It doesn’t matter what name the company has; as long as “MLM,” which is in fact called “multilevel marketing,” is next to it when trying to find out how you can make money with them, the process will be the same.
Suppose you are not familiar with multilevel marketing plans or companies (MLM) or what it means. In that case, you should stop for a second before diving into the company you’re considering since it is the business model followed by it.
To keep it simple, MLM is the usual method of earning profit by selling products or offering services at retail price from the company as a distributor. Still, you make more money by recruiting new members or distributors and creating your downline.
This sounds very similar to pyramid scams we all hate, but it is not there yet.
Now, how is Herbalife related to this part? Simple. It is the business model the company follows and how you should expect to earn money with it.
But what is different in each one is the fact that compensation programs, percentages, fees, conditions, and anything surrounding the business tend to vary.
Thus, we will need to finally dive into Herbalife and let you know if this MLM is worth your time or if it is part of the options that are too similar to illegal pyramid schemes to even give them the benefit of the doubt.
What Is Herbalife? – A Billionaire Business?
Herbalife is a well-known MLM company that has been around for many decades, and we even find it hard to believe you haven’t heard about it before.
Los Angeles-based company is one of the largest distributors worldwide of nutritional supplements, weight loss, and beauty products.
With a revenue of $5.5 billion, Herbalife ranked third on the DSN 100 List for 2020. The company employs over 8,300 people and has 2.3 million distributors in over 90 countries.
But when did everything start? Who is the brain behind this big multilevel marketing company today?
Herbalife was established in 1980 by Mark R. Hughes. He was only twenty-four years old at the time and sold products out of his car trunk with Richard Marconi and his partner, Lawrence Thompson.
Hughes’ mother’s death inspired him to seek safer ways of dieting since the cause behind his mother’s death (according to him) is an eating disorder and poor weight management.
His first product was a protein powder that helped people control their weight and are one of the most popular products today.
Herbalife’s plan requires that you eat one meal per day that contains about twenty vitamins and other supplements. This means you had to either switch your regular meal with the supplements and the company’s products or add it to complete the daily requirements.
The company’s merchandise was sold door-to-door, through word-of-mouth and not through commercial retailers in the beginning.
However, they had a great success rate, making $23.000 per month and showing that their products actually worked for the public.
They had already made more than two million dollars in their first year, and we’re expanding into Canada with the big success it followed.
Hughes took his marketing skills to television, booking openings of two to three hours on cable.
Herbalife also published its own magazine, the “Herbalife Journal.” It was full of testimonials, success stories from distributors, and customer weight loss successes.
The company slogan “Lose Weight Now-Ask Me How” was quickly adopted by bumper stickers and buttons and even copied by some businesses without being too straightforward.
Hughes made a decision to expand the company abroad in the latter part of the eighties. Herbalife merged with a Utah-based Shell company in December 1986 to finance this expansion.
They were able to grow faster than if they had to file a public offer. Hughes was the chairman of this new company, now known as Herbalife International, and took 14 million shares and gave Lawrence Thompson the remaining 2 million.
The firm had already moved to Mexico, Spain, and New Zealand by 1988, and international product sales were performing incredibly. They had reached a hundred and ninety-one million by 1991. In 1995, it was four hundred million.
Asia, Europe, and the Americas have the company present among their businesses, and it continues growing as of this date.
How Does Herbalife Work? Diving Deeper Into MLM
Although we briefly explained the MLM business model and what you can expect from it, we need to clarify a few more details.
Multilevel marketing or MLM works in the sense that you must become a distributor or member of the company in order to earn commissions and revenue, usually based on sales and recruiting people.
In this case, the company is clearly Herbalife.
Usually, all MLM models and compensation plans by the company allow you to earn commissions by selling products. Still, it is a fact that’s not really how MLM structures or companies allow you to make real money in terms of more than a few bucks every month.
Primarily, you will earn income by recruiting new members or distributors who need to purchase a specific starter package or according to what the company has set for you to get the commission and create your downline.
The downline is basically the team you create based on the number of new members you recruit and how you add them during the MLM sign-up in your account.
Every MLM company has its own commissions, fees, and income rates. You need to carefully review the business plan and offer to determine if Herbalife or any other MLM you consider is worth your time.
Many people compare this model with a pyramid scheme because the latter work around the same: You recruit people to make money.
However, schemes don’t work with real products or services (maybe both) but just try to convince you to spend money on membership or items that don’t even work.
Now, as we previously mentioned, Herbalife is all about working with this business model. Still, we will need to dive deeper into other aspects to determine whether it is worth it based on its plan and compensations.
How Much Does It Cost? – Paying Your Herbalife Membership
If you are thinking about giving this company a try, please, wait for what we need to say about it.
The first concern you must have is about the price. Is Herbalife expensive to join? Or is it quite affordable compared to other businesses? All this depends on what you consider expensive or not.
However, we can tell you that we find it reasonable to a degree, especially with all the MLM companies we have reviewed in our blog.
To become a distributor in the Herbalife MLM, you need to pay a membership fee of $94.10.
This is cheap so far, but you also need to add the acquisition of a starter kit as a Herbalife Distributor.
The company offers two kits with different products, and you can either choose one of them, both, or even invest more money in other products at once.
With this in mind, the packages include a wide variety of items based on their costs:
- International Business Pack (IBP): $94.10. It contains messenger bad, sports bottles, buttons, important books and guidelines, sales aids, and more support items.
- International Business Pack-Super Starter: $124.10. It includes the same items as before but includes products like Formula 1, Herbal Tea, and an entire sampling kit.
This means you will need to spend about $218.2 + the fees and expenses based on your work and how you sell your products as a distributor.
Also, it is important to keep in mind that shipment costs and other fees are not included in the cost of the starter kits.
There’s the condition of Herbalife, and just like other MLM companies, if you don’t sell the products at a specific time, you will have to pay for them after a while.
Herbalife Products: What Will You Sell?
Mentioning supplements and herbal products are quite generic. We also think you need to be aware of what you will be offering to customers and introduce the business to potential recruits.
Herbalife products are quite popular worldwide, so you must be familiar with some of them to the point of even tested them.
If not, don’t worry; we will be going over the most popular ones and add the additional you are missing.
First, Herbalife has five main categories: Core Nutrition, Healthy Weight, Specialized Nutrition, Energy and Fitness, and Skin and Hair Care.
For each one, we will be adding a range of products and naming some of the most common that is considered the signature of the category:
- Core nutrition: Formula 1 Shake Mixes 750g. All flavors cost about $43.30.
- Healthy weight: Herbal Teas Concentrate 1.8 Oz., about $26.40. 3.6 Oz., costs $46.20.
- Specialized nutrition: Herbal Aloe Concentrate and digestive products 1/2 Gallon, about $122.
- Energy and fitness: Drinks $39.55, and popular snacks about $21.40 a box of protein bars.
- Skin and hair care: Cleansers start at $20.95, acne solutions and kits at $76.25, and bath and body begin at $20.
The main categories also have subcategories in which you can find more specialized products.
None of the sub-products costs less than $20 at retail price, but as a distributor, you will need to focus on the discount you receive to sell them.
Most distributors are given about a 25% discount on all products, and you can sell them for full retail cost.
Compensation Plan & Earnings: Will You Become Rich?
We will clarify that over 90% of people don’t make that much money with MLM companies and models, so we have to drop you to reality and tell you that you won’t be rich with this.
However, some people find the business a great option for extra income, but everything depends a lot on your skills for selling and how you work around the compensation plan offered by the company.
In the case of Herbalife, it offers a total of six options to earn money. However, the main ones are only two or three at most.
- Retail profit: You make money based on the commission you earn from the sales of products. Since the commission is set at 25% for all products due to the discount you receive, yet you can sell them at retail price, you can do the simple math. If you sell for $100, you will be earning $25 as profit.
- Wholesale profit: It means you get about 42% of potential retail profit or work around 7% or 17%. This can be quite complicated based on the current plan when you’re joining.
- Royalty overrides: You get a commission based on the recruits you bring to the company and the downline organization.
Other commissions and earnings like monthly production bonuses, annual bonuses, and promotions are based on conditions you must meet.
For example, you get monthly and annual bonuses if you sell a specific amount of products + recruit a certain number of new members.
Basically, you just make money with the retail and recruiting option since the wholesale profit is more of a distraction since most people cannot achieve it.
Also, MLM companies work with rankings, and the higher you get, the more commission you earn + more discounts.
Pros & Cons: Why Herbalife Doesn’t Work
We were waiting for this section to tell you something: Herbalife isn’t a good business, and we wouldn’t consider it for an investment.
In fact, this comes from personal experience as we were part of the people who fell into someone’s speech and decided to invest in it.
However, before we get to that part, we want to introduce you to the pros and cons so you can have a better idea of why we don’t think it works:
Pros:
- It is a popular company and follows a legal business model.
- It isn’t expensive to join if you go for the cheap starter kit.
- The company has a reputation in the market, and very few do not know what Herbalife is.
- Person-to-person sales and network marketing can be implemented just like online sales.
Cons:
- Its reputation, however, has declined over the years.
- The company has lost reliability and clients by the fact that its diet or “balanced nutrition” and products don’t actually work for most people.
- You don’t make much money. In very small letters, the company admits most independent distributors earn about $500 a year. That’s nothing.
- You won’t be making much selling products but just bringing new distributors.
- Commissions are low, and payments take time to process when they are bonuses and extra profit.
- With the reputation declining, you will have a hard time selling. Besides, the products are expensive.
With this in mind, the cons in particular, why do you think Herbalife is bad?
The company is indeed a big business today and continues to sell many products.
Don’t get us wrong, some of them actually work and can be used, but the reputation has been declining due to the poor results people obtain or the fact they get to the starting point or get even worse after stopping taking the pills teas, or drinking the shakes.
In fact, there are many memes, jokes, bad reviews, and complaints about the brand, and more reasons for not relying on it continue piling up every year.
You Don’t Need MLM Companies
MLM companies are kind of a big “pass” for us even when some of them actually work and offer good compensation plans that won’t make you rich, but you can earn a decent amount of money.
If we don’t like to invest in them, what do we decide to do with our money and investment options?
We prefer business models and alternatives that allow us to be independent business owners and aim for direct sales or services that can become a passive income or maybe bring independence our way.
Local lead generation is one of our top options, and although it does require more money than Herbalife in the short term, you won’t be placing all your savings in it, and just think about it; it can be your own business.
The best part is that it’s not as difficult later on. While it takes time initially, you can still enjoy passive income later.
Local lead gen is completely online, which means you don’t have to deal with stocking products or working around the usual needs of stores.
But how does lead generation allow you to make money?
This is a way to create or build websites for clients (who you will either contact directly or bring your attention to) and ensure that their sites rank well on Google to generate free organic traffic.
The traffic is then converted into leads, and those leads can become clients for them later on.
These leads need to take action on the sites of the companies. Often, they end up becoming clients.
It is easy to work around it: You bring customers for clients, and you get paid for every lead you generate.
You have to be able and willing to work hard, but it will be worth it when you see how you can enjoy a lot of free time and other benefits.
Although it takes time and effort, a good training course can also help and will be necessary.
We have had great success with this #1 training, and we couldn’t recommend a better one to get started…
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