Oh you like Herbalife?

The MLM model works. As they say (or at least used to say) in Amway, names and circles. A friend of mine was in Amway for a while, and he did ok for the most part. But the MLM design is to get someone to give you names and those names to give you names. This gives you an in for the cold calls, "Mrs. Jones, hello, my name is Bob, your friend Betty gave me your number and she believes that you might be interested in a <insert product/idea/plan here>, when would be a good time to meet up and go over the details?"

Just because the products are crap, doesn't mean the plan is crap. It works. I personally don't like it, but I can't deny that it works. I works for selling products, getting donations, raising awareness for a cause, and many other things.

Think of it like this, when you Share or Like something on Facebook...or even on your wall here, you are in essence, condoning said "thing" and giving your friends an opportunity to see it, which in turn they decide the like and they share it among their friends. Same concept.

That depends on your concept of "works".

Do those companies make money? Yes. At least in countries they haven't been banned from operating in.

But their business model relies on using consumers as "pushers", that really is the best word I can think of. The products are not good and are wildly overpriced, to make up for all the money that needs to flow upwards. A legitimate business would simply put their product in stores and market them to consumers.

With an MLM model people are first being convinced to become pushers with fantasies of early retirement and no work involved. After they've purchased a mini-warehouse of goods to sell they're further encouraged to sign up more people for this scam. Most of the time they end up selling the products to family and friends, who only buy anything out of pity and to try and be helpful. That's the key to the MLM model. These products would not sell in stores. They rely on using consumers to do the selling for them.

The overwhelming majority of people who become involved in MLM marketing lose money. Some lose quite a bit. It may work for the company, but it doesn't work for their users.

So, in my opinion, it may "work", but stealing coins from charity jars "works" too. Doesn't mean there's anything good about it.

While I don't think anyone should waste money on Herbalife, isn't it the same selling scheme as Avon or Mary Kay? As far as I know, no one has told them they are pyramid schemes. Yes, it is unfortunate that some of his constituents decided that the best thing to do with their retirement fund was to liquidate it early and then spend the entire amount on Herbalife that they hoped they could sell to others. To me, that just sounds like a very bad financial decision, but you can't blame that on the company.

A pyramid scheme has no product. It's basically people pooling money, and the people at the top of the pyramid take the money of the people on the bottom. Eventually the money runs out, the pyramid collapses, and most of the people involved are broke. Think Bernie Madoff. That's my understanding, anyway...I didn't google the official definition of "pyramid scheme." MLM has a product available, and no matter how crappy that product may be, it's still there.

FWIW - Madoff was a ponzi scheme, not a pyramid. Ponzi schemes are built on borrowing from one place and then borrowing more money to pay off the first loan and so on. They pay back some loans with a certain amount of earnings and then those people that made money tell others how much money they made and how they should get in on it, and then it comes crashing down.