Lularoe multilevel marketing is failing distributors

By

Kate Dingwall

Published
Mar 18, 2017

After coming under fire for poor quality products and non-existent customer service earlier this year, LuLaRoe is proving to be a tough brand to sell, according to its independent consultants.

CBS MoneyWatch reported that almost 80% of the over 77,000 consultants sold less than $5,000 in sales last month, with 8% of those consultants not selling anything at all. Less than 5% of consultants sold less than $10,000 in sales. CBS did not disclose what percentage of consultants made over $10,000 per month.

LuLaRoe grew to fame by creating low-price leggings in bold prints and patterns that quickly grew a cult following of millennial moms. Instead of selling directly to consumers (the brand doesn’t even have an e-commerce site), the brand looks to a multi-level marketing plan, leveraging a web of ‘consultants’ who directly sell the products to their network of friends.

While some consultants boasted earning over six figures per year by selling the womenswear retailer’s products to friends and family, a larger chunk of consultants are complaining that it is almost impossible to earn a profit.

One reason for this slow-down could be the influx of greater competition among sellers. The number of LuLaRoe consultants has skyrocketed in the last six months, jumping from 38,277 in September to 77,491 in February. The increased number of sellers has had consultants fighting for customers, spending more and more on promotions to draw in new customers or retain old ones.

Another sore point for the retailer is that critics are complaining of poor product quality (the leggings are made in Vietnam to keep prices low). Consultants and customers have been taking to the Better Business Bureau and taken to Facebook to complain about the leggings poor quality - many claim the pants fall to pieces after the first wear. According to consultants, LuLaRoe has gone radio silent after consultants ask for refunds or reimbursement for the faulty products.