Cultural choice | “LuLaRich” Highlights the Manipulative Tactics of Multilevel Marketing Companies
It all started with a pair of leggings.
“LuLaRichThe limited docuseries on Amazon Prime cast a terrifying and limiting satirical light on the world of multilevel marketing and pyramid schemes. It is exhibiting LuLaRoe, a huge clothing retailer that mysteriously raked in over $ 3 billion in profits in 2016, just one year after the company was founded.
The four-part series follows LuLaRoe co-founders Deanna Brady and her husband Mark Stidham, and features exclusive interviews with several former LuLaRoe consultants who have lost everything by falling prey to tantalizing get-rich-quick promises.
The legality and existence of LuLaRoe is unclear in the eyes of the law, as the retailer is classified as a “tiered marketing company,” which is currently legal in all 50 states.
Bryan Hochstein, an assistant professor of marketing at the University of Alabama, said being a multilevel marketing company isn’t always a bad thing.
“There are several questions to ask when investigating an opportunity,” Hochstein said. “Is the opportunity more about recruiting people or selling products? Is there a large, non-refundable initial investment? “
Hochstein said that if the main job of the company is to recruit people, there is a big initial “investment” in a product, and the product is questionable, the job probably crosses the line to become a pyramid scheme.
According to Time, the most likely victims of pyramid schemes are families with “high childcare costs without a guaranteed paid parental leave policy”. Hochstein said that in most cases, pyramid schemes play on most people’s desire to “get rich quick”, “get a good deal” or “do it”.
“If it sounds too good to be true, it usually is,” Hochstein said. “So, investigate any opportunity to make sure it’s a good deal and that you can honestly describe to a family member or friend as worth the money and value for the money.”
While Stidham and Brady have maintained throughout the series that LuLaRoe does not rely on recruiting new member downlines or for-profit start-up costs, interviews with former consultants have revealed that those looking to Becoming sellers for LuLaRoe had to pay a minimum of $ 5,000 to buy “inventory” before they could start selling and recruiting.
Instead of fulfilling women’s promised dream of becoming the primary breadwinner by selling LuLaRoe clothes, families found themselves torn apart by divorce, faced with crushing debt from excess unsold merchandise, and selling their cars or homes to make up for it. lack of sales.
Iliana Estarellas, former designer at LuLaRoe, said it was impossible to meet the company’s growing demands for new models.
“I was doing art with a gun against my head,” Estarellas said.
Courtney Harwood, a former senior consultant at LuLaRoe, said Brady added her to a group chat called “Tijuana LaRoe Skinny’s” to encourage the recipients of the chat to have invasive gastric sleeve surgery in Mexico to lose. weight.
“There has been a push to be a certain height,” Harwood said, citing the hospitalization for his botched weight loss procedure as the turning point in his relationship with LuLaRoe. “What did I do to myself?” What have I done to my family?
Videos of conferences and recruiting conventions have shown the use of emotional manipulation tactics like love bombardment and toxic positivity to falsely state that individuals are directly responsible for their success or failure with LuLaRoe.
“Welcome to life, your experience may vary,” Stidham said. “We have a level playing field, we did not promise an equal result.”
The business has grown exponentially, leading to a decline in quality control and resulting in shipments of see-through, moldy leggings that tear when first worn. Consultants who worried about the decline in the quality of shipments were often cursed or reprimanded by Stidham or Brady.
Former LuLaRoe saleswoman Roberta Blevins said she became skeptical when she received shipments with damaged leggings which she described as smelling “of chlorine and death.”
The consumer protection lawsuit Filed by Washington State claimed that Brady and Stidham “have made inaccurate and misleading statements regarding the profitability of being an independent retailer.”
In addition to having to pay $ 4.75 million in 2021, the lawsuit said LuLaRoe is required to file a tax return, calculate premiums based on retail sales rather than the amount of merchandise purchased by retailers, and allow any new retailer 45 days to return. all inventory for a full refund.
Variety said that LuLaRoe alone serves as a rich metaphor.
“They look like the founders who started great American companies but only sold a picture and a few scraps, a sense of inclusion and belonging that came with strips of soft fabric,” the article said. “Quality control at LuLaRoe has diminished over time, so that, in the depths of the chaotic era of the business, clothes tended to tear at the seams. “