Is Beachbody An MLM?
If you happened to post on your social media earlier this month that your new year resolutions included living a healthier lifestyle, losing some weight, or finding a side hustle to bring in some extra money, chances are you got at least one inbox message from a long-lost acquaintance inviting you to join their Beachbody "team." Beachbody touts itself as being a multifaceted wellness and fitness company that provides a supportive community, nutritional products and plans, and workout plans. It even welcomes you to make money off of the products while using them by getting other people to enroll (via Beachbody.com).
So what's the problem? Well, you might have heard that Beachbody is an MLM (multilevel marketing company). According to Investopedia, an MLM is defined as a business model that "encourages existing members to promote and sell their offerings to other individuals and bring on new recruits into the business. Distributors are paid a percentage of their recruits' sales. New recruits become the distributor's network or downline and are, in turn, encouraged to make sales to earn money." While many MLMs are technically legal, some of their practices boarder on pyramid schemes.
So, is Beachbody an MLM?
How Beachbody works
In short, yes. Beachbody is an MLM. While its consultants might describe it as "direct sales" and make a point that you might buy protein powder from a store, so why not buy it from a friend instead and help them earn a living, there's an essential piece to the puzzle they are leaving out. A simple direct sales model is exactly that: someone sells products to you directly rather than going through a store or other channel. However, with an MLM, a major portion of the salespeople's income does not come from sales of actual products or services; it comes from recruiting other people to sell under them, hence creating a pyramid-shaped system (via Traveling Jezebel).
The way many MLMs, like Beachbody, get away with what is pretty clearly a pyramid scheme on paper, is because they really are selling an actual product, so they can call themselves direct sales. But the ultimate goal of any Beachbody associate is to recruit as many people underneath them as possible so that they can make passive income off those peoples' sales. This creates a situation in which the people at the bottom make very little if any money and only the people at the very top make a lot. In fact, statistically, only 25% of MLM sellers turn a profit at all, which means 75% do not make any money (via Fundera).