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Thousands of Women Say LuLaRoe’s Legging Empire Is a Scam
- moate 8y agoA pyramid scheme...sorry..."Multi-level marketing" company is accused of scammy practices? Color me shocked! There are whole blogs, podcasts, message boards, etc that are all about showing how multi-level marketing is just a flimsy set of guidelines to be able to legally dodge being busted for pyramid scheming.
- smacktoward 8y agoThe article makes it pretty clear that LuLaRoe went above and beyond even the normal MLM scuzziness: > [A]t the national level the job of spotting [pyramid schemes] falls to the U.S. Federal Trade Commission. It primarily does this by checking to see if a company abides by a standard established in the wake of a 1972 lawsuit against a now defunct beauty products company called Koscot. The Koscot standard, as it’s known, says that while a company can compensate people for recruiting new sellers, it can’t base that compensation on how much inventory the recruits buy. Most state laws, including California’s, also require compensation plans to be based on sales. It’s a simple rule. The DSA requires it of all its members. LuLaRoe didn’t follow it for the first four years of its existence, instead basing its bonuses on wholesale orders. For a while it apparently neglected to track what types of clothing actually sold.
- Scoundreller 8y ago“The Dream” was a great podcast on the topic.
- jchallis 8y agoGoogle Autocomplete is very instructive here. Lularoe is a .... Lularoe is a cult Lularoe is a pyramid scheme Lularoe is a ripoff. That’s enough information for me.
- lucasmullens 8y agoI know you're mostly joking, but you'll get the same for any conspiracy: Fluoride is ... Fluoride is bad Fluoride is toxic Fluoride is poison
- itdaniher 8y agoAll of these are true! Except maybe the first one, which is a gross oversimplification. "The dose makes the poison" is not something I expect an average Google user to have modeled accurately. Edit: after reviewing other examples in this thread, my opinion of an average Google user has fallen drastically. Was mostly having a laugh at the fact fluoride salts are generally a thing I avoid, which seems to be the intuition represented by your example.
- Rebelgecko 8y agoI would be wary of trying to use Google autocomplete for making any important decisions. Until they blacklisted showing autocomplete results for queries that look like "Why are <ethnicity>..." or "<ethnicity> are ...", you could get some interesting but certainly not trustworthy results.
- Someone1234 8y agoThey said it was informative, they didn't say anything about making important decisions. It shows you what is often searched for which is informative, even if in that case it shows that racism is common (which arguably is informative within itself, albeit depressing). Personally I like doing "[Something] Vs " to see what people consider are competitors. For example: "hacker news vs " returns: - "hacker news vs reddit" - "hacker news vs slashdot" - "hacker news vs code" etc.
- taytus 8y agohttps://imgur.com/a/gB585KX https://imgur.com/a/gB585KX 🧐🧐🧐
- colejohnson66 8y ago
- aaaaaaaaaaab 8y agoIs it just me, or are women more prone to falling for MLM pyramid schemes?
- crooked-v 8y agoCorrelation is not causation.
- gjs278 8y agoso how does it work on HN? should I just remake a new account so I can post sexist things like this or do I actually have to sit around and wait for my vouches?
- boxy310 8y agoMost MLM's tout a flexible working schedule which women tend to prefer due to being saddled with a higher average proportion of the child-rearing and elder-care responsibilities.
- moate 8y agoYes, but it's likely because MLMs are more often marketed to them. The general pitch for these types of companies, as mentioned in the article, is "work from home selling <product> to your friends online so you can spend more time with your family". This is like saying children are more likely to waste their money on toys, or young men are more likely to fall for military recruitment propaganda. It's "true", but it's got some weird correlation/causation misunderstanding.
- extrapickles 8y agoIt’s more that they are targeted at people who are stable who want to bring some money in on the side without have a normal job. It’s even more rampant in transient families (military) when the employeed person gets orders to move somewhere else. If they had a traditional job, they would have to quit and find a new one.
- deleted 8y ago[deleted]
- nspkr 8y ago
- JohnJamesRambo 8y ago"In March 2016 she paid $9,000 to become a LuLaRoe consultant." Uh, your first clue is that you don't usually PAY companies for the privilege of becoming an employee.
- trcollinson 8y agoI'm not defending multilevel marketing pyramid schemes but if you are signing up for one, you are not an employee. You do pay to run certain types of companies (franchises). But if the franchise isn't supporting you then you are being scammed.
- JohnJamesRambo 8y agoI'm not convinced franchises aren't far off from pyramid schemes and MLM as well. https://en.wikipedia.org/wiki/Franchise_fraud https://en.wikipedia.org/wiki/Franchise_fraud Math on a McDonald's franchise is here- https://www.mymoneyblog.com/mcdonalds-franchise-cost-vs-profit.html https://www.mymoneyblog.com/mcdonalds-franchise-cost-vs-prof... "But if you spend 40 hours a week and only keep tabs on one location, it might really feel like you bought a job." It's looking like 5-6% net return is what you get which is worse than an index fund and you are working your ass off keeping the business running.
- itsangaris 8y agoThey're similar, but I think the main difference is franchises aren't multi-leveled — they traditionally only have a single level between franchisor and franchisee.
- cooperadymas 8y agoHow many individual people are buying new franchises these days? I can't say with certainty, but my impression is that most McDonald's (and other fast food chains, possibly other franchises as well) locations are then owned by semi-regional operators that run a number of franchises. Around here, I know most of the McDonald's are run by 1 corporation. Same with the Burger Kings. It was the same way where I lived previously.
- skunkworker 8y agoWhen your business is built on buying product in large quantities with unknown SKUs. And most of the product you buy is unsellable. It’s laughable to compare to a normal company which buys what they sell, and the specific patterns, sizes etc.
- kondro 8y agoNot specifically about LuLaRoe, but The Dream[1] is an excellent podcast series about MLM’s, why people get sucked into them and why they’re not illegal (even though they probably should be). 1. https://www.stitcher.com/podcast/stitcher/the-dream https://www.stitcher.com/podcast/stitcher/the-dream
- elektor 8y agoAnother great resource to learn about MLMs is Reddit's r/antiMLM. Judging from its activity, it looks like people are getting really fed up with these companies. https://www.reddit.com/r/antiMLM/ https://www.reddit.com/r/antiMLM/
- motogpjimbo 8y agoI can't help but think that Americans let these companies off the hook by referring to them as "MLMs" in the first place. In the UK, we call them "pyramid scams", which is a much more accurate and damning term.
- nathanaldensr 8y agoDefining LuLaRoe as a "legging empire" is simply wrong. They are a weak-minded-person manipulation empire. Their competitors aren't clothing retailers, they're other MLMs, all targeting the same weak-minded people. That's what they sell. The prey on the weak-minded--those who would have their own dreams sold to them--and then wrap it up in fancy English to make the FTC happy.
- xnyan 8y ago"--and then wrap it up in fancy English to make the FTC happy." The wool is being pulled over 0 peoples (in power) eyes. Everyone (again, everyone with power) knows what is going on, including the FTC. MLMs target those particularly vulnerable to their pitch. They leverage their information asymmetry (almost everyone will lose money in a MLM to the benefit of those above) and as you say, hide what the reality of what the "business" really is with lifestyle fantasy and rhetoric marketing. I consider myself maybe a little smart in a few very specific areas - that has not stopped me from being outsmarted or taken advantage of at times I and think this is true for most people at some point. Labeling victims as weak minded is a simple way of dismissing the wrongdoing done by MLM actors with far more resources and power than their victims. What they do should be illegal, and the simple reason it's not is MLMs donate lots of money to lawmakers.
- chewyland 8y agoThe Dream is a wonderful podcast describing a lot of these scams. I highly recommend it.
- smn1234 8y agothis should have a (2018) ?