USANA compensation plan

Today we are going to examine the compensation plan of USANA Health Sciences.

If you would like more information how how network marketing compensation plans work in general, take a look at this post entitled how to evaluate a network marketing compensation plan.

USANA is a health and wellness company. They offer a variety of health & nutritional products as well as personal care products. They also offer a business opportunity that allows you to build a distributorship in the United States as well as several other countries.

The company was founded in 1992 and is over 16 years old. That is very important because you want to align yourself with a company that is well established. Many people believe you need to be involved in a start up company to make big money in this industry. You don't want to be in a start up company because most of those companies fail.

So how does the USANA compensation plan work?

The first way you get paid is in the form of retail sales. As a distributor with USANA you are able to purchase their products at their wholesale distributor prices and then sell those products at retail prices to your customers. While this isn't an exact number, you can expect a difference of about 20% between the wholesale price that you pay and the retail price that you sell the product to your customers.

The start up fee to become a distributor is $49.95 which is very inexpensive. However, you have to remember that you will also need to purchase products, so your product purchase needs to be factored into the picture.

The second way you get paid is in the form of commissions generated based on the purchases made by customers and distributors in your downline. Customers that go on autoship (ordering a minimum amount of product a month) as well as distributors who join the business become a part of your organization.

The amount of income you earn is dependent upon the amount of sales volume your organization is able to generate. Each product is assigned a point value known as SV. On average 1 SV = $1.20 in product purchases.

There are two options as far as your initial product order to get started in the business. You can get started by opening up one business center with a product order that equals 150 SV (about $180 in product). Or you can get started by opening up three business centers with a product order that equals 450 SV (about $540 in product).

You will also need to have a minimum order of at least 100 SV a month (about $120 in product) if you have one business center or if you have three business centers but you only want to get paid on the first one. If you have three business centers and you want to get paid on all three, you will need to have a minimum order of at least 200 SV a month (about $240 in product)

USANA operates a binary compensation plan. This means that you get two lines of sponsorships in which your distributors can be placed under. As both lines of sponsorships accumulate a certain amount of SV, this triggers commissions to be paid to you.

When both the left side of one of your business centers as well as the right side of one of your business centers generates at least 250 GSV (this means the total amount of SV orders made by all of the distributors within that business center), you earn 40 commission points. This is the equivalent to $40 in commissions in the USA but may be another amount depending on what country the orders come from.

When you accumulate 500 GSV you earn 100 commission points. 1,000 GSV equals 200 commission points. 2000 = 400. 3000 = 600. 4000 = 800. It maxes out at 5000 = 1000. Commissions are paid out on a weekly basis.

So if you max out your business center, meaning your team is doing over $5000 a week on both sides of your business center ($10,000 minimum), you can earn up to 1000 commission points a week or 4000 commission points a month. In the US, that's $4000 a month in commissions from the orders placed by people on your team.

It is significantly more profitable to get started with 3 business centers than one. The reason why is it's kind of like getting to count the same volume twice and getting paid twice. With 3 business centers, you have one business center occupied by you. Both the left side and the right side is also occupied by you. You can then build both sides of the 2nd (left) and the 3rd (right).

Therefore, you get paid when ANY of the three business centers reach at least 250 in commissions. In my opinion, it doesn't make any sense coming in at anything less than 3 business centers. Otherwise, you are leaving a lot of money on the table.

If one of your business centers has more points than the other (i.e. left side has 500 and right side has 250), the additional points are carried over to the next week. Points continued to get carried over until the other side catches up so that they can be utilized.

Preferred customers can also be added to your business centers. You don't earn retail commissions on sales to preferred customers but you do earn points to count towards your business center income.

However one disadvantage to USANA's binary is you have to place preferred customers on the left or right side. I've seen other binary plans where your preferred customers are automatically added to the side that has the least amount of points. That feature helps you earn commissions faster in other binary plans and USANA lacks this feature.

Once you max out one of your business centers, you can re-enter your own downline with another business center and begin building this new business center. You can do this twice per business center so technically there really is no limit on your income, because even if you max out the business center, you can always start another one.

Keep in mind that because everyone only gets a limited amount of business centers, those that recruit more than 2-4 people will place those additional recruits under the business center of one of the distributors in their organization. This allows you to potentially earn income from the efforts of your upline. You can do the same with your downline.

Now that you understand how the USANA compensation plan works, let's see how it matches up with our compensation evaluation points.

1. How easy is it to make $500 to $1000 a month?

To earn $500 a month just from retail sales, you will need to move about $2500 a month in product. The amount of people that you are going to have to sign up a month really depends on how much product your average customer purchases from you.

Let's say your average customer purchases $100 worth a product from you at retail prices. That works out to $20 in profits. To get to $500, you will need to sign up 25 customers a month. The average distributor is not going to be signing up that many customers a month.

This means that in order to get $500 a month consistently you are going to have to rely on group volume. Group volume comes from signing up preferred customers and recruiting distributors. You will need to do 500 GSV on both sides for three weeks, plus 1000 GSV on both sides for one week to generate $500 a month if you have one business center.

With three business centers you can reach $500 a month with only 250 GSV on both sides for four weeks for your 2nd and 3rd business center. This will automatically give you 250 GSV for your first business center and produce an income of $480 a month. You can always retail some of your personal product to get the additional $20 to equal $500 a month.

If each customer/distributor on average orders 100 SV a month, you will need approximately 50 active customers/distributors evenly distributed to generate an income of $500 a month. Impossible? Absolutely not. However, that's not something you're necessarily going to get to right away.

Therefore, I will have to say that it is difficult for the average distributor to earn $500 to $1000 a month. There are a lot of other opportunities where you can generate that type of income on a much smaller amount of customers, even if those customers aren't even involved in the business opportunity.

This is why I don't like binary compensation plans. In my opinion, they seem to reward the heavy hitter who can either recruit a ton of people quickly or someone who has the ability to bring over an entire downline from one organization to another. Those types of people can make big money in a binary plan very quickly. The average distributor though is going to struggle and see some very small checks in the beginning.

2. How much does the product cost and how much does it cost to get started as a distributor?

The product costs are about average compared to what I have seen with other health and wellness network marketing companies. The prices are a little on the high side when you compare them to similar products that are marketed through a retail business model.

However, network marketing companies tend to be able to charge higher prices for their products because distributors have the mindset that they are going to support their own business and buy from themselves.

As for whether the products are better than competing products, I have no idea. I'm certainly not a health and wellness expert. Bottom line, if you try the products and you benefit from them, great, continue to use them!

3. Is there competition for the product/service?

There is a tremendous amount of competition for USANA's products. They have to compete with other network marketing companies that offer health and wellness type products. They also have to compete with retail companies that offer similar products.

So what's the bottom line on USANA's compensation plan?

I'm not really a big fan of the compensation plan. I think other health and wellness companies offer a compensation plan that is more lucrative than USANA.

However, there is more to an opportunity than a compensation plan. The fact is USANA is a very successful proven opportunity. There are distributors that are making a significant income. The company has a lot of credibility and third party validation. They are not a start up, but a solid and stable company. You can do a LOT worst than joining USANA trust me!

So if you really enjoy the products don't let the faults in the compensation plan stop you. If you're willing to put your time in, you can create a great income with USANA. I think they are a fantastic company overall.

However, if you are not that excited about the products and you are looking for a more lucrative compensation plan, I recommend that you pass on USANA and keep on looking.

For example, in the company that I'm with, I make $414 if I signed up 2 customers for a service that only costs $35.95 a month. I don't have to place them anywhere in my organization and generate any volume. The customers fill out the application. It gets processed and I get the money wired into my bank account the next business day as we get paid daily, 5 days a week not weekly like USANA.

If I was in USANA and I signed up 2 preferred customers for a product order of $120 a month, that would equal 100 SV. Let's say I put one on the left and one on the right of my business center. It would take me 2-3 YEARS to earn that same $414 on those two customers in the USANA compensation plan.

If you are interested in more information about the company I am with, you can check out a link for the company that I believe has the best MLM compensation plan.

If you are already in USANA or you are going to join and you are interested in learning how to sign up more customers or recruit more distributors into your organization, I highly recommend you check out my web site and download my free report.