system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why are obvious MLM's/pyramid schemes (like herbalife, huns,... ) not illegal in the USA?
gpt
The main reason is that they are not pyramid schemes.  A pyramid scheme is a scheme where early investors are paid not out of profits from the investment, but from the initiation fees or investments of later members.  There is no underlying business model (or, at least, not one capable of sustaining the business) in these schemes - they only exist because new members come in.

In contrast, businesses like Herbalife _do_ sell product and most of their revenue does come from product sales.  Now, you can make _more_ money if you recruit additional people to sell, but your profits still come from actual sales of product (be those from yourself or from your recruits).

Maybe they _should_ be illegal because the recruitment is a bit deceptive, but they don't operate like pyramid schemes so they shouldn't be illegal just be cause such schemes are.