If you’ve purchased beauty products online, you may have come across a company called Arbonne International. Founded in 1975, and brought over to the USA in 1980, Arbonne offers skin and beauty products as well as nutritional products such as teas, protein bars, and shakes.
Looking inside Arbonne International
Arbonne advertises that its products are ‘pure, safe and beneficial.’ It attempts to use botanical ingredients wherever possible. For example, here is the spec sheet on its lip balm:
You can view products and their prices on the Arbonne website. You can even add products into your shopping cart. However, in order to make a purchase, you need to work with an independent consultant.
Because Arbonne International is a direct sales multilevel marketing company. What this means is that the company sells its products directly to independent contractors (called consultants) at wholesale price, and then those consultants sell the products to their customers at retail price.
Consultants can also increase their profits if they recruit other consultants under them. Doing so enables them to make a percentage of their recruits’ profits. This is the MLM-side of the business.
Should you join Arbonne?
Because this company offers an at home business opportunity to sell and profit from its products, I decided to more closely examine the Arbonne business opportunity. Here’s what I learned.
You pay a $79 registration fee to sign up as an Arbonne Independent Consultant for one year. This enables you to purchase Arbonne products at a 35% discount. When you sell them at full retail price, you make a 35% profit. Alternately, you can also make a 15% profit on the sales of preferred clients, which are customers that purchase Arbonne products through you and already receive a company discount of 20%.
With your registration fee, you also receive your own replicated website via Arbonne, enabling customers to order products online.
Each year, you must pay a $30 renewal fee if you wish to remain an Arbonne consultant and keep your website.
Consultants can also earn a 6% commission on the sales of their direct referrals, provided that the consultants themselves achieve a personal qualifying volume (PQV) of at least 500. This PQV is built from personal purchases of Arbonne product and/or purchases from preferred and regular clients.
PQV does not have a 1:1 with dollars. It actually represents required sales volume value, which can differ from product to product. Arbonne’s PQV is about 80%-85% of the dollar value of its products. So, if you need 500 PQV in a month, you’ll end up spending roughly $600.
The next level up is district manager, which earns an 8% commission (also called an override) on direct referral sales. The district manager can also earn a $200 bonus provided that she enrolls five new consultants or preferred clients. Those enrollees must each generate at least a 150 PQV in their starting month.
Area managers earn a 6% override. They also receive a $400 cash bonus provided they meet a 20,000 PQV and recruit 10 new consultants or preferred clients. Each of these 10 enrollees must generate 150 PQV in their starting month.
The entire commission breakdown is shown below.
Going by the commission structure shown above, it is possible to make a good money from commissions- provided that the consultant to manager has a high enough PQV and a sufficient number of recruits. So, given these specifications, is an Arbonne business worth your time and money?
Money-back guarantee– Arbonne products can be returned for a refund up to 45 days after purchase. This includes products that have been opened and tried. That’s a pretty good guarantee and beats the guarantees of man cosmetics and personal care retailers.
Quality products– Arbonne’s products are like upper scale Mary Kay or Avon products. They contain botanical ingredients and do not include potentially harmful additives such as methylparabens.
Cookie-cutter websites- Arbonne does not permit its consultants from selling its products via third party/private websites. Consultants can only sell through Arbonne’s duplicated websites- but this poses a problem for SEO and even SEM. Search engines do not like duplicate websites that spout the same duplicate content and typically de-index copycat sites. So, the only traffic you’ll see on your official Arbonne website is that of people you specifically told to visit your website.
Bankruptcy– Back in 2010, Arbonne filed Chapter 11 bankruptcy due to its $800 million debt. According to Reuters, “The company’s net sales began to fall in 2007-2009 due to a loss of direct marketers and downturn in the economy.” This indicates that the company may be having issue with reaching desired revenue goals, making it a risky long-term investment.
Sales-based overrides– Overrides, or commissions, aren’t paid out to consultants unless they have achieved 500 PQV. So, each month, you’ll be pressing your recruits to sell, sell, sell…or you won’t see a dime of your 6% commissions.
eBay competition– If you search for Arbonne products on eBay, you’ll find many new products being sold dirt cheap via current or ex-consultants with the company. This is bad news for those consultants who are hoping to earn their 35% or even 15% profits. Why should customers pay a premium price for products that are being offered at 50-90% discount elsewhere?
Arbonne: Great products, great business?
Arbonne offers quality products that are based on botanical ingredients and do not contain potentially harmful additives. The business side of Arbonne, however, is a challenge because consultants must ensure a set volume of monthly sales. They also cannot just ‘go rogue’ and market the products as they see fit. On the flip side of things, other consultants with leftover Arbonne stock go off and sell it for cheap on marketplaces like eBay.
If you’ve sold products for Arbonne, or are currently selling Arbonne products, we’d love to hear about your experiences. Please leave a comment below.