Of course, like any other entrepreneurial venture, reaching significant success requires much more than a bit of selling here, a bit there. Only a tiny proportion of people entering this form of direct sales stay in it and make a good living. They do so because they work the job like any other successful sales agent operating between a customer and a producer.
The minimum order is 30 pieces at a time, and LuLaRoe requires sellers to buy a minimum of 33 pieces a month ($346 in wholesale leggings, for example) to maintain active status. This means that if a retailer sold 30 pairs of leggings a week, it would take them just under three months to make back their initial $5,000. As they also need to use their revenue to restock an additional 33 pieces a month ($1,038 worth of leggings over 11.5 weeks), it would therefore take another month or so of selling 30 pairs of leggings a week to start turning a small profit. (There is a more detailed mathematical breakdown of different business models here.) “Just like anyone starting a new business, there is risk involved and not everyone is guaranteed success,” LuLaRoe CMO Lyon says.
MLMs blur the line between 'contractor' and 'customer.' That's because participants aren't just required to sell products - they're required to recruit other people, presumably in the same general geographic area, who also sell the same products. When you recruit someone, you've just created a competitor, which will decrease your own sales. What you gain from recruiting that person (i.e. the cut from his sales) is never enough to offset the loss of your own sales, and thus, your income.
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