I recently learned that Arbonne went into bankruptcy, and it made me question whether or not these dudes ran a scam, and of course lead me to even more questions about how many MLMs really are just sophisticated scams that are designed to have a life span of a few years or more. I presented the following email in my last post and will repost it here since the topic as of now; is Arbonne bankruptcy.

"Dear Arbonne Independent Consultant,
You are a valued member of the Arbonne family, and we want to make you aware of an important action we have taken to strengthen Arbonne financially and ensure that our company is well-positioned for the future.On January 27, 2010, Arbonne, along with our parent company, Natural Products Group, LLC, and related entities, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code to implement a "pre-packaged" debt restructuring plan. This plan will reduce our outstanding debt obligations by more than 80%, which will lower significantly the amount of cash we spend on principal and interest payments. We can use this cash to invest in building our business."

Maybe its just that I haven't been keeping up very well with these kinds of things, but somehow no one sent me a memo that they were doing badly, let alone that they went chapter 11. So exactly what did happen? We do know that Natural Products Group, the owner of Arbonne, filed for bankruptcy protection; promptly hooking up with chapter 11. Did this leave the company in a better place as of the month of March 2011? I'm going to go ahead and say no, because all that has changed is that the company is more or less owned by the banks, and is on life support in my opinion.

The latest on the "streets" is basically that they are in the process of launching a few new products, they are about 80% out of debt and have quite a few people thinking that the Arbonne Bankruptcy days are over, though I am not exactly so inclined to believe that. Who are the leaders now? Who manages them, surely not the banks, how large is the corporate structure? Even if there is some truth to the rumors that they are making a slow recovery, how long can they last under the shadow of the alternative of its competitors? Think about it, you can go with Arbonne, whom has their own share of skeletons in the closet, or you can go with other companies that match a common list of plusses that are a real help in deciding what a good MLM plan is from a bad one.

Think about the track record of the company, have they lasted 5 or more years? Consider the amount of debt they are dealing with, do they own a gazillion bucks, or are they debt free? Do they have a good strong management body, and are they a Fortune 500 company? What about the products, what are they like, are they unique, competitively priced, do they carry with them a high rate of reorder? Do you have to kill yourself to maintain a sales quota or is it reasonable? What's the cost to join, how badly are the products needed, and how saturated is the market? In the end, what is your risk?

I believe Arbonne went down because they couldn't carry the same claims that many other companies can, and also because there is a part of me that thinks greed may have had something to do with it, but who knows, I was never an Arbonne distributor, and obviously not an "insider". What it has come down to is that Arbonne needed to reach 2 billion in sales by 2011, and as you can see, it didn't happen. Their sales had declined steadily for the past two years, which left them pretty helpless in trying to cover their own expenses.  As far as I can tell, they still claim they are not bankrupt, though we don't even know who "they" really are, the bank? The founders? Who knows. Let me ask you this though: If you were about to get into an MLM opportunity, would you choose Arbonne right now?

As far as I knew, I thought Arbonne actually pulled out and managed to avoid bankruptcy didn't they? I know back in January there were tons of rumors that they would probably be closing the door after Natural Products Group filed officially, but it seems that they actually did manage to complete its restructuring by allowing its lenders to own part (more like most) of Arbonne. One thing that can be said in favor of this is that now the company is backed by a financial institution, and that's not a bad thing for reps and recruits. I do think its a bit of a stain, and people that aren't familiar with the company may have quite a few questions wanting to know about this period of the company's history but if you can get past that, I don't think they are all that bad off. For anyone that does jump in, they're going to have to be pretty amazing sellers to overcome the dent in Arbonne's image. MLMs are already on the hot seat because they have to make it past a pretty vast checklist just to be considered legit; add bankruptcy to that list and you really have a challenge. You would have to learn new marketing strategies as opposed to the old ways of warm listing, cold calling, attending networking events, and Business Opportunity events. It's already proven to be hard work succeeding in any MLM business, even those with excellent reputations..how many people will be willing to have to work twice, maybe three times as hard to stay floating with Arbonne?