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NU SKIN GROWS ON AMID ITS CHALLENGES

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In a little more than 11 years, Nu Skin International has grown from a family-and-friends basement business to a half-billion-dollar empire.

During most of that period, the company has fought a perception battle. Legal officials throughout the country have challenged the company's selling methods. Some just can't believe a company can grow so fast without doing something illegal or unethical.Nu Skin's growth has been phenomenal and continues to be so. In 1984, Nu Skin had five employees, 18 products and 200 distributors. The company now employs more than 2,000, has about 120 personal care and nutritional products, and more than a half million distributors worldwide. Last year the company opened five new foreign markets and will open a market in Korea next month.

"Nu Skin is definitely in a significant growth mode," said Renn Patch, Nu Skin vice president. "We're continuing to grow in the markets we're in and not just because of expansion."

The Nu Skin concept was launched in early 1984 when Nedra Roney asked her brother, Blake Roney, why no one manufactured skin-care products without fillers. Blake Roney, who was working with attorney Steven Lund at the time as a law clerk, began researching his sister's question. He contacted ingredient and personal-care manufacturers and discovered that no one did make products without fillers.

He then found a Texas company willing to manufacture non-filler products. In June 1984, Blake Roney, Nedra Roney, Sandie Tillotson and Lund began selling the products out of Nedra

Roney's basement. The company saw modest growth for the first few years.

But a multilevel marketing push, an emphasis on a high-quality product line and Blake Roney's enthusiasm caused the company to explode between 1986 and 1991. Sales grew monthly by up to 40 percent. The company hired every available body and grabbed all available office space. In 1992, Nu Skin opened a 10-story office complex in downtown Provo and a 200,000 square-foot distribution center in south Provo.

About the same time that Nu Skin was opening its new office tower, legal officials were investigating claims that the company was a pyramid. Some distributors were selling the marketing plan more than the products. Company officials said the controversy poisoned the atmosphere that legitimate distributors were trying to sell under.

"Sometimes distributors do things they ought not to do," Patch said.

The company came out of the investigations with a clean bill of health. However, the company did have to implement a new refund policy that allows distributors to return resalable products within 12 months. Also, the company encourages distributors to place more emphasis on retail sales and the quality of the company's products.

"In the end, it is always the quality of the products that make a company endure. The truth is good enough," Patch said.

Despite the agreements, the company still faces the same challenge the entire multilevel marketing industry faces. It's difficult to monitor and track the sales pitches of distributors across the globe. Nu Skin now devotes much of its time educating and training distributors on appropriate ways to sell.

"Education is definitely a major focus of this company," Patch said.

Nu Skin is the sole income source for about 60,000 of its distributors. But distributors sign up with Nu Skin distributors for a variety of reasons. Many just want access to the products. Most are looking for part-time jobs. The most successful are looking for career sales positions. Some become distributors with the misperception that they'll quickly be rich.

"The benefits and rewards equal what a person puts into it, but it's certainly not a quick way to make a lot of money," said Kara Schneck, Nu Skin media relations manager. "Those who look at it that way are just setting themselves up for disappointment."

"We have exceptional opportunities for those who want to play by the rules," Patch said.