The Arbonne compensation plan is a uni-level stair step breakaway compensation plan similar to Herbalife International. So let’s dive in and look at how this compensation plan works. So what does uni-level mean? A uni-level compensation plan simply means that everyone you personally sponsor or enroll, into the Arbitron business, must be placed on your first generation of our Arbonne Consultants. The people they in turn enroll into the Arbitron business would then be placed on their first generation and thus your second generation and so on.
When you enroll as a consultant with Arbonne there are two types of income: retail profit and override income. Retail profit is very straightforward, you purchase products at a 35% discount and mark them up and sell them for 35% profit. Overwrite income is a little bit more complicated but basically it is the income earned for the business volume generated from the people in your downline organization.
We are not going to go into all the details of the Arbonne compensation plan but rather its general concept. You have four different levels of achievement: District Manager, Area Manager, Regional Vice President and National Vice President.
The drawback to a stair step breakaway compensation plan is best explained by way of an example. Let’s say you work hard and achieve the status of Area Manager and you continue to work with your leaders and one of them achieves the same status as you. So what happens? You need a certain amount of sales volume to become an Area Manager. The problem with the breakaway compensation plan is that when someone achieves your same level you will not be compensated on some or all of that sale volume. In reality it is a punishment for developing leadership. So as a leader you are always in fear of someone reaching your status or even worse by passing you in status.
Personally, I believe that you should always be paid on whatever business volume you helped bring to the company whether someone bypasses you or not. So why do so many companies use this compensation model? The simple answer is it is how the company keeps the Consultants “feet to the fire” so that you have to always be producing new business and new leaders.
The challenge is, if you are great at developing leadership that reach your status level or above, you experience a drastic reduction in your personal income. This is one of the main reasons why people who have achieved Executive National Vice President status with Arbonne suddenly leave the company.
So, if you’re going to build a home based business you have to be very, very cautious that when picking your company to be sure you will not be penalized for developing leadership. You should never have to fear someone being equally successful as you.
A friend of mine was in a similar comp plan and earned millions with his company but in the end he lost his home. Today after looking at over 42 companies he found a business that make sense, products that make sense, pricing of those products that make sense, and where he is not penalized for developing leadership and where he now enjoys very reliable monthly residual income.