In this Herbalife Review we will look closer on the company which was founded by Mark Hughes in 1980. Herbalife employs an estimated 8,000 people worldwide and reported net sales of US$4.488 billion in 2016, flat with 2015, and net income of $260.0 million, down 23% from the year prior. The business is incorporated in the Cayman Islands, with its corporate headquarters located Los Angeles, California. The company operates in 95 countries (as of July 2015) through a network of approximately 3.2 million independent distributors.
Together with Amway this is one of the old school dinosaurs in the MLM business. While most companies come and go, these two stay strong. That being said, Herbalife have had its problems recently, the company agreed to “fundamentally restructure” its business and pay a $200 million fine as part of a 2016 settlement with the U.S. Federal Trade Commission (FTC) following accusations of it being a pyramid scheme.
Not strange when we look at what they claim and what people end up earning: Herbalife claim to pay 73% of their turnover back to distributors. In 2014, Herbalife paid 29.67% of turnover to distributors and in 2015; they paid 28% of turnover to distributors.
According to their income disclosure statement, 98.6% of all Herbalife distributors in USA were paid less than $5,000 during the year 2015. In Australia 2015 was also not a good year, 98.5% of Herbalife Distributors earned less than $2,500 for the year. This means that only 1.5% of Herbalife distributors earn more than $100 a week. How many earn 1000 per week, 0.15%? We know from other companies that when it comes to high earners, people who can live a decent life from their commissions, the numbers are as low as 0.001%.
So we have already seen that making money with Herbalife is unsightly. Still some do succeed, and it is a business that will be around for decades more, so if you think you have what it takes to be among the 0.001% Herbalife is not a bad choice.
Pay Plan review
Herbalife offers a tier-2 type structure. You will make money for the products you sell and those sold by the people you directly bring in. Most MLM opportunities will allow you to make money from those people brought in by the people directly underneath you, with Herbalife this is not the case.
You will be paid a commission for everyone you bring into the program. The commission will be paid on the difference you make from the sale of a product. For example, when you join the Herbalife program, you will be able to pick up their products at a discounted price. Then, when you are selling them, you will be able to mark them up to make a profit through each sale. However, you need to make sure when marking up each product, you take the time to stay competitive because if you don’t then someone else will steal your customers.
Each person you bring into the program, you get paid a commission for the products they purchase up from Herbalife. This is a great way to earn money because you paid for the effort you put into people to join the program. If you get enough people into the program, you’ll be able to earn a great commission which will earn you a lot of money going forward. The amount you paid depend on the amounts of products that purchased by the person you referred to the program. However, the more people you have referred to the program, the more sales you’ll be getting.
Cost to join
To join Herbalife MLM and become a distributor, it will cost you $59.00 for a membership. With this membership, you’ll get some training material and a discount on the products. In reality the investment will be higher because you will need to purchase products too, else you have nothing to sell. So you will end up spending several thousand dollars to get started.
If you then are among the average distributors, you will have invested thousands to earn from nothing to 100 dollars per week. But for some people this is a business worth investing into, especially if you like to push products. Herbalife is a real business, but it requires a lot of work.