In “LuLaRich,” Amazon’s new documentary about popular multilevel marketing company LuLaRoe, viewers are shown a video ad in which happy women wave their kids to school, hugging each other and smiling at the camera. Huh.
“You’re smart, kind, confident, independent,” says a voiceover. “We are mothers building a community, creating change through social retail. We are Lularo.”
How did the company that sell leggings go about empowering moms? This is the story of many MLMs, and it is certainly the story of Lularo.
The brand succeeded by targeting a group of stay-at-home moms seeking financial security and extra income in a country where there is no universal daycare or guaranteed paid time off for parenthood. It generated revenue by selling stock to retailers—often called “consultants”—who paid a $5,000 startup fee for the privilege of buying their stock and recruited others to do the same.
As Lularo CEO Mark Stidham aptly put it in the documentary, “If you want to make incredible wealth, identify an underutilized resource. And did you know? The resource used is.” The women they roped in weren’t just selling leggings with hamburgers printed on the crotch, they were told they were joining their “family first” and “movement.”
For a few years, LuLaRoe was good at spreading this gospel of #BossBabes and comparing empowerment to sales of printed clothing. The company generated $2.3 billion in sales in 2017. But then scandals began to rock the business, including mildew, low-quality products, copyright infringement, and laws calling LuLaRoe a pyramid scheme.
What sets this documentary apart from the others, about the company’s dramatic rise and fall, is the involvement of two of Lularo’s co-founders: DN Stidham, who plays a blessed innocent when questioned by lawyers and filmmakers, and his Husband Mark, who is eager to position himself. As a well-meaning VC. This allows viewers to see the many tools of manipulation Lularo has employed to keep its advisors in line – red flags that can occur at other companies as well. Here’s a look at what to keep in mind:
1. Lularo told the women that being involved means putting their husband and family first.
The documentary describes how Lularo was sold as a favor not only to generate income, but as a way to “strengthen families.” As DN Stidham told interviewers, “I wanted to give women the opportunity to help reduce the stress, the financial strain, to be able to give something to their families, to give back to their husbands.”
But MLM experts caution that it sets unrealistic expectations for how well MLM works. It is estimated that 99% of the people who participate in MLM do not make money.
,The idea that you’re going to take time off for your family while making all this money almost magically doesn’t hold water. At the end of the day you have to be very involved in keeping that money flowing,” said Elizabeth Villagomez, an economist who is an international consultant for UN agencies and a women’s empowerment researcher studying MLM.
The LuLaRoe leadership wanted their retailers to maintain strict gender roles. DeAnne, whose Mormon mother wrote a book about attracting and keeping the right man through dedication, transmitted these teachings to her vendors.
A retailer in the documentary said that Diane referred to her by her role only as “wife” rather than by her name. In another extreme example, Lularo’s former salesperson Roberta Blevins told filmmakers that in a company setting, “DeAnne said something to effect,All you have to do as a woman is get on your knees for five minutes a day and please your husband, and then your husband will let you buy everything you want.'”
Ironically, although Lularo and many other MLMs claim that vendors are putting their families first, there is constant pressure on participants to produce and recruit and make it their priority: The women in the documentary cut short vacations, their Sorry about the time lost with the kids, spending time with my kids. Buying into LuLaRoe and its models resulted in families becoming more in debt and divorced.
2. LuLaRoe attempts to emphasize intrusive control over the presence of retailers.
For Lularo, selling printed leggings wasn’t enough—you had to look the part, too. Former top consultant Courtney Harwood said retailers were always encouraged to do their hair and do whatever it took to be a successful businesswoman, including weight loss surgery.
“There came a push to be a certain size,” Harwood said, sharing that she was added to a text series called “Tijuana Lularo Skinny” to encourage her to get a gastric sleeve operation in Tijuana, Mexico. Can go
Another woman said she was asked to change her clothes when she wasn’t wearing a LuLaRoe, and Blevins said she began to question whether she was into a cult when she looked around at a convention. And all the women wore the same clothes. That MLMs share coercive tactics with the cult is a known problem.
Steven Hassan is a cult expert and the author of “Combating Cult Mind Control: The #1 Best-Selling Guide to Protection, Rescue, and Recovery from Destructive Cults.” Hassan has written about ways to forcefully influence the thoughts and feelings of MLM members.
According to Hassan, a cult is an organization that exerts undue influence on its members to make them dependent. They do this by following the BITE (behavioral, information, thought, emotional) model, which involves deciding who a person is and what they can do, including what they wear and what they are allowed to associate with.
Hassan told HuffPost that this form of behavioral control can include dietary restrictions on what a person can eat. “The more they can get people to follow their rules, the more control they’ll have over them,” he said.
For Harwood, he was being hospitalized after a weight-loss procedure, which became a waking moment for him about Lularo: “It was really my turning point in ‘What have I done with myself? What have you done with the family?'”
3. LuLaRoe realizes the false message that individuals alone are responsible and responsible for their own success.
In the documentary, Mark Stidham declared that joining Lularo is “a business you own. Business responds to the amount of time, effort, energy and discipline you put into it. ,
Being “in charge” is a message the company still sells on its “Join Lularo” website page: “You decide how much and when you want to work. You decide what you want out of your business.” Huh.”
It also means that if you fail in this “business”, it is your fault, not the result of being at the bottom of a pyramid or because there are problems with production. When LuLaRoe distributed smelly “dead fart leggings” and bad clothing, prompting consultants to complain, corporate leadership called it their Trouble.
Hassan said that the failure is by design the MLM spinning as the fault of the participants. “They want you to believe that if you’re not making a fortune, it’s because you’re not trying hard enough, not praying enough, etc.,” he said.
But, reality check: Being part of an MLM doesn’t make one a small business owner. At best, retailers are sales reps, and at LuLaRoe, they are Legally independent contractors who have no real voice over the company’s vision, strategy or design and construction. In fact, former consultants explained in “Lullarich” that they couldn’t even choose what clothes they paid for and would have to resell.
Vilgomez explained the difference by comparing running a business on Etsy and being a LuLaRoe retailer. ,On Etsy, you can always say to yourself ‘I didn’t have enough capacity, I’ll have to think about hiring a few more people instead of doing it from home.’ This is how a normal business grows,” said Vilgomez. “Here, the promise of getting you more money doesn’t come from you selling more products. It comes from you putting down $5,000 or $10,000 for other people to buy into it, and you get a share of it. ,
As “LuLaRich” suggests, the most financially successful retailers were early adopters, who were able to create huge “downlines” of recruits whose startup fees earned them bonus checks for their “uplines.” In a revealing moment, ex-seller Ashley Lutaha, one of the first retailers to join Lularo, was asked if she was actually bringing in more money than she sold clothes, with others willing to pay the company. Wasn’t bringing in more money than recruiting women. The initial cost.
But inevitably, as with any MLM, the market eventually becomes saturated and new recruits are harder to find. This is a major reason why the odds are stacked against participants making money. In 2020, 85.38% of LuLaRoe’s retailers did not receive any earnings through its leadership compensation plan, according to the company’s profit disclosure. In a pyramid-shaped business, there may only be a few people at the top – and an awful lot at the bottom, no matter how hard they try. But this was never the message of those at the top.
4. The Lularo leaders insisted that the advisors were either in or out.
When sellers joined LuLaRoe, they were given supportive-sounding titles such as Trainer, Coach, or Mentor as they rose in rank. But this camaraderie ends when the sellers question the Stidhams or attempt to leave, as the documentary reveals.
Harwood said that when she eventually left, saying that Lularo owed her about $100,000, the other members were instructed not to speak with her or she would be terminated.
Vilgomez said that this exclusion is a standard part of how MLM works.
“They make you lose all your other friends first, and everyone you left is in Lularo,” she said. “You feel isolated, and you’re actually taught that if people start telling you that you can’t achieve your dreams, you shouldn’t talk to them. If someone tells you that it’s crazy, you shouldn’t talk to him. They make you emotionally dependent.”
In other words, you-go-girl pep talk breaks down when business is at risk. And as the documentary reveals, the shared bond formed by distrusting Lularo was what eventually lasted.
“I got more support [an anti-LuLaRoe Facebook group] More than I ever did in Lularo,” said Blevins in the conclusion of the documentary.