5 things you need to know before you start a LuLaRoe business
LuLaRoe has developed into a $1 billion business with 80,000 distributors, many of whom are millennial mothers
LuLaRoe has developed into a $1 billion business with 80,000 distributors, many of whom are millennial mothers
LuLaRoe has developed into a $1 billion business with 80,000 distributors, many of whom are millennial mothers
Corona, California-based company LuLaRoe earlier this week announced two initiatives directed toward customers dissatisfied with past and future purchases.
Dubbed the "" and "," the company is offering buyers refunds following complaints about its quality of clothing.
Thinking about starting a LuLaRoe business? Here are five things you need to know:
If it sounds too good to be true...
Founded in 2012 by husband and wife team DeAnne Brady and Mark Stidham, LuLaRoe has developed into a $1 billion business with 80,000 distributors, many of whom are millennial mothers. LuLaRoe advertises itself as a way for mothers to hold lucrative jobs with flexible hours and limitless income, but the multi-level marketing strategy probably won't make you rich, , a Madison, Connecticut-based nonprofit group.
It will cost you
Launching a LuLaRoe An investment of $2,047 is needed for the basic package, which includes 50 (2-pack) one size fits all leggings, 20 (2-pack) small, medium, large and extra large leggings, 25 dresses and 10 (2-pack) "tween" leggings.
The most expensive package comes with 503 pieces of clothing and runs $9,058.25.
Sellers also have to buy additional clothing per month to stay eligible for bonuses, which cost anywhere from $2,000 to $5,000.
The investment could cost a person tens of thousands of dollars.
How much can you earn?
, the average multi-level marketing company sales rep earns just $750 per year before expenses, a figure that hasn't changed since 1980.
The direct selling industry's estimated retail sales reached $34.5 billion in 2014.
LuLaRoe doesn't allow its employees to make income projections or claims. They're also prohibited from sharing their personal LuLaRoe income. The company also makes no minimum income guarantee, explaining that “success with LuLaRoe results only from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership.”
Cost versus quality
LuLaRoe leggings cost $25 per pair, but with the Federal Trade Commission show dozens of reports of defective clothing prone to holes and unreliable sizing. There were more than 80 complaints filed with the government agency last month.
Recruiting is a requirement
Under the company's compensation plan, salespeople have to recruit new distributors in order to be eligible for bonuses. To qualify as a "trainer," distributors must buy at least 100 pieces of clothing per month, recruit three other people and have 10 people working underneath them. Those 10 people also have to buy at least 1,750 items combined (per month) and recruit others.