Nerium International, LLC is a company founded in 2011 by Jeff Olson at Addison, Texas, U.S.A., where the central offices are located. Its area of service covers Canada and Mexico as well, and its products are sold through a multi-level marketing system of independent distributors.
According to the statistics, their sales have exceeded all expectations achieving over $100 million in just their first year of being in business, and the company is involved in charity work which led to the moniker that “the Nerium products improve skin but the company itself changes lives”.
Review of Nerium Skin Care Products
At the 11th Annual Stevie Awards, Nerium International and its CMO Amber Olson Rourke were awarded the following:
- Gold award for:
Company of the year
Women helping women
More than 10 employees
- Silver award for being the second fastest growing company of the year
- Bronze award for:
Female entrepreneur of the year
Woman of the year in advertising, public relations and marketing
They were also awarded the Grand Stevie Award for competing with one of the best collections of entries.
Despite the above awards, there has been some debate recently, whether the active ingredient used is actually as active as described and some controversial complaints about the way they do business exclusively through what they call “Brand Partners”.
The product line
The main product line is NeriumAD which is based on the extract of Nerium oleander (most commonly known simply as oleander). It is a toxic plant found in Asia and the Mediterranean and according to the clinical trials performed at Nerium Biotechnology laboratories, it was found to be effective against hyperpigmentation, fine lines, wrinkles and in generally improving the appearance of damaged skin.
The name used for the skin care product is NeriumAD Age-Defying Treatment and consists of a night and a day cream containing the oleander extract which has not yet received a patent recognition.
The extract mentioned is called NAE-8 and it was tested for safety at ST&T laboratories and not the Nerium Biotechnology ones. The element checked for toxicity was oleandrin which supposedly can produce heart problems. The study included subjects who applied the products to their skin and then had extensive blood tests to determine the presence of oleandrin. None of the tests indicated such a presence and therefore, from this point of view, the Age Defying Treatment is safe to use.
The question of effectiveness can be considered as answered by the user reviews who are split in just about the middle. The ratings go for 2.67/5 for effectiveness, 3.30/5 for the ease of use and 2.67/5 for customer satisfaction. A closer reading of these reviews reveals the following details:
The product line appears slightly more effective on normal to dry skin.
It is strongly recommended that neither product is applied on sensitive skin without prior consultation with a physician.
There have been cases where a skin exposed to constantly working outside and in constant conditions of sweating, presented symptoms of peanut allergy response, therefore, it is advisable to check with a physician prior to using products containing oleandrin.
The effectiveness controversy
After reports of various medical conditions that may or may not be related to the use of NAE-8, a study was conducted by independently hired medical professionals. The results they presented in their analysis were the following:
- The content percentage of pure Nerium Oleander in oleandrin is 0.4%
- The content of 1 ml of the products is 0.000008 grams of oleandrin.
- It takes 1 gram of oleandrin to be lethal.
Therefore, the contents on NAE-8 may be within the safety parameters but probably too low to be effective on the skin. The rest of the ingredients are common to every skin care product and cannot be considered as contributing to the overall effectiveness any more or less than they do wherever else they have been included.
The way of doing business controversy
As aforementioned, the company has implemented a sales system based exclusively on independent distributors. Each bottle of product has a retail price of $110 for 30ml of cream. Each distributor receives a 15 to 25% commission out of each sale, plus a bonus of 5% “coaching fees” for bringing in more distributors to the vault and a bonus for every re-order made by their customers.
There have been many complaints by these independent distributors about the very high initial capital they have to invest to cooperate with the company, which is either $500 for getting the first 5 bottles of the product (i.e. their profit out of selling all 5 is $50), or $1,000 for 12 bottles (i.e. $320 for selling all 12). Including the $100 that have to be paid for the Brand Partner Launch kit, it makes no sense going for the 5 bottle package. Therefore, the distributors are actually forced to pay $1,100 in order to receive some profit.
The second complaint is that it is not a working at home plan as advertised but a complete outside business where the distributor must visit clients at their own premises to make the sale. While there are no restrictions imposed by the company (no imposition of the method used to make the sale, no doing home parties to present the products), the practice of putting it on the internet and selling it has been proven ineffective.
Putting all the commissions offered to the distributors together it makes for 45% of the price. Store managers indicate that with their usual 30% profit, the price to the general public would be much lower and there would be more control over any side-effects and the actual effectiveness, so, to their minds, excluding the usual retail shops from the sales of the products has ulterior motives.
The other side of the coin here is that by doing business through distributors allows for more people to make money and have some control over the money they make, instead of allowing shop owners to make most of the profits in the usual practice and then just pay a salary which may be somewhere close to the minimum wages permitted.
Each distributor makes his or her own sales program and develops his or her own techniques instead of having to follow a specific pattern. If the technique is successful, then they stand to make much more money in less time than what they would working as employees at a retail shop.
It can be argued that it’s the controversies themselves that made NeriumAD so successful. People tend to think that whenever the merchants feel their interests threatened and begin to fight a product, this means that this product is good. Including the fact that cosmetic products sold in their stores are usually overpriced, it is a welcomed initiative to allow other people to make some money even if the price may be a little too high.
However, this is all about the psychology and the atmosphere surrounding the products and not about the products themselves. Publicity, either good or bad, always makes a product known. On this issue, it still lies upon each different skin to determine if they do what they promise or not. And on that score they seem to be doing rather well.
For a look at a similar model, click here for another MLM skin care brand.