Arbonne is a California based multi-level marketing company that has been in business for over 20 years. A skin care and cosmetics major, often a question has been raised over the legitimacy of the business model. The question is whether Arbonne Pyramid Scheme is a true term for what this MLM company does and is it an illegal business format?
What people call Arbonne pyramid scheme, is a network marketing company in reality, and it operates in many countries including Australia, UK, Poland and Canada apart from the United States. They have a fairly large network of over 240,000 independent consultants who are active participants and close to 550,000 preferred clients as per data collated by the end of 2014. Founded in 1975, they started completely operational in the US in 1980 and eventually went through absolute bankruptcy in 2009. If you see the promotional video, you might be almost forced to believe there is no better time to join than now.
But the question is that if you are joining a direct sales cosmetic company would you get trapped in the Arbonne pyramid scheme? Well, let’s accept some basic facts. You cannot possibly make tons of money by simply selling skin care products. Not everyone has the caliber to push products to customers on a sustained basis and make money from such a proposition. For that matter, not just Arbonne but career as a sales representative of any skin care company can’t be a great business or career opportunity for anyone. You don’t have to go too far for it. Just a look at Arbonne’s income outlook will make the picture much clear to you.
I have already explained in the other articles of pyramid scheme category that having a very low or even no income is not a definite and strong indicator of an illegitimate and scam program. Not everybody is able to make money even in a legitimate MLM program. So just because most of the members of Arbonne pyramid scheme can’t make money, you can’t say what Arbonne is doing is illegal and they are illegitimate. They are not illegitimate and what they do is not illegal.
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The Arbonne Compensation Plan
Numbers sometimes can convey a picture lot more succinctly than many paragraphs devoted to the same purpose. So before we go any further on this journey, let’s take a look at the overall Arbonne pyramid scheme compensation plan for a clearer picture.
At the very basic level, an independent consultant gets to maintain the ranks and benefits of their rank if they can aggregate a total 1200 PQV in the 12-month period. In case they are not able to maintain it, they get reassigned to the rank of preferred clients. Every move up the succession chain is deeply dependent on the performance balance that they are supposed to maintain and inability to do so will push them down the ranks almost instantly.
However, the fact is that most times the sales representatives do not know that they are supposed to maintain a150 QV every month to get the promised 35% commission. Additionally, most of the sales representatives are unaware about the hardship involved selling beauty products like Arbonne on a sustained basis to maintain their position through the various ranks in the entire scheme of affairs.
Moreover, most times consultants do not get any support when they fail to make money in the available business opportunity. Perhaps what Arbonne has never paid any attention to be selective about who to recruit and who to avoid. Business is not for everyone, but Arbonne does not seem to have any qualms about tricking hapless individuals into their rewards program.
Can You Believe the Arbonne Testimonials?
Given the fact that almost everyone knows someone who made a neat fortune at Arbonne or that their website is full of testimonials of independent consultants about how satisfied they are, the question is, are the claims by Arbonne believable?
Well, let’s look at the basic testimonials first. A closer look at all those rosy claims of Arbonne being a life altering experience will reveal that “These testimonials are for illustrative purposes only and do not represent income projections.”
Arbonne pyramid scheme representatives have been candid enough to accept that the team does not grow as fast it is projected to. Representatives often find themselves completely stagnant at certain levels. In fact, there is a double speak at every level even if we see the promised white Merc for start performers. Deeper probe indicates that actually, this Merc is not part of a rewards program, it’s more of the compensation package and part of Merc’s cash benefit program at a significantly senior level and is being run in sync with Arbonne for a while now.
How an Arbonne Pyramid Scheme Consultant Earn
Primarily there are four main ways in which an Arbonne consultant work towards earning money. These include:
- Commissions earned from skin and beauty products marketed by Arbonne
- Commission earned based o the performance of the new recruits under you
- Monthly Mercedes cash bonus program for select recruits above the rank of Regional Vice President and National Vice President
- Monthly cash bonus that can be earned by representatives at the district manager level
All in all, it is not important to pursue rocket science to infer that this model of operation is quite like the Pyramid scheme that other lifestyle makers like Amway might be involved in.
After all one of the cardinal principles of a pyramid scheme as identified by the US, Federal Trade Commission indicate that when only a narrow group of people are earning money and the earnings of a wide majority are being compromised. When new recruits get stuck in a situation where they need to either literally shove their products to potential clients to absolutely butter someone to maintain their monthly ranks, it surely highlights that Arbonne pyramid scheme denies the basic principle of MLM. It is encouraging representatives to earn money by convincing more people to join the net.
Arbonne, therefore, highlights the classic pyramid scheme syndrome where the base recruits are struggling to recover their investment, have to sell hard every product that they sell, and most get rewarded to rope in fresh sales representatives. Most importantly this model is not sustainable over the long-term. Eventually at some point of time, it tends to falter, collapse and the interest of many are severely compromised. Overall there can’t be any authentic claims about the effectiveness of their product as the testimonials are often clouded by representatives who also become the biggest customer base for the company. So the argument tilts more in favor of the fact that perhaps there is more illegitimate than a legal element in their entire way of working.
Arbonne Is a Better Business Bureau Registered Company
Like Younique pyramid scheme, Arbonne is a BBB registered company since several years ago. According to BBB, Arbonne International LLC has received 4.12 out of 5 stars based on 6 Customer Reviews and a BBB Rating of A+ so far. Additionally, 19 complaints have been filed against Arbonne and its MLM or pyramid scheme that have been resolved.
However, unlike Younique that had a good number of positive reviews, 67% of the Arbonne reviews have been negative so far. However, almost all of the complaints are focused on the resellers and customers disputes and are raised mainly because of the lazy sale representatives who don’t take care of the customers after selling a product.
Overall, it seems Arbonne is taking care of the customers and their complaints through filing replies on the BBB site. Whether Arbonne pyramid scheme makes money for the members or not, is the matter of lack of proper training or the fact that majority just join the programs but do nothing, and so they make no money.
The fact that Arbonne has been an American company for decades and is also registered with BBB means that they are legal and legitimate and what they have done so far, although looks like an aggressive multi-level marketing or maybe even a pyramid scheme, hasn’t been against any law in USA.