Herbalife, Real Business or Pyramid Scam?

By | June 22, 2014

Multilevel MarketingAs with most multi-level marketing businesses (MLM), Herbalife has its cheerleaders and its detractors. It has been in business since 1980 when Mark Hughes began selling his product out of the trunk of his car. His goal was to change the nutrition and dietary habits of people all over the globe. He began with a protein shake that was intended to help people control their weight. From the trunk of his car to direct selling also known as a multi-level marketing model, Herbalife took on a life of its own and now offers a wide range of products and services.

Who It Is For?

Herbalife boasts that anyone can use their merchandise and that everyone can sell their products. Their products are only offered through their distributors, in other words; you cannot order it online or purchase it from your local health food store. Of course like all MLM’s their goal is to get as many distributors and direct marketers as possible.

Many Herbalife distributors are doing the business on the side. The business model lends itself to a sideline business or a full time endeavor depending on your drive, passion, and finances.

Herbalife does not depend on traditional marketing tools like commercials or sales through retail stores, but rather by word-of-mouth and door-to-door campaigns with the Herbalife Independent Distributors. The company had a slogan, “Lose Weight Now, Ask Me How” that was used by their distributors on badges, flyers, posters and bumper stickers. The slogans now are directly linked to specific products and programs, like “Driven to Perfection by Herbalife Nutrition.”

What Does Herbalife Offer?

Herbalife website

Herbalife website

Besides the original weight loss shake, Herbalife has grown to hundreds of lifestyle related products. Herbalife offers products from vitamins and minerals to shakes to weight management programs. On their website, they offer support discussions and blogs dealing with weight management, energy and fitness, as well as personal care. Their blogs give advice on how to gain healthy weight, lose unhealthy weight, and there is even a Twitter chat program called Ask Me Anything, or AMA, monitored by a registered dietitian.

The company’s number one product is still their Formula 1 protein shake, a meal replacement shake with a soy base. Many of their products are vegetarian, meaning no meat or meat by-products, they are considered kosher, and allergen free. One thing to note, according to their 2009 annual report to the United States Securities and Exchange Commission (SEC), many of their products, including their nutritional supplements, weight control, and personal care products are mass-produced by third-party companies. The main exceptions are the products that are distributed in and sourced in China. There they have their own facility.

Training With Herbalife

There is nothing spectacular about training to be a Herbalife distributor. Training is up to the upline distributors; those people who are trying to get you to sign on with them and thus, under them. It is done with notebooks, one-on-one, and expensive conventions. These conventions are cheerleading, rah-rah, look-at-how-well-I-did-it, hype. The rest is left up to your imagination.

Money Maker or Money Breaker

Multi-level marketing is notoriously called pyramid schemes because they are considered an unsustainable business model.For every one person who makes multi-level marketing a success there are hundreds who do not. One has to wonder if the pool of new recruits will run dry soon.

Herbalife will tell you that you will get out of it, what you put into it, but it must be noted this is not a level playing field, it is essentially a sales job and if you are not a good salesperson it probably will not work for you. It is a hard job.

So is it a scam or not. Herbalife allows you to be simply a distributor, which means they have a product. From the many testimonials, we are led to believe that they are good products. However, they strongly encourage their distributors to become an Independent Herbalife Member (IHM) who reaches out to raise up more distributors, who then become IHM’s and so on.

Just like Mary Kay, Avon, and Amway, if you go into Herbalife, go in with your eyes wide open. Put aside the rah-rah, do the research. The products are not inexpensive, even with the distributor discount. If you are not careful, you will spend all of your gain.

 

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