Herbalife, offering a plethora of health supplements and shakes, has come under scrutiny for being of all things, a pyramid scheme. There is something more to be said about what a product pyramid scheme of this type actually is. It is essentially a monopolistic scheme, a monopoly created in the mind of those who believe Herbalife's prosperity gospel--the myths of the kingdom.
The market for Herbalife's shakes and health supplements are the distributors themselves. They are the consumers. (Sales outside of the distribution chain are non-existent.) They create for Herbalife a monopoly market for their assortment of unremarkable elixirs. Price fixing at predatory levels is possible due to the 'closed market' model founded originally by Nutrilite and then Amway. This monopoly market might be best described as a 'prison of belief''.
Distributors living in the Herbalife prison of belief are left to buy from Herbalife's 'company commissary.' They must pay the fixed price to play in Herbalife's 'game of greed.' Herbalife distributors have become 'defacto' slaves, believers in a totalitarian utopia, a heaven on earth promising 'financial freedom,' a future redemption where investment of time and money will be 'shaken up' and returned to them from those who join downline. Herbalife slaves labor in the field, buying and consuming the product, and recruiting others to take on the Herbalife yoke themselves. They deny the snare that has been set before them.
MLMs always sit at the top while the slaves build their pyramid, really a monopolistic monolith founded on greed at every level. More slaves are always needed. As in any MLM pyramid scheme, most leave much worse for their efforts. It has become what a fellow Amway critic has called a 'theocratic chain of misery'.
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3 comments:
Herbalife is a scam like Amway but sadly I have doubts that the FTC will have the political will to shut them down completely.
Joecool,
I am a little slow in responding to your comment. It is hard to say what might happen with Herbalife. The whole scandal does point a dagger at Amway and the whole sordid MLM industry as a whole. The proliferation of Amway clones may more quickly saturate the market. Whether this might bring an end, who knows.
Amway doesn't really do the kind of business in the United States as it once did. This is a reputational problem. Their fortunes depend on foreign recruitment and expansion. Language barriers seems to afford Amway and Herbalife markets that haven't been ravaged by scandal, at least yet. The one country that Amway has had the most problem is one with an English reading population, India. (That is why I have a translation 'widget' on my blogs.)
MLM's export their scheme in search of naive marks. In many ways, MLM gets around all the bad U.S. press. Amway is always in search of ingnorant suckers.
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