Letters from the Herbalife "work from home" story

I got a lot of letters since I wrote the "work from home" article in March of 2002. Here are some that I would like to share:

to which I replied: "Imagine how you would react if you found out that all porn sites were all coming from one source: You'd try to stop them, right? That's what I am trying to do."

Hello Rob,

I was online looking at what some other people in the business are doing and I ran across your site. I can tell you right now why you failed in this business. Your negative attitiude. If you don't believe in your products and your business, you will never sell anything because people can tell when you speak with them. One of the most important things in this business is know that you are helping people improve their health and not just selling products.

You say you invested $240.00 and you would have to sell 23 sets of Green & Beige to recover your investment. First of all, the Quickstart, Advanced, and Ultimate programs would recover you investment a lot quicker. Second, if you took $240.00 to the bank and they told you they would pay you 35% interest if you left it in the bank for a year, I'm pretty sure you would think that was a good investment. The point I am trying to make is, even if it took you a year to recover your investment, it would still be a good investment, and there is no way, if you are working your business, that it would take a year to recover a $240.00 investment.

You mentioned putting flyers on windshields. Of course people don't like flyers on their windshields. That's why you don't put them there. They should go on the driver's door on the window or crack of the door.

You also mentioned sending out unsolicitated emails. You should not have been doing that because it is against the company's rules.

You kept mentioning weight-loss pills. Our products are not pills, they are tablets. Our products are not medicine, they are pure food. You also referred to home-sold diet pills and the market being saturated. We do not have diet pills. We have weight management products. We have barely scratched the surface and this market will never be saturated, and with the Internet you can access the whole world. We are a health and nutrition company, not just weight-loss. You also mentioned noone buying weight-loss products from a sign on a car. I have have a new distributor that has made a lot of sales from the sign on his car.

I agree with you somewhat on the signs but that is no longer a concern because the company no longer allows signs.

You could not put the Herbalife name on signs because it was in violation of Direct Sales regulations.

You mentioned "Hot Pocket" ads. You may not like them but they are one of the most successful ways to adverise and are inexpensive. I do not use plastic envelopes. I make my evelopes out of scrap paper from my printer. I put 10 ads on a sheet of paper so I can print a considerable number of ads for very little money.

I have not responded to every point you made on your site because I have already spent too much time composing this email.

We have consummable products and are in the #1 Industry in the world. We also have the #1 marketing plan.

Here's some reasons why I think your business was not successful.

1. Poor attitude.
2. No excitement about what you have to offer.
3. Did not take advantage of the training tools available to you (STS's, Quickstart Meetings, etc.).
4. Did not understand that this business is in the numbers. The more people you contact, the more successful you will be.
Here is a great quote by Gisela Richtor. "A series of failures may culminate in the best possible results".

Also, here is a link to Paul Zane Pilzer's site. He is one of the world's leading Economists and he projects that the wellness industry will be the next trillion dollar industry.

Sincerely,
Fran O.

to which I replied: "First off, she got into the business before Mexico was saturated, so she actually had a pool of untapped population to recruit. I can't tell exactly when she got started though. I'm guessing she got started in 1982 or 83, that's about 19 years ago, when Mexico was open territory.

Secondly, she was in the middle of the world's largest city, Mexico City, so each of her fliers had the most impressions anyone can expect from anywhere on earth. You may also notice, if you read her success story, that she was battling a tremendous debt. Guess how she encountered that debt? I bet it was from business expenses.

Another factor is ebay. Now that ebay exists, there is an extremely powerful marketplace accessible to the vast majority of Americans. "retail price" is a fantasy. Retail has new competition. Customers, who know that you are making a profit will at least "check out the options" for new supply-lines."

...On a different topic, I was also VERY interested in your article on Herbalife. We also have many of those signs around here. It just so happens that my music teacher, "discovered" herbalife about 2 years ago and she hasn't been the same since. When she first got started in it, it became her main thing. She cut back to about half the amount of students she had had before, and she started trying to sell this stuff to everyone (me included). I didn't like it. She seemed slightly over-energetic (possibly as a result of ephedrine?), and more distracted from music. She got sucked in big time. This lasted for about a year, and since then she has slowly eased up on it. I'm not saying that she has stopped though. She still uses tons of herbalife products herself, still sells them frequently, and still tries to sell to me as well. I have mixed opinions about herbalife. I think the overly-excesive advertising must go. It's stupid and annoying. I think that if people are capable and good at selling, then herbalife is the thing for them. If the person has a second job though, they should not, in any situation, let the two get mixed or let one take away from the quality of the work done in the other. Also, herbalife should make sure people know exactly what is in their formulas and why they work. I intead to show my music teacher your article. I'm not sure what kind of a response I'll get. I would also like to know if you know of any other web sites with articles on ephedrine that I could use to inform her and others. Quite possibly, ephedrine might not even be legal in Canada, but that's something I intend to find out.

I was at the American embassy a while ago and saw a sign posted warning americans not to attempt to set up MLM scams in Europe. I asked the visa officer about it, and he said the embassy was aware of a number of americans currently in prison for setting up amway or herbalife MLM scams.

When the fraud police see the posters going up, they track back the number and arrest the scammer. Locals are allowed to avoid prison time by cooperating fully in testifying against their recruiter. If the recruiter is a local, lather, rinse, repeat. At the top, they always catch an american or a russian, and throw them in prison.

Americans tend to be ex-military trailer trash types who did a tour on a NATO base, and think they can come back and scam the locals, since they discover the american market is completely saturated a million times over. The russians are mafia wannabes who add physical intimidation, threats, blackmail and other nasty things to increase ROI. Its the russians the police are after, since there are other crimes than just conspiracy and finacial fraud. But they prosecute the americans just as vigorously, because they tend to make full confessions and claim that since fraud is legal in the US, it must be legal here.

Ex-pat groups always get americans or brits trying to set up a new MLM network. But the ex-pat types tend to be intelligent enough to know it can't work, so the scammers move on.

But I still see posters around town. Stopping these scams even with good laws on the books is like playing whak-a-mole.

the AC (regarding Brazil, from Slashdot comments section)

I got one letter from a guy who was defending his own MLM company (not herbalife). He sent me this story, which I researched:

According to my research, this story is a tale that was started by Amway distributors, originally set on the David Letterman Show. I believe this is an untrue modification of that untrue tale.

Thanks for your website Rob. I was given a tall tale about Herbalife, how wonderful it was and that the distributor had searched the web and couldn't find anything bad about Herbalife. It only took me a few minutes searching the web to find out enough to decide that my initial skepticism was dead-on. I went to one of the Herbalife STS training programs in Philadelphia with a coworker - they use lots of acronyms like STS, HOM - who knows what they mean.... They mentioned a few times to not put up the posters anymore. They also talked about fliers on cars, hot pockets - all the nonsense you brought out on your website.

They had distributors come up with their success stories and this glitzy fellow, one of the millionaires that started selling the stuff 20 years ago and knew the founder, would ask them about their marketing techniques.

Many of the distributors who were in the $6,000 to $10,000 a month category would mention the hot pockets and boasted about sticking them anywhere they could be stuck: restroom stall doors, etc. but it was pretty clear that the posters were not allowed any longer.

Then they had weight loss success testimonials and numerous people came up and said how Herbalife had saved their lives. Some of them were so choked up as they were telling their stories you could hardly understand them.

I've never been to anything like this before - very interesting.

Pretty manipulative - especially the misleading information about the founder and his mother.

it sounded to me like the distributors developed their own 'hot pockets' and fliers and newspaper ads.

I wondered why all this advertising didn't mention Herbalife, that should be a red flag to people.

Carol L.

Hi Rob,

I came across your article this morning and was very disturbed to learn such things about Herbalife. At first I took offense and didn't believe it, but I felt inclined to investigate a little myself.

I recently gave $300 to purchase the distributorship package and have been speaking with my "mentor" as recently as last night. I did an online search after reading your story for Herbalife distributors in my own area (Baltimore, Maryland), as my mentor lives in California.

Well I emailed a lady right here in Baltimore and within fifteen minutes she called me! She couldn't wait to tell me to save my money! I am so hurt by this! I recently left my mentor a very long message on her voice mail. I don't know if she'll call back or not but I told her how I feel.

I cannot sell these products! I am currently experiencing extreme indigestion and nausea from the products. I took Formulas 1, 2, and 3 last night for the first time and felt the indigestion shortly after. I felt better this morning and decided to do the whole Advanced Green program today thinking it was something else I may have eaten. So this morning I did the Formulas 1, 2, and 3 again. Also, around 10:00 I drank the Herbal Concentrate (very slowly as they suggested). Well, I am sick again! I think it's the tablets but I'm not sure.

The French Vanilla protein drink is delicious and I hate to not use it anymore! But it's not worth risking my health. It could be one item or all of them that made me sick. I only want to slim down about five to ten pounds as I have never really had much of weight problem. I eat pretty decently and do Tae Bo workouts!

I'll trim down in no time with those probably. That may be my best bet and just leave Herbalife alone! So much for my own testimony of how wonderful the products are! I am very upset right now, but I have to thank you for your story. I felt a little skeptical about this venture from the beginning and would not have really dug for more info if I hadn't read your report.

My mentor wrote my account number down in her records wrong so the check hasn't cleared yet. I've already told her about that unfortunately. I was thinking about stopping payment on the check before it does clear, and returning all the marketing info and remainder of products (which is about 98% of left). I will even keep the products since I've opened them and just get some of my money back. Or I'll just chalk this up to a learning experience and be out the $300. I am in an unhappy job right now and just want out of here. All I want is to enjoy the work I do - that's it! I thought this would be an opportunity to help people get healthier! I've always appreciated the benefits of herbs and thought this would be alright. I wanted to be more of a retailer than a recruiter. I will not put up tacky signs for anybody or anything! So I guess it's back to the drawing board, and for now I have to continue in my 9-to-5 unhappiness! Thank you for your time and I hope others read your story - preferably before they put out that chunk of money

Thank God I didn't enroll in TouchFon yet or purchase any inventory. I am absolutely heartbroken (not to mention sick, literally) but everything happens for a reason. Now it's my turn to warn people. Or maybe it does work for some. I'm just not going to take the chance and lose any more money. Again, thank you very much!

Tracey

1) Ephedrine and amphetamines are closely related, but they have different modes of action for weight loss. Ephedrine reduces appetite, but it also raises your body temperature, burning more calories. In sub-heroic doses, speed don't raise body temperature noticeably; it's the appetite suppression that does most of the work (some amphetamines are thermogenic - MDMA is the most obvious example).

2) Ephedra contains Ephedrine, but ephedrine is not ephedra. Ephedra is a natural, herbal product. Being a natural, herbal product, it contains all sorts of other alkaloids, including PPA (nor-ephedrine). These extras have many more side-effects than synthetic Ephedrine HCl or Ephedrine Sulfate. However, thanks to wonderful FDA regulations, it's illegal to sell ECA stacks made using real ephedrine.

3) With the aid of coffee grinder and a gel-cap maker from a health-food store, you can make your own blend of synthetic ephedrine hcl, caffeine, aspirin and tyrosine, which will be safer, more effective, and about 1/6th the cost of crab like Herbalife or Metabolife. I call this Ghettabolife.

4) As long as you don't have a pre-existing condition, ephedrine is safe when used as directed (that's why it's FDA approved for OTC sales for Asthma). The dangers come when stupid people think that they can lose weight without dieting and exercising, and that if one pill makes you smaller, four pills will be even better.

5) The signs aren't nearly as annoying as the email. Of course, in a college town there are so many fliers everywhere so they don't stick out as much. Mostly they're just a disappointment when you're looking for the first yard sign of campaign season.

Simon

I do not recommend using ephedrine or amphetamines without the advice of a medical doctor.

Regarding the Math

Hello Rob.

I wanted to make a comment on the equation you provided in that article. The graphic is attached. You named the blue variable "X" as the "average number of successful recruits per month per distributor". I don't think this is entirely correct. That variable actually represents the "rate of growth" for the population growth equation. For the example where one distributor recruits another in each and every month, you have 100% growth per month. Each month the number of distributors double and the value for "X" equals 1 and this equation would be right.

But let's say that each distributor recruits another every second month. In this case one may be inclined to substitute 0.5 in the place of "X" but this would be incorrectly calculating for a 50% growth rate.

If, as above, a new distributor is recruited every second month, you would have 2 after 2 months, 4 after 4 months, 8 after 6 months, 16 after 8 months, etc. If we use the equation for 8 months we get (1 + 0.5)^8 = 25.6 which is incorrect. We should actually use the growth rate of 41.4% which gives (1 + 0.414)^8 = 16.

To find out the growth rate you need to use the following formula:

X = [(fD / pD)^(1 / m)] - 1

Where:
X = growth rate to be used in the population growth equation
fD = future number of distributors
pD = present number of distributors
m = number of months

So in the case of trying to determine what rate of growth you would need to get 1 million distributors after 21 years or 252 months, we would assume that the pD is equal to 1 and fD is equal to 1 million.
X = [(1,000,000 / 1)^(1/252)] -1 = 0.056 or 5.6% monthly growth.
To back calculate as to what this means in terms of number of months per new distributor recruit, use the following formula (going from from 1 distributor to 2):
m = log(fD / pD) / log (1 + X)
or
m = log(2 / 1) / log (1 + 0.056) = 12.7 months. This then is 1/12.7 or 0.079 new distributors per month.
I hope this wasn't too confusing.

Good work.
Graeme

Ok, these three final ones aren't actually letters, they are from herbalife recruitment sites:

From the Online Work at Home Engine that will not unsubscribe me no matter what:

Please understand that you are requesting information about our home based business. Any legitimate home based business is going to take some initial investment. The minimum amount to get started is only $199, and if the reasons you checked for wanting to start a business really is important to you, the measly $199 will not be able to stop you from realizing your dreams. Now, some people still say . . . I just don�t have it . . . . and we can understand that.
But what would you do if your car broke down today and it cost $199 to fix it. Would you just stop going to work and driving the kids to school, lose your job and place to live or would you do WHATEVER IT TAKES to get the car fixed.

If this really is important to you then we know that you will do WHATEVER IT TAKES to get started, are you are ready to do WHATEVER IT TAKES. If you KNEW that you could make your initial investment back right away and then continue to make extra money on a monthly basis are you willing to commit $199 to get started. . . .

This "little known" secret is the best one of all! The tax advantages of a home-based business are literally unbelievable. A home-based business has a different set of rules than any other kind of business. First of all you can deduct a portion of your rent, mortgage interest, phone bill, electric bill, gas bill, repair bills etc. In a home-based business you can hire your kids (age 7 and up) and then you can deduct the education expense of your employees . . . . you can deduct private school tuition, home-school expenses . . . . even college tuition! But there's more. . . . you can offer your employee's benefits such as vacations . . . . are you getting this. . . . you can write off your family's vacations! On top of that you can offer your employees (your kids and spouse) benefits such as medical and dental and write that off too! And this is just a little taste of what's possible.