Herbalife Is Under Attack
By Bill Fletcher
Herbalife is under attack again. This recent attack is not new to Herbalife. The Herbalife Company came under attack years ago as a pyramid scheme. This is no different than Amway, Shaklee, LIghtwave, Nu Skin, Juice Plus, Tupperware, May Kay and a host of other MLM Companies.
Pyramids are illegal
Repeat Pyramids are illegal. If these companies were illegal, they would be shut down.
A good friend got involved in a pyramid scheme years ago. It went like this: her sponsor purchased $500 worth of product. The sponsor sold my friend the products for $1,000 leaving the sponsor $500 in profit. My friend was told to sell the products to another distributor for $1,500 leaving her $500. Then do it all over again, each time making $500. This is a pyramid and is illegal (the company is out of business).
Pyramid Scheme
Unfortunately, this model has been associated with Multi-level Marketing.
MLM business model
Multi-level Marketing (MLM) is a legal business model that allows anyone the opportunity to build a successful home business. This form of marketing is taught in many colleges. Another name is Network Marketing. Networking with friends, family and people who want to earn some extra money for personal reasons is the hallmark of Network Marketing.
Franchise business model
Let’s look at a franchise. McDonalds, Subway, Wendy’s, Burger King, and a host of others are franchise. A franchise is a business model developed by the franchiser. You simply follow their business model and marketing plan. Let’s take Wendy’s. Wendy’s is a franchise offering food products. Wendy’s is not in the business of selling hamburgers. They are in the business of selling fanciness, hamburger is the product. The problem with a franchise is the dollars to start. Most people don’t have $200,000–$300,000–$500,000 or $1 million dollars to buy a franchise. Another problem with a franchise is….you just bought a JOB. That’s right, you just purchased a JOB.
Herbalife as a MLM Company
Now let’s go back to Network Marketing or MLM such as Herbalife. Herbalife is what’s known as a multi-level marketing company (MLM). Instead of dealing directly with franchises, an MLM distributes products through a network of independent distributors and sales to customers.
To understand how MLMs differ from conventional franchising, let’s go back to Wendy’s for a moment. If you wanted to take advantage of the business opportunity afforded by the home of the Frosty you’d become a franchisee — you’d pay Wendy’s to use its name and products for your own restaurant. The path would begin in a pretty straightforward way; pay for the franchise, chose a location and open, pay for the product, hire kids, pay rent..utilities, pay a franchise fee or a fee to have the right to operate a Wendy’s franchise and hope that is successes.
If you wanted to work with Herbalife, however, the company would put you in touch with an independent distributor — someone outside the company. The term itself is, “distributor. The real nature of success, is embodied by two key MLM terms: upline and downline. Simply put, if you signed up for Herbalife today, you would interact with your sponsor and/or all the upline in that organization.
Independent Distributor
The Herbalife Company offers you the opportunity to make money on your terms not what a franchise wants you to do. You’d interact with the person who recruited you: your “upline.” (and if you started recruiting distributors yourself, they would be your “downline.”). Your upline has a responsibility to see you succeed since they will receive a commission on your sales, just as you will receive commission on your downline sales. If no one works no one makes money…very simple.
With both Network Marketing and a franchise such as Wendy’s there is no guarantee of success. Success comes with work, but the opportunity is there in both cases.
MLM Problem
The problem with Network Marketing or MLM, is not the business model (the business model works) or with the products (the products works), the problem is with the untrained sponsor, distributor upline and downline.
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Many people get the wrong idea about how to operate a business and that it takes a lot of work to get it going. Also with a low cost to get started in MLM, the incentive to success is low (not a large investment to loose). When not properly trained to operate the home business, the person becomes frustrated, angry and quits saying that MLM does not work. They blame the MLM company not themselves. The problem here is “it does work, there are many millionaires in MLM… the distributor didn’t work”.
Attack On Herbalife
So why the attack on Herbalife? It comes down to training. Without proper training and coaching Herbalife has come under attack by people who want the company to fail. In fact one individual has put a large sum of money in the stock market wanting Herbalife to fail so that he can recoup his money with a large return from the failure. He is not interested in anything except his own interest.
Another attack is again training. Distributors and customers of Herbalife are making “health claims”. Again, without training, these health claims cannot be confirmed by the FDA and therefore the attack.
Wrong Health Claimes
Herbalife products are very good, the company is sound, the marketing plan is sound business model but the lack of training is causing the issue. If you are a distributor of Herbalife, don’t make “health claims”. Instead, make statements, “ I lost weight using the products”, “I feel better using the products”, “I look better using the products” etc:
Summery
Herbalife is a great opportunity to make some extra money with a low start-up cost. This attack will go away but will have casualties. The products are good, the company is good and the business model does work.
But be realistic in your business opportunity. Do not expect overnight success. Plan on hearing NO! In fact plan on hearing NO often. Only 1 in 20 people you talk to will join you. Out of a hundred people in you organization, two, three maybe five will make a business out it. The others will stay on while many will quit.
Be Realistic In Your Business Opportunity
Train your people properly. Help them get their first customer and their first distributor. Do not make health claims!!! Spend quality time with your distributor, but do not allow them to take all your time. Many will demand your time. Help them but remember you are in business for yourself, not theirs. Support, train, coach and be there for them but do not get trapped into building their business. Remember most of them will quit and you have just wasted your time.
Find a “diamond in the ruff” and they will grow with you and beside you.
This is one of many attacks on MLM or Network Marketing. The business model is a great opportunity for anyone interested in having a home based business and who are willing to work to make money.
Thanks,
PS: If you are in Herbalife, Amway, Shaklee, Nu Skin, Xango, Melaleuca, or any other MLM business or Network Marketing business get the coaching and training you need to build your home based business. You can have a successful business if you are coached by people who have been there and are making a success.
