Dietary supplements are the primary focus of Herbalife’s multi-level marketing strategy. When Jim Rohn started Herbalife in 1980, the company became a household name.
It’s another one of those making money online businesses centered around selling a saturated membership that supposedly makes you money by selling marked-up products.
It is promoted by people who have every incentive for you to join the company or buy products from them.
It’s supposed to show you how to become a “Jim Rohn marketer,” but most members don’t make money promoting other products.
That’s just the truth…you won’t get rich off a crappy $6 commission.
And while I have to be honest for this review…
MLMs like Herbalife are a bit of a mixed bag. They CAN be a legitimate way to make money, but some have a reputation for literally ruining people’s lives – so it’s important to know what you’re getting since each one is unique.
Like most of my readers, you were probably introduced to this one via a friend or some influencer you trust online.
And it makes sense why so many people recommend them:
Making money outside of a 9-5 can be… life-changing, to say the least.
So in this article, I want to help you explore two things:
- If MLMs are actually a worthwhile business to pursue
- If Herbalife is a worthwhile MLM
Before that, I want to clear the air on something.
There are A LOT of people out there who bash all MLMs in any form. I am not one of those people.
Instead, I want to genuinely educate you about them so that you can make an informed decision on how to proceed.
If you’re unfamiliar with what MLMs actually do:
They’re businesses in which you pay money to a company for the ability to sell their products.
Sometimes the products are actually kind of decent (I still remember my mom throwing pampered-chef parties when I was younger).
Other times the products are really poorly made and come with a high price tag.
Typically, the only way to make any money is to get people (mostly friends & family) to sign up with you for a recurring subscription.
If the product is 100% legitimate & valuable, it’s entirely possible to get people to sign-up and continue paying you.
If the product is subpar, you’ll usually burn those bridges quickly and end up with $0 coming in each month.
The biggest issue I’ve seen is that this puts significant stress on your personal relationships, as you’re reliant on selling to your “network.”
Think about it: if you KNEW that every time your friend Sally called, she’d be trying to sell you on one of her products… you’d eventually stop answering Sally’s calls.
Now, this doesn’t mean MLMs are outright bad… it means you need to know what type of MLM you’re getting yourself into before you sign up.
Again, some MLMs provide real value to people, but MOST don’t – and so in this article, I’m going to explore what the case is with Herbalife.
But before that, I want to ask you a question: what if there was a way to build actual recurring, semi-passive income?
- Doesn’t have inventory
- Doesn’t make you sell to your friends & family
- Doesn’t force you to recruit people onto your “team”
Something that you could make anywhere from $2,000 – $10,000 with consistently, month after month?
A stream of income that you can build as high (or low) as you feel like building it?
If that sounds interesting, you might want to think about becoming a Digital Landlord.
If you wanna see what Herbalife looks like on the inside, keep reading.
So What Is Herbalife?
Herbalife is a direct selling company. Herbalife’s worldwide net sales in 2019 are expected to be roughly $4.88 billion in US dollars.
You won’t be able to find their protein shakes or nutritional supplements on the shelves of any stores.
The only way that you’ll be able to purchase these products is from an Herbalife distributor. You can learn more about the products on their website and get the prices, but you cannot purchase them.
That’s great for distributors, obviously.
With a network of 3.7 million “members” in about 90 countries, Herbalife is a pretty big company.
How Does Herbalife Work?
Bulk purchases are available to members and distributors of Herbalife. These items might then be used or sold.
Or do both.
You can find a distributor on their website if you don’t know anyone.
How Do You Make Money?
Here’s where it gets interesting.
They pay based on a “multi-level marketing model.”
So what does this mean exactly?
It means that your compensation doesn’t come from selling Herbalife products alone. You can get bonuses from the sales of new members that you recruit and that your recruits recruit as well.
But you’ll need to sell an awful lot of Herbalife protein shakes to make any type of money. And don’t forget you have to buy the products first in order to sell them.
There lies the problem.
Basically, you’re limited to how much you can make based on how much you can purchase.
But not only that.
There’s a risk of buying too much product and not being able to sell it.
You’ll have 12 months to return the products you haven’t opened since you purchased them.
So what is their compensation plan?
See the image below.
Distributors aren’t making much from the sales of these products. Of course, the more you sell, the more you’ll make.
When you reach a certain number of volume points, you’ll be able to move up to the next level, where you’ll make a greater commission from your downline, but your retail commission doesn’t change.
You accumulate volume points when you or your downline order products. So the more you order or downline orders, the more volume points you get.
This will help you to move to the next level.
You say you’re not a fan of having to sell things to friends, family, or even strangers?
We can definitely understand how that might be uncomfortable.
What Are Herbalife Products?
Herbalife Nutrition’s weight-loss and protein smoothies are among its offerings. Additionally, they provide a wide range of health and beauty items, including protein bars and aloe vera gels.
The product claims to change people’s lives.
This is claimed to be achieved by the products targeting your body’s cognitive weaknesses.
These cognitive weaknesses are one subject of debate with Herbalife.
Herbalife encourages social gatherings calling this group “nutrition clubs.” At these gatherings, members will try the shakes and discuss healthy lifestyles.
But are these gatherings are really just a way to grow their business by showcasing the product and getting sales.
Herbalife claims that these nutrition clubs help people who would normally eat from a vending machine and consume fast food. That they help show them healthy choices and support them with positive reinforcement.
But are Herbalife products overpriced?
The jury is still out on that one…
Do People Lose Weight With Herbalife?
You may lose weight by drinking Herbalife meal replacement shakes.
These meal replacement smoothies are much like the many others now available.
You’ll consume fewer calories by feeling fuller longer.
You use these healthy shakes to replace one or two meals.
The research behind Herbalife weight loss products is still ongoing, for the product claims that it can prevent weight gain over several years.
Is Herbalife Legit?
Herbalife, a multi-level marketing company, is often the subject of heated discussion. Nevertheless, some are more likely to be considered frauds than others.
Some say it’s a pyramid scam, but others aren’t sure.
So what is Herbalife?
It’s difficult to answer whether or not Herbalife is legit, a scam, or a pyramid scheme.
So, let’s first take a look at some of the drama that Herbalife has been part of over the past few years.
In 2012 when Herbalife’s president, Des Walsh, was asked by a hedge-fund manager, David Einhorn, “how many sales there were outside of the company’s network” Mr. Walsh responded with this,
“We don’t track this number and do not believe it is relevant.”
As you could imagine, David Einhorn was enraged. And shortly after, Bill Ackman, the head of the hedge fund Pershing Square bet 1 billion dollars against Herbalife. He shortened its stock in late 2012.
Herbalife CEO, Michael Johnson, decided to fight back. He called Ackman’s statements false and misleading.
Then Carl Icahn jumped in to call Ackman a liar and that his claims were complete bullshit.
In March, the worst occurred when there was a front-page story in The New York Times.
Ackman had been lobbying public officials and even contributed funds to anti-Herbalife advocacy groups. Herbalife officials said that this was a lie, only to publicly come out two days later admitting that the Federal Trade Commission or FTC was investigating them.
Ackman has even gone as far as to say that he is convinced that Herbalife is a global pyramid scheme. And believes it’s a criminal operation.”
Herbalife’s chief financial officer, John DeSimone, responded to this statement by saying, “I am 100 percent convinced Bill Ackman is wrong. I think he has gone beyond the legitimate role short sellers play and crossed an ethical boundary.”
Then in 2016, Herbalife was forced to pay $200 million for ‘unfair and deceptive practices’ and had to restructure its US operations. This was following a two-year investigation.
Oh, but it doesn’t stop there.
Why Is Herbalife So Bad?
For the better part of two decades, Herbalife has been in operation. From being a fraud and a pyramid scheme to the FTC, paying millions of dollars, and restructuring its activities in the United States, the company has been the subject of several investigations during its history.
The FTC Chairwoman, Edith Ramirez, has said that Herbalife has sold people on a false promise by exaggerating their claims to become rich by selling nutritional supplements.
And today, Carl Ichan is selling back all of his Herbalife stocks back to them for $600 million.
But why would he do this after the big showdown with Bill Ackman a few years back?
Who Is Bill Ackman?
The head of the hedge fund Pershing Square, Bill Ackman, had contentious involvement in several of Herbalife’s disclosures of alleged misleadings.
Both Ackman and Herbalife spent two years battling each other.
It all started with Ackman betting 1 Billion dollars that Herbalife’s stock price would crash while talking about how Herbalife doesn’t offer its members a real way to make money.
This was the beginning of the outing of how Herbalife has been deceiving its recruits.
Herbalife claimed that Ackman said these things because Perishing Square investors would profit from Herbalife’s collapses on Wall Street.
Why Is Herbalife Banned In The US?
After being accused of being a pyramid scheme, Herbalife agreed to pay a $200 million fine and “fundamentally reorganize” its business in a 2016 settlement with the US Federal Trade Commission (FTC). In November 2017, Ackman’s hedge fund had no other Herbalife short positions.
Concurrently, plant sources of ephedrine were removed from Herbalife products in 2002 after several U.S. states banned supplements containing such herbs. In July 2016, Herbalife agreed to change its business model and pay $200 million to its distributors in a settlement with the FTC.
Is Herbalife An MLM?
Even though Herbalife is a multi-level marketing company, the Federal Trade Commission has long regarded it as borderline pyramid-like. Who a few persons and have been the focus of a lot of debate.
As with most MLMs, Herbalife is structured to make money by signing people up.
But Herbalife borderlines being a scam because of how they present their company, the promises they make to people, and the amount of money you can actually make by joining them as a distributor.
You won’t make a living wage selling their products, at least not anything worthwhile. It’s a known fact that 99% of people who join MLMs break even or lose money.
Just look at what Sharon Shea, a former Herbalife distributor, had to say,
“You don’t make money from selling products. You make a little. Not much. Not enough to pay the bills that are racking up. You make money from signing people up.”
Members are asked to get their friends involved and become distributors, but eventually, their efforts will dry up, and there’s nobody left.
The compensation plan isn’t designed to make money, but rather the business is designed to keep you motivated to keep their members using their products and buy more.
You keep losing money while they continue to make it.
Why Is A Pyramid Scheme Illegal?
Early investors may expect to gain money for a brief time when it comes to pyramids until they run out of steam.
They are designed to fail, but that’s not how they present themselves. They give you false expectations for something that they know will dry up.
These aren’t just a waste of your time; they are also a big waste of your money.
It’s sad how they prey on your hopes and dreams of getting rich.
It seems like there are many MLM companies that borderline do the same.
Is Herbalife A Pyramid Scheme?
No, Herbalife is not a pyramid scheme and has been able to avoid that label after reaching a $200 Million settlement with the FTC (Federal Trade Commission) in 2016. Since then, their product sales have soared to nearly $5 Billion in 2018. That said, the company still has its issues.
John Oliver tried to expose Herbalife as a Pyramid Scheme.
They’re claiming that the business model for this “MLM” company is that you make money off of the people that join and then make a commission from their sales.
But was he right or wrong?
Looking at Herbalife’s incentive structure, you can see what he’s talking about.
Some MLM companies are really good at hiding the fact that they’re not a good company.
They get big names to endorse them so that you believe they are worthy. All the while, they are structured in plain sight for who they really are.
Herbalife has even been declared an illegal scheme by Commercial Court in Brussels, Belgium. This was based on Herbalife’s inability to show its retail customer base anything at all.
Most pyramid cases are easy to spot. They are usually structured with a chain-letter-like arrangement. They ask for new recruits to pay cash upfront in the hopes of making money from your downstream recruits.
This is manipulative and against the law.
Generally, most multi-level marketing companies require up-front payments for products.
But if they are not a scam, you’d be compensated for your independent sales, and these retail sales would be tracked.
There are a lot of gray areas when it comes to distinguishing an MLM from a pyramid scheme. In these gray areas, fraud is often camouflaged within established companies because they don’t dry up, continue to commit fraud, and remain in business.
Some people have tried to argue that is precisely Herbalife’s structure. They’ve been in business for nearly 40 years.
They’ve adapted but haven’t really changed much.
Although after 2014, they were forced to change the structure of how they pay their salespeople.
There are some Herbalife recruits that have received unrealistic promotional materials from top distributors in the past. Videos from a member named Doran Andry where he is seen driving a red Ferrari. He talks about how he’s making close to $100K a month selling Herbalife products.
This was a huge embellishment.
When Herbalife disclosed its financials after this video started circulating, it was proven that this video was a lie.
The company said in 2013 that only 704 U.S. members made more than $100,000 A YEAR.
Not a month.
The truth is that most of their MLM distributors make less than a few hundred dollars.
And let’s not forget about member expenses.
Yes, to remain active, you need to purchase products.
But the part of Herbalife that gets most worked up is their nutrition club.
This club is not only expensive to attend but it is designed to recruit.
But that’s not how they market it.
But they are designed to recruit low-income distributors.
These recruiting venues for Herbalife are all over the world. Herbalife reports a substantial increase in sales from these nutrition clubs.
And they were thought to be drug laundering in Mexico and Venezuela back in 2013 by third-party investigators. However, nothing ever seemed to come from these claims.
Is There A Lawsuit Against Herbalife?
They have had many lawsuits against them, their most recent one being this year.
Just when you thought things were looking up for them.
They bribed Chinese officials for the third time within just four years.
This time, it cost them $123 million to settle these charges with the United States government.
This indictment and settlement came just a year after Herbalife was forced to pay the SEC $20 million for misleading investors with its China business model.
This came after Herbalife CEO Rich Goudis’s audio recording was revealed where he advised an employee to ignore expense account limits in China.
These are just some of the recent lawsuits.
Is Herbalife A Scam?
So, time for the $1,000,000 question: Is Herbalife a scam?
No, not technically. They aren’t going to run off with your money and not give you what you paid for. It’s 100% possible to make money with this program.
That being said, it’s not nearly as simple as they want you to think it is.
There’s A LOT of work to be done upfront and no guarantee that you’ll be successful. The commissions are also fairly small.
Don’t get me wrong; I’m all for doing hard work now so that I can reap the benefits later.
But if you’re going to work really hard for three months, and your reward is a $100 check… it’s not really a great opportunity.
If I do that, I want the rewards to be HIGH and virtually guaranteed.
I’d rather put in that same three months of work (in my spare time) & build a handful of Digital Rental Properties that each produces $500-$2,000 checks every single month afterward (AKA recurring income).
And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of being a Digital Landlord).
Unlike with MLMs, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.
All you need is an internet connection.
Some of my friends are Digital Landlords that run their 6-figure businesses from:
- Camping trips at national parks
- Beachfront in Hawaii
- On the road in a camper van (with a pet pig!)
They focus on living an enjoyable life first and on income second. All thanks to this program.
They can take weeks or months off, and money keeps rolling in.
Living happily is the top priority.
If the thought of living perpetually at your dream vacation spot interests you, being a Digital Landlord might be for you!
Pros & Cons Of Herbalife
Meal replacement shakes are easy and convenient.
The Herbalife diet is designed for busy people who want to lose weight without worrying about what to make for dinner.
It’s quick and easy to make the shake. All you have to do is mix 2 scoops of powder with 8 ounces of nonfat milk or put it in the blender with ice and fruit to make a smoothie.
Soy-based shakes may be good for your heart.
Soy protein isolate is the main ingredient in most Herbalife meal replacement shakes.
This does limit who can take this product.
Research suggests that consuming 50 grams of soy protein per day helps lower cholesterol levels and reduces your risk of heart disease.
Drinking two Herbalife meal replacement shakes a day will only give you 18 grams of protein.
A soy-free, dairy-free formula is available.
Many people have allergies to soy, so Herbalife offers a soy-free and dairy-free alternative.
These shakes are made from pea, rice, and sesame proteins. And they are GMO-free.
There’s no real way to make money.
This company has been in trouble multiple times because they make big promises that they cannot deliver on. No matter how many sales members make, the only way to earn a decent income by most people’s standards is by recruiting people.
So if you’re looking to make money without constant recruitment…I suggest you look elsewhere.
If you’re looking for a healthy alternative, these shakes aren’t exactly your best option.
Herbalife meal replacement shakes contain highly processed ingredients.
Just look at some of these ingredients protein isolates, sugars, gums, fibers, synthetic vitamins, artificial flavors, and emulsifiers.
The sugar content alone makes this an unhealthy choice. With only two servings of a Herbalife shake, you’ll have 18 grams of added sugar.
The goal of a healthy diet is to eat less processed foods and more high-quality proteins, fruits, vegetables, whole grains, and healthy fats.
It could make you hungry.
Herbalife shakes are marketed as meal replacement shakes. But they lack the right amount of calories to be a meal.
So you’re left feeling hungry throughout the day.
You can add fruits, protein, and fat to help increase the calorie, fiber, and protein to help keep you satisfied.
It can get expensive.
Herbalife isn’t cheap. You’ll pay $40 for 30 servings of Herbalife meal replacement mix.
And they recommended that you drink two shakes per day.
So you’ll need to buy two containers which end up costing you $80 per month for just the shakes.
This isn’t including the supplements that they want you to take.
They justify this by saying that you’ll save money on groceries because it’s replacing your meals.
But if you need to add additional things to keep you full, how much are you really saving?
Herbal supplements are said to cause liver damage.
Several supplements contain a bunch of ingredients that the government doesn’t regulate.
So the effectiveness and quality are unknown.
There have been many reports that suggest Herbalife supplements have been the cause of liver damage.
Some Herbalife products have been contaminated with an overgrowth of B. subtilis.
This bacteria is also linked to liver damage.
Herbalife isn’t the only supplement that contains these ingredients. You can find them with many over-the-counter medications and supplements.
Herbalife MLM company borderlines as a scam. Their main goal is to get their distributors to continue purchasing products and getting new recruits.
This company has been into some shady things in its 40 years as a company.
They are structured to look like an MLM, but as with many MLM companies, they teeter on the pyramid side, working in the gray area where it’s difficult to classify them as one or the other.
However, most people, members, distributors, and organizations have spoken against Herbalife company.
But even giving Herbalife the benefit of the doubt for past mistakes and being forced to change the way they word their promises just this year, they got themselves into trouble with the FTC.
There are plenty of MLMs out there, and plenty of business opportunities you can join that will offer you the freedom and income you desire.
In fact, you might find this opportunity below to better be in line with your personal goals.
What Is My Top 1 Recommended Online Business Model In 2022?
I’ve personally tried all of the major online business models:
- I’ve sold fidget spinners through Amazon FBA
- I’ve drop-shipped a toilet bowl putting green on Shopify
- I’ve sold women’s health supplements via Clickbank affiliate marketing
And I made money with all of them, so trust me when I say: there is no “perfect” business model.
I’ve also been on the other side of old friends trying to sell me their fancy new MLM products.
My #1 recommendation for making real money online is, hands-down: being a Digital Landlord.
Whether you’re a complete newbie or you’ve been around the block before but have never had that “big win” to propel you forward, becoming a Digital Landlord is for you.
Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but putting in a few hours per day is enough to see real success.
And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.
That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.
But you can only do that once you’ve created an income stream that doesn’t require YOU to be there every day.
Ownership & Control: With MLMs, you don’t really “own” anything – everything belongs to the MLM.
If you read the contracts, they can kick you out at any time or change your commission at any time (it’s happened in a few high-profile MLM cases recently).
Why pour your soul into a business that could be taken away from you at the drop of a dime?
When you’re a Digital Landlord, you own all of the assets, which means you have ultimate control.
Big Margins: With MLMs, you’re often going to have really slim margins. That means you need to have a VERY large network to make serious money. This usually entails spending A LOT of money on ads and other methods for recruiting members.
Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.
These Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.
Best case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.
It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…
If you wanted to double your income with an MLM, you would need to sell twice as much inventory. And I can guarantee you that’s a lot harder than a few clicks & a phone call.
You’re Helping REAL People: My biggest gripe with MLMs is that you’re likely to ruin your personal relationships.
The MLM may have convinced you that you’re actually helping people, but it’s often not really true.
But when you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:
Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.
You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.
Having this type of impact on the world is what will help you sleep soundly at night.
So, the rest is up to you. You could keep looking at other MLM programs like Herbalife, which might make you money 12 months from now.
You could keep researching and researching for the next few months (or few years), never making a concrete decision.
OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.
Making a fortune while actually helping real people that need it.
If this sounds like you, click here to see how it all works.