nerium-international-logoNerium International launched in 2011 and operate in the anti-ageing MLM niche. The company is is based out of the US state of Texas and is headed up by Founder and CEO, Jeff Olson.

Olson’s MLM career appears to have started in the late eighties, with Olson starting out in National Safety Associates (also known as “NSA”) and then Qurom.

A problematic characteristic shared by both these companies appears to be affiliates being required to purchase stock they don’t need and/or can’t sell (front-loading).

According to the Wikipedia entry for NSA;

NSA had some legal troubles in 1993, as the Attorney General’s office followed up on complaints that the company was deceptively requiring new distributors to make large upfront purchases of air and water filters.

Each of the 32,000 distributors in Florida purchased an average of $7,000 worth of water filters, and many of these distributors were unable to sell all of them.

And on Quorom, Rod Cook over at MLM Watchdog writes;

The little hand held alarms at $25 sold like hot cakes (to quote Raymond Hung) but they were easy to copy and sell in discount stores.

Meantime most distributors were looking at that pile of $450 house alarms gathering dust in the garage! They were looking at top dogs making $1-$2 million and saying “I think I have been had!”

Consumer electronic companies never spun off the main item, the house alarm! Period zip zero, just the hand held and “bike” alarms. So quit the B.s.

Now, another unique front end load with a $450 dust collector?

The WatchDog helped people file complaints to get some of the piles of dust collectors out of people’s garages.

NSA are still in business today (although they no longer market water filters), with Quorom filing for bankruptcy in 1996.

jeff-olson-founder-ceo-nerium-internationalIn a fluff piece on Olson (right), Marketing Merge credits him with having ‘one of the largest organizations in the history of’ NSA and a ‘gigantic organization’ in Quorum (which is for some reason incorrectly referenced as “Coram” on the site). In Quorum, Olsen is specifically referred to as

the #1 money earner in the company. He was so successful; he was eventually made the Chief Executive Officer of the company.

After the Quorum bankruptcy Olson then went on to launch The People’s Network, which later merged with Prepaid Legal. After the merger Olson stayed on as a trainer and consultant for the company, eventually leaving around the time PrePaid Legal was sold to MidOcean Partners (who then changed the company’s name to “Legal Shield”).

I couldn’t find out exactly why Olson left PrePaid legal, but he did so at a time when a whole bunch of top-affiliates also left the company – so I’m assuming it has something to do with the sell off to Mid Ocean.

This was in 2011, with Olson then going on to form a “partnership” with Nerium Biotechnology later that year. That partnership culminated with the launch of Nerium International.

Since then I believe it’s been smooth sailing for the company, with the exception of a lawsuit filed against them by actor Ray Liotta last month.

Around Oct. 13, 2013, Liotta claims in his complaint that as part of a marketing campaign, Nerium, “by and through its agents, distributed photographs and related materials that identify, name, and/or describe, and purport to show [Liotta] ‘before-and-after’ using Nerium AD skin cream.”

In the before photo, Liotta’s skin is blotchy while in the “after” photos his skin appears to be smoother.

Several exhibits in the court filing are photos of the same “before-and-after” photo shared by individuals on social media site Facebook, Twitter, Google+ and Pinterest.

Nerium are claiming ignorance, indicating that this might be a rogue affiliate advertising campaign issue:

In a statement provided to ABCNews.com, a spokeswoman for the company said, “Nerium was surprised to learn through the media about a lawsuit filed by Mr. Ray Liotta. We take claims against our company seriously and we are committed to investigating this matter promptly.”

In the lawsuit, Liotta claims Nerium is “a product-based pyramid scheme”.

Nerium sells its products to “Nerium Partners,” sales agents who recruit new partners “in an ever-growing pyramid.”

To the best of my knowledge, as at the time of publication the lawsuit remains unresolved.

Read on for a full review of the Nerium International MLM business opportunity.

The Nerium International Product Line

Nerium International’s product line stems from their partnership with Nerium Biotechnology. According to a press-release Nerium put out in 2011:

Founded in 2006, Nerium Biotechnology, Inc. was created to fund research focused on new technology and applications of the Nerium oleander plant.

While researching the uses of the Nerium oleander plant, Nerium Biotechnology, Inc. made an accidental discovery: Nerium oleander possesses unique qualities that produce remarkable age-defying results when applied to the skin.

This discovery, with product development through Nerium SkinCare, Inc., led to the creation of the NeriumAD™ skincare line.

In 2009, Nerium SkinCare, Inc. was developed as a division of Nerium Biotechnology, Inc. to provide for research, new product development, formulation, testing, and manufacturing of all skincare applications, including the patent-pending Nerium oleander extract, NAE-8.

In 2011, Nerium International partnered with Nerium SkinCare, Inc. to build a global, first-of-its-kind skincare line based on a strong, scientific foundation.

neriumad-product-nerium-internationalNerium International’s flagship product is called NeriumAD. Retailing at $110 for a 30ml tube, NeriumAD

contains the most effective ingredients available, including our exclusive, patented NAE-8 extract, which has powerful antioxidant properties that help reduce the appearance of many signs of aging.

Nerium also market a “body countouring cream” they call NeriumFirm:

NeriumFirm is a skin-tightening cream developed from the patented NAE-8 extract of the Nerium oleander plant. Its powerful antioxidant formulation has been clinically proven to reduce the appearance of cellulite and dimpling and to help smooth, tighten and firm the appearance of loose skin.

NeriumFirm retails at $98 for a 185ml tube.

The Nerium International Compensation Plan

The Nerium compensation plan has a variety of retail commissions and bonuses, backed by a unilevel residual backend and various performance-based bonuses.

Commission Qualification

In order to qualify for commissions, Nerium requires their affiliates to either

  1. create a monthly autoship order of 80 PV
  2. generate at least 200 PV in customer orders

Note that “PV” stands for Product Volume, and is a points based system used to keep track of product sales.

Nerium Affiliate Membership Ranks

There are fourteen affiliate membership ranks within the Nerium International compensation plan. Along with their qualification criteria, they are as follows:

  • Brand Partner – maintain either 80 PV via autoship or 200 PV via retail sales a month
  • Senior Brand Partner – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit at least three affiliates and have a downline generating at least 1600 GV a month
  • Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit at least three affiliates and have a downline generating at least 4500 GV a month
  • Senior Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit at least three affiliates (three of which must be Senior Brand Partners in individual recruitment legs), and have a downline generating at least 12,500 GV a month
  • Executive Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit at least three affiliates (three of which must be Senior Brand Partners in individual recruitment legs), and have a downline generating at least 37,500 GV a month
  • Regional Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit at least three affiliates (three of which must be Directors in individual recruitment legs), and have a downline generating at least 75,000 GV a month
  • National Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit at least three affiliates (three of which must be Directors in individual recruitment legs), and have a downline generating at least 150,000 GV a month
  • 1-Star National Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month and recruit and maintain at least three active affiliates (one of which must be a National Marketing Director)
  • 2-Star National Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month and recruit and maintain at least three active affiliates (two of which must be National Marketing Directors in individual recruitment legs)
  • 3-Star National Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month and recruit and maintain at least three active affiliates (three of which must be National Marketing Directors in individual recruitment legs)
  • 4-Star National Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month and recruit and maintain at least four active affiliates (three of which must be National Marketing Directors in individual recruitment legs and one of which must be personally recruited)
  • 5-Star National Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month and recruit and maintain at least five active affiliates (three of which must be National Marketing Directors in individual recruitment legs and two of which must be personally recruited)
  • International Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit and maintain at least five active affiliates (three of which must be National Marketing Directors in individual recruitment legs and two of which must be personally recruited), and have three 3-Star National Director affiliates in individual recruitment legs (can be personally qualified or indirect)
  • Gold International Marketing Director – maintain either 80 PV via autoship or 200 PV via retail sales a month, recruit and maintain at least five active affiliates (three of which must be National Marketing Directors in individual recruitment legs and two of which must be personally recruited), and have three 5-Star National Director affiliates in individual recruitment legs (can be personally qualified or indirect)

Retail Commissions

Nerium International offer all affiliates retail commissions on the sale of their products. Although not explicitly clarified in Nerium’s compensation plan material, the percentage paid out on the two examples provided equates to a 27.2% retail commission.

A Customer Acquisition Bonus is also paid whenever a new preferred customer is signed up on autoship (preferred customers receive a wholesale discount in exchange for maintaining a monthly autoship order).

This bonus is paid out in one of two ways, either according to an affiliate’s membership rank and the product(s) a preferred customer has on autoship, or simply based on how many preferred customers they have enrolled.

Membership Rank

  • Brand Partner – $16 for 1 bottle of NeriumAD, $30 for 2 bottles of NeriumAD and $24 for a night/day combo pack
  • Senior Brand Partner – $24 for 1 bottle of NeriumAD, $40 for 2 bottles of NeriumAD and $36 for a night/day combo pack
  • Director – $28 for 1 bottle of NeriumAD, $50 for 2 bottles of NeriumAD and $32 for a night/day combo pack
  • Senior Director or higher – $32 for 1 bottle of NeriumAD, $60 for 2 bottles of NeriumAD and $48 for a night/day combo pack

Number of preferred customers

  • 3 customers – $24 for 1 bottle of NeriumAD, $40 for 2 bottles of NeriumAD and $36 for a night/day combo pack
  • 6 customers – $28 for 1 bottle of NeriumAD, $50 for 2 bottles of NeriumAD and $42 for a night/day combo pack
  • 9 customers – $32 for 1 bottle of NeriumAD, $60 for 2 bottles of NeriumAD and $48 for a night/day combo pack

Note that an affiliate is paid whichever method of bonus calculation works out to be higher for them.

Personal Customer Commissions

A residual retail commission, Nerium’s Personal Customer Commissions pays out an additional percentage on the sales volume generated by an affiliate’s own personal purchases and that of their retail customers (including preferred autoship customers).

To qualify for Personal Customer Commissions, an affiliate must first generate at least 200 PV in self-purchase or retail sales volume each month.

Then, depending on the total number of PV from retail and self-purchase sales generated that month, an affiliate is paid as follows:

  • 201 to 500 PV – 10%
  • 501 to 1000 PV – 15%
  • 1001 to 2500 PV – 20%
  • 2501+ PV – 25%

Note that a preferred customer’s first month’s order does not count towards Personal Customer Commission qualification or payout volume.

Recruitment Commissions

When a Nerium affiliate recruits a new affiliate who signs up with a Success Pack, they are paid a commission. How much of a commission is paid out depends on which Success Pack is purchased and an affiliate’s own membership rank:

  • Brand Partner – Success Pack = $50, Premier Success Pack = $100
  • Senior Brand Partner – Success Pack = $75, Premier Success Pack = $150
  • Director – Success Pack = $100, Premier Success Pack = $200
  • Senior Director – Success Pack = $115, Premier Success Pack = $250
  • Executive Director – Success Pack = $125, Premier Success Pack = $275
  • Regional Marketing Director – Success Pack = $135, Premier Success Pack = $300
  • National Marketing Director – Success Pack = $150, Premier Success Pack = $325

Fast Start Bonus

The Fast Start Bonus pays out a Nerium affiliate who recruits another Nerium affiliate who achieves Fast Start qualification.

In order to qualify for the Fast Start Bonus, an affiliate must achieve the following within 30 days of joining the company:

  • sign up on autoship
  • generate at least 500 PV (personal orders and/or customer orders)
  • recruit at least three new affiliates who also sign up on autoship
  • generate at least 2000 GV (your own volume and that of affiliates in your downline, max 1000 GV can come from any one recruitment line)

Alternatively an affiliate can qualify for the Fast Start Bonus by achieving the Director affiliate rank, however note that the bonus itself is only paid out when recruited affiliates qualify for Fast Start, not when they are promoted to the Director rank.

The Fast Start Bonus pays out $250 per recruited affiliate who Fast Start qualifies.

Unilevel Commissions

Residual commissions in Nerium are paid out using a unilevel compensation structure.

A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):

unilevel-commission-structure

If any of these level 1 affiliates recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team. If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth.

Nerium affiliates earn a percentage of the sales volume generated by affiliates in their unilevel team, with how many levels they are paid out on depending on an affiliate’s membership rank:

  • Senior Brand Partner – 5% on levels 1 to 3
  • Director – 5% on levels 1 to 4
  • Senior Director – 5% on levels 1 to 5
  • Executive Director – 5% on levels 1 to 6
  • Regional Marketing Director – 5% on levels 1 to 6 and 2% on levels 7 and 8
  • National Marketing Director – 5% on levels 1 to 6, 2% on levels 7 and 8 and 1% on levels 9 and 10
  • 1-Star National Marketing Director or higher – 5% on levels 1 to 6, 2% on levels 7 and 8 and 3% on levels 9 and 10

Matching Bonus

Nerium affiliates are able to earn a bonus of up to 10% on the earnings of their personally recruited affiliates.

  • Affiliates who are not Fast Start qualified or are at the Senior Brand Partner or lower affiliate rank are paid 5%
  • All other affiliates are paid 10%

Note that the Matching Bonus earnable from each personally recruited affiliate cannot exceed an affiliate’s own personal monthly commissions.

Differential Bonus

The Differential Bonus pays out on both the acquisition of a preferred customer and recruitment of a new affiliate who purchases a Success Pack, made by one of an affiliate’s personally recruited affiliates (their immediate downline).

The Differential Bonus pays out according to an affiliate’s membership rank as follows:

Preferred Customers

  • Senor Brand Partner – $8
  • Director and Senior Director – $4

Success Pack 

  • Senior Brand Partner – $25
  • Senior Director – $40
  • National Marketing Director – $35

Leadership Bonus

The Leadership Bonus pays a Nerium affiliate an extra 1-3% on their downline. The bonus is paid out down to the next affiliate in each recruitment leg that is at the same affiliate rank as the affiliate themselves.

How much of a percentage is paid out depends on affiliate’s membership rank:

  • 1-Star National Marketing Director – 1%
  • 2-Star National Marketing Director – 2%
  • 3-Star National Marketing Director – 3%

Rank Achivement Bonus

When a Nerium affiliate qualifies at specific affiliate membership ranks, they earn a Rank Achievement Bonus:

  • National Marketing Director – $25,000 paid out over 12 months
  • 3-Star National Marketing Director – $100,000 paid out over 12 months
  • 5-Star National Marketing Director – $250,000 paid out over 12 months
  • International Marketing Director – $500,000 paid out over 24 months
  • Gold International Marketing Director – $1,000,000 paid out over 24 months

Director Bonus

If an affiliate generates 500 PV, signs up for autoship and qualifies as a Director within their first 60 days of joining Nerium, they can choose from either:

  • an Apple iPad
  • $350 cash or
  • seven bottles of NeriumAD

Car Bonus

Senior Director and higher ranked affiliates qualify for a monthly Lexus Car Bonus as follows:

  • Senior Director to Regional Marketing Director – $500
  • National Marketing Director to 2-Star National Marketing Director – $750
  • 3-Star National Marketing Director – $1000

Joining Nerium International

Affiliate membership to Nerium International is available in three options:

  1. Brand Partner – $99.95
  2. Success Pack – $499.95
  3. Premier Success Pack – $999.95

In addition to receiving Nerium products, the main difference between the packs and Brand Partner affiliate membership is qualification for various commissions and bonuses:

The optional Nerium Success Packs immediately qualify you:

• To generate 500 PQV in your first 30 days

• For the first step in becoming “Fast Start Qualified”

• To begin earning Success Pack Differential Bonuses

• For the personal requirement portion of the LEXUS Car Bonus

Conclusion

On the topic of whether or not Nerium’s products work, I can’t stress enough that the most effective form of marketing here is going to be via self-consumption (make sure you take before and after photos!).

It should go without saying that trying to fudge your results, using actors photos (without their permission no less), is a pretty silly idea. Some actors are going to be spending more on makeup than some of your customers might be earning!

Nerium boast that they “always” have a 90-day competition running on their website, so that’s your benchmark. Note that you’ll probably want to sign up as a preferred customer and place a three-month running order (I assume there’s no minimum commitment on autoship orders).

Speaking of autoship, it conveniently brings us to the biggest red-flag I see in Nerium’s compensation plan.

For reasons not entirely clear to me, Nerium require affiliates to purchase a monthly 80 PV minimum autoship order or generate 200 PV in retail customer orders to qualify for commissions.

Shouldn’t this be the other way around?

Other than to encourage affiliate purchase of product, surely the emphasis should be on retail qualification? From a money-flow stand point, retail products cost more (commission aside), so again – I’m not really sure what’s up there.

The Fast Start Bonus for example, which is basically “sign up for autoship and recruit 3 affiliates who do the same”, perfectly illustrates potential problems.

If Nerium can maintain 80 PV for autoship orders, if anything the retail equivalent should be less due to the markup.

It makes even less sense when you consider that elsewhere in the plan (the preferred customer bonus on retail autoship orders), that affiliates are wholly encouraged to increase their retail activity (it directly affects their commission payout).

To that effect I thought the Personal Customer Commissions was a great idea, as it ties in a retail commission bonus to how much product is actually being sold to retail customers.

Similarly, if preferred customers bring in new preferred customers (whose order volume will be credited to the initial affiliate), the affiliate receives free product – which can than be used for sampling or self-consumption.

Again, a great way to incentivize retail activity – so why Nerium has set the personal volume commission qualifier so low comparatively I have a hard time understanding.

Other than that, I did think the way the start packs were set up was a bit questionable. The start packs Nerium offers are directly tied into recruitment commissions. These commissions top out into the hundreds of dollars, and run the risk of luring affiliates who might only be interested in recruitment.

The Differential Bonus, although paying out much less, still adds to this – and would no doubt have a significant impact on larger downlines.

All in all it’s a bit of a mixed bag. I think with a bit of reworking Nerium could have a compensation plan that wholly focused on retail, and got rid of the more “grey-area” stuff.

To try to weed out any potential uplines who might just be recruitment-orientated, I’d pay attention to how they recommend you join the business (and why), and then ask them for their preferred customer and/or retail numbers. Given the repeat consumability of Nerium’s products, I’d say preferred customers are much more likely to exist over straight retail (if for nothing else than the discount).

Good luck!