I would really like some true stories here. If so, how? If not, why not? If it’s such a scam, how is it still in business after 30 years. Does anyone have any first or even second-hand experience? Thanks!
If I understand correctly that it is a multilevel marketing type company.
The true owners of the company make enough to live on.
You will not.
You will join, pay your fees, buy the product, try to convince your friends and family that it is a good deal and they should get in on it.
Then a few months later, you will realize you’ve alienated your friends a bit (but not much, because you weren’t really that agressive); you’ll be disappointed that your business didn’t take off, and slowly realize its easier to make a living doing something else.
And you will be out some cash because you paid fees and had to buy stuff to get set up.
Let me post again.
I make the statement above, NOT based on any experience with Herbalife, so maybe you shouldn’t respect my thoughts much.
But, I make the statements based on watching so many family members and friends (mainly women), buy into various multilevel marketing schemes through the years, with the dream of easy money and respect that goes with being a business owner.
The truth is though, that without a single exception, they have lost interest in the scheme due to lack of success within a few months
Oh, and its still in business because there are always a new crop of hopeful people that come in every few months to replace the disillusioned. You’re part of the business won’t last, but the fact that someone else will be willing to send in their fees, and attempt to sell a few items keeps the people at the top swimming in cash.
My ex-wife was into NuSkin, a different MLM, and went up the ranks a little and made money for a number of years, but then quit. She was invited in when NuSkin was first in Japan, and we were able to see much of the cycle.
It’s a lot of work unless you get in at the beginning and are able to bring in other people who are really good at finding[del]suckers[/del] recruits. Lots of people join for a while, they get all of their friends to buy some stuff, get another few friends to join, but then people get tired of spending too much money on shampoo and vitamins and stop buying.
There are essentially no true end consumers. The MLMs are designed to make people buy a certain amount themselves, and sell a certain amount, but the products are over priced compared to what is normally sold in stores. The only people who buy them are those who are trying to make it up the ranks.
The people who are making a lot of money know that what they are saying is less than candid, but they don’t care.
This is just my experience from watching NuSkin.
YMMV.
just a minor data point:
Recently, I’ve seen lots of want-ads in print newspapers looking for “sales reps”.
Now, you know that in the internet age, those kinds of ads in the back of a weekly local paper are NOT going to lead to good jobs, right?
But many of those ads specifically state: “wanted : sales reps for a good product, yadda,yadda…NOT Herbalife”
So apparently, even within the “advertise-a-lousy-job” community, Herbalife already has reputation as the worst of the worst.
It works like this.
Some guy recruits you and gets you buying products from him. While he makes money from this he can make more if you get other people to get products through you. And then other people get products through them.
These people will only sell to well qualified leads that they usually know personally or via a friend. This eliminates many problems.
All this money (well most of it anyway) is funneled back up line.
Although you may think you can get products cheaper elsewhere, you have to remember that someone above you is probably paying for some kind of assurance from the local police that your operation is safe. This allows them to dictate whose meth you are dealing.
I say they’re pyramid schemes, and I say to Hell with them. Pyramid schemes are based on the idea of being recruited by a current participant and making most of your money by recruiting your own downlines.
Anything that works like that is a pyramid scheme, and it doesn’t work for any but those at the very top based on simple math: Assume each participant only recruits two downlines. At the first level, there’s one person, the founder. At the next level, there’s the founder’s two downlines. At the third level, there’s four people. At the fourth level, there’s eight. And then sixteen. And then thirty-two, on that level alone, which means sixty-three people total. It grows faster and faster and faster, in what’s called a geometric progression. By the time you hit level 16 there’s tens of thousands of people involved. How likely is it for any of their downlines to be able to find new recruits? Even if you’re in a big city, you better be handling drugs, and they better be extremely good.
MLM people like to insist that they aren’t a pyramid scheme. Repeatedly. Loudly. Over and over again, in fact. Without showing how their organization is meaningfully different from a pyramid scheme. But damn do they like to insist.
And here’s another link from someone who’s not enthused about MLM schemes in general. Even if they’re really and truly not pyramid schemes (my ass), they’re still not a good idea.
We don’t have to guess. Here are the facts, straight from Herbalife themselves. Here is their Statement of Annual Gross Compensation for 2011. This is what people selling Herbalife really earned:
83.9% earned $901 for a full year of work. 7.3% earned $6,224 for a full year of work.
So for 90% of Herbalife’s employees, the answer is no, you cannot earn a living working for Herbalife.
Moved from General Questions to IMHO.
samclem, moderator
When I ran an herbal store which was part of an acupuncture/bodywork/herbalist private practice, the actual products (herbs, nutritional supplements) were about 30% of our income. This was with a well respected professional herbalist actually making custom blends sometimes and walking people to the shelves of bottles other times and handing them the products she recommended. Most of the time, they’d buy what she recommended, and come back every month for another refill. Still only 30% of our income. (The rest of it was consultation fees and fees for bodywork and acupuncture.)
Our mark up was 100%: if it cost me $10 for a bottle of freeze dried nettle capsules, it cost you $20 to buy it off my shelf. 100% mark up from wholesale is pretty standard for herbal/supplement sales, based on prices in my area at other retail stores.
We could not have paid our rent on the herbal/supplement sales alone, is what I’m saying, and we were *not *part of an MLM/pyramid scheme paying fees to anyone else, just plain ol’ retailers.
So check the price you have to pay for the product and think about how you’re going to sell, and who you’re going to sell to. You probably don’t have enough friends to keep you in business long. If you truly want to make it work, you’re going to have to establish a brick and mortar or a web presence, and that’s work and money. If you’re doing that sort of work and money, there are suppliers for product you can probably pay less money to so your markup is reasonable and things can still sell.
I agree with what everyone’s said. That said, I do personally know someone who is making a TON of money selling Herbalife. As in, the very top level of leaders according to Postariti’s link. In fact, from what I recall, they (it’s a couple) generally make close to a million a year.
That said, they are VERY lucky, and there’s ample proof that you will not make that much money. They are also really freaky to be around. Literally everything they wear has “Herbalife” emblazoned on it. I had to block them from Facebook because I’m so bloody sick of reading about Herbalife. It’s more like a religion than a job.
Don’t leave us hangin - what was the other 70%?
I’ve been interested in MLM stuff for years…but have been too scared to make any attempts because I hear so many negative things about them.
Why, exactly, so many people fail to make any substantial amount of money in these things?
Unless you’re at the very top or maybe one layer down, it’s market saturation. Too many sellers for the customer base. Think of what would happen if there were twenty Walmarts in the same shopping center.
The way to evaluate whether or not an MLM is worthwhile is to ask “can I make a decent middle class income just in product sales alone?” If the answer is no (and it almost always is) then you need downlines to make it worthwhile. Sooner or later, you’ll run out of suckers (and you’re usually going to be one of the latecoming suckers), and that’s where your income peaks.
Keep reading…
WhyNot says “(The rest of it was consultation fees and fees for bodywork and acupuncture.)”
Right. You cannot make money selling HerbaLife; you can make money convincing other people to sell HerbaLife. The real money stream is from people who try and fail.
The products aren’t really significant. What’s being sold (in virtually any MLM company) is a dream – the prospect of riches and independence. The riches and independence are essentially unobtainable, but the dream is readily available. And while there are precious few customers for the actual products, there’s a cornucopia of customers for the dream.
Because most people don’t think about who they’re going to sell to, how they’re going to communicate to them that they have something to sell, and how much they’re going to make on the sales as compared to how much they’re going to spend for the stock. Y’know, all those Business Plan things that, except for a few flukes and surprises, are really requisite for a successful business.
Most people think that Herbalife is about selling supplements. It’s not. The markup can’t be high enough to make it work; you don’t get your inventory for half what you sell it for, it’s more like 20 or 30% less than you sell it for, generally speaking. So it’s not like a traditional wholesale supplier. You’d have to sell a huge inventory to make a living at it, and who are you going to sell to? Friends? Sure, maybe you’ll make $20 off each friend each month. I don’t know about you, but I don’t have enough friends for that to be a sustainable business model. The general public? Okay, but then we’re back at the needing a store or needing a website, in which case you might as well work with real wholesalers instead of Herbalife, and you can make more money per unit sold.
The real money for those on the top of the pyramid isn’t in selling the product at all. Most of them never move so much as a bottle every month. It’s about selling Herbalife. Selling other people on the idea of being sellers. And once you’ve annoyed all your friends to become sellers, who else are you going to get? Most people don’t have a plan here, and the company has been around so long, it’s hard to find a large number of new people to take the bait after you.
MLMs *do *work…if you’re in the first iteration or three of sellers. If you hear about a new MLM for a decent product line that’s only two generations from the top, snap that shit up (if you can stay legal). But if it’s been around for years and has years of “investors”, then you’re too late to be one of the fleecers, you can only be one of the fleeced.