According to a USANA Document, 92% of Commissions Are Paid To Less Than 1% of USANA Distributors

On USANA's website is a document titled "North American Average Total Earnings". Using a few of the numbers disclosed in this report, I will demonstrate how about 92% of the commission paid out goes to less than 1% of distributors, leaving only $52 per year on average for the remaining 99% of distributors.

USANA claims $616.72 was the average commission paid out if all 135,590 associates in the North American region are considered for 2011. Multiplying those two numbers together gives the total amount paid in commissions, which is $83.6 million.

In the chart, USANA shows that gold directors makes up 0.5% of everyone, which comes out to 677 associates if you multiply the 0.5% in the "of everyone" column by the total 135,590 associates. USANA also shows for the Gold Directors the percentage of Full-Time associates it represents, which is 67%. Now if you want to know the number of associates in the Ruby, Emerald, Diamond, and Star Diamond categories you simply multiple the percent of full-time for the category, multiply it by the number of Gold director associates and divide it by 67%. Now we have the number of associates for each leadership ranking from Gold Director on up to the Star Diamond Directors, which comes out to about 1009 associates.

USANA states in the report that $76,000 is the yearly average income for a full-time associate. Now multiply the $76,000 by the 1009 full-time associates, which comes out to $76.7 million.

$76.7 million for Full-time associates divided by the $83.6 total commissions paid is about 92%, which is the percentage of commissions paid to less than 1% of all associates.

Interestingly enough, USANA did not even update the report this year to show 2012 figures. Either USANA made a huge mistake in their report, or they do not want to publish any more distributor data that shows how little the majority of distributors make, which is virtually nothing. Certainly not enough to cover the required product purchases every 4-weeks.

Can USANA simply disclose the figures as they once did in their 2005 and 2006 North American Average Total Earnings report by showing the number of associates in each leadership rankings along with the total commission paid out in each of those levels instead of presenting a table that only shows theoretical figures that represents a very small percentage of each leadership level? Or is that just too much to ask?

About 85 Percent of USANA's Philippine Associates Quit and The Hidden Information in USANA's Regional Data.

USANA Health Sciences made a couple blunders in the last couple days which I believe reveals an 85% dropout figure for the Philippines market which is not being disclosed to shareholders. USANA wrote a press release on November 12, 2013 regarding typhoon Haiyan. The following is a quote from that press release, which is referenced directly from USANA's website (and still there as I write this):

"We have an incredible USANA family of more than 175,000 strong in the Philippines," said Dan Macuga, USANA chief communications officer. "Their courage and goodness inspires our global team. That's why we feel it so important to help them and all those suffering in the aftermath of Super Typhoon Haiyan." - USANA Investor Relations

I wrote about this 175,000 number on my blog a couple days ago and low an behold USANA tried to change the press release some news organizations got by changing one of their own quotes! Some news agencies now have the same press release but with the following change:

"We have an incredible USANA family, 25,000 Distributors strong in the Philippines," said Dan Macuga, USANA chief communications officer. "Their courage and goodness inspires our global team. That's why we feel it so important to help them and all those suffering in the aftermath of Super Typhoon Haiyan." - Prnewswire

How is it that USANA can change a QUOTE that one of their executives made? It's a quote for goodness sake. I want to thank USANA for making two fantastic mistakes.

1. USANA revealed that the total number of distributors they have recruited in the Philippines over the last 5 years is around 175,000.
2. USANA reveals that there are only 25,000 active associates currently in the Philippines.

So 85% of the Philippine USANA distributors no longer purchase USANA product or participate in the business opportunity. My previous estimate two days ago was 17,000 active associates or a 90% dropout figure.

Here is the key information shareholders should understand here:

If the Philippines has 25,000 active associates, and the East Asia Pacific region has 60,000 active associates, then that means only 35,000 active associates can account for Australia, New-Zealand, Singapore, Malaysia, and Thailand.

Let me show the last time USANA disclosed active associate numbers by the territory: - USANAWatchDog Blog

Active distributors in East Asia Pacific for Second Quarter 2010 (3 years ago)

Australia and New-Zealand =18,000

Singapore = 5,000

Malaysia = 14,000

Philippines = 7,000

Thailand = Non-existent

This totals to 44,000 active associates.

Fast forward to today: Active distributors in East Asia Pacific for Second Quarter 2013 (today)

USANA states in their SEC filing that East Asia Pacific has 60,000 active associates.

Australia and New-Zealand =14,000 *

Singapore = 3,000 *

Malaysia = 12,000 *

Philippines = 25,000 (recently revealed in press release)

Thailand = 4,000 *

* My guestimate in order to make the numbers add up to the reported 60,000 for the region.

Since USANA no longer discloses active associate numbers for each market they are in, investors are left in the dark about the true operations of USANA. The markets were grouped into “regions” and began only reporting regional numbers.

Based on my guestimate, the following represents the percent change over the last 3 years for those markets:

Australia and New-Zealand = 22% DECLINE

Singapore = 40% DECLINE

Malaysia = 14% DECLINE

Philippines = 257% INCREASE

Thailand = new market

USANA's True Health Foundation Donates $20,000 to Victims in Philippines after Typhoon Haiyan Hit. USANA Also Reveals 175,000 Associates In Philippines.

USANA Health Sciences announced in a press release on November 12, 2013 that they donated $20,000 through their True Health Foundation to help the victims of typhoon Haiyan that decimated the Philippines. This is a good thing and I have no problem with that. In fact, I want to commend USANA on their donation. However, USANA made one very interesting statement.

"We have an incredible USANA family of more than 175,000 strong in the Philippines," said Dan Macuga, USANA chief communications officer. "Their courage and goodness inspires our global team. That's why we feel it so important to help them and all those suffering in the aftermath of Super Typhoon Haiyan." - USANA Press Release

Dan Macuga just revealed that USANA has 175,000 associates in the Philippines since they opened there in early 2009. Would USANA care to disclose the current number of "active associates" for their Philippines market? We know it can't be more than the total East Asia Pacific region which they claim has 60,000 active associates as of the end of Q2-2013. I'll remind you that East Asia Pacific is made up of the following territories: Australia, New Zealand, Singapore, Malaysia, the Philippines, and Thailand.

I believe USANA's Philippines active associate numbers for their latest quarter would be somewhere around 17,000. This would reveal that 90% of their associates stopped purchasing USANA product and quit the business opportunity. This should be a clear indication of the real effectiveness of USANA's products, the MLM business model, and how much their associates really love popping the pills. Most of USANA's markets are saturated and unable to recruit more associates than drop out.

Investors and stock analysts should demand that USANA disclose the active associate numbers for each territory rather than just 3 regions. USANA used to disclose that information but no longer feels their shareholders deserve to see the whole picture. Stock analysts have repeatedly asked USANA the number of active Babycare Associates during conference calls and every time USANA refuses to disclose the figures.

It seems USANA would rather operate their publicly traded company in an Enron sort of fashion. Only disclose what doesn't reveal the truth about the numbers.