Company: Usana Health Sciences
CEO's: David Wentz & Kevin Guest
Startup Cost: $305
The company was founded in 1992 by Dr. Myron Wentz and specialises in various health and wellness products like weight loss, energy and nutritional supplements. They distribute their products through the mlm business model, or as they like to call it, direct selling.
The opportunity is marketed as a way for people to gain financial freedom by selling life changing products.
The Usana Compensation Plan
This compensation plan is, like most mlm companies, pretty annoying and elaborate to get your head around. But I do like how clearly they explain it to people so this is good. This comp plan walks you through most of what you need to know but this will help you make sense of it and work out how worthwhile the opportunity is.
Ways You Can Earn
Selling The Product: You can make 10% retail commissions on products you can convince people to buy, the selling of product in this company is a joke to be quite honest.
The products do seem good, but I doubt if anyone makes a good living by focussing on product sales. Why? For one thing, literally anyone can go straight to the company website and buy products at wholesale price (preferred customer price) the same as you can as a distributor.
Why would anyone go to your website and pay retail if they can purchase at wholesale so easily? Yes, people must buy through your affiliate link and you can benefit in other ways, but since buying at wholesale is such a simple task I doubt many are making much from retail sales.
Build a Team: You have the opportunity to recruit people into your downline and make a 20% commission based on the overall performance of your organisation. This works on a binary system where you only ever have two recruits directly underneath you on your first level, left and right.
Each product carries a certain amount of points and whenever a product is purchased somewhere in your organisation, it will count towards your organisations points balance. This is known as GSV (group sales volume).
This happens on either the left or the right of your business. At the end of every week the company will calculate the lesser performing legs point balance (left or right) and pay you a 20% commission based on that.
For example: If your LEFT leg has accumulated 1100 GSV overall and your right leg has 1500, you will get 1100 GSV x 20%. In this scenario you will be paid 220 Commission Points that will then be converted and paid to you in your local currency.
The annoying thing is, I have scoured the Internet and cannot find ANYWHERE how much these commission points actually equate to in dollar value. It is probably safe to assume that 1 commission point probably equals US$1 as this is normally the case with this kind of set up. But I could be wrong and if you know better, please correct me in the comments.
Various Bonuses: Throughout the compensation plan there are various bonuses on offer based on your performance and the performance of your team. This give reps an extra way to earn an income and some of these bonuses are actually pretty good.
To get qualified and really start earning anything at all in this business you will need to acquire your first 200 PV. These are just points associated with products that YOU buy or one of your direct customers buy from you.
The most economical and easy way to achieve these points is to simply purchase a ‘Basic Business Pack’ for $305.
This gives you some basic Usana products and will give you 250 PV which is all you need to activate you first business centre. I am not going to go into detail about the option to start more business centres, but there is that option too which is cool.
Maintaining Your Business
To keep just one business centre open you need to be purchasing or selling 100PV worth of product every 4 weeks without fail, or you will lose out pretty bad. If you fall below this requirement, you are not eligible for your commissions or bonuses and will lose any accumulated commission points. This does not change until you reach the minimum monthly purchasing of 100PV again.
In other words, if you can’t buy or directly sell US $120 worth of product each month, you shouldn’t be getting into this.
It is reasonable to expect to be paying $120 each month for products for yourself to consume, as most new reps end up doing with an auto-ship. And realistically, selling $120 worth of product each month is pretty easy once you get into the swing of things so it’s not a crazy burden.
The Cost Break Down
I’m going to show you an estimate based on what it would cost the typical rep in getting started making money with this company in the first year. This is not indicative of everybody’s costs, but this is just what I would personally consider to be the norm and what it would cost me.
Starter Kit= $305
Yearly Renewal Fee= $20
Monthly Qualifier= $120 in sales
Replicated Website= $19.95/ $239.40 per year
This is not a huge expense all things considered and the monthly qualifier isn’t unreasonable. At least now you have more of an idea on the costs involved with this business. There are also other costs such as conventions, seminars etc but you don’t ‘need’ to go to those, although many company leaders will say this is essential.
The Average Distributor Income
The average yearly income for a Usana rep is about $859 according to their website and the screenshot below illustrates this.
As you can see over 60% of distributors make no money and over 90% only make around $293 per year on average. While I think this is a good thing they are open and upfront about this with people, it does show you what you are dealing with. Now, I am not showing you this to put you off. Not at all.
But I do think it is worthwhile for you to be prepared coming into this if your goal is to make a full-time income. What can you do to avoid being in the bottom percentile range? Don’t rely on chasing family and friends to grow your downline, it really doesn’t work well for the majority of people and safe to say the numbers prove this. There are better ways to achieve your goals in my opinion.
What I Liked
- Products seem good and have been tested by some reputable research companies
- The products have the backing of Dr. Oz which means marketing these just got easier
- They are reasonably transparent with distributor earnings and details about the business
- The compensation plan is very clearly explained
What I Didn’t Like
- They teach the warm market technique for growing your business
- Some critical information about the comp plan was very difficult to find
The products seem good and if you love the results you are getting, this could be a great way for you to get those for free and make some extra cash each month. Personally, I think that in order to make a solid income with Usana you’ll need to do more than just share the opportunity with those you know.
I’m not saying it’s impossible to do things that way but I really can’t say I’m a fan of it or that it’s the best way. Whatever you decide, hopefully this review has given you some insights to make your decision about joining a little easier!