Today we will be reviewing a company called Stella & Dot. Is Stella & Dot a pyramid scheme or scam? Find out in this Stella & Dot review.
Are you even aware that this company exists? Chances are, you didn’t. Not until someone in social media messaged you about it.
To be honest, it is not so surprising anymore for a hunbot to find people on social media and spam them with messages that often promise a “great opportunity to work from home” and “full-time pay for part-time work”.
Let me warn you right now that both those statements are a lie, so don’t bother corresponding further with that hunbot who messaged you about this so-called opportunity.
If you are wondering why you haven’t heard of Stella & Dot before, this is because they do little to no advertising. They leave that part to their members.
That aside, let me explain two terms first that you will be encountering plenty of times in this Stella & Dot review: MLM and pyramid scheme.
MLMs are companies that rely on selling products and recruiting members to make money. However, most of the time, MLMs practice the same business model as a pyramid scheme, which is recruiting. This is why MLMs are always mistaken as pyramid schemes.
Pyramid schemes, on the other hand, only rely on recruiting to get their profits. They do not sell products. Also, this business model is downright illegal and is banned by the FTC.
As a disclaimer, I am not affiliated with Stella & Dot in any way.
Hopefully this Stella & Dot review can help you decide whether you want to sign up for the company or not.
Before we proceed with the Stella & Dot review, check out my #1 recommendation to making money online after reviewing 300+ MLM companies.
What is Stella & Dot?
Stella & Dot is a multi-level marketing company that sells fashion items. Their catalog includes apparel, jewelry, handbags, and accessories.
The thing that sets Stella & Dot apart from other fashion MLMs is that their items are designed by fashion industry professionals and top fashion places.
Stella & Dot have also been featured in TV shows and fashion magazines, including In Style and Lucky Magazine.
You can watch this clip from Today Show on an episode where Stella & Dot was featured:
The company was founded by CEO Jessica Herrin.
Herrin is also an author, and she has published books such as “Find Your Extraordinary”, and she is also a founder of the Wedding Channel.
How Do MLMs Work?
Welcome to my favorite section where I talk about how MLMs continue to thrive despite all the competition they face from big brands.
In my opinion, MLMs have no more place in society. This is because people already know where to get great value for their money.
People already know how to differentiate mall prices and online prices, which is why online shopping has become the new norm.
What I do not understand is that why MLMs are still in business despite all this competition.
I guess I managed to find the answer to that, and it is quite painful. It is because MLMs have found the best customers – the members who signed up for them.
Ever wondered why MLMs impose a monthly quota for their members to meet every month or their active status will be revoked? This is the case.
As long as people keep buying, the company keeps making money. This is also why MLM companies do not care even if their members make sales or not.
The reason why members keep buying in order to keep selling does not make sense to me. Also, they would have to pay money outright before they can get products.
Doesn’t that just sound scummy? How come you cannot order only if you got customers who want to buy from you?
They want their members to keep buying inventory in advance in order to make money.
Yeah, that does not seem like a good business idea for you, if you ask me. You will be forced to keep buying products even though not that many customers are buying from you.
Even then, you have to keep doing it because if you lose your active status, you would not be able to sell all the inventory you bought anymore. It’s a vicious cycle.
MLMs are really a cancer in our society.
I suggest that you watch this video to further understand the point I am making.
Is Stella & Dot a Pyramid Scheme?
Since Stella & Dot members earn money both by selling services and recruiting new members, then it is safe to say that Stella & Dot is not a pyramid scheme.
However, because Stella & Dot is an MLM, recruiting new members is much more encouraged compared to actual product selling
Because of this, Stella & Dot looks like a pyramid scheme in disguise.
Like Vantel Pearls, Ring Bomb Party, and Pomifera, Stella & Dot is not a pyramid scheme.
Is Stella & Dot a Scam?
No, Stella & Dot is not a scam.
However, you may want to watch this video to learn about things that the company may be hiding from you.
https://www.youtube.com/watch?v=sPOz_iPzjOo
Just like what the title says, it is definitely a collection of all the lies that the company has told its customers and members over the years. It is also quite long so you are definitely in for a ride.
When researching about MLMs, I recommend third-party sources like this. This is because people spreading these information are not affiliated with the company whatsoever, which means that the company has no influence over them.
Another good source of information are forums, and the most comprehensive forum I have ever seen is r/antiMLM. When it comes to MLMs, it seems like this forum has already covered a lot of them.
You can also check testimonials from ex-members. These testimonials show how the company treats its members.
How to Make Money from Stella & Dot
Since Stella & Dot is an MLM, there are only two ways to make money with the company. and these are:
- Selling products
- Recruiting members
That is basically it, to be honest. The other ways to make money are bonuses from either number of sales and number of people recruited to the company.
In order to get bonuses and reap benefits, you would have to build a downline. Building a downline is easier said than done.
To build a downline, you would have to recruit people in your company. Once they are in, you will be receiving a commission from their sales. This is where the passive income that MLMs boast about comes from.
So basically, if you want passive income, you cannot make it with sales alone. In fact, having to market and advertise these products take a lot of work and are definitely not passive by any means.
To MLMs, they do not really care about your sales. What they care about is how much you buy and how many people you bring in to do the same thing.
This is sounding more and more like a pyramid scheme, doesn’t it?
How to Join Stella & Dot
Joining Stella & Dot is a pretty straightforward process. All you have to do is fill-up this form with the required information, and you are all set.
You can choose from three options for your initial order:
- Essentials Kit ($350)
- More to Love Kit ($499)
- Ultimate Kit ($699)
In order to stay active in the company, you are required to sell at least 167 PV, which is around $170 per month.
Stella & Dot products
According to their website, their products are categorized in the following sections:
- Jewelry
- Charm Jewelry
- Bags and Accessories
- Clothing
- Beauty
- Gifts
You can watch this video to learn about how the designing process of Stella & Dot products.
Things I Like in Stella & Dot
Established Company
When it comes to MLMs, they are lucky to last one year, luckier even if they reach three years. The business model of MLMs are not sustainable, which brings about their early downfall.
Since Stella & Dot has been around since 2003, we could assume that they are making enough profit every year to stay afloat. Quite impressive for an MLM.
Wide Selection of Products
MLMs often focus on one variety of product alone. In Stella & Dot, they sell a wide variety of products, from clothes, bags, and accessories.
This makes them a one-stop shop where people could easily save people’s money in terms of shipping.
Things I Dislike in Stella & Dot
Very Low Income Potential
It is very rare to succeed in an MLM, no matter what kind of MLM it is.
This is because usually impose a very high quota that is often impossible to be reached by the members. Even if they work really hard, if they cannot sell products, they will continue losing money.
If they fail to reach the monthly quota, they will dropped from the company, so whatever inventory they have cannot be sold anymore.
MLMs often soar to success from the financial failures of their members. That is just how their business model works.
Saturated Market
This is another boutique type MLM, and guess how many boutiques are open all over the world selling the same things? A million, I bet. Or maybe more.
Not to mention that there are a lot of online boutiques and Instagram shops selling products like these. Those stores often have good advertising, great marketing, and celebrity endorsements that boost their sales.
How do you think can you compete with that if you join Stella & Dot?
It is an MLM
In order to keep making money in Stella & Dot, you will have to keep recruiting people.
Take note that these people you are recruiting will also be selling the same kinds of products as you, and will be using the same selling tactics as you.
Basically, you are training them to be your own competition.
Stella & Dot Compensation Plan
You can view Stella & Dot’s compensation plan by clicking this link.
Of course, like other MLMs, Stella & Dot’s compensation plan is made to be deliberately confusing in order to have their members keep putting money in without knowing what actually happens with it.
From what I can understand, here are the ways to get paid in Stella & Dot:
- Retail Commissions – 25% commissions for 500 PV sold every 3 months / 30% for every 2500 PV sold quarterly / 35% for every 10,000 PV sold annually
- Residual Commissions – 3-10% commissions depending on rank
- Other Bonuses – depending on rank achievement and other milestones reached
You can watch this video to get more information about the compensation plan.
10 Shocking MLM Statistics That You Need To Know!
- Almost 99% participants of all multi-level marketing companies lose money, according to the FTC.
- There are 38% more chances of you profiting from your own any kind of small business than joining these MLMs.
- Success rate of an online business, which will give you financial and time freedom, is 20% more than joining MLMs for making money.
- The odds of you winning a lottery worth $10k among 10,000 people is 300 times higher than actually making money from MLMs.
- According to the AARP foundation, 47% distributors of all MLMs lose their money. Apart from this, 27% do not make a single penny.
- In the remaining 26% that actually make money, 53% of them make less than $5000/year.
- 39% of those 53%, who are making $5000/year quit because recruiting and selling crappy products to friends and family members jeopardized their relationships.
- Forget about building a long term business with MLMs, because 50% of all MLMs participants quit within one year.
- 75% people that joined MLMs say that they will never again join any kind of MLM.
- A poll was conducted in 2018 among 1050 MLM distributors and it was concluded that most of them made 70 cents an hour and 20% of them did not make a sale. 60% of them made less than $500 in sales over the past 5 years and 32% of them acquired credit card debt to finance their MLM involvements.
SOURCES:
Final Verdict – Stella & Dot
Before I end this Stella & Dot review, I have a few more thoughts that I’d like to share.
This company is not unique and does not stand out in any way. This means that you will have a hard time selling their products if you plan to join the company. All I could see in this company is that this looks like a pyramid scheme in all aspects.
The problem with this is the competition is too tough to beat. Due to the infamous reputation of MLMs, not many people are willing to support them and buy from them.
Because MLMs rarely make money from selling their products to actual paying customers, they resort to setting these quotas, and their members take the financial brunt of it.
In MLMs, it seems like only those in the high ranks make the money advertised. The passive income, the bonus; the ones in the very bottom do not get any of them, despite the ones spending the most just to keep the business afloat.
Joining an MLM will just bring you financial ruin. If you want to make money, there are a lot of better ways out there.
That’s it for my Stella & Dot review. Hopefully this Stella & Dot review helps with your decision.
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