LuLaRoe employees share mixed feelings on several forums on the Web. Some say that they’ve had great success and others say that the business is just another pyramid scheme. Additional research has shown, however, that LuLaRoe is not a scam but you should do your research before becoming employed by the company or purchasing their clothing. Here’s what we found out:
What is LuLaRoe?
LuLaRoe is a multi-level marketing company. This simply means that the company uses network marketing to get customers. Many companies, like Mary Kay and Tupperware, used this model to get off the ground. If you are looking to join the company as a distributor you need to have a sponsor or referrer. This person will train you on how to get sales. Once you’ve gotten a sponsor and identified a sales team that you’d like to join you will receive an identification link and create a sales account for the company.
Once you’ve created your account and completed an Independent Consultant Agreement you will be able to create an order of clothing. After you’ve received the order of clothing you can start selling and performing demonstrations for interested parties. Before you get started as a seller though, you may want to know what the Better Business Bureau has to say about LuLaRoe.
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BBB Complaints
In the past three years there have been 50 or more complaints filed with the BBB about LuLaRoe. The majority of the complaints (about half) were about the quality of the company’s clothing. Because the company is still new these complaints can be worrisome. Many multi-level marketing companies allow the quality of their products to suffer and it leads to the failure of the company. If LuLaRoe fails to address customer complaints it can lead to both customers and distributors leaving with no return to distributors.
Outside of the quality of clothing other complaints have surrounded billing issues and tax on shipping cost. Most of the complaints being filed could be solved by better communication between distributors and clients. However, the company has yet to find a good way to approach these communication efforts.
As far as working for the company goes many employees seem to like working for LuLaRoe. It is pointed out by many though that selling the products for a living is not easy. Some say that the introductory materials the company gives out are a bit misleading. If you take a better look at the company, is LuLaRoe a scam?
Is it a scam?
No. LuLaRoe isn’t a scam.
Many multi-level-marketing companies are looked at as pyramid schemes or scams but that is not the case with LuLaRoe. Most companies are labeled as “scams” because they don’t stick to their refund policies – or otherwise make false statements about their products or services. This is NOT the case with LuLaRoe. However, if LuLaRoe isn’t able to adopt better business practices it is possible that they will go out of business.
Another reason people have thought that LuLaRoe is a scam is the compensation plan for distributors. The plan looks a lot like a Pyramid Scheme. However, employees of the company have assured people that the company is legitimate. Things can change though. Some companies that started out as a multi-level-marketing company can easily change to a Pyramid Scheme (and fast).
The major downfall with most MLM companies is that they force distributors to purchase products and there is a lack of balance between purchases made by the distributors and outside sales. Then customers become distributors and there is a vicious cycle of “too much product, not enough demand.”
Although there is no evidence to prove LuLaRoe is a scam, it may be wise to only purchase the clothing from an already-established distributor. Once you’ve had time to read the company’s policies, etc. you can make an educated decision as to whether or not you want to get involved with them.
Photo: makerist
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