LuLaRoe, A Statistical Review.

For those who do not know, Lularoe is a Networking sales ring that sells clothing through distributors. Distributors pay 6,000 dollars to get started selling several different cuts of clothing in completely random patterns that they have no control over.

Like so.....

Consultants at lularoe are sold leggings made in Vietnam starting at 14 dollars and told to sell them at 32 dollars to make a profit.

Lularoe has been expanding drastically and has added 33,000 consultants in the last year to sell their clothing line.

Yup, totally not a pyramid scheme!

Lets do some math shall we.... (Census link at bottom)

318 million people in USA. (give or take... babies keep on being born!)

about 75% of them are over 18 and can buy clothes on their own.

318 million * .75 = 238.5 million.

Your target group is women which will be about half of that. (though there are meggings as they are called....)

Yup, those will sell well....

so anyway... women. 50% of the population normally... yes?

238.5 million * .5 = 119.25 million. So far so good.

Your key demographic will be any house hold well off enough to buy expensive clothing. so 20% of the population. (any household making 100,000 dollars or more, because the line for financial worry is set at 78,000.)

119.25 million * .20 = 23.85 million.

That's a pretty big number of customers, but then let's divide it by the number of consultants added last year 33,000 and assume that at least 16,000 was added before that time and is still active. So 49,000 currently active consultants.

so 23,850,000 / 49,000 = 486 potential customers per lularoe consultant.

But, this doesn't take into account that not everyone will want to buy lularoe. I'm going to assume that 50% (which is high in my opinion) will want to buy  lularoe.

486 * .5 = 243 potential customers per consultant who want to purchase lularoe and are well off enough to do so.

Okay, so that's a smaller number. But lets assume each person buys an average of 3 items of clothing. (some buy 10 some buy 1)
243 * 3 = 729.

And average profit is suppose to be 18 dollars a piece so

729 * 18 = 13,122.

Yup. That doesn't look good. P

To double check my math I looked at Facebook ads, Which is a good tool to guess how many people are buying these leggings.

Facebook says 5 million.

So according to Facebook. Those ~50,000 sellers are competing for an even smaller number of people.

5 million divided by 50k = 100.

100* 3 = 300

300 * 18 = $5400. So not even enough to pay back the first purchase of lularoe.


Lets do some more math. Because math, doesn't have hopes and dreams.

You spend 6k for lularoe. get approximately 350 pieces with varying patterns.

Lets be generous.
20 percent will be "unicorns" pieces you can sell for 34 dollars profit.
60% will be "normal" pieces you can sell at 18 dollars profit.
20% will be pieces that you have problems getting rid of, and will either be with you for months or you will probably end up giving away for promotions. (so 0 profit)

total numbers here are
70 "unicorns"
210 "normal"
70 "unsellable"

70 * 34 = 2380.
210 * 18 = 3780.
70 *  0 = 0.

So total profit will be...
6160 so 100% profit, if you are a selling WIZ.

But how long does it take to sell those clothes? In order to sell all of those clothes in 2 months. (which would come out to 3,000 dollars, a livable wage) you would have to sell 5 pants a day.

Unless you have a MASSIVE following of people already willing to buy your clothing, you're going to have to start building it. Which would probably take you a month to a year.

And as we're already established. I'm pretty sure your key demographic will not want 100 pairs of leggings apiece.

Note, this picture is from a seller

sources:
Census:
https://www.census.gov/quickfacts/

The take away from this is, lularoe Does NOT care about you. They don't. All they care about is that you pay them 6,000 dollars and then they are DONE!

Because lets assume that that key demographic also becomes sellers.

so 5 million potential consultants. Lets say 20% of them become consultants.

So 1 million consultants times 6,000 = 6 billion.

Now we see where the actual money is.

Consultants are the customers not buyers of Lularoe.