Written by Bridget Jack Jeffries
What’s that you say? You’re a stay-at-home mom with $6,000 to spare and no idea what to do with it? Stop right there! Before you even think about spending that money on a vacation, a charity, or legitimate business ownership, consider LuLaRoe, the latest MLM that’s taking the gullible proletariat by storm!
Or, you know, don’t. Here are 6 reasons why you should LuLaNO before you LuLaRoe:
1. LuLaRoe leggings are putting assets on display in all the wrong ways
Do you want your better side looking like this?
Okay, so most of us wouldn’t mind having butts like that. But that booty is 20 and attached to some good genes, so for 99% of us, not gonna happen.
The leggings, on the other hand, are LuLaRoe. For almost a year now, LLR has been under siege due to quality complaints surrounding its famous “buttery soft” leggings. These complaints state that the leggings:
- Tear easily
- Show inconsistent sizing
- Are poorly made (one leg longer than the other, bad seams, etc.)
- Arrive with holes, or develop holes after only 1–2 wears
Other prints are laughably bad or boast very unfortunate placing of patterns:
LLR claims a defect rate of < 1%, well below clothing industry standards. Yet many, many customers report that this has happened to large quantities of their leggings (if not all of them) — astronomical odds if the defect rate is really that low. The problem is bad enough that Mark Stidham, the CEO of LuLaRoe, has urged consultants to find creative ways to “sell [their] damaged items” rather than sending them back in to the company for a refund. If you’re a LuLaFanGirl in denial about the extent of the defective leggings problem, better watch out, the Karma bus is likely to go “BEEP BEEP” all over that!
Still thinking of selling LuLaRoe? That’s too bad, because . . .
2. LuLaRoe blames its consultants for the defective merchandise
Yup, you heard that right. In an e-mail to one disappointed customer, LLR maintained that consultants are expected to check their merchandise for holes and defects before selling, so all these blown-out butts are the consultants’ fault:
Never mind that some of these defects do not become apparent until after 1–2 wears (are consultants supposed to grow a spare of every body type imaginable and pre-wear them?). And consultants are expected to have hundreds of clothing articles in their inventory at any given time, minimum. Carefully inspecting hundreds of items of clothing every week is liable to be a full-time job in itself. Whatever happened to earning full-time pay on part-time hours?
Speaking of earnings . . .
3. LuLaRoe does not offer income disclosure to potential consultants
If you were going to franchise a McDonald’s restaurant, McDonald’s would have to provide you with hundreds of pages of analysis demonstrating what you can expect to be earning off your investment and why. LLR won’t even provide you with a 1-page statement of what the average consultant can expect to make.
Why? If this is such a lucrative “business opportunity” — if these women are earning full-time pay for part-time work like the company says — why not simply disclose that? It would be a simple matter to mandate that consultants report the figure they claimed on their IRS Schedule C along with estimating the hours they spend on work every week.
LLR did disclose bonus commissions paid out back in 2015. That number was a median $85.80 per consultant, with 78.43% of consultants being completely ineligible for bonus payments (meaning they received zero). Eligible consultants received a median of $397.69. You could earn more than that in a year donating plasma every other month.
These are only bonus payments, not earnings from sales, but LLR’s silence on what consultants make speaks volumes. While lots of women claim they are totes making bank on LuLaRoe, few are willing to back up their claims with hard data (like their IRS Schedule C). Blogger Kristi Trimmer posted her figures from her first month of selling LuLaRoe as well as some additional information about current her sales, and those numbers have revealed she’s making $6-$9 per hour for the time she’s putting in.
Using leaked figures, Business Insider recently reported that the average LLR consultant sold only $3,387 worth of LLR merchandise in February 2017. (Of course, they probably weren’t aware that this didn’t represent sales…. rather it represented how much consultants ORDERED from the company.) Even still, assuming that those clothes sold at twice the wholesale price (which is a generous assumption), those are gross profits (before all other business expenses) of a mere $1,693.50 per consultant — and that’s before tax, no benefits. If that still seems like the potential to be a lot, please consider that Business Insider also reported that 80% of consultants sold less than $5,000 (which included 10,834 consultants who sold nothing at all) and these consultants typically invested around $15,000 worth of inventory to turn a profit. $1,693.50 isn’t much when you’ve got $15,000 worth of inventory to move.
So, full-time pay? Full-time pay at just barely above minimum wage, maybe.
4. The cult-ure at LuLaRoe
I have a degree from Mormon-owned Brigham Young University. I also happen to be an evangelical Christian. So I’ve spent a goodly amount of my adult life worshiping with people who like to hunt out “cults,” all while befriending and sympathizing with people who don’t want their religion known as a “cult.” These days, “cult” may be the only four-letter word that I’m not comfortable using under any circumstances.
Except LuLaRoe is totally a cult.
Let’s compare some of the things we observe at LuLaRoe to “Characteristics Associated with Cultic Groups” by Janja Lalich, PhD and Michael D. Langone, PhD:
CULTS: “Questioning, doubt, and dissent are discouraged or even punished.”
LULAROE: From the Policies & Procedures Handbook, “Speak well of the Company, other Independent Fashion Consultants and our competitors.” From CEO Mark Stidham, “[A]lways know that we are fierce defenders of the Culture of LuLaRoe. If you see something not in line with the culture, see it as your responsibility to report those things.” Or see the next entry . . .
CULTS: “The leadership induces feelings of shame and/or guilt in order to influence and/or control members. Often, this is done through peer pressure and subtle forms of persuasion.”
CULTS: “The group teaches or implies that its supposedly exalted ends justify whatever means it deems necessary. This may result in members’ participating in behaviors or activities they would have considered reprehensible or unethical before joining the group.”
LULAROE: Most of us would be pretty angry at The GAP if they sold us leggings that developed holes on the first day, then put forth a policy of refusing to exchange or refund them. We would consider that wildly unethical. But LLR tells us “Fashion Retailers are not obligated to honor a return or exchange” if an item has been “worn” (see above). The LLR CEO (as cited earlier) encouraged consultants to find “creative” ways of selling their damaged leggings. And here is one consultant’s “creative” solution to the problem:
5. The LuLaRoe market is rapidly becoming oversaturated
As I’ve explained elsewhere, MLMs fail in part because they oversaturate the market with competition and product. They do not care whether there are already 4 other sellers on your same street; if people want to sign up, they can sign up. We here at PinkTruth recently had a LLR consultant compare LLR to The GAP, so let’s run with that comparison.
I live in Mount Prospect, a northwest suburb of Chicago surrounded by others villages/townships. Each village or township usually has 50,000–100,000 people, so it’s a pretty populated place. How many GAP stores do you think there are within 5–10 miles of me? Answer: One. There is a whole one GAP store over in yonder Schaumburg, and it is a small mall location, not a giant stand-alone store. This longstanding, national clothing company thinks it can only sustain one store in my populous locale, and they sell to both men and women.
Now how many LLR consultants are in the same radius? Well, according to the LuLaRoe “retailer map” feature, there are 22!
I can’t think of any clothing stores with more than 1–2 locations within 5–10 miles of me, yet LLR thinks we need 22 of their women’s clothing “stores” around here.
Business Insider reports that LLR has exploded from 38,277 consultants in September 2016 to 77,491 consultants in February 2017, and if you think the consultants aren’t feeling it in their sales, guess again. So if you buy into LuLaRoe now hoping to make the same amounts of money as people who were doing it 1–3 years ago, come see me. I have some lovely oceanfront property in Utah to sell you.
6. It doesn’t look good for LuLaRoe
LuLaRoe has an F rating with the Better Business Bureau — and no one to blame for that but itself. It has a rating of 2.5 stars on GlassDoor as I write this. LuLaRoe is now fending off two class action lawsuits, one for improperly charging sales tax in states that don’t have it, and one for selling defective merchandise. It is also fending off a copyright lawsuit due to improper use of an artist’s design on one of their leggings. A fourth lawsuit has been filed by CMS, LuLaRoe’s credit/debit card processors, alleging breach of contract on LuLaRoe’s part. LLR’s answer to the aforementioned and longstanding improper sales tax issue was Bless, a transaction system that requires consultants to have an iOS (iPhone or iPad). The 58.1% of smart phone users with non-iOS phones can go pound sand, apparently. The end result is that many consultants are still using Audrey and making improper sales tax charges because, when it comes to a decision between owning an iOS product and breaking the law, the choice is clear.
Do what you want with your hard-earned money, just make sure you LuLaNO.
Bridget Jack Jeffries is a human resources professional from Chicago. Her writing and interviews have appeared in The Washington Post, The Hill, and Religion & Ethics Newsweekly. Follow her on Twitter.