If you are researching Herbalife, you have probably noticed that no two reviews are the same. Many reviews about Herbalife offer conflicting information that can be hard for readers to sort through. Some reviews promote Herbalife as a viable MLM and Home-based Business opportunity, while others flag Herbalife as a pyramid scam. Let me help to clear things up.
A long time ago, Herbalife was one of many companies, including Amway, Nuskin, and Shaklee that went under hard and fast. Back then, these companies used compensation plans that were out of touch. These ancient giants of the MLM industry used business models and product lines couldn't adapt to the changing needs of both their sellers and their markets.
MLMs did manage to progress and over time, people really began to understand the value in this model for creating their own home-based business. Visionary entrepreneurs developed new compensation plans for their new companies, adapting their business models to use unilevels and binaries rather than breakaway plans.
These new compensation structures are more easily adaptable to the changing needs of both consumers and distributors, and that flexibility allows them to stand the test of time.
Herbalife has attempted to improve their compensation plans while still working in the older system. They have added various ways to achieve higher levels within the compensation structure, but in the end using the old-school system means that more money goes to the corporate and higher-level executives than is the case in the more modern compensation structures. Personally, I don't think this is the only reason that Herbalife went under.
In my opinion, Herbalife neglected to explore one of the most important aspects of a flexible, enduring company when they did not expand their funding for research and development. NuSkin, for example, made a bold and brilliant move when they created their sister company Pharmanex, and both have pushed to stay modern and cutting edge by improving product value, WikiTrader and expanding their product lines.
Instead of investing in research and development, and expanding their product line to appeal to a wider range of consumers and distributors, Herbalife invested in heavy advertising campaigns in countries where MLM activity was at a minimum. This was an attempt to minimize costs while maximizing profits, and it has had both a positive and negative effect.
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Because of their compensation structure, an attempt at maximizing profits while limiting the investment into research and development destroyed Herbalife's reputation in some of the marketplaces they initially developed. However, their aggressive ad campaigns brought the MLM model to markets that before then had never seen this type of industry before, and provided opportunities for new markets to develop. Personally, I think that Herbalife tried to take the easy way out by making as much money as possible as quickly as possible, instead of investing in and developing a long-term marketplace.