I’m quite passionate about reviewing different ways to make money online or from home. When I’m not disassembling AdvoCare business opportunity, I like to compare & contrast against other top multi-level marketing like Beachbody, famous for their shakeology…
Without going too deep into it, I have few experiences with various MLM’s myself and what I can say for sure is that a lot of them teeter dangerously close to being a full blown pyramid scheme.
here is why.
Where MLM Companies like Beachbody Go Wrong
network marketing companies like Beachbody, AdvoCare & Plexus all rely on their independent distributor or “coaches” to promote, market & sell the products for them, & in return compensate their efforts with commission.
That in itself doesn’t seem so bad right?
Hey you can almost look at these companies in a good light, they are giving everyday common folks a business opportunity, an opportunity to earn income from home selling healthy shakeology drinks!
Seems pretty ideal for stay at home moms or other people that are hating their current job, or anyone that want to earn extra income.
Where these companies go wrong, is that they realized that even if their products do have a slight edge over their competing brands at GNC supplement stores, its still extremely difficult to push into the market place with so many distractions & competitors.
The original founders of MLM back in the 60’s realized a new model of business where by giving their buyers like you & me an opportunity to earn commission, they can effectively recruit people into the company that will market & sell the products for them and the secret to why this works so well is that these individuals will sell to their warm contacts (friends & family) and we all know that we have at least few people that are close to us, that if we pressure them enough they will buy from us or at least give a try. “The Lay Up Sale”
MLM companies figured out that the explosive growth comes from their distributors recruiting more distributors into the business because each new distributor has the potential to bring more sales via their warm social channels of friends & family.
This is where these companies begin to lose little bit of their integrity.
Because the business model inevitably becomes more about recruiting people into the company for the “business opportunity” / “opportunity to make money” than about the product itself.
You see in order for FTC to not flag you as pyramid scheme and shut you down, the company has to generate majority of their revenue from selling actual goods & services, not selling “opportunities” where majority of the people lose money on.
Classic Illegal Pyramid Model, why Beachbody might or might not be one?
What constitutes an illegal pyramid is a company that dupes people into some scheme.
People shelling out money without any return of any tangible goods or service.
Only an empty promise to “make money” and majority of the people that ended up investing in this scheme lost on their investment.
While that money that they invested travels up the pyramid structure, to the people at the top that is raking in profits that was generated by selling people a lie.
This is a company that is not bringing any value to the world, but only preying upon the vulnerable and taking from the susceptible individuals.
It is vampiric or parasitic in nature.
It is a case which the guys at the top take your money while you have no chance at succeeding in the system.
How Beachbody is similar to illegal pyramid
A lot of MLM companies are similar to an illegal pyramid in that their income disclosure, shows a 95% failure rate.
Out of the few that gets to earn any type of money, 55% of Beachbody coaches only earned less than $1000-$2000 a year.
So those that are actually earning sustainable income is 1% of less of the promoters that join the company.
Another way in which the shakeology company teeters too close to illegal pyramid is the fact that the leading source of their revenue is through recruitment and selling products to the coaches, not actually selling the products to everyday people shopping at the local super markets.
Why is this a problem?
Again goes back to what was said previously, if the company is generating revenue but not providing actual tangible goods or service in return for the money generated, and the money generated is through recruitment and people that are recruited is losing their money then it can be classified as a pyramid scheme.
How Beachbody can be classified as not an illegal pyramid
Not everyone that join the business opportunity fail, you can make the case that 5% actually make money from their efforts so you cannot completely discredit becoming a coach as a scam.
For the 5% it was legitimate.
Also joining the business opportunity in Beach Body or AdvoCare, you have to make initial investments but that’s tied to their products. So the all-in purchase to unlock all the earning potential is still tied to products. You make certain volume of product purchases or you purchase certain packages like Beachbody business kit for $39.95 fee these are discounted prices on some of their top sellers including shakeology and first month membership to their beachbody club, also there is monthly fee of 15.95 to maintain your coach status, and this is explained as certain fees to maintain your website page and also have access to their business training materials.
So yes every time you spend money at Beachbody you do get something tangible in return even if it is just to get to the business opportunity.
Also unlike a pyramid schemes, there is opportunity to advance up the rankings for all new coaches.
The select few that does succeed, are not capped on their earning potential, in fact if they work hard enough and begin building a huge team underneath them they could essentially surpass their sponsor / up line.
Remember in companies like AdvoCare & Beachbody you can only earn bonuses up to 3 levels or generations down.
So all the distributors that joined before you, do not continue to earn infinitely as the company grows & new distributors join. Only 3 levels.
When I say level I mean
In this picture above, if you are the guy in the red, then your organization is 2 levels deep, you can earn bonuses on 1 more additional level, so the people the green guys recruit.
The most important thing that the FTC looks at is, are they actually selling real products as they generate their revenue?
And both in Beachbody & AdvoCare cases, they are.
Because every purchases even if its for the business opportunity, is tied to a product.
This is why these companies stress on being product oriented even though the top players & executive know damn well that its actually the recruitment aspect of the business that drives in the bulk of their revenues.
Beachbody founded in 1998 and AdvoCare began in 1994.
With billions of revenue behind them, they know very well what lines shouldn’t be crossed to piss off the FTC (Federal Trade Commission)
They do not want to end up like VEMMA, getting shut down by FTC for being a pyramid scheme and all their distributors income went down the drain over night.
Its always a risk when joining a network marketing company.
This is why when you decided to join one its very important to pick a company that has a solid foundation of at least being 10-15 years old, their marketing message is very product oriented, & all the recruitment & business opportunity purchases are tied to a sale of a tangible product.
I did a lot of research into these companies before I joined one, this is why I routinely write 3000 word review articles about these companies, but after it was all said & done, I still did not succeed with a network marketing company.
One of the main issues I ran into was
- over saturation
- running out of prospects
There’s only so many friends & family you can pitch this kind of stuff too, and in my case it wasn’t a whole lot.
This site was made in an attempt to pull more leads from internet.
However in my research, I stumbled upon a business model that was much more suited for me.
It’s building sites & ranking them for local business.
Why this model is better?
It is not over saturated like MLM scene, where you have high level SEO guys hogging up the front page, with local there is so many different cities to choose from and different niches to go into.
Also you don’t have to sell to friends & family anymore, you just deal directly with local business owner.
I can tell you it has been a blessing to discover how to make money from home doing this.
If you are struggling with Beachbody, then maybe its time you consider an alternative.
Go here to schedule a 45 min strategy call to see if you are a good fit for the program.