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Nu Skin and the billions made in skincare

Nu Skin is a vintage skincare MLM that is still relevant in the competitive space (see the top skincare MLMs here).

These guys are huge. The New York Times has an entire section dedicated to their business. Even Mitt Romney openly supported it. Nu Skin is all that and more.

So have I been involved?

This video explains:

 

All good? Let’s continue…

Overview

Nu Skin has been around since Girls Just Want to Have Fun was the hit song, in 1984.

What they’ve managed to achieve in more than thirty years is nothing short of MLM genius.  Among the top ten direct selling companies in the world (1), this company is considered a permanent fixture on the skin care scene as well as the occasional headline-maker.

From eHow articles to coverage on the national news, Nu Skin is one MLM the general public might have heard of.

Sure, Jeunesse is the new skin care darling, but Nu Skin is the seasoned veteran.

Outside Avon, Tupperware, Mary Kay and Amway, most people find it hard to come up with the names of companies who use the direct selling approach.

But with support from the likes of Mitt Romney, Nu Skin is well on its way to becoming a household word.  What’s this company all about, and how good are the skin care products, really?

You may be wondering why big politicians like Mitt Romney would have anything to do with a wrinkle cream company. But think again: what drives politicians?

Here’s a hint: Nu Skin is valued at over $3 billion dollars. A publicly-traded company, their stock weighs in with a 5-year annual dividend growth rate of around 25%.  Their revenue in 2014 was $2,569,000,000, a figure so large it’s better read in shorthand: $2.57 billion (2).

When Salt Lake City was attempting to become site of the 2002 Winter Olympic Games back in 1999, Nu Skin wanted to become a sponsor.

Based in Provo, Utah, Nu Skin found resistance in its bid to become a sponsor simply because they were a supplement company (their Pharmanex division is all supplements).  This was a sensitive matter because at that time the International Olympic Committee was very interested in warning athletes to avoid supplements since they could contain banned substances.

But Mitt Romney came to Nu Skin’s defense and even made an appearance at a Nu Skin convention in 1999 (3).  Nu Skin donates to a super-PAC that backed Romney for president, and one of the co-founders of Nu Skin chaired Romney’s campaign finance committee.  Money seeks money and Nu Skin didn’t come to the table to make tiny bets.

Let’s see how they got there.

Products

There are over 200 products developed and sold by Nu Skin.  They have skincare and dietary supplement products…all designed to make people look younger and feel younger.

The supplement division is the result of a mid-90s acquisition of Pharmanex.  They also acquired LifeGen Technologies (in 2009), meaning they are now in the business of genomics.  The anti-aging line of products stems from the genomics work and is called ageLOC®.

Nu Skin has its own labs for conducting studies on the ingredients in its products, so science-backed claims are no problem for them.  There are not one but three global research centers regularly pumping out studies.  They also collaborate with outside research institutions.  This is not white label branding situation here: Nu Skin develops and manufactures its own proprietary products.

As for the Pharmanex brand, scientific integrity is also what sets them apart from their competitors.  In these two extremely competitive industries (skin care and supplements), it takes a lot of good science behind your products to be a major competitor.  Nu Skin has this.

A random sampling of Nu Skin products reveals a pleasing array of products that people want.  Scientific principles are worked into marketing materials in acceptable, bite-sized chunks, making you feel as if the products will truly produce miracles on your skin. Very convincing.

Compensation Plan

Nu Skin is sold all over the world.  There are hundreds of thousands of independent distributors selling Nu Skin products.

The Nu Skin compensation plan has been churning profits for distributors working from home for thirty years now so they must be doing something right.  But much of that business is overseas.  In fact,  87% of Nu Skin revenue is from outside the US, and most of that is from China (4).

But the plan seems fair and square, even to western standards. Take a look at the highlights:

  • earn up to 25% or 30% profit on retail sales
  • products are not cheap: $36 for facial cleanser for example
  • 5% commission on level 1
  • buy-in: purchase a product package and sign up for Auto-Ship
  • product packages range from $475 USD to $1519 USD
  • Auto-Ship of 250 PGSV* is required to remain active

*PGST is Personal Group Sales Volume: personal sales + level 1 customer and distributor sales volume.  To give you an idea of points to dollars: $375 USD ($431 CAD) is worth 200 PSV (Personal Sales Volume).  It is not a one-to-one ratio.

Recap

Nu Skin is big, but not immune to market forces, global events, and new anti-mlm legislation.  Just this past February, quarterly profits fell 63% because the Chinese stopped loving their products, according to an article cited earlier.

Of course it doesn’t help international sales figures when the dollar is strong, but that’s not the whole story of Nu Skin in China. Chinese regulators have found Nu Skin guilty of illegal sales and misleading marketing.  Nu Skin was fined and forced to stop recruiting for 3 months.

That’s worrisome, and it’s also happening in the US. MLM regulation is clamping down on many companies they feel are pyramid schemes.

Nu Skin has the smarts and the power to adjust their practices, if need be, to comply with industry best practices.

They’re already a member of the Direct Selling Association, and have accreditation with the Better Business Bureau where they have an A+ rating. These things, combined with the solid line of products and important backers mean Nu Skin should look forward to at least another 30 years.

But, that doesn’t mean it’s the best way to make money.

After all, pitching your family, friends or church members is old-fashioned and scuzzy. Not a good look.

There are more effective ways to be an entrepreneur. My 30k months come from a non-MLM source, building businesses that I can pass on to my future kids.

Here’s your doctor-recommended treatment for your MLM addiction: click here.

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Multilevel Marketing

Zija review: Nutritional supplements from moringa

Zija is a nutritional products network marketing company capitalizing on the healthful properties of moringa.

In May 2017 they acquired Xango, making them a bigger force in the health MLM space.

Run by a pioneer inventor in the herbal supplement industry and propelled by a top Harvard scientist, Zija is setup to do big things.

Overview

We’ll take a look at exactly what Zija is celebrating. You’ll find out whether the science is there to support the claims made about moringa. You’ll also discover how well their International compensation plan stacks up in a sea that’s brimming with nutritional energy drinks (hint: Tru Vision, Isagenix, and Visi).

First let’s find out about moringa.

Moringa Oleifera is a tree found in the foothills of the Himalayas known for its drought-resistant properties (1). The seedpods are eaten in Africa and Asia. The leaves are the most nutritious part and are eaten in Southeast Asia. The flowers are said to taste like mushrooms.

There seems to be no question as to the high nutritional value of moringa. It’s a good source of protein as well as vitamins, amino acids, minerals, and phenolics (2).

But delve a little deeper and the clinical studies aren’t there yet for many of the claims made by Zija Interntional. More on that below.

Who is Zija International? The founder of Zija is Ken Brailsford. He is credited with inventing herbal encapsulation, and with helping to bring moringa to the supplement industry after watching a documentary about the health benefits of consuming parts of the moringa tree.

Mr.Brailsford is actually something of a “star” in the herbal supplement world. He started Nature’s Sunshine in the 1970s, to capitalize on his new herbal encapsulation methodology. He ran that until 1979 when he left to become a stockbroker because of a noncompete clause with Nature’s Sunshine (3). He later went back but fully retired in 1997 until he founded Zija years later.

The company is based in Lehi, Utah and boasts an executive team of “experienced MLM professionals.”  That would include CEO Rodney Larsen who was hired to promote the growth goals of Zija. Mr.Larsen has been with ZI since 2006 and his LinkedIn profile shows no other data before that year. Some Zija affiliate websites do mention that he worked for NEXX and a branch of NuSkin Entrprises before joining Zija.

President Brad Stewart’s profile mentions that he has managed his career “through vision and faith”. He has been involved in network marketing his whole life.

Executive Vice President Darrell Eyre started as an Amway distributor and has been in network marketing for 25 years.

COO Michael Hershberger has over 15 years experience in management and IT and an MBA.

The takeaway: apart from the Chief Operating Officer, Zija International is run by people who have pretty much always worked in network marketing. The founder is recognized as an important figure in herbal supplement history and founded one of the oldest and most successful herbal supplement companies in the world.

Zija International is a BBB accredited business with a rating of A+.

Products

The ZI products can be divided into three categories: moringa, ameo, and ripstix. Headed by  Harvard Medical School valedictorian Joshua Plant, the scientific wing of Zija International is actively engaged in formulating new products based on moringa and other botanicals.

Moringa is believed to support a wide range of health benefits, including anti-inflammatory support, improved digestion, improved mental clarity, increased energy, anti-aging, immune system support, and blood glucose level regulation. All of these benefits are listed on the Zija International website.

Scientific evidence and clinical trials, however, are hard to find.

There is one agricultural study  where mice and ruminants were given moringa tea. It was found that the white cell count in the mice who drank the tea was significantly higher. Mice also experienced reduced inflammatory responses.

In that same study, Moringa also improved cell viability in sheep and goats, and reduced oxidative stress from internal parasites. No effect on the gut health of pigs was observed, however (4). The results of this study have only been published informally to date.

The same Ag & Tech school that’s conducting that study is also looking into the use of moringa to promote animal health. Specifically, they’re researching moringa’s effects on the immune system (on B and T cells). In addition, they’re studying moringa’s effects on growth rate and performance of pigs. However, at this time it’s merely stated that more research is needed (5).

There is also a World Health Report citing the use of moringa in the use of water treatment in developing countries (6). But so far, not much has made it into the National Institutes of Health’s PubMed system.

The takeaway: moringa is incredibly nutritionally dense, but clinical studies are needed to support many of the health benefit claims made by Zija Interntaional.

Essential oils produced with clinical-grade standards and Zija’s exclusive patent-pending certification system.

Ripstix Hydration and Fitness Line – these are energy drinks in powdered form. Fitness supplements containing L-arginine (8) and electrolytes, they also contain fructose which some people try and stay away from.

Compensation Plan

There are tens of thousands of independent distributors working for Zija International. They have access to an extensive network of Zija training modules, including videos, an app, audio training, all of which is measured by a series of exams.

It’s the only MLM known to have a certification process for its distributors. Not only that, but every 90 days, distributors must re-certify. Passing exams means higher pay, too (7).

This is similar to how non-MLM companies handle their training. For example, public school teachers get pay raises when they pass graduate-level courses from accredited institutions of higher learning.

So what if Zija operates its own training, testing, and certification program in-house: it’s far above and beyond what you’ll see in other MLM companies.

Details:

1) IBOs profit by purchasing products at wholesale prices and selling them at retail (up to 25% profit).

2) Qualify to earn commission by being on autoship for at least 75 PV per month.

3) Get 10% of sales made by your personally enrolled recruits.

4) Team commissions and further bonuses as you advance in rank.

Recap

Zija appears to offer a good product. They have done a lot of things right and have a unique niche in the competitive nutritional supplement industry. But the income potential isn’t worth my time.

I’m not saying Zija International is a bad company – they’re not.

With any MLM, peddling products to your family members and friends at church might work for a couple months…maybe over a year if you’re lucky.

In the end, it’s still the sad story of selling hype and chasing the hot opportunity.

There is a better way.

Check this out. This will help wreck your money-chasing habits.

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