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There are a lot of questions surrounding becoming a LuLaRoe Consultant so I put together this FAQ so you can get some answers!
LuLaRoe has been in the news lately and not for good reasons, they are being sued for being a pyramid scheme by three past consultants Aki Berry, Cheryl Hayton and Tiffany Scheffer as representatives of a class action suit of all LuLaRoe consultants since 2013.
Is LuLaRoe a pyramid scheme or are these former consultants just complaining because they can’t make the business work for themselves?
In this post, I have the top frequently asked questions regarding becoming a LuLaRoe consultant with the answers for you.
By the end of this, I hope you will have a better understanding on whether or not this is a good work at home opportunity.
How To Become A LuLaRoe Consultant FAQ:
- What Is LuLaRoe?
- How Much Does It Cost To Become A LuLaRoe Consultant?
- Does LuLaRoe Really Work?
- How Is The Quality Of LuLaRoe Products?
- What Are LuLaRoe Consultants’ Top Complaints?
- Is LuLaRoe A Pyramid Scheme Or MLM?
- Is LuLaRoe A Scam?
- VIDEO: Better Work At Home Alternative To LuLaRoe?
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WHAT IS LULAROE?
Program Name: LuLaRoe
Owners: DeAnne Stidham & Mark Stidham
LuLaRoe is a multi-level marketing company that sells women’s clothing through direct sales from their distributors, also known as consultants or retailers.
Founded in 2012, it has already past the $2 billion mark in retail sales by their retailers back in October 2017 which has doubled from previous year with over 80,000 consultants already signed up.
The women’s clothing line include many pieces ranging from skirts, dresses, tops, tees, kimonos and, famously known for, super soft leggings.
Consultants of LuLaRoe can make money from selling the women’s clothing and also from recruiting other retailers under your team as well.
As a consultant you will be expected to run your own business with your own expenses to be incurred and paid for by yourself.
You will earn profits by buying their products at wholesale prices from LuLaRoe and then selling them to customers at a retail price which is suggested by the company.
You can sell your inventory by putting on “Pop Up” parties they call it where you host a LuLaRoe Party at your own home or someone else’s.
You can also sell online or even in an actual brick and mortar store, it’s all up to you how you sell your merchandise.
Under their Leadership Bonus Plan, if you recruit people to be consultants under you, you can earn 5% on all orders your direct recruits place and 3% of all orders who are indirect recruits (your direct recruits’ recruits, 2nd and 3rd generations) if you have ordered at least 175 pieces yourself every month.
These orders are based on the inventory you buy from LuLaRoe, not how much you or your team have sold.
The more you can sell and recruit, the more you earn.
HOW MUCH DOES IT COST TO BECOME A LULAROE CONSULTANT?
This LuLaRoe consultant business is not going to be cheap.
You will have to buy a start up kit where options range from about $4,925 to $9,000 (as reported by CBS News) right at the beginning.
By the way, this is a very high cost for the MLM industry and one of the most expensive programs I’ve seen myself.
You are also encouraged to always keep at least $20,000 of inventory around, yikes!
How about other costs than just buying the products?
There are many other costs and can include the following:
- Storing your inventory if you live in a small place.
- Hangers or display props needed for the Pop-Up parties.
- Flyers, business cards, Thank You cards, and promotional materials.
- Advertising dollars – online & offline.
- Shipping and packaging materials if selling online.
- Rent if you need more space.
- Website development and hosting costs.
- Social media branding efforts.
- General office supplies like agendas, bags, containers, etc
You may even have to travel if there’s some event LuLaRoe has that you want to attend.
Your costs can vary greatly and also depends on how extravagant your pop-up parties are.
DOES LULAROE REALLY WORK?
Well, like any other business, it will work if you put work effort into it and if the demand is there for the products being sold.
LuLaRoe offers a product line of women’s clothing that you can buy at wholesale price and sell it for retail price, so there is a definite model here to make money from.
You also have incentive to recruit others to earn money that way too so there are more than one way to make it work for you.
But I have to say it sounds very hard to be a LuLaRoe consultant from all the reports I’ve read because it doesn’t sound like people are selling much.
Not only the start up is expensive in the thousands, so you’re already $1000s in deep right from the get-go, but you are required to buy inventory every month whether you have sold your old inventory or not.
This is required I believe because the people who have recruits under them can make money on a monthly basis from commissions.
To make back on your initial investment, MompreneurAdvice.com reports that you need an average of about 20 pop-up parties. So, it’s possible to get it back in a month, if you do 1 a day, 5 times a week.
So does the LuLaRoe Consultant MLM opportunity work? Yes, if you work and hustle yourself off.
HOW IS THE QUALITY OF LULAROE PRODUCTS?
LuLaRoe products were known to be fun, vibrant in color, and very comfortable, thus their slogan, “where fashion meets comfort” but lately, there’s been different stories.
The quality of LuLaRoe products have been in the news lately for being poor and defective.
Leggings are getting holes in them within a month of wearing and their return/exchange policy is very slow.
The materials used are being ripped or tears easily and some items are sewn incorrectly all together.
It’s next to impossible to get these defective garments returned, furthermore, reps are reporting that the company will retaliate from these complaints by delaying or not sending them their orders (found on consumerist.com).
WHAT ARE LULAROE CONSULTANTS’ TOP COMPLAINTS?
From my research, there seems to be a lot of complaints about this company and LuLaRoe will not stand for it either.
It seems like whenever someone complains about something, they will be retaliated by LuLaRoe, which is unfortunate to see as more of their messes are spilling on the internet.
Some are even telling news outlets they want to remain anonymous so they don’t feel the backlash from LuLaRoe’s home office.
I will summarize the top consultant complaints I’ve found:
- Getting themselves into thousands of debt
- Being tricked about working part time but making full time money
- Having to buy inventory when they haven’t sold all their old inventory
- Can’t return or sell defect products
- Can’t choose the inventory you want to buy, everything is shipped to you as is
- The weekly webinars with the owners are not motivating and Mark Stidham uses language like this when calling out consultants that are quitting (racked.com):
“You cannot wrestle with the pig without getting a little mud on ya. Don’t wrestle with the pigs, ignore them.”
IS LULAROE A PYRAMID SCHEME OR MLM?
At the start of this post, I mentioned LuLaRoe is now being sued for being a pyramid scheme dated October 23, 2017.
The case has not be resolved as of this post of course so we shall see how the court will decide on this issue.
MLM and pyramid schemes are very similar and have many features/qualities in common so it’s easy to get them mixed up.
Here’s a video I found on YouTube that explains it well:
A MLM company usually has a product or service to sell to the general public and pyramid schemes concentrate on passing up money from one to another by recruiting others into the system with no real products or services to be sold to the general public.
So the main difference between a pyramid scheme and a MLM company is retail sales.
If you look at LuLaRoe’s structure, you will see that there is a definitely component of retail sales but we don’t know how much percentage of that make up the total sales for the company.
As of this post, it was reported on cbsnews.com that LuLaRoe’s distributors had already generated over $2 billion dollars in retail sales since Jan.
However, we don’t know what LuLaRoe’s totals sales are and how much of it is made up of orders from consultants themselves.
Another factor I see this leaning towards a pyramid scheme is the requirement of consultants needed to buy a minimum amount of inventory each month even though they have tons of inventory not sold.
They are encouraged to have $20,000 worth of inventory on hand which is quite a lot of inventory to have on hand if you’re selling via pop-up parties and online.
You will bet I will keep you updated on this case and I’d like to see myself how the court will decide on this issue.
IS LULAROE A SCAM?
As of this writing, I can’t say LuLaRoe is a scam but conclude that it is a legitimate MLM company seeing it from the outside.
However, as the court case continues and more information will be disclose in this case, we will find out if it is a pyramid scheme.
I think even without knowing the outcome of the court case, I really do not recommend this LuLaRoe Consultant program for you to make money from home because MLMs generally don’t have a high success rate since you are to sell pretty much door to door and recruit like crazy.
Most money is earned at the top anyway and the people on the bottom of the organization, the newer recruits, never do that well as they will eventually run out of people to recruit and will run out of places to sell using pop-up parties.
I also don’t like LuLaRoe’s, what seems like constant, pestering of “buy more sell more” tactic to keep consultants buying so the people up top can earn commissions from their orders.
This part seems very uneasy to me and I won’t be surprised if the courts decide that LuLaRoe is a pyramid scheme because of this.
LuLaRoe has other court cases still pending as well where they are being sued for their tax practices and stealing another artist’s designs.
With the other complaints about their defective products and a refusal to answer consumer complaints on BBB.org which resulted in a rating of “F” standing, LuLaRoe has much to grow before I would recommend this opportunity to anyone.
VIDEO: BETTER WORK AT HOME ALTERNATIVE TO LULAROE?
If you take a look at this video and see my explanation regarding using affiliate marketing instead of the MLM business model, you will see a clear winner.
You may be able to see other options and opportunities that will open up to you if you choose affiliate marketing instead:
Yes there are many other alternatives you can try that is way better for you, especially that cost.
Whew! I’m glad I’m not in thousands in debt, or any debt, for my online business!
Look, there are certainly many other things you can do that won’t cost you thousands of dollars.
You can do pet walking, baking, crafting, sporting, so many other things to start your own business with but you know what?
The best way to make money is online because you are not tied to a physical location. Every morning I can choose where I want to go work at or just stay at home.
I’m also not talking about a business that you’ll need to buy any inventory for.
You see, the business model I use, I just recommend other people’s products so I don’t have to make anything, buy anything, or sell anything.
You can see how this business model works right in my free guide as I’ve explained it all here:
The best part of this business is that you can get started for today for FREE and it’ll come with training, business tools, and support to help you.
You will be able to build your very own online business with the choice of your own topic. So if you liked fashion, you can do that. If you like cooking, you can do that instead.
You’ll be able to work with many companies, not just one like LuLaRoe, you can choose from a variety of companies to work with who also supports this business model that’s been around for years and proven to work.
You’ll be part of a community (not MLM at all) where everyone is pursuing their own goals but using the same business model and training. So you’ll learn along side other beginners to industry experts and will be able to ask questions if you’re ever stuck.
You won’t find another opportunity like this that is this unique yet offers you a FREE chance to build your own business without having to spend $1000’s from the get-go, or ever if you don’t want to.
This business model is way more far reaching and flexible than any MLM programs out there. You’ll be put on the path to success if you use the business model I use too!
If you have any questions or thoughts regarding whether LuLaRoe is a pyramid scheme or anything else, please do not hesitate to leave me a comment below. I always reply to my readers! 🙂
Let’s make money online!