Nu Skin Enterprises will have you feeling just like new. It offers 200-plus personal care products, including cleansers, toners, and anti-aging skin care products, through a global network of 994,000 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 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. Greater China (including Taiwan and Hong Kong) is an important growth market for Nu Skin, accounting for about 34% of sales.
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 994,000-strong cadre of 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 has seen two consecutive years of falling sales. In fiscal 2015, revenue decreased 13% on prior year to $2.2 billion, due to falling sales in Greater China. Revenue was also affected by foreign currency fluctuations.
Net income fell 30% on prior year to $133 million, in line with the fall in revenue. Cash from operating activities however increased by $378 million, from an outflow of $56 million in 2014, to $322 million. This was due to an increase in depreciation and amortization.
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. The company employs a separate sales model in China in order to comply with anti-multi-level-marketing laws.
In 2015 Nu Skin launched new products in its ageLOC product line: ageLOC Me, an anti-ageing skincare system, and ageLOC Youth, an anti-ageing supplement. The company began operations in Chile with its personal care products, and introduced its Pharmanex nutritional line in 2016.
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.