Stella & Dot Review
Name: Stella & Dot
Price: $199, $499 or $699
Owners: Jessica Herrin
Overall Rank: 2.5 out of 5 ツ
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If you are interested in jewelry, purses and accessories like sunglasses, you might have stumbled upon a company named Stella & Dot. The company has assorted chic jewelry lines, designed mainly by designers from New York, along with belts, purses, scarves, tunics etc. Established in 2003 by Jessica Herrin, the company was featured in both Cosmopolitan and Vogue.
You can’t purchase Stella & Dot items from retail stores, as the company functions using a direct sales model in which it works with “Independent Stylists,” people like you and me, to sell its products. The company also offers products on its website.
Stella & Dot is what is called a multi-level marketing (MLM) company. So, Independent Stylists, who recruit other people into the company to become Independent Stylists too, get commissions from their recruits’ sales.
How To Become A Stella & Dot Stylist
To join, you first have to buy a company starter kit. There are three kits to choose from:
After you get your kit, you are prompted to exhibit your merchandise by hosting what is called a “Trunk Show,” which basically is an at-home demonstration/party. Also, you can highlight and sell your merchandise online through a Stella & Dot dedicated website of your own; however, the company highly stresses Trunk shows as the best way to go:
You begin by receiving a 25% commission on goods you have sold, which increases to 30% should you sell $2,500+, 32% should you sell $5,000+ and 35% should you sell $10,000+ within a single month.
If you begin to recruit other people to become Independent Stylists, you receive a percentage from recruits’ sales. Stella & Dot state that up to 18% in extra commissions can be received from sales created by your downline; sadly, this information is not elaborated on their website.
As with all MLMs or direct sales companies, Stella & Dot have their pros and cons:
Transparency – The company appears to outline its compensation plan quite openly and, save from the absent comissions breakdown of your downline, nearly all information is displayed online. For instance, this is the company’s income disclosure table for the average Independent Stylist:
Chic jewelry & accessories – Stella & Dot jewelry is stylish, hot and visionary. The clothes are extraordinary and numerous pieces have embroidery. Purses are durable and some are made of genuine leather.
No set sales quota – An Independent Stylist who has no downline does not have a set quota to meet when selling Stella & Dot products. S/he can sell merely a single piece a year — and still receive 25% commission.
Quick to respond – With any business or company, there will ultimately be customer complaints. When customers have made a complaint about Stella & Dot products, the company has responded quickly and rectified the problems involved. This leads back to the company’s “Delight Guarantee” offered to customers, along with free product returns and 24/7 customer service.
Pricey products – Independent Stylists who host Trunk Shows in their homes and expect they will earn an easy revenue of $500 a show are in for a big surprise: guests will be pressured into paying up to $228 for a chic purse or $39 for a set of bead earrings. It will take some persuading to get people to shell out hundreds of dollars for, at least in their head, jewelry that does not have brand recognition and/or isn’t made of precious gems/metals.
For example, look at the cost of two tunics for a typical customer:
Sales quota with your downline – If you wind up recruiting new Independent Stylists, you will have to “lead by example” and sell a minimum of $500 in merchandise for each quarter or your commissions from recruits’ sales will be transferred to another Independent Stylist. So, if you are great at persuading others to sign up, but only mediocre at selling Stella & Dot merchandise, too bad for you.
Average earnings are low – If you take a look at the above earnings disclosure, you will see that 72.7% of Independent Stylists do not even average $2,000 and nearly 90% do not earn an average of $5,000 per year. Those odds are rather grievous when you take into consideration the fact that these Independent Stylists are likely out there working really hard trying to recruit other people as they go.
Emphasis on a “warm market” – Stella & Dot’s website presume its sales force are going to be women, mainly housewives and stay-at-home moms, who in some way have lots of friends and relatives to sell their merchandise to. Yes, everybody has a certain amount of people that they know they can bring together for a few parties …but that market is used up rapidly in a couple of months. To be really successful, a person has to inevitably reach out and appeal to a wider audience outside of their warm market for potential customers.
Sadly, Stella & Dot don’t say much about this broader market and how you are to sell to it. As a matter of fact, the company seems to almost de-emphasize advertising and selling online in favor of having Trunk Shows, despite the fact that advertising and selling online has enormous potential for extending to a wider audience.
The Final Verdict
While Stella & Dot indeed offer stylish merchandise and impressive support for customers, it may turn out to be too challenging for Independent Stylists to earn a steady income from, or even a secondary income. Also, the merchandise is pricey and requires a particular demographic of customers with ample disposable income to be able to afford a lot of the pieces offered. There are better, less arduous business opportunities out there.
Do you presently sell or have you sold Stella & Dot products? I’d love to hear from you by leaving your comments below.
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Stella & Dotツ
Yes, Stella & Dot’s products are stylish and their customer support is great, but the products are way too price and may prove a challenge for Independent Stylists who have to look for people with ample disposable income to be able to afford it. There are better business opportunities out there where you don’t have to work so hard. I’d give this one pass.