Team Beachbody has phenomenal brand recognition. Social media is filled with pictures of people getting fit with Team Beachbody exercise programs and supplements. But, is it a genuine business opportunity?
Can You Make Money as a Team Beachbody Coach? Most Team Beachbody Coaches do not earn a profit. According to the Team Beachbody Statement of Independent Coach Earnings for Dec 29, 2016 – Dec 27, 2017, most coaches lose money.
What is Team Beachbody?
Launched in 2007, Team Beachbody is the Multi-level Marketing salesforce of Beachbody, the company that once dominated cable television with late night infomercials promoting fitness products like Insanity, Brazil Butt Lift, Hip Hop Abs, P90X, and others.Team Beachbody calls their distributors “Coaches.” Team Beachbody Coaches are first and foremost commission sales agents. They are not particularly qualified to give nutritional or fitness advice.
The title of Coach has no legal meaning and as such, is not regulated. Team Beachbody coaches are just salespeople. If they have any knowledge of fitness or nutrition, it’s not because they are associated with Team Beachbody.
$800 Million and Counting.
In 2016, Team Beachbody reported revenue in excess of $800 million. However, only 1.2% of all coaches earned $1,500 or more for the same year!
When expenses are subtracted from earnings, it is estimated that less than 1% of all Team Beachbody coaches made a profit.
The coaches dismal earning figures are documented in the Team Beachbody Statement of Independent Coach Earnings. However, Team Beachbody continues to claim that a coach has the opportunity to “earn supplemental income, or maximize their income potential.”
Marketing and Maximizing Profits.
Keep in mind that Team Beachbody’s objective is to maximize profits for the company. Selling the “business opportunity” is just marketing that serves to maximize profits. You must decide if you want to play the game.
It is the responsibility of each individual who might join Team Beachbody to conduct thorough due diligence. That is the purpose of this article.The astronomical profit the company made is not surprising once you understand that Team Beachbody coaches must pay the company for the privilege of making the company money.
And, that the coaches must purchase or sell a minimum of 50PV worth of product each month in order to remain “qualified” to earn commissions.
Paying for the Privilege.
Paying the company for the privilege of making the company money and being forced to buy or sell products each month to remain qualified are unique to the MLM industry.
The MLM business model is lucrative for the company and a few at the top of the organization. However, the money is made at the expense of everyone else in the sales force.
Unfortunately, this structure makes it difficult for coaches at the middle and bottom of the structure to earn more than they spend. This fact is reflected in the Team Beachbody Statement of Independent Coach Earnings for Dec 29, 2016 – Dec 27, 2017.
Profit and Loss.
In typical MLM fashion, Team Beachbody requires coaches to purchase or sell product each month before they can qualify to receive the commissions and bonuses they earned.
The minimum amount is 50PV. PV is Personal Volume. PV is not defined on the Team Beachbody website, but it is assumed that 1PV equals $1. The lack of transparency on the Team Beachbody website is concerning.
If our assumption is correct, a coach is required to purchase or sell a minimum of $50 of product each month to qualify to earn commissions and bonuses.
As a coach advances in rank, so does the minimum PV they are required to purchase each month. The requirement peaks at 250PV or an assumed $250 a month.Because of the requirement to buy or sell products, most Team Beachbody coaches never earn more with the business opportunity than they spend.
In other words, although they might technically earn commissions, they do not make a profit. Their Team Beachbody business operates at a loss, month after month.
Team Beachbody Products.
Team Beachbody markets fitness programs, nutritional supplements, and health products. Below is a partial listing of Team Beachbody products.
Team Beachbody Fitness Programs include P90 ($79.90), P90X3 ($119.95), Focus T25 ($199.95) and the workout DVD Insanity.
Team Beachbody Nutritional Supplements include Shakeology, a meal replacement shake ($129.95), 3-Day Refresh, 3 days of nutritional shakes, meals and snacks ($160), Base Shake ($59.95), Fuel Shot ($49.95), M.A.X Creatine ($29.95), Super Suma ($29.95) and Daily Sunshine, a nutritional shake for children.
Team Beachbody Health Products include Derm Exclusive Kits that reduce wrinkles; prices start at $39.95.
The Products are Available Everywhere.
Team Beachbody products are available on Amazon and eBay. There is no reason for anyone to buy exclusively from a specific Team Beachbody coach.
Also, the products are priced higher than similar products offered by other MLMs and traditional retail outlets.
If you search for a Team Beachbody product on Amazon, Amazon willsuggest several similar products. Many of the competing products are much less expensive.
As we’ll see in a moment, each time a Team Beachbody product is sold, it must generate revenue for up to 14 levels of distributors.
This top heavy structure creates a highly inefficient sales process that inflates the cost of each product.
Traditional sales outlets do not have this burden and can offer similar or superior products at a much lower price.
The Team Beachbody Business Opportunity.
The only sure thing about the Team Beachbody Business Opportunity is it will cost you money.
In the Team Beachbody Statement of Independent Coach Earnings for Dec 29, 2016 – Dec 27, 2017, Team Beachbody states that;
“The …earning potential of the Team Beachbody opportunity allows its Coaches to …take advantage of…personal fitness and health benefits of …Beachbody products, earn supplemental income, or maximize their income potential.”
They go on to say that results will vary depending on the “time, dedication and effort” a coach puts into their business and that there is “no guarantee of success.”
They conclude with stating, “…there is a genuine opportunity for individuals willing to…develop customers…and mentoring others to do the same.”
This wording sells the concept that if you work hard enough, you will succeed. However, nothing is mentioned about how the so-called opportunity is structured to put the coach at a steep disadvantage.
As with any MLM, succeeding with Team Beachbody is difficult.
It doesn’t matter if you spend every waking moment at your Beachbody business or, how much you spend on products or how beautiful you are; the business MLM model benefits the few at the top, not rank and file coaches.
As I will show in a moment, MLM is designed to maximize the company’s profits by tricking the sales force into becoming unwitting captured customers who;
- Pay for the privilege of making money for the company.
- Buy products each month.
In a moment, I discuss this in detail. For now, let’s revisit the Team Beachbody Statement of Independent Coach Earnings for Dec 29, 2016 – Dec 27, 2017.
Statement of Independent Coach Earnings.
It is impossible to perform proper due diligence on the Team Beachbody opportunity without taking a close look at the Earning Disclosure, aka, the Statement of Independent Coach Earnings.
Unfortunately, the Statement is difficult to decipher. This lack of transparency is also typical of MLM. If Team Beachbody was transparent with their earnings, the near impossibility of making a profit with their opportunity would be obvious.
Do the Math.
The Statement of Independent Coach Earnings show that 98.8% or more of all Team Beachbody coaches lose money.
It costs $39.95 to become a Team Beachbody coach and $15.95 a month thereafter.
Coaches are also encouraged to purchase Challenge Packs that range in price from $140 to $305.
Newly recruited coaches are encouraged to enroll in monthly auto-ship. Auto-ship is another typical characteristic of MLM. In the case of Team Beachbody, auto-ship costs $119 a month.
Finally, to qualify to earn commissions and bonuses, a coach must also purchase a minimum of 50PV worth of product each month. The monetary value of 50PV is not clear. However, for the sake of this analysis, we will assume 50PV equals $50.
When we add these numbers together, we see that at the most basic level, a Team Beachbody coach could spend $2,258 or more a year.
However, according to the Team Beachbody Statement of Independent Coach Earnings for Dec 29, 2016 – Dec 27, 2017, only 1.2% of all coaches earned more than $1,500 for the year.
That indicates that as much as 98.8% of all coaches operated at a loss.
Is Team Beachbody Really an Opportunity?
Although Team Beachbody presents the opportunity as a chance for coaches to “earn supplemental income or maximize their income potential,” the truth is most people who try the Team Beachbody opportunity will lose money.
When you look at the numbers, it’s easy to see that coaches are actually customers. Sadly, the ruse of opportunity is a hallmark of MLM.
Jon Taylor’s Research.In the 1990s, Dr. Jon Taylor rose to the top 1% of distributors in a well-known MLM company. As a top earner, Taylor continued to lose money on his MLM business, although he sacrificed time away from his family and spent every weekend promoting the opportunity.
Eventually, he realized that the opportunity he was promoting was not an opportunity at all, and the people he recruited into the business were also losing money.
After leaving MLM, Taylor investigated hundreds of MLM companies, including Team Beachbody, and discovered a disturbing pattern. On average, only a tiny fraction of distributors at the top of the organization earns more than they spend on their MLM business.
Taylor’s research is published on the Federal Trade Commission’s website.
The Ugly Truth about MLM.
Taylor concluded that MLMs are essentially modified pyramid schemes where lower level distributors are forced to buy products in order to “qualify.”
The purchases of the lower level distributors generate an income stream that enriches the few at the top of the organization.
Commissions are structured, so the few at the top earn as much or more from each sale than the person making the sale, although those at the top did not contribute to making the sale.
Traditional Retails Sales.
To better understand how unfair MLM is in general and how the Team Beachbody opportunity is particularly unfair, it’s helpful to compare it to a traditional commission retail sales structure.
A traditional commission sales structure has four levels at most. There is the salesperson, a local director of sales, a regional director of sales and perhaps a national director of sales.
In this environment, the person making the sale earns the largest portion of the commission. For example, the salesperson might earn 70% of the commission generated by a sale. The director of sales who supported the sales effort might earn 15%. The regional director might earn 10% and the national director 5%.
A few things to take away from this example are;
- Revenue is based on genuine retail sales.
- The salesperson did not have to “qualify” for the commissions she earned.
- A salesperson has a reasonable chance to earn a decent living making only retail sales.
- The salesperson did not have to buy products which enriched the directors over her.
- The salesperson did not have to pay the company for the privilege of selling the company’s products and making it money.
- The salesperson did not have to recruit anyone.
The Team Beachbody Opportunity Revisited.
Now that we know what a non-MLM commission sales structure looks like let’s revisit the Team Beachbody Opportunity.
There are 14 levels in the Team Beachbody compensation plan. 14! More than 4 levels is an artificial construct that benefits the few at the top at the expense of the many below them.
Also, as a Team Beachbody coach advances in the ranks, the cost of “qualifying” increases to 75PV at the Ruby Level, 100 PV at the Diamond Level and 250PV 1 Star Diamond and above. Again, 250PV is assumed to be $250.
There is no reason to force a Team Beachbody coach to qualify with product purchases and sales except to generate income for the few at the top.
Also, because qualifying requirements increase as a coach moves up in rank, they will typically always be behind the curve and lose money.
Only the top few ranks earn more than they spend. However, at every rank, the coaches generate commissions for the few at the top, and the company makes money.
When an organization has 14 levels like Team Beachbody does, it creates a very large mass of coaches, all buying product each month to qualify and funneling commissions to the top. And, although the few at the top are far removed from the sales and did not contribute to the sales in any way, they still earn a commission.
The Team Beachbody sales structure makes it very difficult to earn a respectable income from retail sales alone. Recruiting new blood and locking them into buying product each month to qualify is pushed as the way to earn more money.
However, as we’ve seen, this doesn’t work either.
Would You Buy the Products?
The Team Beachbody opportunity is a marketing ploy.
The trick Team Beachbody plays is to make it appear that if you become a coach, you will be building a business by purchasing their products.
If you knew you’d never make money with the Team Beachbody opportunity, would you buy the products?
Why Coaches Buy Team Beachbody Products.
Coaches buy Team Beachbody’s products because they believe they are building a business when, actually, they are first and foremost a customer spending money and enriching the company.
True, the products may help some people manage their weight and to achieve an enviable body, but people are not overweight because they aren’t consuming enough of Team Beachbody products.
Team Beachbody Promotes an Idealized Body.
We’ve been told that you can never be too thin or too rich, and Team Beachbody plays to this ideal. It’s great marketing, but it’s not real life.
Being thin doesn’t mean you’re healthy and money by any means isn’t the answer.
Promoting an idealized body image is not helping people become healthy or to accept themselves. On the contrary, it perpetuates the belief that when “I’m thin enough or rich enough, I’ll be happy.”
It wasn’t a surprise when I found Team Beachbody complaints that included body shaming.
Complaints from Team Beachbody Coaches.On her blog, former Team Beachbody coach, Melissa Blevins, wrote that she quit when she realized that every dollar she earned with the opportunity went right back to the company.
Other coaches and former coaches wrote Ms. Blevins to share similar experiences, sometimes adding that working the Team Beachbody business took time they would have preferred spending with their spouse or children.
A recurring complaint from coaches was how disappointed they were to discover no income after months of hard work.
Winner Take All.
We’ve seen how only a few coaches at the top of the organization make most of the money and how this money comes primarily from coaches in the middle and bottom of the organization.
Because Team Beachbody is structured like a typical MLM, there is very little opportunity for anyone other than a few at the top. The Team Beachbody Statement of Independent Coach Earnings clearly shows that only a very small fraction of all coaches earned a substantial income from the opportunity.
The Earning Statement does not reveal how many years the top earners have been with the company or specifically how many coaches earn more than $1,500 a year.
However, it lumps the top earners together with an annual income of between $1,500 and $3 Million. We only know that only 1.2% of all coaches earned more than $1,500 for the year.
We’ve seen that most coaches will spend more than $1,500 a year to qualify for commissions and bonuses. It’s an impossible game that only a few can win.
I suspect the top earners have been with the company from the very beginning because the MLM business model gives a huge advantage to the earliest distributors.
Everyone else ultimately just feeds the machine with their time, energy, and money.
Like Building a House on Fire.
The MLM business model shares disturbing similarities with pyramid schemes. Both are dependent on recruitment and fundamentally unstable.
Without recruitment, both an MLM organization and a pyramid scheme will quickly collapse.
The two recurring incentives throughout Team Beachbody is to buy products and recruit new coaches. When a coach discovers that they aren’t making money, or worse they are spending money they don’t have, they will naturally quit.
MLM has a high rate of attrition. Each month, approximately 30% of an organization is quitting, 30% is stagnant, and 30% are trying to work the business.
Building a downline in any MLM is like trying to build a house while it’s on fire.
The Tragedy of MLM.Often, it is the people who can least afford to spend money who are attracted to MLM. They need to make money, but only end up going deeper into a financial hole.
MLM harms people. Sometimes people just lose money, but sometimes it’s much worse, relationships fall apart, or a distributor goes into debt trying to make the flawed MLM opportunity work.
A typical MLM marketing strategy is to recruit friends and family. It’s selfish and foolish to exploit the people who are closest to you.
You need them to be friends and family. Take care of your relationships; don’t try to profit from them.
Why We’re Fat.
Although Team Beachbody makes an effort to teach portion control, it does little else to teach proper nutrition or fitness.
Like New Years Resolutions, it’s easy to see the amazing bodies in the Team Beachbody marketing material and fall in love with the idea of looking like a supermodel.
However, calorie restriction and an intense workout regimen cannot be maintained.
Even supermodels and movie stars only look their best for short periods of time. It’s unrealistic to expect most people to starve or torture themselves. And, the truth is, they shouldn’t have to, and it’s not healthy anyway.
Nutritional science shows that we are fat because we eat the wrong stuff and because we are sedentary. We eat too many processed foods. Eating more processed foods, even nutritional designer foods like the Team Beachbody products will not help us lose weight.
The reason we are so confused about what is healthy is largely because of the profit motive of the food industry. As long as we are confused about why we’re fat, the industry can sell us their so-called solution.
Team Beachbody is selling a supposed solution that is profitable for them, but that really doesn’t address the problem.
Until we learn to eat properly and to be more active, we will continue to be over-weight and lethargic.
Proper Nutrition.Because the food industry dominates the nutritional conversation and because there are dozens of MLMs shouting at us from social media to buy their magical elixirs, we can’t hear the quiet, reassuring message of science-backed nutrition.
Decades of science and the largest nutritional study ever conducted, demonstrate that a plant-based diet of whole foods plus moderate physical activity leads to health and longevity.
And, it’s a lot cheaper than buying shake powders and meal replacements.
To learn more about science-backed nutrition, visit NutritionFacts.org. You’ll find an expansive library of short videos discussing all things nutritional.
If you found this article helpful or if you would like to share your experience with Team Beachbody, please leave a comment below. Thank you.