28 Facts From The "Rise And Fall Of LulaRoe" Documentary That Prove It's One Of The Darkest MLMs Out There
In case you didn't know, a multilevel marketing (MLM) company is a company that emphasizes both direct sales and recruiting others to work under you, so you can receive a percentage of profit from the products they sell as well. The people above you are considered your "upline," and the people below you are considered your "downline." MLMs have been around for decades and there's been plenty of controversy over the years surrounding their business practices. I should also note that MLMs are legal, while pyramid schemes are not. The main difference is that MLMs involve the sale of products and in a pyramid scheme, no actual product is sold.
Recently, Discovery+, in partnership with BuzzFeed Studios, released the investigative documentary, The Rise and Fall of LulaRoe.
The doc takes a deep dive into the suspicious business practices of the infamous leggings MLM, and features reporting from BuzzFeed News senior culture reporter Stephanie McNeal.
Now, I personally feel like I should have an honorary PhD in LulaRoe, and even I learned something new! Here are some key takeaways:
Note: People recruited to sell LulaRoe are referred to by LulaRoe — and also throughout this post — as "consultants."
1.LulaRoe originated in 2013 and was founded by Mark and DeAnne Stidham. DeAnne allegedly began making and selling maxi skirts at flea markets and out of her car before transitioning into an MLM business model.
2.Lularoe grew SUPER fast. In 2015, the company had around 1,000 consultants selling leggings. By April 2017 — just two years later — they'd recruited around 80,000 consultants.
This translated to "over a billion dollars in revenue" for LulaRoe.
3.The startup cost for Lularoe consultants originally ranged from around $5,000-$10,000. Some consultants resorted to taking out loans or asking family members to help them join.
4.LulaRoe also allegedly encouraged potential consultants to come up with the startup funds by any means necessary, including selling their possessions and crowdfunding.
One document provided to possible consultants even encouraged them to borrow from their children's college funds.
5.LulaRoe's marketing strategy heavily focused on stay-at-home moms with the promise that they'd be able to make "full-time income for part-time work."
Meanwhile, most consultants reported working for LulaRoe 24/7. The "part-time work" slogan was ultimately used as evidence in the Washington State Attorney General's lawsuit against LulaRoe (more on that later).
6.Early consultants were allegedly instructed to write down 50 names of people they could possibly recruit.
7.LulaRoe's annual cruise was — and is — one of the ultimate incentives for consultants. In order to qualify, consultants have to sell $12,000 worth of merchandise for six straight months.
8.Mark and DeAnne were treated like celebrities — nay, GODS — within the LulaRoe community. In fact, one year DeAnne, Mark, and their head designer Patrick Winget printed and sold leggings with their faces on them.
It's the narcissism for me.
9.Mark and DeAnne pressured consultants and corporate employees to share their "WHY" at conferences, and events. Elijah Tucker, a former hype man at events, described it as, "a sob story to make you relate."
10.At one conference, after having Elijah share his "WHY," DeAnne pulled Elijah's mom — who had no idea what LulaRoe even was — out of the crowd, brought her onstage, and onboarded her as a consultant in front of thousands of people.
Can you say Lula-predatory?
*Also, Elijah's "WHY" was that he wanted to be so successful that his mom never had to work another day in her life. Soooo?
11.Consultants allegedly were pressured to only post their successes on social media, always with the hashtag #BecauseOfLulaRoe.
One consultant described it as "a culture of toxic positivity."
12.If anyone commented something negative about the company or their products on social media, consultants were instructed to immediately delete it.
13.Mark and Deanne often placed the blame on consultants when they struggled to sell product.
14.All LulaRoe orders sent to consultants were "surprise" orders, meaning consultants never knew what they'd be getting. One consultant described the orders as "addicting" and said they felt like "playing a scratch off lottery ticket."
15.The "surprise" business model created a "hysteria" around the clothing among both customers and consultants. Prints that rarely showed up in orders and were harder to find were called "unicorns."
The ultimate unicorn? Plain black leggings.
16.There was a ton of pressure on consultants to constantly "grow their inventory," aka spend more money to buy more product.
One consultant even took out loans to buy more inventory — she ultimately ended up filing for bankruptcy.
17.Mark and DeAnne hired basically all of their adult children and relatives to work as higher-ups within the company.
Rick Ross, founder of The Cult Education Institute, described their business structure as "incestuous."
18.Mark and DeAnne are big believers in the "Prosperity Gospel," which preaches that being financially successful means you've been blessed and favored by God.
19.At LulaRoe corporate, designers were allegedly told to create 1,000 new print designs a DAY, split between a team of just four people.
This means that if each designer worked eight hours, they were expected to churn out one new design every two minutes (and that's if they took ZERO breaks)!
20.This kind of pressure forced designers to reuse print designs and layer them on top of one another to quickly create "new" prints. It also played a part in what I like to refer to as, The Crotch Scandal.?
21.Warehouse workers were allegedly expected to move and handle up to 15 million units A DAY.
22.At one point, LulaRoe's warehouse was so packed with inventory that they began storing "thousands" of leggings outside. Since they were exposed to the elements, the leggings started developing mold and holes — LulaRoe shipped 'em out anyway.
Needless to say, consultants were PISSED.
23.When one former consultant, Christina Hinks, began speaking out against LulaRoe on her blog, MommyGyver, in 2016, she reportedly received death threats and hate mail. People also showed up at her door to threaten her. Meanwhile, DeAnne encouraged employees and consultants to "block all the trolls."
24.Multiple consultants described being involved with LulaRoe as being in a "cult." Not only were they pressured to look the same, dress the same, and devote all their time to LulaRoe, but when consultants decided to leave the company, they were immediately dropped and excommunicated.
One consultant even said, "I can't believe I drank that much Kool-Aid."
25.Sam Schultz, DeAnne's nephew and one of LulaRoe's top employees, left the company in 2017. He later faced 26 felonies for running multiple scams. One included convincing people to "invest" in a medicinal marijuana farm that never even existed.
Many of Sam's victims were LulaRoe employees and consultants. Of the 26 felonies, 24 were ultimately dropped.
26.In 2017, Lularoe changed their policies in order to "get away from being a pyramid scheme," according to Jordan Brady, DeAnne Stidham's son and a LulaRoe executive.
Instead of making commission off of the inventory their downline bought, consultants would only make commission off of the inventory their downline actually sold. This caused a huge drop in consultants' income.
27.In 2019, the Washington State Attorney General filed a lawsuit against LulaRoe based on evidence submitted by consultants. Evidence included the "full-time pay for part-time work" claim, as well as Jordan Brady's "pyramid scheme" comments.
LulaRoe ultimately paid $4 million to settle the case.
28.And finally, in 2021, LulaRoe held a "DREAM" trip/conference in Cancún, Mexico, as if none of the above ever happened.
