Is Herbalife a Ponzi Scheme? (Updated 2022)
Welcome to my Herbalife unbiased review! So, each one of us have our own dreams, right? I am sure you agree with me on that. Dream jobs, dream houses, dream lives, you name it. But probably one of the most common dream we all have is to achieve our dream bodies. Furthermore, who wouldn’t want those well-built and ripped bodies? Or those sexy and nice-figured bodies?
Like all other dreams that we have, achieving this is also not easy. Yet, most of us still work hard.
You go to the gym everyday, follow a routine, and never give up. I salute all of you.
However, the gym alone is not enough to achieve those dream bodies. Food and supplements are a must. Even fitness coaches and trainers out there say that same thing.
With that said, you probably sought the best supplements and encountered Herbalife.
However, if you did your research well, I am sure you stumbled upon people’s comments about how it is a scam.
For those who did not, don’t worry because that is what we will be talking about in this review.
Together, we will uncover the secrets that Herbalife is hiding.
Is Herbalife a Ponzi Scheme: Quick Summary
Name: Herbalife Nutrition
Website: https://www.herbalife.com/
Year founded: 1980
Founder: Mark Hughes
CEO: Michael O. Johnson (Interim CEO)
Products: Dietary Supplements, Sports Nutrition, Weight Management, Personal Care Products
Product price range: $25 – $300
Rating: 2/5
Recommended: No
What is Herbalife?
Herbalife Nutrition is a company founded in the year 1980 by Mark Hughes that sells different kinds of nutrition products, as well as dietary supplements.
In the year 2017, it was reported that it had an estimated 8000 employees. Additionally, the company operates in 94 countries with an approximately 3.2 million distributors.
So, it really sounds like very successful company, huh?
According to them, their purpose is to change people’s lives by providing the best nutrition products and programs and to make the world healthier and happier.
This purpose all began in its founder, whose mother died because of an unhealthy approach to weight loss and an eating disorder.
Who Started Herbalife?
Herbalife was started by now late Mark Hughes in 1980. He had a vision of making the world healthier one person at a time. Now, that dream has expanded into a multi-billion dollar business that spans over 90 countries.
In addition, Hughes also founded the Herbalife Nutrition Foundation in 1994 which aims to help companies supply nutritious food to prone children. Today, that foundation has also expanded and their mission has also widened to support relief missions to disaster events worldwide.
However, do they have an ulterior motive behind their charity works? Well, read further to learn more.
Is Herbalife a Ponzi Scheme: Products
Formula 1 Healthy Meal Nutritional Shake Mix
This product is one of the best-selling products of Herbalife, as well as the most famous one.
As part of their weight management goal, they made this delicious product which reportedly has 21 different nutrients and vitamins that your body can benefit from and can support your metabolic function in a cellular level.
In conclusion, this product will make your life healthier and better as it gives you protein and a balanced nutrition.
The Formula 1 Healthy Meal Nutritional Shake Mix comes in different flavors which will surely pleasure your taste buds too.
Here are the flavors:
- Pralines and Cream
- Banana Caramel
- French Vanilla
- Dulce de Leche
- Orange Cream
- Mint Chocolate
- Vanilla – Alternative proteins non-GM
- Dutch Chocolate
- Wild Berry
- Cookies ‘n Cream
- Piña Colada
- Café Latte
Herbalife 24
Herbalife 24 is a product line that is designed for athletes who undergo strenuous activities.
However, it is not limited to athletes. Herbalife 24 is for EVERYONE.
Furthermore, its products help you and support your training and recovery by providing you the best performance nutrition.
So, if you really need to enhance your performance, Herbalife 24 is has the essential products you need. Some of its products are:
- CR7 Drive
- Formula 1 Sport
- Hydrate
- Prolong
- Rebuild Endurance
- Rebuild Strength
- Restore
If you wish to know more about Herbalife 24, click here.
Herbal SKIN
Herbalife is not just about nutrition and losing weight.
It caters different products that can improve your health and your body.
That is why, Herbalife created Herbal SKIN, which is a skin care line.
Its products contains the essential vitamins and nutrients that can make your skin look younger than ever before.
You can check out their different skin care products here.
Is Herbalife a Ponzi Scheme: Weight Loss Programs
Herbalife offers three different weight loss programs to its customers. Below are the programs including the things you can avail from them:
- Quickstart Program
- Meal-replacement shakes
- Powdered tea drink
- Multivitamin/mineral
- Metabolism-boosting supplement
- Advanced Program
- Everything in the Quickstart Program
- Two more supplements to increase energy and to reduce fluid retention
- Ultimate Program
- Everything in the Advanced Program
- Two more supplements for managing blood sugar and digestion
How to Earn Money in Herbalife?
Now, since we are done getting to know Herbalife, let’s move on to the next important thing to discuss, “How can you earn money in Herbalife?”.
According to Herbalife, they are a Multi-level marketing company (or are they?).
That means you get to earn money through direct selling, network marketing and social selling.
When you sign up in Herbalife, you work as a distributor in which you can participate in three ways:
- Herbalife products can be purchased with a discount for yourself or for household use.
- You can sell their products to earn a retail profit.
- You can recruit other people to sell their products and earn a wholesale profit from your downline distributors.
Compensation Plan
Below is a figure that shows the compensation plan/marketing plan of Herbalife.
It shows the levels or ranks of working in the company along with the benefits you can receive.
When you start working in Herbalife, you begin as a Herbalife Distributor who can earn a 25% retail profit everytime you make a sale.
By the time you earn 2500 Volume Points, you will move up to the rank, Supervisor.
Just by looking at it, it really looks so promising to the point that you will think that in the near future, paper bills will rain down upon you.
Sadly, that won’t be the case. Want to find out why? Then continue reading.
Can’t really understand the figure above?
Don’t worry because a video below will explain to you the compensation plan of Herbalife.
How Much Can You Earn in Herbalife?
During my research, I was able to find out an estimate of how much distributors earn.
This was based on the earnings of US distributors. According to the company,
- Half of the total number of distributors earn less than $370 a year.
- 10% earn $6965 a year
- And only the top 1% earn $108,802 a year.
Now tell me, can you see something shady in that statistics? Because I can. You will find out later on in the review.
Is Herbalife a Pyramid Scheme?
Pyramid schemes are a type of scams that offers people a way to earn money quickly. However, these promises are usually to good to be true and they are illegal in many countries. Most pyramid schemes offer people to join for a upfront payment for membership. However, they do not give you any product for your money but tells you to recruit more people to earn.
So, is Herbalife a pyramid scheme? Well, looking at Herbalife’s business structure, we can say that they are not a pyramid scheme. However, they are an Multi-Level Marketing business which is closely similar to a pyramid scheme. The only difference is that MLMs are legal since they give you a product to sell for profit.
The good news for people trying to join Herbalife as a seller is that you cannot find their products on any retailer shelves and is only accessible by buying it from partner suppliers.
However, Herbalife has been proclaimed as a pyramid scheme in Belgium for failing to provide its retail consumer base. So, it seems that Herbalife is walking the line between a legit MLM and a pyramid scheme.
Earning $3000 per month is kind of my thing. Want to know how I do it?
Is Herbalife a Ponzi Scheme: Red Flags
#1 Its products have downsides
When I was researching about Herbalife products, I came upon a Herbalife Diet Review.
According to the review, the shake products contain multiple highly processed ingredients such as protein isolates, sugars, gums, fibers, synthetic vitamins, artificial flavors and emulsifiers.
Furthermore, the shakes are high in sugar. In each serving, 40% of the calories come from added sugars.
The World Health Organization only recommends getting 5% of your daily calories from added sugars.
Herbalife weight loss supplements have been linked to a severe liver damage. Sources are to be found in the following links (1, 2, 3, 4)
#2 It has a long history of controversies
Over the years since its start, Herbalife faced a lot of charges made by former distributors and investors claiming that it is operating a pyramid scheme.
Back in the year 2004, over 8700 distributors accused it to be a pyramid scheme.
Also, in November 2011, Herbalife was judged to be a pyramid scheme by the Commercial Court in Brussels, Belgium.
Perhaps, one of the memorable moments regarding issues in Herbalife is when Bill Ackman presented a lot of arguments.
He claimed that Herbalife is a pyramid scheme. This led to an FTC investigation. Read more about it here.
#3 Bad reviews
Herbalife did not only affect those distributors and investors, but also a lot of people.
Below are some negative comments regarding Herbalife.
#4 They prey on mothers
If you are a mother, then please beware.
All MLMs, like Evolution Travel, including Herbalife, preys on mothers. They target mothers to lure into their company or to purchase their products.
I saw a Facebook post during my research and you can see it below.
#5 False reviews
Herbalife representatives are highly encouraged to pretend that they are customers and leave positive reviews in different platforms in the internet.
An example is when they comment on Herbalife posts and try to make the company and its products really wonderful.
In my research, I was fortunate enough to stumble upon a former Herbalife representative’s statement;
“When I was with Herbalife they’d always tell us to go onto new/struggling reps posts and comment as if we were customers/prospective customers
(“I love this shake it gives me everything I need for the day!”/“wow this sounds awesome, can I have more info please?”) – all so fake and obvious!
I’ve noticed this a lot with some people recently, posts with a flurry of comments and when looking they are all from fellow reps!”
So, be really careful when reading reviews about Herbalife products
The writers may actually be one of the company employers.
In fact, almost all of the MLMs practice this. Read more about this here.
Is Herbalife a Ponzi Scheme: Pros
#1 Nutrition Awards
Herbalife Nutrition USA was able to garner a couple of awards including the 2013 and 2015 Healthy Nutrition Awards, as well as the 2014 Product of the Year Award.
Furthermore, four products of Herbalife; Formula 1 Healthy Meal Nutritional Shake Mix, Triple Berry Complex, Tang Kuei Plus
and Niteworks Powder Mix, led to the international award, the 2013 SNQ National Quality Certification.
#2 Product Benefits
Let me be honest (which of course I am), I had a very difficult time searching for answers whether Herbalife products are actually good.
I was able to find several studies as to how these products can cause severe effects.
However, according to them, their products can deliver these benefits:
-
- Promotes healthy life and weight loss, as well as weight management.
Their protein shakes contain 21 different nutrients and vitamins that can help the body.
Fiber from their products helps in digestion and weight loss
The products have zero cholesterol and trans fats.
Most of their products contain soy protein isolate which may lower cholesterol levels and reduce heart risks
#3 Positive Reviews
Is Herbalife a Ponzi Scheme?
Before I answer that million dollar question, let me briefly explain what a Ponzi Scheme is.
A Ponzi Scheme (named after Charles Ponzi) is a type of fraud that lures investors into investing to a non-existent company or enterprise.
People usually characterize it as a business proposition of low risk and high return.
It is very similar to another illegal business model, the Pyramid scheme which promises people a commission everytime they recruit someone to the company they are working for.
Below is a video explaining further both schemes and showing their differences.
Is Herbalife a Ponzi Scheme?
Well, based on my research, it is not a Ponzi scheme since the company really do exist since 1980.
Even though it faced a lot of lawsuits and controversies, it is still operating and selling up to this day. HOWEVER…
I can deduce that Herbalife is a PYRAMID SCHEME. Even if they say that they are an MLM, it is still obvious that they are a pyramid scheme in disguise. Here are the reasons why.
Statistics
Earlier in the review, I stated these statistics which I was able to retrieve from the earnings of US distributors;
- Half of the total number of distributors earn less than $370 a year.
- 10% earn $6965 a year
- And only the top 1% earn $108,802 a year.
The statistics alone speaks for itself.
You were able to find out above that in a pyramid scheme, the people who are the bottom of the pyramid earn less or even do not earn anything (50% of the total distributors).
And the people at the top earns the most amount of money (the top 1% of the distributors).
With this free to Join Program I can earn money without even have to pay for anything.
Plus, the limit is the sky! I can earn up to $3000 a month!
Recruiting is fundamental
You already learned that in a pyramid scheme, you got to ALWAYS RECRUIT to earn money.
And guess, what?
Herbalife CEO Michael Johnson already stated,
“recruiting is the fundamental part of the growth of this company” and “We’re still a recruiting company, and we’ve got to never not be”
You can watch the video here.
History
Herbalife’s history is rich in lawsuits and cases against it because of operating a pyramid scheme.
Bill Ackman really fought a battle against Herbalife, exposing that it is a pyramid scheme.Distributors and other employees stated that it is a pyramid scheme.
Why is it a pyramid scheme when it sells products?
Correct.
Most pyramid schemes do not have any products to sell. You can earn money through recruiting.
However, Herbalife has always been an MLM, no doubt about that. But if you look at the business structure of the company, it completely resembles a pyramid scheme.
Let me pacify you by providing this illustration of the earnings of Herbalife distributors.
You can clearly see the structure of the company.
So there you have it folks. If ever you plan on earning money with Herbalife, the choice is yours.
You can take the chances of being successful with this company.
But if you ask me?
I won’t take those chances. I won’t waste my time, effort and money without any assurance that I can actually make more money from it.
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