multi-level marketing

LuLaRoe Startup Costs

October 28, 2016 By Alexa Mason 1 Comment

You may have heard of LuLaRoe recently. It is the next big thing in work-at-home sales. Like many other work-at-home sales positions you host parties online and in your home (or homes of others). Similar to Mary Kay and PartyLite, you help people pick out items you think they would like and help them feel confident about their decisions. These work-at-home sales positions always seem like a good idea, but what are the LuLaRoe startup costs?

Multi-Level Marketing Startup Costs

Most work-at-home sales jobs don’t require you to have a large amount of inventory. Most of the time you don’t have to purchase a ton of the product you will be selling to demonstrate and sell. For the most part, with companies like Avon and Mary Kay, your customers are able to look at a catalog and make decisions from there. You simply pay a fee for the online ordering. Otherwise, the up front costs are minimal. This is where LuLaRoe differs greatly.

LuLaRoe Startup Costs

LuLaRoe startup costs are significantly higher than many other work-at-home sales positions. To start with LuLaRoe you have to purchase an onboarding package. The onboarding package includes315 pieces of clothing broken down like this:

Julia Dress- 30 pieces
Maxi Skirt – 60 pieces
Cassie Skirt – 50 pieces
Irma Shirt – 70 pieces
Randy Shirt – 40 pieces
Classic T Shirt – 40 pieces
Lindsay Kimono – 25 pieces

The overall cost to the salesperson is $5355! That is a huge amount of money for a simple startup. However, that is not the only startup cost you will encounter with LuLaRoe.

Related Articles:

Is LuLaRoe a scam?
What is the LuLaRoe Business Model?
What Does it Take to be a Successful LuLaRoe Consultant?
Commonly Asked Questions About Being a LuLaRoe Consultant
Is LuLaRoe Worth The Price?
Is LuLaRoe a Mormon Company?
LuLaRoe Startup Costs
Is LuLaRoe a Pyramid Scheme

Other LuLaRoe Startup Costs

You’ll notice that the LuLaRoe startup package does not include any leggings, which is what the company is known for. While you are not required to purchase any leggings, you will probably want to for the demos you will be holding. Fifty pairs of OS leggings can be purchased for $525 and 40 pairs of TC leggings for $420. To properly demonstrate and sell the famous LuLaRoe leggings you will probably want to get both types of leggings. So, in addition to the initial $5355, you will likely pay another $945.

Another LuLaRoe startup cost that most people don’t think of is selling your items online. Many consultants don’t hold parties. Instead they photograph their items on a mannequin and post them on the internet. If you don’t already have a mannequin (most people don’t), this will be another added cost. You can get away cheap by just taking photos of the clothing on a hanger, however, the pieces don’t look as nice this way.

Storing the clothing is another cost many people do not factor in when thinking about LuLaRoe startup costs. You will probably need to purchase a few Rubbermaid bins to keep your product protected. Some consultants keep their items on hangers on professional clothing racks. Neither the Rubbermaid bins nor the clothing racks will be free though. If you plan to bring the clothing to other people’s homes, however, you should purchase the clothing rack (it is more friendly to the buyer — they won’t have to plow through your bins to find the clothing they want). The bins sell for about $55 bucks and the racks sell for about $70 dollars on Amazon.com.

Additional LuLaRoe Startup Costs

In addition to the onboarding package, leggings, mannequins and storage for the clothing you may have a few other things to pay for. The following items should also be considered when thinking about LuLaRoe startup costs:

Business Cards – You may want to hand out cards at parties and include the business cards in your packaging materials.
Shipping and Packaging – Packing and shipping your LuLaRoe items isn’t free either. This cost should be considered in your LuLaRoe startup costs.
Software – You may need to purchase software to keep track of your inventory.
Insurance – Normally homeowners insurance will not cover your business inventory. You may need to add coverage to your current plan.

All in all, you will likely pay at least $7000 in LuLaRoe Startup costs (possibly even more). Will you be able to make that money back? Well, it depends.

LuLaRoe Startup Costs vs. LuLaRoe Profit

Your overall profit through LuLaRoe will depend on what you sell and how fast you are able to sell it. For example, if you sell the initial package you will make approximately $12,070, which means you will make $6715 in profit. This means that you’ll be able to make your money back if you sell just half of the initial startup package. However, that still means you have to make 160 sales and that is based on the assumption that those are products your customers want (you don’t get to choose those). Most consultants have to spend more money on more inventory before they’ve made their initial investment back yet.

The startup costs for your own LuLaRoe business are high and it isn’t easy to make your money back. Like many other work-at-home sales positions nothing is guaranteed. Before you pay any of the LuLaRoe startup costs (or any business startup costs) be sure that you are fully aware of what you are getting into.

Did you enjoy this article? Read more about LuLaRoe on Saving Advice.

Photos: Business Insider and romana klee

Is LuLaRoe a Mormon Company?

October 18, 2016 By James Hendrickson 11 Comments

If you keep up with new trends you’ve probably heard about LuLaRoe, a new multi-level company in the United States. LuLaRoe was founded in 2003 by DeAnne and Mark Stidham. The company was formed in Utah and sells children and women’s clothing through a network of consultants.

LuLaRoe is similar to many other multi-level marketing companies in the fact that it was founded in Utah. Many of the companies that exist similar to LuLaRoe are formed in Utah by Mormon owners. With that knowledge, you may be wondering, is LuLaRoe a Mormon company?

Is LuLaRoe a Mormon Company?

Yes and No. LuLaRoe is owned by Mormons, but not all its consultants are Mormons. LuLaRoe consultants sell products using social media websites like Facebook, Instagram, Twitter and email marketing. Consultants also have “pop up” boutiques or home-based selling parties, much like Tupperware or Mary Kay. LuLaRoe was simply founded by two members of the Church of Jesus Christ of Latter Day Saints (the Mormon Church). Although interest in the company is broad and diverse, LuLaRoe’s business model is more conductive to a traditional domestic family arrangement practiced by Mormons.

1. The Founder is a Member of the Church of Jesus Christ of Latter Day Saints

deanne-stidham DeAnne Stidham is the founder of LuLaRoe. She owns the company jointly with her husband Mark. She and Mark are members of the Mormon faith and her faith is reflected in the modesty of the clothing LuLaRoe sells. Stidham said that she wanted to create comfortable, modest clothing for women who were not satisfied with clothing options at larger, more traditional retailers. This is one way in which LuLaRoe is a “Mormon” company: the value of modesty is built into the type of clothing – cut, colors and fabric sold by the organization.

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2. LuLaRoe Is Widely Searched Outside of Traditional “Mormon” States

One way to gauge whether a company operates within a particular religious context is to determine where interest in the company is coming from. If LuLaRoe were primarily a “Mormon” company then search traffic for the company would primarily come from Utah or other areas of the country inhabited by members of the Mormon faith. Google search trends indicate this isn’t the case. For example, LuLaRoe search trends are higher in West Virginia, Alaska, Maine and Iowa (see screen grab below). None of these states are considered “Mormon” in the way that Utah is.

3. LuLaRoe is Designed for Women Who Are Not in the Labor Force

The LuLaRoe is explicitly designed for women who are not in the paid labor force. This is similar to other multi-level marketing companies like Mary Kay, Tupperware or Avon. Each of these companies is designed for female homemakers. Mormon women are more likely to be homemakers so LuLaRoe has a special appeal to this group of people.

When it comes to whether or not LuLaRoe is a Mormon company, the answer isn’t black-and-white. Yes, the company was founded by people of the Mormon faith and the company shares those ideologies. However, not all LuLaRoe consultants will be Mormon or share the Mormon faith and there is substantial interest in the company outside of traditional Mormon areas of the United States.

For more on this topics, read is LulaRoe worth the price and is LuLaRoe a scam?

If you like this posting, please share it on social media or leave a comment below.

Photos: Jill O’Hanlon and wild_cherry_1228

Is LuLaRoe a scam?

September 23, 2016 By Amanda Blankenship 6 Comments

The brand name “LuLaRoe” has become increasingly popular in the United States. You may see clothing items from them pop up on your news feed on Facebook or see that one of your friends is selling LuLaRoe clothing for extra cash. It is true that the company is growing but concerns have grown over how legitimate the company actually is. Is LuLaRoe a scam?

LuLaRoe employees share mixed feelings on several forums on the Web. Some say that they’ve had great success and others say that the business is just another pyramid scheme. Additional research has shown, however, that LuLaRoe is not a scam but you should do your research before becoming employed by the company or purchasing their clothing. Here’s what we found out:

What is LuLaRoe?

LuLaRoe is a multi-level marketing company. This simply means that the company uses network marketing to get customers. Many companies, like Mary Kay and Tupperware, used this model to get off the ground. If you are looking to join the company as a distributor you need to have a sponsor or referrer. This person will train you on how to get sales. Once you’ve gotten a sponsor and identified a sales team that you’d like to join you will receive an identification link and create a sales account for the company.

Once you’ve created your account and completed an Independent Consultant Agreement you will be able to create an order of clothing. After you’ve received the order of clothing you can start selling and performing demonstrations for interested parties. Before you get started as a seller though, you may want to know what the Better Business Bureau has to say about LuLaRoe.

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BBB Complaints

In the past three years there have been 50 or more complaints filed with the BBB about LuLaRoe. The majority of the complaints (about half) were about the quality of the company’s clothing. Because the company is still new these complaints can be worrisome. Many multi-level marketing companies allow the quality of their products to suffer and it leads to the failure of the company. If LuLaRoe fails to address customer complaints it can lead to both customers and distributors leaving with no return to distributors.

Outside of the quality of clothing other complaints have surrounded billing issues and tax on shipping cost. Most of the complaints being filed could be solved by better communication between distributors and clients. However, the company has yet to find a good way to approach these communication efforts.

As far as working for the company goes many employees seem to like working for LuLaRoe. It is pointed out by many though that selling the products for a living is not easy. Some say that the introductory materials the company gives out are a bit misleading. If you take a better look at the company, is LuLaRoe a scam?

Is it a scam?

No. LuLaRoe isn’t a scam.

Many multi-level-marketing companies are looked at as pyramid schemes or scams but that is not the case with LuLaRoe. Most companies are labeled as “scams” because they don’t stick to their refund policies – or otherwise make false statements about their products or services. This is NOT the case with LuLaRoe. However, if LuLaRoe isn’t able to adopt better business practices it is possible that they will go out of business.

Another reason people have thought that LuLaRoe is a scam is the compensation plan for distributors. The plan looks a lot like a Pyramid Scheme. However, employees of the company have assured people that the company is legitimate. Things can change though. Some companies that started out as a multi-level-marketing company can easily change to a Pyramid Scheme (and fast).

The major downfall with most MLM companies is that they force distributors to purchase products and there is a lack of balance between purchases made by the distributors and outside sales. Then customers become distributors and there is a vicious cycle of “too much product, not enough demand.”

Although there is no evidence to prove LuLaRoe is a scam, it may be wise to only purchase the clothing from an already-established distributor. Once you’ve had time to read the company’s policies, etc. you can make an educated decision as to whether or not you want to get involved with them.

Photo: makerist

What to Do If You’re Invited to a Sales Party and You Don’t Want to Buy

August 23, 2011 By Jennifer Derrick 9 Comments

Several ladies in my neighborhood have recently gotten involved with direct selling organizations like Pampered Chef, Tupperware, and Usborne Books. As a result, my mailbox overflows with invitations to all of their “parties.” While I’m happy that they’ve found something to bring in some extra money, these invitations are tricky because I’m just not interested in the products they are selling. I feel like I can get better prices and quality through other retailers, plus I’m usually not in the market for any of the stuff they are selling. The question that I’m faced with about once per week these days is: Do I go to the party to be supportive and social even if I don’t intend to buy anything, or do I decline politely?

I’ve decided that the answer is a wishy-washy, “It depends.” It amuses me that many of these invitations come from women I barely know. We may exchange a smile if we pass while out walking, or wave if we pass in our cars, but I’ve never been in their homes or invited to any other parties they have thrown. Suddenly, though, they think of me when putting together an invitation list for a sales party? In these cases I don’t feel at all bad about declining the invitation because I know that my invitation was just a tactic to get a sale, not a gesture of genuine friendship or desire for social interaction. I am a wallet and that’s all.

I’m not mean about it when I decline. I don’t say, “I’m not interested in your stuff,” or, “I know you only want my money, not me.” I just simply say that I cannot attend due to other obligations. It’s usually not even a lie. Some of these women will try to overcome any objection, but I refuse to be drawn into an argument. They may say, “Oh, it’ll be fun,” or “You don’t have to buy anything,” or, “Everyone else from the street will be there,” but I just stick to my, “I have other plans,” story. Of course, you can always offer a simple, “No,” with no other explanation but the determined salesperson will want to know why and will try to break you down.

It gets tricky when I’m already friendly with the party host. In this case, if I’m very good friends with the person, I might go to be supportive or even offer to help with set up and clean up. I’m friendly enough with these people, though, to be honest with them about my intent to support but not to buy. Genuine friends are usually very happy if I attend, even if I don’t buy anything. For some of my best friends, I may buy something small and give it as a gift to someone else, even if the items don’t interest me personally.

If I’m friendly with the host but not overly so, I might go or I might not. If I feel like the person will be okay with just my attendance, I might make a quick appearance and then slip out. I’ve given some support to the host but I haven’t taken up a lot of the hosts’ time unnecessarily. If I’m not sure how they’ll react if I don’t buy anything, I’ll just decline.

The bottom line is that unless I am very friendly with the host already, I usually offer a polite, “No thanks.” I don’t want to be pressured into buying stuff I don’t need and I don’t want to resent the fact that I’m only there because the person wanted to sell me something. I also think it’s impolite to go and “mooch” off the refreshments and party favors if I already know I don’t want to buy anything.

I’ve decided that, no matter how much these parties are billed as social events, they are really nothing more than a sales pitch. If I’m not interested in what’s being sold, I generally decline, just as I would a salesman in a store who’s trying to sell me something I don’t need. The only exception is in the case of a true friend who values my support more than my wallet.

The High Cost of Multilevel Marketing Plans

June 14, 2008 By Cortni Marrazzo 6 Comments

I am simply amazed at how much money certain “business opportunities” can end up costing. I put the term “business opportunities” in quotes because what I’m really talking about are multilevel marketing plans that disguise themselves as “business opportunities.” I am most familiar with one particular company (though I won’t name it here) but I know there are many others like it.

It starts like this: You are invited to a “party,” “meeting” or “open house” where you are shown certain “high quality” products. You are invited to purchase these products through the host of the get-together. But if you want to go beyond just purchasing “great products” (and you are told you should) you can also sign-up for this program and sell them yourself. Not only you will you receive these products at “discounted” prices, but you will also “make money” on top of that. Sounds like a great idea right? You can buy things you would normally buy, at discounted prices, and if you get someone else to buy from you (or someone who wants to sign up through you) you can make a lot more money. Congratulations – you’ve just been conned by a “friend.” In your friend’s defense, they most likely don’t realize that they are conning you because they’ve been conned themselves and are simply perpetuating the cycle. However, that doesn’t make any of their claims that they’ve been fed any more true.

Even though it can sound like a legitimate way to make some extra money, chances are you will lose way more money than you will ever make if you sign up for a multilevel marketing plan. There are so many extra costs involved that aren’t brought up and usually aren’t discovered until you’ve already made an initial investment.

Initial Investment

This is the first cost associated with a multilevel marketing plan. You have to pay a certain amount up front to even be in the program. This cost can vary depending on what you choose. There is usually a base start up fee, the cost of buying sample products if you want to be able to show potential clients how great the products are, the cost setting up an maintaining a website if you want to sell products online (which, of course, you should because you’ll sell more that way), the cost of catalogs that you will want to give to people to see what products you now offer, and the list goes on. The initial investment that you make on a program like this is most likely more than you’ll ever make in the program itself so essentially, you can end up behind before you even start.

Purchases of the company’s expensive products

Part of the premise of making money in this business is that you buy your normal household products from them every month (they claim you are buying them from yourself, but let’s face it — you aren’t). Many of the products they sell are only available in bulk so if you have a smaller family and don’t need as much, you’re already overspending your budget by buying their items. Even if you normally buy things in bulk, the prices of these products are for the most part higher than you would pay at a normal grocery store on sale.

Their claim is that their products are better quality. While this may be the case on a few items, this claim doesn’t fly on brand name items you can buy at Wal-Mart, and they are assuming you can afford (or even want to) pay a lot more for an item of “significant higher quality.” This guarantees that the money you would spend on buying your normal products through them each month will cost you more than if you were to shop on sale at normal stores.

Taxes

If you were to bring up the above fact that their products cost more, you might be told that you would actually receive a discount on the products through the fact that you make a certain percentage off all your sales. That’s a nice thought, but the reality is that even though you will in fact receive a certain percentage of your sales (albeit a small one) that money is actually considered income and you have to pay taxes on it.

If I have to pay extra taxes on my “discount” then it’s not really a discount is it? In addition, your participation in this plan means that you are an “independent business owner.” This means that you have to file separate taxes for this “business” which can cost you more. If you don’t end up hiring someone to do your taxes for you, it will still take you more time and frustration to file a separate set of tax forms for this “business.” The flip side of this is supposed to be that you can write all your “business” expenses off on your taxes so the extra costs don’t really matter. The problem is that if you aren’t making any money with the business, you have no profits with which to write off the expenses.

Conference and motivational material fees

In addition to selling this company’s products, you are encouraged to also buy motivational materials (books, tapes, etc.) and attend regular “conferences” and “rallies.” These are supposedly to help motivate you to sell more and “realize your dream of becoming financially independent.” At over $100 a pop for a conference ticket, it seems rather backwards if you are trying to make money. While these conferences and motivational materials may not be mandatory, you are likely to be told that if you really want to succeed, you will need to “invest” in these.

Time

In order to sell any amount of products or recruit other people, you have to spend a lot of time in meetings, trying to sell, and basically marketing their products. This can pay off if you are successful, but if not, you can sure spend a lot of time trying for nothing.

Friends and Family

I think the worst part of a multilevel marketing plan is the threat of alienating those around you by trying so hard to get them to join you in this plan. Participants in these plans are strongly encouraged to recruit everyone they can. The simple fact is that the more people you sign up, the more money you make from it. However, many people try to sell their friends and family on the idea that they will make a ton of money from this plan when that is the opposite of the truth. This can lead to mistrust as the new “convert” believes they’ve been lied to or taken advantage of when the money doesn’t materialize.

Even if you have a friend who doesn’t join, your constant encouragement to try to sell them products will most likely get them irritated and they will start to avoid you. I’m all for selling products you believe in, but when there’s so much pressure and such an empty promise to make so much money, quite frankly it makes me angry. If you don’t try to sell the product enough, others in the program will accuse you of not trying hard enough, yet if you sell too hard your friends and family will start to think you only want to make money off of them.

My biggest pet peeve about these multilevel marketing plans is that they fool you into thinking that you are a “business owner” and that you have control of how well you do in your “business.” While technically there is a possibility to make money from it and you do get to write certain expenses off for “business,” the truth is that you are really only a salesman. If you truly owned your own business, you would have a say in the products, how much they cost and you would be running the show. With a multilevel marketing plan, you are merely selling someone else’s product under their guidelines.

The bottom line is that if you are a good salesman, you might make some money in this kind of program, but you could also make money selling other things that wouldn’t include paying all these extra costs. If you are looking for legitimate way to earn some extra money, you want to stay away from plans that will cost you a lot more than you’ll ever make — and that is exactly what most multilevel marketing plans do. So be aware of these programs and all their hidden fees and be sure to research the claims that anyone makes regarding these types of plans.