Supplement and workout company BODi (Beachbody) recently announced that it is changing its business model from multi-level selling (MLM) to an affiliate program. For experts, this is proof that the MLM model has had its day.
• Also read: Here’s why you should be wary of the multi-level sales mirage
• Also read: A nutritionist was asked what she thinks of Beachbody’s ‘mommy juice’
From 1is November, BODi will transition the MLM model, also known as network marketing, to an affiliate link sales program. The MLM program will completely end on 1is January 2025.
In other words, BODi representatives will no longer be paid based on the people they recruit. The levels established based on sales made also disappear.
Rather, representatives will earn commissions related to product sales through affiliate links that they provide to their customers.
In addition to increasing the number of sales channels (BODi products will also be found on Amazon), the change should allow the company to lower its break-even point and reduce its workforce by a third.
The representatives in mourning
The news created a shock wave among BODi representatives.
“It’s like heartbreak and mourning at the same time. I go through the full range of emotions, from sadness to gratitude, from disappointment to hope,” Emilie Robidas, a BODi “coach,” wrote in a post.
“I’m probably in the denial stage of grief. But as long as it’s not over, it’s not over,” wrote Aurélie Dion, also BODi “coach”, on Instagram.
“It’s really sad for all the women who have built something for years, who have worked hard to achieve this. What’s sad is for everything that it brought us,” underlined Sarah Lauzon, BODi “coach”, in a TikTok video.
BODi representatives contacted by 24 hours did not respond or declined our interview requests.
Why change your business model?
Professor of strategy at the Faculty of Administrative Sciences at Laval University Yan Cimon sees the transformation of BODi favorably.
“It’s not a bad idea for companies like BODi to start thinking about their business model. Distancing yourself from the MLM model is a good step forward,” he says.
• Also read: “At the end of everything except wine”: what the culture of “wine moms” tells us about female alcoholism
These companies face “reputational challenges”, although multi-level sales are completely legal, underlines the professor.
“It’s not a model that gets good press. There has been a lot of skepticism and criticism of this model over the years,” he says.
“The model has had its day”
This change at BODi, which comes a few months after Tupperware, one of the first MLMs, began a bankruptcy process, could be a sign that “the model has had its day”, believes Jean-Luc Geha, associate director of the HEC Montreal Sales Institute.
In a press release, Mark Goldston, Chairman of the Board of Directors of BODi, himself admits: “The multi-level marketing distribution model is outdated and unsustainable.”
• Also read: I Had My Sports Card Collection Appraised by a Pro to Find Out How Much It’s Worth
When MLMs came into existence, “it was at a time when there was more face-to-face meeting. People had more time, explains Jean-Luc Geha. There, we live in another era. People are overwhelmed, they run around a lot, they no longer have time for face-to-face meetings.”
“We add to that the competition with products found on Amazon and other platforms, which requires [les MLM] to question ourselves,” he notes.
Fewer reps
The low unemployment rate in the country also makes recruitment more difficult for these companies, argues Jean-Luc Geha.
This is also why the number of representatives of various MLMs jumped during the first years of the pandemic, while many people lost their jobs, he illustrates.
In 2020, the number of advisors doing direct selling jumped 20% in Canada to reach 1.39 million, according to figures from the Direct Selling Association of Canada. The most recent data, dating from 2022, shows a drop in their number to 1.1 million.
Yan Cimon, however, does not believe that the death knell for MLMs has sounded. “There are always people who will think it’s a good idea,” he says.
