Welcome to my Arbonne Review! If you are wondering is Arbonne a pyramid scheme or a scam, I'm here to help you find out.
I want to start by congratulating you on taking the time to do research. There are legit business opportunities out there but there are a ton of scams or shady opportunities as well so doing research is the only way to avoid the wrong ones.
The chances are that someone has approached you about Arbonnes skincare products or their business opportunity. Or maybe someone you know is filling your social media feed about the companies products or incredible business opportunity.
Either way, something made you skeptical. Could this be a pyramid scheme? Well, I'm here to help you find out.
Before we look at if Arbonne is a pyramid scheme it's important to know what exactly a pyramid scheme is. People constantly mix MLMs aka multi-level marketing businesses with pyramid schemes and don't really know what constitutes a pyramid scheme.
We will then look at the company more in detail and dig a bit deeper to find out if there is evidence pointing it to be a pyramid scheme.
Before we continue I want to be completely transparent. I'm not affiliated with Arbonne in any way so I'm not writing this to get you to join them.
My site is about business opportunities that can help you to work on your own terms and to create financial freedom in the long run. So I check out business opportunities and recommend the ones I believe in.
I do have affiliate links in the content to the products I recommend as that's how I monetize my site. But rest assured that anything I recommend is something I have extensively used myself to know it's top-notch and thus I will offer my full support if you end up buying through my link.
Arbonne Summary
Company Name: Arbonne
Company Type: MLM business in the skincare and cosmetics niche
Business Opportunity Price: $79 + $30 annual fee after second year
Summary:
Arbonne is a legit MLM business and not a pyramid scheme according to my research.
It still shares the common opportunities and challenges of all MLM businesses. I.e. you can make good money with them if you have the correct skill set and know what you are doing.
But the challenge is that the vast majority of people are not cut out for this type of business as proven by FTC research that shows that 90% of people don't make any significant profit with MLMs.
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What Is A Pyramid Scheme
Let's start by talking about what is a pyramid scheme as it's very important to understand exactly how a pyramid scheme works before we can decide if Arbonne is one.
Pyramid Scheme is a scheme that is disguised as a real business with a multi-level referral model. Pyramid schemes are often vague about what they are actually selling or offering to the recruits.
But they always promise incredible business opportunities and income in return for your investment. And that investment is the key thing in pyramid schemes. It always costs substantial amounts of money to join a pyramid scheme.
People are lured in with obscure investment promises, life-changing self-development courses etc. Once you are in, it turns out that the way to actually make money is to recruit other people.
In a pure pyramid scheme there won't even be any services or products to sell. The only source of revenue is the recruit fees from new recruits. Here's a horrible picture I drew in 10 minutes:
The word pyramid refers to the multi-level commission and recruitment structure. As you can see in the picture above, the structure resembles a pyramid when put on paper.
There are typically only a few people or a single person at the top. They then recruit several people underneath them and the recruits will recruit several people beneath them.
If you understand a bit of math, the network grows exponentially in this model. Just a few levels down there can be thousands of recruits.
Pyramid schemes typically allow each recruit to earn money for several levels beneath them. So if a single person at the top recruits for example three people they can earn money from all the recruits the three people recruit, and the people below them as well.
This effectively shuttles money to the top of the pyramid from the bottom. And the people at the bottom can never make back their original investment because eventually the system will saturate the market or get shut down by authorities.
This is the reason why pyramid schemes are illegal in most parts of the world. They are just a means of transferring money to the top, not a real business opportunity. There are no products or value added to the market.
What Is an MLM
Now that we know what a pyramid scheme is, it's important to understand the difference between an MLM or network marketing company and a pyramid scheme.
While many people confuse MLMs with pyramid schemes or at least think they are all scams, that is not actually true.
MLM (multi-level marketing) is a legal distribution method that uses a very similar multi level commission structure to a pyramid scheme.
The key difference with an MLM and a pyramid scheme is that the vast majority of revenue to the company will come from the sales of products or services that the individual sales reps sell to consumers.
So in an MLM each sales rep can both sell to consumers and recruit additional sales reps beneath them. What's common with pyramid themes is that reps will earn commissions from recruits several levels beneath them. Here's another horrible picture to explain this further:
The key takeaway here is that MLMs can be legal and legit, they are not the same thing as a pyramid scheme.
MLM is also known as network marketing and it's typically used by companies that manufacture their own products to cut down the costs of their distribution chain. This way they can achieve more competitive prices compared to regular distribution chains.
The sales reps do typically direct selling like door to door sales or cold calling customers but these days a lot of this is done online as well.
The line between a legit MLM and a pyramid scheme is sometimes vague as there have been cases where the FTC has sued companies that have a long-standing as a legit MLM with real
This is partly because the incentive for individual sales reps to focus on recruiting instead of sales can be very high. Most MLMs don't limit the amount of people you can recruit.
The fact is that it much more lucrative to have more people in your downline selling to recruiting and selling instead of focusing selling yourself. This is obvious if you understand the mathematics behind the model.
So why am I talking about MLMs? Well because Arbonne is one.
What Is Arbonne
Arbonne, officially Arbonne International LLC, is an international MLM company that focuses in skincare products, cosmetics and nutrition.
Arbonne was formed in 1980 by a Norwegian entrepreneur Petter Mørck in Orem, Utah. The companies ownership has changed several times since through mergers and most recently the company was bought by the Group Rocher in 2018.
The company focuses on selling green products that are made with natural ingredients and don't include petroleum or animal products.
Arbonne's trademark advertising line is: "pure, safe, beneficial" and many of their products are vegan, gluten free, kosher and cruelty-free.
The company has an R&D department called Arbonne Institute of Research and Development in Switzerland, where they design their products. Arbonne manufactures its products in the United States.
Arbonne uses the MLM direct selling business model where they use independent consultants instead of a regular distribution chain of retail stores.
Arbonne also has a charitable non-profit Arbonne Charitable Foundation that was founded in 2012 to provide programs and opportunities to promote the development of confidence and self-esteem in teenage girls and boys.
Is Arbonne A Pyramid Scheme
Now that we know what Arbonne is, we can find out if it is a pyramid scheme. If you remember earlier on I talked about the differences between MLMs and pyramid schemes.
It's obvious that Arbonne is an MLM. But I also said that sometimes the line between MLMs and pyramid schemes is vague and ultimately for the authorities to decide.
But there are three questions that go a long way in finding out if an MLM company is a potential pyramid scheme. They are:
- How long has the company been around?
- Are there real products or services being sold?
- Are there any lawsuits and more importantly court rulings about the company being a pyramid scheme?
How Long Has Arbonne Been around?
This question is important because pyramid schemes are generally short-lived. Usually in from a year to 5 years max. The reason for this is that the members of the system and authorities will eventually understand it's a pyramid scheme.
Eventually authorities close the system down, media makes it so know that it's impossible to recruit new people or the creators decide it's time to vanish with the money they have before getting arrested.
Arbonne has been around since 1980. It means that at the time of writing this article the company is 40 years old. In my opinion this alone goes a long way to show that the company is not a pyramid scheme.
Are there real products being sold at Arbonne or does it rely on recruitment fees?
Arbonne focuses mainly in selling its physical skincare, cosmetics and nutrition products to consumers. They have their own R&D subsidiary and manufacture their products in the US. There's no reason to suspect they wouldn't actually be selling their products.
The other thing to look at is how costly it is to get in on the Arbonne business opportunity since pyramid schemes depend on the participation fees of new recruits.
Arbonne costs a $79 registration fee and $30 annual recurring fee. You are additionally required to buy value packs if you want to throw parties and demonstrations. These range from $270 to $500.
While this is definitely not free or cheap, the actual participation fees are very modest and the rest is for inventory you can make profit with. Definitely not a sign of a pyramid scheme.
Are there any lawsuits or court rulings?
There seems to be a single case of individuals sueing Arbonne for it being a pyramid scheme. The lawsuit was apparently settled in a confidential settlement, so the information of the
A single lawsuit without a court ruling is not enough to categorize an MLM as a pyramid scheme. Virtually all the large MLM companies have been sued for being a pyramid scheme. But the fact remains that it's a legal business model as long as a company is not determined to be a pyramid scheme.
But this does show the vulnerability of the MLM business model. The fact that most people in MLMs don't make any significant income will make a lot of people who got lured in, expecting good money, feel like they were scammed.
It is possible to succeed with MLMs but it takes a certain kind of personality and skill set to do it. Most people are not cut out for it.
And that's why I personally think these companies should be very picky at who they accept but in reality they have very little control over their individual sales reps who handle the recruiting.
Is Arbonne a Pyramid Scheme?
No, I wouldn't call Arbonne a pyramid scheme. It seems to be a legit MLM with some of the typical issues of all MLMs.
Some people feel like they are a pyramid scheme because they have invested in it but haven't managed to make enough sales to make profit or break even. In reality, they had the opportunity to make profit, though odds were against them.
While MLMs are legal, FTC for example thinks the very structure of "multi-leveling" or "pyramid selling" contains an intolerable potential to deceive.
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Conclusion
I hope you found this Arbonne review useful and it answered most of your questions. If you have any additional ones, feel free to leave them in the comments section below and I'll get back to you.
Arbonne is not a pyramid scheme but it's definitely an MLM. As such it means that succeeding with it will be hard work if you are new to network marketing.
But if you are really interested in becoming an MLM rep and like the Arbonne products, it's definitely one of the legit ones out there. Just beware that FTC research suggests that 90% of all MLM reps fail to make any significant income or profit.
If you want to start a home-based business, I recommend affiliate marketing instead. Even if you are dead set on going with MLMs I really recommend you check out the opportunities the online world offers you.
The Internet allows you to grow your network and reach potential clients much faster and on automation, taking out the hardest part of network marketing.
Thanks for reading and feel free to share this article in social media if you found it useful!
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2 replies on “Is Arbonne A Pyramid Scheme? [2020 Review]”
Thank you for the thorough review and explanation. I had heard of Arbonne and was wondering what it was about. I know there are a lot of cosmetic and skin care companies out there that work the same way and as you said, you don’t make much money. I was a Traveling Vineyard Consultant for awhile and you do have the potential to make some decent money from that if you have a lot of friends that like wine and wanted to host a tasting. I’ve never been very good at sales so I don’t see myself taking on a new adventure with Arbonne but I do appreciate the info. and will send others to your review if I hear they’re interested.
Glad you found it useful Lisa! Yeah there seems to be a lot of MLMs in the cosmetics niche, I guess it’s a lucrative business. Direct selling definitely requires a certain personality and skill set and I honestly think not everyone is cut out for it. Fortunately we have options!