Herbalife continue to dodge retail in LULAC response
Mid last year saw a number of organisations write to the FTC and ask that they investigate Herbalife. One of those organisations was the League of United Latin American Citizens (LULAC), and they’ve remained at odds with Herbalife ever since.
“I’m mad,” said LULAC’s National Executive Director Brent Wilkes. “I’ve seen Latinos ripped off by banks and others, but this scheme really takes the cake.”
After talking with Herbalife “and not getting the answers I wanted to hear, I concluded they are defrauding upwards of 300,000 Latinos a year,” he said.
Another consumer activist planning to attend the meeting said, “We think the problem is getting worse, and we think that the FTC is really important.”
In attempts to appease LULAC of their concerns, Herbalife have since met with them on three separate occasions. Those meetings however appear to have achieved little, with Herbalife President Dan Walsh now penning an open letter , sounding a little frustrated at the lack of progress, now penning an open letter to Brent Wilkes.
Sounding frustrated at the lack of progress, Walsh writes
I write to address your May 31, 2014 letter to LULAC’s membership regarding Herbalife.
We at Herbalife are proud of our presence in the Latino community and the role we play in helping people achieve healthier lifestyles through education and the use of our healthy and nutritious products.
We also are proud of the business opportunity Herbalife provides to those who choose to earn part-time or full-time income. Indeed, our strong support in the Latino community is directly related to the widespread popularity of our products and the business opportunity we make available to those who choose to pursue it.
Herbalife executives and representatives have met with you on three separate occasions. We have explained to you our industry-leading policies and procedures designed to protect Herbalife Members and consumers, and have responded to the issues you have raised during those meetings and elsewhere.
Yet, in your letter you continue to state as “evidence” what are in fact misconceptions and unfounded, inaccurate allegations.
Much of Walsh’s letter is directed at the involvement of the Latino community in Herbalife. That I’m neither here nor there on, but what did interest me was Walsh’s comments regarding retail activity within Herbalife.
Like most consumer product companies, including but not limited to direct sellers, Herbalife relies partially on independent, third-party research to understand point-of-sale information.
Research by Lieberman Research Worldwide and Nielsen shows that Herbalife has millions of customers in the United States and that 78% to 87% of our customers are not within our network of Members.
Why Herbalife needs to rely on any third-party company to tell them how much retail activity is going on within their own company remains a mystery to me.
Herbalife know who is and isn’t an affiliate, and as such tracking product purchases made by affiliates and comparing it to products bought by retail customers is straight forward.
Part of the problem I suspect however, is Herbalife erroneous conclusion that what their affiliates do with products they purchase, has anything to do with the company’s own retail figures.
Third-party, independent research conducted by two leading research companies demonstrates that Herbalife has millions of customers in the US, approximately 78% to 87% of whom are non-Members.
Moneys paid by these customers directly to Members for product purchases are not reflected in the numbers you quote from the Statement.
What anyone pays Herbalife affiliates for is neither here nor there. Retail revenue within Herbalife is what they have on the books, that being product orders made by retail customers.
What are those figures?
Well, Herbalife do but it’s a closely guarded secret that has never been made public.
Walsh claims that
the vast majority of Herbalife’s Members (73%) join primarily to obtain a discount on products for their own use.
In other words, most new Members do not expect to earn a paycheck from Herbalife, and receive precisely the value they do expect and pay for – a great, high-quality product at a discounted price.
No source is provided for Walsh’s statistics, and given events last year the truth of the above is extremely questionable.
In response to criticism that Herbalife was trying to pass off affiliates as retail customers, Herbalife announced they would introduce a wholesale customer class last February.
The wholesale customer class is an industry-standard. Offering a wholesale discount to customers in exchange for a monthly product commitment, wholesale customers are cut off from the compensation plan and are unable to earn.
This fits Walsh’s description of 73% of Herablife affiliates above and, by introducing the class, Herbalife would prove unequivocally prove Walsh’s claim.
April came and went however, and there was nary a peep from the Herbalife camp. Infact it wasn’t until June that Herbalife addressed the issue, providing the results of a company commissions survey that was supposed to act as a substitute.
Problem was though that the Neilsen survey they paid for was a poor substitute, and was in reality nothing more than a smoke and mirrors attempt to bury the problem.
Why Herbalife never introduced the promised wholesale customer class I can’t say. If I had to guess though, I’d say the facts being Walsh’s statements don’t reflect the reality.
To this day I have a hard time taking anything Herbalife put out seriously, and I suspect LULAC and similar organisations do to.
The fact of the matter is Herbalife could introduce a wholesale customer class and put out their retail versus affiliate revenue ratios in a heartbeat, but they continue to refuse to do so.
Instead, we continue to get misdirection and puffery such as this:
As the FTC stated in its January 14, 2004 Staff Advisory Opinion, the critical question relating to a multi-level marketing company is “whether revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.”
So how is this established? Primarily via looking at the volume of revenue generated via retail sales.
What are Herbalife’s company-wide retail figures? Again, we don’t know and the company refuses to make the information public.
Strangely enough, that doesn’t stop them from citing rulings that would in all likelihood see them sunk:
On June 2, 2014, the Ninth Circuit confirmed this accurately stated the law. FTC v. BurnLounge, Inc., No. 12-55926, — F.3d — (9th Cir. June 2, 2014). As the BurnLounge decision makes clear, a legitimate multi-level marketing company sells real products for which there is genuine demand, by members and non-members alike.
The BurnLounge appeal cited above held that, due to upwards of 90% of BurnLounge’s revenue being derived from affiliates, that there was an insufficient lack of retail demand for their services. Thus it followed that despite commissions being paid out on the sale of a service (product), the demonstrated lack of retail meant that these were incidental to the business opportunity.
If we were to apply the ruling to Herbalife, we’d need those retail figures.
What are Herbalife’s retail figures? Again, we don’t know and to date the company refuses to release this information.
No one is paid anything merely for sponsoring new Members, so we do not compensate any “recruiting machines.”
Until they do, I doubt LULAC or anyone else with half a brain are going to take statements like the above from Herbalife seriously. How can we when the basis such statements are made on are surrounded in a veil of secrecy?
I don’t know how many lawyers went over Walsh’s letter to Wilkes before it was published, but it couldn’t have been shorter than the five minutes it would have taken Walsh to provide Wilkes with Herbalife’s retail revenue figures.
We’re still waiting Walsh, where are they?
Footnote: You can read Walsh’s logic-vacuum response to LULAC over at their “I am Herbalife” website.
well , it’s really nice of wilkes to openly admit he’s MAD . his madness may have something to do with being on ackman’s payroll too [ not proved – but apparent].
the questions posed by LULAC , in their letter ,are emotional rantings , unbased in fact or law .
the replies by herbalife are valid in law and within the boundaries of ‘regulations’.
companies are not psychiatrists , they are profit driven systems which ONLY need to satisfy law & regulations and NOT emotional states of detractors.
you mean ‘retail’ detail ?
you’re never gonna get it .
And therein lies the crux. If Herbalife had any significant retail, they’d be shouting from the rooftops about it.
Not only is HLF not providing the retail numbers, they are under a permanent court order to provide them on demand to the California authorities, as a result of a court settlement several years ago.
herbalife has already formally announced that they drop ship approx 30% sales directly to non member customers .73% distributors self consume .with these numbers they will be safe in court , and fall within the requirements of the FTC advisory 2004.
so ? let the california court ask for retail documentation , if they like . why is ackman asking ? why is LULAC asking ? why is oz asking ? none of your business fellas ! herbalife said it does not have visibility into individual retail , and you have no AUTHORITY to ask .
Which has nothing to do with retail revenue figures.
No source and has nothing to do with retail revenue figures.
Keep those consumers and potential members as mushrooms.
Kept in the dark and fed on bullshit.
herbalife will reveal only those statistics that it is REQUIRED to disclose 1]by law ,2] by regulation.
show me the law or regulation that says that herbalife is expected to reveal retail percentages to the public .
the disclosures herbalife has to make, are fully met in their annual disclosures .
just because someone cries, does not mean they will be picked up and wiped and fed.
don’t be emotional littleroundman , this is business not babysitting .
I think the most significant is Herbalife itself doesn’t understand the inherent contradictory position it is standing on (and how fragile it is).
If 73% of their distributors are self-consumers who do NOT expect to profit, and a significant number of them are Latinos (believed to be 70-85%? I don’t have a clear figure handy). Then they can NOT claim to be helping Latino to be making money and improving their economic situation. They can claim something nebulous like “improving their life” but that’d be “healthy lifestyle” not “$$$ in wallet”.
For them to claim both is, frankly, bull****.
as a part of the court settlement in california , for the purpose of this particular settlement , self consumption by distributors in california , was given the definition of ‘Retail”.
whats left in california now ???
Burnlounge is like a Rorschach test: both sides see what they want to see out of it.
DSA and major MLMs see it as reverse proof: we’re not like Burnlounge; we sell a lot of products for real.
MLM Critics see it as proof that retail sales in itself is not a factor; only retail sales in proportion to overall sales is meaningful.
It appears that MLM critics is closer to the truth than DSA and the major MLMs, and if Herbalife doesn’t see the writing on the wall, it and DSA will be forced into a major change in the near future.
And Dan Walsh wonders why LULAC or anybody else isn’t taking him seriously.
There’s a problem with running around making all sorts of claims and then failing to back them up. I’ll let you work that one out.
the DSA has always been closer to the truth , whether the argument was self consumption or the biz op rule .
at the end of the day , the courts and the FTC seem to come around to the DSA’s view .
so, who is winning the battles chang ? so, who is RIGHT ?
Certainly, Dr Freud
Actually, I couldn’t give a damn, emotional or otherwise.
As K. Chang so succinctly put it:
My impression is Herbalife considers itself to be “too big to fail” and has become sluggish, arrogant and is ignoring the most basic rules WRT respecting both its’ members and consumers, banking instead on opening new markets, particularly in Asia.
Such as opening up Vietnam and Cambodia, where their best-selling products are… weight loss supplements…where there’s little to no obesity. 😉
The secret retail sales statistics are probably a decoy, primarily used to draw the attention away from other problems. The longer they can hold those numbers vague and secret the more people will focus on that part.
In a civil case, the burden of proof will be on the party making claims about something. Herbalife can simply defend itself by referring to “research reports”, it doesn’t need to make other claims than that. It can use other types of statistics too, e.g. statistics about shipments sent DIRECTLY from Herbalife to different groups of people.
Any opponent making claims about “lack of retail” will have a hard time proving his claim. And if he manages to prove something about it, it won’t prove anything illegal in itself.
Herbalife is much more vulnerable to focus on certain other parts, e.g. on the qualifying purchases to become and maintain positions as Sales Leaders. That’s why I believe the retail statistic only is a decoy.
It’s like that briefcase in “Pulp Fiction” (the movie) or “Ronin” (the movie). You never found out what’s in it.
It’s the same with “Amway 1979”, “Webster v Omnitrition”, “Koscot” and most other legal sources. “People will see the reality as THEY are themselves, not as IT really is”.
I don’t believe any of us will be exceptions from that statement. 🙂
I look forward to the end of Herbalife. It can’t come any sooner. The lies and false claims that lead to a 90% drop out rate in the first year have victimized enough people.
herbalife has a 100% buy back policy . hence there is no question of loss . even if there were lies and false claims by an upline distributor, buyback ensures that there is no resultant victimization or deception .
some drop out’s may feel ‘regret’ but neither society nor courts can legislate or regulate to prevent ‘regret’.
That policy only applies to products bought DIRECTLY from Herbalife, doesn’t it?
The complaints (or some other material) had some additional information about “almost impossible to return products”, but I don’t remember all the details.
Thats the dumbest shit I have ever heard.
Which is precisely why such forums as BehindMLM exist and are so successful.
Firstly so potential victims can see what actually goes on in some of these multi level marketing companies without having to wade through reams of legal documents and, secondly, so they can get a sense of contempt the “Anjalis” of the industry feel for its’ victims.
anjali: herbalife has already formally announced that they drop ship approx 30% sales directly to non member customers .73% distributors self consume .with these numbers they will be safe in court , and fall within the requirements of the FTC advisory 2004.
1]the 30% and 73% figures are from herbalife own documents , so they cant be dumbestshit.
2]the projection that these figures satisfy the FTC 2004 advisory ,can be easily verified, by reading said advisory .
the amount of self consumption [73%] is not a cause for worry to the FTC , as the products have value [market study] and demand[ 30% drop shipping].
plus herbalife has no inventory requirements at lower levels , and most members ARE at the lower levels .these factors , along with the surveys herbalife has conducted to study its market , are enough statistics to satisfy a court, in my view . this view can be argued, but its not dumbestshit.
anjali : so ? let the california court ask for retail documentation , if they like . why is ackman asking ? why is LULAC asking ? why is oz asking ? none of your business fellas ! herbalife said it does not have visibility into individual retail , and you have no AUTHORITYto ask .
if the california court/regulators have signed a consent decree with herbalife , that retail proof should be made available to them on request , then how can this power be abducted by ackman or oz? use the rational part of your brain.
under which law or regulation can ackman essay orders to herbalife ? or LULAC or oz ? you can yell up a public storm , BUT you cannot pretend authority.
since ackman , LULAC or oz cannot legally demand retail information from herbalife , my statement cannot be dumbestshit.
since you are the ‘one who knows’ , feel free to bring your wisdom to the table .
standing around saying dumbestshit , is just plain dumb shit .
The latest ‘gold standard’ from herbalife says this :
the usage of ‘all’ should cover all product sales , whatever the source , i would think .
any herbalife distributor reading could probably answer this .
the number of complaints are too low, for their information to be treated seriously . i read somewhere that since the ackman attack , the FTC has received only around 18 complaints regarding herbalife .
Because Herbalife would have us believe they have significant retail activity.
I don’t know what the schooling system is down in India but I was taught to think critically.
If you’re running scams like Speak Asia, you want everyone to open wide and swallow without question.
For everyone else, simply stating you have retail is not good enough.
Take five minutes to release the retail revenue figures or face that not doing so implies the reality is far from the narrative being pushed.
The request that Herbalife disclose their retail revenue figures was never made on legal grounds, it was made on common-sense grounds.
Y’know, that thing those not interested in scamming people have.
Spare a thought and be thankful anjali isn’t in charge of US regulators.
The TelexFrees and Zeek Rewards of the MLM industry would run rampant and be beyond analysis, criticism or reproach. They’d operate on a pedestal and god forbid us lowly non-executive dare to question their business models or data.
What a nightmare.
so what kind of schooling does australia have oz ?
the world has to run on commonsense of people who claim to have said commonsense ?
that’s the dumbest shit i ever heard .
you may not like law , but there it is . law ensures people don’t get scammed .
the products of above mentioned companies Fail even a cursory inspection . no chance of running rampant at all .
if your grouse is speakasia , then SA was just first love , stupid ,juvenile and precious . no regrets .
The point about the CA court ruling is HLF should have had the retail numbers at their finger tips when the question was asked over 2 years ago on a quarterly call, not to mention the time, money, and effort HLF has spent on the issue since.
Where there’s smoke, there’s fire. HLF has also had more than enough time to ask for these same numbers from their distributors, numbers the distributors are required to maintain by HLF rules.
The retail sales level is the real issue, NOTHING else is more fundamental to the question of HLF being an illegal pyramid.
If most poor, lower class (Hispanic) fat people buy overpriced HLF products only to lose weight, why aren’t there nearly as many middle class people buying the HLF products to lose weight? The estimates are HLF is 60-80% Hispanic, yet Hispanics make up a much lower percentage of the population.
Also, if the HLF presentations are anything like most other MLMs, the message isn’t to buy overpriced products to get a discount, the message is to get rich. It makes NO sense that most people turn around and buy overpriced products for a discount. NONE.
This blog isn’t successful, if the measure being used is having results. It merely reflects what is going on, and isn’t doing anything to make the impact more significant than a handful of people giving their opinions on an obscure blog.
Regarding the 100% return policy, many people probably buy a boatload of products at the beginning and try for more than a year, so they aren’t eligible for the return policy.
Also, as stated by the people Ackman recently interviewed, their legitimate overhead and tool scam costs were a much larger part of their loss compared to the product purchases. Therefore, 100% isn’t really 100%, it’s an illusion, just like the HLF retail figures.
Flock instinct? 🙂
There is no law against asking questions.
And people get scammed irrespective of the law all the time. Part of that is listening to people who abandon common-sense.
Worst still they abandon it themselves and come up with notions like asking questions is illegal.
Penny auction bids and VOIP services fail cursory inspection? Please.
It was the business models that revealed a lack of retail. Business model being the keyword there. You can’t stake the legitimacy of Herbalife on what kind of product(s) they have.
The irony is too delicious.
yeah norway , when they ask questions , its ‘critical analysis’ and ‘commonsense’ .
when i question their ‘critical analysis’ and ‘commonsense’ its horseshit 🙂
asking questions is fully kosher , expecting answers is where you go wrong .
you are not entitled to any answers outside the requirement of law. herbalife , its business and business information is protected by law . which is good , otherwise companies will not be able to function .
I’m also not entitled to believe a word coming out of Herbalife HQ about retail activity until they provide said figures.
Neither are LULAC, Dan Walsh’s frustrations be damned.
Remmeber, Herbalife are getting upset nobody is taking them seriously.
Everyone else is happy calling them out on their bullshit and getting on with their lives.
stock is holding up , business is flourishing , who is not taking them seriously ?
ackman and his dozen homies ?
Cute, but betrayed by Walsh’s evident frustration.
Stock is being propped up by stock buybacks, high level insiders are selling stock, business fundamentals are suffering, the SEC, FTC, DOJ, FBI, and at least 2 state AGs are taking the HLF scam seriously. The regulators don’t get involved unless there is significant evidence of bad behavior.
Trying to change the subject is indicative that HLF is guilty as charged.
You seem quite knowledgeable about it. What is your “resume” in the MLM industry?
Except the buyback is only for 6 months, even when the most pro MLM Coaches, such as Richard Bliss Brooke, says you need at least a whole YEAR (if not several) to learn the business for real.
During that year, you’re barely making things meet, and you got a family (or yourself) to feed, house, cloth, etc.
Not to mention the shame machine where your upline will come with the entire “team” to shame you into staying in past the return deadline. And they’ll probably offer to buy the inventory from you to prevent the actual return from happening. You’ll simple “fade away”. The company never had to know.
I thought HLF recently raised it to 12 months?
Even factoring in their complete line of bullshit that 73% arent trying to build a business, it STILL shows less than 1% make any money. They did NOT do themselves any favors putting that out.
ALL those “customers” and no one to speak of is getting paid? They just keep digging themselves deeper and deeper, dont they?. ha ha It must be just the “guys at the top” that have the customers.. ha ha They really need to just shutup now.
I thought most people saw it as bullshit, not horseshit? 🙂
The trick is normally to identify and capture the best weapons (arguments), rather than solely looking for the ones you can find close to your own “stronghold”.
Metaphors are different in India. Cows and Bulls are sacred there… mostly.
read the herbalife /LULAC letter , this question is satisfactorily handled by herbalife .
MLM is about selling to friends, family and neighbors , so it can take root in a particular community and grow organically .
it’s not rocket science.
stock buyback ,is old hat , we know herbalife wants to squeeze ackman and /or take the company private at some point .high level insiders selling stock has more to do with financial jugglery , than losing faith in herbalife . these insiders still hold a lot of stock and are still with herbalife.so , i’m missing your point here .
read the first quarter results of herbalife 2014, it requires just simple comprehension talent :
did the regulators get involved of their own volition ? the high decibel press noise and ‘pressure groups’ ackman has conjured up , has forced the regulators to respond. is this going to court –i think not . a couple of slaps and we’ll be done , i think .
you live under a cloud of disinformation, chang :
The question here is… are they actually doing that, or are they signing up new distributors by promising “supplementing your income and be healthy too”? (Yes, there’s a difference… a FUNDAMENTAL difference)
and this concerns me because ? people even think burnlounge 2014 is harmful for MLM . what can one DO , norway! 🙂
which is why everytime oz declares -BullShit ! , i bow my head in silent prayer .
I knew that, but I didn’t know the sh*t was sacred too. 🙂
(back to topic)
I still believe the vague and secret retail customer statistic only is a decoy, designed to draw the attention away from more vulnerable parts and to offer several layers of “resistance”.
HERBALIFE IS ORGANIZED LIKE THIS
1. “Feeder program” (low level distributors)
It’s an ILLUSION of an income opportunity. It doesn’t really PAY anything, but you can qualify for a higher discount on your personal purchases.
It gives the feeling of being a real income opportunity, the brain can clearly be misled to believe it is. It does offer the chance to earn a sales profit from sale, but so do any other products you can purchase as a consumer from almost anywhere.
People simply have too complicated ideas about what they can do or can’t do, e.g. the idea that they must be registered in specific ways to legally do business. That’s not necessary in small scale trade or in any other small scale business. It’s required for SOME business activities, but that doesn’t mean it’s required for ALL types.
The feeder program will feed the recruitment program with new prospects = people interested in earning an income, inexperienced enough to accept illusions. They will partially support payouts to the recruiters by paying an overprice for the products.
The feeder program will fail to meet the second pronge of the Omnitrition test. It will meet the first one (paying for the right to sell a product), but the second one is the most important part of that test.
2. Recruitment program (Sales Leaders)
That’s where the potential pyramid scheme can be found in Herbalife, from Sales Leader positions and higher up in the system.
People do clearly pay for upgrade to a Sales Leader positions, 4000 PV or 5000 PV for the upgrade alone, then 4000 PV in monthly qualifying purchases to qualify for recruitment based rewards.
This part will meet the criteria for both parts of the Omnitrition test.
Nope, merely out of date. It *was* 6 months up to about February 2014, when Herbalife launched the “I am Herbalife” anti Ackman campaign.
Their current defense can be roughly summarized as “we’re a product-based pyramid scheme… but we have a 12-month refund policy if you realize it before then.”
1] sales leaders and above comprise around 29 % of herbalife members [from – opportunity.herbalife.com/Content/en-US/pdf/businessopportunity/StatementAverageCompensation2011EN.pdf]
2] in amway 1979 , the court found that only 25% of distributors were recruiting and hence receiving recruitment commissions.
3] the court found amway to be a product sale company inspite of above recruitment commissions
4] this amway logic has been applied in burnlounge 2014 , in reiterating that amway also incentivized recruitment , but is an example of legal MLM .
Here’s the Omnitrition test (approved by the court):
The low level distributors in Herbalife receives the right to sell a product, but that’s not enough to qualify them as participants. The second pronge is the most important one, “without which it can’t be a pyramid scheme” for those distributors.
Sales Leaders will meet both criteria. They can clearly be participants in a pyramid scheme.
Low level distributors CAN receive one time sales commissions from Herbalife, but it’s not very common and it’s only about small amounts, too insignificant to have any practical meaning. Law isn’t about hypothetical issues. The one time sales commission will be for anyone they introduce to the discount part of the program. It will be based on sale rather than on recruitment (they don’t earn anything for upgrades).
Some other interesting facts about Herbalife’s commissions …
Sales Leaders can NOT earn any sales commission on product sales to other Sales Leaders. Sales commission = “not related to recruitment” = based on differences in wholesale prices. They can ONLY earn recruitment based commissions from sales like that. Recruitment based = Royalty Override Bonus, other bonuses.
Sales Leaders can ONLY earn sales commissions on sales to low level distributors = the difference between the wholesale price they pay and the wholesale price paid by the low level distributor. They can NOT earn recruitment based commissions.
The pyramid scheme part of Herbalife can technically be separated from the “feeder” part of the program. They have quite opposite rules. The legal issues can primarily be found in one of the parts.
in burnlounge the lower program was separated from the mogul program , because the lower program had lesser than 10% participants , and the product sold was different .
why will the lower[feeder] program of herbalife be separated from the sales leaders levels ? majority members are in the lower program . the products being sold top to bottom , are the same .
the herbalife plan is totally different from the burnlounge plan . i do not see how and why they can be accorded similar treatment ?
I used the test from the Omnitrition case to analyse it. They’re simply not part of a potential pyramid scheme.
Products being sold isn’t illegal in itself. The illegal part will be about WHY people buy those products.
* it isn’t illegal to buy products for personal consumption.
* it isn’t illegal to buy products for reselling purposes.
It has a very low degree of harmfulness to consumers as long as they don’t upgrade to become Sales Leaders.
Harmfulness is about high buy-in price, and about high amounts of monthly qualifying purchases. If it isn’t harmful to consumers it’s probably not illegal either.
It may be “harmful” (hypothetically) to income opportunity seekers, i.e. they will waste their time on something that is difficult to make any money from. It may be “harmful” to people believing in dreams about making profit on selling Herbalife products.
Anjali knows a lot but skipped my question regarding her “resume” pertaining to MLM. If this has already been discussed, please direct me to that post/thread.
i have no ‘MLM’ resume . i fancy myself more as an activist . i’m contributing , in a small way , in helping my country adopt regulations for the MLM industry .
which is why i follow the MLM debate online and participate because :
1] it throws up viewpoints i may not think up myself.
2] we get to call each other stupid all the time .
SpeakAsia Online (India, Bangladesh)
–> All India Speakasia Panelist Association (AISPA).
There’s probably 50-60 articles here about SpeakAsia, so I can’t point to a single article or comment. SAOL was halted in May 2011, but the case is still going on in the court system of India.
It had between 1.2 million and 2.4 million members when it was halted (primarily in India and Bangladesh). Known amount 2,276 crore INR ($450 million USD)(1 crore = 10 million, 1 lakh = 100,000). That amount is probably only a fraction of the real amount. Known amount in virtual currency 30,000 crore INR = $6 billion USD.
Organizer / predecessor:
Sevenrings International (India, Dubai, Italy)
Offsprings / reload scams:
Mister Colibri (Brazil)
TelexFree can be said to have copied and refined some of the ideas from SpeakAsia, e.g. the internal payment system and some money laundering ideas.
Yeah claiming not to have an MLM resume was a bit silly.
There’s hundreds of comments from anjali on here defending the Speak Asia pyramid/Ponzi scam. That’s why I’m pretty strict on anything even remotely offtopic with her.
There’s years of flawed-logic history there…
why ? i have never participated in any MLM . i am a net loser in speakasia . my role in SA was after the company shut down . so , where is the ‘MLM resume’ . my participation as an activist in the speakasia fight is out there for anyone to see.
i could say the same for you . you appear to have flawed logic with respect to MLM , which is contrary to case law. the FTC appears to have a flawed logic history , penning advisories to the DSA in 2004 , and then pursuing a path contrary to that advisory . life and logic often take circuitous routes ,it’s where you’re going that matters.
if we need any more discussion on the subject of ‘the life&logic of anjali’ , i suggest oz pen a whole article about me . make me a star 🙂
It provides a backdrop of where you’re coming from.
How you could mistake Speak Asia for anything other than the Ponzi/pyramid hybrid scam that it was, despite all the evidence that was presented and discussed on here, undermines most of your discussion pertaining to Herbalife.
So instead of acknowledging Herbalife’s failure to disclose retail figures, we get excuses like “you have no right to ask Herbalife for their actual retail revenue figures. Just accept the figures they provide as if they were gospel”.
Speak Asia is relevant because if I recall, we had “no right” to ask them about their survey customers either. Y’know, the ones that didn’t exist.
Quite frankly, the parallels between Speak Asia’s survey customers and Herbalife retail revenues both not existing (Herbalife’s not in any significant numbers), and your arguments for both companies’ conduct, are an exercise in watching history repeat itself.
Seriously, for anyone questioning what I’ve written, just punch in “anju site:behindmlm.com” or “anjali site:behindmlm.com” into Google and go grab a cup of coffee. There’s comments dating back to 2011.
That was anju/anjali defending Speak Asia at the height of its Ponzi activities in India (2011).
Here’s what she thinks of recruitment scams and their efforts to launder stolen money overseas:
Note the ease with which one could substitute “speak asia” with “telexfree” today. Or even Herbalife for that matter (“selling products to retail customers”).
Speak Asia’s owners siphoned $104 million USD of stolen investor money out of India. That money was never recovered, with some of it used to pay Speak Asia’s shills (such as anjali) in the years that followed Indian regulatory action against the company.
Straight out of the HYIP excuses 101 handbook. This is the mindset we’re dealing with here.
You could, but there’s countless regulatory actions in the US that’d indicate you were wrong. Not withstanding the latest BurnLounge appeal (which, like it or not, was ultimately decided on after analysis of retail revenue figures).
the arguments for herbalife , are supported by many smart business minds in wall street , established press, the DSA , millions of MLM participants , and i’m sure there’s lots of political support too .
if you’re lumping me with their mindset , i have no complaints.
i have no regrets about speakasia .it has led to a good place. feel free to kick my ass about it .
Common-sense > all.
In MLM, if you’re not selling products to retail customers then you’re probably doing something you shouldn’t.
The problem with that argument is
1) “Wall Street” only cares about profit to shareholders, not business ethics. Even John Hempton from Bronte Capital, one of supporters of Herbalife, said so. Just look at tobacco companies.
2) “Established press” is not supposed to express a preferences.
3) DSA is formed and owned by the largest MLM companies. Herbalife is a founding member, IIRC.
4) Million of MLM participants have a stake in the game. They are hardly impartial witnesses.
5) Political support has nothing to do with legality.
Your argument can be summed up as “bandwagon fallacy”: it’s popular, therefore it must be valid/legal.
And the same BS was trotted out in defence of Speak Asia:
Attempted Legitimacy through association doesn’t negate a business running a pyramid and/or Ponzi scheme.
Why do you think I pay no attention to covering the whole wall street mess and lobby situation between Ackman and Herbalife?
Couldn’t care less. Common-sense analysis of Herbalife’s business model trumps all. Hopefully when all is said and done, that’s all US regulators will pay attention to.
Specifically, the complete lack of evident retail in Herbalife and their repeated attempts to mislead the public with unsubstantiated statistics and strawman percentages (shipping percentages in place of actual retail revenue figures/ratios etc.).
no , law trumps all . to imply that law has no commonsense ,is nonsensical.
you are welcome to your interpretation of burnlounge 2014 ,so is ackman . your experience of MLM is 5 years , ackman’s is not worth talking about . on the other hand DSA and herbalife have been in the trenches for around 40 years , dealing with the FTC and the law. dismissing their interpretation of burnlounge 2014 , is immature .
the majority opinion seems to be the herbalife matter will not go to court . FTC may sign a consent decree or whatever , with herbalife with some warnings and some fines.
such an event will then say something about the mindset of ackman and his bandwagon , won’t it .
Agreed. Which is why your silly pyramid scheme agenda will never amount to anything.
Anjali in 2011:
She thinks Ponzi/pyramid scheme hybrids like Speak Asia are “fair” and should be legalised.
that’s a good step forward by you .
now read amway and burnlounge again .
i have to say , in 2011 , i had as much understanding of law , as oz has today .
I was right about Speak Asia, and have used the exact same common-sense analysis methodology for Herbalife.
Hell, I use it for each and every MLM company review that I conduct on BehindMLM. Been that way since 2009.
Here in 2014, we have the same arguments being trotted out by Anjali, only the company name is now different. She harped on and on about “the law” and how we were all wrong about Speak Asia for years.
Fat lot of good it did then, and fat lot of good it will do now with Herbalife.
Wrong? Yeah, work that one out fellas.
oz , you’re Darn Good with ponzi/pyramid schemes .
but , you don’t yet get MLM .
i am using the same arguments that herbalife supporters are using . if you find my argument flawed , then you find the argument of the whole pro herbalife camp wrong .
neither side has the last word yet , so i’d stop with the self congratulatory mode .
Common-sense > all.
In MLM, if you’re not selling products to retail customers then you’re probably doing something you shouldn’t.
All of which were so publicly, comprehensively and spectacularly wrong, the MLM industry must cringe every time they see the name “Anjali” associated with MLM
you’re overreaching with herbalife , that’s what i’m saying .
yeah , like the FTC and its hercules vandernat were so publicly comprehensively and spectacularly wrong in trying to push their omnitrition dicta down MLM’s throat , in open court.
if they can live , so can i . what’s to cringe ?
So explain the difference… Without resorting to “self-evident” stuff, fallacies, crazy extrapolations, etc.
i’ll start,and you good people can add value if you like :
valuable fairly priced products
low entry bar
no inventory loading , preferably at any stage
in such a system it doesn’t matter ‘who’ is purchasing the product .
What you described has nothing to do with MLM. it could be applied to any sort of marketing. So you didn’t really answer the question.
but this is the system amway follows , from what i read .
the larger part of the herbalife , also follows this system .
both are MLM , right ??
Fallacy of composition.
Didn’t Zeek Rewards and Telexfree both claim to be MLM companies as well ???
Sorta makes your point a teensy bit irrelevant.
when you have to purchase something non refundable to participate —- game over.
zeek and telexfree are not even in the same universe as amway or herbalife .
i just read an article by kevin thompson , so i’ll add a point to post#81 :
if there are required inventory purchases they should be low enough ,to suit levels of personal consumption .
Ah, of course, silly me.
I forgot Anjalis’ rule #1:
“They are all MLM until they get caught, then they are a million miles away from being MLM”
no , egregious schemes get caught .
after amway 1976 , the FTC never attacked MLM.
they’re not starting now , just because ackman is barking up their ass .
read amway , read belgium , read burnlounge , read the FTC advisory and you wont have to make stupid statements about being millions of miles away from anything .
FORGET OMNITRITION, and i promise you will be allright !
The products seems to be overpriced in themselves, based on the product costs. In addition, Herbalife has a 7% non-refundable “surcharge”, overpriced S&H, overpriced non-refundable sales taxes (overpriced when products are being consumed internally, non-refundable when products are being returned).
The sales tax part is technically a fraud.
The entry costs for Sales Leaders are 4,000 – 5,000 PV = somewhere between $2,500 and $4,500 dependant on previous discount level (VAT not included). Monthly costs were around $2,500 in the complaints I checked, not including lead purchases. Some had up to $4,000 in average monthly costs.
Complaints reflected both inventory loading and trouble returning products. The “10 customer rule” / “70% rule” were used to make it more difficult to return goods, rather than being used as it pretends to be (as a safeguard to protect against losses). Only products bought DIRECTLY from Herbalife could be returned.
Please stop repeating marketing BS? You can point out if they have fixed the problems I mentioned here, but marketing BS will be ignored by most people.
Herbalife’s “cleanup actions” have only affected the U.S. and Puerto Rico. That indicates that the only intention is to stay out of legal trouble where they’re under some pressure, rather than to fix the real problem. If people only responds to pressure, then it’s exactly what they can expect.
it’s amazing how people are putting everything about herbalife under electron microscopes. lets nit pick , lets split hairs ,lets pick herbalife’s bones .
herbalife is under attack because its being called a pyramid scheme, not because of S&H and sales tax refunds . if these things are real problems , the FTC will ask for rectifications. are they going to shut down herbalife for 7 % surcharge ? is the FTC a clown ?
Says the internets’ most notorious nit picker and hair splitter.
It’s obviously a part of the problem, a very significant part. Most of the Royalty Override Bonuses derives from the 7% surcharge paid by other members, and from other overpriced services.
People buying products would normally not have accepted all the fees accepted by income opportunity seekers. Herbalife is almost impossible to sell at full price in a normal market, it’s primarily sold to the participants and the low level distributors.
Herbalife may have corrected some of the problems. Trying to minimize them isn’t a good strategy. People will simply not believe in that idea.
Some of the worst problems may have “disappeared” when Anthony Powell left Herbalife in January 2013, some may have “disappeared” when Shawn Dahl left Herbalife in June 2013, some may have “disappeared” between those 2 dates when 28 lead selling businesses got “handcuffed”. I’m not familiar with all details in Herbalife’s “cleanup process”.
I’m familiar with the restrictions against selling “Herbalife Success Tools” at a for profit price, from June 2nd 2014. The restrictions only applied to USA and Puerto Rico = within specific geographical jurisdictions affected by U.S. laws. That indicates that the focus isn’t on correcting a problem, the focus seems to be on avoiding legal risks.
You are not in and never have been in an MLM such as Herbalife or Amway? You stated, “it’s not rocket science”. Shouldn’t you walk the talk?
You’ve ONLY participated in SA one of India’s largest Ponzi schemes.
And Anjali does…..Because of her experience?????? Lol
SpeakAsia was the only one I was able to IDENTIFY, but that was mostly AFTER it had been halted. She has been rather active in Herbalife discussions too right from the beginning.
Since you had asked 2 times, I decided to give you the information I had (in post #61), mostly background information about the company itself.
by your argument, oz has to be the biggest ponzi/ pyramid schemer the world has ever seen , as he claims knowledge of such businesses.
you’ve been caught out oz !
it also means that old goat vandernat is secretly working in an MLM which has >50% retail . sly !!
no , I joined the company when they had announced their wonderful beautiful buying club idea , which could not move forward , as they were shut down ,without being heard .
i was part of a fight to give the company a chance to see its idea through , facilitate payments to the participants ,and get the govt to change the law and set up a regulatory system for MLM .
our association AISPA petitioned the govt twice [ 4500 signatures / 7000 signatures] to get the PCMC banning act , reworded to provide legal space for MLM .
today we have notched up this fight by banding together with senior consumer activists , to push at the govt unitedly . the consumer body I assist , as a measly unpaid internet researcher ,has recently published a book about direct marketing and its importance to india , and has distributed it amongst everyone in the industry and govt , who matter .
we hold seminars regularly , where corporate heads , lawyers, govt representatives , voice their opinions about direct marketing and how to regulate it .
your statement is not a true reflection of me , i should be allowed to state my position .
There, fixed it for ya.
how does one PROMOTE a scheme which is NOT running?
go read up on what ‘Promoting’ a scheme means .
then find out if the supreme court of india found anything illegal or suss about the work of people involved in AISPA.
learn, then fix.
Promoting = past tense = as in: you promoted and continue to promote, albeit using weasel words.
no , i was never ‘promoting’ , and that is what the law says .
if you mean ‘promoting’ by some weird ‘commonsense’ definition , which seems to be the prevalent penchant on this blog , then its merely your opinion .
the world is full of people and opinions , and however thin the pancake , there are always two sides .
law is on my side , you can keep commonsense on yours .
I don’t do Anjalispeak very well
So, can we take it you’re still being paid by SpeakAsia, then ?
Or are you still holding the position SpeakAsia is / was legal and only closed because of improper official intervention ?
i still believe the intent was right , the idea was right , the process was wrong . a better regulatory environment with clear rules , can guide companies and prevent mistakes in future .life is all about experience and learning and building better . or we can give up and die .
For the record – Pretending use funds from corporate survey clients to pay affiliates, when all you’re doing is using new affiliate money to pay off existing investors isn’t a “mistake”, it’s Ponzi fraud.
we will never know , with manoj kumar’s demise , this thing will never go to trial .
it’s a brick wall .
Don’t ya just hate it when that happens ??
Starting a well intentioned survey company and it accidentally turns into a ponzi fraud.
We do know. The guy Kumar paid to write the surveys (read: copy and paste Wikipedia articles) confessed.
Leave that aside, the business model gave the game away from the get go. There was no reason to charge affiliates for investment positions if clients were paying for surveys.
But there were no clients, so Ponzi ROIs it was.
Bloody hell. Speak Asia was as blatant a Ponzi as there ever was and she’s still in denial.
…And that’s why anything Anjali says about Herbalife should be taken with colossal amounts of salt.
..and oz goes around comparing herbalife to telexfree , that’s why everything he says about herbalife should be taken with more than colossal amounts of salt .
oz , if the FTC doesn’t drag herbalife to court , you’re so like FINIS.
have a nice day .
False. Please don’t make shit up.
As per comment #64, the comparison was made between your past arguments for Speak Asia and TelexFree today. And following on from that, the recurring behavioral patterns evident in discussion about Herbalife.
I don’t really give a shit. My analysis is based on Herbalife business model and compensation plan. That’s solid.
What happens outside of that happens. Fact remains, Herbalife has no demonstratable retail sales. The company deliberately hides these figures and misleads the general public with erroneous statements.
And there’s anjali in the corner, making excuses for them every step of the way. Just like she did and continues to do for Speak Asia.
What’s the fuss about?
False. Please don’t make shit up.
As per comment #64, the comparison was made between your past arguments for Speak Asia and TelexFree today – oz
OK , i’ll take back that insinuation , if you meant it differently . peace .
[back on topic]
(Ozedit: Bill Ackman is not on topic)
I’m not sure Anjali is grasping good and bad, right from wrong. Here’s an extreme example explaining to her why the statement above is ridiculous:
Judges don’t go around killing people to gain experience for a murder trial. Nor can you improve and over-haul the act of it, it is what it is. A Ponzi is a Ponzi and illegal.
yeah , and i don’t have to have an MLM resume to study or learn MLM. so , whats your point ?
OK , we’ll spare your billyboy . but why is a letter from bill keep to SEC off topic ?
Interesting letter to the Chair of the SEC, Mary Jo White, from Professor William Keep, dean of The College of New Jersey’s School of Business, says in light of the BurnLounge ruling, regulators should take note of one possible warning sign about Herbalife.
View the letter here: http://www.scribd.com/doc/231325675/William-Keep-Letter-to-SEC-Chair-Mary-Joe-White
That letter had a fatal flaw, it assumed Amway actually enforced their rules. They don’t.
The court thought so and the Dean of The College of New Jerseys’ School of Business agrees.
But, I think I’ll believe the word of a notorious internet troll with a, shall we say, less than stellar reputation for clear and unbiased commentary.
The former Wisconsin assistant AG doesn’t think so, and by my personal experience, I KNOW they don’t. I couldn’t care less what you think of me, you little coward. LOL
william keep , is merely a professor ,who co wrote some mathematical crap which is never used in pyramid cases .the favorite idea of his boss vandernat , and himself ,about ‘ultimate users being only outside the plan ‘[>50% retail] , was rejected rudely in burnlounge .
unable to swallow the grievous insult , he is writing ponderous letters about ‘distributor behaviors and compliance’to the SEC ,because he HAS to be heard.
this the same bill keep who :
littleroundman , do not believe internet trolls , believe instead, in the stellar reputation of deans , who give clear unbiased advise to the SEC .
Tex, back off a little, will ya? Keep is one of us. He’s buddies with Peter Vander Nat, the FTC advisor/expert witness.
William Keep = Professor, Dean, expert witness
Anjali = anonymous internet troll
I’m pretty certain the vast majority of the readers will know who to believe
Well, that settles that, doesn’t it, given your long history of internet trolling.
a quote from the NY post is not believable ?
He has an issue with Amway and he won’t rest until it becomes your issue, too. Even when he’s not talking about his issue it’s clear he would rather be talking about his issue. 🙂
the fact that william keep cannot follow linear logic and thinking ,and remain faithful to his own ideas , is evident from the above quote from NY post .
similarly, 10 years ago ackman’s firm gotham partners , was long, and pumped the stock of an MLM called prepaid legal .this company was later investigated by the SEC and FTC , who closed their inquiry with no action .
As in herbalife , only around 25% of prepaid legals distributors were selling anything .
the allegations were similar to herbalife ,ie misrepresentation of income opportunity.
one has to wonder why ackman believed prepaid was kosher , but herbalife is not , when both have similar problems.
guys like keep and ackman are shifty ,shifting with the sands of time , they don’t convey ‘trust’.
It’s only a puzzle to someone who assume that one’s position cannot change after 10 years.
that’s right chang . but one would expect progress not regression in 10 years .
it appears ackman knew his MLM back then [proved by FTC inaction in prepaid] , but has forgotten now .
meanwhile herbalife has inaugurated it’s new manufacturing plant in winston, USA . it’s unbelievable that the FTC would shut down all this and more , under orders of a short seller .
Who to believe ??
Who to believe ??
Professor William Keep, dean of The College of New Jersey’s School of Business, former expert witness for the SEC and co-author of the first academic article to present a model to differentiate between a pyramid scheme and a legal MLM
Anjali, renowned internet troll, pyramid member and supporter
you know what ??
just this time, I think I’ll go with the professor.
how ’bout this :
Ha Ha Ha! and poor little ackman relied on the keep/ vandernat paper , to make his short on herbalife .
how much honeymoney did keep make off soros then ??
how much honeymoney did keep make off ackman now [for his letter writing skills ] ??
who wants to be a millionaire college professor !!
They declined to say what they discussed.
No mention is made of compensation.
Another Madame Anjali the Gypsy Psychic tea leaves reading exercise.
With the ability to draw conclusions like that, it’s no wonder anjali fell for the SpeakAsia fraud, hook line and sinker.
they met and did not discuss the weather and regulatory filings show big long buys by soros at the same time and why will keep visit soros’ office twice for free ?
does being a littleroundman affect comprehension ?
I speak the truth. Overall, I support BK, but he is simply wrong in this instance. I’m not going to compromise the truth simply because he is “one of us.”
In fact, Amway’s lack of enforcing their rules undermines the entire 1979 ruling and the legitimacy of MLM in its entirety, so I’m actually doing everyone on “our side” a favor.
You “forgot” to address Bruce Craig.
As usual, pure speculation on your part.
You have no bloody idea about what, why and if anyone got paid.
What’s even worse,you are basing your speculation on newspaper reports, with no input from any of those concerned.
Fairly typical troll behaviour.
To be completely correct, that should read: “I address the truth ACCORDING TO TEXTEX” which, given your 20+ years lack of success in attracting anyone to your cause, along with the court ordered consent orders granted to your opponents, indicates your truth” is a whole lot different than the rest of the planets’
well , we know tex does not approve of MLM and lawyers and courts and the FTC and the laws of the european union . now we know he does not approve of news reports either.
we should all take our cues from tex, and tex alone , as he is the repository of all known information in the known universe.
fairly typical deep space alien behavior.
if you read your little professors letter to the SEC , he has gloatingly mentioned the gold unlimited prosecution and the international heritage prosecution , in which he served as an expert witness and the prosecution won [ he has admitted somewhere in another article , that he receives payment for his testimony]
he failed to mention his role as a witness in the the travel biz prosecution where due to his testimony the state lost .
he has also not informed the SEC , about his meetings with soros’ portfolio management staff . his letter says he has no affiliation with any hedge fund and neither has he received any payments .
just like he was interrogated in travel max , someone should sit him down, and ask him why he scooted off to meet soros’ PORTFOLIO manager twice , in the same time frame that soros’ fund went long .
nobody is blind , except littleroundman , who’s just in love.
I’m going to side with Tex here. To clarify, they allow affiliates to create falsities to have the appearance they enforce the rules. I know most disagree here, but I believe the MLM system isn’t designed to do retail – Which is why it’s such a problem!!
Current real world example, Telexfree. Make affiliates ACTUALLY sell VoIP and they’re up in arms.
A resume as in actual personal experience with MLM. Nothing to study.
MY POINT went over your head. Why aren’t you doing MLM if it’s so wonderful and you’re such an advocate? You said it wasn’t rocket science. Why was your only Network gig a ponzi scheme?
Also, people just doing MLM versus successfully applying the system by what they preach (the legal version) is vastly different. I didn’t expect you to be the latter, and you weren’t because I believe very few exist. In fact, you were neither in MLM and only a Ponzi scheme participant.
I don’t do MLM/Ponzis because they are bad business either financially, illegal, or both. I advocate AGAINST them – See how that works.
That’s why you’ll never hear any “expert statements” from me. 🙂
You will find statements about “ordinary internet users”, “without any specific profession (like lawyers, accountants, etc.)” and similar types of statements. I have absolutely no problem filling roles like that completely. 🙂
1] my country india, currently treats all MLM as illegal
2] under current laws anybody doing MLM can be arrested immediately on the basis of a single complaint .
3] i would not appreciate being arrested .
4] hence , my immediate agenda is to help in any way , to get my govt to rephrase current laws and set up MLM regulation
5] this could happen at any time and the MLM industry already has a body IDSA [indian direct selling association], to look after its interests
6] meanwhile millions of MLM participants also need a platform to protect their self interests .eg :if a simple uneducated housewife is being ripped off by any MLM ,where does she go ?
7] we are trying to create that platform so that MLM participants will always have a voice and say in any developments in the industry , and such dialogue will not be restricted between only industry and the govt .
8] i know of enough people who do MLM successfully and unsuccessfully , there is no need for me to have ‘personal’ experience, just as your judge had no requirement to murder anyone for ‘experience’.
9] i beg of you char, please please allow me to do what interests me !
“AISPA v2.0”? It’s probably better to leave those poor victims alone, “they have suffered enough already”. 🙂
Anjali is so smart and at the same time wouldn’t have any use for toilet paper
during this investigation , keep’s visits to soros will definitely come to light . at that point the SEC will duly shred keep’s letter .
don’t be defeatist norway ! 🙂
There’s those tea leaves in action again.
I simply pointed out indirectly that “Consumer Protection” (Activists) can do more harm than good. 🙂
But you can of course use the same argument against LULAC, so the argument wasn’t biased in itself. And when I have established the unbiased nature of the argument, I can probably mention something about “a lot of noise but very few results, it managed to keep the consumers busy for a long period of time, directing the attention away from more important factors”.
Why would the SEC shred Keep’s letter? Is Keep prohibited from talking with Soros?
sometimes circumstances get in the way . but if we keep trying , we may have better results in future . keep the faith ! 🙂
he can talk all he likes . but if he meets soros’ portfolio manager twice , and then writes to the SEC, as if he is a neutral party with a bleeding heart about public interest ,then who will take him seriously ?
he can say , he met soros’ portfolio manager and gave him advice about how to raise chickens, and ne’er took a penny , but then who will take him seriously?
Again good and bad, right from wrong because I know some “successful” drug dealers.
Btw, Are you suggesting India is depriving it’s citizens instead of protecting them? I still cant figure out why anyone would be an activist for a system where about 97% of people lose money?
IMO, Herbalife simply doesn’t want change and their actions in the review prove that. They chose a system which relies on deception and self consumption. It would be suicide if they enforced retail requirements.
Real life example from ones with experience. Latinos selling Herbalife, Tex selling Amway, and Anjali in a Ponzi scheme. Good for India for trying to put an end to it.
yes , of course india is depriving it’s citizens by not changing the law fast enough . our govt is definitely working to legalize MLM , they understand its importance to the economy and understand that MLM can generate small to medium revenue for citizens who are under educated or underemployed .
an inter ministerial committee was set up for this purpose , there is ongoing dialogue between IDSA , consumer activists and other stake holders with the govt .it’s only a matter of time before the govt implements regulation for the MLM industry . thankfully our govt does not subscribe to your opinion .
there are always two sides to every argument , we must never believe that we are right .from my personal experience in listening to various views in india , the large majority is in favor of MLM , while protecting participants from loss or exploitation .
1] herbalife has enforced a new ‘gold standard’ for for buyback
2] herbalife struck down on lead generating businesses run by its top distributors
3] herbalife renamed its non recruiting distributors as ‘members'[ with and eye on the FTC 2004 advisory]
4]herbalife is now positioned as a buying club MLM , which finds favor with the FTC 2004 advisory ,and which has been recently ratified by the ninth circuit court in the burnlounge appeal
5]the question of retail/ consumption is now moot .herbalife can definitely show its product has demand outside its plan , and has released this information .the important question is ‘why’ people are buying the product and not retail percentage.
6]with new standards of deciding legality of MLM thrown up by burnlounge , critics must revise their view , or end up in the krazy kook korner with the likes of david brear and fitzpatrick . these guys have gotten old raging against MLM , and have no results to show for their positions.
That post was filled with marketing BS with very little meaningful info? If you want to post something like that, try to post it in a Herbalife blog rather than here?
see, these are the kind of arguments that arise from krazy kook korners. comparing MLM to drug dealing !
the burnlounge appeal order says : ‘not all MLM is illegal ‘
the day a court says : ‘not all drug dealing is illegal’ , you may post such arguments without fear of ridicule .
why ? is not herbalife a topic of discussion here ? is everyone obliged to kick herbalife’s ass ? marketing and sales are the driver of any business enterprise, marketing a product or an idea can never be BS .
you could point out a flaw if you like , from your perspective , and i’m sure it’s welcome.
That post was filled with marketing BS with very little meaningful info? – norway
1] FACT : herbalife has enforced a new ‘gold standard’ for for buyback
2] FACT : herbalife struck down on lead generating businesses run by its top distributors
3] FACT : herbalife renamed its non recruiting distributors as ‘members’[ with and eye on the FTC 2004 advisory]
how can FACT’s be BS . disagreement is valid , but blanket denial of facts as BS , is BS.
Fact: All of the above is psuedo-compliance bullshit.
Fact: Herbalife continue to dodge the issue of retail, in all liklihood because they know full well they operate as a product-driven pyramid scheme.
Fact: Inb4 “end-users”. End-users are about as relevant to the discussion as my cat’s anus. Significant retail sales is the only yardstick to determine product value.
Anyone who claims otherwise has reading comprehension issues, and is advised to discuss their fantasy on a blog that caters to said fantasies.
Buying club operates by VERY DIFFERENT rules and is NOT advised according to MLM attorneys, such as Kevin Grimes.
What I was trying to tell you was that you didn’t tell people anything meaningful. You simply repeated marketing BS.
Herbalife is the topic here, but marketing BS isn’t. Normal people simply don’t communicate that way, but brainwashed people do. We’re neither set up to promote specific companies nor to bash them.
If you feel Herbalife has been treated unfairly here then simply point it out, but be specific. If you feel Herbalife need someone to defend it then simply do that.
I have covered the termination of 28 lead selling companies in more details than you did, but I focused mostly on identifiable parts of it like Shawn Dahl and Anthony Powell. You don’t tell me anything meaningful when you’re trying to present it in a different way and make it look like Herbalife did something “good”.
If you want to tell us anything about that, then link to some sources on the internet telling some factual about it. Your information simply was vague and misleading. It wasn’t untrue, but it clearly wasn’t the truth either. It was the brainwashed version of the truth.
Marketing BS = empty words with very lite substance, the type of stuff people are repeating to motivate themselves, e.g. focusing on the 2.4% who made money rather than the 97.6% of the people who lost money in a meaningless statement about “provided income for thousands of families”.
Your post was filled with empty words with very little substance. A strategy like that doesn’t work very well here, and it never has. It has failed for anyone who have tried it. If it has worked, then it has worked because of some “added substance” rather than because of the empty words (e.g. if people have managed to add something of value in the same posts).
“Internet is filled with individuals, not with groups of people” = certain communication strategies will simply not work very well. “If it’s accepted in a group of true believers, then it will fail when used on individuals”.
Try to find that group of true believers and post your empty words there. You won’t find it here, so if you really want to post it then find the correct group first.
i stated a FACT about herbalife shutting down lead generating business .
i did not say if it is good or bad . if you cannot call it good you can at least agree that ‘they corrected a mistake ‘
correcting a mistake will generally fall in the category of a ‘good thing to do ‘
so what else am i doing ?
why does defending herbalife mean someone is brainwashed ?
both sides have arguments , i’m pitching for herbalife here , what is wrong with that ?
Then add more details to it, rather than trying to make it become vaguer? Your information was simply vague and misleading.
Then add more details about the corrections they have made, and about the positive RESULTS the changes have led to? But don’t try to disguise information you don’t like.
Herbalife terminated the lead selling activities AFTER it came under pressure. Previous changes have only tried to camouflage similar problems, e.g. the shutdown of Online Business Systems’ predecessor in Canada didn’t really lead to any significant changes (replacing Shawn Dahl’s mother-in-law with Shawn Dahl can hardly be called “changes”, the RESULT will still be the same).
Herbalife’s “good intentions” were focused on covering its own ass, not on solving the problems it was causing.
The lead selling businesses could potentially lead to a shutdown of Herbalife itself, and that’s the ony reason for why they were terminated. Similar activities probably still exists in other jurisdictions.
This website is meant to be a solution to marketing BS people are trying to drown the internet in. If you really want to post marketing BS then find the correct audience first? You won’t find it here, you will only be wasting people’s time.
You missed it again, Anjali. You said you know “successful” Mlmers. I was implying that the people you know who achieved success did it via illegal methods and/ or deception hence, “I know some ‘successful’ drug dealers” comparison.
Success doing something illegal IS illegal.
And another halfa$$ example of change. If Herbalife wants to impress with a “gold standard” refund policy, they need to refund ALL money spent/lost including digested product and tools to the affiliate who had hopes of a profit due to the pitch they were sold by Herbalife. Now that type of refund might just make me a convert.
But that’s never going to happen and you know why. Herbalife gets “customers” i.e. moves it’s product, by suggesting a profitable business opportunity. How about we ask the Latinos how that’s working out? Oh wait, just read the review.
If India is suffering, why on Earth would you want to encourage any system with a 97% failure rate. This I really don’t get.
You can’t expect that. Refund policies should be about fairness, not about over-protecting one of the parties at the expense of the other.
“90% on products that can be sold” is considered to be fair enough, i.e. people will need to accept SOME costs when they return a product, they will need to accept to pay for some of the expenses themselves.
The problem with Herbalife is that no matter how much the company offer in refund, the policy will still not work very well, because Herbalife has other rules in place to prevent return of products.
Gold standard refund policy is simply lipstick on a pig. It may look lovely if you ignore the other parts, but it will still be a pig. Most of anjali’s arguments were about factors like that, focusing on the lipstick rather than on the pig.
MLM is a distribution system, not only an income opportunity. It may have some functions in a normal market, e.g. in bringing out goods to consumers. The problem is that people don’t have any focus on that part.
The refund I was suggesting was to the affiliate only not retail customers.
Perhaps a better suggestion to make the same point would be: Offer free product (enough to cover personal use) and tools to affiliates (like many companies do) to help Herbalife’s workers promote the retail business they claim to have. Retail customers can expect whatever the current refund policy is.
I think this would be fair unless of course affiliates are their only customers.
I’m not sure who you were alluding to re “expense of another”.
The “minimum 90% refund” on “retailable products” (unopened, not outdated, etc.) is considered to be fair enough (among legislators) if it actually work that way. But Herbalife has or had several other rules, so it didn’t work like that.
Herbalife ONLY refunded “SRP minus wholesale discount”. That’s “iron standard” rather than “gold standard”.
“Gold standard refund policy” sounds good in marketing statements, but it doesn’t tell anything about how the refund policy actually works. It’s simply “empty words” with very little substance. If anyone want to make claims like that, they should find the right audience first.
Why should one expect to get back more than what they paid for something?
improve your aim .
how do you know that MLMers, i know , achieved success via illegal means ? i was talking about participants in IDSA registered MLM companies .does your negative impression about MLM also arise from similar unfounded conclusions?
if it is acceptable to regulators , and complaints are few and far between , it makes no difference if you call it ‘lipstick on a pig’ or a ‘blonde wig on a cow’ . you have no proof that buyback NEVER works , this is just your opinion .
Isn’t Herbalife a member of the IDSA? Did you read the complaint about 300k Latinos per year getting scammed in Herbalife?
What’s sad is my conclusion is not unfounded.
is somebody ‘saying’ 300k latinos get scammed or ‘are’ 300k latinos saying they are getting scammed ?
if anyone [ackman and instigated minority leaders] is claiming that 300k latinos are getting scammed, then this is a serious allegation , and they should back it up with some proof :
-show the number of complaints received by the FTC
– collect signatures [online petition] of at least 3000 latinos saying they have been scammed .
saying 300k latinos are getting scammed is a frivolous statement without any facts to back it .
after almost 2 years of hunting , ackman presented a video of around 4 herbalife distributors who said they were scammed.
bostick who has filed a class action against herbalife is trying to add 4 ex distributors to his suit in approx 2 years.
when herbalife had its los angeles convention where thousands of distributors participated , brent wilkes stood outside with a dozen protesters and got spat on ! 🙂
these numbers have a message , loud and clear , which cannot be ignored .
first of all , many congratulations to the telegraph for entering the game late and providing information which has already been in the public domain for the last two years.
fitzpatrick is against MLM . he is rabid in his hatred for MLM. while the press may find it entertaining to talk with him , he has not been able to impress regulators or anyone in govt with his extreme opinions.
when people join herbalife , they buy a cheap refundable business pack which is non commissionable .
there are no inventory requirements at all at lower levels. 71% of herbalife distributors do not purchase any compulsory inventory , they buy AT WILL , small amounts for self consumption and resale .
with only 29 % distributors actively recruiting , the endless chain argument drops dead at preliminary examination itself.
people do not lose money when they buy discounted product , at most they may not EARN money . people also have the choice to return product , so they are reasonably protected.
herbalife’s annual disclosures , give detailed earnings of its distributors , members have to acknowledge this information before signing up .the arguments that people sign in stupidly without any knowledge , are ‘my dog ate my homework ‘ excuses.
the fact that herbalife itself discloses earnings of its distributors , shows that there is no effort on the part of the company to keep these statistics hidden from public view .
MLM is a method of direct selling of products from the company to consumers .some consumers join the company as members to avail discounts .they may or may not be interested in the business opportunity , or may not expect a full time income from it.
a real world example may work like this : i know several women who are home makers with no ‘job’ . they sell MLM products to family ,friends and neighbors . they make small amounts of money , which may pay the school fees of a semi private school. this makes MLM totally worth their while .
many other women , may not have any selling talent or free time, and after an initial try , drop out . if they have a few products with them , they consume it and move on . how much ‘harm’ has been done here ? whyfore does fitzpatrick rail endlesslessly ?
And in other news, Herbalife continue to hide retail revenue statistics from the public…
And in other news, Herbalife continue to hide retail revenue statistics from the public… — oz
…and in other news , the ninth circuit court has found the logic of the FTC 2004 advisory to be correct .
the ‘amount of self consumption [ and hence the amount of retail], in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme. ‘
the DSA and FTC are on the same side now , you guys must also stop fighting 🙂
That shouldn’t surprise anyone? That quote refer to the letter itself, and is found on page 20 of the decision. It’s a description of Exhibit 3 (the letter from FTC).
“BurnLounge and Arnold cite a passage from an FTC advisory letter, Exhibit 3 at trial, …”.
The court hasn’t found the LOGIC correct there. It has found that defendant Arnold has cited the letter. 🙂
The court doesn’t say anything about the logic in the letter, it only concludes that BurnLounge was a pyramid scheme.
(Ozedit: BurnLounge was shut down due to a lack of retail sales, which demonstrated a lack of product value. Stop wasting everybody’s time with waffle.)
I just don’t see the point of hundreds or thousands of distributors for an ordinary line of products.
I always thought that distributors in any field would be no more than a dozen for an entire State, the distributors would buy in bulk from factory and the Resellers would buy from the distributors to sell to the end consumer for a commission.
Any real good product that has a real demand would not need thousands of “promoters” that need to go to meetings and buy “packages” and definitely they would be looking for even more “promoters” to sell to the same customers. That’s insane. That is just fishy.
A really good product line could be the basis of franchise stores where prospect business minded people would invest tens of thousands or even hundreds of thousands to acquire the right for an store based business to sell to an specific area. None of that can be seen with herbalife.
In short a real good product don’t need to be pushed by 3.5 mill people, it would be sold by itself on outlets, malls, Walmart, internet i.e. Apple products.
There is only one reason that herbalife still exists: because of the illusion they sell of supplement or side income, getting ahead in life, etc. None of that related to the products itself
Herbalife trains people to sell the idea of being financially independent to the mass of poor people who are only related to other poor people who cannot afford to buy those overpriced ordinary products, people that are stuck on lack of skills, education with zero chance of upward mobility when with those scarces resources those same people give in to the farse of making money on the side or even being able to quit their low paying jobs.
This is simply wrong and all the defends this façade will at the end fall with herbalife.
the system of distributorship or franchisee-ship you mention ,has faced its own trials and tribulations in the 1960’s , but today you find it to be a part and parcel of the market system. franchising has evolved through aches and pains and trial and error in the market and not through academic debate .
MLM is also settling in , in the same way . technology makes MLM possible and there’s no turning back . better get used to it .
here’s some deja vu from 1969:
can we imagine the business market without franchising today ?
stuff and nonsense , raimund !
all sorts of people do MLM , from every walk of life , except the rarefied ‘ackman’ range of people . it’s just another way to sell and earn , that’s all .
here in india , MLMers are a diverse group of people from businessmen to doctors and teachers and home makers and students .
There is simply no way on a globalized market without duties protections that you can push an overpriced product ( that is not patented or revolutionary ) that compares to generics competing on a fair basis on a lower class population.
The whole MLM wonderland that you seems to worship, on todays time, there is no need or place for. The herbalife actual sales comes bundled into business opportunity.
You can spin it as much as you wants to, for whatever purposes you’ve find fit.
As franchises ( the real ones )demands hard cash real investments, business plans, actual physical business location, employees, on a delimited area, and the reasons behind signing up isn’t self consumption or the great value of “discount” and neither is to try and get more franchisees to join e competing with the same customers.
The MLM is nothing more than smoke and mirrors where ANYONE can join and the results if any just come to a select few. The rest, majority of the participants are just the suckers.
There is no place for MLM now or in the future. From the strict point of view of consumer business it just don’t justify buying any product that on its price there are layers of commissions to people who DO NOT ADD any value to what is being sold.
The offer and demand NEVER fails.
Suckers are everywhere. I was once told that if ones process human feces, drying it and packing it nicely and offering to sells as a “loose weight slim tea” people will buy it!
You keep repeating way too much lies and it becomes true to you. YOUR TRUTH!
MLM is franchising on ‘speed ‘!
except that the costs of doing MLM are minuscule compared to normal franchising costs . MLM provides breath and depth that ordinary brick and mortar franchising cannot achieve . MLM is unrestricted and mobile , sans borders . MLM shares revenue with consumers , instead of the franchisees and companies pocketing all the profits .
read this for the difference between the costs of normal franchisee operations and MLM operations :
that’s true , i have to agree . this product can then be sold at a mall or a franchisee outlet with some advertising support , because such operations DO NOT rely on self consumption
i’m afraid your shitty product would fail in an MLM setting since MLM preaches self consumption and sale 🙂
Every single mlm op I’ve been exposed to reeks of the self consumption odor. Yech.
It feels marvelous to be able to join as distributor to enjoy 35% discount FOR SELF CONSUMPTION on products that worth $3.50 but are listed as $27,34, as soon as I disburse an initial $150,00.
But wait a minute, that’s not all: I can also make commission ( and so 3 other people ) when and if I can convince and sell for my friends or for MY MOTHER
1] a new herbalife member gets 25% discount [ going upto 50% for a supervisor]
2] you ‘think’ the product is worth $3.50 , but your opinion means nothing . you need not buy the product if you do not find it ‘worthwhile’.
3] the fully refundable joining pack of herbalife is around $50, not $150 as you imagine .
4] we always give suggestions and recommendations to friends families and mothers . if you can sell an old car or a phone to friends and family why cannot you bump off a few herbalife shakes ? say : mom , you’re fat , this shake will help you and wheres the money ? 🙂 . its not a criminal activity for god’s sake !
Every single post by Anjali reeks of the self consumption odor. Yech.
Back at ya.
the odor of self consumption
arises from the courts gumption
in overturning vandernats presumption
that retail is the function
that prevents MLM dysfunction
now YOU have no option
Law is a compulsion
you can yech yourselves to distraction !! 🙂
your perpetually running question about retail statistics makes me wonder , that if the percentage of retail was so bloody damn conclusive about the legality of an MLM , then WHY has the FTC/SEC not made this a compulsory disclosure subject ?
they are pretty bold about demanding compliance about other disclosures , aren’t they ?
secondly , in the seminal amway case 1979 , the court did not ACTUALLY ask for proof of retail detail . the court followed the logic that the ‘rules’ followed by amway, would make sure that products would find their way to to consumers [inside /outside], or be returned .
there is not a single line in that order which shows the court has physically checked any statistics of retail revenue.
and now we have the BL order, which says neither will retail and neither will self consumption decide legality , instead ‘the way the MLM functions in practice’ will be the decisive factor .
i’m begging you to GET this oz . you may even win a prize 🙂
All MLM company’s have to demonstrate product value.
This is determined by analysis of retail activity. A lack therof indicating the business opportunity itself is what is being bought and sold, rendering the company a pyramid scheme.
There’s nothing to get. “Company functionality” and retail activity are not independent determining factors. Retail activity is a component of company functionality. Without which, an MLM company is quite obviously a pyramid scheme.
The only exception to this would be an MLM company full of wholesale customers who have introduced other wholesale customers, but this is a scenario that I have yet to see anywhere in the MLM industry.
Why retail figures aren’t legally required to be disclosed is because the FTC/SEC haven’t set a static retail requirement percentage yet (all we know is less than 10% is not enough), and that if a company has significant retail, then being legally required to reveal the figure is redundant.
In the case of Herbalife, there’s nothing stopping them from disclosing their actual retail figures. And in doing so, there’s nothing that could possibly be used against the company, other than a lack of true retail sales.
That begs the question why they don’t just reveal their retail figures and put the issue to rest.
And before you crap on about “but legally they don’t have to”, I or anyone else does not give a shit. If a company wants to run around claiming they are definitely not a pyramid scheme and have thousands of retail customers, they have to back this up with hard numbers.
Only idiots in the scheme itself are going to swallow that kind of rubbish without verified numbers.
Hell, if Herbalife came out tommorow on the record and said we generate xx% from retail customer sales (strict retail, none of this our affiliates buy products and then resell it to their grandmas rubbish), I’d happily report on it.
The underlying issue here is that Herbalife are likely not in the 90% or more affiliate revenue category, otherwise this wouldn’t be taking so long.
They likely operate somewhere well short of 50%, but not over 90%. That’s known as a grey-area and it’s frustrating everybody that nothing is being done about it.
I’m personally content to follow common-sense and peg “significant” retail activity at around 50% and give companies the benefit of the doubt. If they’re lying or operating with insignificant retail, that’s between them and the regulators.
Plenty of BehindMLM reviews analyse the probability of significant retail activity taking place, based on a company’s compensation plan. Herbalife are not immune to such analysis.
When you have companies running around professing their supreme legality based on the existance of retail activity, but at the same time they refuse to release any hard retail revenue figures, I call bullshit.
Every single time a company has refused to release information it’s led to what was suspected being eventually made public in court documents. In the absense of a justifiable reason for Herbalife to not make their actual retail figures public, I have no reason to believe they are any different.
Again, I’m not interested in “but legally they don’t have to” crap. It’s a strawman defense.
in amway the court depended on comparative market studies to conclude amway products were valuable .
in BL the court depended on the testimony of an BL expert who tried and failed to convince the court of the products value .
neither court order has a single line which says product value was determined on the basis of retail .
No idea about Amway, but the BL appeal opinion clearly cites a lack of retail (with included percentages), which is used to determine a lack of product value.
As for “comparable market studies”, one would assume these looked at retail activity in comparable markets. Or at the very least sought to establish comparisons between non-MLM retail activity and what was going on inside Amway.
Please do not waste my time.
i am going to say the words oz – buying club .
with 71% members buying products at 25% discount , why would not herbalife fit this description ,or amway for that matter .
Which is not MLM.
Again, please do not waste my time.
no , just how much ‘sales’ amway had vis a vis other comparable products . and another study to compare pricing .not a WORD about retail numbers .
…being sold in a retail environment.
Subtle change from “comparable markets” to “comparable products”. Stop shifting the goalposts and hoping nobody will notice.
(Ozedit: Please continue discussion over at behindbuyerclubs.com because neither I or anyone else gives a shit.)
The illegal part of a pyramid scheme is the pyramid scheme itself (the chain recruitment system, where participants pay to participate). Lack of retail sale is one of the key symptoms, but it’s not conclusive proof in itself. Sale or consumption will neither make a company become illegal nor legal.
If you look at Lyoness in Norway, more than 50% retail activity was used as a conclusive factor to decide that Lyoness doesn’t violate pyramid scheme statutes in Norway, in a preliminary report. So retail activity can clearly have a legal function in some jurisdictions.
it’s a wonder your ass doesn’t get moderated out for such blasphemy
is it luck or are you paying ? 🙂
yes , and this would describe a product masked pyramid scheme , where you HAVE to purchase inventory to participate .[koscot , ger ro mar , burnlounge].
even if these schemes had a provision for free joining [koscot] , a LARGE MAJORITY of people joined up by purchasing inventory ,proving it to be recruitment driven . hence it was the ‘way the MLM functioned in practice’ that showed up it pyramid feet , not retail or some such nonsense.
and how will it apply to herbalife where are no inventory requirements for upto 71% of participants ?
Forcing affiliates to purchase products is pay to play, it’s one aspect of a pyramid scheme. It goes hand in hand with there being no retail.
Forcing affiliates to purchase products discourages retail activity, and instead focuses on affiliate recruitment (pay to play recruitment commissions).
Not forcing affiliates to purchase products is psuedo-compliance if the majority of sales revenue is sourced from affiliates (demonstratable by a lack of retail sales).
Everything in MLM always comes back down to “is there retail activity taking place?”
what do you mean by ‘forcing affiliates’
if there is NO inventory requirement there is no question of force .such an argument would never stand in court .
there is no required inventory purchase .how can this be psuedo compliance ? you mean participants get calls in the dead of the night : “buy up or die ”
these are legless arguments , try something that will stand in court. if there is no ‘FORCED RULE” to purchase inventory , the court will assume free will . with buyback the court will rest fully content .
Affiliates providing the majority of revenue is indicative of defacto forced affiliate purchases.
This is demonstratable by a lack of retail sales, ergo a lack of retail viability – thus requiring affiliates to purchase products to qualify for commissions.
This is done with PV requirements for affiliate ranks. No retail viability = affiliates self-purchasing to qualify for commissions = defacto mandatory affiliate purchases.
This relegates “we have no purchase requirements” to psuedo-compliance
If a company mandates this in their compensation plan (pay to play), that’s worse, but it can also happen as above.
Again, it comes back to retail sales and viability.
unless these PV requirements are MANDATORY , your argument is just has no ‘value’ and becomes ‘opinion’
Uh… PV requirements are always mandatory. That’s why they’re called PV requirements.
What you’re trying to suggest is that the volume doesn’t necessarily have to come from self-purchase.
Again, if there’s a lack of retail viability then by default the volume does indeed come from affiliate purchases.
In this sense “we don’t have mandatory requirements” becomes psuedo-compliance.
What is actually happening inside a business will always trump psuedo-compliance. Just ask Gerry Nehra.
i am suggesting that 71% herbalifers have no mandatory inventory or PV purchase . all sales to this class of members is under the head ‘unforced product sales’ and is not indicative of ‘force’ or ‘de facto anything’ or poppycock.
let’s talk to babener instead .may i post his BL opinion sir?
It’s incredibly hard to hold a discussion with someone who doesn’t even read what you’re saying. Instead, all they want to do is plug their fingers in their ears and parrot other people’s opinions.
Common-sense will always trump opinion, no matter whose it is (even mine). I think we’re done here for the day.
Retail is still all that matters in MLM, but I’m sure you’ll be back with more irrelevant waffle at some point.
this is the relevant portion of the amway order 1979 which discussed market share/ demand for amway products:
the court is talking about ‘total’ sales of amway products , there is no hint of ‘retail’ sales in a’retail’ environment.
Yeah so… all of those other companies? Their products are sold at a retail level.
They are comparing Amway’s sales volume against retail-level companies (they don’t retail themselves, but exclusively supply their products to retailers).
Why? To ascertain whether or not there’s significant retail demand for Amway’s products.
Stick to quoting others. Thinking for yourself isn’t working.
Furthermore, Amway is offtopic.
Interesting article on a distributor who lost $30,000 buying Herbalife products (from his upline, not the company), and insists he couldn’t sell it retail because people thought it was too expensive.
Anjali likes to parrot Herbalife’s new buyback policy, but back in 2008-2009 Miguel Calderon tried to sell his unsellable products back to Herbalife, and they refused.
Why would these distributors be purchasing thousands of dollars of Herbalife products (from the affiliates who recruited them), if they were unable to sell it, retail or otherwise, on an ongoing basis?
Where there’s smoke, there’s fire.
In the tradition of Herbalife not providing any statistics on their actual retail revenue numbers, and withholding information from the general public,
how many distributors have churned out from herbalife since 2008/2009 ?
only a measly TWO have crawled out of the woodwork , when the pressure on herbalife is sooo intense!
did they register complaints with the FTC in 2008/2009?
do they have call records to show herbalife refused buy back?
i’m just ashamed that this is ALL ackman could manage . the man is spending millions and this is ALL he has to show for it.
from the same article :
they’ll get help , so there .
if someone actually flew in by helocopter it’s not illegal to say it . if someone LIES about flying in by helicopter, in order to lure another person , then it is illegal .
if palma signed a contract without reading , and doesn’t recall seeing a marketing plan — who’s fault is that ?
he’s stupid and he has no memory . great case !
Yo, get Herbalife’s dick out of your mouth eh?
1. 16 Complaints were filed with the Illinois attorney general. This is one state in the US.
2. We’re talking about people “with little English and a basic education”. Whatever they’ve documented has been filed with the authorities. As for recording phonecalls, right. People don’t expect to get ripped of by multinational companies.
Furthermore recording phonecalls willy-nilly is illegal without the consent of the other party on the line. Again, people “with little English and a basic education”…
3. Herbalife can say whatever they want. These victims and who knows how many more like them haven’t been helped.
4. The complaints were filed long before Ackman came along.
5. The number of complaints is insignificant, it’s the details within that are of importance. If it was happening to these people it was happening to others.
You only need to look at the biggest Ponzi/pyramid scheme scams covered on here to see the number of complaints is usually low.
Infact often times, as you’re now doing, affiliates in the schemes point to the low numbers and use them to try and explain away the company’s business model, which ultimately deems a company to be a pyramid and/or Ponzi scheme.
I know all of this because I actually read the article. You’re starting to increasingly sound like a blind crony zealot, grasping at increasingly long straws to explain everything away.
It’s not working.
Regulators don’t look kindly on the splashing of wealth around, however it’s done, to lure new affiliates into MLM companies.
Furthermore, you’ll find providing a lack of information to new affiliates is the responsibility of those running a recruiting event. And to a larger extent, the company itself for failing to enforce compliance.
These are all hallmarks of a pump and dump recruitment scheme. Hit your targets with boasts of wealth, get them to sign contracts you know they don’t wholly understand and withhold information from them you should be providing, so that they don’t ask any questions.
Might be the status quo in India but it’s known as the systematic scamming of people elsewhere in the world.
And they don’t earn recruitment commissions either. But that’s what clearly makes the monthly purchases by Sales Leaders more questionable.
Sales Leaders are the only ones who will need to make monthly “qualifying purchases” for the right to earn recruitment based commission.
english and education have no role to play in a small simple business module like a herbalife distributorship . in most small businesses you will find people who are comfortable in their mother tongue, and have a very basic education . poor excuse .try again .
poor english and education does not stop people from complaining either .
if complaints were filed [all 16 of them] from 2008 onwards , why was no action taken in illinois then ? who’s scraping them out now and towards what purpose ?
When the materials (including affiliate contracts) are in English, then yes they clearly do.
Signing an affiliate agreement with an MLM company != small business.
The investigations are ongoing (mentioned in the article). A company like Herbalife, within which it appears fraud has been committed for decades, takes years to investigate and years again for a case to put together.
Your Speak Asia scam was small potatoes globally, yet look how long that took to play out (Kumar and friends running off with everyone’s money).
from the same article which you have read very thoroughly :
i think illinois investigators think like me , a few failed businessmen complaints , do NOT mean the business is bad. 2008 till now 2014 is a looong time to act even by indian standards.
Why are Herbalife affiliates, over the course of twelve months or more, spending thousands of dollars on products (purchased from the affiliate who recruited them), on products they cannot sell?
When coupled with Herbalife’s apparent “no refunds” refund policy at the time, there’s a logic disconnect here that makes no sense.
Well, unless they’re chasing that elusive income dream continually marketed to them by the affiliate who recruited them. The very same affiliate who milks them dry before moving onto their next victim(s).
Also note the lack of retail sales taking place in this particular example. An affiliate buys $30,000 or so of product and then sells it to their downline… who then tries to recruit new affiliates to offload it to, but can’t. He then tries to sell it retail, but customers complain it’s “too expensive”.
The second example is $15,000 or so worth of product. Same upline affiliate.
When the upline affiliate is confronted, he accuses his victims of lying. He claims he makes most of his money selling shakes to retail customers, not ripping off his recruited affiliates for thousands of dollars.
(Note that this is still not retail for Herbalife, who would be collecting orders from the affiliate, not his club customers (if they even exist).)
That’s just another way of saying “all business carries with it some level of risk”. A popular excuse pyramid scheme operators and net-winners like to trot out when they are exposed.
There are no excuses for pyramid schemes.
so , 71% of members make unforced free will purchases , they may be earning some retail revenue or not , but they earn NO recruitment commissions.
ONLY 29% distributors recruit and receive recruitment commissions.
the plan is heavily tilted towards sale of products . it favors product sale over recruitment . case closed.
yeah it’s a cliched excuse BUT TRUE .
majority of new businesses fail . so much lost money so much trauma. lets ban business. there’s tooo much churn .
There are no excuses for pyramid schemes.
(Ozedit: Please do not try to pass off Herbalife PR bullshit as news, thankyou.)
So tired of this MLM rhetoric and BS spouted by companies like this and their distributors. If you guys would open your eyes you would see that, even if 71 % “were not trying to make money” (which really insults everyones intelligence) the success rates are still patheticly low. You are NOT helping your case AT ALL.
So whats the difference? 0.2% making an income above operating expenses VS 0.02%.. What a freaking joke.
I am not here to promote my company so I wont name names but, our customers ARE NOT in our pay plan, we have 53% of our distributors that are on “autoship” and taking it at least semi seriously. BUT we have 49% of ALL reps making an income above operating expenses.
Thats somewhere around a 95% success rate. If you want to take out the 47% that are not on the autoship (which is a direct reflection of participation) its still a 49% success rate, worst case its a 245% better success rate.
Real talk? its more like a 4000+% better success rate for better products, better systems, less competetion MUCH better pay, better growth, 1000% better retention.. etc, etc,
Sorry for the anonymous plug (i choose not to bring the company name into the this environment and swim in this mlm toilet bowl) but some of you REALLY need to get some perspective.
The poor success rates is NOT “just how it is” its only “just what you settle for” Because you dont know any better.
congratulations for working with the best, of the best, of the best, MLM’s.
this could have been GR8 information if oz was running a competition about : my MLM is the best , booyah to the rest .
sadly , this discussion is only about whether herbalife is legal or not . being worse than your MLM does not make it illegal . people earning less in herbalife does not make it illegal. having members in the payplan does not make it illegal.
courts do not declare MLM illegal on the basis of earnings of it’s participants.
courts just see if valuable product is being distributed, bought and consumed, without forced inventory requirements . herbalife satisfies all these counts.
since your MLM is mucho grandios , you will obviously lead a better life than herbalifers , but that isn’t the point here ?
You are 100% correct. Although i dont recall saying anything about being “the best” nor did I say anything about it being an MLM.
My comments were to simply show contrast so people can get a grip on arguing over which pile of shit smells best. Hopefully it will prompt someone to look for something that actually works for the average person instead of settling for the same old MLM BS results.
You CAN build a network in network marketing without it being an MLM. You can have group sales commissions without it being a top down percentages and levels model. You CAN have something that doesnt funnel all the money to the top.
The whole industry CAN correct the bad press and not have to deal with the bullshit Herbalife and the others go through. Im not saying Herbalife is a bad company, im just saying that people are idiots for putting up with such poor success rates and KNOWINGLY pull other people into it.
You are right. I should move my comments to the ‘Herbalife and anything like it, is poor excuse for a business and their reps who cant face facts are brain dead’ post.
The question is is there ENOUGH of product being distributed “the way it was meant to be”? Merely having some is not enough.
Or as a fellow skeptic said… It’s the baseball bat analogy. The INTENDED purpose of a baseball bat is to hit a baseball. And indeed, that’s often what it’s used to do, but that does not stop it from being used for beating up people.
So should baseball bats be outlawed? No. Is owning a baseball bat legal? Absolutely. Can you hit people with it? Absolutely not.
Herbalife “satisfying” the criteria would be it has demonstrated its “baseball bat” hits balls. It has not demonstrated that majority of the “baseball bats” they sold were used the way it was intended (or not intended).
that still does not make herbalife illegal .
if the business/product herbalife offers is BS, market dynamics will kill it . no one can have a problem with that.
of course , the industry can improve, there’s no argument with that either.
the question before us NOW , is whether herbalife , is legal or not . the question is not whether herbalife is ‘good’ or ‘bad’. the world is teeming with bad business , but that’s not reason to shut them down. that’s the job for the free market and competition .
how much is ‘enough’ chang , lets hear it from you .
in my view , if the product is ‘primarily’ sold without the burden of inventory , the MLM passes the test.
Running, promoting and profiting off of a pyramid scheme is illegal in the US.
duh, everyone knows that . see what happened to telexfree, burnlounge, FHTM?
your point was??
That plenty of people have a problem with pyramid schemes. Particularly US regulators.
“The market” is neither here nor there.
A better test is are the affiliates profiting from SELLING the stuff, or by RECRUITING people who buy the stuff (and sign up as affiliates)?
Because if the affiliates are profiting from selling the stuff, it dovetails quite well with your “primarily” criteria.
It’s when they are NOT doing that… then there are going to be some problems. But didn’t Oz and you already went through that?
Here, let me fix your statement to reflect reality.
by which time thousands, if not millions of people will have fallen victim to the pyramid scheme aspect of whichever business we are discussing.
Anjali = not only believes the strongest, but also the most deceptive should survive
whether affiliates profit from selling the stuff , is not of interest legally .
whether commissions are paid from product sales ‘to consumers’ , is the decisive question.
no, what is legal MUST survive , what is ‘BAD’ must be shut down by the market forces , and people with no argument should not engage in ad hominem attacks either on companies or other people.
ad hominem: (of an argument or reaction) arising from or appealing to the emotions and ‘not reason or logic’.
Except when dealing with argumentative trolls who refuse to deal in either reason or logic (example: defenders of SpeakAsia)
False, since the affiliates can self-consume the stuff.
In fact, self-consumption seem to be specifically designed to render that “sale to consumer” test irrelevant. Thus, the profitability test need to be considered in conjunction with the “commission paid on sales to consumer” test.
Since MLM is about trade, “selling the stuff” should clearly have some legal interest?
The decisive question should normally be about some illegality, e.g. driving a car isn’t illegal in itself but violating some Stop-sign rules is. You can’t claim that “since driving a car isn’t illegal, the driving I did when I passed that Stop-sign in 30 mph wasn’t illegal either”.
The illegal part is about the pyramid scheme itself = participants paying directly or indirectly for the opportunity to earn rewards based on payments from other participants (typically from participants they have recruited directly or indirectly, but that isn’t important).
Rewards from sales to external consumers can clearly not be about “payments from other participants”, so it should clearly have a legal interest.
People buying products internally in a network can clearly be about “payments from other participants”. It should clearly have some legal interest.
The ratio between those two types of product sales may have some legal interest too. It can be needed to understand the primary function of a business.
It seems like you have identified the wrong “decisive question” in your theories. You’re simply repeating some old MLM ideas about legality, some half truths people use to mislead themselves and others.
Your ideas of “legal interest” seems to ignore some important factors. A court will need to analyse more than a few simple factors to be able to determine whether a business practice is illegal or legal. Your “thumb rules” are just as wrong as any other thumb rules.
what i mean by this, is that, whether affiliates make profits from selling the stuff is not the factor which will make herbalife legal .even with zero retail profit herbalife could be legal.
commissions paid should arise from product sales to ultimate usersh ,OK?
when a member ,under NO inventory obligation , purchases a product for personal use from his upline, he is an ultimate user, and a wholesale profit of around 25% is triggered.
71% of herbalife members are ultimate users, or consumers, all their purchases trigger wholesale profits .
if these profits are enough to pay all commissions, then it does not matter if members sell products at retail, at profit or not.
It seems like you have identified the wrong “decisive question” in your theories–norway
my decisive question is that ‘rewards should be paid out of product sale to ultimate users’.
this is the second prong of the koscot test, i have not made it up.
so , tell me why koskot is wrong ?
Well yeah, if the US legalizes pyramid schemes.
Not going to happen.
Nobody cares. “Ultimate users” = offtopic derailing by pyramid scheme supporters.
MLM has to contain significant retail, period.
People buying products internally in a network can clearly be about “payments from other participants” …..IF…. there are compulsory inventory requirements .
when people buy products internally from free will , for the discount , for self consumption , then it cannot be about “payments from other participants”.
You’re simply repeating some old “Amway logic”, as far as I can see? That’s the same ideas which have been repeated over and over again, but they have been proven to be incomplete when companies have been shut down.
BurnLounge didn’t have any inventory loading, but it was still shut down by regulators. If the logic didn’t work for BurnLounge, it won’t work for Herbalife either.
Retail sales to external consumers clearly have some legal interests. Most MLM attorneys seems to agree on that, e.g. Nehra has a “minimum 20% external sales” rule for when he feel a company can have some chances to be seen as legitimate. Kevin Thompson clearly have focus on retail sales, and I’m pretty sure Babener have some similar ideas.
You have probably been looking at the wrong types of ideas, e.g. the ideas they use when they’re trying to bend the rules in favor of their clients (or in favor of some ideas they WANT to believe in).
None of us know enough about Herbalife’s revenue to draw any conclusions like that. 71% of distributors can be 3% of the revenue, or it can be 10%, 20% or any other percentage.
It can be about a number of people who only have ordered a “Starter Kit”. It can be about people who have been tricked into joining an unnamed income opportunity, where they later will find out that the opportunity is about recruiting other participants into the same opportunity.
The 71% doesn’t really tell anything about the legality of the program if you don’t know anything about the details. So your argument was rather irrelevant.
It’s incomplete. The court used more than the Koscot test when it analysed BurnLounge. You can’t point to a single part of the decision and identify it as “the only part that matters”. You can identify it as “one of the core criteria”, but that doesn’t mean you can ignore all the other parts.
Your legal logic was flawed, as I explained above.
In addition, you have also interpreted the BurnLounge decision in a way where it better will support your own ideas, e.g. you have ignored parts of the decision if they don’t support your own ideas.
* The BurnLounge decision doesn’t clearly state that rewards derived from product sales will make the business model become legal. It has some quite opposite statements.
The second prong of the Koscot / Omnitrition test is “the sine qua non of a pyramid scheme” (“without which cannot be”). It’s defined to be about “recruitment with rewards unrelated to product sales”, but the decision specified that it’s not about “completely unrelated to product sales”. Page 12 in the decision.
The rewards derived from low level distributors may be related to recruitment. The fact that the rewards also may be related to product sales doesn’t exclude that. You have used a logic where you have excluded that other option.
The rewards are most likely PARTIALLY related to recruitment, to distributors trying to sell the opportunity itself to income opportunity seekers rather than to consumers wanting to get discounts on their own purchases.
when the court said “it’s not about completely unrelated to product sales”, it was because recruitment and product sale went hand in hand in BL.
to earn bonuses moguls had to recruit two more moguls who bought the higher package .though some parts of the package could be deemed to be ‘self consumption’ some part was clearly connected to recruitment rewards.
in herbalife, on recruitment a member buys a fully refundable business pack which is non commissionable .there is no reward for recruitment.
when and if the member purchases a product , he does so with free will. this purchase cannot be said to be related to recruitment rewards.
If there’s no retail, this is a product-based pyramid scheme.
Retail = the only way to verify MLM product value.
I’m sure everyone is quite sick of the circles. Anjali, unless you have anything new to add, consider yourself permanently spam-binned over all things Herbalife.
The court didn’t specify that? It didn’t use the “hand in hand” argument at all,
To earn Royalty Override Bonuses, distributors in Herbalife must first upgrade to Sales Leader positions by making one 4,000 PV worth of product purchases in one order, or two 2,500 PV worth of product purchases in 2 orders (2 x 2,500 PV, in 2 months).
That can be compared to Mogul packages, i.e. they both involve some products or services and they both involve some rights to earn rewards from recruitment.
BurnLounge had Retailer positions, distributor positions where people could earn retail profit on sales to other people. That part wasn’t illegal and it wasn’t halted. It did pay a 5% bonus if specific sales goals were achieved.
Herbalife has low level distributor positions, distributor positions where people can earn sales profit (not commission) if they sell products to other people. That part isn’t illegal in itself, i.e. the sales profit isn’t illegal.
The marketing of the low level distributor positions may still be illegal, e.g. if people primarily are being recruited into what they believe is an opportunity to earn money rather than an opportunity to save money as consumers.
The BurnLounge decision used that type of logic too, “what was the primary focus?”.
with all spins aside, if the money flows from bottom to top , and to be on the top layers you have to buy in ( pay for the position or privilege of receiving money or credits ), then herbanjalife is not much different than any other pyramid and deserve to be shut down
cheers and salut desde Monterey
herbalife has hauled big fish onto it’s side of the bank :
now, pam will definitely know all about ‘FTC and its complete reliance on retail as a measure of the legality of an MLM’.
lets see if dear pam advises herbalife to announce their retail figures , to ackman and other shrieky ‘activists’ 🙂
in other news , herbalife distributors have claimed , on other forums, that FTC will settle with herbalife in mid 2015 ,with fines and stuff. wait for it .
The horse has already bolted. You can’t bottle up compliance after you’ve been ignoring it for years.
Regulatory investigations hold companies accountable for what they’ve already done.
And in any event,
She’s an affiliate or someone in her family or a friend is. Yawn.
very true . companies that slip up on compliance , get some fines thrown at them . failing compliance is NOT failing the law .
the argument around herbalife has always been about:
“herbalife is a pyramid and will be shut down”
the argument has never been :
“herbalife has some compliance issues and their ass is going to be fined”
there is a WORLD of difference in the two constructs.
let the FTC fine herbalife to the moon and back , ackman and the critics still lose.
Probably want to tell the SEC they’ve made some recent mistakes with Zeek Rewards and TelexFree then.
Ensuring significant retail activity is taking place is compliance with the law.
Otherwise, depending on your business model, in MLM circles you’re either a Ponzi or pyramid scheme – or hybrid between the two.
This latest appointment serves no other purpose than to associate “ex-FTC commissioner” and “attorney-general” with Herbalife’s staff roster.
Just more smoke and mirrors bullshit from the clowns running the show there.
HUH ??? which law ???
psst : koscot died , left you a message —don’t remember me !
The law that says pyramid and Ponzi schemes are illegal.
Remember, this is all within the context of the MLM industry. I’m not interested in or discussing any other context.
nope . a big pat on SEC’s back for zeek and telexfree.
but SEC/FTC will probably tell you about the gazillion legal companies they fined for non compliance, and how the world moved on without a hitch .
correction to post 254 : koscot/omnitrition died . koscot is still alive and well thankyou.
Yes, it’s not news that the severity of a crime dictates the punishment dolled out.
Herbalife’s business model appears to be rotten to the core. No other reason exists for them stating they’ll create a wholesale customer class and then reneging.
You don’t fine rotten MLM businesses, you shut them down.
Had Herbalife’s retail activity been significant (“the majority of our affiliates only want wholesale product pricing”), they’d have created the promised wholesale customer class and have been done with it.
Having not done so, the only logical conclusion to draw is that Herbalife are full of shit.