What is the benefit of joining a company like Herbalife? If Herbalife really is a pyramid scheme, shouldn't the members of Herbalife have been sucked out already?
Well, historically speaking, pyramid schemes can go on for quite some time before anyone becomes the wiser (look at Bernie Madoff for an example). But, we need to remember that although Herbalife is accused of being a pyramid or Ponzi scheme, for certain it is a Multi-Level Marketing (MLM) business model.
The MLM model does have attractions for certain people. First of all, people who are in an MLM organization are told they are part of a "privileged" group. Not just anyone can join the MLM network. MLM's generally have sales meetings which have been called a cross between a revival tent meeting and networking. More emphasis, however, is placed on psychological "boosts" for the participants rather than actually learning any new sales techniques (why bother when sales can only be made to people within the organization).
It has been said that MLM's are more of a cult than a sales group. Whether this has any truth to it is a thread for another time.
Herbalife certainly has its share of "pump you up" meetings and groupthink which, once again, appeal to a certain type of person. However, this only reinforces the topics we discussed earlier that if Herbalife is to avoid the charge that it is a pyramid or Ponzi scheme, then it must produce evidence to show that its profits do not come from the recruitment of people, but rather from the sales of its products.
Well, historically speaking, pyramid schemes can go on for quite some time before anyone becomes the wiser (look at Bernie Madoff for an example). But, we need to remember that although Herbalife is accused of being a pyramid or Ponzi scheme, for certain it is a Multi-Level Marketing (MLM) business model.
The MLM model does have attractions for certain people. First of all, people who are in an MLM organization are told they are part of a "privileged" group. Not just anyone can join the MLM network. MLM's generally have sales meetings which have been called a cross between a revival tent meeting and networking. More emphasis, however, is placed on psychological "boosts" for the participants rather than actually learning any new sales techniques (why bother when sales can only be made to people within the organization).
It has been said that MLM's are more of a cult than a sales group. Whether this has any truth to it is a thread for another time.
Herbalife certainly has its share of "pump you up" meetings and groupthink which, once again, appeal to a certain type of person. However, this only reinforces the topics we discussed earlier that if Herbalife is to avoid the charge that it is a pyramid or Ponzi scheme, then it must produce evidence to show that its profits do not come from the recruitment of people, but rather from the sales of its products.
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