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Is LuLaRoe Worth The Price?

By , September 6th, 2016 | 13 Comments »



 

LuLaRoe is a popular up and coming clothing line selling attractive leggings that you may have never heard of. The soft and cloud-like material of the leggings has captured the interest of many women.

LuLaRoe is a direct sales company, and might work for customers also looking to make some extra income. They would, however, have to deal with some of the financial risks of getting involved with multi-level marketing.

Lets compare whether LuLaRoe is worth the price both on a retail level as well as an entrepreneurial opportunity.  We’ll compare the price of leggings to other popular retailers, look into the process and financial implications of becoming a direct sales consultant, discuss cautions to look out for with multi-level marketing companies, and determine our verdict on whether LuLaRoe is worth the price.

The ultimate conclusion of this article is while LuLaRoe leggings are reasonably priced, becoming a consultant is a risky money losing proposition.

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Is LuLaRoe Worth The Price?
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LuLaRoe Startup Costs
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How Much Are LuLaRoe Leggings?

LuLaRoe leggings are trendy and range from $25 to $50+ depending on style and where you order them. For example, according to this style price list, current rates for LuLaRoe leggings for adults are $25 and $23 for kids. However, on sites like Tradesy and Poshmark, prices range from $30, $40, and even $50 depending on the style.

Those who purchase LuLaRoe clothing do so through a consultant in their area which may also affect the pricing of the leggings. This price doesn’t seem outrageous to the typical legging buyer, but let’s compare the average prices to other leading retailers.

  • LuLaRoe: $30-$50
  • Macy’s: $25-$60 (Kids Leggings: $7-$17)
  • Carson’s: $15-$30
  • Rue 21: $9.99-$12.99

With Macys you can get substantial discounts off the asking price, so Macy’s prices could be significantly lower.

LuLaRoe Leggings – the Final Verdict

While comparing leggings from other retailers to that of LuLaRoe, there are a few considerations to make. For example, while Rue 21 offers the best pricing on leggings their styles look pretty general. If a customer is looking for a specific print or color scheme she may not find what she is looking for at Rue 21.

Comfort is key when wearing leggings so consider the material.

LuLaRoe leggings are 92% polyester and 8% spandex. Leggings sold by Macy’s and Carson’s are made from a combination of cotton, spandex, and nylon which leads to a difference in comfort. LuLaRoe prides itself on their high-quality leggings in chic designs that are ultra-stretchy and super soft. Most of their leggings have a ½ inch elastic waistband that is comfortable to wear throughout the day.

As a final verdict, it all comes down to what you’re looking for. The material used for the leggings and the designs are high-quality.

If you like the designs and are looking for something versatile and comfortable enough to wear inside and fashionable enough to wear on the go, these leggings are a great option.

Our conclusion: LuLaRoe leggings are a bit high for kids, but they are reasonably priced for adults.

Opportunities with LuLaRoe

As mentioned earlier, LuLaRoe clothing is sold via consultants. If you visit their website and are interested in purchasing something, you’ll have to contact a consultant in your area to set up a pop up shop so you can view the catalog and select the items you wish to order. If you like the products and want to become a consultant yourself, you can sign up on their website and potentially earn some extra cash.

There are many stories about successful consultants who’ve been able to quit their jobs and sell LuLaRoe products full-time, but there are also a few reviews from consultants who were less than impressed with their work.

What Does it Cost To Sell LuLaRoe Clothing?

LuLaRoe requires a starter investment of $4,000-$6,000 for new consultants.  This out-of-pocket cost includes inventory in various different sizes, flyers, hangers, catalogs, thank you cards, a training booklet, and more. On top of that, you also have to cover shipping supplies and fees when you do make an order.

Having that much cash on hand to invest is not an option for everyone especially if they are just trying to experiment with being a consultant part-time. Plus, you don’t want to go into debt over an opportunity where the results are very uncertain. In terms of your initial investment, you won’t get it back unless you sell all your inventory.

Actual Earnings as a Direct Sales Consultant May be Low

Direct sales consultants have different commission structures based on which company they work for and how many sales they generate. While not necessarily the case with LuLaRoe, it’s important to realize that in direct sales companies, consultants may only receive about 35-50% in commissions from sales since you are selling through a company and most likely underneath the person who recruited you. There are also sponsors, trainers, and coaches who will all take a chunk of your earnings.

Multi-Level Marketing Companies Are a Class of Systemic Fraud

The structure that LuLaRoe is built on is commonly referred to as multi-level marketing (MLM), which involves network marketing to get to customers. In this section, we’ll discuss in detail why MLMs are not a good option for direct sales consultants who wish to earn a steady income from their sales.

There is a 10-step process if you want to become a LuLaRoe consultant. This includes reading about the company, listening to a recorded call, and completing an independent consultant agreement.

MLM companies are often described as “endless entrepreneurial chains” or, “opportunity recruitment schemes”. According to research conducted by the Consumer Awareness Institute, participants (or consultants) advance to ranks or positions in a pyramid of participants based on timing and recruitment rather than merit or appointment.  Be aware that MLM type companies have been called “a class of systemic fraud“. This means that it is not the intentional fraud of individuals that causes damage, but that the underlying business model itself is fraudulent.

In addition, MLMs finance their operations from purchases by participants who are incentivized to buy overpriced products to qualify for commissions and for “rank advancement”. This sounds a lot like the structure of LuLaRoe’s consultant program. Consultants have to pay thousands of dollars to get started and won’t earn any real money unless they recruit others to become consultants.

Why There are Better Options Than LuLaRoe

Is LuLaRoe worth the price?

No. There are much better alternatives.

LuLaRoe has high start up costs. Other direct sales companies like Avon or Mary Kay require much less capital to start.  An Avon business can be started for just $50 and Mary Kay can be launched for just $100.  With LuLaRoe an aspiring consultant will need to put forth a lot of effort to become profitable.  Factoring in $4,000 to $6,000 in initial costs, the real hourly starting wage for LuLaRoe consultants will be low.

Also, by purchasing all the inventory out of pocket, consultants are basically buying the clothes from LuLaRoe themselves and they need to make sales in order to reimburse themselves. Then, when customers do make purchases, other people involved in the team take a chunk out of the earnings.  Consultants bear all the business risk.

While there are several highly successful consultants being featured by LuLaRoe’s marketing efforts, data from other MLM companies suggests, most consultants will not earn as much as those featured in company marketing materials.  New consultants will probably need to spend a lot of money or recruit other people to join.  Thus the advertised potential of LuLaRoe for most people is probably misleading.

Understanding the payment structure and initial investment is imperative when researching MLM direct sales opportunities. However, in all honesty, there are certainly better and more legitimate ways to make money than LuLaRoe.  If you want a business which requires less risk and start up capital consider purchasing a franchise or buying an existing already profitable business. These often carry less risk and if you bargain hard can be had for under $5,000.

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Comments

  • Jess Mendiola says:

    Those are quite expensive leggings. Maybe they are just for those who are particular.

  • Yo uidiot says:

    You have no idea what you are talking about. When consultants make sales, they pay nothing to anyone except taxes and credit card processing fees. Every sale that is made is pure profit. If we choose to put that back into inventory, fine. If we choose to take a vacation, fine. It goes nowhere except back to us. Get your facts straight before publishing a completely inaccurate article.

  • Hi Yu uidiot,

    Thanks for taking the time to leave a comment. LuLaRoe is a classic Multi-Level Marketing (MLM) type business. These businesses have a very poor track record of delivering long term profitability to the women who operate them and in many cases border on illegality.

    If you look closely at the text it was a statement about MLM businesses in general, not necessarily LuLaRoe.

    Thanks,

    James

  • Anonymous says:

    Hi James,

    I think you’re misinformed on a couple of points. LuLaRoe does not require consultants to pay out any additional costs to anyone besides taxes and credit card fees.

    Also, it’s actually minimal risk to sell with LuLaRoe as you can make 30-50% profit on each item in your inventory. Also, if you decide it’s not for you, you can return your merchandise for a 15% restocking fee. Most companies don’t allow that kind of fall back plan.

    LuLaRoe is unique and set apart from other direct sales companies as the consultants don’t all sell the exact same items. Therefore, we can all sell at the same event, and often do, without fear of competition or loss of sales.

    Thanks!

    • Hi Anon,

      Ah – if I am reading LuLaRoe’s materials correctly if you recruit others, you’ll get bonuses of 1% to 3% of their sales. To the extent that the business is driven by the sales its consultants make, the consultants will be paying that percentage in one way or another.

      Here is the exact wording regarding returns from LuLuRoe’s website. It looks to me that if you cancel your consultant agreement it could be harder to return the merchandise than you initially assume.

      RETURNS

      LuLaRoe offers a thirty-day, money back guarantee on the initial membership fee. All subsequent subscription fees are nonrefundable as the benefits of the service are realized immediately upon payment.

      Upon cancellation of an FC’s agreement, the participant may return resalable sales aids purchased within one (1) year from the date of cancellation for a refund if he or she is unable to sell or use the merchandise. A Participant may only return sales aids he or she personally purchased from the Company under his or her Participant Identification Number, and which are in resalable condition. Upon receipt of the products and sales aids, the Participant will be reimbursed ninety percent (90%) of the net cost of the original purchase price(s), less shipping charges. If the purchases were made through a credit card, the refund will be credited back to the same account. The Company shall deduct from the reimbursement paid to the Participant any commissions, bonuses, rebates or other incentives received by the Participant that were associated with the merchandise that is returned.

      Source: https://mylularoe.com/terms-conditions. Accessed 9/8/2016

    • altair420 says:

      Rehearsed exactly like someone under the influence of multilevel marketing; good job on reading your lines so well!

  • Anonymous says:

    Everyone is entitled to their opinion, however if you are going to review an MLM company you should have all the facts correct first. Several points in this blog are not correct statements. Lularoe might not be for everyone but they have p&p’s for a reason. Such as consultants are not allowed to charge over MAP pricing so leggings are $25.00, and no consultant sells from a catalog. Again you are titled to your opinion but at least get your facts straight.

  • stephania says:

    $25?!?!?!that is nuts! I mean, holy heavens maybe if I wore leggings a lit.. If they’re good for working out or something. I don’t though I think Ill save my $25 for a nice pair of slacks or a super awesome cardigan. Maybe I will consider leggings if I ever work out consistently, but $25 is a steep price…

  • Thinkabout5momin says:

    Those people are naive.
    I agree with James

  • Navyarmy88 says:

    You have stated a lot of inaccuracies. First, Leggings are $25 for adults. Period. Some exceptions are special capsule leggings such as Christmas leggins, but most consultant will still only charge $25. If you find a higher price it is because they are a hard to find print that a non-consultant is selling to make a ton of money and rip people off. Consultants are not allowed to charge more than $25 for leggings. Also the company is who gives those 1% “bonuses” not the consultant. I am with thirty-one gifts, another direct sales company. As a senior consultant I would make 2% of those under me that have at least $1,000 in career sales. Thirty-One pays me that 2%. Not those under me. I in no way shape or form take money directly from their earnings and neither does Lularoe.

  • Ariel says:

    Totally agree. I’m not a consultant but I’ve done extensive research on becoming one and I have several friends who are. You don’t pay anything to your upline. You can sell and be completely successful without having anybody below you. Your sales and profits do not have anything to do with anybody else’s – not counting bonuses that come straight from Lularoe. There were so many wrong and misleading “facts” in this article. If you’re going to generalize about MLM’s but that generalization is inaccurate for the business that you’re reviewing, then it shouldn’t be written.

    Adult leggings are $25 across the board from all consultants.

    Kids/Tween leggings are $23 across the board from all consultants.

    Consultant are not allowed to price gauge or sell above retail for any leggings. They will be dismissed from being a consultant if they do.

    Your out of pocket cost initially is high, but it is all inventory and tools needed to sell your inventory successfully (hangers, racks, lighting, backdrops, etc).

    If you decide that you don’t want to sell anymore and want to stop immediately, you can return ALL merchandise purchased within 1 year of cancelling your consultant status for a full refund minus a 15% restocking fee. Hypothetically if you invest and you have $6000 in inventory on day 1 and decide on day 1 that you’ve changed your mind, you can return it to lularoe and they will give you back $5100. That is the worst case scenario, that you will lose 15% of your investment. That is so minimal compared to the average costs to own your own business.

    There are NO sponsors/trainers/coaches that take any of your profits or money. You don’t pay anybody else anything, with the exception of taxes and whatever you choose to reinvest in your business in purchasing new inventory.

    You don’t need to recruit ANYBODY to be able to make money. You can run your business completely on your own, with nobody under you EVER.

    Do your research before you write a review on a company that you clearly have no knowledge about.

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