Is Lularoe A Pyramid Scheme? (A $5000 Scam Unmasked?) (2019)

Welcome to my Lularoe Review!

Let me guess.

You were attracted by the beautiful and exquisite dresses and different clothing being sold my Lularoe consultants online.

Or maybe you visited a boutique selling Lularoe products.

Then you are on the verge of making a decision whether to purchase their products or even join them and make money.

Are their products worth it? Is Lularoe a scam? Is Lularoe a pyramid scheme?

We are about to find out the answers later on in this review!

First and foremost, I am not promoting Lularoe or even badmouthing it. 

I am just giving you my honest and unbiased review about it to help you guys out!

Without further ado, let's get started!

Lularoe is an MLM type business that sells women's clothing. Most of its products are known because of its beautiful and stylish prints and designs.

It was founded by the couple, Deanne Brady and Mark Stidham in the year 2012.

The company's headquarters is located in Corona, California.

Since Lularoe is an MLM business, pretty much like Cutco, Optavia and Beachbody, it has two main purposes.

1. To create and sell unique, beautiful and stylish clothings for women (there are also some apparel for men).

2. To provide a business opportunity to make money through selling their products.

But first, let's talk about its products!

Lularoe sells a very wide range of women's apparel.

It has different kinds of dresses, skirts, and leggings with unique patterns and prints.

Additionally, Lularoe also sells some men's clothings, as well as kids' apparel

According to Lularoe consultants, the company only makes 5000 copies of each pattern.

That means, when a certain pattern is sold out, you won't be able to find another one, ever again.

Check out Lularoe's full collection here.

Are the products worth it?

There are two questions that are usually asked regarding Lularoe.

For those who wants to purchase their products and rock your fashion style, are they worth it?

Well, there's no denying Lularoe does sell wonderful clothing. You saw them in their website.

Furthermore, most of the products' retail price ranges from $18 to $65.

Because of these two reasons, Lularoe became successful and known to the public. It experience a large growth in the business in just a year!

Amidst this faulty product issue, customers, however, can still get a refund! Rejoice!

But wait!

Like I told you, even the customer service got affected. Customers experienced a lot of times wherein the staff are unresponsive.

So you better take note of these whenever you decide whether to purchase from Lularoe or not.

Like the other MLM companies, there are two ways for you to earn money with Lularoe.

That sounds pretty easy, right?

However, if you keep on reading this review, you will find out shocking things.

Is Lularoe a pyramid scheme? I will answer that for you, later.

How to join Lularoe?

The picture above was taken from the company's website which shows a summary of the steps to join Lularoe.

What makes it different from other MLMs is that, Lularoe does not require you to pay for a sign up fee.

To become a distributor, or a "Fashion Consultant" (the term that the company use to call their distributors), you only have to fill up and pass the application form which can be found here.

Additionally, if you check out the link, you can see the rules, as well as the Lularoe compensation plan.

Once you are done "patiently" waiting, you can start your own Lularoe business!

I mentioned that there is no sign up fee, right?

So, for you to get started, you only need to purchase their products for you to sell!

Hold on right there. Because this is the part that will challenge you.

Oh, and I found out that you can't even choose the designs or styles of the clothing. Oh well.

Ok. So that is the initial inventory plan.

But here's the twist...

You have to maintain an inventory which you will have to purchase every month depending on your rank.

• Consultant - At least 33 pieces per month
• Sponsor - At least 175 pieces per month
• Trainer - At least 250 pieces per month
• Coach - At least 250 pieces per month
• Mentor - At least 250 pieces per month

These are the only requirements that you need to accomplish personally. However, there are also requirements that involve your downline.

You can check it out in the link provided above.

What do you have to do?

Simple. You sell the products and recruit people. 

You can either sell online (mostly distributors host a live video streaming in Facebook to sell) or host a home-party and invite people.

Compensation Plan

"How much can I earn?".

This is another concern that depends on your ranking. The higher your rank, the larger amount of money you can earn.

You can earn commission from your sales and also, a commission from your downline.

Learn more about it in the video below.

#1 Very expensive

Like I told you, there is no need to pay for a sign up fee when joining Lularoe.

That is kind of nice.

However, I think the owners did it to compensate for the VERY expensive initial inventory price.

Would you really spend around $2500 to $10000 purchasing clothes?

There is even no assurance that you can sell all of them!

That is probably why, most sponsors encourage their distributors to "buy more, sell more" because they can earn money each time their distributors purchase!

This lead to most distributors ending up broke.

#2 A Stockpile Of Clothes

The picture above is from a YouTube video I watched about being a Lularoe Consultant.

Do you notice something that is a bit weird?

If not, then let me tell you.

LOTS OF APPAREL!

This is the result of purchasing inventory every month, and not being able to sell all of them.

It is a bit of a hassle.

This is another thing that makes Lularoe different from another MLMs. You have to keep your inventory.

#3 Limited In The U.S.

If you are not from the U.S., then I feel sorry for you since Lularoe does not cater to people who are outside of the country.

#4 Lawsuits

I can tell you that Lularoe has attracted a LOT of lawsuits.

This is due to its sketchy business model and how the distributors don't earn enough money, as well as how faulty the products are. 

In the year 2017, a lawsuit was filed in California against Lularoe, accusing that it operates a pyramid scheme.

In fact, visit your search engine in search up Lularoe. You can find out a lot of articles and news about its lawsuits.

Lately, this happened.

If you want to know more of Lularoe lawsuits, click here.

#5 Not Enough Income

After reviewing MLMs for quite some time, this doesn't come up as a surprise to me.

I came upon the company's annual income disclosure statement of the year 2016.

There, I found out that most distributors only earn $2,118.54 per year! That is like $176.55 per month.

That amount is nothing compared to the amount of payment you give for your initial inventory!

I guess that this is one of the results of spending money on expensive inventory requirement every month.

#1 Beautiful Products

Altough Lularoe products received complaints, there's still no doubt that its products are wonderfully made.

Each clothing has its unique and different styles. It is perfect for those girls out there who are certified "fashionistas".

I salute the makers for their creativity.

If you checked out Lularoe's products, then I am sure that you can relate to what I am saying.

#2 Great Policies

In case you receive a damaged item, then don't worry.

Lularoe will take care of it since it has a 6-month product warranty. This will ensure that your orders will be on good shape.

Additionally, Lularoe has a Happiness Policy. This will ensure its customers happiness.

If ever you are not happy with your order, then Lularoe will give you your refund.

#3 Social Media Usage

Most MLM companies prefer traditional selling and recruiting. Which is a bit of a hassle and difficult.

However, in Lularoe's case, social media is highly encouraged.

Most distributors host a live stream video wherein they can sell the products.

This is really good since where in living in the 21st century. With the help of social media, you can reach out to more people.

P.S. Only in the U.S. (sad face)

"Is Lularoe a pyramid scheme? Is Lularoe a scam?". This is the question you have been waiting to be answered.

To be honest, even though Lularoe received lots of lawsuits accusing it as a pyramid scheme, I still think that it is NOT a pyramid scheme. 

Why?

Lularoe offers products. Additionally, it does not focus on recruiting people for the distributors to earn money.

Personally, I think that those lawsuits originated from people who unsuccessfully made money through Lularoe.

HOWEVER...

Do I recommend you to join them?

No! It is way too expensive! Pay $2500 to $10000 for an initial inventory? And can only earn aroun $100 per month? No way.

If you want to purchase its products, then sure. Why not? That is your decision.

But I am just trying to help you make the best decision for yourself.

With that being said, there are still a lot of ways to earn money online.

Personally, I really like affiliate marketing.

MLMs can sometimes work and give you money. However, it is not enough!

I once tried some of them, since I was in need of money.

But then I decided to quit and started affiliate marketing. I learned that it is a lot better!

WHY???

Because of affiliate marketing (promoting products online), I earn affiliate commissions like this!