Is it possible to buy your way to the top of the pyramid at Usana (NASDAQ:USNA)? Who would even want to? Well the answer is simple… those who are at the top of the pyramid have a much easier time recruiting new marks into the scheme. So buy your way to the top, and you’ll likely get more publicity and more opportunities to recruit new victims. More victims equals more commissions.
Here’s how it would work, and this is compliments of an anonymous writer who wanted to share the methodology with my readers:
USANA Distributors may try to do whatever it takes to rise in leadership ranks
I believe there may be several USANA distributors (if not many) who will do whatever it takes to rise in the leadership ranks. The purpose of this is that the higher your rank, the more likely a prospecting recruit will join your downline. Leadership rank is what it is all about. If you are only a “Sharer” (or not even) and you try to recruit someone into the pyramid, the odds that prospect joins your downline are slim to none. But if you are a Silver Director or higher, that prospect will believe you are making a lot of money and would more likely join your downline.
So how does a distributor manipulate the system in order to rise in ranks? They simply invest $10,000. It sounds like a lot, but it’s probably worth it.
I join USANA and buy a 3-business center deal. $20 for the E-BDS kit, and 5 Health Paks for $500 (“Convenience” Enrollment Package worth 500 sales points). Then each day, I create two or three fictitious recruits and put them in my downline while being sure to always keep everything perfectly balanced.
Each fictitious account I create will purchase the starter kit for $20, have “3-business centers,” and the “Convenience” enrollment package for $500. I do this until I make a total of 10,000 sales points for that given week. This would cost $10,400 for the first week: $10,000 in convenience packs and $400 in Starter Kits. Don’t forget, I also have 100 boxes of Health Paks as well.
Now how much money will I make back in commission for that first week? $3,800 in total commission.
So I’m actually in the hole only $6,600 at the end of the first week instead of the $10,400. But I can reduce this even further! Create an eBay account and sell your 100 Health Paks for $60 each (40% cheaper than what you paid for it) and do this within the first few weeks! You just sold 100 Health Paks for $6,000!!!
Now you are only in the hole $600!!!!
Ta-da! In one week, you made yourself a Silver Director, and by the end of the first few weeks you made back $9,800 of your initial investment of $10,400! I believe this tactic has been used and it certainly does explain how over $10,000 worth of USANA products can be sold on eBay by a single eBay seller.
What else happens here? You get a fictitious number of USANA distributors being counted as “Active Distributors” in the SEC Financial Statements. This creates an erroneous figure in the filings and most certainly cannot be trusted.
Whether it is happening is questionable, but it most certainly wouldn’t be hard to do. Especially since tens of thousands of Chinese Nationals were able to create fictitious addresses outside mainland China and become a USANA distributor while setting up accounts at the Merchant Bank of China.
Interesting theory. And very workable. It has been suggested that Rita Hui may have done this. She moved up extremely quickly in Usana, yet her commissions are low compared to other Diamond Directors. What would explain someone with lower commission at the same level? Fake distributors who aren’t purchasing regularly.
Tracy, very interesting idea. BTW, you should check out the ads running next to this article. Google in its infamous wisdom is running dubious mlm ads. Very funny.
Well, on paper it seems fine. However, you will need about 10 fictious identities to make it work (names, DOB, SIN, Bank account / Credit cards details).
I guess you can buy these (a serious felony in most jurisdictions) but I`d be surprised if your 10,000 budget will support it.
As far as Ms Hui story, It’s qui possible to have Diamond directors with low commissions.
If you do not explain your WHOLE downline that they must commit themselves to purchase regularly products, they will simply not do it.
10 fictitious identities? Try more like 19 including yourself. That will equal 10,000 sales points like the author points out. Not only that, the author points out that it can very likely be done especially when underground Chinese Nationals were able to supposedly fool USANA by creating accounts at the Chinese Merchant Bank or whatever it was called. ALSO, This method of jumping in ranks is not just a break even deal. As the author points out, if the distributor sold all 100 healthpaks at a 40% discount under the autoship price, that distributor would break even. HOWEVER, if the distributor sold all the HealthPaks for 30% lower than autoship price ($70 each), they would have made a positive $400..
If they undercut by 20%, the distributor would make $1400 profit. And if the distributor undercut by 10%, that person would make $2400…
So while you try to poopoo this theory, it is actually profitable beyond what you try to portray. Not only that, it truly benefits the company more than what most people imagine. Rita Hui has been put on a pedestal for quite some time as USANA’s HIGHEST RANKING DISTRIBUTOR. She surpassed even Collete Larsen by several Star Rankings. However, Rita Hui is hardy paid as much as Collete Larsen gets each year.
You reveal something sleazy however. Quote “If you do not explain your WHOLE downline that they must commit themselves to purchase regularly products, they will simply not do it.”
What is this? Distributors “MUST COMMIT THEMSELVES TO PURCHASE REGULARLY”???? In otherwords, Purchase your token to participate in the pyramid scheme, and if everyone does this, The top 3% of current distributors will profit tremendously. But keep in mind, each distributor must bring in about 15 distributors into their downline who each purchase 100 sales points each month (like you say MUST BE DONE REGULARLY). This will allow that distributor to barely break even for their own purchases alone.
They still aren’t profiting until they bring in about 20 distributors into their downline. Thus, it proves the point of the loss rate and the pyramid scheme. 95% are going to NEVER PROFIT right off the bat because the compensation plan FIXES THIS LOSS RATE…
BTW, why should the distributor at the top “explain” to their downline that they must purchase the product regularly??? I thought that USANA’s products were so magically wonderful that the product spoke for itself. Since the drop out rate is so incredibly high, and so many preferred customers are dropping out as well, then the products really aren’t that great after all! If USANA was forced to reveal the rates at which distributors and preferred customers signed up and dropped out, then the company would go out of business because it proves nobody cares for the product, and it is all about purchasing tokens to participate in the pyramid scheme…..
Actually, most (if not all) MLMs do not require a VALID social security number to sign up. You can use any old number, and so long as the fake person stays under the company’s reporting thresholds, no one will ever know it’s a fake. And MLMs don’t care whose credit card is used for the order… If the “recruiter” uses her own card with the explanation that the (fake) recruit doesn’t have one, THE COMPANY DOES NOT CARE as long as they get their money.
Ask anyone in Mary Kay (long held up as one of the most ethical MLMs *gag*) – It is quite simple to make up recruits and it’s done each and every day and the company allows it because each fake recruit brings in anywhere from $300 to $700 for the company. Money talks!
How can this possibly work when you need to supply social security numbers when applying..very stupid advice
It is easy if someone makes up a social security number and the company doesn’t check it.
Once it is a scam it is always a scam. stay away from USANA. simple.
Not ture. My company do check and new join MUST be present personally. And my company only accept cedit of the registered member to pay for it own. Can’t pay for other.
I’m not from usana so I can’t fully comments for them.
But your point of the products are not so good as claims just because they are required to remind downline to purchase regularly is not correct as well.
The main reason for company needs to remind regular repurchase is merely for “maintenance” requirements under their compensation plan structure. Not because of whether products are good or bad. Company with lousy products also do that. Company with excellence products also do that.
Yup there is fraud in every type of business. Its hard to keep the greedy out. I built a very large MLM back in the day and had over 125 thousand distributors. In the years that I built it it was hard work the sponsor rate was 1 out of 3 and you had to work depth quick because the attrition was sad. Eventually my home begin to fill up with people then we rented locations then it jumped the country borders and before long was renting large hotels and stadiums 3 times per year. eventually a large group of doctors and attorneys got involved and the price of 125.00 box of products to get involved turned in to 1000.00 of the 125 box pus tools and easels and tapes. Obviously it was figured out that there was much more money in the tools that was supposed to help people than the products of the company. Eventually many reached success fast by placing family members in their downlines with the correct information however these people never purchased or did anything. In many of these plans its the amount of people that you help to reach a certain level that elevates you in to a higher level so several of these doctors and lawyers rented warehouses and filled them monthly with thousands of dollars of products and hen they would sell them at a very discounted price. Why because when they were introduced as high qualified pins on stage organizations across the country and even internationally would pay them 10k to show up and speak at one of their functions so they would be o the speaking circuit and generate above 60k per month in simply speaking. This became incredible and eventually many started to sue each other. recently I did a research for some businessmen in finding and narrowing down 3 MLM companies that if a system was created that could not be taken advantage of to help it be tied in to todays internet revolution that anyone could with support and with access build a fortune be able to do it they could. Out of thousands of these companies that exist today and three year search and investigation it came down to 2 of them and one changed their rules affecting hundreds of thousands of people and had to be removed leaving only two, here is what to look for. An entre price of no more than 50.00 Many products and services not just a handful and products and services that everyone consumes every day. No anti marketing regulations, no excessive complaints and a duplication system that would allow anyone to be able to communicate it and build thousands of followers in a years time. A special warning if anyone promoted the purchasing of many products at once as a package price for over 100. dollars. Out of all of these companies there was only one company thats been in business for 60 years and producing just under a billion dollars per year that is the only one I would recommend as I did to these business men to build their massive marketing support system with. There was one that I really liked that cost 25 to 30 dollars to get involved however their marketing rules keep them decades in the past and one cannot use the internet of todays technology to build it and the leaders promote getting involved with hundreds of dollars in business packs or they will not work with anyone that actually gets in at the 25.00 then they have the nerve to say that no one that gets n at the 25.00 is successful. So there are good companies however do not get involved with anyone that charge over 50.00 and have what is called unduplicatable workings. Meaning you have to become something you are not.
Just putting some insight here. But not only is SSID required. In many countries the companies have put a system in place where you have to actually send a picture of their ID card as well, or their tax number. And yes they get checked. Similarly what you should do when you see products on eBay, is take a picture or any info you can and send it to the direct selling company. Ideally try to go through the buying process part ways and get as much info as you can. In any industry there will always be people trying to cheat the system. So help out in assisting the hunt. I know they do ban buyers they can track, and have more and more resources put in place now. Selling on third party sites like eBay is in fact illegal as it gives unfair opportunity. So rather then this speculation help out in the clean up of legit, and in many cases legal companies.