Everybody needs clothes and what better way to make someone feel special than to personally sell them clothes and make money for yourself? LuLaRoe MLM is a company you may have heard of. They sell a variety of clothes through direct marketing to a very wide market. In this LuLaRoe MLM review, we’ll take a look at the clothes and how this offer works to see if you can succeed here.
What is LuLaRoe MLM?
LuLaRoe is a multi-level marketing company that was founded by DeAnne and Mark Stidham in 2013. The name is a combination of their three granddaughters’ names. Their flagship product was maxi skirts. Eventually, the line would expand to include dresses, tops, kids clothes, menswear and more. In 2014, their main product became leggings. In the beginning, the distributors (called Fashion Consultants) were located in the mid-west of the United States. LuLaRoe is now available across the U.S. and in a number of countries.
In 2016, it was considered one of the largest MLMs in the business with reported sales of approximately $1 billion. They had over 80,000 Fashion Consultants selling clothes. Unfortunately, lawsuits brought against the company would highlight the many flaws within.
Are LuLaRoe Products Worth Their Price?
Their signature product eventually became leggings. They come in many different patterns and sizes.
You can’t buy these clothes on the website. You can look at the different clothes available but if you want to buy something, you have to be connected with a Fashion Consultant in your area or find them through social media such as Facebook pages. Many Fashion Consultants sell the clothes through places like eBay and Poshmark.
The leggings in the image was found on the Poshmark website and is most likely listed by a Fashion Consultant. I tried to find a reasonably priced product to give you an idea of the pricing. These are actually less expensive than others. The average price is $25 per pair and come in only two sizes–One Size and Tall and Curvy.
But pay close attention to the shipping price. It’s actually more than the price of the leggings. I’m not sure how to account for this except to say that LuLaRoe pays shipping charges to Fashion Consultants. There would certainly be a shipping charge but this seems excessive to me.
There’s a question of quality here as well. Some of the customer complaints were that the leggings fell apart after only wearing once and that includes the more expensive $25 leggings.
LuLaRoe puts orders for clothes through MyDyer, a Los Angeles-based retail company that manages orders for many other retailers. The orders are then completed by Asian and Central American factories.
The clothes are very colourful and come in a variety of different prints and materials which customers seem to like. But the quality may let your customers down.
The LuLaRoe MLM Opportunity
Let’s take a look at how this works. First, you sign up through a sponsor. You’ll need to buy an onboarding package. This is where you decide what type of clothes you want to sell and/or a certain named line of clothes. For instance, you can choose to sell kids clothes or you can choose a certain named collection of clothes such as the Cassie group. From there, you buy your onboarding kit and start selling.
How Much Does It Cost to Join LuLaRoe?
According to the website, you’ll have to come up with $499 for an initial purchase of inventory. The package will include 65 pieces of clothing from a variety of styles. In order to stay qualified, you also have to make monthly purchases whether you have sold clothes or not.
This may seem expensive and it is. But consider that this is a revised pricing structure. In the past, the cheapest onboarding package was the Lindsay Package which included only 45 pieces for $945!
Can You Make Money with LuLaRoe?
Let’s take a look at the different ways you can make money with LuLaRoe clothes. Each Fashion Consultant will have their own inventory that is specific to what they like and think they can sell. You can start by having a party where you guests can see the clothing and perhaps try things on. You can create a pop-up boutique online by setting up a Facebook page where you can post pictures of clothes or hold live events where you can showcase pieces. One-on-one styling sessions could also bring in customers. You earn 35% to 50% from gross sales.
The real way to earn money is by recruitment. The more people you can recruit, the more money you make. In this case, an additional 5%. You can also move up the ladder based on the number of recruits in your team.
Free Ground Shipping
LuLaRoe pays for all shipping costs for the products you order. All orders are shipped within three days of receiving payment. One less expense for you.
Plenty of Resources
LuLaRoe have tons of resources available to make sure that there is no room for failure. Education, business support, training, marketing, and analytics are just a few of the resources listed to help you succeed.
Lots of Selling Opportunities
There are a lot of different ways you can sell the clothes. Setting up a Facebook page, selling through eBay and Poshmark, one-on-one sales, office parties, home parties, and birthday parties are all opportunities to sell clothes.
Pyramid Scheme Accusations
In 2017, A lawsuit was filed in Washington state that accused LuLaRoe of operating a pyramid scheme. At that time, upper LuLaRoe leadership bonus plans allowed consultants to receive bonuses based on the number of recruits they brought in which is a typical pyramid scheme model. The consultants were encouraged to push their recruits to place large orders for clothes which bumped up the bonuses for the upline.
Right now the BBB (Better Business Bureau) have LuLaRoe listed with a B- rating and 2-star customer rating. This is actually much better than their previous rating of F. The F rating came in February 2019 and was the result of hundreds of complaints filed against them and the lack of response to those complaints. At present, the BBB have added government action alerts to their company information page. Below is just one of 175 complaints on file with the BBB.
Fashion Consultants File Bankruptcy
At least 115 of LuLaRoe Fashion Consultants have had to file bankruptcy since 2016. LuLaRoe has disputed this and claimed that one consultant received a full refund. Unfortunately, the data does not support that claim.
Misleading Return Policy
One thing that really turned off a lot of Consultants was that the Return Policy changed. Previously, if a Consultant wanted to cancel their agreement, they could get a full refund for all returned inventory. Instead, LuLaRoe only gave a partial refund or charged fees for returns.
Is LuLaRoe a Scam?
I have to say in this case that this seems like a total scam to me. Coming up with $499 just to get started means that you have to work exceptionally hard to make that money back. So it could take a while before you are made whole with this opportunity. Having clothes sold to you might make your customers feel special but if those same clothes are of poor quality and fall apart, you will lose them fast.
And let’s not forget about the lawsuits here. With such easy access to the Internet, customers can do a quick search on a company to check their reliability and their track record. If you manage to find customers, you may find it hard to keep them. And that won’t be your fault. That will come down to the quality of the products.
I recommend you give this company a pass. There are so many things going wrong here. The average person probably doesn’t have $499 to invest in clothes for their business. If having your own business is important to you, check out my #1 recommendation. I guarantee you it won’t cost you $499 to get started. You’ll get all the tools you need including a website, hosting, training, 24/7 support and more.
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