Did Peterson kill himself over Herbalife changes?
Dear Team Herbalife,
Today is a very sad day for us all. Founder’s Circle member, John Peterson passed away suddenly today, following a tragic accident at his home in Steamboat Springs, Colorado.
The Herbalife family has lost a dear friend, an inspirational leader, and a loving husband and father of John Jr., Jennifer and Bryan.
John occupies a special place in Herbalife as one of our original Founder’s Circle members, and we spare a special thought for his business partner of many years, Susan.
There can be very few Distributors around the world who have not been inspired by his story or benefitted from his experience and knowledge; something he was always so generous with and willing to share.
John was one of Herbalife’s true personalities and he will be missed.
-Herbalife CEO, Michael Johnson
Despite it being referred to as a “tragic accident” by Herbalife in the above email sent out last Monday, news broke today that Herbalife top earner John Peterson’s death was infact suicide.
Peterson was found inside a 2008 Ford pickup parked at his residence in Steamboat Springs, Colo., where he “succumbed to a single gunshot wound,” said Ray Birch, undersheriff for Routt County. Birch said the initial investigation indicated the gunshot was self-inflicted.
What caught my interest was not the suicide itself, which by all accounts was unremarkable, but rather the environment surrounding it. When I read that Peterson’s death was suicide, immediately the question of whether or not it had something to do with Herbalife came up.
To start with, let me say that trying to link any of this with Wall Street theatrics is a futile effort and I’m glad to say that to date, Peterson’s death hasn’t been used by either side of the stock market battle. Let’s hope it stays that way.
On the MLM side of things however, after reading it was a suicide I began to research some immediate thoughts I had and now, a few hours later, despite some pretty large pieces of information missing, think there might be a bit more to this story than we’re being told.
In response to Ackman’s claims the company is a pyramid scheme, Herbalife made an abrupt announcement earlier this year that it would no long tolerate its affiliates selling leads to other affiliates.
The problem?
Many of the company’s top affiliates had been making a killing selling such leads for the better part of a decade.
Before we get into his Peterson’s involvement in the now banned practice though, let’s take a step back and look at how two of Peterson’s fellow affiliates responded to Herbalife’s decision.
Prior to Herbalife’s ultimatum that its top affiliates stop selling leads to their downlines by June 30th, one of Herbalife’s top distributors, Anthony Powell, severed ties with the company and urged his downline to join him in Vemma.
Why?
Barb Henderson, spokeswoman for Herbalife, explained
Anthony Powell’s stated focus is on creating ‘explosive growth’ fueled by lead purchases.
As he has also stated, this is ‘a difference in philosophy,’ not consistent with Herbalife’s focus on building business through the daily consumption of our nutrition products.
Put simply, Powell was far more interested in recruitment affiliates than selling products to retail customers. In the midst of very public allegations that Herbalife was a pyramid scheme, someone obviously decided Powell’s business practices couldn’t continue unchecked.
When he left, Powell strongly encouraged his massive downline to follow him, offering them “free entry” into Vemma if they did so.
The damage to Herbalife?
Herbalife’s US sales growth was cut nearly in half due to (Powell’s) departure and related business changes.
Related business changes of course being the polite expression for what happens when a top affiliate takes the bulk of their downline with them into another company.
With just under half of their business volume vanishing overnight, Herbalife’s official response seemed awfully cool:
The loss of business from Powell’s departure won’t have a material impact on Herbalife’s 2013 guidance.
More on that later.
With Powell long gone, Herbalife made the official “no more selling leads” announcement in April, prompting yet another top-earning affiliate to jump ship.
Shawn Dahl — one of the elite Herbalife distributors in the so-called “Chairman’s Club” — and some of his sales recruits are jumping to Nutrie, a competing diet protein shake peddler.
His status at Herbalife has been in doubt since the company banned its distributors from buying sales leads and other marketing materials from Online Business Systems, run by Dahl.
And whereas Powell’s resignation was somewhat of a publicly amicable affair, this time around there was an undercurrent of seething tension directed at Herbalife:
Earlier this month, calls and e-mails obtained by The Post involving Dahl and another top Herbalife distributor, Tanya McDowall, indicated they were recruiting Herbalife distributors for Nutrie.
“We’ve experienced some really turbulent times over the past six months,” McDowall told a group of Herbalife distributors on one call.
She said that the company had “handcuffed” them, but she promised they could continue their Herbalife business as they moved over to Nutrie.
By “Herbalife business” McDowall is of course referring to the practice of focusing on the recruitment of affiliates via the sale of leads to downlines, over actual product sales to retail customers.
Once again, Herbalife’s response to such a loss defied logic:
Herbalife said the loss of Dahl’s business “is not material.”
And that brings us to Peterson. Like Powell and Dahl, Peterson also built his Herbalife fortune on the foundation of recruitment over retail volume.
A failed Houston real estate agent in the early 1980s, Peterson joined the controversial multi-level marketing company in its early days.
He became one of only a handful of Herbalife’s 3.2 million distributors who made it to the very elite “Founder’s Circle” of top salespeople.
Peterson boasted of owning a Wyoming cattle ranch and homes in Brazil and in a private beach club in Mexico, in addition to his residence in Colorado.
Peterson and his former wife, Susan, rose with the help of an Internet-based lead-generation business now banned by Herbalife.
Called Work from Home Inc. and incorporated in 2002, it recruited individuals to Herbalife.
And now, a month and a half after Herbalife effectively guts its top earner’s business model, news of Peterson’s suicide brings with it a number of messy possibilities.
Off the bat we can discount the notion that Herbalife’s changes had no affect on Peterson’s income. Powell and Dahl’s actions speak for themselves.
One possible scenario that I entertained as I pondered the news today was that, in not taking immediate action as Dahl and Powell did, it’s possible that by the time Peterson came to grips with the magnitude of Herbalife’s policy change, that there simply wasn’t anything worth salvaging.
The question of whether or not there was any overlap between Powell, Dahl and Peterson’s downlines (or whether or not they were part of the same direct lineage of affiliate recruitment) remains open.
Another angle is possible FTC investigation into Peterson’s Work From Home Inc. company.
Along with Powell and Dahl’s lead selling side companies, Peterson’s Work From Inc
drew hundreds of consumer complaints to the Federal Trade Commission in recent years.
These complaints, along with the public accusations that Herbalife are a pyramid scheme are credited as the primary reasons behind the company’s policy change earlier this year.
Was there more going on behind the scenes between Powell, Dahl, Peterson and the rest of Herbalife’s top affiliates who engaged in lead-selling recruitment practices and the FTC?
Perhaps Peterson saw the writing on the wall and chose what he saw as the only way out.
A big piece of this puzzle that would indicate as such would be Peterson’s earnt commissions from Herbalife as an affiliate for the year thus far. Last year he made $3 million and if this year that was substantially less, it’d lend a great deal of weight to speculation that Herbalife’s policy change had a far greater impact on Peterson financially than even he anticipated.
Given the current climate engulfing the company, it’s virtually impossible not to at least consider the possibility.
Meanwhile Herbalife’s continual blasé responses to the effective gutting of their US market raises questions of its own.
To state that losing over a half of their US market is “not material” defies logic beyond belief. The only possible explanation I’ve been able to come up with is the gradual shift of focus from flailing US and Latino markets to China.
Just shy of a fortnight ago Herbalife announced an expansion of the license that permits them to operate in China:
Global nutrition company, Herbalife (HLF), announced today that China’s Ministry of Commerce has granted a license for Herbalife to conduct its direct-selling business in the province of Yunnan.
The licensed area in Yunnan province covers 12 cities, including the provincial capital Kunming, and 16 districts and counties. The license is effective immediately.
Yunnan province alone has 47.5 million people in it and, when combined with the 24 other Chinese provinces Herbalife have a license to operate in, it’s quite easy to see how market wise it wouldn’t take much for the company to cover any loss in US sales.
Back in July Herbalife confirmed that currently’60% of its U.S. distributors are Latino‘. With Hispanic consumer groups and politicians petitioning the FTC to investigate Herbalife though, who knows in what direction that figure will go.
The great thing about China? No pesky FTC and regulation of selling of leads to MLM affiliates. Hong Kong alone this year has proven to be a hotbed for a number of MLM hybrid Ponzi investment schemes, all operating directly under the nose of the local government.
As to the licensing of MLM companies in China, that’s a bit of a mystery to me. Apart from “pay us big sums of money”, I can’t make heads or tails out of what qualifies a company to operate there. In the case of Herbalife, in addition to paying licensing fees, having a great big manufacturing plant in China likely helps grease the wheels along.
After observing a boom in sales over the past decade, what’s stopping Herbalife deploying or encouraging their affiliates to deploy similar lead-selling marketing strategies in China?
Shawn Dahl’s Online Business Systems
is the successor to Global Online Systems, a company judged to be a criminal “scheme of pyramid selling” by a Canadian federal court in 2004.
Yet that didn’t stop Herbalife from turning a blind eye to Dahl using OBS to build a massive downline in the US for another nine years.
One can only wonder if, had public allegations of Herbalife being a pyramid scheme combined with possible action from the FTC not arisen, whether or not there’d have been any change at Herbalife at all.
The impact of the company’s recent policy changes is naturally yet to be felt dollar wise across the company, with any immediate projections and financials not really telling us anything until the business has had time to prove itself.
Then and only then can the true impact of abolishing the affiliate recruitment machine monster Herbalife fostered over the past decade be ascertained.
That naturally gives them some time to build up the business elsewhere, such as in countries like China where MLM regulation, specifically on the front of lead selling by affiliates, is not even an issue. If I had to guess I’d say this is why Herbalife don’t seem too concerned with the ongoing loss of top US affiliates.
As it stands now though, Herbalife have a bit of a ways to go before they can mitigate a decline in the US with Chinese renminbi. And they probably want to get cracking on that front soon if statistical traffic analysis of Herbalife.cn is anything to go by.
As for casualties like Peterson?
Officially it’s all crocodile tears from Herbalife but off the record and somewhat sadly, if indeed Peterson’s suicide did have something to do with the recent prohibition of affiliate lead selling, “immaterial” collateral damage is probably more accurate.
Mark Hughes, the founder, chairman and CEO of Herbalife International Ltd died aged 44 in 2000. The reasons behind his death are still unclear.
Work From Home Inc. pops up with ads targeting the Philippines, e.g. sales jobs and business development.
One example:
jobisjob.com.ph/work+home/jobs
Here’s the different types of job ads found in jobsdb.com for Workfromhome Inc.:
Search method: “workfromhome inc site:jobsdb.com”
The amount you make in “legit” mlm companies is pennies compared to what you make selling a “system” to your downline. Besides of course the money that comes from speaking at the rah-rah seminars, when you add pitching success guides, audio tapes, hot prospect leads and seminar recordings, these top guys a killing.
You have to think about how much you can squeeze your downline for when you encourage them to buy all of your merchandize, telling them that just one tip or trick could potentially explode their income.
These people go heavily into debt not just buying product from the company, but also from their upline’s marketing. The result is that your system money per month can easily be twice what the company pays you.
So, Herbalife putting a stop to this most likely exploded Peterson’s income, but not in a way that he’d like.
oz , your post though riveting, is a ‘hearsay’ kind of post .
A guy [peterson] , who has ALREADY made tons of money is hardly going to commit suicide because his income is [probably] going to decrease.
If he’s the kind of guy who got Brazil started for herbalife, then he’s definitely the kind of guy who can fly off to china on his private plane, and get the china line started under him!
If the guy has been so resourceful in his life time, and given the FTC’s ho humming stance on herbalife, i dont think a few questions or preliminary investigations from FTC can drive him to shoot himself.
If at all he would crumble, it could be only after he was decidedly losing a case against the FTC, and facing criminal charges. It’s too early in the day for a guy to commit suicide over the FTC.
And about paying for leads – overpopulated countries like india and china just don’t need that kind of service, especially when a company is just starting out. Such [ expensive] services will be required only in lowly populated countries where it is difficult to identify new customers or distributors.
Anyway, RIP peterson , you shouldn’t have wasted your life.
The answer to the question in the title of this thread: YES.
@anjali
Um…
John Peterson was an incredible human being who earned the love and respect of everyone in Herbalife. His death is a tragedy that left everyone who knew and loved him in shock.
Why is it that when something like this happens, everyone always starts with the negativity? The main reason is because negativity sells.
People don’t want to read about the good that people who have risen above the masses do in this world. They want to read about every fault and flaw, forgetting that they, too, are human.
The good that John Peterson has done in this world can never be measured. The lives he has changed all over the planet, and will continue to change through the work he has left behind, is immeasurable.
You can cast all of the negative aspersions you want to. It sells. You can make all of the negative comments you want to. People love that.
And speaking of love, you can take a good man, who did good deeds, who loved his family and loved people and villianize him. People will cheer you on.
Someone once said, “You don’t see things as they are, you see things as YOU are.” I guess the lesson in that statement is that if you buy into all of the negativity and love tearing others down, or cheer others on while they do it, what kind of person does that make you?
My grandfather taught me that we are all imperfect beings and that “imperfection cannot judge imperfection, period.”
That sound advice has served me well through the years and I offer it now as a code to live by and a track to run on. Not only with John, may God rest his soul, but with every person you come into contact with from this point forward.
Do the best you can. Treat everyone with respect and focus on the good in people. I can promise you that the rewards from that way of life is mind boggling.
RIP John Peterson. You are loved and you will be missed.
China will make their own “herbal life” and keep the money there. It’s what they do.
Well guys I don’t have the full details, but even the ultra rich have problems. Funny thing is I smell foul play.
@Ron
Nobody is disputing any of that. Fact is however that it’s entirely irrelevant to the topic of discussion. That being why did John Peterson sit in his truck one Sunday and blow his brains out.
You’ve got a hard on for the man, I get that. But please, keep the rose-tinted emotion out of the discussion.
And good luck with the whole “I’m gunna ignore anything that isn’t “good”” lifestyle.
Very well said Ron R
obviously he is human with weaknesses just like all of us. Poking fun and being insensitive is really not a laughing matter
Peterson’s weaknesses are neither here nor there. The question of why he killed himself is what is being discussed here.
Weakness isn’t a reason to kill yourself, it only makes the deed easier.
Do u have a concrete answer to the why?
If I did, you’d know about it. I know what you know.
That being that it had nothing to do with Peterson being an “incredible human being” etc. I’ve put up my take on the suicide based on what is publicly known.
Herbalife releasing Peterson’s earnings for 2013 would go a long way to clarify whether or not it was a result of their “no more lead selling” changes. But we know that’s not going to happen.
Powell and Dahl’s actions following the change in direction speak volumes about how those in the lead selling circle of their top affiliates felt about it. Peterson was in that circle so you do the math.
I’m a big fan of KISS. Peterson’s suicide might have been related to something other than Herbalife’s policy change and the resulting effect it had on his income but let’s face it, probably not.
Well like you said, it may very well be, but quite honestly I don’t think so. I’m in his organization and I and my organization don’t even understand the concept of selling or buying leads.
Our focus is to use products, get greats results and genuinly help others to achieve great results based on their goals.
He still has a significantly large and dedicated organization over many countries who are committed to the dream; so it’s hard for us to see how the changes the company is making (which we are embracing) would drive him to that act. I still smell foul play; many anti-Herbalifers out there.
The concept is simple, you recruit affiliates and then sell them leads with the hope that those leads will join. You make money from selling the leads and residually if any leads join because they indirectly are recruited into your downline.
You continue to sell leads to those you recruit and also to those leads they’ve recruited. This appears to be how a number of top earners in Herbalife made their money, as evidenced by the jumping of ship when Herbalife said “no more”.
That’s all very well, but it wasn’t the focus Peterson used to build his Herbalife downline with.
Maybe he knew (and saw in his monthly commission check post June 30th) something you didn’t. The timing is just too co-incidental to be brushed off for revenge theories IMO.
Herbalife make changes that directly affect how top affiliates make money. Two “leaders” bail, Peterson takes the gamble and stays on. A few months after the change is enforced perhaps he realised he lost the gamble. If not immediately than in a year or two’s time when current recruitment efforts via lead selling failed to be replaced with new ones.
Being in his late fifties starting again was always going to be difficult. By all accounts he certainly liked to spend his money… perhaps debt (assets, not “I have no money”) + a massive drop in his Herbalife commissions wasn’t for him going forward.
It’s the simplest theory that fits and other than “what, but he was such a positive thinking person!” I haven’t seen anything that punches a hole in it.
@Oz
The richest people on the planet have problems that have nothing to do with money. By all accounts, John had many investments and did not count on Herbalife money paying his bills and supporting his lifestyle.
IMO, Powell and Dahl bailed because they were the kind of people that you are accusing John Peterson of being. Good riddance I say! Their actions, not John’s, proved it was all about the money for them and they did not care one bit about what Herbalife is really about.
We may never know why John is gone. Until we have FACTS, it is not prudent to go around making things up and spreading lies and ignorance.
But even when all the facts are available, it still doesn’t stop people from ignorance and stupidity.
The very first post in this thread says that “Mark Hughes died at 44 and the reasons behind his death are still unclear.” Untrue. We know exactly what happened to Mark because the FACTS told the story.
The facts will tell John’s story too. And IMO, what happened with John had nothing to do with Herbalife.
Like I said at the beginning of this post. Rich people have problems that have nothing to do with money.
Yeah, and so do the poorest people in the planet… and everybody in between. Stay on topic please, leave the derailing “saying something without really saying anything” statements at the door.
Such as…? Publicly all I’ve read about is lavish spending on personal assets (property, vehicles etc).
Peterson attained his top-affiliate status in the same manner Powell and Dahl did. How does that make him “different”?
When Herbalife’s top affiliates earn their incomes via recruitment for the better part of a decade, on what basis do you claim that it isn’t “what Herbalife is really about”?
It was only after the public claims that Herbalife was a pyramid scheme escalated that the company bothered to do anything about it. Previously they had no issue being affiliated with a business deemed a pyramid scheme in Canada all the way back in 2004.
I agree, which is why I wrote what I wrote and drew conclusions based solely on facts that are publicly known. Anyone who claims Herbalife had nothing to do with Peterson’s decision is choosing to ignore the Herbalife related events that led up to Peterson’s suicide.
Anti-depressents and alcohol. Care to inform the world why Mark Hughes was on anti-depressants? I reviewed Herbalife myself some time ago and was unable to find this information.
Like I said, ‘anyone who claims Herbalife had nothing to do with Peterson’s decision is choosing to ignore the Herbalife related events that led up to Peterson’s suicide’.
You want to selectively blanket discard what is known, fine. But doing so for the sake of just doing so is not good enough. “John Peterson was a swell guy” does not discount the obvious effect Herbalife’s recent policy changes likely had on Peterson’s income.
Um… oz
in a country like the US where population is average, a downline size of 200,000 is considered a major feat, which can be achieved after like a decade of work.
the commissions from the sales volume of the downline team is then accentuated by piggy backing other ‘products’ like promotional materials and this is where the top bosses of herbalife who ran their own ‘subsidiary companies’ were making the big bucks .
in countries like india or china even state MLM leaders can build that kind of downline in an year. the numbers of people is so high, that you can make big money off the sales volume of your team, and you do not have to rely on selling additional promotional materials.
you say, peterson made 3 million dollars last year? just yesterday i was introduced to a guy ,who is at the top of a mostly unheard of insurance MLM in india, which works only in selected pockets of india, and he’s raking in the same kind of money !this should give you an idea of the kind of possibilities in china.
i cant agree with the ‘foul play’ angle without any whisper from that direction, but i’m inclined to agree that peterson din’t make such a drastic decision over a decreased paycheck. it could as easily be personal problems, triggered by the stress surrounding herbalife .
well ron , i empathise. suicide must be a dark lonely painful place and i wish peterson had help. ignore oz, he’s just bloody rude.
Peterson focused on lead selling recruitment for a decade. From all accounts he was at the forefront of breaking into the Mexican market via this method.
China is a different story altogether. Nobody is breaking into that market without being fluent in Mandarin or having an immediate downline who not only speaks fluent Mandarin but is also a Chinese citizen.
It’s one thing to break in a market that is a neighbouring country where English is widely spoken, China is another environment altogether.
By the time Herbalife indicated they were putting a stop to the bulk of their top US affiliate’s incomes, the Chinese Herbalife market was already developed. Small yes, but already in place.
The only people who will make money in China are those who continue to expand the business they’ve already built there. They know who to pay and how to keep the wheels greased.
US affiliates, unless they manage to recruit (directly or indirectly) Chinese citizens into their downlines don’t stand a chance breaking into that market. Least of all when they’re playing catch up.
listen oz, a few months of headstart in china is barely a drop in the ocean .’old hands’ like peterson would hardly be fazed by it.
We have australians and americans renting apartments in mumbai, and living here part time, to build their teams. do they know our [ many ] regional languages ? NO. With a little local help they get around!
so, powell and dahl and taking their lead selling business over to vemma and nutrie? are these companies complete nut cases to embrace an ‘unethical’ business practice at such a delicate time in american MLM? why would they invite such suspicion and the tag of ‘unethical’ in full public view?
there’s more than meets the eye here. generally when trouble comes calling, people react in different ways. powell and dahl may have had their own views on the ‘way ahead’ for herbalife and had a fallout with johnson.
the prospect of the inclusion of icahn, who seems like a pushy shovey kind of guy, onto the board of herbalife, may not have gone down too well either. this is more about bruised ego’s than vemma or nutrie giving powell or dahl a free run with their lead selling business .
the sequence of events is more probably this: trouble comes knocking – the big boys have a head banging session – they have a fallout – powell and dahl go into a sulk – vemma and nutrie smell fresh meat, and buy them over with promises of better treatment and a huger piece of the cake.
In india this is called ‘set’working as opposed to ‘net’working 🙂
Try six years. Herbalife got it’s Chinese MLM license back in 2007.
Furthermore Peterson spearheaded the Latino market. He knew firsthand once the downlines were established the expansion of existing downlines is all that happens. New top tier affiliate downline lineages are extremely rare in any company once a regional market has been established by an MLM company.
India != China. Infact the MLM market in China, due exclusively to the political environment over there, is unique.
You’re not breaking that market unless you recruit a Chinese citizen and/or speak fluent Mandarin and have political connections over there. Peterson didn’t appear to have either of those things and was already six years behind when Herbalife put a stop to his US-based recruitment operations.
Not being able to generate and work with leads? How ludicrous is that. Wear the Button Use the products and Talk to people was what the company was built on.
To say you cannot use lead generating systems makes Herbalife seriously out of step with reality and a windfall for other MLM companies as Herbalife distributors will leave that restrictive untenable business practice..
The Three wise men, Mark Hughes, Larry Thompson, Jim Rohn all taught build the business with fabulous success..
If Herbalife thinks they can survive on just consumers good luck with that,
Using lead generation systems isn’t the issue, it’s top income earning affiliates selling leads to their downline, having their downline recruit said leads and then repeating the process of selling leads to this newly recruited downline. And on and on and on…
When that is the core focus of your top affiliates (and subsequently where all the money is made), then as a company you have a problem.
They have no choice in the matter.
It’s one thing to be able to fly under the radar of an overworked and underpaid bureaucracy in an environment where your particular MLM is only one of many similarly structured operations.
It’s an entirely different matter when said bureaucracy and a large proportion of your countries’ media have you under a spotlight and spyglass.
I have a serious problem believing the FTC is overworked or underpaid. c,mon, you have a ‘leading’ world country under attack from all shapes and sizes of fraudulent MLM [ this site bears witness to it ], and this is the best excuse you can splutter up?
This is more about LESS govt intervention in the lives of citizens, unless they are dragged into it. This is about an attitude which says -‘it’s your money, be sensible with it OR NOT. we wont be baby sitting ‘
If the FTC is underfunded, it’s because the US govt ‘prefers’ to keep it that way.
heaven forbid the FTC becomes overfunded and turns into an ‘activist’ watchdog, meddling little busy body like ackman 🙂
Or Carl Icahn, who’s trying to derail Michael Dell’s plan to buy back his company… and alleged nemesis of Ackman.
But they *did* run very similar businesses:
* falsely advertise “income opportunity kits” which are just teasers, and costs $50 (it’s advertised as $10, but only if you sign up, or if you return it within 14 days)
* add surcharge to enroll you into Herbalife (or whatever MLM they want to push now) If herbalife charges 50 they’ll charge $150
* Then charge affiliates who want to buy leads for names of those dumb enough to pay the $10/$50 kits.
They basically sell the same person twice: once to himself or herself, and once to existing affiliates as leads.
Guess you haven’t kept up with the “sequester”, have you?
One more idea to ponder: could it be that FTC had subpoena him for investigation?
FTC figures show it had just over 1100 full time equivalent employees and a total annual budget of $313 million at the end of FYI 2012
The US population currently stands at around 316,000,000
Even using analjimath it becomes obvious there is an imbalance between what the FTC can do and what the Analjis of the world think it should do.
whoops that MUCH! and how many pyramid schemes have they shut down in the last 5 years? do the math littleroundass, and figure how much public funds are going down the drain.
have to say it, but our EOW is sharper than that .
you don’t need an army or a mercedez benz truck to shut down a pyramid scheme littleroundass, all you need in the US is a court order. 5 enforcement guys with a strong will and a desk and a car and some food money can get a pyramid scheme stopped. you can do the rest of the math with the analji calculator up your litlleroundass.
Somebody is asserting that all the FTC do is bust pyramid schemes. Oh dear…
You make it sound so easy. /facepalm.
nope .no one said THAT. but if you have pyramid schemes sprouting up like weeds in very corner, and you’re short of staff, why not HIRE? shops HIRE, malls HIRE, corporates HIRE, the FTC can’t HIRE?
and please don’t sit me down for a ’serious talk’ about ‘budgets’. if you consider the amount of american money that is being siphoned off to tax haven islands by these pyramid schemes, hiring even a 1000 more people would make financial sense.
You will need someone to identify the pyramid schemes for them too, so they won’t waste their valuable strong will and food money on false clones.
And you will of course need all those motivation analysts you have mentioned earlier, the very core of Federal Trade and Motivational Analysis Commission.
I’m sure they do. A few big busts every year between the FTC and SEC tends to keep most schemes short-lived. It’s rare for a Ponzi or pyramid to truly affect the general population directly (ala Zeek Rewards).
Right now we’re plotting a course that I’m not entirely sure will wind up leading us. All I can do is follow along and hope you all join me on the ride.
If I had to make a prediction, I’d say we’re overdue for a major court battle and it’s coming. Who they’ll ultimately go after to establish legal precedent and clarity is unclear at this stage.
Personally I think the FTC will go after some of the gifting 2-up and variation companies out there at the moment before taking on a major case. And by major I mean one that will likely see sweeping reform throughout the industry for better or worse.
The time is almost ripe for it, there’s currently no major MLM hybrid Ponzi schemes in operation. TelexFree looked like it was going somewhere but Brazil has shut it down.
On the pyramid front again nothing that I’d call major. The gifting schemes are probably what they’re going to hit next before a major case.
(post #8)
You’re not following your own ideas, you’re only REPEATING some ideas you have heard or read? The messages are only reflected in what you SAY (or write), not in what you DO or who you ARE (they don’t stick deep enough to be reflected in your actions).
Ron was right, there’s not a good idea to speculate about WHY in a suicide case. They are typically caused by PERSONAL reasons, and to psychological misinterpretations rather than to rational reasons.
“Psychological misinterpretation” is when a part of your brain identifies something as a solution, e.g. because the other solutions it’s able to find feels unacceptable.
It may or may not be directly related to Herbalife, but it’s typically for irrational reasons rather than for rational ones. And it’s typically MANY different factors involved rather than ONE single one.
No, it can’t.
It’s called the Budget sequestration.
Originally legislated to come into effect on Jan 1 of this year, but delayed until March 1.
Along with budget cuts and subsequent staff cuts imposed over the past few years since the GFC and in addition to the fact enforcement agencies’ staff and resources were redirected to the so called “war on terror” and Homeland Security, no amount of Anjalitroll shoulda, woulda, coulda theorizing explains away the fact the FTC is both underfunded and overworked in 2013.
Just for grins… Business Insider had some of their staff try Herbalife’s flagship product, the “formula one” weight loss shake. Watch the reactions. 🙂
http://www.businessinsider.com/we-tried-herbalife-2013-8
That video is just ridiculous and it’s just the kind of thing I expected to come out of all of this BS about Herbalife.
1) NOBODY uses a spoon to stir the shake mix. USE A BLENDER!
2) Herbalife offers many different flavors. Did they bother asking anyone which flavor they wanted? No.
3)You can make hundreds of variations of Herbalife shakes. Did anyone get asked what they wanted in their shake? Fruit? Ice? Anything? No.
Oh, that’s right, they didn’t use a blender so they COULDN’T do an HONEST test!
They didn’t go into a nutrition club to get a real shake made the way they wanted it.
Just more BS.
Fair point, but what does the instructions on the container actually say? Does it actually say “use a blender or shaker cup for best results”?
After all, they are testing the product, not the creativity of the preparer.
I found what I think is an accurate label… it says:
“Blend or stir two spoonful…”
So no, you can’t fault them for not blending the stuff. It did mention stirring.
As for ice and fruit… Not sure if they added fruit or not, but those are ice cups (the same kind you find at Starbucks for frappucinos.) Guess I’ll have to watch the video again. 🙂 But technically fruit and ice are not on the ingredient list. :).
THANK YOU for pointing out one of the main reasons why Herbalife is not sold off of the shelves in retail stores. It must be purchased from an Herbalife distributor for that very reason.
When we get a customer we make sure they know how to use the products correctly and work with them to get the results they want off of the products.
Again, thank you for pointing that out 🙂
So you’re saying that the instructions on the container is… inadequate, and would not result in “optimum enjoyment” of the product, correct?
What I am saying is that the video was made that way for the sole purpose of making Formula 1 look bad.
The instructions are perfectly adequate. We just help them get the results they want.
What I am saying is you and Business Insider have completely different set of expectations.
I can’t speak for their alleged motives, but I wouldn’t assume that they are out to bash your favorite MLM just because the video doesn’t paint your product in the best light possible.
Indeed, that’s what a lot of shady scheme promoters do, when Oz here gave an unfavorable review of their scheme. “You’re just jealous” “You don’t understand us.” Blah blah blah.
Ron is merely a neophyte in the mlm “industry”. He will soon learn the realities that they all learn.
1. Recruit your ass off.
2. Buy all the stuff we (upline) tell you to buy.
3. Go to all the rah-rah meetings and pay your own way.
Ron- good luck and limber that wallet of yours up. You’ll need all the cash you can find to “fake it ’till you make it”!
I am literally laughing at this post! Neophyte? Hardly! Been doing this for decades.
And as for the “realities” of network marketing, I know them well, but let’s examine yours:
Product sales is the name of the game. You, personally, can only talk to so many people about the products. So, yes, you are looking for others you can train to sell the products the way you do.
Personally, I will not sponsor someone who is not a product user first. I don’t even mention the opportunity until they have used the product and gotten results.
My focus is on getting people results on the products and getting new members making profits by teaching them how to get results for people on the products.
I have said it before, money is not enough of a reason to build a huge business. You have to have personal reasons, your personal why, to do it.
Product results is a personal thing. Looking better and feeling better yourself, then wanting that for others should be one of the main reasons you do this business.
Nope! My direct upline is President’s Team, 15K President’s Team and Chairman’s Club. Not once have they ever told me to buy anything as far as leads, systems and the like.
In fact, they are big proponents of generating your own leads through using the products, wearing the button and talking to people. It really is that easy.
From my personal experience, the meetings I have been to over the years have very little rah-rah and are mostly sharing what successful members are doing to ethically build their business.
Pay your own way? Of course. However, and I am not giving tax advice here, but if you are in business, you can write off your hotel, food, gas, etc, as a business expense.
With that said, Herbalife also offers complete 100% all expenses paid vacations and other events to members who qualify for them.
Qualifiers just got back from a week long trip to Costa Rica, all expenses paid and they had the time of their life.
Now THAT is a neophyte statement.
There are more Herbalife distributors and leaders who practice the exact method as Ron mentioned. Using, and sharing and teaching. Solid business, gratifying results. Hi Five, Ron
Looks like you’re more of an exception rather than the rule, Ron. At least those that visit BehindMLM.
Seems every week we get a few who were… starstruck, recruited by upline through shady promos by leaving out some details, and had the idea that their favorite thing/scheme is being insulted by “them” (whoever that’s not “us”) and it must be defended. 🙂
World needs more people like you, the ethical network marketer.
@Ron
Sounds like you’re working the business as it should be and if so good luck with that. But out of sheer curiosity, how many non-affiliate retail customer do you have vs. recruited affiliates?
How many does your upline have?
And please don’t waste our time using Herbalife’s BS practice of including affiliates who haven’t recruited as retail customers. Retail customers do not have access to the compensation plan whatsoever and never sign an affiliate agreement, they simply buy product (either autoship or as required).
That might be true after Herbalife’s top affiliates abandoned the company and it banned affiliate lead selling. But over the past ten years those top affiliates made fortunes selling leads to affiliates, and considering that was where the bulk of the money in the company was being generated your statement doesn’t appear to be accurate.
Focusing exclusively on the last month and a half isn’t really useful.
A follow-up question then… How many of them, the ethical ones, are in Founder’s Circle? Because we know many of the “fine folks” in Founder’s Circle are leaving because Herbalife cut off their money tree at the root, and other top affiliates are leaving because they are being “handcuffed” by Herbalife. And these top people are taking all their downlines with them.
Could it be that being a recruiter MLMer, with a bit of shadiness like these lead generation businesses, is what got them ahead of the rest of you doing the way it’s supposed to be done?
And what does that say about the company that shaped the business to allow that to happen over the past 20+ years?
And what does that say about the industry overall when such “shady” affiliates are leaving for other MLMs without the “handcuffing” when Herbalife is trying to set things right?
Food for thought indeed.
There is a number of reasons why someone commits suicide, this topic has no place in an MLM website, more so a psychology blog or something or sorts.
To say Peterson killed himself over herbalife changes to come is irresponsible without significant evidence I.e suicide note, how he acted shortly before his death, etc.
In terms of MLM, whether herbalife wins or loses on the stock market, a major cleanse of the industry is coming.
One can argue that with the way MLM emphasizes personal relationships between upline and downline, psychology is VERY relevant.
That’s a fair point, however it’s a flawed strategy to be “married to your company” and it’s never the sole reason people would succeed in said company.
Digression aside, I’m just saying, despite the title being something of an attention grabber to say “READ ME” (which is fine, that’s the reason for headlines), it’s a HUGE assumption to even entertain.
What was his family history?
What was going on with his life leading up to the suicide?
What was his health like?
What were his finances like? (Compulsive gambler? Failed investments outside herbalife?)
Was there a suicide note?
What was his personal live like? (Divorce? Children issues?)
Is it confirmed a suicide? Was there drugs involved?
Despite this being an opinionated post, one would still need ALL the facts to confirm that the changes in Herbalife were a reason in his suicide.
However, it’s funny, big earners in MLM transition from company to company all the time and always earn big. I think it would just be logical for him to find another company which would surely give him an incentive-laden deal to recruit. So IMO, I don’t changes to a damn comp plan to be a reason to end your life.
@Jeff
It does when there’s good reason to believe it’s intertwined with the practices of an MLM company.
None of that is public but what is public though is enough to dissect and analyse. Simply discaring and ignoring that would be irresponsible.
I tend to cover more of the ugly side of the industry and this is one of those topics. Thankfully they’re not a regular occurence.
That’s why the question is only raised. I openly admit there’s chunks of information missing that would be needed to confirm it either way. One of those, which I believe is far more important than anything you mentioned, would be Peterson’s earnings post June 30th.
The chances of that information being made public though is slim. So instead all we can do is take a look at the company related events and environment that took place in the time shortly prior to Peterson’s suicide. Which, in my opinion, is more than enough to warrant raising the question.
@Oz
Fine, I acknowledge your point about making the connection between Herbalife issues and his untimely suicide. For me who knows people that have taken their own lives, it has never been about money but moreso issues with mental health, life enivornment, etc.
And I strongly disagree about his earnings Post June 30th being the most important of what I mentioned relating back to my point about the migration that occurs in MLM from top earners.
Unless anyone is qualified, i.e. has thoroughly studied psychology and how the mind works OR contains crucial facts that could relate to his suicide, anything said from here on out is purely opinion backed by little fact.
I don’t think the act of suicide is being fully grasped in this forum.
That’s fine for you personally Jeff, but this wouldn’t be the first time an MLM affiliate has committed suicide due to financial reasons.
I don’t personally know anyone who has committed suicide due to financial reasons but that doesn’t mean I automatically discount the possibility carte blanche.
You’re almost sixty and have been doing the same thing for over a decade. Being a top-earner is great if you manage your money well. Problem is a lot of MLM top earners spend it just as fast as they make it, which works out well when the money is coming in, but if it’s suddenly yanked away and you’ve got financial responsibilities to pay off…
Over a decade of building a residual income doesn’t count for much if you’ve just been told those providing the income can’t do what you’ve been counting on them doing.
The question is based on the facts known about Herbalife and affiliate lead selling and the actions Peterson’s fellow top earning affiliates who operated businesses similar to his own.. You on the other hand are bringing nothing factual to the discussion to base your opinion on, other than ‘hey guyz if ur not a psychologist than STFU.‘
Not good enough son.
The act of suicide in general is not important or relevant to this discussion. Feel free to continue discussing suicide in general on one of those psychology blogs you mentioned.
This is the entire point of this article, so let’s keep the discussion within that context. I’m not interested in passing judgement on Peterson for the act or any other emotional aspect or reaction his death has evoked.
thanks for that. though it then begs the question, that if the FTC has not been very enthusiastic in tackling fraudulent pyramids over the last five years, what can we really expect in the years going ahead?
this is good news for herbalife, an FTC with a sequestered budget, is hardly fighting fit to take on the fire power of a ‘herbalife’ in the courts.
Did ackman know of this in dec 2012 when he made his herbalife presentation ? 🙂
yes! it’s totally ridiculous. what does taste or preference have anything to do with pyramid schemes? this is just a childish way of badmouthing a company.
if at all these people wanted to make a point they should have had tasting of similar products of different brands and done a comparative taste test .what was point of the video ? ‘we have too much spare time in the office?’
no one can ever pretend to analyse the reason for a suicide. that said, every death is sorrowful and a loss, but unfortunately suicide does not attract respect, and that is why people talk, and this is an unfair legacy left to the family and friends of the suicide victim.
hey, guess who brought his littleroundass for a s/TROLL around bANALity 🙂
So? What was Herbalife supposed to do? Bad when it turned the blind eye on this situation, but also bad when they did something about it and now have “collateral damage”.
FYI, not all founder’s circle and chairman club members have this method of operation. The fastest growing markets for Herbalife are growing due to daily consumption methods.
It’s good that the ones with bad practices are leaving and who knows if Peterson’s death had anything to do with it or not, but it doesn’t change the fact that Herbalife is taking the right decision and making the right changes.
The decision to stop their top affiliates from selling leads to those they’ve recruited and building their business that way wasn’t “bad” in itself. Rather it was the large amount of time that passed before they decided to do anything about it.
Making changes because things heat up after over a decade of turning a blind eye doesn’t excuse you from turning a blind eye to begin with.
Evidence of Herbalife’s continued lax approach can be seen with their reluctance to create a true wholesale customer class. Calling your affiliates who don’t recruit “members” is only a superficial solution to proving you’re not generating revenue primarily from recruited affiliates.
as long as herbalife is making the changes , it’s petty to say ‘why were they lax before ?’. every system in this world whether it is politics or corporate behaviors, are victims of ‘inertia’ and it really takes a shove to get things going.
also , selling leads, does not make herbalife any MORE or LESS of a pyramid scheme ,at the most it’s unethical .
by going into spring cleaning mode herbalife is making a public statement of it’s ‘intent’.
remember, FHTM got into trouble in some states, but continued to cock a snook , and the FTC decided to jump in ?
herbalife and DSA should move quickly and get ‘some’ self consumption recognized as retail, so that you can stop asking this question repeatedly.
It slowed down several years ago, when the “core pyramid shutdown team” resigned, the 5 men with strong will and some food money, a desk and a car. People like that isn’t the most easy thing to replace.
All the motivational analysing they will need to do will also draw attention away from shutting down pyramid schemes, i.e. they will need to make sure people have the right motives before they can accept information from them.
And it’s actually YOU who have designed it that way. FTC has read each and every advice you have posted and have tried to make the organization work in a similar way.
no way !really ?
you mean the FTC can now AFFORD the 5 men with a strong will and some food money, a desk and a car ?
i thought ALL they could afford now was tea parties with [ackman’s] hispanic representatives !
BTW norway ,do you have some better ideas about handling fraudulent pyramid schemes ? use some of that motivational analyzing stuff – it works !
Not as far as the regulators go. Zeek Rewards was harping on about changes before they were shut down. Ask Paul Burks how that worked out for him.
Yes, it does. Affiliates selling leads to newly recruited affiliates who buy the same leads = recruitment driven pyramid scheme.
All they have to do is make a wholesale customer class. Fail.
Yeah, and maybe after that they’ll classify Ponzi scheme deposits as retail too. For all the hot air you blow it always come down to the same agenda – legalising scams.
(Ozedit: Don’t waste my time posting crap you’re not going to back up. No US state has “legalised scams” by counting affiliate purchases as retail)
Huh ?
No idea what you’re quoting (source?), but this is key:
Take off the buyers club goggles and look at it from an MLM income opportunity perspective. Income generating affiliate purchases will never be classified retail. You just can’t justify the amount of volume as personal consumption/use.
That said, I acknowledge that pyramid schemes could make an argument in these states – however the continued registration in Nevada and Deleware seems to suggest otherwise.
And anyway, the FTC have stated otherwise (publicly as recently as Nov 2012) so I don’t think it’s even relevant what laws states in the southern US pass regarding pyramid schemes. Even moreso when you consider jurisdiction issues of conducting business anywhere in the US online.
I believe southern US states have a lot of redundant laws. Colbert brings up some pretty whacky ones from time to time.
firstly, the above is from : http://www.mlmlegal.com/statutes.html
secondly,it started with these three states ,and went on to approx 10 states [ i cant find the link]
thirdly, this is not redundant legislation, and in fact are the latest statutes on MLM in these states.
fourthly, the FTC said “income must come PRIMARILY from outside sales” and the DSA asked them to explain themselves. the FTC responded thus:
fifthly, before christening companies as ‘scams’ wait for the FTC or a court to say it first .
oz, in a buyers club MLM, retail should NOT be compulsory at all.
in any other type of MLM ‘some’ retail should suffice. even without credible retail data, it is easy to use commonsense and ascertain whether the product is ‘retailable’.
By all means go after the ‘overpriced’ MLM category. Check their compliance standards and stay on their heels.
Sooner or later, the industry will realize, the only way to escape regulatory interference is to sell good, fair price products.
Blahblahblah wafflewafflewaffle blahblahblah.
Game over. End of discussion.
Best of luck waiting for governments around the world to legalise pyramid and Ponzi schemes. Holding onto that candle is going to burn your hands long before you get what you desire.
How ever you dress them up, whatever you tell yourself and however you seek to justify them – the fact of the matter is pyramid and Ponzi schemes are not sustainable and cause nothing but trouble.
Careful now, you’re starting to sound like the ‘our scam is legit until a court of law says otherwise’ crowd.
You don’t need a court of law to identify a dodgy MLM opportunity, only its compensation plan and some common-sense analysis.
By definition, all sales in a buyers club are retail. Buyers club != MLM income opportunity.
As per the FTC and common-sense, more than affiliate revenue, otherwise you’re simply earning via recruitment.
By virtue of a majority of affiliate purchases over retail, the value of a product is easily determined via the presence, or lack thereof of retail sales to non-income opportunity participants (affiliates).
Perhaps a revelation to scamsters in India, this is already known in the industry. It’s the companies that operate in the grey that are the problem. That and the grey itself.
Let’s see where the road takes us. But your delusional if you think Ponzi and pyramid schemes are going to be legalised.
Lastly I have no desire to enter into yet another “hurrah for scams” dialogue with you. It’s offtopic and you really need to get over Speak Asia being Ponzi scheme and this futile quest to legalise scams.
OKAY BOSS 🙂
Self consumption hasn’t been any problem in the last 2 or 3 decades. In itself, there’s nothing illegal in self consumption among participants in a business. The illegal part is about paying for the right to participate in an income opportunity, directly or indirectly.
The problem has been described earlier in this thread by Ron = “people don’t see things as they really are, but as THEY are (the people themselves)”.
Pyramid scheme issues will be interpreted to be about retail sales if all your knowledge and experience points in that direction = if you have limited set of information about the issue.
If you have identified a problem to belong solely within a certain “box” then all your efforts to solve it will also be found within the same “box”. You can have solutions right in front of you and still be unable to identify them because their outside your own “box” of thinking.
The problem is simply about how the brain works, and how it always will prefer to work in “energy savings modus” = repeating the same patterns over and over again. The solutions found in that modus will reflect how the problem initially has been interpreted.
It will eventually result in actions to change the law, and people will probably be deeply concerned when the solutions will fail from time to time.
I gave a short version of Lousiana’s interpretation in the Lyoness thread. Lousiana has exactly the same TYPE of interpretation as I have. It’s clear and understandable if you know how the laws work in reality, but it’s vague and diffuse if you have other sets of ideas.
Can be found inside people themselves, not “out there” in laws and regulations. Trying to solve the problem “out there” will probably lead to more confusion.
You can’t start with the wrong types of ideas and expect to find solutions to something. You’ll need to start with the right ideas before you truly can be able to find solutions that can be repeated over and over again with predictable results.
Isn’t about a premade idea that only is a description of one of the syptoms you have been able to detect, e.g. the symptom that SOME companies have been shut down as pyramid schemes because of lack of retail sales.
The right idea will need to include “How does the legislative system work, and how are the laws organized within that system, and how will it be interpreted by regulators and courts?”.
I gave a definition in the Lyoness thread that will point people in the right direction for how to interpret laws, but the definition is not perfect in itself.
CORE DEFINITIONS
1. I identified the core definition of a promotional pyramid (product based recruitment system), with 5 points. Those definitions are so called “low end rules”.
HIERARCHY OF RULES
2. I identified the “hierarchy of rules”. You’ll need to interpret “low end rules” within the context of their “parent rules”. You’ll need to look at the codified Act as a whole rather than as “sets of details” unrelated to each other.
* a “low end rule” can specify something, but it can’t over rule a “parent rule” in the same Act. It can’t be interpreted in conflict with rules with higher ranks.
HIERARCHY OF LAWS
3. I identified the “hierarchy of laws”. The codified Act that contains the detailed rules has a place in a “system” among other laws. Neither the detailed rules nor the Act itself can be extended into areas where other laws have the correct jurisdiction.
BASIC LEGAL PRINCIPLES
4. I didn’t identify (but they do exist) some basic legal principles that will affect how a law will be interpreted by regulators or courts.
My definition is very similar to Lousiana’s pyramid scheme rules in the 2 exceptions I mentioned.
* sales to a downline can be about fair trade (and it will be governed by other laws than pyramid scheme rules).
* payment for recruitment can be about fair compensation for work or expenses.
I have no problem accepting Lousiana’s pyramid scheme definitions or the exceptions mentioned there, but why do MLM lobbyists always focus on the “low end rules” rather than the main rules?
so, how would YOU differentiate between a fraudulent pyramid scheme and a promotional pyramid scheme?
“Buyers club MLM” isn’t a standardized business model, it’s only an imaginary solution you have repeated over and over again until you have started to believe in it yourself.
It’s a solution to an emotional problem rather than a solution to a commercial problem. The real problem can be found inside your own set of ideas (the ones you’re starting from).
Try to get your brain out of the “energy saving modus” it currently operates in? 🙂
I can clearly see your idea in some of the details. You have probably started from a KNOWN recruitment based income opportunity you KNOW yourself, and have tried to find definitions that will make it become legitimate “Buyers Club MLM” rather then illegal pyramid scheme.
The problem is that legitimate “Buyers Club MLM” don’t exist in reality, it’s just a description people use to mislead themselves. In the real world they’re normally called promotional pyramids.
Try to get your own brain out of its “energy saving modus” first, and then try to list different criterias for what defines legitimate business in general (rather than built up around your own favorite ideas).
obviously this guy blew his brains out because of the changes at herbalife.
seems he was living high on the hog with serious expenses.. ie mortgages.. and I’m sure the drop income along with possible FTC charges was going to make this guy’s life difficult.
Yeah I’m sure he was a great guy.. yada.. yada..
but always follow the money trail… a guy like this (ie making bank on MLM) is not going to blow his brains out if his income was going from 3 mil to 4 mil.. more like 3 mil to 500k and with all his expenses was going to find himself underwater.
now all this is speculation.. but in a biz like this it’s all about money.. and all the “good” and semi-cultish talk is an attempt to rationalize the biz.. nothing more.
In Australia the ones to watch are the Bells and Patterson…running sensational recruiting lead generation stuff..scamming $$ off their group…
@backmlm
(sigh)
Just when we we starting to get some semblance of intelligence in this thread, you come along with an idiotic post like that with more crappy hearsay.
Covered this before. He had MANY income streams and if Herbalife closed it’s doors, he would be fine financially.
Jim Rohn, who knew John well, taught the philosophy of “building a financial wall around yourself and your family that nothing can get through.”
From everything I have personally seen, read and heard from John over the years, he practiced that philosophy.
Where are you getting your info from? The National Enquirer?
Possible FTC charges? More conjecture.
Please tell me you are not now, nor have you ever been in a network marketing company.
Please tell me that no one has ever put their faith in you to guide and mentor them in a home-based business.
Please tell me that no one has ever had to work side-by-side with someone who thinks (using the world loosely) like you do because when I read posts like yours, I can feel my IQ drop.
@Ron
Must have missed that. When was this covered?
What other business ventures was Peterson involved in that supplemented his Herbalife income? What are the figured showing that this covered any ongoing debts he might have had due to his lavish spending?
Read the thread, I mentioned it before.
The specifics of what anyone does with THEIR money is THEIR business!
What are the figures?
Are you freaking serious with this?
NONE of your business Ace!
Yeah so I’m gunna go ahead and call bullshit on your claim Peterson “many income streams”.
Typical MLM marketing PR spin tactics will not work here. You want to make claims? You back them up.
And you’re running around accusing others of conjecture? Check out the balls on this one folks.
Oh and while we’re at it stop dodging questions:
(Ozedit: derail spam removed)
Sorry, but John Peterson never shared his financial statement with me. However, from many years of hearing him speak, he had many income streams.
(Ozedit: derail spam removed)
@Ron
So in conclusion, with the above information and your continued dodging of the simple question of retail customers within your downline, your entire contribution to this article can be summarised as conjectural bullshit.
Cheers.
In the world of network marketing, discount buying services add another product to the marketing opportunities for an industry that has been used to marketing cosmetics, vitamins and nutritional products.
People love to save money, people love to tell people they have saved money. Thus, marketing discount buying services through network marketing is a great opportunity ‘
read the rest of this lovely article at : http://www.mlmlegal.com/join.html
does this seem like a concoction of an ‘energy saving’ brain? are you SURE your brain is firing on all guns loaded ?
norway, ‘buyers club’ MLM exists as a legal entity as described by an MLM LAWYER babener. call them promotional pyramids, or a rats ass, they have legal sanctity .
the moment you are willing to concede, that sales to a downline can be fair trade, ie about true demand and supply, you’re essentially defining a promotional pyramid.
Ron, please don’t waste your time. Obviously another BA crony. Sad that there are people out there who cannot respect and share condolences of one’s loss. It’s amazing, truly inhuman. But what to expect, still not stopping in an effort to driving the stock to 0.
We know the integrity of Herbalife and the foundation it is built on, and yes there were and are phonies associated with the company as with all other companies on this planet, but we still uphold and adhere to what we believe in.
I have been using Herbalife products every single day for the past 6 years and have had incredible results. Not only have I lost 37 lbs initially, i have kept it off and have never set foot in a gym, no more acne and migraines, and feeling my best.
Herbalife to date is one of the best thing that has happened to me. I have no doubt we are going to continue to grow. Behind every dark cloud there is a silver lining and I do believe that we are facing the best days.
I have been drinking shake for the past 6 years and have never seen anyone make a shake as was done in whatever test claimed to be done.
Sad taking a delicious shake and marring it the way it was done, and you call that a test? Sheer stupidity is what I call it. I can make a shake for anyone out there at my expense.
Gee, missing the point there much, Lodestar ??
Any criticisms of Herbalife are not, and never were, about the product/s.
@Lodestar
This is a bit like Lyoness affiliates harping on about the shopping network and ignoring the Ponzi aspect of the business.
Whether you’ve been using the products or even if they work (or taste) is completely irrelevant to the revenue (flow of money) generated by Herbalife, and more importantly the company’s compensation plan.
Nobody here gives a crap about the stock market either so that derail attempt just falls flat.
You appear to be basing much of your assertions on MLM lawyers. That typically doesn’t hold up too well when courts apply common sense.
A buyer’s club MLM is not differentiable from a pyramid scheme. The issue of motive behind purchases will always surface. Thus there aren’t nor will there ever be any MLM buying clubs.
You appear to be basing much of your assertions on MLM lawyers. That typically doesn’t hold up too well when courts apply common sense.- oz
from the same article i linked above :
So what we have here, is not just some babener babble, but actual statues and provisions in law for buying club MLM.
since you have not provided any case law example, of a buying club getting socked in court ,for being a pyramid scheme, i’m going to treat your ‘hypothesis’ as BS.
also ,participants of buying club MLM’s are given protections akin to ‘consumer protection’.this further indicates that ‘sales’ in this type of MLM are treated as ‘retail’
you cant wish away buying club MLM’s because they go against YOUR grain !
Who said anything about a buying club MLM? Regulations for buying clubs is one thing, combining with MLM is just another word for pyramid scheme.
You try running a pyramid scheme
buying club MLMin one of those states and let us know how it goes.When the FTC comes knocking I’m sure “but Jeff Babner said…‘ will suffice.
the regulations are for ‘buying club organisations’. it does not specify whether said ‘organisations’ have to be in the form of a brick and mortar retail shop, a loose group of members OR a multilevel set up.
the ‘motive’ for discount buying is always CLEAR ie the discount.
a multi level sharing of ‘discount’ cannot by any stretch of the imagination be construed to be ‘participation money’, unless of course the product is obviously overpriced and not discounted as claimed.
Which is not an MLM company.
But by all means, start up your own
pyramid schemeMLM buying club and let us know how that works out for you when the FTC comes knocking.Not when commissions are involved tied into the purchases of a recruited downline. If you can’t work out why then get off the PC and have a good long and hard think about it.
What, and risk her membership of “Trolls-r-Us” ??
I don’t think so.
well oz, you don’t like the sound of my voice ? then hear it from the FTC :
In its 2004 “clarification letter,” the FTC noted:
(Ozedit: Stop wasting my time, the 2012 FTC quote below is the end of this discussion)
The FTC message of Nov 2012 distinguishes between legitimate and illegitimate MLM
The letter of 2004 distinguishes illegitimate pyramids from legitimate BUYING CLUBS
get the difference ?
Non-MLM Buying clubs are irrelevant and offtopic.
If you want to discuss
pyramid schemesMLM buying clubs see FTC quote above.i am talking about MLM buying clubs and the FTC view on them.
The FTC quote you have posted IS NOT RELEVANT to buying club MLM.
according to the FTC letter of 2004 they have themselves described buying club MLM as a legal pyramid .
post it here -don’t be afraid .
OZ you know nothing. I’ve been in the Peterson Organization for over 12 years, starting in 2001.
The Peterson’s were the #1 distributors in the world and had been for the previous 3 years when i became a distributor. This was before they started the lead generation business. They did not build their organization entirely by that method.
I trained with John & Susan. I would testify before any committee or hearing that they first and foremost adhered to the USE, WEAR (button regarding weight loss), TALK business method.
John built his business because he never went to bed at night without talking to 20 people. 10 who needed the products & 10 who needed or wanted extra money.
Susan is a champion of balanced business practices — her”3 legged stool” approach is legendary — she preached use and sale of the product as essential to ones success. I knew John personally and I knew his business practices.
I will leave you with this thought: everyone you meet is fighting a battle you know nothing about. Be kind. Alway
@anjali
ORLY? So what does the “MLM” in “buying club MLM” stand for then?
Honestly anjali I’m just going to start marking replies as spam at this point.
No but it was likely the automated evolution of a core existing business practice. Similar to the automated evolution scripts provide online Ponzi schemes (example only, Herbalife is not a Ponzi scheme).
In any case, however things might have once started out, how Peterson and his fellow top Herbalife affiliates made their commissions over the past decade or more is quite obvious.
Yet what you’re saying differentiates from the reality of the past decade.
Volvogal is talking about the difference between Powell / Dahl and other top earners. Anthony Powell and Shawn Dahl popped up IMMEDIATELY in detailed complaints about pyramid scheme practices. Any others mostly had vague complaints about all types of “issues”, e.g. unwanted telephone calls, product quality, false health claims, poor service.
I did some random searches for a few other Chairman / Founders members, but I didn’t find the same types of results. Powell and Dahl will clearly point out themselves as obvious targets.
Here’s the difference in my conclusions in the other thread.
I was looking for what I defined to be a “perfect target for an FTC investigation”, someone who CLEARLY could be identified as a pyramid scheme organizer = someone who ONLY (or PRIMARILY) was focusing on recruitment of new participants.
The Herbalife business I checked in South Africa failed to meet the CLEARLY criteria.
This thread is about Herbalife, not about different MLM ideas in general.
In itself, there’s nothing illegal in self consumption among a sales force or sales to a downline. The illegal parts are about paying directly or indirectly for the income opportunity itself, any type of payment including work.
Laws are about realities, not about constructed law theories. Some of the MLM lawyers clearly have flawed logical ideas, e.g. Gerald Nehra is simply ignoring the reality in some cases, e.g. adding 10 software products per 1 AdCentral doesn’t make much difference, and neither does paying people in 1 software they can sell back to the company for $20 (rather than paying them $20 directly).
I’m pretty sure Babener won’t recommend “MLM Buyers Clubs”. He’s probably talking about “there’s nothing in the law that PREVENTS a model like that from being legal” = you CAN put up a business model that primarily is about self consumption among members, and combine it with an MLM model.
It CAN be about fair trade / fair compensation for work if people are distributing goods throughout a downline. But that doesn’t mean all distribution of goods will meet the same criterias. If you put up a standard MLM compensation plan and combine it with “self consumption only” it will most likely be a promotional pyramid.
Buying Clubs are not about income and rewards, they are about distributing goods to members and meet some consumer needs, e.g. lower price, better quality, more favorable quantities, better availability and similar other consumer needs.
To be able to defend a model like that in court, the products will need to have a retail market somewhere in the World, something you can use to compare it to. E.G. a “French Cheese Buyers Club” will probably have a retail market in France, but the products can be unavailable in the U.S. for general consumers.
A “Buyers Club” like that will meet the consumer needs for availability, taste, quality, quantity etc., and you can probably combine it with a simplified MLM plan where recruitment primarily will meet some consumer needs.
Having an income opportunity attached to a product isn’t about consumer needs, it’s primarily a misleading sales method used to sell the opportunity itself rather than the products. It’s EASIER to sell an opportunity to SOME people, they will gladly buy into almost any opportunity they can afford.
Of course it can be about fair trade / fair compensation for work. But that doesn’t mean ALL selling to a downline will meet the same criterias.
Self consumpion = “what reasonably can be expected to be consumed by the buyer and his family”. It will be about the same quantities (the same RANGE of quantities) an average consumer consumes within a similar time frame.
If the average distributor buy 3 times the quantities of an average consumer, there might be something fishy in the deal. Self consumption is about NORMAL consumption, and also about VOLUNTARILY consumption. A “minimum purchase qualifier” (for self consumption) will need to be within the same range.
Interpretation of laws is about realities, not about constructed theories. It will be a “constructed defense” if the self consumption in a network doesn’t reflect normal consumer behavior, but rather reflects “paying for the paycheck” motives.
so why does oz wave the 50% rule in my face, but avoid you. are you allowed to run a different type of MLM than the rest of us?
i agree it’s about intent and motive and practical realities rather than 50% rules on paper. at most the 50 % rule is the IDEAL standard but not the ‘expected’ standard and the behavior of the FTC reflects this.
back to herbalife now.
Read what M_Norway has written, it’s vastly different to your “Ponzi and pyramid schemes should be legal” waffle.
I put it a lot more bluntly but consumption and motive behind the purchases kill the idea of a buyer’s club MLM as a business opportunity. Not withstanding the FTC.
And I agree, back to Herbalife.
(post #80)
That question is probably about something else, i.e. it derived from my comment about pyramid scheme definitions and exceptions.
The BASIC definition for promotional pyramid (simplified):
1. A chain recruitment system
2. where participants “gives consideration”
3. for prospected financial gains
4. that derives primarily from other participants
5. rather than from sale/consumption of goods/services
It will typically belong in the Commercial Laws / Consumer Protection Laws part of the “hierarchy of laws”, the system where all laws are organized in different groups. You will need information like that to clearly identify its jurisdiction, e.g. for potential conflict with other laws.
The definition will belong to a “parent group” inside the codified Act. Promotional pyramids will typically belong in the section “Misleading trade practices”, subsections “Misleading actions” and “Misleading omissions”. You will need information like that to separate it from other illegal trade practices, and to identify some main rules.
A promotional pyramid will be misleading in itself, in that it heavily will distort the average consumers’ transactional decisions, e.g. they’re buying into what they primarily believe is an income opportunity, but it will fail in reality.
Note the “average consumer” definition, it’s not about constructed theories about “if SOME people can make money, it will be legitimate”.
It’s about Business to Consumer trade practices. Defining participants as Independent Business Owners won’t change their consumer status.
My definitions will not be in conflict with his definitions, they will only cover the topic from a different perspective, covering some of the exceptions.
Sales to a downline CAN be about fair trade. Commissions derived from a downline CAN be about fair compensation for work and expenses. But that will be EXCEPTIONS from pyramid scheme rules, rather than the “accepted standard” where ALL commissions derived from a downline will be fair.
A 50% rule is only mentioned indirectly in the basic definitions:
To be illegal, it has to be about the “financial gains”, e.g. the rewards paid out through the compensation plan. It’s not about the REVENUE or SALES, but about the REWARDS.
Fair compensation for work isn’t “financial gains” within the context of fair/unfair trade practice. A strict 50% rule will fail to reflect the realities in some cases.
* a part of the rewards derived from sales to a downline can be about fair compensation for work. It doesn’t need to be about “financial gains” derived from unfair trade practices.
“Laws are about realities, not about constructed law theories”.
That doctrine should be reflected in how all other parts of a law system should be interpreted. Interpretations will need to be tested against the realities rather than against the rules themselves.
Sometimes law makers will go too far in their eagerness to put up detailed rules about something. The “reality doctrine” will be a solution to problems like that, e.g. in that a rule only will be applied if it reflects the realities of a case.
The legislators in Lousiana have probably responded to MLM lobbyists by putting up specifications for something that already existed in the law system itself.
From my point of view, the “safe harbour” is an imaginary solution to a “constructed problem”. Neither the problem nor the solutions seems to reflect the reality, the very CORE of the problem.
Wow! A ton of speculation here. Sooo many comments by people who have no idea what the specifics are… how about this: If you don’t know the details, don’t comment. If you don’t know, but you think you can guess, don’t comment. (you don’t know)
Rumors and gossip…. sickening.
Seeing as you’re commenting I can only take the above to mean you “know the details”.
Please share.
Sickening as Peterson’s suicide might have been, it’s nothing compared to the ramifications of what his death might have meant for Herbalife.
Another top “I made all my money selling affiliate leads to new affiliates” Herbalife distributor bites the dust:
Re. bolded text, quite obviously Burton filing for bankruptcy within days of Herbalife canning their lead selling business was not a co-incidence. He was relying on that money to pay off his debts. That money disappeared overnight and he hit the wall.
And I like the part about not blaming Herbalife. True that his “other businesses” (selling leads) failed and that’s why he’s broke, but he conveniently sets aside it was Herbalife that effectively terminated those businesses for him.
And what’s this about a “personal guaranty of corporate distributorship agreement”? Corporate distributorship? Herbalife playing funny buggers with their top affiliates? Say it isn’t so!
Were any of the top earners in Herbalife not just making money selling leads to affiliates?
http://nypost.com/2013/10/01/debt-ridden-herbalife-follower-shaken-not-stirred/
Bill Ackman explains why he’s STILL shorting Herbalife… and this short-term rise in Herbalife shares is based on ONE guy’s speculation… and that speculation makes NO SENSE upon detail analysis.
http://www.valuewalk.com/2013/10/bill-ackman-herbalife-j-c-penney/
actually bill ackman is just covering his ass a little bit because he is SOO exposed. he lost a lot of money on his JC Penney bet, his fund is underperforming, his prime broker is getting antsy, and the people who’s money he’s playing with, are wondering if they’ve done the right thing trusting him.
besides, with the stock at $72, what choice does he have besides maintaining his short position? he HAS to hold on, and hope the FTC will step in, to save his money.
if the FTC has a choice politically, to either shut down a 30 year old company employing thousands OR saving ackmans money, it’s easy to see which way they’ll sway. economy is bad, it’s not the right time time to shut down old performing companies on ‘disputable’ allegations of pyramiding.
so while ackman will, of course, bravely defend his decision to water down his risk in herbalife, it’s important to see the other side of the argument too:
for the REAL story behind ackmans move, read the full story:
http://www.zerohedge.com/news/2013-10-02/ackman-books-herbalife-losses-forced-cover-40-short-avoid-being-forced-cover-short
Yet all of Ackman’s analysis on WHY the Herbalife stock prices stay up remains true… Sure he’s covering his own arse, but so’s everybody else.
So what exactly is a “political move”, hmmm? When it’s requested by the congressional members?
what analysis chang ?all you need is a pair of eyes in your head, to see WHY herbalife stock prices are going up.
old stock market stalwarts like icahn, soros, stiritz and DA davison are trading with herbalife. no ones backing ackman except some paid press and a few political lightweights [local hispanic leaders, consumer fora etc]
ackman keeps threatening that regulatory intervention is just around the next corner, and then the next corner, but his predictions aren’t coming true, and the market is not responding to his ‘wolf’ cries any more.
he thought PwC would shudder and shake and wash their hands off the herbalife audit, upon receiving his ‘cautionary’ letter.but guess what, PwC did not see it fit to even respond to his ‘threats’.
now, under pressure from his brokers and his firms bottomline, and confronted with a rising and rising stock price of herbalife, he’s converted 40 % of his short into put options, thereby reducing his risk.
so who blinked first ?
Looks like there’s a LOT of blinking going on in the Herbalife headquarters. The SEC, FTC, DOJ, FBI, AGs from Illinois and New York, and that’s just the ones that have ANNOUNCED investigations. blink blink blink blink blink blink LOL
HOOOOWWWWWWLLLLLLLLLLLL!!!! the wolf is howling pretty loud right now! LOL
Here’s some information about Anthony Powell’s lead selling business. He was on top of the pyramid scheme complaint list, but I didn’t find much information in August 2013.
truthinadvertising.org/leading-nowhere-industry-within-mlm-industry/
The second one on the list (of pyramid scheme complaints) was Shawn Dahl / “Income At Home” (mentioned around post #100 or so).
The companies (Herbalife and others) may be extremely vulnerable to that type of business practice. Those teams are pyramid schemes in themselves, 100% focused on selling the opportunity. The MLM companies allowing those practices can be accused of “organizing” them, as some type of “main organizer” for multiple pyramid schemes.
Anthony Powell had reached President’s Team (very close to the top in Herbalife). It’s possible to blame “rogue distributors” elsewhere in the organization, but that defense strategy isn’t very wise when the “rogue distributor” is one of the leaders with 22 years experience as sales leader.
One “rogue distributor” can be accepted as an “accident”, but Herbalife had many of them and they were typically found among the leaders. Herbalife profited from their activities and rewarded them for running their businesses like they did. It actually encouraged being “rogue distributors”.