What caught your attention about this particular MLM program? Did a friend recommend it to you? Perhaps you had heard about Arbonne and wanted to know more about it. Maybe you were concerned if it was a scam and wanted to learn more. You are at the right place to get the facts about Arbonne.
MLM companies need critical study to find out if they are genuine businesses or perhaps scams in disguise. When a company promises that there is no limit to what you can earn, I worry if they are over promising and under delivering. Arbonne like all MLM programs state that there is no limit to what you can earn. Hence, I want to find out if Arbonne is a scam, or is it worth your time if you are looking for an opportunity to make money.
Is Arbonne a scam or not? Is it a company you should bank on building a business for yourself as an independent consultant? Read on to find out the answers to both of these questions.
Especially the 5 critical things about the company I will tell you about later in the article that should factor into your decision.
My review focuses on the Arbonne MLM business opportunity. I will only discuss the products to provide the basis for the Arbonne business. I will be addressing the following:
- The Company Details
- What is Arbonne about
- How does their business work
- Pros & Cons
- Is This Right For You?
Petter Morck, a Norwegian, started working in the skin care industry in 1965. He was concerned about the harmful ingredients used at the time in the industry and moved to Arbon, Switzerland in 1975 to develop his own line of skin care products that would not have harmful ingredients. They are classed as vegan, gluten free, kosher and cruelty-free. In 2014, it established an Ingredients Guide.
In 1980, he moved to Orem, Utah to open Arbonne International, a skincare company that used the Multi Level Marketing (MLM) model to sell its products. Petter passed away in 2008.
The current CEO is Jean-David Schwartz. Petter Morck’s son Stian Morck, is the Brand Ambassador of the company. Arbonne current headquarters is located in Irvine, California. In 2018 Arbonne recorded revenue of $523 Million.
Arbonne International is operational in the US, Australia, New Zealand, Canada, UK, Poland and Taiwan.
What Is Arbonne About?
Arbonne markets products in the skincare and health and wellness industries. Its products are developed at the Arbonne International Research and Development facility in Switzerland and produced in the US. The company exemplifies the vision of its founder Petter Morck in making products that are not harmful. It prides itself on what ingredients it doesn’t use as much as what it does use.
An introduction of the Arbonne products is available at their Discover site. I am not a consultant of Arbonne. If you wish to sign up as a consultant or preferred client you can do so at this page.
Skincare, Hair and Beauty Line
Arbonne as an extensive line of skincare products that includes its most recent Anti-Aging RE9 line. You can learn about all the Arbonne skin care products by clicking here. In addition to skincare, Arbonne also offers its own line of makeup and hair care products that you can find from the same link.
Arbonne prides itself in offering nutritional products that are made from plant extracts and are vegan and gluten free. As the picture below proclaims they are called the Arbonne Essentials.
How Does The Business Work
Arbonne markets its products through a network of Independent Consultants (referred to as Consultants onward) using the MLM business model. Anyone can join the Arbonne Business Opportunity as a consultant for a registration fee of $79. Renewable annually for $30.
A consultant can earn money 4 ways as follows:
- Commissions from personal sales
- Overrides from team sales
- Bonus for every level of management for company sales targets met by team
- Mercedes-Benz Cash Bonuses for Regional Vice President and up.
Income earned from 1 and 2 above is paid weekly. Income from 3 and 4 is paid monthly.
Arbonne uses specific terms to calculate commissions at various stages of their compensation plan. In the US, 1 RV point is equivalent to 1 US Dollar. I am going to quote the following section between the rows of asterisks, verbatim directly from the Arbonne Success Plan, for clarity.
Key Concepts For Understanding the Compensation Benefits.
All Arbonne products have a Suggested Retail Price (SRP), Retail Volume (RV) and Qualifying Volume (QV). These help you understand your Income and Benefits.
- SRP – This is used to calculate product discounts, Client and Preferred Client Commissions paid for product sales
- RV – This is used to calculate Overide Volume (OV)
- OV – This is used to calculate the overrides for product sales. OV is 65% of RV
- QV – This is used to calculate volume from product sales to qualify for promotions, and maintenance of the ranks in the Success Plan, as well as incentives and other rewards. It is the universal point system that we standardize across each country.
Please note that Starter Kits, Business Aids, Business Fees (i.e., registration and renewal fees), sample packs, and product specials do not have RV or QV. Therefore, items without RV or QV do not generate commissions and overrides and do not count toward rank qualification or maintenance. Discounted or value priced product sets or other product specials may have reduced RV and QV and reduced Client and Preferred Client commissions.
Qualified Status: At all levels of the SuccessPlan, you need to achieve “Qualified Status” by accumulating 150 Personal Qualifying Volume (PQV) each month to receive overrides (500 PQV for paid-as Consultants to receive an override), bonuses and other incentives and to qualify for a promotion to and maintain the team management levels at Arbonne, which are District Manager and above.
Personal Qualifying Volume (PQV): PQV equals the QV from the product sales through your Arbonne account and the product sales to your personally registered Clients and Preferred Clients.
Commissions From Personal Sales
It costs a registration fee of $79 to become an Arbonne Consultant. This renews annually at $30. For this fee a consultant gets their own Arbonne sales and marketing website. Plus the training to promote the products and recruit new consultants.
Each independent consultant can have two categories of customers.
- You sell to Clients at suggested retail price and earn a 35% commission
- You sell to Preferred Clients and earn a 15% commission of the suggested retail price
A consultant can purchase the Arbonne products at a discount of 35% of the SRP.
A Client is just like a regular customer who pays the full suggested retail price (SRP).
A Preferred Client pays a $20 annual subscription, renewable $20 annually, and gets a 20% discount off the SRP. They also get a 40% discount of the SRP on Arbonne Special Value Packs. This link shows more perks for Preferred Clients. Since the Preferred Clients get a discount on the SRP, the consultant also receives a smaller 15% commission of the SRP.
This is the primary method for consultants to earn commissions in Arbonne. Preferred clients are encouraged to make monthly purchased of 150 PQV. When they do that they get free shipping as well as a free gift they can redeem with their next order. If a customer is not willing to maintain a monthly 150 PQV, then it doesn’t pay to be a Preferred Client. In that scenario, the customer is advised to remain a regular Client who pays the full retail price for the products.
Overrides From Team Sales
In order to amplify your earnings, it pays a consultant to sponsor other consultants into their front line, called 1st Generation. This is the pathway to earn overrides from sales made from one’s downline.
The MLM design is classed as an Unilevel Plan. Each Independent Consultant has no limit to the number of personal recruits they can place in their 1st line of Independent Consultants that is termed 1st Generation. The line of new consultants sponsored by their personally sponsored consultants is termed 2nd Generation, so on and so forth. Consultants earn overrides up to 6 Generations deep.
To qualify to earn overrides, a consultant must generate 500 Personal Qualifying Volume (PQV) points in that month. The PQV is calculated by adding up the total dollar value of the retail sales made by the consultant personally, regardless of discounts. For example, if a Client purchased a product at full retail of $50, the PQV would be 50.
If a Preferred Client paid $40 for that same product, a 20% discount, the PQV would still be counted as 50.
The Personal Qualified Volume (PQV) includes sales made by the consultant themselves, as well as the products purchased by their Client and Preferred Clients.
Purchases made by the 1st Generation Consultants and the sales of their Clients and Preferred Clients are classed as Success Line Qualifying Volume (SLQV)
In order qualify to earn 6% of the Override Volume (OV) from their team, a Consultant must meet a PQV of 500. This can be a combination of their own purchases as well as those of their Clients and Preferred Clients.
Note that the OV is 65% of the Retail Volume. I hope you are keeping up with my explanation. It took me quite a while to understand how this works. I will be providing links to the Success Plan and a video down below that will make this clearer.
Consultant Cash Bonus
A Consultant can earn a $100 Independent Consultant Cash Bonus when they personally sponsor a minimum of two new Independent Consultants and/or Preferred Clients, who each accumulate at least 150 PQV in their Start Month, and in the same month, they accumulate 150 PQV and 2,500 SuccessLine Qualifying Volume (SLQV). This SLQV is the sum of all the sales generated in their downline as well as the consultants PQV. To repeat, these points are calculated from the products Suggested Retail Price (SRP).
1st Critical Thing You Should Know
If the consultant’s downline generate a SLQV of 2500 points and the consultant doesn’t meet the 500 PQV, they will NOT earn that 6% override.
Note: Every position in Arbonne, from District Managers to National Vice Presidents have to meet a minimum of SLQV in order to qualify for overrides. Details are provided in the Success Plan, the link shown below.
At the entry Consultant level, In order to earn that $100 bonus, they must also earn a PQV of 150 in addition to that SLQV of 2500. The downside is if the consultant falls short of their PQV in any month, they will not earn any overrides. Of course, they will still earn commissions from their personal sales.
The compensation plan concept may be easy to understand. But the details that explain what you can earn and how, requires some study of the 20-page Success Plan. This is not easy. Part of the compensation plan is how you can increase your earnings by rising up the ranks. These are:
- District Manager (DM)
- Area Manager (AM)
- Regional Vice President (RVP)
- National Vice President (NVP)
To illustrate the process, I’ll discuss the details on how to become a District Manager. However, I am not going to discuss the intricate details on how to advance to the other ranks. I will provide a general overview later.
A consultant is given an option to advance to District Manager over a 1 Month, 2 Months or 3 Month plan. Arbonne states that they can advance at their own pace. The requirements are different for each option as shown below.
- One Month Option – 1000 PQV and 6000 SLQV as defined above. Note that the SLQV includes the 1000 PQV.
- Two Month Option – 1000 PQV, 6000 SLQV and an addition of 150 PQV each month.
- Three Month Option – 1000 PQV, 7500 SLQV and 150 PQV each month
Note that the longer one takes, the more sales are necessary. The main goal that is drummed into every new consultant is they need to aspire to DM as quickly as possible.
After the above qualification process is complete, a DM needs to meet a 2500 SLQV each month to qualify for the DM overrides and bonuses.
I am not going to go into the earnings potential of District Manager and up. When you click the banner below you will be get to the 20 page PDF Success Plan Document that will provide all the details. Here you will find out what goals you will need to meet in order to earn more income as well as bonuses. There is a great deal of information here that you should go over carefully if you decide you wish to become an Arbonne Consultant. You can also download this file for future reference.
The way to increase your earnings is to do whatever it takes to grow your organization of consultants that will achieve the sales targets shown in this document. As your organization gets bigger, you get promoted to higher ranks that I will describe in the next section.
Since this can be quite complicated, here is a video made by one of the Regional Vice Presidents Kristen Furbacher, that provides an overview to help make it easier to understand how all of this works.
How We Get Paid & Promote in Arbonne
Further Advancements To Higher Ranks
- Area Manager (AM) – DM must train 4 1st Generation Consultants to advance to DM in order to become AM
- Regonal Vice President (RVP) – AM must train 4 of their DM’s to advance to AM in order to become RVP
- National Vie President (NVP) – RVP must train 4 of their AM’s to advance to RVP in order to become NVP
Each of these advancements’ comes with having to maintain higher levels of SLQV that in turn earns the Consultant higher levels of override earnings. This is broken down in the following table. You can click this table to get to the Independent Consultant Compensation Summary where this table comes from. You can also download a copy to your computer for future reference. This goes hand in hand with the Success Plan link above.
2nd Critical Thing You Should Know
The vast majority of Arbonne Consultants earn nothing. In fact, it costs them to be in the business because of the PQV they need to qualify to earn commissions.
Hence, the above US table is only based on consultants who are earning an income. It is NOT based on the total number of consultants in the company. This makes these numbers even more worrying.
Let’s focus on the Independent Consultants first. They happen to be the bulk of those who get paid at 62%. Their average annual earnings are $839. The bottom 50 only earned $18 A YEAR! When you take into account the products they had to purchase, they actually lost money.
District Managers and Area Managers
Based on the average earnings, neither of these ranks earn a living wage if they did this full time. The amount of effort it takes to reach these ranks is substantial.
Regional VP’s and National VP’s
It is only when you reach these ranks can you give up your day job and work your Arbonne Business full time. These ranks make up only the top 3% of all income earners in Arbonne. So how do they earn as much as they do? The percentage of their overrides are higher than those below them. More profits flow upwards to them.
You can be demoted. If you fail to make your SLQV in any month, you are demoted to the next rank down. You can increase your numbers and get moved up again. However, the way the system works is you do not end up with the same number of consultants in your team like you had before you were demoted.
Hence, there is tremendous pressure to keep recruiting more consultants into their down lines,
3rd Critical Thing You Should Know
You may have heard of the MLM joke that members end up with cupboards full of products they never end up selling or using. Do you know why? Although there is no direct pressure to buy all this stuff there is a good reason why this happens. It has all to do with maintaining one’s rank.
Rank has a direct bearing on the percentage of overrides you can earn. The higher the rank, the higher the percentage. So if you fall short on sales to maintain your rank, consultants tend to make up that volume by purchasing excess products they do not need. They justify that move as building up inventory for making retail sales.
That never happens. When consultants give up and quit, they end up with all those excess products that ends up expiring.
4th Critical Thing You Should Know
It’s not only Arbonne where the odds are stacked against making it. This principle applies to the vast majority of MLM’s. Sure, you can make a lot of money. But those who do, have already had a lot of MLM experience and can move their down lines when they change companies for a new shiny object.
The companies do not care about this situation. About 95% quit. As long as their Top money earners continue to drive their teams to recruit more consultants to take up the slack, business continues,
5th Critical Thing You Should Know
MLM companies are all part of the Direct Selling organization. Do you know that very little actual direct selling goes on? Most of the products are purchased by the members themselves when you strip away sales made to Clients and Preferred Clients. The Direct Selling connection has been used to legally separate themselves from being branded as a Pyramid Scheme. Or bluntly, a Ponzi Scheme.
The products they make are more expensive compared to high quality alternatives you can purchase in retail stores everywhere. In order to demonstrate they have some edge, an aura is created that what they produce is based on research and patents that set them apart from the crowd. But is that really an advantage?
Pros & Cons
- The products Arbonne manufactures are high quality products. Their nutritional supplements are made to standards used for manufacturing pharmaceuticals. Hence, what you read in the label is exactly what you get. Unlike the low cost alternatives you can buy say at Walmart.
- Attractive commission structure.
- You get your own website to run your business plus excellent promotional materials
- Arbonne has a Mercedes-Benz bonus for RVP’s and up. More on this later.
- Arbonne conducts its own R&D to stay on the cutting edge of their product lines
- The vast majority of consultants loose money
- Rising through the ranks is not as easy as its made out to be
- Focus is more on recruiting new consultants rather than direct selling
- The compensation plan unwittingly encourages buying excessive product
- Not much focus on using websites and SEO techniques to make product sales
OK – Is Arbonne a Scam?
Arbonne has been in business for 40 years. In 2017, it had revenues of $544 Million Dollars according to Direct Selling News. The number of Independent Consultants it had then were 260,000. It ranked 28th among companies listed in Direct Sales. All MLM companies are included in this category along with some others. Arbonne has had its fair share of lawsuits that accused the company of being a pyramid scheme. They managed to navigate through them successfully.
Do you know that in a Pyramid scheme a member pays out money once only? And they do make money until the organization gets taken out of business as being an illegal Ponzi Scheme.
In an MLM company, the members pay out over and over again and very few makes any money at all. Yet it is considered legal. That is because there is a legitimate product that is exchanged. Here is the kicker. The vast majority of product is purchased by its own consultants. Worse yet is that most of the money flows to the top few percent in the organization.
Although it Arbonne may not be a scam, it definitely smells like a Pyramid Scheme, or worse. Because it is legal!
I do not wish to single out Arbonne that is in this position, but almost every MLM company on the planet. When one area they operate gets saturated they move to new areas and then new countries.
Do The Math
Doing the math shows that only $2100 in annual revenue is generated per consultant. This is a pathetic ratio.
260,000 is an awfully high number of consultants for such a low sale per consultant. And most of the profits flow to about 3% of those who are ranked at RVP and up.
My Conclusions and Recommendations
Arbonne traditionally has attracted more women than men as consultants. To some extent this is due to the cosmetic, hair and skin care product lines. Women who are looking for ways to earn some extra money are targeted to become consultants.
An aura of success and optimism is created using the products and those who are the high income earners. Prospects are shown the promise of a luxurious lifestyle that they can attain if only they work hard, follow the business plan and duplicate the process.
They are motivated through high energy upbeat events like product launches, conventions and bonus trips for those who meet specific sales quotas.
The Free Mercedes-Benz Offer
Arbonne has a program where they promise a FREE Mercedes-Benz for those who attain the ranks of RVP and maintain minimum organization sales goals each month,
There is a catch. The Mercedes has to be white. And it has to have the Arbonne logo on it. Arbonne doesn’t actually give a Mercedes away for attaining these goals. They give a monthly allowance that can be used towards a lease or purchase of the Mercedes. If the individual wants a different brand, like a BMW, too bad. It has to be a white Mercedes.
The allowance may not even be sufficient to make the monthly payment. If so, the consultant will have to make up the difference themselves. Plus, there is this matter of auto insurance.
When everything is taken into account, getting a FREE Mercedes-Benz is not so free after all. But the hype it creates builds emotion in aspiring consultant to work hard to become a RVP. Working hard means creating income for those who are already RVP’s.
Is Arbonne Right For You?
If you are already an Arbonne Consultant reading this, you tell me. How many hours a week are you devoting to your business? Are you getting closer to your goals? Do you have a game plan when you will reach your target income regardless at what rank that happens to be? I’d love to hear your response in the comments section below.
If you are not an Arbonne Consultant yet, how has my article made you feel about this company? I know that when you watch the videos of existing Executives, they make the business sound so attractive. You see myriads of smiling happy faces at special events where all kinds of awards are handed out, midst loud cheers. How can you NOT get caught up in those moments.
My advice to you is to stay clear. If you like the products and want to purchase them, become a preferred client. You can even become a Consultant and qualify for the higher discount. Meaning paying wholesale.
I would strongly recommend not doing the MLM business, unless you plan to go all out and do whatever it takes to become one of the upper 5% of income earners. And develop a thick skin to handle the high level of rejection and skepticism you will encounter.
If you are not prepared to do that for the long haul, then don’t delude yourself that you can get the lifestyle they promise easily. Some have described Arbonne of having a cult like atmosphere. You are either with them, or against them.
Is There An Alternative Way
Now that I may have burst your bubble do you think I am going to leave you hanging? Not at all.
I am going to show you a path where you can not only create big dreams, but also the direction and means for you to achieve them.
You need to discover the universal secret to success.
Let me use Arbonnne as an example. When you go through the training provided by Arbonne and its leaders, you will know what you must do in order to reach the income goals you desire. The chances are you won’t achieve your goals because the deck is stacked against you as I’ve demonstrated.
But if you were so convinced this was your path, you can still achieve your goals doing the Arbonne business, just like those top few percent within the company have. How?
You will need to change your mindset and develop new habits that will help you get there. There are many ways to do this. I am going to recommend but one. In doing so, you will find the “secret” to success. You may not be surprised to know that those top earners in Arboinne found out this secret and used it either by will, or subconsciously.
I recommend that you read a book called Think and Grow Rich, by Napoleon Hill. You can buy it on Amazon through this link. I highly recommend you get the physical paperback. The reason is, while going through the book, you will want to highlight lines of wisdom you come across using a yellow highlighting marker, for easy retrieval later. It is so inexpensive so while you’re at it you may wish to buy more than one.
You will wear out this book as it demands several reads. Hence, it is a good idea to have a backup. Also, when you start building your Arbonne team, I suggest you give each of your team members a copy too and task them to do what I will tell you here.
You can also download a PDF version for free at this link: Think and Grow Rich here to get started.
Once you have this book, read one chapter a week. Highlight the nuggets of gold you will find. Go through the exercises given exactly as described. Even though you may not see the logic in these actions. This is all about reprogramming your mindset with new habits you will need to achieve your monetary goals.
Why this focus on money? Most dreams need money to be accomplished. Estimate a dollar value you will need to pay for your dreams. Use this as your money goals. It could be $10,000 or $10,000,000. The process will be the same. So why not go as big as iyou feel is necessary? Do not be greedy. Be mindful when you come up with this number. Then write it down.
I suggest reading one chapter a week. Give it time for the ideas to sink deep into your mind. You will be busy following out the instructions as well as taking the actions you must take in your Arbonne business. So don’t rush it.
What options do you have if you decide that Arbonne is not right for you? Let me suggest what I feel is the best path to help you accumulate the money you need. And it will cost you virtually NOTHING! Just your time and willingness to learn.
The 7 Things You Will Not Have To Do!
- Talk to family and friends
- Do 3-Way calls
- Meet with prospects
- Attend opportunity meetings and take prospects to them
- Buy any products to qualify to earn an income
- Spend money going to conventions
- Spend money buying leads
The 7 Things You Will Have To Do Instead!
- Learn how to build a website that sells for you 24/7
- Use it to attract customers to buy what you are selling
- Unearth problems potential customers have
- Write articles to show what you are selling can solve these problems
- Learn how to find people who are looking for what you are selling online
- Reaching customers all over the world
- Have fun doing this because you enjoy being helpful to others
Yes, this business will involve selling. Unlike MLM you will be using technology to do the selling for you. You decide what you wish to sell. It should be products or services you are passionate about. And you don’t have to own these products at all. It can even be the products of Arbonne is marketing if you happen to be an Arbonne consultant and wish to do that.
This is Direct Selling without needing to recruit other people you have to train to work under you. If you can connect directly with thousands of potential customers online, why use your valuable time building a network of consultants to do the same thing? Your website will be the vehicle for your passive, residual income.
I have written a detailed plan to show you how you can do this. Just click the banner below to get to this article. Read it carefully. Absorb the information provided. Then make a comment in the section below letting me know what you think.
Is this a path you would like to take? I want to know. Either way. Your success means a lot to me. Guess what. I also like to help people. That is why I created this website. Looking forward to hearing from you.
6 thoughts on “Is Arbonne A Scam? – 5 Critical Things You Should Know!”
Really well thought out and articulate post. To be honest I was never a fan of multi-level marketing. I’m not really a sales person, so this will be pretty difficult for me to leverage and sell. With that being said, the earning potential really depends on the person. If he’s comfortable with talking to people and selling, he/she will probably make a good income with this.
Lots of ifs. The person could probably earn some money to supplement a day job. But to make this a full time income will require a lot of dedication and time.
Thanks for commenting.
Is Airborn a scam? Well, not legally but it should be illegal how they take advantage of the emotions of their workers. It is very sad to see people working so hard for little or nothing in the end. I have been down that road and it was tiresome.
I am trying to explain to my friend that MLM companies now are just not worth the time and effort unless you already have the customer base put away from a previous business that you can now use in the new MLM venture and even then it is still a struggle to maintain a good customer base and rise to the already well established “top”
I will have to show this article to her because I am not doing a very good job of explaining it by myself.
Affiliate marketing, your second option there in the article, it is a way more promising path to take. Wealthy Affiliates has a very good reputation in the affiliate marketing world.
You got this Crystal. I am glad you found this helpful. Please show this to your friend. Anyone pursuing an MLM opportunity has to know what they are up against.
Thanks for your comments. All the best to you.
This is a very comprehensive article about the pros and cons of this particular affiliate program. I am so please to have read it because I am looking to use a second affiliate marketing outlet since the bombshell of Amazon affiliates slashing of commission rates.
I had not yet come across this particular program but I’m pleased you have done this post so I can dismiss it as a possible contender. I probably would have got around to looking at it as it in my area of expertise. Your post has saved me a lot of time and possibly money. This program does look good at first glance, but once you get down to the nitty gritty it looks pretty negative to me. Thanks again for the info!
Thanks for your comments. There are a few MLM companies that are worthy of pursuing. You can tell who they are of their products are attracted to pure customers. When the products are overpriced a technique used to market them is to encourage the customer to become a distributor. As they earn money they can essentially get them for free. If you have to earn money selling those same products to afford them yourself, that is a red flag.
Even though got screwed by the Amazon reduction in commissions, do not give up on affiliate marketing. Make sure you diversify the companies you affiliate with. You can do that and stay in the same niche.
All the best to you.