Welcome to my Nu Skin MLM review. In this review, I’ll answer the question if Nu Skin is a scam, pyramid scheme, or a legitimate MLM company.
Over the last few years, I’ve been busy creating reviews about all kinds of online products and opportunities.
Some turned out to be fake others were legit ways to make money online but in the process, I learned how to spot scams.
I’ll break down the MLM program, financial numbers, the history of Nu Skin, and the current state of the company.
After reading this post, you can decide for yourself if Nu Skin is worth your energy, time, and money or if you should run for the hills.
Nu Skin Review Overview
Name: Nu Skin
Website: nuskin.com
Founder: lake Roney, Sandie Tillotson, and Steve Lund
Business Opportunity: Beauty and skincare MLM program
Earning Potential: Low
Risk: High
Price: Free at the lowest level
Summary:
Nu Skin is a company that distributes beauty and skincare products with the help of multi-level marketing. Nu Skin has been around for a long time. I’d be lying if I said there’s never been any controversy with Nu Skin.
Some things have occurred in the past that might shock you which I get into in this article but it does seem like they’re operating as a legitimate MLM right now.
This doesn’t mean it’s a good business opportunity.
Chances of earning money seem to be very low and you even have the risk of losing money. In the past, they’ve definitely dealt with the consequences of presenting false advertisements but there haven’t been any crazy incidents since 2016.
I’d put it at the moment, in the category of bad business opportunities for a majority of people.
Similar to: Beauty Counter, Seint, Young Living, Avon, Younique
Recommended: No
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What is Nu Skin?
Nu Skin Enterprises is a multi-level marketing company that focuses on selling personal care products and dietary supplements. It was founded in 1984 by Blake Roney, Sandie Tillotson, and Steve Lund. The company is headquartered in Provo, Utah, United States.
Nu Skin’s primary business model involves recruiting independent distributors to sell its products.
These distributors are not traditional employees but function as an independent workforce who buy Nu Skin products and then sell them to customers, often while also recruiting others to become distributors themselves.
Distributors earn commissions not only from their sales but also from the sales made by the distributors they have recruited.
Nu Skin initially gained attention for its innovative use of skin care products that incorporated ingredients like alpha hydroxy acids.
Over the years, the company expanded its product line to include various skincare, anti-aging, and dietary supplement products, often emphasizing the use of natural ingredients.
Nu Skin is active in over 54 markets and has more than 1.2 million independent distributors.
As with many multi-level marketing companies, Nu Skin has faced both positive and negative attention. Supporters argue that it provides entrepreneurial opportunities and a chance for individuals to create their businesses.
Critics, on the other hand, have raised concerns about the potential for distributors to focus more on recruitment rather than actual product sales, which can create a pyramid scheme-like structure.
Nu Skin has faced legal challenges and regulatory scrutiny in various countries, with some authorities investigating its business practices.
Nu Skin controversy and lawsuits
Nu Skin has dealt with its fair share of controversy mostly revolving around making unsubstantiated claims about their products and MLM program. Here are some of the situations that took place that involved Nu Skin.
Pyramid Scheme Allegations
In 1992 an investigation was done after Nu Skin was accused of being a pyramid scheme. Nu Skin eventually settled with 5 states in the US with the reason for the settlement being deceptive advertising and overstating the income earned by distributors.
Despite Nu Skin never admitting any wrongdoings they did vow to improve their business operations by:
- providing distributor training sessions,
- offering refunds for 90% of their products
- Monitor sales so that 80% of revenue is derived from retail sales and is made by non-distributors
- Review all sales aids and revise all promotional materials used by distributors.
Source. Deseret news
False fat loss claims
In 1995, Nu Skin had to pay a penalty of $1,5 million because according to the FTC, they didn’t have enough scientifical evidence to promote one of their supplement as a fat loss product.
As a result, they were in violation of an agreement they signed in 1994 that’d require them to supply enough evidence of their products working before advertising their benefits.
Pyramid Scheme allegations in China?
In 2014, the Chinese government started an investigation suspecting Nu Skin to be operating as an illegal pyramid scheme. Nu Skin agreed to pay a $47 million settlement for operating as a pyramid scheme.
They also had to pay an additional $750.000 after the SEC found out Nu Skin bribed a Chinese official with money coming from Nu Skin its charitable division.
How does Nu Skin work?
Nu Skin is a company that distributes beauty, wellness, and skincare products. Instead of directly selling it to consumers they have chosen to use the MLM model which gives you the choice to earn money by:
- Selling the products for a commission
- Recruiting people to earn bonuses.
What is MLM?
MLM (a.k.a network marketing or direct selling) stands for multi-level marketing.
According to Wikipedia, multi-level marketing is a marketing strategy for selling products or services where the revenue is derived from a non-salaried workforce.
As a part of this workforce, you sell the products from the company, and/or recruit people to do the same thing. This group of people you recruit will work under you and is referred to as your downline.
The bigger your downline is the more money you can earn passively (technically speaking) because you’re getting paid a percentage based on the performance of your downline.
This also means the person that recruited you which is called your upline is making money based on your performance.
The act of recruiting turns an MLM company into a pyramid-shaped organization where the first people to join make the most and are on the top of the pyramid and those last to enter are at the bottom.
Source: Wikipedia
MLMs have been around for a long time. There are Multi-level marketing companies active today that were founded in the 1950s. MLM has a lot in common with pyramid schemes, so scammers often use MLM to disguise their pyramid schemes.
Is it necessary to recruit people? No.
You can also stick to just selling products you can order at wholesale price and re-sell to make a profit. This is easier said than done for multiple reasons which is why most members try to recruit others so they can earn more money.
MLM is an industry that has been around for a long time. The first companies using the MLM business model popped up around the 1920s and 30s.
Since then it grew to become a billion-dollar industry. According to statistics the MLM industry brings in roughly 180 billion dollars annually and doesn’t seem to be slowing down.
Is Nu Skin an MLM?
Yes. Nu Skin uses the multi-level marketing model to distribute its products and can without a doubt is a MLM company.
How to join Nu Skin
Most people get referred to Nu Skin but you can also sign-up through their website and a sponsor will be assigned to you.
After that, you can become a Nu Skin distributor a.k.a. a brand affiliate by following these 3 steps.
Step 1: Purchase a starter kit
Step 2: Recieve training
Step 3: Start sharing and earning
Is Nu Skin a pyramid scheme?
To answer this question we need to know what a pyramid scheme is.
What is a pyramid scheme?
A pyramid scheme is a type of scam where people are promised money for joining the scheme and recruiting other people instead of selling products and services.
No selling of a product or service is involved whatsoever.
So you might be wondering where the money comes from.
The people that join are expected to pay a one-time or a monthly fee and in exchange for that, they get a percentage of the fee of everyone they recruit after.
The remaining money goes to the creators at the top of the pyramid.
The problem with this model is from a mathematical standpoint everyone can’t make money because you simply run out of people.
Take a look at this picture below showing how everyone can’t earn money.
Source: Wikipedia
As you can see, in this pyramid model it’s required for every member to recruit 6 people. You’ll notice from the 12th level and further, it’s not possible anymore for everyone to earn money.
The 2.2 Billion people on the 12th level need 13.1 billion recruits in total for them all to make money which is more people than there are currently on Earth.
At the point that people can’t be recruited anymore, the pyramid collapses because not enough money is coming in to pay members and sustain the pyramid.
That being said, there are pyramid schemes that disguise themselves as MLM companies because MLMs also use a similar pyramid structure but they sell products and services.
These pyramid schemes offer products that are almost impossible to sell to push you to recruit people because you supposedly can get higher commissions.
Red Flags of a pyramid scheme in disguise
Often an argument to counter pyramid scheme claims is sustainability.
Unfortunately, this isn’t a good argument because there are a lot of companies that have been running pyramid schemes for over a decade and have been closed down just recently.
These pyramid schemes get an influx of new money by expanding to new countries or introducing new products that are geared to different audiences. The influx of new money makes it possible for the pyramid scheme to sustain itself a lot longer.
This is why it’s better to look at the following red flags.
1. There is an endless chain in which recruiters are encouraged to recruit other recruiters.
2. Advancement in ranks is based on recruiting rather than sales
3. The compensation plan pays out on 6 levels or more
4. Upline earns more than the person makes the sale
5. You have to pay-to-play
Calling Nu Skin a pyramid scheme in the past wouldn’t be a crazy statement but the FTC has been keeping a close eye on them. They still have some red flags but there does seem to be a bigger focus on sales instead of recruiting.
They vowed to implement rules that prohibit distributors from buying all the products to maintain their title and become the main source of income for Nu Skin but it’s hard to confirm if this rule is being upheld without looking at their books.
That being said, It seems Nu Skin is operating as a legitimate MLM and is saying the right things but I’m not 100% convinced yet.
Who can benefit from Nu Skin?
Who would benefit from joining Nu Skin:
- Expert salesmen
- Expert recruiters
- People that want to use Nu Skin products for themselves.
- People that are older than 18
Who shouldn’t join Nu Skin:
- People that hate sales jobs.
- People that hate recruiting
- People that expect to earn passive income
Pros and Cons
Pros
- A lot of good product reviews
Most people that have rated the product online seem to be satisfied with Nu Skin. This makes it easier to sell as a distributor because you can refer to all the positive reviews.
Cons
- You have to pay to play
The lowest title doesn’t require you to invest money into Nu Skin but if you want the opportunity to earn more money you’re going to have to pay-to-play. You’re in the reselling business as a Nu Skin distributor. The same applies to getting commissions based on your downlines. The higher the rank, the more you have to purchase. - Earning decent money without recruiting is extremely hard
Most of the products are around $20 to $100. The problem is that the commission rate on these products is a bit too low to make decent money just by selling products. - NuSKin is losing relevancy worldwide, its biggest market in China, and is inconsistent in the US
Numbers have proven that Nu Skin is losing relevancy every year. Less and fewer people are searching for the brand on search engines( Google, Yahoo, and Bing) which often is connected to the demand for products.
Nu Skin Compensation Plan
Nu Skin can be considered a traditional MLM when looking at its compensation plan. You either sell their products for a commission or you can recruit people and receive residual income, climb up the ranks, and earn bonuses.
In total, there are 9 ranks that all come with their benefits such as getting a higher commission percentage of all your sales.
- Brand affiliates
- Qualifying Brand Representatives
- Brand Representatives
- Gold Partners
- Lapis Partners
- Ruby Partners
- Emerald Directors
- Diamond Directors
- Blue Diamond
Your rank is based on multiple factors such as:
- Number of active personal customers
- Average Monthly Commissionable Sales Value
- Team Sales Volume
- Monthly Personal Enrollee Group Volume
- Active Consumer Group members
- Consumer Group Sales
For more information concerning the compensation plan, you can look at the official document by clicking here.
How much does it cost to join Nu Skin as a brand affiliate?
To become a brand affiliate at the lowest level you don’t have to invest money but to earn money you have to be what Nu Skin calls an “active” brand affiliate.
In Nu Skins Income disclaimer they define an active brand affiliate like this:
An “Active Brand Affiliate” is a Brand Affiliate who either made a personal product purchase, sponsored another account, or received a Sharing Bonus during the most recent three-month period.
This is only for people planning to sell products for profit and are eligible for a retail and sharing bonus.
So basically every 3 months at the very least you’ll have to either purchase a product. The cheapest product on the Nu Skin website is currently the ageLOC® LumiSpa iO Rose Gold Stand at $11.
This is a more than reasonable price to start with. What you do have to take into account is that at this level you aren’t capable of earning the maximum amount of money.
Multiple bonuses and high commission rates are only available to people with higher titles.
At this point, you’ll have to start investing money to maintain your title. This is done in the form of what they call blocks.
Every calendar month you’ll have to at least purchase or resell 500 points of sales volume. In most MLM companies 1 point is at least $1 so maintaining your title will undoubtedly become very expensive.
Ways to earn money with Nu Skin?
As a Nu Skin brand representative, you’ll be provided with 5 ways to earn money. Just like with any other MLM company they don’t pay a salary but they hand out commissions and bonuses.
At Nu Skin these “payouts” come in 5 forms:
1. Retail profit
The profit made by reselling products purchased at wholesale price for a higher price. The difference in price per sale is yours to keep (excluding shipping costs and taxes).
2. Sharing Bonus (weekly)
This is the bonus you receive for purchases made by your personally registered customers.
3. Retailing Bonus (Daily)
This is additional compensation you receive for product purchases by your Retail Customers.
4. Building Bonus (Weekly)
This is the bonus you receive for building your Consumer Group, providing customer service to them, and assisting Brand Affiliates and Qualifying Brand Representatives in the promotion of Products to their customers.
5. Leading Bonus (Monthly)
This is the bonus you receive when helping your Brand Affiliates qualify as new Brand Representatives, and motivating, directing, and training the Brand Representatives who you directly lead in your Team
Can you really earn money as a Nu Skin distributor?
You can read everything you need to about these bonuses in the compensation plan but I’m more interested in real numbers.
Luckily, Nu Skin has published an income disclosure with the numbers showing the income of all members.
Brand affiliates (14,5%) earn an average of $36
Qualifying Brand Representatives (1.44%) earn an average of $108
Brand Representatives (4.36%) earn an average of $675
Gold Partners (1.35%) earn an average of $1,354
Lapis Partners (0.95%) earn an average of $2,642
Ruby Partners (0.19%) earn an average of $4,484
Emerald Directors (0.38%) earn an average of $6,271
Diamond Directors 0.15% earn an average of $11,169
Blue Diamond Directors (0.26%) earn an average of $39,567
Key takeaways from the Nu Skin earnings disclosure
The majority of members aren’t active
76,42% of all Nu Skin brand affiliates aren’t active.
Less than a quarter of all distributors have earned money.
Only 23,58% of all brand affiliates earn money with Nu-Skin in the last year. The majority of this group earns on average $36 per month.
A small minority is making a US full-time income
According to the Bureau of labor statistics, the annual mean wage for a full-time wage or salary worker in the United States is $53,490 per year or $1,028 per week. 0,78% of all distributors are earning a full-time US income.
It’s also important to know that these numbers reflect revenue, not profit. This means a lot less money is taking home every day.
Why aren’t people earning decent money with MLM companies like Nu Skin?
I have summed up the reasons why it’s hard to make money with Nu Skin and MLM companies in general into 3 points. As a Nu Skin distributor, you’ll have to deal with the first 2 points mentioned below.
1. MLM companies are often associated with pyramid schemes
MLMs have a pyramid recruiting structure that you often have to join to be able to make decent money or at the very least not lose money. The problem is a lot of pyramid schemes disguise themselves as MLM programs making it difficult to differentiate the two.
This is the biggest problem why most distributors have a difficult time recruiting people. The moment people hear about how you can make money by recruiting people red flags appear in most people’s minds.
This isn’t good for your sales.
2. You have to consistently invest your money to earn commissions
You’re only eligible for bonuses and commissions if you buy their products. The bigger the bonuses, the more product you have to buy. You do get discounts but if you can’t sell the products I can see you easily fall into a financial deficit (which happens to the majority of distributors of MLM companies).
3. The price of the product often isn’t aligned with the market
It’s hard for a multi-level marketer to sell products because most MLM products tend to be a lot more expensive than similar products sold by non-MLM companies. This means even if you’re good at recruiting your downline still needs to sell those same expensive products for you to make decent money.
You can see that translated in these statistics I found about Multi-level Marketing.
- Nearly half (47%) of MLM participants reported that they lost money.
- One in four (27%) MLM participants reported breaking even (made no money).
- MLM participants are 7% more likely to declare bankruptcy during their lifetime.
- Direct sales have risen 79% in the last decade, but MLM participants continue to lose money.
- 90 – 99% of distributors in multilevel marketing only receive a couple of hundred dollars in commission per year.
- Out of the 33,000 interviewed, 90 people made enough money to cover the costs of building their businesses.
- 50% of the people who start a network marketing enterprise abandoned it in the first year.
- One AARP study found that 52% of MLM participants felt a company’s representation of achieving financial success through direct selling was “not too accurate” or “not at all accurate.”
Sources:
FTC
AARP
Jobsinmarketing.io
Nu Skin Revenue, Popularity, and Future
According to press releases from Nu Skin regarding its revenue over the years, its peak in earnings was achieved in 2013 when it brought in 3.18 billion US dollars worldwide.
Ever since then NU Skin’s revenue has been decreasing with the exception of 2018 and 2021 where they earned more than the previous years.
After 2021 there has been a steady decline up until the start of Q4. Within that time there has been a decrease in revenue of $0.6 Billion.
Their biggest market China where they get 20% of their revenue has also been decreasing.
According to Nu Skin, this doesn’t necessarily have to do with its popularity but accusations that through its network marketing, it has been spreading covid.
Google Trends
Nu Skin had an amazing run from 2011 to 2017. It seems on a global scale Nu Skin is beginning to slowly lose traction in Google Search since 2020 with the exception of a spike during the pandemic.
Globally, there are countries that see a fairly consistent decrease when it comes to the relevancy of Nu Skin but that doesn’t seem to be a problem in the United States.
Search volume has been a lot more erratic than it has been in the past. It seems Nu Skin has seasonal peaks between March and July since the year 2020 but there’s no significant decrease.
It is interesting to see that these seasonal spikes don’t seem to translate into revenue when you compare them with the Nu Skin earning reports on their website.
Looking at all the data in Google Trends, it’s easy to come to the conclusion that chances at success with Nu Skin definitely be different dependent on where you decide to start your business.
The Future of Nu Skin
Google Trends is a great indicator for identifying the demand for Nu Skin products. It does seem to be steadily declining every year on a global scale.
I don’t see it disappearing in the next couple of months or years even but I wouldn’t be surprised if they’ll start pivoting into new sectors and countries in the near future in an attempt to get more revenue.
My Personal Take
Nu Skin seems to be a very controversial company.
It kind of surprises me they haven’t done a rebrand after all they’ve been through. A lot of changes have been made to their compensation plans that are geared toward sales but I’m not fully convinced yet.
The drop in revenue also is a bit worrying when calling it a business opportunity. I wouldn’t say it’s impossible to earn money with the Nu Skin MLM program but the deck will be stacked against you.
Verdict
Is Nu Skin A Pyramid scheme?
The settlements that took place do indicate that this might’ve been running a pyramid scheme in the past. At the moment, a lot has changed in the company.
It seems they’re trying to move on from that and there haven’t been any crazy incidents since 2016. That being said, I can’t 100% rule out that they still could be operating a pyramid scheme in disguise.
Is Nu Skin A Scam?
According to the oxford dictionary, a scam is defined as a dishonest scheme or a fraud.
Nu Skin in the past, could very well be put in this category up til 2016 when the settlement in China took place.
There haven’t been any controversies in the last 7 years. They also share more documents containing do’s and don’t’s with their distributors to prevent them from spreading false truths.
At this point, I can’t call it a scam.
Do I recommend joining Nu Skin?
The company seems to be losing a significant amount of revenue and relevancy on a global scale since 2021.
It’s already hard to succeed with this business model so if the demand decreases it’s only going to become exponentially harder to earn money. I also think the reputation of the company might be difficult to overcome.
I wouldn’t recommend joining Nu Skin if you expect to earn a side or full-time income.
Nu Skin Alternative
Are you interested in earning money without monthly quotas, recruiting, or selling products?
If yes, then I might have something for you. It’s the method I have been using since 2018 to earn money right from my laptop.
It’s called affiliate marketing.
I’ve tried a lot of different methods in the past, and I spent most of my days reviewing all types of “make money/Business” opportunities.
I can say without a doubt this is the best way to earn money without huge financial risk.
Affiliate marketing is similar to the method used in the business opportunity above but there are a few significant differences.
Unlike Multi-Level Marketing:
- There’s no need to recruit people (and possibly lose valuable relationships)
- You don’t have to sell products (and sound like sleazy salesmen to earn money)
- You don’t have quotas that require you to purchase products every month
- You don’t have an upline (that next to the company also takes a piece of the pie)
No previous experience in online marketing, no problem.
It’s by far the simplest method to earn meaningful money online and even turn it into a full-time income.
Thanks to this method acquired simple affiliate websites that can bring in +$100/day without me selling products or networking with possible recruits.
If you’re interested in learning how I did it take a look at this 100% Free Step-by-step Affiliate Marketing training that’ll teach you everything you need to know.
Important* This is not a superficial guide or a starter training that leads to a premium course that you need to pay for.
It’s a Free A to Z course that you can use to set up your affiliate business and start earning money online.
That’s all for today.
I hope this course was of value to you.
If you have had experience with Nu Skin or MLM companies in general, I’d love to hear from you in the comments.
