As the economy grows, many individuals are looking for an opportunity to earn additional income or more income by doing business. Starting an enterprise is not easy. You have to consider the inventories, financial management, operations and logistics. When Multi-level Marketing schemes become famous, many people, especially those who are employed, went to join these companies. One of the top-rated MLM company is the Herbalife. But many are asking, is Herbalife a scam?
Herbalife maintained its third position as one of the top MLM companies in the world, having a revenue of $4.9 Billion in 2018. It doesn’t mean that a company showing a record-breaking earning is already legitimate and safe to invest your hard-earned money.
In this Herbalife review, you will find out what are the company’s products, business packages, benefits, and compensation plan.
The MLM is always being feared to be a pyramiding scheme. The main reason, of course, is its business model which is in the form of a pyramid.
Nonetheless, knowing the right information about this company, I am sure you will be able to take the right decision. So stay tuned ...
Herbalife International Review
Product Name: Herbalife International Ltd.
Founders: Mark Hughes
Recommended: YES, but it's not the best method to make money
What is Herbalife about?
Herbalife is one of the longest-surviving MLM companies in the world. They are almost 40 years since the launching of the business in 1980. Despite the global recession, the company continues to be in the industry with more products to offer to distributors, sellers, and consumers worldwide.
The major products they offer:
Meal nutritional shake mix
High protein snacks
Specialized nutrition supplements for the heart, skin, digestion, stress management and boosting the immune system
Energy and fitness supplements
Skin and hair care products
The company highlighted the success stories of people who lose weight. In which, people around the globe are searching for ways to stay fit and healthy to avoid deadly diseases. As we all know that massive body weight is associated with top deadly illnesses in the world. Herbalife becomes successful in using the stories to drive the market and motivate distributors to sell and consumers to patronize the products.
In late 2012, Bill Ackman, head of the hedge fund Pershing Square, led the charge and accusing Herbalife a scam. He firmly stands his claims that Herbalife is deceiving recruits with wealth-soaked testimonies. When, in fact, there is only a tiny fraction of the members are earning money. However, the accusation of Ackman did not prosper that eventually gave up the 5-year fight in 2018. Although he still stands his claims that Herbalife is earning from direct recruitment rather than actual product sales, he put down his guard-off from the fight.
How does it work?
You need to become a Herbalife Distributor so you can be able to participate in three ways;
1. You can enjoy a massive discounted-price of all products of Herbalife for your use
2. You can sell the products and make a retail profit
3. When you are selling the products for retail profit, your buyers will likely want to know how to avail and experience the benefits (i.e., huge discounts). Then that’s high time to invite them to sign-up and buy the distributor package and become a member
In most cases, many people join to enjoy discounts on all Herbalife products and do not participate in business activities.
An interested distributor may choose to buy types of initial distributorship kit. Each kit differs from the number and kinds of products that are included in the distributorship package:
- International Business Pack ($94.10)
- International Business Pack - Super Starter ($124.10).
Distributors can choose how and when they work. Most of the distributors start to sell as part-time and introduce the products to people whom they know. Since, it is still a business the same as other businesses around, the guarantee of success depends on the effort and approach of the distributor. But Herbalife is offering training and seminars. They are helping to boost the knowledge and skills among distributors on how to run their business and network.
If the product and business don’t work, you can always cancel the distributorship at any time if you are in your first year of business engagement. You can also receive the full refund of your business package and return the unopened products you purchased.
How to make money with Herbalife?
There is no other formula to make money with Herbalife but to sell their products. The 25% discount on your first products must be promoted and sold. You can gain a maximum of 50% discount every time you make a re-purchase of any products of Herbalife.
Once you are doing the direct selling of products, in a way, you are also introducing the product to target consumers. More likely, many people who do not want to buy retailed-price products but aiming to enjoy the vast discounted-products. Ultimately, they need to buy the distributor package for them to become a member and enjoy all the benefits.
With this, you will earn up to 25% commission from the packages you sell.
You can also make up to 5% on the earn base value of the distributors who buy and sell the products that are under your network (individuals who become distributors because you recruited them). But the company give a limit of up to the third active level of the downlines only.
Besides, there are additional bonuses that the company is offering if the distributor achieves the target performance level, such as free travel and cars.
So, these benefits and perks are the driving motivation of the uplines to support their downline distributors to sell and invite more recruits. They conduct daily business presentations, fitness events, and small-group meet-ups to increase the number of downline distributors and consumers.
Who is this program suitable for?
The program is suitable for the following;
- People who want to lose or gain weight and live a healthy lifestyle
- Those who are beauty conscious and wants a safe beauty care products
- Employed persons who wish to earn extra income
- Persons who want to start a business but do not have enough funds for capitalization
Who is the founder Of Herbalife?
Mark Reynold Hughes was the founder and President of the Los Angeles-based company Herbalife International in 1980. He was born in Los Angeles and attained only a ninth-grade education. When his mother died when he was 18 due to accidental overdose of prescription diet pills, Mark becomes interested in nutrition.
In 1976, he began selling weight loss products of Slender Now by direct selling in three years. After the company failed, he transferred to a company selling exercise equipment and weight-loss products where he teamed up with Richard Marconi that later on, they worked together to start Herbalife in 1980.
Mr Hughes sell Herbalife based on “natural and herbal ingredients” where people buy out the key messaging. In five years, he became one of the top millionaires in the US.
In February 2000, Mark Hughes died due to natural cause. Today, Herbalife continues to stay in the market and competition with Michael Johnson as CEO and Chairman.
The PROS of Herbalife
The CONS of Herbalife
Is Herbalife a Scam?
Is Herbalife a Scam? The straightforward answer is Herbalife is not a scam! The amount that a prospect pay is equivalent to a product package and other benefits. It means that there is the value- for- money you are giving. If a prospect does not receive anything after the payment, then that for sure is a fraudulent business.
The good thing is that the earning does not come only from the recruitment of prospects. There are other means such as direct selling and override income from the products being sold by the downlines.
Both a scam and legit MLM may have products. But the difference is the products from the scamming company does not move in the marketplace. Herbalife products have lasted and innovated for the last 40 years. For as long as the members and non-members are buying the products, the potential income-earning will continue.
The paychecks that members are getting are not incentives because they bring recruits. These are commission and sales because those recruits that buy product packages.
Herbalife sets a limit of level as to profit gaining among members (3rdlevel of direct sponsors) for override income. A pyramiding scam does not set any restrictions, and there are no product movements, that is why when recruitment stops, everything will be burned down. In Herbalife, even if recruitment stops, for as long as people are buying the products, income will never end.
The company has been existing for almost 40 years. It has complied all government regulations despite the lawsuits and charges it has been receiving. But the fact that many individuals continue to buy and use the products and giving testimonies, it makes Herbalife relevant and non-fraudulent in the dynamics of the MLM industry.
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Is Herbalife a scam? The definite answer is no. People are misled in the use of the terms “recruitment” and “membership” as a method and approach of inviting individuals to become members of Herbalife.
The terms “recruitment and members” are a social construct. It becomes the easiest way to address the specific process for everyone to remember and identify. The truth is, these individuals that were termed to be recruited are those who are looking for business opportunities and willing to listen and assess if the business fit to their capacities. Becoming a member is becoming a distributor who does wholesale and retail of products. They were called as members because they join in a closed-group of business persons helping one another and sell the same product without competition.
A study shows that 89% of the Herbalife members do not earn income from Herbalife. Ergo, the figure is right because not everyone in the network is going to distributorship and selling. Most are buying the products for their personal or household use.
Some people joining Herbalife are having the wrong understanding of MLM. They thought that after buying the products and enlisting their names in the business system, they leave it and wait for the income to come. They misunderstood that MLM is still a business. You need to work and labor hard. You still need to promote, sell and even use the product for you to become the product of the product.
Alternative Method to Earn
Doing an MLM business, at the beginning, looks very attractive. I am telling this from my own experience. However, when you want to become financially successful, you will realize that without recruiting people, it's impossible. If you are not a big fan of face to face sales and running behind your friends who can potentially be your downlines, this is not for you. What about looking into a different business model like affiliate marketing? Compare to MLM; you don't have to:
- buy products
- do a face to face selling
- recruit people
- depend on your downlines
Did you know that affiliate marketing is one of the most lucrative business opportunity nowadays? If you wish to know more about it, read my post: "What is Affiliate Marketing and how to get started". The best place to learn about building your own business from ZERO is the Wealthy Affiliate. You can join this platform for free and see if its something you wish to do.