Herbalife Nutrition Business Plan: The Real Truth

Herbalife Nutrition is among one of the top 5 MLM companies in the world in terms of revenue and it is also among the most popular MLM Companies in India.

In our country from the last 1 decade, the number of MLM Companies started is remarkable, and cause of this very few International MLM Company survived in which Herbalife is a shining name.

 Herbalife Afresh, Formula 1, and Formula 2 Shake are the popular Herbalife Products which really looks premium in quality. But the issue arises with the pricing and adverse side effects faced by several consumers.

About Herbalife Nutrition Products, we will discuss later, Now we will start with Herbalife’s brief introduction and then review Herbalife Nutrition Business.

Herbalife Nutrition Marketing Business

Herbalife is an international Network Marketing company that sells health, skincare, haircare, and weight management products. Being an MLM Company, Herbalife provides an opportunity for everyone to join the company as a distributor and earn money.

Herbalife History

Mark Reynolds Hughes, the founder of Herbalife, lost his mother at the age of just 18 in the 1970s. Mark Reynolds’s mother was a model, and she needs to maintain her weight.

However, at that time there were not decent diet plans to keep the weight moderate. People used to take only Pills to control weight, who’s benefits were less and the side effects were more.

Jo-Ann used to consume these pills, but due to overdoses she died which caused a deep shock to Mark, and then Mark started exploring new remedies to manage weight.

Meantime, Mark went to China and began his search there. With the use of Chinese herbs, Mark was able to supply all the essential elements to the body and those herbs would also help to remove extra body fat. Mark called these herbs “Formula 1“.

1980: The Beginning

Herbalife company started with the first Chinese herb product “Formula 1“. The company’s first consumer was Mark’s grandmother herself, who reduced her 9KG weight with no side-effects within few months.

With this, Mark’s company Herbalife gained greater recognition and in the first month, Mark made $23,000 from the trade of Formula 1. At the age of 23, Mark achieved a turnover of 2 million US dollars from Herbalife.

Herbalife 1980-2018

Within the first few years of Herbalife, FDA (Food and Drug Administration) started accusing Herbalife for making false promises and claim about the products. Even today, Herbalife receives the same complaints.

In 1986, Herbalife went in public and got registered in NASDAQ Stock Market. In that meantime, Herbalife reached all the continents and multiplied their business.

But the founder Mark was not pleased with the way Herbalife treated in the stock market. So in the 90s, he tried to privatizing Herbalife back, but the company was getting a low valuation, which made Mark stressed and remain unsuccessful to do so.

He died in the year 2000 at the age of 44, because of excessive alcoholism and taking anti-depressant medicines.

Then in 2002, Herbalife again becomes private in partnership with an equity firm. In 2004, Herbalife comes back to the stock market, and this time NYSE (New York Stock Exchange) and still Herbalife is in NYSE.

But the biggest problem arises in 2014 when FTC (Federal Trade Commission) charged Herbalife (as Amway). FTC accused Herbalife of running pyramid schemes and deceptive business practices.

The case ends in 2016 and Herbalife paid a $200 million fine. Later, the fine was used by the FTC to refund money to associates.

Recently in 2019, 2 employees of Herbalife (not Associate) are caught in China for doing corruption and influencing people by using media.

Herbalife admitted their mistake, and the company has been fined $123 million that is Rs 900 crore.

In past 38 years, Herbalife has changed completely. Company have associates in 90+ countries.

Herbalife in India

In 1998, Herbalife International India Private Limited registered under MCA in India. Its India head office is in Bengaluru, currently, Ajay Khanna and Mark David Story are the Indian directors.

Herbalife has been sponsoring top players and athletes in India and the world, including Cristiano Ronaldo and Indian cricketer Virat Kohli.

Herbalife Business

Herbalife is spread to so many countries which would be impossible without direct selling and the role played by the distributors.

Here we will try to briefly explain Herbalife’s business plan.

So, anyone can join Herbalife and after joining the company person is called Herbalife Associate.

How to join Herbalife?

To join Herbalife, contact any existing Associate of Herbalife and ask them to enroll you in the company.

Before joining know about the person and his/her intentions, because he or she is going to be your upline and you have to be selective while choosing upline. Cause later your success highly depends on them.

To join you have to provide some of your documents, such as aadhaar card, pan card, and bank account information.

After this you have to buy some Herbalife products which is compulsory, on the basis of the purchased amount, you will be given a level and the Retail Profit percentage is decided.

Herbalife Income Plan

If you are familiar with MLM, you will be aware of how an MLM company like Herbalife works. But if you are not aware, no issue. We are here to explain this.

Herbalife promises to give 7 types on Income.

1. Retail Profit
2. Wholesale Bonus
3. Royalties Reward
4. Production Bonus
5. Cash bonus
6. Vacations Bonus
7. Mark Hughes Bonus

Herbalife won’t give all these income in beginning. So you don’t need to know about all of this income in beginning.

Believe me, even various Herbalife Associates also properly not known about these types of income. Like most MLM companies, Herbalife’s compensation plan is also hard to understand.

Remember, When downline numbers and personal as well as downline product purchase increases, your chances to earn increases and another income get unlock.

Except first 2 (Retail Profit & Wholesale Bonus), for the other 5 income types, you have to complete certain personal and downline targets which are not everyone’s cup of tea. And even have to maintain monthly prerequisites.

On the basis of work Herbalife associates have to do, I am explaining here first 2 incomes.

1. Product Sales

After becoming an associate, the company will give you the product at a lower price which we can call Distributor Price (DP).

You can earn a certain amount by selling Herbalife products at MRP which is Herbalife’s first income Retail Profit.

Your Retail Profit can be counted on the basis of given formula.

Retail Profit = MRP - DP

If you are not selling these products ahead and consuming for self, then it is considered as personal savings. LOL 🙂

In Herbalife the distributor price varies for associates, you can view the retail profits percentages according to level in the below chart.

Level is decided on 2 parameters.

• Your Total VP and
• Total VP of your downline

VP is the sum of PPV (Personal Purchase Volume) and DLV (Downline Volume). On every product purchase from Herbalife, every associate gets fixed points, These points are used to calculate each income and level.

VP, PPV, and DLV are important and you can call them currency unit of Herbalife.

2. Recruitment

The second way, which is a way to earn more from Herbalife is recruitment. To earn passive income, you need to recruit more people like you and add them to your downline in Herbalife.

With this, you will also get some percentage of profit on their product purchase. Wholesale Bonus is the first income in Herbalife, that you get from the downline.

Remember, according to the Direct Selling Guidelines, no MLM company pays money for recruiting people. Earnings are always on the product purchase which can be your personal or in the downline.

In Wholesale Bonus the level of you and your downline play an important role.

For example, You are a Senior Consultant (35%) and your downline is on the Distributor (25%) level. So your Wholesale Bonus is 10% of the downline’s purchase.

You can consider this formula to get Wholesale Bonus.

Wholesale Bonus = (Your Level - Downline's Level) % of Downline's Purchase

You can understand about Herbalife compensation plan in more detail from given video.

Herbalife Products

Products are the most important in any MLM company. Herbalife Products List is significantly smaller and holds fewer products than its competitor FLP, Amway, Vestige does.

Herbalife is a product-based MLM company, whose intention to start MLM was to increase product sales.

I am neither against nor promoting Herbalife products. But of course, selling products of $4.88 billion in 1 year (2019) which is not a cakewalk.

But so far I have talked to many people personally regarding Herbalife Products and various people have complained against Herbalife product. I concluded, Stomach ache is the most common side effect while consuming Herbalife Products.

Research says that Herbalife product has a bad effect on the liver. It also threatens the life of weak people.

If we talk about its weight loss program, In this person has to replace diet with Herbalife Products. But the shake and other products are very processed, which are obviously not suitable for everyone.

Once we can ignore the side effects of the Herbalife product, as some supplements can cause some adverse effects on some people.

But the product price that the end consumer has to pay is extremely high, these products are not in the budget of most Indians.

Several stories come where people bought Herbalife Products once and lost some weight. But when they stopped consuming Herbalife Products, people gain their weight back. It is back-breaking for them to continue Herbalife products for years.

If instead of Herbalife, if we buy supplements from traditional companies or always eat healthy food as per the requirement, then the consumer may find it cheaper and better.

Yes, as an Herbalife Associate, we can say Herbalife Products best, because it is our job to promote it. But for the end consumer, these products are just expensive supplements, which they buy under pressure from their friend or relative (Associates). Even after paying a high amount, they may face side effects.

Conclusion

In the end, I will tell you some pros and cons of joining Herbalife as an Associate, so that it can help you in making your decision and I will keep my views by being fair with some real facts.

Benefits of joining Herballife

• Herbalife is a product-based and old company on which you can trust.
• Herbalife is registered in the MCA and is also on the Legal Direct Selling Company List, which follows the Direct Selling Guidelines.
• Its products are effective and give more retail commissions to Associates.
• There is a 1-year pack product refund policy for associates and 1 month for consumers.

Disadvantages of joining Herbalife

• Have a complicated business/compensation plan.
• Products have various side effects on some consumers.
• Expensive products, even if we compare to other Indian MLM Companies.
• 0.4% success rate, cause Herbalife is also an MLM company.

Herbalife issued a statement stating that 50% of Herbalife associates earn nothing and The rest 50% Herbalife associate earn an average of $140 to $315 every month.

This data is only for the United States, where people can earn minimum $14,000 annually by doing any work. While Herbalife gives an average $2700 annually. This figure ratio can be lower in India due to the extremely expensive products.

We hope you liked this article and got to know something new about Herbalife Nutrition Business. If you have any questions or suggestions, then do let us know in the comment.