In this article, I'll provide my personal Herbalife business review. This includes the good, bad, and the ugly.
Herbalife is an American, Los Angeles-based, MLM corporation that develops, markets, and sells weight-loss, nutrition, and personal-care products. The company also provides nutrition and weight-loss programs that are targeted towards personal consumers and other distributors, including business opportunities for independent distributors.
Herbalife is known for its multi-level marketing business model, which it says is not dependent on recruiting new participants, but on word of mouth and product demand. In 2019, Herbalife reported at total revenue of $4.8 billion.
The company was founded in 1980 by Mark Hughes and has gone through multiple initial public offerings (IPOs) and is currently traded on the New York Stock Exchange (NYSE) as HLF.
Mark sold the first product out of his car and that was Formula 1, a nutritional shake mix. Over the next decade, the company continued to grow by launching new products and increasing revenue.
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Is Herbalife a Pyramid Scheme?
Herbalife, a multi-level marketing company offering nutrition products, has been at the center of controversy for years. It has been accused of being a pyramid scheme and fined for deceptive business practices.
The controversy stems from Herbalife’s business model. Herbalife sells its nutrition products through a network of distributors, who earn money for each new distributor they bring into the company. Critics say this model encourages distributors to recruit more distributors — not for the sake of selling more nutrition products, but for the sake of earning a commission on the sales.
In recent years, there was a documentary called Better Than Zero. I wouldn’t call it non-biased. Billionaire Bill Ackman shorted the stock to hopefully make a fortune as he slammed Herbalife throughout the media for 5 years. However, his plan backfired. Carl Icahn, a billionaire investor, invested greatly in the company and the stock skyrocketed after the company’s settlement went public.
What’s Bad about Herbalife?
The answer to that question depends on who you ask. The company’s CEO, Michael O. Johnson, says the company offers products and income opportunities that can help distributors “change their lives.” But critics have questioned whether the company is a pyramid scheme, as some distributors have lost thousands of dollars without ever making a profit.
If we just focus on the business opportunity, realize that it is a business and not a job. That means that you can spend weeks or months on it and still not get paid. So you’re not getting paid for your time, you’re getting paid for your performance. This applies to the bulk of the business owners out there even outside MLM.
If you search for the bad stuff on Herbalife in recent years, you’ll find a lot of trash talk by Bill Ackman, Carl Icahn opposing him, and the FTC settlement. Most of this spawned from Ackman’s failed attempt at trying to make money from Herbalife’s downfall that he instigated.
While this FTC settlement might seem bad, I believe it helped solidify the industry. The “retool” effort that came from this settlement adds more legitimacy by increasing retail sales (instead of bulk sales by members, also known as internal consumption).
Is Herbalife Banned?
There are some articles online about Herbalife being banned. After looking for evidence, I found that Herbalife had to remove ephedra from their products in 2002 since it was banned in the United States. This impacted many companies at that time, even traditional supplement and OTC medicine providers.
There was another article that mentioned that they were banned in China. Herbalife did experience complications due to bad business in China and how it reported their business model over their to investors. In general, China has banned MLM for many years. However, they do allow direct sales. In order to do business over there, Herbalife had to pay their distributors based on the hours that they put in.
So to set the record straight, Herbalife was not banned.
Is Selling Herbalife Profitable?
About making a profit with the company, you have to look at the meaning for what it means to make a profit.
Keeping it simple, if you’re able to make more than you spend, then you are profitable.
The issue that I’ve found with many business opportunities is selling the dream. When MLM’s sell the dream, it leads to people getting a fake idea that they can quit their jobs and make tons of money.
If that’s your expectation and you want to get-rich-quick, then there’s an extreme likelihood that you will fail.
That’s based on my personal experience.
All businesses that I’ve worked in require a lot of work and you have to work smart to avoid wasting money. When I lose money in a business, I take responsibility for it. However, many of the people that join the opportunity and fail end up blaming their upline or the entire company.
Being a Herbalife distributor comes with start-up and annual costs. First, let’s look at the start-up costs. It can cost between $94.10-$124.10 to start. That fee doesn’t include taxes or shipping costs. You’ll also have to pay an annual processing fee. That’s $15 for non-supervisors and close to $80 for supervisors.
Can You Sell Herbalife on Amazon?
One of the easiest ways to sell nowadays are through websites that have a pre-existing audience. Amazon is one of the most popular ways to run a shop online, and they also have something called Amazon FBA (fulfillment by Amazon). That’s where you have Amazon stock the goods, and they do all of the packing and shipping.
While these might seem like the easy way to sell your Herbalife products, it’s not allowed.
It’s not a Herbalife thing, it’s the typical MLM approach.
From the company’s perspective, they want to help distributors and create a level playing field. Imagine if a distributor creates extreme discounts on Amazon. How do you think it will impact other peoples ability to sell?
It’s not just about price. Imagine if another distributor starts selling their inventory and it expires in 3 months. Then potential customers look at all of those bad reviews for that single distributor. Those bad reviews can impact other people’s businesses and it has nothing to do with them or Herbalife as a whole.
I’ve provided a lot of details in this Herbalife review. It’s one of the top nutrition MLM’s in the world. While they’ve had recent issues due to the negative publicity and the FTC settlement, they’ve still managed to rise above it all. The company has created better processes since then to create more stability and higher standards in the network marketing industry.
Herbalife website: https://www.herbalife.com/