Wednesday, November 13, 2013

Are Latinos Defending Herbalife Making Sense?

Rafael Fantauzzi is head of NPRC (National Puerto Rico Coalition) and recently he penned a piece for Fox Business Latino, where he basically claimed that Herbalife is merely misunderstood. You can read his piece here, as I may have misunderstood his message, but I doubt it:

Is he making any sense? My answer to that is absolutely not.

His primary praise for Herbalife is heavy involvement of the Latino community. To quote him:
Herbalife has succeeded at something that quite a few companies, and the Federal government for that manner, have failed, and that is to achieve real Hispanic inclusion. Hispanics make up at least 60 percent of Herbalife’s direct selling workforce – better known as distributors.
Okay, what's the next thing Fantauzzi said however, is a bit more controversial:
The big problem I see is that the critics of Herbalife and multi-level marketing companies are confusing business ventures with a welfare program. They assume that everyone must have equal outcomes, not just equal opportunity.
He then went on claiming that Herbalife rewards hard work, and he can't denounce a company that is the embodiment of American dream.

Does his points actually make sense though? I say no. Let me explain why.

Does the part about "heavy involvement of the Latino community" make any sense? No.

That part is simple to explain the lack of logic... If someone said "XXX is scamming the Latino community", your reply is "Really? Let me check it out."

After all, scamming the Latino community is "heavy involvement", is it not? "Heavy involvement" doesn't have to be positive.

Clearly, this is dependent on later points. So is this next point making sense?

The problem is instead of conducting his own investigation using all resources, Fantauzzi basically went and asked XXX "Are you scamming the Latino community?"  And they said, "of course not!"

Can they be TRUSTED THOUGH? Let's keep that in mind... Next point:

Does MLM / Herbalife actually REWARD people for the hard work they do, as Herbalife alleged, and Fantauzzi accepted?

Does that even make any sense when Herbalife itself states that 73% of all its distributors did NOT join to earn any profit?
The majority (73%) primarily join us to receive a wholesale price on products they and their families enjoy
cited from  
Another question that need to be asked here is... what exactly is Herbalife rewarding the affiliates / distributors for?

According to Herbalife itself, it is rewarding distributors for THEIR OWN PURCHASE of Herbalife products and purchase by their downline distributors.
As you order products, you accumulate credit for the
amount of Volume Points that are applicable to the products
ordered. These accumulated Volume Points become your
sales production and are used for purposes of qualifications
and benefits.
Volume is credited to you in various ways depending on who
purchased the volume, their status and discount, your own
status as a Distributor and other factors of the Herbalife Sales
& Marketing Plan. 
cited from 

Please note that it says very clearly: "as you order products". Distributors are being rewarded for THEIR OWN PURCHASE of Herbalife products, as well as purchases made by their downlines (and NOT necessarily actual customers).

Furthermore, Herbalife announced in July 2013 that they are going to rename the lowest rank distributors as "customers".

Why would a company do that if it already has customers?

To summarize:

FACT: Herbalife is rewarding distributors for ordering stuff, not for SELLING stuff.
FACT: Herbalife is renaming lowest rank distributor (i.e. those who didn't sell anything) as "customers"
FACT: Herbalife admits that most of its distributors do NOT earn money (and did not intend to)

Add all these together, and what do you have?

LOGIC: Herbalife does NOT reward distributors for hard work (but for stuff ordered) because it really has no customers, and is actively creating customers through renaming.

The ENTIRE Fantauzzi editorial is a completely baseless rant NOT based on facts, but merely his PERCEPTION of Herbalife, after being lead on a PR Tour by Herbalife, of his own admission. 

Who is leading the Latino community, and who's letting down the Latino community? That is for you to decide.

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