So someone has probably introduced LuLaRoe to you as a great way to “be your own boss”.
But you’re still wondering… can you really make money selling LuLaRoe? Or is it just a pyramid scheme scam?
This honest LuLaRoe MLM review, with videos, will expose the company for what it really is. This will help you to make an informed decision if it’s something you are interested in starting or not.
What to look for in an MLM
- Low start-up fee & maintenance cost
- High-quality affordable products (decent, not overpriced)
- You don’t have to carry inventory
- An affiliate-like system
- Generous compensation plan
- Company is in the early momentum phase
What is LuLaRoe?
LuLaRoe is a clothing Multi-Level-Marketing company.
It was founded in 2012 by DeAnne Brady and her husband. But I don’t think she ever expected the explosive growth of the company to happen like it did.
The company made approximately $1 billion sales in 2016 and had over 80,000 distributors in 2017.
These distributors have been sold the dream of “becoming financially free” by selling LuLaRoe clothing.
You can learn more about how LuLaRoe could help you live the “American Dream” in the 5 minute video below…
But you’re smart enough to realise this is just a sales video. And just because the company seemed to be doing well in 2016 it doesn’t mean it is today! That’s why you’re on this page!
So you’re probably still wondering…
Is LuLaRoe a pyramid scheme?
No LuLaRoe is not a pyramid scheme because it’s possible for “consultants” to earn money just by selling LuLaRoe’s clothing.
However, can you really make good money just by selling LuLaRoe?
Not really!
This LuLaRoe review will explain why you can’t realistically make good money just by selling clothing later.
For now the question you should probably be asking is…
Is LuLaRoe just a pyramid scheme in disguise then?
What is a pyramid scheme?
A company that promises payment to its members for recruiting more people rather than selling a product or service.
These are illegal in most countries because it’s impossible for every member to make money inside a pyramid scheme.
You can see why in the Wikipedia diagram below…
Most MLMs sell legit products.
However, it’s very hard to make good money or just “break even” inside many MLM companies unless you recruit a lot of people.
That is still the case for LuLaRoe although they have made some changes to the company to help consultants break even quicker.
This makes LuLaRoe like a pyramid scheme in disguise. You can learn more about how to spot these companies in the 5 minute video below.
Success is rare with LuLaRoe
The truth is that success is hard to find in any MLM company.
Did you know that between 73% and 99% of all MLM representatives lose money?
LuLaRoe’s income disclaimer doesn’t include any sales that their consultants made because they mainly sell them in person rather than online. This makes it hard to track their profit from each sale.
However, their 2015 income disclaimer proves that only 3% of consultants made a bonus paycheck of over $1,000 in a month.
With the expensive starting costs and monthly sales quotas to hit you can see that LuLaRoe fits into the stats above.
How does LuLaRoe Work?
LuLaRoe produces a wide range of clothing items.
But rather than spending loads on marketing and advertising each month, they get everyday people to sell the products for them.
These everyday people (“consultants”) have the opportunity to make money from home by selling these products and recruiting more people into the company.
So it sounds a bit like a win-win, right?
LuLaRoe products
If you are serious about joining any MLM company, then it’s crucial that you understand the products because this is what you will be selling.
LuLaRoe has hundreds of different items of clothing under the following categories:
- Womens collection (bottoms, denim, dresses, layers, leggings, skirts, tops)
- Denim
- Elegant collection
- Valentines collection
- Mens collection
This type of MLM company is pretty rare to find. You can find hundreds of health and wellness MLMs such as Purium, Shaklee and Le-Vel Thrive or beauty MLMs such as SeneGence, Younique and Beautycounter.
There are other fashion based MLMs such as:
- Dot Dot Smile (children’s clothing)
- Thirty One Gifts (bags and purses)
- Pink Zebra (perfumes)
But you can see that LuLaRoe is quite unique in that sense.
The pricing of the clothing ranges from between $20-$65 (with the wholesale price being around 20-50% cheaper) as you can see below…
But the main selling points for LuLaRoe compared to high street lenders will be their…
LuLaRoe Maxi Skirt - flagship product
LuLaRoe’s first item of clothing was their Maxi skirts…
They offer a huge range of sizes, designs and colours.
The big selling point is that their clothing is unique. You won’t be able to find these items in regular retail shops on the high street.
Watch the 7 minute video below if you’d like to learn more about the special Maxi skirts…
Can you really make money selling LuLaRoe?
It seems that only the people who turn their house into a LuLaRoe store, are extroverted and focus on recruiting a lot of people make good money from selling LuLaRoe.
It is possible, but it’s clear that the vast majority do not make good money selling LuLaRoe.
There are 2 ways you can make money as a LuLaRoe consultant:
- Sell their clothes
- Recruit people into your “downline” to earn bonuses from the sales they make or clothes they buy
The reason that LuLaRoe avoided being called an outright pyramid scheme in the 2017 lawsuit was because consultants can’t make money by recruiting people directly.
They only make money from the sales that their recruits make.
How much does it cost to join LuLaRoe?
I****t costs $499 to receive 65 pieces of clothing and become a LuLaRoe consultant…
There has clearly been a big change to some parts of the company since the lawsuits.
It appears that it used to cost upwards of $5,000 to start!!
So $499 seems much more reasonable, but the costs do not end there…
LuLaRoe monthly cost
Consultants need to sell $350 worth of clothes every month to “remain active”.
If you cannot sell this amount you will need to purchase the clothes yourself…
You can see that Consumer Reports shows that is still the case today.
Many consultants are unaware of this when they join and then get pressured by their “upline” to buy the products so they remain active. Many MLM distributors tell their downline that “it will get easier” when they are really saying “please keep buying clothes as you’re paying me some good commissions”.
The minimum expenses you need to be prepared to pay in your first year are:
- $499
- $350 x 12
Total 1 year cost = $4,699
And this is before you allow for any storage space, marketing materials such as postage and packaging or anything else.
Yes, you can offset these costs by selling the products. But many distributors end up with thousands of dollars worth of products that they can’t flog, as you’ll find out later.
LuLaRoe compensation plan
For some reason most MLM companies make their compensation plan harder to understand than solving a Rubik’s cube blindfolded.
LuLaRoe is no different.
So I will try to keep this simple…
There are 3 main ways you can get paid from LuLaRoe:
- Retail commissions (20-50% it depends on what you sell it for)
- Override bonuses (bonus for sales your downline makes 1-5%)
- Fast start bonus (sell $5,250 each month for your first 3 months)
That is a screenshot of the LuLaRoe Leadership Bonus plan. It’s how you will “graduate up the ranks”.
If that doesn’t look like a pyramid scheme in disguise to you then I’m not sure what does!
There’s no point in making this harder to understand than it needs to be. All you need to know is WHAT you need to do to make money:
- Sell clothes
- Recruit people
That’s all there is to it.
The 18 minute video below goes into more detail about the compensation plan if you want to know more…
Or you can find the full 18 page LuLaRoe compensation plan here.
Is LuLaRoe a scam?
Technically LuLaRoe is not a scam.
They sell legit clothes and their consultants are paid exactly like they are told they will be.
However, there has been a lot of controversy around this MLM for being a pyramid scheme and dishonest to people joining.
But all that matters for you is if this seems legit and if it can work for you. The rest of this review will help you to decide if you can really make money selling LuLaRoe or not…
Just to be fully transparent with you, I am not a distributor myself and I do not endorse LuLaRoe in any way.
I have researched the website, testimonials and information on the Internet to get to the bottom of what this program genuinely does. This is because I have been burnt from programs just like this in the past and I want to prevent others from making the same mistakes. If you’d like to learn how to “Spot an Online Marketing Scam” then click the highlighted text.
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What I like about LuLaRoe
There are some things that I like about LuLaRoe compared to other MLMs out there…
Key terms
- Pyramid Scheme
- recruits members via a promise for payment from referring others to the service rather than providing a product
- Affiliate Marketing
- Connecting a customer to a product they are looking for and receiving a commission for doing so
- Red Flag
- A warning sign
#1 Focus on selling products
Now, I don’t know if this has been something that they have changed since the pyramid scheme accusations.
But this is genuinely encouraging people to sell their products rather than just recruit…
So you can only get promoted to sponsor people after you have generated a minimum of $10,000 retail sales and completed 10 “pop-up boutiques”. You can also see that a pop up boutique is not as fancy as it sounds in the 3 minute video above.
However, some people will be encouraged to buy this amount of products themselves so they can start “sponsoring people” and make the “real money” quicker.
The fact is that even if you use a “pop up boutique” it doesn’t guarantee any sales. After all, you need a demand for it and it won’t be legal to pop these up in city centres!
#2 Positive product reviews
You can see on review sites like Sitejabber that some people genuinely do love the clothes…
To be honest, nearly every complaint I’ve seen is to do with customer service, refunds or the MLM business.
It’s very rare to see people complain about the clothes.
When a company has great products that always helps them make sales! They’re also not overly expensive like many other MLM products.
#3 Warranty
There is apparently a 6 month warranty for a full refund of any undamaged clothes…
I initially thought this is a great sign as you can at least get your money back for clothes that you can’t sell…
But then I found this (and lots of similar complaints on BBB)…
So there are some hidden truths that are important to be aware of before diving in.
After you read this section at least you will be aware of all the red flags around the company and you can make a more informed decision if it’s for you or not…
#1 Can you really make money selling LuLaRoe? Nope, here’s why…
So we’ve already figured out that you need to allow close to $5,000 of expenses for your first year as a LuLaRoe consultant.
Well, check this out…
You can see the truth in plain sight in the 2015 LuLaRoe income disclosure.
The average bonus for consultants was $424.81.
So you spend at least $4,699 on products and that’s your bonus?
Yeah of course you can sell a few dresses here and there. But it is a FACT that almost every LuLaRoe consultant has a house full of clothes they need to try and sell! Watch any YouTube video and you will see rows of clothes hanging up that they need to sell.
And only 3.6% of consultants made a bonus of $1,000 in a month or more!
Could you quit your full time job from $1,000 a month?
#2 Hidden monthly expenses
This is the MAJOR red flag about the company and one I hope you are aware of by now from this LuLaRoe MLM review…
If you want to earn any bonuses from the sales that your “downline” make then you will need to sell $1,950 worth of clothes EVERY month!
That is insane!
I’ve reviewed a lot of MLM companies and I have never seen anything like this!
It now makes sense why so many consultants end up…
#3 Stockpiling- you need to become your own “LuLaRoe shop” to make money
It’s not even funny how many LuLaRoe consultants I saw on YouTube that have a house like this…
It’s just bananas!
How can anyone think that it’s OK to have this many clothes that they need to sell in person?
How many friends and family members do they have?!
If you were located in the center of New York, then yes of course you could sell this… but from your own home?! Really?
And these are not sales people. They are everyday people like you and me trying to sell thousands of dollars worth of products from their own home every month!
If it was done online, then at least you could use the power of the internet to help you.
#4 Is LuLaRoe a pyramid scheme in disguise?
Just watch the 3 minute news video below…
In 2017 LuLaRoe was accused of being a pyramid scheme with a class action lawsuit.
There are a lot of consultants who have lost thousands of dollars to LuLaRoe with the dream of becoming their own boss.
But this dream is simply impossible unless you recruit a lot of people.
And any MLM that requires you to recruit a lot of people to make money is a pyramid scheme in disguise. And most people lose money inside these schemes… even if you do make money you will do it at the expense of other people that you “recruit” 99% of the time.
#5 Downward trend- most people are jumping ship let alone joining!
Google Trends reveals the final nail in the coffin for LuLaRoe…
When you compare how many people search for Farmasi each month you can see how some MLMs are building gradually over time.
If the trend is still going up for an MLM then you could potentially piggy back off this interest to sell products and recruit people. However, LuLaRoe is going the wrong way.
There are also over 440 complaints on BBB about LuLaRoe and it really seems like the company grew far too quickly for them to keep up.
It’s basically a mess now!
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Hey, I'm Mike. I created a passive income online within a year, with no marketing skills or online experience when I started.
Find out how you can tooWhat do I honestly think your chances are of making any money from LuLaRoe?…
I think LuLaRoe used to operate exactly like a pyramid scheme.
They have made serious changes but these changes mean that if you want to make money you basically have to set up a full LuLaRoe shop in your house to make any money… and then recruit people.
The whole company seems to be a mess now and there is far too much bad publicity for it to recover any time soon.
Other people will be wary about them and you will need to get other people to join if you want to make money.
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