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The other serious problem is that the quality and advertising of the products are suspected. For example, although Herbalife declares that Formula I is the top-selling product and generate 1.8 billion retail sales in 2011, few people heard of it, and it does not even have logo. Formula I is not sold in stores and does not provide Ready-to-Drink offering. However, it is more expensive than other similar products. (Who Wants to be a Millionaire ", 3) The new product innovation also incurs public's doubts. Compared to other multinational food and personal care companies, Herbalife does not spend as much "Research and Development expense " as other companies. As a company for sells nutrition, weight management and skin-care products, the R&D is an important department. Those products should have scientific proofs to support its efficacy. However, Pennsylvania State University professor, Ed Ketz said that the costs are incurred for R&D activities should be expensed, but the real situation is that Herbalife reports those costs as either in SG&A or an inherent part of our cost of goods sold (CNBC Article). We should not only suspect whether or not Herbalife has invested the R&D, but also query the quality of the products. .
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Herballife defends the charge of being an illegal pyramid structure company. Unlike Amway sales system, Herbalife does not oblige the distributors to sell and deliver products that he bought during a month in order to qualify for the acquisition of the commission. According to the CNBC, the CEO of Herbalife, Johnson claims in "This is a Legitimate Company " that people also get confusion for its consumers. The reason why the consumers are called as distributors is that they can get discount from buying products. Actually, 90% of sales are outside the distribution network in Johnson's assertion. ("This is a Legitimate Company ", video) According to its fourth quarter record, the net sales of $1.
Large portions of red meat and butter are encouraged, which conflicts with the studies that show a connection between high levels of saturated fat and heart disease. ... Metabolife, along with many other pills such as Herbalife, Adiphen, Thermalean, Lipodrene, Zymax, Thermoslim, Trim Life, Natural Trim, and Therm-Lift all contain Ephedrine as the active ingredient. ...
