Core BuddyPress doesn’t have member types out of the box, BuddyPress Member Type is the free plugin that adds them, with an actual admin interface rather than requiring custom code.
Creating a Member Type
Go to Users > Member Type in wp-admin and click Add New Field. Name the type, configure its settings, and save. Repeat for each type your community needs, Instructor and Student, Vendor and Buyer, Free and Premium, whatever categories fit.
Editing and Managing Types
Hover over any existing type in the list, click Edit, adjust settings, then Update. Members can hold multiple member types at once, someone doesn’t have to be exclusively one category. Admins can also exclude specific types from showing up in the public members directory, useful for internal roles that shouldn’t be browsable.
Letting Members Choose a Type at Registration
Go to Users > Profile Fields, select the Base tab, and add a new field. Set its field type to Member Types, mark it required if every new member needs to pick one, and enable it for the site registration form.
Pricing
Free (v1.3.1, updated within the last two years, tested up to BuddyPress v14.3.3). Download it here.