Arbonne is a company that you may have come across if you are under 30 and active on social media. Arbonne MLM is one of the most popular.most popular multi-level-marketing schemes in the world right now?This incredible opportunity is being promoted by hundreds of thousands of young women who use Facebook and Instagram to spread the word.promises of ‘financial freedom’ and being able to ‘be your own boss’ and ‘make money from your phone.’
Do you sound familiar?
These phrases are used by many multi-level marketing firms like Arbonne.
sales pitchesYou see social media posts constantly and it’s easy for people to understand why. Who wouldn’t want their own business and the freedom to work anywhere and not worry about money?
It sounds amazing. It sounds unbelievable, but it is also too good to be true.If it sounds too good to true, it probably will be.
NOTE: I HAVE A FREE BIE FOR YOU TO USE!
I havewritten before about MLM schemesMulti-level marketing (if you’re unsure what it is, you can read that article before reading this one). I also explain why they are a bad business model. But the most common question I see online is “Is Arbonne a Pyramid Scheme?”. This is frequently answered with frustration and defensiveness by individuals who work in ONLINE MARKETING schemes.
This in mind, I decided that it was worth a deeper dive into Arbonne MLM, which is one of the most well-known MLMs. To find out if Arbonne is a pyramid scheme.How much you can make from Arbonne.
This one is going to be long, as I always say. So I recommend you grab a cup of coffee or a glass wine and get started.
What is Arbonne?
Let’s first define Arbonne before we get into the details.
Arbonne International is multi-level marketing firmNetwork marketing is also known as selling.Beauty products that are cruelty-free. It was established in Norway in 1975. However, in 1980, Petter Morck, the Arbonne cofounder, set up its international headquarters at Irvine, California. It has been owned worldwide by Yves Rocher, a beauty and health brand.
Arbonne is a beauty and health company that sells makeup, skincare, and nutritional supplements. Arbonne claims all its products are vegan and made with the finest ingredients. These high-quality ingredients are what make Arbonne products so expensive, according to their FAQ.“Why is Arbonne so Expensive?”This I find a bit odd.
Arbonne does not sell their products in brick and mortar shops. Instead, they use theOnline sales of products can be made through their distributors.Advertisers who use the products and make videos showing how the product works on social media.
Apart from makingCommissions from the sale of productsDistributors make money byOther people can be recruited into the scheme. Each person they recruit is part of their “downline” (with the recruiter known as the “upline”), and the distributor receives bonuses for each person they recruit as well as for each person their downline recruits.
So,The more people you hire, the more you can make.As you start to reap the rewards of passive income from your downline, The theory is that your income source will continue to grow the more people in your downline.Multi-levelMarketing
What is a pyramid scheme?
A pyramid scheme is an opportunity to make money.Business model in which members are recruited by making an initial investment and then promising to pay them when they enroll others in the scheme.Instead of selling products or supplying investments, they will be helping others. The scheme becomes more difficult to recruit, so members cannot make a profit or return their initial investment.
This Wikipedia diagram illustrates how unsustainable this business model looks. After just a few recruitment levels, everyone would be recruited and there would be no one left to recruit.
What makes pyramid schemes so bad?
It’s obvious. Pyramid schemes work by maximizing the wealth of those at the top and making it difficult for those at bottom to succeed. They promise a dream and make it possible for anyone to achieve it, even though statistics show otherwise.
The richer the people who ‘pay to play’ (invest money in the scheme), the more they get. Others never make their initial investment back.
Gambling has a better chance of making money than investing in a pyramid scheme.
Pyramid schemes are therefore illegal.
Is Arbonne a pyramid scheme or not? Let’s take another look.
Arbonne distributors are often faced with the challenge of being accused of running a pyramid scheme.
Anti-MLM people, like me, refer to ALL MLMs in flippant terms as pyramid schemes. This provokes defensiveness and anger from those working in the companies.
Let me start by being petty, and say look!If you find yourself constantly being asked to defend your company from claims it is a pyramid program,I don’t know anyone from thereAnyAnother line of work that requires you to constantly say“Hey, my company isn’t a pyramid scheme!”Because they’re not trapped in pyramid schemes.
Let’s not get into all the sass. Let’s be real. It’s easy to see Arbonne from a superficial level.canArbonne is a pyramid scheme First,Pyramid schemes are illegal.They also sell products! Arbonne is a beauty brand that believes in a new way of marketing.
But not so quickly.
Arbonne’s rules might be well-crafted.AppearAlthough they appear to be a legitimate multi-level marketing company it is possible that they are still operating an illegal pyramid scheme.
If you want to determine if an MLM is a pyramid scheme, it is important that you always follow the money.
Investigating whether Arbonne might be a pyramid scheme
What is the best way to make money with Arbonne?
Arbonne representatives often boast about their extravagant lifestyles and financial freedom. The Arbonne website promises to allow you to have the ‘freedom of living the life you want’ and to own your own business.
But is this possible with Arbonne? To see the truth, I took a look at Arbonne’s income disclosure statements. The numbers are quite grim.
Arbonne in the UK
Arbonne employed 21,000 independent consultants in the UK in 2018, according to Arbonne.Only 12% of Arbonne Consultants earned money from Arbonne each month.This means that only 2,600 people out of 21,000 were actually successful.ANYArbonne makes money.
Below is the income disclosure statement that only 12% of Arbonne reps made any money. Arbonne calls these reps ‘active consultants’. However, this term is misleading because it implies that they are not actively trying sell products or work.IsYou put in work, but you don’t make any money.
Let’s break this down.
- 8.8% of 21,000 independent consultants earned an average earnings of 18,400 dollarsNothing.
- 7% (1544 individuals) earned PS42 per monthly, or PS503 annually.
- 3.7% of the population (777 people) earned PS167 per calendar month or PS2004 per annum.
- 0.9% of Arbonne consultants (that’s 190) earned PS909 per month or PS10908 per year.
- Only 0.3% of the population (70 people) earned PS3445 per month or PS41.340 per year.
- 0.08% of people ( 18 people), earned PS12.366 per monthly, or PS148,392 per annum.
These numbers are shocking enough, but let’s dig deeper.
Arbonne would have paid 88% of the people who had no income.LostMoney becauseYou must pay to become an Arbonne consultant.While most people would agree with the statement, a majority of them would disagree.‘huh? To work, you must pay? What the F! What the F?Arbonne representatives would argue that they are small-business owners and must invest in their businesses.
While it is true that small business owners may invest money in their businesses, this does not mean they do so alone.MLM workers don’t own their businesses.ButOnly 39% of small business owners lose money, compared to 88% Arbonne reps.
According to the Office for National Statistics a 25-year-old working 37.5 hours per week on the New Living wage will earn PS265 every week after income tax and national insurance.
This means that in 2018, only 88 Arbonne consultants in the UK earned more than the National Living Wage.
The remaining 99.6% of Arbonne representatives either work for free or earn a living.LessRather than the National Living Wage, or actuallyLostThey invested in Arbonne, which resulted in them making money (more details later).
Arbonne in the USA
There were 174,385 Arbonne consultants in the US in 2018.
- 83% of people (that’s 144,586) earned zero.
- 11.4% (19.866 people) earned $70 per month or $840 per year.
- 4.1% (7224 individuals) earned $321 per month or $3852 per year.
- 1.51% (1806 people) earned $1531 per month. This is $18,372 per year.
- A mere 0.4% (602 people), earned $5987 per months or $71,844 annually.
- 0.178% (301 individuals) earned $21,711 per month or $260,532 annually.
Arbonne has not yet provided complete income disclosure statements for 2019 (I wonder why),DidSay it“A typical Arbonne participant in America earned between $120 and $502 in 2019 in earnings or commissions.
This is$2 – $10 per weekThey do not take into consideration any money they have invested in the business.
For a deeper analysis, you can visitArbonne’s 2019 Income Disclosure Statement here.
Arbonne features testimonials from Arbonne consultants, raving about Arbonne’s impact on their lives and helping them to build ‘global business’. However, Arbonne acknowledges in the small print that“The Arbonne Independent Consultants featured in this article have attained the rank of Executive Area Managers, Regional Vice Presidents or National Vice Presidents.
Also,These success stories come from the top 1%.It is not representative of the experience of 99% of Arbonne reps.
All of this being said, the original question might be“Can”You make money with Arbonne’, not ‘How much?What money can you make using Arbonne?
What is the cost of joining Arbonne?
The income disclosure statements don’t include money that the consultant spent on products and expenses. They say In the small print, they don’t include expenses incurred by Arbonne Independent Consultants for the promotion of their businesses …’.
How much does it cost?
Own your Arbonne businessArbonne is hiring
Arbonne tends to hide the costs so it is hard to estimate what it will cost to work for them. It was almost impossible to calculate how much I would need to invest in order to start working for Arbonne. Arbonne says that you must first pay a deposit.Register for a PS30 registration fee and place an Arbonne order totaling 150 QV.
The registration fee covers a “Welcome Kit” that includes:‘Product LookbookThis is presumably a catalog of Arbonne products that you can view for free on our websiteWelcome Letter and Success PlanThis is Arbonne’s Compensation Plan, which you can view online for free.Find the Arbonne Brochure, Consultant Guide, and Healthy Living Brochure.“
That seems like a lot of money to me for a brochure and pamphlets.
It is still unknown how much 150 QV actually amounts. Online consensus seems to be 1 QV point (PersonalQualifying Value is equal to 1 USD. If QV is equal to PQV, thenTo join, you will need to spend 150 USD on Arbonne Products.Despite that, I could not find it.AnywhereIt is not clear whether PQV equals QV or the same as PQV.CouldThis was only available for Arbonne US. I could not find any Arbonne UK figures.
It’s not just aboutBefore the Welcome Kit price is displayed, you will need to create an Arbonne Account (and give Arbonne your contact details).ButEven thenThe amount of product you will need to buy in order to achieve the 150 QV target has not been revealed.
I created an account, filled up my basket and even went so far as to create an account.then,I wasn’t told how much QV my products added up to in my basket.To see the total amount I would have spent and shipping costs, I needed to enter my card details.This is not what I did, but it’s something I wanted to share with you.HellThey will do whatever it takes to keep their costs secret.
In factI was not able to check out the Terms for shopping with Arbonne before I had actually offered my email address.and your residence address. Yikes.
Trust me if you are still confused. It seems impossible to determine how much you need to invest in Arbonne to become a distributor.
If you have allThatIf this is enough to discourage you, don’t worry. Your costs are not over.
You areEncouraged to buy ‘business tools’Marketing packs and sample kits. These are not available on the Arbonne website, but I found an Arbonne US promotion.onlineThe ‘Share Arbonne’ package (a collection of product samples and catalogues) cost 49 USD when purchased together with the Welcome Kit, and 56.90 USD separately.
You also have the option to purchase two ‘Special Value Packs’ for PS170 each. A ‘Cosmetics Pack at PS511 or a Business Pack at PS999 are also available.These packs are not available for inspection.
What does it cost to operate an Arbonne business?
We have now established that even has a higher cost than it appears.Sign upArbonne can have a high price tag, but that’s not all. This is an MLM.
Anti-MLMer will tell anyone thatDistributors are the best customers in any MLM.
MLMs can avoid being called pyramid schemes, because they sell products.
Who are you?BuyWhat about the products? Are they the distributors or the general public?
ArbonneTo’remain active’ and to earn any commissions, every consultant must spend at least $750 per month on Arbonne products.
Also, it means that youPlay to win
You don’t have to buy the products. You don’t have to buy the products. ButYou will not be eligible to receive any commission if you do not spend the monthly amount on ArbonneYou will work for nothing, so it is a no-cost job.
How much is the minimum amount?
You’re welcome, friend!
To remain active with Arbonne you must generate 150 PQV of product each month with your Arbonne account. The PQV system is basically a points system. In the US, each $1 spent on Arbonne products will earn you 1 PQV. This is how it works:To earn a commission on any sales you make, you must spend $150 each month on Arbonne products
Even better, you canTo ensure your active status, set up a standing payment of $150 per month.
I don’t know of anyone who spends more than $150 per month on beauty products. I am sure there are people like that, and it is possible to spend as much on beauty products as Arbonne products. It’s not the norm.NormalTo be spending that much. The above answer answers the question –Distributors are Arbonne’s largest customer!
There are nowIsSigning up people is a great way to cut down on your spending.
You get one free for every person you sign up below youTheirPurchases count as part of your PQV.
If you can’t recruit anyone to your downline, then tough cookie Karen! You’ll need to make that cash.
Arbonne also exploits this loophole.Pyramid schemes pay people to recruit other people. Arbonne offers cash bonuses and increases your commission.
Also,You can be promoted by recruiting other people.It is not a direct cash reward but a financial incentive to recruit rather than sell shampoo.
It is, however, not a problem.TechnicallyIf you are picking up my pyramid schemy material, then it is definitely pyramid schemy.
You are not only required to spend the amount to stay active in Arbonne but you can also spend a lot of money if you feel so inclined.
Arbonne encourages its consultants to “live the Arbonne lifestyle.”
You can show your followers how beautiful Arbonne products are, how energetic you feel when using Arbonne ‘fizz sticks’, and how your morning skin looks after using all Arbonne products. Your network will encourage you to upload TikTok or Instagram videos of yourself using the products. This is a great marketing strategy because social media influencers are able to sell products by showing how they use them.They will use the product.
Celebrities are paid millions of dollars to endorse productsWe are more likely to purchase something if someone we trust recommends it.
There is a catch: Influencers, brand ambassadors, etc. They actually get paid to do this, but they are not paying for the product.
Arbonne Consultants need to purchase the products in order for them to be advertised and make some money.
This is amazing! I can’t stop laughing at it. This is amazing!
Arbonne products aren’t cheap. A Arbonne eyeshadow palette retails at PS50 A can of hairspray is priced at PS24
Arbonne reps receive a discount of 35 percent on all products they purchase, but are they really getting a deal or are they still paying too much for what many reviewers claim to be a poor product?
Arbonne tells its representatives not to go bankrupt, in fact (gee, how generous),Spend enough to feel uncomfortableThey say it will motivate you to work hard and make your money back.
This is technically called thesunk cost fallacy.This means that you will be more likely to stay with something if you invest more money.
This roughly means:“I can’t stop now, I’ve invested so much time and money in building my business!”
This is how they make you rich. You will stay longer with Arbonne if you have more money.
It is an inexorable cycle.
Earnings vs. investment
Remember how I described the shocking earlier?Manufactured insufficientArbonne Consultants’ earnings
Are you aware that 83% of Arbonne Consultants were paid in 2018?Nothing8.4% earned $839 in total for the year
Let’s look at the people who actually earned anything with Arbonne.
We get the following results if we take the minimum amount an Arbonne Consultant must spend each month to earn any commissions from their sales:
150 per month X 12 months = 1800
Therefore, every Arbonne Consultant must invest AT LEAST $1800 annually to make anymoney.
Then,Largest percentage of people who have ‘earned’ anything with ArbonneThe average annual salary for Independent Consultants was $839.
839 – 1800 = 961
These ‘earnings” are actually a loss. The $839 profit of the people at the bottom of this chart was not a PROFIT. They LOST $961
In 2018, the average salary for District Managers was $3851.
The above equations show that 3851 – 1800 = 2051. This is 4.1%ActiveConsultants earned $171 per month or $2051 annually, or $2051 each year.
These expenses do not include additional costs such as:
- Register fee (49$)
- Sample pack ($49)
- Additional sample packs or ‘business tools’ may be purchased throughout the year.
- Additional Arbonne products purchased by the consultant to continue living the Arbonne lifestyle
- Any travel expenses, hotel costs, conference tickets etc. The Arbonne hosts an annual conference in Las Vegas.
The gist is obvious.
Is Arbonne a pyramid scheme in disguise?
People in MLMs are the first to accuse pyramid scheme allegations of being false.“But pyramid schemes are illegal!” If it were a pyramid scheme, my MLM would have been closed by now!
Yes. Pyramid schemesThese areIllegal
Many MLMs are able to accomplish this, however.Be sure to carefully define their terms and conditionsThey do so in a way that avoids legal loopholes. They end upfunctioningAs a pyramid scheme, and either evading or fooling people long enough to avoid lawsuits.
To determine whether it is possible to use the Internet for your research,That is what I believe.Arbonne is a pyramid scheme disguised (I don’t want to get sued so all of this must be my responsibility).opinion),I will try to answer four questions.
What is the best way to make money at Arbonne? Is there a strong focus on recruiting? __S.773__If you know the answer,YesArbonne then meets the criteria to be a pyramid scheme.
Are you required to pay for Arbonne work? __S.782__If you know the answer,YesArbonne then meets the criteria to be a pyramid scheme.
Are there loopholes in Arbonne that allow it function as a pyramid scheme or are they intentional? What are these loopholes? __S.792__My answer is yesopinionBased on my research.
Is Arbonne ever been involved in legal proceedings related to this matter? __S.801__Self-explanatory.
Let’s get started.
How can you make money at Arbonne?
Pyramid schemes are different from legitimate MLMs in that they have a main difference (I am unsure if this is true).AnyMLM can be legal, but that’s another story).The product.
This goes back to 1979’s Amway vs. the FTC. Amway was found to have a legitimate business and not a pyramid scheme after four long years of court proceedings. The ruling was based on technicalities in Amway’s paperwork. This is now known as the “The Amway Decision”. 70/30 rule.
The rule 70/30 means that70% of a company’s profits must come from retail sales of its product, not recruitment. The company could be accused of being an pyramid scheme if the scale is tipped.
Because the company’s main focus is not on recruitment, they can play with the idea that a pyramid scheme might be possible without getting into legal trouble.
Arbonne’s main focus is on recruiting, or signing people up for the “Arbonne lifestyle.”videoEmily Leah shows Arbonne babes bragging all about their beauty.People think that we sell makeup. Have you ever seen us selling makeup? Have you ever purchased makeup from us? Most likely not.
They continue to say“You guys can buy products. It is [sic] there for a second income stream […] but we bring people in, share business concepts and mentor them in their businesses. We are business mentors.
This isn’t admitting that you are a part in a pyramid scheme.
Arbonne reps getHuge bonuses and promotions for recruiting others to their downlineThe more people they hire, the more passive income they can make. It’s easy to make a living selling lipsticks.
Selling products is not the best way to make money.
This is the moment. This is not to say that Arbonne representatives don’t sell any products. You can find out more about Arbonne products here.canYou can make money selling Arbonne products directly to the public. You can make money selling Arbonne products to the general public.ChooseIt is your choice.
Arbonne doesn’t release data about how much it makes from selling products to customers.We are unable to say how they compare on the 70/30 scale in terms of retail sales.
What are we?canIt is very likely that Arbonne consultants are spending more than $150 per month on products.NotThe public, Arbonne’s largest customer.
A company cannot claim that it is a pyramid scheme victim and then try to get out by pretending otherwise.DoesEven though the product is sold to its distributors, it can still be sold.
You must make 70% of your profits from retail sales to general public and not interior sales from employees.
they have independent contractors Arbonne does not employ these people.
This sounds to me like a loophole, I don’t know if you do too…
Arbonne sounds plausible.DoesThe bulk of its income comes from sales…to its independent contractors. It’s sneaky.
Arbonne therefore meets the criteria to be a pyramid scheme.
Are you required to pay for Arbonne work?
Everyone at the back will say YES, YES and YES again.
It is important to spend well on aThousandsArbonne pays a salary of $2.5 million annually. What other job is better?PayTo go to work? To be able to go to work!
Even a salesperson working only on commissions can be a successful one.It is not paid to go to work.They might not make money if they don’t sell anything, but that’s okay.LosingMoney.
To be allowed to sell cars, a car salesperson does not have to buy a certain number of cars each year.
This means that Arbonne has fulfilled twoof criteria to be a pyramid scheme.
Are there loopholes in Arbonne that allow it function as a pyramid scheme or are they intentional? What are these loopholes?
It is not possible to say for certain that Arbonne uses legal loopholes to disguise itself as a pyramid scheme.
I’m not a lawyer.
Do IBelieveArbonne uses loopholes to avoid being called a pyramid scheme
Here are the reasons:
MLMs must make the bulk of their profits on this basis.Retail sales to the general population.This excludes sales to employees of the company. ArbonneEmployedIf we look at the distributors of Arbonne, there is a good chance that most product sales will be going to them.NotBecky Smith, down the street.
ButArbonne distributors do not work for Arbonne, they are independent contractors.This means they can be considered members the public when it comes to product sales.
Loophole #2: MLMs must show they don’t have a “recruitment focus”. Arbonne would be proud.Distributors who recruit directly are paid by themThen we’d probably be able to see that they have a recruitment focus. They are doing what theyActuallyInstead, give them promotions and ‘bonuses’ instead. Hmm…
Arbonne may be exploiting more loopholes, but that is not the point. It doesn’t mean that something is impossible.TechnicallyAndLegalAlthough it may be classified as a pyramid scheme, that doesn’t necessarily mean that it operates in the exact same way as a pyramid system in practice.
Is Arbonne ever been involved in legal proceedings related to this matter?
Cynthia and Michael Dagnall filed a lawsuit against Arbonne at the Orange County Superior Court in May 2017. They claimed that Arbonne was an illegal pyramid scheme.
A portion of the legal action stated that “Arbonne calls for that they acquire start-up packages, pay annual dues and that distributors buy great deals of Arbonne items. The Consultants are entitled to compensation in return for their efforts to recruit new Consultants (who must pay fees, dues and purchase products). The Arbonne program works in a similar way to a pyramid scheme. Consultants can earn more money the more they bring in new Consultants and the more Consultants who make more.
The lawsuit was eventually dropped after a settlement was reached.
However, this does not mean that Arbonne is not a pyramid scheme.
Arbonne paid money for the couple to make them drop the case.
Similar to the way that Harvey Weinstein and R Kelly, who are completely innocent, reached settlements with their accusers.
Arbonne was also subject to criticism by the FTC in April 2020. They spoke directly with Arbonnesaying The ‘Federal Trade Commission (FTC) staff reviewed social media posts by Arbonne International LLC (“Arbonne”) business opportunities participants or representatives who illegally advertised that certain products prevent or treat Coronavirus Disease 2019. (“COVID-19”)erroneously states that Arbonne business opportunity participants will earn substantial income.
It is important to remember that Arbonne representatives are available for consultation.Arbonne claims it can treat Coronavirus(wow…just…wow) The FTC claims that Arbonne representatives make false claims about people earning substantial incomes with Arbonne, when in reality they are not.
FTC continues to state that“Express and implied earnings claimsmust be honest and not misleadingTo avoid being misleading, claims about the possibility of achieving a rich lifestyle, career-level income or significant income should not be made. Business opportunity participants usually do not achieve such results.
Although this is not a question of whether Arbonne is a pyramid scheme or not, it is certainly food for thought.Unknown reason, you arestillArbonne is worth considering.
Are Arbonne pyramid schemes? Final thoughts
It’s clear that I feel strongly about Arbonne being a pyramid scheme.
Are you sure that Arbonne is a pyramid scheme? If so, could the FTC close it down?
No, I do not.
Are you sure Arbonne is still available? Operating as a pyramid schemeBy controling lawful technicalities.
Without a doubt, YES.
Do you think the law will eventually catch up with these companies who are exploiting these loopholes in the future?
Yes, I do. ArbonnePresentWhile they aren’t an illegal pyramid scheme I believe that the FTC, other relevant authorities, are quickly catching on to their tricks and that Arbonne will soon be out of business.Arbonne’s days seem numbered to me.And that anyone who is employed by Arbonne and feels smug that they don’t belong to an illegal pyramid scheme should know that this will end soon.
Last but not least, the most important question that we should be asking is –is Arbonne ethical?
Arbonne may be legally operating right now, but this doesn’t necessarily mean it is ethical. If you knew that only 1% of people will generate real income, would Arbonne still be a viable business opportunity? Would you feel confident in promoting Arbonne and recruiting them to your company?
My guess is no. It wouldn’t.
Alternative to joining Arbonne
How do you make online money? It’s easy!
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