Let me say from the start I have nothing against Herbalife and nothing is hidden, but as per usual many people do not RTFM (That's shorthand for Read The ******* Manual) and all I endeavour to point out here is some things that can happen and people feel bad as they feel tricked or scammed, even though this is clearly not the case, unless the person that sponsored them told untruths.
Also the products do work for most people and are a good product but seem reasonably expensive nowadays when compared with other products such as shown below.
Finally a lot of people never see this information before they join and experience it for themselves or they join through a "System" created by a group of distributors, not the corporate company and buy "Decision Packs", "Success Builder orders", "Supervisor Orders", "Training Systems" and more that they don't actually need to get started, so this is not to discourage people from trying the products or business, but just to be an information source to reduce any surprises when they don't RTFM.
Is this Legal or a Pyramid?
Yes it is Legal and it is not a pyramid. A pyramid is simply where you pay to join and there is usually no product of any benefit although some elaborate schemes may seem to have an information product such as an e-book or the like. There is certainly no product that you could retail or sell to anyone and the only way they make money is people's member fees and sometimes ongoing monthly fees. They collapse when the originators take the money and run or they don't have enough new members to pay the existing members.
What do I need to get started?
A distributor kit which is approx US$49 or close to that in your own country. You are not required to subscribe to any systems (see below what are systems), nor are you required to buy any stock to sell or fill up your spare cupboard or space in your garage.
How Do Refunds Work?
If you are in business long enough you will eventually get a refund from someone who wants their money back for any reason and some people just won't use it properly, for others it won't work, for some it works but they figure they can lose weight and scam you by asking for their money back.
Regardless of their reason within 30 days they can fill out a form and return either partially used or completely empty containers and you must give them back exactly what they paid you for it.
You then either empty the contents into your own containers and use what they did not as the products is still good but when you return it to Herbalife they cannot use it so they will throw it out, so you may as well get some benefit right? If they give you back empty containers you can't use any leftover product, but no problem as Herbalife doesn't care if the containers are empty or not.
When you return the containers and the refund form the customer completed to Herbalife they will replace the containers you sent back. You will get brand new replacement products to either use or resell but you will not get back the money you used to purchase the products originally, so until you sell the products again you will be out of pocket unless you have another customer who wants the same products right away.
This is a good reason to establish a customer base and not buy a big heap of products.
What Is Front-Loading?
Is the practice of getting new distributors to buy a big load of products to get them to a new level in the marketing plan, increase their own Volume Sold, and earn a wholesale commission from you right away.
This is a bad practice because typically people go to a meeting, get all excited about how rich they will get because of all the great results they hear at the meeting and all the people that could use the products. While the results are true, not everyone you speak to will want the products as there are many choices in the marketplace and this style of product will not suit everyone.
So you go a get a "Supervisor Order" of 4000VP (approx. US$4000-US$5000) and you put it on your credit card because you get all excited because everyone you speak to will buy the products and you will have your money back with a great return on your investment and pay off your credit card.
Well for some people this works. No Problem. For most people they do this, speak to a few friends, get rejected because they don't have the sales skills required which can be learnt, feel disgruntled and panic about how they will sell this product in time to make the credit card payment, let alone make a profit.
How Do I Qualify as Supervisor?
Every product has a Volume Point (VP). The reason for this is too make sure that no matter what country you operate in you will all have to sell exactly the same amount of product to meet Supervisor or any other qualification.
To Qualify in a single Month = 4000VP
To Qualify in 2 consecutive months = 2500VP one month and 2500VP the very next month
This Volume can be made up of sales the retail customers, wholesale customers and distributors you and your team introduce into your business.
See above for front-loading. I have seen many people "BUY", not "ACHIEVE" Supervisor status and do not recommend buying enough products to qualify supervisor unless at least 3 conditions are met.
1. The money required to buy all this product is already in your bank account and you are treating this as a serious business. I do not recommend borrowing money (especially from family) or using a credit card where you are under pressure to pay the money back. I know some people have done this and been very successful, but the majority don't and then products end up to ebay and firesales in order to try to pay back the debt and the company and products end up with a bad reputation they don't deserve.
2. You will stick with the business no matter what for a minimum 2-3 years, go to the local or online trainings, RTFM, learn the skills to sell and recruit new customers and distributors and know that most people you speak to will say NO.
3. Are comfortable that should you decide you can't handle all the NO's and don't wish to stay in business that you will be perfectly happy using all the products yourself knowing that you got the 42% cheaper than you would have if you had to buy them from a distributor at retail cost.
If you can't do the above 3 things, then one of the best ways is to increase your customer and distributor bases until you actually need this much product every month. Then you have a very stable business with no debt and that is how most successful people started this business, not by "Buying into Supervisor"
One thing you should ask your sponsor or upline is how you can go Supervisor with other people in your team and share the volume. If your sponsor does not know, keep asking till you find out as the marketing plan allows it and whilst I won't go into it here as an example for you and 4 of your team to go supervisor would normally be 20,000VP (5 of you @4000VP in one month), BUT the marketing plan if used the right way can allow you all to go Supervisor with just 8000VP and even better this can be split between all of you so that you all only buy 1600VP of product, not 4000VP. You need your sponsors advice on how to do this and how to do the paperwork.
I have to requalify Supervisor every year?
Yes you do in order to retain your 50% buying rights and your downline Supervisors.
There are 3 ways to do this
1. 4000VP in 1 month
2. 2500VP in each of 2 consecutive months
3. 4000VP in 12 calendar months, but if you do it this way you will lose your downline supervisors and you will never get them back even if you become one of the top distributors in the company.
Can I Lose My Downline?
If you do not pay your annual registration fee or if you are a supervisor and either do not requalify or use the 4000VP in 12 months to requalify, you will lose anyone in your organisation that is a supervisor and anyone below that Supervisor.
They will all go to your next qualified upline Supervisor and they will never ever be in your downline again even if you do eventually qualify Supervisor by the 4000VP in one month or 2500VP in 2 consecutive months methods.
You will not lose anyone directly sponsored by you that has not reached a Supervisor level.
Whilst this is designed to stop people sponsoring other distributors then sitting back and doing nothing whilst reaping the benefits of hard-working people below them, it is nice to be aware of this so that you are not caught out by it.
How Do I get Royalties?
You need to be a Supervisor and you need to have people in your downline that are also Supervisors. The company says that because you are both now at a 50% discount and you can no longer make a wholesale profit from your Supervisors because of this that they will pay you up to a 5% Royalty on your Supervisors business turnover.
This is where people get all excited about residual and big incomes from other peoples work and sitting back on a beach never working again. This is not quite true because in order to collect the full 5% royalty you must still order 2500VP of product every month or you will get between 0% to 4% for less than the 2500VP. Again this stops lazy people benefitting from the work of others and it is quite clearly set out in your distributor manual. If you know and understand it it's not a problem.
One last thing is that the 2500VP of products must be going to retail customers and distributors that are not at a Supervisor level as anyone at a Supervisor level that buys products from the company does not count towards the 2500VP so you will be constantly getting and keeping new and existing customers and distributors.
How Do The Products compare?
They are good quality products and for the majority of people the do work when taken as instructed.
For a long time there was nothing comparable and even now there are still many rubbish products in the marketplace and poor quality control such as the PAN Pharmaceuticals problem in the early 2000's in Australia when they were a manufacturer for several health companies and got caught substituting ingredients for lesser quality and alternative ingredients to what was meant to be in them.
Whilst Herbalife quality has not suffered this problem to my knowledge you should have an idea of what you are going into competition with in the marketplace.
One example I found was this and whilst not exactly the same ingredient wise here are the results.
Omega 3 based Products
450mg Natural Fish Oil
Concentrated Omega 3 Triglycerides - fish 400mg
use 3 per day
approx $2.19 a day to use
Healthy Life Omega 3 Fish Oil 1000mg
1000mg Natural Fish Oil
use 3 per day
approx 37 cents a day to use
Now admittedly the healthy life does not have The addition of three essential oils thyme, peppermint and clove helps keep the fish oil fresh and pure and I do not know how much of a difference this makes but they both have best before dates, so I am thinking that they will both work well if used within this time.
I don't know what makes the Herbalife product so much more expensive, maybe it's quality, maybe its the distribution method. I am not arguing one against the other, but if I can make this comparison, then most likely so will your potential customers and you need to have a Unique Selling Proposition if they do if you want them to use your product.
What are systems?
They are not designed by Herbalife corporate as a company and not required to do the business.
The bad thing I believe is that these are sometime the first exposure people have to Herbalife and they believe that they must subscribe to these systems and that is how you must do Herbalife. They typically are designed to expose people to the Herbalife opportunity without disclosing the company name. In a way they work as many people have ideas about Herbalife and MLM that are simply not true and people have become involved and are quite happy with the products and business that would never have given it a go had they known the name up-front.
Possibly a good thing is that they give a structured way of learning and basically learning most of what you would have if you attended a training or RTFM. They also have the advantage of regular support and communication with others to keep your spirits ups and learn what is and isn't working for others. It also gives the brand new distributor a method of teaching one of their new recruits a step by step way of doing the business instead of leaving them to their own devices.
While they do work they are an added expense which is not required and typically involve additional fees for phone systems, websites, literature, decision packages, leads and advertising.
If you are going to use one find out what they offer and the ongoing expenses and if you can really afford to use the system for at least 12 months if you don't make a profit. It's not that you won't, but many people keep ploughing borrowed or credit card money into these in the hope they will make a profit and can't sustain it for the required time and end up with a huge debt.
Beware and be sensible and work out a budget. If you don't have the money it's back to the basics.
- Use The products
- Wear the button
- Talk to people
Herbalife probably provides some of the best product and personal development training in the business and the events and trainings are worth going to and should be an essential part of your business plan.
Let me ask you, if you are going to be a mechanic, can you go and buy tools and not do an apprenticeship or attend tradeschool and expect the best results and happy informed customers and repeat business from these people when you don't have the required skills and learning and make a long term business and income?
Why then do some people expect to sign a distributor application, buy some product and get rich without getting any training or developing skills?
Tab Team and Infinite Bonuses
Once you qualify as TAB Team you can get a bonus on your downline not just 3 levels deep like a supervisor but as far down as your organisation grows.
GET (Global Expansion Team) = 2% bonus
MILLIONAIRE Team = 4% bonus
PRESIDENTS Team = 6% bonus
Be aware that you must meet an annual requalification each year and also do the 2500VP a month to qualify for your full 5% royalties and the infinite bonus.
One other thing to keep in mind is that TAB team is a status level that once achieved is never lost so long as you make the annual supervisor qualification each year in one of the 3 above-mentioned ways.
What this does mean in the real world is that their are GET, Millionaire and even some Presidents team members that have retained their status level but are not actually earning their infinite bonuses, so whilst they did initially work hard and many still do, not all of them are making the incomes that are generally associated with thier status level.