Scout & Cellar Review: “Clean-crafted” wines
Scout & Cellar operate in the wine MLM niche. The company was founded in 2017 and is based out of Texas.
Heading up Scout & Cellar is founder and CEO Sarah Shadonix.
So the story goes;
While studying to become a wine professional, Sarah began experiencing inexplicable headaches.
So she did the research, consulting winemakers, grape growers and physicians before discovering the truth: Many of the world’s wines can contain up to 300 questionable chemicals and additives.
This discovery changed everything, and not long after, Scout & Cellar was born.
Shadonix (right) worked as a lawyer before switching gears to work in the wine industry.
As per an October 2017 report from Dallas Innovates;
Shadonix learned the business during a two-year stint with California-based Wine Country Connect, a wine e-commerce and logistics company that powers the wine segments of internet retailers such as Wine.Woot and Rue La La by curating wine offerings.
“I got to learn the industry and developed some good relationships,” she said. “In fact, the company with whom I worked is our logistics partner in this company.”
Read on for a full review of Scout & Cellar’s MLM opportunity.
Scout & Cellar’s Products
Scout & Cellar market a range of “clean-crafted” wines.
For a product to meet our Clean-Crafted Commitment, it goes through two rounds of independent lab testing to ensure that the final product is free of chemical pesticides, synthetic additives and added sweeteners.
We also evaluate and review farming and production practices.
We do this because we’re committed to offering a more natural, altogether better-tasting beverage experience.
Wine categories featured on Scout & Cellar’s website include canned, sparkling, white, rosé and red.
There’s also a “cellar sweep” section, which appears to be wines on sale.
Scout & Cellar has two in-house wine brands; Mixtrack and Wilderness Road.
Mixtrack is a selection of canned wines:
Wildnerness Road appears to be bottled wines designed for cocktail mixing.
MIXABLE is a lower-alcohol alternative for cocktails, created by combining a fermented Clean-Crafted white and rosé wines with a distilled neutral Clean-Crafted grape wine.
The result yields a higher alcohol content than traditional table wines but evokes a clean, fresh, neutral flavor perfect for mixing!
A full catalog with retail pricing is available on Scout & Cellar’s website.
Scout & Cellar’s Compensation Plan
Scout & Cellar’s compensation plan pays commissions on retail customer orders.
Residual commissions and a generation bonus are paid through a unilevel team.
Additional performance and rank-based bonuses are also available.
Scout & Cellar Affiliate Ranks
There are eleven affiliate ranks within Scout & Cellar’s compensation plan.
Along with their respective qualification criteria, they are as follows:
- Consultant – sign up as a Scout & Cellar affiliate and maintain $600 PV over a rolling twelve-month period
- Senior Consultant – generate and maintain 200 PV and 500 GV a month
- Executive Consultant – generate and maintain 300 PV and 800 GV a month
- Associate Manager – generate and maintain 400 PV and 1500 GV a month (max 750 GV from any one unilevel team leg), and generate and maintain one Builder leg
- Senior Manager – generate and maintain 500 PV and 3000 GV a month (max 1500 GV from any one unilevel team leg), and generate and maintain two builder legs
- Executive Manager – generate and maintain 600 PV and 6000 GV a month (max 3000 GV from any one unilevel team leg), and generate and maintain three Builder legs
- Associate Director – maintain 600 PV a month, generate and maintain 12,500 GV a month (max 6000 GV From any one unilevel team leg), and generate and maintain two Builder legs and one EM+ leg
- Director – maintain 600 PV a month, generate and maintain 25,000 GV a month (max 12,500 GV from any one unilevel team leg), and generate and maintain one Builder leg and two EM+ legs
- Senior Director – generate and maintain 700 PV a month, generate and maintain 60,000 GV a month (max 30,000 GV from any one unilevel team leg), and generate and maintain three EM+ legs
- Executive Director – maintain 700 PV a month, generate and maintain 150,000 GV a month (max 75,000 GV from any one unilevel team leg), and generate and maintain three AD+ legs and “NewGenQ”
- Managing Director – maintain 700 PV a month, generate and maintain 500,000 GV a month (max 250,000 GV from any one unilevel team leg), and generate and maintain three D+ legs and “NewGenQ”
PV stands for “Personal Volume” and is sales volume generated by retail sales and an affiliate’s own orders.
GV stands for “Group Volume” and is PV generated by an affiliate and their downline.
With respect to rank-specific legs:
- a Builder leg refers to a unilevel team leg with a Consultant in it
- an EM+ leg refers to a unilevel team leg with an Executive Manager or higher in it
- an AD+ leg refers to a unilevel team leg with an Associate Director or higher in it
- a D+ leg refers to a unilevel team leg with a Director or higher in it
For a unilevel team explanation, refer to “residual commissions” below.
Finally, NewGenQ qualification requires an affiliate to generate a new personally recruited Executive Manager ranked affiliate over a rolling twelve-month period.
Scout & Cellar pays retail commissions across three PV tiers.
- generate $1 to $599 in PV and receive a 15% retail commission rate
- generate $600 to $2999 in PV and receive a 20% retail commission rate
- generate $3000 or more PV and receive a 25% retail commission rate
Note that this appears to be a cumulative volume requirement, as opposed to an ongoing monthly one.
Also note that retail commission percentages are paid on 70% of generated PV.
E.g. If you qualify for a 20% retail commission, you’l be paid 20% of 70% of your generated retail PV that month.
Scout & Cellar pays residual commissions 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.
Scout & Cellar caps unilevel team levels at two.
Residual commissions are paid out as a percentage of sales volume generated across these two levels as follows:
- Senior Consultants earn 3% on level 1 (personally recruited affiliates)
- Executive Consultants earn 5% on level 1
- Associate Managers earn 6% on level 1 and 3% on level 2
- Senior Managers earn 7% on level 1 and 5% on level 2
- Executive Managers and higher earn 8% on level 1 and 6% on level 2
The Generation Bonus is paid out using the same unilevel team residual commissions are paid with.
Scout & Cellar define a generation within a unilevel team leg when an Executive Manager or higher ranked affiliate is found.
This Executive Manager or higher ranked affiliate caps off the first generation for that leg, with the second beginning with them and immediately after (deeper in the leg).
If no other Executive Managers or higher exist deeper in the leg, the second generation of that leg runs the full depth of the leg.
If a second Executive Manager or higher exists deeper down the leg, they cap off the second generation. The third generation for the leg then starts with them.
Using this generation structure, Executive Managers and higher can earn a percentage of sales volume generates on up to four generations per unilevel team leg.
- Executive Managers earn 1% on the first and second generations in a leg
- Associate Directors earn 1% on the first generation and 2% on the second
- Directors earn 1% on the first generation, 2.5% on the second and 2% on the third
- Senior Directors earn 1% on the first generation, 2.5% on the second and 2% on the third
- Executive Directors earn 1% on the first generation, 3% on the second and third and 2.5% on the fourth
- Managing Directors earn 1% on the first generation and 3% on the second to fourth
The Infinity Bonus allows Executive and Managing Directors to earn on volume beyond the first four generations of a unilevel team leg.
The Infinity Bonus pays 0.5% to Executive Directors and 1% to Managing Directors.
These percentages are paid on sales volume generated beyond the fourth generation of a unilevel team leg to infinity (the full depth of the leg).
Fast Start Tasting Rewards
Fast Start Tasting Rewards pays affiliates based on them hitting $600 PV during a “single tasting”.
A “tasting” is what Scout & Cellar refer to as a home party.
If an affiliate generates $600 in sales at a single tasting event, they receive a 4-bottle tasting set”.
New Scout & Cellar affiliates can qualify for Fast Start Tasting Rewards monthly over their first four months.
During this period, if an affiliate recruits a new affiliate who then qualifies for Fast Start Tasting Rewards over their first four months, a $50 commission is earned.
This commission is paid per recruited affiliate, each time they qualify for the Fast Start Tasting Reward.
Associate Directors qualify for Sample Credits by generating $3500 or more in PV for the month.
Qualified Associate Directors and higher receive 5% of their PV for the month in Sample Credits.
Sample Credits can be redeemed for Scout & Cellar product.
Rank Achievement Bonus
Qualify as an Executive Manager and receive $500. $500 is also paid to the first Executive Manager upline affiliate.
Qualify as a Managing Director and receive an “invitation to a benchmark tasting hosted by the CEO”.
Joining Scout & Cellar
Scout & Cellar affiliate membership is $129.95 annually.
Scout & Cellar Conclusion
Typically with wine themed MLM companies we see a subscription model used to hook retail customers.
While it’s not front and center in Scout & Cellar, it exists under “Scout Circle”.
This and the company’s Fast Start Tasting Rewards and Sample Credits offer decent retail incentives.
25% of retail order volume is fair, although I don’t know why it’s reduced to 70% before the retail percentage is applied.
All of that said, Scout & Cellar has no retail volume qualifiers. This perhaps isn’t so important as it might be in a non-wine MLM company – but it does leave the door open for pyramid recruitment.
That would be you signing up, ordering your PV requirement each month and earning commissions on others you’ve recruited who do the same.
This does become expensive as PV requirements rise but the idea is you’re earning enough to cover the expense at that stage.
The prominent danger with wine MLM companies is spending too much on samples and not generating enough sales.
Scout & Cellar adopt the party model, meaning affiliates are encouraged to host “tasting” events to generate sales.
Baked into that marketing approach is the expectation an affiliate will have inventory to sample.
A bottle of wine won’t go far at a modest part of even five people. Especially if you’re targeting anyone with a fondness of wine.
Raw consumption at tasting parties isn’t your only concern. The expense of providing enough variety can also add up.
And any time Scout & Cellar updates their seasonal offerings, you’re also looking at an additional expense to keep up.
To their credit Scout & Cellar offer a 2020 Income Disclosure Statement in their most recent compensation documentation.
Here are the take-aways:
In 2020, 26.8% of all consultants received no income at all.
The expenses a consultant incurs in the operation of his or her Scout & Cellar business vary widely. Expenses for consultants can be several hundred or several thousand dollars annually.
Typical operating expenses for each consultant is $378.95 which includes the Scout and Cellar join fee and the annual renewal fee after the first year as a consultant.
~80% of active Scout & Cellar affiliates are at the Consultant, Senior Consultant or Executive Consultant ranks.
From the averages above we can see that, on average and once the $129.95 annual membership fee is factored in, not much is being spent on samples.
Those annual income figures are also quite low. More importantly they don’t factor in expenses.
E.g. If you’re a Scout & Cellar Consultant, your annual membership fee alone on average guarantees you an annual loss.
At the Senior Consultant rank, again on average, factoring the annual fee reduces the average annual income to $94.57 (I’m using the “all consultants” column as active consultants isn’t the whole picture).
Things get better at the higher ranks but the question is are you going to get there.
If you’re keen on Scout & Cellar as an MLM business the first step might be to order some wines as a customer and see what you think.
Then set your self some specific monthly goals – three to four months is a good period of time.
Go easy on yourself over the first two months but if sales haven’t picked up from the third month or so, it might be time to reconsider.
Being a relatively shallow compensation plan, you should be getting support from your upline. See how they’re running their business. Maybe shadow a tasting party or two to get a feel for things.
If your upline isn’t having much luck with sales, this might be a warning sign. They could be just be buying rank and earning off residual commissions and the deeper Generation Bonus.
Without retail sales would constitute a pyramid scheme.
Whatever you do, assess at the five month mark and again, don’t fall into the monthly expenses trap.
Monthly expenses do add up and if you yourself aren’t making retail sales, you’re only digging yourself into a deeper financial hole.