Considering joining LaLaRoe as a consultant? Below you can find information about the history of the company, who its leaders are, the types of products it sells, as well as whether or not you have a true chance to make any money.
- Corona, California
- Deanne Brady (Founder)
- Mark Stidham (CEO)
- Women’s Clothing
- Multi-Level Marketing
Number of Consultants
- Estimated $1 Billion in 2016
In 2012, LuLaRoe founders Deanne Brady and Mark Stidham astutely predicted that the leggings industry was on the cusp of rapid expansion. Their idea was to recruit a distributed workforce of moms working from home that could host parties and sip wine, all while purchasing trendy and affordable leggings. When looking at the actual products however, we see a different picture. First, the price: LuLaRoe leggings are far from the cheapest options on the market with an average pair of leggings costing $30-$40 each. If you talk to a LuLaRoe rep, they’ll undoubtedly respond that “you get what you pay for”. That brings us to point #2: the quality. Do a quick search on Google or Facebook/Instagram and you’ll find an almost unlimited number of posts of LuLaRoe customers who have found holes in their leggings with only a few uses. If LuLaRoe is going to justify their higher price, then it needs to be backed up by higher quality products that last longer than a couple of days or weeks. And as it turns out, LuLaRoe doesn’t even hide the fact that their leggings are getting holes too quickly. Here is a statement from their head of production:
“The leggings may get holes, because we weaken the fibers to make them buttery soft,” Patrick Winget, the head of production for LuLaRoe, is quoted as saying in the January 17 email. “We have done all we can to fix them.”
I’m guessing that customers would be fine trading holes for leggings that are not as “buttery soft”.
LuLaRoe Income Disclosure Statement
So, leggings are clearly an in-demand product, which should make selling them extremely easy, right? Well, according to the company itself, that doesn’t seem to be the case. For starters, we uncovered that the initial LuLaRoe starter package to become a consultant is $5,000. This is an astonishing number and makes it one of the most expensive MLMs that we’ve seen in terms of a startup cost. What’s even more unsettling about this number is that according to LuLaRoe’s Income Disclosure Statement, 99.84% of retailers/distributors will only see bonus earnings of $6,781 for the year (keep in mind this is not profit). When you subtract the $5,000 startup cost from that, it equals less than $2,000 for the entire year. In addition, there are at least 80,000 LuLaRoe consultants in the U.S. as reported by the company, which means a ton of competition for market-share among LuLaRoe representatives. If you are considering joining LuLaRoe as a way to either replace or supplement your income, you may want to think twice based on these numbers.
LuLaRoe Customer Reviews
Currently LuLaRoe has an overall Better Business Bureau rating of F, which is the result of over 300 formal customer complaints. The recurring issues throughout the complaints are:
- No refund for inventory returns
- Lack of response from customer service department
- Being charged sales tax even though the consultant lives in a state without sales tax
- Poor quality clothing that falls apart quickly
- Overcharges and ongoing billing issues
LuLaRoe Employee Reviews
Clearly, given the fact that employees have brought now two class action lawsuits against the company within the past year, sentiment is at an all time low for the company. Glassdoor shows a pretty clear sign that employee sentiment has been falling steadily since the summer of 2016, and the overall employee rating for the company stands at 2.4 out of 5 stars with less than 1/3 of employees approving of the CEO.
- In 2017, a class action lawsuit was filed against LuLaRoe regarding improper charges resulting from their point-of-sale (POS) system.
- In October 2017, a class action lawsuit was filed in California accusing LuLaRoe of being a pyramid scheme.
- You can find a complete list of LuLaRoe lawsuits here.