From Academic Kids

Template:NPOV Founded in 1980, Herbalife International Template:Nyse is a company that sells weight-loss and health products through infomercials and multi-level marketing methods through distributorships. Distributors make money from retailing, and a residual income from their downlines' retail sales volume.

The company was founded by Mark Hughes who died in 2000, at the age of 44 of a prescription drug overdose. (Not the Welsh football player Leslie Mark Hughes.)


Recent History

  • The company is in the process trying to rebrand its Herbalife line with the introduction of ShapeWorks.
  • On December 15 2004 The company had an initial public offering on the NYSE of 14,500,000 common shares at $14/share

Company History

In February of 1980, Mark Hughes began selling the original Herbalife weight loss product from the trunk of his car. By 1982, Herbalife had reached $2,000,000 in sales and opened a distributorship in Canada, its first outside of the United States. In 1986 Herbalife became a publicly traded company via NASDAQ. The weight loss business continues to boom and in 1996 Herbalife reaches $1,000,000,000 in sales. In 2000, Mark Hughes, Herbalife's founder dies at the age of 44 from an adverse reaction to an accidental mix of alcohol and prescription sleeping pills. Herbalife continues to grow to this day (March 2005).

Product Overview

As of 2005, Herbalife's weight loss approach is aligned with health industry recommendations for safe weight control, eating a balanced diet, low in calories and taking regular exercise. Their nutritional and weight management line of products facilitate this through macronutrient and micronutrient food formulas.

Some of the original Herbalife weight loss products contained the active ingredient Ma Huang, an herb containing Ephedrine. Herbalife discontinued using Ephedrine in its products in accordance with FDA guidelines.

Herbalife provides testimonials by health professionals as part of their marketing campaign.

Public Relations Issues

There are two main public views on Herbalife. One view, commonly propagated via the internet, is that Herbalife is nothing more than a glorified and just barely legal Ponzi scheme[1] (http://www.cockeyed.com/workfromhome/workfromhome.html). Others, especially those who have worked with the company state that Herbalife provides a genuine and profitable multi-level marketing home business opportunities, much as advertised. In reality, due to its multi-level nature (a fact which is not in dispute), it is difficult for Herbalife to directly manage all of its independent distributors all of the time. As such, though many levels of Herbalife may offer genuine business opportunities, it is no surprise that some unethical independent distributors abuse the Herbalife name and resources solely for the purpose of personal profit, as with any business and business opportunity.

As other businesses and the public become more familiar with the network marketing business model, acceptance will foster improved industry standards and behaviour guidelines for those starting in business for themselves, as seen with previous business models such as franchising.

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