My phone rang. It was an unknown number.
“Bonita here,” I greeted as I picked up the phone.
“Hi Bonita, this is Patricia!”
Patricia had been my college classmate back at Ateneo. We worked on our senior year project together, doing an operational and marketing project as a requirement for graduation. I have also not been in contact with her for the last 12 years, only managing to see her at Starbucks last year.
“Hi Patricia,” I answered. “How are you?”
“I know it’s been awhile since I’ve been in contact,” she said. “Do you have time to talk?”
“Sure, I have only a few minutes,” I said. “What’s up?”
“Yeah, it’s just that I thought about you recently and I wondered if it would be good to catch up? It’s just coincidental since I saw you last time in Starbucks and we go to CCF together,” she said. CCF stood for Christ’s Christian Fellowship, one of the largest and most aggressive Protestant church in Manila today.
“Sure, that would be nice,” I said.
“How about Monday or Wednesday?” she asked.
“I think Wednesday would be okay. 5:30pm?” I answered.
“Sure,” she said. “Wednesday it is then at 5:30 pm. At Starbucks where we last saw each other.”
I thought nothing of it then though found it weird when she texted me a confirmation of our meeting.
Hi Bonita! Patricia here. See you Wednesday next week, the 6th, 5:30 pm at Starbucks!
“Thanks and see you!” I replied.
As I was busy with work, I thought nothing of it until on Wednesday morning when she texted me to remind me about the meeting. People can be organized, and it was a breath of fresh air to people who are less so.
But when I saw her on Wednesday, I came out of the catch up a little bit disappointed. Why? For the following reasons:
1) She caught up with me not much that she wanted to know how I was, but instead, to tell me about a wonderful entrepreneurial opportunity that was available, which turned out to be Nu Skin.
After asking me about how I was after college, and how I met my husband, Patricia then shared with me that she was working for a group called Nu Skin, and how interesting it could be if I wanted to have more income.
“I know you’re an entrepreneur, Bonita.” she said. “My group Nu Skin offers you the opportunity to set up your own business, make additional income. Look at me, it’s enough for me to quit my job and do it full time.”
As an actual entrepreneur, I wondered what she meant. According to the Merriam Webster dictionary, an entrepreneur is “a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.”
Personally, I feel that an entrepreneur develops the product or service, and sells it to somebody else. With Nu Skin, you are selling somebody else’s products and services. In my book, we call these people AGENTS, NOT an entrepreneur.
She then shared with me how multi-level marketing works: Basically, you recruit people — Nu Skin calls them distributors — and you ask them to sell Nu Skin products with you, with you the recruiter getting a cut on their sales.
The long compensation plan is detailed here: Nu Skin Compensation Plan.
If you have no patience to read the 5-page document, let me summarize it for you. To make the long story short, if you are successfully recruited as an Agent cum Distributor, you will get products at a whopping 30% discount. For any recruit you have at the first level, you will be given 10% commission for every sale they have. On the second to the sixth level, 5% commission.
It’s basically a pyramid scheme where you profit from people below you. Depending on how your recruits perform, your profit can reach “millions,” or so Patricia said if you’ve reached the Blue Diamond level.
Long story short, Nu Skin employs GREED to recruit people who can recruit people to sell their products. Products that are mostly for weight loss or for stem cell therapy, innovative products that they say works but require you to try out first all at cheap packages of at least Php 24,000 for a month, and Php 75,000 for a program. Their weight loss program for example lasts for 90 days and costs Php 75,000, 6.25x the monthly wage of an average Filipino.
Honestly, I felt a bit suckered. Even more so when I realized the whole meetup was a ploy to get me to listen to Nu Skin’s sales pitch.
I felt even worse when I came home and talked to Ben, my husband’s cousin, who was also a new Nu Skin recruit, and hence, was more forthcoming on the many sales strategies Nu Skin distributors employ to find new recruits.
Ben told me that distributors were provided a script on how to get people to meet up with Nu Skin agents.
“They give you a script which tells you how to word the call,” he shared. “First, you have to smile while making the call because people can hear your smile. Then you should keep the call short — less than 5 minutes — and the purpose of the call is to get the person to meet with you.”
“We aren’t allowed to say what organization we work for,” he said. “Just say ‘you’re part of a group’ and tell them you’d like to catch up. Then give them two options of date/time to meet up. Don’t ask them when they are free. Ask them a choice of two — Day 1 or Day 2. That way, they would most likely to say yes.”
I was dumbfounded as I heard Ben share with me what Nu Skin has been telling their agents. Basically, the whole catch up was to get me to meet up so they can talk about their organization!
“If Nu Skin wasn’t such a bad word,” my husband said, “Then why do they even advise their agents to NOT mention their organization’s name? If you were so proud of your company, why not let other people know until you’ve fallen into their trap?”
I myself am proud of my own company, and I want all my other employees to be proud of their work too. I would never advise my staff to dodge the question on where they worked if asked.
It saddens me that my college friend cannot even declare wh2)ere she worked until I was there having coffee in front of her.
“It’s to stop close minded people from judging you immediately,” Ben said.
Well, I can tell people where I worked and close-minded people will NOT judge me. So what does that make of Nu Skin?
2) The purpose of the meeting was to invite me to their talk in Octagon Building in Ortigas. And the talk was full of misleading marketing messages!
“One of our members, Mr. Dennis Ong, is giving a talk this Thursday,” Patricia invited me. “You should listen to him. He used to import PC hardware before computers became popular, and made a pretty buck. But now he’s doing Nu Skin and makes millions a month. As you can see, now that he’s a millionaire, he’s not doing this for money but instead because he likes what he does.”
The pitch is that Nu Skin provides you with passive income, a lot more money than if you’ve worked on a traditional brick and mortar business. Honestly, I was curious – I wanted to see what type of organization can get my college friend to ask long-lost friends out for coffee to share them wonderful opportunities to make even more money. I wanted to check out the organization that seems to have an ulterior motive in every step.
I attended the talk.
The talk first dealt with how Nu Skin Products were in the forefront of technology, with breakthrough products that help with anti-aging and weight loss. “You want to have a stable partner who can give you the products that works,” the speaker said. “With Nu Skin as a partner, you’ll have a low cost of entry and high profit potential as we can give you products you can sell, and people will need.”
I don’t have a problem with this. Personally, I believe that Nu Skin products aren’t bogus. You can’t be a listed company in the US if you market fake products. However, I do believe that the company misleads their recruits.
Case in point, at last Thursday’s presentation, they showed a Discovery Channel clip as an introduction to their product. The Discovery Channel showed how people were much worried about aging and many scientists were developing medicine to find the fountain of youth.
Here’s the clincher: The Discovery Channel segment did NOT even mention Nu Skin or its products! It merely talked about anti-aging and the search for the fountain of youth.
But immediately after the clip, the presenter showed a Flash presentation of Nu Skin’s anti-aging product. As if the two clips were one and the same, and the scientists of the Discovery Channel were endorsing Nu Skin and their products!
I was flabbergasted. This is truly misleading marketing!
Then Dennis Ong came in and talked about his background. He first started his talk saying he wasn’t in here for the money, and that he has more than enough to already live a comfortable life. But then he shared that he is a graduate of architecture and how he decided to go to business because architects don’t make a lot of money.
Wah, Nu Skin truly is a company full of conflicting statements. First you say you don’t care about money, then you tell me that Greed is good. Ano ba talaga, pare?
Then he talked about the principles of Robert Kiyosaki, author of Rich Dad Poor Dad. Paraphrasing Kiyosaki’s book and seemingly convincing everyone that these ideas were his own, he briefly talked about the principles of asset vs. liability, and how people should count on passive income if they want to be wealthy and retire before the age of 65.
While talking, I was observing how in a room of 70, half of the room consisted of old agents who would excitingly answer every one of Ong’s questions.
“Do you want to be rich?”
“Do you want to retire before the age of 65?”
I felt it was weird that the whole setup was like a semi brainwashing process. Put enough monkeys in the room, and the non-primates would think they’re monkeys too.
I also found it funny how new recruits were chaperoned to sit in front while their recruiters sat at the back. The whole set-up was to make more converts.
Personally, I felt Ong spewed a lot of financial common sense that was mostly taken from the book Rich Dad Poor Dad. Taken apart, it made sense, but if you really thought about it, a lot of the things Ong said was misleading.
For example, he stressed the importance of having passive income instead of just putting your money in the bank where it’s being killed slowly but surely by inflation. To have a passive income of Php 50,000-100,000, you have to have a savings account of Php 30 million. This is WRONG.
You would need more than Php 30million to get an income of Php 100,000. Bank rate for savings is just 1.25% per annum. So to get Php 100K monthly income, you’d need a savings account of Php 96 million!
Two, I don’t understand how passive income is related to multi-level marketing. Passive income makes you money night and day, non-stop. It’s like rent — once you lease out your place, your tenant gives you his monthly rent whether he likes it or not. Even if he doesn’t stay in the place, he still has to pay you. Same goes with borrowing money from the bank. Night or day, you still have to pay for the interest.
It’s radically different from multi-level marketing!
If people from your downline don’t work, you get no income if you stop working. You and the people below you would have to continuously work in order for you to get money. Once you and they stop, the money also stops. And once it stops, unlike property which you can sell at a capital gain, you are left with nothing except your savings.
This is not passive income, my dear. Which is why I am unsure why Ong would link passive income to a multi-level marketing scheme, except maybe to dupe more people in signing up.
Two, he also talked about how Nu Skin gave him financial freedom.Because Nu Skin can be done full or part-time, agents can control their own time.
“After I got married, my priorities shifted.” Ong shared. “All of a sudden, I wanted to stay with my family. Working hard for another corporation would not have given me the time or money to do what I want which is to spend time with family.”
This concept is once again true.
Working part- or flexi-time gives you more time for family and for other endeavors. But like any other job, you don’t work, you don’t eat. So how hard you work recruiting for Nu Skin will determine your income. The more you work, the more money you’ll have. So depending on how greedy you are, there is a big chance you’d be out schilling for Nu Skin products with your friends instead of spending time with your family!
Ong continues on and on about misleading principles on how to get rich and how Nu Skin might hold the key to being wealthy. The talk I think was 85% recruitment and 15% about the product!
Mercifully, we finally end the talk by spending the last 10 minutes talking about the three products Nu Skin is endorsing that day — The TR90 Weightloss Program, the R2 and the Galvanic Spa, all of which was sold at a cheap wholesale price of Php 68,000 to Php 77,500. But a starter kit would only cost you Php 24,000-30,000. Ong said for any questions, our distributor friends would talk to us more about these products, then signalling the end of the talk and the start of my one-on-one session with Patricia.
Again, I am amazed on how effective Nu Skin’s marketing can be. First, they bring you to the talk to fire up your greed, then funnel you back to your distributor/recruiter who will share with you how you too can be part of the Nu Skin family and make thousands and millions of bucks, depending on how you worked.
3) The one-on-one session invites you to buy Nu Skin products for yourself, or to recruit people you to know to buy the products.
“You have to use it so you can believe,” Patricia cajoled.
“I’m afraid I’m not your target market Pat,” I quipped pointing out to my 50 kilo frame. “I am not in need of weight loss, and I am too young for stem cell therapy of r2. My father has also blessed me with very good skin. I have never been to a dermatologist in my entire life and have no need for a Galvanic Spa kit.”
“But you know of people who can use it, no?”
“I do, but I don’t feel confident to offer them products as I am not a doctor,” I answered. Personally, I don’t like to offer or endorse products I have never used, or to do so for personal gain. It makes me feel as if I am using my connections for profit and I don’t feel very comfortable about that.
“If you can suggest to me 5 names of those who can potentially take advantage of these products…” Patricia said.
I then asked how many Blue Diamonds – the highest rank at Nu Skin – the Philippines has.
“15,” Patricia answered. “Dennis and his wife are two of them.”
I nodded my head. Nu Skin has been in the Philippines for the last 15 years. Dennis has been at Nu Skin for 15 years. As Blue Diamonds make Php 2.2 million per month, that gives the Ong family at least Php 4.4 million of income if the statistics were true.
“Dennis and his wife must be gazillionaires,” I laughed. “Why is he still working at Nu Skin?”
“Oh he stopped for three years because him and his wife wanted to make a baby,” Patricia explained. “But stopping, well, you know what it does… and yes, after AgeLoc came out, Dennis decided it was too good an opportunity to pass up.”
People work to have money. Once they have enough money, they stop. The Ong family, bless their heart, are more hardworking. Or just greedy. Maybe it’s both. My theory is, like what I’ve said, multi-level marketing is not really passive income so once you stop, money comes in trickles and you have to get back to the horse again.
“So how long have you been doing this?” I asked.
“Oh a year…” Patricia answered.
Later, I learned from Ben that Patricia was already an officer and was doing Nu Skin for more than a year. Maybe even a couple. It’s disappointing how an organization somehow makes their agents lie through their teeth. :(
To summarize, I have nothing against Nu Skin. I will not be like these bloggers who have written blog posts against Nu Skin distributors lambasting them. Scathing articles can be found here, here, and here. But personally, if there’s smoke, there’s fire… and the fact that Nu Skin tells their distributors not to mention that they’re from Nu Skin is smoke for me.
Now again, let me repeat. I have nothing against Nu Skin.
But I do have an issue with the way they recruit new distributors.
Or the way that they mislead people into thinking this is an easy get-rich scheme.
Or the fact that they misconstrue facts with bullshit. I still can’t get over the fact that they’ve linked the Discovery Channel clip with their product even though the clip didn’t even mention Nu Skin and their product!
Or that they try to blind people with greed. If your product is really good, you don’t have to give people a multi-level compensation scheme to market your products. Your products will sell themselves for you. So if this is the case, why emphasize money and greed instead of product knowledge in your training sessions?
In short, I don’t like that Nu Skin is a company with an ulterior motive. It gave me a bad taste in my mouth, and I felt bad hearing how experienced salespeople have to come up with misleading facts to sell their products. I think it is unethical AND wrong.
So the next time somebody invites you for coffee, be wary. Nothing is an innocent as it seems.
To Nu Skin leaders and distributors, please be more forthcoming with your customers. We are not idiots and we don’t like to be misled. Your products, if they are really good, should speak for themselves. Please don’t give me a get-rich scheme because you and I both know there is no easy way to get rich. You still have to work your ass off to get somewhere. And please stop with the ulterior motives. If we do discover you’re a Nu Skin distributor, then great! But please, please don’t ask us for coffee to catch up and then give us a pitch for Nu Skin.
You are better than that. Please do better than that.
For the rest of you readers, I think it’s better to watch this super short clip by billionaire John Paul Dejoria on what success is than to go to a Nu Skin pow-wow.
Happy weekend guys!