From: roger@nrc.com (Roger Goeb)
Subject: Herbalife (was Amway)
Organization: Network Research Corp, Oxnard, CA
Date: Fri, 21 Aug 1992 22:03:48 GMT

In article <1992Aug17.193120.24160@newsgate.sps.mot.com> rrbk50@email.sps.mot.com (Rick Cottle) writes:
>
>I think it is great to associate with those people from all walks of life.
>Does this mean you actually do business with them, or are they part of 
>your upline system and your association is based on their coming into
>town for rallies, motiviation, etc.?  I think that for fairness in
>advertising, all amway distributors should post 1) their current pin,
>2) how long they've been in, and 3) what their net profits are since
>they've been in the business.  Of the hundred's of distributors I 
>know from my 2-3 years of heavy involvement, I know of maybe 2 who
>have in total made more money than they've spent.
>--
>rick 

This last comment sounds strange to me.  I'm involved in Herbalife.  There
is no way (that I can see, anyway) that I could possibly lose money on my
business unless I intentionally put my money at risk.  Obviously I may not
make any money, but it would be extremely difficult (and not too smart) for
me to create a set of circumstances where I will lose money.  I could lose
money if I went out and bought many $$$ worth of products that my retail
customer base couldn't accomodate, and then quit the business claiming I
lost money.  I could also spend $$$ on advertising and other related business
costs before building enough retail customers to warrant doing so.  I suppose
I could consume massive quantities of the products and claim I lost money
because I spent money on a product I used.  I wouldn't do any of these 
things, regardless of whether my business was multi-level or not.  

Anyway, is Herbalife's  business plan different than other MLM's or what?

Do other MLM's (Amway, Mary Kay) mandate a certain level of purchases
to stay active?  *PLEASE NOTE*  "Stay active" is different than "Receive
higher royalties".  In Herbalife the more business you do, the higher 
your royalty percentage is.  If you don't do any business in a given month,
then you have no royalty check, but you don't lose your downline or
get penalized in any manner.  The next month's royalty check is again
dependant on next month's gross volume.

How can you actually lose money?


By the way, I've been involved for 11 months.  I spend about $80.00 per
month on ads, $200.00 on the phone bill, maybe $50 on postage and another
$100 on promotional materials from Herbalife (Product guides etc).  My
retail sales average about $5500 per month, but have increased every
month.  My profit margin is %50. $2750 -%80-$200-$50-100 = $2,320 profit.
I probably spend about 15 hours per week on this so that comes out to
about $40.00 per hour.  As soon as I have enough business to warrant spending
30 hours per week on my retail business, I'll jump at it and be self-employed.

My "downline" really doesn't provide me with anthing.  My royalty checks
have been between $0.00 and $350.00.  My point is that the retail side of
these businesses ought to be able to support the effort.  The "big money"
from the multu-level aspect comes later.


-roger
roger@nrc.com



-- 

Roger H. Goeb.				
Network Research Corp.
roger@NRC.COM