How much money can you really make working for MLM Stella&Dot?
How much money can you REALLY make working for Stella&Dot? In this article, we compare an income disclosure statement from MLM Stella&Dot with their marketing messages, to find out.
We recently published a popular article Thinking of joining an MLM? Read the truth about the ‘income opportunity’. In it, we linked to research into 11 MLMs by MLM expert Robert Fitzpatrick that revealed that “on average, 99% of all participants received less than $10 a week in commissions, before all expenses.”
But is this really true of all MLMs? And what about companies who attempt to distance themselves from the term ‘MLM’ and instead call themselves ‘social selling’ or ‘network marketing’ companies?
It’s hard to separate MLM promises from facts
It can be hard to know what the truth really is, especially when representatives of companies claim that they are enjoying the perfect life working for themselves, and are able to afford all kinds of desirable material possessions, experiences and lifestyle choices.
As if the claims made by reps weren’t enticing enough, the companies themselves appear to promise easy income opportunities on their own websites. And this, for us, is the real problem with MLM companies. It’s the huge difference between how they appear to be, and what it’s actually like working for them.
To try to establish the truth, in this article we compare the marketing/recruitment messages of Stella&Dot, a popular MLM that targets women, with their own income disclosure statements.
How much money can you expect to earn with Stella&Dot?
Before we examine their income disclosure statement to find out how much money you can make with Stella&Dot, let’s take a look at some of the messages on their site designed to encourage people to become stylists (this image is from this page – click on ‘see what you can earn’):
And this image is an FAQ from this page, note the line “Other Stylists treat this as an opportunity like a full-time career and are building a six-figure income in the process”:
So how do these messages from the Stella&Dot website compare with their income disclosure statement? This is their 2015 income disclosure statement for Canada, taken from their website:
As you can see, 74.1% of stylists earned an average of just $2,000 over the year. The bottom 25% of these earned just $400. But this isn’t the full picture. Take a look at the copy underneath the table:
The table above ONLY shows commissions paid to ‘active’ stylists, who earned at least $1 in any given month. It doesn’t take into account the stylists who earned nothing. When you add these into the mix, Stella&Dot say that:
“The typical stylist (including inactives) during 2015 earned between $0 to $100…”
Compare these earnings to the minimum cost of getting started in Canada, which is $169 according to their website (see screen grab below) and you wonder how many stylists even make back their initial investment, let alone earn a profit:
And what about your expenses selling Stella&Dot?
There’s one important thing we need to take into account when looking at these figures: they’re just income. They don’t take into account your expenses, so are therefore not even actual profit.
As we mentioned, you already have the cost of your Starter Kit to take into account. And then you have the cost of displays and products which, according to this ex-stylist “never ends because they are constantly discontinuing certain lines so you have to buy more each season.”
Any expenses hosting or traveling to trunk parties needs to be taken into account. (Plus, as mentioned, you need sample products for your trunk parties, which you need to buy yourself.) Then you have all your stationery: hostess books, brochures, potential stylist booklets, order forms and pads, and bags.
Indeed, when you factor in your costs in selling Stella&Dot, you begin to understand why, on average, 99.6% of MLM reps lose money.
How do the facts compare to the marketing messages?
So what can you realistically expect to earn with Stella& Dot, compared to the marketing/recruitment messages? To find out, let’s quickly return to the top image. Here it is again:
Let’s say you want a ‘flexible & rewarding part time career’ with an average monthly income of £715-£1,900. To earn £715 a month, using Stella&Dot’s own figures, you’d need to be above the top 3.7% of stylists. And to earn £1,900 a month you’d need to be above the top 1.1%.
And what if you want a ‘career opportunity’ to replace your corporate income and earn £3,000-£52,000 a month? To earn £3,000 a month you’d need to be above the top 0.5% of stylists. And to earn £52,000 a month you’d need to be off the table.
And remember, the figures in the table appear to be a best case scenario – only factoring reps who made any money. According to Stella&Dot themselves:
“The typical stylist (including inactives) during 2015 earned between $0 to $100…”
And this is before you take into account your expenses, including your Starter Kit.
Is it hard to make money selling Stella&Dot?
One of the big complaints about Stella&Dot products is their price point, as this review of the business opportunity points out:
“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.”
Like many MLM products, Stella&Dot is priced highly for the quality when you compare it to high street alternatives. And you’re not just competing with high street and online brands – as with all MLMs, you’re competing with ex-Stella&Dot stylists who are selling on sites like eBay after going out of business.
“It’s an orchestrated sham as a business opportunity.” Read what the Financial Times learned about Stella&Dot during their own investigation.
“But my friend says…”
If you have a friend or acquaintance doing Stella&Dot, or another MLM, the chances are you’ll have heard a very different story. They may tell you that their company or their experience is completely different, and they they (or someone they know) is doing really well at it. They’ll also probably tell you that those who failed did so because they just didn’t work hard enough, or didn’t have the right ‘mindset’.
But again we need to return to THE FACTS. According to Stella&Dot’s own income disclosure statement, it appears that only the top tiny percentage of stylists make ‘good’ money, despite what you may hear anecdotally (Stella&Dot is not unique; research shows the same pattern is repeated in other MLMs).
And if you’re told that MLM is just like any other business – some people succeed but many more fail – read our MLM article to find out why this just isn’t true. Equally, if a rep argues that most people just participate in MLMs for pocket money, we recommend you read this:
“Part-timers and seasonal participants are not profiting, but are merely contributing to the coffers of the company, founders, and TOPP’s (top-of-the-pyramid-promoters).”
Why do we believe this is so important?
Like we said, if you go into any MLM scheme with your eyes open and a realistic earning expectation, then that’s fair enough. But as you can see, the marketing messages that MLMs use to entice you in don’t appear to match up with the real life experience of most of their own representatives.
That’s why we believe it’s important to represent a more realistic picture of what you can expect if you sign up to an MLM, such as Stella&Dot. So if you’re considering joining one, ask to see their income disclosure statement first. And if they can’t (or won’t) provide one, we’d advise you to consider it a red flag.
Want to read more about MLMs?
We’ve been researching the truth behind MLMs or several months now. Here are some articles we recommend looking at if you want to find out more:
- The 10 ugly truths MLMs don’t want you to know
- Thinking of joining an MLM? Read the truth behind the ‘income opportunity’
- Why there’s no such thing as a free MLM car
We also look at the earning potential of other MLMs in these articles:
- How can you make money with MLM LuLaRoe? Why the sums don’t add up
- How much money can you really make working for MLM Arbonne?
- How much money can you really make working for MLM Herbalife?
Please note: This is our analysis of information made publicly available by Stella&Dot. If we have incorrectly interpreted this information, or you work for Stella&Dot and have factual income disclosure statements that contradict our findings here we would welcome seeing them, and will happily edit this article to reflect. Please note, we do not accept personal experiences from representatives as ‘factual income disclosure statements’.