely irrational for USANA to combine the European segments along with the North American segments because they are so incredibly geographically different. The only reason for USANA to have done this is to mask the continuing dismal distributor numbers in the US and Canada by including a new territory that is expected to have somewhat rapid growth. I call this sleazy and USANA's stock analysts are too blind to have noticed.
If you wanted to take the United States revenue and divide it by the number of active associates for the United States territory, then you can forget it.
Important to whom? Certainly not me.
ReplyDeleteI fail to understand your failure to understand a simple concept.
Gold directors are earning lots of money because they worked hard to build their businesses. It did not come to them on a silver (or gold) platter.
Associates who do not earn commissions are simply because they do not have a robust downline of associates and PC's. It's that simple. If you can't stand the heat, get out of the kitchen. Don't give up the day job.
I'm loving the business opportunity after just 8 months and earning commissions and growing my business from MY hard work. Plain and simple. It works for me. I love the products and the vast majority of users in my experience have high regard for the products. I believe your attempts to discredit the company will fail; I suspect USANA's profits will be acceptable this quarter and I suspect you will continue with your delusions, looking for a smoking gun that does not exist.
The fact that Usana reps are out there providing nutritional recommendations when the majority of them do not even have any qualifications in the field is irresponsible. Never mind the extremely over priced placebo range they offer....
DeleteNot all celebrities are earning.
DeleteNot all Engineers are earning.
Not all Doctors earn the same.
I bet most if not ALL, have debt and lost a battle somewhere right.
Blaming AND finger pointing, the lamest excuse of a loser, this what i think this is.
Are you selling the product or the business opportunity?
ReplyDeleteI think that you are making the point for the Dog. For every one on the top making money, there are 99 in the downline losing money. It is not about how good the product is. It is about signing up people by selling a business opportunity. The products are over-hyped and over-priced and are very difficult to retail. You are making money by ripping off the downline.
You are incorrect about me. I am "selling" the product to preferred customers, who can purchase it at the lowest prices if they autoship. I do not sell retail. I do not "rip off" any downline as I currently do not have any associates on my downline. Any future associate who joins my downline will be fully informed of the nature of the business with no hype, just the facts.
DeleteThen you are one of the few people who are not ripping off the people at the bottom.
DeleteI wish all of the other associates are like you.
I find it interesting that almost every distributor I discuss this with all claim they are selling to Preferred Customers. However, According to USANA's 2012 First Quarter 10Q SEC filings, USANA had 219,000 "active" associates but only 67,000 "active" preferred customers. That's over 3 associates for every preferred customers.
DeleteSorry if some here find it hard to believe that you are making any profit by only having 1 or 2 preferred customers with no recruited associates in your downline. According to USANA's same SEC filing, an Active preferred customer purchased $70 worth of product every 28 days. Are you ready for this?
You as a USANA distributor must personally purchase 100 Sales Points worth of product every 28 days if you want to be commission eligible (or you will lose all Group Sales Points accumulated from your preferred customers!!!). That would cost you about $110 (if you got the Healthpak100) plus another $6 for shipping. So you need to make about $116 in commission to recover your participation fee.
If you are a "Believer" or higher, your will receive more percent commission than a "Sharer" (10% instead of 8% of the Sales Points accumulated). We'll say that a Sales Point costs about $1.10... So now in order to recover your $116, You need in theory 1160 Group Sales Points. In other words, your preferred customers need to purchase about $1276 every 28 days. Based on USANA's SEC filings, each Active Preferred Customer purchases only $70 worth of product every 28 days.
What does this all mean? You need 18 active preferred customers on average just to cover your own mandatory product purchases! Sadly enough, it is actually worse than this because of the whole "Balancing Your Downline" tricky and the "I'm not going to pay commissions until you accumulate a certain number of Group Sales Points" scam.
You get it? You don't get paid commission until you accumulate enough points. But it takes time to accumulate these points. However, if you don't make your mandatory $110 product purchases, you LOSE all the accumulated points and never receive a commission.
This is the Pyramid Scheme that I have been trying to explain to people for the last 6 years.
Thank you -"AnonymousJuly 23, 2012 7:57 PM
DeleteAre you selling the product or the business opportunity?"-
You just summed up why i gave up the business after a couple of years this is not for people with conscience and intelligence,it's for politicians and car salesmen if you are either then you will be good or even great at USANA and I have to say that after getting to know my up-lines they are most definitely sleazy car salesmen.
I have been using and recommending Usana products for over 13 years. I have retail customers,PCs and downline. I do it part time and make a small profit after paying for my products. I get my products wholesale and love them. They have made a huge difference to my health and my family's health. The $110 I pay out every 4 weeks is not an expense, it is a purchase of great products and a way to keep my family healthy. I love what I do. I help people. I work the hours I chose. I work with who I want to work with. I do not make a vast amount of money but what I do earn I have worked for and deserve. Just like any business. We do not claim get rich quick or easy money. We show people how you can earn an extra income, bg or small by working a business. Incidentally I have met loads of wonderful people in Usana. None sleazy, all helpful genuine people who want to make a living while making a difference
DeleteThat's great that you would willing pay $110 each month for the products you use but please explain to me why Usana makes this a requirement when it's the sole reason people are calling the company a scam? What reason could be so good that they would be willing to sit there and watch as their hard working distributors are being called scammers?
DeleteI can see you're passionate about the products but can you not see that this monthly requirement is a scheme to push overpriced products? Are you also not able to see that the more people you bring into this system, the more people you're financially hurting? Is the ability to work when you want really worth supporting this scheme?
looks like another day of your PnL getting smoked.
ReplyDeleteWatchdog, this is a business that takes time and effort to nurture. Slowly but surely one's efforts can pay off and I can assure you that I and many other associates are not out to rip off other associates and watch them suffer. I understand it is hard to earn a profit in the beginning. Is that different from most other businesses? Is this different from all other MLM companies? Is there no credibility at all being a member of the Direct Sellers Association which has a code of ethics? If an early associate does not have enough downline business to generate a commission, there is no obligation to maintain a 100 point monthly minimum (ie. you don't have to spend the money if you don't have the downline volume to earn any money). The primary purpose for most associates is health first, freedom second. The exclusive purpose of all of my PC's is health. I don't talk about the freedom. I want them healthy. So for six years you have been trying to make a point. You have expressed your opinions and that is fine. You have not exposed any secret smoking gun. You have shown that there are unscrupulous associates that do unethical practices. That is not USANA. Meanwhile USANA released their record breaking revenues this quarter. That tells the world this company is doing a lot of things right in their 20 years of business. They are growing despite the challenges in North America and other areas economically. Personally I am happy that I have associated with USANA to both help my health for which I am grateful and for which I feel proud to promote their products to others and help others feel better. That's my USANA story.
ReplyDeleteIPB
"The primary purpose for most associates is health first, freedom second."
ReplyDeleteLOL. Uh, no. If it was, most people who quit Usana would continue to buy just as many products each month, but they don't.
As for Usana's earnings continuing to increase, it only makes sense. As long as Usana's overall distributor count increases, earnings will as well because distributors are the ones doing most of the buying. Recruiting is the key to this company's survival so that's why they reward you more for recruiting than merely selling the products. It's also why they need to expand to other markets to recruit more people and create more false demand in order to move more products.
"..associates are not out to rip off other associates and watch them suffer."
Most people in MLM aren't intentionally making others fail. I'm sure most people in MLM wants every single person in their downline to succeed. But that's impossible. Yes, IMPOSSIBLE. In other words, like it or not, the bigger the downline you build, the more people you're financially screwing over.
You should actually be glad that 99% of the reps don't really get anywhere with Usana, because if just half of them did, we'd have hundreds of millions of people making nothing with Usana. Take the time to do the math, numbers don't lie, but people with dollar signs in their eyes do. That or they let those dollar signs blind them from seeing the obvious truth.
People keep saying that they want people to be healthy by selling them the products. Well I have been taking the healthpak for almost 4 years now. What I did notice from it compared to Gnc's healthpak is that it absorbs better . Being healthy is not just vitamins and its is only a fraction of what it takes to be healthy. Most of the top associates I seen are not as healthy as people I see the work hard at the gym.
ReplyDeleteWhat is wrong with the business is that most of the commisions are made from selling a dream they will be rich. the top leaders will sell you on a dream that you will be a millionaire. Do you know how many Pro Packs you have to sell to make a million dollars in commisions. 10 million dollars worth balanced in numerous legs.
The only real ethical way to do the business is to sell the products to real customers and good luck being a millionaire trying to do that. Associates always say they market the products and have no downlines. You need 400 people on autoship on healthapk balanced perfectly just to be residual gold. Never heard of anyone with that.
Associates always use the word hardwork. example of what people think what hardwork is: Kobe byrant training early in the morning to work on his shooting...
Hardwork in Usana: Make friends and gain their trust and before you even met them you already wanted to recruit them. Once they trust you then you edify you upline so your upline can talk to them in a meeting or a table talk in starbucks and sign them up. Set up trainings at a house almost everyday. That is hardwork. Whats even hard is that you make no income from all these trainings you actually lose money paying for hotel/gas/food/time. It truly is hardwork recruiting a massive amount of people and still make no money because most of the income go to autoship. Buying formal clothes and investing in the buiness.
Gold directors and above do not all make decent income. In order to be gold you just need to recruit 8 propacks a week for 4 consecutive weeks in a row. that is about estimate $45,000 worth of propacks in the the month you make $1000 x 4weeks equals 4000. A few of your downlines hit silver and director in the process and make a few hundred. You guys are all in the hole and in debt because in a gold run the comapny makes 45K and commsions in the run is about 6k-9k. some of that 45k is spent on your gold retreat trip. So many casualties. I know personaly because I am a silver director part of a "gold run" . Shady practices happen in a gold run sometimes. when the time runs out (on a Friday) you trick people or beg people or pay for them to get plugged in just to meet the 10,000 points needed to hit silver that week. ..... Just ask Alina Nguyen, Nhi Nguyen, Jennifer Hyunh, Jeannie Thai, Tai Tran, Thong Tran. All live with their parents and all gold and above. If a Gold was making 1500 a week as they claimed; they would of had atleast move an apartment. Alina Nguyen was in big debt from her gold run. She had so many blender bottles at her house and reset kits. She must of paid for her Gold run then resell the products on facebook ebay for way cheaper to minimized her lost... she quit usana and got a decent job and even seen her facebook post... wow atlast out of debt after a year all from all those propacks she had to buy...
This type of associate behavior is absurd and is in direct contravention of USANA's policies and procedures section 5.3 Excessive purchases of inventory prohibited. These "casualties" are self-induced, illegal and do not represent USANA. Selling 8 propacks weekly represents unethical predatory practices and is strictly forbidden because one is clearly deceiving a downline for personal gain. These so called associates should all quit because it is they who spoil it for others. Reading "at last out of debt after a year from all those propacks she had to buy..." You've got to be kidding. She was a fool and should not have been buying anything. Read the rules and obey them. Plain and simple. Don't like? Get out!
DeleteRight,,,, because all Usana associates are so truthful and honest,,, oh please put a sock on it! come clean I saw the same behavior and you have too, they plead with their downline leaders to "help them out and I will help you out when your time comes" reporting does not help, once they are gold they are way to precious for Usana they will do nothing don't kid your self, well no, if you are just a sharer or believer they will kick you out so they can claim they do. You really drank the kool-aid didn't you? and still drinking it, no brains no way to think for your self you are perfect for USANA!
DeleteThe dream of being rich can only happen to 1 out of 100,000 people like jeremy standfield because that 100,000 people are the ones paying for all that stuff he owns from their autoship......
ReplyDeleteThe products are not the only vitamins in the market. The apple test doesnt' prove anything and the comparative guide is not 100% credible. But I do know the products do some good and so does my One a day. One a day help my auntie with her energy. My brother likes the healthpak and gives him energy. My auntie uses Melleluca and it works for her.
Usana associates also sell the fear of "if you don't take this healthpak you will get sick.. at some points it is true.. you get the nutrients from the vitamins and your body is stronger.. But its another trick to make you buy and buy. I even heard Aaron Dinh at a beach party that the healthpak cures cancer but keep it a secret. he says,"we have what people need and its just our job to tell everyone" this is just one of the shady lies he tells his downlines to keep buying the autoship.
Well just to make your point even stronger, I actually did get pretty sick while taking Usana vitamins, so they actually masqueraded the sickness because I felt fine it wasn't until one night my breathing was so shallow that I ended up in the doctor's with asthma attack (I never had asthma before) the doc asked me why I let it get so bad and i told him "I felt fine"
DeleteYou felt fine! You had bad asthma and you felt fine??? Well that must be some pretty good stuff!
DeleteEither the healthpak was protecting your cells from damage or was it your God?
Thanks for the EBAY tip, great product great prices (not overpriced like if you buy in autoshipment)!!!!
ReplyDeleteFrom my previous comments in an earlier article:
DeleteWell done logic. From reading your comments, USANA associates fully understand and agree with what you are saying but for whatever reason, they are in self-denial to the facts.
As an ex-USANA associate, I can confirm the following:
Quote:
'autoship's only purpose is to make sure the company sell products whether there's a real demand or not? Basically, your "residual income" is forced which is why so many MLMers have to keep rebuilding when a part of their organization collapses'.
Quote:
'With REAL residual income, you're making the money from genuine customers who actually WANT to buy the products like what cellphone and internet companies do. That's sustainable while endless recruiting and creating false demand is not'.
Quote:
'I know most of you have friends or family members who turned down Usana and after stating that you're going to make it big with this business, the thought of being wrong is too embarrassing to admit so you'd rather just put up some blindfolds and block yourself from realizing the truth'
Quote:
'The sad thing is that many people get in way too deep, where they feel like there's no going back, to the point where they're doing deceitful things but in their minds, they truly believe they're helping people. Their mind just won't let them go through the pain of being wrong and having to potentially face all of the "I told you so's" from their "negative" friends and family members. As a result, their thinking becomes fuzzy'
Based on the above quoted reasons from logic, I bravely withdrew from the USANA business. My sponsor was very disappointed but I took the bold move to withdraw once and for all and never to be involved in any form of MLM ever again. It's definitely against public interest 99% of the time. Save on paying autoship every 4 weeks. I now get my USANA products from eBay which is so much cheaper. The products are pretty good but not the business concept of endless recruiting and ripping off aquaintances, friends, relatives and family members. Best decision I have made to quit. I'm now at peace with my conscience and back to my pre-USANA days. I can now get on with my life again.
Good for you, from the beginning I always hoped for the best but when ever someone asked me if they could make lots of money I told them yes, but it is a one in a million chance, I myself have not seen much money in,I was honest.
DeleteYou might say perhaps this is the reason I did not make it big but you know what? I feel good I did not cheat and lie to get somewhere I am now on my way to that somewhere after 3 years with my own business I am out of debt and have enough down payment for a nice house
To Anonymous who wrote:
ReplyDelete"The products are pretty good but not the business concept of endless recruiting and ripping off aquaintances, friends, relatives and family members. Best decision I have made to quit. I'm now at peace with my conscience and back to my pre-USANA days. I can now get on with my life again"
Do you realize what a hypocrite you are writing that? You like the products enough that you are willing to purchase them from sleazy distributors who are dumping on eBay. Obviously you lost all senses of decency by wishing to perpetuate the problems some distributors self inflict. You should be ashamed of yourself. If you are at peace with yourself with your unethical purchases, you need help.
I feel sorry for you. One day you will see what I mean. I was an ex-USANA distributor and was in the thick of action. You are right, there are a lot of 'sleazy distributors' not by choice. It's because they have heaps of unused products due to Autoshipment delivery every 4 weeks. These 'sleazy distributors try to recover some of their money from eBay. If you consider them sleazy, that's because of your ignorance. I suggest you read the comments from Tony (August 1, 2012 6:33PM). He reckons you should be ASHAMED of yourself and rightfully so for your ignorance. Good Luck to you and keep on dreaming to strike it rich in MLM. Rest my case.
DeleteTo the anonymous poster above. You are an a**hole. So does that mean anyone and everyone who buys anything on ebay has lost all senses of decency? Heck no. You must be a distributor who came to the realization that your product costs way too much and that people are becoming more wise and looking for other avenues to save money on a product that is over priced. Nothing unethical about it and I bet that poster has found much peace not giving her hard earned money to a scam company.
ReplyDeleteAlso, distributors who sell products on ebay are not sleezy. They simply can not sell the product and are looking for an avenue to recoup their cost.
You should be ASHAMED of yourself. Ripping off your downlines from forced autoshipments etc. You're the sleeze ball.
At least have the balls to not behind Anonymous and put your name to your bull sh*t post like this.
- Tony
To the anonymous poster "You should be ashamed of yourself. If you are at peace with yourself with your unethical purchases, you need help"... What do you mean by unethical? Do you mean all people that buy from EBAY are making unethical purchases? EBAY is illegal?
ReplyDeleteDon't worry you can keep buying overprice product from DR Wentz and we will buy good and real low price product from EBAY!!! And we all are going to be healthy!!!
Dear Tony and the above poster:
ReplyDelete"Ripping off your downlines from forced autoshipments etc. You're the sleeze ball". Let me start by stating quite emphatically that MY downline consists 100% of Preferred Customers. I do not have a SINGLE associate currently on my downline. I do NO associate recruiting, so take back your slanderous claims. I do not rip off any of my preferred customers who purchase product directly from USANA at their PC pricing.
Secondly, it is ILLEGAL for distributors to sell product on eBay. It is also clearly stated in the USANA Policies and Procedures that associates are NOT permitted to make aberrant purchases in order to advance levels. Clearly, distributors who are "trying to recoup their costs" on eBay are breaking all the rules unless there are insiders stealing product from the production line.
Quite frankly if you think the products are too expensive for your liking, then buy another company's products that are less expensive. No one is forcing you to buy USANA. On the other hand if you actually do agree that the products are good for you then you should pay what everyone else is paying.
I never said eBay is illegal. eBay is a great company and I purchase all the time on eBay. However, the resale of USANA products on eBay is NOT legal. And remember, every time you buy USANA products on eBay are perpetuating ILLEGAL activities by associates. Clearly we are going to agree to disagree. However, I will not stoop to your level of inappropriate expletives which will not further your goal.
To Anonymous above, I'm delighted that you take the products to be healthy. It sounds like you do believe in high quality supplementation. I believe that the companies that manufacture supplements that are as equally highly rated as USANA are in the same ballpark cost. So, does that make USANA truly overpriced? My understanding is that a little over 40% of the costs go towards commissions and other incentives. That's how the company set things. It's not for me to decide if that is too much.
Incidentally, Tony, my name is Ira. It is a pleasure to meet you.
So you have absolutely no distributors under you and only real customers? Even though you're not making much, that's awesome! But, realize that there are distributors out there who are not only making a lot more than you by recruiting like crazy, they get recognized for it, admired for it, and celebrated for it. Is it any wonder why people focus on recruiting? People with big down lines are like celebrities in Usana, people with no downline are no bodies. Sucks, but that's how the business is.
DeleteAnd yes, Usana IS overpriced. That is why they FORCE sales from reps by requiring a monthly purchase in order to qualify for a paycheck.
As for reps selling Usana on Ebay being illegal, you talk as if they will be sentenced to prison if caught. I think the only reason they don't allow distributors to sell on Ebay is because they don't want people to know what the real market value of their vitamins are.
To Ira, even though it might be against company policy, distributors make large purchases of products and/or pay for new associates enrollment packs to rank advance all the time. Usana doesn't complain because that means more money for them. If you haven't seen this yet, you will. Especially if someone on your team is on a serious rank advancement run.
ReplyDeleteUsana does not allow associates to have their own websites unless you are Gold or above. Associates looking to sell products online have no choice but to use Ebay or Craigslist get some online orders. Usana created this activity due to their own restrictions imposed on new associates.
I also read the previous posts and Tony's response to the person blasting the woman for buying things on ebay and having lost on sense of decency, is appropriate. That poster was way out of line.
Ira, if your business is comprised of all preferred customers, good luck to you. Only way to make it big in Usana is to recruit hundreds of associates.
Lastly, while you might not be directly ripping off your preferred customers, Usana definitely does. If one looks at their invoice, they see a shipping, tax, and dutie charge. From speaking to high level management in the past, Usana charges fees to process monthly autoshipments and hides them in this charge of the invoice. Usana also sends out autoshipments every 28 days opposed to every 30 days in order to get 1 more autoshipment during the year. Why can't it simply be the same day of the month each month?
The products are good, expensive but good, think all of us can agree on that. The biggest problem I see with Usana is the business model and with the distributors who constantly try to sell you a dream that doesn't exist. Not there fault, but something they just have to do in order to get more associates in order to make any money.
i just started in usana, and yet i already have my own website..are you even an associate in usana? coz u don't know anything, well based on what you said on this comment of your..:)
DeleteYou have a "Sub Domain" provided by USANA for a fee. So what if you have a website?
DeleteIs anyone of you who had these negative comments an active associate of Usana?..because if you're not, or not anymore, then with all those things you're saying about the company, I now know why..Geez! do you even get good things out of putting bad words on others? ..well, God bless you..you need a lot oof those..:)
ReplyDelete..haha!and whoever's approving these comments, duh! your dumb you know..approving only those who will benefit your claim..tsk3..
ReplyDeleteHave you written a comment on any of USANA's blogs? I have many times. Are they up there? Nope.
DeleteI approve all the comments I receive as long as they are not SPAM or filled with bad words...
..haha!and whoever's approving these comments, duh! your dumb you know..approving only those who will benefit your claim..tsk3..
Delete>>> Before you call him dumb... Have you read ALL of the comments in this blog? He hasn't done any personal attacks towards you, so don't bash him up like he owes you big time.
If I'd personally attack you I'll pinpoint that grammar of yours, really.
yah right..well good luck top this blog of yours..
Delete