Is Beachbody a Pyramid Scheme?

This is the most common thing that I am asked by people. A fellow coach found this PERFECT explanation. Unfortunately, I don't know where it originally came from to give the proper credit. I do THANK the person who took the time to write this!!!!!

“My fiance and I were having a discussion the other day over a remark that one of her friends made. That remark went something like this “oh, that (Beachbody) is just one of those pyramid schemes”.

One of our problems is dealing with the negativity surrounding the reputation of the phrases “pyramid scheme”, “network marketing”. “multi-level marketing (MLM)” or “direct selling business”.

First of all, the grand daddy of them all, Amway, went under very serious, expensive and prolonged investigation into this sort of activity back in the early 70’s. The results proved that Amway was not a “pyramid scheme” (which is illegal) and paved the way for the whole multi-level marketing industry that has boomed over the past 35 years.

In Quixtar’s (the current name used for the Amway distributor business) Business Rules and Regulations it states:

“A pyramid is a scheme in which an individual pays for the right to recruit additional persons into the scheme who, in turn, receive the same right to receive profits from recruiting others.

Three common elements of a pyramid scheme have been identified as: (1) a large, required initial investment or purchase of inventory: (2) direct payment for recruiting additional persons into the scheme; (3) heavy emphasis on recruiting additional persons, with little or no emphasis on selling products to consumers.”

Beachbody certainly has none of the above components of a pyramid scheme. Anyone who refers to Beachbody as a pyramid scheme is talking out of ignorance combined with obvious negative past experiences with MLMs in general or, perhaps, an illegal pyramid scheme. In fact, I was duped into one such scheme because the Chief Economic Advisor of the Reagan administration, Art Laffer of the infamous “Laffer Curve”, was on the Board of Directors of this company. That company did have several of the components mentioned above.

In fact, Beachbody is squeaky clean on this one as: (1) Beachbody has no required inventory, period; (2) there is no direct payment for recruiting in Beachbody, period; (3) Beachbody is all about products to consumers. In fact, on the last point, Beachbody is currently paying $90 million this year for new customers that it passes on to Emeralds and above. I am not aware of any other MLM that does this.

Another interesting fact is that Beachbody was not created to be an MLM. It was already a very successful company before adding a network marketing component. I am not aware of any other MLM company that has ever had such history before becoming a MLM. Are you?

There is no question that adding a coaching program was in the best interest of Beachbody’s customers. If you were the executive of Beachbody, would you have created a coaching program with all the overhead of adding a coaching division within the company (the salaries of the coaches, office space, additional phone lines, computers, etc) where the employees true incentive was to keep his job. Or would you opt for the brilliance of the network of independent coaches where:

1. There is no additional employees with additional salaries
2. The only way a coach can be successful is to be a product of the system
3. Being a product of the system he/she is a few steps ahead of the customers and any new coaches that he/she sponsors
4. There is a non-salaried advocate of the company to create new customer activity and to advise existing customers of different or additional products to improve their fitness goals
5. Because, in essence, coaches get paid to be fit through the system of sharing, existing coaches will help the whole system grow. As the coaching network grows Beachbody will have a tremendous impact for turning around the greatest epidemics in the history of the US - Type 2 Diabetes because of a grossly overweight society.

Our opportunity is unprecedented. There has never been a greater need for a fitness and health system that works. And I have never been exposed to a fitness and health company that works as well as Beachbody. Most people will not get involved because it is a network marketing (MLM) company and/or opportunity. I believe the reasons they will get involved will be one of these:

1. To personally improve their physical appearance
2. To look and feel healthier
3. They were convinced that Beachbody has superior products to achieve their weight and fitness goals
4. Because a medical advisor or doctor told them that they must lose weight (this will be big soon with the coming Type 2 Diabetes product)
5. That they needed a motivation or reason to be fit other than number 4 above (I was in this category)
6. They want to be part of society’s weight solution instead of part of the problem
7. They want an at home business that makes sense
8. They like the idea of getting paid to be fit

It is my opinion that after someone is involved and really understands this company’s vision, that they will stay in this program for most of the above reasons.

The company desperately needs additional active coaches to succeed in its mission. In my opinion, that is why they are having current recruiting contests and, most importantly, that is why they are going to get new coaches the same way they know how to get new customers - infomercials.”