If you’ve been approached about joining Arbonne or buying their products, you might be wondering: Is Arbonne a pyramid scheme?

This question has been circulating online, with many searching for terms like “is Arbonne a pyramid scheme company” or asserting that “Arbonne is a pyramid scheme.” On the flip side, supporters ask, “Why is Arbonne not a pyramid scheme?”

With its range of beauty, health, and wellness products and a business model that relies on independent consultants, Arbonne has both ardent supporters and vocal critics.

In this comprehensive review, we’ll dive deep into Arbonne’s business model, address the pyramid scheme allegations, and provide you with the information you need to make an informed decision.

Our Verdict

Arbonne Review

3.5/5

Multi-Level Marketing Company

Arbonne uses a multi-level marketing (MLM) business model that has faced pyramid scheme accusations. While it offers legitimate products, the emphasis on recruitment raises concerns. Read this Arbonne review to understand if it’s a pyramid scheme or a viable business opportunity.

Pros

• Wide range of health, wellness, and beauty products
• Vegan and botanically based product line
• Potential for earning income through sales and recruitment
• Some products receive positive reviews from customers
• Offers business training and support for consultants
• International presence in several countries

Cons

• Multi-level marketing structure can be difficult to succeed in
• High startup costs and ongoing purchase requirements
• Products often priced higher than comparable alternatives
• Potential strain on personal relationships due to sales tactics
• Complex compensation plan that may be hard to understand
• Low success rate for consultants (most make little to no profit)

What is Arbonne?

Arbonne is a multi-level marketing (MLM) company that sells a range of health, wellness, and beauty products. Founded in 1980 by Petter Mørck, the company markets itself as a provider of vegan, botanically based products that promote a holistic approach to beauty and wellness.

Key Facts:

• Founded: 1980
• Headquarters: Irvine, California, USA
• Product Categories: Skincare, Cosmetics, Nutrition, Hair Care, and Body Care
• Business Model: Multi-Level Marketing (MLM)
• Global Presence: Operations in several countries including the US, Canada, UK, Australia, and New Zealand

Arbonne’s business model relies on independent consultants who sell products directly to consumers and recruit others to join the company. This structure has led to both praise for its entrepreneurial opportunities and criticism for its similarity to pyramid schemes.

The History of Arbonne: From Norwegian Skincare to Global MLM

Understanding Arbonne’s history provides context for its current operations and the ongoing debate about whether Arbonne is a pyramid scheme. Here’s a brief timeline of Arbonne’s journey:

1965: Petter Mørck, Arbonne’s founder, begins working in the skincare industry in Norway.

1975: Mørck starts developing the concept for Arbonne, focusing on botanical, natural ingredients.

1980: Arbonne is officially founded in the United States, starting with 19 products.

1984: The company expands to Canada, marking the beginning of its international growth.

1990s: Arbonne continues to grow, expanding its product line and consultant base.

2004: Arbonne enters the UK market.

2007: The company is acquired by Harvest Partners, a private equity firm.

2010: Arbonne expands to Australia and Poland.

2014: The company launches in New Zealand.

2018: Groupe Rocher, a French family-owned group specializing in cosmetics and beauty products, acquires Arbonne.

2020: Arbonne celebrates its 40th anniversary and navigates the challenges of the global pandemic by shifting more operations online.

Throughout its history, Arbonne has positioned itself as a pioneer in botanical, vegan skincare and wellness products. However, as the company grew and adopted the MLM business model, it began facing scrutiny similar to other MLM companies, including questions about whether Arbonne is a pyramid scheme.

How Does Arbonne’s Business Model Work?

To address the question “Is Arbonne a pyramid scheme?”, it’s crucial to understand how the company’s business model operates. Arbonne uses a multi-level marketing (MLM) model, where independent consultants earn money through two primary methods:

1. Direct sales of Arbonne products to customers
2. Recruiting new consultants and earning commissions from their sales

Here’s a more detailed breakdown of Arbonne’s business model:

1. Becoming a Consultant: Individuals sign up as Independent Consultants by purchasing a starter kit (usually around $49 in the US). This provides them with business materials and access to Arbonne’s consultant portal.
2. Personal Sales: Consultants can earn retail profit by selling Arbonne products directly to customers. They typically receive a 35% discount on products and can sell them at the retail price.
3. Preferred Clients: Consultants can also sign up Preferred Clients who receive a 20-40% discount on products. Consultants earn the difference between their discount and the Preferred Client’s discount.
4. Building a Team: Consultants are encouraged to recruit others to become Arbonne consultants. As they build their “downline,” they can earn commissions based on their team’s sales volume.
5. Ranks and Bonuses: Arbonne has various consultant ranks (e.g., District Manager, Area Manager, Regional Vice President, National Vice President). As consultants move up in rank, they become eligible for higher commissions and additional bonuses.
6. Monthly Qualification: To remain active and qualify for commissions, consultants typically need to maintain a certain level of personal sales volume each month.
7. Training and Support: Arbonne provides training materials, online resources, and events to support consultants in building their businesses.
8. Product Discounts: Consultants receive discounts on Arbonne products for personal use, which the company encourages as a way to become product experts.

This multi-level structure, with its focus on both product sales and recruitment, is at the heart of the debate over whether Arbonne is a pyramid scheme. While the model allows for earning through product sales, the emphasis on recruitment and the multi-tiered commission structure bear similarities to pyramid schemes, which we’ll explore in the next section.

Is Arbonne a Pyramid Scheme? A Detailed Analysis

The question “Is Arbonne a pyramid scheme?” is complex and requires a nuanced answer. Let’s break down the arguments for and against classifying Arbonne as a pyramid scheme:

Why Arbonne is Not Legally a Pyramid Scheme:

1. Legitimate Products: Unlike pure pyramid schemes that only move money, Arbonne sells real, tangible products. The company offers a wide range of skincare, nutrition, and wellness products that many customers genuinely use and appreciate.
2. Income from Sales: Consultants can earn money by selling products, not just from recruitment. This differentiates Arbonne from illegal pyramid schemes where the only way to make money is through recruitment.
3. Legal Operation: Arbonne operates legally in several countries and has successfully defended its business model when challenged. The company complies with regulations governing direct selling and multi-level marketing.
4. Product Buyback Policy: Arbonne offers a buyback policy for unsold inventory, which is not typical of pyramid schemes. This policy helps protect consultants from being stuck with unsold products.
5. Training and Support: The company provides business training and support for its consultants, investing in their success beyond mere recruitment. This includes online resources, in-person events, and mentorship programs.

Why Arbonne is Often Associated with Pyramid Schemes:

1. Emphasis on Recruitment: While not the only way to earn, there’s a strong focus on recruiting new consultants. Many critics argue that the real money in Arbonne comes from building a large downline, not from product sales.
2. Multi-Level Structure: The business model rewards consultants for building a downline, creating a pyramid-like structure. As consultants recruit more people, their potential earnings increase exponentially.
3. High Failure Rate: Like many MLMs, the vast majority of Arbonne consultants do not make significant income, with many losing money. According to Arbonne’s own income disclosure statements, only a small percentage of consultants make substantial income.
4. Product Pricing: Arbonne products are often more expensive than comparable items available in retail stores. This can make it difficult for consultants to sell products to non-Arbonne affiliated customers.
5. Pressure to Purchase: Consultants often feel pressured to buy products themselves to meet sales quotas or qualify for commissions, leading to criticism that consultants are the primary customers.

Expert Opinions:

Dr. Jon Taylor, author of “Multi-Level Marketing Unmasked,” states: “While Arbonne may not fit the legal definition of a pyramid scheme, its business model creates a de facto pyramid structure where the vast majority at the bottom support the few at the top.”

Robert FitzPatrick, president of Pyramid Scheme Alert, argues: “The fundamental flaw in Arbonne’s model, like all MLMs, is the infinite chain recruiting structure. This creates an unsustainable model where most participants are destined to lose money.”

Legal Precedents:

While Arbonne itself has not faced major legal action classifying it as a pyramid scheme, the MLM industry as a whole has been subject to increased scrutiny:

• In 2019, the FTC sued Neora (formerly Nerium International), another MLM company in the skincare industry, alleging it was operating as an illegal pyramid scheme.
• In 2016, Herbalife, another prominent MLM company, reached a $200 million settlement with the FTC and agreed to restructure its business, though it was not legally classified as a pyramid scheme.

These cases have put pressure on companies like Arbonne to ensure their business practices do not cross the line into pyramid scheme territory.

Final Thoughts on the Pyramid Scheme Question:

While Arbonne does not meet the legal definition of a pyramid scheme due to its product sales and compliance with regulations, its business model shares many characteristics with pyramid schemes. The emphasis on recruitment, the multi-level structure, and the low success rate for most consultants are all red flags that potential recruits should carefully consider.

The question “Is Arbonne a pyramid scheme?” may ultimately depend on one’s definition and perspective. From a strictly legal standpoint, Arbonne is not a pyramid scheme. However, from an ethical and practical standpoint, the business model raises many of the same concerns associated with pyramid schemes.

Potential consultants should approach Arbonne (or any MLM opportunity) with caution, carefully considering the realities of the business model, the market saturation, and their own skills and circumstances before deciding to join.

Final Thoughts: Is Arbonne Right for You?

After this comprehensive analysis, we return to the central question: Is Arbonne a pyramid scheme? While Arbonne is not legally classified as a pyramid scheme due to its product sales and legal compliance, its multi-level marketing structure and emphasis on recruitment share characteristics with pyramid schemes that warrant caution.

Arbonne offers legitimate products and a potential business opportunity, but success as an Arbonne consultant is challenging and not guaranteed. In fact, the data suggests that the vast majority of consultants do not make significant income, with many spending more than they earn.

Before considering joining Arbonne, carefully weigh these factors:

1. Your personal goals and financial situation
2. Your comfort level with direct selling and recruitment
3. The market saturation in your area
4. Your ability to invest time and money with no guaranteed return
5. The potential impact on your personal relationships
6. Your skills and whether they align with the demands of an MLM business

Remember, there may be other business opportunities or traditional employment options that better align with your skills and aspirations. Entrepreneurship comes in many forms, and MLMs are just one controversial model.

Ultimately, the decision to join Arbonne should be made after thorough research, careful consideration of all factors involved, and perhaps consultation with a financial advisor or mentor. Be wary of high-pressure recruitment tactics, and always prioritize your financial wellbeing and personal relationships over any business opportunity.

Whether Arbonne is a pyramid scheme in the strictest sense may be a matter of legal definition, but the more important question is whether it’s the right opportunity for you. Armed with the information in this article, you’re now better equipped to make that decision for yourself.

FAQs About Arbonne and Pyramid Schemes

Is Arbonne a pyramid scheme or MLM?

Arbonne is officially classified as a Multi-Level Marketing (MLM) company, not a pyramid scheme. Here’s the distinction:

• MLM: Arbonne is a legitimate MLM company. It sells actual products and allows consultants to earn money through product sales, not just recruitment.
• Pyramid Scheme: While Arbonne’s structure resembles a pyramid due to its multi-level nature, it doesn’t meet the legal definition of a pyramid scheme because it involves the sale of real products.

However, the line between MLMs and pyramid schemes can be blurry. Arbonne’s emphasis on recruitment and its tiered structure have led some critics to argue that it functions like a de facto pyramid scheme, even if it doesn’t meet the legal definition.

What is the lawsuit against Arbonne?

Arbonne has faced several lawsuits over the years. One significant recent case includes:

• In 2017, a class-action lawsuit was filed against Arbonne in the U.S. District Court for the Central District of California. The lawsuit alleged that Arbonne operated an illegal pyramid scheme, made false and misleading income claims, and violated various state laws.
• In 2018, Arbonne agreed to a settlement in this case without admitting wrongdoing. The settlement included changes to Arbonne’s business practices and compensation plan, as well as monetary relief for some former consultants.

It’s important to note that lawsuits against MLM companies are not uncommon, and a settlement doesn’t necessarily imply guilt. However, these legal challenges highlight the ongoing controversy surrounding Arbonne’s business model.

Is working for Arbonne worth it?

Whether working for Arbonne is “worth it” depends on individual circumstances, goals, and expectations. Consider these points:

Potential Pros:

• Flexibility to work from home
• Opportunity to earn income through sales and recruitment
• Access to discounted products
• Potential for personal growth and networking

Potential Cons:

• High startup costs and ongoing expenses
• Difficulty in making significant profit (most consultants make little to no money)
• Potential strain on personal relationships due to sales pressure
• Time-intensive nature of building a successful MLM business

Ultimately, for most people, working for Arbonne is not financially worth it. According to Arbonne’s own income disclosure statements, the vast majority of consultants make very little money or lose money. However, some individuals do find value in the social aspects or enjoy the products enough to justify the costs.

What has happened to Arbonne?

Arbonne has undergone several significant changes in recent years:

1. Acquisition: In 2018, Arbonne was acquired by Groupe Rocher, a French family-owned group specializing in cosmetics and beauty products.
2. Business Model Adjustments: Following legal challenges, Arbonne has made some changes to its business practices and compensation plan.
3. Digital Transformation: Like many companies, Arbonne has increased its focus on digital sales and marketing, especially in response to the COVID-19 pandemic.
4. Product Evolution: Arbonne continues to expand and update its product lines, with a growing emphasis on clean, vegan, and sustainable products.
5. Global Expansion: While facing challenges in some markets, Arbonne has continued its international expansion efforts.

Despite these changes, Arbonne’s core business model as an MLM company remains intact.

Do people actually make money with Arbonne?

Yes, some people do make money with Arbonne, but it’s important to understand that the majority do not make significant income. According to Arbonne’s own income disclosure statements:

• A small percentage of consultants (typically less than 1%) make substantial income.
• The vast majority of consultants make very little money or lose money when expenses are factored in.
• Top earners often have large downlines and have been with the company for many years.

Factors affecting potential earnings include:

• Your ability to sell products
• Your skill in recruiting and managing a downline
• The market saturation in your area
• The amount of time and money you’re willing to invest

It’s crucial to approach Arbonne (or any MLM opportunity) with realistic expectations about potential earnings.

Is Arbonne good or bad?

The question of whether Arbonne is “good” or “bad” is subjective and depends on various factors:

Potential “Good” Aspects:

• Quality Products: Many customers appreciate Arbonne’s vegan, botanically-based products.
• Business Opportunity: For some, Arbonne provides a flexible income opportunity.
• Social Connections: Some consultants enjoy the social aspects and sense of community.

Potential “Bad” Aspects:

• Financial Risk: Most consultants do not make significant money, and many lose money.
• Ethical Concerns: The MLM structure and recruitment emphasis raise ethical questions for some.
• High Pressure: Some consultants report feeling pressured to buy products or recruit others.
• Product Pricing: Arbonne products are often more expensive than comparable retail alternatives.

Ultimately, whether Arbonne is good or bad depends on individual experiences and perspectives. While some people have positive experiences with Arbonne, either as customers or consultants, others view the company’s business model as problematic. It’s important to carefully research and consider all aspects before getting involved with Arbonne.