It’s likely that you have come across LuLaroe through an email list, on social media or got it recommended by a friend or family member.
You’re here because you think Lularoe is a scam right?
You’ve maybe heard about their apparel and business model stating that you could make very good money promoting and selling LuLaroe’s leggings and maxi skirts.
First and foremost I must commend you for actually doing a bit of extra research before committing to becoming a part of LuLaroe’s ecosystem. For all you could have know, this entire system could be a full on scam so taking your time to make sure that you’re not leaping into a business opportunity that’s a scam is a good call on your part.
To be completely transparent with you I don’t own any of LuLaroe’s apparel neither am I one of their members so I can assure you that I will not attempt to sell you this product unless of course it’s worth investing in.
What I will aim to do is provide you with an unbiased 3rd party look at Lularoe which will hopefully help you to make the correct decision in the end.
PRODUCT NAME: LuLaroe
OWNER/S: DeAnne Brady & Mark Stidham ( founded in 2012)
TYPE OF PRODUCT: Clothes Based MLM Company
PRICE: Starting Costs $5,000 – $7,000, In Some Cases Upwards Of $10,000
SUMMARY: LuLaroe is an MLM company that has it’s members (consultants) sell their clothing line for them in exchange for commissions. It’s a very expensive business to run, starting at $5000 and has quite a few other issues such as lawsuits claiming it to be a pyramid scheme, the confusing compensation structure and the fact that over 90% of its members FAIL! Because of these issues I really can’t recommend joining LuLaroe.
FINAL RATING: 1.5/5
WHAT IS LULAROE?
LuLaroe is an MLM structured business that sells womens clothing. These clothes are sold through members known as consultants whom sell LuLaroe’s stock online or to family and friends.
LuLaroe was founded by DeAnne Brady & Mark Stidham with the goal of creating clothing products that would connect with women whom had a passion for comfortable and quirky looking attire.
The whole business model was derived as a way for women, who genuinely liked these bright and quirky designed clothes, to ultimately sell them to others who also resonated with the design.
LuLaroe is a way for women to not only discover an empowerment amongst themselves but to also make a full time living making sales.
That’s the basic come up of the business. Lularoe has a major emphasis on having their consultants sell clothes as a way for these consultants to make money.
So what exactly do they sell?
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WHAT IS LULAROE’S PRODUCT LINE?
LuLaroe’s product line, as you probably have already figured out is a product line that sell both womens and kids apparels.
They have a large variety of designs they offer that are bright, quirky, unique and colourful and kind of in my opinion resonate with slightly more hipster crowd. Lularoe doesn’t have any fixed designs for any of their clothing products, all of the apparel that they make tend to only have a limited supply of up to 5000.
Anyhow, just because they have a limited number of clothes available in a specific design doesn’t mean that they don’t have basic types of clothes that they sell. Some of this clothing types they sell include:
– Maxi skirts
– Geometrically designed dresses
And so on, they do have a very large collection so if you want to check out the collection out for yourself click here
ARE THE CLOTHES FROM LULAROE ACTUALLY GOOD?
This is purely dependant on what you look for in designs but, if we’re talking comfort and quality, quite a few people have found that LuLaroe’s are in fact both soft and comfortable.
On the other hand there are a fair few consumers who have a problems with the quality.
The product line prices range from $18-$65 but this is only because LuLaroe suggests this to be the price, if one of their consultants actually wanted, they could charge a lot more. Afterall all of the products sold are made in limited quantities.
One such person who really liked the quality of the products is the blogger from themessybunmama who has this to say about the product.
“As soon as I opened up the package I was excited because they were just so soft! I kept touching them and making Jake touch them because so soft.”
She also said that she wasn’t a fan of the colourful quirky look of the garments initially but overtime a couple of the pieces she bought actually become one of her favourite pieces.
There are a lot of individuals who aren’t really a fan of the clothes due to its over the top quirky hipster look in general which is a fair enough but, there have also been instances where after one wearing the clothes ripped.
Considering that the clothes aren’t the most insanely pricey, instances such as ripped clothes aren’t too common, I still feel though that spending $30ish and having the clothes rip may affect your decision to join the system and sell the clothes yourself.
But that’s just my 2 cents on this specific matter…
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HOW DO YOU MAKE MONEY THROUGH THE PRODUCT
There are 2 ways to make money through MLM companies
1. The first method is through retail sales through which you you will make a commission for for every items sold.
2. The second method is through recruitment and making money through your downline and through rewards and bonuses the company may give you.
These are the same 2 methods through which you will also make money with LuLaroe if you’re good enough to do so. Of course this will be most dependent on your own abilities because LuLaroe won’t be providing you with a step by step guide on how to accomplish this.
HOW TO GET STARTED
To get started you with LuLaroe and become one of their consultants you will need to first sign up as a member through the recommendation of an already established member.
If you don’t know anyone who actually is a Lularoe member, you will need to find one. This can be done by going on LuLaroe’s join the movement section on its website.
By doing that you will be given the ability to actually find a local retailer or “consultant” of the company who will provide you with the required link to actually join.
Once you’ve found a consultant who’s sent you the link to the application, you’ll need to fill it in and submit it. After submitting it’s likely that you could wait for weeks before being accepted into the program.
This can be as long as 10-12 weeks before you actually get contacted by LuLaroe to see if you’ve been accepted.
Once you’ve been accepted, you’ll be expected to purchase the starter kit that includes the clothes that you will be selling. This whole starting kit can set you back around $5000-$7000, this kind of money isn’t anything to scoff at, it’s definitely a huge sum of cash to part with.
Even after all this waiting and money spent on stock, you will next need to plan how you’re going to actually sell everything and actually become a successful consultant.
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WHAT WILL YOU NEED TO DO AS A CONSULTANT?
So once you’ve become a consultant what will you need to do. The obvious conclusion is that you’ll need to sell your stock but how exactly would you do that?
Through my own research I’ve found that there are a few ways you can go about doing this.
METHOD #1: Social Media Marketing
This is one of the primary methods that most consultants sell stock. Essentially what you will need to do is create multiple social media accounts focused on your LuLaroe business.
These social media will obviously be made in an attempt to get the knowledge that you have some LuLaroe’s unique product line out there.
You can also advertise on your social media using the ad networks they provide. By doing this you can market to a larger audience.
LuLaroe doesn’t teach you how to use these ad networks so you’ll have to learn about them yourself before trying them out.
METHOD #2: Pop Up Parties
These are organised parties that have been personally set with the purpose of showing your friends, families and other potential customers to scan your stock and potentially purchase something.
METHOD #3: Selling On Amazon Or Ebay Or Your Own Store Online
The final method at your disposal is selling the clothes on amazon or ebay or your own store online. To actually make sales you may need to invest a fair bit of cash in advertising fees which means you’ll need spend a helluva lot more than the starter price of 5k.
Furthermore besides the selling aspect you’ll have to deal with a few more things to actually keep your business running
1. Firstly in order to carry on being a consultant you will need to purchase atleast another 33 clothes a month
2. This in turn will require to have plenty of space available to store the clothing especially if you don’t sell as fast as your buying stock
3. For the pop up parties, if you don’t hold them at your home, you’ll probably need to carry stock back and forth between venues which can become cumbersome overtime.
4. This cycle will need to be done over and over which can make your life a stressful environment to be in especially if you can’t sell.
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However if you are one of these individuals who manage to make a sustainable income by selling the clothing how exactly would LuLaroe pay you?
What is their compensation structure?
LULAROE’S COMPENSATION STRUCTURE
The amount of money you can make through LuLaroe will mostly be dependant how much product you can sell and what rank you are within the company.
As a starter member you will be given the status of a consultant. A consultant will generally make anywhere between 35-50% in commission for every item they manage to sell.
If you are a member who signed up a consultant by sending them the starter link, you will then become a Sponsor. A sponsor is eligible to a 5% override commission from your downline along with the other commission made through direct retail sales.
There are however some extra guidelines that need to be followed on top to actually be able to take home the extra 5% override commissions. In order to be 100% eligible for them you will need purchase atleast 175 items from LuLaroe.
Beyond this level is the Trainer level. In this rank you will be eligible for another 3% in commission. To actually open the opportunity to make that extra 3% you will need have:
– 3 direct referrals, basically 3 people who you directly helped sign up through your membership link
– 10 total members within your downline e.g 3 direct referrals who have a total of 7 referrals of their own.
– All your downline will need to have bought a total of 1750 items
– you will also need to purchase 250 items for yourself however, if one of your direct referrals purchase 175 items themselves, you will only need to purchase 200 and if 2 more direct referrals do the same you’ll only need to purchase 100.
100 is the hard limit for the amount that you will need to purchase every month if you’ve acquired the bonus reductions.
There are a few more things that you may need to know if you become a trainer and if one of your direct referrals becomes a trainer too.
Check this video out to find out what they are
So to recap, you’ll make 5% in commissions from your direct referrals whilst you’ll make 3% from every other referral. I can see why some consultants or potential buyers would find the business structure confusing but as far as I can tell the system isn’t that different from other MLM structures
THE NOT SO GOOD THINGS
Only In The United States
Unfortunately for those of you who are overseas and not a us citizen, you simply aren’t eligible for LuLaroe’s program.
Really Darn Expensive Start Up Costs
First off the costs. To getting started with thia business you will need to spend around $4900 for a starter kit that include a bunch of clothes that you CAN’T PERSONALLY pick, you’ll need to purchase atleast another 33 items every month and this isn’t including all the other miscellaneous costs such as hangers, boxes and possible social media advertising fees.
The entirety of this business model is just way too expensive! With the amount you’re spending on the startup and running of the business, you’re probably better of starting your own clothing line or just a significantly cheaper business such as affiliate marketing or blogging.
That’s just the lowball startup costs as well, some individuals have even spent $10000 just to get everything running.
I get that LuLaroe are the one actually making all the clothes and other items but, this doesn’t excuse the fact that the start up costs are still way too high!
Waiting Times To Actually Be Accepted Are Too Long
Putting the starting costs aside, the waiting list in actually being accepted as a consultant is equally as irritating. After completing and sending your membership forms off, you’ll still need to waits upwards of 12 weeks before getting a response on whether you’ve been accepted.
I could understand if the waiting times were only 1-2 weeks, although still a little bit annoying I think these times would atleast be a little acceptable but 6-8 weeks on average and up 12 weeks for the unlucky few is abit too long.
Considering how big LuLaroe is, i would think that they’d be more than capable of hiring a few other worker to quicken the process for people who actually want to join.
You Need To Purchase Stock To Sell Products
This one isn’t my biggest gripes but I do feel that having to purchase stock is a little outdated. Most other MLM companies actually tend to have their products within their personal warehouse where you only have to sell the product and not deal with products yourself.
I guess you could say that the reason you’ve got to buy stock is because there are limited quantities of any one product and unlike these other business that manufacturer a ton of the same products find it a lot easier to organise stuff.
Although this is a slight negative the real negative behind purchasing a lot of clothes is….
This is a problem for a lot of LuLaroe’s consultants, because they have got to buy at least 33 new items every month, the number of clothes they have will increase.
If the consultants struggle with selling, these items will stockpile and not only will the consultant not be making enough money to cover their expenses, they’ll also be taking up too much space just to hold the clothes.
Pyramid Scheme Lawsuits
Recently LuLaroe had been hit by a $1 billion dollars lawsuit which was filed on the basis that LuLaroe is running a pyramid scheme.
It accused LuLaroe as encouraging their consultants who were in credit card debt to further their debt just so LuLaroe could make more money, which is disgusting thing to do if it’s true.
It should come without saying but this is a very negative point regarding LuLaroe and another reason to avoid joining them in fear of them being shut down by the FTC leaving you in major debt.
To check the full break down of the lawsuit click here.
There are also a bunch of other lawsuits that came their way pretty recently too such as a supplier suing them for $34m and former Lularoe clients trying to sue them for billions.
This should definitely make you think twice before investing in this, frankly shady company.
Most People Fail
Before jumping into an MLM business you’ve first got to learn if it’s actually a business you can succeed within or even breakeven with.
Considering this section is titled most people fail, LuLaroe is clearly not something that you’ll be able to succeed through as easy as you may have been led to believe.
Looking at the income disclossure for 2016 it states that the average consultant in the year only made $2118. 54
That’s less than the average startup cost starting at $5000 and probably wouldn’t even cover the clothes that need to bought every month.
Moreover 72.63% weren’t eligible for any commissions. This makes sense because the upkeep to be eligible is prerty darn hectic and can become very expensive when you consider the monthly purchases you have to make to stay active.
As you can see most people cannot even breakeven with LuLaroe’s business model so in my opinion it definitely isn’t something worth pursuing.
THE GOOD THINGS
Social media leveraging
The fact that LuLaroe pushes the usage of social media as a primary method of advertising the items is cool and very forward thinking business movement.
It’s one of the good things about LuLaroe’s way of doing things
The 6 month warranty
This is cool because you actually have the ability to replace your clothing if you find any defects, which is a nice thing that LuLaroe do.
Along with that they also have a happiness policy which states that if you are unhappy with the item purchased, you will be eligible for a refund as long as it is within 20 days of the purchase.
These additions are cool for the customers.
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IS LULAROE A PYRAMID SCHEME/SCAM?
The product is neither a pyramid scheme or a scam, you’ll be surprised to hear that LuLaroe is a legitimate MLM business.
Although there are quite a few things I don’t like about it, it still possible to make money through it.
However, if you do decide to become a consultant, you will need to have quite a large chunk of cash saved up to get the ingredients to start thinking about baking the cake.
All businesses require you to work hard and smart to some degree to actually see results and pretty much all businesses require you to invest time and money into them.
So it shouldn’t suprise you that the same work ethic and financial resources are required to start a business as a Lularoe consultant however, I don’t think that it’s the best model to start off with, especially since the Internet became a “thing” .
There are a cheaper and better alternatives out there if you want to make money online or through social media so, that’s why I really can’t recommend LuLaroe.
And maybe also because of the lawsuit too…
If you still think it’s the best option for you, go for it, as I stated in the beginning of this whole review, I’ve written everything with the purpose of giving you the resources to make the right decision for you in the end so if you still think it’s right for you I’m not planning on stopping you.
However if you still want to make some money online I do have another option you could look at…
MY PERSONAL RECOMMENDATION
I personally will always recommend against using a MLM business model to make money, not because you can’t make money through it (you totally can) but, the system has always seemed shady to myself and is kinda synonymous with the likes of a pyramid scheme or scams (MOBE and Digital altitude).
Instead I prefer working with something created through ones own means and is ultimately dependent on yourself and your work ethic alone.
This method I’m talking about is affiliate marketing.
The reasons as to why I recommend it over MLM based structures are because
– there is no need to recruit constantly
– it is a legitimate method that has been working consistently and continues to grow as more businesses want individuals to promote products
– and because it is free to start up, no unnecessarily large start up funds needed.
The service I recommend is Wealthy Affiliate. It’s free to sign up to and will get you set up and ready to start your affiliate marketing journey within minutes, as it did for me when I begun my journey.
If you have any questions that you would like to ask me regarding LuLaroe, feel free to do so in the comments section below and I will get back to you as soon as I can. If you have your own thoughts and would like to talk about it, again feel free to do so in the comments below!