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).
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.