Chances are you’re here because you’re considering joining Arbonne and becoming an Arbonne Independent Consultant.
You’ve probably tried their products and figured you may as well take the next step and register as an Independent Consultant so that you can start selling Arbonne to your family and friends and enjoy the additional income.
And why wouldn’t you?
Who wouldn’t want to have their own business, work from anywhere in the world and enjoy financial freedom?
However, you’re a bit hesitant.
You’ve heard people saying that Arbonne is a pyramid scheme and that it is impossible to make money with them, and you want to do your research before you dive in headfirst.
This article is here to help.
We are going to dive into the Arbonne business opportunity and find out whether you’ll be able to make money selling Arbonne, and whether Arbonne is secretly a pyramid scheme in disguise.
Is Arbonne a Pyramid Scheme? The Truth About Selling Arbonne
The Basics
What is MLM?
Before we get into Arbonne specifically, you ought to know what an MLM company is, because this is the business model that Arbonne use.
MLM stands for multi-level marketing, and MLM companies are also referred to as network marketing companies, social selling companies, and multi-tiered affiliate marketing companies (that last one is a mouthful, hey?).
MLMs have been around for years, and popular MLMs include Isagenix, Monat, Color Street and even Avon!
You don’t receive a salary in a multi-level marketing company.
Instead, you earn money from selling products to people you know and recruiting others into the business.
When you recruit a new person and that person begins earning money, you will earn commission from the sales and recruits generated by THAT person.
This continues down in multiple levels (hence multi-level).
Imagine a triangle.
If the person at the very top of the triangle recruits 10 people, and every one of those 10 people recruit another 10 people, and each one of those people recruit another 10 people, you’ll be making commissions from EVERYBODY within the triangle because they’re all in your direct downline (the people underneath you in an MLM are referred to as your ‘downline’ and you’re their ‘upline’).
All you had to do was recruit 10 people and you make money from 1100.
While MLM companies like Arbonne also give you the chance to make money from selling their products, most of the people in MLM companies prefer to recruit others because they stand to make a lifelong passive income from that person, whereas if they sell a product they’re just going to receive a one-off commission.
The ultimate aim of somebody in an MLM company like Arbonne then, is to have as many people in their ‘downline’ as possible, enabling them to form large amounts of passive income for little work.
What is a pyramid scheme?
Pyramid schemes are very similar to MLMs, but the main difference is that MLM reps are supposed to make more of their money from product sales rather than recruitment.
A traditional pyramid scheme takes an initial investment from each member and promises to pay them for enrolling others into the scheme, meaning that people are buying into an ‘opportunity’ to get rich.
However, as members increase, recruiting quickly becomes impossible and so most members are unable to profit or even make their initial investment back.
The Wikipedia diagram below illustrates just how unsustainable this business model is – after just a few levels of recruitment, the scheme would have recruited everybody in the world and there would be no-one left to recruit!
Because it’s impossible for most people to make any money in a pyramid scheme, pyramid schemes are illegal.
However, most pyramid schemes these days have got wise to the fact that they have to offer a product in order to appear legit, so even though a business may have products, the focus will always be on recruitment rather than product sales.
Because there are so many of these ‘pyramid schemes with products,’ around, the FTC hasn’t quite caught up yet, and so many people believe that just because a company hasn’t been shut down yet, it can’t possibly be a pyramid scheme.
This simply isn’t true, and we’re about to dive into the Arbonne opportunity to see if Arbonne is a legit direct sales business or just another shady pyramid scheme in disguise.
What is Arbonne?
Arbonne International was founded in Norway in 1975, and by 1980 had set up its international headquarters in Irvine California.
Arbonne sells cruelty-free health and wellness products, and since 2018 it has been owned by worldwide health and beauty brand, Yves Rocher.
Arbonne products include makeup, nutritional supplements, hair products and more.
Arbonne claim that all of their products are vegan and use the best quality ingredients that money can buy.
Rather than selling their products in stores like a regular company, Arbonne’s products are sold online and in person through their distributors, or ‘Independent Consultants.’
Arbonne Consultants will purchase Arbonne products themselves (at a discounted price), use the products, and make social media posts and videos about how great they are, encouraging their followers to buy the products through their personalised links.
In addition to selling products, Arbonne distributors can earn money by signing other people up to become distributors.
While they don’t get paid directly for recruiting people, they do get bonuses and promotions for ‘building a team,’ and they also earn commissions from every sale that people in their downline make.
Inside the Arbonne Opportunity
How do Arbonne Consultants make money?
The main thing that sets MLM companies apart from illegal pyramid schemes is the product.
This dates back to the 1979 case of Amway vs the FTC. After 4 years in court, Amway was found to be operating a legal business rather than a pyramid scheme. This ruling came down to technicalities in some of the wording in Amway’s paperwork, which has come to be known as the 70/30 rule.
The 70/30 rule means that 70% of a company’s profits must be made through product sales instead of recruitment.
If the scale is tipped then the company could be classified as a pyramid scheme.
At first glance, we do see somewhat of a focus on selling products with Arbonne.
Many Arbonne Consultants make TikToks and Reels using Arbonne products and talking about how great they are.
It doesn’t seem as if Arbonne is completely focused on recruiting people into the company.
With that said, I see a hell of a lot of Arbonne Consultants posting repeatedly about the ‘business opportunity’ they have to offer, and so I took a look at Arbonne’s ‘SuccessPlan’ (compensation plan) to see how you really make money as an Arbonne Consultant.
The main ways that you can make money with Arbonne according to their SuccessPlan are:
- Selling Arbonne products to clients and receiving commission (35% for regular clients and 15% for preferred clients)
- Additional income as a result of how much your team sells
- ‘Achiever Awards’ are awards given when you and your team make sales. There are different Achiever Awards at each level within the company
- Vice President Success Award – a special bonus paid to Vice Presidents based on their team’s earnings
For the average Arbonne Consultant, there are only 3 ways to make money, as the 4th bonus is only available to Vice Presidents, who make up just 3% of the company.
Of the 3 ways that most Arbonne Consultants can make money, 2 of them involve ‘building a team,’ or recruiting others, and only one involves product sales.
One major red flag of a product-based pyramid scheme is a focus on growing a ‘team’ rather than selling products to the general public.
How much money can you make selling Arbonne?
To see how much money people are making with Arbonne, I checked out their Income Disclosure Statement (IDS) from 2020.
An Income Disclosure Statement is a document which outlines how much money people at each rank in Arbonne are making.
The Arbonne Income Disclosure tells us that, in the year 2020:
- 56% of Consultants earned a median average of $108
- 33% earned a median average of $1769
- 8% earned a median of $12,037
- 2% earned a median of $58,719
- 1% earned a median of $173,677
So, what do these numbers tell us?
Well, when we look at the chart, we can see that 97% of all Arbonne Consultants earned less than $12,000 during the entire year.
Only the top 3% of people in the company earned what could be considered a ‘good’ wage, with the Regional Vice Presidents (2%) making around $59,000 annually and the National Vice Presidents (1%) making $173,677 on average.
It is also interesting to note that these numbers don’t represent profit because they do not take any expenses into consideration.
How much does it cost to be an Arbonne Consultant?
The numbers on Arbonne’s Income Disclosure Statement don’t take into account the expenses that an Arbonne distributor will accrue.
Arbonne Independent Consultants have to pay for a Welcome Kit ($49), and an annual renewal fee of $29, as well as products for themselves to use and advertise on social media.
While Arbonne don’t require you to purchase Arbonne products, you can’t run a social selling business without being a ‘product of the product’ and showing off the products constantly online and IRL.
In Arbonne, every distributor must generate 150 PQV (Personal Qualifying Volume) per month in order to receive any commissions from their team’s earnings, as well as other awards and bonuses. They will also not be able to receive promotions if they don’t meet this target, and risk losing their rank entirely.
(Note: 150 PQV is roughly $150.)
You can do this by selling products (a small percentage of the product price will count towards your target), recruiting others, or just buying Arbonne products for yourself.
In fact, this is usually what happens if it’s getting close to the end of the month and Arbonne Consultants haven’t made the required amount of sales – they either buy products for themselves, or buy products from their friends in order to help their friends out and make it look like they’ve sold more than they actually have.
Their friend will then do the same for them.
When you think about how many Arbonne products the Consultants are buying and showcasing on social media and compare that to the Income Disclosure Statement, it doesn’t seem that joining Arbonne is a realistic way of making money.
Is Arbonne a pyramid scheme?
As of right now, the FTC has not ruled Arbonne to be a pyramid scheme, so technically speaking, it is a perfectly legal multi-level marketing company.
In order to see whether Arbonne is a pyramid scheme in disguise, we must attempt to answer 3 questions.
1. Are most people unable to profit?
When we checked out Arbonne’s Income Disclosure Statement, we saw that 89% of Consultants were making between $108 – $1769 annually, without taking into account anything that they spent on their Arbonne business.
Even if we assume that none of these Consultants bought a single Arbonne product all year, thus only spending $49 on their Welcome Pack, we still have to consider that these people are putting time and effort into their work, and that the few people earning $1769 with Arbonne are still only making $34 per week on average.
What this tells us is that most people in Arbonne are not making anything close to a full-time wage, and that most of them are probably spending more money than they’re making.
We can also see that although the people at the top of the company are making a significant amount of money, the vast majority of people are not making a profit.
2. Do you have to ‘pay to play?’
Yes.
Not only do you have to pay $50 to join the company, but you are also encouraged to buy products, if not to hit your PQV than to show potential how well they work.
Arbonne’s compensation plan isn’t as aggressive as Monat’s when it comes to pushing its distributors to buy products, but the expectation is still there, nonetheless.
3. Is there a heavy focus on recruitment?
As we have seen so far, the only way to make real money with Arbonne is by growing a large team underneath you, and 3 of the 4 ways you can earn money with Arbonne involve growing a team.
This suggests that yes, there is indeed a heavy focus on recruitment, and not too much emphasis on selling beauty products to people on social media.
While you can earn money by selling Arbonne products, the real money to be made is by growing a large downline and making passive income from the people in it.
Quick Recap FAQ
Arbonne is a multi-level marketing company with a focus on wellness and nutritional supplements, as well as beauty products. Many people consider Arbonne to be a pyramid scheme.
Yes, Arbonne is an MLM company, also known as network marketing or direct sales.
According to Arbonne’s Income Disclosure Statement, most Arbonne Consultants did not earn more than $108 in the year 2020, and only 3% earned a full time wage.
To start selling Arbonne, you need to pay a sign-up fee of $49.
Arbonne has not been officially classified as a pyramid scheme by the FTC but it does share many similarities to an illegal pyramid scheme.
Is Arbonne a Pyramid Scheme? | Final Thoughts
Most MLMs closely resemble pyramid schemes and Arbonne is no different.
With a huge emphasis on recruitment, fees to join and pressure to constantly buy products (making the distributors the biggest customers), Arbonne, much like any other MLM, appears to be functioning very much like a pyramid scheme.
Most people in Arbonne are either not making very much money or are losing money, and so the idea that Arbonne is a legitimate business opportunity is just not true.
If it wasn’t already clear, Not Your Boss Babe does not recommend becoming an Arbonne Independent Consultant!
An Alternative to Arbonne
If you’re looking for a side hustle or a work from home job, you may find these articles helpful:
Advantages and Disadvantages of Blogging
Easy Freelance Jobs for Beginners
Best Side Hustles for Single Moms
How to Sell Feet Pics Online
Secrets to Selling on Poshmark
Profitable Digital Products to Sell on Etsy
How to Become a Micro Influencer
That’s about it for today, but as always, if you have any questions then don’t hesitate to leave them in the comments section below and I will get back to you!
Until next time,
XOXO
Become a VIP
[…] companies or social selling companies.MLMs have been around for years, and popular MLMs include Arbonne, Monat, Nu Skin, and even Avon! You don’t receive a salary in a multi-level marketing […]