Should You Join The LuLaRoe Business Opportunity?

You’ve probably heard all the amazing things the LuLaRoe business opportunity can offer you. Maybe you’ve even read some reviews that sound like a glorified sales pitch.

Well, I’m not promoting this company.

This review is for people who want an unbiased look at the company, its products, and its business model. Most of all, this is for anyone wanting to make a more informed choice about whether or not to join the business opportunity.

LuLaRoe Review

LuLaRoe was founded by DeAnne Stidham and her husband Mark Stidham in 2012 and was incorporated in 2013. The name stands for Lucy, Lola, and Monroe which are DeAnne’s first few grandkids.

Interestingly, several of Stidham’s family members also run MLM companies in similar niches:

• Dot Dot Smile was founded by her daughter Nicole Thompson (children’s clothing)
• Her twin sister, Dianne Ingram, launched Honey & Lace (woman fashion)
• Buffy Bandley, her niece, started Agnes & Dora (woman fashion)

Seems like a family-oriented company, run by multilevel marketing enthusiasts.

Anyways, the company sells a range of womans and kids fashion pieces, and say they’re all about empowering people to create a better lifestyle.

So, how does this company stack up? Read on…

The LuLaRoe Product Line

In order to understand how good the business opportunity is, we first need to look at the products.

LuLaRoe is best known for its line of colorful leggings. But they also sell a range of skirts, dresses, tops and kids’ clothing. I’m no fashion guru (not by a long shot) but it seems their ‘niche’ is comfortable clothing.

The clothing is not sold in-store or online, because this is a direct selling/ MLM company. In order to purchase something, you need to book a ‘pop-up’.

This is where a LuLaRoe consultant comes out to your home, sets up their shop, and demonstrates the clothing line. If you like it, you can then buy it straight from the consultant.

You’ve probably heard of these ‘party plan’ MLM companies before. Think Avon and Tupperware.

Consultants also host ‘live events’ on social media sites like Facebook, which is another way you can place an order.

As for the price of these products, it depends on who you buy from. The company’s official price list shows the recommended retail price range is between $19 to $65.

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Update Feb 2018: The price list I originally linked to above was removed after publishing this review. So here’s the web archive link to the same price list so you can see where I got my facts from. If you have the link to the latest price list, please comment below.

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To me, this seems pretty reasonable. But again, I have no clue about fashion or prices for woman’s clothing! I think as long as you like the clothing and it’s a quality product, all good.

There does appear to have been some issues regarding the quality though. At least, according to a number of complaints online.

According to the BBB website:

this business has a pattern of complaints concerning receiving defective and/or poor quality products. Customers also allege getting double charged for ordered products.

To be fair, every company (even great ones) gets bad reviews. Especially large companies like this. So it pays not to judge too quickly from stuff like that. And a recent article on Forbes says LuLaRoe is taking steps to appease customers and make things right.

In any case, the company is thriving, so they must be doing something right.

They reached a billion dollars in sales in 2016 and boast almost 100k consultants which is not something most MLM companies can say.

The LuLaRoe Compensation Plan

The company website does not disclose its compensation plan or the cost of getting started, among other important documents. Which is pretty annoying, and a pet peeve of mine.

But I did my homework and sifted through a bunch of different resources to find the most accurate and up-to-date documents.

In this section, I’ll walk you through the business opportunity and compensation plan, to help you understand how this business works.

Becoming a LuLaRoe Cosultant

Becoming a consultant is free and can be done online by contacting a sponsor. The website provides a means for people to do this which is cool.

However, to actually start your business, you MUST place an initial order. Sometime after applying, you will first receive a phone call from the company who will take you through the initial order process.

There are several startup packages to choose from:

As you can see, the cost of these packages ranges from $4,959 to $8,995.55.

Also, from what I’ve seen (and using some common sense), budgeting an addittional $500 for assorted business costs is probably worth factoring in too.

As far as MLM companies go, this is quite a high startup cost. There’s no getting around this. On the other hand, if you compare this to starting a typical franchise, it’s cheap. And this is not a fee, it’s inventory, which you can sell for a 35-50% markup.

Getting Commission Qualified

Every consultant can sell products each month without having to qualify each month. However, if you want to take full advantage of the compensation plan, you’ll need to meet certain requirements.

I’ll explain what each rank is about in detail shortly. But to give you an idea, you are required to sell anywhere from 75-250 ‘pieces’ per month as a consultant.

The official price list shows the ‘price per piece’ ranging from $8.50 to $31. It’s up to you what you sell, but these are the two price extremes.

This makes the cost of staying ‘commission qualified’ range anywhere from $637.50 to $7,750 per month.

Exactly how much this will be, depends on your rank and the inventory you stock your business with. In any case, that’s certainly a high cost compared to many network marketing companies I’ve reviewed.

On the plus side, this cost can be significantly reduced if your direct referrals purchase enough product themselves.

Ways You Can Earn

There are four main ways you can earn money as a LuLaRoe consultant.

1) Direct Sales

This is the most basic and easy to understand way you can make money.

Purchase your initial inventory, reach out to people you know and run a ‘pop-up’ to sell your products. When you’re running low, it’s time to re-stock. When you’re done selling to people you know, you need to reach out to the people they know. Or you can learn how to generate leads online.

Given the difference in the wholesale price and the RRP, you stand to make between 35-50% or more depending on how you price your products.

The ‘Bless’ App helps consultants keep track of inventory, sales, customers, fulfilment and all that stuff. It looks like a pretty cool system for what it is.

I found a video that shows you how the Bless app works:

It appears as though you must be using this app, since this is how the company keeps track of sales and commissions.

2) Downline Commissions

This is where the compensation plan kicks up a gear. Instead of just selling fashion products, you can also earn money by introducing others into the business opportunity. AKA recruiting.

It’s also where most people get confused about how it all works. I’ll do my best to explain how this works, so stick with me.

Once you meet the requirements of becoming a ‘sponsor’ (explained below) you can earn from those in your downline. In this case, the company uses a ‘unilevel’ downline structure.

This places a consultant at the top, and anyone they directly recruit under them onto level 1. Anyone your referrals refer, are placed under them, on your level 2. Each person you directly refer lands on your level, and starts a new ‘leg’.

This process continues infinitely wide and deep, and it pays out anywhere from 1-5% of the retail sales volume taking place within your downline. This will make more sense once I explain the consultant ranks.

Note: Commissions are based on the wholesale price of the retail sales generated.

3) Bonus Pool

The company takes 2% of the Wholesale value of all retail sales in a given month, and divides it amongst the ‘leaders’ in the company.

A ‘Leader’ is defined as a Trainer, Coach or Mentor ranked consultant.

The number of points you earn depends on your rank and activity as a consultant. The value of each point is determined at the end of the month, according to the company sales and the number of points it’s going to pay into.

For example: The company made $10M in sales for the month, this is the wholesale value of those sales. It then worked out 2% of $10M, which is $200,000. Amongst all the trainer, coach and mentor affiliates there were 400 points in the ‘leadership pool’ for the month. This makes the point value $500. If you had 2 points, you’d make a cool $1,000 bonus.

Obviously, the actual numbers will vary but this shows you how it works.

4) 90 Day Fast Start Bonus

If a new Sponsor sells 175 pieces (with a minimum retail value of $5k or more) in each of their first 90 days, they receive 50 free pieces. And their sponsor gets a $500 bonus.

The Various Consultant Ranks

There are four ranks within the LuLaRoe compensation plan. Each rank has a different set of qualifiers and can earn you more income. How much you can earn from the income streams I just explained, depends on your rank and how many sales take place in your downline each month.

Sponsor

Requirements:

• Complete 10 pop-up boutiques
• Generate your first $10,000 in retail sales
• Recruit 1 ‘Independent Fashion Retailer’ (who makes their initial order)
• Sell at least 75 pieces* and generate a minimum of $2,250 in retail sales value each month

* Selling 75 pieces means purchasing $637.50 to $2,325 worth of inventory each month.

Compensation:

• Earn 5% of the wholesale value of any retails sales your direct referrals make

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Trainer

Requirements:

• Recruit 3 Retailers
• Have 10 people in your downline up to and including the next Trainer consultant in each leg
• Sell at least 175 pieces* and generate a minimum of $5,250 in retail sales value each month
• Have at least 1,750 pieces sold and a minimum of $52,500 in retail sales within your downline each month

* Selling 175 pieces means purchasing $1,487.50 to $5,425 worth of inventory each month. This is reduced to 100 pieces if 3 of your direct Retailers each sell 175 pieces in a given month. See comp plan for more details.

Compensation:

• 5% commissions on retails sales your direct referrals make
• 3% commissions on retails sales of your level 2 referrals
• 1% commissions on retail sales of the first leader in your downline
• 1 point in the leadership pool for you, and 1 point for each of the first leaders in your downline

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Coach

Requirements:

• Recruit 3 Retailers
• Have 10 people in your downline up to and including the next Trainer consultant in each leg
• Have 3 Leaders in 3 separate legs
• Sell at least 250 pieces* and generate a minimum of $7,500 in retail sales value each month
• Have at least 1,750 pieces sold and a minimum of $52,500 in retail sales within your downline each month

* Selling 250 pieces means purchasing $2,215 to $7,750 worth of inventory each month. This is reduced to 100 pieces if 3 of your direct Retailers each sell 175 pieces in a given month. See comp plan for more details.

Compensation:

• Same as Trainer plus;
• 1% commissions on retail sales of the second level leaders in your downline
• An addittional 1 point in the leadership pool for yourself (2 points total)
• Each second level Leader is worth an extra 2 points in the leadership pool

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Mentor

Requirements:

• Meet the requirements of a Coach plus;
• Have 3 Coach ranked consultants in 3 separate legs
• Have 6 Leaders in 6 separate legs or more in total

Compensation:

• Same as Coach plus;
• An addittional 1% on retails sales made by 3rd level Leaders

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All ranks require consultants to be selling their inventory at an average of $30 per piece to qualify for downline commissions.

Can You Really Make Money Selling LuLaRoe?

The answer to this question depends on a number of factors. Not the least of which is your personal effort. But many people appear to be concerned about the LuLaRoe income disclosure so I wanted to discuss this real quick.

According to this document, half of ALL consultants made less than $526 in 2016. The average income for the same year was under $2,100.

Those aren’t very flattering numbers.

However, regardless of the business itself or the business model, not everyone makes a substantial income. This is just how things go. It may indicate an issue, but it may not either.

There are LuLaRoe consultants who DO make a fortune, yes. But they eat, sleep and breathe the business for the first few years at least, and they’re also doing a lot of recruiting.

If you’re going to join a business like this, make it count. Know that it will require a substantial amount of effort if you want the rewards.

Conclusion

All things considered, I’d say this is a legitimate network marketing company.

On the plus side, they have strong retail sales requirements in place. You can’t earn commissions from recruiting if you’re not making genuine retail sales.

This is super important for an MLM company, and it’s what separates the pyramid schemes from the legit companies.

They also offer genuine products and a genuine business system for consultants.

The drawback is, the costs are quite high to start this business and qualify for downline commissions. At least, in comparison to many other network marketing companies I’ve reviewed.

One simple solution would be allowing consultants to sell from a replicated store.

This way, rather than having to stock so much product, you could buy some samples and let the orders come straight from the company to the consumer. You just earn the commission.

This would significantly reduce the burden on consultants.

In any case, LuLaRoe is not a scam. How much money you can make, and whether or not it’s worth it for you, is a question only you can answer though.

Hopefully, this review makes your decision a little easier.