There are often times where people use the terms multi-level marketing and pyramid scheme interchangeably. I have the habit of mainly using the term MLMs to refer to both. It’s just easier to use an initialism because it’s often shorter. It makes sense why people often use both terms like that, though. Both of them use a pyramid-like structure when it comes to how the money through that structure flows. Both schemes require you to join into them by paying a fee. Both schemes require you to recruit people to join in. The main difference is that MLMs are more focused on the sale of the products while pyramid schemes are more focused on the money being put into new recruits. Some pyramid schemes will often employ a similar strategy by actually selling products. But often than not, they’re a lot more focused on hoarding investments from the recruits.
Optavia falls on the multi-level marketing side rather than the pyramid scheme. The company, which was then known as Take Shape For Life, was founded in 2002 as an subsidiary of Medifast, which produces meal replacements kit. Medifast mainly sold its products through health professionals when it first started in 1981. Eventually, it went on to shift towards direct selling through Take Shape For Life, a company that was founded by then Medifast CEO Bradley MacDonald and Dr. Wayne Andersen. The company proved to be successful which, in turn, made Medifast focus more heavily into this business. They eventually rebranded TSFL to Optavia in 2017. Dan Chard currently serves as Medifast’s CEO.
Compared to a lot of other health and wellness companies that employ a multi-level marketing strategy, Optavia doesn’t sell nutritional supplements. A lot of MLM companies in this industry, like Usana and Arbonne, are more geared towards that, for some reason. Optavia has its own dietary program where you five of their pre-portioned meal kits and a meal of your choice. They call this their 5&1 Plan. The meals have 2–3 hour intervals between each one. A bunch of the meal replacement kits are nutritional bars made out of grains and nuts. And there are also ones that look like you just bought them off the freezer aisle in the grocery. That makes sense since the meals are pre-proportioned.
Like a lot of multi-level marketing schemes, you have to pay for a membership to become part of their affiliate program. The introductory business kit costs $199 and includes a bunch of guides and product brochures. Product kits range from $379 to $423. The total servings per each product kit are more than a hundred.
Another thing that differentiates multi-level marketing schemes from pyramid schemes is that there is at least some legitimacy to MLMs that pyramid schemes do not have. What I mean by that is that MLMs have a better standing than pyramid schemes. Some of Optavia’s affiliate members, dubbed “independent coaches,” have been featured in articles for publications like People Magazine or even in morning shows like The Today Show. The things that I linked are mainly about the weight loss journey that was in part due to Optavia.
While there is a bit more positive reception to multi-level marketing schemes, it’s not really that great either. The only way you can earn through MLMs is by selling products and recruiting people to become an affiliate. Everybody has to do the same thing. Remember: you paid to become part of this. Optavia did not hire you to sell their products. If you did, Optavia would be paying you an actual salary for it. You do get commissions for selling the product. And some MLMs will buy back the product you don’t sell. But you are putting money out of your own pocket for this venture.
Not a lot of people who become part of MLMs have a lot of success in it. According to a study that the AARP did, 47% of the people who took part in MLMs lose their money from being a part of it. Another 27% just make even on their sales. Your success in MLMs is also reliant on how wide your network of friends is. That could sometimes become strained because not everyone is willing to join MLMs because they didn’t find the products or services that satisfactory.