Herbalife settled with the FTC in 2016 in exchange for FTC not calling the company a pyramid scheme outright. The settlement included a long series of accommodations and required disclosures, and the first of which was just published, and it included some interesting statistics. The document is called "Statement of Average Gross Compensation" for 2016, and here's a link to it from myHerbalife.com
It's parsing the numbers that make things interesting and reveals what's between the lines (and behind the numbers).
Note the following tidbits:
"In 2016... 86% of US Distributors (466926) did not receive earnings from Herbalife"
If you do some math, that says 14% of distributors, or about 76000, did receive earnings in 2016.
"In a typical month from June to September 2017, about 45000 US distributors order products for resale from Herbalife and about 40000 of them earned money from their sales and the sales of those they sponsored."
This disclosure statement contrasts HEAVILY with what the president of Herbalife, Des Walsh, said during the November 2 3rd quarter earnings call, where he said
"Today, we've got about 470000 preferred members. We've got about roughly 215000 distributors." (source)
How did Herbalife go from 215000 distributors in June to September 2017 (3rd quarter) to "45000 distributors (who) ordered products" between June and September? If it were only 10-20% variance, we'd say oops, and let them fudge. But we're talking about a 478% variance (45000 vs 215000). 170000 distributors went missing between the President's statement and FTC-required disclosure.
Clearly, the two are using some VERY VERY different definition of "distributor"
Which really makes you wonder... What ELSE is Herbalife not telling us?
a blog about Skepticism, MLM, Scams, and Critical Thinking
