Herbal Life's pyramid scheme

Response to posts #58-59: JohnnyVegas, it's clear that you lack the reading comprehension to understand what I've written in previous posts regarding commissions based on a function of my own sales as well as those of my team, so I have no hope that reading the compensation plan mentioned in post #54 will further elucidate this for you. God bless. Don, I believe there still may be hope for you to gain a better understanding of this, even if you have no desire to participate personally. If you really want to know how a legitimate plan works to compensate those who market and train others how to market a company's products/services, read the compensation plan in post #54 and let me know if you have any questions. Of course, this is just an example of one company's plan (which I personally know well and from which I derive benefit). You may also find of interest this article by another industry trainer/advocate who is not tied to one particular company as he differentiates a pyramid scheme vs. a legitimate MLM: http://www.firstclassmlm.com/2007/12/07/pyramid-s…
— May 25, 2008 12:48 p.m.

Herbal Life's pyramid scheme

Response to posts #56-57: Fred_Williams, my response to this thread is on behalf of the industry, in general, not to promote my own corporate partner. That said, I hold the integrity of my company (USANA Health Sciences), its products, and its compensation plan against any in the industry. Of course, every industry has its bad apples, and those individuals who lie to you in order to sweep you into some meeting are acting without integrity and do not represent the professionalism with which I and many others conduct ourselves as independent associates/distributors. It's unfortunate that this handful of individuals has colored your prospective of the entire industry, any more than Enron, Tyco, and Global Crossing would have done so for their respective industries. As for the people you know who have "worked their tails off" in MLM and earned nothing for their efforts, I, too, know a few of these of folks. I even have a few in my own downline who claim to have worked their tails off in other companies before. However, these individuals have yet to complete even the first 10-step checklist in our initial training program on how to set up a proper foundation for their business (which only takes a couple of hours). So what kind of work are they actually doing? There is a big difference between being "busy" and being "productive." People can spin themselves around in circles being busy and never produce anything of value, regardless of their industry or profession. Very likely those of whom you speak were either not exposed to proper training or failed to follow that which was laid out for them. I've seen both types of folks, and neither group makes a dime in this business long-term, nor would they succeed in any business if their effort is similarly misdirected. Your claim that "the real money is in selling motivational books, tapes, and videos to suckers" has no bearing to those of us who build legitimate businesses in MLM. I have not produced a single book/tape/video myself, nor am I compensated by my company for purchasing or distributing these materials. Simply stated (again): I am paid for moving product and teaching others how to do the same. BTW, I personally have never sponsored an Associate as a result of a "revival tent" meeting. I typically meet with someone over a cup of coffee or lunch and take 30-45 minutes to explain how the business works and answer their questions. There is no fluff, smoke and mirrors, or other pyrotechnics... just logical Q&A. All information I offer is publicly available and allows one to decide for himself/herself whether to participate in the opportunity. I leave the irrational religious pitches to Rev. Minkow et al.
— May 25, 2008 12:24 p.m.

Herbal Life's pyramid scheme

Response to post #55: Don, in the interest of maintaining journalistic integrity, I expect that you would research all aspects of the topic upon which you are writing. In your own words describing the "exposed Salt Lake City–based Usana Health Sciences," you apparently have not even bothered to read the company's compensation plan which is publicly available (see link in post #54). If you took 5 minutes to read the plan, you would see that an associate's commissions are derived 100% from product volume moved within his/her organization. While you may have experience *writing* about a subject, that does not necessarily mean you actually have any educated background or experience on the subject matter, but then there is no law against that. Only the content which you produce which attracts readers will pay your salary, and we all know that "scandal" (regardless of truth) sells.
— May 25, 2008 12:20 p.m.

Herbal Life's pyramid scheme

Response to posts #49-52: Clearly you are both in category #2 (ignorant or uneducated on the subject of MLM). Neither of you have any personal experience with MLM and have only a superficial, misguided concept of how this business model actually works. The product/service offered by an MLM is NOT incidental to the operation, just as with any other business. In fact, this is strongly enforced by the FTC and is exactly what differentiates a pyramid scheme from an MLM (refer back to post #48). What you describe in post #50 is completely inaccurate. In my business, I earn absolutely NO commission for simply enrolling another associate or distributor in my downline. I only earn commissions by generating sales of a product or service, just as in any other business (e.g. car salesperson, real estate agent, insurance agent, mortgage broker, etc.). What differentiates me from the aforementioned classical sales professionals is that I also benefit from the leverage of my team. My commissionable sales volume is calculated a function of products purchased by my own direct customers as well as the customers of individuals who are working with me as Associates/Distributors in my organization (downline), as well as the personal consumption of products by these Associates. This is spelled out in detail within the compensation plan made publicly available by my corporate partner: http://www.usana.com/media/File/Training%20page/B… You will note that it is entirely possible to have a profitable business without recruiting ANY additional distributors and simply market products to customers who are not associates/distributors (just as in any other traditional business which markets to customers one-on-one). After all, we are only compensated by product volume sold within our organization. Of course, in doing so, one does not gain the leverage which is built in to an MLM structure, where those who are great teachers are compensated handsomely to the degree in which they are able to effectively train others (in their downline) to market a company's products/services and generate a much larger amount of product volume through a team than one is capable of accomplishing as a single individual.
— May 23, 2008 12:55 p.m.

Herbal Life's pyramid scheme

Ironically, there is some great advice here: Investing in a pyramid scheme is likely not to return a profit. However, Don does not understand the difference between a pyramid scheme and a legitimate MLM company. - Pyramid scheme: promise of profit gained for recruiting other individuals into the scheme (at a cost) without moving any products or services as a legitimate business - MLM: identical to any traditional company except in how it chooses to market its products or services An MLM advertises through a network of entrepreneurs who market the company's products/services via word-of-mouth. These people earn commissions based on their effectiveness in moving the company's products and services through their own teams of affiliates, as opposed to more traditional advertising methods (e.g. celebrity endorsements, national TV or print ad campaigns). Those whose marketing efforts generate the most product sales make the most money, not those who "started at the top." It’s a simple concept, but it is unpopular with the excuse-prone who would rather blame the model rather than be accountable for their own failings as entrepreneurs. Anti-MLMers tend to fall into one of 3 categories: 1. MLM failures: They started a business and were either too lazy, too fearful, or too ignorant to learn about the industry, work with their upline mentors, and put in the necessary footwork to build a successful long-term business. These folks should remain as employees since they lack the mindset and determination to build a successful business. 2. The ignorant or uneducated: They reiterate hearsay from others without any personal experience or real study of the subject. These people tend to be bigots, irrationally jump to conclusions, and often play a role in promulgating ignorance throughout society. 3. Those who have a financial stake in the demise of either MLM as an industry (by selling their own books/tapes/programs) or of an individual company: Minkow falls into this category, having purchased put options on the USANA’s stock and having received outside funding to fuel his anti-USANA "research." I run two small businesses, one of which is as an MLM distributor and have been in the industry for 2.5 years. I have learned the ropes and put in the effort necessary to have generated steady, weekly, residual commissions from this venture for more than a year now. I believe it makes the most sense to learn any trade or new skill from those who have expertise in a given subject rather than receive "gospel truth" from charlatans, failures, or otherwise ignorant individuals. Learning about MLM from an individual belonging to groups #1-3 above is analogous to getting advice from a chronically obese person on how to lose weight, receiving personal training from a couch potato, or consulting a convicted felon for fraud on evaluating ethical business models. To which of the three groups above do Don and JohnnyVegas belong?
— May 21, 2008 11:28 a.m.