Lularoe Review – Lularoe Clothing.
- 1 Lularoe Review – Lularoe Clothing.
- 1.1 How Does Lularoe Work?
- 1.2 Lularoe Consultant – is it worth it?
- 1.3 The Pros;
- 1.4 Cons.
- 1.5 LuLaRoe Compensation Plan.
- 1.6 Training And Marketing Material.
- 1.7 LuLaRoe Products.
- 1.8 LuLaRoe Leggings Review.
- 1.9 Unicorn Leggings Lularoe
- 1.10 Terms and Conditions.
- 1.11 LuLaRoe BBB Complaints.
- 1.12 Lularoe Better Business Bureau Update.
- 1.13 Is LuLaRoe a Scam or Pyramid Scheme.
In this review of Lularoe clothing l am going to look at what it is all about, the opportunity, compensation plan and point out a few flaws with the business model pursued.
The company was formed in 2003, by a DeAnne Stidham. It sells mainly ladies and children clothing through a network of consultants. Lularoe consultants sell their products on social websites such as Instagram, Facebook groups and also in pop-up boutiques.
It boasts of Patrick Winget, a fashion designer who is well established and has designed clothes for celebrities.
This is one of the most difficult review that l have ever written. Bashing a company that empowers women will leave you with a guilt conscience. The review as you will see, is a bit watered down but still informative on what to expect when you join the company.
How Does Lularoe Work?
The company is a Multi-level company which uses mostly network marketing to get customers. If you want to join the company as a distributor and earn commissions, you need a sponsor or referrer. Be diligent when assessing which team or sponsor to join because you need someone who can train you on how to get those sales. Establish contact with your sponsor send questions to establish their commitment to help you.
You are encouraged to go trough a 10 step process that is laid down (see compensation plan in this review for details). In summary, you will need to read about the company, listen to a recorded call on how to become a distributor and create a new gmail account. Once you have identified the ‘team’ that you want to join, you get the unique identification link and use it to get access to your account creation portal.
Once the you have created your account, you complete the Independent Consultant Agreement and create your order of products between 275-350 pieces from various categories. Send in your bank details too, in the required form. You scan and send in the information using the email you created above. Once the company confirms receipt of your documents, you join the LuLaRoe queue.
When your turn comes, you will receive a call confirming registration and your first order. After payment, you wait for your batch of clothes while you ‘celebrate’ .. lol. Once you receive your clothes, the selling commences.
Lularoe Consultant – is it worth it?
- Clothes come in various patterns and colors which provides more options to customers.
- The clothes are stylish and some are reasonably priced.
- There are new styles with every batch.
- It provides an opportunity for women to work in the comfort of their homes.
- Profit margins of between 35-60% are fairly high as compared to say affiliate commissions by Amazon (8-12%).
- You get bonus items if you purchase 300 items and above which can increase your profits.
- It seems like you are allowed to market your products using your own website, which is great.
- Clothes are mostly made in America which can give consultants an edge over competitors who outsource.
- Encourages good business ethics emphasizing good client car and non-deceptive advertising.
- The company is very generous and will match your donation to ‘any’ cause dollar for dollar up to a certain level.
- The donations are based on category of products sold.
- They are not sold on Amazon by the company which greatly reduces competition.
- Some leggings are reported as having holes in them (see BBB complaints below) – the company admits that they are outsourced.
- There are complaints against Lularoe support as it takes time to resolve issues.
- The company has been bashed for charging sales tax on shipment costs (seemed as if the issue was resolve though).
- Some clothes are said to be substandard and there is suspicion that it is due to outsourcing.
- Most of the sizes are said to be off the mark which makes online selling a challenge.
- Bulk ordering of products by distributors is not recommended by regulating authorities such as FTC.
- Sales to real customers must be more than sales to distributors or consultants (Vemma ruling).
- Some of the recommended marketing strategies such as home parties suffer from Geographical limitations.
- There are lots of restrictions on where you can sell the products e.g. popular sites such as Ebay are no go areas.
- Consultants must bear most of the advertising costs including those for hosting parties.
- The promised ‘freedom’ is likely to be a hoax as you need to work in your boutique, prepare orders for shipping and arranging parties can chew a large chunk of time.
- There are no set standards and if you are new to marketing your success depends on the team you join. This is grossly unfair because how can an outsider tell how good the team they are joining is?
- There is no easy access to answers if you have any burning questions. You are advised to use (5 methods) common sense, search on LuLaRoe Facebook, Google answers and so forth which can be time consuming and in the end of it all, you are not sure if it is the official position of the company.
- There are challenges in replacing problem items due to changes in styles and fabric with every batch.
- Initial orders are too big if one is just getting started (275-350 pieces) which can cost you $3 000 and above.
- Ever changing policies e.g. you can no longer earn commissions from purchases by your down-line. Now you need to wait until they sell the products to earn a commission no-matter how long it takes.
- Negative LuLaRoe reviews are starting to pop-up on the first page of Google which will make recruitment of fashion distributors even more difficult. (l know this review will on the top position in a few days).
LuLaRoe Compensation Plan.
In summary you will earn 35-60% profit (gross – remember there are selling costs). You will also earn commissions from sales by consultants that your recruit.
Fashion consultant – must sell at least 33 pieces a month to remain active.
Sponsors – earn 5% from gross sold by their direct recruits – you must buy 175 items to qualify for the commission.
Trainers – 10 consultants in your down-line. This is a bit complicated and depends on your down-line’s sales volume. (you can visit LulaRoe Comp Plan PDF).
Coach – must have 3 trainers below them. You will earn 1% on selected sales by people you coached. You will also receive points when consultants become trainers.
Leadership Bonus Pool – based on points accrued as a coach.
Note: No more earnings from down-line purchases but only on sales.
Visit LuLaRoe Comp plan PDF for further details.
Training And Marketing Material.
You will get access to LuLaRoe back office training – updates on policies and procedures.
Training call – other successful consultants share their advice and tips on how to push products.
Opportunity call – for those still on the fence but they want to join the company.
Business starter kit includes:
Thank you cards.
Hardbound spiral planner for the year.
Sign in sheets.
Mylularoe.com for stock photos.
LuLaRoe Leggings Review.
l picked on the leggings because they are the only product that the company claims to be outsourced. There is no mention of where the leggings are made, most probably in China. This is the probable cause why there are many complaints against the leggings. Of course, NOT all outsourced products are bad.
Leggings complaints include ripping off when stretched, sizes are not standard and of course the price which is around $25 a pair. There also positive reviews which unfortunately you can not tell if they not mostly from distributors trying to defend their commissions. This is a challenge with MLMs as they often add on distributor commissions as a mark up (35-60%) on the real market price of products. You wonder if it is really worth it to finance distributor commissions if you are not participating or earning any money from the opportunity.
Unfortunately, the pricing of leggings does not reflect the fact that the leggings are outsourced. You can read a thread inside Amazon with a total of 1,243 comments from women who found a better alternative to LuLaRoe leggings which costs half the price.
Unicorn Leggings Lularoe
The company is popular for producing unique leggings per batch. These are difficult to come by and you may not find similar products ever, hence the name ‘Unicorns’. It does not necessarily mean that the company produces Lularoe Unicorn print leggings, maybe in future.
l have bumped into some uniques leggings such as the solid mustard leggings, blue dahlia and so forth. Why the company doesn’t make such leggings no one knows when there are hundreds of Unicorn leggings on Amazon.
Probably, it is the way the company maintains the hype through using scarcity. This works very well in the internet marketing sphere to boost conversions. Remember messages such as ‘only one left, count down timers or 59 people are currently viewing this item’ and so forth. As humans possess intrinsic motivation to out do others and marketers takes advantage of that.
Terms and Conditions.
- No selling of products below company prices – 24 hour sales are permitted.
- Do not speak anything bad about the company and its products.
- Never speak ill about other company’s products (l would be chucked out the first week…LOL).
- You are not allowed to link your social media posts to outside websites.
- l also heard that you are not allowed to sell products on eCommerce websites (still to confirm).
LuLaRoe BBB Complaints.
There are more than 49 documented LuLaRoe complaints in 3 years. Most of them are about the products which is quite worrisome. Sadly, some MLMs let down their distributors by failing to deliver quality products and on time. Failure to address customer complaints can also lead to distributors leaving.
Other complaints are about billing issues and tax on shipping cost which the company promised to look into. The company needs to improve on communication with distributors and clients. The 1-5 points for finding solutions to challenges is not the best way to support distributors.
The good part is that the company managed to address most of the complaints. l believe the BBB complaints could have been managed if support was responsive. Why not solve it now, than waiting for the issue to be taken up with authorities.
I really advise people to seek internal solutions before rushing to websites such as BBB as it tarnish the company name. l have also some stupid complaints for instance after someone forgot log in details for a free account… Duh!
Lularoe Better Business Bureau Update.
One of the visitors to AvertScams left a comment which reads;
49 complaints on BBB has turned to 111 – just FYI and with an F rating
Thank you for the heads up Marcia.
l visited the website and indeed Lularoe complaints have ballooned to 111 from the time l wrote this review. The BBB rating has gone down to F, the lowest grade ever. If you think l am are bashing MLM companies for no reason … think again.
Why would someone join a company with more than 50% of the total customer complaints against the product or service? Then promote that same crap to the so called ‘
loved hated ones’ or in MLM terms, soft targets. Of course, just to earn a profit and a commission.
Congratulations to LuLaRoe for efficiently collecting money and delivering the product on time as shown by the low numbers of complaints.
Unfortunately, your products still suck and your support can’t can’t keep up with the complaints. According to BBB, 46 complaints were NOT addressed. That is almost half of the complaints.
No one seems to care because the problems are still the same;
- Unresponsive customer support.
- Most of your leggings have holes in them.
- Products are overpriced when compared to similar products selling for half the price.
- The issue of taxation has not been adequately addressed.
- Sizing of the products remains a thorny issue.
l really respect companies that promote and empower women. BUT letting them shoulder the burden of dealing with angry customers because of your sub-standard products isn’t the best way to do so.
Is LuLaRoe a Scam or Pyramid Scheme.
During my research l did not find any claim that the company was a scam. Unfortunately, most companies are labeled as such if they fail to stick to their refund policies. There is need by the company to improve on their customer care side of business. l even suggest an introduction of a live chat option during specified periods.
Why the compensation plan looks like that of a Pyramid Scheme, LuLaRoe it is not a scheme (for now). There are a few issues though, for instance Vemma was sued by FTC for selling more than 51% of its products to distributors and the ‘opportunity’ side of business got closed.
Bulk buying of products by distributors is also frowned upon by FTC. Herbalife was been fined 200 million and ordered to sell 80% of products to real customers (non-participants). l am not sure is this company is meeting these set standards given the required Personal Volumes which are on the higher side.
Distributors must only buy what they can consume. l hope it is headquartered in Utah where sales to distributors are treated as sales to end users or outside customers. Unfortunately, once the business expands out of the Utah comfort zone, there is always friction with the law.
l have read quite a number of MLM lawsuits, peer reviewed journals on MLM businesses, DSA guidelines, FTC requirements. The major weakness of MLMs is the forcing of distributor to make mandatory purchases, lack of balance between sales to distributors vs outside sales (often unregulated), registering discount seeking customers as distributors and so forth.
Share your opinion or experience with LulaRoe in the commentary box below? l have initiated the dialogue.
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