Is Nu Skin Pyramid Scheme a Scam?

Is Nu Skin Pyramid Scheme a Scam?

Nu Skin ReviewHad someone recently try to sell you their products or even business opportunity, and wondering if the Nu Skin pyramid scheme is for real? You have landed at the right place.

First of all, let me congratulate you for doing your own research before committing to any ‘opportunity’ that requires you to show your wallet. Many times, lots of hype around some products or a company could simply mean very aggressive selling tactics, as their monetary gains are at stake.

I am not associated with Nu Skin in any way. So I can assure you that the views I share will be honest and unbiased. Usually, when there are strong opposing opinions on a particular subject, numbers can help you make the best informed decision.

In this article, I will provide an in-depth review of Nu Skin, through the following sections:


Nu Skin: Review Summary

Product: Nu Skin

Creators: Blake Roney, Sandie N. Tillotson, Steve Lund, and Nedra Roney

Product type: Personal care and anti-aging products, and nutritional supplements, sold through multilevel marketing

Price: 100 PV (equivalent to $100) per month

Scam / Legit? : Legit

Recommended or not? : Not recommended

Nu Skin is a big company, making billions in revenue, selling personal care and anti-aging products, as well as nutritional supplements. Its business model works on MLM (multilevel marketing) scheme. Though there have been great reviews about its products, and I do believe in their quality, the prices are exorbitant. Moreover, when you join as a distributor, you are taught to focus on recruiting more people to form your downline, rather than on retail sales of the products.

This spells an ‘opportunity’ that works more for those in the higher ranks and its founders, rather than for the regular distributors. As it turns out, just like any other MLM company, the vast majority of Nu Skin distributors do not earn any money (in fact you would be very fortunate not to be losing thousands of dollars instead).

If you do not want to waste anymore time, money and effort on MLMs that fail to give you the financial freedom they promised, check out my #1 recommendation to making money online:

Read on for the detailed review of Nu Skin, and why I do not recommend it.


What is Nu Skin

Nu Skin was formed in 1984, in Provo, Utah. It is an MLM (multilevel marketing) company that sells anti-aging and personal care products, along with dietary supplements that boost your immunity, manage your weight, and keeps you young and vital.

On their website, Nu Skin commits to providing quality skin care that features only premium, wholesome ingredients, remaining true to its “all of the good, none of the bad” motto, and developing innovative products that support the health and longevity of hair and skin.

Plagued by lawsuits

Nu Skin tells its distributors that they are a network marketing company, in an attempt to move away from the stigma that MLM has with pyramid schemes. It is a very fine line between MLM and pyramid scheme.

And considering the lawsuits that Nu Skin had gotten into over the years, it is no wonder that they are very careful in how their distributors may portray the business.

In the 1990s, the Federal Trade Commission (FTC) investigated Nu Skin over complaints of its marketing practices, for which Nu Skin reached settlements with 5 states that alleged the company was deceptive in its advertising, and overstated the income claims of its distributors.

In 1994, Nu Skin paid a settlement for making unsubstantiated claims of its products.

This repeated itself in 1997.

In 2014, the Chinese government investigated Nu Skin for operating an illegal pyramid scheme. In 2016, Nu Skin paid a settlement to the Chinese government.

With a long chain of lawsuits that follow them, would you even want to get involved with this company?

Nu Skin Product Line

These are the main items that the Nu Skin product line consists of:

  • ageLOC – dramatically diminish the appearance of aging, by targeting the ultimate sources of aging. Products include home spa equipment, cleanser, toner, serum, creams, etc. which are priced over the top.
  • Face care – masks, scrubs, and all sorts of creams and gels for targeted treatment.
  • Cosmetics – foundation, powder, lipsticks, eye products, etc.
  • Nutritional supplements – Superfruit blend, weight management products, targeted supplements for immunity, energy, heart, mobility, cell protection, mental sharpness, and digestion. Again, priced exorbitantly.
  • BioPhotonic scanner – allows you to measure the carotenoid antioxidant activity in your body. So you can actually try to verify whether the supplements are effective.

nu skin scanner

I have no doubt that Nu Skin prides itself in its research and advanced technology harnessed in making its products. But the prices are quite outrageous. That makes it not marketable to the masses. Which is the starting point of any MLM scheme that spells trouble for almost all its distributors, as I will explain in the business opportunity section below.

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Nu Skin Pyramid Scheme? Or Not?

Before we point fingers at the Nu Skin pyramid scheme, let’s take an objective and close look at how one can make money through the Nu Skin business opportunity.

To start, we take a look at what it takes to become a Nu Skin distributor:

First, you have to accumulate 2500 points, if you want to become an independent distributor, being able to form your own team. One point is equivalent to spending $1. That means you have to accumulate $2500 worth of purchases before you can even start earning. That, to me, puts any new distributor at a very disadvantaged position. Obviously the company is out to earn your money.

Though there is no time frame for achieving these 2500 points, you can be sure your upline, or sponsor, or simply the person who roped you into the company, would be pushing you to buy a high priced package at the start, so that you achieve your independent distributor rights quickly, and can start earning.

At the same time, you also need to make a monthly purchase order of $100 minimum, to be an active distributor. They call this ADR (Automatic Delivery Rewards). This can count towards your accumulation of the 2500 points. For these monthly purchases, you have to either sell off or consume at least 80% in value of the products. Which does not seem to make any sense at first.

Why should they care what you do with them, since they have already made the earnings from you?

The answer is simple: they do not want distributors to return the goods for a refund when they decide that they are done with the business that is not getting them anywhere. So with this clause, it caps your refund entitlement to only 20% of all your purchases. Smart, huh?

Which means at the end of the day, you would have stocked up an entire storeroom of Nu Skin products worth thousands of dollars, that you are not able to sell because they are too expensive, and that you cannot return because of this 80% policy. Well, I really hope you don’t find yourself in this situation. It is cruel.

Now let’s see how much you can make as an active distributor. As with any MLM scheme, there are two main ways to earn with Nu Skin: retail commission and recruitment commission.

Retail commission

This is the commission you will make when you sell Nu Skin products to customers at the retail price. You make the difference between that retail price and the wholesale price, which can be lucrative IF IT WORKS.

The problem is, nobody would buy at the retail price, because they can easily join as a distributor themselves, to buy the products at wholesale price. Or even for people who do not want to join the business opportunity, they can sign up as preferred customers, to buy at wholesale price. Which means you earn nothing.

Even to get preferred customers signing up under you is an uphill task, simply because the prices are too high.

Recruitment commission

Anyway Nu Skin does not even bother getting its distributors to try to make retail commission. Because there is simply no real market demand for their products. So they focus on teaching you to recruit people under you, called your downline, to form your own team.

As you expand your team, you move up the ranks, and your commissions and bonuses increase too.

MLMs have a way of making their compensation plans so complicated that nobody can understand them (or maybe it’s just me and my very dense brain), when in fact they are hiding the conspiracy for the bulk of the earnings to go to the highest ranks.

So I never bother to go through their mind-boggling incentive structure. You just need to know, the higher the ranks you move up to, the more you earn. So the point is to keep recruiting and recruiting.

The Gist of the MLM structure – why Nu Skin will not work for you

After reviewing many MLM companies and their business opportunities, I have seen through how they all work. I will explain it here very simply.

It all starts with exorbitant pricing of the products that nobody can afford. So there will not be any real demand. Then they create an incentive structure, such that distributors are made to buy their products, with the hope of getting back their investment and more, since this business opportunity is dressed up in the promise of financial freedom, and living your dream life.

Hence the entire reward structure creates an artificial demand for their products, since distributors are required to make minimum monthly purchases, which can add up pretty quickly.

And yet, distributors are not rewarded even when they work so hard to recruit people under them, because you have to move up a lot in the ranks, in order to see any substantial earnings. While you and the people you recruit keep feeding $100 per month each to the company, and get nothing back.

I hope you see now, why Nu Skin will not work for you. The whole system is made to work for the founders, as well as those who joined at the right time, when the company was just starting up, and they could gather a large team under them, which continued to grow through the years, resulting in them being at the top of the ranks, and making millions from the money that comes out of the distributors’ pockets, those from the bottom ranks.

You are paying with the hope to earn, and yet the earnings never come in. You are also paying to promote the company to people around you, and paying to build up the company. How does it all make sense? Because it simply does not.

The proper way to make money from home

Many people are attracted to MLM opportunities, because of the perceived flexibility of working from home, working around your social circle, being able to decide how much effort and time you want to put in, etc.

All these are not true. To have even the smallest earnings with any MLM company, you need to put in 100% of your time and effort, to go all out, promoting the products, or the business opportunity to people. With this kind of commitment, you may earn a few thousand dollars in the whole year. To me, it is totally not worth the time, effort, and the relationships soured.

Instead of working your butt off for other people’s business, and making less than a part time income, the best way to earn is to have your own business. In the internet age, it is not difficult or complicated at all.

We are not talking about a brick and mortar business, where you have to sink in huge capital for renting a place, renovating it up, buying your products, sorting out the logistics and inventory, hiring people, handling delivery, customer complaints, and refunds.

None of these.

It can be run by just you alone, so you get to keep all the earnings. The start up cost is very low, and the best thing is, it works! Here’s a peek into my earnings on a recent day:

affiliate commission

As you can see, more than $100 a day is very do-able. And this is not even at its maximum potential yet, I’m still growing this business every single day.

In fact, I want to show you a platform where it is free to start. This allows you to try things out, take some online lessons totally free, see how things work, before deciding if it is what you want to do in the longer term.

There is too much I want to share about this platform, so if you want to see how exactly I am earning an online income, hop over to my other post, where I explain everything in much more detail. Click on the button below:


Pros of Nu Skin

1. Established company with great products

Nu Skin is an established company, having been around for 35 years. That says something about its quality of products, as well as its knowledge and experience in running the MLM business.

2. Evergreen niche

Anti-aging and beauty are niches that will never go out of trend. As long as there are women on this planet, there will be a need for anti-aging, beauty, and skin care products.

Cons of Nu Skin

1. Pushing overpriced products that people do not need

Nu Skin products must be the most overpriced that I have ever seen among all the MLM companies that I have reviewed. No one will go around looking for overpriced products to buy, when there are so many great and cheaper alternatives out there in the free market.

So to sell Nu Skin products will make me feel like I’m shoving something that people do not need down their throats. Not something that I want to do unto my family, friends, or even acquaintances.

2. Recruitment for your own financial gains

When you try to recruit people into Nu Skin, it is purely for your own monetary gains, and not because it is a great opportunity that you are already making money with. To me, this feels very exploitative. I would be totally uncomfortable to rope anyone into such an ‘opportunity’.

3. Vast majority of distributors do not make any money

Take a look at this income disclosure of Nu Skin distributors for the year of 2011 (I was unable to find a more current one):

nu skin income disclosure 2011

This table only includes all the active distributors who managed to earn something in the year. Which means 87.3% of distributors are not even in the picture, because they never earned a single paycheck.

Look at how much they are earning, even these distributors who are making something, the annual income is so little, not even a part time income, and they must have put in full time hours and effort.

If you look at the section boxed in red, together with the 87.3% that did not earn anything, a total of close to 98% of distributors made less than $4.7K in the entire year of 2011.

How about that for a life-changing business opportunity?

Not earning anything basically means suffering losses. Let’s not forget about all the monthly purchases that add up more quickly than you want to think. This is exactly where the profits for the top earners come from… the distributors’ pockets.

4. Family and friends will start to shun youIt is very natural for people to shun you, when the agenda for interacting with them becomes a self-centered one, rather than out of pure friendship or kinship.

Recommendation

Nu Skin is definitely not a pyramid scheme. It is a legitimate MLM scheme that sells great quality products. But its focus is very much on recruiting rather than retail, making it not such a pleasant opportunity. It is very similar to so many other MLMs that I have reviewed, to name just a few: Jeunesse, Mary Kay, and New U Life.

If you are serious about making money, with the flexibility of working from home, owning an online business is the best way to go about it. Because it is something that you can eventually build into a passive income stream.

Unlike MLM, which is not as easy as they try to make it sound, with barely 1% making an income that they can call the dream life. And with the other 99% working so hard just to support this 1%. In my opinion, MLMs are not ethical at all, and should be totally banned.

The way I want to show you, of making money online, is a completely honest way, and does not prey on vulnerable people. Neither does it make you exploit your family and friends.

Hop over to my other page, where I detail how this method works exactly, and you will understand why I love what I’m doing right now. Click on the button below:

If you have any concerns or questions regarding this Nu Skin review, do comment below, and we will start a conversation from there.


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6 thoughts on “Is Nu Skin Pyramid Scheme a Scam?”

  1. many years ago i joined nu skin back then we had to pay lots to join .now it free i never made any money .yes there products are good and they do there research but i would never work for them again

  2. Hi. I am actually a distributor for nuskin. It’s free to join. I have been doing this since October and have earned way more than I have put in. I think the part where you said your upline pushes you, is a bit inaccurate. It’s really based on the culture your upline is creating. Mine are very understanding, loving and I never feel pushed or obligated. If I have put money in it’s for myself or my family. Now I have done younique and It works, That is where I lost money. Autoship, paying for your website, buying a kit. All that and you have to maintain a PSV. Nuskin does not require all that. Also with the mention of lawsuits, any made has been handled by nuskin. They actually are BBB accredited and publicly traded on the NYSE. So my advice to interested individuals is, take this as a grain of salt. Go out do your own research and try it. No money needed so No loss.

    • Hi Mary,
      Really appreciate you taking the time to chime in on this post. Happy that your experience with your upline in Nu Skin is a positive one. You have provided a balanced view of MLMs for the readers here to see and choose for themselves.

  3. Most of this information is pretty inaccurate, or fed to you guys in a way that is a negative connotation which actually still had positive sides to it. Like the pyramid scheme itself, yes everyone knows the people at the top benefits the most as they should because they started the company, however it doesn’t mean that you’re at less of an opportunity to make money as well.

    • Hi John,
      Thank you for your views on this, which I do respect.

      However, I tend to disagree as I see the MLM scheme as being set up to exploit distributors at the lower ranks, which form the bulk of their members. It is precisely where the entire revenue of the companies come from. This is a model very unlike any other business that operates in the free market, which of course the owners of the companies rightfully earn whatever profits they make, if their products are of great quality, and can withstand the competitiveness of the market by pricing it at an affordable rate.

      The numbers will tell you that 98% of Nu Skin distributors did not make any substantial income. The figures from FTC are at 99%, for all MLMs in general.

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