Direct Cellars Review: Monthly wine tasting club subscriptions
Direct Cellars was launched in 2014 and operates in the wine MLM niche.
On their website, Direct Cellars claims to have US ‘offices in Chicago, Fort Lauderdale and Seattle‘.
A corporate address in Florida is provided on the Direct Cellars website. Further research however reveals this address actually belongs to Carr Workplaces, who sell virtual mailing addresses.
Whether Direct Cellars exists in Florida other than in name only is unclear. Ditto Chicago and Seattle.
Direct Cellars is headed up by Founder and CEO, David DiStefano (right).
DiStefano’s MLM history is unclear. Posts on his Facebook page suggest he may have been involved an affiliate in Talk Fusion (2013), Solavei (2012) and Bidify (2012).
Direct Cellars does appear to be DiStefano’s first MLM venture as an executive.
Read on for a full review of the Direct Cellars MLM opportunity.
The Direct Cellars Product Line
As the company name suggests, Direct Cellars market wine.
In Direct Cellars customers don’t choose from a selection of wines, instead the company ships out a collection of bottles each month.
How are the selections picked that you send me?
Our highly experienced and highly trained wine experts personally taste-test each of our wines.
They “hand-pick” the best selections for you, based on wines they have tasted for you from all over the world.
Direct Cellars retail customers either pay $69.95 for two bottles of wine or $99.95.
Retail customers can subscribe monthly to continue to receive wine, for $49.95 a month for two bottles or $79.95 for four bottles.
The Direct Cellars Compensation Plan
The Direct Cellars compensation plan pays affiliates to sell monthly wine club memberships to retail customers. Direct Cellars affiliates are also paid to recruit new affiliates.
Residual commissions are paid out weekly through a binary team and monthly through a unilevel team. A matching bonus on residual binary commissions is also available.
Direct Cellars Affiliate Ranks
There are nine affiliate ranks within the Direct Cellars compensation plan.
Along with their respective qualification criteria, they are as follows:
- Wine Lover – sign up as a Direct Cellars affiliate and recruit and maintain at least one affiliate
- Wine Enthusiast – achieve commission qualified status
- Wine Critic – recruit and maintain three commission qualified affiliates
- Wine Specialist – recruit and maintain four commission qualified affiliates
- Wine Expert – recruit and maintain five commission qualified affiliates
- Wine Connoisseur – recruit and maintain six commission qualified affiliates
- Wine Aficionado – recruit and maintain seven commission qualified affiliates
- Wine Master – recruit and maintain eight commission qualified affiliates
- Master Cellar – recruit and maintain nine commission qualified affiliates
In order to qualify for MLM commissions, a Direct Cellars affiliate must recruit and maintain two active affiliates and maintain a $79.95 autoship.
An active Direct Cellars affiliate is one who maintains a $79.95 monthly autoship order.
Direct Cellars affiliates are paid $20 for each retail customer they sign up (can be a two or four bottle purchase).
Direct Cellars affiliates are paid to recruit new affiliates.
How much of a recruitment commission is paid out is determined by how much a newly recruited Direct Cellars affiliate spends on their membership:
- recruit a Premium Wine Lover affiliate ($249.95) and get paid $125
- recruit a Premium Wine Lover Elite affiliate ($499.95) and get paid $250
Residual Commissions (binary)
Residual binary commissions in Direct Cellars are paid out via a binary compensation structure.
A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):
The first level of the binary team is made up of two positions. The second level is generated by splitting each of these two positions into another two positions each (4 positions).
Subsequent levels of the binary team are generated in the same manner, with there being no limit to the depth of a binary team.
Sales volume is tracked on both sides of the binary. At the end of each week Direct Cellars tallies up sales volume and pays affiliates a percentage of volume generated by their weaker side.
How much of a percentage is paid out is determined by affiliate rank:
- Wine Enthusiast – 6%
- Wine Critic – 8%
- Wine Specialist – 10%
- Wine Expert – 12%
- Wine Connoisseur – 14%
- Wine Aficionado – 16%
- Wine Master – 18%
- Master Cellar – 20%
Residual Commissions (unilevel)
Residual unilevel commissions in Direct Cellars are paid out via a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
Direct Cellars cap payable unilevel levels at nine, with commissions paid out as a percentage of sales volume generated by a unilevel team.
How many unilevel levels a Direct Cellars affiliate can earn on is determined by their rank:
- Wine Lover – 10% on level 1
- Wine Enthusiast – 10% on level 1 and 5% on level 2
- Wine Critic – 10% on level 1 and 5% on levels 2 and 3
- Wine Specialist – 10% on level 1, 5% on levels 2 and 3 and 4% on level 4
- Wine Expert – 10% on level 1, 5% on levels 2 and 3 and 4% on levels 4 and 5
- Wine Connoisseur – 10% on level 1, 5% on levels 2 and 3, 4% on levels 4 and 5 and 3% on level 6
- Wine Aficionado – 10% on level 1, 5% on levels 2 and 3, 4% on levels 4 and 5 and 3% on levels 6 and 7
- Wine Master – 10% on level 1, 5% on levels 2 and 3, 4% on levels 4 and 5, 3% on levels 6 and 7 and 2% on level 8
- Master Cellar – 10% on level 1, 5% on levels 2 and 3, 4% on levels 4 and 5, 3% on levels 6 and 7 and 2% on levels 8 and 9
Direct Cellars pay a matching bonus on binary commissions earned by recruited affiliates.
The matching bonus pays out down four levels of recruitment, using the same unilevel compensation structure residual unilevel commissions are paid out through.
How many levels a Direct Cellars affiliate can earn a check match on is again determined by their rank:
- Wine Lover – 10% match on level 1
- Wine Enthusiast – 10% match on level 1 and 5% match on level 2
- Wine Critic – 10% match on level 1, 5% match on level 2 and 4% match on level 3
- Wine Specialist – 10% match on level 1, 5% match on level 2, 4% match on level 3 and 3% match on level 4
Joining Direct Cellars
Affiliate membership with Direct Cellars is tied to the purchase of one of two affiliate packages:
- Premium Wine Lover – $249.95 for four bottles of wine
- Premium Wine Lover Elite – $499.95 for twelve bottles of wine
To maintain their membership, every Direct Cellars affiliate must pay $79.95 a month for a four bottle wine subscription.
The cost of the initial subscription aside, Direct Cellars retail customers are looking at an ongoing cost of $25 a bottle for two bottles or $20 for four bottles.
We source the finest wines from wineries across the US, and from the top providers in the world, including France, Italy, Argentina, Chile, Australia, South Africa, Spain, Germany and more.
The quality of wine is highly subjective, however to gauge value we can compare the cost.
This can be done by asking an existing Direct Cellars affiliate for labels of some of the wines they’ve received.
Or the more adventurous can sign up as Direct Cellars retail customers and research the wine they receive.
One potential roadblock for wine enthusiasts is a lack of control over what they’re purchasing.
Can I change my Wine Preferences as I learn more about what I like and what I don’t like?
No! This is a tasting club. We are taking the guess work out for you.
What would be the fun of a tasting club to learn, taste and explore something new if we just sent you the same kinds of wine each month?
To be fair, Direct Cellars do market the subscription as a wine-tasting club. This obviously won’t be for everybody though so bear that in mind.
Moving onto the compensation plan, Direct Cellars is not without red flags.
The opportunity as a whole seems very much geared to signing up as a Direct Cellars affiliate, paying $79.95 a month and recruiting others who do the same.
How many affiliates directly impacts an affiliate’s income potential through rank, with nine recruited affiliates on autoship required to max out the compensation plan.
There are unfortunately no retail customer qualifiers, meaning retail sales can be ignored.
Whether this is the case or not will have to be evaluated on an individual basis.
For prospective Direct Cellars affiliates, a quick check with a potential upline as to how many retail subscriptions versus recruited affiliates will reveal all you need to know.
What you want to see is a healthy balance of both. Little to no retail and an abundance of recruited affiliates is indicative of a product-based pyramid scheme.
That Direct Cellars affiliates are directly paid to recruit new affiliates certainly doesn’t help.
Direct Cellars could remedy these issues by introducing retail qualifiers (add two retail subscriptions to initial commission qualification and then one more per rank).
As it is though I’m not seeing any real incentive to generate retail sales, which is likely reflected in how the majority of Direct Cellars affiliates are managing their business.
Approach with caution.
Update 17th October 2019 – A few days ago Direct Cellars terminated its MLM operations and distributors.
There are DOZENS of established wine clubs, many of which will tailor a case to your tastes, for about $15 per bottle, or less. Some even specialize in red wine, California wine, Italian wine, etc.
So basically, with this Direct Cellars thing, you pay more and get less.
The whole idea of a wine club is to eliminate the distributor middleman and buy in bulk directly from the vineyards, i.e. eliminate the margins. It has no margin to support MLM.
The only thing going for it is the difficulty in putting a “value” on bottles of wine, as one’s heavily subjected to ownership bias / sunk cost fallacy, but this thing IMHO, is a “meatball sundae”.
They picked a real tough item to really push out there for autoship
How much does it cost to ship these heavy bottles, let along how much does the wine cost at wholesale to the company?
At these prices the quality of the wine might be really subjective in quality if money is to be made.
time will tell.
For 25 bucks a pop you can go to the store and pick most bottles at random and still save some money plus avoid any associated fees.
I would absolutely ask my referrer what are some of the wines they’ve gotten.
I believe the shipping and handling are included in price of wine. This adds to the value.
Keeping in mind the shipping is free including any bottles you may not enjoy… you can get credit for it. YEP the wine is premium.
I also get the “book club feel”, where they choose your wines. Why be in a book club if you’re only going to read your favorite book?
The same goes with the wine, and I can appreciate that. I like the surprise, the mystery and the information about the wine that comes with every new bottle.
SO because it gets shipped anywhere the value of the win increases?
who knew that – so I can ship it around the globe and back the value of the wine increases hmmmm wow.
Actually there is an incentive to recruit customers since they have a 3 for free aspect.
So, if you get 3 customers (not distributors) your autoship is free for that month except for a $15.00 shipping fee. This not apply if you enroll 3 dist.
Or you can just buy your own cheap wine instead of trying to recruit others to buy it.
Direct Cellars does have a presence in the Seattle area as they ship out of Woodinville, a town known for wine as well as parts of eastern Washington being wine country — could be a fun opportunity, especially for the holidays.
If nothing else you can give bottles away as a means of promotion. You can get other wine club deals that are “cheaper” and “customized” but they don’t PAY you to promote them, and lets be honest, people are in these deals to get paid.
Skydance was simply pointing out that the free shipping adds value to this club.
Yes you can definitely go to the store and buy “cheap” wine and save money. I don’t know of a store that will give you a credit or your money back if you do not like the wine you opened!
There are people out there that like wine but don’t know where to go to get variety’s from all over the world, they are playing a guessing game there as well.
There is a social aspect to this as well. Meeting like minded people that like the same things and have fun doing them.
Really it’s not for everyone, that’s why it’s called an opportunity. Why not make some money or get your wine for free along the way?
You can be a wine expert or snob or just cheap all by yourself.
Appeared in one of my UK FB this week.
I have a copy of a webinar from last night.
Looks little pricey based on not knowing which wines are being supplied.
I usually purchase at £10 to £15 per bottle, so if I have control of which wine, it might be of interest.
However, as soon as I saw Binary, my interest waned.
The compensation plan is a hybrid, part binary, part unilevel. It’s simple, can be explained on 1 page.
I’m betting that they get this right and that people are benefited from Direct Cellars, “Book Club” feel.
speaking with one of the promoters, they had no idea about ‘bonded warehouses’ here in the UK, which is a legal requirement.
Suddenly they have gone very quiet about launching properly in the UK as a result of that question.
Quote from Shayo Alofe, who claims to have reached the top of the Direct Cellars plan in the UK while they are in pre-launch:
It seems quite clear from the post and replies many participants are just in the business for the money, rather than being genuine advocates of the products.
That flies in the face of “conventional” MLM principles. How can you recommend something you don’t use?
I predict this will implode either before the UK launch or once they run out of people to recruit for what appears to be largely “internal consumption” (i.e. Purchases by distributors. Not necessarily drinking the wine).
I had someone approach me to buy in. I’m confused. I want to know how much I’ll get monthly if I do everything right. Lol.
Confused and think it’s a rip off! I don’t know.
Depends on what you think “everything right” entails.
The way you define a pyramid scheme is if the customer would buy the product if there was not an opportunity attached.
In this case the answer is NO. Who would buy $20-$25 bottles of wine every month sight unseen?
When you figure out how much margin is paid back to the distributors in sign up bonuses and commissions my guess is your getting a bottle of wine whose cost is $3.00-$4.00 a bottle. Can you say 3 BUCK CHUCK.
This is an illegal pyramid scheme and it’s just waiting to implode soon.
the way to define a pyramid scheme has very little to do with the “product”.
If participants do (or can) earn the majority of their income by recruiting other participants, you have a pyramid, or endless chain recruitment scheme.
Most modern pseudo MLMs have a “product” of some sort, but they exist only to cover the fact recruitment is where the money is made.
You guys are nuts if you think this concept isn’t smart. I don’t know what MLM’s you’ve been with in the past, but I can guarantee you won’t find a business model that says “SEE YA” to products that everyone in the USA is sick of seeing people peddle all over social media.
Products are great, but the HIGH of people buying so many MLM products on social media was great from 2013 through mid 2016. By then, saturation completely ruined social media for MLM’s, making people start to turn a serious “deaf ear” to the posts…
Bottom line, I’ve been top ranked in one major company, and for 2 1/2 years I watched business BOOM, and then drop without anything we could do.
Fads come and go. Products go away, and people forget about them. People don’t ever forget about that wine they’re drinking after 5pm every night.
Everyone drinks wine, or at least, 56% of people in the country daily or several times a week. Whether this lasts for 12, 18, 24 months+, you’d be a fool to turn a blind eye if you’re a smart network marketer
20 days in. 35 personally enrolled reps. over 135 people under me. And there’s no end in sight. $7k all in 21 days.
So no retail customers? All affiliate autoship commissions?
That includes weekly 20% commission in the dual team pay, which is volume from affiliates & customers combined. There are no “retail” customers anymore. It’s 2 for $49 or 4 for $79. No autoship required for customers, although if they refer 3 they get their wine free every month.
The long term unilevel residual will be ridiculous after time goes by.
You have to have retail customers in MLM, otherwise you’re in a pyramid scheme.
The question seems to be whether you’ve more retail volume than recruited affiliate volume. Sounds like you have more recruited affiliate autoship volume.
Oz is entirely correct. Without customers outside of the company, it violates rulings and regulations dating back to the 1970s (the Amway decision).
As well as recent rulings such… Vemma, I believe it was, that the FTC came down on for this violation recently?
I can do you one better.
100% of people I know use toilet paper and laundry soap – hopefully more than several times a week.
Ever heard of Amway? It’s an MLM too. 99% failure rate.
Your point was?
Lazy Man wrote an interesting article addressing this issue. It seemed to fit right in with the wine topic.
So Shayo Alofe now claims to have 10 people in her group who have reached the top rank BEFORE the launch in the UK. And she still doesn’t seem to think it matters that she doesn’t like wine.
Bearing in mind this means they all potentially have no idea what the quality of the product will be. But who cares eh, if they’re all making money 😀
Are the vineyards AVA? What are the vineayrs? Producers? Is there a WSET 4 or CMS 3 or 4 involved?
The way Direct Cellars is being promoted on their conference calls reminds me of how Vemma was pitched.
It’s all opportunity driven – – recruitment with an auto ship program. This isn’t going to end well, IMO.
Costco is the largest retailer of wine in the United States. Their margin on alcohol is between 10-13%.
Why would anyone buy their wine through Direct Cellars when they can just add a couple of bottles to their cart on their next visit to Costco?
The obvious answer and ONLY reason? The Money!
anyone who promotes Direct Cellars in my FB groups are immediately kicked out. Think the wine is corked.
It does not look a very good bet or should that be vintage? ;o)
It seems that Shayo Alofe still doesn’t need anyone to have sampled the wine from Direct Cellars to build a business.
Another person in her organisation has apparently reached the top of the compensation plan purely based on recruitment. It can’t be from retailing the product, as nobody is receiving the product yet.
Here’s Shayo’s latest Facebook post:
“Please join me in congratulating this amazing lady, Alicia Johns who has just hit the highest rank in our company, in a country where we have not launched yet and where we are not receiving our product yet!
It takes a certain type of person to build a business without products, however it takes a phenomenal leader to make it to the top of the compensation plan without products!!! Massive, Massive congratulations dear Alicia and have a very Happy Birthday too!
#DCUK #WinningwithWine #UKWineGang”
MLM junkie Austin Zulauf is claiming that MLM Attorney Kevin Thompson has put his name and stamp of approval on Direct Cellars which includes a strategic partnership.
Kevin Thompson NEVER endorses any company. It’s his standard policy. He may have consulted on a comp package, but he would never authorize such use of his name. And one should NEVER make a lawyer angry.
The “experts” makes me raise an eyebrow. One thing if someone is WSET or CMS certified.
Apparently, Direct Cellars will launch in the U.K. 31/07/17
Its Wine, it’s the crowd favorite. Simple
Red or White according to taste no big deal.
You can advocate going to the local store and buying the cheap mass produced stuff with no real flavor or depth of character or whatever is on special or stick to what you know or whatever a friend recommends to try.
If you join Direct Cellars there is no need to stop buying your cheap stuff locally, just add this deal into your social experience.
Its only a couple of bottles a month, on auto-ship no big deal.
I think quite a few people would enjoy being a part of a trendy International wine club, offering tasting wines every month on autopilot, just to round out their wine experience and pallet.
What i find of value, is they advocate social wine tasting get-togethers and include some basic educational training on wines, which to me is something very worthwhile over and above the money earning aspect.
Wine is totally social, try that with typical MLM pills, potions, lotions, shakes and skin care and bloody Bitcoins.
Its wine, whats not to like about it.
I have been collecting wines for 15 years and I can say their prices are reasonable for the quality of wine on offer. Their satisfaction guarantee is something i find rather curious. (if you dont like it send it back)
They would have to be super confident about their product to do that, as i could not imagine that working as a sales gimmick in MLM land.
Their start-up package prices are reasonable, it’s not as if they loading you up with dozens of cases of wine, this shows some restraint of their part, compared to other programs.
From where i stand right now the company is making a big deal out of promoting their 3 and its FREE customer program, Which is what OZ mentioned was lacking back in July 2016.
So it seems something encouraged them to address the customer acquisition rule with all seriousness, something which Kevin Thompsons advocates heavily that companies must pay attention to.
Direct Cellars recently launched UK, Australia, New Zealand, and Germany.
Australia is not an easy place to launch, not only do they have to deal with compliance for the direct selling side but also liquor and gaming compliance and they appear to have negotiated things successfully.
To Quote Wine Woman above
Why be in a book club if you’re only going to read your favorite book?
Just one question:
How does the MLM company expand/grow?
As the founder, I want affiliates to recruit others. I don’t want an affiliate to have just a customer, an end-stop. They both, affiliates and customers, buy product, but the affiliate’s customer does nothing additional for me the founder.
I don’t care if said affiliate makes a mark up, I don’t see that money. However, an affiliate who recruits others keeps the chain going – for my company.
You BigC are making the mistake a focusing on the product. It’s irrelevant. The method is the same.
Tip: Try looking at it from the founder’s perspective. Part of the ruse is making you think from an affiliate’s point of view and its bunk.
The product was all, I was commenting on basically.
The marketing plan and their method of distribution I did not bother to comment on, as anyone can visit the website and see for themselves how that part works.
By the tone of your comment you have not studied the Direct Cellars plan, if you did you would see customers are encouraged to refer 3 customers and get their wine FREE, without having to become affiliates (Brand Partners).
Brand partners can recoup their outlay by registering two people. Customer also generate volume.
If you are talking in generic term this is off topic for this thread.
DIRECT CELLARS HAS NOW SHUT DOWN.
Their Facebook page is gone. Company website is still up though. Last blog post Oct 3rd, 2019?
edit: Twitter Oct 10th. No shutdown announcement I can see (???).
Search on Facebook and you’ll find multiple posts from distributors. They shut it down last weekend. One post says because of a lack of financing, but I don’t know how reliable that information is.
Example post: m.facebook.com/1302311600/posts/10220130925605695/
Thanks for that. I’ll do a quick write-up tomorrow.