3 ms·

I'm struck by the unwillingness of people to say they don't know what's going on. But total disagreement on what's going on implies nobody really knows. People

I'm struck by the unwillingness of people to say they don't know what's going on. But total disagreement on what's going on implies nobody really knows. People have written an enormous amount on why HLF is/isn't a pyramid scheme. Yet it hasn't gone to zero yet. At the same time, it looks and smells fishy and people seem to agree the products are commodities. So how can it not be a scam? It seems to me like the logical inference is that there is something hidden below the surface and that even with all the time Ackman and others put into researching it, there's something not public sustaining it. Even if it's just a pyramid scheme, the mystery deepens, because some people who don't seem to be shills have written an unbelievable amount defending it.

gamblor956 6y ago
MLM = product sold by multiple levels of distributors. Pyramid scheme = an MLM in which most income at any level is from sales that end with lower-levels rather than ultimately ending with actual customers. The FTC investigated Herbalife in 2016, concluding in 2018, and determined that more than 80% of ultimate product sales were to individuals outside of their distributor network...even though their distributor figures were inflated by "distributors" that were just customers purchasing product for personal use at the highly-discounted distributor rate. Herbalife is an MLM, but it's not legally a pyramid scheme, and the agency that investigates this (the FTC) said as much in 2018. (It did, however, fine Herbalife $$$ for practices that would have resulted in Herbalife being a pyramid scheme if the majority of its product didn't actually get sold to non-distributors.)
- perl4ever 6y ago
  I get that. I was just reading John Hempton's long blog post in defense of it, and someone in the comments pointed out that the bulletin board behind some people he photographed, was all about classes on MLM, not about health club type activities. So I'm saying, yes, at some level it checked out for him and the FTC, but I'm still left wondering if it is what it seems, ironically due to reading the long defense and feeling it had gaps.
  - csours 6y ago
    I read the defense as well, and the biggest gap to me was the people not in the room, literally. The people who show up to the club are happy enough, but not everyone shows up to the club.

gamblor956 6y ago

MLM = product sold by multiple levels of distributors. Pyramid scheme = an MLM in which most income at any level is from sales that end with lower-levels rather than ultimately ending with actual customers. The FTC investigated Herbalife in 2016, concluding in 2018, and determined that more than 80% of ultimate product sales were to individuals outside of their distributor network...even though their distributor figures were inflated by "distributors" that were just customers purchasing product for personal use at the highly-discounted distributor rate. Herbalife is an MLM, but it's not legally a pyramid scheme, and the agency that investigates this (the FTC) said as much in 2018. (It did, however, fine Herbalife $$$ for practices that would have resulted in Herbalife being a pyramid scheme if the majority of its product didn't actually get sold to non-distributors.)

perl4ever 6y ago
I get that. I was just reading John Hempton's long blog post in defense of it, and someone in the comments pointed out that the bulletin board behind some people he photographed, was all about classes on MLM, not about health club type activities. So I'm saying, yes, at some level it checked out for him and the FTC, but I'm still left wondering if it is what it seems, ironically due to reading the long defense and feeling it had gaps.
- csours 6y ago
  I read the defense as well, and the biggest gap to me was the people not in the room, literally. The people who show up to the club are happy enough, but not everyone shows up to the club.