Herbalife is a company that sells weight loss and health products. Their main product line consists of weight loss shakes, appetite suppressants, cellulite-fighting herbs and metabolism enhancers. Though Herbalife is an international company and they sell millions of products every year, there have been an almost equal amount of complaints about their company and its products. So many consumers question whether or not Herbalife is a scam.
Herbalife promises aspiring business owners the chance to start their own business with low startup costs. They promise those who are seeking to start an Herbalife product selling business that they need no experience to be successful with this company and that the risk is very minimal. Aspiring entrepreneurs can choose from two different independent distributor “opportunity packs”, the standard opportunity pack and the mini-pack. Each Herbalife independent distributor pack is around one-hundred dollars.
The initial investment isn’t much, however many consumers stated that they were constantly bothered by their sponsor to buy thousands of dollars worth of Herbalife products during their first thirty to forty-five days. They promised that though they would need to spend thousands of dollars upfront, they would see a return in this investment in a matter of weeks. These sponsors were telling their independent contractors that the demand for Herbalife products was enormous. Many independent distributors discovered that this demand was quite small because Herbalife products cost up to three times more than other brands with the same exact ingredients. Once an independent distributor stocks their garage full of thousands of dollars of Herbalife products, their sponsor seems to disappear. However, the sponsor will still receive a portion of any sales made by the independent distributor.
Herbalife operates its business on a basic MLM, or multi-level marketing plan. In this type of business, individuals begin selling for the company while recruiting new individuals to sell under them. As an individual gets more people to sign up under them, their profits increase. Their profits increase because they begin to receive a percentage of the sales of those under them..
Those who decide to become independent distributors for Herbalife are also highly encouraged to take the company’s products themselves. When a person signs up and receives their introductory pack, they also receive some of Herbalife’s products for personal use. This is quite dangerous because many people are not able to take herbal supplements due to medications or medical conditions. However, Herbalife doesn’t ask about this, they simply send the products and expect their independent distributors to consume them and promote them.
Herbalife promises that their independent distributors make an average of $5,500.00 per week working full-time and $1,500 per week working part time. However, they neglect to mention that one approximately one percent of their independent distributors have made this. This means that approximately one percent of Herbalife’s independent distributors make eighty-five percent of the companies gross sales. This leads to the other ninety-nine percent of independent distributors fighting for the other fifteen percent of gross sales.
Regardless of how one looks at it, Herbalife is a scam. It operates on a pyramid scheme-type business model. If one researches pyramid schemes they will see that those that are anywhere, but on top of that pyramid ending losing more money than they have the chance of making.