Chances are you’re here because you’re considering signing up to be an USANA Associate and dipping your toe into the world of network marketing.
It sounds great – who wouldn’t want to make some extra cash by recommending products you love to your friends while getting healthy and making money at the same time?
After all, USANA’s own website promises that if you decide to sell USANA products, you can ‘be your own boss, be healthy, be part of a community, and be courageous.’
What’s not to love?
However, you’re a little hesitant.
Maybe you think that everything sounds too good to be true, or you’ve heard people saying things like ‘USANA is a pyramid scheme!’ and ‘USANA is a scam!’ and you want to figure out whether USANA is legit before diving in headfirst.
In this article, we are going to dive into the USANA MLM opportunity and find out what being an USANA Associate is really like, and whether USANA is just another pyramid scheme in disguise.
Is USANA a Pyramid Scheme or a Legit Business Opportunity?
What is MLM?
In case you were wondering, USANA is an MLM company.
MLM stands for multi-level marketing, and MLM companies are also referred to as network marketing companies or social selling companies.
MLMs have been around for years, and popular MLMs include Nu Skin, Monat, Pampered Chef, and even Avon!
You don’t receive a salary in a multi-level marketing company.
Instead, you earn money from selling products to people you know and recruiting others into the business.
When you recruit a new person and that person begins earning money, you will earn commission from the sales and recruits generated by THAT person.
This continues down in multiple levels (hence multi-level).
Imagine a triangle.
If the person at the very top of the triangle recruits 10 people, and every one of those 10 people recruit another 10 people, and each one of those people recruit another 10 people, you’ll be making commissions from EVERYBODY within the triangle because they’re all in your direct downline (the people underneath you in an MLM are referred to as your ‘downline’ and you’re their ‘upline’).
All you had to do was recruit 10 people and you make money from 1100.
While MLM companies like USANA also give you the chance to make money from selling their products, most of the people in MLM companies prefer to recruit others because they stand to make a lifelong passive income from that person, whereas if they sell a product they’re just going to receive a one-off commission.
The ultimate aim of somebody in an MLM then, is to have as many people in their ‘downline’ as possible, enabling them to form large amounts of passive income for little work.
What is USANA?
USANA Health Sciences was founded in 1992 by Dr. Myron Wentz, who, according to his own website, is a ‘world-renowned microbiologist, immunologist, and pioneer in the advancement of human cell culture technology and infectious disease diagnosis.’
Although he does indeed have qualifications in microbiology and immunology, his main focus is his USANA business.
USANA is a wellness MLM that sells various nutrition supplements, personal care products, and more.
Its flagship product is something called USANA CellSentials.
USANA CellSentials are a line of dietary supplements that consist of two products: a multivitamin and mineral supplement called ‘Core Minerals’ and an omega-3 fatty acid supplement called ‘Vita Antioxidant.’
They are formulated to support overall health and wellbeing by providing essential nutrients and antioxidants to the body.
With that being said, USANA products are not evaluated by the FDA.
Inside the USANA MLM Opportunity
How do USANA Associates make money?
In order to find out how USANA Associates make money, I took a look at their compensation plan – all 9 PAGES of it.
Like most MLM compensation plans, the USANA compensation plan is pretty complicated (more complicated than most, in fact), but to summarise, you make money in USANA by selling products and recruiting others into the company.
The concept behind their binary compensation plan is to fill up your left and right ‘arms’ with people you recruit into the company.
You must then ensure that your downline is continually replenished with new members.
The 6 different ways that you can make money with USANA are as follows:
- Retail Sales
- Weekly Commissions
- Lifetime Matching Bonus
- Leadership Bonus
- Elite Bonus
In order to sell USANA products to customers, you must first purchase the product at a ‘special Preferred Price,’ and then sell it on.
The ‘Preferred Price’ is 10% lower than the recommended retail price, so if you purchase a product for $100 and sell it for the recommended amount of $110, you will make $10 profit.
With that being said, you could charge more than the recommended price, but selling something at a higher price than your competitors (other USANA Associates), is never easy.
You will receive a weekly percentage in commission of the sales generated by your team.
This value is called a Group Sales Volume (GSV), and corresponds to the amount of products that are either sold or purchased by you and your team for personal use.
In other words, if you encourage your team to purchase USANA products for themselves, you will get a kickback from that.
Lifetime Matching Bonus
When you reach the ‘Pacesetter’ rank and maintain it for 3 consecutive months, you will then earn a 15% lifetime commission match for each person you recruit who also makes it to this rank.
A large part of making money with USANA is dependent on not only ranking up within the company (achieved by recruiting others), but on the success of the people you recruit as well.
As your progress is dependent on the success of people who may be so far in your downline that you don’t even know, your own determination and work ethic doesn’t really factor into your success with USANA.
A range of random incentives such as prizes and bonuses.
A Leadership Bonus is an additional cash bonus awarded to every Associate who ‘builds a large team,’ (recruits a lot of people), hits a high rank within the company, and continues to recruit people.
This is a monetary sum that is divided by the top 40 earners within the company.
The section of the USANA compensation plan that talks about how to begin your business with USANA says that as soon as you have completed the relevant application forms and paid the sign-up fee, you can immediately begin ‘building a business’ (you will not own your own business if you join USANA) by recruiting others into the company.
You can then purchase products for your own use, and you also have the ‘added benefit’ of being able to sell those products on to retail customers.
It is interesting to note that actually selling products is considered by USANA to be an ‘added benefit’ rather than the foundations of their business model.
It certainly seems as though the focus is on ‘building a team’ (recruiting people into USANA).
Remember this detail for later.
How much do you make with USANA?
In order to see how much money USANA Associates are making, it is necessary to see their Income Disclosure Statement.
An Income Disclosure Statement is a document that allows us to see exactly how many people are earning money with an MLM company, and how much of it they’re making.
The 2021 USANA Income Disclosure Statement shows that 28.7% of USANA Associated made less than $0 during 2021 (meaning they lost money).
42.9% of USANA Associates made between $0 – $250 in 2021.
Breaking it down even further, 27.4% of USANA Associates made between $501 – $20,000 in 2021, with just 1% of USANA Distributors making over $20,000.
Unlike other MLM compensation plans, this does take into account the $27 that USANA Associates spend on average on ‘non-commissionable products’ (their sign-up fee), but it does not take into account products that Associates buy for personal use, or products that Associates may buy with the intention of selling, but don’t manage to.
How much does it cost to join USANA and be an USANA Associate?
The cost to actually join USANA is actually very low – you just need to purchase a Welcome Kit for $9.95 and pay the annual $20 renewal fee.
The real cost of being an USANA Associate is revealed when you read the compensation plan, and see that regularly buying USANA products is not mandatory, but it is expected.
Here’s what it says:
Before you sell USANA’s top-rated products, you really should use them yourself. And although this step isn’t required, it’s important to become a product of the product – there’s no easier way to do that than by setting up Auto Order.
An Auto Order is a recurring shipment of product that is sent to you on a regular basis.
It’s essentially a subscription to USANA products, meaning that you will be spending a lot on USANA products over time.
You then have to maintain a monthly personal sales volume of 100 in order to remain ‘active’ and receive any commissions.
If you don’t make any sales, this means that you must personally spend around $100 every month in order to remain active within the company.
It is important to note that group sales or sales made by members of your downline do not count towards your personal sales volume.
So then, if you maintain a monthly Auto Order of $100, you will spend at least $1200 per year on USANA products.
Going back to the Income Disclosure Statement, we can see that 87.7% of Associates made less than $1000 per year with USANA, meaning that they likely lost money.
In other words, while the actual sign-up fee is low, you’re going to have to spend big money on USANA products.
Is USANA a pyramid scheme?
In order to see whether USANA is a pyramid scheme in disguise, we must first outline what a pyramid scheme is.
What is a pyramid scheme?
Pyramid schemes are very similar to MLMs, but the main difference is that MLM distributors are supposed to make more of their money from product sales rather than recruitment.
A traditional pyramid scheme takes an initial investment from each member and promises to pay them for enroling others into the scheme, meaning that people are buying into an ‘opportunity’ to get rich.
However, as members increase, recruiting quickly becomes impossible and so most members are unable to profit or even make their initial investment back.
The Wikipedia diagram below illustrates just how unsustainable this business model is – after just a few levels of recruitment, the scheme would have recruited everybody in the world and there would be no-one left to recruit!
Because it’s impossible for most people to make any money in a pyramid scheme, pyramid schemes are illegal.
However, most pyramid schemes have got wise to the fact that they have to offer a product in order to appear legit, but even though a business may have products, the focus will always be on recruitment rather than product sales.
Because there are so many of these ‘pyramid schemes with products,’ around, the FTC hasn’t quite caught up yet, and so many people believe that just because a company hasn’t been shut down yet, it can’t possibly be a pyramid scheme, which simply isn’t true.
In order to see whether USANA is a pyramid scheme, we must attempt to answer 3 questions.
1. Are most people unable to profit?
Earlier in the article, we showed that if people sign up to the Auto Order that the USANA compensation plan encourages them to, 87.7% of them will lose money with USANA.
Even if we assume that an Associate never bought a single USANA product, the numbers are still bleak, with 27.7% making ‘less than $0’ (losing money), and 42.9% making between $0 – $250 in the year 2021.
$250 per year works out to less than $5 per week.
In addition to that, Robert FitzPatrick, president of Pyramid Scheme Alert, says that USANA’s entire business model is can only succeed when most of its distributors fail.
He says the following:
‘If this chain [a downline] were continued just 26 levels, it would exceed the number of households in the US. Usana’s “success” depends on the “failures” of tens of thousands of recruits.’
2. Do you have to ‘pay to play?’
While the official sign-up fee isn’t very high, it is pretty much impossible to succeed in the company without being a ‘product of the product’ and regularly purchasing USANA products.
USANA Associates are encouraged to sign up to a monthly autoship, as well as purchasing products for themselves if they don’t hit their personal sales volume.
Like all MLMs, USANA’s entire business model is designed to force distributors to spend as much as possible, essentially making them the biggest customers.
3. Is there a heavy focus on recruitment?
USANA has a very aggressive approach to recruiting, with the compensation plan talking about recruitment as the main way to earn money within the company, and commission from retail sales only as an ‘added benefit.’
However, it is important to note that USANA does not pay their members directly to recruit people.
Instead, it give ‘bonuses’ or rewards of ranking up within the company (where they will then earn more money).
This is one of the sneaky ways that USANA avoids being classified as a pyramid scheme by the FTC.
Of course, you can make a small amount of money selling products, but earning a 10% commission from $30 supplement is not going to make you rich (unless you have a lot of friends who buy a lot of supplements).
The only real way to make real money with USANA is by recruiting a lot of people and earning residual income through their sales and the sales of people under them.
Is USANA a Pyramid Scheme? Final Thoughts
Most MLMs closely resemble pyramid schemes and USANA is no different.
With a huge emphasis on recruitment, a ‘pay to play’ model and huge likelihood that barely anyone in the company is making money, USANA definitely appears to be functioning like a pyramid scheme in disguise.
If it wasn’t already clear, Not Your Boss Babe does not recommend joining USANA, or any other MLM!