Dear Surly Amy,
I have some friends who have jumped on the herbalife bandwagon. They go to conferences, host herbalife parties, and insist that they feel amazing. They’re convinced they’re going to make lots of money, but the whole thing sounds like a scam. I can’t find any unbiased reviews that aren’t from an herbalife distributor. What gives with this company? Something doesn’t seem right.
Dear Not Convinced,
You are wise to be not convinced.
Skepchick Felicia saw your email and immediately brought this to my attention:
Ah, thought this rang a bell… http://www.mlmwatch.org/04C/Herbalife/herbalife00.html I remember seeing not one but TWO herbalife tables at the Stockholm altmed fair. They didn’t even have any products to sell from what I could tell, their posters just spoke of business opportunities. I guess the altmed crowd are prime targets for MLMs, hence Amega, Aloe Vera stuff etc.
If you click that link it will take you to a website dedicated to keeping an eye on Multi Level Marketing companies with a page dedicated specifically to Herbalife International. In case you are unfamiliar with the concept of multi-level marketing, essentially it is a business model where you have to get people to sign up under you to distribute your products to while you purchase products from the person you signed up under and everyone gets rich*! (*Not really)
Here is the basic MLM plan:
Step one: Sign up under someone to sell some random product! Could be ANYTHING like dust monkeys or edible undies but you have to buy a certain amount during a certain time frame. Usually monthly.
Step 2: Get enough people to sign up under you to buy what you bought from the person above you.
Step 3: Hope they get people to sign up under them so they keep buying from you.
Step 4: PROFIT cuz the random product is so super great! (But only if you get enough people who keep signing up under you that don’t go broke.)
That’s what multi level marketing companies want you to be. Because the majority of people who actually make money from these business arrangements are the people at the very top of the pyramid, in other words the people who fist sign up or create the company. The majority of the lower tier salespeople struggle to sell enough product to reach their quotas and to simply break even, without profiting at all. Many people just end up using the products they have agreed to buy and often convince themselves that the product is great or tell everyone around them that the product is great in hopes of selling at least some of what they have agreed to buy themselves.
In this case the product happens to be a lot of herbal supplements which as a good skeptic knows, you really don’t want and probably don’t need at all. In fact, if you click through on the link Felicia shared up above you will find this: “Herbal does not mean innocuous: Ten cases of severe hepatotoxicity associated with dietary supplements from Herbalife products”
The Skeptic’s Dictionary has a good explanation of Multi Level Marketing here.
And this site goes so far as to show the math that demonstrates why multi level marketing can NOT work for the lower tiers. Your best bet is to completely avoid any type of multi level or pyramid schemes altogether.
Run! It’s a trap!
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