Is Herbalife a Pyramid?

Diet advice
Herbalife è una Piramide?
Recently, on the economic pages and not only, we have read a piece of news that is disconcerting and which, in the opinion of those who experience first-hand the more than positive experience of Herbalife, has absolutely no foundation. This is an investigation that would like to silence Herbalife as "pyramid selling system” which would mean a sort of scam, which it absolutely is not. Before outlining the various aspects of the investigation - which we are certain will only verify the correctness of Herbalife and its operators - we want state clearly how things stand: Herbalife is not a pyramid! In fact, the new appointees do not have the initial investments necessary to enter Herbalife (only 13 euros + a jar of formula 1) and absolutely nothing is gained from inviting new people to the structure, but only from their sales. Furthermore, the new sales manager who, within 6 months, decides to give up the activity, will also be able to return any stock to the company and be reimbursed, both for returned products and membership fees. In short, a pyramid selling system is a system in which the people at the top of the pyramid earn money by inviting people "below them", who in turn will have to invite others. Instead, Herbalife's MLM (multi level marketing) system does not provide direct earnings for affiliates, but only percentage earnings based on sales made... the more you sell, the more you earn! Now that we have briefly explained how things really are, for the record, let's explain, schematically, the reason for this investigation.

The fact

But is Herbalife a pyramid selling system? In fact, it has thrown into complete despair and utter confusion the fact that Herbalife, a well-known brand that specializes in the sale of food supplements intended for weight loss as well as for skin care, is being investigated by the US FTC. So, according to what is known, the Federal Trade Commission has launched an investigation into a fraud hypothesis. To better understand the events, you need to take a few steps.

The accusation

As suspected by Federal Trade Commission, Herbalife would be accused of having instituted a sales system known as the pyramid scheme. It should be remembered that this sale is prohibited as it is considered misleading. The thesis supported by the US FTC is that Herbalife's earnings would not derive so much from the sale of its products to consumers, but from the continuous recruitment of sellers. Herbalife, whose registered office is in the Cayman Islands while its operational headquarters are in California, operates in numerous countries and has something like two million independent distributors.

The defence

Accused of having implemented a pyramid selling system, known to most as a "chain letter", Herbalife has obviously rejected this accusation. At the basis of his defense is the concept of network marketing, which is considered a modern trading system. In extremely synthetic terms, the network marketing it is a business model that requires a network of distributors to build the business. Hence, it is generally considered as a type of business opportunity which is also very popular among people looking for a part-time job.

The conclusions

Finally, in mid-July 2015, the final verdict was finally delivered! The US Federal Trade Commission (FDT) has ruled that Herbalife is NOT a pyramid scheme or fraud, as multi-billionaire Bill Ackman has accused for years.

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