A new USANA document written for their customer service employees shows them how to explain to customers why the products are so expensive. Why bother contacting USANA for the answer when yours truly can give you the document they provided for their customer service?
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| http://www.usana.com/UPLOADS/usana/2014/115/115-1_KAA.html |
Product Pricing (Why the Products Are So Expensive)
Occasionally, we receive questions as to why our products are so expensive. You can use the following in response to this question:Before pricing our products, we do our research to ensure that we not only supply the finest quality products, but at the best price possible. There are many factors that go into pricing: research, formulations, raw materials, costs associated with batch size, manufacturing, packaging, transportation, commissions, regulations, inflation, taxes based on the market, etc. All of these add up to the cost of doing business and impact the price USANA is able to offer on a product.Posted: 25-Apr-2014
Lets break this down so we can see exactly why the products are "so expensive" as USANA puts it.
- Research and Formulations would be categorized under "Research & Development" and represents a measly 0.7% of the price of the product.
- Raw Materials, Costs associated with batch size, manufacturing, packaging, and transportation would be categorized under "Cost of Sales" and represents 18.5% of the price of the product.
- Commissions are categorized as "Associate Incentives" (which also includes bonuses, and certain awards and prizes) represents 43.2% of the price of the product - the biggest reason why the products are overpriced. It is also worth mentioning that two thirds of all USANA associates have never collected a single commission. Most of the commission is paid to the top 1% of associates. Last but not least, 99% of USANA associates do not make a profit. This category is the heart of the pyramid scheme.
- Regulations and Inflation. well I'm not sure where these fits in with the cost. However, even USANA's 10K SEC filings state this about inflation: "We do not believe that inflation has had a material impact on our historical operations or profitability." So why does USANA want their customers to now believe otherwise?
Interestingly enough, nothing about voluntarily manufacturing to "pharmaceutical good manufacturing practices" even made the list of excuses, although that would be considered part of Cost of Sales anyway.
So lets look at the price of the USANA Healthpak100 which can be purchased through auto-order (formally known as autoship) for $105.75
Healthpak100 Auto-Order price: $105.75
Cost of Sales: $19.61
Associate Incentives (commissions): $45.73
Selling, General, & Administrative (SG&A): $25.84 (Includes Research & Development of $0.74)
USANA Earnings: $14.56
How do USANA customers feel about this? Only 74 cents toward research and development! Now lets remove the commissions from the price of the Healthpak100. Instead of $105.75 for the Healthpak100, the product is now only $60.02 (We'll call it $59.95 for marketing purposes). Wouldn't you rather pay $59.95 for the product as a distributor (or customer) and be able to mark up the price yourself if you choose to retail the product? Remember, 66% of USANA associates never make a commission and 99% of associates never make a profit. So then what good does it do to overcharge 99.9% of USANA customers for an incentive they never benefit from? It only benefits the top 1% of distributors who are out primarily selling the "get rich scam" rather than selling the product...
USANAWatchDog answer to why USANA products are so expensive:
To fund the pyramid scheme.
So just how exactly did you get your hands on an internal document sent to employees of Usana?
ReplyDeleteThis isnt first time you have magically obtained confidential internal documents for Usana.
Quite conclusive beyobd doubt that you are an employee of usana, and that's also why you simply refuse to tell everyone your name.
And by the way, I am a Usana customer and this in formation about over priced products is very upsetting.
Glad you are publishing this info, and hope Usana never catches you.
Magically obtained information?
DeleteIf it's a confidential internal document, why can it be accessed by anybody? If I am to keep those, I'll only allow access to those with accounts in USANA or at least encrypt it.
Easily accessible Moon? Okay, prove it. Share link to this document.
ReplyDeleteHuh? The link is in the article. Anyone and everyone with an internet access can access it.
DeleteI'll paste it again for you: http://www.usana.com/UPLOADS/usana/2014/115/115-1_KAA.html
The link is in the post.
ReplyDeleteDo you know how much is the cost of Pharmaton each capsule? Do you know how much is the cost of a PAIR of USANA essentials tablets? How cheap is a capsule of Pharmaton vs a pair of tablets of USANA essentials (Megaantioxidant and chelated minerals)?
ReplyDeleteSo, at Starbuck's coffee, how much is the real cost of coffee? Is it worth to take out a cup of Starbuck's coffee? If it is expensive and not worth it, I believe it's common sense. Don't buy!
ReplyDeleteThis is funny ..why calculate it as by pack?? Everything is done by volume when they made it not by pack or piece.. Even a small businessman earns by volume calculation, not by piece .. Your just making things up for brainwashing or something .. Make a better topic rather than your " example"
ReplyDeleteIt is true that sales commissions create a crippling overhead cost in the MLM model vs direct retail overhead and it is a shame that a company would respond with such a misleading response.
ReplyDeleteWith that said though, USANA does not mislead in regards to product quality and integrity. Their science is sound and quality is top notch. You are getting ripped off by the sales commissions but at the same time getting a leading edge top quality product.
Is it worth it? Depends on how lazy you are. The Healthpak is very convenient. MyHealthpak is truly an awesome product if you can afford it.
So as unethical and cost prohibitive as the model is, it does provide a convenient and top quality product with a focus that is usually a couple years ahead of mass market retail. There is no getting around that.
ex-silver director 2009
Deletenutritionist say that it is better to use natural vitamins rather than synthetic vitamins.... the positive effects of usana products maybe the same of gnc depending on the person.. I have been off the healthpak for years now and I do not miss it at all....... In training they say usana is the best.. but based on what facts? Just like what every USANA reps say about this site.... ITS ALL OPINION... your claim of usana being high quality could be very well just opinion if GNC and Nature foods vitamins etc can do better in feeling and in performance ...... I would love to see proof that USANA products is the best from a real third party source... not from the comparative guide by the way.. which I have 3 copies if you want one LOL... when its winter time I'm going to use that book as a fire started in my chimney.. that's how useless the book is....
usana does not have proof usana is better than everyone else... watchdog doesn't have facts it is bad........ once this is truly proven by a person that is an expert in this field, this will probably end this company... usana will have nothing else to defend once the product quality has been truly exposed..
It Is True
ReplyDeleteOn what do You base you comment that Usana has product quality and integrity? In the reports that I have seen the contents did not match the label by more than 10%. Top notch? I doubt that too.. Most of the material comes from China. You can ask Herb.
The only reason the products are in existence is to be used as tokens in a pyramid scheme. They are not convenient nor are they awesome. Usana has been in business for more than 20 years and nobody has heard of them. At the price that is charged they cannot be retailed. The main consumers for the product are the Usana associates. 80% of the associates drop out each year when they realize that the product cannot be sold at the retail price.Some marketing plan?
Do you know who was put in your upline today?
.
Yes, I would love to pay that price!!! However, who spreads the word of USANA if not the associates? Marketing is much more expensive and the products would cost much more. How can I look at a person and find things wrong with them? I feel sorry for your poor spouses and children. Find more things that your kids and spouses do wrong than what they do right?
ReplyDeleteconsumerlabs.com
ReplyDeletefor 3rd party independent usana reviews. you have to pay for a subscription but its all in there.