Is Stella and Dot a Pyramid Scheme? What You Should Know
If you are looking into the business opportunity that Stella and Dot offers then you should read this first. There is a fair amount of misleading information out there, both on the negative and the positive side of it all. I am in no way affiliated with this business so what I’m going to be going over is from a non-biased perspective.
If you are wondering is Stella and Dot a pyramid scheme then you are in the right place. This is a particular area of interest since this term has been thrown around a lot by people talking about his business. And in this review I’m going to clear the air and tell you what you need to know.
Stella and Dot Business Opportunity Review
- Name: Stella and Dot
- Website: stelladot.com
- Cost to Join:
- Recommended?: For some, more on this later
Just to be clear, this review is focused on the business opportunity that Stella and Dot offers, not the products that are sold.
Stella and Dot was founded by Jessica Herrin in 2003. They are a company based around fashion and sell a vast array of jewelry and accessories.
The reason that you are interested in this business is because of the business opportunity that they offer. Because of their direct sales selling method, anyone can sign up and become a consultant, or as they call it, a “stylist”. As a stylist you can start your own home-based business selling Stella and Dot products.
Another very important aspect of this business is that it has a mlm compensation structure. What this means is that you can make money by recruiting other people into the business as stylists beneath you. This is the side of it that people compare to a pyramid scheme, which I will talk all about in detail.
The Cost of Getting Started
In order to join in on the business opportunity here you are first going to have to purchase what is called a starter kit. With the starter kits that Stella and Dot offer you will get marketing training, display tools, a personal website, and and a bunch of jewelry and accessories to sell.
There are 3 starter kits you can choose from…
- Essentials kit – $199
- More to Love Kit – $499
- Ultimate Kit – $699
The difference between these kits is just the amount of products that come with them that you can sell.
There are several ways to get paid if you are a Stylist. Of course the most obvious way is by making sales directly to customers in which you can earn up to 35% profit on. But what I want to get more into here is the mlm side of it all.
As mentioned, this is a mlm business and this means you can make money from the efforts of your recruits. There are quite a few ways you can earn off of them but I’ll just be touching upon what they call “line commissions” and “generation commission” because those are going to be the most important if you are serious about his business.
Line commissions are when you get paid for the sales that your “team” makes, aka the people beneath you. You can earn these line commissions from 2 levels (lines) beneath you, this means from the work of your personal recruits and the people that they recruited.
The amount you will make depends on your rank in this business. You can earn anywhere from 4-9% on your first line and 0-5% on your second line.
You will also earn an extra 3% commissions on newly recruited stylists for their first 60 days.
When you get one of your team members, aka the people recruited beneath you, to reach the rank of Star Stylist this person will form their own team, aka a generation. You will then earn commissions off of these teams for having coached that person to achieve a star rank.
As you can see below these generations can go quite a far ways down and that means a lot of money could potentially trickle up to you.
In order for this to be considered a pyramid scheme you would have to say it is a product based pyramid scheme, because obviously they do sell legitimate products. And for it to be considered this it would have to be overly revenue dependent on recruitment of new stylists rather than sales to the general public.
I absolutely do not think it is too dependent on recruitment. Although they do give a heck of a lot of incentive to go out there and recruit your butt off with the mlm structure I just went over, they don’t force you to do this.
Its actually quite the opposite. You don’t need to recruit at all if you don’t want to. But what they do force you to do is make $500 in personal retail sales per month if you want to stay active. This is a good sign of a legitimate business.
Although this mlm does resemble a pyramid scheme in some ways it definitely is not one.
But just because they are legit doesn’t mean you should get all excited and sign up right away.
Related Reading: Difference Between MLM’s & Pyramid Schemes
This Is NOT Easy
This is not an easy business to make it in. I know they don’t push you to recruit more people in, but the fact of the matter is that if you want to be successful you are going to have to take full advantage of the mlm structure here and recruit like crazy.
You are going to have to put recruiting above all else and move up those ranks.
To prove to you how hard this business is, take a look at the official income disclosure from 2015 that Stella and Dot released… I know its old, but its the newest official one I could find and it proves my point.
Those average incomes that I circles on the right… those are for the ENTIRE YEAR. As you can see the large majority of people fail to make good money. This is because in order to make good money, like I said, you have to climb to the top of this mlm.
Final Thoughts & What I Recommend
The problem with this business, and any mlm business for that matter, is that it rewards members too much for recruiting new members.
The reason I said at the beginning of this post that there is a lot of misleading information out there is because much of the sales pitches about this business you hear are very misleading and are intended to get you to join in on the business opportunity.
Everyone that makes good money with this business knows that you have to recruit, recruit, recruit to be successful. The bottom line is that recruitment is key, although not forced upon you.
So if you have that salesperson type personality and think you would be good at recruiting others… and you love jewelry, then go for it. Sign up and give Stella and Dot a try. You don’t have to worry about being scammed, just know it won’t be easy.
If you are like me and are just not the salesperson type and don’t think a recruitment style business like this is right for you.. and you want another option for making money with your own business, you should take a peek at how I make a living working online (link below). I work for myself online and its a pretty awesome career. In the post I wrote I explain what it is that I do, how it all works, and how others can do the same.
Comments, questions, concerns??? Leave them below in the comment section and I’ll get back to you soon 🙂