LuLaRoe, best known as the company behind the lycra leggings that at least six of your high school friends are trying to sell through Facebook, markets itself to freelance “consultants” as a possible pathway to financial independence and stability. But once again, LuLaRoe sellers are coming out of the woodwork to allege that this job is putting stress on their well-being, financially and physically.
Previously, LuLaRoe consultants have talked about what they perceived as problems with the company, particularly with regard to quality control, pricing, and inventory.
Now Quartz has taken an even more in-depth look at the culture and costs of living the LuLaRoe life, and turned up sellers who claim they are being driven into debt, say they were misled into paying for thousands of dollars in items they could not sell, and allegations of bullying and harassment.
We recommend checking out the full Quartz story when you have the time, but here are just a few of the important takeaways.
1. The Hope
With promises of an endless stream of customers and ever-expanding opportunities to run their own business, it’s not hard to see why many women would be attracted to selling LuLaRoe clothing.
Kayla tells Quartz she first learned of the company after a friend invited her to an in-home party, and decided to join the company after hearing how much consultants were making through sales — sometimes as much as tens of thousands of dollars a month.
“I realized if they’re making the money that they say they’re making all over their Facebook pages and how it’s life changing, why can’t it change my life?” she recalls.
2. The Cost
But in order to make money, you have to spend money. Like other multi-level marketing (MLM) companies, those who want to sell LuLaRoe must purchase their own inventory from the company. And that can be expensive, with reps telling Quartz that they paid between $4,000 and $6,000 for initial inventory packages.
These packages, a LuLaRoe spokesperson tells Quartz, are “designed to provide sufficient inventory to help retailers succeed.”
The hitch, according to some of the sellers Quartz spoke to, is that they have no say in what products come in this initial shipment. To get items they believe they’ll have a better chance of selling, the consultants say they have to go out of pocket to purchase additional products.
This expense is in addition to the fact that reps say they are required to make a minimum purchase of 33 pieces a month, totaling around $350, in order to remain active.
3. The Debt
Many reps tell Quartz they were encouraged by their upline — the person who signed them up to sell products — to buy thousands of dollars more in inventory after their initial package. Sometimes these consultant groups suggest reps take out credit cards or even crowdfund to raise money for their shops.
Kayla says other consultants suggested she obtain a low-interest line of credit to make these additional purchases.
At first, things went well, says Kayla, who quit her full-time job after earning between $3,000 to $5,000 a month during the first few months.
However, the real key to a successful MLM operation is that sellers are always recruiting new sellers. While this means the parent company is moving more inventory, the influx of competition can also cannibalize the market.
Between this increased competition and waning interest, Kayla says she hasn’t been able to recoup her expenses.
Another seller, Ashley, told Quartz she opened three credit cards to cover her initial purchases. And when her sales declined after a few months, Ashley says her consultant group blamed low inventory, urging her to buy more.
Ultimately, Ashley says she was only making $500/month, but had $8,000 in LuLaRoe inventory she couldn’t sell.
A rep for LuLaRoe tells Quartz the reps should “absolutely never put their personal financial situation at unreasonable risk to establish or operate their retailer business.”
Of course, not all reps have fallen into debt while hawking shirts, skirts, and other clothing items. Quartz notes that some consultants, usually those who came onboard early, have been able to make quite a payday.
4. The Stress
Still, those who have struggled in selling LuLaRoe say they aren’t only hurting financially, but emotionally and psychologically.
Consultant Sophie tells Quartz that after falling into a debt trap of sorts where she would buy more inventory in order to muster up more sales, the venture started to take a toll on her health.
When she started having panic attacks, she told Quartz she had to get on anxiety medication.
Another rep said her business began to affect her family life. While Sarah tells Quartz that she was making tens of thousands of dollars at the peak of her business, she was also consumed by maintaining the sales.
She says she finally realized she needed to take a step back after she found she was spending all her time uploading items and participating in multi-consultant sales instead of with her family. When she took her daughter to dance class, instead of actively interacting with others, she was busy managing her Facebook group.
For its part, a rep for LuLaRoe tells Quartz that the company invests “considerable time, resources, and talent” to support consultants.
Still, the company maintains that consultants are responsible for their own success and failures.
“Retailers own their own business and make their own decisions…The success of any business depends on its leader’s own respective and independent business goals, and the strategies they employ to achieve those goals,” a spokesperson said.
For more information about LuLaRoe and consultant’s experiences, check out Quartz’s full story.
by Ashlee Kieler via Consumerist
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