Welcome to my review. Is LulaRoe a pyramid scheme? Is it a legit MLM business? Should you risk it or not by joining?
LuLaRoe is best known for making incredibly soft and comfortable leggings in a variety of fun, unique and creative patterns.
Additionally, instead of just being a customer, you can join the company’s MLM program to earn an income by selling their products to other people and building your own team of salespeople.
And this is the main reason why people claim that LuLaRoe is a scam pyramid scheme.
Is it true? Keep reading my review to find out!
Before we get into this post, let me introduce myself…
Hi, I’m Ivan and I’m an online marketer who went from losing my time waiting tables to running a thriving online affiliate marketing business.
In the meantime, I have actually tried and reviewed 600+ courses, scams, MLMs, and even pyramid schemes to find the very best way to generate income online.
Keep reading my LulaRoe MLM review where I’m going to show you what this company is about.
Also, I show you how it works, and I share my opinion about whether LulaRoe is a scam pyramid scheme or a legit MLM opportunity.
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LulaRoe MLM Review – Overview
- Type: MLM (Multi-Level Marketing)
- Owner: Deanne and Mark Stidman
- Price: $499 + extra costs
- Recommended?: Read my review…
Overview: LuLaRoe is a multi-level marketing company that sells leggings and other garments for women. You can become a part of the company’s direct marketing team to earn active or passive income.
In other words, it is an MLM (multi-level marketing) business.
For this reason, many people call LuLaRoe MLM a pyramid scheme in a disguise.
So is LuLaRoe a scam or legit? That question has been answered in detail in my review. But if you’re in a rush, I can save you time and say that LuLaRoe is legit MLM.
The main reason for saying so is that they offer real products. And you get a legit chance to make money selling the same.
But like every other company that uses this model, it’s got some problems. Keep reading my LuLaRoe MLM review to learn more before you make your own decision.
Alternative: If you’re a newbie who is looking to earn passive income online, there are other, more beginner-friendly, and cost-effective alternatives. My top-rated affiliate marketing course has helped me to go from earning $0 to $100’s per day!
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What Is LulaRoe?
LuLaRoe is a multi-level marketing company. The company markets ladies’ apparel, and they focus on ladies’ tights. The brand is known for its distinct and stylish prints, which they produce in restricted quantities.
As soon as a design is gone, it will not be generated once again. The company offers its items through their Independent Style Stores. The products can be purchased face to face or online.
However, the main issue with this MLM is a ton of complaints and accusations that LuLaRoe is a pyramid scheme scam.
Below is just one of the many intriguing videos found online…
And in this MLM review, I’ll be taking a closer look into LuLaRoe to help you decide whether it is a pyramid scheme or a legit MLM that you can join to start your own clothing business.
Who Owns LulaRoe?
LuLaRoe was founded in late 2012 by Deanne Stidman and her partner Mark.
Currently, Mark is the chief executive officer of the business. Deanne had actually formerly operated in multi-level marketing.
According to Company Expert, LuLaRoe has skyrocketed in development lately. In September 2016, they had 38,277 specialists as well as in February 2017 they had 77,491 consultants.
According to Forbes, LuLaRoe was likely to accomplish $1 Billion in sales in 2016.
Keep in mind that this company is only about 6 years of age, growing rapidly to the Billion dollar mark in sales. Could LuLaRoe actually be a scam pyramid scheme? Let’s find out…
Related MLM Review: Shaklee
Is LulaRoe a Pyramid Scheme?
Given that LuLaRoe members generate income both by selling products and also hiring new members, it is risk-free to state that LuLaRoe is not a pyramid scheme in my review.
However, thinking that this is still multi-level advertising, do not anticipate earning money if you have no strategies for recruiting people.
Recruiting will make you significantly a lot more cash than actual product marketing.
For this reason, this makes LuLaRoe resemble a pyramid system in camouflage, does not it? Prior to responding to that, let’s uncover what a pyramid scheme is …
What Is a Pyramid Scheme?
According to Wikipedia, “A pyramid scheme is a business model that recruits members by promising payments or services in exchange for enrolling new members into the scheme, rather than providing investments or product sales”.
You can check out a short video below to learn more…
From the video above, we can see that the continuous demand to bring in new members is a vital part of a pyramid system.
So why do so lots of people assume that LulaRoe is a pyramid scheme?
It’s due to the fact that it’s possible for you as a representative to offer their items to make compensations.
It’s also because you can make cash by hiring a lot of individuals right into the multi-level advertising and marketing plan.
That’s the most significant reason some individuals call it a pyramid scheme in disguise …
Is LulaRoe a Pyramid Scheme in Disguise?
As I said in my review so far, LulaRoe is not a scam pyramid scheme. They promise you commissions based on the sales made by you and others you register.
However, there are no straight repayments just for getting them to sign up. That said, LulaRoe, once more, is not a pyramid scheme.
To put it simply, the company sells real items for people to consume.
Having that said, although not legitimately a pyramid, whether you consider LulaRoe a pyramid system depends upon your viewpoint of these schemes.
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Is LulaRoe a Scam or Legit MLM?
Because of many complaints and lawsuits, it certainly appears like a LuLaRoe is a scam.
The recent legal actions, the poor item quality that causes a suit, the insane qualification demands for perks, and also the high up-front cost to get in, all add up to absolutely nothing great.
LuLaRoe focuses on stay at home moms with their home party principles. This principle is to get the possible expert hire to believe this is likely to make money selling the same items fast.
Sounds like a great deal, doesn’t it?
The problem with this MLM is that unless you have an extraordinary variety of friends and family, you are going to quickly lack people to purchase your products.
If you remain to press your products on your friends and family, you’ll lose a number of friends in the process.
I found a ton of videos and reviews from women who said this is exactly what happened to them (show later in my LuLaRoe MLM review).
And for this reason, lots of people involved in this scheme say it is a pyramid scam.
In my review, LulaRoe is not a scam because there is nothing illegal about their business.
See, LulaRoe is a legit multi-level marketing company that might help you to make real money.
However, regardless of it being a genuine opportunity, I do not suggest signing up due to the fact that it can cost you a lot more time, effort, and money than you may think.
Alternative: On the other hand, if you’re looking for the best business model to earn passive income online as a beginner, there are other, more suitable, and cost-effective alternatives.
My top-rated course has helped me to go from earning $0 to $100’s per day!
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What Products Does LulaRoe Sell?
Simply put, LuLaRoe sells clothes. The company is popular for its leggings but additionally markets a variety of skirts, knits, gowns, and so on.
They supply a selection of vibrant patterns that are produced in a restricted quantity of each pattern to make sure that the garments being sold are very special.
Quite a nice way to attract customers, isn’t it?
Is LulaRoe Products Any Good?
The garments are made in many different nations including China, Vietnam, as well as Guatemala. They are open about where the products are made so there is no issue with the global nature of their items.
The trouble is that the products are of low quality.
There are grievances that there is no standard sizing. So for one LuLaRoe product, you might require a small but for one more LuLaRoe item, you might need an extra-large.
There are likewise numerous problems concerning the product being used is exceptionally thin. As a result, the clothing splits or wears out easily.
Therefore, the appeal of LuLaRoe is its colourful special boutique design garments. However, the low quality of that apparel is likewise the resource of lots of problems.
The eruptive development of LuLaRoe may have added to the low-grade items. Only time will tell if they improve the high quality of the products.
In my opinion, the low-grade product could ruin LuLaRoe’s credibility faster than they might have the ability to recuperate the item’s quality.
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How Does LulaRoe MLM Work?
As mentioned in this review, LuLaRoe is an MLM (multi-level marketing) company based in Corona, CA. When you join LuLaRoe, you’ll end up being a style consultant.
Here’s how it works…
With LuLaRoe, you are basically starting your own in-home clothing shop. You acquire your supply of garments you are going to attempt to sell.
Then, you offer them at an increased list price. Also, you can hire others to do the selling for you while you act as a trainer.
As a result, LuLaRoe experts receive compensation for the sales of individuals that they have hired.
Here’s how the scheme looks from the bird’s eye perspective…
Great, right? Not so much.
As I said, this is the main reason why LuLaRoe is being called a pyramid scheme.
To be eligible for the incentives and payments, you are required to have accomplished a certain level of sales.
The problem is that the substantial majority of the experts are not able to attain these sales degrees thus losing the bonuses and commissions.
How To Join LulaRoe MLM?
To become a LuLaRoe professional you’re called to acquire the start-up kit of inventory.
They use advance prices to legitimize themselves as a business i.e. a real apparel store needs to purchase supplies ahead of time so they have to be legit.
This is a large ahead of time repayment as well as it does make people seem like they are buying a real company. But there is a problem which is the same as any real clothing shop.
You have to sell it all! Otherwise, you’re looking for money!
What does the specialist do with the clothes that they can not sell?
Allegedly, LuLaRoe company offers some sort of buy-back guarantee.
However, there are mixed testimonials on being able to obtain refunds from LuLaRoe on this inventory. Most of the reviews are that specialists can’t get their money back so it’s a loss for them.
Not a good way to do business, in my opinion…
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How Much Does It Cost To Join LulaRoe MLM?
The LuLaRoe starter pack costs $499. It includes 65 arbitrary items of LuLaRoe garments. You will not have the ability to select which apparel you will certainly be buying.
To learn more, you can see the video below for more info. Keep in mind that the author is a bit biased…
The price of the starter pack is rather high, in my point of view. Moreover, I am not actually a fan of big prints on clothes.
Some pieces of LuLaRoe clothes have large, horrible prints that do not look fashionable or stylish in any way.
If I am purchasing a collection of preliminary inventory for $499, I believe I am entitled to select which designs or which articles of clothing I will be obtaining.
I do not think that paying $499 for random pieces deserves it since you are uncertain what you will be getting.
In any case, as I said in my LuLaRoe MLM review, once you buy the kit from LuLaRoe, you can start acting as a representative and make money by selling the same clothes to other women.
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How To Make Money With LulaRoe MLM?
There are 2 ways you can make money as a LuLaRoe distributor:
- Sell LuLaRoe products and earn a commission
- Recruit people and earn bonuses from the sales your downline makes
In my opinion, the only way you can make a consistent good income is by recruiting a lot of people. And in the next section of my LuLaRoe MLM review, I’ll show you how much you can earn.
By the way, this is exactly the reason why people complain that LuLaRoe is a pyramid scheme or a scam…
What is LulaRoe’s Compensation Plan?
You can check out the official LuLaRoe compensation plan here. As mentioned, independent professionals additionally described as LuLaRoe Fashion Retailers, typically market LulaRoe apparel with Pop-Up Boutiques.
Relying on the business’s compensation plan, you can gain between 35% and 50% of gross sales in compensation. To stay active as a specialist, you must sell 33 items monthly to receive your payment.
I always thought this to be a bit unfair to people who join, which is why I hate MLMs.
Nonetheless, there are 6 different ways you can make money with LuLaRoe. They are as follows…
- Retailer
- Sponsor
- Trainer
- Coach
- Mentor
- Ambassador
It would take me 10 pages to explain how each level works. For some reason, MLMs like LuLaRoe make these plans hard to understand for us common people.
I suggest that you watch this video instead so you can understand it better.
Can You Make Money With LulaRoe MLM?
According to the LuLaRoe 2016 Earnings Disclosure Statement, 72.63% of the Independent Style Retailers in the USA were ineligible to get compensation from LuLaRoe.
This is probably due to the fact that they did not sell adequate items.
As you know, you can also make money by employing others for company opportunities.
As an enroller, you can get an added perk offer of 5% of the individual volume of gotten experts. Nevertheless, you should acquire a minimum of 175 products every month to get this reward.
If you accomplish this, you can make a 3% perk on subsequent generations of professionals hired from your downline.
So the answer is yes, you can make money with LuLaRoe. However, you will have to buy a ton, and sell two tons of clothes before you can earn a full-time income.
As shown above, most people fail to make “big” money with MLMs like this one…
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LulaRoe Reviews and Complaints
One of the best ways to learn whether LulaRoe is a scam or legit is to read some testimonials online. Most LulaRoe reviews online are directed toward their products and are generally negative.
I’ll show you these in a few moments.
Before I do so, I just wanted to say that there is a ton of complaints and negative voice outside about LulaRoe.
I discovered a ton of articles such as this one on VanityFair with the title “Inside the Alleged Billion-Dollar Pyramid Scheme”.
Basically, all articles online are directed toward a documentary called LulaRich that’s been streamed on Amazon Prime.
Here’s a clip…
Positive Reviews
- I love LulaRoe. They are mostly kind and generous and understanding. I said mostly, I have run into some gruff people in this business. However, the good ones make up for the bad.
- I loved the pattern I received & they actually have all three colours I want to match with tops! One review said the pair she received were different than the Lularoe’s she had gotten somewhere else. Mine actually fit a little better & the material is a little heavier than the pair I already had, so I call that better. I am going to order another pair. Thanks for a GREAT deal!!
Negative Reviews
- I had a pair of leggings and after a week it had 3 holes. I never sat on anything and yet they ripped when I sat down. Keep in mind I bought my size, they weren’t too small or anything. Also, it smelled weird. I will say that the designs are cool, just the quality isn’t good.
- Bought a pair of leggings, The first pair was amazing so I bought about six more pairs all in the same size just different prints, even though they were all labelled the same size they were almost all different. Half looked like they were made for children, and a half was too big. Don’t waste your $.
To be honest, the LulaRoe reviews online are quite mixed. Some people say that LulaRoe is a scam and a garbage product. Others say it’s the best thing ever.
But the MLM complaints are something that I can’t neglect in my LulaRoe MLM review…Let me first go over the pros and then I’ll reveal these complaints too.
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LulaRoe MLM Review – Pros
LulaRoe Garments is Praised By Women
Moms need to really feel comfortable while still being stylish, and LuLaRoe has the prospective to do just that. Take tights, as an example, are quite popular, which tells me that women love them.
This is good because if you are going to become a representative, you have to have a product that people love.
If their products are not in demand, and people don’t like them, they will not buy them. And you, as a salesperson are going to have a hard time selling them to anyone.
Redeeming Unsold Inventory
LuLaRoe has a buy-back plan where they will buy all unsold stock. This is an excellent policy because they will pay you back completely.
To capitalize on this, you will require to return your unsold inventory to LuLaRoe within 1 month of acquisition.
I suggest that you take advantage of this plan right away if you observe that you are not making the sales you expected to make.
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LulaRoe MLM Review – Cons
Hight Startup Expense
Before I wrote this review, the starter pack you are called to buy used to cost $5000-6000. They decreased it to $499 after a lot of reactions and complaints.
However, that is still way excessive for inventory. I do not think that it is still a good price for a number of arbitrary garments that in my opinion, look ugly.
Product Quality is Decreasing
LuLaRoe’s acknowledged products are its leggings. If you saw that video I shared above, you will clearly see how badly their items’ top quality has actually come to be.
LuLaRoe also attempted responsible for this to their clients as well as even made a condescending video that shows how to effectively wear tights.
If you need to inform individuals how to properly wear your items without ripping them, it is clear that the problem lies with your products.
LuLaRoe is a “Pyramid Scheme” in Disguise
In order to earn money with LuLaRoe, you have to focus on recruiting. If you do not recruit sufficient people to join your downline, you are essentially screwed.
Team reliance is a common fad in these firms. You have no getaway from its vicious grip.
And even if you have a history in advertising products, you will probably not be able to make sufficient cash from sales alone.
Therefore, your only option is to recruit others.
LulaRoe Clothes Is Ugly and Expensive
Regrettably for LuLaRoe, I am not actually a fan of the prints in their clothing. The price for a piece is likewise not worth it.
It is way too pricey for an item that appears like something you can make by stitching items of random prints you can discover at your regional fabric store.
On top of it, LuLaRoe has several bad reviews on the internet. One of the most prevalent ones is those who have verified that the items’ high quality has actually been worsening ever since.
It is unworthy to lose friends over a company offering ugly leggings with hideous prints, right?
LulaRoe MLM Got A Lot Of LawSuits
The firm was launched in 2012 so it is a rather new company. Nonetheless, you will discover that LuLaRoe has been a target of various legal actions from both associates and consumers.
Huge growth was seen in October 2017, when a class-action lawsuit was filed in California, filing a claim against LuLaRoe for being a pyramid scheme.
Related MLM Review: Rodan and Fields
LulaRoe MLM Review -Conclusion
Although multi-level marketing has a close relationship with pyramid schemes, LuLaRoe itself is not one. It is a legit company but with feasible shades of grey.
Why? Well…
Multilevel marketing, as practised by LulaRoe, calls for a network of independent salesmen selling straight to consumers, commonly in their residences.
You as a salesman are paid commissions, along with particular group perks on both your very own sales and additionally those made by salesmen you recruit.
This makes LulaRoe a pyramid scheme in disguise. But not a scam …
Pyramid systems, on the other hand, which are consistently a scam, guarantee commissions entirely for generating new employees instead of actually marketing products.
In this regard, LulaRoe is not a pyramid scheme.
Thanks for reading my LulaRoe MLM review. What is your opinion? Is it a pyramid scheme/scam? Were you a part or maybe still are a member of this business?
Feel free to leave your reviews at the end of this page!
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Why I Don’t Recommend MLM…
- Virtually 99% of individuals in all multi-level advertising and marketing firms shed cash, according to the FTC.
- There are 38% even more opportunities for you to make money from your own work
- The odds of you winning a lottery worth $10k among 10,000 people is 300 times higher than making money from MLM.
- According to the AARP foundation, 47% of distributors of all MLMs lose their money.
- Of the remaining 26% that really earn money, 53% of them earn less than $5000/year.
- 39% of that 53%, that are making $5000/year stopped because recruiting and offering lousy products to loved ones members threatened their relationships.
- You can forget about building a long-term organization with MLM because 50% of all participants stop within one year.
- 75% of individuals that joined MLM claim that they will never ever join any kind of multi-level marketing.
- A poll was carried out in 2018 among 1050 online marketing distributors as well as it was ended that the majority of them made 70 cents an hour and 20% of them did not make a sale. 60% of them made less than $500 in sales over the past 5 years and also 32% of them generated credit card debt to fund their network marketing participations.
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There are too many scams out there, especially in the make-money-online world. I know, because I reviewed over 600+ sites so far!
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And don’t forget to share this review with your friends and family!
Thanks for reading my review of the LulaRoe MLM!
All the best, Ivan. contributor @freeaffiliatemarketingbusiness.com
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