Personally I’ve never really gotten this question, but a lot of people I work with in Beachbody have come to me and asked, “Keith, how do you deal with the question, ‘Is Beachbody Coaching a pyramid scheme?’” or “It sounds like a pyramid scheme. What should I tell them?”
The first thing I tell them is to ask the person if they understand what the phrase “pyramid scheme” actually means, or what the definition of a pyramid scheme is. According to Wikipedia, a pyramid scheme is an “unsustainable business model that promises participants payments or services primarily for enrolling other people into the scheme rather than supplying any real investment or sale of any products or services to the public“. The last part is really crucial because that is what a pyramid scheme is. You have a business model where you enroll others but there is never a product or service that is sold, which is not the case at all with Beachbody.
So, Is Beachbody Coaching a Pyramid Scheme?
As you know with Beachbody, we obviously have an enormous line of highly effective fitness programs and nutritionals. Coaches get paid a portion of the sales from our fitness and nutritional lines — you don’t just get paid for bringing other people in who pay a large sum of money. So, no. Beachbody is not a pyramid scheme.
There are two things that we do as Beachbody Coaches.
- First, we help people who are going to be investing in a product, and help them to go through the program.
- Second, we introduce the business opportunity to people who would like to sign up as Coaches themselves. Most of the Coaches who sign up have already gone through and done a fitness program themselves. That really is the core of it; we are people helping people, and we get paid a percentage of that. You get paid a percentage of the profits that Beachbody, the parent company, makes from the sales of fitness programs and nutritionals.
An Important Note to Understand: Beachbody actually had the opportunity to go into Walmart, Target, GNC, all the big box stores, and they declined to do so. What happens when they market their products in those stores is the retailer takes a percentage of those sales. With network marketing and Beachbody, the Coaches are the ones who earn a percentage of the sales. However, Beachbody took it even one step further, Beachbody Coaches are the ones responsible for working their customers to ensure they have success with the programs. Remember the movie, “Pay it Forward”? That is what we do. We help people get results, and then they in turn help more people get results. If you haven’t seen the movie, you have to check it out.
There are actually two companies: Beachbody and Team Beachbody
First, there was Beachbody, which was founded in 1998. Beachbody eventually began spending 100 million dollars per year marketing, promoting, and advertising their nutritionals line and fitness programs. About 8 years later, Team Beachbody was formed. Team Beachbody is the network marketing arm of Beachbody. Whenever someone asks if Beachbody is a pyramid scheme, I explain that Beachbody was already a thriving company. So, it wouldn’t make sense for a well-established and highly-successful company to suddenly run the business as a pyramid scheme.
There are always going to be some people who say, “OK, so this isn’t a pyramid scheme, but you are making money off of other people, right?” Again, I have a difficult time understanding that. Perhaps I had a bit of a leg up when I started in the network marketing business because I owned a couple of businesses prior that I failed miserably at. I understood that in any business, you have someone who is receiving a service and someone who is paying for a service. That is just how the economy works. So yes, we do get paid for providing a service for people. What really got me excited about the Beachbody business is that I already knew it wasn’t a scam because I had completed the program with amazing results. In addition, I learned about the principle of passive income.
What is passive income in Beachbody?
In the simplest of terms, passive income allows you to get paid over and over again for work you did just one time! For example, if an author publishes a book, he gets paid initially, and then every time someone buys that book going forward. He doesn’t need to write the book over and over; he just does that one time and gets paid for that work over and over. That is how we built a team with over 7,000 coaches in only a 3 and a half year period! We began doing simple things, and then duplicated the process. I would help people go through the fitness program, a few would decide to become a Coach, then those people would then help others go through a fitness program, and then they would have others who became Beachbody Coaches.
It started slowly, but over time it grew larger and larger.
I started to understand that as a Beachbody coach we get paid two ways.
- First, we get paid by getting a percentage – a very nice percentage at that – of fitness programs or nutritionals that people purchase from us.
- Secondly, we get paid a very small percentage from other Coaches who we have brought into the business, as well as Coaches they have brought into the business. This is usually where people get confused and incorrectly label the business a “pyramid scheme”. In reality, you will get paid to help people directly and indirectly.
This can be broken down quite simply. Let’s say that you are a personal trainer at a gym. You have a client who has been paying you over the course of a few months, and now they are in excellent shape. They enjoyed the experience so much that they actually go out and get licensed to be a personal trainer and start training people at the gym. In this situation, you don’t make any money after your client leaves you; only the gym does. With Beachbody, you would be making a small percentage off the clients of that person that you trained! This is how you earn money indirectly.
Still concerned about the “Pyramid Scheme” thing? You can easily tell if something is a pyramid scheme. Ask yourself this question: is there a product or a service that is being sold? If the answer is no, then it is clearly a pyramid scheme. These days there is no hiding, especially with the proliferation of social media. Visit the Better Business Bureau and see how they are rated. Google it! YouTube Beachbody scam.
Beachbody is a billion dollar year company. Sure, you may find one or two people who are upset, but there are 350,000+ Beachbody Coaches. If only a few people are turned off, that stands as pretty good odds that Beachbody is a reputable business. Finally, talk to other Beachbody Coaches. Ask them all kinds of questions! Ask if they are earning money. Ask them how they are earning money. Is it because they are just signing people up or is there an actual product and service being delivered?
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