Is Nu Skin a scam? If you’re here, you’re probably wondering about that since you’ve heard NuSkin is a MLM.
What is Nu Skin?
Nu Skin Enterprises is an American multilevel marketing company that develops and sells personal care products and dietary supplements under its Nu Skin and Pharmanex brands.
What is a pyramid scam?
A pyramid scam, known commonly as Multi-Level-Marketing (MLM), is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
In the classic “pyramid” scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.
The fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early stage investors. But eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money.
What makes Nu Skin a scam?
Pyramid scams are such that only people at the top make the money. Therefore people at the bottom don’t make money or even lose money. Therefore, avoid the Nu Skin pyramid scam and go make money a different way 🙂
Why Nu Skin might not be a Scam
One legitimate part about Nu Skin is that they have (or had) a long standing research partnership with Stanford University. Stanford University has acknowledged their relationship and that some research was being funded by Nu Skin.
How Nu Skin Works
Nu Skin recruits people as “distributors”. Distributors sells products directly to potential customers which they’re paid a markup commission from. Distributors can also recruit other people to become distributors, from which they get a percentage of those downstream distributors’ sales. This is the part that makes Nu Skin a pyramid scam. It is a classic multi level marketing scam.
Also note that the products are overpriced. Nu Skin states that it pays approximately 43 percent of its product revenue in sales compensation. This means that almost half of the sales price goes to commissions, which means that if the company Nu Skin itself is to be profitable, the markups would need to be huge.
Additional Nu Skin Scam Warnings
Very few people make money
According to reddit user hyrle who claims to be a former employee of Nu Skin corporate:
Only approximately 8,000 out of their 2M current distributors take home $100/mo in commissions or more. Million dollar lifetime earners are rather rare, I think the company had approximately 700 when I last checked. When you’re talking about a company that’s been around 30 years, it’s not exactly churning out tons of millionaires. If a rep sells a $30 bottle of pills, they’ll see around $10 in commission, if they can manage to sell it without offering any discounts (which come out of their pay.)
Government Investigation for Being a Scam
In the 1990s, the states of Connecticut, Pennsylvania, Florida, Illinois, Ohio, and Michigan investigated Nu Skin over allegations of misleading marketing practices.
In 1997, state of Pennsylvania sued Nu Skin, alleging that the company operated a pyramid scheme through a subsidiary, QIQ Connections.
John Oliver criticises Nu Skin for the fact that in 2015, 93% of its distributors did not earn a commission check in a typical month. That’s vastly misleading from claims of getting rich easy, and therefore we think Nu Skin may be a scam.