Everyone needs clothes, so what could be a better way to make someone feel special while also making money for yourself by selling them garments that you have personally made? There’s a firm called LuLaRoe MLM that you might have heard of. They target a very broad clientele with their direct marketing efforts and sell a wide array of clothing items. In order to determine whether or not you have a chance of being successful with the LuLaRoe multi-level marketing opportunity, we’ll analyze both the clothing and the way the business opportunity is structured.
What does “LulaRoe MLM” stand for?
DeAnne and Mark Stidham are responsible for the launch of the multi-level marketing company known as LuLaRoe in the year 2013. The name is a portmanteau created by combining the names of their three granddaughters. Maxi skirts were their signature item in the market. Dresses, tops, children’s clothing, menswear, and more types of clothing will eventually be added to the collection. In 2014, leggings became their primary product offering. In the beginning, the distributors, who were also known as Fashion Consultants, were situated in the central and western regions of the United States. LuLaRoe is now sold in a variety of locations around the United States as well as in other nations.
With reported sales of close to one billion dollars in 2016, it was considered to be one of the greatest multi-level marketing companies in the industry. They had more than 80,000 Fashion Consultants working for them to sell clothing. Unfortuitously, legal action taken against the corporation would shine a light on the numerous deficiencies within it.
Are LuLaRoe’s Products Really Worth What They Cost?
Leggings ultimately emerged as the company’s hallmark product. They are available in a wide variety of sizes and patterns.
These garments are not available for purchase on the internet. You are welcome to browse the many garments that are for sale, but in order to make a purchase, you are required to have a connection with a Fashion Consultant in your area or to locate them through social media such as pages on Facebook. A significant number of Fashion Consultants sell the garments on online marketplaces such as eBay and Poshmark.
The leggings in the photograph were discovered on the website Poshmark, and it is quite likely that a Fashion Consultant was the one who advertised them. In order to give you an idea of the prices, I looked for a product that was within a reasonable price range. These are actually more affordable than comparable options. They are only available in two sizes, which are One Size and Tall and Curvy, and cost an average of $25 a pair.
However, pay particular attention to the cost of shipping. In point of fact, it’s a greater amount than the cost of the leggings. A possible explanation for this is that LuLaRoe covers the cost of shipping for Fashion Consultants, although I’m not entirely sure how to explain it. There would almost definitely be some sort of freight fee, but I think that this one is excessive.
There is also a concern over the level of quality here. Even the more costly leggings that cost $25 were said to have fallen apart after only one use, which was one of the things that led to customer complaints about the product.
MyDyer, a retail company situated in Los Angeles, oversees orders for numerous other merchants, including LuLaRoe, which places its clothing purchases through the company. The orders are subsequently fulfilled by manufacturing facilities located in Asia and Central America.
Customers appear to prefer the garments since they are brightly colored, come in a range of different designs, and are made of a few different fabrics. However, the quality might not meet the expectations of the buyers.
LuLaRoe’s Multi-Level Marketing Opportunity
Let’s have a look at the mechanics behind this, shall we? To begin, you will need to register by going via a sponsor. You are going to be required to purchase an onboarding package. At this point, you will choose the categories of clothing that you intend to offer, as well as the specific lines within those categories. For instance, you have the option of selling children’s clothing or selecting a certain named collection of women’s clothing, such as the Cassie group. You might even choose to sell both options. You then proceed to purchase your onboarding kit and begin selling after doing so.
If I Want to Join LuLaRoe, How Much Does It Cost?
According to the information provided on the website, the preliminary purchase of inventory will cost you a total of $499. The bundle will contain a total of 65 garments, each of which is crafted in a distinctive manner. In order to maintain your eligibility, you are required to make purchases on a monthly basis, regardless of whether or not you have sold any clothing.
This may give the impression of being expensive, which it is. Take into consideration, however, that there is a new pricing structure. In the past, the Lindsay Package was the most affordable option for onboarding, despite the fact that it only featured 45 components and cost $945.
Is It Possible to Earn Money With LuLaRoe?
Let’s take a look at the myriad of methods in which you might monetize your LuLaRoe clothing collection. Each Fashion Consultant will have their own inventory, which will be comprised of items that are unique to what they enjoy wearing and what they believe may be successfully sold. You might begin by throwing a party at which your guests will be able to view the apparel and possibly even try some of it on. You can open an online pop-up shop by creating a Facebook page on which you can publish images of the clothing you sell or by holding live events at which you can display the items you offer for sale. Personal styling sessions with an attendant could potentially attract customers. You make between 35 and 50 percent of gross sales.
The true way to make money is through the process of recruitment. The more people you are able to sign up as new members, the more money you will make. In this instance, an additional 5% will be added. You can advance up the ladder based on the number of recruits that are currently in your team as well.
Pros:
Free Shipping on Ground Level Items
LuLaRoe will cover the cost of any and all shipping fees associated with the products you purchase from them. After receiving payment for an item, it is processed and mailed out within three business days. One less expense for you.
A Abundance of Available Resources
LuLaRoe has an abundance of resources at its disposal, ensuring that there is no space for error in their business model. There are many different tools available to assist you in achieving your goals, some of which include education, business support, training, marketing, and analytics.
Numerous occasions for sales activity
It is possible to make money off of the clothes in a variety of different ways. There are many different ways to sell clothes, including creating a Facebook page, selling through online marketplaces like eBay and Poshmark, doing one-on-one sales, hosting workplace parties, house parties, and birthday parties.
Cons:
Accusations of Operating a Pyramid Scheme
In 2017, a lawsuit was brought against LuLaRoe in the state of Washington, alleging that the company was running a pyramid scheme. During that time period, higher LuLaRoe leadership bonus schemes permitted consultants to get bonuses depending on the number of recruits they brought in. This is an example of a standard pyramid scheme approach. It was recommended to the consultants that they urge their recruits to place large orders for clothing, as this would increase the bonuses for the consultants’ uplines.
Rating of BBB
At this time, LuLaRoe is listed on the website of the Better Business Bureau (BBB) with a rating of B- and a customer rating of 2 stars. This is actually a significant improvement over their prior grade, which was an F. The company received a F grade in February of 2019, which was a direct result of the hundreds of complaints that were submitted against them and the company’s failure to respond to those issues. At this time, the Better Business Bureau has included government action warnings on the firm information page that they maintain. One of the 175 complaints that have been lodged with the BBB is presented here.
Bankruptcy Petitions Submitted by Fashion Consultants
Since 2016, at least 115 independent fashion consultants who sell LuLaRoe products have been forced to declare bankruptcy. This has been contested by LuLaRoe, which asserts that at least one consultant was given a complete refund. Sadly, there is no evidence in the statistics to support that assumption.
Misleading Return Policy
The fact that the Return Policy was altered was one factor that discouraged a significant number of Consultants. In the past, a Consultant who wished to terminate their arrangement with the company could do so and receive a complete refund for any returned inventory. Instead, customers were only eligible for a partial refund, and LuLaRoe assessed a fee for returns.
Is There a Catch With LuLaRoe?
In light of everything that has transpired, I feel obligated to state that I believe this to be a fraudulent scheme. The fact that you need to come up with $499 just to get started indicates that you will need to work really hard in order to earn that money back. Therefore, it is possible that there will be some time before this option restores you to your previous state. It’s possible that having garments sold to you may make your consumers feel more appreciated; however, if those clothes are of poor quality and easily fall apart, you’ll find that you lose clients very quickly.
And let’s not overlook the pending legal action here, shall we? Customers have the opportunity to conduct a speedy search on a company thanks to the accessibility of the Internet, allowing them to examine the organization’s reliability and track record. Even if you are successful in acquiring new clients, it may be challenging to hold on to them. And you won’t have any responsibility for that. The quality of the products will determine the outcome of this situation.
A Few Parting Thoughts
I strongly advise that you avoid doing business with this company. There are a great number of things that are operating improperly here. It’s highly unlikely that the average person will have $499 lying around to spend on garments for their company.
