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1,536 word individual article excerpted from Nutrition Business Journal's December 1999 issue, Multilevel Marketing III.
With sales growth in a slump, network marketer acquires new products to attract distributors and announces divisional strategy.
Although Nu Skin Enterprises Inc. (Provo, Utah) fared better than most publicly traded MLM companies selling nutrition industry products, the company saw sales soften in 1998-99. This was due primarily to currency fluctuations in its largest markets of Japan, Taiwan and Korea, where Nu Skin generates the lion’s share of its nearly $1 billion in revenues. Moreover, in the United States, which represents most of Nu Skin’s remaining 10% of sales outside of Asia, the MLM market also softened, mostly due to the strong economy. (MLMs tend to do better in economic down times.)
According to Nu Skin President and CEO Steven Lund, rather than wait out the cycle of positive economic news at home, or simply hold on during the roller coaster ride of Asian economic recovery, Nu Skin has taken steps to attract new distributor demographics and provide existing distributors with a wider selection of products to sell: “When the marketplace changes, the challenge to the management team is to respond to that change. Fewer people [distributors] are entering, but we have sought out new demographics,” said Lund.
These days, a better story in the nutrition industry—whatever the sales channel—means trademarked products against a background of clinical research. To enhance its ability to present both, in October 1998 Nu Skin purchased Pharmanex Inc. (Brisbane, Calif.), a raw material supplier and manufacturer in a deal worth $xx million. According to Lund, in the two years prior to acquisition, Pharmanex generated $20 million in sales through ...
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