Is LuLaRoe a Scam? My Honest Review! [2021]

Welcome to my LuLaRoe review 2021!

LuLaRoe is a clothing company and CLAIMS that after becoming their affiliate, you can take part in their lucrative compensation plan.

It looks interesting for all those who want to excel in clothing business but don’t think it is as simple as you might think. This is why I always recommend you to read honest reviews on the internet before joining any business opportunity.

But first, I must congratulate you for researching LuLaRoe before becoming its part.

Is it really that easy for LuLaRoe to fulfill its promises? Is it worth your time? And most importantly, is LuLaRoe a scam or legit?

I will cover all this in my LuLaRoe review.

 So let’s start;

LuLaRoe Review Summary 2021!

Product Name: LuLaRoe


Founder: DeAnne Stidham


Product Type: Multi-Level Marketing (MLM)


Price: $5,000


Best For: People who have a passion for fashion

Is LuLaRoe a Scam

Summary: LuLaRoe is a clothing company that was launched in 2012. The cost to start this business is nearly $5,000. It uses a multi-level marketing model to market its products.  


Rating: 55/100


Verdict: No

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What is LuLaRoe?

LuLaRoe is a clothing company that was established in 2012 by DeAnne Stidham. Before this Company, DeAnne had already found success in network-based marketing businesses.

She always had long dreamed of one day creating her own clothing line. This has led to her success with LuLaRoe. She started LuLaRoe with the help of her husband, Mark.

Over the five years, the Company has grown significantly and it deals in the fashion niche with core focus is on clothing.

Clothing is a competitive niche, and there are many other network marketing companies are operating. Some of the names are;

The Company has reported $1 billion in sales in the year 2016. LuLaRoe is among very few MLM companies (Team National, doTerra, and Juice Plus) that have achieved this milestone within a short period of the span.

Is LuLaRoe a Pyramid Scheme

LuLaRoe Product Line

At the time of its launch, LuLaRoe sold maxi skirts.

In early 2014 other skirts and dresses were added and in July 2014 LuLaRoe debut their own leggings.

Since then LuLaRoe has mainly been known for their leggings, although the company website also has dresses, tops, skirts, bottoms, layers, and kids lines.

The production and development of clothes (style, print, and design) touch the hands of thousands of artists and craftsmen across the world.

What Do People Say About the Products?

I have read many reviews of the people, and I found pretty mix one. As some are complementing about;

  • a lot of patterns
  • good colors
  • clothes are comfortable
  • prices are relatively fair
  • a lot of sizes

While on the other hand, some of the people are complaining about;

  • Defective items
  • High prices

So, there is a mixed trend. But honestly speaking, I must say that I have found more goods ones.

Therefore, I am confident about their products quality and variety, and also the growth of the Company has confirmed this trend.

How to Make Money with LuLaRoe?

Unlike many other MLM companies, you don’t need to purchase any starter kit to become their “Fashion Consultant” a term they use to denote the distributors.

 First, you need to submit an application form which you can access here.

They could take up to 5 to 8 weeks to get approved you which I believe is pretty lengthy.

After that, you need to purchase your own stock of goods. This is where they charge you too much, and even some of the surveys have confirmed this amount starting from $5,000 to $10,000.

That’s true. For this amount, you can order 250 to 300 clothing items (leggings, skirts, tops, bottoms, dresses, etc.) so that you have the inventory to market.

Wait this is just the initial order…

You also need to maintain monthly order requirements depending on your rank.

  • As a Fashion Consultant (the lowest rank), you need to order at least 33 pieces per month to stay eligible and qualified for the commission.
  • For "Sponsor," rank, you need a minimum order of 175 pieces per month.
  • For "Trainer" rank, a minimum order of 1,750 pieces from your entire downline team is required

LuLaRoe Compensation Plan

LuLaRoe’s compensation plan pays commissions based on your ranks.

LuLaRoe Affiliate Ranks

There are 5 ranks within the LuLaRoe compensation plan.

Affiliate – Join as a LuLaRoe Independent Fashion Retailer

Leadership Levels
Sponsor

To become a sponsor, you must complete at least

  • 10 pop-up boutiques
  • Produce at least $10,000 in retail sales volume and
  • Recruit at least one “Fashion Retailer.”

To receive a commission as a sponsor, you must be qualified for each month. The monthly requirements are:

  • Personal Retail Sales totaling 65 Pieces
  • At least $1,950 in Retail Sales for the month
  • The average price of at least $30 per piece sold

You will be qualified to make a 5% override bonus on the Wholesale Value of the Sales of your Personally Sponsored Affiliates or Independent Fashion Retailer(s).

All of your sales and bonuses will be calculated per calendar month.

Trainer

To become a Trainer, you must;

  • Personally recruit at least three Fashion Consultants and 
  • have a total downline of at least ten people

To receive a commission as a Trainer, you must be qualified for each month. The monthly requirements are:

  • Sell at least $3750 in retail sales (minimum 125 pieces of clothing)
  • Generate $19,500 in group retail sales (minimum 650 pieces of clothing)
  • The average sales price of at least $30 in Retail Sales

Once you become a Trainer, you will begin joining in the Leadership Pool.

`You will qualify to earn a 5% bonus on the wholesale value of the Retail Sales of your Fashion Retailers personally sponsored by you.

For other members, you’ll receive a 3% bonus on the wholesale value of their Retail Sales.

Coach

To become a Coach, you must have;

  • A total of 10 people in your team
  • At least 3 Fashion Consultants personally recruited by you
  • At least three Trainers

To receive a commission as a Coach, you must be qualified for each month. The monthly requirements are:

  • Sell at least $4500 to retail customers (minimum 150 pieces of clothing)
  • Generate $25,500 in group retail sales (minimum 850 pieces of clothing)
  • The average sales price of at least $30 in Retail Sales

In addition to the leadership bonus you receive as a Trainer, you will also be qualified to get 1% of the Wholesale Value of any Second Tier Leader’s Group Retail Sales.

You will also be qualified for additional points in the Leadership Pool.

Being a Coach, you get 2 points in the Leadership Pool for yourself, with an extra one point for each First Level Leader and two points for each Second Level Leader on your Team.

Mentor

To become a Mentor, you must have;

  • A minimum Leadership Lines with Coaches or above, and
  • Three additional Leadership Lines.

To receive a commission as a Mentor, you must be qualified for each month. The monthly requirements are:

  • Maintain Coach volume requirements and recruit and
  • Maintain at least 3 Trainers and at least 3 Coaches

Other than Coach Bonus, you will be qualified to earn 1% of the wholesale value of any third Level Leader’s Group Retail Sales.

Fast Start Bonus

If new LuLaRoe Fashion Consultants sell 175 pieces of clothing having a minimum retail value of $5250 within their first three months

  • they get a free 50 piece order of clothing and
  • their up-line gets a $500 cash bonus
Cruise Fast Start Bonus

LuLaRoe appears to run cruises a few times a year for their Fashion Consultants.

To be eligible for the cruise, an affiliate must “cruise qualify.” For some reason, cruise qualification standards are not given in the LuLaRoe compensation plan.

Nevertheless, the Cruise Fast Start Bonus is attained if an affiliate “cruise qualifies” each of their 1st consecutive six months with the company.

  • the qualifying affiliate gets a $2000 cash bonus when they attend the cruise and
  • their up-line gets a $1000 cash bonus

For further explanation of LuLaRoe's compensation plan, please see the video below explained by LuLaRoe's Consultants:

Pros & Cons:

The Good

1. Product Warranty

LuLaRoe has a six month warranty period for its products and a "Happiness Policy."

The warranty period protects customers from any defects that customers found in their products.

On the other side, the Happiness Policy ensures that the customers are happy with their products.

So, if you think the products aren’t what you expect, you can request for the refund within 20 days.

The Bad

1. Only Works in the US

That’s true! The site only worked for the people of the United States.

If you are reading this and belongs to some other country, I recommend you to don’t waste your time looking for the Company’s information.

However, if you like to build a homemade business from home, I recommend you to see my #1 recommended site which is available worldwide (except a few countries)

2. Very Expensive Startup Cost

I have written nearly 500 reviews on my site, and this is perhaps the most expensive products I have ever seen.

You need at least $5,000 just to start this business. For $5,000 you will get clothes inventory, and it will just become stockpile.

Please also don’t forget to maintain the monthly purchasing requirement to be eligible to earn bonuses and commissions.

Also, don’t think the cost will end here. You need to buy a store or rent a shop to display all those products to the people.

3. Investment Tied Up

If you look at newly MLM companies, they don’t require you to carry inventory. All you need is to order them, and they then send those items directly to the customers on your behalf.

So, if you, again and again, ordering them your room will end up full of stock. All of your investment will be tied up, and if you aren’t able to sell them for some time, it will be a nightmare for you.

You don't just need to keep these clothing items; you also need to box them and post them one by one to your customer in case you receive the order.

Honestly speaking, this is not the true way for you to work for financial freedom if you require to spend time doing these stuff.

4. Too Many Lawsuits

Though the Company launched in 2012 and it is a pretty new company. However, you'll find out that LuLaRoe has actually received numerous lawsuits from both affiliates and consumers.

Massive development is seen in October 2017, when a class action lawsuit was even filed in California suing LuLaRoe of being a pyramid scheme.

Three former Fashion Consultants also alleged LuLaRoe against encouraging them to borrow money, take loans, take out credit cards, and some were even probed to sell their breast milk to get funds to buy inventory.

5. LuLaRoe is Dropping

LuLaRoe is just around six years old and when you compare it with other MLM Companies like Team National, which has been in business for over 20 years.

Now I am showing with you an interesting trend which reflects the interest / popularity of LuLaRoe over the past few years:

As you can see, the Company has grown till 2016, but suddenly it started to decline since 2017.

But we must wait at least for a decade to finally conclude it. However, the major reason for its decline is due to new entrants in this industry that are very cheap.

You could see my reviews on Piphany, Buskins, and Legging Army.

6. Limited Earning Potential

I always consider this a most significant issue before joining any MLM.

If you read the company's income disclosure statement, the average annual income earned by LuLaRoe's affiliates in 2016 was only $2,119 per year!

That's only $177 per month, hardly enough to pay some utility bills...

And 73% of all LuLaRoe Retailers didn't make anything in 2016 because they were unqualified.

I can totally know why for such a large percentage of people being ineligible for the commission.

It's definitely because of all the costly monthly inventory they must purchase to stay active.

Is LuLaRoe a Pyramid Scheme?

To be called a pyramid scheme, a company must have the following features;

  • Its products are unreal
  • Its sole purpose is to recruit people

LuLaRoe, on the other hand, provides only real products that are of good quality at affordable prices. Also, the Company focus is selling its products to people rather than recruiting.

This area is tricky, as most of the Companies that are pyramid schemes but they try to show their products as real which are not.

They only try to hide their pyramid scheme behind those products.

The Company also faced lawsuit about being a pyramid scheme, but later on, all of those appeals were voluntarily dismissed without explanation on January 12th, 2018.

So, until the Company is officially declared as pyramid by Federal Trade Organization (FTC), we have no right to call anyone this.

Is LuLaRoe a Scam?

In short, LuLaRoe is not a scam. It's a legitimate network marketing business opportunity that could allow you to make real money.

Despite a real opportunity, I don’t recommend you to join because:

  • The startup cost is at least $5,000 is way too much, and also you need to incur other costs as well. So you could expect a $10k at the start
  • And the affiliate success rate is too low as confirmed by the income disclosure statement

Moreover, the pace at which it is receiving lawsuits and complaints from the affiliates and customers, you could expect very surprising in the coming few years.

This is surely a RED FLAG that you should beware.

Final Verdict In My LuLaRoe Review:

Though MLM has a close relationship with pyramid schemes, LuLaRoe on its own is a legit site.

However, due to the above issues, I recommend you to start your own online business using affiliate marketing business. 

This is the business model I am using since 2015 and are getting huge success even I was a complete beginner at that time. You don’t need to;

  • Recruit people to earn money
  • Involve in face to face marketing
  • Invest $5000 at the start
  • Wait too long to see results

If you need to know where to start your affiliate marketing business, I recommend you to see Wealthy Affiliate. Due to this platform, I am also earning a four-figure income each month.

It is free to join and a community of over 1 million people.

What's your thoughts on my LuLaRoe review 2021 and if there is any question in your mind, please ask me in the comment section.

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