Everything In America That’s Not A Pyramid Scheme Is A Cult
March 12, 2020 8:09 AM   Subscribe

“ LuLaRoe is now facing a $49 million lawsuit from its old supplier (LuLaRoe countersued the supplier for $1 billion) and a class-action lawsuit from angry customers alleging they were sold defective clothing they couldn’t return. Another $4.5 million lawsuit was filed in California in November 2019 on behalf of a group of consultants, who are alleging LuLaRoe is running an illegal pyramid scheme. The state of Washington is also suing the company for operating a pyramid scheme. Last fall, the company laid off all 167 workers in their Corona, California, warehouse and permanently closed it.” Millennial Women Made LuLaRoe Billions. Then They Paid The Price. (Buzzfeed News)
posted by The Whelk (38 comments total) 26 users marked this as a favorite
 
(Folks who have issues with perceived motion, be warned that this article has an animated header that may not be great for you.)
posted by zamboni at 8:30 AM on March 12, 2020 [4 favorites]


TIL that Startup is a family name. I can just see it in the medieval guild rolls: Mason, Bowyer, Fletcher, Smith, Sievewright, Startup … I bet they were the ones hot-desking the monks' cells before the cathedral was finished.
posted by scruss at 8:40 AM on March 12, 2020 [22 favorites]


Go to nursing school to help people when sick --> have to pay society back for the privilege to learn how to help us --> never earn enough money helping us to pay us back for being allowed to do so --> that means you're not allowed to help us anymore sorry you have to find some other way to pay us back and it will NOT be through helping anyone lol --> one less person who can help us when sick --> not enough people who know how to help when a lot of people get sick. Our society is totally unworkable.

Also this makes me think about my grandma who started a business buying dresses in the city wholesale and sold them to people working at big estate houses who couldn't get out much; it's too bad it didn't occur to her to transition her product away from selling dresses to selling the idea of selling dresses wholesale to the people who used to buy the dresses. Instead of "Here's a dress, you need this" "I want that, take this $20" it just becomes "Here's me having to call someone like you, go to where they live, and convince them to give me $20 for a dress; you need this" "I want that, here's $200".
posted by bleep at 8:49 AM on March 12, 2020 [17 favorites]


"If you couldn’t make your business work, you just weren’t trying hard enough."

So, LuLaRoe weaponized the protestant work ethic?
posted by notsnot at 8:50 AM on March 12, 2020 [16 favorites]


So, I really hate MLMs. They are a sham business who scam billions of dollars. I think that Betsy DeVos wants children to be undereducated so that there will be more unsavvy adults who will buy into her family's pyramid schemes. I think they are bad for women, bad for minorities and any marginalized group. And, yet, if you want to feel like you are a contributing member of society and if the money that you need to make to make ends meet on a monthly basis is less than $1000...there are very, very few ways to do that. There are so many under-utilized people with energy and enthusiasm to spare who are locked out of traditional paying jobs because they have children, or they have a disability or they are in a remote area or they are a member of a religious cult who frowns on women doing anything with their spare brain power other than wiping butts and keeping house. UBI would help. Affordable childcare would help. Part-time and job-share work would help. Gah!

I hope LuLaRoe gets buried but it would be even nicer if we could get some court precedent to take down some of these other companies.
posted by amanda at 9:15 AM on March 12, 2020 [43 favorites]


DeAnne Startup Brady Stidham was born to be an entrepreneur. [Her] father, Elbert Startup, was a great-grandson of Hyrum Smith, the older brother of the church’s founder and prophet Joseph Smith

Well, something runs in that family. I just don't think it's the rugged entrepreneurial spirit they think it is.
posted by Mayor West at 9:21 AM on March 12, 2020 [22 favorites]


For more on MLMs see The Dream on Fanfare or Timeless Vie on the blue.

All of these companies should be driven into the ground, but when your CEO is also the head of the GOP (see Amway, or how supplements and MLMs are the two biggest industries in Utah), somehow you get special dispensation.
posted by fifteen schnitzengruben is my limit at 9:25 AM on March 12, 2020 [11 favorites]


I hate MLMs (and can everyone please understand that for professional reasons as well as political ones I am well familiar with the systematic problems they exploit), but I'd be lying if I denied that they activate certain tensions in my thinking. E.g., the ones aimed at Mormons and fundamentalist moms are leveraging their desire not merely to help pay the bills, but to do so without being one of those Inferior, Probably Godless, Can-You-Even-Really-Call-Them-Moms in the Workplace.
posted by praemunire at 9:26 AM on March 12, 2020 [18 favorites]


When I was at or near my lowest point, I got a message from a guy who I’d met a while before, he was a Reginald customer and beloved friend of the couple whose bar I was running the kitchen for while trying to launch my own place. When he called, I was literally trying to figure out how to make ends meet, and cursing myself for having been dumb enough to end up where I was.

So, this guy, who’s known to be low key wealthy in a crowd of people who were barely scraping by, says he’s got a proposition for me, and wants to meet with me. The thing is, I knew he had helped finance another acquaintance’s English conversation school. And he’d been eating the food I was making, and telling everyone how much he liked it. I thought to myself, maybe this guy might be talking about helping me get my own place set up.

I go to meet him, but weirdly, he couldn’t meet me in his work office, and it seemed off, this guy who owns his own business, not being able to do what he wants in his own office. Instead, he takes me around the corner to his “other” office, which is a lot more like a rented room shoddily thrown together, and starts talking to me about this great thing, this great opportunity, and tells me to have a seat and watch this video, and it was the most blatant MLM/pyramid shit I’ve ever seen, and I went to a cutco recruitment thing in college.

About halfway through, I was just done. I’d spent most of the time kicking myself for having thought something good would come out of this, and finally, I just told him that this wasn’t for me, and if that’s all he wanted to talk about, I was sorry for wasting his time.

Later on, I found out that the couple who were barely keeping their bar running, and a crap ton of their loyal but mostly broke customers were in the scheme with this guy, who’d somehow managed to recruit enough of them that he at least, if none of them, was making money off of it.

He, and the people doing this, either they don’t know what they’re doing and dragging down friends and family, or they do know, and they’re just dragging down as many people with them as they can in an attempt to stay afloat. And even they have nothing on the ones at the top of the pyramid. It’s downright evil, and preys upon all sorts of psychological weak points we have. It should be illegal. Not like “oh, there are laws about it” but like close-the-fucking-loopholes-you-assholes illegal.

But yeah, anything where you have to pay someone for the right to work for them? Run the other way.
posted by Ghidorah at 9:32 AM on March 12, 2020 [24 favorites]


notsnot: "So, LuLaRoe weaponized the protestant work ethic?"

A lot of MLMs do that, and add New Age flavoring-- if you aren't succeeding, you aren't visualizing hard enough/thinking negatively.

Ehrenreich's Bright-Sided is about the damage done by positive thinking.
posted by Nancy Lebovitz at 9:37 AM on March 12, 2020 [30 favorites]


I was surprised by how many people in my grad school program were involved in Lularoe. These were people who were supposed to be better informed than the general populace in all manner of things and they're hawking for an MLM. I'd even see some of the faculty in hideous Lularoe leggings and dresses sometimes.
posted by Brain Sturgeon at 9:37 AM on March 12, 2020


I have someone on my social media who was once my replacement for a job I left and then eventually left to be a stay at home parent. They started doing Arbonne and they are scarily good at making it sound like it's so great: "small business owner, ditched my 9-5, sure don't miss that commute, get to work around being a parent!!" All the cliches.

Every time I think "I know exactly how much you made at Old Job, and it wasn't great, but there is no way you are making even close to that, much less benefits. Maybe it breaks even if you calculate not having to pay for childcare? Maybe?? But a break-even would already be attractive to a lot of parents - why not be honest that that's what it is, not a magical way you can avoid childcare AND make a full time job's salary?
posted by nakedmolerats at 9:51 AM on March 12, 2020 [1 favorite]


There's a fair amount of "if you're already using the product, why not become a consultant for the wholesale pricing, anything you sell is a bonus" pressure with MLMs. I can see the appeal if it's something consumable that doesn't have a huge "you must purchase $X of product at Y interval to stay active" commitment. Lularoe, where one person can only wear so many clothes and you don't even get to pick what items/sizes they send you... not so much.
posted by Flannery Culp at 10:16 AM on March 12, 2020 [3 favorites]


As far as I can see, not getting involved with MLMs takes some numeracy, but mostly it takes having a lot of emotional intelligence. Or maybe cynicism. Education doesn't seem to help much.
posted by Nancy Lebovitz at 10:44 AM on March 12, 2020 [11 favorites]


My problem with MLM is that it turns every personal interaction you have into a commercial transaction (sales, search for sales, etc), which makes everyone around you miserable. Added to the fact most people cannot or will not due complete cost/benefit analysis or business plans, except for a very small few they're all losing money, but are in the "zone" so they don't want to hear any negative views on what they're doing since they need it to succeed since else they're out a ton. I usually just wind up cutting them out entirely until the MLM burns out, and they go back to being normal people.
posted by jmauro at 10:44 AM on March 12, 2020 [13 favorites]


E.g., the ones aimed at Mormons and fundamentalist moms are leveraging their desire not merely to help pay the bills, but to do so without being one of those Inferior, Probably Godless, Can-You-Even-Really-Call-Them-Moms in the Workplace.
I haven't spent much time hanging out with Mormons since high-school. But, I was always amazed by all the college-educated, multilingual, worldly, incredibly thoughtful and engaged women who didn't have careers outside of the home. Not everybody needs a career outside of the home and keeping house (for want of a better phrase) isn't a bad thing. If you love it, go for it! But, I'd go nuts within weeks if I were in their place and had no other engagement with the world besides playing Beethoven on the piano during the few moments when the babies aren't crying. Sure, I'm a cynical, big-city materialist judging people whose world view and choices are radically different from mine. Maybe I just don't get it. But, if 10% of Mormon women secretly feel like me, that's a hell of a tragedy. Reaching out - for anything at all, even if you know down deep that it's dumb and it will cost you money and friends - is a response I can understand.

I really don't understand the appeal of MLMs. Every interaction I've ever had with them seems sleazy as hell. I'd rather bite off my own legs than try to sell products to my friends. But, I do understand the yearning for something bigger than ordinary life. I'm sure the promise of money is a part of it. But, it may not be the most significant part for everyone.
posted by eotvos at 11:33 AM on March 12, 2020 [14 favorites]


So, LuLaRoe weaponized the protestant work ethic?

The Protestant work ethic was always a weapon - aimed squarely at working people by the idle rich.
posted by ryanshepard at 12:17 PM on March 12, 2020 [30 favorites]


A lot of MLMs do that, and add New Age flavoring-- if you aren't succeeding, you aren't visualizing hard enough/thinking negatively.

It's remarkable how similar all the MLM cultures are. I don't know if they're all remixing something specific from the LDS and other faith communities they tend to grow from, or stealing cultural markers from each other, or whether they're all popups generated by some meta-MLM which is where all the real money is (pay $10K for your "start a MLM" kit, and recruit all your friends to start their own to rake in the real money from your downlines).
posted by jackbishop at 1:21 PM on March 12, 2020 [1 favorite]


It's all just metastasis of U.S. sales culture. You can find similar rhetoric in, like, nineteenth-century (what we would now call) self-help literature. I bet I can find an MLM-like pitch somewhere in The Confidence Man.

Reaching out - for anything at all, even if you know down deep that it's dumb and it will cost you money and friends - is a response I can understand

It doesn't just cost you, it's predicated on hurting other people (because the only real way to make money is to have large downlines). The main subject of the article was putting forth non-stop misleading advertising. I'm really not okay with that. Don't get me wrong, I'm a lot more not okay with the people building these structures in the first place, but MLMs leverage some of the shabbiest characteristics of human nature.
posted by praemunire at 1:47 PM on March 12, 2020 [1 favorite]


Someone I knew once tried to get me into Amway in college. The sales pitch was "Of course you sell the product, but the real money is in recruiting others. If you recruit two people every month, then you'll be rich."

Because I was an engineering student, I recognized the exponential nature of the equation. I went home, did the math, and wrote the guy a note saying, "This implies that in X months, everyone in America will be an Amway dealer, and there'll be no one to sell to. No thanks."

MLMs should be banned, just like the post office bans chain letters.

p.s. Any business where you pay them 10k to join the company immediately sounds fishy to me.
posted by CheeseDigestsAll at 1:52 PM on March 12, 2020 [19 favorites]


I'd even see some of the faculty in hideous Lularoe leggings and dresses sometimes.

Don’t assume that if you see someone wearing or utilizing a product that they are selling it or have been taken in. It’s surprising to me how many people I encounter who have never heard the term MLM or they have heard it but they want to support their friend or family member who is in it. When I see people posting on social media about supporting small businesses when their business is an MLM, I like to point out that MLMs make billions and if I can find an earnings report or estimate for their company, I post that, too. As a woman and owner of a small business, I’m often thrown into networking groups where people are MLM-ers as a side hustle or only gig. My grandparents bought all kinds of AmWay stuff to support their granddaughter when she did it. I have another friend who has listened to my rants and seemed to agree with me but then admitted that she buys one makeup product from a friend because she likes it so much. I sent her an article comparing products retail with the MLM including info on price and quality and she was so shocked. It had not occurred to her that there were likely near-identical products that were much cheaper. And she’s a frugal person!
posted by amanda at 1:54 PM on March 12, 2020 [4 favorites]


amanda, I see that a LOT in the makeup forums I frequent. Someone's friend will be gushing about their Younique palette and not even having a clue that there are eyeshadows half the price with twice the payoff. Younique in particular has some very shitty makeup, but even old MLM standby Mary Kay's stuff is pretty crappy.
posted by fiercecupcake at 2:07 PM on March 12, 2020


Surprised no one has mentioned the recent "On Becoming a God in Central Florida"
posted by djseafood at 2:12 PM on March 12, 2020 [5 favorites]


As mentioned above, I don’t think it’s a coincidence that Michigan (Amway) and Utah (LuLaRoe and various others) are two of the main centers of MLM, as both are essentially bastions of (in my view) extremist religions that preach that a woman’s place is in the home, and subservience/submission to their husband as the highest duty. Obviously Mormonism gets all the press, but the Dutch Reform church that’s prevalent in Michigan, especially the western half, is just as sexist, racist, and any other ist you’d care to think of, with a heaping dose of white supremacy that’d make Mormons say, “dude, tone it down, stop shouting the quiet part.”

Source: growing up Jewish in southwest Michigan.
posted by Ghidorah at 2:25 PM on March 12, 2020 [18 favorites]


Younique in particular has some very shitty makeup, but even old MLM standby Mary Kay's stuff is pretty crappy.

The Avon stuff my mom would get was really good - especially the no-more-tears detangler which, at age 6, was the one I really cared about.
posted by jb at 3:19 PM on March 12, 2020 [2 favorites]


Some of the products are fine. Some of the terms are better than others. LuLaRoe is somewhat egregious for the amount of the initial buy-in. $10k is a lot of cash. I also assume, that like all of our other consumer products, that quality has gone down over the years. So, an old-school Avon or MaryKay product might have been equivalent or better or truly unique back when it was introduced but I wouldn't trust anything today. I mean, most makeup is some kind of scam, amirite?

I love the part where the founder's family history includes activism for traditional marriage and fighting against the equal rights amendment. That's {{kisses fingers}} just perfect!
posted by amanda at 3:36 PM on March 12, 2020


I see Lularoe dresses at the thrift store all the time. Whenever there's an especially large concentration, I think oh good. someone got out of a pyramid scheme.
posted by nonasuch at 4:51 PM on March 12, 2020 [9 favorites]


My wife loves Luluroe stuff. She has been showing me all these really cure dresses she keeps buying through FB for $3. I've been wondering how anybody was making money at that price. Now I know.
posted by COD at 6:26 PM on March 12, 2020


Speaking of Younique: there's a great personal story about it from Elle Beau.

I think I saw it previously on MetaFilter. (Yep, there it is!)
posted by fifteen schnitzengruben is my limit at 9:58 PM on March 12, 2020 [2 favorites]


How Direct Sales Are Ruining Friendships, on the exploitation of emotional labour in MLMs. The new mini-series "Hey Hun" from the Illegal Tender podcast is very good on this.

Both Mary Kay and Avon have suddenly shut up shop in Aus/NZ, which is a promising sign, although it sucks out loud for their vendors who were treated in typically shoddy fashion.

The Avon stuff my mom would get was really good - especially the no-more-tears detangler which, at age 6, was the one I really cared about.

It's gone super downhill in quality the last few years. I had to review some of their stuff for an ecommerce project at work a while back and...eeech. Just dollar-store level garbage.
posted by Gin and Broadband at 2:32 AM on March 13, 2020 [1 favorite]




How Direct Sales Are Ruining Friendships

Oh hell yes. Remember that time (just before social media) that everyone was into aloe products? My sister went for it in a big way. It required a Family Intervention of a seriousness not heard since the You are not getting a pony and that's final incident of 1979.
posted by scruss at 5:11 AM on March 13, 2020 [4 favorites]


But while consultants can place orders for styles and sizes of clothes, they never know which prints they will get until they open the box [...] In this way, shopping for LuLaRoe is like a treasure hunt. [...] Katie said the hunt was intoxicating, and she probably bought 200 pairs of leggings before she became a consultant (she doesn’t think she ended up wearing more than half of them, saying, “It was more of a collection thing”).

I think in some respects what LuLaRoe sells isn't apparel or even a business, but the lifestyle of running your own business. What it sells is a vision of success, of being your own boss, a way of being part of something bigger, as eotvos mentioned upthread. I think it's possible to look at it as a gamification of entrepreneurship, a kind of socially reinforced bit of role-play where you get to design your dream success story. But you have to pay to win, and the treasure hunt mechanic keeps you hooked by dispensing desirable items on a variable ratio schedule, much like loot boxes do. And you have to always be grinding, or you'll fall behind, and lose not just your money, but also your story.
posted by dmh at 7:09 AM on March 13, 2020 [8 favorites]


Speaking of Younique: there's a great personal story about it from Elle Beau.

I think I saw it previously on MetaFilter. (Yep, there it is!)


Seconding this recommendation.
posted by solotoro at 7:41 AM on March 13, 2020


If you also hate MLM but love Kirsten Dunst, On Becoming a God in Central Florida is an absolutely wonderful girl power dramady that has 1 season already and is set for a 2nd.
posted by FirstMateKate at 9:40 AM on March 13, 2020 [4 favorites]


the ones aimed at Mormons and fundamentalist moms are leveraging their desire not merely to help pay the bills, but to do so without being one of those Inferior, Probably Godless, Can-You-Even-Really-Call-Them-Moms in the Workplace
The Evangelical/Charismatic term of art back in the day was "Proverbs 31 Women," after the "Virtuous Wife" passage in Prov. 31:10-31. "Lydias" was a hip, New-Testament alternative.
posted by verb at 5:36 PM on March 13, 2020 [1 favorite]


Someone who used to be a good friend of mine destroyed her life doing Lularoe. She and her husband were already terrible with money, and he was pressuring her to help him out financially. Instead of just getting a part time, minimum wage job, she decided to be her own boss. From the first time she mentioned Lularoe, to the date her divorce finalized, it took about two years. Even at the end, she was still talking about moving all her unsold inventory to her new place to keep trying to sell it.

Now this friend has no healthcare, no savings, and is working the part time, low-paying jobs she was always too good for. She’ll receive alimony for 10 years. After that I have no idea how she will get by. Her two immediate family members can’t or won’t help her. If she’s able to maintain a good relationship her two kids, who are nearing adulthood, maybe they will help support her in her old age, but I really doubt it.

Meanwhile, her husband is 10,000% financially secure. She was the agent of her own destruction, certainly, but Lularoe definitely played a huge part. It’s tragic.
posted by GliblyKronor at 9:37 AM on March 14, 2020 [2 favorites]


The Evangelical/Charismatic term of art back in the day was "Proverbs 31 Women,"
The MLM named after that has unfortunately given me a new low for actions inspired by pyramid futility: asking an elderly relative to host so you can hopefully make a sale during a global pandemic. In a move defying parody, this kind of desperate quota chasing is billed as entrepreneurship and being your own boss.
posted by adamsc at 4:36 PM on March 15, 2020


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