Herbalife is a major health brand that’s gained a lot of attention due to its celebrity endorsers. And maybe you’ve heard their success stories and think selling it is the way to go!
But is it really worth becoming an Herbalife distributor?
Whether or not you choose to become an Herbalife distributor is ultimately your call. Some people earn good money and others really enjoy their products. Although some claim their products are dangerous, and the company has run into multiple legal issues in recent years.
Let’s take a closer look at this company that’s gained a lot of attention (both good and bad) recently.
Herbalife Nutrition Overview
Herbalife Nutrition is a global multilevel marketing company that started in 1980.
Since then, it’s been their mission to provide science-backed nutritional products (that taste great) to residents all over the world. They strive to improve the nutritional habits of people across the globe – just like other direct-selling companies like TruVision.
Currently, they’re operating in over 90 countries with over 8,000 distributors worldwide. They’re definitely one of the big players in the MLM space, bringing in over a billion dollars in revenue.
They offer a variety of products, some of the more popular being their meal-replacement shakes.
And speaking of their products, they have some awe-inspiring statistics that they can tell you.
For starters, in 2018, they sold over 77 million canisters of protein shakes. And, according to their website, they’re the number one brand in the world for meal replacement shakes.
Which shouldn’t be surprising, seeing as they claim that 4.8 million protein shakes are consumed daily. The company as a whole has brought in over $4.9 billion in net sales, too!
With all those stats, it’s probably seeming like a great company to sign up for. But is it all good?
There are some skeletons hiding in their closet.
For one thing, one distributor drops out of Herbalife every 16.7 seconds according to factsaboutherbalife.com. That high of a turnaround rate should raise some concerns – obviously there’s something going on that people don’t like.
Further backing those concerns is the fact that 90% of new Herbalife distributors drop out in the first year alone.
Let’s delve a little deeper and see why there’s a disconnect between their revenue and their reputation.
What Do They Sell?
Herbalife is a company dedicated to selling high-quality health and wellness products. Some of those things include:
- Weight management products
- Dietary supplements
- Personal care products
- Sports nutrition
- “Industry-leading” meal replacement shakes
Like we’ve already stated, one of their main products is their protein shakes. They come in a variety of flavors and even offer some that are gluten and dairy free which is cool.
Unfortunately, though, if you wanted to get your hands on these products, they’re only sold through distributors. And that’s the story with many MLM companies we’ve reviewed.
Are the products worth it?
Some say yes, some say no. To get the positive side, all you need to do is visit the Herbalife website or speak with a distributor. But if you want to see what others are saying outside the Herbalife circle, you’ll need to dig a little deeper.
So that’s exactly what we did. And what we found is that, while it’s not all bad, there’s definitely some controversy.
For example, in 2004, Israel’s Health Minister investigated the products after four people who were using them had liver failure. The investigation concluded that there was a “causative relationship” between the two.
In 2007, also in Israel, a hospital investigated an association between Herbalife’s products and hepatitis.
And in 2019, a woman found herself in the hospital with liver issues two months after starting with Herbalife’s products. Unfortunately, she passed away soon after. The doctors considered whether or not Herbalife had any part in this, and those findings are discussed in this article on docwire.com.
So, while the data isn’t conclusive on Herbalife’s products – and certainly many people do enjoy their products with no ill effects – it does pay to be cautious.
How Much Can You Make?
Getting down to business, making money with Herbalife is confusing to say the least. Basically, there are 7 different income streams:
- Retail Commissions
- Wholesale Commissions
- Production Bonus
- Cash Rewards
- Paid Vacations
- Mark Hughes Bonus
And before we delve deeper into both of these, you might be wondering how much money you will likely earn.
Unfortunately, 89% of distributors for Herbalife don’t ever make any money. Which is a similar story among MLM companies including companies we’ve reviewed like Xyngular and Team National.
Of course, that doesn’t mean that will be the case for you, but it’s worth considering before you join and invest your own money into this company.
This is the place where most people start off: level one.
The way you make money here is by purchasing Herbalife products at a discount, selling them at the suggested retail price, and pocketing the difference.
This method is extremely similar to companies like Mary Kay, but the overall goal isn’t to stay here. The company puts an emphasis on recruiting, and the more you recruit, the more ranks you move up, and the more you can make on the people under you.
To get to the next step in the income chain, you’ll need to have recruited some people and moved up at least one level in the system.
Then, you’ll be able to start earning wholesale commissions. Basically, if you purchase products (say, at a 40% discount) and someone in your downline purchases it for a 25% discount, the 15% difference would be tracked and paid to you by direct deposit or check.
This is the section of the income river where you need to have a strong downline under you and have really moved up the ranks.
You’ll need to have reached the position of supervisor, which entails having purchased approximately 4,000 volume points worth of product.
And if you’re curious, a volume point is basically Herbalife’s “currency.” It’s essentially equivalent to $1.
And once you’ve reached the position of supervisor, you still aren’t technically eligible yet. You need to have other supervisors in your downline as well.
Once you’ve reached that position, you can earn 1-5% commission on your first three tiers of downline.
This stream is only available to you once you reach the Global Expanse Team – or “G.E.T.” for short.
This is similar to the Royalties plan, except you can earn 2-7% commission on all the tiers of recruits you have.
This one is pretty straightforward: Herbalife offers cash incentives for achieving different things.
For example, Herbalife pays $500 to their distributors once they’ve reached the Active World Team rank.
This one is a standard among multi-level marketing companies: the paid vacation.
Unfortunately, like most, this comes with lofty qualifications you must meet (and generally you must meet them for a few months at least) in order to win vacations or cruises.
Due to their selling method (distributors purchase the products themselves and then have to sell), this can lead to some distributors putting a lot of pressure on either themselves or members under them to purchase lots of product in order to qualify.
Mark Hughes Bonus
This particular bonus, named after the founder, is where people are making all the money. Unfortunately, it’s only for the top of the top distributors.
This bonus includes 1% of the entire company’s revenue that year being spread across the top-performing members.
It also includes a check that is (usually) over $2,000,000 awarded to the top distributor.
But, with only a few exceptions, the top winners have all been the same group of people for the past 15 or so years.
Is Herbalife A Scam?
No, Herbalife isn’t a scam, although in 2014 they paid out over $15 million settling a class-action lawsuit that claimed they were a pyramid scheme.
And that’s not the only time they’ve run into legal issues.
A more recent incident was in 2016, when the Federal Trade Commission required Herbalife to pay out a $200 million settlement to over 300,000 people, which was apparently due to “deceptive earnings claims.”
And in 2018, another class-action lawsuit was filed against them for misrepresenting how much potential distributors could actually earn.
And if you’re wondering how Herbalife handled these lawsuits, they took them in stride.
In fact, CEO Michael Johnson took it as an “acknowledgement that [Herbalife’s] business model is sound” and that the settlements show their “confidence in their ability to move forward successfully.”
Even through all the legal issues, the FTC never actually called Herbalife a scam, so that’s worth noting as well.
Whether or not you decide to be an Herbalife distributor is a personal decision, and there are some weighty matters to consider.
Overall, though, if you have your heart set on joining an MLM company, there are other options to consider that are less controversial.
Either way, I hope this article has given you some useful information!