Mark Hughes Founder of Herbalife
This Herbalife review is comprehensive, but not exhaustive. I recommend that you still do your own research if you intend on joining Herbalife. However, this is a great starting point for you. I’ve reviewed Herbalife’s compensation plan, Herbalife’s leadership and its strengths, weaknesses, opportunities and threats.
The 30 Year History of Herbalife
Founder Mark Hughes
Herbalife has been around since the 1980’s and is now one of the largest network marketing companies in the world. It is publicly held under the ticker symbol HLF. The founder Mark Hughes passed away in 2000 but he blazed a trail for network marketers around the world.
Mark Hughes stated, “I am convinced that the future will be brilliant beyond compare”.
This statement embodies the mindset of a network marketer to the fullest. It’s no surprise that Herbalife is still around today. The foundational principle of attitude can be found at the base of any successful network marketing business.
Just like any successful network marketer Mark Hughes struggled by starting this business by selling his products from the trunk of a car. The similarities between all successful people are that they have a vision and that vision motivates them enough to sell stuff out of their cars.
Herbalife’s Ascent
As Herbalife began its accent into network marketing fame, the 80’s could be characterized by two things, international expansion and the partnership of an industry legend. Herbalife began a successful partnership with the late network marketing legend Jim Rohn (1930-2009). Not only did they partner with arguably one of the most influential people of the industry, but Herbalife began rapid international expansion opening in Mexico, Canada, the U.K., Australia, and New Zealand.
To say that the 90’s were a phenomenal success would be an understatement as Herbalife expanded into 39 countries!! During this time Herbalife and Mark Hughes founded charitable organizations such as, Casa Herbalife and Herbalife Family Foundation. The next decade experienced tragic loss as Mark Hughes passed away in 2000. However, this did not stop the incredible growth of Herbalife. With the advent of technology and scientific breakthroughs, Herbalife was able to launch amazing amount of products and capitalize on several health trends. As Herbalife captured market share, the company sought to make their brand a household name. They did this by strategically sponsoring various sports teams and athletes.
My Take on Herbalife
As a person that is fairly new to network marketing, Herbalife’s success is very, very intriguing to me. Most of my life, I had always heard about the negative aspects of network marketing and never the positives. Let me tell you. When people say MLM’s are dead or network marketing companies are scams I can honestly say they are flat out wrong. Seriously, Herbalife is a scam?!? I’m pretty sure the only scam that is happening to people in MLM’s is that they are not being trained properly.
Before I truly evaluated this company, I heard some serious horror stories. But the cause of failure wasn’t because Herbalife was a scam; it was because entrepreneurs didn’t understand how to run a business. Let’s face it ladies and gentlemen; you have to make sure that you know what you’re getting into when you go into business for yourself no matter what business you get into.
Herbalife is the REAL DEAL. And here’s why.
Herbalife Compensation Plan Highlights
NOTE: In no way are earnings ever guaranteed in any business. You have to develop current skills, and develop new skills in order to succeed. With that being said, the sky is the limit if you put in the work.
Herbalife’s compensation plan is built around the stair-step break-away model. This model is very, very misunderstood. And when things are misunderstood people draw their own conclusions without knowing the facts. The stair-step breakaway model is designed for true business builders who are good at recruiting top performers. This is why the top earners make so much more money than everyone else.
In Herbalife, when you reach a certain volume you will break-away from your upline. Thus removing the volume from your upline and as you can imagine, this does suck for your upline. But they still earn a percentage from your group. The idea is that you continue your rockstar ways and recruit like hell and build, build, build. Your upline must know how to recruit more people like you and how to manage you. They’ll still earn a percentage of royalties off of your generation, but you have to continue to expand. This is where the real residual income is.
In the end, in order for your upline to be successful they too, must recruit like a bat outta hell and build their organizations because they’ll get to the point where they’re only working with those people who grow massive downlines.
However, do you see how this plan can be easily misunderstood? Do you think people will resent a company like this if they think that they’re being taken advantage of?
You are literally breaking away from another person’s organization. Their commissions will fall therefore they will either do one of two things. They might take a look at their current organization and say you are worth coaching and continue to do that. Or they might leave you be and let you falter. A good MLM leader will make sure you continue to succeed because they know your why.
There is an initial start up fee of $49.95 which then qualifies you for the first level of compensation and a 25% product discount.
This start up fee is typical of most MLM companies and the hard sell here is that if you wanted to start a traditional business, you’d have to spend a lot more than that. The American dream is to get something for nothing and $49.95 in exchange for an unlimited earning potential is what we’re all chasing.
So here’s the catch. There’s always a catch you should know that by now. Remember this though; the business world isn’t for the weak and mediocre. Anyways moving on…there are additional levels at which you can join. They are Senior Consultant, Success Builder and Supervisor. The catch is that if you want to earn money off of your organization it is required that you join at the Supervisor level.
The cost to join is as follows:
- Senior Consultant – $300 One Time Product Purchase
- Success Builder – $580 One Time Product Purchase
- Supervisor – $2,320 One Time Product Purchase (Can be spread over two months)
There are four ways to make money in Herbalife and they are:
- Retail Profit – Active Income
- Wholesale Profit – Active Income
- Royalties – Passive Income
- Bonuses – Passive Income
Discounts are as follows:
- Distributor 25%
- Success Builder 42%
- Supervisor 50%
Royalties work by allowing a Supervisor to make 5% sales royalties on the first 3 level supervisors. So if you recruit another person that becomes a Supervisor, you do not make royalties on that leg. So what’s the incentive to build more Supervisors? For the bonuses.
The bonuses work by 2% for the GET level, 4% the Mill level and 6% Pres level on everything in your downline.
There are enhancements to the plan that I don’t want to get into, but you can learn more here. Basically, you need to know that they added a couple more levels.
Here’s another take on Herbalife’s compensation plan.
Herbalife Leadership of Champions
Michael O. Johnson – Title: Chairman and Chief Executive Officer – Before Herbalife, he was a part of Walt Disney Company for 17 years. During his tenure at Herbalife, he has had five years of growth to the tune of $1.1 billion in net sales in 2005 to $2.4 billion in net sales in 2008.
Richard P. Goudis – Title: Chief Operation Officer – This man is responsible for the growth of this company. He previously held the Chief Financial Officer role prior to this one and was responsible for the initial public offering on the New York Stock Exchange. You can also thank him for the debt restructuring of the company which resulted in ratings upgrades in a time where many public companies were doing the opposite.
Y. Steve Henig – Title: Chief Scientific Officer – Henig holds a Ph.D. in food science from Rutgers University and a M.S. in food and biotechnology and a B.S. in chemical engineering from Technion-Israel Institute of Technology. He also sits on Herbalife’s Scientific Advisory Board. Henig previously worked with well know companies such as, ConAgra, Oceanspray Cranberries, Inc., Hunt’s and Healthy Choice. Apparently this guy’s the bees knees.
Basically, their leadership consists of individuals who have a lot of corporate experience and this is expected since they are a publicly traded company. There is a certain level of comprehension that you must have at that level. You don’t necessarily need to know the network marketing industry per se, but you do need to understand how to run a massive company and keep investors happy. You will find that companies that are publicly traded tend to hire leadership whom their majority owners feel comfortable with. Sometimes they choose wisely and sometimes they don’t, I guess we’ll find out soon enough.
Herbalife Products
There are too many Herbalife products to review here, so this will be a brief overview. If you’d like to see what they’re offering, go to their corporate website as this website will have the most up to date listing. There is a great website called Herbalife Reviews , they have a ton of great information there about products and they seem to still be in the game of reviewing Herbalife. The main thing here is that this company has been around for 30 years. They have great products period.
Herbalife products are separated out into 4 main categories and they are weight management, energy & fitness, targeted nutrition and personal care.
This is a great way for Herbalife to focus in on several niches within the health and wellness industry. In my opinion, this could be your one stop shop for all your preventative health care supplements. But do they work?
Herbalife product reviews state that yes they do work. But here’s the catch, they only work if you have a healthy lifestyle. Ladies and gentlemen, any health related product only works if you decide to change your lifestyle.
Your lifestyle can dramatically impact how well a supplement works for you. Eating fast food and then drinking a shake isn’t going help you lose weight as much as working out and drinking shakes will.
What Kind of Support Does Herbalife Give You as A Distributor?
Well I want to be as objective as possible with this review and I am finding that as I browse the internet looking for answers to what the company offers you in terms of support and to position their distributors for the best success, I’m seeing a lot of personal distributor websites. These are not company replicated websites. My initial thought with this is that distributors are really running their own businesses in every sense of the word. This is great to see because is show that people run with the desire to succeed.
At first glance a lot of these websites are OLD. They don’t look like they’ve been updated in a long time. Many of them are structured like typical e-commerce store fronts and some are just places on the internet to pitch the opportunity. I’m pretty sure the owners of these websites don’t drive much traffic to them otherwise, they would have updated the products at some point.
However, the good and great websites are definitely top earners or at least making some kind of money. They’ve identified niche markets within the opportunity and they’re running full steam ahead. These people know where the resources are and how to use them.
After somewhat laborious research I found that there is online support offered by Herbalife called HerbalifeCentral and myHerbalife. The training offered by Herbalife is still old school offline network marketing training. I mean they’ve been affiliated with Jim Rohn, so you’ve got to expect that right?
Herbalife does offer training calls and you can find these call schedules online. I would recommend speaking with someone high in the organization to find out which training calls will be the most beneficial for you. However, you always learn more by doing so you better go out and take action. Be wise and don’t spend your life savings, but run a business. Make a plan first, then execute it.
As I mentioned above Herbalife distributors have created a niche within a niche and provide replicated websites for those wanting to go online. They’ve been coined online shopping centers which is really an e-commerce site. Nothing spectacular here folks, everyone’s got one these days. But this kind of support isn’t easy nor is it ever free.
Finally, there’s always your upline to support you. If you join an MLM, your upline will be the life of your business in the beginning. You need to make sure you choose wisely here. Most MLM companies will have local meetings and given the size of Herbalife I don’t expect this company to be any different.
If you’re looking for help with your Herbalife business whether it be generating traffic, leads or sponsoring, please fill out the form below.
Strengths Weaknesses Threats Opportunities
I just want to say before I go on writing this section that this is an opinion section and is written from the knowledge that I’ve gained over the last several years of my education and the study of the MLM industry and business trends in general.
Strengths – The strength of Herbalife is definitely its easily recognizable brand. The brand can be found in many different countries worldwide. The co-branding with different sports stars and teams, is also has a huge impact on brand recognition as this puts the company in front of many people that normally wouldn’t be exposed to them or their products. This makes Herbalife as recognizable as Amway.
Weaknesses – Market saturation can be a weakness depending on YOUR perspective. The saturation that I am referring to is that many people have heard something about Herbalife, whether it be positive or negative. I know that’s not the true definition of saturation, but from a recruiting and sponsoring perspective this is an issue because there is a lot of negativity from unsuccessful distributors. This is clearly a result of the misconception that this company is easy money. I feel that this company is one in which people don’t realize how hard it is to make money in and how much you need to know about distribution and product management. The true weakness is proper training, now I know what you’re going to say here. There is training yada yada. It’s getting an organization this large to train duplication on such a large scale that’s the problem.
Opportunities – Well let me tell you something. If you want a company that’s positioned to take full advantage of the booming health and wellness industry, you’ve found it. This is an opportunity of a lifetime for the company. Distributor success will hinge on the leveraging talent and knowledge, but it can be done. As with most opportunities in life, you have to make the decision to be successful. If you choose that, then be prepared for a life of abundance and wealth. Secret tip of the day: this is a publicly held company, if you don’t want to be a distributor and still want to ride the coattails of success, buy some stock in health and wellness companies like this one.
Threats – Competition in the health and wellness industry will increase exponentially. As the baby boomer generation begins to age they are going to increase demand. With an increase in demand comes an increase in competition. Everybody wants a piece of the pie. What’s the short-term threat? The threats are new regulations that limit MLM companies from operating efficiently and any changes to distributor commission or royalty disbursements.
Would I Join Herbalife?
Herbalife is a great opportunity, but I would not join Herbalife. The main reason why I would not join Herbalife is because I do not want to hold inventory or worry about distribution.
This business model is great for people that fully understand inventory systems, management, marketing and recruiting. I don’t have a background in distribution or inventory systems, so I would be hesitant to join. It is worth noting here that this is an opinion from someone on the outside and I don’t fully understand how the distribution system with Herbalife works.
However, if you are motivated and are willing to learn new skills, this can be a very solid opportunity for you.
The skills that I would focus on are understanding distribution and marketing because you will have to know what kind of product to have on hand and who will be purchasing it. My advice is to set up a drop-ship system, so that you don’t have to hold inventory. But I’m not sure if Herbalife can facilitate that or if you’re on your own as an independent distributor.
Understanding your target market and who to market different Herbalife products will be critical to your success as they have so many different products. Focusing on one niche would be great and then branching out as you get the hang of things would be ideal. This is something that is great for other people not so much for me.
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