Blog
arbonne
Contents
Arbonne: An Inside Look at the Controversial MLM
Arbonne is a health <u>and beauty direct sales company</u> that has been operating since 1975. The company markets a wide range of vegan skincare, cosmetics, nutrition and aromatherapy products using botanical formulas. Arbonne operates using a multi-level marketing (MLM) business model where consultants earn commissions not only from their own sales, but from the sales of people they recruit to join their “downline.”While Arbonne has seen tremendous success over the years, the company is not without its fair share of <b>controversies</b>. Critics have called Arbonne’s business practices into question and have accused the company of operating like an illegal pyramid scheme.So what’s the full story on this polarizing health and beauty MLM? Let’s take an in-depth look.
How Arbonne’s Business Model Works
Arbonne relies entirely on a network of independent consultants to sell its products. To become an Arbonne consultant, you need to purchase a $79 starter kit. This kit includes some product samples, brochures, order forms and other promotional materials.From there, as an Arbonne consultant you can:
- Earn 35% commission from any products you personally sell
- Recruit other people to become Arbonne consultants and earn commissions from their sales too (this is referred to as your “downline”)
- Earn bonuses and rank advancements for hitting certain product sales targets
The more consultants you recruit, the more bonuses you can earn. As your team grows, you move up the ranks from consultant, to district manager, area manager, regional vice president all the way up to national vice president.
“The earning potential is technically unlimited,” says Sarah, an Arbonne regional vice president. “The more people you bring in, the bigger your team grows and the more money you stand to make from all those cumulative sales.”
This compensation structure is what defines Arbonne as a multi-level marketing company. The focus is not only on selling products, but also building a team (your downline).So in theory, if you build a large enough team under you, the commissions from all those cumulative sales could add up to a hefty income.But that’s a big “if” that raises some eyebrows…
The Pyramid Scheme Controversy
Critics of MLMs like Arbonne have accused these companies of running pyramid schemes or having a pyramid-like structure.
“Any MLM has that same pyramid shape by nature of how it’s set up,” says Robert FitzPatrick, president of Pyramid Scheme Alert, a non-profit consumer education group. “The people at the top make the most money from the efforts of thousands of people below them in the pyramid. That’s the very definition of a pyramid scheme.”
However, Arbonne contends that it is not a pyramid scheme because actual products are being sold. Consultants earn money from retail sales to real customers, not solely from recruiting other consultants.And technically this is true. Arbonne does sell real products that people want to buy. You can actually make money just from selling products without recruiting anyone.But the reality is, it’s extremely difficult to make any real money as an Arbonne consultant without growing a downline.Why?
- The commission on product sales alone is relatively small
- There’s a ton of competition with 230,000+ Arbonne consultants right now
- Retail customers can simply order products directly from Arbonne instead of going through a consultant
So while the company stresses retail sales in its official policies, the true path to financial success inevitably involves building a large downline.
The Actual Income Statistics
According to Arbonne’s 2021 Income Disclosure Statement, the average annual earnings for an Arbonne consultant were $502.Yes, you read that correctly…just $502 per year.Even for senior level Arbonne executives, the earnings are modest compared to traditional corporate leadership positions. For example:
- The average Regional Vice President earns $43,198 per year
- The average National Vice President earns $135,312 per year
Additionally, Arbonne’s own data shows that about 19% of consultants earned no commissions at all.So why do so few consultants actually earn livable wages from Arbonne?Critics point to the saturation of the market and the constant pressure to recruit even more consultants:
“The new people at the bottom of the pyramid are the sole revenue source for everyone above them,” explains FitzPatrick. “But the market always becomes saturated. You run out of new people to recruit. When that happens, the pyramid collapses and those at the bottom are left with nothing to show for their efforts.”
High Pressure Culture
Apart from the income statistics, former consultants have also spoken out about Arbonne’s high pressure sales culture.Many felt pressured to aggressively sell and recruit, even pressuring friends and family members to buy products or join their downline. Those who failed to meet their sales quotas were criticized and demoted.Lauren, a former Arbonne executive shares:
“My upline was always telling me I wasn’t working hard enough or posting enough on social media. I had to buy a minimum amount of products each month too which was hard when sales were slow. It was super stressful and toxic.”
These exploitative and deceptive business practices are common complaints about MLMs in general.
Is Arbonne Worth It for the Average Consultant?
Given the modest earning potential and high pressure environment, is joining Arbonne actually beneficial for the average consultant?The company makes big promises of financial freedom, Mercedes Benz cars and exotic vacations for top performers. And certainly the very top executives do profit handsomely.However, the income disclosure numbers paint a more sobering picture for most consultants.While Arbonne’s business model is legal and you can technically earn money, your chances of achieving six or even low five-figure yearly earnings are slim. Most consultants end up losing money on product purchases and inventory they fail to sell.So unless you are extremely driven, well-connected and willing to aggressively sell and recruit people with no qualms…joining Arbonne is generally not worth it from a financial perspective.As one former consultant puts it:
“I spent a year busting my ass but all I got out of it was a few hundred bucks and a garage full of unsold products. Don’t believe the hype.”
The Bottom Line
Arbonne is a reputable company with quality products that has helped many people. If you just want to buy or sell some products for a little side income, Arbonne provides a decent opportunity to do so.However, tread carefully before quitting your job or making major financial investments to pursue Arbonne as a full-time business. Be realistic about your prospects of earning a large income solely from an Arbonne business.As with any sales career, success is dependent more on sales skill rather than the quality of products. Make sure direct sales aligns with your talents and interests before jumping in.