Why MLMs Like LuLaRoe Are Disturbingly Similar to Cults

LuLaRoe, the multi-level-marketing (MLM) company that has recruited tens of thousands of women to peddle its athleisure wear over the past decade, touts itself as an agent of female empowerment. It lures in sellers, many of whom are stay-at-home moms, with the promise of independence, inviting them to “be your own boss,” “achieve your dreams,” and “take back control of your time and your life” by becoming a LuLaRoe retailer, according to one recruitment page. In reality, LuLaRoe thrives not by giving women control, but by wielding it over them—a fact made disturbingly clear in LuLaRich, Jenner Furst and Julia Willoughby Nason’s new, four-part Amazon docuseries chronicling how LuLaRoe has abused, manipulated, and exploited its workforce since its inception in 2012.

According to allegations from former retailers interviewed in LuLaRich, co-founders DeAnne and Mark Stidham ruled over their sellers’ lives. They encouraged sellers to go into debt. They pressured sellers to get weight loss surgery. They asked sellers to convince their husbands to quit their jobs, and urged them to invest their families’ entire financial portfolios into the company. When anyone complained—about their inability to turn a profit, defective product they received, or their uneasiness with certain aspects of the organization—they were told they were weak and lazy, gaslit into believing that they, not LuLaRoe, were the source of any problems they faced. If sellers wanted to leave the company, they were often forced to take a multi-thousand-dollar loss—and if they did walk away, the Stidhams forbade those who remained at LuLaRoe from speaking to them, leaving them isolated, lost, and often destitute. (In a statement to the Guardian, the Stidhams denied the allegations made in LuLaRich, and asserted that LuLaRoe “was never a scam, but a meritocratic ladder reflective of personal effort and character.”)

In allegedly deploying those tactics, LuLaRoe functioned less like a company and more like a cult, according to Rick Alan Ross, a leading expert on cults and the founder and executive director of the Cult Education Institute. LuLaRich raises that comparison—mostly through the testimony of one former retailer featured in the docuseries—but it doesn’t delve too deep into it.

In an effort to further explore LuLaRoe’s cult-like traits, VICE called up Ross, who walked us through the parallels between LuLaRoe and many of the organizations he’s spent his career studying. According to Ross, LuLaRoe isn’t a one-of-kind case. All too often, he explained, MLMs pull straight from the cult playbook to recruit and retain the people whose lives they consume.

VICE: Would you call LuLaRoe a cult?

Rick Alan Ross: There are three core criteria that make something a destructive cult. Number one—and this is the most important feature—you have an absolute totalitarian leader who has no meaningful accountability, who becomes an object of worship. Whatever the leader says is right is right, whatever the leader says is wrong is wrong, and people will turn on a dime based on what the leader says. I don't really see that in LuLaRoe. There is a certain amount of worship of Mark and DeAnne, but not to the extent that it was with Keith Raniere [the head of NXIVM] or Jim Jones [the head of the Peoples Temple] or David Koresh [the head of the Branch Davidians].

The second is brainwashing: The ability to manipulate people into a position of undue influence where you can exploit them. I think LuLaRoe did that. Did they do it to the extreme of a destructive cult? Maybe not. But then there are some cults that are less extreme than others. So I think they did use manipulation—and in my opinion, they did it knowingly.

Third: Did they hurt people? Absolutely. So they could be seen as a destructive group in that sense. I wouldn't go so far as calling it a cult. I would call it cult-like.

What elements of LuLaRoe seem particularly cult-like to you?

One of the things that struck me was that if you leave, [they are] going to tell people that are consultants that they can't talk to you anymore. If an organization makes you feel that you're a terrible person for leaving, and then they go a step further and they say if you leave, you will be a pariah, and [they] will not allow your friends that you know here to continue to communicate with you—that kind of control over communication between the people inside versus the people outside, that's very cult-like.

Another thing about LuLaRoe that is very cult-like is that DeAnne and Mark never take responsibility for anything. They blame the victim: “If your business isn't working, it’s because you're lazy.” The underlying assumption is that the business plan is perfect—but it was flawed. That is similar to Scientology. For example: “I'm doing all my auditing counseling sessions, and I've taken all these courses. Why don't I have what you said I would have?” “Well, because you're not doing it right. Because there's never a flaw in what we're doing. We’re perfect.” I hear a lot of that from DeAnne and Mark.

Broadly speaking, what are some other parallels between cults and MLMs, aside from what you’ve already mentioned?

For one, the social isolation that people may experience in an MLM. They devote all their time to the MLM, and they become encapsulated in a subculture of like-minded people who are constantly reinforcing the message of the MLM. And they're not hearing alternative perspectives, they're not getting accurate feedback. That kind of isolation and control of information is a parallel between many MLMs and cults. Through the internet and social media, they create an artificial bubble of information control. I can sit here, and I'm not in a cult compound. But I can be watching YouTube videos over and over, getting indoctrinated by some crazy cult on YouTube. If I'm following only LuLaRoe people on Instagram, Twitter, and Facebook, and I'm watching their stuff on YouTube, I’m immersed. All I'm hearing and experiencing is what the MLM wants me to experience. And the MLMs can use that to extract money.

[Another parallel] is the propensity for people in an MLM to blame themselves rather than to question the MLM. That kind of self blaming, self loathing, and shaming—making the person feel that they are to blame for anything bad that happens to them—is very cult-like. The people who end up really hurt by this, they're so hard on themselves. You don't hear them saying things like, “DeAnne is a dirtbag,” or “Mark is a malevolent miscreant.” What you hear them saying is, “Shame on me. How could I give them so much money? I’m bad.” No, you're not. If they had come to you and told you what their business plan really was, you would have said, “Get out of my house.”

And just the whole idea of exploiting people for the benefit of an elite leadership. That kind of exploitation is typical in destructive cults. What you see in MLMs is people giving up their careers for the MLM, marriages being destroyed by the MLM, losing their savings, their retirement funds, their homes—all of this is the kind of damage that I see being done not only by MLMs, but by cults. So the destructiveness, the propensity of the organization to just use and abuse people, and then make them think that they're to blame—that's very cult-like.

What are some of the similarities between the ways that cults recruit and the ways MLMs recruit?

One is the use of what's been called “love-bombing.” You initially come into an MLM and everybody's very loving, very upbeat, very positive. They're making you feel that everybody loves you and that you've got all these new friends and that everything's going to be great. That is also typical of many cults: They make you feel like you've found this family, this group of people who will love you unconditionally. It’s a total lie. If you leave the MLM [or the cult], they're all going to say, “We're done with you. No more communication.” So these friendships that you're thinking, My God, these people are fantastic, they're kind, they’re loving, they're positive—it's all conditional. And they're not telling you that.

Another thing is just the deception. It's a bait-and-switch con. [In an MLM], you're being told that this is a way for you to become rich and successful and independent in the same way that cults will tell people, “We're here to help you recognize your potential and have a great life.” There are all these promises being made. And there's this deception that is deliberate, which is to withhold the disturbing aspects of the group—for example, the demands that the group may make, which will escalate over a period of time. They're not going to tell you that you might have to lose 100 pounds. You're going to have to dress the way we want you to dress. You're going to have to sacrifice your marriage if your husband isn't supportive of what we're doing. And, by the way, you may have to sacrifice a lot of money before you can realize any success, and you may be wiped out. And we don't care. They're not going to tell you any of that from the beginning. And so people will say, “Well, why would anyone join an MLM or a cult that could hurt them?” And the answer is because they lie to the people that they're recruiting, and they're deceptive. And they deliberately mislead people to believe that quite the opposite of what's going to happen will happen.

What are some of the similarities between the way cults and MLMs retain recruits?

A lot of these people are kind of like a rat running on a wheel. No matter how hard they work, and no matter how much they try to do everything right, the group will tell them they’re still doing something wrong. And so they're in this state of brokenness, and that makes them easier to manipulate. In destructive cults, I often see that: No matter how much the individual accomplishes for the group, and no matter how hard they live to the group's dictates, the group will always point out what they're doing wrong. And that engenders dependency upon the organization. I think that's what LuLaRoe did. They made it seem that DeAnne and Mark and the really high-ranking consultants, they have the formula, they have the answers, and the rest of these people that were often feeling exhausted and broken would then become more and more dependent upon the MLM and the leaders to fix them, to help them. In that sense, there's a commonality with cults.

Historically, has there been any literal overlap between MLMs and cults?

Cults will often buy into an MLM. I’ve seen that numerous times. There was this group called People Unlimited, and they would sell vitamins and different MLMs. (Note: People Unlimited denies that it is a cult.) [As a cult leader,] you've got hundreds of people that are following you that will do whatever you say. So you say, “OK, all of you guys sign up and become distributors.” And I've immediately got hundreds of people below me.

Keith Raniere first plied his skills as a master manipulator as the creator of an MLM. He was an Amway distributor, and then he realized, Well, hey, I want my own MLM. So he created Consumers’ Buyline. And what he found was there was this core group of women that he recruited in Consumers’ Buyline that became more than just distributors. They were like his slaves. That became the impetus behind the creation of what later became known as NXIVM. What Raniere realized through his time as an MLM creator is the power of persuasion, the power of manipulation. And then if you were a [NXIVM] coach, you recruited other coaches. If you had 10 people that you recruited to coach under you that all took NXIVM courses—which were quite expensive—in theory, you would get a piece of the money that generated. What you saw with NXIVM was the structure of an MLM with Raniere at the top, and he became an object of worship, and he transformed it from just an MLM into a cult.

LuLaRoe still exists, and thousands of sellers still work for the company. Do you think LuLaRich might lead some people involved with LuLaRoe to leave the organization?

It will serve a useful purpose, both to get people to leave and get people not to sign up. But until the laws are changed in the United States so that MLMs are more difficult to create, there will still be these MLMs and they will still take advantage of people. I mean, look at all the bad press Amway has gotten. You think Amway isn't making money? No, they're making money hand over fist. Documentaries are great. It's wonderful that they make them. But the only way to really stop MLMs is to change the law.