We’re in the world of COVID-19 and I’m homeschooling two kids on two curricula at the same time. My military wife is deployed helping with the COVID-19 response.
However, the FTC has warned many MLM companies about COVID-19 claims about health and investment claims. I thought it may be useful to refresh (not republish) this article with this message. It may give you a flavor for how MLMs work in general.
Happy Halloween everyone. I’ve got a tale of a scary MLM to share. It’s my first attempt using a new writing tool, Scrivener and a new writing shorthand called Markdown. Normally, I’d put more time into proofreading the article and formatting, but having spent dozens of hours on it as it is, I need to bite the bullet and publish.
Regular readers know that I have a hobby of analyzing MLMs and showing consumers how they deceive you. Last week, I noticed that Nick Loper of Side Hustle Nation had highlighted a friend who has grown a $4k a month business in an hour a day. Kellie Gimenez is doing it with an MLM called Beachbody. You may know of Beachbody’s workouts: P90X and Insanity are two of the most popular ones.
Truth is, I’ve been meaning to write about Beachbody for a couple of years now. I noticed a good high school friend of mine promoting it on Facebook. I pushed it to the back-burner because I wanted to believe it was legit for his sake. Also, I see nothing wrong with P90X. From what I’ve heard it is a great workout.
With Nick’s podcast and what Kellie said, I couldn’t ignore Beachbody any longer. Oh well, this could make for an awkward 20th reunion in a few weeks if we both go.
This is a long article so if you want the “TL;DR” version, it’s:
“Get the hell away from Beachbody’s Shakeology and its ‘business opportunity.’ You are wasting your time and money. Every piece of information seems to show it is an illegal pyramid scheme according to the FTC’s guidelines. A former Beachbody Coach also gives good details into the pyramid scheme nature of the company. According to her, the focus is not on nutrition or fitness, but classes instead include: “How to never take no for an answer when trying to sign on new coaches” or “How to not take no for an answer when selling Shakeology.”
You can pick up Vega One available on Amazon which is extremely similar (and better in some ways) for half the price. A former Beachbody Coach mentioned Nature’s Plus Spiru-Tein High Protein Energy Meal is a great choice at about a single dollar per serving, 1/4th price of Shakeology.
There’s no reason to be a Coach to get a discount as you can get the Shakeology discount price on Ebay without paying coaching fees.”
The Products
As I said in the introduction, I don’t mind the workouts. They seem legit.
What is extremely fishy is the Shakeology product. The product itself isn’t particularly, but the pricing. Before I cover it allow me to explain why pricing matters in an MLM.
Why Does Pricing Matter in an MLM?
This is a good question and few people seem to grasp it initially. One of the best explanations I’ve seen is by a commenter on FatWallet using an analogy:
[I go into this analogy in more detail here.]”Say Mr Pyramid buys pens in bulk from Staples and sells them for $100 each. Who’s gonna pay $100 for a pen? But tell them that they can also sell pens for $100, and we’ll pay you $30 for every pen you sell, plus you can recruit people to sell pens as well, and you’ll get $10 for every pen they sell, and $5 for every pen their recruits sell. Three levels, $45 commissions total on a $100 sale. Everyone has to buy 10 pens a month for personal use to participate in the program. Just find three people who find three people who find three people…. In the end, yeah, you are buying 10 pens a month for $1000, but you are getting $3150 in commissions, so don’t sweat it. Why wouldn’t you join?
Product is moving. The pens get used. No recruitment revenue, only product commissions. Absolutely 100% a pyramid scheme. The only real reason people are paying $100 for a pen is for the opportunity to make money off the sale of pens. Completely unsustainable as eventually, you run out of people to sell to and those at the bottom get hosed buying $1000 pens but not being able to sell them. This is an extreme example, but if you look at the world of MLM, there are some pretty big name companies out there that somewhat fit this mold on a less cut and dry basis.”
This is why The Verge and The Atlantic are writing about Herbalife which is being investigated by the FTC for being an MLM that is a pyramid scheme.
Back to Shakeology
Anyone who has read my ViSalus article knows this is a red flag. There I showed that ViSalus was charging $1.50 for a shake that any consumer could make with 3 simple ingredients for under 50 cents: whey protein, Fibersure, and a multivitamin. I know saving a dollar doesn’t seem like much, but in 10 minutes of time, you could save your $300 or more each year. Unless you are the CEO of company making millions this is exception use of your time.
Unfortunately Shakeology isn’t quite as easy to break apart. There are many ingredients. I found a nutritional label here, which is worth looking at.
There’s a pretty good product comparison of many shakes including Shakeology here. It criticizes Shakeology in quite a few places, but gives it an overall thumbs up for ingredient choices. His conclusion is interesting:
”Drinking shakes as meal replacements is not, in my opinion, a sustainable long term health plan. No liquid meal replacement satisfies the need to eat and chew solid food, which also stimulates the release of digestive enzymes in saliva… I do not recommend any of these products as a route to supreme good health. However, if you are going to drink a meal replacement, opt for Shakeology by Team Beachbody, it seems to be way better than the others in terms of the quality of the ingredients.”
So in fairness, Shakeology may have decent ingredients, but it isn’t necessarily a good health choice (according to this extensive review).
As we covered earlier, pricing does matter in MLM. According to Gimenez’ description on the Side Hustle Nation podcast, the meal replacement shake is around $4 or $120-130 a month. We’ll dig into pricing in a minute, but we are going to take a quick detour.
At the 11:50 mark of the podcast, Nick Loper politely says, “ummm, it didn’t really do it for me” while laughing (Translation: You don’t want to put this in your mouth.) Kellie says that some shakes “you can just shake in a shaker and go for it.” With Shakeology you need to “find your mix” and “you need to blend it.” She mixes the chocolate flavor with peanut butter, a banana, almond milk, ice.
This is where Shakeology starts to fall apart.
If you go back to the nutritional facts, it only has 140 calories a serving, not a good value for $4. It’s marketed a meal replacement, but I’ve never seen 140 qualify as a meal. The US RDA for calories in a day is around 2000 calories. (It varies with age/gender, but that is an average.) People typically eat three meals a day. Allowing for some snacks, a typical “meal replacement” should have between 400-500 calories.
Thus to get a true “meal replacement” you’d have to drink 3 shakes at a cost of $12. However, as Ms. Gimenez points out you need to “find your mix” and “blend it”, so it isn’t meant to be a “meal replacement” on its own. Let’s just say that for $4 and an additional dollar of mix ingredients, you can make yourself a $5 shake. That’s in your own home, not at a swanky restaurant as you might in Pulp Fiction (Note: adult language). If you are going to pay restaurant prices for a shake mix at home, you might as well buy $40/lb. steaks at your grocery store.
Wait, there aren’t any $40/lb. steaks at your grocery store? Are there any shake mixes that are $4 for 140 calories? The closest thing you can find is Carnation Breakfast Essentials, No Sugar Added, which has similar calories, protein, fiber, vitamins and minerals for $0.62 a serving (nutrition label: http://www.nestlehealthscience.us/asset-library/PublishingImages/8.0PRODUCTSLocalLandingPage/Nutritional%20Panels/CBE-Powder-NSA.jpg). If you use the Subscribe and Save option, the price comes down to 50 cents a serving. Yes, I know Shakeology Coaches are going to try to rip me apart for the comparison saying that Carnation is full of bad ingredients. However, as long as shakes aren’t a good health choice (according to the review referenced above) to begin with, quibbling over the differences here doesn’t make sense. What’s vastly more important is that the nutrition label is very, very similar, but at around 1/6th or 1/8th the price of Shakeology. If you are looking to get into shape the important things are calories, protein, carbs, fiber, etc., not whether it has apple pectin powder or wheatgrass in it.
Update 1: I found a similar product, Vega One available on Amazon, that is $53.48 (as I write this) or $2.43 per serving. Looks like it almost identical with digestive blends, antioxidant blends, probiotic blend, tons of vitamins and minerals, similar calories/protein. Vega One has double the fiber and an Omega 3 blend, which arguable makes it better at a much lower cost. Oh and Amazon’s autoship (Subscribe and Save) saves me an additional 20% off the $53.48 price making it $42.78.
Update 2: A former Beachbody Coach mentioned Nature’s Plus Spiru-Tein High Protein Energy Meal as a great choice in the comments. It is about a $1.15 a serving or nearly 1/4th the price of Shakeology. The comment also gives good details into the pyramid scheme nature of the company. According to her, the focus is not on nutrition or fitness, but classes instead include: “How to never take no for an answer when trying to sign on new coaches” or “How to not take no for an answer when selling Shakeology.”
In a year, you would spend over $1200 a year drinking Shakeology, but save a thousand dollars going with Carnation Breakfast at $225. That buys a lot of Beachbody workouts, time with a personal trainer, or other things that will help you get in shape.
And let’s take a minute to mention how terribly inconvenient it is blend a shake if competing products have an option to “shake in a shaker.” You certainly aren’t paying for convenience with Shakeology… you are paying for inconvenience.
However, if you are going to go with blending route anyway, I suggest that you get a Nutribullet (here’s my review) and make this mix at home for around 50 cents a serving. I combine frozen fruit (around a cup), whey protein (1/2 scoop), Greek yogurt (a tablespoon), and some spinach (you’ll never know it is there) and blend away. Sometimes I get crazy and add flax seed. It tastes great and costs probably around 50 cents a serving… again a fraction of Shakeology. So for the health nuts that have a problem with the Carnation Breakfast option, this is another option that should eliminate all health questions.
Finally here are some other cheaper alternatives to look into:
To summarize, it seems like Shakeology tastes so terrible that you need to mask it with a plethora of other ingredients. It is so expensive that the pricing at a restaurant is famous in a movie for being outrageous. Shakeology may be healthy for a shake, but shakes aren’t healthy to begin with. It misrepresents itself as a meal replacement when it is really nothing of the sort at only 140 calories. In only becomes a meal replacement when you add the other ingredients… at which point you might as well just had the meal.
Beachbody Bummer has a great chart about how absurd Shakeology pricing is… Pricing for 200 calories: Slimfast is $0.63, Ensure is $1.03, GNC Total Lean is 2.36, Shakeology is $6.66. Yikes!
Given all the problems with Shakeology, a natural question to ask is, “Who is going to pay $4 a serving for Shakeology?” If that sounds like the “Who’s gonna pay $100 for a pen?” from the Pen Pyramid Scheme, you are starting to get the idea.
What Can you Expect to Earn as Beachbody Coach
When someone presents you with a business opportunity it is always wise to crunch the numbers. Beachbody has posted an their income disclosure statement (PDF) on its website. You’ll want to click on that.
The first thing you’ll notice is that the document is from 2010-2011. Hmmm, that’s not a good sign. Giving Beachbody the benefit of the doubt, I dug deeper and found a Beachbody income disclosure statement from 2011-2012 at an obscure URL (see the link when you mouse over it).
I was unable to find information from 2012-2013. Maybe it exists, but I think Beachbody just gave up and didn’t release one. You’ll find out why I presumed they gave up as we analyze it.
To make things easy, these income disclosure statements are commonly referred to as an IDS in the MLM world, and I’ll keep the same convention. Also since they go from the end of December to the end of December, I’ll just use the year that encompasses 99% of the data. So I’ll refer to the 2010-2011 as simply the 2011 IDS and the 2011-2012 as the 2012 IDS.
I’ve evaluated IDSs from dozens of MLMs, and the first place to look is always the fine print. In footnote 2 of the 2011 IDS you’ll find that only 49.3 of Coaches earned a check from Beachbody… 50.7% earned nothing, nada, zilch. In the 2012 IDS it gets worse as footnote 3 says that only 45.9% earned checks… 54.1% earned nothing, nada, zilch.
Thus the chart that you see in each of the IDS’ is automatically missing half the data. It’s like analyzing hitter’s performance in baseball, by only looking at the hits and ignoring the outs he makes. Or it’s like evaluating a QB in football by looking at only the completed passes he makes and ignoring the incomplete passes.
It doesn’t make sense to sweep the failure of 50+% of the workforce under the rug in a footnote…
…but it gets worse.
In each IDS footnote 1 says that it includes Coaches who were with Beachbody the entire period. Thus the data includes only experienced coaches who have been with Beachbody for a year. The growing pains of people new to Beachbody are excluded. This means that those who have put in a year in the business had a less than 50% chance of receiving a check of any kind.
Churn Rate in MLM
I Interrupt this analysis to talk about churn rate in MLM.
It’s important to note that there is a huge churn rate in MLM. It ranges from 60-90% from the few companies that have accidentally disclose it at one time or another. (It is never regularly reported by any MLM that I am aware of.) It’s not often that people will stick around in business when they aren’t earning a check. In fact, I go out on a limb and say that it is dumb to put a year in a business that isn’t paying you a check. It’s a crazy limb to go out on, I know.
There is a great article on Seeking Alpha that explains that the people at the top of the pyramid stay year after year while the people at the bottom quit when they make no money and are replaced by new people (i.e. churn).
Back to Beachbody IDS analysis
Getting back to the IDS analysis, all the people who got churned in under a year or were members from June to July (not qualifying for either IDS), are excluded from this analysis.
Here’s what I would consider a more accurate representation of the Beachbody Income Opportunity. This chart has four “cases” depending on the churn rate that I don’t believe is disclosed by Beachbody. It assumes 100,000 Coaches – I had to pick a number since I didn’t see one disclosed. This is a nice round number to get an idea of the percentages… and in my experience it probably isn’t too far off from the actual number of Beachbody Coaches in the United States.
From my experience with MLMs, “Case C” or “Case D” are the most likely cases accounting for the churn. So when you read this chart you’ll see that somewhere between 4.59% (4,590 of 100,000 in Case D) and 18.36% (18,360 of 100,000 in Case C) of Coaches earn checks after accounting for typical churn for IDS 2012. From there you’ll most of those (71%) are “Retail Seller” Coaches.
Beachbody Expenses
While Beachbody provides an Income Disclosure Statement, like all MLMs, it avoids any attempt to estimate expenses. Thus we are at a loss to figure out how much money a Beachbody Coach actually brings home.
The excuse they give is that the expenses vary with each person. They do, but many of them are consistent. Here are a few to think about:
- Conference Fees – The Beachbody Coach Summit ranges from $99 to $295 depending on when you buy it. As I write this, 10/24/14, the price for the event on 7/16/15 (still nearly 9 months away) is $195. The early pricing was expired months ago (7/31/14).
The people who benefit from this early pricing are the people who are already in and already making good money… the people in the diamond ranks. It doesn’t seem right to me that the people who are making the most are going to end up paying the least. The new person who joins in 2015 is going to pay $245 or more.
This doesn’t count hotel, car, airfare, and food (restaurants are expensive), which reasonably add another $1500 in costs. Some will argue that conferences are optional. No doubt about it, they are.
However, the same people will talk out of the other side of their mouth saying that if you are serious about the business, you need to go. They’ll also say that the people who aren’t making money aren’t putting in the effort in doing stuff like this.
To those people, I’d say, “You can’t have it both ways.” Either going to the conference is a critical ingredient AND COST of doing the business or it is not. If it is not, then not going is not an example of something “not trying.”
- Monthly Coach Fees – There is a monthly $15.95 fee to be a Coach. That pays for a website and a subscription to “Success.” I’ve covered this already when I wrote about the ViSalus scam, a similar MLM shake company, but it is worth mentioning here.
The “Success Magazine” is brainwashing material, more commonly known as propaganda, directed at the MLM business. If you look at the company that distributes it, they make it clear that their business is partnering with MLMs. Just go through all the partners at the bottom of the screen and you can see that they work (it appears 100% exclusively) with pyramid selling companies. If you’ve ever seen a copy of Success Magazine, you’d see that 90% of it is sound business advice designed to gain trust… but the other 10% of it is about legitimizing MLM. In contrast, pick up any other business magazine, Fortune, Entrepreneur, Inc. Fast Company, BusinessWeek, and you’ll see nothing about MLM being a legitimate business. In fact, Inc will tell you quite the opposite.
The problem is that most people buying into MLM are too brainwashed to see that “Success Magazine” is essentially an infomercial. You shouldn’t pay a monthly fee for propaganda… especially propaganda that sells advertisements. It is a combination of paying for the Metro and your company newsletter.
The website is another area where the company shouldn’t be charging money. Facebook, Tumblr, and other similar websites don’t charge money. They make their websites available to you for free and you don’t even work for them. Why would you pay Beachbody money for a website to sell their products? Does your current office job charge you for the use of the company’s email system? Of course not.
The website that Beachbody provides has almost no incremental cost to add coaches. It is similar to the cost that iTunes incurs when you buy music there: it is fractions of a penny to send the music. The real costs are in producing the product the first time. Same thing with the Beachbody website. I don’t know how often they roll out new tools on the website, but for the most part it should be very basic, something with minimal costs to produce the first time and very few ongoing costs to update pricing and policies.
It may not seem like the monthly $15.95 fee is outrageous, but it’s a huge deal when Netflix raises rates from $7.99 to $8.99. Netflix is a good example of a company that provides product in unlimited quantities that is extremely expensive to produce… and it’s priced at nearly half of Beachbody Coach fees. It is interesting to see how the $190 in annual Coach Fees stacks up add up to the income that is being earned.
- Weekly Club Fees – I’ll let this Beachbody Coach explain this: “There is also an option to be Club Member that costs $2.99 a week and is billed quarterly. I consider the Club Membership as a cost of doing business, because in order to qualify for the customer lead program, one of the requirements is for a Coach be a Club Member. Some Coaches don’t like this, but to me $2.99 a week is a small price to have customer placed in my business.”
This is Mindbloggling. It is an annual fee of over $155 a year. It is almost as much as the Coach Fees themselves, but it can be overlooked since it is such a small number. It’s billed more often though. I realize this is “optional”, but many, like the Coach above, consider “a cost of doing business”, simply because the Beachbody created a policy to makes this fee a requirement for the customer lead program.
The customer lead program is a hairy best of complexity. Good luck wrapping your head around this 5 part series. The gist of it is that if someone signs up at Beachbody who wasn’t referred by a Coach, Beachbody will place that customer with a Coach who has paid this $155 annual membership.
Breaking it down, Coaches make money by either selling product or recruiting people to be Coaches who buy product… but this system allows Coaches to make money for doing neither. Essentially Beachbody’s website is doing the Coach’s job. Sounds like a nice free lunch, until you realize that it isn’t free.
It should be obvious that it is a strange game Beachbody is playing. They charge Coaches for websites, but when the Beachbody.com website makes money they disperse the commission to Coaches.
Shouldn’t Beachbody keep those commissions that they earned without any Coach’s help and use it to pay for the websites? That would make sense. The only reason I can see to NOT do it this logical way is that there are very few leads, and it is more profitable for Beachbody to collect the annual $155 in Club Membership fees from Coaches to qualify to get one.
Profit Analysis
It’s business 101 that income minus expenses equal profits. Making money is earning profits, not income. Here’s some analysis from Beachbody’s own information.
The easy expense is coaching fees. The $15.95 monthly fee comes is rounded down to $190 a year. The “cost of doing business” weekly fee to qualify for leads is another $155 a year. That’s $345 and you haven’t gone to a conference. You didn’t put gas into your car to go a meeting. You didn’t buy any sample product to give away. This is pretty close to the bare bones minimum.
When you fall into the 50% that didn’t earn a check after a year, the Beachbody people are going to say, “It’s because you weren’t committed.” However, by “committing” yourself, you are guaranteeing yourself of only one thing: greater expenses. As we see, the odds of greater income are extremely slim and there are certainly no guarantees.
If you start adding some of the expenses I listed it isn’t trivial. It can be thousands of dollars.
Using “Case C” of the 2012 IDS in the above chart, we see that only 18% (18,360 of 100,000) earned any income at all… 82% (rounded) earned nothing. Of those lucky enough to make a check, 71.4% had an average income of $467 Combine those two stats and 95% of Coaches are below Emerald who either lose money or maybe break even… earning no real profit for their time spent.
Using “Case D” of the 2012 IDS in the above chart, it gets worse with only 1% of Coaches making it to Emerald or above… around 99% either lose money or break even.
And remember these expenses are incurred from the start of the business, while the income is measured of those who have been there for a minimum of a year.
Is Beachbody a Pyramid Scheme?
That’s the question that people are going to ask when looking at MLM. Many people just jump to the conclusion that it is a pyramid scheme. That’s not a bad instinct and let’s look at why:
The Federal Trade Commission (FTC) is the authority on pyramid schemes and put together this document to help consumer tell whether an MLM is legit or if it is an illegal pyramid scheme. I’ll quote some important lines, but it is worth reading the whole document:
”Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money…
… Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. That’s a time-tested and traditional tip-off to a pyramid scheme…
One sign of a pyramid scheme is if distributors sell more product to other distributors than to the public — or if they make more money from recruiting than they do from selling.”
In three separate places in one small document they’ve made it very, very clear… selling product to the public (people not in the MLM) is legit, making money recruiting people is a pyramid scheme. That’s consistent with every legal definition of a pyramid scheme that focuses on endless chain recruiting.
To summarize in caveman language: “recruiting hierarchy (”building a team”/pyramiding/[call it what you want]) is very bad. Selling to public (friends, family, etc.) is good.”
So with the FTC guidelines in place, I have to conclude that Beachbody is indeed an illegal pyramid scheme. I’m sure Beachbody’s lawyers are drafting their cease and desist letters now. To them I’d say, this is my constitutionally protected opinion based on the FTC’s guidelines and the information that I am going to (and have already) presented. While you may choose to conclude differently, I think your opinion would not be based on any evidence, so you might as well conclude the world is flat.
Before we Get started. Let’s debunk the pyramid scheme myths
To start I have to debunk the three pyramid scheme myths that MLMers always come to me with:
- A pyramid scheme doesn’t have a product or service. It seems this is part of a definition on Wikipedia. It simply isn’t true. Otherwise the FTC wouldn’t have put out the document on MLMs that I referenced above. MLMs clearly have products and services yet they can be pyramid schemes. Also, the FTC wouldn’t have shut down this MLM which was selling Dish Network products for being an illegal pyramid scheme.
- You can earn more than the person who recruited you, so it can’t be a pyramid scheme. That’s another common myth. Go through the FTC guidelines again and tell me where you see that. It’s a story that MLMers tell each other to convince themselves that they are legal. It’s not based on any case law or regulatory body that I’ve ever seen.
- Your company is a pyramid. This is the most common one. These people are confusing legal hierarchical organizations not based on recruiting with pyramid schemes that are based on endless chain recruiting. Think of it this way… A software engineer at Microsoft can make 6 figures a year without ever recruiting a single person. Typically zero percent of his annual salary is based on him recruiting others. If we go back to the FTC guidelines, this income is not based on recruiting, and clearly it is very legal. So no, Microsoft, nor your typical company, is not a pyramid scheme.
Here are some Beachbody Coaches spreading these myths (and a couple of others):
Coach 1 – Spreads “doesn’t have a product” and “a company is a pyramid” myths.
Coach 2 – This Coach doesn’t use any of the above pyramid scheme myths, but instead uses Donald Trump who licenses his name to MLM companies and sells books to MLMers. Of course Trump isn’t a distributor or Coach with any MLM company.
Coach 3 – Spreads the trifecta: “doesn’t have a product”, “a company is a pyramid”, and “you can earn more than the person above you” myths.
Lindsay Matway via YouTube video – Says a pyramid scheme is “making money not by selling product, but signing up people below them”, which is an accurate definition of Beachbody, at least in the Gimenez case study above. She spreads, “no real product being consumed” myth. The example of the FTC shutting down a company used Dish Network TV service, which is certainly a real product and consumed by viewers. The rest of the video is fluff unrelated to definition of pyramid schemes.
Coach 5 – Spreads “You can earn more than the person who recruited you” myth. Doesn’t address any of the key things that may make an MLM a pyramid scheme.
Coach 6 – Spreads “doesn’t have a product” and “a company is a pyramid” myths. Documents the money that Beachbody pays him, despite misleading people with these myths.
Coach 7 – Spreads “bogus product” myth.
Coach 8 – Spreads “doesn’t have a product” and “a company is a pyramid” myths. Creates a whole chart of misinformation such as legal MLM is generated ONLY by product sales which ignores the key difference of selling to recruits vs. selling to the public. Chart has a myth about the presence of a training program making a difference. Chart makes up a “get rich scheme” vs. “true work” myth. The only thing really accurate about the chart is the overpriced product being a sign of a pyramid scheme. As covered earlier, this points to Beachbody being a pyramid scheme. Spreads a myth about the BBB not accepting Beachbody as a member if it were a pyramid scheme, but the BBB page clearly says, “BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB.” Spreads a myth about the DSA not accepting companies that pyramid schemes, but the DSA spreads a definition of pyramid schemes that doesn’t match federal regulators.
Coach 9 – Spreads “doesn’t have a product” myth. Doesn’t cover any of the points brought up by the FDA.
Coach 10 – Spreads “a company is a pyramid” (via image), and “you can earn more than the person above you” myths.
That’s 10 Beachbody Coaches I found in just a few minutes simply by going to Google and searching “Beachbody Scam” and “Beachbody Pyramid scheme.” Not one of them had a legitimate reason that I could see why Beachbody is not a pyramid scheme. Not one of the coaches addressed the point about making more sales to the public than through its downline of distributors.
Some of them are making significant money. It is gross negligence on Beachbody’s part to not sufficiently police the misleading of consumers. At a very minimum, Beachbody could put an official page on its site and tell distributors to not address the topic at all simply point to the website.
I just solved Beachbody’s massive compliance issue in under an hour. This stuff isn’t rocket science and any reputable company would have been all over it.
So How is the Money being Made in Beachbody?
The Kellie Gimenez case
Kellie made it clear in the Side Hustle Nation podcast that she makes $4000-4500 a month and that $500 comes from direct sales. The rest comes from commissions from her downline. Here is what she says at the 17 minute market of the podcast:
”A majority of your income isn’t going to be coming from the products. The majority of your income, as you grow a team, is going come from your Coaches and the volume they sell. Because you can only sell so many workouts a month… If they aren’t drinking Shakeology every month, I mean, they can buy one workout and never buy anything else from you.
… When I first started as a coach and didn’t have a team underneath me, I was making about $500 selling products. That’s not bad. It paid for our groceries. It paid for gas. It was a good income, but it’s definitely not something that could be a successful side hustle.
She’s clearly making more from recruiting than from sales to the public. Kellie is essentially saying this is how it is designed. She even is negative on making sales to public.
This fits the FTC’s definition of an illegal pyramid scheme exactly. Any reasonable person would have to conclude that using the FTC’s guidelines and definition, Gimenez is running a pyramid scheme. She may not even realize it, because of the myths of pyramid schemes that I presented above. She might be a fantastic person… certainly sounds like it on the podcast.
As a reminder Kellie is a Diamond level Coach in Beachbody. This is in the 0.4% or 0.1% of Coaches depending on “Case C” or “Case D” of the my IDS analysis chart above. If anyone in the organization should know the rules and is abiding by them, it should be diamond Coaches. Beachbody corporate should be “coaching” their distributors about the FTC’s guidelines regarding pyramid schemes and at the very least look at its top distributors and see if they are making their money from the downline vs. selling to the public.
Let’s Look Back at Shakeology’s Pricing again
Ms. Gimenez’ quote in the previous section about which products are being bought is significant. If someone buys a workout, the commission is earned one time and then maybe never again. However, Shakeology is different as a customer spends consistently on it month after month. It seemed like Nick cut her off before she could say it, but it certainly sounded like she was ready to say that the emphasis is on selling the shakes.
In fact, if you go back and listen to the podcast, at the 11:30 mark, Kellie says that she tries to get everyone to buy the shakes.
Given what we saw with the Pen Pyramid Scheme analogy in the section about Shakeology, it fits the mold to be a pyramid scheme. Get people using vastly overpriced pens/shakes regularly and reward a fraction of the money back to the people at the top pyramid.
It might not be a smoking gun of a pyramid scheme, but it is another major piece of evidence against Beachbody. They could very easily offer an affiliate program that rewards Coaches for selling product without the pyramid of rewards for recruiting more Coaches. Such an affiliate program would quickly end any questions as to whether it is a pyramid scheme.
Beachbody’s own words on their Income Disclosure Statements
I thought that Beachbody’s own words in its Income Disclosure Statement interesting.
”Many of our Coaches have chosen not to build a business, but rather join for the opportunity to purchase our programs at wholesale and to be able to earn extra income by helping their friends and family purchase our programs. For this period, 33% of our Coaches decided to take advantage of the bonuses available for those who help the company recruit and enroll other Coaches and retail Beachbody® products to customers. This activity is rewarded through a binary compensation plan which pays bonuses at the Development and Leadership Ranks of Emerald Coach and above.”
First Beachbody makes the fundamental mistake that most MLMs make and have Coaches “join the [business] opportunity” to earn a discount. Many MLMers describe it like being a member of Costco. There’s fine, but Costco conflate a business opportunity with a discount.
The discount earned by joining is 25% according to Kellie in the podcast. That is a hefty chunk on the monthly price of Shakeology. The question becomes, who is left to buy the products at a retail price… the “public” mentioned in the FTC guidelines?
Next, the Coaches who join “to be able to earn extra income by helping their friends and family purchase our programs” are building a business contrary to the opening sentence of that quote. If selling product to family and friends doesn’t count, then it looks even more like a pyramid scheme when evaluated through the FTC’s guidelines.
The final two sentences of that quote are confusing at best. It makes it sound like earning a bonus is a decision that someone makes such as ordering a cheeseburger at McDonalds. It then bonuses are earned by recruiting and enrolling other coaches as well as retailing Beachbody products to customers. However, according to the first sentence retailing Beachbody products to friends and family are not running a business. So unless there’s some distinction of what a friend/family/customer is (and the FTC doesn’t seem to make this) apparently we can exclude retailing Beachbody products in the later part.
That leaves us with earning bonuses for recruiting and enrolling. As you can see, this is where the majority of money is earned. That’s hits the FTC’s guidelines for being a pyramid scheme on the nose.
Beachbody Bummer is a great resource
I stumbled upon Beachbody Bummer which lists federal warnings about pyramid schemes and MLMs. I would have like him/her to link to the SEC’s guidelines, but nonetheless she/he does a great job at highlighting some of the important things like inappropriate pricing (as mentioned earlier).
The Beachbody Scam
As we’ve seen actual profits are very, very rare in Beachbody. Yet it doesn’t distributors from recruiting. They can’t see the “business opportunity” for what it is… a wolf in sheep’s clothing.
Here’s a great quote from Harper’s Magazine on Mary Kay and MLM schemes:
“The women I interviewed for ‘The Pink Pyramid Scheme’ told me stories about struggling to patch together daycare or to survive high-risk pregnancies while working long hours scouting prospects and hosting parties without any guarantee of a sale. Debts mounted, marriages failed. They couldn’t have it all because Mary Kay’s business model (like that of any multilevel-marketing enterprise) is designed primarily to profit from, rather than enrich, its workforce.“
Think about those recurring expenses in relation to the average income. Suddenly the Coaches fees and Club Membership fees make sense.
Think about the high margins the company is earning on distributors buying Shakeology… even when distributors buy it wholesale Beachbody makes a substantial profit. It’s essentially the Pen Pyramid Scheme, but with (slightly) less exaggerated margins and purchased much more regularly. The Pen Pyramid Scheme doesn’t become less of pyramid scheme if they give distributors the right to buy pens for $80 instead of $100. A 20% savings looks good, but it is minimal when the pricing is so absurd.
Do the Ends Justify the Means?
Beachbody Coaches may argue that in the end people are getting healthy, so who cares about all the scammy stuff that goes along with it. If you are really interested in people’s health, then I suggest you simply coach them without Beachbody. Form a buddy system and keep each other in check.
There are countless other tools available. The free website SparkPeople is a health community. Additionally you could also use another site StickK.com (my article on it: StickK to Your Goals) is a way to keep people motivated.
I have no problem with Beachbody workouts, but there are numerous options available. Workout videos have been around for decades.
Just a few minutes of research can give you all the value of the “ends” without all the problems associated with the “means.”
I STRONGLY IMPORE everyone to petition the government with your feelings about this as I have done. The official FTC Twitter account has instructions about how you can communicate your opinion of scams and help others avoid being scammed:
If you think you see a scam, talk with someone. Your story could help someone avoid that scam. Then report it to the FTC at https://t.co/gtPxXAxsek: https://t.co/PWFawyXejS
— FTC (@FTC) May 20, 2020
This article was originally published on October 31, 2014. It contains the best information I found at the time of publication. If anyone has factual information where I may be incorrect in my OPINION above, they are welcome to leave a comment for my own and public review. Readers with different opinions are always free to publicize those opinions elsewhere.
I strive to update this article, and all my articles, with the best information available to help consumers make an informed decision. I may not always achieve that goal due my other career and family obligations, but I do my best. If I’ve been informed publicly (such as Twitter) multiple times over 1-3 months it will probably get my attention. One easier way is to leave a comment.
Just to make it extremely clear to readers and MLM lawyers looking to sue me, the article above is my constitutionally protected opinion. It’s strange that I have to say it and cite the FTC above, but some lawyers act badly when they are offered a bunch of money by a company looking to bully a military family.
Hard to argue with sound logic and data… although many will try.
Another couple MLMs I’d be interested in hearing about… only because it shows up on my FB feed every.damn.day… is Young Living Essential Oils and Jamberry Nails. The “snake” oil sales people are the worst because they claim all of these health benefits from them. Homeopathic health may or may not be proven science, but to claim some of the crap these people claim is illegal. Some have even gone as far as claiming they don’t need a flu shot because the oils protect them… Just ridiculous.
Jamberry might be a legit MLM because at least they have a unique product that doesn’t claim any health benefits. Although I don’t know about their pricing or recruiting.
I’m hoping to cover the essentials oils, but maybe it is another company’s essential oils. I have to check my list.
If people are saying that about oils, then it’s not just ridiculous, but dangerous.
So far I haven’t seen too many dangerous claims with Shakeology, but I didn’t look. It was more than enough to pick apart the “business opportunity” and the evidence that it appears to be a pyramid scheme.
LazyMan,
I just finished reading your review and report on “BeachBody”. I never heard of them before this, but from your analysis I now know to stay away. Thank-you. It was very thorough and it seems better written than your report that I first read from you concerning “Youngevity”.
I made my comments on that one and haven’t returned because it seems like “beating a dead horse” at this point. From what I gathered about their products, they are beneficial to a point health wise, perhaps, but like you pointed out in the comments thread there and in this article, eating a healthy diet has the same vitamins and minerals.
As I said previously, I take vitamin and supplements, but if I can get the proper diet of food, solid or liquid form, I would cut the cost of buying those supplements that are in pill form.
Back to the article here, you mentioned MLM and I can really only give my experience of these types of businesses. I have never signed up for one to make money off of someone I recruited. I sign-up to sell the product; I suspect this is what attracts people to companies, like Youngevity. It did for me. But as I had pointed out, the cost of buying the product was to steep for me. And if the cost outweighs the benefits, then, forget it. Besides, it seems to me that those who would profit off of the efforts of others are running dangerously close to an old practice that was supposed to be outlawed over a hundred years ago; slavery.
That would be why a pyramid scheme is unlawful, because it is nothing more than fraud and a subtle form of slavery; this is mostly for those who will likely come on here and try to defend MLM, or other products and companies that they participate in.
I had signed up to be a distributor for Youngevity; it was an affordable price of $10 and I was supposed to get their products at wholesale. That was supposedly $20, but I ended up paying nearly twice that, for just one canister of Tangy Tangerine. I wish I could afford it, but not because I see it as a “cure-all” for diseases or other medical conditions; those are some outrageous claims.
I drink Snapple products because they taste good, to me, and they do not have a bunch added junk. They are a popular beverage and a healthy choice, imo. Yet, they do not claim that their products will cure you ailments. If I can ever get a business running based on affiliate marketing, I would love to promote Snapple. Of course, they do well enough without such a program, near as I can tell.
The only reason I have repeated what I said about Youngevity is because it is the last company with an MLM structure that I dealt with; though briefly. I am not trying to distract away from the topic of this article you have written. It was an example I use because it is one that I am familiar with and not Beachbody, as previously mentioned. Just wanted to make that clear.
Given that your articles so far, the ones I have read, are well done, I will keep your website in mind for reference toward the MLM type of deals.
Thanks again for the report,
Chris Kalkbrenner
Thanks for the comment Chris. I’m glad you found this more organized than the Youngevity one. I always struggle with how to structure an article, because there are people who are into the business and other who care about the products. And of course there’s those who are interested in both.
Time and again research tells us not to waste money on vitamins and minerals, but I don’t think I’ve read an article that says, “Eat a crappy diet. You need more processed foods and fewer fruits and vegetables.” I’m still waiting to be crucified for the mention of Carnation Breakfast Essentials, but sometimes you don’t have a blender with you (such as at the office). Personally, I’d skip shakes and get Kind’s Dark Chocolate Nuts & Sea Salt bar.
This is great! btw The link to the “their income disclosure statement (PDF)” is broken.
Thanks Cleder. I think all my links were broken. Something about importing from Scrivener caused all my quotes to be doubled. I’m sure it was my error in just not knowing how to use Scrivener well enough.
Lazyman,
There is a problem with the argument concerning vitamins and minerals. It seems to me that various foods, like fruits and vegetables, are sources for many different vitamins and minerals; all of which were supposed to be necessary nutrients for the body. So if there is anything to validate the article you referenced, then, what do they suggest when it comes to the above mentioned foods?
Did they also, take into account if any of those people involved in their study, were on prescription medications? Many such medications have side effects that are worse then, the condition that it is meant to treat; or so it seems to me.
Maybe, as a satire piece, someone should write an article saying what you said about eating a crappy diet. Actually, it sounds like it could be a skit from SNL. I wonder, though, how many people would take it seriously?
Chris K.
Christopher,
I don’t want your comment to be lost in the shuffle with Mat’s. I hope it won’t be, but Mat’s was long and my response was long, so it may be the case.
The article that I referenced, said, “The large body of accumulated evidence has important public health and clinical implications. Evidence is sufficient to advise against routine supplementation, and we should translate null and negative findings into action. The message is simple: Most supplements do not prevent chronic disease or death, their use is not justified, and they should be avoided. This message is especially true for the general population with no clear evidence of micronutrient deficiencies, who represent most supplement users in the United States and in other countries.”
My interpretation of that (and the rest of the article) is that with regard to vitamins and minerals the diet in the United States is fine. In my view the key words there are “with regard to vitamins and minerals”, because I definitely don’t want to say that the typical American diet is fine.
You can read the study, but when I read it (and it has been some time) it involved research from dozens of different studies involving hundreds of thousands of people. Each study has their criteria and some may or may not have people on prescription medicines. I wouldn’t be worried about side effects of prescription medicines. If every car commercial was required to disclosed that use of the product could result in head trauma, loss of limbs, death, etc. perhaps people would feel that way about driving. I think the commercials for prescription medicine get people focused on things that are extremely rare, because such disclosures are required by law.
I think that car commercial would be a better SNL skit.
In any case, I’d appreciate it if we can keep to Beachbody-specific questions. That’s what the people reading his are going to be interested in.
Lazy Man,
I love your blog, love how you base your opinions, and how authentic you are.
I am a Beachbody “Coach”, so is my wife. I thought I might throw out some devil’s advocate opinion into this!!
I got into Beachbody in 2012. I was doing P90X from home, I had the DVDs from a couple years back and just started the program on January 2nd 2012. I was the quintessential “New Years Resolution” weight loss goals guy!!
Being a social media person, to a degree, I felt I would post what I was doing on Facebook, to keep myself accountable. As soon as I told people what I was doing, a friend hit me up and invited me to a “Challenge Group.” This friend was a Beachbody coach, but I had no clue what that was and just wanted accountability. That’s what the group was. I just posted everyday….for literally 90 days every time I did a work out. And I did it every day. I didn’t miss one day.
Coincidentally, I lost about 35lbs in that 90 days. Going back a step though, in mid February, I had ordered P90X2, from QVC, and it came with a 7 day supply of Shakeology! I didn’t even look at it for 4 days. I was just going to throw it away, but I read the ingredients. This is what brought me to the Beachbody website. I questioned this stuff and wanted to look into it.
Low and behold, they have contests where people can win money. Real money for real results. The thing was, when I went on every person’s bio, they had all had Shakeology. Obviously results are based on much more than a shake per day, but it intrigued me. At least I would try it.
So it did, for the seven days. I loved it! It instantly changed my digestion and bathroom tendencies, I felt more energy and overall it was a little hard for me to believe. I already ate, decently healthy. No fast food, no soda, not much in the way of processed food. I had lost 15 or so lbs by mid February, so I was in it and loving it.
So, back to the computer. I needed to know more about this Shakeology. Time to research. I found out Beachbody was a MLM….red flag. I found out the price of Shakeology…..red flag. I already had done multiple mlms and had told my wife I would never join one again…..GIANT red flag. So I decided to not take “no” for an answer and went and read every word in the Terms and Conditions. I had a really good teacher, for my Business Law class at University of Washington, and I always read the entire Terms and Conditions when approaching a business of any mlm variety….to the “T”!!
Read it, had some questions, but it didn’t seem so bad. Went and and looked up FTC, as you mentioned in the article and did some comparing. Then I did my math, because remember, I just wanted to buy Shakeology. So here it is:
Shakeology – $130/month
Coach Fee – $15.95/month
Coach Discount – 25% off retail price
Club Membership – $2.99 per week, (but came free for a month and I read the details, and you can cancel before being charged.)
Net Savings = Approximately 10%
So, signing up to be a “Coach”, which I hated the title, but whatever, meant I saved 10% for this product that I wanted and I personally justified the cost. Sold.
Personally, no problems there. I told my wife that I could get Shakeology for 10% off and I didn’t have to sell anything. I got the okay and there went the order. I had no inclination or desire to sell anything. I just wanted a discount and no one had told me anything about it. I did all myself.
So, stating this, I believe a lot of the “Coaches” in Beachbody are of this variety. Numbers are very skewed based on this way of getting a discount. And I know for a fact, this equates to over 50% of coaches that sign up.
So, back to my story, I had just signed up and hadn’t even received my full 30 day bag of Shakeology yet and I was at a friends house. He was amazed I was looking so much thinner that just a month and half ago and was wondering what I was doing. I told him and he asked me how to sign up!! I literally had no clue. But this was the beginning that has now brought my wife and I to today. My wife mainly works the front end of the business and I do the nerdy and boring behinds the scene stuff.
So let’s talk about the direct sales side and how pay works. I talk to Jack, Jack buys Shakeology and a workout, called a “Challenge Pack” for $150. I receive a commission of 25-36% of the purchase price. In this case let’s say I make $40. There is a retail sale, easy. That person also gets a Club Membership, which is free for the first month, and oh yeah, when you buy a challenge pack, it puts Shakeology on an HD order system. This means it is Home Direct….monthly.
So far none of this is illegal, though I wouldn’t say I like it a ton, but I could go into “how to run a business”, because I own three and how much time it would take Beachbody to do it a different way, but you don’t want me to bore you with my opinion anymore than I already am!!! (Super long sentence!!)
Remember, I am an independent representative, a 1099 taxable entity, and it is up to me to tell people how to work Beachbody’s products. I know the rules, I know the systems and I am selling their products. I don’t work for them, I am outside sales representative choosing their product, because it worked for me and then going and selling it on my own. What they have done is created structure and allow us to profit share.
It is up to me, as that representative and as a good and conscientious person to tell my client all these things because they decided not to read any fine print. So we do. I say we, because my wife does it more than me. We have a system set up to remind our clients to cancel their Club Membership, if they want to, and that their Shakeology is on HD and to cancel it if they would like. It’s called good old customer service!!!
So, now we have covered retail, I will go into the “team” concept: As soon as Jack looses 30lbs, he comes to me and tells me he wants to be a Beachbody “Coach”. I show him how and he signs up. At that point he is no longer a retail customer. Any sales he does I am now paid through Team Volume Points(TV). This is where it also gets confusing but really makes it legal!!! Beachbody’s mlm is set up as a Binary system. As an Emerald Coach, I am paid $14 for every 200TV on one leg and every 100TV on the other. I am given points on all retail sales that a coach under me earns through their direct selling of Beachbody products. So essentially I lost the retail commission I was getting from Jack and now replace it with TV. Everytime I switch a person from retail to coaching, I lose money. In the short term or if that person only wants to do it for the discount.
To get free customers, I have to be an Emerald Coach, I have to have 50PV per month, (which means, I have to sell or buy something of about a $60 value), and I have to have a Club Membership. These “free” customers, as you said, come from Beachbody, after this customer has bought a program. Beachbody wants us to follow up with them and help them on their journey, potentially having them buy other products in the future. At this point, I am pretty sure, most would know what they are getting into and know the costs. And remember as an independent contractor, it is my duty to know what I am doing and to help those around me. (I know this may not be the industry standard!)
I may be mistaken, but after a lot of personal research, I believe that Beachbody is purely direct sales and retail. My wife and I support others to do the same. But the Team Volume is nothing more than retail sales of other coaches that are doing the same thing that I am…..helping friends and people I have in my sphere around me. They made a system to reward people for helping others. Now, you don’t have to like the price of Shakeology, but I lost 65 lbs in six months. I did P90X, Insanity and the Ultimate Reset, as well as Shakeology everyday. Fast forward to the present, I have been having Shakeology almost everyday, since February of 2012. You might call me crazy, but a lot of people don’t!! Is it crazy to spend $4 per day on a cup of coffee from Starbucks? Is it crazy to buy a brand new car versus one 2 and a half years old for a 30% discount or more? Is it crazy to put your savings on one company’s stock because they read something good about it on the internet?
Shakeology has personally changed my life. I have blood work to prove it! But that’s not the point!!! The point is about the legal or illegal set up of Beachbody as a MLM. By definitions, you would need to go personally buy everything in Shakeology, every ingredient, break it down into a daily amount and then proceed to break down the cost per serving. Once you know that, now it is conceivable that the argument is legitimate. I can go break down the cost of pen very quickly. There are usually three to six running parts and all can be found separately, put together and now I have a pen. I know now how much it cost, it may be $4 or it may be $40000 if I decided to use gold and diamonds for the external components! Same goes for Shakeology. Go find the 70+ ingredients and do it for yourself. I tried…..it wasn’t worth it. It took too much time, it was extremely pricey, in the upwards of $17-20 per serving. I got most my prices from Amazon or other online retailers.
The thing is…..I had the same arguments. I am an OCD person, with a degree in finance, that doesn’t believe it until I break it down myself. I contemplated even commenting, but then thought, what the heck!!! It’s fun!! I love debating and I love how you debate, so why not!
I could go into a lot more detail and for the note, my wife and I are both Emerald Coaches, she has been actively doing coaching for a year now, and we are making money at this. But, it is not a walk in the park and it is about consistently helping others. I would love to hear your feedback and criticism….don’t mind it at all and thank you again for sharing your impressions on all that you do!! I love it! (Oh and I don’t edit very well….so sorry for imperfections in my writing.)
Thanks for the comment, Mat. It was a long one :-)
Let me start off by saying that I love challenge groups and paying people for health. That was the idea by the end of the article with points about SparkPeople (a challenge group) and StickK (a commitment contract). There are probably a dozen more. I’ve written about getting paid for getting in shape before.
I don’t see it as a coincedence that you lost 35 pounds in 90 days of working out.
As you said, “Obviously results are based on much more than a shake per day…” I think that’s really the key. I don’t see anything scientific proving that Shakeology at 10x of the price of other products mentioned per serving. It looks mostly like they are conflating a seemingly good exercise program with an excessively overpriced shake, trying to capitalize on the popularity of one (P90X) to get people to buy the other (Shakeology).
Yes signing up for a Coach can save you 10% on the product. However, I looked on Ebay just now and it looks like you can save over 20% simply buying from there… no Coaching fees.
So who is really paying the retail price of $130 a month? If they don’t have a lot of retail sales to the public (not other Coaches), it would a huge red flag of a pyramid scheme.
As for people signing up as Coaches to earn a discount, I call BS on the whole system. Beachbody can see that people are doing it. It’s not genuine to sign up as a Coach without intentions of coaching someone. MLM companies often use the “signing up for a discount” excuse to hide the people at the bottom who are unable to recruit anyone. It’s impossible to tell from a sales perspective is someone is “signed up for a discount” or “spending hundreds of hours a month spinning their wheels in a satuarated pyramid scheme”… both have zero Coaches below them. Some MLMs solve this by having the “discount chasers” as preferred customers to differentiate them from failed distributors (Coaches).
Beachbody could easily do this and break out the two groups, but they don’t. It’s a major red flag. As an MLM company they should know better. Unless we conclude they are incompetent for not knowing this, we have to assume they are purposely conflating the two groups, which is one of the best ways to hide a pyramid scheme.
And finally, Beachbody wouldn’t want to skew the numbers in their business by accounting for “discount chasers” unless they had a REALLY good reason, right? What would be a good reason other than hiding a pyramid scheme? I can’t think of one.
When you say, “I am an independent representative, a 1099 taxable entity, and it is up to me to tell people how to work Beachbody’s products.” You really shouldn’t be telling people how to use a shake. If you do then Beachbody is doing something wrong. Carnation Breakfast Essentials, SlimFast, Ensure, and GNC Total Nutrition don’t require Coaches. And if you are showing people how to exercise, I’d suggest that be best left to personal trainers. It certainly doesn’t seem like a good idea to give anyone who pays coaching fees a title that presumes they are trained to teach others.
You are right and wrong that you don’t work for Beachbody. You are their salesforce. MLMs make their distributors sign contracts and they can “fire them” at will. They can and have sued distributors for breach of contract when a distributor decides they want to promote another product… even if the product is completely unrelated such as an MLM of coins. In short, you bare all the liability. If you did work for Beachbody, you’d be entitled to such wonderful things as minimum wage. You would also likely receive health insurance, vacation pay, and a bunch of other things.
Beachbody has created a structure that works great for them: limited legal liability, not having to pay minimum wage, not having to pay benefits, not having to pay their share of Social Security as an employer, charging the salesforce for access to sales tools (Coaching Fees), and require purchases or sales to “be active” to earn commissions from the downline.
I looked through the policies and procedures document very briefly and there’s a clause about binding arbitration and waiver of class action lawsuits. That’s yet another huge red flag of an evil company.
I don’t see how the Team Volume Points you describe makes Beachbody legal. It looks like they are pushing people to be Coaches as it is more cost effective to a Coach than a retail customer. More Coaches in a downline and fewer retail customers is a bad thing. Sure, you might take a short term hit if they become a coach vs. a customer, but the important thing is how the distribution is in reality. Kellie Gimenez made it clear to me that the idea is not to have a bunch of retail customers, but to have a bunch of Coaches.
I didn’t realize that the “free” customers were only going to Emeralds. That’s yet another red flag. The rich get richer. The rewards benefit the very few people who are already making money.
Mat, you said, “And remember as an independent contractor, it is my duty to know what I am doing and to help those around me.”
So my question is, why are so many distributors failing in their duty to know what an illegal pyramid scheme is? Today, I spent a few minutes (way under an hour) and found 10 Beachbody Coaches spreading erroneous definitions of pyramid schemes. So what do we do? Beachbody doesn’t seem to policing and firing these Coaches for incompetency.
Mat said, “I may be mistaken, but after a lot of personal research, I believe that Beachbody is purely direct sales and retail. My wife and I support others to do the same. But the Team Volume is nothing more than retail sales of other coaches that are doing the same thing that I am… helping friends and people I have in my sphere around me. They made a system to reward people for helping others.”
As I tried to show in the article, if you replace the word “Team” with “Pyramid” it becomes a little more clear. Team Volume doesn’t necessarily come from retail sales of other Coaches. If it came from people paying the $130 retail price who are not affiliated with Beachbody in any way, I’d say it is clearly legal. However, when those sales come from other Coaches who recruit other Coaches who recruit other Coaches, it is something different. They aren’t retail sales. They aren’t sales to the public (people not affiliate with Beachbody). It’s closer to the Pen Pyramid Scheme. The fact that you support people doesn’t factor into whether it is a pyramid scheme. I could support the people below me in marketing their $100 pens. I could give them daily pep-talks. It really doesn’t matter.
Mat said, “Now, you don’t have to like the price of Shakeology, but I lost 65 lbs in six months. I did P90X, Insanity and the Ultimate Reset, as well as Shakeology everyday.”
Earlier today, I went back and showed how the excessive price of products is actually in the SEC warnings of pyramid schemes. It’s in the FTC warnings as well. So while I don’t like it, I think I have shown that it is excessive and why that is a problem.
Losing 65 pounds depends a lot on starting weight. People seem to be able to lose that on The Biggest Loser in 4-5 weeks. They don’t do anything from Beachbody. My point is that there’s really no secret here. It’s a time-tested tale of exercise and calorie consumption that’s proven successful billions of times throughout history.
Mat said, “Is it crazy to spend $4 per day on a cup of coffee from Starbucks? Is it crazy to buy a brand new car versus one 2 and a half years old for a 30% discount or more? Is it crazy to put your savings on one company’s stock because they read something good about it on the internet?”
Funny that you mention Starbucks, I’m doing a whole week of articles on coffee/caffeine starting Monday. One of the things that I stress is that Starbucks is a restaurant with restaurant overhead (baristas, real estate, comfy chairs, etc.) It’s like comparing the cost of a Coke at store to one at a movie theater – different beasts entirely. Furthermore, 16 ounces of coffee (the average size of a Tall or Venti) is an average price of $2.00, not $4.
Re: Buying a new car vs. an old one. I wrote about this when I bought our cars recently. Most statistics I’ve seen has the average car lasting about 10 years. If you buying a car that is 2.5 years for 30% off you are really getting 7.5 for 70% of the price… or 75% of the time to use it for 70% of the price. I went through this exercise and decided it wasn’t worth buying that used car, because dealer incentives on the new car made it like paying 90% of the price for 100% of the 10 years. You aren’t significantly overpaying either way.
If you are putting all your savings on one company’s stock because you read something good about it on the Internet, it is indeed crazy. I hope that was rhetorical.
Mat said, “Shakeology has personally changed my life. I have blood work to prove it!”
Do you? Does your blood work really show that it was 100% due to Shakeology and not related to any of the exercise programs?
Mat said, “The point is about the legal or illegal set up of Beachbody as a MLM. By definitions, you would need to go personally buy everything in Shakeology, every ingredient, break it down into a daily amount and then proceed to break down the cost per serving. Once you know that, now it is conceivable that the argument is legitimate. I can go break down the cost of pen very quickly. There are usually three to six running parts and all can be found separately, put together and now I have a pen. I know now how much it cost, it may be $4 or it may be $40000 if I decided to use gold and diamonds for the external components! Same goes for Shakeology. Go find the 70+ ingredients and do it for yourself. I tried…it wasn’t worth it. It took too much time, it was extremely pricey, in the upwards of $17-20 per serving. I got most my prices from Amazon or other online retailers.”
Well, I’d argue that the FTC guidelines were pretty clear that it is more about where the sales come from. The pricing of the product is an indicator that consumers can use, because it isn’t clear where the sales come from. It was fortunate that Kellie Gimenez was able to break it down for us. We need more of this transparency. Beachbody needs to show us more of this transparency.
And let’s not forget that what I can buy the ingredients for individually is not representative of the actual cost per serving. There are so many ingredients, I would likely have to buy from many different companies, paying for their profit margins on each and every one. Beachbody buys all the ingredients in bulk at an incredibly low price that you or I couldn’t do individually. I hope you read my articles this week, you’ll be surprised about how much 100mg of caffeine costs in an energy drink vs. in bulk powder. I intend to show that the average person with the average caffeine intake could spend $4600 a year on MLM energy drinks or $13 in buying bulk powder. I show a lot of the in-between such as coffee at home, soda, Starbucks, Monster energy drinks, etc.
All this isn’t to say that such a comparison is not possible. It is, but after spending dozens of hours, it seemed safe to appeal to common sense that $4 shakes at home is just ridiculous… especially when you need to add ingredients to make it palatible. For what it is worth, I did this kind of comparison with LifeVantage Protandim and found I could buy the same quantity of the ingredients on Amazon of a bottle for $4.66. The retail price is $50. The distributor price is around $40. They are easily making at least $33 per bottle sold (leaving some room for error or pricing inaccuracies) to each of their distributors.
Think about multivitamin pricing. The cost of a multivitamin does not reflect the individual costs to buy each vitamin separately. Companies realize they can buy in bulk, combine it and charge a small premium. It’s the same analysis that should be done with Shakeology to see if pricing is “reasonable.”
As best I can tell, the quantities of some of the proprietary blends are unknown and thus we couldn’t attempt to calculate if we tried. Beachbody Coaches would shout, “It isn’t the same Super-fruit blend!” and discount the entire analysis as being inaccurate.
Matt said: “I may be mistaken, but after a lot of personal research, I believe that Beachbody is purely direct sales and retail.”
I don’t buy it. You painted an atypically benign picture of how you allegedly build the business that doesn’t seem to place any emphasis on recruiting, but that’s not the reality of how MLMs like Beachbody typically operate. All the big incentives are contingent on recruiting, and that’s exactly what distributors are encouraged to do to build their businesses. To suggest otherwise seems like whitewashing.
Matt said: “Shakeology has personally changed my life. I have blood work to prove it! But that’s not the point!!!”
Um, wait a second there Matt, you don’t get off the hook that easy when making a claim like that. What you’re doing is making an indirect claim that Shakeology affected some blood parameter, and that constitutes an illegal advertising. That’s a pretty damn important point wouldn’t you say?
Matt said: “The point is about the legal or illegal set up of Beachbody as a MLM. By definitions, you would need to go personally buy everything in Shakeology, every ingredient, break it down into a daily amount and then proceed to break down the cost per serving. Once you know that, now it is conceivable that the argument is legitimate. I can go break down the cost of pen very quickly. There are usually three to six running parts and all can be found separately, put together and now I have a pen. I know now how much it cost, it may be $4 or it may be $40000 if I decided to use gold and diamonds for the external components! Same goes for Shakeology. Go find the 70+ ingredients and do it for yourself. I tried…..it wasn’t worth it. It took too much time, it was extremely pricey, in the upwards of $17-20 per serving. I got most my prices from Amazon or other online retailers.”
Product price comparisons have no direct bearing on whether or not the company is an illegal MLM; it only speaks to whether or not Shakeology is a good value, although the MLM commission structure necessitates that it won’t be. To determine value, the reasonable comparison would be Shakeology versus a product with similar, not identical, ingredients. The Shakeology alternative combination that LazyMan came up with (whey protein, Fibersure, and a multivitamin) was perfectly reasonable; the ingredients were similar enough to Shakeology to make the comparison a valid one. The exact ingredients and amounts may differ, with LazyMan’s version having more of some and less of others, but they’re close enough. The cost of LazyMan’s combination is far cheaper and would save someone hundreds of dollars a year versus Shakeology, and there’s no reason to think that the much higher price of the latter is justified in terms of effectiveness.
It seems very misleading to suggest that someone would have to spend $17 to $20 per serving to make an exact knockoff of Shakeology. Your beverage lacks many of the ingredients or has less of them than LazyMan’s combo, but you didn’t account for that discrepancy in your price comparison. If you had to add the cost of those additional ingredients (especially at MLM markups) to the cost of Shakeology, LazyMan’s combo would beat it even more handily.
Vogel,
In fairness, the combination that I came up with (whey protein, Fibersure, and a multivitamin) admittedly did not have proprietary enzyme, “super-fruit”, non-dairy probiotic blends. I grant that Shakeology has ingredients in those areas, but:
1) Those are not areas that are typically shown to help with weight loss or increased muscle mass (to the best of my knowledge).
2) Given #1, it does not bridge the gap of a $0.50 serving product to a $4.00 serving product.
Granted Shakeology lists a few ingredients that your mix doesn’t have, but the amounts of those ingredients aren’t listed. The bulk of the mix in the chocolate version consists of protein and cocoa. It’s a safe bet that the added value of the so-called superfruit ingredients and enzymes is negligible.
Also, I’m guessing that your mix would probably have more protein and fiber per serving, and that has to be factored into the value proposition too.
But the one overarching attribute of your suggested mix that I find most appealing is that it doesn’t come from a scammy pyramid scheme company. I haven’t seen one yet that isn’t dishonest at its core. They are the last people I’d trust to make a safe reliable good-value product for daily human consumption. Really, I can’t emphasize that point enough. They’d be selling sawdust laced with crystal meth if they thought they could get away with it.
Who knows what kind of low-grade crap they use among that list of umpteen ingredients in Shakeology, or whether its sourced from reputable suppliers. No doubt they chose from among the cheapest sources suppliers on the planet.
I used to be a Beachbody coach and wanna leave my two cents worth.
First off, Shakeology. It does have good nutrition in it. It will help the grossly obese lose weight. It is way better than McDonald’s. Heck, in my office job I used it as a good mid-day snack, we have a blender in the break room, I’d toss in some almond milk and a banana and have a fast nutritious make-shift meal. Better than skipping eating. However, it is WAY WAY WAY overpriced. Cheaper than McDonalds or fast food, so maybe that’s a good excuse. However, there is a product you can get off Amazon called Spiru-Tein that tastes amazing, costs a fraction of the price, and has damn good nutrition in it too. Many flavors and you can also pick it up in some health food type grocery stores. Go with that.
Beachbody gets people convinced to get the home delivery of Shakeology and that it is the answer to all their weight loss needs. Truth be told, sure, coaches do turn a small profit from sales, but a lot of the revenue goes to the elite coach events like cruises and what not. So…..better than McDonalds but there are cheaper options with decent nutrition too, if you’re looking for a shake.
Next. The workouts. I love all their workouts and have a huge library of such. I’m a bodybuilder and I use a lot of the cardio workouts to this day instead of mindless running on a treadmill or stairclimber. The workouts have a lot of research behind them, they are fun, and effective. To me they are worth the price because you can use them over and over for years to come and they have so many to choose from for any type of workout preference and fitness level. In fact, P90X and Body Beast were the programs that got me started on my bodybuilding.
Supplements. Don’t bother. WAY overpriced!! As an example, the Body Beast supplement creatine…..they have that priced about five times what you can buy it on amazon. Creatine monohydrate is creatine monohydrate. Period. Huge mark up. So do your homework and buy supplements elsewhere.
Fast detox programs. Save your money. They do work but you’re just gonna be on a highly restricted diet and drop some water weight. Maybe you need to make that purchase to have all they guidelines and stick with it…..if so, maybe it’s worth the pricetag? But I say don’t bother.
As for being a coach….I did it for the discount and I didn’t kid myself into thinking I was going to make money at it. I do know a few people who make great money at it but they are convincing everyone they know to be coaches and buy shakeology. So if you’re popular or pester people to death, great! But realisticly, I know many, many more people who dump more money into Beachbody than what they get out of it and kid themselves into thinking it’s a retirement option.
Final thoughts…..if you wanna buy a workout, just buy it. If you use it and follow it’s outline and menu guide, you will probably have fun and see some good results! Don’t bother being a coach, don’t waste your money on supplements, and check out Spiru-Tein or some other shake that is mentioned on this thread instead of paying out a ton of money on Shakeology. Better yet, just cook all your own food with good ingredients.
Oh yeah, one last thought on the conferences. I went to two and the first one was a lot of fun. The second one was very disappointing. Any “classes” or “workshops” or “presentations” are all brainwash tactics to get you to recruit more coaches and sell shakeology. I had high hopes of learning nutrition or fitness or how to actually help people who need to lose weight….how to ask and answer questions….how to help people with health conditions so you don’t recommend products that aren’t right for them….etc. Nope. Instead they had classes like “How to never take no for an answer when trying to sign on new coaches” or “How to not take no for an answer when selling shakeology”. There was also a couple pep rallies where they emphasized very hard how BeachBody is NOT a pyramid scheme. OK, whatever. They also pushed everyone to purchase all the new products they had to offer for weight loss…..because if a coach is familiar with them, it will be easier to sell them. Beachbody makes most its money off coaches. If you are still interested in conferences, find a coach who is attending and obtain a guest pass so you can attend the whole thing for free and don’t pay the registration fee. My suggestion is that if you are interested in fitness….find a REAL fitness conference and attend that.
So….all in all….their products are what they say they are but very overpriced. Workouts are good but don’t bother with the rest. Save your money.
Shasta,
Thanks so much for your comment. It was exactly what I was thinking when I was writing the article. The workouts are fine, but there are workouts everywhere. It’s about pushing the vastly overpriced shakes by hiding what appears to a pyramid scheme and calling it an MLM.
Yeah, great comment Shasta. Seems like we’re all on the same page: good workouts; the shake is OK but overhyped and overpriced relative to other comparable products; the business opportunity is a joke and the distributors are annoying as hell, as they are with all MLMs.
So just a few very very brief comments. In full disclosure, my wife is a coach and signed up in mid 2014. I have actually been fairly blown away by her progress.
A few things to note that aren’t immediately obvious.
First, there are around 230,000 coaches. However, only about 10% of those are actually people working the business. My wife signs up all retail customers as “coaches” (they call them discount coaches) because it does in fact save them around $20 a month compared to the full retail price. In her downline, that 10% number stands- about 1 in every 10 coaches are actually people working the business.
The other 9 are people who are happily paying the coach price for Shakeology (the $97 plus the $16 coach fee plus tax) just because they love the product. A lot of them do it for just one month, some stick around for several months, and a couple go even longer.
So, here is some math. Beachbody hit $1 billion in revenues in 2014. I was curious, how much of that came from the Coaches?
OK, so let’s say that every coach gets Shakeology every month for $113 (coach fee + shakeology discounted price).That’s 230,000 * 113 * 12 months = $311 million in revenue for Beachbody.
That means that 70% of the revenue that Beachbody is generating is through actual non-coach customers. Now of course this is a back of the napkin calculation, coaches may buy other products like fitness programs also. And this is keeping in mind that of the 230,000 coaches, only around 10 – 20% of them are actually MLM distributors working the business. So it’s more like $50 – $100 million from the “MLM” component, which is about 5 – 10% of the revenue of the company.
Another thing on that club membership – at least in the downline my wife is in, they encourage everyone who is not actively pursuing the business side of it to cancel the club membership (the $2.99 per week thing). But, it does in fact pay for itself if you are hit certain milestones. You get Shakeology customer leads which pay an instant 25% commission on their order. My wife has had three of those this month, for a total of $90 in commissions, just in January. So in 1 month she has paid for 6 months worth of the club fees already. But yeah, if you aren’t an “active” coach, then it’s pretty worthless, at least now.
anyway, just wanted to drop some of the things I thought about. Before she joined beachbody I was the world’s biggest skeptic. we agreed if she couldn’t make her money back in 2 months she would quit but so far she has done really well for herself.
If there are people signing up for the discount, it reinforces that it is a pyramid scheme. It shows that there are no real retail sales. It doesn’t make sense to pay retail price.
I’ve seen this with dozens of MLMs. A while back, MLMs realized that if this makes it impossible for anyone to reasonably evaluate the business opportunity. Are 220,000 of the 230,000 distributors or are 10,000 of them distributors? Is someone failing to recruit or are they a customer not interested in the business opportunity at all? One can’t tell for certain due to the situation that the MLM has carefully created.
It’s worth noting that this creation makes the math of the business opportunity look terrible, which is certainly not in Beachbody’s best interests. I think one should question why they’d purposely shoot themselves, and their distributors, in the foot unless they are covering up a pyramid scheme?
When you say that Beachbody hit a billion in revenue, is that overall or per year. It makes a big difference. Also which auditor has verified this claim? MLMs are notorious for claiming that they are bigger than they are to give themselves an air of legitimacy.
As I tried to point out in the article there is a somewhat legitimate site to Beachbody’s business, the selling of workout videos. The extremely high-level distributor that I mentioned in the article was fairly clear that wasn’t how to make money. It seemed to me that she stressed the sales of Shakeology, which I focused on as being part of the pyramid scheme side of the business.
Let’s assume that McDonalds buys something that we all agree is a pyramid scheme tomorrow. It would likely be a very small percentage of the overall revenues. I wouldn’t say it is no longer a pyramid scheme.
The club membership is another red flag of a pyramid scheme. They are getting distributors to pay every month to be eligible for customer leads they don’t deserve. Think about what you wrote, they are paying a 25% commission to someone who didn’t make the sale, right? Does that make any sense?
Yeah, there is no denying it’s pretty complex. What i know for sure is what is in my wife’s downline which is several hundred coaches and about 11% of them who are “active”; the rest are strictly customers. They can be signed up as retail but as long as they get shakeology longer than 1 month, it doesn’t really make any sense.
Ironically, signing the up as coaches is actually less lucrative for a coach. As a customer, the coach gets commission on every single purchase. But as a coach, you only get volume. So for comparison’s sake, someone who gets shakeoloy every month, would net a coach a $30 commission as a retail customer. If they are in as a coach, you get 90 Volume points, which as long as it’s balanced out, is worth about $6. So you do in fact make about 5x as much signing them up as retail customers.
What I do know is that my wife who was previously a teacher has been able to quit tutoring and she has never earned less than $2k (after her shakeology costs) per month doing this business. Now, I recognize she is an outlier – but it’s entirely from her own effort that she has put in . She works her ass of for this – like 4+ hours a night – but it works. Her organization is growing and every single one of her downline active coaches is at least making enough to pay for their own shakeology (which for some of them, that is their only goal). The business model may or may not appeal to everyone. I mean when she brought this up to me I wanted to stick needles in my eyes. But I can’t argue against the impact it has had on our bank account. With her staying home with our kids, it’s been legitimately a financial turnaround for us; and not just that but with beachbody we have also maintained our weight for the longest time I can recall. Hell, I only gained 5 pounds this entire holiday season – usually its at least 15 – 20. And on top of that, we have gotten into reading more personal development books, not even MLM related. I’m reading books on self confidence that I hadn’t even thought about before and i’ve seen major improvements in my own performance at my job, because of the motivation my wife has brought into our house. It is definitely a lot of pom poms and rah rah’s, but I get that at my regular job also.
Regarding this:
They are getting distributors to pay every month to be eligible for customer leads they don’t deserve. Think about what you wrote, they are paying a 25% commission to someone who didn’t make the sale, right? Does that make any sense?
You become that customer’s coach, which means more than just commission. My wife reaches out to them adn runs free clean eating groups, free fitness groups that don’t require any purchase at all. She also works with them on what programs to get involved with and puts them into facebook accountability groups. It’s a lot more than just a sale and walking away. The lead wheel works on a rotating basis – just starts at Coach #1 and works up to Coach #230,000 and everyone who meets eligibility criteria get that lead.
I’ll research more into the billion dollar question, it didn’t even occur to me that could be aggregate. it was definitely phrased as “annually” but I’m going to try to find it now. I’m a numbers guy, through and through. When my wife wanted to do this originally the first thin I did was take to the internet to find successful coaches and see what was involved.
Anyway, I’d be happy to come back and report how things are going six months, a year, etc. from now.
Good article anyway. skepticism and caution is always good, but Ive been thrilled with how things have worked out, at least for our family.
I want to explicitly thank you Nick, as I’ve literally responded to tens of thousands (yes literally that many) and there are only a handful of objective comments. Most don’t even attempt to have a reasonable discussion of the article or business and resort to calling me a “hater” and not worth reading.
Nick said, “Yeah, there is no denying it’s pretty complex.”
Indeed. I think it is important to highlight that as another red flag of a pyramid scheme. I believe a legitimate company would distance itself from being a pyramid scheme.
CNBC has an interesting article Why Spotting a Pyramid Scheme Isn’t So Easy which cites an FTC document (this PDF) that states, “‘Identifying a pyramid scheme masquerading as an multi-level marketer requires a fact-intensive inquiry.’ It ‘entails a complex economic analysis including an in-depth examination of the compensation structure and the actual manner in which compensation flows within an organization.'”
I keep coming back to the thought of “Why risk the entire company and multiple long jail sentences by walking the line?”
I certainly wouldn’t risk my business on such a thing.
I’d simply say that if 11% of several hundred “coaches” are “customers”, there’s something fundamentally wrong there. I think given that A) the complexity of the compensation plan as you stated and B) the complexity in determining a pyramid scheme… categorizing customers as coaches should scare any objective person away.
I’m not sure I follow your logic about signing up coaches being less lucrative. I think if we were talking about a single-level affiliate program it makes sense. When you look at the top earners in any MLM/pyramid scheme, it has never been the case, to my knowledge, that they made a majority of their money selling product to customers. I don’t think I’ve ever read an MLM compensation plan centered around the payment to people selling product to the public as opposed to those who are affiliated with the company.
I completely understand how you’d focus on your own situation. I think 99.99% of those involved in MLM do. I urge you to go back and read the Pen Pyramid Scheme that I highlighted in the article. Putting a great effort into selling outrageously overpriced pens (or shakes, in this specific case) doesn’t necessarily make it right (or legal).
Since you said that you are skeptical, when you use the word “organization”, have you thought about interchanging it with the terminology of “pyramid scheme”? Is that fine-line clearly addressed? From the expert testimony of one the highest coaches, it clearly seems to be more of a pyramid scheme. I put a great effort into analyzing how Beachbody coaches are marketing and it seems that they clearly don’t know what a pyramid scheme is either.
I understand that this appears to be the transition to you going to self-improvement. Ten years ago I read Rich Dad, Poor Dad and it (in part) inspired me to look at money and start this blog. However, I’ve subsequently realized that Kiyosaki’s arguments don’t make sense… and his organization seems to be built around scamming people out of money according to the Canadian news network that I cite in the article.
I like to think that you can get into self-improvement without getting into pyramid schemes.
If you get “a lot of pom poms and rah rah’s” at your regular job, I’d ask if your regular job’s compensation is directly related to recruiting people. I imagine that Nike gets their employees to root for the company. In this discussion, I want to make sure that we aren’t talking about them recruiting others and compensating people on that basis.
Responding to the customer leads… I don’t mean to diminish the amount of attention your wife gives to those in her organization/pyramid. I would equate that to someone making sure that everyone’s pens are functional in the pen pyramid scheme. That’s actually/probably a poor example since fitness groups is not related to Shakeology.
From a personal finance perspective (which is what this website is about), is there clear “coaching” from Beachbody “coaches” to buy Vega One or Spiru-tein instead of Shakeology? Financially, that is clearly the smart move. (Note: I wrote this article before I heard of either of the products.)
I know this is super old but I just have to add the “not making sense” to remain a retail customer and sign up as a coach for the discount sounds worse to me. Yes the coach gets less if they sign them up but everyone agrees that’s why they sign up. The incentive to be the coach and to recruit is in that discount for the consumer, not the seller. Once again, the seller doesn’t matter so long as it ads to Beachbodys bottom line. Also the discount confuses me a little, so if someone could explain. If you make less and that’s less than the difference for the discount, Where’s that extra money going?
Great read, thank you for posting. Have you ever done something g similar for Isagenix? We have an Isagenix cult currently flowing into our community
I haven’t, but I probably should. There are hundreds of such pyramid companies out there.
I’m a former Coach. I didn’t last very long; I was out in less than six months. Thankfully, I didn’t make two mistakes that a lot of people who get sucked into MLM’s do: I didn’t lose thousands of dollars, and I didn’t alienate anyone I cared about. I ticked off two total strangers on the Weight Watchers boards and one or two other total strangers on Facebook, but no family, friends, neighbors, or anyone I actually knew.
There’s a stereotype that people who get involved in MLM’s are looking for fast easy money. I certainly did meet people like that, but the majority of people I met were like me: the victims of a decimated economy. I had a B.S. in Math & Computer Science and years of work experience, I was enrolled in an MBA program … and I couldn’t get hired at Pizza Hut. I didn’t want fast easy money. I just wanted a job, or at least an opportunity to work hard and see financial results. Sadly, a lot of the people I met in Beachbody were even worse off than me. Some of them were on welfare. Others were in some stage of foreclosure. Some of them had been unemployed for a couple of years and lived in areas that were even more economically depressed where I’m living (think places like Michigan and Ohio). I wasn’t styling, but I didn’t hand Beachbody my last nickel in a desperate attempt to save my house. Some of the people I met did, and I don’t like to think about what likely ultimately became of them.
This is the biggest reason why I really MLM’s. The economy is in tatters, and MLM’s are thriving because of it. Beachbody and other MLM’s are no better than scam “We’ll keep you out of foreclosure” places. They take advantage of desperate people and sell them false hope.
It’s a shame that Beachbody got into the MLM business, because while Shakeology is overpriced garbage, their workout tapes are great. The ONLY quality product this company makes is workout DVD’s. They should have just stuck with selling the DVD’s via the infomercials, their website, and maybe (as someone else suggested) an affiliate program, and everything would have been good. By instituting the MLM scheme, Beachbody has alienated itself from a lot of potential customers. I’ve seen many people online say they would never buy one of their DVD’s simply because they hate coaches and MLM’s so much. That’s a shame, because they are great workout programs.
My husband and I own P90X and Insanity. We’ve done both programs, we had great results from them, and we still use them for cross-training (we’re distance runners). My advice to anyone who is interested in the workouts is, instead of buying them from the 800 number or a Beachbody site, buy them on Amazon or eBay. That way, you won’t be “assigned” a sleazy coach who then pesters you to join their team and buy Shakeology. Do not buy Shakeology, any of their other supplements, or their fitness equipment.
My advice to anyone who is financially desperate is to steer clear of Beachbody and all other MLM’s. You will not make any money through an MLM. You will LOSE money, and if you’re not careful, you’ll also alienate all of your family, friends, neighbors, and everyone else you care about … people who might actually be able to help you get out of your situation if they don’t hate you because you’ve been hammering them to “join your team” and pour money down a black hole.
If you need money, go apply for a job as a car salesman. I did this for awhile. Car lots stink, but at least THEY DON’T MAKE YOU PAY THEM FOR THE PRIVILEGE OF HAVING A DESK THERE. They pay you. Go put an ad on Craigslist offering to walk dogs, shovel snow, rake leaves, or haul junk. ANYTHING but an MLM.
Excellent comment Nightcrawler. One of the best I’ve read in thousands of comments on MLMs.
In the amount of time you’ve taken to write this ridiculous article and multiple comments, Lazy Man, you could have accomplished quite a bit… doing something that is actually constructive. Are you just out to bash anything that goes against your screen name? I’m confused as to what your motive is. Are you sponsored by Beachbody competitors? I certainly hope your readers are intelligent enough to know this article/blog is entirely unfounded…but then again, why would they be subscribed to a blog such as yours in the first place if they did have half a brain? I have so many questions…
Thanks for the comment Tess Smith. I’ll try to get to all your questions.
I don’t know if you realize it, but pyramid schemes are a huge form of financial fraud causing an estimated 50 billion of financial fraud to Americans each year. I don’t know how constructive your hobbies are, but I’m going to take a stab that you don’t prove that according to the FTC’s guidelines big companies are operating illegally. I think the typical American watches reruns of Seinfeld.
You should probably take a few more minute and read my about page and my website before you make erroneous assumptions about me bashing things. I’m out to bash fraud. When I see fraud, I write about it and explain in as plain and simple language as possible why it’s fraud.
My motive is to help people avoid get defrauded out their money.
I’m not sponsored by Beachbody competitors. I explained why I wrote the article at the beginning. I’m a big fan of Nick Loper’s Side Hustle Nation except for his unfortunate blind spot when it comes to understanding pyramid schemes.
Why would you or anyone else think this article/blog is unfounded? Did I misquote the top distributor in the podcast? Did I misquote the FTC? Did I misquote the 10-12 people who lie about what a pyramid scheme is? Please point to the specific pieces of information that you feel are unfounded and we can discuss them. Don’t just broadbrush it by saying, everything is trash. Give the article a real critical review and we can work to make it better.
If you have more questions, please continue to send them along.
So, for everyone who likes to hate on spelling and grammar, get your pitch forks.
I think it is a funny idea to judge a product without using it.
I have to reevaluate my entire life every time I read something like this. I buy Shakeology, and I would pay full price. I have major weight loss to accomplish, and have made huge progress.
Originally, I was skeptical of a shake that’s under 200 calories. I am a lazy clean eater, and have tried to find the most simple/quick way to “eat right.” I add stuff to my shake, not for taste, for calories. I wanted to say that with most of the workout programs the recommendation is to eat 5-6 times a day, and then they give you a calorie target. For me to hit my calorie target each meal needed to be between 300-400 calories. A large banana is 100 calories on myfitnesspal, 1 tbsp of pb2 is about 22 calories, and raw honey or raw nuts to fill in the rest.
When you look at the “clean eating” market, like non gmo, and organic food, you will probably see a lot of other outrageously priced products. I bought 8oz of organic maple syrup from TJ for about $7, and 1 can of organic pumpkin is $2. Shakeology is marked GMO free, and its supposed to be all natural.
I don’t think this article makes me any less in love with the shake. I think that if something is working, I don’t care if its rainbows and unicorn. I want to ride it until the wheels fall off, because motivation is fickle. I think if someone finds hope in me, and Shakeology is their talisman, I’m fine with that. There are worse things like HCG, and xenadrine that are out there.
As for the business, it is what you make it. I think that is what the coaches have said. I have met people who want to help others, and I have met people who out to squeeze every penny from unsuspecting hopeless people. I have seen the same difference in my 9-5. I think humans are the problem there, not the business.
That said, I bought in.
Thanks for your research.
If anyone has a problem with spelling and grammar, please be the first to volunteer to be my editor. I tend to write 4-5 articles a week, and this ones like this take a couple of dozen of hours of research before the writing begins. If someone has a problem with a couple of typos an article that is typically 12 times as long as my usual articles, then they don’t deserve the benefit of my extensive research.
It seems like a funny idea to judge a product without using it unless you understand nutrition. If you brought it to licensed nutritionist, would he/she respond with, “I need to try this product to tell you if it’s any good?” No of couse not. Chemo doctors don’t have to get chemo to know whether it is useful. People don’t have to jump off a bridge to determine if jumping off a bridge is good idea.
I don’t want you confuse your progress in losing weight with Shakeology. It seems like you are doing that. The nutritional label is the nutritional label. I pointed out several products in the article that have similar nutritional labels for a fraction of the price. Your claim sounds like someone saying, “I like to pay $10 a gallon at XYZ gas station, because I’ve noticed my car runs well with it.” Well, the entire history of human research shows it would work just as well with the $2-ish gas at any place in your neighborhood.
Sara said, “When you look at the ‘clean eating’ market, like non gmo, and organic food, you will probably see a lot of other outrageously priced products.”
Perhaps, but there are some well-priced products that are in that category as well. As I mentioned in the article: Nature’s Plus Spiru-Tein High Protein Energy Meal and Vega One available on Amazon.
There are probably more, but you have two options that will save you 75% off of Shakeology, so you shouldn’t need to look further.
If you want someone to find hope in you there’s is a great free online forum called SparkPeople. You already mentioned MyFitnessPal that has great forums as well. The MyFitnessPal community is pretty clear: Avoid Shakeology!
When you say there are worse things out there like HCG and Xenadrine, it tells me that you completely misunderstood the article. I’m not saying the product is harmful. I’m saying that you are being sold a Honda Civic for $200,000 and that the pricing is due to it being a pyramid scheme according to the confession of a top distributor and the FTC guidelines.
You can do what you want with your money, but this website is about helping people make better decisions. I’d rather see them pay an appropriate amount for an equivalent supplement and use the leftover money to subsidize a personal trainer, a gym membership, healthier food (not shakes), etc. If you have Bill Gates money, perhaps price doesn’t matter. That’s very rare and I doubt Bill is reading this.
The business is definitely “not what you make it.” The minimum pricing of Shakeology is set by Beachbody. The compensation plan is set by Beachbody. If you meet someone who really is interested in helping others, they will NOT recommend Shakeology… they’ll recommend one of the many equivalent products for a quarter of the money.
My guess is that your 9-5 is not something that the FTC warns is an illegal pyramid scheme as I pointed out in the article. If it really was just the people and not the business, Beachbody could solve all the pyramid scheme questions in 24 hours by announcing that the commissions will be single level, based on sales, no recruiting into a pyramid. Many, many legitimate companies operate this way.
It’s very, very telling that Beachbody does not announce this change and continues to associate itself with pyramid schemes.
A few more comments below!
Nick said, “Yeah, there is no denying it’s pretty complex.”
Indeed. I think it is important to highlight that as another red flag of a pyramid scheme. I believe a legitimate company would distance itself from being a pyramid scheme.
I should say that while it is certainly complex and has a lot of parts, it IS fully and 100% understandable and learnable, if you do the research. I would say it took me about 2 – 3 months to fully understand the way the business operates and how you earn income, but now that I do I fully understand the compensation plan and how it works. I can predict to the dollar what next week’s paycheck will be given the information available.
I’d simply say that if 11% of several hundred “coaches” are “customers”, there’s something fundamentally wrong there. I think given that A) the complexity of the compensation plan as you stated and B) the complexity in determining a pyramid scheme… categorizing customers as coaches should scare any objective person away.
I don’t know why you think it’s “fundamentally wrong”. First off, Beachbody is ambivalent themselves to which way distributors sign people up (coach vs. customer). As a matter of fact, the word “Discount Coach” doesn’t appear anywhere in the policies and procedures. It’s a term used by coaches for a practice that has been found to help them optimize their incentive plan. Coaches are motivated to put other people in the system as “discount coaches” for a few reasons –
1) It makes the products cheaper for people which is attractive
2) If that person wants to recommend someone or sign someone up, even if it’s just a friend, they are already in the system as a coach and can do that
3) Coaches earn Rank by meeting certain criteria below them and that includes requiting a number of coaches in the downline
Now you may or may not think this is logical or the way you would operate a business, but I don’t know how you can say it’s “Wrong”. It’s just a way of doing it. No one is obligated to do anything and as I said before, 80 – 90% of people in fact don’t do anything! And that’s totally cool!
I’m not sure I follow your logic about signing up coaches being less lucrative. I think if we were talking about a single-level affiliate program it makes sense. When you look at the top earners in any MLM/pyramid scheme, it has never been the case, to my knowledge, that they made a majority of their money selling product to customers. I don’t think I’ve ever read an MLM compensation plan centered around the payment to people selling product to the public as opposed to those who are affiliated with the company.
Let’s assume someone comes up to my wife and says I want to do P90X and get Shakeology, and I do NOT want to be involved with the MLM at all. My wife has two options – sign that person up as a customer, or as a coach.
As a customer, my wife would get a 25% commission on the sale and a 25% commission on each subsequent sale (say, Shakeology). So, she would make $30 a month as long as this person kept purchasing Shakeology.
If my wife signed this person up as a coach, she would get an initial Bonus (usually $40 – $60), but that’s it – no more recurring commissions. What she would get is volume which is used for the cycle bonus portion of the income. Shakeology is 90 volume points, and every 300 volume points, a coach gets $18 as a diamond coach.
So she would make way less money monthly signing them up as a coach – AND – the person buying it is paying about $25 more a month vs. becoming a coach.
Now, people in the upline don’t care. This counts for them as volume either way. But the point I am making is that, for any individual coach, generally speaking, it is more lucrative for them to sign up their Personally Sponsored people as customers.
I completely understand how you’d focus on your own situation. I think 99.99% of those involved in MLM do. I urge you to go back and read the Pen Pyramid Scheme that I highlighted in the article. Putting a great effort into selling outrageously overpriced pens (or shakes, in this specific case) doesn’t necessarily make it right (or legal).
This is totally in the eye of the beholder. Is Shakeology more expensive than other products? Sure, it’s more expensive than other products. But a LOT of people are willing to pay the price for it, and it’s marketed as a premium product. I mean, what is the difference between designer jeans and Levi’s? Not much, other than the price. This is a value proposition that only the purchaser can decide for themselves.
Also, I would say that when you buy a challenge pack from a coach, if they are a good coach :), you get a lot of value beyond the shakeology for the price, you get a coach for free, for LIFE. My wife easily spends 1 – 3 hours per month with every one of her clients. Even AFTER they quit shakeology! She provides them with recipes, adds them into groups for any workout programs they bought, and she generally keeps up with them on their fitness & health journeys through and through. Now, not all coaches are like that – a lot them, especially dabblers, might sell a product and then disappear, and that’s unfortunate for the person looking for help.
Most people who are strict customers seem to stay on Shakeology for anywhere from 2 – 3 months. Some stay longer, she has a few that have been on it for seven or eight months now since she began coaching.
And how is it not legal? Beachbody can set their own pricing like you can for the ads on this site (by the way, I also run a community website with advertising). If you want to charge $50 CPM for a 125×125 box, you have the right to do that. And if someone finds value in that, and they buy it, then OK.
Since you said that you are skeptical, when you use the word “organization”, have you thought about interchanging it with the terminology of “pyramid scheme”? Is that fine-line clearly addressed? From the expert testimony of one the highest coaches, it clearly seems to be more of a pyramid scheme. I put a great effort into analyzing how Beachbody coaches are marketing and it seems that they clearly don’t know what a pyramid scheme is either.
Why would I change out a word? I don’t expect to sway you (at all!), but I just don’t see it as a pyramid scheme any more now that my wife has been involved with it and I actually understand the business.
This business is more entrepreneurial than I originally thought. Here’s the thing – success isn’t a gamble. It’s not a roll of the dice if you succeed or fail at Beachbody. Just like it’s not a roll of the dice if you succeed or fail when you start a business or a blog.
How about this- 95% of blogs are failures, according to this New York Times article. Would you tell someone that starting a blog is a scam or a scheme?
My wife has succeeded in Beachbody because she puts in 35 – 40 hours of focused, dedicated time per week into it. When someone wants to be a coach, she tells them – you reap what you sow. You get out of it what you put into it. Many people sign up and do literally nothing. They don’t make connections. They don’t talk to people. They don’t even try the products themselves. They just expect that money will start coming in. It doesn’t work that way, and any honest coach will tell you that. And I think most of the top coaches do say that, because they are top coaches BECAUSE they do the same thing – work hard and make sacrifices to make their businesses succeed.
I understand that this appears to be the transition to you going to self-improvement. Ten years ago I read Rich Dad, Poor Dad and it (in part) inspired me to look at money and start this blog. However, I’ve subsequently realized that Kiyosaki’s arguments don’t make sense… and his organization seems to be built around scamming people out of money according to the Canadian news network that I cite in the article.
I like to think that you can get into self-improvement without getting into pyramid schemes.
Oh, don’t get me wrong – my usage of personal development WAY predates Beachbody :) I read Rich Dad, Poor Dad myself when I started my first business, a web design company ,in 2004. Then I started a real estate business in 2005, that folded in 2006. I have also run a mobile payments startup (that also failed), my online community I mentioned earlier, another community forum that failed. But, as I got older and had kids, and responsibilities mounted, that stuff ended up taking a back burner. And that’s on my shoulders – my fault. But the drive for personal improvement that Beachbody pushes has helped me rekindle a flame I had almost forgotten about. I love that. Even if my wife didn’t succeed at the business, I would have left it having learned a lot about myself.
From a personal finance perspective (which is what this website is about), is there clear “coaching” from Beachbody “coaches” to buy Vega One or Spiru-tein instead of Shakeology? Financially, that is clearly the smart move. (Note: I wrote this article before I heard of either of the products.)
Why would a Beachbody coach recommend a competing product? Would you hire someone to work on this blog that recommended you go to another blog? I mean, I get the point – this is a personal finance blog, like the simple dollar, and the point here is to help people save money and make smart financial decisions, so I can totally understand you probably have a visceral reaction to the thought of overpaying for something (anything).
But everyone has their own value propositions. Speaking of PD, I was listening to the audio of “Start with Why” this morning, and in it Simon Sinek touches on this – talking about how he is an early adopter for technology and his sister is an early adopter for clothes, and neither can understand the other person. He doesn’t understand why she will overpay for clothing, and she doesn’t understand why he will overpay for a new piece of technology that is overpriced and untested. It’s all about each individuals perspectives.
If someone can’t afford Shakeology – my wife asks them if they want to join a clean eating group so she can help them reach their goals, even without Shakeology. That’s time of hers she is giving up with the expectation of nothing in return.
This business is WAY more entrepreneurial than people think. A lot of people do come into thinking it will be easy, or that they can make a million bucks in a year, and that’s garbage. Succeeding takes hard work – like anything else. It’s interesting to me because there are people that express interest in the business opportunity, but then they come in and act like employees and not business owners – People like that – who need supervision and management and a “boss” – can NOT succeed in this business or I’d gather any MLM.
The compensation plan may be understandable after 2-3 months of being fully immersed in it, but proves my point. It is so complex that it can’t be adequately and easily explained to a new person quickly and easily. If you are running a pyramid scheme you make it complex like Beachbody. If you are running a legitimate business, you make it easy for people to understand.
At some level, the information isn’t available. As we found out in the article one of the diamonds is running a pyramid scheme according to the FTC and doesn’t seem to know it or at least admit it. Numerous coaches seem to misunderstand what a pyramid scheme is.
Whatever Beachbody is coaching about running the business, they aren’t doing an effective job of warning them about not becoming a pyramid scheme by recruiting more than selling product to people outside the scheme. It should be highlighted in big bold letters on the home page and in every distributor communication. No excuse from Diamond level executives to be confused by the VERY first thing they should learn and have drilled into their process.
MLMs have created discount coaches and discount distributors to hide the nature of the pyramid scheme. This way you can’t tell if someone is failing to recruit or if they are simply not trying. Most MLMs don’t formally address this situation that they purposely create with their pricing. They know going in that if they price something at 1000% (10x) mark-up, they can get people to say, “What a bargain at 25% off!” So someone is only paying 7.5x what they should be.
Nick said, “Coaches earn Rank by meeting certain criteria below them and that includes requiting a number of coaches in the downline.”
This is essentially admiting that it is a pyramid scheme. It’s fundamental in in the FTC’s guidelines about recruiting being the pyramid scheme and selling products being safe. If you are recruiting a discount coach, you are no longer selling products to someone outside the pyramid, but you are recruiting into a pyramid scheme. It may not seem like a big difference, but it is.
It isn’t wrong as in “a way of doing it”, it is “wrong”, because pyramid schemes are illegal.
Nick said, “No one is obligated to do anything and as I said before, 80-90% of people in fact don’t do anything!”
They are obligated to be on autoship or pay to play to earn commissions from the pyramid. And of course in any scam that tricks people out their money, people aren’t obligated to give it to them.
Your scenario about your wife signing people up a coach vs. customer is further evidence of the pyramid scheme. It might be initially worth more signing up someone up as a customer, but not in the long haul.
As you said, “What she would get is volume which is used for the cycle bonus portion of the income.” Now combine that with what you said about “Coaches earn Rank by meeting certain criteria below them and that includes requiting a number of coaches in the downline.”
Now look at the Beachbody disclosure statement and see who is making the money. Is it people selling to customers? The Diamond in the article acknowledged that it was about building the team/pyramid. She should know because she’s the one making the bulk of the money. The one sale is nice, but the volume points/money is in recruiting people who recruit people. Obviously a coach trying to spread the word can lead to more volume than a single (even reoccurring) sale.
Generally speaking the upline is going to be incentivized to push their team/pyramid to recruit because that’s going to lead to the most volume points which translate to dollars.
Nick said, “Is Shakeology more expensive than other products? Sure, it’s more expensive than other products. But a LOT of people are willing to pay the price for it, and it’s marketed as a premium product. I mean, what is the difference between designer jeans and Levi’s? Not much, other than the price. This is a value proposition that only the purchaser can decide for themselves.”
I’ve debunked this dozens of times over the last 7 years when I first heard about MLM.
The question is whether a LOT of people are paying for it, because they are obligated to be in the scheme or not. Often that’s the case… since they are required (pay to play) to buy the product they do. Are coaches falsely pushing the product as something beyond what it is? I’ve seen this on numerous blogs. I pointed out a couple of MUCH CHEAPER substitutes that are premium, organic at the top of the article. Are coaching generally interested in their clients? If so, they should be recommending these very much equivalent products instead of Shakeology.
Designer brands are often about showing off a status that the owner has obtained. Women love the Christian Louboutin because they are instantly recognized as something that costs hundreds of dollars. It shows a signal of success like a nice designer suit. That is something that people will pay more for (aside: I think they are chumps in most cases).
Shakeology is not fashion and it doesn’t convey status with the general public. The other bad argument people make is comparing pricing of Starbucks (with overhead, baristas, and such) to making coffee at home. They are also apples and oranges.
This is where I challenge companies to sell their products on a WalMart shelf at the price point they’ve chosen to sell distributors. They never do it. They know that they simply can’t compete at the price point without the business opportunity tied in.
Things that absurdly priced (like Shakeology) is yet another red flag for being a pyramid scheme. See the Pen Pyramid Scheme as I outlined in the article. Once again, if you are going run a legitimate business why would you purposely choose all the red flags of a pyramid scheme? What kind of idiotic corporation would do that?
As for the “coach for free for life”, it’s worth noting that most of these coaches have no certifications. They are simply people who signed up for a business opportunity. They aren’t qualified trainers or nutritionists (typically). It is little more than the buddy system, but with a complete stranger. You can get that from SparkPeople.com… for free… for life. And let’s not forget, it clearly isn’t free… the price is more than baked into the “premium” of buying Shakeology.
As for “running a blog”, I most certainly don’t recommend people do it to make money. I’ve written about it a few times.
What makes things a scam or a scheme is the FTC’s guidelines showing that it is because of the recruiting and how the money flows (in the form of excessive product pricing) from the bottom to the top. When someone starts a blog, there is no recruiting of paying people funneling money to the top in any way. You are making a very bad analogy.
I’m sorry that you can’t see it as a pyramid scheme even when the FTC guidelines clearly show that it is. It sounds like you are trying to talk yourself out if by focusing on the failure of blogging or other things.
Nick said, “My wife has succeeded in Beachbody because she puts in 35-40 hours of focused, dedicated time per week into it. When someone wants to be a coach, she tells them – you reap what you sow. You get out of it what you put into it.”
This sounds true, and to some extent it is, there’s a lot wrong with it. With MLM, there’s no tie to supply and demand… see this great article. MLMers will sign up more distributors than there are people to sell to. It’s the equivalent of McDonalds letting everyone open one up very cheaply on every corner of every street in the US. Obviously, many of those McDonalds would be set up for failure simply because of circumstances… too much supply and not enough demand.
MLM has the same problem. With every person that signs up, there is more competition to make sales to customers, and this competition ensures the high failure rate… no matter much effort people put in.
When I covered MonaVie’s pyramid scheme before it imploded, a knowledgeable writer covered this beautifully It’s not a matter of effort, it’s a mathematical certainty.
Nick said, “Why would a Beachbody coach recommend a competing product? Would you hire someone to work on this blog that recommended you go to another blog? I mean, I get the point – this is a personal finance blog, like the simple dollar, and the point here is to help people save money and make smart financial decisions, so I can totally understand you probably have a visceral reaction to the thought of overpaying for something (anything). ”
I take guest posts for free where people recommend other blogs. I recommend The Simple Dollar in my blogroll myself.
The point is if you are going to position yourself as a coach, you are there to help people. That’s helping them make the smart decisions. It shouldn’t be, “How do I get this person to overpay a thousand dollars a year, so I can get a portion of the proceeds for myself?” Is that what you want from your financial advisor? Do you want him to recommend his overpriced index funds or do you want someone who recommends the low expenses of Vanguard or Fidelity?
I really, really hate when people take advantage of others and hide it as if they are helping them. It’s pretty low.
OK haha – I can’t help myself – I have a few more comments to add in.
First, about this –
*****
The Kellie Gimenez case
Kellie made it clear in the Side Hustle Nation podcast that she makes $4000-4500 a month and that $500 comes from direct sales. The rest comes from commissions from her downline. Here is what she says at the 17 minute market of the podcast:
”A majority of your income isn’t going to be coming from the products. The majority of your income, as you grow a team, is going come from your Coaches and the volume they sell. Because you can only sell so many workouts a month… If they aren’t drinking Shakeology every month, I mean, they can buy one workout and never buy anything else from you.
… When I first started as a coach and didn’t have a team underneath me, I was making about $500 selling products. That’s not bad. It paid for our groceries. It paid for gas. It was a good income, but it’s definitely not something that could be a successful side hustle.
She’s clearly making more from recruiting than from sales to the public. Kellie is essentially saying this is how it is designed. She even is negative on making sales to public.
*****
Your statement, “She’s making more from recruiting than from sales”, is false. All the volume being generated that produces that $4000 – $5000 per month that she is earning on is in fact product sales, made by her and a team underneath her. These are actual products shipping to actual people. You don’t earn a single penny in Beachbody just by “recruiting someone”.
Oh and by the way, the billion dollar was annually.
Last thing – the reason I’m here on this blog and even writing is because I can so relate to the way you think about it, because that was me x100 literally 10 months ago. I couldn’t see it from the outside and refused to believe it because I too grew up thinking pyramid scam about all MLM’s. But it’s crazy how insanely rewarding this has been for our health, our family, and for our finances.
I’ll leave you with this. Here are actual , 100% unsolicited quotes from people my wife has worked with (customers who are signed up as coaches, by the way ;) )
** “I will say that the program was helpful in many ways. It taught us both to be more conscious of what we eat and for me, how much water I am consuming – which was by far not enough. We love the shakeology! It’s very tasty!Thanks for your support;)
** “Officially down 20lbs!!! Ya for yoga and Shakeology! Thank you for being such a great coach!!! “
** “You sent me that message at the perfect time just when I was ready to take a leap into a more healthy lifestyle.”
** “I finally feel like I found something that I enjoy and have time for….so thank you for that!”
**“I love being a mommy! Thanks for giving me a chance to be there for her! I had seen beachbody so many times three other friends sell it and I was mildly interested you convinced me. Thanks for changing our lives”
** “Just wanted to say thank you for getting me back on track! I was eating crap and feeling like crap. Thank you for believing in me! I love the chocolate vegan shakes!”
**“Just wanted to let you know that outside of motivating people to reach their fitness goals, you inspire people in other ways! The quote on your new page struck me and gave me the push I needed to re-enroll in school. I was already re-admitted and planned to register within the next year, but those words for whatever reason made me decide today was a much better plan than a year from today. Keep doing what you do!
Nick on the Kellie Gimenez case said,
“Kellie made it clear in the Side Hustle Nation podcast that she makes $4000-4500 a month and that $500 comes from direct sales. The rest comes from commissions from her downline.”
I think I made this clear in the article, but let’s review what the FTC says about that exact situation:
“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”
I added some bolding so you can see that when I say “money from recruiting” it is short-hand for “money made based on the number of people recruited and sales to them.”
Again, it goes back to the Pen Pyramid Scheme above. Yes product is being sold and money is being made based on product sold, but that doesn’t matter.
I understand that it may be rewarding for you, but that’s only because you have recruited other people to vastly overpay for products. If instead you’d just tell your team/pyramid to buy the cheaper identical products you’d all save a ton of money. You can all be involved in a pen pyramid scheme where some people (in this case you) at the top make the money with the rest losing money… or you can do some simply math and see what would happen if you just bought pens at Staples.
Again, you are too focused on seeing what it does for you and not seeing what it does for the people at the bottom of the pyramid.
By the way, there’s a good video on this here: https://www.youtube.com/watch?v=VVUUbEw_Pm8
“There are many, many complaints about Beachbody on general fitness websites such as MyFitnessPal. “
So having run internet communities for years now and being very familiar with how they work, there are a few things to keep in mind. Forums are always targeted towards people complaining. It’s human nature – when we have a problem we want to vent. Beachbody or any company isn’t immune to both a) screwing up and b) having unhappy customers. But, a few threads on MyFitnessPal or Sparkpeople is hardly “evidence” of “many, many complaints” in the scheme of things.
I mean hell, Amazon.com has a rating of 2.1 by consumers looking to complain. Duh.
I still don’t get this, either:
I’m really looking forward to your response on the Kellie Gimenez case and the other things you brought up previously. It seems like when you get proved wrong, you move the topic to another tangent (in this case the enthusiasm of new recruits).
I didn’t change topics, you brought up the complaints about the people “at the bottom” so I was addressing that.
Here, let’s cover it:
“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”
As I said before, the money you make is almost entirely (like, 85% +) based on volume of sales to the public. In my wife’s downline, for example, there are currently 350 “coaches” – but 325 of them are just in it for the discount and are in fact “customers”. I don’t consider them as “losing money”, because they are purchasing the product at the published price and are happy to to do so. This would be like saying that everyone who buys a T-shirt at The Gap is “losing money”. I don’t know about other products like MonaVie but the article you shared says that “Therefore for every 1 person in the “opportunity” who breaks even, 20 must be cash flow negative. What is true for one individual “tree” is true for all. There is no way for anybody to make money without 20 people losing no matter how much effort or what system you are plugged into, it is a simple case of mathematics. except, at least in Beachbody’s case, the profits that pay coaches are coming from customer sales – so it’s not a matter of people “losing” money. Of my wife’s ~20 active coaches in her downline, only one has not broken even. Everyone else has earned at least $100 or more per month.
So again, the money you make is based almost entirely on sales to the public. And as I mentioned before, less than 1/2 of the revenue Beachbody produces comes through the Team Beachbody (the MLM arm) of the company.
Regarding building a team – yeah, you get compensated for building a team. Just like you make more money if you are a district manager vs. a sales rep in any other company. As you grow and help your team succeed you earn more. Lots of people are happy to earn $200 – $300 a month selling to 6 – 10 customers and that’s it. Other people want to grow teams that earn residual income.
Here are a few things that I was in the dark on, before my wife became a coach, that I didn’t understand about MLM’s that make a lot more sense now:
1. Market Saturation – I always figured if you joined later, you had no chance to make money, and you were only benefitting those above you. This was completely wrong! First off, this chart is completely wrong, at least when it comes to Beachbody, (not sure about other MLM’s) although that is how I always thought all MLM’s where before also. Beachbody has a binary leg system – so you have a left and right leg. You can join at any point in time and still earn money, and you don’t end up at the “bottom of the pyramid”, you end up at the bottom of whoever signed you up. This could theoretically even be really high up in the pyramid. But every single person is a new layer, so it’s not flatlined like the chart shows. My wife’s organization, for example, is 73 layers deep No two people are on the same layer. The other thing is that there is a lot of turnover! People do the workouts and shakes for a few months, then quit. Then they join up again later. Saturation is no more an issue for Beachbody than it is for any other company selling products to a limited amount of global citizens. And BB is always releasing new programs and products so there is always new things for individuals to buy – just like any other company.
2. Coaches have income caps. I always thought that you earned from everyone below you and therefore it was impossible to sustain a business model like this. With BB at least, a coach can only earn $12k a week in a business center on cycles. While that is a lot of money, it does mean there are practical limits so the business doesn’t go insolvent. 12k per week is approximately 10,000 people in a downline. Some early coaches have 50,000, 60,000 in their downline. Well guess what, everything over 10k provides no additional benefit to them.
3. Roll of the dice – before I joined I had always read you might as well go spin the wheel at the casino. Well, it’s not like that. My wife has the same opportunity that anyone else does, if you want to go for it. Most people don’t have the wherewithal to stick with it or put in the required effort. But you can join today and be six figures in 2 – 3 years, or 1 year if you are incredibly aggressive and put in the time. It’s not easy, at all; but it’s doable and it will still be doable five and ten years from now.
4. Money comes from customers – before I joined I thought all MLM’s made all their money from coaches. It’s just not true (again, with Beachbody at least). I already explained this above but the vast majority of the sales are from regular customers signing up to get into challenge groups to improve their health and fitness. In any given month my wife might sign up 15 people – and typically 13 or 14 of those are customers and 1 or 2 are people interested in actually coaching and earning an income.
5. People at the bottom can outearn anyone above them- I did not think this was true at all, but it is! My wife is already earning more than the 50 people above her. It has to do with the binary leg system, again which I did not understand at all before she started doing this. Now it is clear as day and makes perfect sense, but it’s so key to understanding it.
Anyway. I know I”m sort of wasting a lot of time here typing all this out as I’m pretty much 99.9% positive it won’t even put a dent in your opinion or views but I’ve always loved to have a truthful, non-bitter and honest conversation, so here it is. For what it’s worth.
Have a great night :)
Oh, and to Nightcrawler, sorry it didn’t work out for you. It’s not for everyone, that’s for sure. Especially if you don’t like the products!
The MyFitnessPal forums are not places for people to complain or vent. They are places for people to talk about health and nutrition. It is like WeddingChannel or TheBump forums helping people with weddings and pregnancies. Forums like PissedConsumer are obviously geared towards complaints, so that’s a bad example.
If I had linked to BeachBodyScam forums, you might have a point, but MyFitnessPal is completely unbiased and that unbiased general appears to generally HATE Beachbody (seriously, “rather drink their own urine” bad).
“As I said before, the money you make is almost entirely (like, 85% +) based on volume of sales to the public. In my wife’s downline, for example, there are currently 350 ‘coaches’ – but 325 of them are just in it for the discount and are in fact ‘customers’.”
If they executed a “coach” contract, they are by definition not sales to the public. Those are sales to recruited people in a downline. You are trying to call people something they are not by putting quotes around them.
“Of my wife’s ~20 active coaches in her downline, only one has not broken even. Everyone else has earned at least $100 or more per month.”
And that’s the thing, who is to say what active is? The definition of “active” according to income disclosure statements are usually people who have recruited people. It could be 300 people who are just unable to recruit people (it’s very common in MLM) and 25 who are just trying to be customers or the other way around. Some MLMs make this clear for people to see by calling discount customers, preferred customers. It’s yet another red flag for Beachbody not to have this designation.
Let me illustrate how much money is being lost here. I am going to estimate that each person is paying $100 a month on Beachbody. It might be $90, it might be $110, but I think that’s pretty fair. Feel free to correct me if I’m significantly off. At 325 people, your wife’s organization is paying $32,500 each month. However, Nature’s Plus Spiru-Tein High Protein is less than $12,000. The product is extremely high rated and undoubted loved according to the overwhelming reviews on Amazon.
So why on Earth would your “team” want to pay $32,500 when they could pay about 1/3rd at $12,000? No coach should be purposely making bad decisions for their “team.” But hey, if you are getting kickbacks to throw the team under the bus I guess it makes sense?
Nick said, “And as I mentioned before, less than 1/2 of the revenue Beachbody produces comes through the Team Beachbody (the MLM arm) of the company.”
If McDonalds buys the Pen Pyramid Scheme tomorrow, the majority of their revenue would still be from selling hamburgers, sodas, and fries. It doesn’t make the Pen Pyramid Scheme any less of a pyramid scheme. Again, bad logic to try to explain it away.
Nick said, “Regarding building a team – yeah, you get compensated for building a team. Just like you make more money if you are a district manager vs. a sales rep in any other company. As you grow and help your team succeed you earn more.”
If you are a district manager or sales rep in any typical company, money isn’t earned by recruiting people and selling product to them. Also sales reps and district managers are never coerced to buy product to earn their salary/commissions.
The Wikipedia chart that you cite is not supposed to be inclusive of all types of pyramid schemes. It is designed to show one type in its simplest form.
There’s a good explanation of how a binary leg pyramid scheme works here: https://www.igolder.com/glossary/pyramid-scheme/. Again, this another complexity designed to make it more difficult to see the pyramid scheme.
Nick said, “The other thing is that there is a lot of turnover!”
No sh!t there is. It’s true in every MLM I’ve looked at. That’s because people are getting in the business failing and moving on. The people at the top are not turning over, because they are living off the fat of the people at the bottom. The people at the bottom start to realize that paying $100 is garbage when they can go on Amazon and pay $30-35. Without the lure of the “business opportunity” many people leave.
This is explained in great detail using as an example Herbalife. It’s the same principle for every MLM though.
I cover MLM and the Reality of Saturation here. You are right that every company may have saturation in the number of products it sells, but when it reaches that point it stops hiring salespeople and paying them money. MLM tells every salesperson that they can be as profitable as they try… without ensuring that there is product demand to meet the number of salespeople. It’s telling everyone who wants a McDonalds franchise that they too can be rich and they should open them up on every block. It doesn’t work that way, because not everyone wants hamburgers, and the more McDonalds that exist, the fewer customers each one will have. Fewer customers mean more McDonalds will fail and go out of business.
This is a very easy concept to understand.
Regarding the 12k per week on 10,000 downline… are you kidding me! Clearly the bulk of these people’s money is coming from sales to people in a downline and not from a Beachbody/lemonade stand. It couldn’t be any more clear cut of a pyramid scheme.
When you suggest that it is simply hard work, it ignores the fact that mathematically only around 32,000 people in the United States could reach the 10K downline level before everyone in the country was in Beachbody. That’s not a very large town. It gets worse when you say that there are 50,000 people in a downline. The limit of 10,000 is absurdly high.
Nick said, “Roll of the dice – before I joined I had always read you might as well go spin the wheel at the casino. Well, it’s not like that. My wife has the same opportunity that anyone else does, if you want to go for it.”
Not true. The opportunity gets worse as more and more people get in. The people at the very top are usually handpicked from other MLMs in a pre-launch. There are also other factors at play. I know some people who run mommy blogs who have a bunch of faithful readers who will buy whatever is being sold. These people are not on equal footing with someone who does not have an audience. (I don’t know your wifet to know what her thing is.) There are studies that more attractive women and better sell to guys and girls… so that can be an advantage that someone else doesn’t have. You wife might have been the first in a geographical region to get involved, where someone else might have picked up those people.
Kellie Gimenez said on Side Hustle Nation that she uses Facebook ads, but if you are going to try to the same, you are going to have to compete against her. The opportunity constantly gets worse.
Nick said, “People at the bottom can outearn anyone above them- I did not think this was true at all, but it is!”
MLMers like to say that something can’t be a pyramid scheme, because you can earn more than the person who recruited you. That’s true, however it isn’t a test of a pyramid scheme! You won’t see the FTC or any regulatory body say any such thing. It’s an irrelevant piece of information that people feel like saying to justify running a pyramid scheme, probably because they don’t understand what a pyramid scheme is.
An “active” coach is someone who buys Shakeology (or ~$100.00 of another Beachbody product) each month. If you’re not buying anything, you aren’t “active” and cannot earn any commissions.
Perhaps people who’ve never worked in sales would fall for Nick’s nonsense about “it’s like any other company.” But I spent four months selling cars.
* Sales managers at dealerships don’t make ANY money simply from “recruiting” salespeople. They make money when their sales staff sells cars, accessories, and service contracts. That’s it.
* Managers aren’t encouraged to hire just anyone. While high turnover is expected (car sales is brutal), a manager who *routinely* hires completely incompetent salespeople will find himself unemployed.
* Salespeople are not required to buy cars, accessories, services, or anything else in order to keep working at the dealership and earning commissions. New hires are given a ~12-week stipend to get started, so at least they earn *something* while being trained.
* Salespeople get commissions only from selling cars, accessories, and service contracts. They are not told to get all of their family and friends to come in and sign up to sell cars “under” them.
* There are only so many sales slots in each dealership. When a dealership has enough salespeople, they don’t hire more.
It is absolutely nothing like Beachbody or any other MLM. If you want to try sales, go apply to sell cars, bang on doors for Terminix or Tru Green Chemlawn, or even sell online ads over the phone. All of these jobs stink, but at least you have *some* chance of succeeding, and you’ll be paid *something* for the time you spend trying it out.
Another thing I’d like to note: I remain friends with several people I met in the car business. All of them are at least moderately successful, and two of them are very successful. Almost none of the people I met through Beachbody (other than the shysters at the top of the pyramid) are still with the company. There are one or two people who are hanging on, making no money but hoping that someday their luck will change. Eventually, they’ll learn.
Regarding:
Again, you are too focused on seeing what it does for you and not seeing what it does for the people at the bottom of the pyramid.
Here’s the thing. we DO see what it does to the people at the “bottom”. And they are ecstatic. They all love the programs and love the products.
This is probably one of the reasons why complaints about Beachbody are so far and few between.
That’s true of every MLM. You can go back 5 years and read tips on how to get brainwashed people out of such schemes.
I’m really looking forward to your response on the Kellie Gimenez case and the other things you brought up previously. It seems like when you get proved wrong, you move the topic to another tangent (in this case the enthusiasm of new recruits).
There are many, many complaints about Beachbody on general fitness websites such as MyFitnessPal.
Here is are some quotes from the front page:
“Once you’ve lost weight or run out of money to keep buying it, you have to figure out how to go back to eating real food while either maintaining or losing. Your best bet is to figure out how to eat without using meal replacement shakes.”
“It’s garbage and a waste of money, ‘coaches’ will say differently but they are pretty ignorant on the product themselves”
“This. Avoid.”
“Keep it simple, eat a well balanced nutritious diet and maintain a modest caloric deficit. You don’t need gimmicks or shortcuts.”
“Yeah…let’s not talk about Shakeology.”
“Shakeology is expensive (even with the Coach discount I had) and I couldn’t stand the taste.”
“You say ‘Shakeology?’ I say ‘No thanks. I’d rather drink my own urine.'”
Complaints “few and far between”? You’d have to work hard to get more complaints.
I maintain what I said in my previous comment: Beachbody’s workout programs are great, or at least, P90X and Insanity are. I love them.
However, Shakeology and everything else they sell is overpriced garbage.
I am glad I got out of “coaching” before I lost tons of money, and without alienating anyone I cared about.
If you want to try your luck at sales, go apply at a local car lot. Most dealerships will hire people with no sales experience, especially right now; they are all gearing up for their busy seasons. Granted, car sales wasn’t for me, but at least (1) It isn’t a scam that involves “recruiting” other suckers to “join your team” and sell cars “under” you and (2) They’ll pay YOU for working there; you won’t give them a dime.
My brief foray into “coaching” didn’t “change my mind” about MLM’s. It made me despise them even more.
I am a Beachbody coach and although I don’t agree with all of your points, I do agree that the top coaches are profitng from their downline sells. However, if I never recruit a coach EVER, if I sell 5 Challenge packs a month my profits will continue to grow, which includes my commission and residual commissions. So Beachbody may have elements of a MLM but you can honestly make money just marketing the programs.I became a coach because I really believe in the products and they have changed my life. However, I am always hesitant to share the coaching opportunity with people because I know that if you want to see BIG numbers recruiting is involved, but that’s not my goal. I am happy with my $500 and growing extra every month.
There’s usually the opportunity for a few people to run an MLM in a legitimate fashion. For example, if you weren’t selling the grossly overpriced Shakeology product that puts the spotlight on the pyramid scheme.
However, it looks like the challenge packs are a way to package the Shakeology product, which is what you are really marketing, not the videos/programs.
I would hope someone reading this would say would be smart enough to say, “Hey, I can buy the products mentioned in this article with the videos and save myself a fortune while avoiding a pyramid scheme.”
In any scenario, I can’t see why anyone would want to support a pyramid scheme. There are thousands of other options available. If you really want to be a health coach, why not get a personal training certification?
“In any scenario, I can’t see why anyone would want to support a pyramid scheme. There are thousands of other options available. If you really want to be a health coach, why not get a personal training certification?”
You call it a pyramid scheme, I call it capitalism, which is how most big businesses are set up since well the Industrial Revolution. I am not going to knock anyone, nor Beachbody for using this age-old profit system for making money. Whatever label you decide to put on it, it works and as long as everyone involved understands the compensation plan, more power to them! However, I not sure if the factory worker from China who made the shirt or pants you are wearing, would agree with me.
Like I said, you make good points but just because someone (like you) has put a label on something doesn’t make it accurate. There are alot of labels I can use to describe your blog, but does it make it true??? Of course not.
Btw, I am in school for nutrition and nursing. Go me! Lots of love.
I guess Bernie Madoff and Enron called their scams “capitalism” too. I would urge you to go back to the article and read the FTC definition of MLM and pyramid schemes. Click on through and read the FTC’s guidelines on the matter.
Businesses since the Industrial Revolution are set up as hierarchical organizations which are legal and are not based on recruiting and have no pay-to-play aspects to them. Clearly hierarchical organizations are not illegal according to the FTC the way pyramid schemes are.
You say “it works”, but clearly it doesn’t work if you look at the compensation plans of dozens of MLMs (including Beachbody as I have). When you see that 99% of people lose money, and understand the Pen Pyramid Scheme as explained in the article, I don’t see how you can compare it a factor worker in China.
I know what you are saying about putting a label on something doesn’t make it accurate. What makes it accurate is showing the official government definition for the label and a top person in the scheme describing their business as matching that definition.
So if my label is not accurate, please explain why… and please use official definitions from organizations like the FTC, SEC, etc… not your own label.
ok, I saw this article.
I guess, people here are confusing and arguing two different things. Lazy Man says that this by definition is a pyramid scheme and others just say how great shakeology is. Here are my 2 cents worth.
I have been a “coach” for a while now. I don’t actively participate, I only order shakeology for my family. If someone wants to order through me – great, if not, I don’t ask anyone. Lazy man stated a few things that after my 2 years being a “coach” I have not experienced. I have an upline coach that I belong to – I never had a speech given to me about How to take no for an answer or ANY of those things. Everything I hear is only how GOOD it is for your health and what results and great experiences people are having by using it. So to me that part of your report is not true. I am sure some people are getting that training – however that’s not different from any other training. Second, I researched the ingredients for example your suggested cheaper alternative for Vega One. It looks like it’s really good, but it is 20 servings for the price and it is lacking a bunch of ingredients contained in shakeology. I would say I took your post seriously at first. But I see a few wholes. Using your analogy, I would say shakeology is like a pen that can write upside down, no other pen can, it is sold at a premium price (to justify the technology), but it really should be worth much more, so beachbody is actually giving away some of it’s money (to coaches that promote it) to have people spread the word and share the profit. Unlike some stores that have a sale of 70 % on items – and they still make money – I always ask there – how overpriced WAS this clothing in the first place?
Every time I try to find an alternative to shakeology, I am disappointed either by the taste, or by lack of ingredients available in Shakeology, or cheaper versions of comparable ingredients. Like I bought second highest rating of one of the shakes after shakeology, and I still have one tub sitting at home, I was disappointed it uses soy protein. Can’t bring myself to take it (although the taste is decent) and it was only 40 buck.
There is always someone who makes more money on something. It’s fine. I just find some of your findings to be not really findings based on my experience dealing with this company. I make no money on it. But I enjoy discount on other fitness products. So, don’t get all worked about the pyramid scheme. They do produce a superior product.
And YES, taste matters – you should try the alternative ones and this one yourself…
Sharon,
There are different conversations that can be had amongst any MLM. Most of the experts in pyramid schemes I’ve talked to have said that it isn’t even worth talking about the product, because it takes the focus away from the illegal activity of the financial fraud.
I don’t believe I said that Shakeology isn’t “GOOD” for your health, so I don’t know why you are saying that part is not true. If you talk to unbaised registered dieticians they are likely to advocate eating real food and not shakes over the long term. Of course, if you just listen to the Shakeology salespeople in your upline of course you are going to hear how GOOD it is.
The two products that I mentioned, especially the Spiru-Tein one, have AMAZING reviews on Amazon from people who AREN’T salespeople. So whatever great experiences you have with Shakeology, you can have them with these products as well.
Vega One is indeed only 20 servings, but it is a much cheaper price per serving. Just buy two and you’ll get more product.
There is not going to be an exact replica, which is why I said that Vega One is “extremely similar (and better in some ways).” One looking at it from the other way could be disappointed in what Shakeology lacks compared to Vega One. Maybe you could tell me which ingredients you consider important and list exactly how much of it you are getting your Shakeology. Just because the ingredient is on the label, it doesn’t mean that there’s enough of it or that it has significant value in the first place.
When you get to that level of comparison, you can’t see the forest from the trees.
It isn’t like a pen that writes upside as you suggest. That would be extra functionality. Shakeology has no extra functionality that Vega One lacks. It’s not like Shakeology gives me the ability to fly. It isn’t significantly nutritionally different in terms of core components (protein, fat, etc.)
In a previous comment, I referenced a bunch of people who weren’t hand picked that didn’t like the taste. If you listened to the podcast that was a catalyst for this article (linked at the beginning of the article), the person trying it says it is bad and the Diamond-level person didn’t disagree, but suggested mixing it with other foods (strongly implying that you should cover-up the taste.)
There’s nothing wrong with making money, and that’s what this whole website is about (hence the word “and money” in there). There is something wrong with running an illegal pyramid scheme
I eat real food. When I do make a shake, I don’t buy something preprocessed. I simply use whey protein, Greek yogurt, and frozen berries. Tastes great to me. My kids love it too. (Of course this isn’t relevant, but that’s why I’m not going to spend a lot of money on it.)
Well, yes, there is a purpose for every product. I don’t believe that shakeology is a meal replacement. It is basically a supplement mix. Is there a category like that that it can be sold under? I don’t believe in eating shakes as a meal replacement either. There is no such thing. And even beachbody does not advocate that. They usually say no more than one a day except for some short term things, which is legit.
I know that eating any food liquefied (even the one you just prepared from wholesome ingredients) is not good for you. Health aware people should know that. Even one of the beachbody programs basically kind of snubs it a little (they really struggle to find a place for it in the program – Body Beast). I don’t know if there is a prohibition to charge a higher price (even ridiculously so) if there are us willing to pay it. and honestly sales pitches are no different than ANY OTHER COMPANY.
I don’t like the structure of this either. I would prefer to pay 80 or 60 (or any less amount) for it and cut out all that “coach” bs. I agree with you there. But beachbody is so much more than just this one product – (if they even have a pyramid on a side :). I know I wasn’t lured into a scheme by high profits – I never saw profits there for myself. I don’t know how people do. In anything like this only select people benefit…. There are companies that are NOTHING like a pyramid schemes, with high sales turnover rates especially for the new associates.
I mean if your blog helps expose a truly illegal activity, that’s great. But right now it’s neither here nor there. Although I do admire the work that you did for this post… you should change your nickname :).