Is LuLaRoe a Pyramid Scheme

Is LuLaRoe a Pyramid Scheme? – Who Believes This?!

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Is LuLaRoe a pyramid scheme or it’s going to give you a real opportunity for making real cash? LuLaRoe is a clothing company with an affiliate marketing scheme. They claim that people can get good compensations when they join their affiliate program.

If you want to join the clothing and fashion industry, LuLaRoe might sound interesting to you. But succeeding in their program is not as easy as it seems. This is one good reason why you should read internet reviews before you join any internet business opportunity. You will be able to learn from the experience of others and see if a business opportunity is worth it or not.

Is LuLaRoe worth your time and money? Does LuLaRoe deliver on its promises? Is LuLaRoe legit or a scam? Read on to find out more about LuLaRoe in this review.

Summary

Product Name: LuLaRoe

Official Website: www.lularoe.com

Owner: DeAnne Stidham

Type: Multi-Level Marketing (MLM)

Cost to Join: $5,000

Suitable For: Only people who are interested in the clothing industry

Short Review: Launched in 2012, LuLaRoe is a clothing company. You need about $5000 to start the business. It is a company that uses an MLM scheme to market its products.

Do I Recommend It? No

Overall Rating: 5 out of 10

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what is lularoe

Background – What is LuLaRoe All About?

Established in 2012, LuLaRoe is a clothing company that was established by DeAnne Stidham. DeAnne Stidham was involved in network-based marketing businesses before she founded LuLaRoe.

DeAnne Stidham had the help of her husband Mark in founding the company. Since the company has been established, it has been successful, and it has grown a lot. It focuses on clothing in the fashion niche.

DeLaRoe has now made over $1 billion in sales which was declared in 2016. Very few MLM companies have attained $1 billion in sales in a short period of time. Other companies to achieve this are JuicePlus, doTerra and Team National.

What is Opinion of Other People About Products of DeLaRoe?

There are several reviews of the products on the internet. The reviews are mixed. The good reviews say:

  • The products are good
  • The products come in various sizes
  • The products are comfortable to wear
  • The products come in varying patterns
  • The products have good colors

The complaints about the products include the following:

  • The products are expensive
  • The clothes were defective

The reviews are mixed, but the good reviews are more than the bad reviews. So, the product quality is good, and there is a lot of product variety. The monumental sales made by the company also confirm that customers are well receptive to the product.

how lularoe works

Can You Make Money Through LuLaRoe?

They call their distributors ‘fashion consultants.’ You don’t need to buy a starter kit before you can become a fashion consultant of LuLaRoe. Before you can become a fashion consultant, you need to submit an application form. They take up to 5 to 8 weeks before they approve application forms.

After your application has been approved, you will need to buy your own stock of goods. They charge a lot of money for this. The minimum amount for buying a stock is about $5000 or even more.

Trainer Level

To become a trainer, you must do the following:

  • Recruit a minimum of three fashion consultants
  • Have a downline of at least 10 people

If you want to receive your commission as a trainer, you must qualify for it every month. The minimum requirements for receiving commissions are:

  • Selling at least $3,750 worth of clothing in retail sales (at least 125 pieces of clothes)
  • Generating at least $19,500 in group retail sales (at least 650 pieces of clothing)
  • The average sales price of retail sales must be a minimum of $30

After you become a trainer, you can join the Leadership Pool. You will also earn a bonus of 5% on the wholesale value of retail sales of fashion retailers that are sponsored by you. You will receive a 3% bonus on the wholesale value of retail sales of other members.

Coach Level

For you to become a coach, you must have the following:

  • 10 people in your team
  • A minimum of 3 trainers
  • A minimum of 3 fashion consultants that you recruited personally

You must be qualified for each month before you can receive your monthly income. The monthly requirements include the following:

  • Sales of at least $4500 to retail customers (a minimum of 150 pieces of clothing)
  • At least $25,500 in group retail sales (a minimum of 850 pieces of clothing)
  • Average sales price of at least $30 in retail sales

As a coach, you will be qualified for additional points in the Leadership Pool. As a coach, you get two points in the Leadership pool for yourself. You get one extra point for every First Level Leader, and you get two points for every Second Level Leader that is on your team.

You also qualify to get 1% of the Wholesale Value of the Retail Sales of Second Tier’s Leader’s Group.

Bonus at The Beginning

If you sell 175 pieces of clothing with a minimum retail value of $5250 within your first three months as a new LuLaRoe fashion consultant, you can be eligible for a fast start bonus.

You must also ‘cruise qualify.’ But the requirements for cruise qualification are not given in the compensation plan given by LuLaRoe.

lularoe pros and cons

The Good, The Bad

The Good

  1. Good product warranty:

There is a six-month warranty period for all products, and there is a happiness policy. The warranty period ensures that customers are protected from defects found in the products. The happiness policy ensures that customers are happy with the products. If products do not meet your expectations, you can request for a refund within 20 days.

The Bad

  1. It only works in the US: The program only works for those that stay in the United States. If you don’t stay in the United States, then there is no point reading about the company.
  2. The startup cost is expensiveLuLaRoe’s packages could be the most expensive ever. You need a minimum of $5000 to start this program. You need the $5000 to buy a stockpile of clothes inventory. Apart from the expensive startup cost, you also need to maintain the minimum monthly purchasing requirement that will make you eligible to receive commissions and bonuses.
  3. Not Clear Investment: This option has been changed during the last years. New MLM companies prefer to get order from you and send it on your behalf. This means you do not see and do not own products anymore and can’t see how it their quality.
  4. Complains For LuLaRoe Is More Than Standard! When a company is just 5, 6 years old, (like LuLaRoe) it’s considered as a new company and that’s not good to see many complaints for a new launched company. Unfortunately this is what happens for LuLaRoe and although it’s got success in sales but it’s got significant number of complaints at the same time and these complaints does not come only from customers. It even received a suing last year for being active and work as a pyramid model.
  5. Low Potential of Income: To be honest, this is the most important section when I review and even want to join a company that works based on Multi-Level Marketing business. Unfortunately there is not good news about potential income you can make through LuLaRoe as an affiliate.

According to income report that company publishes every year, the average money you can expect to make by promoting LuLaRoe is around $2000 in a year and when we divide it into 12 months the result is disappointing: ~$170 monthly! I don’t think it would be enough for living at all.

And… Not Long History

I understand that every new company starts its business from a point but the same as anything else when you compare LuLaRoe with other MLM companies that are up there for 10, 15 or even 20 years, you’ll see that LuLaRoe has a long way to make credit and get 100% trust of their customers.

Is LuLaRoe Pyramid Scheme

Final Conclusion – Is LuLaRoe a Scam?

I guess this is a wrong question everybody ask when people want to know if a program is scam or not. You may find a program totally legit but it may not worth your time end effort. This applies for LuLaRoe too; if you just want to know if LuLaroe is a scam or not, I assure you that it’s completely a legit company and if you make money through them, they’ll pay you for sure.

But let’s back to the RIGHT question: Is LuLaRoe worth your time? Or do I recommend you to join them No! There is not much chance to make serious money if you decide to work with LuLaRoe as an affiliate and $170 or $200 monthly is the maximum potential income you can reach there.

You should prepare $5000 in advance to be able to start working with LuLaRoe and since this is not all cost (cost of web design, hosting, marketing, etc. will be add), you’ll ended up with a significant cost to start your business.

Finally, all those complains that LuLaRoe received from customers and affiliates on almost a regular basis let me tell you that you should think TWICE if you’re planning to work with LuLaRoe. Always consider complaints as a negative point for a company and it’s what LuLaRoe received very soon!

My Verdict

My best advice to you is staying away from LuLaRoe if you’ve just started making money online. Actually not only LuLaRoe but any other company that works based on a MLM business model can’t help you to make any serious money from Internet.

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my recommendation

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