Herbalife has been around a long time and the publicly traded company just announced growth of 23% in the 4th quarter of 2011. That’s some big growth for such a large company.
So, why isn’t this great news for distributors?
Because as a publicly traded company, Herbalife pays out a dividend to shareholders, 30 cents per share this quarter.
A quick search shows Herbalife’s payout to it’s distributors (you know the folks who actually drive all of the sales) at 32.9%, the lowest payout among public companies that I found.
Just so you know, I am a capitalist. I like it when companies make money, it usually means that jobs are being created and value is being brought to the consumer.
But in the case of Herbalife, the company is paying out 15 to 40% less to it’s distributors than other companies in the industry.
At the same time, Herbalife has people on the Internet saying things like:
Herbalife’s compensation plan is one of the most generous in the direct-selling industry. It pays up to 73% of product revenues to Distributors in the form of retail and wholesale profits, royalty and bonus income, and incentives.
So the actual payout according to Herbalife’s own financials say 32.9% but you have (ill informed) Herbalife reps telling people they pay out 73%.
There are some other issues with Herbalife that we will be covering in the coming weeks…stay tuned.
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