If you take an interest in jewelry, purses and accessories such as sunglasses, you may have heard about a company called Stella & Dot. This company offers several different lines of chic jewelry designed mostly by New York designers, as well as purses, belts, tunics, scarves, etc. The company was founded in 2003 by Jessica Herrin and has even been featured in Vogue and Cosmopolitan.
You won’t find S&D items in stores because the company operates via a direct sales model, working with so-called “Independent Stylists,” who are actually private individuals (like you and me), to sell its goods. The company does offer its goods via its website, however.
Stella & Dot is also an multilevel marketing (MLM) company. So, independent stylists that recruit other individuals to also become stylists receive commissions from their sales.
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How do you become a Stella & Dot stylist?
To sign up, you must first purchase a starter kit from the company. There are three kit choices:
Once you receive your kit, you are encouraged to showcase your wares by hosting a “Trunk Show,” which is essentially an in-home party/demonstration. You can also feature and sell your goods online, via your own dedicated Stella & Dot website. However, the company strongly emphasizes that trunks shows are the way to go:
You start off earning a 25% commission on your sold goods, which jumps up to 30% if you sell over $2,500, 32% if you sell over $5,000, and 35% if you sell over $10,000 in a single month.
If you start recruiting others to become stylists, you earn a percentage from their sales. Stella & Dot advertises that up to an extra 18% commission can be earned from sales generated by your downline; unfortunately, this information is not broken down or otherwise elaborated on through the website.
As with all direct sales MLMs, there are pros and cons to working for Stella & Dot:
Transparency– The company seems to lay out its compensation plan rather openly and, except for the missing breakdown of downline commissions, most information is shown online. For example, here is the company’s average stylist income disclosure table:
Fashionable jewelry and accessories– Stella & Dot jewelry is chic, trendy and imaginative. The clothes are unique and many pieces are embroidered. Purses are sturdy and several are made from genuine leather.
No sales quota– An independent stylist with no downline has no set quote to meet when she sells Stella & Dot products. She can sell even a single piece per year- and still earn a 25% commission.
Responsive company– There will be customer complaints with any company or business. Where customers have complained about Stella & Dot products, the company has been quick to respond and rectify the issues involved. This also goes back to the “Delight Guarantee” that the company offers to its customers, including 24/7 customer service and free product returns.
Expensive products– Stylists who host trunk shows at their homes and assume they’ll make an easy $500 in revenues per show are in for a surprise: Guests will be hard-pressed to pay up to $228 for a stylish purse or $39 for a pair of bead earrings. It will take some convincing to get people to pay hundreds of dollars for jewelry that, at least in their minds, carries no brand recognition and/or is not made with precious metals/gems.
As an example, check out what two tunics would cost for the average customer:
Sales quota with downline– If you end up recruiting new stylists, you will be required to “lead by example” and sell at least $500 of merchandise per quarter or your commissions from their sales will be reassigned to another lead stylist. So, if you are good at convincing others to join but only so-so at selling Stella & Dot jewelry, too bad for you.
Low average earnings– If you look at the earnings disclosure posted above, you’ll find that 72.7% of stylists don’t even average $2K in earnings for their work, and almost 90% don’t make an average of $5K/year. Those odds are quite sobering when you account for the fact that these stylists are probably out there, working hard, and trying to recruit others as they go.
“Warm market” emphasis– Stella & Dot’s website assumes that its salespeople are going to consist of women, mostly stay-at-home moms and housewives, who somehow have plenty of relatives and friends to sell their wares to. Granted, every person has a certain number of people that she knows and can gather together for a party or two…but that market is quickly used up within a few months. To be truly successful, that person must eventually reach out to and attract a wider (outside) audience of potential customers.
Unfortunately, Stella & Dot says little about this larger market and how to sell to it. In fact, the company almost seems to de-emphasize online selling and advertising in favor of trunk shows- in spite of the fact that online selling and advertising have immense potential for reaching a wide target audience.
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Is Stella & Dot worth it?
While Stella & Dot does offer fashionable products and impressive customer support, it may prove too great of a challenge for independent stylists to make a steady income from, or even a side income. Also, the products are expensive and require a certain demographic of customers with sufficient disposable income to afford many of the offered pieces. In my opinion, there are less challenging business opportunities out there.
Have you sold or do you sell Stella & Dot products? Please leave a comment about your experiences below.