Lularoe Review: Is It Still Worth Joining or Is This MLM Dead
Maybe it was your mom. Or perhaps it was your old roommate. Was it your neighbor?
Even if you can’t remember who it was, you are not likely to forget the first time you saw those colorful LuLaRoe leggings in a social media post, along with the related taglines.
“They are so soft!” “Most comfortable leggings yet!” “I love literally all of the prints!”
It’s 2020, people. Who hasn’t read a gushing review of this trendy legwear over the last few years? But since the 2019 release of a short documentary by VICE media, you may have also seen a more scathing analysis that names the multi-level marketing company a scam.
If you’re wondering whether this MLM is worth joining or is nearly dead, you’ll need all the information you can get to make a decision. We are more than happy to step up to the plate and provide it.
Headquartered in Corona, California (foreshadow much?), LuLaRoe was founded by DeAnne Stidham and her husband Mark in 2013. They both saw a growing need in the fashion market for leggings. Originally branded as a company targeting women, the fashion brand quickly expanded to include men’s and children’s lines.
For women, what started as quirky leggings developed into LuLaRoe dresses, skirts, tops, overlays, and denim. There is even an “Elegant Collection” with pieces designed for evening wear.
Men’s offerings are limited to shirts, but the children’s line is more varied and comparable to the women’s line.
In a website video, Stidham describes herself as a once-struggling mother. She said she started the company out of a hope to help other women, and it began as a family affair.
This is first reflected in the LuLaRoe name, which is a mashup of the names of Stidham’s granddaughters. Pieces from the collections are affectionately titled after members of the family, like the LuLaRoe Carly swing dress and the LuLaRoe Amber hoodie.
Their product is rather straightforward, but what about their business practices?
People are attracted to multi-level marketing companies because of the freedom to choose your own hours and the potential to grow a fun side hustle into a full-time job.
Like most MLM’s, insider-language is used to describe the trajectory of your sales. When you join LuLaRoe as a consultant, you start at the rank of “sponsor.” You then have the opportunity to successively move up the ladder to “trainer,” “coach,” and finally “mentor.”
Most multi-level marketing companies require their representatives to purchase a package or product set to kick off their journey in sales. With LuLaRoe, this is a clothing inventory that representatives sell at either at trunk shows, a small at-home boutique, or house parties. You get to become an “Independent Fashion Retailer.”
Starter kits typically cost anywhere from $50 to $200, but LuLaRoe’s equivalent is a whopping $5000. That’s more than the average monthly salary for the working American, making it a rather risky investment.
But it is a worthwhile risk, right? If you work hard, isn’t it possible to earn a six-figure salary from the job?
For LuLaRoe, 99.84% of its representatives are at the rank of “sponsor” and average $6,781.84 in annual bonus earnings. After subtracting the $5,000 start-up cost, you are left with less than $2,000 for a year’s worth of effort. That’s nothing to write home about.
And while they used to have almost 80,000 consultants, LuLaRoe’s numbers have dwindled to around 25,000, thanks to the controversy surrounding their name.
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In January 2019, the Attorney General for the State of Washington filed suit against LuLaRoe. The claim? The popular leggings company had exposed itself as a pyramid scheme.
While multi-level marketing companies are legal, a pyramid scheme is designed to work against the people who join as representatives. Instead of being paid for their work in sales, consultants get checks when they sign on new consultants.
Within this business model, it rapidly becomes difficult to find new people to join. Because of this, the struggling consultant spends money meeting their monthly product quota, but it doesn’t turn into income.
After being embroiled in other lawsuits, the company was required to shut down its warehouse in California five days before last Christmas, leaving 167 employees jobless.
In addition to legal issues, there have been questions surrounding the quality of LuLaRoe products. Multiple sources have reported the leggings being delivered to both consultants and consumers with holes in them.
The company itself admitted to this flaw, with a spokesperson recorded by Business Insider as saying they “weaken the fibers to make them buttery soft.”
DeAnne and Mark Stidham insist on the company website that LuLaRoe is a “business for families built on the principles of entrepreneurship, freedom, and service.” But the laundry list of ticks against them just keeps getting longer.
Given the circumstances, it isn’t surprising that LuLaRoe has been spotted on lists around the internet of companies to avoid. But if you are interested in joining an MLM company but are afraid because of the lack of transparency and the scam potential, there are services designed to help you.
Websites like MLM Guide have vetted companies on your behalf, so you can have peace of mind. MLMs are often broken down by industry, making it easy for you to find a business that’s interesting to you.
If you’ve decided that LuLaRoe is more lifeless than lucrative, check out our opportunities for help finding an MLM you can trust.
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