If you’re on Facebook regularly, you may have noticed postings from LuLaRoe Buy/Sell/Trade groups. In fact, quite a few groups on Facebook are focused on LuLaRoe, and these groups also often hold virtual parties via that social media platform.

What is LuLaRoe?

LuLaRoe is a company that sells merchandise to its “retailers” via direct sales/wholesale. The reason I put retailers in quotes is because these retailers are not employed by LuLaRoe; instead, they work as independent contractors and are called LuLaRoe Fashion Retailers.

The role of the LuLaRoe Fashion Retailer is to purchase clothing at wholesale from LuLaRoe and then sell it to customers at a markup. How much the clothing is marked up is at the discretion of the Consultant. However, to make a reasonable profit, Consultants have set prices higher than wholesale.

As is typical with many wholesale companies, LuLaRoe requires its Consultants to purchase a bulk quantity of pieces in their orders. The LuLaRoe Startup Kit, which is the kit that a beginner Retailer purchases, consists of 381 total pieces and costs roughly $5,500.00. That equals a wholesale cost of roughly $14.43 per clothing item.

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Yes, you read that correctly- the minimum investment to become a LuLaRoe Fashion Retailer is $5,500. However, the company estimates that your clothing package is actually worth a retail value of $12,500. You are encouraged to price your items from $18-$65 in order to make a 40%-60% profit margin.

How do you sell LuLaRoe products? Retailers are advised to either host product parties 1-3 times per week. These parties can be conducted at home or online. The company estimates that you should easily sell 20 pieces per party.

LuLaRoe is especially known for its buttery-soft leggings, which come in a variety of patterns.

Other clothing items include T-shirts, skirts and dresses.

How does a typical LuLaRoe retail shop operate? Here’s one example:

  1. The LuLaRoe Fashion Retailer orders a LuLaRoe Startup Kit at $5,500.
  2. The Kit arrives in 3 business days at the Retailer’s home. The Retailer purchases additional and optional business items such as an ecommerce website, packing materials, address labels, printer and mannequins.
  3. The Retailer takes photos of the merchandise and creates online listings. She also joins LuLaRoe Buy/Sell/Trade groups on Facebook and other social media platforms.
  4. The Retailer holds regular in-home parties to sell her clothing items.
  5. Items are priced at markup. If all items are priced at $18, for example, that results in total retail sales of $6,858, which equals $1,358 in profit for the Retailer.
  6. Retailer ships items to buyers.
  7. Once all inventory has been sold, a new wholesale lot is requested from LuLaRoe.

So, is LuLaRoe a retail sales model that you should invest in? Here are some good and not-so-good points about this business model.

The good:

  1. LuLaRoe clothing seems to have a strong following, with its leggings being especially popular.
  2. Items can be sold at a markup and make money for the Retailer.
  3. The Retailer can sponsor new recruits and make a 5% commission from their product sales.

The not-so-good:

  1. Market oversaturation. The LuLaRoe market, at least in the U.S., is heavily saturated with Retailers. Here is a Retailer map that shows just how many Retailers already exist in the U.S. Market oversaturation not only leads to intense competition for customers, it forces some Retailers to just throw in the towel and sell their merchandise at loss. That’s bad for Retailers who are still trying to make a profit.
  2. Product quality may be an issue. Search for ‘LuLaRoe lawsuit’ on Google and you’ll find many news reports on how the company’s leggings rip during the first wear or wash. LuLaRoe is being sued for its defective products and for refusing to compensate customers who bought those products. That means if you bought those leggings at wholesale, you may end up eating the cost- and have completely unusable product. (Updated 4/28/2017: LuLaRoe is now offering refunds or product replacements of its leggings at the following site.)
  3. LuLaRoe clothing isn’t cheap. Even at its wholesale average price of $14.43, LuLaRoe clothing isn’t priced at rock-bottom prices. By comparison, major discount retailers like Wal-Mart and Target can not only match such clothing prices, but oftentimes even beat them. You, as the Retailer, will need to mark up your products even further to cover your business costs and shipping. It’s hard to tell if a customer will want to purchase a T-shirt marked up to $18 or more.
  4. You better like house parties. Want to throw a party at your house three times a week? That is something you will definitely need to consider as a LuLaRoe Fashion Retailer. Most customers want to try on the clothing that they purchase to make sure it fits them. Other customers want to feel the fabric and understand how it’s cut and sewn before taking out their credit card.
  5. That 5% commission is conditional. Yes, you can earn a commission check directly from LuLaRoe for any person you sponsor and who then buys and sells product. However, you only earn that commission if, in the same month, you also purchase at least $175 of wholesale merchandise from LuLaRoe. If you didn’t buy any extra stuff, or are just trying to unload what you already purchased, you miss out.

LuLaRoe: Overhyped and underwhelming?

Business opportunities always carry risks. However, in the case of LuLaRoe, it appears that the risks outweigh the gains. Between the fierce competition and the high amount of selling effort required with this business, you will be hustling to make your profit. Furthermore, there is the glaring reality that LuLaRoe’s actual customer is you, not the people who purchase your sourced clothing. Frankly, what motivation does the company have to work with and help you out once you’ve paid your $5,500 for clothing?

Are you a LuLaRoe Fashion Retailer?

If you are a current LuLaRoe Fashion Retailer or used to be one, we’d love to hear about your experiences with this company. Please leave your thoughts in the comments below.

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Join the Discussion

  • Mike Jay
    Mike Jay

    Hey Steve,

    Great review on LuLaRoe, I’m impressed with your whole site. I hope I can get mine to that level one day soon. I like your upbeat writing style. Your use of bold headings, short paragraphs, relevant images, and numbered lists make your content easy to read. Thanks for all your hard work and for inspiring me to keep getting better at being an online business owner.

    I am a fan and bookmarked your site for future reference. Wishing you all the best!

    Mike Jay

  • Veronica

    I just have one word: EEEEKK!!!

    Okay, perhaps I can expand on that comment…

    I used to work in the fashion industry in New York City; to say that the apparel industry is a tough business is an understatement. I was fortunate enough to have been an Accessory Buyer, which is so much easier than apparel…like 100 times easier!

    I’ve definitely seen LuLaRoe on Facebook but didn’t know anything about the company. I think it’s fair to say most people know that it takes money to build a business, and by many people’s estimate, $5,500 may be on the low end. But if you’re going to invest that amount of money, you better know what you’re getting yourself into! I was already a part of an MLM company that required inventory; unless you have a garage or a spare room, it’s not the best situation. And regardless of what You may think, you will get stuck with inventory! There’s a reason why major retails close multiple stores…just ask Sears!

    Keep these great reviews coming, Steve!

    • Steve Razinski
      Steve RazinskiFounder

      Thanks for taking the time to comment and share your experiences Veronica. $5,000 might be on the low end required to start a traditional retail business, but these types of MLMs aren’t exactly targeting those who want a traditional retail business, but rather someone looking to make a little extra money here and there. This seems to be where the issues arise as you need to put in a full-time effort to pull in a full-time income, but a lot of people think they can pull a full-time income in their part time. Getting stuck with inventory only exasperates the problems as well.

  • Dana

    Hi Steve,
    Sounds like a big risk seeing products might not sell. I for one would not want to host all those parties every week either, after a while it would be difficult to get people to attend. I have seen multiple buy/sell/trade things on social media (Facebook specifically) but I have not seen LuLaRoe. Thanks for the information, this is something I will be staying away from.

    • Steve Razinski
      Steve RazinskiFounder

      LuLaRoe activity seems to be dying down a bit on my Facebook and Instagram feeds. It was EVERYWHERE a few months back and I suspect things might pick back up once the cooler weather swings back around.

  • Maxx

    Wow, This really opens my eye that this happened in fashion clothing as well. I read about similar business tactics in Jewellery-Crystal. Very similar. In fact, I was thinking how this kind of business teaches people how to business? Organizing parties several times in a week?

    I am not sure others countries but I definitely won’t do it here and scared off my friend and relatives from my house.

    • Steve Razinski
      Steve RazinskiFounder

      There are a ton of these types of systems out there that allow you to sell just about any product imaginable. Jewelry, clothing, makeup and supplements are the big players in the MLM industry at the moment.

  • Princila

    Hi Steve,

    I’m not a LuLaRoe Fashion consultant, but I have a cousin who is one. For an outgoing person who loves holding parties and networking, it was an excellent business model for her. Plus, she gets to do something that she loves: partying while selling their products.

    My thoughts about LuLaRoe Fashion? Honestly, I think the startup cost is high compared with other business models. In addition, there’s a high risk of ending up with products if people are not interested in purchasing them, especially if the market is as saturated as depicted in the figure. If I had to choose between this (being a LuLaRoe Fashion Consultant) and starting a niche or authority website, I would definitely choose the later. At least with $1500 or less you can get your online business up and running.

    • Steve Razinski
      Steve RazinskiFounder

      Thanks for the comment Princila. It can be the right opportunity for the right person, but you definitely need an exit strategy so you aren’t stuck with a whole bunch of LuLaRoe inventory that you can’t sell. I agree though that there are much better opportunities that would be a better use of your time and effort.

  • Andy

    This looks like an opportunity my daughter might be interested in because she is really into fashion. However, after reading your review, I think I would advise here to steer clear of LuLaRoe. Thanks for that, by the way.

    I know it is not really a MLM company, but it operates similar to one, with the house parties and direct selling to neighbors, friends and families. Plus, it sounds like don’t control the number of distributors given the oversaturation of the market. Combine that with over-pricing of what seems to be low quality (easy ripping leggings?), and I think a person interested in fashion would be better off sourcing their clothing from better and multiple sources to ensure the quality fits the price.

    • Steve Razinski
      Steve RazinskiFounder

      It’s not a terrible opportunity (we’ve seen much worse) especially if you have the influence and the interest is there. The quality issues do have me a little concerned. Problems arise when you are stuck with product after the initial interest dies down. You don’t want to get stuck with hundreds of dollars of product that you can’t sell.

  • Kerryanne

    Have I heard of LuLaRoe? To be honest no.However, I read your well informed review and really appreciated the fact that you have done your research on this LuLaRoe business. It sounds too hard from the get go in regards to what you have to do to get any type of decent return on investment. Then if the quality isn’t that great. What’s the point?

    • Steve Razinski
      Steve RazinskiFounder

      You’re right Kerryanee. You absolutely need to stand behind the product your selling. Quality should never be a concern of yours. If you’re running into quality issues and your main customers are your family and friends, things can get a lot worse than just dealing with upset customers.

  • Adriana

    Honestly I have never heard about this clothing line but I was curious because there is money to be made LOL but honestly this looks like too much money needs to be put in to begin with. I feel that there are better opportunities out there for you don’t have to put as much money into it. I am too make money not lose it LOL. I may keep this in the back of my mind though in case I am in need of money I don’t mind putting some into it . It looks like the retailer has the opportunity to really staggers the prices and make quite a profit

    • Steve Razinski
      Steve RazinskiFounder

      That is probably my biggest gripe with these setups. The initial upfront cost is absolutely staggering. And then what happens if you are left with product you cannot move? I also do not like the high-pressure to throw parties and sell within your social circles. Those leads will dry up fast, especially if there are quality control issues.

  • Dave

    My wife wanted to get into it and try her luck but I’m happy I managed to talk her out of it. I’m not a party guy but she fairly is.

    Holding 3 parties per week is a real challenge for me and the kids. Again, I don’t think it would be fair to sell clothes that will get ripped after the first wash.

    To me, that is a good way to loose clients you have worked so much to get, and friends too. Are there any alternative programs like lularoe?

    My wife wants to build her career off of fashion, and I promised I’d help.

    • Steve Razinski
      Steve RazinskiFounder

      We have been covering MLMs pretty extensively this past month. If you’re going to be selling exclusively to your friends and family, you are going to want a products that stands up to some basic quality control measures. You’re right, there’s no faster way to lose the trust of others than by selling them sub-par products.

  • Mat

    I`ve been scourring the internet formoney making opportunities for my partner as currently she is a stay at home mum. As shes into fashion, I thought something along the lines of this might be an option. The high start up cost is a massive downer, but I understand that with the brand come a certain respect.

    I now know to scribble LULARoe off our list.


    • Steve Razinski
      Steve RazinskiFounder

      In addition to the high start up costs, there are loads of reports that the quality of the leggings just aren’t up to par ( http://www.snopes.com/2017/04/06/lularoe-lawsuits-quality-business/ ) and distributors are stuck with products they can’t move. A Facebook group that covers defective leggings is reaching close to 30,000. Hopefully they can clean up their quality control.

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