Why I left LuLaRoe

Ok - this will be long because I just want to do one post encompassing my whole time as a consultant and the reasons why I left. It's also probably a bit jumbled and I'm sure I'm leaving stuff out. I want to be candid about my experience (both positive and negative) and I want to be careful to note that some of the reasons I left are based on speculation that has yet to be proven true or false.


Back in the fall of 2015, I was introduced to LuLaRoe by my boss at the time and good friend. I was skeptical of buying clothes on Facebook at first, but I started with a pair of leggings and then a Randy and before I knew it, I had fallen completely in love with the clothing. I never cared what I wore before - usually just a jeans and sweater or t shirt kind of girl. Not much pattern. I didn't like to stand out. But these clothes were comfortable (they seriously feel like you're wearing jammies) and cute (at least back when I fell in love - the patterns were not as crazy as they are today) and I actually started caring about what I wore each day. I'd plan my outfits so I could wear my LLR every day. I was promoting it all the time, even though I didn't sell it. In fact I told my friend repeatedly I didn't want to sell it because "I don't have time for that."

Three months after I started buying it, I realized I was up to about 50 pieces and said, alright, I should just sign up. This was in February 2016. I had about an 8 week wait in the queue. I was so excited - I did a practice party using photos of my own personal LuLaRoe. I bought racks and revamped one of the smaller rooms in the house to do my LuLa in. Bought storage units and prepared as much as I could. I onboarded on April 1, 2016 during a lunch with my two bosses. Immediately after placing my initial order package (this was back when we could do custom packages), I bought more leggings, so my initial investment before I started selling was about $9,000. I paid for this by using a new credit card that offered 0% interest for 21 months. Throughout my time as a consultant, I never kept more on my credit card than we as a family could pay off if something bad were to happen. Unfortunately many other ladies got into a situation where their debt was more than they could pay down. I can't speak for anyone else's financials. I just knew that I wasn't going to make the investments if it would be an impact to my family. 

For those of you who may not be familiar with how LuLaRoe works - we buy the clothing at wholesale cost from LuLaRoe and then sell to our customers at retail. Which means that unlike some other direct sales companies where you are paid on a commission basis, you own this inventory. You have to store it, take photos of it, and ship it all from your own home.

So I launched, and sales were amazing. It was SO much work doing LuLaRoe in addition to a full time job outside the house, but I loved it. I wasn't sleeping much, but it was fun. I enjoyed photographing the clothes, helping ladies find pieces they loved, and running my own business. I met so many amazing ladies in my consultant groups and as people became repeat customers of mine. I spent the entire first year of selling LuLaRoe re-investing my profit, so I built up my inventory to around 1600-2000 pieces (including leggings). I finally started taking a small salary in April of 2017 when I had paid off my 2016 taxes and lowered my credit card balance to a few thousand. I did finally pay that balance off completely in the summer of 2017.

Let me sidetrack for a moment and talk about some of the good and bad about being a consultant, for me:

The positives: I learned how to run my own business. I learned how to market via social media. I learned that I loved being my own boss and doing something that was more creative than my day job. I met some wonderful women! I had some customers that just made my day by letting me know how much they loved their items and how good they felt about themselves. I built a community in my VIP Facebook group and I truly enjoyed interacting with people there. When I left the business, I left with a profit (more on that later).

The negatives: This is specifically speaking about my time as a consultant: Taking so much time away from my son/my family. I was glued to my phone because I'd constantly be getting customer questions, or I needed to load my inventory for this event, or this event, or I needed to do admin tasks for the multi consultant group I ran. Customers that didn't pay invoices despite repeated reminders. (The ones who claim items and then ignore you completely are the worst - sorry folks, don't claim items if you aren't going to pay for them, it's a waste of everyone's time). Looking back, while I know that putting customers first allowed me to be successful and have repeat business, I wish I'd maybe put off answering a question about material for 5 minutes to tuck my son into bed or read him a story. Another negative? Put a bunch of women together in any group and there is bound to be some cattiness. Most specifically - everyone worried about how everyone else did business. So much reporting to compliance when people sold below retail (hell, I'm guilty of reporting people because that's what my mentors told me to do!). To expand on that, another negative of being a LLR consultant is you can't run sales openly. Normal businesses, when styles go out of season or have been sitting awhile, you can run a sale and advertise it. Not if you're following LLR policies though. You have to say "PM me for details" and most customers don't want to bother having to send a private message to find out the price on something. Launches of capsules were always (and continue to be) a shitshow. I usually managed to get items but their site to order inventory would crash, people would be double charged, they'd send out the wrong items to people). When I launched they put my entire order of 75 Azure skirts on backorder for almost 3 months! That's money I paid that they had and I didn't get my product to sell until months later. And this happened a lot during my time as a consultant - I had backorder slips in almost every box the first several months. And when I'd finally get a box of backorders, they were almost always wrong. I'd either get less stuff, the wrong stuff, or a few extra items. It was impossible to keep track of. One time I got an entire duplicate box of an order and when I tried to return to LuLaRoe, they yelled at ME because of their screw up. I should have just kept it.

Ok, back to the story.

I had the biggest sales months of my time in January, February, and March of 2017. I was ordering twice a week, I was selling a ton, it was awesome. And then in April, it was like everything came crashing down. I went part time at my day job because I just couldn't handle both anymore. And then LLR sales TANKED. And when I say tanked - every single consultant I spoke with noted April as the month their sales just went to shit. I don't know specifically what happened, but around that time there were a ton of going out of business sales being advertised by unhappy consultants who were leaving the company. And I want to admit a huge mistake I made here - I assumed those consultants just couldn't cut it. I was wrong! And I'm sorry for assuming. I thought that people leaving just didn't realize how much work this was going to be, or made mistakes with their money - and while that may be the case for some...it's not the case for all and I admit fault for assuming.

So LLR tried to combat all the GOOB sales by changing their policy on returning inventory when you decide to leave the company. Our contracts I believe all had a note about that we could return our inventory for a restocking fee when we left. They changed this to say they'd refund inventory 100% and cover shipping. I think they thought that it would get more people to onboard because there would be zero risk in signing up, and also stop everyone selling at a discount because they could get their money back. But it blew up in their face. So many consultants were unhappy they just all decided to leave at once, and LLR couldn't afford to pay their refunds. (Allegedly).

Also happening during this time was a massive backlash on LLR for holes in leggings. Now, I want to be clear that I have about 50 pairs of leggings myself and I've only ever had holes in two pairs. I've washed and worn them many, many times. And I was always very careful to inspect every item of clothing I sent out during my time as a consultant and only ever had maybe a dozen items returned for damage during that whole year and a half (more items were damaged, I just caught them before even listing them for sale). But many consultants don't have time to inspect every item and sent stuff out and then refused to replace for their customers, which led to lots of customers leaving bad reviews about the company's clothing and eventually I think a lawsuit was filed about the damages. And there was/is also a lawsuit about charging sales tax to customers improperly, but I don't really get too involved in that because coming from MA, we don't have sales tax on clothing, so none of my customers were charged tax during that time.

Anyway, it's summer of 2017 and I'm happily working towards making LuLaRoe my full time job after my day job ends at the end of this year. I'm drinking the Koolaid and assuming that the damage issues and sales tax problems are being taken care of. I don't know at this point how many thousands of retailers are going out of business. I'm not in any groups that allow negativity - it's all unicorn farts and rainbow glitter in my team pages. Those that left, left because they couldn't cut it, right? At least, that's the bullshit I'm fed every day. At this point, I'm increasing my LLR space in my house by converting my dining room to an office/extension of my LuLaRoe room. I'm ready to work hard after the new year. At this time, I had one "LuLaBaby" (a friend from school) and she'd decided to leave the company because sales had dropped so much. She resigned and was waiting for her free shipping labels to send back her inventory.

And then LLR did something that I cannot understand. They decided one day that they weren't going to honor the 100% buyback anymore. Now, this would have gone over ok if they'd just said "from today forward, we're going back to our original policy." Instead, everyone that had resigned already under the 100% assumption but didn't have their labels yet got SCREWED. They said "oh well, too bad, you're only getting 90% and oh by the way you can't return any capsules or seasonal items and if you earned bonuses during your time as a consultant we're taking that out of your refund." I don't even know what part of that is legal! Maybe it is...but what the fuck? So basically if you were a higher level consultant there was no point in returning inventory because your bonuses would probably be too much for you to get a refund. They also said they wouldn't accept any returns while they processed all the refunds for everyone who had already sent their stuff in - they were running about 2.5 months behind on those (meaning people who returned inventory in July didn't get a refund until like, October). And so the GOOB sales skyrocketed. Because people wanted out, and they couldn't return their inventory, so why not sell everywhere at a discount?

And with this announcement I had decided I was going to lay low for awhile. Continue selling and just try to reduce the level of inventory I had, and prepare myself if something were to go wrong with the company in the future.

And then the very next day, I saw something that really concerned me. I'm going to link to a post on this by Mommygyver because I don't think I can explain it that well.
https://www.mommygyver.com/single-post/2017/09/14/Retail-Roe

I, and many other people, have interpreted this information as LLR wants to swap from their consultant format to a retail, direct to consumer format. This may or may not be true - though in the past few months they've expanded their direct to consumer site already by adding shoes, and supposedly jeans are coming, along with many other items of clothing and accessories. So...they're already doing it.

This scared the shit out of me. I was concerned that if the company suddenly closed their consultant business, everyone would be trying to sell product off at once and the market would be flooded even more so than it is already, and I would not be able to sell off even for wholesale.

I spoke at length with my husband and friends and former LLR trainer who had left several months prior (her reasons were mostly for time with her family - she has a full time job she loves that she won't give up and she couldn't continue to do both. Plus, it was becoming not fun for her anymore). They all advised me to GTFO. So I decided that night I was done. Between the way they screwed thousands of women with their return policy change and this potential direct to consumer change, I couldn't trust this company anymore. So I announced it to my group a few days later and over the course of about 6 weeks I sold off 1400 pieces of inventory and then closed up my Facebook group. I am still working through about 250 pieces by selling on eBay and Mercari. And then I have to figure out how to sell off my Z racks and other equipment/tools I invested in. I've taken back my dining room and 3/4 of my LuLaRoom is now an office.

I am walking away from my year and a half as a LLR consultant with a profit of around $30,000. About 2/3 of this is going to pay off the Disney Vacation Club membership we purchased in August of this year. I feel pretty good about that - I've paid for the next 48 years of vacations for my family with my time as a consultant. That's something! It isn't nearly the right pay for the amount of hours I put into this business (you can't begin to understand how much work is involved unless you've been a consultant - its almost 24/7), but knowing that I paid that off by myself is huge to me. That is a substantial thing that we now own because of LuLaRoe.

Once I announced I was leaving, I was able to join a bunch of groups for consultants going out of business, or ones disenchanted with the company and considering leaving and the things I have read - the responses the company has given to consultants, the decisions they've made - every day I read something new making me so glad I left.

Now, allegedly...there are concerns about cash flow. This is boosted by the way the company has been pumping out capsule launches like crazy since the refund policy change. It appears (again...not proven one way or another) that they don't have enough money to refund consultants unless they sell a capsule. Seems that every time they launch one, suddenly a whole bunch of consultants are sent their checks. Also when they'd initially announced the 100% buyback they said they wouldn't send the returns back out in the new order boxes to current consultants and instead donate the items. This was proven to be a lie, as some sneaky consultants would leave their business cards in Carly pockets or folded up in leggings, or the tags would have punches on them and these items were received in new boxes. When they changed the return policy, they said they would no longer be donating but would be "sanitizing" them and sending them back out in new inventory boxes (this was why I had originally said I would stay on selling but probably not order inventory for awhile). Not donating these returns indicates that they have to send them back out because they can't afford not to. Again. Allegedly.

And I feel sorry for any current consultant who has to get someone's ugly returns in their new boxes. Good prints sell. The ugly shit is what's going back and believe me, there is some UGLY SHIT out there. LLR likes to put triangles on everything. The triangles often look like Doritos. So you may see things about "Dorito prints" out there and now you know where that comes from.

So there are consultants waiting for months for their refund checks. There are consultants going out of business being attacked by other current consultants and being told to just wait until they can send stuff back (at the consultant's cost) to get a partial refund. There are top sellers bragging about how they have the best prints. There are more and more people going out of business every day.

And then this week? The Noir collection. If you don't know about this - it's an all black (or shades of black or something stupid like that) collection. LLR pumped this up so much. They had all their retailers promoting it and getting customers excited for it. And like every other launch in LLR history, it failed big time. And for many consultants that were on the fence, this was the end. I read something like 2% of consultants were able to get black. All those other consultants had to turn around and disappoint their customers and point them to the big time sellers who ordered 2,000 to 5,000 pieces of black. Those top sellers do not need more customers. This launch really showed how much LuLaRoe doesn't give a fuck about the little guys. They claim to care about every retailer - it's bullshit. If you cared, you'd limit the collection so everyone could order some if they wanted to, and then open leftovers up later. But no...they released this purposely like this so the big sellers could buy it all up and the little guys got nothing and it's going to push those little guys out of business.

Why would LLR do this?

I suspect (again...totally a suspicion and speculation and not proven to be true) that LLR wants to push out the little people. Why? Well, think about it. If your low level consultants leave...you don't have to pay bonuses to the top sellers. It's cheaper for LLR that way. They push good product to top sellers who will just keep working their asses off to sell and make money that way, and they don't get bonuses because they don't have enough people in their downline to have them qualify.

About LLR being a pyramid scheme...I don't know the definition or legal stuff or anything like that. All I know is fact. Up until I think July of 2017, bonuses were paid based on how much was ordered each month (purchased from LuLaRoe). NOT based on sales volume. I was continually told by my uplines a bigger inventory got bigger sales. My group actually ran contests based on how much you ordered each month. In July they changed to a sales based bonus structure. That's all I know, and all I can say on this because I really don't know what makes a pyramid scheme and I don't want to say things that aren't true here.

There's really so much more I could say but much of it is speculation and I'd rather you form your own opinions on that stuff. If you want to read more, I encourage you to check out Mommygyver's blog. She has the best public information about the company and the sketchy practices. There are also groups on Facebook you can join for more if you're so inclined. Buzzfeed has done some articles. Most of the local news stations have done stories on the pyramid scheme lawsuit. Take some time to Google and form your own opinion.

That's my story. That's why I left. And that's SOME of why I'm super glad I'm gettin' outta Dodge. I don't regret being a consultant. Again, it allowed me to pay off a DVC membership and taught me a lot about running my own business and what I'd like to do in the future. But I'm glad I left when I did.

3 comments:

  1. Glad you were able to come out okay, and make some money.
    To me, LLR suffers from the "How many clothes do I actually need?" problem. With vitamins and makeup Multi Level Marketing you use the product up every month. But unless the clothes fall apart in the laundry - and then why would you buy them? - I only need so many shirts, etc. I do love my 2 maxi LLR's. But I hate most of the patterns they sell. And I really really really hate the Facebook group model because I'm so sick and tired of people adding me to those groups because they are trying to win coupons or discounts from the host/party.
    And the Noir release made me laugh. I have 1 consultant group that I am in. And she got some Noir, but not much. How long have people been asking for black pieces? Seriously. Black goes with the crazy shirt patterns and crazy legging patterns. It seems that should be a staple.

    And I don't think LLR qualifies as a pyramid, I think it's a trapezoid like most MLM's.

    Thanks for being so open about what is normally a secretive club!

    ReplyDelete
  2. Damn! Ive had a few friends GOOB because of shady stuff, but none of them actually said what was going on. One friend had a GOOB sale for about three months because she said she refused to send it back on her dime. Sad that what started as a potentially great thing has turned so awful for many.

    ReplyDelete
  3. I missed your writing so much! Thank you for posting! I love my comfy classics and all... but I’m more excited to go proper shopping with you!

    ReplyDelete