If you have been here before, welcome back!
Thank you for taking the time to check out my Herbalife review!
One of the common questions I get asked often is if Herbalife a scam or not.
We’re going to take the next few minutes to take a look and get some answers.
The main concern I have for people who are researching this opportunity is that I don’t want them to get burned. In the profession of network marketing, anything could happen.
A company ends up shutting down in a few months due to bad business decisions for being non-compliant, compensation plan change, or the company not paying it’s distributors.
Even worst, your direct sponsor or upline leaves the company. Leaving you hanging to dry.
I understand that many of you are new. Sometimes we are not in a position to make a solid business assessment due to inexperience.
Additionally, I am going to offer you a way for you to escape the ‘9 to 5’ if you decide that this company is not for you.
You landed on this blog because you are thinking about joining Herbalife because someone approached you about it or you just want to try out their products.
Unlike all the other Herbalife reviews on the internet, this is completely third party unbiased. I have no relationship with this company what so ever so when you read this blog post all the way through and pay attention, I can assure you that I am not going to ask you to join or buy.
By the time you have read this unbiased review, you will be able to decide if Herbalife is a fit or not. I do not promote, nor I am affiliated with Herbalife. I stand neutral in the current development of the Herbalife Nutrition business.
With that said, let’s dive in!
What is Herbalife?
Herbalife is an MLM company that sells nutritional supplements and personal care products in more than 90 countries around the world. One of their products is the Herbalife weight loss program, which uses meal replacement shakes and dietary supplements to help people slim down.
Herbalife’s headquarters is located in Los Angeles, CA.
Herbalife has been through challenges in 2016 and early 2017 has put a huge dent in its business.
Unfortunately, Herbalife has been called a pyramid scheme, and FactsAboutHerbalife.com has created a series of videos that explain why the company is considered a Pyramid Scheme in the past.
Herbalife is the brainchild of Mark Hughes, which he founded in 1980.
A natural-born salesman, the young Hughes had previously sold everything from raffle tickets to exercise equipment.
He was also introduced to the concept of multi-level marketing, becoming a top-earner for a small MLM outfit called Seyforth Laboratories.
After Seyforth and another company he was involved in went out of business, Hughes finally decided to branch out on his own and Herbalife was born.
For years, it seemed like you couldn’t go anywhere without seeing someone wearing a badge emblazoned with their slogan:
“Lose Weight Now, Ask Me How!”
This turned out to be an incredibly popular way for Herbalife distributors to draw in potential customers and new recruits.
How does the Herbalife business plan work?
In order to sell Herbalife products, you’ll need to sign up as an independent Distributor, which will give you access to product discounts, a step-by-step training program, the ability to work from anywhere of your choosing, and more.
Herbalife offers “science-based nutrition products” that are claimed to “help people live healthier, active lives.” These products are offered to the public through direct sales opportunities, and include the following categories:
- Weight Management – Personalized quick-start programs, protein mixes, enhancers, and snacks.
- Energy & Fitness – Tablets, drinks, teas, and more.
- Targeted Nutrition – Men’s, women’s, and children’s heart, aging, digestive, immune, and stress management supplements.
- Personal Care – Anti-aging, skin revitalization, and bath & body care products.
What products does Herbalife sell?
Herbalife has 50+ products under their distribution, and are broken down into 4 categories:
Healthy Weight is their product category for their famous protein shakes and bars, healthy nuts, and their multivitamins.
Their shakes and bars go for about $30 on average per item, and the weight management programs are somewhere between $100 to $230.
As the title says, this category is dedicated to a wide variety of pills to help with:
- Heart health
- Women’s health
- Men’s health
- Children’s health
- Aging health
- Digestive health
Energy & Fitness
This product line is geared towards athletes to help deliver key nutrients for faster recovery and optimal performance. The products under this line will either come in pill or powder form.
Skin & Hair Care
Soaps, creams, and gels are part of the products listed under this category.
Their products include common ingredients like Aloe Vera and Shea Butter.
How do you earn commissions with Herbalife?
Retail Profit in Herbalife is defined as the difference between the discounted product price paid by distributors and the retail price paid by their customers.
Herbalife state that this retail profit equates to 25 to 50% of the retail price of the product.
Wholesale Profit in Herbalife is defined as the difference between the discounted price distributors pay for products and the discounted price paid by their personally recruited distributors.
Herbalife state that if a distributor sells products directly to their recruited distributors (downline), they ‘can earn up to 25% wholesale profit‘.
If recruited distributors purchase products directly from Herbalife, then the company pays out the wholesale profit as an override, to the first qualified “Supervisor” in the purchasing distributor’s upline.
Much of the Herbalife compensation plan revolves around “points”, which are allocated upon the sale of Herbalife products by a distributor to either customer or recruited distributors in their downline.
Distributors themselves can also generate volume via the direct purchasing of Herbalife products from either the company or their upline.
“Personal Volume” is defined as all volume generated by a distributor and their recruited downline, up until the first qualified “Supervisor” is found in the downline (this is done via a unilevel I believe and is sorted by levels).
“Group Volume” is generated by newly qualified Supervisors who place orders in their first month of qualifying. Group Volume can only be earnt by distributors who are ranked as qualifying Supervisors or above.
Finally for the purposes of rank qualification volume points can be deemed “encumbered” or “unencumbered”.
Encumbered points are volume points used by another distributor in your downline for qualification purposes (they can be used by both of you, it’s just classified as encumbered). The points that qualify as encumbered are those generated by distributors between a distributor who qualifies as a Supervisor and a Supervisor who is generating 2500 volume points a month.
Unencumbered points are volume points generated by any distributor, counted down to the first qualified supervisor in any unilevel lineage leg (generating less than 2500 points a month total each), as well as a distributor’s own personally generated volume.
Senior Consultant Sliding Scale
When a distributor joins Herbalife and starts earning a retail and wholesale profit, they do so purchasing the product themselves at the wholesale discount rate of 30% (effectively resulting in a 30% commission upon reselling of the products to either recruited distributors or customers).
Via the Senior Consultant Sliding Scale, this margin is able to be increased on a scale to up to 42%. Distributors must qualify for the Sliding Scale, and are able to do so in one of three ways:
- Personally purchase a single order worth 400 volume points or more of product or more that month
- Personally purchase a total of 800 volume points or more in a month, composed of orders consisting of less than 400 points each (product purchased after the qualifying 800 points is scaled)
- Accumulate 400 volume points or more over two consecutive months (failing to qualify under criteria 1 and 2 above), which result in sliding scale qualification for the following third month (it does not apply retrospectively to purchases made during the two qualifying months)
Once qualified for, the scale is tied into total volume (personal + group volume) generated as follows:
- 0-424 points – 30%
- 425 – 549 points – 35%
- 550 – 799 points – 38%
- 800 – 999 points – 40%
- 1000 – 1999 points – 41%
- 2000 – 4000 points – 42%
- 4000+ points – 50%
Herbalife Membership Ranks
There are three primary membership ranks within the Herbalife compensation plan. Along with their qualification requirements, they are as follows:
- Distributor – sign up to the company and pay a joining fee
- Senior Consultant – see qualification criteria for sliding scale in “Senior Consultant Sliding Scale” above
- Supervisor – generate 4000 volume in a month (1000 unencumbered) or generate 2500 volume for two consecutive months (1000 each month unencumbered)
Supervisor distributor status is an annual qualification, which must be met between February 1st and January 31st of the following year to maintain Supervisor status for another 12 months.
Also note that genealogy wise, a Supervisor who has a Distributor in their downline qualifying to become a Supervisor must be able to match the qualifying Supervisors volume production during their qualification month(s).
If the upline Supervisor is unable to do so, the qualifying Supervisor is shifted up to a qualified Supervisor above their upline who is able to match their volume generation (all future commissions are then paid out to this upline Supervisor).
Royalty Override Income
Royalty Overrides in Herbalife are paid out using a unilevel compensation structure. A unilevel compensation structure places a distributor at the top of the structure, with every personally recruited distributor placed directly under them (level 1).
If any of these level 1 distributors recruit new distributors of their own, they are placed on level 2. If any level 2 distributors recruit new distributors, they are placed on level 3 and so on and so forth.
Using this unilevel compensation structure, a qualified Supervisor Distributor is able to earn an override bonus on the volume generated by Supervisors down 3 levels.
The override is a percentage of the volume generated by Supervisors in these first three levels, with the percentage being determined by a distributor’s own total monthly volume generation:
- 0 – 499 points – 0%
- 500 – 999 points – 1%
- 1000 – 1499 points – 2%
- 1500 – 1999 points – 3%
- 2000 – 2499 points – 4%
- 2500+ points – 5%
Note that Supervisors who qualify for overrides must also have made sales to ten individual retail customers for that month (no minimum volume). This is an ongoing monthly requirement for override qualification.
Global Expansion Team
The Global Expansion Team (GET) is the first of three Herbalife membership levels that extend past supervisors.
GET distributors earn a 2% Production Bonus on the volume of their downline if they generate 5000 volume points for that month. The volume counted uses the unilevel compensation structure outlined above and continues down until another GET or higher ranked members is found.
Additionally, GET members also “qualify for vacation and training events”.
Qualification for GET distributor status is the generation of 1000 Royalty Override Points for three consecutive months.
Millionaire Team distributors are able to expand the Production Bonus to 4% if they generate 3000 volume points and 4000 Royalty Override points in any given month. Failure to qualify results in a 2% Product Bonus being paid out.
To qualify for the Millionaire Team, distributors must generate 4000 Royalty Override points for three consecutive months.
President’s Team distributors are able to expand the Production Bonus to 7%, depending on their generation of Royalty Override Points:
- President’s Team (6% Production Bonus) – generate 10,000 Royalty Override points over three consecutive months
- 20k President (6.5% Production Bonus) – generate 20,000 Royalty Override points over three consecutive months
- 30k President (6.75% Production Bonus) – generate 30,000 Royalty Override points over three consecutive months
- 50k President (7% Production Bonus) – generate 50,000 Royalty Override points over three consecutive months
Note that at the Presidential Level the Production Bonus extends beyond the first GET or Millionaire Team Distributor found in a downline. A further 4% Production Bonus is paid out on the downline of a GET Distributor and 2% on a Millionaire’s Team Distributor’s downline.
Also, note that this is an ongoing monthly requirement and that should a distributor fail to reach their Royalty Override point target, they will be paid out at the level they did qualify for (all the way down to the 2% GET Production Bonus rate).
Luxury bonuses (in the form of jewelry and diamond-studded pins are also awarded to distributors, based on annual Royalty Override point generation (15,000 for cufflinks and earnings to 1,000,000 for a diamond watch.
How to join Herbalife
To become a distributor for Herbalife, you’ll need to purchase either of the following kits:
- International Business Pack – $94.10
- Super Starter International Business Pack – $124.10
These kits include the following:
- Discounts on Herbalife products
- Training and Support
- Ability to sponsor others
My Final Thoughts
Before you decide to join Herbalife. I would recommend that you try out the products first. See if it’s a fit for what you’re looking for.
If you don’t believe in the products that you are selling, chances are others wouldn’t. Makes sense, right?
If you’ve decided that you want to join Herbalife, you must have the following if you want to succeed:
- A support team and system that will help build your business.
- A mentor that will take you by the hand and help you reach your dreams and goals.
- A constant flow of new leads and prospects that want to join your business.
It is not easy to be successful in the Herbalife business and which is why more than 95% fail.
If you feel the person you are going to sign up with is not going to be able to give you the necessary tools to help you succeed…
You might want to check this out by clicking here! 😊
Herbalife is not a fit for you?
Now, if you feel that Herbalife isn’t for you. But determined to find a home-based business so that you can create a legacy for you and your family.
I would suggest that you check out my number #1 recommended program.
This program is the reason why so many people are having success with a ‘work from home business’.
Last but not least (drum roll please)…
I would love to hear from you if you are looking to join Herbalife or if you were an affiliate.
Please share your experiences by leaving your feedback below.
The feedback will help out those who are doing research on the company.