But for most MLMs, the real money isn’t in selling wares: It’s in signing up consultants. Up until July 2017, LuLaRoe’s sellers who signed up new retailers got a 3-5% commission on the inventory their downline bought. But they only garnered that commission if they and everyone underneath them each bought 175 pieces a month, a rule that incentivized inventory buying.
“The majority of [retailers] earn income from only selling LuLaRoe clothing and not through participation in the Leadership Bonus Plan,” says a LuLaRoe spokesperson of their recruitment-based bonus structure. “LuLaRoe’s success is based on [retailers] selling the comfortable and stylish clothing to consumers, not ordering more inventory.” LuLaRoe says that in 2016, 72.63% of their consultants earned their income through selling clothing alone.
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Network marketing, also known as Multi-Level Marketing (MLM), is a business model where independent contractors buy into a company and earn a commission on the products they sell. The profession appeals to many people because they can be their own boss, set their own hours, and work towards their own success. It is a big commitment, but network marketing can be a very lucrative career.
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