hmm, consumers going to distributors in "daily consumption model" doesn't sound like Ponzi
This is a great article. Ackman doesn't mention the daily consumption model except to slam the appearance of a few of the weight loss clubs in some low income neighborhoods. Why doesn't he talk about the daily consumption model any? Because clearly a person buying one meal at a time and consuming it that day is not a Ponzi and wouldn't make his arguement!
search for Herbalife claims almost a third of global meal replacement shake market.
"because what was being sold was a meal, not a supplement, the money consumers spent on meal replacements was not discretionary, but replaced what they would otherwise have spent on food, making the business model surprisingly resilient in difficutlt times, he claimed"
"Whilte the traditional direct sales model was "characterize by medium to high-priced purchases made infrequently", Herbalife had "completly redefined" this model through its daily consumption approach, which was all about smaller, more frequent purchases, he said.
Because distributors were increasingly interacting with customers through nutrition and weight management clubs, it was also a more efficient model he claimed.
"customers are now going to distributors rather than the distributors going to customers. This also allows distributors to have more customers than with the traditional model. It also improves compliance, making sure the consumer is taking our meal replacements ever day..."