Several times a year, Herbalife runs promotions with high qualification thresholds, usually lasting for 3 or 4 months to win a cruise or vacation. Upline distributors use these promotions as opportunities to pressure downline distributors to buy large quantities of product. Promotions like these reward those at the top of the pyramid by encouraging those beneath them to make product purchases even when no end customer demand exists. It is complicated, structurally designed so that the only way to make any real money from the company is to sell others on becoming Herbalife distributors.
They, in turn, can really only make money by recruiting their own downline and getting them to do the same. The confusing scheme obfuscates the probability of success and makes it easier for the company to recruit. Because the compensation plan is complicated — and rarely thoroughly explained — millions of people every year sign up for an opportunity that will rob them of time and money and leave them far short of becoming the millionaires they thought they might be.
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All rights reserved. The Herbalife levels are used in defining the role played by sales representatives within the mulit-level marketing system. The big question that surrounds the Herbalife model is the business structure and the potential to define it as a pyramid scheme.
A major aspect of the Herbalife program is recruiting other distributors to work beneath you in the distributor model. A pyramid scheme is loosely defined as a business structure where the individuals have more incentive to recruit other sellers than actually selling the primary products.
While Herbalife rewards recruitment, they also pay out for product sales. If you focus on a combination of both product and recruitment, it is not considered a pyramid scheme. Pyramid schemes are illegal. In this sense, it depends largely on the individual and how they conduct business as an independent rep. If recruitment is the primary goal, the model does not benefit through the sales of actual inventory. Individual reps stand to benefit by selling and recruiting reps into their network.
Herbalife has several levels of distributors and each comes with a different set of requirements. The bottom level is called the Member and it requires an application and a purchase of product. As a member, you receive product discounts and a commission on sales.
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