4/22/2011

Beachbody and Pyramid Schemes

For some reason, I get the question Is Beachbody a Pyramid Scheme asked quite a bit. First of all, no, it's not a pyramid scheme and second, most people do not understand the workings of a pyramid scheme.

What is a Pyramid Scheme?

"People are often misinformed about network marketing and get the business model confused with illegal pyramid schemes.  To give a short summary, a pyramid scheme is similar to a Ponzi scheme.  Pyramid schemes are to the network marketing industry as Ponzi schemes are to the Investment industry.  Both look like a legitimate business opportunity and look like they are based on the business model, but they promise high returns with no work involved except for getting other people into the scheme and paying those above them with the money taken in by new investors.  Why they always ultimately fail it that as the scheme grows, new investors are required to put more money in.  Once the bubble bursts, the scheme falls apart and everyone gets burned." - Coach Jim Wyatt.

People PyramidWhat does this mean? New recruits are paying money into a business, but often do not receive any type product. The primary source of income, for example in Ponzi schemes, is from new investors. They must constantly bring in new investors in order to continue paying the old investors. Beachbody’s costs are not paid to the coach who recruits you. They are paid directly to Beachbody. Something else, a lot of those schemes require you to have inventory (most are likely to end up in the trash). Beachbody does not have such a requirement. Purchases are directed through their site or their resellers. There is no inventory kept on hand by the coaches.

If you want to know more on why Beachbody is not a pyramid scheme, read more on this at Fit Corner Network. <- CLICK!

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