Frequently Asked Question for Starting LuLaRoe
By: Kate Crump
I wrote this blog post as a way to help others find answers to questions when starting LuLaRoe. I personally asked most of these questions myself, and wanted to share my experience with all of you! I hope these help!
Q: What makes LuLaRoe different than any other MLM?
A: One of the biggest things that sets us apart is that we don’t have a catalog. When you purchase your inventory, you purchase styles, sizes and quantities. LuLaRoe will send you various prints in the sizes and styles you’ve ordered. This means that the competition for customers is extremely low because every consultant has completely different inventory. You don’t need to worry about losing a customer to another consultant because the next time you get new inventory, that customer will right on your page looking through your goodies because they’ll be completely different every time.
Q: How much do I make from each sale?
A: You’ll make anywhere from 100%-110% on each sale, depending on which items you’re selling. For example, you buy an item for $10 and sell it for $22. Not all items have the same percentage mark up but they’re all around the same percentage. The least you’ll make is 100% which is more than any other MLM I have ever found.
Q: What does it cost to become a LuLaRoe Consultant?
A: There are multiple start up packages to choose from! The cheapest onboarding package is $4,925. Feel free to see other initial order packages and costs in my post LuLaRoe Start Up Cost.
Q: What is included in the initial package?
A: There are about 300 items included in the most popular initial package. You’ll get a few styles of skirts, shirts, dresses and leggings, if you choose the additional package. Please message me for the initial package details. They change from month to month.
Q: What ways can I pay for my initial investment?
A: Most consultants choose to use a 0% interest rate credit card to pay for their initial investment. Some pay with debit card or ACH (checking account). You can also get a business loan to pay for your investment.
Q: Is there a consignment program?
A: There used to be, but there is not anymore
Q: What if I sign up and decide it’s not for me? Can I get my money back?
A: If you decide to pause or terminate your LuLaRoe membership, you can either sell off your inventory to other consultants (and trust me, they will be beggings to go through your inventory to buy for wholesale!) or you can sell your inventory back to LuLaRoe. There will be a 15% restocking fee to send it back to them, so you’d want to sell as much as you can to other consultants first. You could also do a blow out sale on your website/facebook page to get your money back for your inventory.
Q: What are different ways that I can sell my inventory?
A: Most people sell online in a facebook group created specifically for your business. A lot of sales are starting to happen on periscope too. A lot of consultants like to do home pop-up’s (home parties). You can customize your business to what you want.
Q: How will not picking my own prints help my business?
A: This is another cool thing about LuLaRoe! If you were to pick all of your own prints, then you’d only be catering to people who like what you like. By allowing LuLaRoe to send you various prints, you’re catering to everyone. You might get a print that you think is awful, but one of your customers will love it. Trust me, everything sells.
Q: What if I get prints that are taking a while to sell?
A: Every couple weeks, local consultants get together and bring those types of items (or items they have duplicates in) and we swap inventory. This will allow you to get a batch of new inventory, without having to pay more money for it. You can also sell back items to LuLaRoe, and they will give you a store credit. They charge a 15% restocking fee to do this.
Q: Can I create a website for my business and sell there?
A: You are more than welcome to create a blog to share your LuLaRoe experiences (see my LuLaRoe Kate Crump homepage); however, you are not allowed sell or promote product directly from your blog. It is also not allowed to sell anywhere there is a checkout/shopping cart, including ebay or amazon.
Q: How do taxes work? Do they send you a 1099? How much do you have to put aside, do they take taxes out of your check?
A: They send you a 1099 if you earn over $600 in commissions from them. Commissions are earned if you have a team or at least someone under you. If you don’t get a 1099 then you file your own taxes and report it all yourself. They don’t take income taxes out of our commission checks or customer purchases. They do withold the sales tax and pay that to your state for you though. I set about 35% of my profit aside for income tax, and I pay quarterly.
Q: How often do you get paid for my customer’s purchases?
A: When a customer pays her his/her order, they pay through the LuLaRoe porta/site. When they collect the funds, they take out a small credit card processing fee and the sales tax. They pay your sales tax to your state and then direct deposit the remaining balance to your checking account. It usually takes about 2-3 days for the funds to process and be issued to your checking account.
Q: Will I be paid per transaction or per day?
A: LuLaRoe will direct deposit the sums from each day into your account. So it will be one deposit per day, not one deposit per transaction.
Q: If I have a downline/team, how often am I paid my commission check?
A: If you build a team, you get a commission check once a month around the 20th of the following month. For example, for June’s commissions, you get paid around July 20th. They mail the checks out from California on the 15th of every month. It usually takes about 3-5 days to receive.
Q: Am I required or pressured to build a team?
A: You are not required or pressured to build a team. You can just sell the clothing if you want. And you can start building a team as early as you want. There is no waiting period to start building.
Q: Is there a waiting list to join LuLaRoe?
A: For now, there is. The waiting list is about 8 weeks long. This wait will allow you to get totally ready to start selling as soon as you’re officially signed up.
Q: Why is there a waiting list?
A: There didn’t used to be one, but at the beginning of 2015, more consultants signed up than they had anticipated, or were ready for. This created a back up in signing up because they didn’t have enough inventory for everyone. It got to the point where they were 12 weeks behind, so they’re slowly catching up. They should eventually be caught up completely to where there won’t be a waiting list.
Q: What can I do during the waiting period?
A: The “waiting period” is referred to as the “queue”. While you are in queue, I will coach you and help you with all you need to do. Some things include setting up your facebook group, advertising that you are a new consultants, purchasing your racks, hangers, backdrop, business cards, bins, label machine, labels, and getting your LLC set up. There is seriously so much to do, that the 8 week wait is a blessing!
Q: When do I pay for the initial investment?
A: You won’t pay for your first order until you are at the top of the queue. So you won’t have to pay for anything during the 8 weeks while in queue. This will also give you time to get your finances in line so you are ready to pay when it’s your turn to sign up.
Q: When you order new inventory, how long does it take to receive?
A: I’m in Utah, so it takes about 4 days to get my order. Most of the time, LuLaRoe ships same day, and then I’ll get it within 3-4 days. It’s great. Those on the east coast take about a week to receive.
Q: Is there a purchasing minimum in order to stay active?
A: The Policies and Procedures states that you need to order at least once every six months to stay active; however, LuLaroe has never terminated an account for not ordering this minimum. In order to check out, while ordering, the minimum is 33 items per order. You can’t just order one or two things, it has to be a minimum of 33 items. You CAN order one single Amelia Dress and then 32 Leggings if you want, but the order TOTAL has to be 33.
Q: What is the wholesale cost on each item?
A: Most of the items are about 50%-60% off. They’re not all the same, but on average, it’s about 55% off.
Q: How do you keep track like when you have an online facebook pop-up/party with who claimed what?
A: When someone buys something, I write their name and e-mail address on a post-it-note. On the bottom I’ll write down who their host is. When they pay, I add their name to my spreadsheet under that host with how many items they purchased. That way I can easily keep track of how many items that host sold. If there isn’t a host, then I just ship without keeping track of ay host.
Q: In regards to shipping…do you have a “deal” with the post office for pick up or do you have to bring everything to the post office to drop off everyday?
A: You can schedule the USPS to pick up all your packages everyday, so you never need to go drop them off. My mailman comes at 10:30 everyday so sometimes when people pay after that, I’ll go drop it off so it ships same day. If it’s later though, I’ll just wait till he comes again the next day.
Q: Do you get discounted shipping?
A: I use stamps.com as my shipping platform. They offer a discounted shipping rate since since I ship so much. I can give you more information once you get you’re in queue.
Q: Do you have to do online pop-ups/parties every week or can you leave your stuff up all week and then just add new inventory when you get?
A: This is the cool thing about LuLaRoe, you can do whatever you want! You don’t even have to do online pop ups if you don’t want to. I feel they’re important because they help me to gain new clientele. You’d be surprised how helpful they are. Some people do them more often than I do. In addition, I’ve noticed that I sell much more when I take my inventory down once a week because it creates a sense of urgency for your customers to get it while it’s there. And then If you have inventory that you’ve had for a while, when you take your inventory down and put it up often, they can’t remember what you’ve had for a while, but if your inventory is always up, they start to memorize your inventory and know what’s been there for a while, especially because of the post date. They can see what date you posted it and how old it is. People want the newest prints and so by posting once a week, I’ve been able to sell a bunch of old stuff because people don’t know what’s old and what’s new.
Q: For pictures, are there certain procedures you have to follow or can you do how you want?
A: You can take the pictures of your inventory however you want. They suggest they look professional and neat, which will only help your business look professional. Do not take your pictures on carpet or a blanket. Take your pictures on a mannequin with a backdrop in good lighting. You are representing LuLaRoe through your pictures.
Q: Do you get a check or do they do a direct deposit?
A: You’ll get a check for your team commissions and direct deposit for customer sales.
Q: What are your checks based on?
A: Checks are based on team purchases. When your first level team purchases from LuLaRoe, LuLaRoe pays you 5% of their order. The compensation changes depending on what level your team members are on and what rank you are. Let me know if you want more information on the compensation plan!
Q: When looking for a sponsor, what are some things to keep in mind?
A: You want your sponsor to be available to you, someone who will give you the resources to be successful and someone who is upbeat who will be your biggest cheerleader!! We have team webinars and trainings monthly to keep everyone up on ideas and strategies to be successful. Our Facebook team group is also incredibly helpful to get ideas and help from other successful girls on our team.
Q: In addition to my initial investment, what kind of extra supplies are required?
A: You’ll need to get racks, hangers, size tags, poly mailers, label maker, labels, merchandise bags, business cards, post it notes, bins for leggings, Re-tagger etc. I spent about an extra $600 on these extra items.
Q: Are there monthly fees to be a consultant?
A: No, there are no monthly fees!
Q: Do you have to sell a specific amount each month?
A: No selling minimum.
Q: Are there trainings that will help me be successful?
A: YES! I do a weekly training for my team on my team Facebook group, via Facebook Live. I also have monthly in-home trainings where you can meet other consultants on your team and gain new ideas from others. There are also training webinars every week that are put on by LuLaRoe. LuLaRoe also holds trainings all over the country so they can come to YOU and provide you with excellent training, in addition to the annual convention, held every July.
Q: Is there a certain price that I have to sell the clothing for?
A: When you sell the clothing online, there is a MAP (Minimum Advertised Price) that you are required to sell it at. If it is marked below MAP, then you are risking your membership as a LuLaRoe Fashion Consultant. When you sell the clothing at a home party, they give you a range of prices so you can sell the clothing for lower than MAP.
Q: Am I allowed to do sales online, since there is a MAP requirement?
A: Yes, you can sell the clothing online for a discount, but you can’t advertise the discounted prices. You need to advertise “Sale on _. Message me for sale price!”
Q: When you get new inventory and there’s something you want for yourself, do you just keep it or do you buy it from yourself?
A: You can just keep it. My CPA actually said we can use that as a tax write off, as a marketing expense. You’ll basically place an order for it in your back office (Audrey) and mark it down to $0 so that you have a receipt for it.
Q: How many hours a week do you put into LLR?
A: I put about 40-50 hours into my business. The amount you work will really determine how much you will sell. The more time you put into your business, the more successful you will be. At first, when you’re working to get your business going, it’s going to take a lot of time and work. Once you get the hang of things, it might not require as much time. But it all just depends on how much you want to make/sell.
Q: How much should I set aside for income tax?
A: I’ve estimated that I need to pay 35% so that’s what I set aside to pay quarterly. For example, $35 is what I set aside for every $100 earned (profit).
Q: What do you like best/worst about LLR?
A: I love the culture of LuLaRoe. They are all about giving and serving others. They always say the more you give the more you’ll see your business thrive. They’re incredibly positive and motivating. I love that since we all sell diff items, there isn’t much of any competition. We are all helping eachother, even if we aren’t on the same team. We are…. a sisterhood. It’s amazing, and you won’t find this anywhere else, because in any other MLM, everyone is competing for customers. Here, we share customers and help each other to be successful. It’s amazing.
On the flip-side, LuLaRoe is growing incredibly fast, so when you need to call them, you may have a long hold time (sometimes none at all). When you email them, they may take about a week to get back to you. Other than that, I don’t have issues with weird prints because everything eventually sells. I sometimes get an item and am like, who the heck is gonna buy this… and then someone does.
Q: With all these people signing up to sell LuLaRoe, do you think it will soon become over-saturated?
A: Until you see everyone, everywhere you go wearing LuLaRoe, you don’t need to worry about saturation. Because LuLaRoe is still so new, I rarely see anyone wearing it, and quite often when I tell people what I do, they have never even heard of it! So it still has a long ways to go. Women will always be buying clothing!
Q: There are already a few consultants in my area who sell. How will this affect my business?
A: This is GREAT news! With more consultants nearby, the better you’ll do. You can swap inventory with these other consultants (to spice up your selection) and do multi-consultant sales together. Remember, everyone has totally different inventory, so you don’t need to worry about completion and losing customers to other consultants.
Q: Because the leggings don’t come in the initial inventory, is there a way I can still order them?
A: YES! There are two ways to get them, actually. There is an add-on package of leggings that you can order with your initial order. It comes with Adult, Tween and Kids leggings. If you choose to add on this package, then you’ll also get free Patrick T’s! If you don’t want to order the add-on package, then you can order in the back office (Audrey) immediately after you hang up the phone while placing your initial order. You’ll have access to order anything you want immediately after your call.
Q: If I get in the Queue and decide that I don’t want to do it anymore, can I still back out?
A: Yes, you can. You can tell them you aren’t interested anymore when they call you, or just ignore the phone call.
Q: Will the wait ever be shorter than 8 weeks?
A: Yes! Every week they seem to get closer and closer to catching up. It’ll soon get to the point where there won’t be a wait to sign up. Woot! Woot!
Q: Can I sign people up to be on my team while I am still in queue?
A: YES! You can!