Beware: what is the Herbalife scam?
Has someone presented you that unbelievable business opportunity called Herbalife? Or maybe someone is trying to sell you that miracle weight loss product from Herbalife. Now you are doing some research online and finding all this information about scams and pyramid schemes. You’re curious, what is the Herbalife Scam? As a former Herbalife distributor, I’ll give you a look into the Herbalife scam and it’s realities.
What Is Herbalife?
Herbalife is a Multi-level Marketing (MLM) company that sells nutrition, weight management and skin-care products. The company was founded in 1980 and reported over $3 Billion in sales in 2014. There are approximately 3.2 million independent distributors in over 90 countries. Herbalife is a publicly traded company on the New York Stock Exchange (NYSE: HLF).
The Herbalife Product
Herbalife sells a variety of nutrition, weight-management, energy, fitness and personal care products. I’ve tried some of these products and I did not see or feel any changes due to these products. I’m a skeptic of the supplement industry and it was my wife that got us involved with Herbalife. My wife who takes supplements all the time has no interest in purchasing any more Herbalife products. Plus as is typical with the MLM business, these products are very expensive. I can buy much better supplements for much less money at a local Walmart or vitamin store.
When asking “What is the Herbalife scam?”, could the scam be the overpriced and underwhelming products? For some it is. In your research online, you’ll find claims that not only do these product not do what they claim but some claim they are dangerous. There have been claims of high lead levels as well as claims that people have had liver problems with these products. Of course none of these have been proven. This is a problem across the supplement industry and not unique to Herbalife. When people talk about the Herbalife scam, they are usually referring to the Herbalife business opportunity.
What Is The Herbalife Business Opportunity?
Will Herbalife give you that home business opportunity?
Herbalife is a Multi-level Marketing company so when you join Herbalife you are an independent distributor of the Herbalife product. This means you can sell the Herbalife products for a profit. What makes the MLM business model unique is the independent distributors can recruit other independent distributors and earn a commission from each of their sales. But it doesn’t stop there, you also earn commission from each sale from the recruits of the people you recruited. These commissions continue all the way down the network recruited below you. Sounds great, you could earn commissions from 100’s or 1000’s of people recruited below you. You only recruit a few people and they go out recruiting more and you earn commissions on their work. Sounds too good to be true!
What is the Herbalife Scam? The answer
What’s the difference between the MLM and Pyramid Scheme?
MLM’s are a legal business model in the United States and many other countries. As you read the above description of the MLM, you may have been thinking “this sounds like a pyramid scheme”. You were thinking that because an MLM and a pyramid scheme are very similar. There are 2 major difference. This first difference is the MLM is legal and the pyramid scheme is illegal in the United States. The second difference is the MLM has a product and the pyramid scheme does not have a product.
Why does the product matter? In the pyramid scheme, the people at the top of the pyramid scheme make all the money. The people at the bottom lose money because they run out of people to recruit into the scheme so they have no incoming income. In an MLM even if you are at the bottom of the network and can’t find anyone to recruit you can always sell the product to earn money. In theory, everyone in the MLM can make money regardless if they are at the top or bottom.
Don’t waste your money
Now the reality of what is the Herbalife scam. In a typical MLM, 97% of the people that join will not make any money. There is a variety of reasons why this happens. Most people in an MLM, spend all there time recruiting other people to the MLM (i.e. pyramid scheme) and they don’t even attempt to sell the product. Those in Herbalife have a low quality high priced product so you can understand why they can’t sell the product.
With the low start-up cost, most people that get involved don’t have the background or training to conduct the marketing or selling required to be successful in this business. The MLM provides a lot of training that is motivational but contains little content. The up line knows little about marketing and tells the new recruit to make a list of family and friends. Well, this list usually runs out very quickly.
My Advice For MLM’s
If you currently involved with Herbalife or considering joining Herbalife or any other MLM, please consider the following advice.
Join An MLM With A Great Product That You Love
First I would advise avoiding MLM’s in general but if you are going to join an MLM be sure it has a great product that you love. The product is what keeps the MLM legal and from being a scam. If you go into an MLM with little to no interest in selling the product then you are entering into an illegal pyramid scheme and you are looking to scam people. Don’t do this. Find a great product and focus on selling the product. By focusing on the product, you’ll find others who love the product and will be great distributors like you so you’ll earn lots of money.
Learn How To Market And Sell
Education is the key to success in any business
This advice applies to any business you may decide to start. Marketing and sales is a key element to every business. If you don’t have experience or training in these areas then you should find some training in these areas. Today, Internet marketing is essential to your success in business. I’ve done a review on a top notch internet marketing course that has a free membership with two complimentary websites that you can customize to your business needs.
Final Thoughts
Even though I have joined 3 different MLM’s, I’m not a big fan of MLM’s and would advise avoiding them in general. Herbalife is a typical MLM with an overpriced product. In the comments below, give me your thoughts about “What is the Herbalife scam?” as well as any experience you may have had with Herbalife.
Thanks for such an informative post, I wish I could of found information like this years ago!!!! Thank you 🙂
Hi Justine, I really hope that post like this and my other post on the different MLM’s help people who are considering joining an MLM. 97% of people that join an MLM never make any money. I would like to think that my site will help to keep at least a few people from wasting money on such programs.
I myself was never involved with Herbalife, but my father was and he was not happy at all. The person who recruited him would contact him everyday for weeks until my dad gave in and gave it a shot. But as soon as he paid he could never reach the guy. My dad had questions with no one to answer them. So he dropped them immediately and couldn’t get a refund. I’m not a fan of MLM, I think they’re all scams.
Many people would agree with you that MLM’s are all scams. At the corporate level, the MLM is a legal business model. The problem is that the way many of the independent distributors conduct business is actually illegal. When the entire focus of the independent distributor is to recruit and nothing to do with selling the product then it’s illegal because it’s the same as a pyramid scheme. Unfortunately, this is how most distributors conduct business from the top to bottom because the products are typically low quality and over priced.
Not all MLM are scams , people just live in fear and just bash the whole industry, i am in MLM and well the downline i have that didn’t make money was because they didn’t do what they were told to do , which means not coachable , which means wont waste my time on them . Then they quit and say they got scamed i remind them” hey remember did you do what we were telling you to do the other guy that join along with you did and profit first month” has happened many times but now i just say quit and get your money back im not working with you simple as that.
Chris, I agree with you that in general MLMs are not scams. The business model used by MLMs are legal which is why they are allowed to continue. The way many distributors run their businesses is not legal. That’s why the corporate level has you attending different training and signing several legal documents to keep them from being liable when you don’t do things properly.
I also agree with you that many fail and call it a scam because they didn’t put in the effort required to make it a success. Where does the fault lie here? Where this becomes a scam is if these people where sold into the program that it would be easy to succeed. That overnight with little effort they will have money rolling in. Or that someone else will do all the work for them.