You are welcome to my LuLaRoe Review.
I am sure you are here because you must have seen beautiful clothing adds on social media hosted by LuLaRoe Consultants.
Do you like the idea of making money with LuLaRoe parties from your home and that of your friends and family?
Now, imagine a business that allows women to make money from clothing. What a great idea, right?
I am sure you are reading my LuLaRoe review because you want to find out if indeed you can make money from home by purchasing clothes at wholesale prices from LuLaRoe and sell them at almost double the price.
Is LuLaRoe a Scam? Can you ever make real money as a consultant?
I am glad you are here to research about how you can make money as a LuLaRoe consultant.
Please know that I am in no way affiliated to this product and will be giving you a detailed review devoid of prejudice.
Continue reading to find out if you can earn an income selling wholesales clothes using LuLaRoe’s direct selling model.
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LuLaRoe at a Glance
Product Name: LuLaRoe
Founders: Deanne Brady and Mark Stidham
Year Founded: 2012
Price: Up to $10,000.
Head Office: Corona, California, United States
Area Covered: United States
Nature of Business: Privately held company
Summary Review of LuLaRoe
LuLaRoe is a legit fashion/clothing company whose business model is reliant on Multi-Level Marketing or direct selling; at least that is the good news.
The company recruits people as fashion consultants who in return would sell the company’s products for commissions and profits.
As a LuLaRoe consultant may make some monies but I can assure you it will not sustain you.
The LuLaRoe clothing may be great, but the majority of the consultant fails from making good money with this business.
It is difficult always to break even, most notably when you must spend huge money on stockings.
In this review, I will lay bare LuLaRoe’s products, its affiliate MLM opportunity, and the controversies surrounding the company.
At the end of this review, you will see LuLaRoe for what it is, an exploitative venture. Please drop a comment if you have had a positive or negative run-in with LuLaRoe.
What is LuLaRoe?
LuLaRoe founded by Deanne Brady and her husband Mark Stidham in 2012; the company is based in Corona, California.
The company, whose name was coined from the names of Brady’s granddaughters, grew from a small family-run business initially focused on marketing maxi skirts to ten employees, 145 distributors, and three million dollars in revenue within a year of starting.
That is a remarkable growth in my opinion.
In the four years that followed, LuLaRoe introduced its main product – a line of leggings – and had grown to a humongous 80,000 distributors and over one billion dollars in revenue.
The company deals majorly with female wears, but they do have a few for men.
Their first clothing line was maxi skirts before they diversified into all kinds of patterned leggings, shirts, and dresses.
You can click here to check out their full clothing collection.
Well, early in 2017, a large number of distributors sued the company.
The plaintiffs complained that the company’s software incorrectly calculated sales tax rates on domestic sales – especially in states that sales taxes do not apply.
In addition to this, there were several complaints of the poor quality of the company’s clothing, tax evasion by founders and unfair business practices were among the mountain of charges.
LuLaRoe Compensation Plan
LuLaRoe's leadership involved five significant ranks. There are requirements to qualify for each of the stages. Each is explained in turn below:
The Requirement for Consultant Rank
When you join LuLaRoe, you automatically become a consultant for the company, but you still have a long way to go to earn big with the company.
You must purchase a minim of 33 pieces monthly directly from LuLaRoe to maintain and retain your consultancy rank with the company.
The Requirement for Sponsor Rank
To attain the Sponsor rank with LuLaRoe, you must generate $10,000 in retail sales and complete 10 Pop-Up boutiques with minimum referrer of one Independent Fashion Retailer.
If you are an aspiring Sponsor, you can add an individual to the queue pending when you meet the requirement above.
Compensation Requirement for Sponsor Rank
For you to receive your compensation as a Sponsor Rank and to be able to earn a 5% bonus on the wholesale value of every sale made by your personally sponsored Independent Fashion retailer; you must achieve the following:
- Each Sponsor Rank must qualify for each month
- You must have a personal retail sale of 65 pieces of clothing with a minimum retail purchase of $1,950.
- The average retail sales of a piece of cloth must be $30
The Requirement for Trainer Rank
For you to become a trainer and earn the rank, you must have sponsored three Independent Fashion Retailer, and you must also have ten people in your downlines.
Your team must be a graduated leader.
Compensation Requirements for Trainer Rank
For you to secure your compensation monthly as a trainer. You must be qualified regularly.
The requirement for a Trainer to qualify for monthly compensation are:
- A Trainer must have a personal retail sale of 125 pieces of clothes with a minimum retail purchase of $3,750 monthly.
- A trainer must have a minimum retail team sale totaling 650 pieces with a minimum team retail sale of $19,500.
- Qualification with a Trainer Rank will qualify you to participate in the leadership Pool.
- You will also continue to enjoy the 5% bonus on the wholesale value of the sales of your downlines or Personally Sponsored Independent Fashion Retailers.
- Every one of your downlines that become a Trainer will graduates and will allow you to concentrate on other downlines yet to be Trainer.
Your 3% on every dollar of your group volume will be replaced by 1% of every dollar amount of your group volume plus one point of the leadership pool.
Your Trainer Volume will count for your Group Volume; while their Group Volume will not count towards your group volume.
It is critical to note that if any of your Trainers produce another trainer(s); you will not earn any bonus from such downlines.
The Requirement for Coach Rank
For you to attain a coach as a rank, you must have three personally sponsored Independent Fashion Retailers with a total of ten people on your downlines (this does not include graduated leader).
You must also have three first-level leaders. Your volume of your first level leader will be counted for your Group volume.
Compensation Requirements for Coach Rank
To receive monthly compensation as a person with the Coach Rank; the requirement is:
- Your rank must qualify every month.
- You must have a total personal retail sale of 150 pieces of clothing with minimum retail sales of $4,500.
- Your team retail sales must be a minimum of 850 pieces of clothes with a minimum value of $25,500.
- You must have for your personal and team per piece of cloth sales must be at least $30 in retail sales.
As a coach, you will earn 1% of every wholesale value of second-level leaders’ s group sales.
You will also earn 2 points of the leadership pool plus 1 point each of your first level leader and 2 points for every second level leaser of your team.
The Requirement for Mentor Rank
For you to attain a mentor rank, It is a must first to meet the requirement of a Coach.
You must have a minimum of three leadership lines with Coaches and above plus three additional leadership line.
Compensation Requirements for Mentor Rank
With a Mentor rank, you must meet the requirement of Coach and have a minimum of six leadership legs.
You will have access to Coach bonus and also available for 1% wholesales value of any 3rd level leadership of the group retail sales.
Fast Start Program
***90 Day Fast Start Bonus***
If you started your business after April 2017 as an Independent Fashion Retailer, then this fast start program is for you.
For you as a new Retailer to be eligible for this one-time bonus; you must market and sell 175 pieces of clothing in a given month with a minimum Sales of $5,250. This must happen for their first three months.
Such a Fashion retailer will get a free 50-piece order; your sponsor will get a one-time bonus payment of $500.
***Cruise Fast Start Bonus***
This bonus is up for crap by any Independent Fashion Retailer who started with Lularoe after 1st of December 2016.
You must cruise qualify each of your first six months as an Independent Fashion Retailer. You will be rewarded with a $2,000 cruise cash bonus when you attend the cruise of which you qualify.
Your sponsor will also be rewarded with $1,000 Cruise Cash Bonus ( This is for each Independent Fashion Retailer that cruise qualified).
All Independent Fashion Retailer will have to cruise qualify for the first six consecutive months; without it, you and your sponsor will lose this incentive.
What Is Leadership Pool
The leadership pool is computed using a point system. The lake consists of 2% of all Retail Sales transacted but using wholesale value.
The summation of the amount gathered in the pool will be divided by the total point earned; this will result in real dollar value for the point made.
Bonus can then be shared amount the participant based on points earned.
You can read and download the recently released 2018 LuLaRoe Leadership Bonus and Compensation Plan in PDF format.
How Much Are LuLaRoe Consultant Making
Do you like to know how much you can be earning LuLaRoe? An income disclosure statement is usually the document that can avail of such information.
The problem is this; the current LuLaRoe Income Disclosure Statement is not available in the public domain. We will have to do with the 2016 LuLaRoe Income Disclosure Statement.
From the 2016 income disclosure statement I observed the following:
- 99.96% of LuLaRoe Consultants could not make a full-time income, they earn less than $250 monthly
- Only the top people are at the top of the ladder earn the most money
- Adding up the percentage of the eligible consultants; the math is not making up (every percentage should be on %)
- You will be working for the people at the top of the pyramid scheme.
See an extract of the income statement below:Source: Download the Income Disclosure Statement Here
The Cost to Become a LuLaRoe Independent Consultant
Trust me unless you have struck it significant elsewhere or have the cash to throw around, it costs a great deal (in fact an arm and a leg) to become a LuLaRoe distributor.
As a LuLaRoe distributor, you are required to purchase an initial inventory of clothing and marketing materials which cost between $4,925 and $9,000.
Subsequently, you will be “encouraged” (goaded) to have $20,000 worth of inventory on hand.
Who is LuLaRoe Independent Consultant Program For?
Most LuLaRoe distributors are stay-at-home moms, single women, and people with limited mobility who were attracted to the idea of running a business out of their homes.
However, I think the business is undoubtedly most suited for existing and established fashion distributors.
This is because these people already have a pool of loyal customers who patronize them. As a newbie, you probably won’t make it with them.
This is because of the many controversies and lousy reputation surrounding the company.
How to Make Money with LuLaRoe MLM Program
How much can you make as a LuLaRoe Independent Consultant? You must know that it is not worth the stress and your money.
According to the company's income disclosure statement, the average annual commission earned from downline distributors is $85.
But if you are sure you can hack it with them, here is how it works.
LuLaRoe’s main produces limited quantities of brightly patterned women-oriented clothing including leggings, shirts, and dresses.
As a distributor, most of your marketing is done online mainly on social media – primarily Facebook.
On social media platforms, you set up your “pop-up boutique,” advertise on Facebook groups, or display your catalogs.
Its bonus system is not only tied to sales but mainly to the volume of sales by downlines brought into the company.
The way LuLaRoe works, there is no signup fee; all you need to do is purchase some of their products to become a fashion consultant.
How Does LuLaRoe Work
Submit Your Application
First, you fill and submit an application form online.
Usually, there is a long wait to say 6-10 weeks before your application is approved.
Purchase Your Startup Inventory
After approval, you need to purchase your inventory and start selling. You will have to place an initial order of about 250 to 300 clothing pieces.
You might need about $5,000 to $10,000 as an initial investment into LuLaRoe.
Your inventory will include leggings, shirts, skirts, and dresses of which you cannot choose your designs.
Go For Your Monthly Order
Next, you will have to make a monthly order which is required to go up in rank.
The lowest rant is that of the consultant, and you need a minimum order of 33 pieces per month to enable you to have access to the commission.
Also on the rank of a Sponsor, you need a minimum order of 175 pieces and 1,750 pieces as a Trainer from both you and your downlines.
Wait For Your Commissions
Finally, it is time to start earning commissions, and what you can make depends on your rank.
Consultants earn retail commissions of 35-50% retail, while Sponsors earn an additional 5% override commission from their direct downline along with their retail commissions.
Finally, Trainers earn a 3% commission from the downlines of their downlines in addition to their retail commissions and override commissions.
This means that you will likely purchase more products to make sales which may likely lead to debts.
Also, to make it as a LuLaRoe fashion consultant, you might have to host parties.
You can host approximately 20 sales party per month where you have an average of 20 items, and you make an average of $15 per item and $300 per month.
LuLaRoe Support /Customer Service
The Official Contact of LuLaRoe As listed On Their Website Are:
Home Office Address: 4160 Temescal Canyon Road, Suite 607.
Phone Number: (951) 737-7875 and
Email Address: firstname.lastname@example.org
Note: Users also contact the company by its social media pages.
What is Good About LuLaRoe?
Honestly, in my honest opinion, the company has fallen from grace to mud.
There are no silver linings to be a LuLaRoe consultant. The following are a few identified good stuff about the LuLaRoe MLM program.
LuLaRoe Usage of Online Platform
Most Multi-Leve Marketing program depends entirely on the traditional ways of doing business. But LuLaRoe's usage of an online platform for sales is a good thing any business venture should emulate.
The online and social media platform is the best place to drive sales and improve the conversation in today’s business.
It is a good thing to observe and see many LuLaRoe consultants on Facebook showing casing different types and sizes of clothing for sales.
It is important to note that LuLaRoe still depends on the traditional ways of promoting its MLM program, but they are now employing a new approach of adds on social media.
Six Month Warranty
LuLaRoe has a six-month warranty on its products.
If as a customer, you bought any goods and you detect defects or damages within these time frames.
The company promised to replace such goods for any customer.
It is important to note here that there is some complaint that customer also finds it difficult to claim this warrant (It is important to note this).
20 Days Happiness Policy
LuLaRoe also has what they called the happiness policy.
If a customer bought any clothing material and within the first 20 days, she decides that she is not happy with for any reason.
Such a customer can claim a refund. Details can be found on their websites.
It is important to note that some customers have a complaint that they were unable to get a full refund despite these promises.
Issues with LuLaRoe
Excessive and Continuous House Parties (For Recruiting and Sales)
LuLaRoe consultant is expected to host this so call dress up house parties for the sales of clothes and recruitment of more members.
Aside from the movement of your stocks (clothing, hangers, and stands) around to where ever the party is taken place.
The extra cost involves will always bite into your expenses daily.
LuLaRoe Operates Only In USA
This Multi-Level Marketing program is only for US residents, and it is not open to all regions or countries. The reason for this is not known.
But if you are from any other country or region; then LuLaRoe is not meant for you.
You Can’t Just Quit
Being a LuLaRoe distributor means you have a load of clothing in your house or warehouse, so if you decide to leave at any time, a refund will probably not happen.
thousands of distributors who, in the face of the company’s mounting problems, decided to jump ship have found it hard.
One big-time distributor laments on how she has a mountain of clothing that is useless to her – a huge loss.
Delay in Compensation and Refunds
Thousands of distributors who eventually jumped ship lament the fact that they have been waiting for months to get their refunds.
Some for over a year to get a refund of their checks.
LuLaRoe's Many Pyramid Scheme Lawsuits
The significant number of class-action suits facing the company, bad debts, and lay-offs point to the fact that it is imploding and fast.
LuLaRoe has many lawsuits against it from both distributors, formal consultants, and consumers. You need to search online to see the number growing daily.
Major issues ranging from customer service complaints, the MLM business models, and most important the product quality.
LuLaRoe now has less than 25,000 distributors – from 80,000 as at 2017.
Screenshot of many report lawsuit against LuLaRoe in the news below, just by searching Google:
LuLaRoe top sellers and mentors encourage their downlines to take out loans, credit cards, and mortgages.
Read a formal LuLaRoe consultant complaining online below:
The company’s products have increasingly lost market share because the clothing is easily damaged, patterns were becoming undesirable and ripped apart on washing.
High Competition in a Crowded Market
If you join LuLaRoe and you become a consultant.
Suppose you’re the order sent to you is what you like, and they are great and not a damaged one.
Another primary task you will be confronted with is how to make back your investment not to consider making profits.
The problem is that the LuLaRoe market is saturated and you will be made to compete in an extremely crowded environment.
We have many LuLaRoe consultants with no distinct geographical ownership, unlike other franchise companies’ practices.
You will be competing with another LuLaRoe consultant in your region or home town and thousands of them online selling virtually the same stuff.
An Overnight Return Policy Change
When the can of worms was opened in September 2017, in a bid to protect itself from unavoidable bankruptcy, the company had to change its 100% buyback policy.
Initially, the policy promised a 100% refund on unsold inventory for distributors who wanted to leave; this includes shipping and handling of goods.
Then the buyback inventory policy has no expiration date, and this includes clothing buys at any time.
Now, the buyback return policy is to refund 90% of our net cost of purchase made in the past 12 months only. This is subject to meeting the LuLaRoe requirement policy, and it is going to be less shipping.
This is the main reason it is difficult to make money with LuLaRoe.
Stock Pilling of Inventory
LuLaRoe required you to order for various sizes and types of clothing at wholesale prices, and they must be warehoused in your house or a specific store you created as inventory.
The company policy is required for every consultant to have a stockpile of clothes in his or her houses. The problem with this kind of system is that unwanted, and unsold clothing will get buried in your home.
LuLaRoe does not practice drop shipping where there is no need to keep inventory. You can order goods sold directly from the manufacturers and send them directly to the buyers.
But you can’t do that with LuLaRoe. All your goods both wanted, and unwanted are imposed on you and when it cannot be sold; it becomes your liabilities.
This is another wrong practice when you are sent clothing you don't like or do you love to sell to another human being. Every sales consultant of LuLaRoe has one pile of clothing in his or her houses. This is why most of them are not making money with LuLaRoe.
LuLaRoe Startup Cost Is on The Extreme
This is one of the most expensive MLM start-up cost ever. How can you pump between $5,000 to $10,000 to get started in an MLM cloth selling the business?
As a consultant, the initial cost of your order is not listed on their website. However, you must order for 175 clothing material to qualify for a commission monthly.
With the wholesale ranging from over $8 to $35; I can bet that you can never make money with this venture.
Don’t forget that pressure to inject more funds into your investment with LuLaRoe will always kick in from your sponsor.
It is a saying within this MLM that re-investment is the only way to be more profitable in this venture.
Is LuLaRoe a Scam?
Although LuLaRoe has received many official lawsuits for being a pyramid scheme and many other accusations (It is still a red flag); but, in my personal opinion, LuLaRoe is NOT a scam.
Some people also argue that they are not pyramid schemes because they are offering and selling real products and their various distributors' incentives are not based on the number of conversions.
The consultants earning are based on the sales of products, i.e., clothing, and they also derive from every transaction made by their downlines.
But, in my opinion, they are qualified to be operating pyramid schemes because their earnings still involve downlines conversions.
The implication is that very few people are earning massively from the direct efforts of many people that are at the bottom of the scheme.
Every consultant ought to be earnings from their efforts only and not because they join at the early stage.
Also, the cost of joining the program is too high, and there is always a need to re-invest back your earnings monthly to stock and purchase more clothing.
I will suggest you avoid LuLaRoe because of the high volume of complaints about the company. If you are considering multiple streams of income; there are many options better than LuLaRoe.
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Is LuLaRoe Worth It?
What do you think of my LuLaRoe review? Do you think LuLaRoe is a Scam? Can you now make money with LuLaRoe?
While it is easy to believe that retailing clothes will launch you into a steady stream of income, I do not buy into LuLaRoe business models.
Most often people who made money off LuLaRoe were those at the top of the pyramid. This is typical of all Ponzi schemes.
While the servants remain at the bottom struggling to makes, ends meet.
But, if you make a steady stream of income while helping people online or offline; I would recommend Wealthy Affiliate.
From this internet marketing training, I have personally created a steady monthly income of four-figures.
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I need your feedback on my LuLaRoe Review. And you can also learn more about LuLaRoe inside Wikipedia.
Kindly grant me your feedback in the comment section below. It will be great to hear what you think.
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