The HerbaLife Scam
If you walk around any major city, you'll probably see flyers posted on light and electrical poles saying things like "Work From Home", or "Lose 30 lbs Now, Ask Me How!" The ads may all be different, but what they all share in common is the same phone number. When you call that phone number, you obtain a company by the name of HerbaLife.
Back when I was unemployed, I toyed with the idea of joining HerbaLife. Little did I know the company history or the other questionable business practices of this firm. However, after doing some online research, here is what I found out:
HerbaLife was founded in 1980 by Mark Hughes, a guy who, at the young age of 44, was found dead due to a likely drug overdose. Still, HerbaLife continued on, and is now almost 30 years in business. As of this posting, the HerbaLife company states that it has over 1.8 million distributors in about 66 countries. The company is even on the New York Stock Exchange (NYSE: HLF). Annual gross sales for HerbaLife are roughly $3.5 billion, though they may have taken a hit due to the recent recession.
HerbaLife sells all kinds of vitamins and other nutritional supplements. There are shakes, protein bars, weight loss products, herbs, even meals replacements.
Do you like what you hear so far? Would you like to buy some HerbaLife vitamins? Well, you can't. First, you need to become a distributor.
HerbaLife makes the big bucks not by selling nutritional supplements, but by recruiting folks to become distributors.These distributors buy up a certain lot amount of the company's products, sample them, and try to sell them. More importantly, though, the newly-minted distributors are "encouraged" to recruit their friends and family (and anyone else they know) to become distributors too. And when I say "encouraged", I mean that the company will pretty much twist your arm in order to have you find new recruits. Weekly meetings, HerbaLife newsletters, company-wide e-mails, etc., will all repeat the company core motto until it comes out of your ears: recruit, recruit, recruit!
Of course, there is an incentive to finding new distributors: a portion of their earnings on products gets kicked up to you. And likewise, part of your earnings get kicked up to whoever recruited you. And so it goes, until the very few people at the top of this pyramid scheme rake in the big bucks while you drive around in your car with big boxes of muscle-building protein powder. It's multi-level marketing (MLM), plain and simple.
What are the costs for this pyramid scheme? It takes around $220 to enroll in the HerbaLife scam, er, I mean program. This money pays for your enrollment, your first pack of product, and also some samples for you (since distributors are highly encouraged to use the company's products as well as to sell them).
If HerbaLife would just stop here and allow you to purchase and sell its products, I doubt you could call it a scam. However, the scamming really starts when you listen to what the company is trying to have you believe:
In its flyers, HerbaLife claims that you can make as much as $1500 per week for part-time work. If you work full-time, you can make $5500 per week. However, the statistics say otherwise. In actuality, about 1% of HerbaLife distributors make 85% of the company's gross sales. These distributors are in the upper echelons of the company, and were around back when the company was still starting up in the early 80's. The remaining 99% of HerbaLife distributors, who joined the company after the mid-1980's, make the remaining 15% of the company's gross sales.
What does that mean math-wise? Let's crunch the numbers: 99% of all reported HerbaLife distributors comes out to 1,782,000 distributors (99% of 1.8 million). Meanwhile, 15% of $3.5 billion comes out to $525 million. Divide $525 million by the 1,782,000 distributors and you obtain $294 in annual sales per distributor!! And keep in mind that is not profit, but sales, so the actual take-home pay is even less.
Of course, not all distributors are alike. Some may have enormous selling potential, and lots of eager friends and family to whom they can sell HerbaLife products. But that's still a big chance to take when your initial investment in the company is almost the same amount of money that you are likely to make over the course of an entire year!
So, in conclusion, should you invest in the HerbaLife scam? Only if you have extreme sales savvy, as well as lots of spare time on your hands. As for me, I think I'll pass. I can think of many other businesses that pay a lot more money for a lot less work.
The HerbaLife Scam
Have you ever heard of HerbaLife, or would you even sell its items? Otherwise, then without a doubt concerning the Herbalife scam.
Should you walk around any major city, you'll most likely see flyers published on light and electrical rods saying such things as "Work At HomeInch, or "Lose 30 pounds Now, Request Me How!" The advertisements may be different, but the things they all be part of common is identical telephone number. Whenever you call that telephone number, you get a business through the title of HerbaLife.
When I was unemployed, I considered the thought of joining HerbaLife. Little did I know the organization history or even the other questionable business practices of the firm. However, after doing a bit of online investigation, here's what I discovered:
HerbaLife was founded in 1980 by Mark Hughes, a man who, in the youthful chronilogical age of 44, was discovered dead because of a likely drug overdose. Still, HerbaLife ongoing on, and it is now almost 3 decades running a business. By this posting, the HerbaLife company states it has over 1.8 million marketers within 66 nations. The organization is even around the New York Stock Market (New york stock exchange: HLF). Annual product sales for HerbaLife are roughly $3.5 billion, though they may take popular because of the current recession.
HerbaLife sells a myriad of vitamins along with other dietary supplements. You will find shakes, protein bars, weight loss items, herbal treatments, even foods substitutes.
Would you like that which you hear to date? Do you want to buy some HerbaLife vitamins? Well, you cannot. First, you have to be a distributor.
HerbaLife helps make the a lot of money not by selling dietary supplements, but by prospecting folks being marketers.These marketers buy up a particular lot quantity of the business's items, sample them, and then try to sell them. More to the point, though, the recently-minted marketers are "urged" to recruit their buddies and family (and other people they are fully aware) being marketers too. So when I say "urged", I imply that the organization will virtually twist your arm to be able to perhaps you have find new recruits. Weekly conferences, HerbaLife news letters, company-wide e-mails, etc., will all repeat the organization core motto until it arrives of the ears: recruit, recruit, recruit!
Obviously, there's a motivation to locating new marketers: some of the earnings on items will get started your decision. Basically, a part of your wages get started as much as whomever employed you. So it goes, before very couple of people towards the top of this pyramid plan bring in the a lot of money as you drive around inside your vehicle with large boxes of muscle-building protein powder. It's multi-level marketing (Multilevel marketing), basically.
Do you know the costs with this pyramid plan? It requires around $220 to join the HerbaLife scam, er, I mean program. These funds will pay for your enrollment, the first pack of product, and some samples for you personally (since marketers are highly urged to make use of the business's items in addition to to market them).
If HerbaLife would certainly stop here and permit you to trade its items, I doubt you can refer to it as a gimmick. However, the conning really begins whenever you pay attention to what the organization is attempting to possess you think:
In the flyers, HerbaLife claims that you could make around $1500 each week for part-time work. Should you work full-time, you may make $5500 each week. However, the data say otherwise. In fact, about 1% of HerbaLife marketers make 85% from the company's product sales. These marketers have been in top of the echelons of the organization, and were around when the organization was still being setting up in early eighties. The rest of the 99% of HerbaLife marketers, who became a member of the organization following the mid-1980's, result in the remaining 15% from the company's product sales.
What am i saying math-smart? Let us crunch the amounts: 99% of reported HerbaLife marketers arrives to at least one,782,000 marketers (99% of just one.8 million). Meanwhile, 15% of $3.5 billion arrives to $525 million. Divide $525 million through the 1,782,000 marketers and also you obtain $294 in annual sales per distributor!! And bear in mind that's not profit, but sales, therefore the actual take-home pay is less.
Obviously, not every marketers are alike. Some might have enormous selling potential, and a lot of eager buddies and family to whom they are able to sell HerbaLife items. But that is still a large opportunity to take whenever your energy production in the organization is nearly the equivalent money that you'll probably make during the period of a whole year!
So, to conclude, in the event you purchase the HerbaLife scam? Only when you've extreme sales savvy, in addition to plenty of free time to deal with. For me, I think I'll pass. I can think about a number of other companies that pay much more money for much less work.
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