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rated:
My wife has been a LuLaRoe consultant for about a year. Recently I started to look over the letters she has been receiving from them to see why there has been an influx in mail from LuLaRoe.

One conversation I had with her recently was around them controlling and dictating total transaction. What I mean is that she takes someone's credit card and puts it online so that it can be processed through their payment system. They also charge a transaction fee which is higher than square or other POS readers. It seems weird to me that you pay this company for her inventory upfront then they control transactions and then send you the payment all from their accounts. it seems like they would be able to capitalize on the cash they are processing and leverage it for their gain.

Two weeks ago they then sent out communication saying they would be providing consultants with credit card readers. It turns out that these readers are basically a square knock off controlled by LuLaRoe. On top of that it's only able to be used on iOS systems and not Android so they informed my wife she could get an iPad or iPhone....

Today we received a letter stating that she had been signed up to receive her payments that they transact to a new LuLaRoe debit card which they partnered with metabank in order to provide consultants an easier way to manage their finances..... We already had our money going to an independent bank account which we were utilizing for only the business. The letter denoted if you want your funds transferred to your chosen account it is a 1$ fee. presently reviewing the transactions they process them on a daily basis. The logical thing to do if they are charged transaction fees to transfer cash to consultants would be to pay out once a week. the weird thing to me is that now they get your money when you buy inventory and hold it until you spend somewhere else... It seems beyond shady to me.

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OP, if you had to get that idea off an internet board, you might wanna rethink your position as an entrepreneur and get ... (more)

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FB is passively making money on these schemes via ads on their platform.  I'm sure they'd be happy if everyone on FB had... (more)

defjukie (Feb. 16, 2017 @ 7:15a) |

Wait til another consultant sees or hears about her Square. She'll report it to higher ups and your wife will get penal... (more)

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rated:
Wait, you're saying an MLM might be sketchy? I'm shocked, shocked!

rated:
No idea what lularoe is.

rated:
walletsr said:    It seems beyond shady to me.
  I'm just going to leave this here... https://www.youtube.com/watch?v=s6MwGeOm8iI



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I've never heard of this company but yes I would be worried. Every single item you listed is classic for a multilevel marketing scheme or piramid scheme. I'm having a hard time remembering the product names but it's almost always the same patterns. Force people to buy inventory, control payments, push recruiting more than sales... They all the same. Fad product, few top folks make tons or get arrested. Everyone in the middle gets burned. That's the pattern.

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Is there a question? Or is this just a MLM's are shady PSA?

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It's a little bit of both I suppose a PSA and my question is, is it legal for them to control the entire process of funds in such a manner?

My wife made all of her money back but now it seems beyond crazy...

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walletsr said:   It's a little bit of both I suppose a PSA and my question is, is it legal for them to control the entire process of funds in such a manner?

 

  

I can't see why it wouldn't be legal.


of course, IANAL
 

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Found their website http://www.lularoe.com but how is this a successful business model for selling clothes? There must be 50 independent women's clothing stores at the mall 2 miles from me and I rarely see more than 2 or 3 shoppers in any of them, while Macy's and Target has many.

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It seems weird that the company selling goods also owns the transaction service as well as the payment processing system. Typically one of those are outsourced. I guess when you have an MLM they try to nickel and dime you anywhere. I guess my biggest question is can they force you to create a bank account with a bank they use in order to pay the money they owe us after each transaction.

I looked at MN labor laws for payment and direct deposite it says that they have to offer you a different paymenterhod if there is a few involved. I didn't know if it was different since at the end of the year we get an 1099 and not a w2

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What is the process if a customer wants to pay cash?

EDIT: Where I am going with this is couldn't you just claim you make only cash sales and run the payment through your own Square? I am assuming you have all the inventory on hand and their payment transaction service isn't needed for them to ship the products to the end customer.

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If a customer pays cash then we have cash on hand. The ideal scenario is someone has a "party" at their home and people impulse buy with cash.

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atikovi said:   Found their website http://www.lularoe.com but how is this a successful business model for selling clothes? There must be 50 independent women's clothing stores at the mall 2 miles from me and I rarely see more than 2 or 3 shoppers in any of them, while Macy's and Target has many.


People have parties at their homes and are given free clothes as well as my wife sells to a wider audience via Facebook live where people purchase clothes in real time.

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walletsr said:   If a customer pays cash then we have cash on hand. The ideal scenario is someone has a "party" at their home and people impulse buy with cash.
  See my edit above.

rated:
string3599 said:   walletsr said:   If a customer pays cash then we have cash on hand. The ideal scenario is someone has a "party" at their home and people impulse buy with cash.
  See my edit above.



That actually makes a lot of sense and is something that we will look into thanks for that idea. The other issue is that there are sales that take place online and PayPal transaction fees are pretty high

rated:
Which Mintz brother owns this one?

rated:
walletsr said:   My wife has been a LuLaRoe consultant for about a year. Recently I started to look over the letters she has been receiving from them to see why there has been an influx in mail from LuLaRoe.

One conversation I had with her recently was around them controlling and dictating total transaction. What I mean is that she takes someone's credit card and puts it online so that it can be processed through their payment system. They also charge a transaction fee which is higher than square or other POS readers. It seems weird to me that you pay this company for her inventory upfront then they control transactions and then send you the payment all from their accounts. it seems like they would be able to capitalize on the cash they are processing and leverage it for their gain.

Two weeks ago they then sent out communication saying they would be providing consultants with credit card readers. It turns out that these readers are basically a square knock off controlled by LuLaRoe. On top of that it's only able to be used on iOS systems and not Android so they informed my wife she could get an iPad or iPhone....

Today we received a letter stating that she had been signed up to receive her payments that they transact to a new LuLaRoe debit card which they partnered with metabank in order to provide consultants an easier way to manage their finances..... We already had our money going to an independent bank account which we were utilizing for only the business. The letter denoted if you want your funds transferred to your chosen account it is a 1$ fee. presently reviewing the transactions they process them on a daily basis. The logical thing to do if they are charged transaction fees to transfer cash to consultants would be to pay out once a week. the weird thing to me is that now they get your money when you buy inventory and hold it until you spend somewhere else... It seems beyond shady to me.

Is this a division of Amway??
 

  

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I can't for the life of me figure out why women get involved with this stuff...and I'm a woman.

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I live in a community where everyone is involved in some sort of MLM sales scheme. My opinion of Lularoe is similar to that of Mary Kay and Pampered Chef... great product and style, but overpriced and wrapped up in a crummy distribution scheme. There is a focus on actually selling the product to try to distance it from a classic pyramid scheme, but the "independent sales" aspect encourages (requires) "consultants" to pester their friends to the point of alienation.

My family has Lularoe clothes, they really like the style and quality, but I dread every time our friend who sells it has an "event" that we have to come up with an excuse to skip.

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...wait unto you have to sell Girl Scout cookies...

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atikovi said:   Found their website http://www.lularoe.com but how is this a successful business model for selling clothes? There must be 50 independent women's clothing stores at the mall 2 miles from me and I rarely see more than 2 or 3 shoppers in any of them, while Macy's and Target has many.
  b*ches be crazy.

There are some women that LOOOOOOOVE lularoe junk. I know some people that buy soon to be discontinued items with the goal of selling them on eBay after discontinuance for a markup - people are loyal and want a particular thing and will pay more for it if it's not available.

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BeardedThunder said:   ...wait unto you have to sell Girl Scout cookies...
  
GS Cookies are an MS copper mine. 

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You're lucky your wife has made your money back. Tell her that this "transaction control" is just the tip of the iceberg and convince her to walk away from this as fast as possible. You will be doing yourself a huge favor. Don't say we didn't warn you.

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I hate this company.
My wife buys their stuff and it irks me because its a shady run business.
They did replace a pair of pants at that ripped on the firstwear and so far the other stuff has held up, but bugs me that there is no store and no real brand to depend on.

The way they sell is through these stupid facebook sales.
A seller sets up a time to go live on facebook, claiming they "ONLY HAVE 1" of an email, and you comment you want it.  I bet if 3 comment, suddenly all 3 get one.
Inf act, once my wife thought she didn't get an item because someone commented ahead of her.  Next thing I knew $30 bucks hit the CC, and she said, oh yea, after the sale so in so emailed me and said she had a second one so I bought it.

They create a sense of urgency like this, so you log on and watch the sale live, comment you want the ONLY ONE THEY HAVE, and thenlater they cahrge your cc and ship it.

I CAN'T stand this company and this crap.  What a shady setup

rated:
In reviewing all the financials and transaction fees they have been charging my wife with we realized that square would be the best option. It has lower costs and better invoice management. In reviewing the transaction I saw that LuLaRoe collects a 7 cent fee for every transaction they process. They have around 30,000 consultants and on average they sell about 10 pieces a day meaning they get 21k a day for forcing people to use their transaction system.

rated:
Just 7 cents?

That's really not bad relative to what I understand is often charged.


ETA : 
Just one reference about fees:  https://www.cardfellow.com/average-fees-for-credit-card-processi...
card present businesses : "Pay lower interchange fees - roughly 1.60% plus a $0.10 transaction fee."
card not present : "Pay higher interchange fees - roughly 1.90% plus a $0.10 transaction fee."

https://squareup.com/help/us/en/article/5068-what-are-square-s-f...
square fees are 2.75% for swiped transactions and 3.5% plus 15 cents for manually entered

The % fee is the bigger deal generally.    7 cents seems small.

rated:
do you have a hookup for tupperware too?  some of my cups from the '70s are breaking and I want replacements that don't appear to be available online.

rated:
With the gaining popularity of this, particularly using Facebook Live and Albums as an outlet to sell, it wouldn't surprise me if FB jumped in and blocked this sort of thing, or charge LuLaRoe money somehow.

At least your wife makes money on the product, my wife spends money. She swears by their leggings, says most comfortable things to wear. I just hate contributing to MLM's, particularly shady ones like this.

rated:
walletsr said:   
string3599 said:   
walletsr said:   If a customer pays cash then we have cash on hand. The ideal scenario is someone has a "party" at their home and people impulse buy with cash.
  See my edit above.

That actually makes a lot of sense and is something that we will look into thanks for that idea. The other issue is that there are sales that take place online and PayPal transaction fees are pretty high

  OP, if you had to get that idea off an internet board, you might wanna rethink your position as an entrepreneur and get a job at the Post Office....

rated:
TuxFL said:   With the gaining popularity of this, particularly using Facebook Live and Albums as an outlet to sell, it wouldn't surprise me if FB jumped in and blocked this sort of thing, or charge LuLaRoe money somehow.

At least your wife makes money on the product, my wife spends money. She swears by their leggings, says most comfortable things to wear. I just hate contributing to MLM's, particularly shady ones like this.

  
FB is passively making money on these schemes via ads on their platform.  I'm sure they'd be happy if everyone on FB had live show "parties" every hour of every day.

What I REALLY don't get, is who's tuning in to these things?  You couldn't pay me enough.

rated:
Wait til another consultant sees or hears about her Square. She'll report it to higher ups and your wife will get penalized or booted out of the MLM, which might be a good thing for you. Also, read the wage laws carefully because many of them don't apply to contractors. She is likely not considered an employee.

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