In “LuLaRich,” Amazon’s new docuseries about the popular multilevel marketing company LuLaRoe, viewers are shown a video ad with happy women waving their children off to school, hugging each other and smiling at the camera.
“You are smart, compassionate, confident, free,” a voiceover says. “We are mothers building a community, making a difference through social retail. We are LuLaRoe.“
How did a company selling leggings become about mothers’ empowerment? This is a story of many MLMs, and it’s definitely the story of LuLaRoe.
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 earned revenue by selling stock to retailers — often called “consultants” ― who paid a $5,000 startup fee just for the privilege of buying their stock and recruited others to do the same.
As LuLaRoe CEO Mark Stidham plainly put it in the documentary, “If you want to create incredible wealth, identify an underutilized resource. And you know what? There is an underutilized resource of stay-at-home moms.” The women he roped in weren’t just selling leggings with printed hamburgers on the crotch, they were told they were putting their “family first” and joining a “movement.”
For a few years, LuLaRoe was quite good at spreading this gospel of #BossBabes and equating empowerment with selling printed clothes. The company generated $2.3 billion in sales in 2017. But then scandals started rocking the business, including allegations of moldy, low-quality product, copyright infringement, and lawsuits calling LuLaRoe a pyramid scheme.
What sets this documentary apart from others about the company’s dramatic rise and fall is the participation of LuLaRoe’s two co-founders: DeAnne Stidham, who plays a blessed innocent when questioned by lawyers and filmmakers, and her husband Mark, who is eager to position himself as well-meaning patriarch. This allows viewers to see many of the tools of manipulation LuLaRoe leadership employed to keep their consultants in line ― red flags that could happen in other companies, too. Here’s what to watch out for:
1. LuLaRoe told women that joining up meant putting their husbands and families first.
The documentary details how LuLaRoe was sold not just as a side hustle to generate income, but a way to “strengthen families.” As DeAnne Stidham told the interviewers, “I wanted to give women an opportunity to help ease the stress, the financial stress, to be able to give something to their families, give back to their husband.”
But MLM experts caution that this sets up unrealistic expectations of how much work an MLM takes. It’s estimated that as many as 99% of people participating in MLMs don’t make money.
“This idea that you’re going to have time for your family while making all this money almost magically, it doesn’t hold water. At the end of the day you have to be very involved to keep that money flowing,” said Elizabeth Villagomez, an economist who is an international consultant for United Nations agencies and a women’s empowerment researcher who studies MLMs.
LuLaRoe leadership wanted their retailers to maintain strict gender roles. DeAnne, whose Mormon mother authored a book on how to attract and keep the right man through submission, disseminated these teachings to her sellers.
One retailer in the documentary said DeAnne referred to her only by her role as “wife” instead of her name. In another extreme example, former LuLaRoe seller Roberta Blevins told the filmmakers that in a company setting, “DeAnne said something to the effect of, ′All you have to do as a woman is just get on your knees for five minutes a day and please your husband, and then your husband will let you buy whatever you want.’”
Ironically, although LuLaRoe and many other MLMs claim sellers are putting their families first, participants are under constant pressure to produce and recruit and make it their priority: Women in the documentary spoke regretfully about cutting short vacations, missing time with their children, dragging their families into further debt and getting divorced as a result of buying into LuLaRoe and its model.
2. LuLaRoe attempted to assert intrusive control over retailers’ appearance.
For LulaRoe, it was not enough to sell printed leggings — you also had to look the part. Former top consultant Courtney Harwood said retailers were encouraged to always have their hair done and do whatever it took to look the part of a successful businesswoman, including having weight loss surgery.
“There came a push to be a certain size,” Harwood said, sharing that she was added to a text chain called “Tijuana LuLaRoe Skinny’s” to encourage her to get a gastric sleeve operation in Tijuana, Mexico.
Another woman said she was told to change her clothes when she wasn’t wearing LuLaRoe, and another said she began to question whether she was in a cult when she looked around at a conference and all the women were dressed the same. That MLMs share coercive tactics with cults is a known problem.
Steven Hassan is the author of “Combatting Cult Mind Control” and the founder of the Freedom of Mind Resource Center, which provides intervention and recovery services for people in cults. Hassan has written about the ways MLMs exercise coercive influence over members’ thoughts and emotions.
According to Hassan, a cult is an organization that exercises undue influence over its members to make them dependent. They do that by following the BITE (Behavior, Information, Thought, Emotional) model, which includes dictating who a person is and what they can do, including what they wear and who they are allowed to associate with.
Hassan told HuffPost that this form of behavior control can include dietary restrictions of what a person can eat. “The more they can get people to obey their rules, the more control they have over them,” he said.
For Harwood, it was being hospitalized after a weight loss procedure that became her wake-up moment about LuLaRoe: “That was really my turning point on ‘What have I done to myself? What have I done to my family?’”
3. LuLaRoe sent the false message that individuals alone are in charge and responsible for their success.
In the documentary, Mark Stidham declared that joining LuLaRoe “is a business that you own. The business responds to the amount of time, effort, energy and discipline that you put it into it.”
Being “in charge” is a message the company still sells on its “Join LuLaRoe” website page: “You decide how much and when you want to work. You decide what you want out of your business.”
What this also means is that if you fail at this “business,” that’s your fault, not a result of being at the bottom of a pyramid or because there are problems with production. When LuLaRoe distributed stinky “dead fart leggings” and defective clothing, prompting consultants to complain, corporate leadership spun it as their problem.
Hassan said that MLMs spinning failure as the fault of participants is by design. “They want you to believe that if you’re not making a fortune, it’s because you’re not trying hard enough, not praying hard enough, etc,” he said.
But, reality check: Being part of an MLM does not make someone a small business owner. At best, retailers are sales representatives, and at LuLaRoe, they are legally independent contractors who have no real voice over the company’s vision, strategy or design and manufacturing. In fact, former consultants explained in “LuLaRich” that they couldn’t even choose what clothing they paid for and would have to resell.
Villagomez explained the difference by comparing running a business on Etsy and being a LuLaRoe retailer. ”At Etsy, you can always tell yourself ‘I didn’t have enough capacity, I’m going to have to think about instead of doing it from home, hiring a couple more people.’ That’s how a normal business grows,” Villagomez said. “Here, the promise of you getting more money doesn’t come for you selling more product. It comes from you getting other people to buy into it, to put down their $5,000 or $10,000, and you get a chunk of that.”
As “LuLaRich” shows, the most financially successful retailers were early adopters who were able to build vast “downlines” of recruits, whose startup fees earned bonus checks for those in their “uplines.” In a revealing moment, ex-seller Ashleigh Lautaha, one of the first retailers to join LuLaRoe, would not answer when asked if there was a time she was bringing in more money from actually selling clothes than from recruiting other women willing to pay the company’s startup costs.
But inevitably, with any MLM, the market eventually becomes saturated and it’s harder to find new recruits. This is a major reason the odds are stacked against participants making money. In 2020, 85.38% of LuLaRoe retailers did not receive any earnings through its leadership compensation plan, according to the company’s profit disclosures. In a business shaped like a pyramid, there can only be a few people at the pinnacle ― and an awful lot at the bottom, no matter how hard they try. But that’s never the message from those at the top.
4. LuLaRoe leaders insisted consultants were either in or out.
When sellers joined LuLaRoe, they were given supportive-sounding titles like trainer, coach or mentor as they moved up the ranks. But that camaraderie ended once sellers questioned the Stidhams or attempted to leave, as the documentary shows.
Harwood said that when she finally left, saying LuLaRoe owed her approximately $100,000, other members were instructed not to talk with her or they would be terminated.
Villagomez said this excommunication is a standard part of how coercive MLMs operate.
“They make you lose all your other friends first, and all the people you have left are in LuLaRoe,” she said. “You end being isolated, and you are actually taught that if people start telling you that you can’t achieve your dreams, then you shouldn’t talk to them. If somebody tells you that this is crazy, then you shouldn’t talk to them. They make you emotionally dependent.“
In other words, all that you-go-girl pep talk falls apart when the business is threatened. And as the documentary shows, the shared bond people formed by distrusting LuLaRoe was the one that ultimately lasted.
“I found more support in [an anti-LuLaRoe Facebook group] than I ever did in LuLaRoe,” said Blevins in the documentary’s finale.