There are numerous Herbalife diet success stories that can be found on the company's web site or across the internet. "I lost weight and, at 65 years old, biked 200 miles in two days," or "I set out to lose 25 pounds, and I lost 40." But can Herbalife's health and wellness products fatten your bank account?

The Company and Products

Herbalife was created in 1980 by entrepreneur Mark Hughes, who started selling the products out of the trunk of his car. He was inspired by the passing of his mother, who had struggled with health and weight issues all of her life, to create a healthy way to lose weight. Herbalife now offers a wide range of nutrition, weight-management, and personal care products that focus on a balanced diet and total health.

The Program and Compensation

Herbalife sells its products through a traditional multi-level marketing system that uses 1.9 million independent distributors to market their products in 70 countries. The distributors receive retail and wholesale profits on the products, plus royalties and bonuses depending on the level they have achieved in the company. There are basically two ways to make money: by selling the products and by recruiting more distributors to your down-line to earn commissions off of their sales. To enter as a distributor the cost of entry is low (buying around $240 of products to sell), while starting as a Supervisor is more costly (approximately $2000 worth of merchandise). The company offers training and motivation online, conventions, and partnerships with their up-line to learn the business and market effectively.

Analysis

Despite a down economy, the wellness industry is still a viable opportunity with $44 billion in nutrition and weight loss sales in 2008. People can and do make money with the Herbalife system and it has an almost-30-year track record that shows that the company is stable and will continue to make effective products for years to come. But as a business opportunity the program is aged and ineffective in today's global internet-driven economy. Their traditional MLM system that uses buttons, posters, bumper stickers, and flyers is not a useful way to reach those needing nutritional products. And the fact that this industry is saturated with numerous competitors with huge advertising budgets and more prevalent distribution channels also hurts the distributor's ability to succeed. The average annual gross compensation paid by Herbalife to Active Leaders in 2008 was $5,200 (not including profits earned on resale of products). To make more than this in a year you will need to sell the products and the business opportunity to your warm market first (your friends, family, and acquaintances); and this is something many people are uncomfortable doing. Secondly you will need to find a way to market to the masses of people you do not know, and this is an even bigger challenge with the tools provided. So if you believe that you can sell enough weight management and health care products to your warm market, and can beat the odds in reaching others to join the business, then the Herbalife diet success stories might propel you to a winning home business. If you are looking for a company that pays out higher commissions, offers better training and support, and a mentoring program that will show you how to market on the internet for success, then I recommend that you keep searching for another home-based business opportunity.