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Herbalife Ltd. Message Board

  • nomas333 nomas333 Mar 11, 2013 12:09 PM Flag

    Ackman makes out like a pyramid is the same as Ponzi.It's not.

    A pyramid is not illegal while a Ponzi obviously is.

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    • Are Herbalife and FHTM Similar?

      29 January 2013

      fhtm-herbalifeWith yesterday’s shutdown of Fortune Hi Tech Marketing, consumers have been asking if Herbalife is a similar operation. Last year Herbalife’s business model was called into question by David Einhorn, and then the company was accused of being a pyramid scheme by Bill Ackman.

      Naturally, Herbalife denied being a pyramid scheme. Management has repeatedly said that Herbalife is all about selling products, and that the products are indeed selling, so it couldn’t possibly be a pyramid scheme. But according to this (start at 2:00 mark), no one really knows how much product is being sold to actual consumers. To be clear: Herbalife does not track retail sales.

      I previously compared Herbalife and BurnLounge, a company shut down by FTC because it was a pyramid scheme. (BurnLounge is currently appealing, but that is a story for another day.) Today we compare Herbalife and FHTM:

      Management – It is common for managers and executives to work for multiple companies within the industry. Just like other industries, knowledge of the industry and its customers is important. Simon Davies was the Director of Internal Audit at Herbalife, and spent the last six years at FHTM as CFO and then Chief Analytics Officer.
      Levels of Distributors - Herbalife has nine levels between Distributor and President’s Team (and then additional levels exist for President’s Team distributors), while FHTM has seven levels between Manager (first level, and equivalent to the HLF Distributor level) and Presidential Ambassador. It is common in MLM to have seven to ten “levels” of representatives, with increasing commission and bonuses at each level, and increasing requirements in order to qualify for the commissions and bonuses.

    • A pyramid is not illegal? How long have you been living under a rock?

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