Introduction to NuSkin MLM Compensation Plan
I consider myself well-traveled, at least within the continental United States. One of the redeeming qualities of the multilevel marketing (MLM) industry is that the wild goose chases it sends you on have a way of turning into pretty enjoyable road trips. I have never been to Idaho, but I have been to all the Midwestern states, and I have dipped my toes in both the Atlantic Ocean and the Pacific Ocean. I have kept my eyes open for alligators in the Florida Everglades (I saw tons of them; it was alligator mating season, and they wanted to be seen) and for gila monsters in the desert (no luck). Every so often, though, something reminds me of how much of my life takes place inside my Midwestern mindset. For example, today, while researching my NuSkin review, I came across an MLM industry witticism I had never heard before, namely that MLM stands for “Mormons Losing Money”.
I can attest to the fact that Utah ranks in the top five US states in terms of numbers of MLM companies headquartered there, and it definitely has the highest concentration of members of the Jesus Christ Church of Latter Day Saints (known colloquially as “Mormons”). And it goes without saying that the MLM industry and losing money go hand in hand.
Longtime readers of Notebook Crazy know about my request to review every MLM business opportunity out there, and they know that I sometimes start my reviews with origin stories about rock bands or anecdotes about my family and friends here in the Midwest, and I occasionally start with a shaggy dog story about an unusually spoiled iguana (shaggy iguana story?), but today the truth is stranger than fiction, and the story of the NuSkin controversies is even more interesting than the foibles of the people in my little corner of the Midwest. I am indebted for much of the information in this NuSkin review to a few news articles that came out around the time of the 2012 presidential election (for reasons that will become obvious soon), most notably an article in Fortune magazine.
NuSkin: The Company and Its Products
Without question, this story begins in Utah. The NuSkin business opportunity, with all its controversies, is so closely tied to the state of Utah that NuSkin has been a corporate sponsor of the dance team of the Utah Jazz. (Yes, I thought it was weird, too, that Utah’s NBA team is called the Jazz, but according to Wikipedia, the team kept its name when it moved from New Orleans to Salt Lake City. Likewise, the LA Lakers were originally named after the 10,000 lakes of Minnesota, which is not too far from here, but they kept their name when they moved to LA.) NuSkin has ties to several politicians from Utah. It made donations to the presidential campaign of Mitt Romney in 2011. (I know that most of Romney’s political career did not take place in Utah, but he can be connected to Utah through his role as president of the Salt Lake City Olympic Games Organizing Committee in 2002, and he is, in any case, the closest thing the United States has had thus far to an LDS president. Romney actually spent his early life in Michigan, which is not too far from here.) Jason Chaffetz, who is currently serving in the House of Representatives as a Representative from Utah, was a spokesman for NuSkin for much of the 1990s. While doing research for this NuSkin review, I also found out that one of the senators who played a major role in the passage of the 1994 law that deregulated nutritional supplements so that they could be sold without FDA approval, thus opening the door for a whole host of nutraceutical MLM companies, some of which originated in Utah and many of which I have reviewed right here on Notebook Crazy.
The company was founded in 1984 by Steve Lund, Blake Roney, NedraRoney, and Sandie Tillotson. This sounds a bit like gossip, but one of the sources I read said that the reason that NedraRoney’s name is no longer mentioned on the NuSkin website is that she has been married 13 times, which, to put things in perspective, is more than double the number of marriages of Henry VIII. The company claimed that NuSkin products could reverse the effects of aging, and while the company grew quickly, with lots of NuSkin distributors jumping on the anti-aging skincare bandwagon, the NuSkin controversies started almost from the beginning. There was a big NuSkin lawsuit in the early 1990s about the exaggerated claims that NuSkin distributors made on behalf of the company about the anti-aging effects of NuSkin products, and in 1994, the company paid a settlement without actually admitting that it had done anything wrong.
But by far the most interesting of the many NuSkin controversies are the ones that stem from the efforts of former husbands of Sandie Tillotson who tried, through scandalmongering memoirs and good old-fashioned NuSkin lawsuits, to take down the company and its wealthy founders. The lesser of these NuSkin lawsuits initiated by a former husband of Sandie Tillotson was made by Adam Baker, who was married to Tillotson from 2002 until 2007 (but they separated in 2005; those last two years were taken up by their divorce). Baker is 13 years younger than Tillotson, and they met at a club where Baker was performing, under the stage name “Dirty Dalton”, a whip-wielding exotic dance. (If this story is true, it means that there are strip clubs in Salt Lake City, which completely contradicts the squeaky clean image of the place that has formed in my mind thanks to the media and thanks to the people from Utah that I have met at MLM conventions in other states.) Their divorce left Baker broke, and he decided to write a memoir and trash his ex-wife, one of the founders of the company which was responsible for the proliferation of unsold anti-aging lotions in the basements of a substantial portion of the houses in Utah and other states. The legal battle got complicated, but it eventually led to Tillotson suing both Baker and another ex-husband of hers, Diederik van Nederveen.
Diederik van Nederveen and Sandie Tillotson were married from 1995 until 2000. They met at an MLM event at a Club Med in Mexico. Van Nederveen, who is originally from the Netherlands and can speak five languages, had worked as an Arnold Schwarzenegger impersonator, an actor in low budget action films, a painter, a yacht captain, a commodities trader, and an underwear model. Following their divorce, the legal disputes between Tillotson and van Nederveen mostly centered around the custody and visitation agreement regarding their daughter. Van Nederveen has been relentless in his efforts to take down NuSkin, even teaming up with short-sellers who were betting against the company. (If you want to know what a short-seller is, I recommend watching the movie The Big Short. It will inspire you. It inspired me to set out on my MLM reviewing quest. Without it, this NuSkin review that you are reading now might not even exist.)
You who have been distributors for MLM companies before or even those of you who haven’t but who live or work in communities where MLM is a big deal will know that most MLM products are nothing special, and for the most part, NuSkin products are no exception. After the NuSkin controversies got too big to ignore, NuSkin started branching out from anti-aging skincare into other types of products, most of which are just business as usual in the MLM industry. It started selling nutraceuticals and business tools. It also eventually debuted a new anti-aging skincare product line called ageLOC, and people started buying it up simply because it was not called NuSkin. None of this should surprise you. Having worn out its welcome in the United States, the company also expanded its overseas markets, especially in China and Japan. Now Asia accounts for the majority of NuSkin’s sales.
The NuSkin Compensation Plan
The NuSkin compensation plan requires NuSkin distributors to purchase at least $100 of NuSkin products each month, which means big payouts for the people at the highest levels. The company does suggest that, if you need to buy more NuSkin products in order to meet your quota, but you have enough lotion, you can participate in the Nourish the Children program, in which you buy porridge for children in Malawi. The journalists from reputable news sites described the NuSkin compensation plan as a “mega-pyramid”, in large part because of its breakaway feature. I do not disagree that a breakaway structure in an MLM compensation plan is bad news, but I probably have a higher threshold than the people who write for the mainstream media about what constitutes a mega-pyramid.
Advantages and Disadvantages
- People from the United States are not known for their knowledge of geography. I’m sure that there is someone somewhere who first heard of Malawi when frantically clicking on the NuSkin website in order to make enough purchases to maintain his or her active status in the NuSkin business opportunity for another month.
- Dirty Dalton. Just wow. If I ever decide to become an online troll, I am definitely adopting “Dirty Dalton” as part of my screen name.
- I will never again let anyone tell me that Utah is boring.
- Breakaway plans are, indeed, bad news.
- Nutraceuticals are, indeed, bad news.
- NuSkin has gotten a lot of press in the mainstream media. It is one of the ten largest MLM companies in the world. Unless you can sell it to your recruits on the grounds that it has managed to reinvent itself numerous times after numerous blows to its reputation (you can compare it to the Lernaean Hydra if you want to), your friends and relatives don’t have to look past the first page of search results on Google to find out about the NuSkin controversies. When they do, they will probably run in the opposite direction, as well they should.
- Nourish the Children has to be one of the least efficient nutritional programs I have ever heard of. The porridge it distributes to families in Malawi costs more than ten times as much per serving as the porridge distributed by USAID. I guess we should expect no less from the MLM industry.
That who “MLM stands for Mormons Losing Money” joke made me smile, but the biggest laugh I got when researching this NuSkin review is one that technically should not make me laugh anymore because I have seen it happen so many times when researching MLM reviews. The thing that made me laugh the most was how shocked the writers of the news articles about the NuSkin controversies were that some frustrated NuSkin distributors had “thousands of dollars” worth of MLM merchandise in their basements. Poor, innocent mainstream journalists. If only they knew! There are some states where, if you went into every basement and sold off the MLM merchandise at its full retail price (assuming that there was a buyer out there who was willing to pay retail for a large amount of MLM merchandise, which assumption should probably be called the MLM Fallacy), you would be able to pay off the national debt. The story about Sandie Tillotson marrying and divorcing an Arnold Schwarzenegger lookalike and an exotic dancer named Dirty Dalton makes for an entertaining read because it defies stereotypes about Utah, but I have come to expect such stories from the MLM industry. Except for the fact that the characters are a little more colorful than the average players in an MLM drama, there is really no reason to single out NuSkin among MLM companies. You have come to expect it, too, and that should tell you something.
Just kidding. I could never be an online troll. I am actually just a mild-mannered Midwesterner. Schedule a call with me, and you will see what I mean.