I have no idea how you're supposed to find this organically; Here's the PDF that tells the tale:<p><a href="https://opportunity.herbalife.com/Content/en-US/pdf/business-opportunity/StatementAverageCompensation2011EN.pdf" rel="nofollow">https://opportunity.herbalife.com/Content/en-US/pdf/business...</a><p>In 2011, in the US ~351,000 people were on the roles as individual sellers. The pdf even acknowledges "Single-level Distributors benefit from buying Herbalife products
at a preferred price for their consumption and that of their families, and for many this is the only benefit
they seek."<p>Those 351,000 people are the product for the "Supervisors"<p>Here's another one for 2013: <a href="https://opportunity.herbalife.com/Content/en-US/pdf/business-opportunity/statement_average_gross_usen.pdf" rel="nofollow">https://opportunity.herbalife.com/Content/en-US/pdf/business...</a><p>400,000 people who earned nothing at all from herbalife as individual sellers (they could potentially profit from selling product, but that's quite rare, it looks like 50,000 people bought more than the minimum [see footnote in pdf]).<p>Next, 43,000 people who could potentially earn money from their downline (see the 400,000 chumps above); but only 2,300 actually did earn anything at all.<p>Next, the actual winners in the pyramid: 73,000 people at the top. But wait, 18 percent earned $0 and another 56% earned $250 on average. So how many people in the pyramid earn above minimum wage? Something like 2,600 people.
Our own government perpetuates the greatest of all frauds, the lottery, over the poor and uneducated to the tune of tens of billions a year. I’ve tried all my life to get my mother to stop buying tickets and she simply won’t despite being a complete dependent of her children (and she’s never won decades later!). It’s a sickness.<p>Herbalife (and Casinos) for that matter feed off that sickness as well. It’s hard to rationalize banning one and not ban the others and from my ignorant perspective, American society is not in a place where it can collectively come to a consensus to end industries that feed off of the intellectual, emotional and psychological deficiencies of people. The machine is just too big.
For a harrowing, tragic, and hilarious MLM story, read Elle Beau's blog, it's a treasure: <a href="https://ellebeaublog.com/poonique/" rel="nofollow">https://ellebeaublog.com/poonique/</a><p>People tip-toe around calling MLM what it is, specifically a scam using psychological tactics of a cult. For example, Dave Ramsey (host of a highly popular financial radio show and podcast) condemns credit cards in fiery rants, but uses carefully measured terms when talking about MLM. "Most people lose money, but a few can be very successful..."<p>Something about MLM gets people scared to tell the truth. I think that everyone knows a friend or family member in MLM, and don't want to risk that relationship. Of course that's what MLM preys on.
Bill Ackman of Pershing Square tried really hard to publicize their shittiness for his massive short bet on Herbalife. There's even a documentary about it. Never seemed to work. Not sure how much he lost in the trade, but a tidy sum, to say the least.<p>Of course it didn't help that Carl Icahn was on the other side of the trade. Herbalife's stock has done really well for a company that sells no real product and has no real value.
See this link (previously at <a href="https://news.ycombinator.com/item?id=9714417" rel="nofollow">https://news.ycombinator.com/item?id=9714417</a> on HN) for a different take on Herbalife (by a short seller who went long on Herbalife and made quite a bit of money).<p><a href="http://brontecapital.blogspot.com/2015/06/herbalife-very-long-post.html" rel="nofollow">http://brontecapital.blogspot.com/2015/06/herbalife-very-lon...</a>
Because there is loud grumbling about a "nanny state" when government prevents people from making probably-stupid business decisions. Multi-level marketing, initial coin offerings, allowing people without much money to invest in startups, and casino gambling all lead to most people losing their money.
Well I think it's pretty simple - MLM companies contribute more in political funding, than than the perceived detrimental aspects of their business hurt the electoral prospects of our elected representatives.<p>As a token example - <a href="https://en.wikipedia.org/wiki/Betsy_DeVos" rel="nofollow">https://en.wikipedia.org/wiki/Betsy_DeVos</a>
A lot of it simply comes down to how much you want government to police behavior. There is only so much irrationality that can be reined in.<p>There are also legitimate home based businesses. Government regulations tend to not be very good at telling the difference between legitimate operations and those which are sketchy, but not outright fraud.
Season 1 of The Dream podcast is an easy and informative look at mlm.
<a href="https://www.stitcher.com/podcast/stitcher/the-dream" rel="nofollow">https://www.stitcher.com/podcast/stitcher/the-dream</a>
A recent conversation on reddit exposed me to somebody who feels its ok to say card fees are for chumps and fund his no fee high return points wins. I think predating on ill informed poorer people who incur credit card debt and fees is wrong personally. Some people think it's OK.<p>Herbalife is in this spectrum of product: the government is mostly financially a-moral not moral or imorral and so prostitution income is not untaxable even if prostitution is. Herbalife has to get closer to the ponzi end of the spectrum to fall afoul of the law. Right now, it's only appealing to greed.<p>If herbalife and flyer miles points cards predate willful stupidity then the government needs a strong drive to legislate because in the end it too is conflicted.<p>Its a long bow libertarian position I dont agree with BTW, I think the role of government is to protect the innocent dupes. But there are thin-end-of-the-wedge arguments a-plenty here.<p>If I were king, I'd ban herbalife. If I needed a kings tax income I might not.
The premise is exactly backwards. Why should the government be able to put a company like Herbalife out of business? Adults should be able to decide for themselves whether to buy products. If they make mistakes by our judgement, which is always very imperfect, that is their business.
> Nevertheless, Herbalife recruiting materials were festooned with “images of expensive cars and opulent mansions.”<p>Why does it stay in business? Because there is nothing wrong with a company that exploits the greed of individuals. Yes, some people are compelled due to desperate situations. But the solution here is raising the education level high enough to not succumb to their inner greed. The solution isn't reactively outlawing knives that cut more people than others.