The multi-level marking distribution model is “outdated and unsustainable,” says BODi’s executive chairman as the fitness and nutrition company looks to diversify revenue sources

The Beachbody Company, known for workouts such as P90X, Insanity, and more, is transitioning from its long-standing multi-level marketing (MLM) model in favor of a single-level affiliate program.

The fitness and nutrition company, which rebranded as BODi last March, says the official transition will occur on November 1, with the current MLM network expected to sunset by January 1, 2025. Participants in the U.S. and Canada’s Team BODi Partner Network will shift to the new affiliate program, according to the company.

BODi is also shedding a portion of its workforce, impacting approximately 33% of staff. The changes come as BODi looks to streamline operations and position the home-based wellness company for future profitable growth. 

Beachbody’s Turnaround Strategy

“The first phase of our turnaround is centered on lowering our infrastructure costs and re-architecting our financial model,” Mark Goldston, BODi’s executive chairman, said. “We have successfully accomplished that goal–we’ve lowered our revenue break-even point by more than $400 million, have reduced our net losses, and generated positive Adjusted EBITDA over the last three quarters.”

Goldston added that the next phase of BODi’s journey is optimizing and broadening its distribution points, which includes expanding BODi’s direct-to-consumer, Amazon, and partnership-driven sales channels to diversify revenue sources.

Just one year ago, BODi announced a new “Growth Game Plan” to reward high-performing network sales partners with special bonuses and streamlined its content into a digital fitness library.

A New Outlook

As for BODi’s long-held multi-level marketing distribution model, Goldston noted it’s “outdated and unsustainable” in light of market dynamics and consumer preferences. 

“The evolution to the affiliate model offers a simpler, more modern approach to customer acquisition and will directly reward the seller for their effort,” he continued. “The evolution to the affiliate model offers a simpler, more modern approach to customer acquisition and will directly reward the seller for their effort. The organizational challenges and complexity of the MLM approach has weighed on the company’s turnaround and the ability of partners to optimize their potential. We are confident this shift will be beneficial to stakeholders and to new potential participants.”

Goldson added that he will share additional details on BODi’s third-quarter earnings call, projected to be held on November 5, according to Zacks. 

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Carl Daikeler, CEO and co-founder of BODi, weighed in on the business model change, stating that since its inception, the nutrition and fitness company has had a long history of evolving its business model to adjust to dynamic market environments. 

“We continue to adapt and evolve to optimize our sales channels,” Daikeler said. “We believe that transitioning to the affiliate model will energize our network of partners and new participants to stay more consistent with their own health and fitness objectives and share their results to help others live healthier and more fulfilling lives and get paid for it, now without the complexity of managing and recruiting a team of other partners.”

BODi has also reaffirmed its financial guidance for Q3 and expects revenue in the $97 million to $107 million range

Beachbody Welcomes New Brand Ambassador

Last month, BODi named former professional football player and pro wrestler Dean Muhtadi as its new brand ambassador and partnered with Truemed, a healthcare payment provider that helps qualified customers use their HSA/FSA funds on supplements, exercise, and other healthy interventions. The partnership gives qualifying BODi customers the ability to use their pre-tax HSA or FSA funds to purchase BODi supplements, including its Shakeology superfood nutrition shakes.