I have never been a LulaRoe retailer. I have been in eCommerce since 2012. I have created over 10 eCommerce businesses since then. I sold my last eCommerce business in July 2018.
My opinions are based on articles such as this story that ran on Bloomberg News, this video by a LuLaRoe retailer and this blog that dissected a LulaRoe investment.
What is LulaRoe?
LuLaRoe is a multi-level marketing (MLM) company specializing in women’s clothing. It gained significant attention and notoriety for several reasons, which led to the company being frowned upon by many consumers, business analysts, and even former consultants.
Here are some of the primary reasons why LuLaRoe faced criticism and negative perceptions:
1. Quality Issues.
One of the main criticisms against LuLaRoe was the inconsistent quality of their products. Many customers reported receiving leggings, dresses, and other items with defects, such as holes, rips, or poor stitching. This led to dissatisfaction among buyers, tarnishing the company’s reputation for providing high-quality clothing.
2. Overly Saturated Market.
LuLaRoe relied heavily on recruitment, and as a result, the market became oversaturated with consultants. As more people joined the company, competition increased, making it difficult for consultants to find customers and sell products effectively. This saturation often resulted in financial losses for individuals who had invested in starting their own LuLaRoe business.
3. Controversial Business Practices.
LuLaRoe’s business practices and policies faced scrutiny. For instance, consultants were required to purchase inventory upfront, which could be an expensive investment. If they couldn’t sell the items, they were left with unsold merchandise. Additionally, there were allegations of misleading income promises, pressuring consultants to recruit more people, and the difficulty of returning unsold inventory.
4. Lawsuits and Legal Issues.
LuLaRoe faced several lawsuits. One notable case was related to the quality of their leggings, where customers and consultants alleged that the leggings ripped too easily. The company was also sued by former consultants accusing LuLaRoe of operating a pyramid scheme, which is illegal in many jurisdictions.
5. Poor Consultant Support.
Many consultants felt that LuLaRoe did not provide adequate support and training. This lack of support made it challenging for consultants to succeed, especially given the competitive nature of the MLM market.
6. Negative Publicity.
Due to the controversies and legal issues, LuLaRoe received negative publicity in the media. Stories of consultants losing money, coupled with the company’s legal battles, further damaged its reputation.
These factors contributed to the negative perception of LuLaRoe within the public and business communities.
While some individuals may have had positive experiences with the company, the overall reputation suffered due to these widespread issues, leading many to view LuLaRoe and similar MLM businesses with skepticism and caution.
Why starting your own online boutique will be better than joining LulaRoe:
It’s cheaper to start & you’ll actually be in charge!
Getting your initial investment for LuLaRoe can cost anywhere from $5,500 to $7,000— then you’ll still need to get supplies such as hangers, storage, etc. Starting an online boutique costs less and you actually have full control. Click here to read more about how much it costs to start an online boutique.
If you are a LuLaRoe retailer you don’t own or control anything. LuLaRoe sets the terms and restrictions on what you must do to stay in good standing.
If you had your own online boutique, you’d be able to make decisions that help YOUR bottom-line.
You can sell while you’re asleep!
Most LuLaRoe selling is done in Facebook groups where the seller hosts virtual pop-up shops. LuLaRoe sellers can also choose to host actual pop-up shops in their homes or the homes of friends and family. Either way, you have to be active (and in some cases aggressive) in the selling process.
When you have your own online boutique, you can create a beautifully designed website that enables you to sell product even when you are not actively pitching the items that you have for sale.
You can choose your merchandise
As a LuLaRoe retailer you have no say in what designs and styles you get when stocking inventory and you are required to buy a minimum of 33 pieces each month. You may get items that the customers in your Facebook group are not attracted to, leaving you will items that you are unable to sell (and thus less/no money for new stock).
If you had your own online boutique, you’d be able to select exactly what styles you want from your wholesale supplier. When you know who your target customer is and what they like, it’s easy for you to choose merchandise that sells well & sells quickly!
Build your own brand instead of someone else’s
As a LuLaRoe seller, you’re already doing the hard work of building a business all without actually being in charge and reaping all the benefits. You have to actively market and you are always on the hunt for new customers. LuLaRoe doesn’t do anything other than provide merchandise that you can’t select.
Why not put that sweat equity into your own business?
Go ahead and build your own brand, if you are a current/former LuLaRoe seller or interest, you are capable.
Building your online boutique business is not that different from the work you are currently doing.