Is Beachbody Coaching a Pyramid Scheme?
Beachbody Coaching is Network Marketing, or multi-level marketing, but network marketing is not the same as a pyramid scheme. Though, network marketing is about as controversial as politics, and people’s opinions are just as fierce. The problem is, the majority of those opinions are based on fiction, not fact. For whatever reason, despite the fact that it’s a wonder of the world, when the majority of people think of a pyramid, they think scam. Never before, in the history of our society, have people been so afraid of a triangle.
So, why is the word “pyramid” so taboo? After all most successful organizations are shaped like a pyramid. Our military, government, universities, corporations, hospitals, and school systems: all pyramids. And there’s a reason for that. As an organizational structure of hierarchy, it’s one of the strongest and most sustainable around. Pyramids are good, however, pyramid schemes are bad.
Let me break it down for you… Most people think a pyramid scheme is an organization where one person (or a few) sits at the top making all the money, while the masses at the bottom do all the work, right? Wrong. That’s not a pyramid scheme. That’s the company you currently work for! And that’s perfectly legal.
So, then what is a Pyramid Scheme?
- A pyramid scheme is a form of fraud and it’s illegal.
- he first type of pyramid scheme is actually called a Ponzi Scheme (named for the criminal who made it famous). It doesn’t involve a product, service, or even business at all. It’s just a scam described as an investment opportunity. In a Ponzi Scheme, the initial people who invest are paid from the subsequent investments of other people who later join the scheme. In other words, no genuine profit is made; the money earned is from brand new, unsuspecting members.
- The second type of pyramid scheme is one in which a product or service exists, but is really just a cover for the scam itself. In reality, the products are never actually used. The company makes very little profit from the sale of these goods, but instead derives almost all of it’s revenue from the enrollment of new recruits. The representatives get paid the same way – in kickbacks for bringing in new people to the scheme, as opposed to sales actually made. In that sense, it’s a lot like a Ponzi Scheme, but with some meaningless (and often overpriced) products changing hands.
Network Marketing companies are completely different than pyramid schemes. So, what is a Network Marketing Company?
- They sell real products and services that are actually in demand and work.
- They do not compensate their network marketers for recruitment alone.
- There are no direct kickbacks from sign-up fees, and reps are only paid when a sale is made to an end user, or personally consumed (yes, we’re allowed to buy from ourselves).
In case you didn’t catch that, let’s review:
- A Pyramid scheme is a form of fraud and it’s illegal. Network Marketing is totally legal.
- A pyramid scheme offers no real products or services or sham products that don’t work, are of little value to consumer, and are overpriced. Network Marketing companies offer legitimate societal demand products that are valuable and competitively prices. Beachbody definitely offers products – amazing ones at that. P90X anyone?
- In a pyramid scheme, you are told you will make money by signing up people and getting a kickback of their (ridiculously expensive) sign up fee. Not true with Network Marketing – in fact, Beachbody coaches do not a cut from the sign up fee of their coaches. Our compensation is tied to the product/service distribution of the sale.
- With pyramid schemes, there are large enrollment fees, big product buy-ins required, and the company and distributors profit from training. With Beachbody, the start-up cost is low (just $40), and we do not profit from training, nor are we required to carry any inventory.
- In a pyramid scheme only the people at the very top make money. In Network Marketing, it is possible to make money at any level and even possible for people to advance past the person who signed them up.
- n a pyramid scheme, the only way to make money is from the sign up fees of people you sign up. In network marketing you can make money from selling the products and services without ever signing a single person up. And like I said earlier, with Beachbody you don’t make money when someone else initially signs up anyway.
- Pyramid schemes give vague descriptions about the company that can only be answered by signing up and paying the fee. Beachbody puts all the information out there before you ever sign up. They even post the business model and the high, low and average annual income of coaches by rank, on their website. And a current coach will tell you everything and anything you want to know about the process.
As you can see, at a distance, network marketing companies can look similar to pyramid schemes, but up clse they are drastically different. In the United States today, over 16.1 million people are network marketers! What are some other network marketing companies you may have heard of? Tupperware, Avon, Mary Kay, ACN, AdvoCare, Amway, shall I go on…
The confusion between network marketing companies and pyramid schemes is, in part, what created the stigma of the industry as a whole.
Why would a company initiate this business model if there’s so much confusion? One of the main reasons is to save on the cost of advertising. Network Marketing companies are able to reward it’s members by spreading the word. And once you get past the confusion, it’s actually a very rewarding business model. In Beachbody, you help your coaches build their business and in return, you can accumulate volume points from your coaches sales and purchases which go towards a team bonus. The model gives coaches initiative to help others with their business.
And one thing that’s unique to Beachbody is that you are not required to have any inventory, like I said before. All purchases can be made through your online store and are directly shipped to the customer from Beachbody. In fact, the only cost associated with coaching is the $14.95 monthly fee that goes towards maintaining your online store.
Beachbody makes no false claims to income either. One of the first things you’ll hear when you become a coach is that you will get out of this what you put into it. If you do nothing, you will make nothing. Any company who promises money for nothing is lying to you.
So if you love Beachbody’s products and have entertained the idea of becoming a coach, don’t let the misconception that it’s a pyramid scheme hold you back. It’s a rewarding business, both financially and personally.
Still pretty skeptical about the network marketing business? I HIGHLY suggest you check out the book The Flip Flop CEO.
After you read that book, come back and then tell me if you think network marketing is a pyramid scheme, and you can never really make any money.
Or, take the leap of faith, click the button below and sign up as a Team Beachbody Coach! Start making residual income and start planning your work around your life, rather than your life around your work!