Is LuLaRoe a Pyramid Scheme

Is LuLaRoe a Pyramid Scheme? It’s Not, But Take Caution!

Being able to earn money from the comfort of your own home seems like a great and convenient idea. That is why a lot of companies are now offering job opportunities that could be done from home.

There are some companies that offer to double or triple your cash if you invest in them. These are called pyramid schemes. Pyramid schemes are illegal.

One of the companies that offer these work-from-home opportunities is LuLaRoe. Is LuLaRoe a Pyramid Scheme? Let's find out.

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What is LuLaRoe?


LuLaRoe is a multi-level marketing company established by Deanne Brady and her husband Mark Stidham in 2012.

The company's name was derived from the names of Brady's granddaughters; Lucy, Lola, and Monroe. LuLaRoe sells women's clothing. The selection includes:

  • dresses
  • leggings
  • skirts
  • tops
  • jackets
  • denim products

The company is currently based in Corona, California, United States.


How to become a LuLaRoe consultant


LuLaRoe offers different tools and resources to help their members in their business. These are:

  • Education resources. These resources can help you get started and grow.
  • Business support. This include customer service and systems support.
  • Trainings. You can get exclusive trainings to help you market LuLaRoe.
  • Point of sale. Sell your products through LulaRoe's very own online POS system.
  • Card readers. This can help your process payments both in-person and online.
  • Marketing resources. These are materials designed to help you promote your products.
  • Leadership support. These leadership trainings will help you support your team.
  • Events. LuLaRoe organizes events that could help you meet members of the LuLaRoe community.
  • Sales incentives. These programs give you bonuses for selling LuLaRoe products.
  • Reports & analytics. These are the numerical data you need to understand your business better.
  • 5% discount. This is rewarded for every wholesale order you place.

Joining LuLaRoe can be done through these simple steps.

  • If you have a Sponsor ID or Link, you may fill up this form. You can obtain a Sponsor ID or Link from a LuLaRoe Fashion Retailer. You can look for a retailer in your area here.
  • If you do not have a Sponsor ID or Link, you may fill up this form.
  1. Wait for your confirmation.
  2. Upon receipt of your enrollment confirmation, place your initial order.
  3. Pay for the cost of your initial order ($499). Reach out to your sponsor to choose the styles, sizes, and quantities of your initial order.
  4. Congratulations! Just wait for your shipment and you're good to go.

LuLaRoe Enrollment Kits


LuLaRoe has no specific enrollment kits, but your initial order costs $499. This will consist of 65 pieces. Ask help from your sponsor in choosing what styles, sizes, and quantities you would like.

However, you cannot pick what prints you would receive. This makes LuLaRoe unique. Since everyone carries different styles, sizes, and prints, the chances for consultants to have the same inventory is extremely low.



What are LuLaRoe consultant levels?


There are 6 total rankings in LuLaRoe. Each rank requires members to reach a certain sales quota on a monthly basis.

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

LuLaRoe Compensation Plan


LuLaRoe's compensation plan can be accessed and viewed through this link.

There are two ways to make money on LuLaRoe.

  1. Selling products. This process is pretty straightforward.
  2. Recruiting members to your team. Being in a team grants you different benefits. You can earn commissions from the sales of your members and from their direct purchases to you.

I found a YouTube video that can help you understand the compensation plan better. You can watch it below.


LuLaRoe Pros and Cons


PROS

  • Inventory is unique for each consultant
  • 100% or more income from every piece sold
  • Each consultant is provided a website where they can sell thie products online

CONS

  • Some prints are very hard to sell
  • Retail price for customers are quite expensive
  • Poor quality control of products

Do LuLaRoe consultants make money?


​​​​According to LuLaRoe's 2016 Income Disclosure Statement, 72.63% of Retailers did not earn from LuLaRoe.

However, those in the Sponsor rank, which consists of 27.33% of all US members, earned an average of $6,781.84 from LuLaRoe.

This is quite sad as this just emphasizes that Sponsors focus more on recruiting members than actually training their members to sell LuLaRoe products. $7k earnings is a huge difference compared to $0 earnings.

I believe that there are better ways to make money online than joining MLM companies such as LuLaRoe or Young Living. This document alone shows us that when leaders do not properly train their team, they end up losing money.

This also goes to show that the leaders seem to care more about their members ordering inventory from them, but have no care whether their members can sell them or not. This is always the fatal flaw of these MLMs - they make it seem so easy to sell their products, but reality is nothing like that.

This does not mean that all team leaders are like this, though. As long as you find a team that truly cares for each other, you can look forward to your success in LuLaRoe.



LuLaRoe lawsuits


LuLaRoe has its fair share of lawsuits and controversies.

In 2017, customers filed a class-action lawsuit against LuLaRoe for failing to calculate sales tax rates from interstate sales. These complaints also included statements about the poor quality of goods that the customers received.

In 2019, LuLaRoe's clothing supplier, Providence Industries, demanded seizure of $34 million worth of assets from the company. They alleged that the company had not paid their bills in months.


Is LuLaRoe legit?


Yes, LuLaRoe is a legit company that has been in business for many years now.

However, MLMs get quite a bad reputation for the following reasons:

  • Team leaders focus more on pushing their members on recruiting new people than actually training them to do sales
  • Members, on the other hand, have no proper sales training from their leader
  • Members find it difficult to reach out to their target market, which affects their sales

A great team makes all the difference when it comes to MLMs. A team that helps each other do better can help an aspiring entrepreneur find success in this venture.


Is LuLaRoe a Pyramid Scheme?


First of all, let's look at what a Pyramid Scheme is:


"A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products." Wikipedia

how-a-pyramid-scheme-works

As LuLaRoe consultants make money both by recruiting other team members AND by selling products to customers, it is safe to say that LuLaRoe is not a Pyramid Scheme!



How to succeed with LuLaRoe and any other online business


MLMs are often mistaken as pyramid schemes because only a few of those who entered this venture came out successful.

This is mostly because of the team leaders who wants to recruit members as a way to earn easy money. Those members, however, receive little to no guidance from them, and fail as a result. This discourages them from trying out any more opportunities like this.

Here is the thing... Joining an MLM is quite challenging if you do not know how to market your products properly. Your family and friends are not your target market. They are out there, waiting for you to make first contact.

You need to find a way to reach those people who are genuinely interested in buying the products you offer.

There are two popular ways to do this:

  1. Set up paid adverts that target a specific audience within your niche
  2. Find a way to generate free organic traffic that can be turned into sales

The first option is very expensive and if you are just starting out, then I recommend you scrap that for now.

The second one is completely doable and inexpensive, in fact, you can even get the right tools and information for FREE.

In my FREE 7-day Make Money Online Course, I teach a number of things that can help you succeed with LuLaRoe and any other similar businesses.

By the end of the course, you will have the following knowledge:

  • How to find your purpose and combine it with your goals for the ultimate winning mindset
  • How to choose your niche or better leverage your existing one
  • How to build a website in just a few clicks and have your own branding
  • How to write content that can attract thousands of visitors who ACTUALLY want to buy your products

and more!

Grab my FREE course by clicking on the red button below 🙂


I hope you enjoyed reading my "Is LuLaRoe a Pyramid Scheme?" review!

Feel free to let me know your thoughts by leaving a comment below 🙂