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- Jul 14, 2014
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Is Herbalife a Pyramid Scheme?
less than 1% of their sales leaders make a decent 100k+ per year.
some excerpts:
...
Herbalife is a direct-selling company. That means you cannot buy its protein shakes and nutritional supplements in stores. Instead, Herbalife distributes its products exclusively through a network of 3.7 million “members” in about 90 countries. Members buy Herbalife products in bulk, and can then either consume them or try to resell them. They are paid based on a “multilevel-marketing model,” meaning that their compensation comes not only from the products they sell, but also from bonuses related to sales by new members they recruit: the more Herbalife protein shakes that members you’ve signed up buy, the more money you make. There’s a catch, however: you and your recruits need to buy several thousand dollars’ worth of shakes and supplements before these bonuses kick in. The risk is that if you don’t drink or resell the shakes you buy, or return them within a specified window of time (90 days for the first purchase), you will be stuck with them. Herbalife’s net sales last year were $4.8 billion; its market capitalization is about $6 billion.
...
The company recently began disclosing financial information to prospective members; in 2013, only 704 U.S. members received more than $100,000 a year (not a month) from the company, and the vast majority received less than a few hundred dollars.
less than 1% of their sales leaders make a decent 100k+ per year.
some excerpts:
...
Herbalife is a direct-selling company. That means you cannot buy its protein shakes and nutritional supplements in stores. Instead, Herbalife distributes its products exclusively through a network of 3.7 million “members” in about 90 countries. Members buy Herbalife products in bulk, and can then either consume them or try to resell them. They are paid based on a “multilevel-marketing model,” meaning that their compensation comes not only from the products they sell, but also from bonuses related to sales by new members they recruit: the more Herbalife protein shakes that members you’ve signed up buy, the more money you make. There’s a catch, however: you and your recruits need to buy several thousand dollars’ worth of shakes and supplements before these bonuses kick in. The risk is that if you don’t drink or resell the shakes you buy, or return them within a specified window of time (90 days for the first purchase), you will be stuck with them. Herbalife’s net sales last year were $4.8 billion; its market capitalization is about $6 billion.
...
The company recently began disclosing financial information to prospective members; in 2013, only 704 U.S. members received more than $100,000 a year (not a month) from the company, and the vast majority received less than a few hundred dollars.
