you don't work for lularoe. >> it's insane.le to have a full-time income and it's life saving. >> reporter: online some say they've made good money. >> you get the product, put it before people, you sell it, and you have money. and that's the sip policety of the business and that's as easy as it can be. >> reporter: lularoe's approach what's called multi-level marketing. retailers buy in, about $5,000, and sell to customers at a markup. they can make money by recruiting other sellers to join their team and make bonuses off of those retail sales. they point to success companies like the company in california misty it started three years ago when there were 700 sellers nationwide and now has more than 11,000. >> reporter: she seas her profits are upward of 3 grand a month. >> for me i focus on what's important for my family and my business that and you've been able to pay your mortgage with this. >> yes. >> reporter: it all sounded good to chicago area stay-at-home mom sunl counselor. they told her -- >> it's minimal. you'll have

and lularoe's case, $5,000. sell to customers at markup.uiting other sellers to join their team. and make bonuses off those retailers sales. the company pints to success stories like consultant they introduced us to in california misty el sasser. she started three years ago. when there were 700 sellers nationwide. and now has more than 11,000 members in her facebook group. >> i love lularoe. i wear it every day. she says her profits are upard of $3,000 a month. >> for me i focus on what is important for our family and my business. >> you have been able to pay your mortgage. >> yes. >> with this. >> yes. >> ill all sounded good to chicago area, stay at home mom, says a recruiter told her minimal part-time work for full time incup. you would have time, lots of money to do whatever you want with your family. >> so council says she invested around $11,000. despite working more than full time hours, says she couldn't make it work. and now is still over $4,000 in debt. >> i feel like i failed my family. i put my family into debt. to do something

because lularoe, they allege, is a pyramid scheme that only profited a few.nsultants based on how much product those consultants and their recruit s purchased on a regular basis. >> what that is is an uneducated opinion. they haven't looked at who we are. because we sell product through to a consumer and it is highly desirable product. that is not a pyramid scheme. >> reporter: shouldn't they think it is easy. >> no, i think it is easy. that's me. for me, in my background, and my life experience, i do not say it is easy for everyone. >> reporter: here is the thing. some consultants say they were told this is easy. >> that's what i think they heard and it is not the truth. >> reporter: they did say that while more than half of lularoe's sellers, some 40,000 make a thousand dollars or more per month, a small group at the top pull s in $500,000 or more per year in bonuses, made off the sellers below them. and douglas brooks, an attorney who is sued other multilevel marketing companies says -- >> for the vast majority of people that get into a company like this,

mall kamal >>> on coming up on "cbs this morning", the clothing retailers of lularoe are speaking outthat the company is a pyramid scheme. ut the allegations that the company is a pyramid scheme. i'm about to pop a cap of "mmm fresh" in that washer. with unstopables in-wash scent boosters by downy. and if you want, pour a little more. ah, it's so fresh. and it's going to last from wash to... ...wear for up to 12 weeks. right, freshness for weeks! unstopables by downy. for a fresh too feisty to quit. anyone ever have occasional constipation,diarrhea, gas or bloating? she does. she does. help defend against those digestive issues. take phillips' colon health probiotic caps daily with three types of good bacteria. 400 likes? wow! try phillips' colon health. another anti-wrinkle cream in no hurry to make anything happen. neutrogena® rapid wrinkle repair works in just one week. with the fastest retinol formula to visibly reduce wrinkles. neutrogena®. >>> our top stories this morning, president trump arrived in china this morning where trade and north korea top the agenda. before leaving so

only on "cbs this morning" the cofounders of lularoe respond to a lawsuit that claims the clothing companyramid scheme! all that plus the eye-opener, your world in 90 seconds. we'll see you at 7:00. >> thank you. >>> palo alto-based tesla has announced it is buying one of its suppliers. the electric carmaker says it's acquiring a machine company. it's an automated equipment manufacturer. tesla not disclosing any financial details of the deal. >>> the company behind snapchat getting a disappointing earnings report and bad news for a couple of retail giants. with details here is kcbs radio's financial reporter jason brooks. >> reporter: good morning. snapchat was the most highly hyped ipo of 20 but it's been a stream of bad news from its parent firm since then. 3rd quarter earnings missed expectations because its user growth was weaker than expected. totaling 178 million, up 17% from a year ago. that's not the kind of growth that snapchat needs if it's going to compete with facebook. and that's the key for investors. snap's ceo told investors during the earnings call that the snapchat site i