Are you thinking of entering a pyramid business? Watch out! Read this before making your decision.
I'm sure that at some point in your life a friend, family member or acquaintance invited you to join the Herbalife club. Under the promise of leading a healthy life with those shakes.
They probably also told you, and even convinced you, of the wonders of starting your own business with the sale of these products. Which would be a "little gold" for your economy.
However, they didn't tell you about the dark side of Herbalife.
What is a pyramid business?
Herbalife is looking for those who want to earn quick money. As are thousands and thousands of people. The temptation is great. So they find easy prey, who want to pay a fee to this company to get permission to sell their miracle products. With the promise that one day they will be rich from these sales.
This is called a pyramid business. Basically, the main profits of a company come from the fees of recruiting distributors. Not from their products.
Thus, as in any pyramid business, it is important that the flow of people entering the ring never slows down. The dark side of Herbalife is getting new members. It does NOT lie in the sale of smoothies and juices, as many of us believed.
How does Herbalife operate?
In the USA the initial fee to be a seller is 59-95 dollars. Considering that Herbalife has more than 2 million sellers or distributors in 90 countries. A simple multiplication of these figures would suffice to give us an idea of the large amount that the company takes. Just for recruiting people!
And of course, the profits Herbalife makes are not compared to those obtained by distributors from the sale of shakes and powders to lose weight.
According to CNN, in 2011 the 25% of sellers earned an average annual income of $ 637. While the 0.6% (of the top positions of the company) received an average annual income of 336,900 dollars.
In a way, the pyramid business does work, but only for that 0.6% at the top of the pyramid. And let's face it, it won't be us, no matter how much we want to.
Reports to Herbalife
For obvious reasons, the company founded in 1980 in the United States by Mark Hughes has had several accusations.
Many people have complained about having invested in the business and not making a profit from it.
In July of last year, the US Federal Trade Commission (FTC) forced Herbalife to pay $ 200 million as refunds to its distributors (partners).
In addition, the FTC ruled that the company famous for its shakes needed to be restructured so that distributors could make a profit from what they sell and not from the number of people they recruit.
The FTC's final verdict took two years after investor Bill Ackman accused Herbalife of being an illegal pyramid business.
But ... the business is still alive. And the promises of becoming a millionaire and making quick money from this pyramid business will continue, as long as the company has the funds to evade the lawsuits.
Betting on Zero
This controversial case was once again placed in the eye of the hurricane. Well, Netflix presented the documentary Betting on Zero, which reflects the testimonies of several people, particularly Latinos, dissatisfied with this company and deceived by the false promises of Herbalife.
The documentary tells the stories of many Latinos who live in the United States and who lost from $ 8,000 to $ 22,000. All for betting on Herbalife products.
The saddest thing about these cases is that immigrants are the easiest prey in this business. So don't be fooled!
Remember that there is no "elevator to success", do not be fooled by the pyramid business. In the end, only the company will be the big winner of your work.
Every Mexican is very nationalistic until he buys his coffee at Starbucks: Click here to read: 5 American Brands That Mexicans Can't Stop Using