Nature’s Sunshine: From Herbal Encapsulation to Global Success

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Nature’s Sunshine is a globally recognized MLM company in the natural health and wellness industry.

With a rich history and a strong international presence, the company has established itself as a frontrunner in the market. From its innovative approach to herbal encapsulation to its extensive range of nutritional and personal care products, the company continues to grow worldwide.

This article uncovers the reasons behind its enduring popularity.

Key points

• Nature’s Sunshine is a global MLM company in the wellness industry with an extensive range of nutritional and personal care products.
• Founded in 1972, Nature’s Sunshine revolutionized the supplement industry with its innovative approach to herbal encapsulation.
• The company markets its products through independent consultants and also has direct-to-consumer channels, including e-commerce.
• Nature’s Sunshine offers an extensive product range across categories like General Health, Immune, Cardiovascular, and Digestive.

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Section 1 – The Company

In this expository exploration, we unravel the layers of Nature’s Sunshine’s corporate identity, its historical milestones, current market standing, and crucial financial indicators. This comprehensive exploration offers a balanced and authoritative account of the company.

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Overview of Nature’s Sunshine (Video)

Nature’s Sunshine Products, Inc. (NASDAQ: NATR) is a prominent player in the natural health and wellness industry.

With a strong global presence, the company operates through a direct sales force marketing and distributing nutritional and personal care products.

The Company runs three business segments:

• NSP Americas, Asia Pacific, and Europe
• NSP Russia, Central, and Eastern Europe
• Synergy WorldWide

Overall, all the geographic segments operate under Nature’s Sunshine Products (NSP) and Synergy® WorldWide brands. Note that the company runs a wholesale business in Latin America and other segments.

Furthermore, the company boasts an extensive network of subsidiaries, with 50 subsidiaries worldwide. They include:

• NATR Distribution (M) SDN. BHD. Malaysia
• Nature’s Sunshine Marketing Ltda. in Brazil
• Nature’s Sunshine Products de Nicaragua, S.A. Nicaragua

Market Performance

With sales worth $422 million in 2022, the company continues to thrive on a global scale. Remarkably, around 70.9% of its net sales were generated outside the United States, highlighting its strong international presence.

Nature’s Sunshine Products operates in four distinct geographic segments: Asia, Europe, North America, and Latin America/Other. These segments contribute to the company’s robust revenue stream, as follows:

• $186,292,000 from Asia
• $78,991,000 from Europe
• $133,214,000 from North America
• $23,413,000 from Latin America and Other

The company’s strong market performance is evident in its impressive sales figures over the years:

• $444.1 million in 2021
• $385 million in 2020
• $362 million in 2019
• $365 million in 2018
• $342 million in 2017
• $341 million in 2016
• $325 million in 2015
• $366 million in 2014
• $378 million in 2013
• $368 million in 2012

With operations in over 40 countries and a dedicated workforce of 800 employees, Nature’s Sunshine Products, Inc.’s international footprint solidifies its position as a frontrunner in the industry.

History

Nature’s Sunshine played a significant role in revolutionizing the nutritional supplement industry through its innovative approach to herbal encapsulation. Founded in 1972 in Utah by Gene and Kristine Hughes, the company states that they were the first to encapsulate herbs, laying the foundation for the modern nutraceuticals market.

Gene Hughes, seeking relief from a stomach condition, discovered the benefits of cayenne pepper. Kristine Hughes proposed encapsulating the herb for convenient consumption. Since then, Nature’s Sunshine has evolved from a small family-owned business to a global leader.

The company’s success soared when it became a public company in 1978, and it continued to thrive in subsequent years. In 1984, Nature’s Sunshine gained recognition in Forbes magazine as a “growing and promising” enterprise, securing a place among the top 200 best small companies in the United States.

By 1998, the company’s products were sold in 22 countries. Its global presence expanded steadily, with entry into the Russian market in 1999, the Polish market in 2006, and Ukraine in 2008. Notably, the company ventured into China through an 80% ownership joint venture with Shanghai Fosun Pharmaceutical in 2014.

Nature’s Sunshine Products, Inc. bought Synergy Worldwide in 2000, a multi-level marketing company that focuses on nutritional supplements.

Top Leadership of Nature’s Sunshine

Terrence O. Moorehead assumed the positions of President, Chief Executive Officer, and Director on October 1^st, 2018. He has over 25 years of experience in the retail consumer products industry.

Assisting Moorehead is Shane Jones, the Executive Vice President and Chief Financial Officer. Meanwhile, Jonathan D. Lanoy holds the position of Senior Vice President and Chief Accounting Officer.

In the boardroom, Richard D. Moss assumes the role of Chairman of the Board. Additionally, Curtis Kopf serves as a Director.

The Owner and Headquarters of Nature’s Sunshine

Being a publicly traded company, Nature’s Sunshine has the following shareholders:

#	Shareholders	Equities	Percentage
1	Shanghai Fosun Industrial Investment Co., Ltd.	2,929,001	15.40%
2	Red Mountain Capital Partners LLC	2,522,983	13.20%
3	Wynnefield Capital, Inc.	2,473,686	13.00%
4	Prescott Group Capital Management LLC	1,783,097	9.36%
5	Heartland Advisors, Inc.	1,481,250	7.77%
6	Paradigm Capital Management, Inc.	1,080,800	5.67%
7	The Vanguard Group, Inc.	628,927	3.30%
8	Dimensional Fund Advisors LP	605,633	3.18%
9	Nantahala Capital Management LLC	600,409	3.15%
10	Renaissance Technologies LLC	590,839	3.10%

The company’s primary location is found at 2901 W Blue Grass Boulevard, Lehi, UT 84043. Here, it has an approximately 61,000 square feet facility. However, the company doesn’t own the facility, but leases it.

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Section 2 – Business Model

In this highly detailed and analytical resource, we provide a descriptive and unbiased account of the inner workings of this company’s business model. By employing a balanced and authoritative approach, we offer a precise and comprehensive understanding of its sales system.

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How Nature’s Sunshine Markets Its Products

Nature’s Sunshine primarily relies on a network of independent consultants who sell their products directly to consumers or use them personally.

These consultants, acting as brand ambassadors, employ direct selling techniques and also sponsor other consultants to expand the customer base through multi-level marketing.

Additionally, the company has incorporated direct-to-consumer channels, operating its own website and leveraging other e-commerce platforms. While this represents a smaller portion of their overall business, it diversifies their sales avenues.

They also have a wholesale business in their Latin America and Other segment, selling products to independent, locally-managed entities with distribution rights.

The Number of Nature’s Sunshine’s Distributors

According to their official 2022 report, NSP boasts a sales force of more than 500,000 active independent Managers, Distributors, and customers worldwide, operating in over 40 countries.

Their extensive network of consultants, affiliates, and customers surpasses 600,000 individuals.

In the United States alone, NSP had around 32,608 consultants in the year 2021. An “Active Consultant” is defined as someone who had at least one other consultant or customer in their personally sponsored downline during that same year.

Based on this criterion, NSP recorded approximately 14,752 active consultants in the US, constituting roughly 45% of all consultants in the country.

How to Make Money on Nature’s Sunshine

Nature’s Sunshine offers multiple avenues for individuals to earn income and benefits, including becoming an affiliate, consultant, or premium member.

Affiliates are similar to customers but can receive payment in either product credit or cash by sharing the company’s products with others.

On the other hand, consultants have a wider range of earning possibilities. They can earn through reselling products purchased at a consultant price or earning commissions and bonuses from their own sales and those of other consultants or customers in their downline.

The Subscribe & Thrive program offers additional benefits like free shipping, discounts, and free products (approximately 37% of U.S. consultants participated in it in 2021).

Consultants can set their own prices for customers, although a suggested markup of around 33% above the consultant price is provided. Furthermore, consultants can get volume discounts (additional bulk purchase discounts of up to 30%), which totaled approximately $17.2 million in 2021 for US-based consultants.

Commissions from downline sales networks were paid to approximately 65% (9,567 consultants) of active consultants in 2021, amounting to approximately $29 million in the United States.

The company offers various other consultant benefits, such as 5 levels of rewards based on downline consultant purchases, up to 20% rewards on customer purchases made by referred individuals, and 15% cash rewards through the Customer/Affiliate Sharing Plan.

Additionally, Nature’s Sunshine organizes promotions, conventions, regional meetings, incentive travels, and other short-term offers for consultants.

For customers and affiliates, becoming a premium member can provide additional advantages. Premium members receive free monthly shipments of products and a 20% discount on their orders.

They also earn payments from shared orders throughout their membership duration.

As an exception, the company does not pay volume incentives in China. Instead, they pay independent service fees, which are part of administrative expenses.

Nature’s Sunshine’s Compensation Model Explained

Nature’s Sunshine offers two distinct programs for individuals looking to earn income through their platform:

• An Affiliate Program
• A Consultant Program

The Affiliate program provides an easy entry point for those interested in earning commissions.

Signing up is a quick and straightforward three-step process, granting participants their personal link to share. By sharing this link, affiliates can offer a 25% discount to anyone who clicks on it and makes their first purchase from Nature’s Sunshine. In return, affiliates earn a 15% commission on every order resulting from their shared link, for a lifetime.

Payment options include cash through FastPay or Nature’s Sunshine product credit. Additionally, affiliates gain access to images, gifs, and shareable content, along with tips, tutorials, training, and personalized dashboard analytics to maximize their influence and earnings.

The Consultant program provides a more extensive opportunity. Consultants can enroll for a fee of $40 to get a welcome kit (the annual renewal fee is also $40). They’ll access various ranks as they progress within the program. These ranks include:

• Consultant
• Senior Consultant
• Director
• Director 3K
• Director 6K
• Executive 12K
• Executive 25K
• Executive 50K
• Presidential 100K
• Presidential 200K
• Chairman’s Club 500K
• Chairman’s Club 1M

Nature’s Sunshine has provided the following rank qualification requirements for consultants.

Consultants can enjoy perks such as residual commission potential, discounts of up to 45% on purchases, free shipping for two orders per month, and exclusive deals and incentives.

Here are the expected commissions based on different ranks:

You also get rewarded for your downline’s activity. Here is the earning structure:

How Much Money Can You Make With Nature’s Sunshine?

Here is the company’s statement of the average compensation paid to its US consultants in 2021.

Annual Commission-Based Income	Percentage of Active Consultants
$0 (or less)	35%
$0.01 – $100	27%
$100 – $200	8%
$200 – $500	10%
$500 – $1000	6%
$1,000 – $1,500	3%
$1,500 – $2,000	2%
$2,000 – $5,000	4%
$5,000 – $10,000	2%
$10,000+	4%
TOTAL	100%

Note that consultants may receive volume discounts that are not accounted for in the average compensation statement. NSP granted approximately $17.2 million in volume discounts to U.S. consultants in 2021. Also, the statement does not include consultant expenses or sales made at marked-up prices.

Commissions were earned by around 65% of active consultants in the US, amounting to approximately $29 million.

Additionally, NSP offers incentive trips, such as conventions and meetings, which are based on historical and current sales trends. In 2022, the company spent approximately $5.8 million on incentive trips.

For Chinese consultants, the service fees totaled $14.9 million and $18.7 million in 2022 and 2021, respectively.

How to Sell Nature’s Sunshine’s Products

Nature’s Sunshine sets itself apart in the market by granting consultants the opportunity to inventory and showcase their products in a retail setting, providing them with comparable profit margins to non-MLM suppliers of similar products.

However, a closer look at their policies and procedures reveals some restrictions and limitations.

Consultants are prohibited from selling through publicly traded franchise stores, national or regional chain stores, and major retail outlets such as GNC, Albertson’s, Thrifty, and Long’s.

This means that consultants should establish their own retail outlets if they wish to sell through retail stores. Such retail stores must also offer interested customers the opportunity to become consultants themselves.

For online sales, consultants are prohibited from selling NSP products through internet auction sites, marketplace sites, shopping sites, or order fulfillment stores, including popular platforms like eBay®, Amazon®, and OverStock®.com.

These restrictions remain in effect even after a consultant’s membership is terminated, canceled, or expired. The company emphasizes direct selling, whether in-person or online.

How to Quit Nature’s Sunshine

According to NSP’s Policies and Procedures document, consultants have the freedom to resign or terminate their membership at any time, provided they give NSP a written notice at least 30 days in advance.

This notice should clearly indicate their desire to discontinue, resign, retire, or terminate their membership.

When a consultant leaves NSP, the company offers a repurchase option for their products based on the 70 Percent Rule. Under this rule, NSP allows the return of products up to 100% of the last order placed and up to 30% of the preceding order.

NSP expects that at least 70% of the purchased products have been sold to non-participating consumers or personally consumed before reordering. Returns will not be authorized for products purchased on earlier orders.

Additionally, it’s crucial to return products within 12 months from the date of purchase from NSP, and note that the return policy specifically applies to inventory returns and not regular returns for dissatisfied or defective products.

It’s worth mentioning that exceptions to these rules may exist for consultants in specific states.

Product Returns Policy

According to their official documentation, the company allows independent consultants to return unused products within a ninety-day period if they are dissatisfied. However, the return requirements may vary in certain markets.

In terms of sales returns, Nature’s Sunshine Products, Inc. reported $1.4 million for 2022 and $1.1 million for 2021.

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Section 3 – Products

In this section, we unravel NSP’s unique selling proposition, shedding light on the qualities that make their offerings different.

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What Nature’s Sunshine Sells

Nature’s Sunshine offers an extensive range of over 800 encapsulated herbs and other raw materials. They cater to diverse health needs with six distinct product lines, namely General Health, Immune, Cardiovascular, Digestive, Personal Care, and Weight Management.

In terms of revenue distribution, here is the contribution of each product category:

• 37% from General Health
• 7% from Immunity
• 18% from Cardiovascular
• 24% from Digestive
• 7% from Personal Care
• 7% from Weight Management

Their diverse product catalog spans capsules, chewable tablets, liquids, lotions, packs, paste, powder, soft gel capsules, and tablets.

Nature’s Sunshine products are crafted through a process involving bulk material procurement, quality control testing, formulation, encapsulation, tableting or concentration, labeling, and packaging.

Some of their top sellers include Vitamin B-Complex and Ashwagandha, priced at $24.95 and $34.95, respectively. The lineup also includes Chlorophyll Liquid, Super Supplemental Vitamin & Mineral (Without Iron), and Greenzone Ultimate Powder, among others.

What is Unique about Nature’s Sunshine’s Products?

At the forefront of their operations is the Hughes Center for Research and Innovation, a cutting-edge facility situated at their corporate offices in Lehi, Utah. This research center serves as the epicenter for their research and development endeavors.

The core focus of Nature’s Sunshine lies in conducting clinical research to support the creation of novel products and the improvement of their existing offerings.

Where Nature’s Sunshine’s Products are Made

Located on approximately 10 acres in Spanish Fork, Utah, the company owns a vast 270,000 square feet building that serves as its principal warehousing and manufacturing facility.

Additionally, the company leases distribution warehouses in Georgia, Ohio, Texas, and Utah, along with offices and warehouses in various countries where they conduct business.

While most products are manufactured in their Utah facility, they also collaborate with contract manufacturers who adhere to Nature’s Sunshine’s specifications and standards to assure quality control.

Product Regulation, Testing, and Certification

In the United States, the company’s products fall under the purview of the Food and Drug Administration (FDA) and are regulated by the Federal Food, Drug, and Cosmetic Act.

These regulations define terms such as “food” and “dietary supplement” and outline conditions that must be met to prevent adulteration or misbranding.

Title 21 of the Code of Federal Regulations contains specific FDA rules pertaining to food and dietary supplements, including labeling requirements and good manufacturing practices.

The regulations cover areas such as personnel, cleanliness, production controls, packaging, and complaint handling. Additionally, ingredient testing and accurate labeling of active and other ingredients are essential aspects of their quality assurance process.

Nature’s Sunshine also operates in foreign markets and must obtain approvals, licenses, registrations, or certifications from health authorities in those countries.

Compliance with varying labeling and packaging regulations is necessary to avoid product removal from a specific market.

In the United States, governmental bodies such as the Federal Trade Commission, Consumer Product Safety Commission, Department of Agriculture, and Environmental Protection Agency also regulate Nature’s Sunshine’s business practices and products.

Moreover, as the primary manufacturer of their products, the company adheres to FDA regulations on Good Manufacturing Practices (GMPs), which include ingredient identification, manufacturing controls, and record-keeping.

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Section 4 –Doubts and Misconceptions about Nature’s Sunshine

In this section, we uncover the truth behind the controversies and gain a comprehensive understanding of NSP’s contentious issues.

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Lawsuits and Independent Reviews of Nature’s Sunshine

NSP has faced a series of legal issues and lawsuits over the years concerning the company’s practices and ethics.

In 2006, NSP’s auditing services provider, KPMG, resigned, accusing then-CEO Douglas Faggioli of deceiving auditors and approving bribery. In July 2009, NSP agreed to pay $600,000 in fines following charges by the Securities and Exchange Commission (SEC).

The company was found guilty of bribing Brazilian officials with over $1 million between 2000 and 2001. These bribes aimed to enable the importation of unregistered nutritional products into Brazil, and NSP attempted to conceal these payments through falsified accounting records.

In recent years, NSP has faced additional legal challenges. Veronica Maddy filed a complaint in New York in August 2022, alleging that NSP’s website lacked sufficient digital accessibility. The case seems to be currently ongoing.

Another lawsuit, Ivy Bridge v. Nature’s Sunshine Prods., was filed in 2021. The case involved a lawsuit brought by Ivy Bridge and other plaintiffs against Nature’s Sunshine Products, Inc. (NSP).

The plaintiffs allege that NSP changed its compensation structure and launched direct sales, which violated the terms of their membership agreement. NSP filed a motion to dismiss or stay the litigation and compel arbitration, which the court granted, since the plaintiffs’ claims would fall within the arbitration provision of NSP’s policies.

Moreover, a class-action lawsuit in November 2009 alleged insider trading and securities fraud by several top executives of NSP, resulting in a settlement of $6 million.

Are Nature’s Sunshine Products Organic or Non-GMO?

Nature’s Sunshine has made significant strides towards incorporating organic and non-GMO ingredients into its product line.

Currently, over 85% of their ingredients are non-GMO. They prioritize the use of organic herbs and botanicals whenever feasible.

Can Nature’s Sunshine’s Products Replace Prescription Medications?

Nature’s Sunshine’s products should not be used as a substitute for prescription medications without consulting a healthcare professional.

They are intended to support overall health and well-being and may complement a healthy lifestyle.

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Section 5 – FAQs and Recap

In conclusion, we summarize some key concepts by answering frequently asked questions about Nature’s Sunshine

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Sources

• Shareholders and Company Profile | MarketScreener
• SEC fines Nature’s Sunshine – The Salt Lake Tribune
• Nature’s Sunshine pays $600K to settle bribery charges 
• SEC – Litigation

Credits (Images)

• USA Comp Plan

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