I have built software for a number of MLMs in the past 20 years. I can tear down a compensation plan and tell you where the money will go and what the likeliho

I have built software for a number of MLMs in the past 20 years. I can tear down a compensation plan and tell you where the money will go and what the likelihood of success will be for "the little guy" as well as the upper management reward for the "hitter". The #1 factor in deciding if an MLM is legit is the product. Many, many MLMs have products that have no real value to any market, existing only to attempt to legitimize a money game. However, MLM is a pretty good marketing approach for products that: 1 - are new or difficult to understand, and where having a human explain or demonstrate in person helps the potential consumer decide if it's something for them 2 - depend on customer testimonials to express their effectiveness, particularly regarding consumables that are not or cannot be judged and regulated by the FDA or similar body 3 - are consumable, such that the buyers and _consumers_ of the product naturally evangelize the product, and then get rewards for bringing new customers Let's be honest - there are a lot of BS products that are legally marketed through traditional, accepted, and even respected channels. And there are a ton of BS products marketing via MLM. The difference is that some MLMs have lured members with the unrealistic prospect of huge incomes and then guided the new members to buy a ton of product ("front-loading") so as to ascend more rapidly to the higher earning potentials. That's how you end up with people with a garage full of junk they'll never manage to sell. I don't know if Herbalife does this. I rather doubt it. But really, if a new employee in a company could choose to pay $25k up front with the promise that they would be more quickly promoted to higher management levels, I think a lot of people would do it - even if they had no skills or motivation to work to earn a promotion. In some MLMs, that option exists. Regarding compensation, every company that markets products takes some percent of product sales and directs that toward marketing efforts. What makes MLM unique is that it directs that marketing money to individuals (presumably based on the amount of sales they drive). And just as Division Managers of large companies may receive bonuses based on the success of their divisions, MLM leaders often receive some compensation based on the sales (success) of representatives they have personally recruited or who have been recruited by their recruits. I could go on, but it's boring now. Point is, MLM isn't inherently evil, just as capitalism isn't inherently evil. But everywhere, there are some people who will do anything for a dollar. Some become hedge fund managers, and some become MLM lead marketers.