LuLaRoe MLM Review

Hey there sea changers, and welcome back to my series of MLM reviews. Today we are going to stitch up a look into the clothing/fashion industry with my LuLaRoe MLM Review. The online sale of clothing is an extremely lucrative one with many making a good living selling new and used clothing via online stores and affiliate marketing. Added to this obviously is the ever growing array of clothing based multi level marketing programs that appear to be popping up more and more. So, what is the LuLaRoe MLM all about? Let's check it out and see…

Lularoe MLM Review - Mission

What is MLM?

Multi-level marketing (MLM) programs are the traditional mainstay of the ‘party plan' world of products such as Tupperware, Mary Kay and Amway etc. and, of course within the beauty/cosmetics, supplements and essential oils markets. It is not as prevalent within the clothing industry but as MLMs have become more popular in recent times – mainly due to the fact that much of the sales and marketing is now being managed online – companies in other niches are starting to get in on the action.

The ‘multi level' aspects of MLM come from its hierarchical nature in which you make commissions based not only on those that you sell to, but also the sales of those whom you ‘sign' into membership arrangements as well.

In short, the process works as follows:

  1. You join the program, either via referral from another person (known as your up line) or directly through their website.
  2. You promote the products of the company via parties, workshops or online.
  3. As you make sales, you offer incentives to your customers to sign up as a member of the program (there are different names for this but they all mean the same thing).
  4. That new member is then placed ‘underneath' you in a hierarchical arrangement (known as your down line).
  5. You, and a number of levels of your up line, then gain extra commissions for everything they sell as well.
  6. If they manage to refer their customers into memberships, they also become a member of your down line allowing you to make up line commissions as well.

The number of levels of your up and down lines will vary depending on the program you have joined. Commission rates will also change as your down line grows or contracts and many will also offer other incentives such as total company sales percentages and/or access to membership prizes as your own business grows.

Who are LuLaRoe?

Lularoe MLM Review - Home

With a vision to help others succeed, LuLaRoe was founded in 2013 by DeAnne Stidham and is based in Corona, CA in the United States. The company promotes itself as a “community of social selling entrepreneurs, offering individuals the opportunity to achieve their dreams by connecting people to a product”.

What do they Sell?

LuLaRoe are a fashion based site that sells a complete range of apparel to suit all shapes, ages and seasons. Their product line is quite decent with ranges in the following categories:

  • Bottoms
  • Dresses
  • Denim
  • Layers
  • Leggings
  • Skirts
  • Tops

There is also a small number of tops and shorts for men as well.

Lularoe MLM Review - Stripe

Item costs appear to fall into the low to medium price range of around $20 to $100 per piece keeping it in line with MLM based competitors such as Matilda Jane and Cabi.

MLM Program outline

The LuLaRoe MLM program calls their members ‘Independent Fashion Retailers' (IFRs) who are part of what appears to be a fairly simple program with a basic retail and downline commission structure with a couple of extra bonus options thrown in for good measure. I was unable to locate their compensation plan on their website and whilst it didn't pop up cleanly on a web search, I was able to eventually locate a copy. From that, and some of the information found on the sites of other IFRs, I have been able to cobble together some base details as per below (happy for you to comment below if any of this is inaccurate):

Base Commission rate: 25 – 50% (the difference between wholesale purchase price and retail selling price)

Down line commission rates: 0.6 – 5% to four levels (level 1 down line for initial rank is 3%)

Minimum monthly spend to qualify for commissions

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Monthly sales thresholds are tiered dependent upon rank but start at 65 pieces with a minimum of $1950 sales total (average price of at least $30) per month.

Payment terms: Monthly.

Application required?: Yes, application form on website.

Purchase requirements to join: Yes

New IFRs are required to purchase an initial inventory in order to become active. The initial outlay for this is $499 and includes 65 pieces of clothing.

Ongoing collection purchases are required to be used for display and try-ons during in-home ‘pop up boutiques'. I have seen varying cost requirements in my research however it appears that IFRs will need to outlay at least $2500 – $5000 to be fully stocked for their pop ups (plus the cost of demonstration items such as racks, coat hangers etc.). Selling is also allowable via Social Media and personalised online boutiques.

Marketing materials provided: Personalised online POS system, marketing resources, training and support.

As with the most MLM programs, downline commissions are determined by the total personal volume (PV) generated by the IFR and their down line within a calendar month. Most MLM programs manage it this way in that commissions are paid on the points assigned to a product rather than the entire sales total. From what I can tell, LuLaRoe calculates its PV points on the retail dollar amount of the sale meaning that if a product sells for $20 to purchase then commissions are calculated on the full $20 (not including tax and shipping).

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How can I get paid?

LuLaRoe offers IFRs an interesting mixture of ‘old and new' MLM sales processes with its main promoted avenue being via the traditional in-home pop up boutiques. This process is really a throw back to the good old party plan days in that an IFR needs to convince someone to hold a showing and invite their friends. Then there is the more modern option of running shows via avenues such as FaceBook live and their online boutique.

The compensation plan is not as easy to comprehend as some but from what I can work out (again, happy to be corrected below), there are 7 payment options for the LuLaRoe MLM program as follows:

1. Retail Sales Profits

Retail Sales Profits are the base profits earned by IFRs from their day to day sales options. There is no clear commission rate as such rather the profits are earned on the difference between the wholesale price that the IFR pays for the item (as part of their packs) and the retail prices that they end up selling the item for.

2. Sponsor Compensation

Sponsor Compensation is paid at a rate of 3% on the retail sales of all personally sponsored IFRs.

To qualify for Sponsor Compensation (and as a starting point for all further payments), IFRs must generate personal Retail Sales totalling 65 Pieces with a minimum total of $1,950 for the calendar month and an average price per piece of at least $30.

3. Downline Commissions

In addition to the Sponsor Compensation above, IFRs at rank of Trainer and above qualify for 1.8% of all sales generated by those within their down line that they have not personally sponsored (i.e. those sponsored by members of their down line).

Below is an example of this process for the Trainer rank:

Lularoe - Downline commissions

4. Graduated Leader Commissions

The Graduated Leader Commission is a ‘generation' type commission common to many MLM programs designed to encourage sponsors to nurture their down line to higher ranks. In this case, sponsoring IFRs earn an extra 0.6% of the total down line sales of any Graduated Leader (Trainer of above ) within their team.

5. Sponsor Tier Ranks

As IFRs progress through the ranks within the LuLaRoe compensation plan, they can qualify for once off payments for each tier that they can reach. There are three tiers per rank based on generated sales and down line numbers with an example for the Sponsor rank as follows:

Lularoe MLM Review - Sponsor tier bonus

Payment amounts and generation thresholds rise at each rank level.

6. Leadership Pool

The Leadership Pool is another common MLM bonus option designed to reward those who reach the higher ranks via percentages of total company sales. The leadership pool is 1.2% of the value of company wide retail sales and paid out of a points systems – i.e each point is worth a percentage of the total Leadership pool. Points are designated as follows:

Lularoe MLM Review - Leadership pool

7. 90-Day Fast Start Bonus

The 90-Day Fast Start Bonus, designed to encourage newly signed IFRs to hit the ground running with sales targets within their first three months, is paid as follows:

Lularoe MLM Review - 90 day FSB

To qualify, new members need to sell at least 175 pieces a month with a minimum of $5,250 in Retail Sales for each of their first 3 months in business and an average price per piece of at least $30.

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Ranking structure

LuLaRoe, as with most MLM programs, uses ranking structures on which to base commission payments and other bonuses upon. Rankings for the LuLaRoe MLM program are as follows:

Lularoe MLM Review - Sponsor
Lularoe MLM Review - Trainer
Lularoe MLM Review - Coach
Lularoe MLM Review - Mentor
Lularoe MLM Review - Ambassador

Again, as is common with almost all MLM programs, rank progression is determined by both the number of members within down line legs, and the total sales made by those legs per month. Ranks can rise and fall based on the ability (or dis-ability) to reach the required member and sales targets.

What is good about it?

So, after a good look around the site and looking at all the options I could find, I do like the following:

  • Commission rates for retails sales are good.
  • Good variety of product at a decent price.
  • Women's fashion is a lucrative market.

What is no so good about it?

There are also some things to be aware of including:

  • There are not the full array of bonuses that are evident in other programs within this niche.
  • Joining and ongoing costs are extremely high.
  • Downline commission rates are quite low.
  • Company is currently fighting a number of lawsuits.

How much can you make?

I was unable to locate projected income figures on the LuLaRoe website however as with most MLM programs, the percentage of members making the upper rank levels – and hence earning a living – is usually very low. I also suggest a little more research here for ex member feedback too – I have not included it here as it cannot be verified but again, do your research.

My final thoughts

Can you make money with LuLaRoe? Look, MLM is not an easy platform to make money in and there is not much here to put this program above the many others I have seen. To be honest, unless you are an absolute fashion nut with a large customer list at your disposal and willing to run a lot of old-fashioned MLM party plan style fitting sessions, I would carefully consider this one before entry.

The main red flag for me is the ongoing costs of constantly having to keep your demonstration stock up and although there is the option to make sales online, feedback from current and old members state that it will take around 15 – 20 demonstrations to make your money back from the kit purchases before any profit is made. This one does have a few more bonus payment options than others within the niche however base down line commissions rates are quite low.

Lularoe MLM Review - Stripe 2

Reviews

Again I have to be honest, a simple search for “LuLaRoe complaints” reveals a long list of articles outlining the company's fall from grace in recent times due to everything from ongoing complaints about flimsy leggings that tear easily to the Washington Attorney General's accusation of them being nothing more than a pyramid scheme (although that is leveled at most MLM company's these days).

There are also posts outlining lawsuit action from suppliers in regards to unpaid bills (and some alleged unsavory comments from the CEO about refusing to pay them – although they have counter sued as well) and class actions in regards to substandard products. I have not seen the formal documentation for this but again, would strongly recommend doing this research as part of your due diligence.

Conclusion

So there you have it, my honest review and appraisal of the LuLaRoe MLM program. I hope it has been of assistance but as usual, if you have any questions or experience with this program please do not hesitate to reach out by commenting below – especially if any of my information is inaccurate.

Are there any other programs you have been looking at but want to know more about? If so, please comment below and I will do my best to get some details for you.

Do you want further assistance with any of the above or need help to build your own fashion based website?

Are you looking for a comprehensive training platform that can give you step by step training, 24/7 support, tools to develop and host your very own website, ongoing assistance with SEO and social media and access to some of the best affiliate marketing minds on the planet, then click on the following link to read more about Wealthy Affiliate.

Until next time

Have fun

Paul

Note: If you make a purchase from this page, there is a very good chance that I make a commission from it – these commissions do not increase your sale price.

LuLaRoe MLM Program

$499+++++
2.6

Clarity of Information

4.0/10

Commission Structure

4.0/10

Cost to Enter

1.0/10

Ongoing Cost Requirements

1.0/10

Bonus structure

3.0/10

Pros

  • Commission rates for retails sales are good.
  • Good variety of product at a decent price.
  • Women's fashion is a lucrative market.

Cons

  • There are not the full array of bonuses that are evident in other programs within this niche.
  • Joining and ongoing costs are extremely high.
  • Downline commission rates are quite low.
  • Company is currently fighting a number of lawsuits.

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Note: This is an unbiased review as I am not a member of the any of the programs listed here (and hence make no commissions from any of the links included within this post). The reason for this is that I prefer to write these posts based on what a newbie would be seeing if they were interested in joining – that way I feel I can make a better judgment on what it is that these companies are offering within their programs.

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