LuLaRoe Review: Is It An MLM Scam in Sheep’s Clothing?
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We all know there are a ton of ways to make money online. But running an online business can be a lonely affair at times. If you like to socialize a lot, there are many business opportunities out there that will give you the chance to do just that. Some mlm companies like LuLaRoe are set up to help you make money through hosting parties in your home or in the homes of your family and friends. But are these home parties really worth your time and investment? Let's take a closer look.
What is LuLaRoe?
LuLaRoe.com is a multilevel marketing company that sells fashion clothing for women, men, and children. The company was founded in 2012 by DeAnne Stidham. Its corporate headquarters are located in Corona, California.
What Products Does LuLaRoe Offer?
The company is best known for its comfortable fashion leggings. But LuLaRoe has expanded and also offers dresses, skirts, and t-shirts in a wide variety of colors and patterns. Available sizes range from XXS to 3XL. Suggested retail prices generally range from $18-$65.
LuLaRoe Compensation Plan
Independent consultants also known as LuLaRoe Fashion Retailers typically sell LulaRoe clothing through Pop-Up Boutiques. These are essentially home parties that take place in a customer's home. According to the company's compensation plan, consultants are able to earn between 35%-50% of gross sales in commissions. To stay active as a consultant, you must sell 33 clothing pieces each month to receive your commission.
You can also earn money by recruiting others into the business opportunity. As a sponsor, you can earn a 5% override bonus from the personal volume of recruited consultants. However, you must purchase at least 175 clothing pieces each month to get this bonus. You can earn a 3% bonus on following generations of consultants recruited into your downline. Also available is a Leadership Bonus Pool. However, fashion home parties don't appeal to everyone. If this opportunity is less than thrilling for you, I'd invite you to check out my Top Work At Home Recommendation instead.
How to Become a LuLaRoe Consultant
To become a fashion retailer consultant, you must find a local fashion retailer sponsor and fill out an Independent Consultant Program Application and Agreement. You can find other retailers by visiting the company's website. You will also have to place an initial order consisting of 275-350 clothing pieces. 80 of the pieces will be leggings and the rest will be a combination of skirts, dresses, and tops. The cost for this initial order highly depends on what items you have selected.
What We Like
6-Month Warranty: This limited warranty covers any defects in workmanship for six months from the date the item is purchased. You will need to return the item along with the original receipt to the consultant you purchased from. The consultant will then handle the rest to exchange the item for you. There is no cost for shipping and handling on the part of the customer for returning the item.
Happiness Policy: If you are unhappy with your purchase for any reason, you can receive a full refund, credit, or exchange within the first 30 days of purchase.The Happiness Policy also extends to a full credit or exchange within 90 days if you are not satisfied.
So before you get to excited about this opportunity, we have to keep it real with you. There are definitely some complaints down below that may give you pause. It's not to say this company is a scam. But you need to know the good and bad. So here it is.
Don't Quit Your Day Job: According to the company's 2016 Income Disclosure Statement, 72.63% of all LuLaRoe Retailers didn't make anything in an entire year. Those who were eligible to receive commissions in the United States only earned an annual average of $2118.54. You must sell at least 33 clothing pieces a month to be considered active enough to receive commissions. The numbers suggest that this business opportunity isn't a great one and you may be better off with my Top Work At Home Recommendation instead.
Hole-y Clothing: There are numerous complaints from customers recently regarding the material in the leggings ripping, tearing, and falling apart within hours of wear.
Poor Business Rating: At the time of this review, the company has an F rating with the Better Business Bureau. Much of this rating has to do with the large volume of complaints with its defective clothing. Another big issue has to do with complaints with the company charging customers the wrong state sales tax.
Expensive Business Costs: The company does not list prices for the initial order when you become a consultant on its website. However, others online say that this order costs around $5,000-$7,000. You also need to purchase 175 clothing pieces a month to qualify for commissions. Wholesale prices range from $8.50-$31. Doing the math, it's difficult to see how you can make any real money with this business opportunity.
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Inventory Overload: You don't get to select the specific styles or sizes of clothing items you get to sell each month. This means that you can wind up over time with tons of clothes customers don't want and you may not be able to return them to get your money back.
So is LuLaRoe Legit or A Big Scam?
LuLaRoe is a legitimate fashion multilevel marketing company. However it's not necessarily one I would recommend or join. The company sells a wide range of affordably priced clothing for men, women, and kids. If you don't like what you bought you can return or exchange your purchases through the company's Happiness Policy and limited warranty. Consultants are able to earn up to 50% in commissions through home parties known as Pop-Up Boutiques. However, the cost to join is incredibly high compared to other similar companies. You must also reinvest a good chunk of your earnings back into the business each month to purchase a large number of clothing items.
The company's business opportunity appears to be one to avoid at the moment because of the large number of complaints with its leggings falling apart easily. Plus, the expensive startup costs and heavy reinvestment with clothing purchases each month suggests you'll have a hard time making any serious cash. If you are looking for multiple streams of income, there are a ton of better choices than LuLaRoe. I highly recommend you check out my Top Work At Home Recommendation and my Work At Home Courses for other possible options. But that's up to you.
If you have any experiences with this company, I'd love to hear what you have to say. Please leave your comments down below. And if you enjoyed this review, please free to check out my other work at home reviews as well.
Until next time,
Eddy with a y