Is Arbonne a Pyramid Scheme or a Legit Business Opportunity? A Deep Dive Into Arbonne

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Is Arbonne A Pyramid Scheme?

Yes, Arbonne is a pyramid scheme and should be avoided at all costs.

Continue reading this Arbonne Review to find out why.

 

What is Arbonne?

Arbonne defines itself as a health and wellness company with a focus on people, planets and profits. It was founded in the U.S. by Petter Mørck in 1980.

Arbonne derives its name from Arbon, a historic town in Switzerland with typical natural features. Petter Mørck, states that when he founded the company, he had a vision of establishing a place where people flourish.

Arbone defines itself as a botanical product-based company that deals in plant-based products for wellness; skin-care and body nourishment.

The company states that it is aimed towards producing products that give consumers a healthier mind, stronger body and a beautiful skin.

You can check out this video by Ashley on what a sample day looks like in Arbonne’s 30 days to healthy living program!

 

The Diversification

The company started out as one providing skin-care products but has over the years diversified to make an array of products including beauty products, nutritional supplements, hair care products and baby products.

It is typical of a pyramid scheme to diversify the range of its products to increase its relevance and also achieve a larger community of consumers.

 

“Become a Product of the Product…”

As a matter of fact, most of Arbonne’s sales representatives are the primary consumers of these products. They are naturally enthusiastic about the products and in the long term become Arbonne’s devotees.

Most Arbonne independent consultants are health and wellness enthusiasts. Arbonne’s favourite slogan encourages the independent consultants to buy the products, use them for some time to “become a product of the product” and then recommend the product to friends and family.

Many of the testimonies made for the products by the sales distributors are lacking in validity but are aimed at attracting purchases because as a sales representative you earn a commission from each sale made through your custom link.

These distributors are always excited whenever the company expands their line of products and they are the first to publicize this news all over their social media platforms.

 

Expensive Consumables.

The company offers consumable products rather than durable goods to ensure frequent repeat sales that will provide a niche to new recruits.

Definitely, in every disguised pyramid scheme there is a legal product or products that the company claims to offer to avoid attracting the legal action which would have occurred if the payment to join was merely in form of cash.

Additionally, Arbonne’s products are over-priced. You could purchase a similar quality product from top companies at a price lower than that which an Arbonne product costs.

This is actually due to the business model of a multi-level marketing company.

The products have to be over priced to accommodate for the commissions the sales representative and their uplines receive.

Additionally, this also serves to keep you in the same position in the scheme since expensive products generate less sales.

You remaining at the beginning level as an Independent Consultant is profitable to the company since you stay longer in the company in hopes of achieving your promotion to the next level.

 

Do Not Be Left Behind, Join the Revolution…

It is wiser that a pioneer establishes a pyramid scheme in a profitable industry, one that both will generate may sales and also boasts of having a large percentage of millionaires in the country.

Many people will be attracted by this, to become a part of the scheme (disguised as a company). Arbonne is a company that deals in health and wellness.

While attracting new recruits, it is accentuated to the targets that the health and wellness industry is a profitable one. Such statements are followed with statistics whether valid or invalid to stress the point.

 

“I will mentor you on how to make money quickly and at your comfort..”

In multi-level marketing language, there are two terms that you will encounter much often and they have also been used in this article.

These terms are antonyms of each other and they are; ‘downline’ and ‘upline’.

The pyramid in a pyramid scheme represents a temporal hierarchy with the members that joined the scheme earlier in time (uplines) occupying the apical top of the pyramid while those that join later in time occupy the pyramid’s bottom (downlines).

The uplines recruit the downlines and each downline that recruits a new member becomes that member’s upline. To avoid raising attention, pyramid scheme companies replace the terms ‘upline’ and ‘downline’ with safer, more appealing terms like ‘mentor’ and ‘team member’.

Like similar schemes of its kind, Arbonne is founded on a network marketing basis where downline distributors are encouraged to recruit more downline distributors and also sell the products.

This is basically done through referrals and word-of-mouth passed on by a downline member of the scheme to people within their sphere of influence, like close friends and relatives.

We’re still asking, “Is Arbonne a pyramid scheme or it’s legit?”

There are two ways to become a part of Arbonne. You can join either as an independent consultant or a preferred client.

As an independent consultant: You can start your online business with Arbonne as an independent consultant for 49 dollars.

You are then given a personal website that carries your personal link through which clients can purchase Arbonne products.

For each client that you convince and successfully buys products through your link, you earn a percentage commission. Unlike other similar schemes, with Arbonne you don’t need to stock inventory in your home.

All you need to do is add products to your cart on your independent consultant website. The company has it’s shipping and delivery team that reaches the products to the customers who have purchased through your link.

It must be noted that what you get for your initial 49 dollar sign-up is a catalogue, a welcome letter and a copy of their compensation plan. In addition to this, you have to purchase the products you want to sell, try them out and become a ‘product of the product.’

An independent consultant earns 35 percent commission when a normal client makes a purchase through their personal link while when it is a preferred client who purchases, the independent consultant earns 15 percent discount.

A preferred client, on the other hand, is one that enjoys the discounts the company offers by paying yearly subscription for this status and repeatedly buying in bulk. Becoming a preferred client requires that you subscribe for this status by paying 29 dollars per year.

A preferred client enjoys a 20 to 40 percent discount each time that they shop. The commission given to an independent consultant when a preferred client shops is less than that they receive when a normal client shops.

 

You’re Both “Independent” and a “Consultant”.

You will agree with me that the phrase ‘independent consultant’ does not mean literally here. It is a shield to the company ownership from the legal liability the scheme entails,

Any adult with $49 can become an independent consultant. In the unfortunate case that an independent consultant causes any form of damage while fulfilling the company obligations, the company cannot be held much accountable, since this is an ‘independent’ personnel and additionally, they are a ‘consultant’.

They should be knowledgeable enough about what they are doing.

The second point to note is that, in the position of an independent consultant. You are definitely not working independent from the company but closely with it.

This just gives an illusion that you are operating your own business and just offers the pride feeling of having flexibility and total control.

This is like an incentive to join and ‘fulfil’ the American dream of the 21st Century of owning your personal business.

Truth is, you remain under the umbrella of Arbonne. The word consultant is actually misappropriated here, because not all Arbonne independent consultants qualify to have the literal title of consultancy.

Arbonne offers health and wellness products that are made for people’s health and wellness.

It is rather crucial that in health matters, consultation is made with well-trained health and wellness practitioners because in most cases health and wellness issues are not a one-size-fits-all but require professional assistance.

 

How You Can Earn As An Independent Consultant

While working with Arbonne as an independent consultant, you can earn in three basic ways:

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a) Through Personal Sales

Whenever you convince clients to buy the products and make the purchase through your custom website, you earn a percentage commission.

b) Overrides

The person who inspires you to join Arbonne becomes your mentor who trains you in ways to effectively speak about Arbonne so that you can convince friends and relatives to join, guides you in scheduling online calls with your people in any part of the world, trains you in handling objections and provides any other kind of support a beginner needs to stabilise.

Basically, the mentor trains you in the recruitment process. As you become more conversant with the setting, you also recruit more people and become their mentor.

The group of people below you in the pyramid scheme, those whom you have recruited become your team.

When each member of your team makes product sales or recruits other members you earn a commission termed as an ‘override’.

Therefore, to earn from this scheme, you have to make sure you recruit a large number of people.

The more you recruit, the more you earn since overrides make up the largest percentage (65) of the revenue contribution to the members of the scheme compared to the small 35 percent commission gained through direct product sales.

c) Rewards

These range from 100 to 600 dollars. These are extra earning in addition to the commission.

They are based on sales performance. As you climb up the hierarchy of partnering in the activities of the company as an independent consultant, each high level has higher money rewards.

 

Recruit and Earn.

There’s a false claim made by Arbonne to stir people’s minds from the pyramid scheme nature of the business. The company claims that “Arbone Independent Consultants do not earn compensation for recruiting other Arbonne Independent Consultants. They only earn compensation when products are sold.”

This is not true. Arbonne Independent Consultants earn through overrides whenever they convince other people to join the business under their referral.

The only difference with certain other pyramid schemes is that Arbonne does not explicitly give direct compensation for recruitment but does this through the overrides the members get by getting themselves downlines.

In a nutshell the Arbonne business models comes down to something like this;

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The Hierarchy.

There are four levels in the hierarchy of the independent consultant category. You start out as an independent consultant.

The next step in the hierarchy if you graduate from being an independent consultant is becoming a District Manager.

This transition takes an average of 8 months but it could happen in as fast as one month if you are ferociously ambitious in your recruitment.

If your recruitment circle (team, as they call it) gets noticeably large in a short time.

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The next level is becoming an Area Manager. This transition takes an average of 21 months.

It comes with a raise in the earning and 6 percent commission. At this stage, your business becomes willable.

The person whom you have included as your next of kin continues to earn the commission if you pass on, as long as people keep shopping through your custom website or through the websites of your team members.

Definitely your next of kin can take on your business in the advent of your death.

When you graduate from being an Area Manager, you become a Regional Vice President. This transition takes an average of 38 months. By becoming Regional Vice President, you will have joined the top 2 percent league of the company.

The company claims that you are given an additional cash award of 800 dollars to buy a Mercedes Benz. If you can purchase your Mercedes at a cheaper price, good for you, you can keep the change.

The ultimate position in this hierarchy is that of a National Vice President. The average time required to make the transition from being a Regional Vice President to becoming a National Vice President is 58 months.

By this advancement, you join the top 1 percent league of the company.

You then qualify for yearly business trip to Maui for a leadership meeting and a 1000 dollar cash award towards buying your Mercedes Benz.

Below are their annual earnings for Active Arbonne Independent Consultants  for 2018.

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Is it Really Easy?

Most, if not all Independent Consultants would love to make the transition to ultimately becoming National Vice President.

However, this entails a lot of effort and input. You have to invest in terms of money, time and effort.

Probably, it is attainable but the opportunity cost of the achievement is really high.

At the end of the day, about 99% of people lose money.

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Most independent consultants cannot make it to this top most level that is why it is called the top one percent of the company.

As you strive towards achieving hard targets of hierarchical advancement, you continue to work for the company and above all recruit more members who also go ahead to recruit more and the pyramid continues expanding at the base.

The Mercedes Benz ‘Vice President Success Award’ as Arbonne terms it is not a free gift from the company as they claim.

You actually pay for most of the car bill yourself. Arbonne just contributes a comparatively small amount.

On top of this, as a requirement from the company, you have to make a car presentation.

You have to give people the impression that as an Arbonne Vice President, you have achieved through the company. You even have to fix the Arbonne emblem on your car.

 

To What Extent is it Sustainable?

Arbonne boosts itself in being comprised of a diversity of people from all parts of the world. Pyramid schemes thrive on exponential recruitment of members by current members.

However, the system cannot be sustained indefinitely as the recruitment ‘market’ becomes saturated, making it impossible for the company to pay the downline members.

The scheme collapses and in most cases the top proprietors run out of the country making a large number of people to lose their money.

The image below shows just how unsustainable this business model is.

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Don’t You want Financial Freedom?

As you are lured to join Arbonne, you will be convinced with phrases like “I was introduced to an opportunity that could allow me to earn more income as a side hustle by a friend..” and “Arbonne is an opportunity I would love you to take up.

It has given me the financial freedom to leave my corporate job and fully concentrate on earning more, while working in the comfort of my home.”

And who honestly doesn’t want financial freedom? Who doesn’t want that free new Mercedes Benz?

Who won’t believe what their friends are telling them?

Be wise and don’t end up like Karen, LOL……

Still confused about how pyramid schemes work

Here is a video on how to spot a pyramid scheme.

 

Conclusion: Is Arbonne A Pyramid Scheme?  (The Reality Beyond the Claims)

The actual truth is that, according to Arbonne’s yearly income statement, independent consultants and district managers earn just a few hundred dollars annually.

If is only when you rise to the top ranks that you can earn a liveable pay.

Most of the money is funnelled to the top of the pyramid as the people at the bottom are actively losing money. Is that really legit?

 

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