Is Herbalife a Pyramid Scheme or Legit MLM? – 2022 Review

Is Herbalife a pyramid scheme or not? This is one of the most asked questions in the MLM industry. And in my Herbalife review, you will finally read everything you need to know about this direct marketing company.

Herbalife is a multi-level marketing firm centred around marketing nutritional supplements. Herbalife was founded in 1980 and is widely recognized in part thanks to Jim Rohn.

So is it legit? Is Herbalife a scam or a pyramid scheme? Before I share my verdict, let me introduce myself…

Hi, I’m Ivan, an online marketer who went from losing my time waiting tables to running a thriving online affiliate marketing business.

In the meantime, I have actually tried and reviewed 600+ courses, scams, and even pyramid schemes to find the very best way to generate income online.

That said, keep reading my Herbalife review to see all the good as well as the bad stuff about this company. You will find out whether Herbalife is a pyramid scheme or legit MLM…

Shall we?

Is Herbalife a Pyramid Scheme? Review

 

Herbalife Review – Overview

  • Type: MLM
  • Owners: Mark Hughes
  • Price: $94.10 + MLM Costs
  • Money-Back Guarantee: No
  • Recommended?: Not really…

Quick Summary: Herbalife is a nutritional company that you can join and become a part of their direct selling team. In other words, it is an MLM business model. And because of this, many people call Herbalife a pyramid scheme.

So is it a pyramid scheme? That question has been answered in detail in my Herbalife review. but if you’re in a hurry, I can save you time and say that it’s legit MLM.

However, I still highly recommend reading everything from my review before you make your own decision…

Alternative: If you’re a newbie who is looking to earn passive income online, there are other, more beginner-friendly, and cost-effective options. My top-rated affiliate marketing course has helped me to go from earning $0 to $100’s per day!

 

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What Is Herbalife?

Herbalife is a direct selling company centred around marketing nutritional supplements.

It’s another among those making money online companies that are focused on offering a membership that allegedly makes you cash by selling marked-up items.

The main goal behind their marketing strategy is to show you exactly how to come to be a “Jim Rohn marketer”. But the problem with this business model is that most participants do not make money advertising other items.

Network marketing as a business design is getting a little saturated for the ordinary individual. In other words, if you aren’t a “Jim Rohn marketer” already, you’ll have a hard time selling their products.

That’s just the reality…

On the bright side, Herbalife does include some really useful details to generate income online and land huge payment checks.

Who Founded Herbalife?

Mark Hughes (1956– 2000) started Herbalife Nutrition in 1980, with the goal of transforming the dietary habits of the world, a single person each time.

Mark Hughes

He shared his vision for success in an enthusiastic and powerful means, resulting in what is now a multibillion-dollar firm with committed Independent Herbalife Participants in more than 90 nations around the world.

In 1994, Hughes developed Herbalife Nutrition Foundation (HNF), with the goal of boosting youngsters’ lives by helping companies supply healthy and balanced nutrition to prone children.

Today, the program aids to provide proper nutrition to countless children all around the world. HNF likewise lends support to relief initiatives as well as replies to all-natural disasters around the world.

But the main question here is< is Herbalife a scam pyramid scheme? Or is it a legit MLM? Keep reading my Herbalife review to find out…

Is Herbalife MLM?

Herbalife is basically a direct-selling MLM firm. In 2019, Herbalife’s international web sales amounted to approximately 4.88 billion united state dollars.

So how can you take a piece of that delicious pie?

The trick is that you can’t find their protein or dietary supplements on the shelves of any shops.

The only manner in which you’ll be able to get your hands on these items is from a Herbalife supplier. You can find out more about the items on their website, and get the prices. However, you can not purchase them.

Herbalife is MLM

That’s terrific for anyone who decides to join Herbalife MLM.

With a network of 3.7 million “members” in around 90 countries Herbalife is a quite big company. This information helps you to understand that Herbalife is not a scam – more about this later in my Herbalife review.

How Does Herbalife MLM Work?

As a member or representative, you’ll have to purchase Herbalife products first. After that, you can offer them or utilize them to promote the company. Or do both, which is the most recommended route.

However, this is the main reason why some people get confused and say that Herbalife is a pyramid scheme. Let’s debunk this once and for all…

How Do You Make Money?

Herbalife pay is based upon an MLM model.

This means that your compensation doesn’t come from marketing Herbalife products alone. You can get incentives from the sales of new members that you recruit and that your employees hire as well – as shown in the diagram below…

Herbalife Compensation Plan

But you’ll need to market a great deal of Herbalife healthy protein shakes to make any sort of cash. And don’t neglect the fact that you need to purchase the products initially in order to sell them.

And that is a problem, at least in my opinion…

Essentially, you’re restricted to how much you can make based on just how much you can buy.

However not only that but, there’s a threat of buying way too many products and not having the ability to sell them to anyone.

On the bright side, you’ll have 12 months to return the items that you haven’t opened up from the moment that you purchased them.

That said, the fact that you have to “pay to play” is the main reason why Herbalife review tends to get a label a pyramid scheme. But before we jump the gun, let’s see how much and whether or not they pay first…

What is Their Compensation Plan?

Obviously, the more Herbalife products you sell, the more you’ll make. But the truth is, distributors aren’t making much from the sales of these products.

The goal is to sell products and with each sale earn volume points.

When you get to a certain number of volume points you’ll be able to move up to the next level where you’ll make a greater commission from your downline.

The table below explains how many points you can earn based on your level and number of sales…

Herbalife Compensation Plan Structure

The bottom line is that you collect volume points when you or your downline order items. So the more you or your downline order, the more volume points you get.

Based on this, it looks like a Herbalife is a pyramid scheme, right? Well, the truth is, many people think so. But as you’re about to see in my Herbalife review, a pyramid scheme would be a heavy label…

After all, the company sells real products, so it’s hard to give them a label of a pyramid scheme.

How Much Does It Cost To Become A Distributor?

The Herbalife distributor cost to join is a one-time investment of $94.10. Once you pay the fee, you will get access to a starter kit, training, and some other benefits, as well as the opportunity to start marketing their products.

Below is the list of items included in your starter kit…

Herbalife Starter Pack

Also, distributors get a lifetime, 25% discount on their orders like customers when joining.

That being said, once you make it to the distributor rank of supervisor you receive a huge, 50% discount on your orders. In addition, you also start earning higher commissions and bonuses the higher you go in rank.

What Are Their Products?

Herbalife Nutrition’s products include weight loss and healthy protein shakes. They have healthy protein bars, teas, aloes, vitamins, as well as sports hydration, energy, and individual treatment items as well.

Herbalife Products

So how can you effectively market these products to make money?

Herbalife motivates social gatherings calling this team “nourishment clubs”. At these events, members will try the drinks and go over healthy and balanced lifestyles.

However, these events are simply a way to expand their organization by showcasing the product.

Herbalife claims that these nourishment clubs aid individuals that would typically eat from a vending machine or eat fast food. So as a way to help, they assist show them healthy and balanced options as well as support them during this change of lifestyle.

Do People Lost Weight With Herbalife?

Herbalife meal replacement shakes do help you slim down. However, this statement is also the subject of a debate… You need to also exercise, and watch your diet all the time to get the best results.

The research study behind Herbalife fat burning products is still ongoing for the product claims it is able to avoid weight gain over a number of years.

But the bottom line is that these products are of good quality. Furthermore, they are promoted by people who use them. And, if you choose to follow in their foot spots, you can make some money too!

But the question remains; is Herbalife a scam pyramid scheme?

Is Herbalife a Pyramid Scheme?

Before I can say whether or not Herbalife is a pyramid scheme in my review, you have to understand what this scheme actually is about. This way, you can understand everything I’m about to say with the right attitude.

What Is Pyramid Scheme?

Pyramids are designed for early investors to make money, but only for a short period of time before they dry up.

They are designed to fail, but that’s not how they present themselves. They give you false expectations for something that they know will dry up.

Pyramid schemes aren’t just a waste of your time, they are also a big waste of your money. It’s sad how they prey on your hopes and dreams of getting rich.

It seems like there are many MLM companies that borderline do the same. So is Herbalife MLM a pyramid scheme too?

Below is a video that helps you to spot a pyramid scheme easily…

Does Herbalife Fit a Pyramid Scheme?

No, Herbalife is not a pyramid scheme. The firm has been able to prevent that label after reaching a $200 Million negotiation with the FTC (Federal Trade Commission) in 2016.

Ever since then, their item sales have soared to nearly $5 Billion in 2018.  However, the company still has its issues.

A while ago, John Oliver attempted to reveal Herbalife as a Pyramid Scheme.

Asserting that the business design for this “ONLINE MARKETING” business is that you generate income off of individuals that join and afterwards make a payment from their sales.

But was he right or wrong?

As you can see in the image below, about 99% of participants in these make money opportunities make less than minimum wage…

Is Herbalife Pyramid Scheme?

Is Herbalife a Pyramid Scheme in Disguise?

If you have a look at Herbalife’s reward framework you can kinda see what John Oliver is speaking about.

Some MLM firms are actually good at hiding the fact that they are not excellent at what they sell.

They earn big names to support them so that you think they are worthy. At the same time, they are structured in simple sight for who they really are.

That said, Herbalife has even been proclaimed a pyramid scheme by Commercial Court in Brussels, Belgium. This was based on Herbalife’s failure to reveal its retail consumer base.

Pyramid schemes are typically structured with a chain-letter-like arrangement. They ask brand-new recruits to pay cash upfront in the hopes of earning money from your downstream employees.

This is manipulative and against the law.

On the other hand, most multi-level marketing businesses call for up-front repayments for items.

That said, there are a lot of grey areas when it comes to identifying an MLM from a pyramid scheme.

It’s in these grey areas that scams are usually masked within recognized companies because they do not dry up like a pyramid scheme. They remain to commit fraud and also continue to be in the organization.

Why? Well, because they offer real products to their distributors.

But Herbalife hasn’t quite cleaned its name from this label…

Can You Make Money With Herbalife Then?

There are some Herbalife recruits that have gotten unrealistic advertising materials from leading suppliers in the past.

For example, video clips from a member named Doran Andry where he is seen driving a red Ferrari. He discusses how he’s making close to $100K a month marketing Herbalife items.

This was a huge claim.

When Herbalife disclosed their financials hereafter video began circulating it was shown that this video clip was a lie. The company said in 2013, that just 704 U.S. participants made greater than $100,000 A YEAR. Not a month.

The fact is that a bulk of their network marketing distributors earn less than a couple of hundred bucks.

However, the part of Herbalife that gets most developed is their nutrition club. This club is not just costly to participate in, but it is made to hire. But that’s not just how they market it.

These clubs are made to hire low-income distributors.

These hiring places for Herbalife are around the world. Herbalife reports that they have a significant rise in sales from these nourishment clubs.

True or false? I’m guessing we’ll never know…

The bottom line is that Herbalife is not a pyramid scheme.

Alternative: On the other hand, if you’re looking for the best business model to earn passive income online as a beginner, there are other, more suitable, and cost-effective alternatives.

My top-rated course has helped me to go from earning $0 to $100’s per day!

 

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Is Herbalife a Scam?

So is Herbalife a scam? Multi-level marketing like Herbalife is often the facility of a dispute.

Some MLMs are checked out as a scam much more so than others. While others teeter on it being a prohibited pyramid scheme or simply an illegal scam.

So what is Herbalife? It’s tough to address the concern of whether Herbalife is not a scam, a rip-off or a pyramid system.

Is Herbalife Nutrition a Scam?

So, let me first take a look at some of the dramatization that Herbalife has been part of over the past few years.

Was Herbalife a Scam in 2012?

In 2012 when Herbalife’s president, Des Walsh was asked by a hedge-fund supervisor, David Einhorn, “the number of sales there were beyond the firm’s network”?

As you might imagine David Einhorn was angered. And soon after Costs Ackman, that is the head of the hedge fund Pershing Square bet $1 billion bucks versus Herbalife. He shortened its stock in late 2012.

Herbalife Chief Executive Officer, Michael Johnson, made a decision to fight back. He called Ackman’s statements incorrect and misleading.

After that Carl Icahn entered to call Ackman a phoney and that his insurance claims were total bullshit.

The worst of it took place in March when there was a front-page tale in The New york city Times. This tale exposed Ackman.

Ackman had actually been lobbying public officials as well as even added funds to anti-Herbalife advocacy teams.

Herbalife officials said that this was a lie just for them to publically come out two days later admitting that they were being checked out by the Federal Profession Payment FTC.

Ackman has also gone as far as to say that he is persuaded that Herbalife is a global pyramid plan. As well as thinks it’s a criminal operation.”

Herbalife’s primary financial officer, John DeSimone, reacted to this statement by claiming,

“I am one hundred per cent persuaded Bill Ackman is wrong. I assume he has actually gone beyond the reputable role short sellers play and also crossed a moral border.”

Then in 2016 Herbalife was forced to pay $200 Million bucks for ‘unjust as well as deceitful techniques’ and had to reorganize its United States procedures. This was following a two-year examination.

You can watch more about Herbalife’s alleged scam in the video below…

Is There a Lawsuit Agains Herbalife?

One of the easiest ways to find out whether Herbalife is a scam is to check out if there are any lawsuits going on.

They have had numerous legal actions against them. With their latest one being this year. Simply when you thought things were working out for them, they rewarded Chinese authorities for the 3rd time within just four years.

This time around it cost them $123 million bucks to clear up these charges with the United States government.

This charge and settlement came just a year after Herbalife was required to pay the SEC $20 million for deceptive financiers with its China business model.

This came after Herbalife chief executive officer Rich Goudis’s audio recording was revealed where he recommended a worker disregard expense account limitations in China. These are simply some of the recent claims.

But none of this means that Herbalife is a scam. It’s simply proof that the company has problems, like every other.

Why Herbalife is Baned in the US?

Herbalife agreed to “basically restructure” its organization and also pay a $200 million fine as part of a 2016 negotiation with the united state Federal Trade Compensation (FTC) adhering to accusations of it being a pyramid scheme.

In November 2017, Ackman’s hedge fund liquidated its short position in Herbalife.

Concurrently, plant sources of ephedrine were removed from Herbalife’s product line in 2002 after numerous states prohibited supplements consisting of such herbs.

In July 2016, Herbalife consented to change its business design and pay $200 million to its representatives in a negotiation with the FTC. Does this mean that Herbalife is a scam? No!

This means that, once again, like every other company, they have problems.

And the fact that they actively resolve all these issues shows that Herbalife is legit.

Is Herbalife Legit MLM?

Is Herbalife an MLM?

Herbalife is a legit MLM.

However, for years they have been called out to be a borderline Pyramid scheme by the FTC. Also, a couple of individuals have actually been the centre of a good deal of dispute.

Similar to much Multi-level marketing Herbalife is structured to generate income by signing people up.

But Herbalife borderlines are a scam MLM due to the manner in which they present their firm, and the quantity of money you can really make by joining them as a supplier.

The truth is…

You will not make a living wage offering their products, at least nothing that worthwhile. It’s a well-known fact that 99% of people that join network marketing recover costs and make some.

A few individuals have tried to argue that Herbalife is a pyramid scheme. You can see their testimonials in the video below…

As you can extract from this video, members are asked to get their pals involved and become distributors. But at some point, your initiatives will certainly dry so you’ll have to resort to modern tactics like online marketing…

The payment plan isn’t created to make money. However, instead, the business is designed to keep you encouraged to keep their participants using their products as well as buying even more.

So one of the most possible outcomes is that you keep losing cash while they make more and more.

Alternative: On the other hand, if you’re looking for the best business model to earn passive income online as a beginner, there are other, more suitable, and cost-effective alternatives.

My top-rated course has helped me to go from earning $0 to $100’s per day!

 

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Herbalife Review – Pros

  • A long-standing company (40 years in business)
  • Good quality dietary and weight-loss products
  • Some people reported success with their MLM

Herbalife Review – Cons

  • You have to purchase to products you plan to sell up-front
  • Herbalife is known as an illegal pyramid scheme
  • Their products and scheme are expensive
  • MLMs have a very – very low success rate

Herbalife Review – Conclusion

So is Herbalife a scam or legit MLM? Herbalife is a legit multi-level marketing firm in my review. Their main objective is to get their distributors to proceed with acquiring products and hiring new employees.

But that’s just an objective view… As always, there is a dark side…

Herbalife and other such companies are structured to look like multi-level marketing.

However, as with numerous MLM companies they teeter on the pyramid side operating in the grey area where it’s hard to classify them as one or the other.

There is plenty of network marketing’s out there, and lots of business possibilities that you can join to make money.

And in my opinion, Herbalife is not one of them…

It’s just too shady, full of complaints, and their plan is overcomplicated for my taste.

Thanks for reading my Herbalife review! What are your Herbalife reviews? Feel free to leave them in the comments section below…

Related MLM Reviews:

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If you need any help or you have a question, feel free to contact me.

And feel free to share this Herbalife review to help others as well!

All the best, Ivan. Founder, and CEO @freeaffiliatemarketingbusiness.com

17 thoughts on “Is Herbalife a Pyramid Scheme or Legit MLM? – 2022 Review”

  1. Herbalife has been around for over 40 years and has had to pay out hundreds of millions of dollars for bad business practices.

    They had to make that money in order to pay it out. This means that people believe their products do work.

    I’m not a fan of the MLM business model because it is very difficult to get others to join as well as sell the products.

    If you can do both then you are in the minority who actually make money.

    I prefer your recommended method of Affiliate Marketing.

    Reply
  2. Hi Ivan, 

    Thanks for this review-  very informative and thorough. It seems to me that this company is basically a waste of time.  There are other options out there- like affiliate marketing, as you said- that are way more promising. Why spend time on this company when most people don’t succeed with it? It’s not worth a person’s precious time,  in my opinion. 

    I have been working with wealthy affiliates, and although affiliate marketing does take time and effort, I have found that so far they deliver what they promise. 

    Moreover, you learn a lot through their platform, even the free version. I knew nothing about technology and they taught me a lot. Well worth it for the educational aspect alone. 

    All the best to you and your business,

    Beth

    Reply
  3. I really do not have any question because I am familiar with this business model. 

    One thing I do not like about it is that you have to recruit people as a part of making money and they encourage you to do this from the very beginning when you are STILL learning how to sell off of the model that they provide you.

    Another thing is that you have to buy the products yourself. It is not like affiliate marketing or drop shipping where you do not have to spend any money on products.  Many people starting out struggle to have the extra money to make a life change and would rather not have to figure out how to own a huge inventory.

    Moreover, they want you to sell to friends and family. I think mixing your business life with your very close personal life is a recipe for disaster. They don’t want you to bring in one or two close friends/relatives as business partners. They want you chase and run down any and everybody you can find and a lot of people I know just are not interested but you depend on this tactic to make more money.

    Furthermore, I think they lack good training on how to implement their business model. You only know to buy the product, form social gatherings (which can be a task to do over and over again), and sell to the same people that you are trying to recruit.

    Finally, I do not think it is pretty at all that 99 percent of people that enter this type of business are not very successful. That is a huge red flag.

    I think you did a great job giving all the details and shedding the proper light on a company of this nature. Just because it is not a scam doesn’t mean it is not a bad idea for most people.

    Reply
  4. I have always wondered what the benefits are for joining a program like HerbaLife. I can see how it has been so successful, as it fits in with the top niches of wealth, health and relationships. 

    I love using whey protein powders, but I could not justify the monthly cost, on top of the food costs.

    These guys have a great marketing campaign, and that is obvious when you see the people who endorse them publicly. Like I would never have thought I would see Cristian Ronaldo promoting HebaLife.

    What do you think the original owner would think of his creation if he was still alive? Do you think this was his vision? 

    I guess I don’t see why not, as the brad has become huge over the past 10 years or so. 

    Interesting to see how they compare to say Atkins, when Robert Adkins died around the same time, and that brand looked like it was going to take off.

    Reply
  5. I love whey protein powders, but I hate the high costs. When I heard about HebaLife, I was a bit skeptical at first. But after checking out their terms and conditions, I thought this could be the way to get more protein into my diet without breaking my bank account.

    Reply
  6. I heard about this MLM company, they one of the biggest and long lasted mLM companies, but still I don’t even participate no what kind of reputation they have, good or bad.

    Moreover, you have pay monthly fee and buy products to stay a member, it is better to build a website and as an affiliate rather than build a network upline and downline.

    After I found affiliate marketing I never go back to network marketing again, it was the biggest mistake of my life i joined MLM. 

    Thanks for your post to educate people.

    Reply
  7. Herbalife has been around for more than forty years, which basically makes them a legitimate company, even though it is based on the multilevel marketing (MLM) business model. MLM is a legitimate business model, although I think it is outdated. I worked for a MLM company, and know how difficult it is to make money if you are not continuously recruiting new team members and building your downline. 

    Herbalife is the same. They have been involved in several law cases and is bordering on a pyramid scheme in disguise. I would avoid joining Herbalife as a distributor and rather explore affiliate marketing as a viable way to earn passive income. 

    Reply
  8. Although I agree that Herbalife is not a pyramid scheme, I have to agree with you and would not recommend it to others. There are much better quality natural products that can be found out there at a lower price, and as you mentioned MLMs in general have low success rates for individuals and there are much better business models available to pursue. As you also mentioned even if a person is interested in MLMs there are better ones out there without all these drawbacks and past baggage. 

     

    Reply
  9. This reminds me of MaryKay but for nutritional supplements. And yes I agree it isn’t a pyramid scheme at all but that still doesn’t mean that it is a good thing to invest your time and money into doing. And of course Herbalife’s main intrests are to make money for the top people in the business.

    Reply

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