The Real Reason Why Women Are Giving Up On LuLaRoe


If you join LuLaRoe, it’s said you’ll be able
to work from home, set your own schedule, and join a team of independent fashion retailers.
But as the old saying goes, if it sounds like it’s too good to be true, then, well, it probably
is. Before you can get started selling for LuLaRoe,
you have to have inventory. But inventory isn’t free for consultants, and sellers don’t
have the option of borrowing some before paying the company back after they start making sales.
According to the Join LuLaRoe section of their website, you have to invest a minimum of $2,500
up front to secure your first shipment of clothing, which you can then turn around and
sell at a markup. For many consultants, who are often stay-at-home
mothers, that’s a big chunk of change. And according to an article in Racked, the average
price for a consultant’s first shipment of inventory is $5,000 – double the said amount.
There are also sales incentives for those who sponsor consultants, as the more money
a consultant puts down initially, the bigger bonus her sponsor reportedly receives. Founder DeAnne Stidham has said the origin
story of LuLaRoe is a humble one, according to Bloomberg Businessweek. In 2012, she sewed
a skirt for her daughter, and so many of her friends admired it that they started placing
orders. In mere days, Stidham had hundreds of orders, and with the help of her husband
Mark, a business was born. Fast-forward to 2016, buzz about the company
was spreading via Facebook groups, which intrigued women like Roberta Blevins. In March of that
year, she paid $9,000 to become a LuLaRoe consultant. At the time, there were only a
few thousand consultants out there, and Blevins said she had no trouble making money. Within
four months, she rose from consultant to trainer, the next level of the pyramid. But then the company blew up, and the market
became saturated with thousands of consultants trying to sell clothing. By April of 2017,
LuLaRoe announced they would buy back inventory, and many lower-level consultants decided to
cut their losses and run. It seems there was just too much competition out there for so
many consultants to be profitable. LuLaRoe was officially founded by DeAnne and
Mark Stidham in 2013 as a multi-level marketing, or MLM, company, according to Bloomberg Businessweek.
To be successful as a seller in an MLM, you must sell a certain amount of products to
people who then sell those products themselves. The more people who work under you and the
more inventory you distribute, the more money you make. As long as there’s continued demand
for the product, a seller can be successful. While an MLM can legally give bonuses to consultants
who enlist new sellers, the bonuses can’t be based on how much product those new recruits
purchase. That stops too much inventory from being flooded down the line of distributors
and winding up sitting in people’s spare bedrooms. But during LuLaRoe’s first four years, that’s
what it was doing. Consultants would make more money if their new recruit spent more
money, regardless of whether or not they could turn around and sell that inventory. That
sounds a lot like a pyramid scheme, and a big reason sellers ran screaming for the hills. “Can you look at that?” “It’s a pyramid scheme” “It’s not a pyramid scheme, it’s a reverse
funnel system.” “Turn it upside down.” According to the “Join LuLaRoe” section
of the company website, the first step in becoming a LuLaRoe consultant is to “choose
your inventory.” You can select pieces from their offerings, with the option of getting
access to new items as they’re launched. When your order arrives, it will be filled
with clothing that you’ve hand-picked and can then sell to others. But according to consultant Christina Hinks,
that’s not what happened when she decided to join the LuLaRoe family with a $4,900 down
payment. Hinks told Racked: “I googled around and saw these hedgehog and
bear leggings — so cute. I live just outside of Chicago. My first shipment included 270
pieces of Southwest-inspired prints.” That’s not exactly the look of the Midwest. Hinks then sold her shipment to another consultant
who lived where those patterns would have a better chance of selling. In the earlier part of the company’s history,
customers seemed taken with their leggings in particular. In some circles, they were
even called “butter leggings,” as they developed a reputation for being extremely soft and
warm. It’s no wonder people were interested in having a pair. Or ten. But in early 2017, LuLaRoe leggings became
known for something else: ripping. Customer Valerie Williams told Business Insider, “These pants rip like wet toilet paper.” She reportedly ordered five pairs of leggings,
and she claimed two of them ripped right after she put them on. As a lot buyers reported
the same thing, LuLaRoe responded by setting up a huge refund program. The company had
literally gotten too big for its britches, and it was showing in the quality of the products. Some consultants even reported a foul stench
emanating from their unworn, brand-new LuLaRoe inventory. “If I just spent my kid’s college fund
on leggings, I am wearing them as pants, a cape, oven mitts and I would probably even
be buried in them.” Making the decision to have children is a
big one for a variety of reasons. That’s why when consultant Marlie Ezarik was asked at
a LuLaRoe convention what her motivation to sell was, she told the crowd it was because
she was having a baby, according to Truth in Advertising. She was ten weeks pregnant
at the time, and wanted to make sure she was financially ready to grow her family. But two months after that, Ezarik found herself
in dire financial straits. She had over $15,000 worth of debt because of her LuLaRoe business,
rather than the bundle of profit she’d hoped to make. Worried about her finances, Ezarik
filed for bankruptcy in May of 2017. Ezarik’s story isn’t the only one. Over 100
other LuLaRoe consultants had also filed for bankruptcy as of April 2019. One of the things that LuLaRoe promises consultants
on its company website is the ability to, quote, “create freedom” and run one’s own
“independent fashion retailer” business. That’s part of the draw, especially for women who
have other obligations and need to make their own schedules. But in January 2017, consultants allegedly
received an email from the home office with a special request. Specifically, the company
asked sellers to report anyone who was selling LuLaRoe merch at a discount, saying that they
wanted to protect the brand, according to Racked. That reportedly spurred a culture
of sellers spying on each other, including on Facebook groups. Christina Hinks told the
publication: “The level at which consultants were turning
each other in was unbelievable. There was this rabid attitude encouraged by the weekly
calls from home office.” Hinks was troubled enough by that and other
concerns that she quit selling LuLaRoe, even though she had reportedly been successful. As some former LuLaRoe consultants tell it,
they left the company after selling off the remainder of their inventory in a going-out-of-business
sale. One Google search, and you can find a number of LuLaRoe consultants selling off
their inventory at discount prices. That’s what a woman going by the pseudonym
Rachel Smith did after she became frustrated with the leadership at LuLaRoe. Smith told
Racked: “The final straw was being lied to regarding
the new merchant agreement they were trying to bully us into signing.While they were pressuring
us to hurry up and sign the new merchant agreement, Mark [Stidham] said there would be no credit
check.” As it turned out, there reportedly was indeed
a credit check. And when consultants discovered that one was conducted, the company allegedly
said it was a so-called “soft” credit check. But the reality was that the credit check
was a hard inquiry, said Smith, which caused consultants’ credit scores to drop. After the notorious legging-ripping scandal,
LuLaRoe implemented two different return policies, according to Business Insider. The first was
called the Make Good program, which assured that customers who had purchased defective
clothing produced between January 1st, 2016, and April 24th, 2017, would receive a full
refund, a gift card, or a replacement product. They also implemented the Happiness Policy,
which refunded customers within the first 30 days and offered a credit or exchange within
90 days. LuLaRoe also said that, if consultants wanted to quit, they would buy back all of
their unsold inventory, according to Bloomberg Businessweek. Although that was helpful for the many lower-level
consultants who cut their losses and ran, those moves had ramifications up the chain.
On September 13th, 2017, LuLaRoe canceled the 100 percent buyback policy, citing too
much inventory coming back. They adjusted it to 90 percent of the wholesale value, as
long as it was purchased within a year. But many LuLaRoe sellers have reportedly said
they got much less than that, especially those in the upper ranks. According to Business Insider, LuLaRoe’s growth
was explosive between 2016 and early 2017. The company doubled in size, going from 38,277
sellers in September to 77,491 sellers in February. But explosive growth came some problems
for sellers. In this case, because there was so much competition, sellers were reportedly
finding it harder and harder to move their inventory at all, despite being encouraged
to make such a large investment up front. According to an article in USA Today, LuLaRoe
allegedly had some less-than-stellar advice for its struggling consultants. Three California
woman said that, when they reached out to the company for help, they were told to borrow
cash and even sell breast milk to stay afloat and make ends meet. We don’t even have words
for that one. The year 2017 proved to be quite the time
for LuLaRoe, and not in a good way. According to Truth In Advertising, that’s when the lawsuits
against the clothing juggernaut started to flood in. Among the lawsuits against LuLaRoe
was one filed by the Attorney General of Washington state against the company, its founders, and
a promoter in 2019, alleging that LuLaRoe is a pyramid scheme. A number of class-action lawsuits were filed
against the company on the federal level, citing a litany of alleged wrongdoings, including
return policies that were deemed unfair, pyramid scheme allegations, sales tax that was illegally
charged, plus the notoriously defective leggings, about which so many customers had complained.
All in all, Truth In Advertising listed 17 total lawsuits. Apparently, LuLaRoe’s consultants aren’t the
only people who are upset with them, according to Truth In Advertising. There’s been yet
another lawsuit, and this one was filed in November 2018 by Providence Industries, LLC,
one of LuLaRoe’s clothing suppliers. Specifically, the complaint alleges that LuLaRoe
is not in a healthy financial situation. Providence claims it has sufficient reason to believe
that the company is, quote, “insolvent.” It goes on to say that they believe LuLaRoe is “[…] indebted to numerous other vendors
and suppliers that [LuLaRoe has] been unable or unwilling to pay.” Among those other debts is allegedly the chunk
of change they owe UPS, to the tune of $1 million. It wouldn’t be surprising at all
if women decided to walk away and never look back – butter leggings be damned. With all of the promises made by LuLaRoe to
consultants and all of the resources that the company offered on its website, it makes
perfect sense that consultants would look to leadership for advice. After all, LuLaRoe
certainly projects the image of success, something many consultants would naturally want for
themselves. But active listening and supportive advice
was not what Mark Stidham, LuLaRoe’s CEO, reportedly shared with approximately 80,000
consultants in a now-deleted video of a weekly webinar, according to Racked. Instead, they
allegedly got this from the CEO: “No, you’re stale. Your customers are stale.
Get out and find new customers. If you bring a new customer in, then your inventory isn’t
stale. The problem is, you try to sell to the same group of people day after day after
day.” His advice to consultants hearing bad things
from ex-sellers? “You cannot wrestle with the pig without getting
a little mud on ya. Don’t wrestle with the pigs, ignore them.” On top of the less-than-stellar career advice
that Mark Stidham gave consultants, some LuLaRoe sellers have reported other behavior from
the founders that seems off. Former consultant Rachel Smith told Racked: “After a year of watching the weekly webinars,
nothing surprises me anymore in terms of what Mark and Deanne say. His comment struck me
as that of a man who feels superior to anyone who goes against him, particularly women.” DeAnne Stidham has also allegedly made some
comments that are downright odd. Former mentor Courtney Harwood, who spent time with DeAnne
on several occasions, told Bloomberg Businessweek that DeAnne encouraged her to be “subservient”
to her husband, though they were separated at the time. Additionally, DeAnne also encouraged
Harwood to get gastric bypass surgery at a clinic in Tijuana – and offered her a discounted
referral. DeAnne seemingly prefers that her leaders be a size small or medium. “Shouldn’t they think it’s easy?” “No, I think it’s easy. That’s me. Ok?” Check out one of our newest videos right here!
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18 Responses

  1. Star Cherry says:

    I just want to know who was designing those ugly ass leggings ๐Ÿ˜น

  2. Tech Unboxing Videos says:

    ๐Ÿ”ฅMy wife started selling on Poshmark, Etsy, Ebay, and Mercari two years ago. Her sales dropped tremendously. I think that the online sellers space has become so saturated until online sellers aren't making what they used to.
    ๐Ÿ”ฅ

  3. golden blood 2 says:

    Omg๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚

  4. Cyber Lex says:

    The start up price has dropped now to $499. Just showing their desperation ๐Ÿ˜‰. #downwithmlms

  5. Stephanie Santos says:

    Their clothes are ugly

  6. KittySnicker says:

    Well their clothes are ugly too. Thankfully my friend recently stopped buying shit from this low key pyramid scheme. If you want to invest money and sell clothing, start your own damn company!

  7. A .M says:

    Their clothing is kinda ugly ๐Ÿ’€๐Ÿคซ

  8. Linda Virgilio says:

    I find it strange that the inventory the sellers receive is sight unseen. Some nice items, other ugly items. They order based on style and size.

  9. debbie T. says:

    Thereโ€™s a pyramid in their logo ๐Ÿค”

  10. Walkin' Tall says:

    I f'ing HATE MLM's (pyramid schemes)!!! SMH.
    It targets the poor, low-income women, being promised a great income, their own work hours, being able to move up in the company when the truth is these women ended up in a shit ton of debt, and worse off than they were!!
    I WISH ppl would do research before buying from companies, and I WISH ppl would refuse to invest their money in these fraud companies!!
    Its not just LuLaRoe – It's Young living brand, younique brand, Avon, Mary Kay, doTerra, Tupperware, Scentsy, pampered chef, and MANY, MANY, MANY MORE!!!
    Do NOT give your money to these companies!! You are pretty much supporting employee abuse, slave labor, and just supporting shitty shitty ppl!!

  11. monelka1985 says:

    these clothes are so ugly and tasteless and cheesy looking. Not to mention the quality…the quality is non existent!

  12. Mojo Jeinxs says:

    Real reason….ugly over price cheap frumpy clothes being sold by people who have absolutely no clue about retail.

  13. The List says:

    Is LuLaRoe a pyramid scheme?

  14. catbyte 06 says:

    Man, that stuff is so effing ugly. And who put some of those patterns together, Mr. Magoo? ๐Ÿ˜ฑ

  15. Night Reader says:

    Why can't you just have some samples for parties and then you place orders for the clients? Greedy- the owners are laughing all of the way to the bank! The products are now at Goodwill, EBay, and Poshmark.

  16. Night Reader says:

    Sorry, this stuff is ugly assed. The randy baseball tee shirts are no too bad- you can get them for under 5 dollars new.

  17. Lara H says:

    The clothes are super ugly !!๐Ÿคฎ

  18. Beautiful Life says:

    I'll tell u why because 99.9 percent of it looks like clown clothes.

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