As we discussed, Herbalife is a company that uses Multi-Level Marketing ("MLM") to sell products. Basically, an individual will need to recruit other people who work under him to sell products. In return, these underlings need to recruit people of their own to sell products.
It's a never-ending recruitment process. In other words, more people need to enter into this chain of salespeople for profits to be generated. Or, in other words, if you look at the bottom of this recruitment chain and go up, it looks suspiciously like a triangle. Or a pyramid.
Controversy regarding MLM schemes is nothing new. Many people and organizations consider MLM's nothing more than a scam and they are even featured in the Skeptic's Dictionary as nothing more than an unsustainable fraud. The Skeptic's Dictionary states: Multi-level marketing is system of marketing which puts more emphasis upon the recruiting of distributors than on the selling of products. As such, it is intrinsically flawed.
Why use MLM at all? Why is there a need for it in the 21st century when everything and anything is available on the internet? Why is it that people need to be recruited in addition to the slae of the products?
Answering the above questions is beyond the scope of this current thread. However, as stated, it is beyond question that Herbalife is an MLM company. This does not automatically mean that Herbalife is running a Pyramid or Ponzi scheme but it does draw attention to their marketing practices not to mention the business model of Herbalife.
It's a never-ending recruitment process. In other words, more people need to enter into this chain of salespeople for profits to be generated. Or, in other words, if you look at the bottom of this recruitment chain and go up, it looks suspiciously like a triangle. Or a pyramid.
Controversy regarding MLM schemes is nothing new. Many people and organizations consider MLM's nothing more than a scam and they are even featured in the Skeptic's Dictionary as nothing more than an unsustainable fraud. The Skeptic's Dictionary states: Multi-level marketing is system of marketing which puts more emphasis upon the recruiting of distributors than on the selling of products. As such, it is intrinsically flawed.
Why use MLM at all? Why is there a need for it in the 21st century when everything and anything is available on the internet? Why is it that people need to be recruited in addition to the slae of the products?
Answering the above questions is beyond the scope of this current thread. However, as stated, it is beyond question that Herbalife is an MLM company. This does not automatically mean that Herbalife is running a Pyramid or Ponzi scheme but it does draw attention to their marketing practices not to mention the business model of Herbalife.
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