Herbalife Nutrition Membership Levels and Benefits, Lecture notes of Marketing

Download Herbalife Nutrition Membership Levels and Benefits and more Lecture notes Marketing in PDF only on Docsity! Page 1 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Introduction Herbalife Nutrition’s Sales & Marketing Plan offers you unique opportunities which can lead to various levels of success; the plan was developed by Herbalife Nutrition’s founder, Mark Hughes. The result is arguably the best Sales & Marketing Plan in the industry. Herbalife Nutrition’s Sales & Marketing Plan pays a high percentage of product revenues to Members in the form of Retail and Wholesale Profits, Royalty and bonus income and incentives. This tested, proven business plan is designed to maximize rewards for effort and provide substantial and ongoing income. The Herbalife Nutrition business opportunity and the Sales & Marketing Plan are identical for every Member. Each Member’s success is dependent on two primary factors: • The time, effort and commitment put into the Herbalife Nutrition business and • The product sales made by a Member and their downline organization. These two factors raise the importance of a Member’s responsibility to train, support and motivate their downline organization. The following pages describe the different levels of Herbalife Nutrition’s Sales & Marketing Plan. Each level has specific qualifications and associated benefits to reward Members for their efforts and enhance their success. Table of Contents Sales & Marketing Plan Steps to Success President’s Team Plus Awards and Recognition Achievement Awards and Anniversary Pins Understanding Volume Member Benefits Royalty Override Income President’s Team Plus TAB Team Production Bonus Payout Guidelines Glossary of Terms SALES & MARKETING PLAN Page 2 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Becoming a Member – The Important First Step The only required purchase in order to become an Herbalife Nutrition Member is the Herbalife Nutrition Member Pack (HMP). Each HMP contains the Herbalife Nutrition Membership Application and Agreement, which you must complete and submit in order to receive an Herbalife Nutrition Identification Number and purchase products. Registration You officially become an Independent Herbalife Nutrition Member when your properly completed Application has been processed and accepted by the Herbalife Nutrition Corporate Office. The quickest and easiest method of completing your registration is online at MyHerbalife.com. You may also mail your Application; however, this process might take a few days. In the meantime, you are entitled to purchase Herbalife Nutrition products at the applicable discount through the Herbalife Nutrition Sales Order Department. Once your Application has been accepted, your contract with Herbalife Nutrition becomes effective immediately, giving you all the rights, responsibilities and privileges of an Independent Herbalife Nutrition Member. Income Opportunities The Herbalife Nutrition Sales & Marketing Plan provides many opportunities to earn income and other rewards. Immediate Retail Profit 25% to 50% The profit from direct sales to customers. Wholesale Profit (also known as Commissions) Up to 25% of Earn Base value The difference between what you pay for products and what Members in your personal organization pay for products. Monthly Royalty Override Income As a Supervisor, you can earn up to 5% on the Earn Base value of the sales from your three active levels of downline Supervisors. Monthly Production Bonus TAB Team can earn an extra 2% to 7% Production Bonus. Mark Hughes Bonus A bonus that eligible President Team members and above may qualify to earn in recognition of outstanding performance. Page 5 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 ACHIEVEMENT AWARDS AND ANNIVERSARY PINS *For complete qualification details, refer to your HMP. 1 Million Lifetime Achievement Award 1 Million Volume Points Lifetime Achievement Awards are given to Members who have achieved 1 million Volume Points or more during their Herbalife Nutrition career* 2 Million Lifetime Achievement Award 2 Million Volume Points Lifetime Achievement Awards are given to Members who have achieved 2 million Volume Points or more during their Herbalife Nutrition career* 3 Million Lifetime Achievement Award 3 Million Volume Points Lifetime Achievement Awards are given to Members who have achieved 3 million Volume Points or more during their Herbalife Nutrition career* 4 Million Lifetime Achievement Award 4 Million Volume Points Lifetime Achievement Awards are given to Members who have achieved 4 million Volume Points or more during their Herbalife Nutrition career* 10-Year Anniversary 10-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 5-Year Anniversary 5-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 7-Year Anniversary 7-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 3-Year Anniversary 3-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 1-Year Anniversary 1-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 15-Year Anniversary 15-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 20-Year Anniversary 20-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 25-Year Anniversary 25-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition 30-Year Anniversary 30-year anniversary packages are awarded to Members in recognition of their contributions and longevity with Herbalife Nutrition Page 6 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Understanding Volume Throughout this manual, we use the term volume extensively. Volume is a key element in the Sales & Marketing Plan and is the basis for qualifying and working your way to higher levels. Each Herbalife Nutrition product has a Volume Point value assigned to it that is equal in all countries (see order forms and price lists for exact information). Official Herbalife Nutrition Member Packs (HMP), literature items and sales tools do not count as volume. As you sell products, you accumulate Volume Points that are applicable to the products ordered. These accumulated Volume Points become your sales production and are used for purposes of qualifications and benefits. Volume is assigned to you in various ways depending on who purchased the product, their status and discount, your own status and other factors of the Herbalife Nutrition Sales & Marketing Plan. Volume is calculated on the accumulated Volume Point value of products ordered in a Volume Month. Explanation of Volume Month Definition of Volume Month Volume is assigned to and accumulated by a Supervisor on a Volume Month basis. The Volume Month begins on the first business day of the month and ends on the last business day of the month. If the last day falls on a weekend, the Volume Month will be extended to Monday. Likewise, if the last day of the month is considered a holiday, the month may be extended to the first business day after the holiday. Herbalife Nutrition reserves the right to modify the Volume Month as it deems appropriate. Determination of Volume Month Volume is assigned to the Volume Month in which the order is both placed and full payment is received by Herbalife Nutrition. Add-On Volume The following conditions must be met for an order to be accepted as Add-On volume: 1. Order must be placed no later than the designated last order day of a Volume Month 2. Full payment must be made, or initiated, on the same last order day of the month. For example if payment is mailed, the postmark must be stamped the designated last order day of a volume month. If the payment is a direct deposit or other bank transaction, then it must be initiated on the last order day of a volume month. 3. Full payment must be received by Herbalife Nutrition no later than the 5th day of the following month. If the 5th of the month falls on a weekend or a holiday, then the payment must be received by the last business day before the 5th. If for any reason, a payment is not accepted or received, then the order will be canceled and the Volume will not be applied. There are a number of ways volume is assigned in the Herbalife Nutrition Sales & Marketing Plan. The following definitions and examples illustrate these: Personally Purchased Volume (PPV) Personally Purchased Volume is the volume on orders purchased directly from Herbalife Nutrition using your Herbalife Nutrition Identification Number. Downline Volume (DLV) Downline Volume is achieved on orders placed by your non-Supervisor downline directly from Herbalife Nutrition Page 7 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Downline Volume Example Purchases/ Discount % Downline Volume A 2,500 Volume Points * Supervisor @ 50% discount B 500 Volume Points 900 Volume Points Senior Consultant @ 35% Discount (C&D’s Volume) C 500 Volume Points 400 Volume Points Senior Consultant @ 35% Discount (D’s Volume) D 400 Volume Points 0 MEMBER @ 25% Discount *For Fully Qualified Supervisors, Downline Volume is counted towards Personal Volume or Group Volume. Personal Volume (PV) As a Fully Qualified Supervisor, Personal Volume is the volume achieved from your own purchases and purchases made by your non-Supervisor downline, down to your first Fully Qualified Supervisor. As a non-Supervisor Member you may purchase directly from Herbalife Nutrition, from your Sponsor or your first upline Fully Qualified Supervisor. Please note that purchases made from your Sponsor or first upline Fully Qualified Supervisor may not be used for Supervisor Qualifications, only orders placed with the Company count towards these levels. Therefore, if you are a Fully Qualified Supervisor, all of your own orders purchased at 50% as well as all orders purchased by your downline Members, Senior Consultants, Success Builders and Qualified Producers at 25% to 42% discount - count as your Personal Volume. Personal Volume Example Purchases/Discount % Personal Volume A 1,000 Personal Supervisor Volume Points = 2,800 + B, C & D’s Volume Personal Volume B 1,100 Volume Points Success Builder + C & D’s Volume = 1,800 @ 42% Discount Personal Volume C 300 Volume Points Senior Consultant + D’s Volume = 700 @ 35% Discount Personal Volume D 400 Volume Points = 400 Member @ 25% Discount Personal Volume Group Volume (GV) Group Volume is the volume on orders purchased at a temporary 50% discount by Qualifying Supervisor(s) during the qualifying month. This Temporary 50% Volume is accumulated as Personal Volume for the Qualifying Supervisor who orders it and is purchasing, and it is Group Volume for the first upline Fully Qualified Supervisor. As a Fully Qualified Supervisor you will earn Royalty Overrides on Group Volume if all other Royalty Override requirements are met. (Refer to the “Qualifying as a Supervisor” and “Temporary 50%” sections of this book for complete details.) Page 10 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Wholesale Profit (Commissions) Example Retail Earn Base Your Cost Your Downline’s Cost Your Profit (at 50%) (at 25%) $110 $100 $60 $85 $25 Split Commission Example Total Earn Base Discount Your Split Commissions Retail Level Downline’s To the Qualified To the Cost Producer (QP) Supervisor $110 $100 25% $85 $17 $8 $110 $100 25% $85 N/A (no QP) $25 $110 $100 35% $75 $7 $8 $110 $100 35% $75 N/A (no QP) $15 Senior Consultant Improve Your Profits With the Discount Scale As you and your non-Supervisor Downline sell more Herbalife Nutrition products, your Total Volume increases and you may reach the next level of Senior Consultant. As such, you become entitled to buy products at a 35% or 42% discount off the Earn Base, giving you a greater profit margin. Discount Scale As a Member you may purchase at a 25% discount on all orders until you become eligible for a higher discount by achieving the Senior Consultant level. Thereafter, your discount on purchases will be determined by the Discount Scale as indicated on next page at no less than a 35% discount. Volume Points accumulate either from orders placed by you directly with Herbalife Nutrition, which are referred to as Personally Purchased Volume, or from orders your downline Members place with Herbalife Nutrition, which are called Downline Volume. Both types of volume may be used to achieve Senior Consultant Level at a 35% or 42% discount. Page 11 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Monthly Discount Eligibility Level Volume Senior Achieve 500 35% All orders will be placed Consultant Volume Points at 35% discount until you become eligible for a higher discount. Senior Achieve 2,000 42% Once you have achieved Consultant Volume Points 2,000 Volume Points, you are eligible to place this order and all orders for the remainder of the Volume Month at a 42% discount. Success Builder Minimum 1,000 42% Your own Personally Purchased Volume Points Volume order of 1,000 Volume Points or more entitles you to a 42% discount on this order and all Volume Points orders for the remainder of the month. (One Order) Qualified Accumulate 2,500 42% As a Qualified Producer Producer Volume Points you are entitled to a 42% within 1-3 months discount on every order until you become eligible for a higher discount. Volume can be achieved with PPP or utilizing up to 1,500 Downline Volume Points, with the remaining 1,000 as Personally Purchased Volume. Qualifying Achieve 4,000 Temporary Once Qualifying Volume Supervisor Volume Points 50% Points are achieved in one volume month additional orders are with a minimum 1,000 Volume purchased at a Temporary Points Unencumbered or 50% discount. - Achieve 4,000 Volume Points over two consecutive months, with a minimum 1,000 Volume Points Unencumbered or - Accumulate 4,000 Volume Points within 12 months with a minimum of 3 months required Supervisor 3 ways to qualify: As a Supervisor, you are See “Qualifying as entitled to a 50% discount a Supervisor” in this 50% on every order. (Must section of the Career requalify annually). Book for details Note: Your Personal Volume, plus your downline’s Volume, count as your Total Volume. Once you are on the Discount Scale, your discount will never be less than 35% for as long as you remain an active Member and/or until you become eligible to a higher discount. The more you sell, the greater your profit potential. Remember that each Volume Month you begin again at a 35% discount and can work your way up to 42% and 50% discount. Page 12 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Success Builder As an Independent Herbalife Nutrition Member, you have an opportunity to purchase a single order of 1,000 Volume Points directly from Herbalife Nutrition at a 42% discount. This qualifies you to become a Success Builder. As a Success Builder, you will be able to order at a 42% discount for the remainder of the Volume Month. Members (non-Supervisors) who do not achieve Success Builder are able to order at a 42% once they have accumulated 2,000 Volume Points in one month or have achieved the Qualified Producer level. • The Success Builder level is a Personally Purchased Volume qualification; Downline Volume may not be used towards this discount opportunity. Qualified Producer You have the opportunity to achieve Qualified Producer status by accumulating 2,500 Volume Points within 1-3 month of which 1,500 points can be from Downline Volume. All volume achieved towards this qualification must be from orders purchased directly from Herbalife Nutrition. You will automatically receive the 42% once the qualification has been achieved; and will be updated to this status on the 1st of the month following the month your qualification volume was achieved. A Qualified Producer is eligible to: • Purchase at 42% immediately after qualifying for this status • Earn a 42% Retail Profit • Earn up to 17% Wholesale Profit (Commissions) on the Earn Base value from purchases made by your downline Members at a 25% or 35% discount Once you achieve Qualified Producer status, all purchases will be at a discount of no less than 42% as long as your Annual Member Services Fee remains current and paid. Fully Qualified Supervisor At the Supervisor status you will earn the highest discount of 50%, plus Retail and Wholesale Profit, and become eligible to earn Royalty Overrides (RO). A Fully Qualified Supervisor is eligible to: • Earn a 50% Retail Profit • Earn up to 25% Wholesale Profit (Commission) on the Earn Base value from purchases made by your downline Members at a 25% - 42% discount • Earn RO of 1% to 5% on their first, second and third-level active Supervisor • Attend special workshops and training sessions • Qualify for special Supervisor recognition Members who achieved the level of Supervisors are often referred to as Members or Independent Herbalife Nutrition Members. As a Supervisor, purchases may only be made by you directly from Herbalife Nutrition. Qualifying as a Supervisor There are three ways to qualify as a Supervisor: • One-Month Qualification: Achieve 4,000 Volume Points in one Volume Month (with a minimum 1,000 of those 4,000 Volume Points Unencumbered). • Two-Month Qualification: Achieve 4,000 Volume Points over two consecutive months (with a minimum of 1,000 of those 4,000 Volume Points Unencumbered over the same two month period. • Accumulated Qualification: Achieve 4,000 Volume Points within 12 months (of which a minimum of three months is required). Members have the opportunity to qualify via this method when purchasing their orders directly with Herbalife Nutrition. You can use up to 2,000 Downline Volume Points with the remaining 2,000 as Personally Purchased Volume. Page 15 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Accumulate 4,000 Unencumbered Total Volume Points over the 12-month requalification period. When requalifying by accumulating 4,000 Unencumbered Volume Points between February 1 and January 31 you will retain your Supervisor status and 50% buying privileges. However, any downline lineage that includes a Supervisor will be lost and moved to your next upline Fully Qualified Supervisor. You will automatically requalify as a Supervisor each year if the volume requirements are met during the qualification period. As a reminder, you have the advantage of receiving a 50% discount on your requalification orders. In addition to requalifying your Supervisor status, you must assure your Annual Membership Services Fee is current and paid. Failure to pay the Annual Membership Services Fee prior to or within 90 days after requalification will result in suspension of your ordering privileges and earnings until the fee is paid. If you do not complete your Supervisor Requalification you will lose all rights and privileges of a Supervisor, including the loss of any lineage that includes a Supervisor. In this case, the entire downline lineage will be moved to your next upline Fully Qualified Supervisor. As a Supervisor if you fail to requalify each year by January 31 you will be demoted to the position of Senior Consultant, unless you have met the requirements to requalify as a Qualified Producer. To requalify as a Qualified Producer, you must achieve 2,500 Personal Volume points of which 1,500 may be Downline Volume points, within 1 to 3 consecutive Volume months between the requalification period of February 1 and January 31. Three Levels of Success The people you personally sponsor as Independent Herbalife Nutrition Members are known as your First Level. They may be friends or family or business associates, or even people you have just met. You can personally sponsor as many people as you want in any country in which Herbalife Nutrition officially operates. When these Members in your First Level sponsor other Members those new Members become your second level. When your Second Level, in turn, sponsor others, those they sponsor become the third level in your Herbalife Nutrition organization. By training your Members and encouraging them to follow your example, some may choose to set their goals and qualify at the Supervisor level. As a Supervisor with Fully Qualified or Qualifying Supervisors in your first three levels, you may qualify to earn Royalty Overrides between 1% to 5% of your Organizational Volume. ROYALTY OVERRIDE INCOME Payment of Royalty Overrides Your Royalty Override percentage is based on your Total Volume for each month, if your Volume Points are less than 500 Volume Points, then no Royalty Overrides are earned. If you produce 2,500 Volume Points or more, then a maximum 5% is earned on three active downline levels. The following Royalty Override scale shows the volume requirements that you must meet as a Supervisor every month to earn Royalty Overrides. Royalty Override Scale Your Total Royalty Override Volume Points Earning % 0–499 0% 500–999 1% 1,000–1,499 2% 1,500–1,999 3% 2,000–2,499 4% 2,500 plus 5% Page 16 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Royalty Overrides are paid as follows: In the following example, at the maximum 5%, your Royalty Override is calculated on 30,000 Organizational Volume, which gives you 1,500 Royalty Override Points. Royalty Override Points are used for qualification purposes. Keep in mind, earnings are calculated on the Earn Base value of the products in the country from which the product is ordered. In certain countries, these Royalty Override earnings are converted to your local currency. Royalty Override Example YOU 2,500 Your Total Royalty Override Volume Points = 1,500 Royalty Points First-Level 10,000 Supervisor Volume Points = 5% = 500 Royalty Points Second-Level 10,000 Supervisor Volume Points = 5% = 500 Royalty Points Third-Level 10,000 Supervisor Volume Points = 5% = 500 Royalty Points Royalty Points are calculated as follows: • 1% to 5% Royalty Points are achieved from the Total Volume of personally sponsored first-level qualified Supervisors. • 1% to 5% Royalty Points are achieved from the Total Volume of personally sponsored second- level qualified Supervisors (e.g. a Supervisor who has been sponsored in turn by your personally sponsored Supervisor). • 1% to 5% Royalty Points are achieved from the Personal Volume of personally sponsored third- level qualified Supervisors (e.g. a Supervisor who has been sponsored in turn by a second-level Supervisor). Additional Requirements As a Supervisor who meets the specified requirements to earn Royalty Overrides you must also comply with Herbalife Nutrition’s 10 Retail Customers Rule and the 70% Rule, to earn and receive both Royalty Overrides and Production Bonus. You must confirm your adherence to these requirements by submitting the Earnings Certification Form each month. If you fail to comply with either of these rules, the Royalty Overrides and Production Bonus will not be paid to you. Royalty Override Roll-Up As a Supervisor, you also have the opportunity to earn Royalty Override Roll-Ups. Royalty Override Roll- Ups are paid to the appropriate qualified upline Supervisor(s) when any downline Royalty Override contributing Supervisor earns less than the maximum 5% payout. This “roll-up” percentage is the difference between the 5% maximum Royalty Override and the actual percentage earned by the downline Royalty contributing Supervisor. To be eligible for Royalty Override Roll-Ups, as a Supervisor you must be at the maximum 5% earning level, based on the Royalty Override Sliding Scale. You may not earn more than 5% Royalty Override on any order. Page 17 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Royalty Override Roll-Up Example Earns 5% Royalty Override on First, Second and 2,500 Third-level Supervisors YOU Total Volume Points = 5% Royalty Override Earns 4% Royalty Override Roll – Up on Fourth-Level Supervisor First-Level 2,500 Earn 5% Royalty Override Supervisor Total Volume Points = on Second, Third and 5% Royalty Points Fourth-Level Supervisors Second-Level 2,500 Earn 5% Royalty Supervisor Total Volume Points = Override on Third and 5% Royalty Points Fourth-Level Supervisors Third-Level 500 Supervisor Total Volume Points = Earns 1% Royalty Override 1% Royalty Override on Fourth-Level Supervisor Fourth-Level 1,000 Supervisor does not Supervisor Total Volume Points = have downline to earn No Royalty Override Royalty Overrides World Team Qualifying as a World Team member is an important step in your Herbalife Nutrition business. You have demonstrated your success by qualifying for this prestigious team. World Team is your launching pad to move on to qualifying for the TAB Team. To Qualify: • Achieve 10,000 Total Volume Points in one Volume Month after becoming a Qualifying Supervisor or a Fully Qualified Supervisor. • OR As a Fully Qualified or Qualifying Supervisor, achieve 2,500 Total Volume Points, each Volume Month, in four consecutive months. • OR Achieve 500 Royalty Points in one Volume Month. Providing you have achieved your Supervisor qualification, after achieving the required Volume or Royalty Points you will be updated to World Team status on the first of the following month. You Receive: • All the benefits of a Supervisor • A World Team pack, containing a personalized World Team Certificate, World Team pin and Herbalife Nutrition daily journal Plus You Become Eligible to: • Attend special planning and training sessions targeted to accelerate your progress to TAB Team TAB Team Successful Supervisors have the opportunity to proceed to the higher scale of the Herbalife Nutrition Sales & Marketing Plan, which is the Top Achievers Business (TAB) Team. There are three levels within the TAB Team: Global Expansion Team (GET), Millionaire Team and President’s Team. Page 20 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Awards Replacement and/or Repair Policy: Herbalife Nutrition strives to provide the highest quality awards available. In the event that an award was received defective or otherwise damaged, you may return the item(s) for free replacement within six (6) months of the original qualification date associated with the award. After this six-month period, you may return damaged item(s) to be professionally refurbished or repaired which shall be at their cost paid through an earning deduction form. Any deviations from this policy shall be at the sole and absolute discretion of Herbalife Nutrition. Request may be submitted by phone or in writing to: Member Services P.O. Box 80210 Los Angeles, CA 90080-0210 Or At 310-216-9661 PRESIDENT’S TEAM PLUS Page 21 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 President’s Team Plus Awards and Recognition One Diamond Executive President’s Team To qualify you must have one first-line, Fully Qualified President’s Team member in any line of your downline organization. Two Diamonds Senior Executive President's Team To qualify you must have two first-line, Fully Qualified President's Team members in two separate lines of your downline organization. Three Diamonds International Executive President's Team To qualify you must have three first-line, Fully Qualified President’s Team members in three separate lines of your downline organization. Four Diamonds Chief Executive President’s Team To qualify you must have four first-line, Fully Qualified President’s Team members in four separate lines of your downline organization. Five Diamonds Chairman’s Club To qualify you must have five or more first-line, Fully Qualified President’s Team members in five or more separate lines of your downline organization. Ten Diamonds Founder’s Circle To qualify you must have 10 or more first-line, Fully Qualified President’s Team members in 10 or more separate lines of your downline organization. Presidential Plus Awards The Presidential Plus Awards are based on production (January through December Volume Months). Baume & Mercier Watch 250,000 Royalty Override Points Marquis Diamond Ring 500,000 Royalty Override Points Piaget Gold and Diamond Watch† 750,000 Royalty Override Points Piaget Diamond Watch† 1,000,000 Royalty Override Points †Actual watch model may vary based on availability at time of qualification. Page 22 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Qualifications by Team Level Following is an easy-to-understand graph of qualifications for each team level. Qualifications Waiting and Earning Periods Production Bonus Earning Percentage Requirements Once you have qualified and/or requalified for a particular TAB Team earning percentage level, the following must be achieved in each of the earning months to receive a TAB Team Production Bonus (“PB” on the following table) during your earning period: TAB TEAM PRODUCTION BONUS PAYOUT GUIDELINES To help you better understand the TAB Team Production Bonus [Production Bonus] Payout, we’ve put together the following guidelines. • When a TAB Team in your downline earns a Production Bonus at a lower % level than you, you will earn the percentage difference on their downline. For example, if you earn a Production Bonus at the 6% level and your downline TAB Team earns a Production Bonus at the 2% level, you will earn 6% on that TAB Team and the remaining 4% Production Bonus on their downline organization down to the next Production Bonus earner. Your Production Bonus earnings below those downline Production Bonus earners will depend upon the earning percentage of each Production Bonus earner. • When a downline TAB Team earns Production Bonus at the same percentage level as you, you will earn on that TAB Team but you will be unable to earn a Production Bonus on their downline. This is commonly referred to as “Cut-Off”. • When a downline TAB Team earns a Production Bonus at a higher level than you, you will be unable to earn a Production Bonus on that downline and their organization. This is commonly referred to as “Blocking”. • Remember, to be eligible to receive the Production Bonus, your completed TAB Team Production Bonus Acknowledgment Form must have been accepted and approved by Herbalife Nutrition, and all other terms and conditions must be met. Team Achieve required Royalty Points each month for 3 consecutive months Waiting Period Earning Period Global Expansion Team (GET) 1,000 None 12 months from Fully Qualified/Requalified Date Millionaire Team (MILL) 4,000 2 months 12 months after waiting period is complete President’s Team (PRES) 10,000 3 months 12 months after waiting period is complete President's Team20K (20K) 20,000 3 months 12 months after waiting period is complete President's Team30K (30K) 30,000 3 months 12 months after waiting period is complete President's Team50K (50K) 50,000 3 months 12 months after waiting period is complete Max Earning % Level Total Volume Points Required Royalty Points Required for Max 2% PB Royalty Points Required for Max 4% PB Royalty Points Required for Max 6% PB Royalty Points Required for Max 6.5% PB Royalty Points Required for Max 6.75% PB Royalty Points Required for Max 7% PB 2% 5,000 1,000 4% 3,000 1,000 4,000 6% 2,500 1,000 4,000 10,000 6.5% 2,500 1,000 4,000 10,000 20,000 6.75% 2,500 1,000 4,000 10,000 20,000 30,000 7% 2,500 1,000 4,000 10,000 20,000 30,000 50,000 Page 25 of 25 6149-JM-02 (Corp V35) Rev. 10/30/2020 Royalty Roll-Ups: Herbalife Nutrition pays Supervisors the full 5% for each of three active downline Supervisor levels. Royalty Roll-Ups are paid to the appropriate upline Supervisor(s) when a downline Supervisor earns less than the maximum 5% Royalty Override payout per level. In these instances, the difference between 5% and the Supervisor’s earning percentage (1% to 4%) results in the Royalty Roll- Ups. Senior Consultant: A Member who has qualified to purchase at 35% or 42% discount. Split Commission: The commission earned from a downline who is purchasing at a lower discount than your discount at the end of the volume month. A commission of up to 25% will be split amongst the eligible Senior Consultant, Qualified Producer, Qualifying Supervisor and Fully Qualified Supervisor in the purchasing Member’s upline. Sponsor: A Member who brings another individual into Herbalife Nutrition. Success Builder: A Member who places an order of 1,000 Volume Points at 42% discount.* Supervisor’s Personal Organization: Includes all Members in the Supervisor’s downline who are Members, Senior Consultants, Success Builders, Qualified Producers and Qualifying Supervisors. TAB Team: A Member who has met all the requirements for GET, Millionaire Team or President’s Team. 10 Retail Customers Rule: A Member must make sales to at least 10 separate retail customers each month to qualify and receive Royalty Overrides and Production Bonus. The 70% Rule: In any given month, a Member must sell at least 70% of the total value of Herbalife Nutrition products they purchased each volume month in order to qualify to earn and receive Royalty Overrides and Production Bonus for that month’s business. Upline Organization: Your Sponsor and their Sponsor and their Sponsor’s Sponsor, and so on. Volume, Downline: Volume achieved on orders placed by your non-Supervisor downline directly from Herbalife Nutrition. Volume, Encumbered: Volume being used by your downline for Supervisor qualification purposes. Volume, Group: Sales from orders purchased at a temporary 50% discount, by Qualifying Supervisor(s) in a Supervisor’s personal organization.* Volume, Matching: The Total Volume a sponsoring Supervisor must have in a given month to equal or exceed the volume achieved by their downline Member(s) who are qualifying for Supervisor.* Volume, Organizational: The accumulated volume amount on which a Supervisor earns Royalty Overrides. Volume, Personal: The volume from orders purchased by you as a Fully Qualified Supervisor and all others in your downline organization, excluding any 50% orders by Qualifying or Qualified Supervisors. Volume, Personally Purchased: The volume from orders purchased directly from Herbalife Nutrition using your Herbalife Nutrition Identification Number. Volume, Total: The combined total of Personal Volume plus Group Volume. Volume, Unencumbered: Volume not being used by your downline for Supervisor qualification purposes. Volume Point: A point value assigned to each Herbalife Nutrition product that is equal in all countries. Understanding Retail and Wholesale Profit Throughout this document we refer to retail and wholesale profit as one of the Member benefits. Please review the material below to better understand these terms and how retail and wholesale profit are calculated: Suggested Retail Price: • This is the suggested selling price to customers which may include taxes and/or shipping costs (depending on market) and the price that is published on Herbalife Nutrition’s official product catalogues and websites. • Each Member is free to set their own selling price to their Customers. Retail Price: • This is the starting price for all Members • It is the suggested selling price to customers (before any taxes and/or shipping costs, depending on market) and the price from which the Discount Amount is deducted. Earn Base: • This is the monetary value assigned to each product on which all discount and earning calculations are based. • The Earn Base value of a product is typically less than the Suggested Retail Price. This is because the Suggested Retail Price includes administrative/processing fees, and in some markets shipping costs, which do not generate earnings and do not qualify for discounts. • Like in all retail businesses, product margins and pricing can vary, and in some cases, the Earn Base value of a product may be set further below the Suggested Retail Price in order for the product to be priced more competitively. Discount Percentage: • This is the percent discount of the earn base that a Member is entitled to based on their performance and their qualification level in the Marketing Plan. • The Discount Percentage can range from 25% to 50%. • The Discount Percentage is always applied to the Earn Base to determine the Discount Amount. Discount Amount: • This is the monetary value/amount of the discount calculated on Earn Base and is deducted from the Suggested Retail Price to determine the Member Price of the product (before taxes and in some markets shipping). • Discount Percentage x Earn Base = Discount Amount. Member Price: • This is the price the Member pays for the product before any taxes and shipping in some markets. • Suggested Retail Price – Discount Amount = Member Price Retail Profit: • This is the amount of profit that a Member earns on a retail sale. • Retail Profit is the difference between the price at which the Member sells the product to the customer and the Member Price. • Selling Price – Member Price = Retail Profit • Retail Profit percentage is not the same as the Discount Percentage because: (a) each Member is able to set their own selling price to their customer. (b) Discount Percentage is calculated off of Earn Base, which is lower than Suggested Retail Price. Wholesale Profit: • When a Member qualifies for a higher Discount Percentage than a Member in their downline, then the Upline Member may earn a Wholesale Profit • Wholesale Profit is equal to the Earn Base value of the product times the difference between the Upline Discount Percentage and the Downline Discount Percentage. • Earn Base x (Upline Discount Percentage – Downline’s Discount Percentage) = Wholesale Profit Retail and Wholesale Profit Example Retail Profit Example: Gary is a Supervisor so he has a Discount Percentage of 50%. He orders a can of Herbalife Formula 1 to sell to his customer - Gary’s Discount Amount is $19.95 The Discount Amount is calculated by taking the Earn Base (39.90) x Discount Percentage (50%) - Gary’s Member Price is $22.05 The Member Price is calculated by taking the Suggested Retail Price ($42.00) – Discount Amount ($19.95) - Assume that Gary sells to his customer at Suggested Retail Price ($42.00). In that situation, Gary’s Retail Profit is $19.95 Retail Profit is calculated by taking the Selling Price ($42.00) – Member Price ($22.05) = Retail Profit RETAIL PROFIT EXAMPLE FOR A 50% DISCOUNT MEMBER Suggested Earn Base Discount Member Price Retail Profit Retail Price Amount (50%) x (b) (a) - (c) (a) - (d) (a) (b) (c) (d) (e) $42.00 $39.90 $19.95 $22.05 $19.95 Wholesale Profit Example: Gary’s downline (Sue) is a Senior Consultant at a 35% Discount Percentage who also sells a can of Herbalife Formula 1 - Sue’s Discount Amount is $13.97. The Discount Amount is calculated by taking the Earn Base ($39.90) x Discount Percentage (35%) - Sue’s Member Price is $28.03. The Member Price is calculated by taking the Suggested Retail Price ($42.00) – Discount Amount ($13.97) WHOLESALE PROFIT EXAMPLE FOR A 35% DISCOUNT MEMBER Suggested Earn Base Discount Member Price Retail Profit Retail Price Amount (35%) x (b) (a) - (c) (a) - (d) (a) (b) (c) (d) (e) $42.00 $39.90 $13.97 $28.03 $13.97 Since Gary’s Discount Percentage is 50% and Sue’s Discount Percentage is 35%, Gary also earns a Wholesale Profit on Sue’s sale/order Gary’s Wholesale Profit is $39.90 x 15% (50%-35%) = $5.99. Earn Base x (Gary’s Discount Percentage – Sue’s Discount Percentage) = Wholesale Profit *Special Note to Wholesale Profit: If Sue is a Member outside the United States or US Territories, Gary will earn Wholesale Profit on the products Sue orders from Herbalife Nutrition as calculated above. If Sue is a Member in the United States or US Territories, Gary will earn Wholesale Profit only on the products Sue sells to her customers (not what she orders from Herbalife Nutrition), and only where Sue submits a valid Receipt for the sale to her customer showing the required customer and pricing information showing that the sale was profitable . For more information on how current pricing compares to historical pricing, click here. Published: 10/29/2020 FORMULA 1 • Volume Points: 32.75 • Suggested Retail Price: $42.00 • Earn Base: $39.90