many parts of the presentation weren't very compelling
Specifically the weight loss clubs. But the whole disclosure thing was a big woopdie doo. They clearly tell everyone that virtually nobody makes much money from doing this. So their percentages didn't include inactive members. Big deal. so instead of saying 85% make virtually nothing, its really 95%. I was surprised they would even go as far as they did. Using Amway as precedent, the FTC will just tell them to clean up their literature with no fine assessed. It took Amway breaking their settlement with the FTC before they were even fined a measley $100,000.
They have already cleaned up their return policy to 100% refund. I do agree with the presentation that a large amount of product gets purchased and then not really sold. But this is because distributors are lazy. If they have $500 in product or $1000 in product they could take the time to try to sell it. But they choose not too. This is equivalent to the country club requiring members to play and pay for 5 rounds of golf a month regardless. So distributors have to sell some product to stay in the club. They could sell the product if they wanted to, but many just buy the minimum amount required to keep getting their royalties and don't bother to try to sell it. I don't really understand it completely, but doesn't sound illegal. They agreed to sell the stuff to the public and they are the ones not holding up their agreement, not herbalife. But maybe i'm missing something.
The main arguement was that the % of recruiting payments is shown as a % of total sales at MSRP but really most sales are done lower so the recruiting payments might actually be greater than retail payments, which is warning sign with the FTC. But it is unclear if the FTC would really have a problem with this, because to get recruiting rewards, product must be sold. So what is the worst case here? My take is that they would be required to rework their recruiting rewards. I don't think it would hurt the business much, because nobody is really making anything anyway acording to achman! So that would be one country out of 80.