MLM Series: Arbonne

Wikipedia Site | NZ website | Australia & NZ Facebook

Country of Origin: Orem, Utah, United States

Year Founded: 1980

Founded by: Petter Mørck

Year MLM established in New Zealand: June 7, 2016

Generally sells: Skincare, cosmetics, and nutrition

“Cult” products: Fizz sticks, 30 days to Healthy Living supplement programme

Is there a buy-in?: $75 NZD Welcome Kit with an annual renewal fee of $45 NZD

Name for workforce: No silly rank names here, you are an Independent Consultant. Then it's District Manager, Area Manager, Regional Vice President, and National Vice President

Compensation Plan?: Here. Commission is earned from your personal sales, “overrides” or commission from product sales by your team, and additional awards based on team performance.

Client commissions are 35% of the recommended retail price and commission from sales to preferred clients is 15%; the consultant earns no commission from products that they purchase for themselves or that other consultants may purchase from them. Preferred clients are customers who pay an annual fee of $29 to get discounted prices on products, flat-rate or free shipping, and the occasional gift.

Each product has a QV or qualifying volume attached to it and consultants get the full QV volume attached to the product. However, the QV tends to be about 60% - 70% of the recommended retail price and despite New Zealand prices being higher, the QV points are the same as Australian consultants.

Each level has a personal qualifying volume (PQV) to be achieved in order to maintain that rank, earn rewards, or be promoted. Not all products are eligible to be counted towards a consultant's qualifying volumes; welcome packs and sample packs are such ineligible products while also being the ones that consultants are likely to sell the most of. Renewal fees also are not counted towards PQV. There is some indication on external sites that the consultants' purchases for themselves also count towards PQV, but this isn't entirely clear. However, this does indicate that while consultants can't earn commission from one another, they can help each other maintain or buy ranks.

You can start building a downline as soon as you sign-up but you need to accumulate 500 PQV each month in order to earn the 6% of the Override Volume (OV, which is 65% of the retail volume) from your downline. On top of that, you can only claim Override volume/commission form the consultants you directly recruit (aka the 1st generation); you cannot earn commission on anyone your recruits recruit for themselves.

For example, say you sold only Ginseng Fizz sticks to your clients. They are $93 NZD per box with a QV of 65 and a consultant would need to sell 8 boxes $744 to get the 500PQV needed to earn commission.

A consultant can also earn a $145 consultant achiever award if they personally register at least 2 new consultants or preferred clients who accumulate at least 150 PQV WHILE the consultant themselves also accumulates 150 PQV and a little something extra called 2,500 SuccessLine Qualifying Volume (SLQV). SLQV is the total amount of your QV and the total QV of your downline.

Using the fizz sticks again, your new recruits can each buy 3 boxes to surpass the 150PQV minimum (195QV or $279 spend), then you do the same (195 PQV/$279). Presuming that the recruits PQV and your PQV needed to be eligible are also included in the 2,500 SLQV, an additional 2,110 PQV or 33 boxes of Fizz sticks or $3,019 worth of fizz sticks have to be bought in order to earn a reward of $145.

Calculating a potential commission for an entry level independent consultant. My presumptions are there are no preferred clients dragging down your profits and the consultant is going about this honestly and not requiring other consultants to boost the PQV but relying totally on the first generation of recruits to help them out here. To earn the 6% commission, the consultant has personally sold $744 and accounts for 500 of the 2,500 PQV to get the bonus $145, and gets the commission on that at 35% which is $260.40. On the remaining 2000 PQV which comes from the direct downline, $2861.50 is sold but the commission is 6%, so $171.69 is made. The total amount earned from this scheme alone could be $577.09.

Your ability to promote to higher ranks and draw on commission and QV from your downline's downline, however, is dependent on your multi-month achievement of higher PQV (1000 PQV) and SLQV (6000-7500 SLQV) total amounts. If members of your downline are promoted to the same level as your or leap-frog ahead of you, you can claim a one-off credit. However, it appears that this can only be claimed 1 time per rank regardless of how many in your downline are promoted ahead of you. Furthermore, anyone that said downline has recruited are no longer eligible to be counted towards your commissions; this seems like it could disincentivise helping one's downline develop or at least reinforce the need to keep recruiting a direct downline of newbies.

Income Disclosure/Earnings Statement?: For 2020, Yes. For 47% of independent consultants, average annual earnings were $229 with the bottom 25% making $5 and the top 25% make $1,801; for many, making $577.09 per month would be a dream but also not enough to retire your husband as it only adds up to $6,925.08 per year.

A 2018 Spinoff article estimated that there were 3500 consultants in NZ with just 12 at the level of Regional Vice President, a rank which does garner more liveable income with the bottom 25% earning $47,177 and the Top 25% earning $72,670 on average. Still, not great numbers.

Is there a “free car”?: Yes. The care of choice is a white Mercedes-Benz. Consultants who reach the Vice President level are eligible for the VP success award, which is an allowance that starts at $385/month to go towards the purchase or lease of the Mercedes-Benz and you also have to affix the Arbonne car emblem to that vehicle. Less than 2% of Independent Consultants earn this award and the award is provided, as per the compensation plan, when the consultant has provided documentation that they have purchased or leased that specific colour and model.

Has a reputation for: Early proponents of vegan and petroleum-free products. Being one of the MLMs specifically named by the FTC due to false claims made by representatives related to COVID-19 as well as misleading income claims.

Should you be worried?

While Arbonne is thriving now, it did file for chapter 11 bankruptcy in the US in 2009, so it may be on the radar for awhile. Also, the high number of recalls due to products having unacceptable levels of bacteria, including Salmonella and those of the Staphylococcus variety, should put anyone off but unlike the oil MLMs, most of Arbonne's products are meant to be ingested.

So, I don't know what's worse.

In 2018, Arbonne was frequently named-dropped in mainstream and independent NZ media as both a newish MLM in the NZ market and for some of the recruitment tactics of its employees. The SpinOff had two pieces in 2018 and 2019, Sauce Mag, NZ Herald, all had a go alongside the usual YouTube Anti-MLM channels, which focused more on the false health claims.

There is little to say about Arbonne that hasn't already been explored previously in this series with Mary Kay and the car rebate or Young Living/doTERRA and their poor health claims and excessive prices. That to make the meagre commission, consultants spend money on products, resources, advertising, and their unpaid time which brings their profit into the negative.

All of it applies to Arbonne too. For $413, you can buy a 30 day detox kit. Thoses fizz sticks that everyone loves can cost over $90 for a pack of 30 and contain the same amount of caffeine as a 250ml can of Coke, which would make your wallet feeling much nicer.

But in view of the spotlight on Megachurches in New Zealand at the moment, I thought

Arbonne was a good selection for this week due to the close links between the MLM and Destiny Church. Ainsley D reports that Brian Tamaki's daughter-in-law, Kiri, co-leads the Brisbane campus with her husband Samuel. Kiri's twitter and instagram accounts still list her as a National Vice President, which places her at the top of the company and was the star of a few YouTube videos on behalf of the Australia/NZ branch here and here. In the posts that Ainsley screenshots, Tamaki makes a connection between her faith and her success in business, integrating the language of the prosperity gospel, with a dash of The Secret.

As always, I highly recommend the videos below.

Kiki Chanel: Arbonne MLM Scam…Consultants make crazy False Health Claims

Cruel World Happy Mind: MLM Mean Girls | Arbonne Consultants | #AntiMLM

Iiluminaughtii: Arbonne, Mediocre at Best

CC Suarez: Joining Arbonne? Watch this first

CC Suarez: Interview with ex-Arbonne Distributor | She was in the top 2%