USANA Health Sciences - Some More Cows Beb?

To any of you readers who doesn't like to read omputeh (for whatever reason), please scroll down below to the end of this article... even though I strongly advised against it, because the infos that I gathered here is a must-read, for you to understand about this crappy USANA thingy.


A Forbes Magazine Article

Multilevel Marketing

Hard To Swallow

Evelyn M. Rusli, 08.08.07, 11:25 AM ET

In February, Usana Health Sciences seemed untouchable. Shares in the vitamin maker were roaring towards an all-time-high above $60. The company was preparing to announce its 20th consecutive quarter of record sales. Its global empire was expanding, with the addition of Malaysia, its 14th country. 

That may well have been the zenith of Usana's 15-year existence. On March 19, Usana revealed it was the subject of an informal Securities and Exchange Commission probe into its sales practices. Then, in July, its long-time auditor abruptly and mysteriously resigned.

Now things are getting worse. Last week, sources told Forbes.com that the FBI had launched a criminal investigation into the company. Usana says it isn't aware of any such probe. Meanwhile, Usana is suing Barry Minkow, a convicted felon-turned-fraud-buster, who penned a 500-page report alleging that the company's fantastic performance in recent years came not from selling vitamins but via a pyramid scheme that roped suckers into a multilevel marketing scheme from which few would be able to glean profits.

Usana claims Minkow improperly shorted its shares in concert with unnamed codefendants. The company alleges they arranged so-called naked short sales, creating phantom shares that put enormous pressure on the real stock price. That would have been illegal, but also a pretty good strategy: The stock has plunged 41.2% since its March high. Minkow admits to having held put options on Usana, but says he didn't profit from them and claims that he never naked shorted the stock.

"We believe everything he says to be false," Usana spokesman Joseph Poulos told Forbes.com. "He's a liar; he's a criminal - he can't be trusted." Minkow, who has assisted federal and state authorities in 21 closed fraud cases, remains unfazed by the lawsuit, calling it a diversion to mask Usana's real problems.

Usana, Minkow alleges, is a convoluted pyramid scheme that baits consumers with promises of personal wealth and leaves them empty-handed. Instead of offering its products in stores, Usana is a multilevel marketer, with a network of 178,000 distributors selling its line of nutritional supplements and personal-care products to consumers. In theory, distributors can make money by selling products to anybody who wants them, but they can make much bigger profits by recruiting other salespeople and getting a share of their revenue. 

To get into the company's commission program, a Usana associate must front an initial fee of $20 to $50 for a business starter kit, buy roughly $150 in products and then order about $120 of goods each month, either for sale or personal use. Minkow and other critics say Usana distributors aren't really paying for the products - they're ponying up the cash to participate in the profit-sharing network, which each can do once they've roped in two new recruits. Usana's promotional materials are emblazoned with phrases like "true wealth" and "financial freedom."

Usana disagrees, saying its members are "end users" who get involved less to make money than to enjoy Usana's vitamins at wholesale discounts. However, a customer does not have to sign up as a distributor to access the wholesale prices. One can also join as a "preferred" customer at no additional cost.

The company offers a diverse trove of nutrition and personal care products spanning from natural toothpaste to hair-care goods. Its best-selling product, however, is a 28-day pack of Essentials, a set of multivitamins and mineral supplements that wholesale for $39.95, or $1.43 a day. The product costs significantly more than standard retail varieties of vitamins, such as Centrum, whose multivitamins cost approximately $7.00 for a 50-pill bottle, or 14 cents a day. Usana says its premium is justified because its products offer "high-quality, certified nutritional supplements that are in a class by themselves."

Not quite, according to Anthony Almada, the president and chief scientist of Imaginutrition, a consulting firm for the nutritional supplement industry. Alamada, who has more than 30 years of experience in the industry, said Usana's vitamins are not that special. "The economic reality of Usana, and other [multilevel marketing] entities, mandates that their products invariably lack robust distinctiveness and convincing evidence of consumer relevance and superiority - achievable through rigorous clinical trials only - to their retail counterparts," Almada said.

The key question, according to James Kohm, associate director for the Federal Trade Commission's Bureau of Consumer Protection, is whether the company is really in the vitamin business. "Are they truly retail sales or simply incidental to participate in the scheme?" 

Robert Fitzpatrick, the president of Pyramid Scheme Alert, who was contracted by Minkow to review Usana's structure, says there's another big problem: The company's sales model is untenable, at least from the point of view of recent recruits being able to find new distributors to work for them. "If this chain were continued just 26 levels, it would exceed the number of households in the U.S.A.," Fitzpatrick said in a recent report. "Usana's "success" depends on the "failures" of tens of thousands of recruits." 

Usana wouldn't tell Forbes.com what portion of its distributors actually do turn a profit, but in an April conference call, Chief Financial Officer Gil Fuller said, "You only have something on the order of about 12% of people who get into this business with the intent of making money." 

"The people who work at it are the ones that in fact generate the income for themselves. Those that don't, or do it for product reasons, obviously don't." 

While the average distributor doesn't make enough to cover the cost of a one-month supply, the company and its senior executives have done somewhat better. The Salt Lake City-based firm has experienced explosive growth since being founded in 1992 by Chief Executive Officer Myron Wentz. It operates in 14 countries and has 889 employees. In the last five years, the stock has skyrocketed from less than 70 cents a share on a split-adjusted basis to an all-time-high of $61.80 in February. It ended on Tuesday at $36.20. In the second quarter, Usana blew past the Street’s second expectations by posting profits of $18.2 million, or 66 cents a share--above analysts’ estimate of 62 cents. From 2004 to 2006, Usana held a spot on Forbes' top 200 small companies list.

By the books, Usana seems to be in the prime of financial health, but Minkow doesn't buy it. He says the company is dotted with red flags. He claims that Wentz has renounced his American citizenship and stows his 50% shareholder stake in the tax haven of Lichtenstein. According to Minkow, company insiders wring cash out of Usana through a concert of buybacks and stock dumps. Since the summer of 2003, Usana's board and executives have sold $100 million in shares. Meanwhile, the company has repurchased $211 million in stock since late 2000. This week, Usana announced an additional $50 million in repurchases.

In essence, according to Minkow, Usana is using shareholder funds to support its stock price while its insiders cash out. Not so, says Usana, which claims the aggressive buyback program reflects "management and the board's decisions to use excess cash reserves to return value to shareholders and avoid share dilution." 

Then, there's the auditor situation. Grant Thornton, Usana's auditor for more than a decade, resigned in July. Thornton did not respond to requests for comment, but in an SEC filing released Aug. 1, Usana said the firm initially disagreed with its audit committee on when to "engage independent consultants" in the company's investigation into Minkow's accusations. Usana's audit committee wanted to complete an internal investigation first before considering an independent consultant, but Grant Thornton wanted to employ an independent counsel immediately.

Fuller, Usana's CFO, said the company has not secured a new auditor. He refused to speculate on why Grant Thornton quit, aside from saying "From every indication I've been told, they were satisfied with the work," and the firm's departure "did not relate to any of the financial statements." 

"It was a little bit frustrating," Fuller said. "Life is too short to dwell too much on it." 

Usana has enough other problems it could dwell on. In June, Fuller and Jerry McClain, a board member who is also a member of the audit committee, agreed to stop representing themselves as certified public accountants (they used to be). Also that month, a leading sales associate stepped down from the company's medical advisory board after Minkow revealed he no longer had a medical license - he turned over his license in 2004 after allegations surfaced that he had inappropriately doled out prescriptions to a family member. In April, Dennis Waitley resigned from the board of directors but stayed on as company spokesman soon after Minkow uncovered that he lied about having received a master's degree from the U.S. Navy (he didn't).

In addition, the company may have breached a loan covenant regarding a $40 million line of credit from Bank of America, which could force it to pay back its borrowings. As of the end of June, the company had borrowed a little more than $34.5 million under that facility. According to the terms of the credit line, the company's total debt cannot be more than 2.5 times its cash flow, or earnings before interest, taxes, depreciation and amortization. 

The company believes it is within those bounds because its debt load is relatively low. Even though the company lists $35.2 million in "other current liabilities" in its second-quarter press release, Usana said a large portion of that is revenue "that we cannot recognize until the product is shipped and not an actual payment we will make to a third party." 

However, after evaluating the loan document and Usana's recent filings, Don Coker, a banking specialist, said the company had less than $4 million in deferred revenue in the first quarter and even less than that in the fourth quarter of 2006. "In my opinion, to state that the $35 million plus in 'other liabilities' does not constitute 'debt' appears to be inconsistent with how a bank normally would make such a calculation," Coker said. 

After adding the Bank of America loan and Usana's current liabilities--and subtracting $4 million in deferred revenue--the company's consolidated funded debt totaled $65.7 million, making its ratio 3.6-to-1. "They could be in violation of one of the covenants of their loan," said Coker, who holds a certificate in business valuation from Harvard Business School and has testified as an expert witness in hundreds of cases. The company disagrees, insisting that it is in compliance with the loan's covenants.

If Usana does have too much debt, Bank of America can revoke the entire loan. Bank of America did not return multiple calls seeking comment. Faced with this tempest of controversy, Usana remains optimistic. "We have total confidence that we'll come out with flying colors on this. We're not wringing our hands over this matter," Fuller said.

Evidence of Scam Mounts Against The MLM Company

Usana Health Sciences

Forbes Magazine reported in 2007 that the FBI had initiated a criminal investigation of the MLM, Usana Health Sciences. The Forbes article includes the extraordinary news that the national accounting firm that audits Usana's books, Grant Thornton, had suddenly quit.

An 2007 investigative article in the prestigious New Zealand business magazine, National Business Review, revealed that thousands of New Zealand consumers are being solicited by Usana without getting true or complete facts about almost certain financial losses they will suffer in the scheme. Entitled, “Most People Won’t Get their Money Back” the article quoted government statistician Murray H Smith, who has served as an expert witness in New Zealand pyramid scheme cases, “you can make a very strong argument that this could be a pyramid scheme.”

Usana distributors accused the company of fraud and filed a class action lawsuit that sought to shut down Usana operations in California. A California judge dismissed the case.

In a letter to Deborah Platt Majoras, Chairman of the Federal Trade Commission, the consumer education and advocacy group, Pyramid Scheme Alert, requested that the FTC open an investigation of Usana Health Sciences, headquartered in Utah. Pyramid Scheme Alert also sent alert letters to the Attorneys General in all 50 states.

Very little revenue is gained from actual retail customers (consumers who are not in the pay plan) and even less distributors’ profits come from retail sales. In this lack of retail revenue of profits to distributors, Usana operates in a very similar manner to Burnlounge Inc., which has been prosecuted by the Federal Trade Commission as a pyramid scheme.

The Wall Street Journal has reported:

1. Numerous class action suits have been brought by Usana shareholders that charged the company misrepresented important information or withheld it.

2. The founder of Usana renounced US citizenship to swear allegiance to a well known offshore tax haven. He also parked the largest block of the company’s stock in another offshore tax haven.

3. The founder of Usana – same one that renounced his USA citizenship for a tax haven – sold millions of dollars of shares of Usana stock when it reached its highest price ever – and just before the stock plunged when the Wall Street Journal reported findings of a fraud investigation report.

4. The Usana Chief Financial Officer admitted he had falsely reported he is a CPA.

5. A major spokesman and Usana director admits he faked his academic credentials.

6. A major medical advisor for Usana admits he had falsely claimed he is a licensed M.D. when he is not.

Usana's own published data, when properly analyzed, revealed that 99% of all distributors do not earn a profit.

1. Usana will not disclose the total number of distributors that quit the scheme each year, but experts estimate it is between 50-90%. Effectively, the scheme is constantly collapsing, since distributors are also the “customers.”

2. Usana products are priced as much as 20 times higher than similar products sold in retail sales. The pyramid recruitment money (about 40% of the price) is imbedded in these high prices and is passed upline to the recruiters. 3% of the recruiters at the top get over 70% of all commissions.

  

Letter from Pyramid Scheme Alert to Chairman of FTC

FTC INVESTIGATION REQUESTED OF USANA HEALTH SCIENCES

May 4, 2007

Deborah Platt Majoras

Chairman

US Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

Dear Commissioner Majoras:

We respectfully request that the Federal Trade Commission immediately open an investigation of the company, Usana Health Services, based in Salt Lake City, Utah. Publicized evidence indicates that this company is marketing a “business opportunity” in which tens of thousands of US consumers are lured each year to invest thousands of dollars and countless hours and effort in a business opportunity based upon the fraudulent trick of “endless chain” recruiting.

The Securities & Exchange Commission has already opened an informal inquiry into the company following revelations in The Wall Street Journal .

According to The Wall Street Journal, each year more than 92% of all “active” Usana participants do not earn a profit in Usana. (Many more lose money that are not officially counted by Usana as “active”. Their exact number and the full scale of losses are not disclosed by Usana). The great majority quit the scheme within a year after suffering losses. The mission of the Usana scheme is to replace these consumers with other victims, using the same lures and promises based upon the consumers’ making financial investments and engaging in pyramid recruiting.

Our organization, Pyramid Scheme Alert, a non-profit, non-partisan consumer education group, has received inquiries and complaints from consumers about the marketing and business practices of Usana.

The Wall Street Journal staff applied Usana’s sales and financial data in a test used by the Federal Trade Commission in previous prosecutions to determine if a multi-level marketing company is a direct selling company or a pyramid scheme. It found that 63% of all Usana sales to distributors would need to be retailed to consumers for Usana to pass the test of legality. Currently only 14% of reported sales are made on a retail basis. All other sales go only to distributors. Few are ever retailed.

A recent report by the well respected investigation company, Fraud Discovery Institute, revealed – and The Wall Street Journal fact-checked and reported – that products of Usana Health Sciences are priced extraordinarily higher than comparable products, (e.g. Usana's price for its vitamins is more than 20 times that of mass-market brands like Wyeth's Centrum).

Additionally, upon signing up, Usana induces consumers to increase their initial investment with the purchase of “business centers”. These “centers” are not locations and have no intrinsic value. They serve no other business purpose than to increase initial investment and to offer higher rewards based on recruiting other investors.

The combination of the practices of (1) inducing high up front investments with (2) promises of higher return from endless chain recruiting, (3) inflated pricing and (4) the lack of retail sales indicate that Usana operates as a chain letter or pyramid scheme, according to FTC guidelines, advisories and past prosecutions.

The initial investment in “business centers” and monthly quotas of purchases serve as the “consideration” to join and participate in the network. “Endless chain” rewards are offered to induce ongoing purchases and recruiting activity. Payments are directly tied to recruitment of new investors who sign up with the same proposition offered. This is the classic pattern of companies such as Equinox International and others that the FTC has prosecuted for unfair and deceptive trade practices.

They also reveal practices that the FTC warns consumers about on its official website. As an example, we refer to The Statement on Pyramid Schemes Delivered by the FTC’s General Counsel at the International Monetary Fund's Seminar On Current Legal Issues Affecting Central Banks at (http://www.ftc.gov/speeches/other/dvimf16.shtm).

“There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company's incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company's distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.”

We will appreciate a reply. Thank you for your consideration and your service.

Sincerely,

Robert L. FitzPatrick

cc: Pamela Jones, FTC Commissioner

Jon Leibowitz, FTC Commissioner

William E. Kovacic, FTC Commissioner

J. Thomas Rosch, FTC Commissioner

Lydia Parnes, Director, FTC Consumer Protection Div.

Lois Greisman, Director, FTC Div. of Marketing Practices

James Kohm, Director, FTC Div. of Enforcement


The Price of USANA Product:
 
Example 1:

USANA Pure Rest™

Example: USANA's Pure Rest(TM) melatonin product

Costs USANA associates $14.95 and retails for $17.94. Each bottle Contains 56 tablets and each tablet contains 2 mg of melatonin. So USANA's melatonin product costs associates 13.3 cents per milligram. Most melatonin products retail for less than 3 cents per milligram! 

All of USANA's products are overpriced like the above example. However, when taking all of USANA's perks into consideration, USANA associates can potentially receive $20 in commission every 28 days from each associate in their downline simply from the required product purchases! Of course, what gets left out of their promotional material are the vast amounts of rules that prevent most all associates from making a dime. This is why is pays to recruit instead of retailing USANA's products.

Example 2:

USANA's absurdly overpriced CoQuinone® 30 versus comparable products
USANA's CoQuinone® 30 product is quite popular among its distributors. Do their distributors know just how much they are paying for their CoQ-10 product? I thought I would compare USANA's product with other companies. USANA's CoQuinone® 30 has 56 tablets, each contains 30 mg of CoQ-10 and 12.5 mg of Alpha Lipoic Acid. USANA Charges its distributors $37.95 for one bottle.
What I did is find other companies who sell both CoQ-10 and Alpha Lipoic Acid. I calculated the cost per mg per tablet for both products. Then I recalculate the cost to make an equivalent product as USANA's (56 pills each with 30 mg of CoQ-10 & 12.5 mg of Alpha Lipoic Acid). The resulting cost is astonishing! 
GNC, Natrol, Source Naturals, and Nature's Bounty all fall under $10 for an equivalent product to USANA's. The graph below says it all. I recommend sharing the PDF document in the link below as it contains all the calculations so there is no refuting the numbers. Again, USANA overcharges its distributors in order to fund its pyramid scheme. Contact your state's attorney general's office if you are or have been a victim of USANA's business opportunity scam.

How about USANA's price in Malaysia? Let's see...

Bahagian ni yang aku nak korang faham - dan aku tulis dalam bahasa ibunda, just in case.

Compensation Plan - USANA

Mendaftar dan jadi Distributor USANA

Distributor USANA adalah seorang yang menjual produk USANA dan merekrut distributor lain sebagai downline, yang akan buat kerja yang sama jugak. Downline cari downline cari downline cari downline... sampai kiamat - kata orang USANA la. And kiamat tu is just around the corner. Untuk menjadi distributor USANA, seseorang kena berdaftar dan beli satu distributor kit berharga RM99. Ini memberikan seseorang itu keahlian untuk buat skim piramid USANA... uik! Untuk jadi sorang distributor USANA. Sori, cirit-birit lak. Tak sengaja bang.

The Business Center Model

Asas kepada perniagaan MLM USANA ni adalah "business center". Takde ofis pun, hanya satu "istilah" (atau kelentongan, kata Aidid Mu'addib) yang berkait dengan 2 business center derivative, iaitu downline si bahalol yang join USANA tu, dan beberapa orang "preferred customers" yang dia ada (pelanggan yang telan produk USANA secara berkala, yang jugak dikira sebagai di bawah downline tersebut). Organisasi ni berbentuk sistem binari (macam Score A tu ha), di mana ada kaki kiri dan kaki kanan. Komisen berkait dengan business center, bergantung kepada jualan keseluruhan (GSV - group sales volume) yang dikira untuk setiap minggu. Setiap business center mesti ada satu upline di atasnya, takde dia wujud terkontang-kanting sengsorang. Maknanya, setiap business center ada upline kat atas sampai la ke puncak piramid USANA.

Figure 1: USANA Distributor Organization
 

Activation

Setiap distributor yang berdaftar akan memulakan dan mengaktivasi satu business center dengan cara mencapai jualan peribadi (PSV - personal sales volume) sebanyak 150 points, dan seterusnya mencapai 100 points PSV setiap 4 minggu. Ini bermakna ahli itu perlu membeli produk USANA sebanyak point tu... duit dah siap masuk dalam poket CEO USANA. USANA pakai point yang nilainya lebih-kurang sama dengan 1 USD - sebab banyak negara, banyak matawang, jadi kena la ada point bagai. Syarat 100 point dalam 4 minggu tu penting beb. Kalau 99 point, ko tak kan dapat apa-apa, dan USANA bolot semua. Best!

3 Business Centers

Satu cara alternatif adalah dengan memulakan 3 business centers, dengan pencapaian 450 points dalam 6 minggu pertama, diikuti dengan order sekurang-kurangnya 200 points setiap 4 minggu. Dia orang kat USANA saja sesuka kasi mamat dan minah low IQ yang tamak-haloba kompius - senang sket nak dikelentong. 200 points tu cukup untuk kasi beberapa business centers yang ada jadi aktif, termasuk business centers yang re-entry... wadefak. Untuk kasi keuntungan maksimum, 5000 points perlu dicapai di kedua-dua kaki (at least), di mana jika ahli berjaya melakukannya, dia boleh masukkan satu lagi business center (re-entry) di mana sahaja di dalam rangkaian downline nya. USANA dapat duit lagik, what else is new? Only the distributor's IQ is unchanged.

Komisen
USANA dengan murah hati macam Mother Teresa akan kasi komisen pada distributor dalam increments 1000 points GSV untuk setiap kaki, dan jugak untuk jualan $500 yang pertama. Komisen ini adalah 20% daripada GSV yang paling sedikit di antara 2 kaki, sampai maksimum $1000. GSV yang lebih tu akan terkumpul setiap minggu, dan akan dicampurkan dengan GSV untuk minggu yang berikutnya untuk kaki tersebut, sampai maksimum 5000 points. Kalau lebih jugak, USANA akan telan dengan rela hati, jadi jangan buat keje lagha, mahu kasi lebe-lebe gitu.

Figure 2: Commissions   USANA tidak kasi komisen bila benda ni berlaku:

1. Business center yang tak aktif - Takde komisen dapat dicapai atau terkumpul jika business center tu tak aktif. Business center jugak akan kehilangan semua komisen yang tak berbayar jika ia jadi tak aktif. Duit free untuk USANA. Best!
2. Jualan yang tak seimbang - Perbezaan antara GSV di antara kedua kaki adalah komisen yang tertangguh, tetapi kalau GSV tetap tidak seimbang, komisen tu kira lesap la beb... bukan lesap. USANA simpan untuk kasi CEO.
3. Bila jualan melebihi 5000 points - jika kedua-dua kaki dapat menghasilkan jualan melebihi 5000 points, apa-apa points yang terlebih tu dikira sebagai sedekah distributor kepada syarikat alkafirun mormon USANA - dan ianya tak boleh dimasukkan sebagai zakat harta. Kat akhirat nanti resit zakat sebegini tak laku. Jadi jangan buat kerja lagha. Komisen tertangguh juga tidak boleh melebihi 5000 points, di mana apa yang lebih, USANA telan.
4. Jualan yang di buat di antara "increments" - Komisen di bayar pada GSV yang naik secara increment 1000 points. Maksudnya, komisen dibayar pada 1000 points, 2000 points, 3000 points... tapi kalau jualan si kuli-batak hanya sampai kat 2999 points sahaja untuk bulan tu, USANA kasi komisen sampai 2000 points sahaja - yang lebih tu kira duit free untuk USANA (ini daripada apa yang aku tengok dalam manual USANA, dia orang suka cakap berbelit gitu - kena tanya distributor USANA yang dah kena kencing, betul tak benda ni).

Masalah Utama Compensation Plan USANA

 

Mengutamakan Struktur Piramid Lebih Daripada Jualan

Handbook USANA cakap sket sangat pasal jualan produk keramatnya, tapi blabber on and on and on pasal macamana seseorang distributor boleh jalankan business center nya dengan jaya, dan akhirnya akan kaya macam millionaire taik kucen. Hampir semua maklumat yang ada tak sudah-sudah cakap pasal macamana nak rekrut distributor, dan bagaimana kadar keuntungan akan meningkat bagai nak rak, kalau dapat manyak-manyak distributor kat downline masing-masing... itu aje la modalnya. Kat situ orang dah tahu struktur piramid bzns ni - kecuali untuk sapa-sapa yang dungu tahap cipan. Silap-silap cipan kat Zoo Negara tu lagi tinggi IQ daripada sapa-sapa yang join USANA (sebab cipan tu definitely tak join kejadah USANA ni).

Ketepuan Pasaran

Mengikut kata handbook USANA, "there is truly no limit to the number of business centers you can have in your organization! You are limited only by your ability and desire to build financial security for yourself and your family." Wadefak? Bahalol ke apa? Syarikat jual billion dollar punya bzns, tapi tak kan cakap benda merapu macam ni? Mana-mana sistem piramid, sama ada binari seperti USANA ni, atau apa-apa sistem MLM yang ada syarat penajaan, akan pasti mencapai peringkat ketepuan dengan cepat disebabkan faktor perkembangan jumlah distributor secara eksponensial. Dalam manual USANA ada kasi contoh 8 levels distributor, yang secara implikasinya, USANA fikir 8 level tu kiranya "reasonable" untuk seseorang ahli. Tapi, 8 levels memerlukan 255 ahli, jika seseorang ahli nak balancekan kedua-dua belah kaki kiri dan kanan. Tapi level ke 8 yang seramai 128 orang tu, tak kan dapat apa-apa komisen, selagi dia orang sendiri tak dapat downline masing-masing. Dan distributor level ke 8 juga berhak untuk dapat keuntungan seperti yang dijanjikan oleh USANA, kalau tak, USANA memang laknat-keparat haram-jadah punya syarikat kelentong la jadinya kan? Janji berdegar-degar, rupanya mengencing mala'un tak sekolah macam lahabau.

Janji USANA adalah untuk kasi seseorang distributor kaya-raya, tapi bahalol yang join level ke-8, perlukan 8 level ke-bawah untuk dapat keuntungan yang sama macam level 1. Tapi level ke-16 camane pulak? Kalau USANA berkembang pesat, dan membesar sebagai johan sampai level ke-32, semua 6 billion manusia kat dunia ni kena join syarikat MLM ni - tapi itu pun masih tak cukup lagik. Still... 4.2 billion orang yang terakhir tak dapat apa-apa jugak, kecuali kalau kita import 8.6 billion rakyat alien daripada planet Coruscant untuk jadi downline manusia kat bumi. Lepas tu, Chancellor Palpatine akan hantar Death Star kasi musnahkan bumi, sebab alien rakyat Coruscant tu semua tak dapat cari downline, dan akhirnya kerugian jugak. My point is - plan pemasaran sistem binari USANA (macam plan binari syarikat MLM bangsat yang lain-lain, seperti Score A, MonaVie, etc.) adalah skim piramid 1 cari 2 aje dik oi! Takde yang logik pada plan pemasaran sebegini. Tak payah level 32, di mana sahaja level distributor sudah mencapai peringkat ketepuan, >50% distributor tu akan kerugian, sedangkan USANA dah ambik duit dia orang siap-siap, masa dia orang berdaftar sebagai distributor. Win for USANA, loss for bahalol yang dungu.

 

OK... apa alasan semua syarikat MLM pasal benda ketepuan ni? Bak kata MsAwin (sakai Papua New Guinea) dan Razali (the English language scholar), itu semua teori matematik aje, dan tak pernah berlaku di alam nyata. Maknanya dalam alam nyata yang diduduki oleh dua ekor lembu sesat tu, sistem matematik kalkulus tak wujud, sebab dia orang tak nampak pun perkembangan jumlah ahli secara eksponensial berlaku. Dia orang tak nak nampak, jadi ia tak wujud la. Budak 2 ekor tu ada life yang cukup sempoi, nombor yang besar dan matematik kasi kepala lututnya migraine. Kalau aku tak nampak - takde berlaku le tuuuu.

And another thing, ketepuan selalunya tidak berlaku sampai peringkat 6 billion manusia. Ianya bukan isu global, tapi lebih kepada isu ketepuan sesuatu lokaliti. Faham tak? Aku kasi contoh. Katalah, ada sorang mamat kat pekan Pokok Sena dapat hidayah sesat dan berdaftar sebagai distributor USANA - sekarang untuk kasi perniagaan jual pil dan makanan keramat USANA berkembang, dia kena cari downline seramai mungkin, well at least kena isi kaki kiri dan kaki kanan. Dan downline dia jugak kena cari downline dia orang, dan proses pencarian downline akan berterusan sampai infiniti. Tapi, apa hal infiniti pulak? Pekan Pokok Sena di Kedah (tempat tumpah darah menses ku, bak kata si Salmah) ada anggaran dalam 50,000 orang penduduk sahaja, dan itu termasuk semua penduduk yang ada, daripada pangkat moyang sampai la peringkat cicit. Kalau kita anggap setiap moyang sampai cicit jadi distributor USANA, termasuklah si Salmah, ketepuan akan berlaku pada level ke-14 hingga 15. Takde nya Salmah nak cari downline kat San Francisco atau Helsinki deerr... dia dah stuck kat Pokok Sena sahaja, sebab orang kat Pokok Sena tu aje yang dia tahu. Lebih 50% daripada distributor USANA akan kerugian, tak kesah level mana ia akan tepu... level 5 pun sama, level 27 pun sama - lebih 50% orang ahli akan kerugian tanpa untung satu sen pun.

Itulah dia plan pemasaran USANA - dia orang tak kesah lebih daripada 50% distributor akan PASTI kerugian, sebab kerugian ahli itu tetap akan menguntungkannya - best kan buat syarikat MLM ni? Itu yang chayanunalip sebok buat Avail Beauty, Score A, Asia Herbal Tech, Power Root dan semua MLM yang aku dah mention kat dalam blog aku ni. Sama jugak ciptaan omputeh alkafirun Amerika dengan syarikat MonaVie, Amway, Herbalife, bla bla bla... cuma, terlalu ramai manusia yang tak boleh faham sepatah-haram matematik dalam dunia ni, termasuklah ahli-ahli politik yang memegang kuasa (kecuali kalau korang ambik iktibar daripada - Saudi Arabia, China, Singapore). Apa yang susah nak fahamnya ntah? What the fffuuu...

Komisen

OK, problem dengan ketepuan pasaran di atas, walau pun macam lahanat, sebenarnya kurang berat sket daripada problem dengan pemberian komisen USANA. Ini lagi cibai. Gambar di bawah menunjukkan senario yang paling ringkas di mana seorang distributor yang ada rangkaian kaki kiri dan kanan yang seimbang, dan setiap distributor dapat pulak mencapai jumlah PSV minima yang diperlukan untuk mengekalkan sesebuah business center aktif. Setiap level menunjukkan jumlah sales keseluruhan yang dicapai oleh oleh semua peringkat yang dibawah seseorang distributor (kumulatif), serta dengan jumlah komisen yang dibayar kepada setiap ahli di bawah organisasi tersebut. Dalam kes ini, kalau ada 12 level distributor, ianya akan menyebabkan USANA terpaksa membayar komisen lebih daripada jumlah keseluruhan pendapatan syarikat. Kalau dalam contoh yang diberi dalam handbook USANA, 8 level yang digambarkan itu akan menyebabkan lebih daripada 50% pendapatan syarikat diperuntukkan kepada komisen. Ada yang tak kena neh...

 Kalau kita campurkan jumlah pendapatan melalui "preferred customers" pun tak dapat membantu jugak. Dalam rajah 4 di bawah, ianya sama dengan rajah di atas, cuma setiap distributor ada 2 preferred customer setiap sorang, untuk setiap belah kaki. Setiap preferred customer mencapai 100 points dalam jumlah jualan. Jumlah komisen kekal melebihi jumlah jualan dalam 12 level.

Figure 4: Sales vs. Commissions, Case 2
   

Untuk situasi ni jadi logikal kepada USANA (maksudnya, ia dapat untung), ianya memerlukan supaya rangkaian downline tidak sekata, di mana kaki kiri dan kanan tu tak seimbang, jadi mana-mana bahalol distributor yang takde "pairing" akan kehilangan komisen, dan dapat la USANA dapat songlap duit mala'un tu semua. Ianya menguntungkan USANA, tapi apekejdahnya punya business sebegini kalau syarikat mengharapkan keuntungan perniagaan daripada kerugian distributor? Gila ke apa? Dah tu, promosi USANA yang gah ya amat tu yang kata, USANA nak kasi "financial security" kepada ahli yang nak join USANA. Financial security what the fuck nye dey?

Figure 5: Sales vs. Commissions, Case 3 

Jadi, al-kesahnya... ada 2 senario di sini. Sama ada USANA adalah syarikat berasaskan badut sarkas dan tidak viable langsung, atau sebenarnya distributor USANA tu yang tak akan dapat pendapatan yang longkah seperti yang diwar-warkan oleh syarikat MLM ni. Kepentingan kewangan (financial interest) distributor-distributor tersebut sebenarnya adalah BERTENTANGAN dengan kepentingan kewangan USANA. Ini yang paling tepat, sebab itu USANA meletakkan syarat "tree-balancing" tu - kedua-dua kaki kiri dan kanan mesti seimbang - kalau tak - komisen tarak. Dan kalau la pulak semua distributor USANA dapat balance kaki dia orang dengan seimbang di setiap level - abis lingkup terus USANA. Pembayaran komisen akan jadi lebih banyak daripada keseluruhan pendapatan syarikat, di mana-mana level.

Korang fikir balik, pehal USANA perlukan syarat balancing tadi tu? Sedangkan si distributor dah bersungguh-sungguh menjajap kejadah produknya, tapi disebabkan downline nya tak balance, dia tak dapat satu sen komisen pun daripada kaki dia yang tak balance (sounded so stupid, btw) - that's screwed-up, man! Apakah muslihat USANA? Apa lagik? Dia mahu kasi kurangkan pembayaran komisen kepada distributor supaya keuntungan syarikat mencadak naik, dan CEO boleh beli yacht 200 kaki panjangnya, serta boleh jugak beli 4 orang Penthouse Pets, COD... kasi romen sampai tak hengat dunia - 4 awekz serentak. Uik! Mana aku melalut neh? Anyway... nak balancing tu, pihak USANA cakap ianya senang aje nak buat, tapi realitinya, ia bergantung kepada GSV, dan sesetengah distributor takde kawalan langsung terhadap berapa banyak GSV yang dicapai oleh distributor di bawah downline nya. Dan si downline bawah downline bawah downline tu semua ada kesah ke apa yang berlaku dan berapa pulak pendapatan yang dijana daripada rangkaian downline orang lain? Advantage to USANA - and screw all you distributors!

INTISARI NETWORK MARKETING

Multilevel Marketing (MLM) atau nama timangan lainnya Network Marketing (istilah lain untuk orang yang dungu, yang senang kena kelentong) adalah tidak lebih daripada SKIM PIRAMID yang ntah kenapa boleh diluluskan undang-undang kat Malaysia ni. Kalau kat USA, kita tahu bahawa kerajaan Amerika tu sendiri memang mahukan syarikat USANA, Herbalife, Amway, MonaVie dan berbagai syarikat lain berkembang pesat, sebab bila syarikat tersebut masuk negara lain, secara tak langsung, keuntungan syarikat akan memindahkan dana daripada keuntungan yang dihisap macam lintah daripada negara-negara tu semua, masuk ke negara Amerika. Itu sebab Amerika teruskan MLM dalam pelbagai bentuk bermaharaja-lela sejak tahun 60-an lagik. Itu salah satu sebab negara Amerika negara terkaya di dunia. Kalau dapat rakyat beratus negara, yang dungu dan senang kena kelentong (sebijik macam kat Malaysia neh) - memang seronok orang Amerika kaut keuntungan.
 
Oh, berbalik kepada Malaysia, apekejadahnya woi? Takde ke pakar ekonomi yang jadi penasihat kat mana-mana ahli politik tu semua? It's like, we're all still in the dark ages concerning all these MLM thingy. Tak kan la terima bulat-bulat bahawa kalau syarikat seperti Herbalife, dan seperti USANA ni, sebab ianya ada jual produk kesihatan (yang tak kasi sihat tubuh-badan manusia pun), jadi ianya bukan skim piramid. IT IS A PYRAMID-SCHEME straight-up fucking 'ell! The compensation plan that USANA provided show a clear-cut pyramid-scheme - what's the confusion here? Plan pemasaran USANA memang sama aje dengan skim piramid, cuma dia jual produk, tapi ianya tetap akan menghadapi masalah ketepuan pasaran, dan promosi "financial security" USANA hanyalah kelentongan buta-buta di siang hari untuk lembu yang makan rumput di tengah padang yang tandus.
 
Lepas tu, syarikat-syarikat seumpama USANA ini, mesti ada syarat yang sentiasa menguntungkannya, dan merugikan distributor bulat-bulat. Distributor tu semua MESTI bayar sejumlah wang kepada USANA untuk continue to play the game, dan maintain minimum purchase setiap bulan, dengan harapan yang berkobar-kobar akan dapat pulangan yang mencukupi untuk cover modal dia orang, dan berharap komisen yang akan didapati tu akan jadi durian runtuh kepadanya. Tapi, boleh sustain ke tak? Kalau collapse? Mana ada syarikat macam USANA akan boleh collapse... alasan yang biasa kita dengar. Tell that to Amway dol.
 
Bukan itu sahaja. Taktik "deferred commission" yang menjadi salah satu MO syarikat USANA adalah satu cara untuk mengekalkan pengikut ajaran songsang perniagaan kejadah ni untuk terus kekal buat kerja skim piramid made in USA sebegini. Kalau stop rugi. Dan kalau takde komisen yang tertangguh tu, takde pulak mala'un distributor yang tamak haloba tu akan tunggu deerr... Lagi pulak, seperti syarikat "Network Marketing" yang lain jugak, USANA ada side-business dalam meningkatkan keuntungan perniagaan MLM nya dengan arahan pembelian video/CD/DVD motivasi yang cikai, menganjurkan seminar kasi pengikut bertempik-sorak macam monkey yang horny awekz tarak, kasi gathering hujung minggu sana-sini, kasi gathering 2 minggu sekali kat HQ kat PJ - yang mana semua ni, distributor kena bayar. Bahalol nak mampos distributor nya pun.
 
Ada beberapa ciri syarikat MLM yang boleh kasi kita tahu ianya ada problem:
1. Syarikat terlalu kyusuk mengesahkan plan pemasaran lebih daripada jualan produk.

2. Struktur syarikat tidak menunjukkan ianya "beneficial" pada ahli.
3. Plan pemasaran terlalu rumit dan sukar difahami, tanpa ada sebab yang munasabah.
4. Syarikat mempunya terlalu banyak level "independent distributors".
5. Syarikat buat kempen tak sudah-sudah yang mengatakan ianya bukan scam skim piramid.
 
USANA ada ciri-ciri tu semua, and then some more. Tapi, yang paling teruk pasal USANA ni, in my not so humbled opinion, syarikat tu datang daripada Mormon country, yang sentiasa sebok saban hari mahu export sistem perniagaan mungkar alkafirun ni ke merata cerok dunia (termasuklah Malaysia), supaya dana rakyat negara-negara tersebut dapat dipindahkan secara rela oleh mereka-mereka yang dungu tahap I-dunno-what ke dalam peti duit USANA kat Utah - dengan cara mengambil kesempatan ke atas "enthusiam", kerajinan dan cita-cita yang menggunung tinggi yang dipunyai oleh mereka-mereka yang tak sekolah tu semua. Si pathetic distributor bermimpi siang-hari siang-malam nak jadi kaya-raya macam 3-star Diamond Director, tetapi syarikat USANA sendiri sebenarnya dalam diam, hanya menjanjikan impian yang mereka takde hasrat nak bagi pun. What a shame.
 
Shame on USANA for being a lousy parasitic pyramid-scheme. Shame some more on those deluded clueless distributors who are blinded by greed and can't really see their way home. And most shameful is the "I washed my hands" attitude of the powers that be. I've done my job. Take it or leave it. It's past 5, I think I'll just head home... I'm getting hungry again.