
Citron thinks Shopify is like Herbalife - infynyxx2
http://www.citronresearch.com/citron-exposes-the-dark-side-of-shopify/
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madamelic
This is beyond grasping at straws.

Shopify performs a service, Herbalife does not. Shopify recruits people,
Herbalife sells inventory.

I don't see Shopify asking for upfront payments from their affiliates.

Not to mention the fact that a successful Shopify store relies on skill at
SEO, social media and picking the right products. Herbalife relies on being
early enough in the "reverse funnel" and having a lot of people downstream
(not skill).

There is literally no similarities between Shopify and HerbaLife beyond a
program recruiting people, which basically every large site has.

~~~
rtkwe
There's one overlap where there might be a bit of tooth is in the possible
revenue claims which seems like a big portion of what Herbalife actually got
hit for it seems, though I'm not really familiar with the exact details of the
FTC's findings in the Herbalife case.

Other than that though there's very little relation between the two Shopify
really doesn't sound like a pyramid scheme even from this page.

~~~
0x4f3759df
If you're in the mood for a documentary 'Betting on Zero' is pretty good.
[http://www.imdb.com/title/tt3762912/](http://www.imdb.com/title/tt3762912/)

~~~
rtkwe
Saw it. Just don't remember so much and didn't read in depth at the time so no
idea what may have been glossed over or slanted in that documentary.

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dasil003
I can't help but laugh at the irony of the copywriting style, is this meant to
appeal to the same kind of clueless audience that calls numbers for MLM-scheme
posters stapled to telephone poles? If so, to what end?

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actsasbuffoon
This is a fundamental misunderstanding of the problem with Herbalife. The
problem with Herbalife is that it is a pyramid scheme. You don’t make your
money by selling products, you make it by recruiting people to sell for you,
who recruit people to sell for them, and so on.

Shopify does not appear to be a pyramid scheme. I see nothing to suggest that
you recruit other sellers recursively in order to generate revenue.

Herbalife is primarily noteworthy because they are a pyramid scheme. If you
say that something is like Herbalife, then you’re strongly implying that other
thing is also a pyramid scheme. If I say my cousin is like Vincent Van Gogh,
you’d assume I mean that he’s a brilliant painter. If I was actually trying to
convey that my cousin only has one ear, you’d understandly find my statement
misleading, and probably poorly conceived.

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save_ferris
> Google search shopify and millionaire and you'll see 27k results. Then go to
> Youtube and enter shopify and millionaire and you'll see 10k results.

Funny, I just searched "google ads millionaire" and it returned 6M results, as
well as 30k from Youtube. By Citron's logic, Google is also like Herbalife.

Now, he might have a case if Shopify and Google generated these pieces of
content themselves, but he makes no attempt to discover where the content
originates.

~~~
ChuckMcM
I wouldn't disagree with that comparison :-)

Back when I was working at Google there clearly was tension between people who
were promoting the AdSense platform and Google's desire to have more
inventory. Much of it seemed to fall into the "we didn't tell them to do this,
they just came up with it on their own."

At the time (2006 - 2008 or so) the "deal" was person A would get a partner ID
and they would resell Google ads through their partner ID to shops that they
recruited. It was so bad that after I had left Google and joined Blekko the
easiest web spam page to detect was the same AdSense ID across more than a
handful of domains. The ranking team de-indexed every site where the AdSense
ID appeared on more than 50 different URLs and it pruned a very significant
chunk of the index of 'web spam'.

The only point I'm trying to make is that when your platform makes money on a
per-use basis, whether its transactions or page views, there are people who
will use that to create affiliate type businesses.

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eli
But aren't the vast majority of Shopify users selling products (not recruiting
other users to Shopify)?

~~~
giarc
Exactly. I believe Shopify has an affiliate program (like just about every
other platform) but it's not pushed like MLM. The main goal of majority of
shopify users is to sell their product, not to sign up their friends.

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wonder_bread
Pretty hilariously bad report. When they first came out with it the URL path
said 'Spotify' instead of 'Shopify'

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mrguyorama
I've never heard of this Citron Research group. However, anytime a company
tries to sell something as a "lifestyle" or other cult like mentalities, you
know something sketchy is going on.

Also, I'm disappointed that Herbal Life was only required to pay $200 million.
Their predatory practices destroyed lives in order to enrich top dogs in the
business, and that makes my blood boil

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ng12
Who listens to these clowns? I'm shocked they have such an overwhelming effect
on the market ($SHOP is down ~20% since last week).

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parthdesai
He probably made a ton of money shorting the stock.

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reiichiroh
Are these the losers who underestimated the fandom of the Ubquiti networking
owners?

~~~
i_are_smart
They are (1), and although that did hurt Ubiquiti's stock price nothing else
ever came of it. I have no idea why anyone listens to these guys.

[1] [http://www.citronresearch.com/citron-exposes-ubiquiti-
networ...](http://www.citronresearch.com/citron-exposes-ubiquiti-networks/)

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frgtpsswrdlame
@dang

What's up with this flagging? A contrarian opinion on a tech darling shouldn't
be a basis for removal from the front page.

~~~
jrs235
Apparently enough HN users flagged the story.

~~~
frgtpsswrdlame
Sure and we've seen over-rides before due to misuse of flagging. In this case
it seems to me that flagging has been used as a mega-downvote because people
don't want a negative story on Shopify, that misuse is bad for the community
and silences people who act within the norms and are upvoting articles they
want to see. If stories like the below are fine here, I think this story
should be fine here.

[https://news.ycombinator.com/item?id=9583196](https://news.ycombinator.com/item?id=9583196)

[https://news.ycombinator.com/item?id=8032614](https://news.ycombinator.com/item?id=8032614)

[https://news.ycombinator.com/item?id=13200455](https://news.ycombinator.com/item?id=13200455)

[https://news.ycombinator.com/item?id=14209161](https://news.ycombinator.com/item?id=14209161)

[https://news.ycombinator.com/item?id=13806397](https://news.ycombinator.com/item?id=13806397)

[https://news.ycombinator.com/item?id=15441429](https://news.ycombinator.com/item?id=15441429)

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RayVR
Why was this flagged?

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eswat
Indeed. Was hoping for more discussion on this topic.

You have a vigilante shorter that roams around markets “identifying fraud and
terminal business models” and using strawman arguments with little research to
improve his position.

This is probably just as sketchy as his claims about Shopify’s marketing and
referral tactics are.

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soared
So is this like a conspiracy theory / clickbait blog but for investors? The
content (and even web design) is laughable.

~~~
eswat
Despite that he has an audience. He’s also shorted Nvidia, claiming it to be a
“casino stock” and the price followed accordingly.

Crazy how prices can be manipulated by these people so easily.

