MLM's and pyramid schemes like LuLaRoe require a minimum investment of $5,500 to pay for things like inventory. This does not include things like parties, which sellers of LuLaRoe host to get other women hooked. The company, however, does not advertise this. They instead advertise success stories of women who found their purpose or found wealth through their company. Unfortunately, this is hardly ever the case.
To be a sponsor, which is the lowest level in the pyramid and 99% of retailers are, you are likely to get no bonuses through the company itself and instead have to make all of your money off of commission. This, of course, is before your 'mentor' or the people that got you hooked take their cut of your commission as well. According to Business Insider, sellers have to sell their inventory at an estimated 40-50% markup to make profit. You have to sell a significant portion of your inventory at a significant markup to break even at first, before you continue to buy more packages to increase your ranks and inventory. This can lead to many women making minimal profit or even no profit at all.
The whole theory around companies like this is that women who are vulnerable and feel little fulfillment in their lives, such as military wives or stay-at-home moms are so desperate to have control over their own lives and to make friends that they are willing to pay thousands upon thousands of dollars. The image LuLaRoe pushes of being a "boss babe" and going on expensive vacations is just a ruse to increase personal gain and enrollment in the company. It's despicable and it's costing women thousands.
And because it's a business made of out direct communication between mentors and trainers, escape is nearly impossible. To afford their inventory and other packages, women are often encouraged to take out second mortgages and temporarily stop paying their bills by their trainers, who all claim that they'll be able to make back enough money to pay the bills and then some. According to CTPost, one woman was convinced to pawn her car to have more money for inventory. It's all-too-common for women to take out multiple credit cards in a fruitless attempt to rise in the company's ranks.
According to the FTC, there are simple ways to tell if the company you are being encouraged to join is an MLM/pyramid scheme:
1. You are required to buy a lot of inventory(product you have to sell to others to make profit).
2. Other members of the company are constantly pushing you to buy more things.
3. They brand your position as "having uncapped commission", being able to "choose your work schedule", or specifically advertising to military spouses.
Some known MLM's include:
- Mary Kay
- Herbalife
- Avon
- LuLaRoe
- Rodan & Fields
- Young Living
- It Works!
- Plexus
- Team Beachbody
So if you ever get a random message from someone claiming to have the ability to change your life via working from home and being your own boss, know that all they see in you is profit.
https://money.howstuffworks.com/pyramid-scheme1.htm
https://directsellingstar.com/pyramid-scheme-list/
https://www.businessinsider.com/how-much-money-lularoe-consultants-make-2017-8
https://www.ctpost.com/technology/businessinsider/article/LuLaRoe-is-making-some-women-rich-while-11007161.php
https://www.consumer.ftc.gov/blog/2014/05/telltale-signs-pyramid-scheme
https://www.google.com/search?rlz=1CAPQVW_enUS709US710&ei=uzAvXproDNrD0PEPhKqv8AY&q=popular+mlm%27s&oq=popular+mlm%27s&gs_l=psy-ab.3..0i13j0i7i30l2j0i30l7.528.1668..2280...0.2..0.289.1386.0j1j5......0....1..gws-wiz.......0i71.pvMFDNqBiyM&ved=0ahUKEwjasdKKuaTnAhXaITQIHQTVC24Q4dUDCAs&uact=5&safe=active&ssui=on
No comments:
Post a Comment