Herbalife
Des Walsh ( President) Richard P. Goudis ( Chief Operating Officer) John DeSimone ( Chief Financial Officer ) Brett R. Chapman ( General Counsel )
Herbalife International Inc. is an American company that offers dietary products, cosmetics and info materials by means of network marketing.
- 2.1 Overpriced Products
- 2.2 Role of the founder Mark Hughes
- 2.3 Illegal Business Practices
Business
Herbalife was founded in February 1980 by Mark Hughes and began with the sale of dietary supplements in the United States. In 1982, the company generated sales of two million dollars and expanded to Canada. 1986 Herbalife went public. The founder Mark Hughes died in 2000 at the age of 44 years.
Herbalife is listed on the New York Stock Exchange under the symbol HLF since 15 December 2004. The annual sales of Herbalife in 2010 was 2.7 billion U.S. dollars according to statutory accounting requirement to U.S. GAAP.
Products
Herbalife sells weight management, nutritional supplement and personal care markets. As a provider in the areas of " health, health care, complete diet with all the micronutrients, combating obesity, toning and anti-aging " the company positions itself in the market for wellness products. The products are marketed as "internal nutrition" ( nutritious meal replacement food supplements) and " outer nutrition" ( cosmetics).
Herbalife products are stamped with the seal of the Mark Hughes Cellular & Molecular Nutrition Laboratory at the Centre for Human Nutrition at the University of California, Los Angeles. This university department is sponsored by Herbalife and should, inter alia, with the confirmation of a positive value of industrial pipeline products of soy proteins, this includes Herbalife deal for human consumption.
Distribution
The distribution system of Herbalife consists of over 2.2 million independent consultants worldwide (figures from 2011), which are organized in a multi-level marketing system. However, only a small part of it is really acting as a reseller and reaches the minimum revenue to be included at all on the bottom step of the marketing plan (Supervisor), while the bulk of the products purchased solely for their own use. As of June 2007, there were 368 062 people at level supervisor or higher. The company is present in over 75 countries. Largest market is the U.S., followed by Mexico with each nearly 20 percent share of total sales.
As with other structural distributors of Herbalife 's distribution system based on the fact that customers in turn are seller for the products. For the sales of the reseller not only itself receives a commission, but also one who has previously recruited him. Thus, such a structure to work, the product margin must be high. The vendors are independent and responsible only to their work and time use themselves.
Since the products of Herbalife products are consumption, are sought as a target group mainly permanent users. The aim of the business is the long-term use by the customer, which is justified by company stating also that a result or result of the use of a rule can only occur after prolonged use. The first task of a Herbalife Partners is, accordingly, the construction of a personal customer base. The reseller is gaining new potential customers for the products, by individual or group presentations to prospective customers to become customers. In practice, there are very different-sized customer bases. According to Herbalife is a number from 20 to 50 deliveries per month at an appropriate time and circle of recipients duration is realistic.
Buyer of Herbalife products receive a money- back guarantee on the products purchased. The distributor itself is a commission and, on the basis of the prevailing German-speaking laws for the consignment sale, the remaining unsold products give back to Herbalife. A financial risk through lack of sales occurs when the distributor fails to comply with the prescribed by the manufacturer return solution.
The remuneration system of Herbalife there are various so-called permission levels. Based on the classification in this system of discount when buying products the reseller is set. To obtain "Supervisor Status " must the reseller once reach 4000 " Volume Points " or two times 2,500 " volume points " in two consecutive months. This " volume points " are an internal accounting unit for sales of Herbalife distributors and correspond approximately with the respective local currencies. A " consultant " with so-called " supervisor state " that has thus already bought goods worth 4,000 " volume points " or Euro, receives in consequence a 50 percent discount.
The number of resellers is limited by instructions of Herbalife neither regional nor in the country. Also, the Internet is used as a selling platform, often close together several dealers.
Nutrition Advisory Board ( Advisory Panel on Nutrition )
Herbalife indicates that the Nutrition Advisory Board ( NAB ) is composed of leading experts in the fields of nutrition and health which form distributors and provide them with information on the basics of nutrition, physical activity and a healthy lifestyle. Is chaired by David Heber, professor of medicine and healthcare. His accession to the NAB could be described as controversial. This took place about the same time as Herbalife has donated $ 3,000,000 to Mark Hughes Cellular and Molecular Nutrition Laboratory at the Center for Human Nutrition ( Center for Human Nutrition ) at the University of California ( UCLA) to establish.
Criticism
Overpriced products
In a test of different formula diet products Ökotest the magazine (2/ 2002) Herbalife is one of the most expensive products. Therefore, some consumer centers Herbalife products have found their tests for overpriced and, like almost all Formula diets for not recommended.
Role of founder Mark Hughes
A business biography of the founder Mark Hughes can be found on most Herbalife sites. From his biography - he had witnessed as a 18- year-old, as his mother had died of a harmful weight loss treatments - his motivation is derived to help all obese people through the development and distribution of the Herbalife products. The image of the man whose mission was " through healthy eating to improve the lives of people " ( Herbalife original sound) does not match the personal tragedy that gives an idea of the forensic report on the autopsy of Mark Hughes Mark Hughes died as CEO of Herbalife on 21 May 2000 at the age of just 44 years after a multi-day binge (4 -day binge ) with existing alcohol dependence, with a blood alcohol level of 2.1 parts per thousand and a toxic concentration of antidepressants.
Illegal business practices
On 23 November 2011 Herbalife Belgium was condemned by the Brussels Commercial Court as an illegal pyramid scheme. Plaintiff was the Belgian consumer protection association test Aankoop who complained several sales practices of the company, including that forced product our customers to advertise itself as a consultant in order to buy the products at reasonable prices can. The Brussels Commercial Court announced in his ruling that the Herbalife system is contrary to the Belgian law. Under the penalty of a fine, the Commercial Court Herbalife imposed on, adjust the offending business practices within two months. It can be seen as a result of the judgment that Herbalife is now on its Belgian, Dutch and German website provides information about the average income of certain management levels available, providing more transparency for its members.
Health Consequences
The German Nutrition Society came to the conclusion that the solution was not alone, expressly mentioned by weight problems in diet products Herbalife, but rather in long-term changes in dietary habits towards a low-fat and high-carbohydrate balanced mixed diet, coupled with adequate exercise to see whether.
There is also evidence that Herbalife products for weight loss may cause fulminant hepatic failure, which may require a liver transplant is necessary and fatal. On over 20 patients with liver damage with the use of Herbalife products are documented, in one case resulting in death. In case of suspected liver damage or aggravation of a pre-existing liver disease, the application should therefore be terminated immediately. In light of the possible danger is to be noted that in the recognized medical database PubMed no studies to a positive effect of the specimens are cataloged.