Real people join Herbalife – $4.8 billion in net sales – Did Bill Ackman bit off more than he could chew?

Real people join Herbalife every single day. They join as customers and they join as distributors. These Herbalife members all have one primary focus: the using and distributing of Herbalife products. What Bill Ackman seemingly don’t understand, is that $4.8 billion in net sales after 33 years of business does not spell pyramid – it spells “the fruit of your labour”.

Ackman’s investment corporation, Pershing Square Capital Management LP, which he founded in 2004, is so far in for it’s biggest loss since its inception. Some might ask whether Bill Ackman bit off more than he could chew when he decided to take on Herbalife.

For those who do not know: Ackman placed a bet (by taking a short position on Herbalife’s shares) to the tune of $1 billion in 2012 against the Herbalife share price. Immediately thereafter he held a press conference whereby he started his public smear campaign against Herbalife, calling it an illegal pyramid scheme. All in an attempt to drive the Herbalife share price down. So far, in spite of legal, financial and governmental scrutiny which followed Ackman’s allegations, Herbalife has withstood these attacks remarkably well. Some might even say that Herbalife has to date been vindicated on all fronts.

18% Increase in Net Sales

Just 10 days ago, Herbalife released the official 4th quarter sales figures for 2013. Since the initial share price drop after Bill Ackman’s cowardly attack, the Herbalife share price has rallied back. Last year, Herbalife’s stock was one of the top performers on the NYSE. The company reported net sales of $4.8 billion dollars for the year. That is an 18% increase!

What Bill Ackman seemingly do not understand, is that $4.8 billion dollars in net sales might to an investor only be a figure on a financial statement, but for every day people who join Herbalife for the products and for the business, that figure represents so much more. That figure represents a solid company with a 33 year track record that is second to none. (One cannot but wonder whether Pershing Square will exist even half that long.) That figure furthermore represents real products being used by real people. Whether it be retail customers, wholesale customers or distributors. All these Herbalife members enjoy a better quality of life simply because they incorporate the Herbalife nutritional supplements in their daily diets. They chose to join Herbalife for a better life.

What Bill Ackman fails to see, is that behind this $4.8 billion dollars in nett sales, there are real people. People like myself who have been using the Herbalife products since March 1996. People like myself who have our current level of health as a result of a real person who has introduced a real product into my life to address a real problem. I, like so many members of society today, have been quite obese. However, after incorporating the Herbalife products into my daily diet, I lost 36kg in just 6 months. No sagging skin like you get with normal diets. No stretch marks. Just a new, healthier me. It is only in later that I got the opportunity to hear Dr David Katzin, the then chairman of the Herbalife Nutritionary Advisory Board, explain the concept of cellular nutrition to me. For the first time I understood why the Herbalife products produce such miraculous results. It simply enables your body to do the miracles by feeding it optimum nutrition; everything the body cells need to function at their best. This scientifically formulated diet, using natural products (food) and combining it with age-old Chinese herbal wisdom, has literally changed the lives of millions of people around the world since the company launched on 1 February 1980.

When you join Herbalife, your join a network marketing system that puts profits in your pocket faster than any ordinary business

Herbalife distributes its products through a system called network marketing or multi level marketing. In layman’s terms it’s called the “people’s franchise”. It’s a system where people can join the company as independent distributors of the products. So, instead of selling through a normal wholesale, retail chain (with all the middlemen in between), the company sells directly to the public via these independent distributors. This ensures that the end consumer gets real value for money – not the inflated value that a normal distribution chain produces. Do you know what a tin of soft drink costs to manufacture? We are talking cents. What do you pay for it in the supermarket? That huge gap represents (makes up) all the profits and wasted costs in between. With network marketing all that waste is cut out. This leads to more money for R&D and better quality products. What is wrong with that?

Network marketing is of course nothing new. It’s been around since the 60’s. All around the world it’s regarded as a legitimate business module. It allows people to start their own business for very little start-up capital. No other business model allows you to get in profit so quickly. Most businesses require a huge capital start-up outlay – before you even invested in any stock to sell. Not with network marketing.

Network marketing is simply people caring about people. It’s people working with people. Something Bill Ackman does not seem to understand.

All business carries some form of risk. Network marketing carries less risk than any other business out there. Does it guarantee success? Of course not. However, your potential risk (loss) is limited. When someone buys a franchise and fails, he is financially ruined and would probably end up in bankruptcy. So many as 80% of new small businesses fail in their first year. Not so with network marketing. If someone tries a network marketing business and fails, their financial loss is measured in hundred’s of dollars, if any. Anyone who claims bigger losses than a few hundred dollars in a failed attempt at Herbalife, will only have themselves to blame for being unwise with their money. It’s virtually impossible to lose money with Herbalife.

You read that correctly. It’s virtually impossible to lose money with Herbalife. Why is it impossible to lose money with Herbalife? Because Herbalife not only has a 30-day money back guarantee for any retail customer, but also a product buy back guarantee for any distributor who does not wish to continue with his business. People who claim to have lost money, are those who have done so with unwise advertising or business building expenses. For that, they have to take personal responsibility. Where else in the world do you find an opportunity where people with no money can start out and build a business empire? Nowhere. But those are people who take personal responsibility.

Of course there will always be people who think they know better. They become a Herbalife member and then spend thousands of dollars on unsuccessful marketing or advertising campaigns. For them to turn around and blame Herbalife is just shameful. Any other small business owner will take his medicine. In small business, there is only one person to blame if things don’t work out – the person in the mirror. If you stick to the basics of the Herbalife model of use the products, wear the brand and talk to people, you are bound to be successful, or at the very least, not lose any money. (Unlike the investors who invested in Bill Ackman’s Perishing Square who are to date about 49% down on his $1 billion dollar bet – and rightfully so if you ask me.)

Will Shane Dinneen join Herbalife?

Recently, Bill Ackman’s right hand man decided to abort ship. Shane Dinneen, Ackman’s lead analyst when he decided to take on Herbalife, has since parted ways with Ackman. Some might say he abandoned a burning ship before all the blame comes back to him (who knows, the inside story might be quite different from the public spin they’ve put on it. If you lost my company about $500 million, with a chance of losing a cool billion, your head will most definitely be on the chopping block, but that’s just my perspective.) The official line is that he left for “areas of his own interest outside of activist investing”. Someone must look at the term “activist investing”. From the outside it looks pretty fishy. Choose a victim, place your bets and off to the media, I mean races. Some might even say the facts suggest that Bill Ackman bit off more than he could chew.

More people join Herbalife in my business than ever before

Herbalife members all over the world are rallying behind the company more than ever. That is why sales figures are on the rise and that is why the share price will keep its steady growth.

When you stand to lose something, you begin to see its true value like never before. For years many Herbaife members, myself included, has taken the company and its products for granted. When Ackman started his attack and accusations, it brought Herbalife under focus. That was a good thing. No longer could you be luke warm. You are either hot or you are cold. You are for or against. Sure, some faithless people with ulterior motives will jump ship on the first hot day. Even Gideon (from the Old Testament) had to thin out his army before his epic battle. What a victory he had. The battle plan was something extraordinary.

Unfortunately, there are other sharks out there, circling the Herbalife business. I am of course referring to other network marketers, but more particularly a new breed of online marketer, who are trying to lure weaker (or new) Herbalife distributors away by spreading Bill Ackman’s falsehoods or just simply trying to blow smoke to get them to jump ship. You see these online advertisers everywhere. Some of them are downright dishonest or at best misleading and deceptive in their business dealings. Needless to say, each business owner must take responsiblity for his or her own business decisions. If you are going to be swayed by false prophets and nay sayers, who are just after your money, you shall have to pay the price of your own folly.

All I know is this: Herbalife is stronger and better than ever before. If ever there was a time to get involved in Herbalife, it is now. The growth to $10 billion in nett sales, is now a reality. Most of the new Herbalife business millionaires have not yet joined Herbalife. We are living in exiting times.

The Herbalife troops around the world are being weighed and measured. They sharpen their focus. They are fighting back. None fights harder than the one who stands to lose what he treasures. I truly treasure the Herbalife products. I cannot think about a future without it. I am not alone. Thousands of Herbalife distributors around the world feel the same way. This saga with Ackman has only served to rekindle the Herbalife fire than burns in so many hearts around the world.

Thank you Herbalife for staying the cause – the cause Mark Hughes began in 1980. Customer by customer, distributor by distributor, country by country….all around the entire world.

Lastly, thank you Bill Ackman for rekindling my fire, my passion for the Herbalife products and business opportunity. I am a real person. Real people join Herbalife to solve real problems. I am forever grateful for all the real people around the world who join Herbalife; who are passionate about the products and the network marketing opportunity. I am particularly grateful and thankful for every person who has joined and are joining my Herbalife organization. Herbalife unite.

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