Thread by @lepas

listening to several podcasts about Lularoe, the Modest Leggings and Dresses pyramid scheme company that collapsed because they accidentally created a product people wanted.

We all know that MLMs/pyramid schemes send money upwards by tricking people into paying money to sign up/purchase inventory to sell, with the actual goal being signing up other people to sell under you, and not much of the company's actual products really go out

so these things are financially structured to give bonuses for selling product that the company never really has to pay because everyone is just trying to get other people paying to sign up. Not a ton of overhead or product demand for corporate to worry about.

Well, in the early days of Lularoe, women were fucking HANGRY for those leggings and the consultants were having largely zilcho trouble selling enough leggings to meet their goals and get monthly bonuses. Think the beanie babies craze but you have to get them via the avon lady.

and in the beginning the product was good! because they weren't worried about the cost of making them, because they weren't really expecting to have to make so fucking many of them, the damn leggings weren't supposed to be the point of all this lol

so a MLM fell face first into an actually viable business and they didn't know what the fuck to do! They didn't have enough warehouse space to store all the leggings that they needed to keep up with demand, and turns out those nice leggings are actually expensive to make

so now women are making tons of money selling tons of leggings under a pricing structure that wasn't designed for people actually selling things, so they tried to make a shift and quietly cut quality but kept the prices the same. and people kinda started to notice a little.

but women still wanted to collect those limited print patterned leggings, and now dresses and skirts, because we have to keep people coming back, so they started slapping on any old pattern, including stealing them straight from spoonflower with intact watermarks(?!!?)

Consultants started to notice that sometimes their product shipments would be wet and moldy. Turns out not being structured to actually sell product meant that Lularoe didn't have enough warehouse space to store product, so they just left it out in the rain or whatever ¯\_(ツ)_/¯

Quality control got so bad that the leggings--that sill cost as much as they did when they were nice--were often so thin you could just poke a hole in them with your finger. Buyers were pissed, consultants were pissed, and here came new harsh restrictions on returns and exchanges

They also expanded into plus sizing around this time, and loads of women excited to finally get in on the wacky leggings craze got their first taste of Lularoe with faulty product that was totally see-through or ripped when they tried to put it on.

They company also wouldn't allow any negative comments or complaints on their facebook pages, and told consultants to enforce that same policy, so women were still signing up to sell, and got sent inventory that was rotten and torn that they maybe even couldn't send back.

women revolted and quit, took to social media and youtube to show the shoddy merchandise, filed for bankruptcy as a result of lularoe's return policies, and now the company itself is embroiled in various legal troubles including being sued for not paying their manufacturer either

Lularoe was never really interested in shifting into a legitimate clothing brand, even though people actually wanted their scheme product. I can't off the top of my head think of any other MLM that collapsed because people actually bought what they were trying to fake sell.

Thanks for going on this journey with me and special thank to @deedala for telling me about the stolen pattern part!