I must say, I am enjoying looking into these companies that my readers are recommending – so make sure you keep those requests coming in the comments section! This time, I’m going to discuss Arbonne!
I suspect this post will attract two key individuals. You’re either going to be an avid user of Arbonne products (or a distributor yourself), or you’ve potentially been burned by an MLM company, and you’re very against their business practices.
This post is mostly put together purely from an informational point of view in order to delve into the details of Arbonne and whether or not they’re a legitimate business opportunity, or just another MLM hiding behind the reality of being a Pyramid Scheme.
Throughout this overview, I am going to try and remain impartial, and look at both sides of the story. As it is never all good or all bad in these scenarios. I will mostly try to inform you with as much information as possible about the various factors you will need to know about to decide whether or not working with Arbonne is going to be beneficial for you.
There are many common questions I see asked online about these types of companies. The key one being whether you can actually be successful with Arbonne, or whether it is too good to be true.
Just a quick warning, if you’re currently an Arbonne consultant, you’re unlikely to agree with everything I write here, as I am analyzing both sides of the equation. However, I do please ask that you remain open minded throughout this post, and you may learn something that you didn’t know of before today.
So, without further ado, let’s go ahead and learn all about Arbonne!
What/Who is Arbonne?
Arbonne was set up by Petter Mørck in 1980 in the United States. Their key focus is providing nutrition and health-care products to the masses through network or multi-level marketing platforms. They’re comparable to NuSkin in my view.
In 2018, they were acquired by a large French company called Groupe Rocher and they claim to be making over $500 million in Revenue.
Arbonne is not a listed company, unlike NuSkin or Herbalife, so it is difficult to fully analyse the financials of the company and see whether they are truly as successful as they seem.
Business Model
Arbonne is pretty similar to other MLM companies that I have reviewed in recent times. In short, you pay a fee to become a distributor or in Arbonne’s case, a “consultant”. However, they are slightly different in that you can effectively be an affiliate through Arbonne, where you simply send people to the Arbonne website via your link, and you get a 35% commission when they make a purchase.
It should be noted, that I am far more favourable towards an affiliate marketing setup than other common setups where you are required to buy stock, and if you don’t sell enough stock in that month, you’re downgraded.
You can however purchase Arbonne products at discounted prices, and list them for whatever price you wish and pocket the profits on sales. However, there are no inventory requirements required with Arbonne, and therefore that makes them different from many of their comparable competitors.
If it wasn’t for their affiliation with many young women peddling their products relentlessly via Instagram and other social media platforms, then you wouldn’t think of it as too different from any other generic business selling a product.
However, there is more to Arbonne than meets the eye initially, so stick with me, and we’ll cover all bases!
How Much Does/Can an Arbonne Consultant Make?
This is the million dollar question always asked about these MLM style companies, isn’t it? Are you likely to make money, and if so, is it as much as the marketing spiel claims you can make?
According to Arbonne themselves, the average earnings for an Arbonne consultant was $839 – This statistic has been taken from the official Arbonne Income Disclosure/Compensation summary statement. However, that is just an independent consultant – a District Manager then goes up to $3,851 on average. It isn’t until you become a Regional Vice President (2nd highest level) that the average earnings become a very healthy annual salary, at an average of $71,847 per year.
That means that the answer here is, Yes, you can indeed make a good income from Arbonne. However, the likelihood of you getting close to that in a short space of time is slim to none. My guess would be that the Regional and National Vice Presidents have been working for Arbonne for years. You could argue that is the case for most well paid employees in day-to-day life. However, nobody has to struggle through earning only £1k a year, and then £3k a year until eventually maybe 5-10 years down the road they’re earning an amount they could actually live on.
To add a little more colour to these statistics:
- Arbonne had 174,000 independent consultants in 2018
- Only 17% of those consultants receive any earnings from the company during the year.
- The above table only factors in the 17% who actually received earnings during the year
- That means that based on the above, 90% of all active consultants earn an average of less than $4k per year. That isn’t an amount of money you could live on
- Only 3% of consultants ever make it to Regional Vice President Level
- The above table doesn’t take expenses into consideration
The reality here is that you’re more than likely going to be losing the will to live on these sorts of income levels. You cannot afford to live here, so it would have to be a 2nd job for you. But how many hours of work would you need to put in just to get $800 for the year? I imagine it is quite a lot.
At this point, it seems as though putting your efforts into an conventional job is likely to see you receive a better net reward over time than committing to chasing the elusive high paying vice-president positions within Arbonne.
If you’re being recruited by someone who works for Arbonne, then find out what their rank is. This will tell the whole story. If they’re claiming that they’re living the life, and it is all plain sailing, yet they’re only a district manager – It is more than likely they’re not even earning enough money to pay their rent each month.
Let’s look on the brighter side here for a second. These are averages, so they should be taken with some level of skepticism. It is possible that the amounts are dragged down significantly by some low performers. However, the accountant side of me thinks if there were “Independent consultants” earning far far higher than $839 a year, then Arbonne would release figures to benefit themselves here. For example, they could release a weighted average, which would appear much more favorably if the aforementioned was the case. The reality is probably that the above figures are quite accurate, at best. At worst, they’ve been massaged to make Arbonne take on a more beneficial image.
Compensation Plan
Costs of Becoming a Consultant
There is a $79 registration fee to join Arbonne and get the basic starter kit. This also includes some training material to get you started. On top of this, there is a $30 annual recurring fee that needs to be paid. However, this is all before you have any Arbonne products to sell, which is the key to making money in this business.
The ‘value packs’ for products which are discounted start at $270 which come with a range of products you can try and sell to the market.
You would think the expenses end here, right? Well, wrong…There always seems to be a catch with these MLMs.
There is a monthly sales quota you need to reach in order to maintain your qualification level, and be included in bonus schemes. Arbonne quotes this as being a minimum of “150 PQV each month”
The difficulty here lies in exactly what is 150 PQV? What does this actually equate to in cost terms?
Well, when an Arbonne Consultant sets up an order for product, it will show them what the “QV” is valued at in the checkout. So, for example, when watching a YouTube video explaining the system, they showed the following screenshot:
As we can see here, from spending $463.20, they were able to pull together 502 QV. It would be logical to assume then that 150 PQV would equate to a spend of approximately $150 – However, I doubt there is a strict rule on QV per dollar spend. I suspect certain products get better ratios of QV, and there’s a general sliding scale of the more you spend, the better your cumulative QV will be!
So, let’s add $150 to the monthly cost of being an Arbonne consultant, as without this expenditure, you’re not going to maintain your level, or get your bonuses.
Let’s set up a model here if you were to become an Arbonne representative, and what your costs would likely be in the first year:
- $79 Setup Fee
- $30 Annual Recurring Fee
- $270 (minimum) for a starter pack of products
- $150 x 12 = $1,800 minimum PQV expenditure
TOTAL COST: $2,179
This is without even making a single penny. So, based on their average compensation schemes, unless you happen to being in the top percentile of distributors, you’ll likely be losing money for your first few years, not making it. But, they’ll keep you lured in by the idea of being a top distributor one day and earning the big bucks!
Is Arbonne a Scam?
Not technically, no. Unethical in their business practice? Perhaps, yes.
They do sell legitimate products that people are buying, and I’m sure some people love their products, so you cannot fault them there.
They do however rope their consultants into an endless money pit where they’re tied into constantly purchasing a minimum order quantity each month in order to have any hopes of succeeding in the company. They also incentivise by providing bonuses for any consultants you can recruit into the MLM company.
So, in summary, no, Arbonne isn’t a scam, however, I would think long and hard as to whether it is the right business opportunity for you.
Is Arbonne a Pyramid Scheme in Disguise?
Currently, Arbonne is not widely recognised as such, as they’ve managed to get through the loophole of preaching the “multi-level marketing” approach to their business model.
However, they have butted heads legally on the argument that they are indeed a Pyramid Scheme. In 2017 Cynthia & Michael Dagnall sued Arbonne, claiming they were a Pyramid Scheme. However, the case was eventually settled out of court in 2018, which means the accusation has been mostly ignored and kept quiet.
There is a huge focus of recruitment at Arbonne – which when compared to a conventional business, is completely different. In fact, as a part of their training, they tell you to focus on building a list of 100 people that you know, that you can approach to try and bring in as a consultant. If you bring them in, you make more money. Simple.
This approach to business seriously has the potential to ruin friendships and drive people out of your life. Based on the returns you’re potentially going to get, is it worth it? You might make friends with other consultants who have done the same, but I just don’t think the disappointing revenue is personally worth it. Even the higher levels aren’t earning eye-watering levels of income.
The key problem here is that only the top percentile of consultants are really making good money. Because, the stats Arbonne are releasing aren’t including the expenses that people may endure. Sure, they may make $30,000 a year,but they probably spent $20,000 of that on product and reoccurring expenses of their membership to the company.
The simple fact that the people at the “top of the pyramid” are the people who benefit, and the people at the bottom desperately trying to sell and recruit to get there are losing money. This really does lean towards Arbonne being a Pyramid Scheme.
Effectively all you’re doing by recruiting more people is passing on the risk of failure to them. The more people you recruit, the less selling and personal purchases you need to make, as you’ll be maintaining your stature in the company through their hard work.
A simple fact is only 1 in 256 people who are consultants earn more than $18,000 a year. That alone is barely enough to live on, and doesn’t factor in the expenses. We can automatically chop almost $3,000 off that income as expenditure for maintaining your level in the company.
Only 13% of consultants made any money at all in 2014. So, they potentially forked out thousands for all the starter requirements, and then just made no money. This is the sad reality of many of these large corporations similar to Arbonne.
How Do I Stop Being an Arbonne Consultant?
The key to getting out of something you deem to be a Pyramid Scheme, or a negative business, is simply realising that what you’re involved in is not longer beneficial to you in the long term.
The problem and what makes this difficult is the marketing behind these businesses. They’re very “cult-like” and try to brainwash you into staying a part of the business. This can make it very difficult for many to detach themselves. There is immense pressure to buy more product, or bring in more people, and I’ve even read stories of people being ostracised if they didn’t act a certain way a company seminars.
I’ve also read many stories of people who strongly believe in the product, and that’s why they get involved. Many of these “MLM” style companies have good products, there’s no denying that. However, it is the delivery system, the seminars, the pressure and the style of selling which can be toxic. Sometimes it is important to realise that it would be better to stick to using the product, and not selling it.
Trust me, causing animosity with your friends and family because you feel as though you have to pressure them to buy your product, or join your ranks is not worth it in the long run.
Is Arbonne a Scam?
All of these similar companies – Arbonne, NuSkin, Herbalife etc are similar in my outlook towards them. They are what you make of it. The structure itself isn’t “bad” in terms of the monetary potential. The issue is the over inflated claims made in their marketing. You’re highly unlikely to become a millionaire or be paid a really high wage from Arbonne. Despite this, the marketing would lead you to believe that you have the potential to lead the life of luxury!
The hard reality of these schemes is that with the level of work involved to be highly successful, if you had just put that level of work into your own business or your own established career (lawyer, accountant, property, engineer etc) you would have made significantly more than you would from being an Arbonne Consultant. Go in with realistic expectations and you may not be disappointed.
See the below video about Arbonne and whether it is a scam:
