For many new Herbalife distributors, understanding the company’s compensation plan is a daunting task. As distributors move up in the company’s structure, they gain access to product discounts and commissions that are paid when their downline (those they recruit and their recruits’ recruits) make purchases from Herbalife. The problem is, that Herbalife’s excessive fees and convoluted math reduce the income of rank and file Herbalife distributors by at least 10 cents and as much as 41 cents per volume point purchased by their downline.
For example, when a Distributor reaches the Supervisor level they have access to earning a Wholesale Profit of up to 42% on all purchases made by their downline, including those made by non-Supervisors. But to earn that percentage, the Distributor must meet certain qualifications and be able to prove they are qualified to do so. This is why it’s important to use the Earn Base to track and report on your retail sales.
Herbalife has recently tried to simplify its pricing structure by removing the Packaging & Handling line item on distributor invoices and increasing Retail Prices by around 1%. But even after these changes, Herbalife’s fee structure remains opaque to most rank and file distributors.
A key part of the Earn Base is a calculation called “Blocking.” Blocking is when a Production Bonus earner has a Herbalife compensation plan downline that exceeds their own Production Bonus earning percentage, meaning they are not eligible to receive any commission or Wholesale Profit from anyone below them. For example, a Distributor with a downline of five Production Bonus earners can only receive a Wholesale Profit from the two highest earners.
Another key component of the Earn Base is Royalty Overrides, which are payments ranging from 1% to 5% made to Fully Qualified Supervisors on the sales activity of three levels of active downline Supervisors below them. To be eligible for these payments, a Supervisor must submit a TAB Team Production Bonus Acknowledgment Form and comply with any applicable requirements.
Herbalife also pays Distributors who meet certain qualification criteria a special bonus known as the IsoPlacenta Bonus. The bonus is based on the volume of sales that Distributors in their downline achieve, including those that are Preferred Members and those that are not. To qualify, a Supervisor must have met all of the requirements for either GET or Millionaire Team and be able to prove they are earning.
Finally, Herbalife also pays its top earners a Leadership Pool Bonus which is based on the combined total of the IsoPlacenta Bonuses earned by everyone in their personal organization. The maximum amount of this bonus is $1,000,000 and it is based on the number of Herbalife products sold to both Consumers and Distributors. As you can see, the Herbalife compensation plan is complex and confusing, but it is also extremely lucrative for the company’s most successful distributors. The best way to understand Herbalife’s compensation plan is to speak with an experienced Independent Distributor.
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