Hello everybody. This is Jason Fisher, also a former international Millionaire Team member for Herbalife International and I’m here to do a review on the Herbalife Compensation Plan.
Herbalife Compensation Plan Ranks
We’re going to go through some of the Herbalife Distributor levels, or statuses, and how people get paid within this Herbalife Compensation Plan overview. So when you first start off into Herbalife, you start at the Distributor level. Then the next level is Supervisor, then the World Team, GET Team next, Millionaire Team following that, President’s Team following that and then Chairman’s Club following that.
In the Herbalife Compensation Plan, you start off as an Herbalife Distributor, you’re able to earn 25 percent retail profit when you sell Herbalife products. Now what happens is once you reach either 2500 volume points in personal sales between you and your distributors two consecutive months in a row, or 4000 volume points in one calendar month, you advance to the next rank which is Supervisor.
Herbalife Compensation Plan Breakaway
Now where it gets a little tricky is that there’s a breakaway and as you know, if you’ve been on the TimeAndFreedom.com site and you watched one of the webinars that we’ve done with about the “MLM Industry Lies Exposed”, one of the biggest problems within compensation plans are the breakaways that take place.
So let’s say that I’m retailing, selling, wholesaling to my Distributors $2500 a month and then one of those Distributors reached the rank of Supervisor. So I’m at 50 percent buying privileges because that’s what happens when you are a supervisor. You have 50 percent buying privileges. Distributors are at 25 percent. Supervisors are 50 percent.
When I have one of my Distributors reach the level of Supervisor, and we’re both at the 50 percent buying privileges, that’s where the breakaway occurs. Up until that point, I’m able to make wholesale profit on what my Distributors are selling. If they’re selling at 25 percent and I’m at 50 percent buying privileges, I earn the 25 percent wholesale profit within the Herbalife Compensation Plan.
Herbalife Compensation Plan Royalty Income
So you either have retail profit, wholesale profit or royalty income. So where the royalty income takes place is when someone reaches that same status level as you, Supervisor, the same buying privileges, they then breakaway and any sales that they produce, you have the opportunity of earning a 5 percent royalty income override on that volume.
Now where it gets tricky as I mentioned is let’s say that I have two or three folks that are underneath me that are selling $500 or $1000 or $1500 a month and they’re helping me reach my 2500 volume points that’s required to earn my full royalty.
When they breakaway, they become my organizational volume and I will earn 5 percent residual income on that, only though if I maintain my 2500 volume points myself.
So where the Herbalife Compensation Plan gets tricky is the piece that once the person breaks away, you have to replace the volume that just broke away because you still have to maintain your 2500 volume points monthly in order to earn off of those breakaway Supervisors.
So I want you to just understand that one of the biggest problems in the industry – and this has nothing to do with just Herbalife. A lot of companies operate under these guidelines, and the majority of people that are part-time in this business, they have a hard time retailing $2500 a month, retailing and wholesaling $2500 a month.
Big Problem With The Herbalife Compensation Plan
The problem is once you have someone reach the Supervisor rank, their volume no longer counts as part of your personal volume to meet your 2500 volume points. That’s the first major breakaway within the Herbalife Compensation Plan.
Now, understand this. As you move up to the GET Team, Millionaire Team and President’s Team, there’s what’s called production bonuses. When you hit GET Team, you’re able to earn a 2 percent production bonus on your first 3 levels of royalties, plus 2 percent down to infinity.
Millionaire Team, you are 5 percent first 3 levels plus 4 percent production bonus, which will be 9 percent on your first 3 levels and 4 percent down to infinity, or President’s Team which would be 11 percent on your first 3 levels and 6 percent down to infinity.
Now it’s down to infinity until the next level ranking Distributor at your level reaches your level. So if I’m a President’s Team member or a Millionaire Team member and I have somebody underneath me that hits Millionaire Team member, then I’m blocked off of that production bonus.
Now how the production bonus works with the Herbalife Compensation Plan is let’s say I’m a GET Team member and I have 20,000 organizational volume points, I get a 2 percent production bonus. I’m going to get 2 percent all the way down to infinity until somebody reaches the GET Team status underneath me. Once they reach the GET Team status underneath me and if I’m GET Team myself, not advancing to Millionaire Team status yet, let’s use that as an example, then I would be cut off or the breakaway of my production bonus would take place.
So the only time that you earn production bonus is when people are not at the same level as you. So if I’m a President’s Team member and I am earning a 6 percent production bonus, and I have somebody underneath me and my team that is a Millionaire Team status, the Millionaire Team status member would get the 4 percent production bonus and I would get 2 percent because there’s a total of 6 percent paid out, and that 2 percent production bonus I would earn until that person reaches the same rank. In the example, if I was President’s Team, once they reach President’s Team, I would be cut off from that production bonus.
KEY Factor For Long Term Residual Income
One of my main things that we teach here at TimeAndFreedom.com is that you should never be penalized for developing leadership. You never should be in the fear that your income is going to drop based on someone advancing to a higher rank. We’re in this industry supposedly to watch people grow and to create massive abundance, not only for ourselves but for others as well.
When you want people to become successful but just not as successful as you are, because you get paid more by them not being as successful as you are, that’s where I have a hard time with any plan that operates underneath that because we’re always talking about how we want to help everybody. But when there are compensation plans that have these breakaways, they dictate the opposite and that’s where it starts to become a little bit fuzzy.
Again,, hopefully this review helped a little bit regarding the Herbalife Compensation Plan. There’s a lot involved with the Herbalife Compensation Plan, but this gave you a little bit of overview. We go a lot more into detail in our full Herbalife Review.
One of the biggest downfalls I’ve seen in many other former leaders is the breakaway situation and it can be a scary thing and if you can find a business that doesn’t have breakaways, that does not penalize you for developing leadership to the same status as you, that would absolutely be the ultimate.
(NOTE: Want to learn about partnering with us in a business model that has deleted the MLM structure, and all the headaches that come along with that?)
We hope you got a lot of value from this Herbalife Compensation Plan review.