Multi-level marketer Nu Skin Enterprises keeps itself busy exfoliating and polishing. It offers 200-plus personal care products, including cleansers, toners, and anti-aging skin care products, through a global network of 950,000 independent distributors, sales reps, and preferred customers. It also sells cosmetics, fragrances, hair care items, and mouthwash. Nu Skin has its foot in the door in 50-plus global markets, including cherished China. Its Pharmanex unit sells LifePak nutritional supplements. Its Big Planet subsidiary offers personal and small-business technology and communications products, as well as Internet and long-distance services. Nu Skin was founded in 1984 by its former chairman Blake Roney.
Geographically diverse Nu Skin rings up almost 90% of its sales outside the US. Japan is the company's largest market accounting for more than 20% of sales. Greater China (including Taiwan and Hong Kong) is an important growth market for Nu Skin, accounting for about 37% of sales.
The company operates through Nu Skin (61% of sales), its proprietary brand of anti-aging personal care products, including the ageLOC line of skin care and nutritional items; and Pharmanex, distributor of the LifePak brand and other nutritional supplements.
Sales and Marketing
Nu Skin relies on person-to-person marketing -- rather than traditional media advertising or direct marketing campaigns -- to sell its personal care and other products. Its cadre of nearly 950,000 active distributors and consumers purchase products directly from the company and resell them. However, Nu Skin employs a different business model in China where it has an employed sales force and contractual sales promoters to sells products in stores.
After posting record-setting revenues of $3.2 billion in 2013, Nu Skin saw its revenues decline 19% to $2.6 billion in 2014. Profits also fell 48% from $365 million in 2013 to $189 million in 2014.
Sales in Greater China, an emerging and important market for the company, declined by 30% in 2014. This region was negatively impacted by a suspension of business meetings and an acceptance of applications for new sales representatives in Mainland China in response to adverse media reports and a government review of its business in the first part of the year.
Nu Skin in 2014 was also negatively affected by a 35% decline in sales from Pharmanex.
Nu Skin is betting on rapid growth in the global anti-aging market as Baby Boomers in the US and skin-obsessed women in Asia fuel demand for its products. Since entering China in 2003, the company has expanded to more than 50 cities in 15 provinces.
To fuel sales growth the company is developing new ageLOC anti-aging supplements and products, including a weight management system launched in the second half of 2013. In 2015 Nu Skin introduced Epoch Essential Oils in the US, Canada, and Latin America. The company also plans to introduce essential oils in China and Europe. The essential oils can be used topically or aromatically to provide a variety of sensory and wellness experiences and benefits.
Brigham Young University graduate Blake Roney and his sister, Nedra, came up with the idea for Nu Skin in 1984 while pondering the amount of fillers in personal care products. They compiled a list of beneficial ingredients, came up with $5,000 (from friend and present SVP Sandra Tillotson), and found a manufacturer to make their product -- and Nu Skin International was born. Roney was dead-set against incurring debt, so he decided to use multilevel marketing to push the products. Such marketing systems are often accused of being illegal pyramid schemes, and Nu Skin has drawn the attention of many attorneys general across the US.