Learn and Earn! Everything You Need To Know About The Herbalife Compensation Plan, And How You Can Make Money With It
The Herbalife Plan
Herbalife claim to offer a ‘lucrative’ and ‘industry leading’ compensation plan, yet many critics claim that the uni-level plan they use should be left in the 1980s where it belongs.
The 1980s was the decade of the Cold War, the Chernobyl Disaster, the Challenger Space Shuttle disaster, economic depression and the assasination of John Lennon. Pretty grim, right? But it wasn’t all doom and gloom in the ’80s – we saw the BMX bicycle, the explosion of video game technology, the Rubik’s cube and the completion of the Star Wars Trilogy.
But some things are just meant to be left in history. How many kids want a Rubik’s cube from Santa Claus this year? Is anyone still playing Pac-Man on their games console? And does anybody really still listen to Milli Vanilli?
Another thing that many people claim should have been left in the 80s is the uni-level compensation plans used by some MLM companies today, including Herbalife.
Uni-Level Marketing Plans
The Herbalife compensation plan is a classic uni-level, or pyramid plan. Unlike in a binary plan where you can place people in two downlines on either your left or your right side, a uni-level plan allows you to have only one arm, with unlimited width but limited depth. You therefore earn commission on every person you sign up for the scheme, so if you sign up 10 team members you will earn a commission on all the sales that those 10 team members can generate. If each of your 10 team members then sign up another 10 people, you will now have 100 people on your 2nd level. You could now start earning commissions on all the sales generated by your 2nd level as well as your first level.
In theory, the number of people you can sign up, and therefore also the number of people you can earn commission from, is limitless.
Uni-Level systems often pay down 5 levels or more, depending on the individual company and their plan. If each person were to continue to add 10 people into the business, this would mean that you had a 3rd level of 1000 people, a 4th level of 10,000 people, and a 5th level of 100,000 people, and so on. The possibilities which a plan like this can offer seem endless, and very attractive, but in reality it is rarely this easy, and the uni-level plan is often criticised for the relatively small returns distributors make in comparison to a binary marketing plan, for example.
The Advantages And Disasvantages Of Uni-Level Plans
Uni-level plans are fairly easy to understand, and are therefore attractive to beginners in the MLM industry. You also tend to start earning immediately, which is a bonus for people who are concerned about losing money. In order to make a lot of money in a uni-level plan, however, you must regularly add new people into your business all the time, whilst continuing to work with those you have already added into the business to improve their sales. Succeeding in a uni-level plan therefore relies very heavily on your ability to add new people into your business regularly, and on their ability to do the same.
The Herbalife Marketing Plan In Detail
There are 5 ways to earn money with the Herbalife plan.
Retail profit is the commission you receive simply by selling your Herbalife products on to others. As a new distributor, you will receive 25% of the total sales, so if you sell $100 worth of products you will be paid $25. Depending on how many orders you place and how much stock you sell, the percentage level of commission you can take home rises. At Senior Consultant Level you will earn between 30% and 42% of your total sales on what Herbalife refer to as a ‘sliding scale’; as a Success Builder you earn 42% guaranteed; and as a Supervisor you qualify to earn 50% of the total sales volume generated.
As a Distributor you are able to buy products at wholesale prices, and sell them on at a price of up to 25% more than what you paid for them.
Both retail profit and wholesale profit constitute an ‘active’ income, in other words a source of income which you will only achieve by actively going out and selling the product directly. This is in contrast to the bonuses you may receive later, which are referred to as ‘passive’ income.
The Royalty-Override income is paid monthly to Supervisors, and allows them to earn 5% commission on the personal sales of all other supervisors in their downline, to three levels deep.
If you are a successful Supervisor, you have the chance to progress up the ladder and join what’s called the Herbalife TAB (Top Achievers Business) Team, which contains three steps within it – the Global Expansion Team, the Millionaire’s Team, and the President’s Team. As a member of the TAB Team you will be eligible to receive the TAB Team Production Bonuses. The Production Bonus pays out between 2-7% on your entire downline organization’s sales.
As a reward for outstanding performance, Top Achievers can qualify to earn a portion of the entire company’s sales as an Annual Bonus.
According to the latest figures published by Herbalife, over 25% of distributors reach the Supervisor level or above, therefore qualifying for the additional bonuses.
The Truth About The Herbalife Compensation Plan
Herbalife say that their compensation plan is flexible because distributors have the choice of either earning a relatively small supplemental income, or going all out with the business in order to try and achieve higher levels of income. The average earnings for somebody reaching the Millionaire’s Team, for example, is around $80,000 per-year, whilst someone in the President’s Team can expect to earn over $475,000 per-year. The only way that you get to these levels however is by developing a strong and active downline, and the only way of doing this is by learning how to regularly add people into your business, and keep them there.
To find out more about how to make the most of the Herbalife marketing plan, read Free Herbalife Training – 100% Free Training In Growing A Herbalife Business