LuLaRoe Scam Review: A Bad “Business” for Women

LuLaRoe leggings have become popular, and therefore the multi-level marketing (MLM) “business” of LuLaRoe has taken off. I’ve said over and over that multi-level marketing is not a business because more than 99% of participants lose money. But I wanted to take a look at this company specifically, because it’s been getting so much press.

Business Insider promoted the idea that LuLaRoe is making women rich. While there ARE a handful of women who are making a ton of money from the company, only an incredibly tiny fraction of participants can make this type of money. Why? Simple math. If you’re making a 3% to 5% commission on your downline (as you’ll see below), it takes $700,000 of wholesale purchases by your downline to earn $35,000 in a month. (I realize that various bonuses change the math, but I’m using these numbers to simplify things.)

Imagine how many people need to be in the downline and how much they each need to buy to generate this volume. Simple math tells you that everyone below the woman earning $35,000 can’t build a pyramid of this size. There simply aren’t enough people on the planet, and there are only so many customers available for each distributor.

Let’s talk about some of the specifics downfalls to this fake business.

LuLaRoe Inventory

Initial inventory purchases are where multi-level marketing companies make the bulk of their money. The first purchase is almost always the most a recruit will buy over the span of her “career” with the MLM. So the bigger the recruiter can get her to spend on that first purchase, the better for the company and the recruiter.

In LuLaRoe, you MUST buy an inventory package. You can’t take orders from customers and then just go to the company and get what you need. You have to get a package, and you must sell from that. And guess what? You don’t get to choose your inventory. You can make some selections regarding the types of products, but you don’t get to choose the colors or patterns. This means that you inevitably will end up with products you can’t sell because they’re the wrong style, size, or pattern.

The LuLaRoe inventory packages look like this, according to my research:

Package #1 – $4,812 for 336 pieces
Package #2 – $5,365 for 365 piece.
Package #3 – $6,784 for 463 pieces

It is “recommended” that you have about 700 to 800 pieces of inventory on hand at any give time. That’s about $15,000 to $20,000 wholesale cost in inventory. When re-ordering, you must order 33 pieces at a time. That’s about $500-$800 that you must spend each time you order. You can dictate the size and style of the pieces you order, but you can’t specify the print. You get what you get.

The bottom line is that it’s REALLY expensive to get started with LuLaRoe. And then there’s the LuLaRoe inventory problem. Every time you order inventory, you must plan to have items left that you can’t sell. Your unsellable items build up and represent money you will never recover. I suspect many women underestimate the amount of inventory that will go unsold and how much of your “profits” this will wipe out.

Getting Paid on Your Downline

So maybe the money is in recruiting people into LuLaRoe? Well, yes. All MLM companies are endless chain recruiting schemes. The core of the business is continuously recruiting new people. MLM has an extremely high dropout rate because almost no one makes money (and therefore they drop out when they realize that). In order to sustain the company, the remaining participants must keep recruiting in new blood. As you can see from this income disclosure statement, over 78% of consultants receive no commissions/ bonuses from their downline.

As with all MLM, the LuLaRoe scheme is pay to play. You can get paid commissions on your downline, but only if you purchase products too. As you see below, you are “eligible” to earn 5% on your downline’s wholesale purchase (so on a $5,000 initial order, that’s $250), but only if you purchase at least 175 clothing pieces in the month the bonus is calculated. If the average wholesale price of a piece of clothing is $20, that means you have to spend about $3,500 in a month in order to get your $250.

As you can see from this LuLaRoe income disclosure statement, as a LuLaRoe consultant you can expect to make about $85 (on average) per year in commissions. That’s for the whole year! And in order to receive the amount you qualify for in a given month, you have to buy 175 pieces of clothing in that month. So again, you’ve got to spend about $3,500 in a month on clothing to be eligible to receive that month’s portion of your $85 annual commissions.

Once you have personally recruited at least 3 people and have ten people total below you, you’re a “trainer” and you can get paid additional commissions. You get the regular 5% on people you have personally recruited, and then can get an additional 3% for people your recruits have recruited. BUT… you can only get these commissions if the downline has purchased 1,750 pieces in the month (about $35,000 total wholesale cost if the average piece is $20) and you have personally purchased 250 pieces (about $5,000 total wholesale cost if the average piece is $20, but the total could be reduced a bit if certain purchases have been made by the downline). Basically, you *could* get commissions of about $1,000 to $1,500 on your downline, but only if the group has spent huge (about $35,000 spent by the group and $5,000 spent by you).

 

MLM advocates will tell you that you can build a business by helping others to get started. Because it is so difficult to build a profitable and sustainable retail base in MLM, it would seem that you MUST recruit in order develop a strong income. Yet these numbers show how (nearly) impossible it is to build a real income from recruiting into LuLaRoe, since the purchases the downline must make are so astronomical.

Do You Own a Business?

In multi-level marketing, you own nothing. You are subject to a contract with the company that creates a whole bunch of rules for you, but gives the company the ability to essentially fire you at any time. You don’t own your customers. You don’t own the right to get clothing from LuLaRoe. All you have is the temporary ability to sell the products, but that could go away at any time.

LuLaRoe in the Real World

The biggest argument in favor of multi-level marketing is that you can sell the product and turn a profit. That’s a business! Except that’s only a theory. Yes, you could buy a LuLaRoe product for $10 and sell it for $20. You’ve doubled your money! But the reality is different. It is nearly impossible to turn a profit retailing products in MLMs. And that’s the reason 99% of people lose money in MLM.

Here is a real world example of how things work in LuLaRoe. Kristi Trimmer is an established travel blogger with a pretty healthy following. She’s got a much bigger audience than the average person. (So what this means is that she has a lot more people to market LuLaRoe to than the average woman does.) Kristi signed on with LuLaRoe in October and spent $7,000 on inventory for her “business.” She recently recapped her first month with LuLaRoe on her blog.

Kristi reported selling 154 pieces of clothing for $4,716… which became $3,847 after discounts and incentives. Her profit on those sales was $938, as she showed below.

Sounds pretty good for a first month, you say? Remember this… Kristi put $7,000 into inventory and about $500 into other costs. That’s a lot of money invested for less than $1,000 in profits for a month.  And Kristi has stated that it would be better to have much more inventory, so she will likely be putting all that money back into purchasing more clothing.

But the bigger problem is the nature of MLM itself. Kristi made these sales because she has a large following. Most people don’t have such an online presence, and so they won’t be able to replicate this. And even with a large following, Kristi only made $938. MLM participants find that they make a number of sales in the beginning, and then it trails off. Simply put, your friends and family make pity purchases to support you in the beginning. Most people will purchase once or twice and that’s it. It is very difficult (and for most people, impossible) to continue this level of activity or increase it.

Further, wildly-patterned leggings are a fad that will fade quickly. Even if they remain popular, you can only have so many leggings. Therefore, a customer is only going to buy a certain amount from you. And it’s not like a retail store where you have constant foot traffic to generate new customers. It is much more difficult to cultivate new customers in MLM.

Even if Kristi’s activity is sustainable, $1,000 net income per month isn’t going to support her. Especially not after she pays income taxes and self employment taxes. Maybe she could double her activity? Net income of $2,000 per month, less income taxes and self employment taxes won’t support her either.

Possibly a better analysis than the net profit shown above would be the cash flow. How much did Kristi spend, and is her cash positive or negative? Here’s how I estimate her cash outlay:

Of course, Kristi didn’t update her blog to disclose her results from November or December. I suspect she didn’t do any better. While she may have sold more, she said she was planning on buying more inventory, so any cash she brought in would surely be spent (and more!) on additional products. She will probably find herself in a cycle of spending more than she’s making month after month, as is typically the case in mutli-level marketing companies.

The Bottom Line on LuLaRoe

LuLaRoe is no different than any other MLM. It’s a grand scheme made to look like a real business. They use the concept of retailing to make it appear to be a legitimate business. But in reality, you’re going to spend thousands of dollars on inventory, profit very little from actual sales, and almost certainly lose money on building a downline (because you have to purchase so much in order to receive a relatively tiny commission check). And this is why I call multi-level marketing a scam.

71 Comments

  1. Michelle M Murphy

    Great article, Tracy! As I was reading, it occurred to me that the goal of having a “full store” or $15K – $20K in clothing ends up disguising the fact that the profits are tiny. Because creating a full store is something that you can succeed at! Also, the idea that you are ramping up and will enjoy high profits later is a key manipulation, when the truth is that you will continue to enjoy the same hard work and tiny profits that you have now.

  2. Morningstar

    Go to any retail store that sells clothes take a look at the glut of Inventory, the stuff they are trying to clear out, and ask your self do I want to be in the competitive clothes business where my inventory is of a lower quality. Cotton prices are high so that is why items are thin material. Also there is the fast fashion aspect of this company, they are in the money to make goods not expected to last very long. Consignment stores are doing well in this market as women look for quality goods not cheap leggings with childish prints. I think this company uses scrap cloth to make items, that is one reason the inventory is vague. It is a get rich quick scheme and guess what the owners are rich off of scrap cloth. Amusing if not sad.

    1. Michelle M Murphy

      Excellent point, Morningstar. I had the same thought about all the mismatches in the patterns. I have this vision of 3rd world sewing mills being told to make as many items as possible from the provided low-quality cloth.

    2. Lazy Gardens

      I’ve always thought that the LLR marketing scheme is partly to disguise that they are buying small lots of leftover prints and things that didn’t sell … it’s not that they don’t want to sell more of a print, it’s that they can’t.

  3. Shay

    LaLaRu has some ugly patterns too.
    I can’t see how anyone would spend thousands of dollars to spend on sizes and patters that I couldn’t pick out myself.

    This is worse than MK
    I sure would love to know the inside cult stories.

  4. Lazy Gardens

    “If the average wholesale price of a piece of clothing is $20, that means you have to spend about $3,500 in a month in order to get your $250.

    WOW … that makes absolutely no sense at all.

      1. nopinkplease

        And where are they PUTTING all those clothes?

        My place is already too full of my own clothes, and for a little while, I dabbled in flipping vintage stuff from thrift shops, and I felt like *that* made my house too crowded with clothes. Imagine…this.

  5. Cindylu

    When will these predatory mlm scams focusing on women end? Amway, Scentsy, Mary Kay, Avon, Tupperware, Pampered chef, Jewelry mlm’s etc. Fifty years of these misleading pyramid schemes promising women a so called opportunity. With the internet, hopefully young women will stop believing in all these pie in the sky promises. This sounds like the clothing mlm “Weekenders” that failed.

  6. enorth

    “I think this company uses scrap cloth to make items, that is one reason the inventory is vague.”

    LuLaRoe is pulling the scrap-cloth over consultants’ eyes.

    LLR has an “F” rating by the Better Business Bureau. You could spend hours on the BBB site reading the LLR complaints. Poor quality, poor treatment of consultants, refunds held up, etc. According to the BBB, it notified LLR of its concerns and received no response from the company. Social media sites poke fun at LLR “bloopers”, wherein bizarre prints, combined with sloppy cutting at the factory, result in embarrassing clothing.

    Yet, many women wait in line to sign up with LLR, gleefully handing over thousands of dollars of their money, some even giving up other careers.

    You can’t make this stuff up.

          1. MLM Radar

            Dallas being the location of MK headquarters, I would expect that. The Dallas rating has to do with the corporate HQ aspect of MK, which is probably pretty good. I doubt that rating has much to do with the independent sales force.

  7. LC

    Thanks for this post. I hope people who are considering joining LLR will read it. A dear friend of mine became a consultant in November. She has regular “online pop-ups” and it’s the same initial inventory sitting there week after week. What’s horrible is that she put the entire initial inventory on a credit card because she was convinced she would be able to pay it off within two weeks. She is recently divorced and a single mom of three. They live in a tiny house…god knows where all of these clothes are stored. Between the LLR market being over saturated and the trend dying down, I’m afraid she will have a rough time even recouping her initial investment .

    1. UghLLR

      They allow returns on inventory as follows:
      1. every item must be in original plastic wrapping (as of 2017) in order to receive a refund with a 15% “restock fee”.
      2. if items are not in the very thin, impossible to keep intact plastic bag then they will take a 25% “restock fee”

    1. pinkfanbutnomkfan

      A majority of the patterns are just ugly. Some are cute (I’ve looked at them out of curiosity and the fact it’s become popular) most of the patterns I wouldn’t be caught dead in.

      1. enorth

        From complaints I’ve read, the attractive/pretty patterns are only sent to a chosen few consultants.

        “Chosen”, as in, they are relatives of the owners and/or are the biggest sellers (buyers) of LLR inventory. Everyone else gets items covered with purple zebras, pizza slices, monkeys, frogs and pine cones. And let’s not forget Uncle Sam and Sasquatch.

  8. enorth

    On Reddit, there’s an article entitled “Trying to break down the cost of LuLaRoe for my wife.”

    One of the posters says he knows the LLR owners and they’ve entrenched many family members at the top of the pyramid. The “top seller”reps are actually relatives being propped up as successful.

  9. Jessica

    As a LuLaRoe consultant, I appreciate the thoughtfulness of this post. I’ve been a consultant for just over a year with my sister and have been successful at it. While we don’t have a large downline (we only have 4 under us) we are consistently able to make money AND reinvest in inventory each month. We did not join LLR with the intention of getting a large downline so they can support us. We solely did it so that we could host pop ups on our own. We do like the clothes and don’t feel the dresses, skirts and shirts are overpriced. The leggings? It’s a minimal part of our inventory because they’re too much of a fad for us.
    Our downline commissions are minimal, and we are ok with it. We aren’t trying to build an empire or change lives or whatever the latest MLM slogan is. We are debt free and making money. Is it $60k a month? Nope. But it’s enough that we split it 50/50 and are happy with the additional income.
    I think those who fail at it are the ones who honestly think they can sell all their inventory on Facebook and can pay off a credit card in 3 weeks. That’s not realistic and I see a lot of them closing up shop because of that.
    Is it a perfect company? Not at all. They have flaws that drive me crazy but we will roll with it for now.
    Anyway, that’s my experience with it.

    1. Did Pink

      I would be curious to see an income statement. You start with your revenues at the top. Subtract the ‘cost to selling the goods” What is your total? Then your liability is your unsold stock. Wow only $200 wholesale? So a few ugly smock style shirts and like corn the cob leggings or something? I know, its none of my business but I think you should do it for yourself. Take that net number and divide it by how many hours you spend unpacking that crap, hanging it up, photo it etc.
      Still making the bank?

      1. Jessica

        I don’t understand why you’re being rude to me, I’m not lying about our situation and I’m certainly not hustling the business telling everyone if they they can make a ton of money if they do it. We both own small businesses other than LLR so I believe we have good business sense. And if us each bringing home $1500+ after purchasing inventory each month isn’t enough bank for you, then I guess we aren’t doing so well. We don’t do Facebook sales, we do in home parties, so we don’t spend time taking tons of photos. Hanging up items is negligible time. But to each her own. I was just sharing my personal experience with it.

        1. Did Pink

          Not being rude- asking questions you should know with your ‘good business sense’. The $1500 after purchasing, is that your net sales you come up with in my formula which is just basic accounting practices? $1500 would not even pay my mortgage hon so no that is not impressive. Take the number of hours worked or devoted to your LLR business- that includes everything, home parties, gas, getting there, getting all your bookings, it all. How much per hour does that come to?

        2. Lazy Gardens

          “And if us each bringing home $1500+ after purchasing inventory each month isn’t enough bank for you, then I guess we aren’t doing so well. ”

          Is that before or after your expenses? Not just inventory, but travel, hostess gifts, party expenses, and expenses you wouldn’t incur if you weren’t in LulaRoe (child care, convenience foods, the clothes you decide to keep for yourself, etc.) .

          And how many hours do you spend on getting the hostess, the guests, and all the stuff that comes before the party? And then the party?

          Because what can look good when you only look at income often falls apart when you consider expenses and the time involved.

        3. MLM Radar

          You both own other businesses.

          Are these other businesses also MLMs? If they are, you’re violating contract clauses which prohibit you from selling another MLM to the first MLM’s customers and recruits. But you probably don’t care about that.

          If your other businesses are not MLMs, how much time and effort are you taking away from your real businesses to promote your MLMs?

          Furthermore, it’s a violation of MLM contracts to sell MLM products in a retail location. There’s a reason for that; it has to do with legal liability for the company when there’s a retail outlet for the merchandise. But you probably don’t care about that either.

        4. Rarity

          So you each net $1500/month on your LLR business—how many hours do you spend on LLR to make that $1500/month? Is the $1500 before or after you deduct for taxes (which are substantially more when it’s self-employment income because an employer isn’t paying half of your Social Security tax)? If it’s before taxes, you’re probably only netting $1200-$1300, tops.

          If you’re working 20 hrs/wk, you’re only making $15-$17.30 an hour—not a great haul, but not the worst. If you’re working 30 hrs/wk $10-$11.54. If you’re doing this full-time, you’re making $7.50-$8.65/hr without benefits.

          But if you’re only spending 5-15 hours a week on this, then okay, $1500 is decent supplementary income for that amount of time. The blogger mentioned in the OP seems to be making this a full-time effort, all for what amounts to less than minimum wage with no benefits.

  10. nevermlm

    Like Mary Kay, LuLaRoe consultants are forbidden from selling products on ebay.

    And yet, there are currently 83,497 listings for LuLaRoe.

    For anyone keeping score at home, that is 18,351 MORE listings than there are for Mary Kay.

    Hard to believe there is so much unwanted, unsellable product from these companies. It seems like every woman I see is sporting LuLaRoe leggings and a face of Mary Kay makeup!

    Just kidding, I’ve literally never seen anyone wear either of those products.

    And we all know any woman wearing LuLaRoe or Mary Kay would be impossible to miss.

    1. enorth

      “consultants are forbidden from selling… on ebay.”

      More proof that the “system” or “marketing plan” does not work. The people who are successful in MLMs have to go outside the system to make money. Whether it’s selling the products via eBay or other outlets, or having avenues of income related to the MLM that do not include selling the products; for example, income from motivational speaking to the MLM’s reps or selling them self-help books and wares.

  11. Dani

    I’m a consultant getting out of this “business”. This article could not have been more accurate. I personally feel like it’s a scam and preys on stay at home moms, single mothers, or any woman looking to better her life with additional income. The claim it is part time work for full time pay. Let me tell you in 10 months I worked 65+ hours a week. I busted my butt and purchased inventory as often as I could because that is how to be successful. I ended up making $214 in profits total in 10 months. Yes after investing $12k on inventory and supplies initially and thousands more on additional inventory, supplies, account fees to programs, postage, giveaways, personal clothing, etc I made $214. I’m walking away along with 30 of my consultant friends and it is so freeing. This company feels like a nicely disguised modern day cult. If you complain you are hushed. The blanket responses for really big problems are laughable. This company is taking advantage of unsuspecting women and luring them in with promises of making ridiculous money. It got so bad that the company had to tel those top earner to stop telling people how successful they are with actual numbers because the new recruits weren’t making any where near those numbers and felt like they were lied to a deceived. When it doesn’t happen for these girls they are blamed and told they aren’t “working their business” in my opinion the company could care less about anything other than making their money. I feel that this company is going to collapse very soon. I’m glad I’m getting out now before that happens. At least I’ll be able to sell my uglies to other consultants who still believe in LLR’s bs promises of financial freedom.

    (The prior statements are my personal opinion and feelings in regard to this business)

  12. Just another consultant

    2016 rundown of profit etc. from just sales not bonuses.

    1099-K from both LLR and Paypal for 2016 added up to $86,813.00

    Wholesale purchases for 2016 added up to $61,995.00.

    The difference of those two being the gross profit $24,818.

    Hours worked however was no more than 25hrs a week.

    This total though does not include expenses, such as clothing racks, light kit, hangers, shipping, bins, boxes, bags, labels, equipment like a dymo etc.

    So yes you can write off those things. I feel if you put more time you could possibly make good money, building a team obviously nets a healthy bonus check each month but that isn’t as important as understanding the value of selling this product.

    1. Lazy Gardens

      gross profit $24,818. This total though does not include expenses, such as clothing racks, light kit, hangers, shipping, bins, boxes, bags, labels, equipment like a dymo etc.

      Hours worked however was no more than 25hrs a week.

      It’s worrisome that you can’t tell us what your shipping costs were … however, assuming your unavoidable costs are 25% of your gross, you are making $15 per hour BEFORE taxes and social security.

      1. Just another consultant

        Worrisome I can’t tell what the shipping costs were? Unsure why that would be worrisome. Based on my current estimate (we used paypal for some and the bank account for the other half of the year), shipping costs are at $3,115.34.

        I think the point I was trying to make is that you have to put in way more time to potentially see more profit margin, but I don’t even know if that’s true. Either way, isn’t the point of LLR to give you more freedom? If you’re spending more than 40 hours a week on this, it’s not more freedom.

        For some, this is their full time. I’m completely happy with my full-time job. I wouldn’t quit it, but I do help my wife with her LLR endeavor. I still get skeptical when I run the numbers.

        Take for instance the fact that LLR hasn’t disclosed the amount of sales for 2016FY, or even the quarters, or even the months?

        However, you can open the compensation report and see that in November the bonus pool was $4.1 million dollars which is 2% of the $200 million they made in purchases from all of the consultants. Then that $4.1 mil is split across all of the bonus points to equal the bonus point worth. Back to the point of all that… $200 million in purchased inventory… but how much in sales? That’s what makes me skeptical, has that margin changed over the year? Or is the ratio not good so they don’t disclose it. We know that black friday weekend $33 million was processed through Audrey, but what about the whole month? Does it even reach 50% of the purchased inventory?

        Granted they still have the issue that not all consultants run sales through bless because it has issues from time to time.

  13. A successful consultant

    I don’t follow this site and its unlikely I’ll get back here to answer replies. I only skimmed the article and it’s misleading IMO. I started in Nov 2015 and here are my 2016 numbers (rounded and a little fuzzy with starting near xmas):
    –grossed about $155K in sales
    –About $85k in profits
    –initial investment $6K
    –investments in home boutique and business start up supplies abut $15K
    –Shipping costs (-customer charges; mostly from free shipping promos) about $1500
    –My profits after costs: about $62,500

    –I also get an average of $2500 a month in bonuses, but I didn’t do any active recruiting.

    These are my first year numbers. This is starting my business, building my inventory, and buying equipment, some of which was wasted as I learned what worked and what didn’t. I currently hold about 5k pieces in my inventory.

    I went into this understanding IT IS A BUSINESS! and I may not turn a profit the first year. Who sold you on a get rich quick scheme?

    Aside from my profit, I cruise qualified, so me and my husband got to do that for free. I also got to travel a lot for training and convention. Mostly free from points from the CC I use to order and pay off.

    Aside from the initial $6k, all other $$ put into the business came from sales profits. You make roughly 53-56%. So for most of the year i just put the money back into the business. I paid off my $6k in 2 months and started building inventory after that.

    I do have a team of 13 people, but I did absolutely no recruiting. These are people that sought me or teammates out. That $2500 a month is pure profit that I treat as a true bonus and don’t expect or budget on it.

    I had a girl join 2 months ago that got the mid package and she just paid it off form sales and has ordered 4 times since with profits.

    Based on recent sales I’m looking to be on track to sell over $240,000 this year, that roughly profits of about $10k a month. I’m done building my business so, aside from some operating costs, all those profits are for me.

    Most of the reason I see people fail is due to thinking they are buying into a get rich quick scheme. This is a business. You’ll get what you put into it, and honestly, product you may never sell is a business cost. If you invest this much to start a business you should know that going in. Unfortunately, we do have many people recruiting who aren’t training, so some girls fail just due to a lack of info. I take as many of them in as I can. The owners are addressing this through holding bonus points for leaders who don’t train.

    Another reason girls fail is because they stick to one mode of selling, usially just Facebook sales that take a lot of time and sell the least. I do on-line, in home, and I do events. I put about 35-40 hours a week. Not bad for the income I expect this year…at least not to me.

    I just got off the cruise and there are plenty of successful people doing this. Most of them just on sales and not actively recruiting. This is set up as an MLM, but you can profit well from just sales if you run the business correctly.

    1. TRACY

      It’s interesting that you say it’s “misleading” but then don’t say what exactly is incorrect. The facts are what they are. Nothing misleading about that.

      The reason most people fail is not because they don’t work hard enough. It’s because MLMs are pyramid schemes in which 99% fail, no matter how hard they work.

      Do I believe you’re selling that much? Nope. But I would love to see some documentation from the company proving how much product you’re purchasing. That would help.

      1. A successful consultant

        Well, I took screenshots. I’ll put the links below if this site allows it.

        Not sure why I care so much what you think… I guess because I have done a ton of MLM companies and this one actually makes me real money without having to recruit.

        Is Lularoe an MLM company? Sure. But you can make a good living off sales alone, and that’s why I love and promote it. The fact that you don’t believe I did this and I just got off a cruise with over 2000 other people who sold $12k a month for at least 4 months to qualify is all the proof I personally need.

        Believe my screenshots or not, I don’t care.

        One screenshot is of my sales report in my Lularoe portal (BLESS). I took out the personal info and transaction stuff in case it could be used for nefarious activities.

        The other screenshot is of the spreadsheet I copied the data out of to add up real quick. It seems my sales were better than I though. This doesn’t include the sales I have take via Paypal at event through out the year. So my sales were probably over $200K. In this screenshot I highlighted all the data in the column to add it up. Look at the bottom right of the pic to see the total.

        With the 2 side by side you should see that the info matches. And no. I’m not going to scroll through and take a million screenshots to prove I’m not adjusting the data. Believe it or not. not my problem.

        Maybe I’ll pass this link on to my team and let them all decide to comment as well. If you run this as a small business, it is profitable. I met lots of couples where the husbands have left 6 figure jobs to help run it. On the cruise I estimated that I was about in the middle for sales.

        http://imgur.com/a/vIApk

        1. MLM Radar

          Nice screenshot. We got a glimpse of dollar values for February 12, 2017, ($186) and February 13, 2017, ($384). We also got fragments of February 3 and February 14. Interesting that there’s a gap from February 4 through 11. No sales those days?

          I’m sure you know that a screenshot of a spreadsheet doesn’t scroll like a spreadsheet, so we can’t see any other dates. Intentional?

          If we average February 12 and 13 and apply it to the rest of the month that’s a total of $570 and a daily average of $285, which puts you on track for $8,000 in gross monthly sales, or $104,000 in gross annual sales. Before cost of inventory and other expenses.

          But wait… to see the whole picture we have to take February 4-11 into account, when no sales were recorded. So that’s really a 10-day total of $570, or an average of $57 per day. Gross revenue. After that the math kind of goes downhill.

          Oh yes, please don’t tell me about your shell game of reinvesting your profits to fund your inventory. If you’re putting all your profits back into inventory, those are new purchases and you have to count them. You can’t just pretend it’s all take-home profit and the new inventory was free.

      2. A successful consultant

        Oh, and I forgot to tell you, my orders totaled $41,052.35. But like I said in my original post, my goal my first year was not to make a profit, but to build. I won’t be ordering such big orders any more. And those costs are already figured into my gross vs profit numbers.

  14. A successful consultant

    Well, I tried to post a link of screenshots of proof of my sales, but I guess you probably don’t allow links to screenshots?

    Basically I sold $183,140 in 2017. And that is only sales from BLESS (the Lularoe sales system). Some of my sales are from Paypal from my in-person events outside my home. Probably around $20k, but that is pure speculation as I haven’t looked at those totals in a while. And even after that I have in person cash sales that sometimes I forget to put in. I do a sale like that about 2 times a months and usually do around $1500 for the day.

    1. TRACY

      I assume you mean you sold $183k in 2016, not 2017. Although you seem to be including some 2017 sales in your total.

      Do you realize that it isn’t possible to have sold $180k based on your earlier statement that your orders totaled $41,052?

      The sales you’re showing don’t seem to be at a pace that would allow you to sell $240k in 2017. In order to do that, you’d have to sell $657 a day, every single day of the year.

      1. A successful consultant

        Yeah, 2017 was a typo, but for time saving sake, yes, I just took the screenshot with 2017 numbers in there.

        Yes, obviously the $41K for purchasing was a typo. Not going to put more time into it. Roughly half of all sales is profit, so I don’t really pay attention to how much I have spent over time since I’m doing so well. Soon, I’ll be doing my taxes and will have all the number to the penny.

        An average of $657 a day…yeah, that’s right. In December I did Just over $20K and in Jan just over $22K. A $20K month would be $666 a day. ( I guess you’ll use that as proof I’m lying because its an evil number right?)

        Like I said, I just came across this site. I assumed you and your followers were rational people and facts would be relevant…apparently not.

        You guys are in a conformation loop. Even after the numbers you believe an anonymous stranger, who has no way to gain business from taking the time to post here, is lying. For what reason? What would I gain? The owners are millionaires. Pretty sure they don’t care enough to post here.

        I’ll make a 6 figure profit this year, and probably around $30k in bonuses (for no work at all), plus all the points I get from my CC allow my family to vacation for free (3 times last year, all flights and hotels paid for in CC points just from my business expenses).

        But you and your followers would just use the gaps in my sales over vacation to prove I’m somehow lying.

        Whatever guys. I meet 20 consultants every couple weeks at events doing the same thing (some lower, some higher). I just got off a 7 day cruise with 3k other people making a living off this…but you go ahead and believe in am here posting lies at no gain to myself.

        Any potential Lularoe consultant who reads this, don’t believe the negativity. If you go with someone who is successful and will take the time to train you, and you aren’t looking to get rich quick, and you realize this is work, you can make a good living off of the sales from this business. I have seen one person on my team quit due to low sales, but she thought she was going to invest and throw her stuff on FB and just sell with almost no work. This is a self run business. If you want to be successful long term, you have to put in the hard work upfront to get there…like any other business in the world.

        Others who have low sales either stick to only one mode of selling (just online or just at events) or are only working part time and only want part time money.

        You don’t have to recruit or face the prospect of business drying up if you never recruit. Women buy clothes and they always will. New styles come out every year to stay with trends, this MLM company is uniquely set up to last.

        Lastly, if you want to join, realize its a small business, not a get rich quick scheme. Anyone selling you that is a drive-by recruiter and wont help you get started. The company says they are trying to root them out.

        When I have someone interested I share my numbers if they ask (soon I’ll have tax papers to prove it and I will share those) and any successful consultant will prove this to you with tax forms as I would. And when I have someone join in another area, I fly out to help them launch. Anyone who is successful should be willing to invest a little time and money into you since you dong well will make them money in the long run.

        Alright, that’ll be my last post. I could post my tax forms here and you guys would still say I was lying. This post is a waste of time.

        1. A successful consultant

          I lied, one last post since I know you guys are foaming at the mouth to say I don’t know my numbers since I don’t know how much I put in to inventory.

          I don’t know that because in the beginning I put all profits back into the business. I have a separate account for my business that I keep money in for purchasing inventory and paying expenses. Well, really I use a CC for points then pay it off with that account.

          In November when I started taking a profit I cut the account down to $8K and took the rest as profit. I was putting 25% of profits into that account for Nov-Jan, but that’s too much. Since it has over $10k in it, I’ll probably just cut back to 10% and see if it starts getting lower than I like over the next few months. Since I have built my inventory I don’t spend very much on ordering now. Just enough to keep fresh items coming in as that generates more sales. Right now I’m selling more than I order.

          So as I know its not real, right now it feels like everything is a profit since I built my bank account and inventory up…but I know that isn’t a real thing.

          1. TRACY

            We’re not foaming at the mouth. We are simply questioning your numbers. And in fairness, you agreed that you posted a WRONG number… the purchases. So which numbers that you posted are true, and which are false?

            We would be idiots if we didn’t question your numbers. If you make what you say you are, and it’s primarily from selling products, then good for you. But we’re not just going to take everything as gospel and not use some critical thinking skills.

            Unfortunately the things you posted didn’t support what you are saying about your numbers, and we simply pointed that out. We’d LOVE to look at documentation that shows the whole story. Maybe you’re right. Maybe you CAN make a living from just selling the clothes and maybe you only put in 25-30 hours a week. If that’s the case and you believe so strongly in the company, why won’t you prove it to us? I know you don’t owe us anything, but I’d think if you’re telling the truth and you think the company is great, then you’d be happy to prove us wrong.

  15. Did Pink

    For the record, no one here is here to put you in your place. But everyone wants you to be honest when posting and more important- with yourself. LuLaRoe is a private company so they have no obligation to show your their financials unless legally required like a public company. That is quite telling, if you cannot see their income statement, other than the sunshine and rainbows they are ramming up your ass, you have no idea what is going on. This is not to insult you but to get the facts into your mind.

    IF this is a business as you stated, I would love to see your income statement.

    To give an example:

    Gross sales
    – cost of goods sold
    = net sales
    IF you divide the net by the gross, you can see your gross margin. The higher the number, the more money you’re making.

    Then take net sales which is really before you take your taxes out and subtract what you will be paying for taxes.

    How does that number look?

    If you cannot do this or when you do your taxes all perfect, I invite you to review your schedule C. That should put everything into perspective. Numbers never lie. But as shown here many times, liars use numbers.

    I also invite you to prove me wrong when you post your Schedule C.

  16. Brianna

    why oh why does anyone care??? Let these ladies (or men- no judgement) do what they like. If they want to sell this stuff, so be it. I purchase lularoe here and there…I think some prints are great, I think some aren’t. The girl hanging with me to my left may think the opposite. In the end, it doesn’t really matter. These people aren’t making you buy anything you don’t want. It may be a fad, it may not be. The person I know who sells it is a SAHM who was looking for a way to keep connected to the outside world of diapers and bottles. Is she making money? I don’t know and I don’t really care. Is she happy? Seems so. I get the feeling that some of us are a little jelly…maybe too large to actually look cute in leggings with pieces of cake on them. I’ll share with you all what my Grandmother would say in a situation such as this “Mind your own biscuits and life will be gravy.” Good job Grammy!

    1. TRACY

      Brianna – I’m sorry you missed the point of the article. The point was that 99% of people lose money in MLMs. These things are scams, and you’re almost guaranteed to lose money. So while it’s nice to say “let them do what they want,” I am here to help educate people. You see, the MLM recruiters are pushing this as a way to make money, when they know almost no one will make money. I’m here to shine a light on this and to get truth out there.

      Oh, and I look amazing in leggings. Thanks for asking!

    2. Lazy Gardens

      why oh why does anyone care?

      Because we don’t like seeing OUR friends and families getting lured into debt by this sort of shady tactics.

      If the business was honestly presented, no one would sign up … “pay thousands of dollars for inventory you have no control over and cannot return even if it has manufacturing flaws. Compete with thousands of other sellers online and at flea markets while the fad for gaudy large print leggings lasts. ”

      Yup, sign me right up

  17. Kat

    Agree with this article 100 percent. Run away from LLR. I started in Aug and i wasted so much time , And money in this company….when I should’ve focused on my own independent business.

    I hate how things are hush hush.. and we can’t say anything negative, or we are shun.
    I purchased about 22k and made about 14k since august…which I haven’t seen because the whole time I was reinvesting. I feel bad for anyone who is signing up now… run and don’t look back. Waste of time!

  18. Lazy Gardens

    BTW – Wholesale brushed floral milk soft bulk leggings for women can be purchased for as little as $1.38 plus shipping for large orders.

    https://www.alibaba.com/product-detail/W…39182.html

    300 – 599 US $1.90
    600 – 1199 US $1.65
    1200 – 1999 US $1.55
    >=2000 US $1.38
    (This may be the source of some of the faux LulaRoe leggings, but the AliBaba manufacturers pricing is just a bit below what you would expect to pay for short runs with a wider variety of fabrics. There are other manufacturers on AliBaba. )

    The LuLaRoe inventory packages look like this, according to Tracy’s research:
    Package #1 – $4,812 for 336 pieces
    Package #2 – $5,365 for 365 piece.
    Package #3 – $6,784 for 463 pieces

    So what LuLaRoe can buy for $638.94 from AliBaba they are selling to one of their reps for $6784 … about 10X the true wholesale price.

    Talk about license to mint money.

  19. enorth

    Enjoy LLR while it lasts, because the competition is increasing. Every day, new companies similar to LLR are popping up. Everyone is jumping on the “colorful, comfortable clothes” bandwagon, and women will no longer put up with thin, dry-rotted leggings that already have holes when they arrive at their doorstep.

    And the “free” cruise wasn’t really free. You had to order enough inventory to qualify, and you paid $ to get your partner and yourself to the port of Miami, hotel if necessary, excursions, and port taxes, plus income tax on the cruise. (You could order even more inventory and qualify for bonus checks to help you cover those extra expenses. But the bonus was only given to you when you were physically on the ship.)

    MLM trips/cruises are just photo ops to make the public think reps are “successful” and making big money.

  20. Consultant friend

    Here is the thing about cruise qualifying. I have 2 friends that have cruise qualified, meaning they made over 12k in sales a month…. but guess what, they have been doing this for about 8 months now and are still largely in debt. Cruise qualifying means nothing, because you can spend 25k that month purchasing inventory and sell 12k and guess what, you cruise qualified, you get that “elite” title, but you put yourself further in debt to get there. And 3K women on that cruise? First off, how many of those women are actually making a profit.. I don’t know, maybe some, DEFINITELY not all. And second.. how about the other 68,000 consultants that are now selling these clothes. Seems like a VERY tiny percentage actually can make a decent wage from this or profit in any way at all. Just my 2 cents. 🙂

    1. enorth

      “Cruise qualifying means nothing”

      Exactly. It sounds good to those who don’t know about the requirements and details. The cruise is just publicity and photo ops.

      Did you notice how many people boasted about being “cruise qualified” but didn’t go? Why not? Because they could not AFFORD to go. Not only that, they can’t take time to go on a cruise, because they need to be home working their business or they’ll fall further behind and deeper into debt.

  21. Did Pink

    “Aside from my profit, I cruise qualified, so me and my husband got to do that for free. I also got to travel a lot for training and convention. Mostly free from points from the CC I use to order and pay off.”

    So LLR paid for you and hubby to go on a cruise because you are so great? Or did you qualify, then you and hubby paid for yourselves to go on a cruise floating around w the others who also qualified and paid for themselves?

  22. Ex LLR

    I just went to Ross and bought clothes of similar style, same fabric, & Qualiity in “unicorn” floral, solid black, and paisley prints. 3 dresses (similar to the Nicole & Amelia) & 2 kimonos similar to the Lindsay and Monroe kimonos. For the price of an Amelia Dress & a pair of leggings. I fell for the LLR addiction. I tried being a consultant, but the selling style was not for me. First of all, I got in at the same time as everyone else got into the craze. I was able to sell off my inventory, but some of the prints were not sellable, so unless you use to them as a giveaway/ incentive, or a private sale discount, you get stuck with them. I noticed the quality go down hill as they started to up the onboarding levels. Some of the Shirts and Julia’s came extremely thin, see-through, and there were 5 pieces damaged in my initial order. I was able to have a few successful pop ups. The problem with the clothing business is you have to have the infrastructure and manufacturing in factories to keep up with the demand in new consultants as well as the sales for the top consultants. Shipping times at first were quick, but then started to take weeks, and there were lots of back orders. So the consultant above is in the top 3-5% and went on her cruise. Which is probably is true. But like the writer of this article says, The other much larger pool of consultants are not going to be successful because in most mlms they eventually do become saturated. When I first started and did not get many sales, I felt that feeling that the company was making money off the new consultant inventory packages. You definitely do have to hustle and work hard to be successful in this business. I am glad I got out out when I did.

  23. enorth

    I watched a cruise video made by a rep’s husband. Several references to how they “had to stand in another line” for everything. (LOL…yet another queue…they should be experts at that.)

    Honestly, the cruise did not look like much fun. People dressed in LLR clothing in line for the next whatever. Plus, they had to go to LLR training and meetings.

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