Is LuLaRoe a Pyramid Scheme

LuLaRoe MLM Review: Pyramid Scheme or Scam?

Today we will be reviewing at a company called LuLaRoe. Is LuLaRoe a pyramid scheme or scam? We will look at the company, its products, and how you can make money with it.

Should you consider investing in it? Find out as you read the review.

Being connected to the internet is made possible because of our portable gadgets.

Monetizing one’s time online is a perfect way to find ways to make use of the idle time we have in our hands.

If you search online, you can easily find many ways to make money online.

However, it seems like scammers have also ventured in this lucrative business.

These days, scams are everywhere. Many people fall victim to them everyday.

Some lose their life savings, go deep into debt, and have their properties repossessed.

A popular scam to look out for are called pyramid schemes.

Pyramid schemes are illegal, and if you invest in them, you will not see your money again.

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What is LuLaRoe?

LuLaRoe is a multi-level marketing company founded by Deanne Stidham and her husband Mark in 2012. The company sells women’s apparel, and they specialize in women’s leggings.

The brand is known for its unique and trendy prints, which they produce at limited quantities.

Once a design is gone, it will not be produced again.

The company sells its products through their Independent Fashion Retailers. The products can be bought in person or online.

You can browse the website to find the products and then choose from which retailer you will be buying from.

LuLaRoe’s product selection includes:

  • leggings
  • dresses
  • skirts
  • tops

LuLaRoe MLM Review: Pyramid Scheme or Scam? - LuLaRoe products

The company is currently based in California, United States.

Is LuLaRoe a Pyramid Scheme?

Since LuLaRoe members earn money both by selling products and recruiting new members, then it is safe to say that LuLaRoe is not a pyramid scheme.

I do not advise joining LuLaRoe. A legitimate business should train its business personnel to properly market its products.

I do not think that LuLaRoe is doing that, since they insist on recruiting new members and pays more for recruiting than selling products, which makes them look like a pyramid scheme.

Like?Pampered Chef,?Optavia, and?Juice Plus, LuLaRoe is not a pyramid scheme.

High Failure Ratio

According to the LuLaRoe 2016 Income Disclosure Statement, 72.63% of the Independent Fashion Retailers in the United Status were ineligible to receive compensation from LuLaRoe, perhaps because they did not sell enough products.

Isn’t it quite funny that more than half of those in the company did not sell enough products?

Like I have been saying before, the products are expensive and pretty hard to market.

The market is overly saturated with clothes already, and there are those websites that sells clothes for wholesale prices.

Those clothes look better than LuLaRoe, and are also of higher quality.

LuLaRoe has pretty much overstayed its welcome in the fashion industry.

With the birth of social media sites like Instagram, people always want to dress their best.

LuLaRoe has definitely made waves for its uniqueness, but as an Instagram user who posts pictures of myself wearing clothing, I would not post a picture of myself wearing LuLaRoe.

I have seen posts on Reddit about people who have been seeing LuLaRoe products at their thrift stores. I think we now have an idea of where those unsold inventory goes to.

At this point, you might be thinking asking yourself, “Is LuLaRoe a Pyramid Scheme? It definitely looks like one.”

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Is LuLaRoe a Scam?

No, LuLaRoe is not a scam. However, this video might reveal some dark secrets of LuLaRoe. Take it with a grain of salt.

According to our data above, there are still people who make money from it.

Most people who joined LuLaRoe did not make money.

Like other MLM companies, you would have to recruit people to earn more money.

Recruitment is often emphasized more than actual selling.

How To Make Money From LuLaRoe

Unsurprisingly, LuLaRoe offers only two major ways to make money.

  1. Selling products. LuLaRoe offers wholesale prices for their products, which you can sell for retail price for your profit.
  2. Recruiting people to your downline. Again, more emphasis on recruiting.

Just like all these scummy MLMs, you would have to pay a steep price before you can even start.

How to Join LuLaRoe

Before you join LuLaRoe, you should watch this video first.

To become a LuLaRoe Independent Fashion Consultant, click this link.

Here are the steps you need to follow to ensure a smoother application process:

  1. Find a sponsor. You can do this providing your zip code. The website will present you with consultants that are located in your area. If you already have your sponsor’s ID, provide that instead.
  2. Provide your personal information.
  3. Pay for your initial order.
  4. Wait for your initial inventory to arrive.

Online registration will not take much time. The forms are pretty straightforward so you would not find it difficult to accomplish the forms.

After submitting your form, all you have to do is sit back, relax, and wait for your initial inventory to arrive.

LuLaRoe Starter Pack

The LuLaRoe starter pack costs $499 and consists of 65 random pieces of LuLaRoe clothing. You will not be able to choose which clothing articles or which designs you will be purchasing.

You can definitely expect variety with your purchase.

The price of the starter pack is quite steep, in my opinion. I am not really a fan of huge prints on clothing.

Some pieces of LuLaRoe clothing have large, hideous prints that do not look trendy or fashionable at all.

If I am buying a set of initial inventory for $499, I think I am entitled to choosing which designs or which articles of clothing I will be receiving.

I do not think that paying $499 for random pieces is worth it since you are not sure what you will be getting.

You might be unlucky and receive those hideous prints that no one wants to buy.

Things I Like in LuLaRoe

Buying Back Unsold Inventory

The company has a buy-back policy where they will buy all unsold inventory.

This is a good policy since they will pay you back in full.

To take advantage of this, you will need to return your unsold inventory to LuLaRoe within 30 days of purchase.

I recommend you that you take advantage of this policy immediately if you notice that you are not making the sales you expected to make.

Things I Dislike in LuLaRoe

High Start-up Cost

LuLaRoe’s starter pack costs way too much. Back then, the initial inventory you are required to purchase costs $5000-6000.

They lowered it to $499 after a lot of backlash, but that is still way too much for inventory that you would not even get to pick.

I do not think that it is still a good price for a bunch of random clothes.

Product Quality Has Gone Downhill

LuLaRoe’s most recognized products are its leggings. If you watch the YouTube video from VICE that I shared above, you will clearly see how badly their products’ quality have become.

LuLaRoe even tried to blame this to their customers and even made a condescending video that shows how to properly wear leggings.

If you need to tell people how to properly wear your products without ripping them, then it is clear that the problem lies with your products.

Outrageous Recruiting Procedure

In order to make money with LuLaRoe, you have to focus on recruiting.

If you do not recruit enough people to join your downline, you are basically screwed. Downline dependency is the common trend with these companies. You have no escape from its cruel grasp.

Even though you have a background in marketing products, you will not be able to make enough money from sales alone.

People hardly make money because recruiting is often easier said than done.

Ugly Promotions

LuLaRoe MLM Review: Pyramid Scheme or Scam? - LuLaRoe ugly leggings

Unfortunately for LuLaRoe, I am not really a fan of the prints in their clothing. The price for a piece is also not worth it.

It is way too expensive for a product that looks like something you can make by sewing pieces of random prints you can find at your local textile store.

I think you will be able to find better looking prints in your local mall, for a way cheaper price.

LuLaRoe has many bad reviews on the internet.

The most prevalent ones are those who have proved that the products’ quality have been going downhill ever since.

It is not worth losing friends over a company selling ugly leggings with ugly prints.

Get in Debt While Drowning in Leggings

LulaRoe’s compensation plan does very little to explain how you can even sell that many leggings.

With the company’s lack of understanding of how a single seller can possibly sell hundreds of leggings a month just to reap a small amount of compensation.

This also begs the question: How many of these sellers bought leggings that they did not even sell?

I am pretty sure you already know the answer to that.

LuLaRoe Compensation Plan

The LuLaRoe Compensation plan can be accessed with this link.

The compensation plan is quite long and winded, so I suggest that you watch this video instead so you can understand it better.

A good compensation plan should straight up tell you how to earn and how much you will earn. This compensation plan is 26 pages long and very confusing.

I do not think that anyone can understand something this complicated.

LuLaRoe Ranks

There are 6 total ranks that you can reach in LuLaRoe. To advance to the next rank, members should meet specific requirements and maintain them on a monthly basis.

LuLaRoe MLM Review: Pyramid Scheme or Scam? - LuLaRoe Ranks

  1. Retailer
  2. Sponsor
  3. Trainer
  4. Coach
  5. Mentor
  6. Ambassador

Ever wonder how many leggings you would need to sell just to climb up the ranks? Clue: Too much.

I do not think you will be able to rank up by selling clothing alone; you would have to recruit people into your downline, and even buy some unneeded inventory just to reap some benefits.

This is always the way to climb to the top of most MLMs.

10 Shocking MLM Statistics That You Need To Know!

  • Almost 99% participants of all multi-level marketing companies lose money, according to the FTC.
  • There are 38% more chances of you profiting from your own any kind of small business than joining these MLMs.
  • Success rate of an online business, which will give you financial and time freedom, is 20% more than joining MLMs for making money.
  • The odds of you winning a lottery worth $10k among 10,000 people is 300 times higher than actually making money from MLMs.
  • According to the AARP foundation, 47% distributors of all MLMs lose their money. Apart from this, 27% do not make a single penny.
  • In the remaining 26% that actually make money, 53% of them make less than $5000/year.
  • 39% of those 53%,who are making $5000/year quit because recruiting and selling crappy products to friends and family members jeopardized their relationships.
  • Forget about building a long term business with MLMs, because 50% of all MLMs participants quit within one year.
  • 75% people that joined MLMs say that they will never again join any kind of MLM.
  • A poll was conducted in 2018 among 1050 MLM distributors and it was concluded that most of them made 70 cents an hour and 20% of them did not make a sale. 60% of them made less than $500 in sales over the past 5 years and 32% of them acquired credit card debt to finance their MLM involvements.

SOURCES:

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Final Verdict – LuLaRoe

Just like any other MLM company out there, LuLaRoe targets women in the guise of “empowering” them.

This statement is not new when it comes to companies that are being marketed towards women.

Women who are often easy to target are those with low self-confidence, stay-at-home parents, and those who have difficulty making friends.

I do not recommend LuLaRoe because of this guise.

It is quite scummy to lure people into your women with the purpose of welcoming them into a sisterhood when all you want from them is to urge their friends and their family to buy ugly products.

Not only that, but LuLaRoe promises a long-term and stable paycheck.

You should not believe that since if that is true, LuLaRoe would not force you to recruit, but instead offer you regular training in sales and marketing.

Think about this. Just to climb ranks and enjoy benefits, you would have to sell a lot of products.

How would you be able to compete with other bigger clothing companies who have stores in malls and shopping centers?

This business is not sustainable.

Just think of the quota you would have to reach every month just to earn something bigger than regular jobs pay.

You will need to buy a lot of products yourself just to ascend the ranks, and that is ridiculous.

Also, most people who join LuLaRoe did not make money in their first year.

So, how many years do you think should you stay in the company to consider it “stable”?

LuLaRoe promises that you can be your own boss. If that is true, then why aren’t you making money?

Why are the founders and CEOs the ones making money?

That’s it for today’s review.

I do not recommend MLMs. but if you want to make money online, you should check out my #1 recommendation to making money online after reviewing 300+ MLM companies.

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