And certainly a company that's been in business since 1980 with an annual turnover of $3 billion should be considered. Herbalife is an innovator by introducing the marketing of nutrional supplements via network marketing. It opened the way for hundreds of other companies to follow suit and create a giant industry.

But for people considering starting a mlm business there are some problems with Herbalife that need to be looked at before making the decision to join.

Here are some of the problems with Herbalife:

Nutritional Supplements

The health and wellness industry is considered the fastest growing industry on earth. According to Dr Paul Zane Philzer, this industry is tipped to be the next trillion dollar industry especially as the baby boomer market searches for easier and more convenient ways to look good and feel good.

But it is also one of the most competitive industries. Diet pills and weight loss products can even be found in supermarkets. And usually for a much cheaper price. While Herbalife distributors argue that their products are unique; that uniqueness is dissolved in the consumers mind at a certain price.

It's The Amway of Nutrional Products

Meaning that when you present the opportunity, people often say before you announce what you are offering “This is not Herbalife; is it?” Then unfortunately they hang up.

People have the perception that the company has market saturation which Herbalife will tell you is not true but it remains a problem with Herbalife. This is especially relevant if you are going to operate in the US, Australia, Europe etc where Herbalife has been in business for 20+ years.

The Compensation Plan

Without getting into the pros and cons of a unilever plan, any company that requires you to buy, sell, upsell $2500+ (assuming you are a Supervisor+) personally every month to receive your full royalty, you have got your back to the wall to make any money. The plan was great in 1980 but now there are so many better compensation plans out there.

This type of heavy personal volume forces people who are not good at retailing or sponsoring new people to buy their volume. This creates serious strain on distributors as their stockpile grows and their finances dwindle. And sadly people leave the network marketing industry in droves with a negative sentiment rather than preaching the benefits of the business.

Distributor Training

The biggest stars in Herbalife got into the business in the '80's. Geri Citanovich, John Tartol, John Petersen or Alan Lorenz started building their businesses by making a list, running ads, doing flyers or door knocking.

And this is basically what they still teach their downline except for John Petersen who runs a very effective (from his perspective) but high capital outlay lead buying method.

There are many distributors who pay thousands for “old, dead” leads from a broker and quickly go out of business which is another problem with Herbalife training.

The new marketers in other companies show their distributors how to create thier own leads through free attraction marketing methods. This teaches distributors to be self dependant not co-dependant.

The Marketing Plan

To maximise the best discount from Herbalife you need to become a Supervisor. At this level you'll receive a 50% discount on all product purchases and therefore maximise your retail and wholesale profits when the goods are onsold.

To reach Supervisor, you'll need to outlay 4000 volume points at a 42% discount. This equates to approximately US$5500 or AUD$9000. Many sponsors with their eye on their wallets strongly encourage their new distributors to purchase this amount with the idea that they'll consume the products anyway and retail the balance. Unfortunately most Herbalife distributors are not good retailers and therfore can't teach their downline to do the same. This leads to newbies stockpiling thousands of dollars of stock, becoming very dissenchanted, losing money and leaving the industry with a bad taste in their mouths.

A continuing problem with Herbalife is that once you've reached Supervisor level you'll need to maintain a 2500 (US$2500 or AUD$4000) personal volume each month to receive the maximum royalty payout on your Supervisors below you. The pressure is on. This is transferred to the newbie through the catch cry ” buy…..buy….go Supervisor!”

In concluding, Herbalife is an industry icon and is a must consider on any new business opportunity seekers list but there are some problems with Herbalife that should be investigated before signing on. Knowing how to attract targetted free leads into your business should be one area in which you become an expert before diving into any company.