Let’s Chat about LuLaRoe

Hello everyone and WELCOME BACK TO MY BLOG!

Given the snooze-fest that is Lululemon, as of late (I CAN NOT WAIT until they get the Spring collection online), I thought it would be fun to write about a company that is constantly showing up in my news feed. I want to write this article for a couple of reasons. One reason is to dispel any confusion regarding any link between the two companies (there is none), and the second is to talk about LuLaRoe as a whole and give my severely uneducated opinion on a company whose clothes I have never tried.

Truly, if you like LulaRoe, I encourage you to continue to indulge. However, several articles have popped up in my news feed regarding the declining quality of the clothing, so I decided to do a little research. In addition, I’ve seen questions on Twitter about whether LulaRoe and Lululemon are the same thing. If you are here regularly, you know that they are not. However, there are some people who may not know that, so I’m writing this article to highlight some of the differences. In addition, I have also come across somewhat more substantiated claims that LuLaRoe and Agnes & Dora are the same. Well, they do have similar models in that they are both sold by representatives. The clothes look somewhat similar to me, but there are articles and YouTube videos, so you can decide for yourself about that. And while I can’t say for sure that these companies are in fact the same, what I can tell you is that the owner of Agnes & Dora, Elizabeth (Buffy) Bandley (maiden: Worsley) is LuLaRoe founder Deanne Stidham’s niece. So, are LuLaRoe and Lululemon the same? No. Are LuLaRoe and Agnes & Dora the same, you decide.

A question on Twitter about whether Lululemon & LuLaRoe are the same

I recently came across this article: This clothing company is facing claims that its ‘pants rip like wet toilet paper’. It’s a Business Insider article with the most thorough description of the problems LuLaRoe is having with the leggings, in my opinion. LuLaRoe is a relatively new company (started ~2013 or 2014- I’ve seen both and their website doesn’t specify), and it is a company with a multi-level-marketing compensation scheme. I am going to try my best not to let this color my opinion of the company, but to be honest, I am not a fan of MLM-based companies. However, let’s begin by addressing the BI article:

On Quality:

Honestly, growing companies have hiccups. When you add 33,000 consultants in one year, you’re going to have growing pains. However, that does not absolve LuLaRoe of its corporate responsibility regarding quality. And there are a few points to touch on here, so please bear with me. Actually, kudos to you if you made it this far down! Let me know if you did in the comments! Haha!

  1. Hire fewer consultants. Easy task. First off, there is already talk that the market is saturated with LuLaRoe. (On this note, I found many websites with articles on whether the market was oversaturated with LuLaRoe. However, they all had clear bias either for or against LuLaRoe. It was my intention to find something less biased, however, there doesn’t seem to be any websites without opinion-based articles on whether the market is saturated or not.) If the market is oversaturated, LuLaRoe should slow down on-boarding of new consultants. As I understand it, there is already a queue to become a new consultant, so perhaps the wait should be lengthened even more.  Or perhaps the market is not oversaturated, in that case, my advice is the same. If your company is growing so quickly that it can not manage quality, growth must be slowed, quality must become the priority and the queue, therefore, must still be lengthened.
  2. Monitor Quality.  Given the pace of growth of LuLaRoe, quality monitoring must be maintained throughout the supply chain. When a company is growing quickly, that company may change suppliers or hire an extra supplier to keep pace with demand- and that’s OKAY! In fact, it’s probably the right thing to do! However, the new supplier must be able to produce a quality product, and again, that product must be quality monitored so that the consumer who is demanding the product because it has always been good quality can receive the quality product that they want.
  3. Develop a better return policy. I’m the first to admit that Lululemon’s return policy is not the best. Athleta’s is, actually.  But if a product gets random holes in it, or pills beyond belief or has a general quality issue, Lululemon will take it back. The reason so many customers and consultants are angry about the recent quality issues with LuLaRoe’s clothing is because they have to return the clothes to the consultant. And it can be difficult. Maybe the consultant won’t accept the return, maybe the consultant no longer sells LuLaRoe and can’t be found- who knows!? And the consultants are angry because, LuLaRoe, although they do accept returns, has been slow or reluctant to issue refunds for returned items.

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On Compensation:

Lululemon and LuLaRoe also have vastly different compensation schemes. Let’s discuss LuLaRoe’s first:

It works like this: You sign up to sell LuLaRoe, your “sponsor” receives 5% of your sales as a commission for getting you to sign up. You sign up your friends to sell LuLaRoe, and you get 5% of their sales. Most people know this, but this business model can only be recycled 13 or 14 times before everyone on earth is selling a single MLM product. In my research, I found this better, and more entertaining (albeit, NSFW) description of MLMs here on John Oliver’s YouTube channel.

LuLaRoe Lingo:

Team: Your “Team” is comprised of everyone you sign up, and everyone they sign up in turn. The people beneath you, and the people beneath them.

LuLaRoe Levels

Sponsor: As a sponsor, you can earn 5% of the sales for each friend you sign up, as well as 3% of the sales for each friend that they sign up. However, you, personally must be ordering 175 pieces a month to qualify for those earnings.

Trainer: In order to qualify for trainer status, you need to have a minimum of 10 people on your team who are ordering 1750 pieces or more per month. In addition, you need to be ordering 250 items per month. However, if three of the people on your team are ordering 175 pieces a month, then you can reduce the number you need to sell by 50 items per person, to a minimum of 100 items ordered per month. You might also qualify for “Leadership points,” which allow you to share in the profit pool. The profits you receive depends on the number of people who qualified that month, and on the profits, of course.

Coaches and Mentors: The next highest ranks comprise the fewest number of people, and the bonus structures get quite complicated. However, they are explained in some detail here, and here. The first site is a “pro-LuLaRoe” site, and the second is an “anti-LuLaRoe” site, so you get both sides of the story.

Anyways, this type of compensation structure encourages something common in the MLM industry called “becoming garage qualified,” or simply put: stockpiling. You can’t qualify for the bonuses that make selling worthwhile unless you are ‘qualified’ and in order to qualify you have to order a certain amount of product, so you continue to do so, hoping in turn, that everyone you signed up to sell LuLaRoe also meets their order quota, so that you can qualify for the bonus attached to them making that quota. It is cyclical and it encourages stockpiling.

As opposed to Lululemon, that of course, is a publically traded company, whose stores are corporately owned (they’re not a franchise) and that does not sell wholesale merchandise. Meanwhile, LuLaRoe’s compensation scheme and the independent representative model described above is quite different. So, ad nauseum, they are not the same.

This post is not meant to be anti-LuLaRoe, and again, if you love it, by all means, buy it! Some of the prints are really cute in my opinion. And that’s all this is, an opinion. If you’re thinking about selling LuLaRoe, congratulations on thinking about starting a new venture! Entrepreneurs are important to everyone’s continued economic success! However, I do encourage you to do your due diligence, and check out LuLaRoe’s financial disclosure statement. At the end of the day, buying or selling- it’s your choice! I do, however, hope that you found this helpful. And I also hope that it solidifies that Lululemon & LuLaRoe are not the same thing.

Thanks for reading. Please let me know your opinion in the comments, and also, if I got any of my information incorrect, and you have a better source for me to cite, please let me know.

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Edited to add LuLaRoe’s Financial Disclosure Statement. I suppose it is easier to see it here, rather than click off to a link to view it.

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Author: lululemonexpert

Blogger, Lululemon Enthusiast, Polyglot, Autodidact

4 thoughts on “Let’s Chat about LuLaRoe”

  1. LLR is different than MLM’s in the sense that you can make money without having a team. You can carry the styles you want to carry, and once you purchase your stock from the company, you personally own it and can do what you wish with it. Additionally, the profit margin is enough per item so you don’t even need a team to make money. I know people making a ton of money just selling it, and they have no desire to have a team.

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    1. Hello Becky, and thanks for commenting! I am sure that some people make money! I am even certain that few people make a lot of money! In fact, thank you for this comment. I will be posting LuLaRoe’s Income Disclosure Statement in this post, as an addendum for transparency and to show income earning potential. Thanks for keeping me honest!

      As far as carrying the styles you want to carry, I heard that your initial order is comprised of styles that the company chooses for you. Here is one source, a LuLaRoe consultant (http://www.rlovers.com/lularoe-onboarding-package-may-2016/) who says that during onboarding there is only one package available for recruits to order. And of course, once you purchase your items, you can do as you wish. First Sale Doctrine happily applies here!

      Thank you again for your comment!

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      1. Please note, too, that in this MLM structure of LuLaRoe’s, they pay commission NOT on sales, but on the purchasing of new inventory by the people on the sponsors’ teams. There is not necessarily an incentive to assist people with sales training, but more of a push to encourage consultants to stock more inventory. And while the Stidham’s have promised that this model will change “soon,” it’s been well over 6 months and no change date has been set. ALSO, and this is a big one too, consultants are not refunded for damages. Their accounts with LuLaRoe are credited to be used towards a future 30 piece minimum order, and all damage claims placed may not be accepted. It is possible that a consultant could exchange a damaged item that someone else sold and be out the wholesale value for both pieces, with no credit for a future purchase.

        Liked by 1 person

    2. Not true. Once you purchase your stock from the company, you personally own it BUT cannot “do what you wish with it”. LLR consultants are controlled by a very strict set of rules & regulations, such as not being able to market the clothing in any other ways except those acceptable to LLR, only using “Audrey” as the payment processing system, not being able to sell the clothing on eBay, online auctions to buy/sell/trade websites, and setting prices according to the LLR regulations. In my humble opinion, plunking down $6,500+ for merchandise to re-sell at astronomical prices & having to comply with a bunch of rules from the company where you purchased the clothing from is foolish. Legally, once you purchase something, it’s yours to do with however, whenever, wherever you want. If you want to put your stuff in a friend’s clothing store/boutique to sell, you should be able to do that. If you want to sell it on eBay, you should be able to do that. You should be able to price the items at whatever price point you choose. The real customers in LLR are the consultants that are purchasing clothing from LLR at retail prices & then doubling the price in an effort to turn a profit. When LLR is paying $1.50 for a pair of leggings & then selling them for $12.50/pair to the consultants, the REAL winner is LLR—LLR knows when a consultant “onboards”, they will be paying for a certain number of pieces and are unable to choose the patterns, so the sale is guaranteed. Once the consultant gets the clothing, there is a very good chance that a considerable number of those pieces will not sell because they are ugly. If somebody wants to re-sell clothing, at the wholesale prices LLR is paying for the clothing, $6,500 can get them a whole lot of inventory to sell. At $1.50 for a pair of leggings, a person can get a truckload of leggings, shirts, dresses, cardigans—much, much more than what they’re getting from LLR. It’s a great business plan for LLR and a bad business plan for the consultants.

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