LuLaRoe Press and Lawsuits: Addressing the good, bad and ugly about LuLaRoe in the Press
This morning I was thrilled to see a well balanced, honest, respectable press outlet take on talking about LuLaRoe and the unprecedented, somewhat unexplainable growth. Forbes posted this article and shared openly and candidly their facts about the company and gave honest information about the pros and cons of this business model and the potential benefits and risks. THEN, hours later on my yahoo email an article popped up that was addressing ANOTHER class action lawsuit being filed against LuLaRoe, this time having to do with the company switching back to their original 90% buyback policy for Independent Fashion Retailers. These don’t surprise me and they don’t upset me because facts are facts and eventually that’s what will come out through all the allegations and emotions. FACTS.
Has LuLaRoe received a ton of negative press coverage? YEP. Has is stopped their growth? NOPE. I’ll argue that in a way it’s done a healthy pruning of the sales force. As is fact in any company, turnover will happen and LuLaRoe is no different. The difference here though is there seems to be an unhealthy focus by some on this basic business fact. Some will succeed and some will fail. Does LuLaRoe have it’s retailers at the forefront of their business decisions? They’d be ignorant not to. I believe they do. They are wholly dependent on their retailers moving their product and growing their business. It would not be business smart to make decisions that would hurt their retailers.
BUYBACK POLICY LAWSUIT
So when they reinstituted the 90% buyback as opposed to 100% buyback policy, I was thrilled because any smart business owner would know that kind of policy isn’t sustainable or fiscally responsible when general knowledge is ALL companies experience turnover and people WILL leave EVERY company! This may sound harsh, but I don’t want LuLaRoe in the red and with a policy that allows any retailer at any time to return all their product, get 100% of their money back AND the company will pay to ship those hundreds and hundreds of pounds of clothing back, that’s gonna cost the company A LOT of money! In my counseling practice I tell every client you MUST have skin in the game. You gotta put some money on the line. With this kind of policy you don’t have to have any skin in the game. You can step out at any time and there’s no cost to you, which in my opinion risks the commitment and sacrifice that MUST be required to be a successful entrepreneur. 90% buyback is still crazy generous and something you won’t frequently find.
I don’t spend much time trolling the internet looking for LuLaRoe Press coverage, but many people send me links to them and sometimes they even pop up for me when checking my email, like today! All these stories talk about how Multi Level Marketing (MLM) companies prey on stay at home women, women seeking more for their family and the flexibility that being an entrepreneur can provide. In my opinion “prey” is not really a fair term. Does the MARKETING and OFFER these companies present pull on a women’s heartstrings? YES. Does it appear more simple and doable than it really is? YES. Does it require critical thinking to make a smart business decision when presented with the information about any of these direct sales companies or one like LuLaRoe, which functions more like a retail shop? YES.
Here’s where the counselor in me takes the soap box. If you’ve got a well balanced sort of perspective on life and business and STAY IN YOUR OWN LANE you’ll do great in a business like this! If you’ve got the mental fortitude (in my opinion, this is the BIGGEST predictor for success or failure with a direct sales business!) to withstand the storms, pressures, stressors, self determination it takes to make a business like this work, you’ll succeed. If you are prone to negativity, peer pressure and opinions of others, comparing yourself to those in other lanes, then in my opinion, you’re less likely to succeed. It takes DRIVE, DETERMINATION, STAMINA, and COMMITMENT to succeed in ANY direct sales business! Can I tell you my story?
For a decade I sold lia sophia jewelry. I did ok. Some would say I did awesome. Well, not some of these negative Nelly’s out there bashing direct sales any chance they get. 😉 But I at least wasn’t spending money to do the business and in my days of selling lia sophia we’d always joke if you’re not spending money to make money you’re doing ok. I would sell a few thousand a month and it would help pay for things here and there and allow me to buy Starbucks when I wanted and splurge on Christmas gifts for others. Did I think I was doing well? Sure. Did I buy into the company motto of sell and recruit and you’ll succeed? Yep. Did I think it could make me rich? Sure. Did it? Nope. Devastatingly December 2014 the company announced in an 8 minute conference call to all of it’s independent advisors that they would be closing their company in 28 short days and we would be left without a job. In reality they closed up shop 18 days later and I was left with the mess of explaining to booked hostesses and confused customers that their “lifetime guarantee” on their product and booked party just went up in smoke. Just 2 months prior to this unfortunate news, I was the company’s #1 retail sales advisor nation wide. To have the rug pulled out from under you gives you a new perspective and causes you to really look at direct sales companies with a critical eye before jumping on board.
And to those who think LuLaRoe doesn’t offer a great profit opportunity and sound business model, I want to laugh out load. When I looked at my lia sophia bank account when all was said and done I had very little to show for the decade of blood, sweat and tears. I hustled my booty off and I thought I made good money. I earned the trips, I recruited the teammates, I spoke at trainings and thought this is it. I can sit here today and type that LuLaRoe has substantially changed my financial contributions to our family with the same amount of hustle as I gave lia sophia. So, for those who say you bust your ass and you don’t see any return, I beg to differ. I’ve done other direct sales companies where the buy in for a lia sophia jewelry kit was $99 or so to get started. They would print sales numbers and tell everyone in the sales force what the top ladies in the company were selling and it was something like $10-20,000. With LuLaRoe I would not consider myself a hard core retailer like some who sell $50,000+ a month, but have been selling monthly between $10,000-$24,000 in retail clothing and this is “average” as far as my read on the company (they don’t publicly post retails sales numbers). Even as a retailer in a sea of thousands I’m happy with my profits. I am not sitting on any debt in this company. Last month I contributed $8,000 towards closing on our new house and was able to contribute another few thousand to purchase some land in Africa, my husband’s home. The mortgage on our new house is pulled from our LuLaRoe bank account and the profits from this company have helped us in so many ways financially. I could also get sappy and talk about the even more substantial non-financial ways it has contributed in my life too. I will keep the sappy brief, but suffice it to say that I have found such sheer joy and deep gratitude that I have never felt in my decade plus of direct sales interacting with the women in my life because of this company. I have found myself having more quality time with my husband and children (something in the company’s mission and that has been true for us) and a true spirit of community and support.
Can I say this about the SAME EFFORT and DRIVE of my work with other jewelry direct sales experiences? No. Do I still love and support my friends who choose other direct sales companies out there? Yep. I think the reason there’s so many lawsuits and negative press around LuLaRoe as opposed to say Mary Kay, Rodan & Fields, Jamberry, etc. is that these company’s buy in and risk is LOW. Kits range from free to maybe a couple hundred dollars. Yes, LuLaRoe requires it’s retailers to buy the bare bones of a basic retail shop. You have to have the wit and drive of a downtown retail boutique because you are now an inventory based retailer who must think like a business owner and who can’t dabble and see a return on your $5-6,000 investment very soon like others would on a $49 kit!
If you’ve stuck with me this long let me just say you’re the bomb! I would love to get to know you better and have you subscribe to my blog here or jump in my VIP shopping boutique here. If you’re one of those girls scouring the internet to unearth all the negative press because you’re scared you might be making the wrong decision but you STILL want to be a LuLaRoe retailer I want to hug you and tell you, YOU CAN DO IT!!! PLEASE, reach out and message me and ask all your questions. I will NOT sugar coat anything. It’s hard work, it’s scary, it’s overwhelming sometimes, but if you have it in you I promise there’s success out there waiting for you!