Herbalife is the 3rd strongest MLM company in terms of revenue generated in 2017. If you are wondering what is the Herbalife scam that you are hearing about, you are at the right place to check things out.
Here, I will provide an honest and unbiased view of this established multilevel marketing company, by looking at its products’ quality, as well as the business opportunity that you may have as a Herbalife independent distributor.
Are its products worth buying, or are they simply too exorbitantly priced? How does their incentive structure work? Why do some people call Herbalife pyramid scheme? We will uncover these and more here…
In this article, I will provide an in-depth review of Herbalife, through the following sections:
- its review summary
- what it really is, and how it will not work for you
- its pros and cons
- is it scam or legit
- my recommendation
Herbalife: Review Summary
Creator: Mark Hughes
Product type: weight loss and beauty products, and nutritional supplements, sold under MLM (multilevel marketing) scheme
Price: $94.10 or $124.10 to buy starter kits to qualify as an Herbalife distributor
Scam / Legit? : Legit
Recommended or not? : Not recommended
Herbalife is a highly successful MLM company. That doesn’t mean it will work for you, since majority of the profits appear to have gone to only those few executives at the top of the ranks. The main issues with Herbalife are its expensive products, hence relying mainly on recruitment to create a false demand for the products, since everyone needs to buy an expensive starter kit in order to qualify as a distributor. So distributors are the ones who end up giving business to the company – not a very ethical way to run a business, in my opinion.
If you are prepared to work hard, you might as well make all the money for yourself, rather than support the extravagant lifestyle of a few privileged people at the top, and only take home a meager amount.
Click on the red button below to see how I am making my online income through my very own business, not somebody else’s.
Read on for the detailed review of Herbalife, and why I do not recommend it.
What is Herbalife?
We will answer this question by taking a close look at its products as well as business opportunity. But before that, let’s have a brief look at its history and background.
A brief history (including what is the Herbalife scam)
Mark Hughes, a young lad at 24 years old, founded Herbalife in 1980. Prior to that, he was selling all sorts of things, including weight loss shakes. A natural in sales and marketing, Mark was introduced to the business model of direct selling when he joined a small MLM company, which later closed down.
He went on to build up Herbalife aggresively, mainly selling weight loss products. His company was under fire when scientists and nutritionists claimed that his formula was unsafe.
Amidst lawsuits and scrutiny by the US FDA (Food and Drug Administration), Herbalife continued its rapid growth, expanding its influence to all corners of the world.
In 2014 came the biggest setback ever: Herbalife was being investigated by the FTC (Federal Trade Commission) for being an illegal pyramid scheme. In 2016, FTC accepted a $200 million settlement, which it gave out to Herbalife’s former distributors who allegedly lost money through the scheme.
So that’s the juicy bit of news behind ‘what is the Herbalife scam?’, which sparked lots of debates because FTC did cite their business model as ‘deceptive and unlawful acts’, but did not actually shut them down.
Triumphant that at least it wasn’t officially labeled as a pyramid scheme, Herbalife made a comeback, stronger than ever. In fact, it made $4.5 billion in its 2017 revenue, coming in 3rd among all the MLM companies in the world, right after Amway and Avon.
- Weight loss – nutritional shakes, protein shakes, protein bars, herbal tea concentrate, etc.
- Nutritional supplements – for heart health, women and men’s health, healthy aging, digestive health, immune health, and stress management
- Beauty products – skin and hair care products
When it comes to quality, I believe Herbalife products do adhere to some standard, and customers’ reviews are mostly positive. That would be expected, otherwise it can’t be in business for almost 40 years!
Like anything under the sun, it has its fair share of negative reviews, but it’s an acceptable percentage, not alarming in nature or number of complaints. So even though I wouldn’t say these are some miracle products that can help you lose weight fast, they won’t cause you harm in any major way too, as long as they are taken in moderation.
Personally I’m no fan of any kind of protein shakes or nutritional shakes, as they still contain fillers that our bodies do not need. The best way to diet is the healthiest and cheapest way – go on a plant based diet, with careful supplementation for vitamin B12. That’s it. Life has always been that simple.
But of course companies like Herbalife will capitalise on the human need to do something about their weight, to remain slim. And like any other MLM company, they jack up the prices of their products on the claim that they are of top quality, and then create artificial demand for their products through the MLM recruitment scheme, since the prices are too high for real market demand.
So let’s now move on to take a look at how their compensation plan works.
How to earn as Herbalife independent distributors
Like in any other MLM scheme, you can earn through 2 ways when you join as an Herbalife independent distributor:
- Retail commission – you earn a commission off the products that you sell to people. This is a direct and fair way to reward anyone who works hard to promote the company’s products to people. Unfortunately, products by MLM companies are naturally very difficult to sell, by virtue of its exorbitant pricing. That is why MLMs always urge their distributors to focus on recruiting others to join as distributors, instead of making a commission off their sales.
- When you recruit people to become independent distributors of Herbalife just like you, they form your team, and become part of your downline. Whatever they manage to sell, you get a bonus. As the team grows, the bonuses grow too. That’s the gist of it. I have never tried to understand the exact compensation plans of MLM companies when it comes to recruitment bonuses and commissions, because they intentionally make the whole system exceedingly complicated, it’s irritating! Or maybe it’s just me.
To become an independent Herbalife distributor, first you have to buy yourself in, with one of these kits:
- International Business Pack: $94.10, or
- Super Starter International Business Pack: $124.10
They include discounts on Herbalife products, and training and support.
Why Herbalife will not work for you
Herbalife is like any other typical MLM company, which works for its founders and the few who joined at the right time when the company was in its infancy stage, thus managed to work their way to the top pretty easily.
It works for them only, and not for you and more than 93% of the distributors, because the entire business model was structured to achieve just that. You see, it all starts with overpriced products that no one in the open market would want to buy, because there are equally great products out there at much lower prices, owned by non-MLM companies.
So only people who are incentivised with bonuses and rewards will buy the products, since they are in fact buying the rights to sell the products, and recruit more people, and earn from the commissions, made to believe that this is a business opportunity that will change their lives for the better. So the more people who get pulled in, the higher up those at the top will rise, because they are supported by all the distributors.
I hope you now see the whole picture of how MLMs are not made to work for its distributors. They use a lot of hype, all their fast cars and big mansions, to make promises of a better life, with their convincing scripts.
I know it because I put one foot through the door of an MLM company. I took a clear look around, and stepped right out. The compelling reason was that I couldn’t sell the products or the business opportunity to my friends and family, because I felt that I would be exploiting them for my own gains.
I didn’t feel it was right to shove an expensive product into their face when they weren’t even looking for it or in need of it. So I got out of there fast.
This may work for you
The business model I’m using now doesn’t require me to do any face to face selling or recruitment. I’m not working for someone else’s business. It’s my very own business, my own website. I build solid content on my site, so that search engines send traffic to it, by ranking my site on the first page when people search for answers related to my niche area.
My content provides the perfect match to the answers they need, as search engines do their job. So I’m adding value, genuinely helping people who are actively searching for answers to certain problems. If they like my recommendation, they make some purchases through my affiliate links, and I earn a commission.
This is a fair business model, one where everyone wins, from my website visitors to the companies selling those products, to me.
It is also something that can be built into a passive income, because once you get the trust of the search engines, the free organic traffic they send to your site will be unstoppable.
You may be thinking right now, that you do not know how to set up a website. Don’t worry, that’s in fact the easy part. I started from scratch myself, with zero knowledge about websites. I found an awesome training, tools and community platform that has allowed me to build up my own businesses, so I can have the freedom of working from home, while being there for my kids.
If you’re ready to learn exactly how it can be done, click on the link below and let me show you the way…
Pros of Herbalife
1. Established and highly successful company
Herbalife is highly successful, so they must be doing something right. You just need to ponder whether that something is right for you or not.
2. Evergreen niche
The niche that Herbalife is in – weight loss, will never go out of trend. So it should be around for quite some time, provided it doesn’t run into some serious lawsuit again.
Cons of Herbalife
1. Overpriced products
It all starts with the pricing, to know how much an MLM company values its retail over recruitment. If products are really great, then the company should be confident that they can make great profits, the honest and transparent way, if marketed affordably to the masses.
But no. Too many MLM companies are deliberately overpricing their products This can only mean one thing – make the distributors pay for those expensive yachts and limos.
2. Too much focus on recruitment
When a company builds on recruitment instead of products, there may come a day when people see through the fact that things are just not working out for them, and decide to call it a day. When distributors are no longer supporting the company financially, it collapses on itself.
3. Majority of distributors do not earn anything.
Look at the income disclosure for 2015:
More than 93% of sales leaders with a downline are earning an annual income of less than $10K, with 72% earning nothing or less than $1K for the whole year. How is that even a life-changing opportunity for anyone?
And people who haven’t managed to recruit any downline under them has not been included in this set of data, so in fact the real percentage that is earning close to nothing is much higher.
4. Friends and family may start to shun you
Once you start to approach family and friends as your warm leads, you may find that they start to steer clear of you. And you can’t blame them, for you are obviously selling them things that they don’t need.
I do not recommend Herbalife, or any MLM company for that matter.
The fair and transparent reward system when you help a company promote and sell their products is for them to pay you a commission, for each sale that you make. Not for headcounts, unless you are the human resource manager.
By marketing the products, you are already helping them with free advertising. It makes no sense that you should pay them to help them promote their products, right?
In my online businesses, my earnings are based off whatever sales I help the companies make. And I do not have to limit myself to any one particular company. I can even make a comparison of the same thing sold by different company brands, on one page of my website, weighing each of their pros and cons, and letting my website visitors make their own informed choice.
No matter what they finally decide on, as long as they purchase by clicking through my affiliate links, I get to earn.
This is affiliate marketing, the way through which many successful internet marketers are making their full time income, and even turning it into a passive income.
Are you ready to take the first step, and learn how it can be done? Click on the button below.