Is LuLaRoe A MLM Scam – Or A Pyramid Scheme

Chances are, you’ve just come across some beautiful dresses or clothing on Facebook sold by LuLaRoe Consultants. Or, you’ve ever attended one of their “pop-up boutique parties” trying out different clothes. Maybe you have been approached to join the network; But, without doing any research, how can you be sure if LuLaRoe isn’t another one of them MLM scams, or a pyramid scheme. 

A relatively young business that virtually stormed the online marketing world selling women’s clothing using multi-level marketing as the retail outlet. The cornerstone of the company is its unique brand and style of ladies clothing; During its short life, it has been subject to many questions asked, about its legitimacy whether it is an MLM Scam Or A Pyramid Scheme? Yet, it has continued to go gangbusters over as many years.

LuLaRoe is a US Based company Located in Corona, California, and was founded in 2012, by Deanne Brady along with her husband, Mark Stidman.

LuLaRoe Company History

They have over the past, been a very driven company, using an extensive network of women on an independent contract basis through the MLM network, selling women’s clothing.

Once the business began to rapidly take hold, it created lots of opportunities for stay at home mums, who could potentially earn a decent monthly income selling their clothing.

The company sales figures for 2017 back that up, reaching a staggering $2.3 billion US dollars.

So, here you have a company that was booming, and a line of clothing that was unique, naturally it attracted women, making the company a household name for its online style of dress;

This method of selling isn’t anything new to the MLM industry, especially where exclusivity is concerned.

If you are an avid Facebook follower, then there’s every chance that you will have at some stage came across LuLaRoe consultants selling this boutique line. Or, perhaps you have been invited to attend one of their in-home parties where guests can try on the clothes first hand.

Company Research

Maybe you’re thinking about being a LuLaRoe consultant, so you are checking out the company, its history, and the clothing. It doesn’t matter, because putting in a little time and effort, in most instances pays off handsomely, and research has proven that over and over. It’s always best to be sure and avoid getting being caught up in the many scams out there.

By the way, let me give you the heads up here; I am in no way connected to the LuLaRoe business, nor have I any association with them.

But, what I am going to do, is reveal to you, a few of the underhanded truths that LuLaRoe Fashion Consultants try their damndest to hide away from you.

What then is The LuLaRoe’s mission?

Produce a unique line of ladies clothing, while at the same time provide an avenue for others (consultants) to sell a stylish range of clothing that is unique in many ways; and, earn an income.

But, is LuLaRoe as they say, a genuine company, driven by selling top quality ladies clothes. Or are they trying to sell something totally different?

“YES”, they are trying to sell something else “A DREAM”.

That’s right, they are trying to sell a dream, a mesmerising dream, where women, just like yourself,  can unshackle the irons, and have them believing they can become financially independent forever.

But, the truth remains, is it just another sales gimmick dressed up in a way to attract new consultants?

Let’s Undress The Mission Statement

LuLaRoe’s published income disclosure statement tells a different story, indeed. The report reveals that the annual bonus for a distributor “At All Ranks” was a mere $92, with the median yearly premium $86.

And, no surprises why 98% of distributors fail to recoup the initial stock outlay from any bonuses earned.

Sadly, these distributors are now looking down the barrel of financial distress, not economic freedom, with catastrophic outcomes.

So, the question is then, is it really just a con job, using the clothing as a decoy?

Let’s dig a little deeper and see what we can uncover.

Business Opportunity

Initially, the lifestyle of work appealed to women, who were looking for a job that fitted in with their daily lives as a stay at home mums. The product style of clothing attracted their attention, as did the flexible hours, so the opportunity, become very eye-catching, so they sign on.

Now that may be fine, and a reasonable expectation; But, how practical is the clothing? And, can you make a decent income from this opportunity?

Remarks left on the online forums paint a very different picture. They reveal the truth based on first-hand experiences, either as a distributor or a customer.

LaLuRoe Business Opportinity

Here is some of what they had to say.

The Lularoe leggings are great… well dust rags.

They work way better than Norwex dust mitts, which is more proof that MLM products are s***.

AND

Absolutely. You should be able to find a un-ending supply of NWT Lularoe clothes at any local opp shop that has been donated by women who had to learn about MLMs the hard way.

ALSO

So could I then cut up a pair of leggings and make it into Swiffer sleeves?

I’m not sure of that. I didn’t cut mine up. Dusting, I put my arm through one leg and slowly turn it inside out, so none of the dirt falls out.

I suppose if you do cut it, you may have to hem, just to stop from falling apart.

AND ON

They bang on about the fabric being ‘buttery soft’, and it’s probably because the fibres need to be quite delicate so that it is soft. A bit like the microfiber cloths.

And, this is what a couple of past consultants think of the business opportunity.

Someone asked the question, how an adult could be so naive to buy into this garbage. Since I was that adult, I decided to respond.

Her answer got long, so to provide insight to more people, so she thought she’d put it online. And this what she had to say This is my Lula Roe Journey to Hell and back: Read the full story here.

And, another.

I joined the company in Fall of 2016, right in the middle of the onboarding boom. My husband, who has a business degree, we ran the numbers.

We both thought it was a wise investment, and our shows were a hit, The laundry baskets were filled every week of paid orders to ship out.

At the time I quit my job with a Fortune 500 company (which may be a blessing since it’s since sold and fallen apart). And then July of 2017 hit and I couldn’t keep up with the GOOB sales.

So I submitted my resignation, but in the middle of waiting for my return labels, they changed the policy.

Never held faith they’d honour me 100% if I did happen to get return labels. Sold what I could, then donated the awful pieces to the Salvation Army and the less terrible bits to a women’s shelter.

I took the loss, and this January we paid off the rest of our loan that we’d taken out to survive.

Thankfully, her marriage, house, and car, survived.

But the self-blame is real, and at times I feel the anger and just recoil.

If the parts were solids or more neutral patterns and better quality, maybe things would have played out differently for many of us.

I learned a lot about myself. I’m bolder and more outgoing than I thought, but I’m more durable and more resilient than I thought too.

These are only a sprinkling of what is being vented in the online forums, click here for full details.

LaLuRoe Women Not Being Told The Truth

Getting Started

First of all, before you can get a start, there are a few hoops they need to jump through before being accepted;

Things like:

Consultants who wish to join the business must agree to purchase an initial inventory of stock, including marketing materials costing about $5,000. Once they enter, they quickly realise the stockholding and other incidentals will increase that to a whopping $9,000.

The first $5,000 order kit, has something like 250 pieces of clothing to get started. That’s only, to begin with, as you will then be locked into a monthly purchase order to remain an active consultant and be eligible for any bonuses.

Oh, and did I mention there are things you’ll need, (more expense) such as clothing racks, hangers, business cards, printer, computer, and the list goes on.

After joining, and in a short space of time, it is expected your stockholding reach $20,000 and remain at that level at all times.

There are two main streams of income that consultants can utilise, and they are; Direct selling to customers and commission derived from transactions by consultants you have recruited “downline”.

Consultants more often than not start selling to their family and friends, and eventually branch out with inhouse dress parties and online, using social media as an outlet.

How Time Has Changed The LuLaRoe Brand

In the earlier days of the company’s existence, some consultants earned about $80,000, a month.

But, the point being, in the earlier days of the business operation, the clothing was of top quality, fashionable and durable.

Over the past eighteen (18) months, however, consultant sales figures have taken a massive tumble, as has the quality and brand.

It’s now so dramatic that the level is way below par, and many consultants aren’t earning one dime and leave the company with no sales and a sizable debt.

LaLuRoe Women Want Equal Rights

There are exceptions, though. If you are prepared to work extremely hard and long hours and possess the required skill set in selling, then it’s possible to earn an adequate income.

Unfortunately, a majority of ladies don’t have the time to commit nor the selling smarts that are necessary. So they fail.

Make No Mistake Direct Selling Isn’t Easy And Takes A lot Of Courage.

Apart from that, the startup is costly; and without sales, then you are again doomed to fail. Worse still, finish up with an unwanted debt that can stretch, or break, the household budget.

However, later we’ll also uncover some other hidden truths, that may suggest they aren’t legit as first thought.

During the past 18/20 months, and what I can reveal, the company has lost many of its top sellers, indicating that the business is experiencing some financial problems or maybe, something else unbeknown to the general public. No matter the problem, it’s not a good sign, and that suggests that they are not travelling well; So, best to STEER CLEAR. 

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Lawsuits Against LuLaRoe

LuLaRoe has during its lifetime, copped its share of criticism, including lawsuits from their distributors and consumer advocates, that relate to their business model. Plus, the product quality and design.

A class-action lawsuit early in 2017, was filed by customers who accused LuLaRoe over several issues of company proprietary. Topics such as point-of-sale, sales tax, and interstate sales; and even tax-fees in places where taxes on clothing doesn’t exist.

Such underhanded tactics by the company, and the numerous amount of complaints, resulted in them receiving a downgrading to, “F”, by the Better Business Bureau (BBB).

In that same year, a further lawsuit filed in Canada, that accused them of being a pyramid scheme. The core of the class-action claimed they were engaged in improper business practices, contract breaches and advertising that was misleading or deceptive.

Defaming The NDSS

The National Down Syndrome Society, (NDSS) in January 2017, severed their ties with the LuLaRoe business. The base of the discontinuance evolved around a comment from a senior consultant who mocked the mental disabilities of people.

The NDSS demanded that LuLaRoe dismiss the consultant based on such abusive behaviour. LuLaRoe refused, sighting that they accepted the apology from the distributor. The action of the distributor and LuLaRoe caused widespread online criticism.

My Final Word

So then, is it reasonable to say that, on the surface, LuLaRoe is not a legit MLM business? Absolutely. 

The facts remain, this is one company that in the past few years is getting hit with lots of lawsuits that consist of impropriety or complaints.

Any business that receives so many lawsuits & complaints within just a few years of operation is definitely a “RED FLAG”, so you should be aware not to trust them.

Lawsuits are a NO GO ZONE warning, and best to look elsewhere.

Anyway, why would you start with a company that can’t be trusted?

LaLuRoe MLM Business

 

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