Nu Skin is a large multi-level marketing company based in the United States that specializes in products in the health and beauty industry including personal products and supplements. The company is publicly traded on the New York Stock Exchange. Throughout the company’s nearly 40-year history, it has been subject to many investigations and fines for wrongdoing, both in the U.S. and abroad. Even through these scandals, the company still achieved revenues of over $2.6 billion in 2018.
Nu Skin Overview
History of Nu Skin
The company was founded in 1984 in Utah. The company grew quickly as its personal care products proved to be very popular. In fact, its first product offering sold out in a matter of hours. Customers loved the products and even brought their own jars to the company so that the founders could fill them with products using a household spoon.
The company vowed that their products would include “all of the good, none of the bad.” The company sought to bring in the highest caliber of salespeople through an attractive and lucrative business opportunity.
Nu Skin expanded internationally six years after its founding when it began operations in Canada. The next year the company started operations in Asia, giving it a worldwide presence. A short 12 years after its founding, the company went public and began trading on the New York Stock Exchange. Today, the company believes it has the best people, product, culture, and opportunity in the direct sales skin care industry.
Company Investigations
Throughout its history, Nu Skin has been subject to many claims of operating as an illegal pyramid scheme. The company was investigated by the Federal Trade Commission in the 1990’s for this claim. Multiple states accused the company of deceptive marketing practices and overstating the income earned by its distributors. The company settled with those states in 1992.
In 1994, the company agreed to pay $1 million to the FTC over deceptive marketing practices, and they agreed to pay another $1.5 million to the FTC in 1997 over improper promotional statements. The Chinese government got involved in 2014 and sued Nu Skin in Federal Court in Utah. Nu Skin ended up agreeing to pay $47 million in a settlement for operating as an improper pyramid scheme.
Lastly, the company was found guilty of bribing a Chinese official and was forced to pay $750,000 after an investigation by the Securities and Exchange Commission. Interestingly enough, the even through all of these scandals, the company found its way onto Forbes list of 100 Most Trustworthy Companies in 2010.
Current Company Structure
Nu Skin is currently headquartered in the same city as its founding. Company headquarters are still located in Provo, Utah. The company’s current annual revenues are approximately $2.6 billion. Ritch Wood serves as the current CEO of the company.
Nu Skin operates with approximately 4,900 full-time employees and does business all around the world. There are around 825,000 independent distributors and preferred customers in the company’s network today. The company is still publicly traded on the New York Stock Exchange under the ticker symbol NUS.
Nu Skin Products
Nu Skin’s product line consists of over 200 Nu Skin products for the personal care industry that are marketed to help people look and feel younger. Nu Skin sets the standard for anti-aging products. A couple of their more popular product lines are ageLOC and Tru Face. Those lines contain a variety of Nu Skin products, including creams and serums designed to prevent aging.
Also included in their skincare line are a number of peels, masks, scrubs, and acne treatments. In addition, the company sells body care, hair care, oral care, sun protection, and cosmetics. In 1998, Nu Skin expanded into the nutritional supplement space through the acquisition of a company called Generation Health, the parent company of Pharmanex.
The company’s nutritional supplements are targeted to a variety of health items. This includes vitality, weight management, energy, and immune support. They also offer supplements targeted specifically to men’s and women’s health and bone and joint support. Lastly, Nu Skin children’s meals that can be purchased for consumption or purchased and donated to underprivileged children.
Company Marketing Practices
Nu Skin encourages its distributors to utilize social media in order to grow their customer base. The company has even published marketing materials for its reps that encourages this by highlighting the “BEhaviors” that the company recommends for growing a social media following. These are Be Real, Be Wise, and Be Connected.
They mention the fact that you need to be yourself because people can detect a sales pitch. Reps are encouraged to be subtle as they weave Nu Skin into their daily lives and depict their usage on social media. They go on to encourage their reps to gain knowledge on the latest social tools for use in their business; however, they discourage being pushy or making false claims. There is a whole list of “DO NOTS” included in the guide.
Nu Skin Jobs: Brand Affiliate
It is obvious that Nu Skin sells quite a bit of product given their revenues over $2 billion. And with only 825,000 distributors in the company, there seems to be a larger opportunity than with many of the larger MLMs. So, are people actually making money selling the products? According to the company’s 2018 Income Disclosure Statement, they paid nearly $127 million in sales compensation to Brand Affiliates residing in the United States that year.
When you further break down the numbers, there is still a very small percentage of affiliates who are making a full-time income, let alone making significant income. The average income for an active Brand Affiliate is $151 per month. It should also be noted that only 19% of active Brand Affiliates are actually receiving an income on a monthly basis. The other 81% are earning zero income. Of the 19% earning an income, the average monthly payment was $786 which is pretty high compared to other MLMs.
On the high end, the company’s top sales earners are making more than $450,000 per year on average. These are the Blue Diamond Directors. Roughly 0.7% of all active affiliates earn more than $30,000 per year. While this seems like a very low percentage, it is slightly higher than many other MLM’s.
How to Enroll
As with most MLMs today, enrollment is quite simple through the company’s website. Simply go through the company’s website and complete the application. While there is no cost to join, the purchase of a starter kit is encouraged. This allows a new rep to have some products to show to potential customers who are interested in buying.
Compensation Plan
Brand Affiliates can earn money in two ways. They can purchase products from the company at a substantial discount and then resell these to consumers. They can also earn up to 30% commissions on products purchased by their customers directly from the company. Nu Skin has published a thorough Compensation Plan that outlines the full payout methods and procedures.
In addition to earnings and commissions from their own sales, affiliates can earn commissions on the sales of their downline as well. The larger your GSV, or group sales volume, the higher the commission you will earn on your downline sales. The higher your leadership level, the more you earn too. Once you reach the highest levels, you can earn commissions up to six levels deep in your leadership downline.
Sales and Marketing Techniques
Affiliates who see the most success know how to effectively use social media to engage with their audience and make sales. They have followed the company’s guidelines and advice about proper usage of social media, and they have a large following there where they can demonstrate and advertise their products. While some traditional word of mouth advertising does take place, the online world is where most reps make their money.
Nu Skin Compared To Other MLMs
Nu Skin has been subject to many investigations and fines for operating an illegal pyramid scheme, even more so than many other MLMs. However, from an income perspective, their reps earn, on average, more than most of the other MLMs. They are a large company in the personal care and beauty space, which is a very large industry. So, there will always be a market for their products even though they are on the expensive side.
Conclusions For Nu Skin
While Nu Skin certainly is not perfect, their opportunity seems to be one of the better options in the MLM world. Nu Skin products are a bit expensive, but people seem willing to pay the price for them. Their affiliates earn quite a bit more, on average, than most other MLM reps. Overall, the company has had some blemishes on their image through the years, but they present a nice opportunity for people to earn money through direct selling.
