Is Nerium International a Scam?
There are many misconceptions surrounding the “Network Marketing” industry. You may have heard it referred to as that title or any number of others including but not limited to: Direct sales, relationship marketing, MLM, multi-level marketing, word of mouth advertising etc. Many people think all MLM companies are scams and pyramid schemes. This is simply not true. However, there have been some MLM companies that I would consider pyramid schemes. Please allow me to distinguish the difference and then to report where Nerium International sits in the spectrum.
First, A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public . So, basically, if a company is generating all or most of its revenue by collecting an enrollment fee instead of by the sale of a product or service, it can probably be labeled a pyramid scheme. The United States Federal Trade Commission (FTC) states “Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products.” 
So, are all MLM companies pyramid schemes? Certainly not. Many reputables companies have employed the MLM distribution model. Companies such as Avon, Amway, Vorwerk, Mark Kay, Herbalife, Primerica, Tupperware, and several others have reached more than a billion dollars in annual sales. Multi-level marketing is not inherently a scam. It is is simply a product distribution model whereby a company employs independent representatives to essentially advertise and distribute their product. Instead of spending millions of dollars on TV, radio, print, and other forms of advertisement, network marketing companies attribute power to word of mouth advertisement and choose to promote their product using paid independent distributors. There is absolutely nothing wrong with this. In fact, it provides a great opportunity for companies looking for sales and individuals looking to earn an income essentially being their own boss. The key is that revenue must be based around the sale of a product or service. Sometimes that line gets blurry and companies invent products just to build an MLM business model around and focus almost solely on recruiting new distributors, and not selling a valuable product or service. Those companies and individuals inevitably fail and unfortunately leave a bad taste in many people’s mouths about the industry. So the question is, where does Nerium International fall in this discussion: legitimate direct sales company or pyramid scheme/scam?
The bottom line is, Nerium International is not a pyramid scheme or a scam. At this point, the company is around 15 months old and Nerium did an impressive 100+ million dollars in sales in its first 12 months. The large majority or all of this money (when someone joins Nerium as a “brand partner”/distributor, they must buy a pack of training and start-up material, and I’m not sure if this is included in the sales numbers) generated came from the sale of the company’s first product: Nerium AD. The corporation emphasizes the sale of its anti-aging product and not simply the recruitment of new distributors. Also, a great indication that Nerium International is not a pyramid scheme is the fact that its product was not invented for MLM. It was reportedly discovered by a cancer research hospital, and only later was the network marketing company created to distribute the product.
I hope this article helped you understand the difference between a legitimate MLM company and a pyramid scheme. If you are considering using the Nerium International product or becoming a “brand partner”, you can proceed with confidence because it is a very reputable company with a lot of potential. Not many companies, MLM or otherwise, ever do 100+ million in sales, let alone in the first twelve months.
- ^ Common Fraud Schemes: Pyramid Scheme Federal Bureau of Investigation
- ^ Debra A. Valentine (1998-05-13). “Pyramid Schemes”. United States Federal Trade Commission. Retrieved 2010-09-01.
- Facts for Consumers; The Bottom Line About Multilevel Marketing Plans and Pyramid Schemes Federal Trade Commission