Do you struggle with learning how to start an online business?

LuLaRoe MLM Review: LuLaRoe or LuLa-NO – You Make The Decision

(This review of LuLaRoe MLM examines many facets of the business and compensation to evaluate the company’s MLM program and provide an informed decision. The author, nor anyone affiliated with site content, are in any way compensated by LuLaRoe.)

LuLaRoe has instant name recognition from their fashion line and, particularly, their leggings, which took the internet by storm in the past few years.

Having heard of the company and its ubiquitous presence on social media, one might conclude that its “independent fashion consultants” are making so much cash In the MLM program that they injure their backs, pushing wheelbarrows full of commissions. Right? They must be the kind of people who buy a new boat when the one they have gets wet.

The Laura MethodAn In-Depth, Step-By-Step Masterclass
For Newbies To Set Up A Niche Website

Learn More about The Laura Method Here!

Before you invest in LuLaRoe and a fleet of high-end wheelbarrows, let’s look at some facts and critical information and see if it’s LuLaRoe or LuLa-NO!

Who Is LuLaRoe?

Let’s examine the history of LuLaRoe. The company was established in 2013 by DeAnne Brady and Mark Stidham, her husband. By 2016 they reached over a billion in sales. In 2017 they had 80,000 active “independent fashion consultants” in the field and were shipping 35,000 packages a day.

When the volume reached the level of 35,000 packages a day, the company was sighted with various lawsuits by distributors, consultants, and customers for multiple reasons.

In 2017, In California, attorneys filed a class-action lawsuit against LuLaRoe, claiming the company was a pyramid scheme. And to top it off, in 2017, the Better Business Bureau downgraded their rating to “F” for unresolved issues.

In 2018, The National Down Syndrome Society, a charity partner, opted to sever ties because a distributor on a web conference mocked the disabled while broadcasting.

This event, combined with the other issues, led the top-performing consultants to leave in mass numbers.

In 2019, the state of Washington filed a class-action lawsuit and later settled for 4.74. Million. A condition of that settlement requires LuLaRoe to add income disclaimers regarding how the compensation works and create more transparency in their pay plan.

LuLaRoe MLM review clothing line

What Products Does LuLaRoe Offer?

LuLaRoe offers a variety of women’s fashion and accessories, including their famous stretchy leggings. The company is a wholesale company that sells inventory to independent distributors only.

Some of the fashion products offered are

  • Leggings
  • Shirts
  • Pants
  • Handbags
  • Denim

How Can You Become An Independent Fashion Consultant?

You can go to the LuLaRoe website and join or join and become a downline under friends and family.

Price To Join

To become a distributor for LuLaRoe, you have to pay a minimum investment of $499 initially. With this investment, you get 65 pieces of clothing valued at $2400. If you know anything about fashion, you know that you’re going to need a lot more inventory than that. On average, people spend over $5,000 – $9000 to purchase items to join.

To remain active status an independent distributor you must sell 33 items per month. They can make 45 – 60% profit which is approximate $2,200 – $3,000. So in the end you pay $5000 + and make $3000. Not a profit!

compensation plan
This is a quick graph of the compensation plan. But what it doesn’t say is how hard it is to recruit people to sign up under you so you can make money.

LuLaRoe Compensation Plan

There are two ways to make an income as an independent consultant — first, your retail profits. Secondly, you get whatever you sell the item for minus the wholesale price paid. Remember you have your business expenses that come out of that profit.

You can obtain a second income stream by recruiting people to do what you do. They become part of your “downline,” and you receive commissions from the company based on a percentage of sales.

Benefits can have an impact on earnings if they have a true value. Here is a list of benefits from the LuLaRoe website.

  • Free shipping on orders from us to you (ground)
  • Point of Sale system, e-commerce website, and sales reports
  • Platform for selling on Facebook Live
  • 5% off wholesale orders when using retailer card
  • Sales Tax and Shipping & Handling Tax remission
  • Payment processing with instant funding
  • Marketing assets for product launches including product photos
  • Education for new retailers and ongoing peer-to-peer coaching

Video Of The Compensation Plan

Ratings

LuLaRoe is rated an “F” by the Better Business Bureau.

2 star review

Pros

  • Name recognition
  • Product recognition
  • Free shipping
  • Payment processing
  • Fashion products that are trendy

Cons

  • Terrible reputation
  • Have been sued repeatedly
  • Poor rating with the BBB
  • High cost to join
  • Low-quality products
  • Low credibility
  • Questionable ownership.

LuLaRoe MLM Income Disclosure

From LuLaRoe’s website:

“LuLaRoe makes every effort to accurately represent the products and potential for success of Independent Fashion Retailers.”

Leadership compensation, earnings, and income statements made by LuLaRoe and Independent Fashion Retailers are estimates based on reasonable experience but are subject to limitations.

“As stated in the LuLaRoe Leadership Compensation Plan, the potential compensation earned is not necessarily representative of the payment an Independent Fashion Retailer will make through sales of LuLaRoe products or participation in the LuLaRoe Leadership Compensation Plan.”

Testimonials and examples, if any, are exceptional results, which do not apply to the average Independent Fashion Retailer and are not intended to represent or guarantee that you will achieve the same or similar results.

LuLaRoe does not represent that the Leadership compensation and success of exceptional Independent Fashion Retailers can be duplicated in the future by you or anyone else.

Testimonials and examples, if any, do not include the actual profit made by Independent Fashion Retailers.

One should not consider the figures referenced in the LuLaRoe Leadership Compensation Plan as guarantees or projections of your actual Leadership compensation (or earnings, income, or possible profits, if any).

Any representation or guarantee of Leadership compensation (earnings, income, or possible profits, if any) would be misleading.

Successful retail sales of LuLaRoe products and Leadership compensation result from factors within your control (i.e., hard work, dedication, diligence, creativity, business experience, perseverance, etc.) and factors outside of your control (i.e., market conditions, demand, etc.).

You can see the rest of the compensation plan HERE.

Bear in mind that only 25% of MLM participants turn a profit. Please note that this says “turn a profit.” It does not say that 25% make money. After you take out expenses, very few make money.

Is LuLaRoe MLM A Scam?

A scam is a fraudulent business where the company is dishonest in what they offer. LuLaRoe does not meet that threshold. They provide a product with which you can sell for profit. As well, the metrics for recruiting distributors and the pay for each level are articulated and consistent.

Having said that, while not technically a pyramid scheme or a scam, the reputation makes it a challenge in every possible metric of success.

The chief complaint in many lawsuits has been about:

  • The quality of the LuLaRoe product line
  • That the previous compensation plan and how imbalanced it was

The lawsuits required the company to post a disclaimer. The disclaimer was written to the distributors, which caused a considerable loss of the top performers. LuLaRoe was deemed insensitive with a poor payout model.

The compensation plan has a lot of combined metric qualifiers that can insulate the company from paying out many top-tier amounts. Though, that’s typical for all MLMs.

The Problem With MLM Companies In General

According to an FTC Government File, an MLM operation does not have a clearly defined definition. It calls MLM’s a” product-based pyramid scheme and compares it to an illegal chain letter.

LuLaRoe MLM Review pin

A chain letter is the mail version of those emails you would get that said, “If you forward this to ten friends, you’ll get a $100 gift card to Wal-Mart, but that card never came, but all your friends started getting spammed.

The FTC Government document also states that the MLM model “is inherently flawed, unfair, and deceptive.”

My Recommendations Regarding LuLaRoe MLM

Ultimately, I’m not a fan of the company nor the income potential of this MLM. Once you’ve subtracted your investments and expenses, the remaining amount is likely to be less than expected, and when you divide that by the number of hours you put in, that hourly wage will likely feel insulting. I am uncomfortable recommending this MLM in any possible way.

My 4-Step Blueprint

Why not start a legit affiliate marketing business. Make money the honest way with my 4-step Formula. Click on the tab to learn more about the 4-steps and affiliate marketing.

Other MLM Reviews you may be interested in are:
Scentsy MLM Review
Vasayo MLM Review
Matilda Jane Clothing
Color Street MLM Review

The Laura MethodAn In-Depth, Step-By-Step Masterclass
For Newbies To Set Up A Niche Website

Learn More about The Laura Method Here!

Resign With Money is supported by its readers. When you click on a link on our site, we may earn a commission.
Do you struggle with learning how to start an online business?

Leave a Comment