Arbonne was founded in Norway in 1975. In 1980, co-founder Petter Morck set up international headquarters in Irvine California. According to the Arbonne website, the company uses science, to produce products which promote healthy living.
Rather than using traditional promotions, Arbonne uses multi-level marketing to sell their products. They say that as of 2017, they have almost 320,000 Independent Arbonne Consultants around the world pushing their products
Here at the Finance Guy, we believe that you can't make money with network marketing, but we won’t let that stop us from doing a full review of the Arbonne opportunity
What is the Arbonne Opportunity
According to the official Arbonne opportunity page, it’s your chance to join a ‘community of life changers’. You can earn an income, inflict change, and have fun. Sounds like a great deal! Then again most MLMs sound pretty good when we first look at them. We decided we better take a closer look, starting with the video below:
As we can see from this video, there are some very excited Arbonne consultants. They want to share how great the opportunity has been in their lives. There is even an ‘Abronne manifesto’, of motivational messages printed in the background.
The video tells us that Arbonne was established with the goal of delivering pure, safe and beneficial products.
We found it refreshing, that one Arbonne consultant explains that ‘their role is to sell Arbonne products’. If you join the opportunity, then they say they’ll train you to do the same.
While the video seemed very positive about the Arbonne opportunity, it still left us needing more information, so we carried on with our own research.
How Do You Earn Money With Arbonne
To find out how you actually make money, we looked at the compensation plan. Or as they call it, the Arbonne Success Plan. This document explains all the different ways you can earn an income as an Arbonne consultant. We’ll take a look at them below:
If you sell Arbonne to retail clients, you can earn a commission of up to 35% (if products are sold at the suggested retail price). We think that retail sales are the best way to make money with Arbonne, or any other MLM for that matter. If you’re not looking for a sales job, then MLM might not be for you
If you decide to recruit others to become Arbonne consultants, then you may be entitled to earn override commissions on any products they buy. Your direct recruits will be known as as your ‘first generation’ in Arbonne
It doesn’t end there, if your recruits also start recruiting others, then you may also earn commission from your ‘second generation’. This is the second level down from you in the MLM…
The amount of override commission you can earn each month will depend upon your rank in the Arbonne MLM, as well as the overall volume of products purchased by you and your team.
When you join, your initial rank will be as a ‘consultant’. At the entry level, you can earn up to 6% override commission. This is based on the total Arbonne products purchased in the calendar month, by all the consultants you have personally sponsored.
To qualify for the 6% consultant override, you’ll need to generate 500 PQV points in the same month. PQV is ‘Personal Qualifying Volume’, in the US, you get around 1 PQV point for ever $1 you directly spend on Arbonne products. If you register any retail clients, then their purchases will also count toward your PQV.
To us, this raises Red Flag 3 - Pay to Play, in Dr Jon Tayolors 5 Step MLM evaluation. To us, this ‘opportunity’,, looks like a system where you can’t make money with Arbonne unless you spend a lot on their products.
If you keep recruiting and build your downline organization, then you can earn more. As your organization grows, you will accumulate OV (Organizational Volume), and as you meet the required OV points, you can climb the Arbonne ranks. For us, this is Red Flag 2 - Promotion Through Recruitment
The commissions you can earn at each rank in Arbonne are shown in the table below:
If we look at the ‘National Vice President’ rank, we can see that it is possible to earn overrides adding up to 50%! That sounds pretty good or does it? The price for new consultants is 35% below the SRP… but these commissions are not based on SRP.
Overrides are based on the price paid by other consultants in your downline. This is all well and good if you are a ‘National Vice President’, but what if you’re just a new consultant? If you have just signed up, then 50% of what you pay for Arbonne products goes to your upline as commission
While some may see this as an opportunity to build a long term business, we see Red Flag 4 - Most of the Rewards go to your upline
If you do manage to make it to the top ‘National Vice President Level’, then you may be entitled to a lot of commission. Having said that, you will still need to meet your spending requirements.
At the top level, you’ll need to generate 160,000 ‘central points’ per month. These central points include all your spending, and that of your direct retail customers (both regular and preferred)… Even so $160,000 per month is a lot of Arbonne products to be buying/selling
Fortunately you don’t need to sell $160,000 of Arbonne per month yourself…. Your ‘Central volume’ is not just your own activity. It also includes the sales made by everyone in your Arbonne organization who has not yet reached the same rank a you.
This concerns us because the people above you in Arbonne earn more if you’re never promoted. Getting paid something from unlimited consultants in your downline may sound good, but it does raise Red Flag 5 - More than 5 levels in the payout plan
If you want to make more than just your retail sales commissions with Arbonne, then you need to raise Red Flag 1 - Constant Recruitment of New Members
If you manage to become a ‘Vice President’, with Arbonne, then you may be entitled to a luxury Arbonne Merc… if you want an even better car, just increase your Arbonne Organizational Points
While it is nice to get a company car, there are a few things about this which concern us
1. All Mercs must be white with Arbonne labels included - The car you can ‘earn’ from Arbonne, is essentially an advertising billboard. They should pay you to do it, not make you earn it!
2. There is no choice - Do you want a white Mercedes? Would you prefer a red Porsche, how about a luxury holiday? Arbonne is ‘paying you’, with a car of their choice, with their own advertising included. We’d rather just receive the cash and spend it on something we want for ourselves
3. Arbonne doesn’t buy your a car - You will not be given a car, you will receive a monthly payment towards it… the success plan doesn’t state whether or not this is a full payment, but we assume it is not. If you want an Arbonne Mercedes, you will need to kick in your own funds on top of the Arbonne bonus
At all ranks in Arbonne, you may be entitled to earn random cash bonuses. Arbonne randomly decides how to pay these, and how you need to qualify. It is possible to earn a cash bonus at any Arbonne rank. All you have to do, is meet whatever qualification criteria they decide to set
The cash bonuses are nonsensical, they’re almost not worth mentioning, except we already included them…
Based on what we’ve found so far, Arbonne looks just like another typical MLM, but there is still more to research to be done…
Are Arbonne Consultant Making Money
When assessing any business opportunity, it’s a good idea to look at how well others are doing with the same deal. Before you invest your time, effort and money, you should take a look at their track record.
The best performance report we could find, is the USA 2017 Arbonne Consultant Compensation Summary. While this document is limited to just USA, it does give us an idea of how good the Arbonne opportunity is. Let’s see what we learned…
The first thing we notice, is that that Arbonne paid over $173 Million in bonuses to consultants in the US alone. USA had over 227,000 Arbonne Consultants in 2017
Arbonne has kindly created a table showing the 2017 ‘Average Annual Income of Active USA Arbonne Consultants’ here’s a copy if you’d like to see:
According to this table, 62% of Arbonne consultants averaged less than $1,000 in commission in 2017. That’s before we consider that those people had to purchase products to earn that commission. It’s quite possible that most Arbonne Consultants lost money in 2017
As we continued to read through the text, things only got worse. We learned that the table only included the 27,300 US consultants who earned commission in 2017. In other words 88% of US Arbonne consultants earned absolutely nothing in 2017
Before we continue, we’d like to point out that we are not including customers or preferred customers, our research is only looking at those who join the Arbonne business opportunity
We find it interesting, that the average annual commission for ‘Regional Vice Presidents’ was only $23,951… That’s less than $500 a week! To make things worse, our math told us, that this income put them in the top 0.3% of all Arbonne consultants
Our math could be wrong, but it probably isn’t, and the findings aren’t good for Arbonne. Our research has lead us to believe that 99.7% of Arbonne Consultants are losing money
It could be that 2017 was a bad year for Arbonne. to make sure we also looked at the UK 2018 Arbonne Income Disclosure. The UK table of earnings is shown below:
Once again we see a disappointing result. Only 3% of Arbonne consultants earned a full time income in 2018. The table only includes consultants who actually earned an income. They tell us that 88% of Arbonne consultants earned no commission at all in 2018
If we adjust the figures in their table to include all Arbonne consultants who participated in the income opportunity, then we see that only 0.3% earned a full time income. In other words 99.7% earned less than they would with a regular job from the Arbonne opportunity in 2018
Another review of Arbonne by the talented ladies club, had similar findings to ours. They also point out that the income shown in the average earnings does not include expenses.
If we were to include all the expenses incurred, this would confirm that most consultants lose money on the Arbonne Opportunity
Why is it Hard to Make Money With Arbonne
We believe that the problem is not with Arbonne or their products. The problem is with network marketing! MLM is a business model which is designed to market products. It is not a franchising system.
As we have seen, Arbonne has raised all 5 red flags from Jon Tayolors 5 Step MLM evaluation. His studies have found that if a company raises 4 flags, then the chances of making money are less than 1%. He has also found that overall, 99.7% of people who enter any MLM will lose money
MLM often makes money for the company selling the products. This doesn’t mean that you can make money in their direct sales force. At the end of the day, the goal of any MLM is to make you buy products. The system wants you to be a customer, not a business partner
Another reason it may be hard to make money with Arbonne is because of the products. We read a review of Arbonne by Meghan Telpner, who found that the products aren’t as good as they claim to be.
At the end of the day, this opportunity is a sales job. Any salesperson will tell you that you make the best money selling quality products at a good price. Even though consultants may claim that they are high quality, it seems that Arbonne are overpriced compared other similar products.
Is Arbonne an Illegal Pyramid Scam
Even though MLMs closely resemble pyramid schemes, they are not illegal. The reason dates back to the 1979 case of Amway vs the FTC. After 4 years in court Amway was found to be offering a business opportunity, rather than a pyramid scam. The technicalities came down to wording in their paperwork. One example requires consultants to make retail sales.
The Amway ruling effectively opened the doors for all other MLMs to operate within the law. However we should remember that being legal doesn’t make it ethical. If you knew that less than 1% of people had a chance of generating a real income, would you feel comfortable recruiting new consultants?
Another issue, is that even though these rules may be in the paperwork, they are difficult to enforce. For example, several people in MLMs have said that they have cupboards full of product. This is because of the minimum monthly purchases they need to make to remain active in the system. Even though stockpiling is against the rules, there is no way for the company to monitor it.
Being legal does not make MLM ethical. All companies are in business with the goal of selling goods and services for a profit. Network marketing companies are able to charge a higher price because they create a customer base of loyal members who believe that by consuming these products and recruiting others to do the same, they will become financially free.
Even though MLMs operate within the legal framework, that has not stopped some former consultants from going to court and claiming Arbonne is a pyramid scam.
Should You Join Arbonne
The only reason to join any MLM, is if you are already buying their products, and are happy enough to recommend them to others. The only way to make Money with Arbonne, is to sell a lot of product. If you’re not looking for a sales job, then Arbonne is not for you
If you are considering Arbonne as a business opporutnity, then we suggest that you also look at other options. Before you join, perhaps spend some time getting familiar with the Arbonne products, and make sure that you’d feel comfortable promoting them.
As always we welcome your feedback in the comments section below. We'd love to hear what you think about Arbonne, especially if you can share your personal experiences with the company
For more posts like this, look at our list of mlm reviews.