If you have looked into any skincare and/or nutritional supplement MLMs lately, then you may have heard of Nu Skin. This company offers a direct sales MLM sales model to its independent contractors, who are called distributors. Anyone can sign up and become a distributor by filling out an online application on the Nu Skin website.
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What is Nu Skin about?
Nu Skin is a Utah-based direct sales MLM company that was founded in 1984. It offers several lines of skin lotions, spa products, nutritional supplements and even select foods. Nu Skin’s 200+ products are strongly based on the premise that their use will delay and/or mitigate the process of aging. This claim is promoted quite strongly in the company’s ageLOC lines of skin care and nutritional supplement products.
Over time, Nu Skin has worked with and acquired scientific and health related companies to expand its product lines.
In 1996, Pharmanex, which is a nutritional supplements company, was added to the Nu Skin portfolio. This addition brought about the launch of the Pharmanex BioPhotonic Scanner, a device purported to measure carotenoid levels in skin and report them back to the user via a Skin Carotenoid Score. In 2011, Nu Skin bought out LifeGen Technologies, a genomics company based in Madison, Wisconsin. This enabled Nu Skin to launch its ageLOC line of products.
How do you start a Nu Skin business?
Nu Skin does not sell its products in stores. Products can be purchased online, on the Nu Skin website, provided that the customer already knows his/her distributor’s ID. Alternately, one can purchase and/or sell Nu Skin products by applying to become a distributor. To do this, one also needs to know a distributor’s ID.
The price of enrollment is low at just $25. A new distributor is also not obligated to sell any minimal volume of product. However, in order to start earning commissions and bonuses, he will need to purchase inventory at wholesale price and sell it to new customers. He will also need to recruit current customers and non-customers into becoming Nu Skin distributors.
Wholesale inventory is reduced by 25%. So, for example, if you wish to purchase and sell 3 units of ageLOC Future Serum, you’d first need to spend $492.75 on the wholesale order. Then, you would pocket $164.25 for yourself once the customer purchased those units from you.
Nu Skin products are not cheap. Luckily, the company now offers a 30-day 100% money-back guarantee on returns. It also offers 90% monetary compensation on returned products that are over 30 days old.
Nu Skin distributors also earn additional commissions from their downline- provided that their downline meets a given amount of sales. So, as a new distributor with a few recruits, you must ensure that your downline makes $200 in sales before you get that additional $10 commission.
As with any business opportunity, there are pros and cons to signing up with Nu Skin.
Study-based products– While the company has been criticized and even sued for outlandish claims about the benefits of its products, Nu Skin does publish user-based studies of its skincare and other products. These studies are based on the observations of the users after using Nu Skin products for a period of time. Overall, user perceptions of product benefits are positive.
Minimum sales requirements– Nu Skin claims that its distributors aren’t obligated to sell a given amount of product. However, if they wish to earn any kind of commission and bonuses, they must actually purchase and (hopefully) sell a given volume of product. They must also ensure that their downline purchases/sells a set volume of product.
Expensive products– Nu Skin products are expensive. Expensive products mean that potential and even current Nu Skin customers will need extensive proof that these products are good and actually work as claimed. The sales cycle will be longer. Finally, some customers will simply be out-of-reach because they will not have the budget for such expensive purchases.
False product claims– Nu Skin has been sued by five states for overstating the income earned by its distributors and has been called an illegal pyramid scheme by the Attorney General for Connecticut. It’s also gotten in trouble with the FTC and has had to pay out $1 million in 1994 and then another $1.5 million in 1997. More recently, the company was fined $540,000 in 2014 by the Chinese State Administration for Industry & Commerce for illegal sales and deception of consumers.
Exaggerated science claims– When a company publishes “scientific proof” slides like these, even non-scientists like the FTC) raise their eyebrows:
A statement, such as the one provided above, is so vague as to be completely useless. Anti-aging research has, to date, identified a few aging-related genes. It has yet to cause them “to express themselves more youthfully” – except perhaps by caloric restriction. Furthermore, the work was performed on mice and rhesus monkeys, not humans. If such an event has in fact occurred any other way, the data (i.e., journal citations) are not provided here.
And then there is this slide:
Aging research scientists still can’t agree on what is/are the actual cause/s of aging, much less how to target them. Unless LifeGen Technologies stumbled upon a massive breakthrough in aging research, such claims are unsubstantiated and misleading.
Unsavory personal and legal issues– The founders of Nu Skin have attempted to portray the business as wholesome and family-oriented. However, the founders’ personal and professional lives have been anything but. Sandie Tillotson, one of the company’s founders, has had her ex-husbands publish tell-all books that have damaged Nu Skin’s image. Nedra Roney, another Nu Skin founder, was charged with prescription and insurance fraud. Robert Clark McKell, her husband, was accused of committing other (even worse) crimes.
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Is a Nu Skin business worth it?
Given the ongoing legal issues with Nu Skin and its products, I cannot recommend this company as a business opportunity. Also, because the company’s products have been overhyped by both its executives and distributors, it’s hard to believe any of the product benefits touted by the company and its published collateral. With so many other (and less scandalized) business opportunities out there, you are better off passing on Nu Skin.
Have you bought or sold Nu Skin products? Please leave a comment about your experiences below.