Nobody wants to sit next to the Amway guy on a plane.
In betwixt peanuts and pretzels, you’re fending off offers for unlimited toothpaste, acne cream or whatever it is that Amway multi-level marketers try to sell you on (“My whole family is doing it, and getting rich!). I had a old college friend that swallowed the pill, and he became almost impossible to hang out with. He had business cards made with his new “company”, and wouldn’t I want to strike it rich too? (No)
On a flight home from Chicago, I sat next to probably the next worst thing, a Herbalife distributor. I was actually the one who struck up a conversation. A young-looking Hispanic guy wearing a soccer jersey, I could practice my Spanish and talk about futbol. What’s not to like?
Next thing I knew, I was hearing about weight loss and vitamins. I quickly squelched talk about vitamins by talking about my organic garden. Next year I’m going to make my own echinacea. What, you’ve never heard of it? Man, it’s great for allergies. Check the labels on your vitamin bottle, hey there it is! And let me tell you about my tomatoes.
Soon enough, the poor guy’s eyes were glazing over. He might have been the one wishing he’d sat next to someone else.
Nevertheless, once he realized I wasn’t about to become the next bottom rung on his multi-level ladder of success, we had quite a good chat. we talked about kids, soccer — he was a rabid Juventus fan, regrettably — real estate, politics, healthy eating, and solved quite a few of the world’s problem during the two-hour flight. We exchanged business cards at the end of the flight, but like many acquaintances I make on short flights, I’ll probably never hear from him again.
I asked about his background, how he came to be involved with Herbalife.
His was quite the success story.
Let’s-call-him-Juan — because that’s what his name was — had been an Herbalife distributor for close on the 11 years. He came to the US about 20 years ago from Mexico to work in the meat-packing plants in Omaha, and eventually wound up as a chicken wrangler in a Tyson foods plant.
About 11 years ago, he and his wife got involved in Herbalife as a way to lose weight. He was hooked, and soon started the distributor gig amongst his co-workers as a side gig. He was quite candid in sharing how much money he made (a little imprudently, I thought. I might have been an IRS agent).
His first year, he made about $4,000 as a side hustle. The following year he was pumped to double his net income to $8,000. The income kept on going up ( except for 2009, where he admitted it took a dip ), until this year he and his wife are going to net out close to $200K. Not bad for a former chicken wrangler.
Oh, and they’ve lost a bunch of weight. He had before-and-after pictures, but they were in the overhead package. I had no reason to doubt him on that, he seemed quite sincere.
He was quite astute in his marketing. His “customers” were almost exclusively in the Hispanic community. To paraphrase his comments, his customers are fat and need to lose weight and be healthier.
I asked what he was doing going to Tulsa. He was actually driving on to Springdale in Arkansas. Makes sense. As you drive east on the 412 Turnpike, the chicken farms start dotting the landscape the closer you get to the Arkansas border. Springdale itself is home to a very large Hispanic community that work in the poultry industry. Tyson, Smithfield, Hormel…. they’re all in Springdale.
These days, Juan said that his role with Herbalife was in good part devoted to telling his story. He would speak in front of large gatherings of prospective customers, and share his success story with the audience.
And a good story it was.
That evening at home, I checked out Herbalife in Google finance. That’s a quite a story too. Phenomenal growth in the last few years. Check out this graph:
Almost the classic ten-bagger, that mythical beast that gets talked about incessantly on investing message boards. From about six bucks a share in early 2009 at the market lows, to a high of $60 a share just recently… and a small but growing dividend to boot. Just makes you want to plop down some hard earned cash for a few shares, huh?
For the second part of this story, tune in next week. Find out if I did put in an order for Herbalife or not.
Cheers,
101C
Anyone have any experience with multi-level marketing? PF Bloggers like to post lists on side gigs, but I’ve never seen Amway or Avon or Mary Kay or Herbalife listed as potential side income opportunities.
I’ve actually attended a scamway meet a long time back. Oh god, never again!
I know from an investment point of view, these companies are great, but I simply cannot stand their reps. Sorry, won’t be buying into Herbalife.
MoneyCone recently posted..Confessions of a Lazy Blogger
This is the first Herbalifer that I’ve met. He did have some very good people skills. Engaging without being overbearing.
Very interesting. I actually think I tried that program years back. The stock does look like it is doing well although I don’t think I am going to buy any.
Miss T @ Prairie Eco-Thrifter recently posted..How to Make Your Own Clothes
Hi Miss T. – That upward parabola on the stock is impressive, is it not?
Good story. Sometimes we can have some interesting conversations on the plane with people who would otherwise be strangers. While I normally prefer to get things done on business trips, I occasionally get sucked into these conversations. Interestingly, despite my initial hesitation, I usually find these exchanges to be rewarding. Maybe I need to change my initial disposition on flights?
As for my experience with multilevel marketing, it’s more non-experience. I had a guy in my fraternity, from way back when, try to get me into some business. I listened to him but nicely declined. Then never heard from him again, until 15 years later when I got a random Linkedin invitation from him. Looking at his profile, he’s still involved in such ventures.
He wasn’t at all the most impressive guy or best student in college, but he had this entrepreneurial nerve, so to speak. I’ll bet he’s doing fairly well, based on what I saw on his current profile.
Squirrelers recently posted..Historical Pattern: Stock Prices Increase on the First Day of the Month
Squirrelers, I’m more open to conversation on short flights than long ones. With long hops, on go the earphones right away.
Isn’t this a great country where a former chicken wrangler can do well? I think this is true of a lot of people who are willing to work hard and find their niche and succeed.
krantcents recently posted..Stay Late or Go Home?
KC, that’s one of the things that impressed me favorably about the guy. Although he had attained some measure of success, he was still working hard and putting in long hours.
Sounds like his success is tied to tapping an untapped diet/nutrition market..all his immigrant peers. Good for him!
No I have not gotten sucked in but have been pitched to before. I think what deterred me is the startup cost. I sometimes wonder how much of their revenues come from their starter kits.
First Gen American recently posted..Pricey HGTV landscapes and frugal gardens
Sandy, he was definitely going after an under-served portion of the market. I’m not very familiar with multi-level pyramid schemes like these, but I suspect you’re right… the startup costs are probably very high.
Awesome story of upward mobility too. It just shows that if you work hard, it’s possible to make a lot of money if you stick to it!
MR recently posted..Why We Should Not Hate Businesses
Hi MR – I remember one of the things the fellow mentioned that there was quite a bit of tension between him and his many other less successful siblings.
First off, they all lie about how much they make. They’re trying to “sell” their success and rope you into being under them in their scammy scheme. MLMs are the worst. They all eventually crumble. What they’re selling is always useless and overpriced (well, at any price if something is useless, it’s overpriced).
Looks like a good long-term short to me!
Darwin’s Money recently posted..Unemployment by Major – Some Degrees Pay While Others Leave YOU Paying
Hi Darwin – the income revelation came quite some time after he’d realized that I wasn’t interested in vitamins or weight-loss creams (or whatever). In fact, I was the one who asked. Might have he been lying? Perhaps. I thought he sounded sincere enough, but I might have been projecting.
I don’t know a whole lot about MLMs, except in a superficial way. Pyramid schemes eventually run out of new suckers.
This is an encouraging story. I think it goes to show that it takes some time and effort to build something from scratch.
cashflowmantra recently posted..Hondurans Know How to Hustle
That, and a winning personality…
Wow what a career change for that guy. Glad he believes in the product and lost weight. I’ve never been good at getting my money’s worth when it comes to supplements. I get really interested at first but then stop taking them and end up having to throw them away in the end because they expired! -Sydney
Untemplater recently posted..Istanbul Top 10 Must See Sights: My Travel and Photo Adventure
Untemplater – There’s research data on how poorly some supplements are absorbed by the body in processed pill form. Taking fat-soluble vitamins like A without any accompanying food is not so very effective. Even mega-doses of vitamin C can have harmful effects.
very inspiring, that graph makes me want to grab a few shares too hehe right now is the best time though
That’s a great story. I’m sure his success is due in large part to the niche market he targeted. There is a huge Latino community in the US and 11 years ago, they weren’t being targeted much.
retirebyforty recently posted..2012 Annual Enrollment Time
The Hispanic community spends as much money as any other, and they have purchasing power for certain things. That’s why we sometimes shop at Hispanic markets for things like limes, chorizo and queso fresco.
I loved this part: “Let’s-call-him-Juan — because that’s what his name was”
And it sounds like his story is a huge part of his success. I was briefly an Amway distributor, but it wasn’t for me. I try not to recommend things as side gigs that involve plunking down money to get started.
Jackie recently posted..It May Rain in the Jungle
That’s right, Jackie. I suspect that a good chuck of revenue boost comes to these companies from the startup kits.
I like hearing those stories of rags to …hmm middle class let’s say! good for Juan for climbing the ladders of success. Not a big fan of supplements, really prefer the natural organic stuff.
BeatingTheIndex recently posted..Stock Trades: Bought More Open Range Energy
hehe, rags to middle class… Maybe climbing the stepstool of success?
I’m with you, except for echinacea extract and vitamin C, I’m not much for supplements.
That’s an awesome story. The title initially scared me: I thought it was a sponsored post
I think a lot of people have experience with Cutco/Vector Marketing. I even allowed a student to give a demonstration recently. She was quite good. I think it is a great business model with the exception of the fact that most people are not successful and many people are not made aware of that fact from the beginning.
Hi Roshawn – sorry about the title, I didn’t stop to think that it would be interpreted as a shill…
Oh my gosh, what an interesting flight that must have been. I worked with someone before that was talking to me about ‘network marketing’ and of course, it was Amway. She even offered me Amway gum, which I found to taste awful.
I am anxious to see how this turns out. I don’t know much about Herbalife, but if it is safe and helps people lose weight (and keep it off), then I am glad it is succeeding.
Hi Kris – I’ve tried Amway coffee, courtesy of my college buddy that went Am-trepreneur. It was kind of “meh”…
I just came across from Everyday Tips and Thoughts. My few flights aren’t usually that eventful, except one time when I sat next to someone who ended up sick and needed an oxygen mask, and another time when I was next to a Thai race car driver who had just won a championship. It’s interesting the people that you can meet!
Given a choice, I think I’d take the Thai race car driver over the sickly person.
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I’m skeptical of any business that relies on multi-level marketing. If the product was good you would think it would be successful using traditional marketing methods.
Good point, Andy.
Losing weight through a nutritional program is effective, no matter the brand. Jenny Craig, Weight Watchers, etc. Perhaps Herbalife gains cachet by its “exclusivity”.
I am also skeptical of businesses that require me to buy via a middleman, but that doesn’t mean we shouldn’t be happy for Juan.
He found a way to work his way out of a low-end, low-paying job and do extremely well.
And, he was a nice guy to talk to. An enjoyable way to spend a couple hours.