Selling on scare tactics: Fitness MLMs and the Coronavirus
Updated: Apr 16, 2020
The COVID-19 pandemic has flipped the fitness industry, and indeed the world, upside down. For fitness professionals around the country it has been a time of great uncertainty, stress and hardship. At the time of writing we are currently around 10 days into our lockdown in the UK and it has been two full weeks since gyms were asked to close. Whilst there is so much generosity and kindness coming from the community right now, there are also people who see the current unemployment crisis as an opportunity. Whether having malicious intent or not, there has been increasing noise from sellers in the MLM community with job opportunities for vulnerable fitness professionals. The following post will be quite a personal account of my interactions with and feelings about fitness MLMs, both before and during the pandemic.
For those of who aren’t familiar with the term, MLM stands for multi-level marketing company. The most prominent of these in the UK fitness industry are Isagenix, Juice Plus, BeachBody and Herbalife. These companies sell supplements, shakes and workout plans through their representatives. These people are not employees of the company but earn commission from their sales of products and by recruiting more people to join the business. When someone they recruit makes a sale, they get a percentage of the commission. The prospect of working for an MLM sounds great on the surface – work from home, build your own business, be your own boss, all you need is your phone and a great Instagram account! What better business to start at a time where staying at home in quarantine is our reality? What they often fail to tell you is the large start-up costs for beginning your ‘business.’ You often have to buy inventory to sell to people and pay a monthly or annual subscription fee for the privilege of being a representative. Despite MLM companies vehemently denying it, their set up is often likened to pyramid schemes, with many people earning more from recruitment than they actually do from sales, that is if they earn anything at all.
As a fitness professional with quite a large professional network, I often receive Facebook friend requests and follows on Instagram from people who have something like “health and wellness coach” in their bio (although many of them do not have a coaching or fitness qualification!). This is usually followed by a DM asking me if I’d like to join their “team” or telling me about a great business opportunity. These are all salespeople for MLMs, looking for you to join their ‘downline.’ However, since the closure of gyms in the UK at the tail end of March 2020, these requests have picked up speed. Most fitness professionals have lost a good chunk of their income due to the pandemic and MLM representatives see an opportunity to recruit. In times of financial hardship, our logical brain will not be functioning the same way. Many people will be worried about how they are going to pay their bills right now, so somebody coming along and telling you that you can make money from home and will be able to start selling right away is going to sound even more appealing than normal.
It has been shown that only around the top 1% of the company will make any substantial living from the company, which is mainly due to the number of sellers they have recruited underneath them. According to CNN, in 2011 only 25% of Herbalife representatives qualified to earn commission checks. Of these 25%, the median annual salary was $637 (£516). That’s £43 per month. The stats from Team Beachbody are just as shocking. At the end of 2018, 74% of their coaches held the basic ‘coach’ title. The average earnings of this group were $402 (£326) per annum. The average earnings across the company were $3019 (£2450) per annum, which is dragged upwards by the tiny percentage at the top of the company who may be making upwards of seven figures. Many people have shared their personal stories online about losing thousands of pounds due to working for an MLM. Check out this YouTube documentary on fashion MLM Lularoe and "Betting on Zero" on Netflix for a deep dive into Herbalife. These shocking earning statistics and stories of loss make it even more worrying that MLM representatives are using the coronavirus pandemic to recruit. They are targeting people who may have lost all their income, encouraging them to fork out a few hundred pounds for a starter kit with no real proof that they will actually earn any money from this. The person recruiting, however, will earn money from it.
The most concerning thing about all of this is that many existing sellers are trying to sell more products to their friends and family with the claims that these products will keep them healthy. There are a multitude of claims suggesting the products will boost your immune system, support a healthy body, reduce blood pressure, and risk of heart disease! At a time where everyone is concerned about staying healthy, these companies are praying on our anxieties and weaknesses. The science behind these claims is minimal to none. Juice Plus representatives often jump on the array of scientific studies behind their products, however all of these have been funded by the company itself. They lose legitimacy due to the small size of the testing group and nature of the participants. If you take a group of smokers who do not consume many vegetables and give them a vitamin supplement, they are likely to get better results than someone who goes to the gym three times a week and eats a balanced diet. Devin Gray wrote a fantastic research review of Juice Plus’ claims, which you can read here.
In summary, if you are a fitness professional struggling because of the coronavirus there are a lot better ways to make some extra money than joining an MLM. Check out this post I wrote on how to stand out from the crowd in the online fitness space. If you are struggling then see what government help is available to you at gov.uk.