Founded in 1980 by Mr. Mark Hughes, Herbalife is a multilevel marketing and advertising business (MLM) that gives items for nutrition, weight-management and personal-care. A 2008 corporate annual report claims 1.9 million distributors in 72 countries, with annual sales of three.8 billion dollars. Of the 1.9 million distributors, the report estimates that 505,000 had been "sales leaders." This is their term for distributors who 1) actively market the products and 2) recruit other salespeople into their "down-lines," or sales teams. Sales leaders are paid a commission on 1) personal sales of products and on two) sales made by other people who have been directly or indirectly "recruited" into their down-line teams.
Approximately 80% of Herbalife's 2008 net sales occurred outside of the United States. Herbalife's 2008 report claims that they are "A world-class company with visionary leadership to assistance your home business." The report also states: "Herbalife's mission for beneficial nutrition, a wholesome, active life-style and economic well-being assists millions of individuals reach their perfect weight, look and really feel healthier, and earn what they're worth." Please bear in mind this quote.
The following statement of earnings is taken from their 2008 Annual Report. Herbalife offers its Distributors an chance to accomplish a lifetime of far better well being via its scientifically advanced weight-management and nutrition items. When numerous of our Distributors join the Herbalife family merely to enjoy our life-changing merchandise, others want to share their results and reap the benefits of the many income positive aspects our company opportunity gives. With Herbalife, you are able to work part-time and earn a supplemental income or focus solely on your Herbalife Distributorship and improve your economic prospective. It's entirely up to the individual just how much he or she wants to obtain! A Distributor earns profits by purchasing Herbalife items at wholesale and reselling them at retail. If the Distributor wants to boost his or her involvement inside the home business and take pleasure in the possibility of higher levels of income, he or she may perhaps sponsor other people into the organization and create an organization.
The same 2008 annual report states: "We are listed on the prestigious New York Stock Exchange, are members of Direct Selling Associations around the globe, and have brand visibility via sports sponsorships." A very substantial section of exactly the same report states: "Holders of our typical shares may face difficulties in protecting their interests due to the fact we are incorporated under Cayman Islands law. Our corporate affairs are governed by our amended and restated memorandum and articles of association, and by the Organizations Law (2007 Revision) plus the widespread law of the Cayman Islands.
The report continues: "The rights of our shareholders as well as the fiduciary responsibilities of our directors under Cayman Island law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions inside the United States. Thus, shareholders may perhaps have additional difficulty in protecting their interests inside the face of actions by our management or board of directors than would shareholders of a corporation incorporated in a jurisdiction in the United States, on account of the comparatively much less developed nature of Cayman Islands law in this location."
To summarize, Herbalife is really a Cayman Island Corporation with 1.9 million distributors, of whom 505,000 are "sales leaders." The average annual income throughout 2008 for all Herbalife sales leaders was $2,200. Among their "active sales leaders," 86.4% earned $440 for the year. 6.4% earned much less than $5,000, and five.1% earned an annual wage of $17,785. This indicates that 97.9% of their "active sales leaders" earned less than $20,000 for the whole year.
Do you recall the Herbalife mission statement from above? It states: "Herbalife's mission for great nutrition, a healthy, active life style and economic well-being helps millions of individuals reach their ideal weight, appear and really feel healthier, and earn what they're worth." If there is certainly a Herbalife scam it's that Herbalife management apparently considers that 97.9% of active sales leaders who choose Herbalife as their household organization are "worth" less than $20,000 per year.
The company model that Herbalife uses appears to be legitimate; nevertheless the income distribution appears to be heavily weighted to favor the top 0.5% of active sales leaders and stockholders. Hundreds of thousands of workers in the broad base of the structure do most of the function and create the income to support a few at a very narrow best. Does this model/structure recommend a pyramid to you? The Chinese seem to believe so.
Approximately 80% of Herbalife's 2008 net sales occurred outside of the United States. Herbalife's 2008 report claims that they are "A world-class company with visionary leadership to assistance your home business." The report also states: "Herbalife's mission for beneficial nutrition, a wholesome, active life-style and economic well-being assists millions of individuals reach their perfect weight, look and really feel healthier, and earn what they're worth." Please bear in mind this quote.
The following statement of earnings is taken from their 2008 Annual Report. Herbalife offers its Distributors an chance to accomplish a lifetime of far better well being via its scientifically advanced weight-management and nutrition items. When numerous of our Distributors join the Herbalife family merely to enjoy our life-changing merchandise, others want to share their results and reap the benefits of the many income positive aspects our company opportunity gives. With Herbalife, you are able to work part-time and earn a supplemental income or focus solely on your Herbalife Distributorship and improve your economic prospective. It's entirely up to the individual just how much he or she wants to obtain! A Distributor earns profits by purchasing Herbalife items at wholesale and reselling them at retail. If the Distributor wants to boost his or her involvement inside the home business and take pleasure in the possibility of higher levels of income, he or she may perhaps sponsor other people into the organization and create an organization.
The same 2008 annual report states: "We are listed on the prestigious New York Stock Exchange, are members of Direct Selling Associations around the globe, and have brand visibility via sports sponsorships." A very substantial section of exactly the same report states: "Holders of our typical shares may face difficulties in protecting their interests due to the fact we are incorporated under Cayman Islands law. Our corporate affairs are governed by our amended and restated memorandum and articles of association, and by the Organizations Law (2007 Revision) plus the widespread law of the Cayman Islands.
The report continues: "The rights of our shareholders as well as the fiduciary responsibilities of our directors under Cayman Island law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions inside the United States. Thus, shareholders may perhaps have additional difficulty in protecting their interests inside the face of actions by our management or board of directors than would shareholders of a corporation incorporated in a jurisdiction in the United States, on account of the comparatively much less developed nature of Cayman Islands law in this location."
To summarize, Herbalife is really a Cayman Island Corporation with 1.9 million distributors, of whom 505,000 are "sales leaders." The average annual income throughout 2008 for all Herbalife sales leaders was $2,200. Among their "active sales leaders," 86.4% earned $440 for the year. 6.4% earned much less than $5,000, and five.1% earned an annual wage of $17,785. This indicates that 97.9% of their "active sales leaders" earned less than $20,000 for the whole year.
Do you recall the Herbalife mission statement from above? It states: "Herbalife's mission for great nutrition, a healthy, active life style and economic well-being helps millions of individuals reach their ideal weight, appear and really feel healthier, and earn what they're worth." If there is certainly a Herbalife scam it's that Herbalife management apparently considers that 97.9% of active sales leaders who choose Herbalife as their household organization are "worth" less than $20,000 per year.
The company model that Herbalife uses appears to be legitimate; nevertheless the income distribution appears to be heavily weighted to favor the top 0.5% of active sales leaders and stockholders. Hundreds of thousands of workers in the broad base of the structure do most of the function and create the income to support a few at a very narrow best. Does this model/structure recommend a pyramid to you? The Chinese seem to believe so.
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