WineShop At Home promises a career that may include a rewarding lifestyle and the freedom to work at home, part-time or full-time. But, is WineShop At Home a good opportunity or just another MLM exploiting its salesforce?
Is WineShop At Home a Good Opportunity? Contrary to the Direct Selling Association’s Code of Ethics, WineShop At Home does not reveal how much its Independent Wine Consultants earn.
Industry averages suggest that less than 1% of WineShop At Home Independent Wine Consultants earn a profit.
In this article, I reveal the 6 secrets you need to know before becoming a WineShop At Home Independent Wine Consultant.
To understand the daunting financial challenge you will face as an Independent Wine Consultant, be sure to read this entire article and watch the video, Why You Can’t Win with MLM.
A few minutes spent here could save you time, money and heartache.
Is WineShop At Home a Good Opportunity?
If you’re into wines or want to be, and considering WineShop At Home as a business opportunity, your first impression might be that it would be both fun and profitable.
However, there’s a lot more to the story.
WineShop At Home uses a predatory business model that exploits its salesforce. It’s doubtful you will earn more with the opportunity than you spend on wines.
WineShop At Home is a direct selling company that uses a multi-level compensation plan which it calls a “Career Plan.”
Critics of the industry refer to such companies as multi-level marketing companies or MLMs.
The MLM business model is great for the owners of the company and a few professional marketers at the top of the salesforce.
Unfortunately, most rank and file salespeople fail to earn a profit in MLM.
Typically, they will lose money and quit their first year. Many are left with credit card debt.
MLMs conceal the truth about how difficult it is to succeed, and WineShop At Home is no exception.
WineShop At Home appears to carefully avoid any promise of a business opportunity. Instead, it describes its offer as a career opportunity.
WineShop At Home’s double-speak is but one of many red flags.
In the WineShop At Home Training Manual, it states that as an Independent Wine Consultant, “you are NOT a business owner.”
Whatever WineShop At Home is offering, it’s not a business.
Without a record of how much WineShop At Home Independent Wine Consultants earn and how much they spend on expenses, the potential for income cannot be determined.
Because WineShop At Home intentionally withholds this information, we conclude the potential for income as an IWC is consistent with the industry average. Dismal.
Extensive research shows that throughout the MLM industry, less than 1% of the salespeople earn a profit. A part-time, minimum wage job pays more.
The dismal profit potential for an MLM salesperson is the result of how the business model is structured.
To paraphrase, Tracey L. Coenen, a corporate fraud investigator, ‘MLM is a game that is rigged against you.’
Because the company is not transparent about the total cost of being an Independent Wine Consultant and the income potential, WineShop at Home does NOT appear to be a genuine opportunity.
6 Secrets About WineShop At Home.
- WineShop At Home is an MLM.
- Independent Wine Consultants (IWC) do NOT own a business.
- The probability of earning a profit is less than 1%.
- IWC must generate $300 worth of business every 90 days.
- According to industry averages, most IWC will probably lose money and quit within a year.
- The Party-Plan marketing strategy quickly saturates a market.
Why You Can’t Win with MLM (Video).
If you don’t see the video, Click to Watch Why You Can’t Win with MLM.
You Are the Customer.
Everything about the WineShop At Home Compensation Plan, aka Career Plan, makes money for the company at the expense of nearly everyone in the salesforce.
To begin, an Independent Wine Consultant (IWC) must purchase a starter kit.
The price for a kit ranges from the Wine Gig Kit $59.95, Wine Cellar Entry Kit $39.95, Mini Kit $79.95, Starter Kit $149, and Premium Kit $299.
After the first month, an IWC is also charged $19.95/month for a clone website and business software tools. There are additional costs as well, including buying business cards through WineShop At Home.
A key point to understand is an IWC pays WineShop At Home for the privilege of making the company money.
If that realization doesn’t make you pause, you don’t understand how crazy it is.
No other industry does this.
Most companies do not expect their salesforce to pay the company for the privilege of selling their products.
Like every other MLM, WineShop at Home draws in people with what appears to be an opportunity, only to turn them into customers, first and foremost.
An Independent Wine Consultant must also sign a contract with WineShop At Home.
This contract restricts the IWC’s behavior and prohibits her from working or participating in other wine-related ventures or selling products for other companies.
Another way WineShop At Home turns its IWC’s into customers is through incentives and sales quotas as outlined in the Career Plan.
According to the WineShop At Home Training Manual, purchases for personal use count towards Personal Base Volume (PV-V).
An IWC’s Personal Base Volume is the volume of wine they sold to others or purchased for personal use. It determines if an IWC is active or inactive and how much commissions she earns.
An IWC must generate a minimum of $300 in sales in a rolling 90-day period to be considered active. That’s $100 a month.
If an IWC fails to meet this requirement, they are deemed inactive and may lose their customer base and the people they recruited.
Because an IWC can meet the $300 requirement with purchases for personal use, the incentive is to buy their way to active status.
And, that’s the point.
If an IWC enrolls in the Wine Club auto-ship option for $100 worth of wine each month, they will always meet the minimum requirements.
Funny how it works out like that.
It can get a lot more expensive too.
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To earn bonuses, an IWC must generate $300 of Personal Base Volume per MONTH! They can buy their way to qualifying for bonuses too.
They can also buy their way to earning more in commissions.
At entry-level, an IWC will earn a 20% commission on the wine they sell.
However, if they generate $1500 in Personal Base Volume in a single month, they will then be qualified to earn a 25% commission on all sales.
If they generate $2500 in Personal Base Volume in a single month, they are qualified to earn 30% on all sales.
And, if they generate $3500 in Personal Base Volume in a single month, they are qualified to earn 35% on all sales.
In other words, there is a clear incentive for an IWC to buy $3500 worth of wine the first month they are in the business.
That’s how Independent Wine Consultants lose money. It is also how WineShop At Home earns millions.
WineShop At Home is a privately owned company.
In 2018, it earned $37.8 Million in revenue, while most of its Independent Wine Consultants lost money.
Federal Trade Commission Warning.
You can find a lot of information about MLMs on the Federal Trade Commission website. The line between a legitimate MLM and something else is often difficult to discern.
The FTC warns us there are two things we must know before joining a company like WineShop At Home.
- 1How much do WineShop At Home IWCs actually earn?
- 2Does WineShop At Home promote recruiting as a way to make money?
How Much Do WineShop At Home Consultants Earn?
As mentioned earlier, WineShop At Home does not reveal how much their IWCs actually earn.
To be sure, the company knows how much it paid its IWCs. WineShop At Home must track this information for tax purposes.
The WineShop At Home Training Manual states that the company will issue a Federal Tax Form 1099 for every IWC who earns more than $600 for the year.
So, how many earned more than $600 for the year? We don’t know.
WineShop At Home won’t tell us.
No serious investor would consider a business where they could not determine the income potential.
The value of a business asset is directly proportional to its potential to generate revenue.
For example, an article on Forbes.com states that a website is worth 24X to 36X the monthly revenue.
In other words, a site that generates $1000 a month would be worth $24,000 to $36,000.
Getting back to WineShop At Home, we don’t have a clue about how much money Independent Wine Consultants are actually earning.
Without this information, there is no way to determine what the “opportunity” is worth.
If most IWCs were making a profit, WineShop At Home would probably publish this information on its website because it would help recruitment.
However, because it does not publish this information, we are left to conclude that most IWCs do NOT make a profit.
Refusing to publish the information needed to evaluate the opportunity conflicts with the Direct Selling Association Code of Ethics.
The DSA Code of Ethics states in Section A, Paragraph 8 Earnings Representations, Subparagraph 5.b.3, a prospect must be given sufficient information to reasonably evaluate the opportunity.
Although WineShop At Home refuses to publish the actual amount its IWCs earn, it tries to entice IWCs into spending thousands of dollars on its “implied” opportunity.
If we used the MLM industry averages as a guide, an IWC should expect to lose money and quit the first year.
Does WineShop At Home Promote Recruiting as a Way to Make Money?
The WineShop At Home Career Plan has 9 levels.
The first level, the entry-level known as New Independent Wine Consultant (IWC), does not require recruiting.
It’s a purely commission-based position.
However, all 8 levels above the IWC do require recruiting to make money.
The FTC Warning Revisited.
Remember, the FTC warns us to first determine how much most Consultants earn with the WineShop At Home Career Opportunity BEFORE signing a contract and spending money.
This just makes sense, but if you get caught up in the excitement of wine parties, you might leave reason behind.
The FTC also warned us to determine if recruiting was necessary to make money with WineShop At Home.
WineShop At Home’s Unstated Objective.
WineShop At Home was NOT created to help you make money. It was created to help the owners of the company make money.
Incidentally, it isn’t clear who owns WineShop At Home. This is yet another red flag.
Although WineShop At Home offers a “career opportunity,” that is just part of its marketing strategy.
If it was a genuine opportunity, we could expect to see accountant worthy income figures to back it up.
As a company, WineShop At Home is pursuing the same fundamental objective as every other company with competent management. It’s striving to maximize profits.
There is nothing wrong with a company maximizing profits. That’s capitalism at its best.
However, if you’re on the wrong side of the profit equation, you can get hurt.
To maximize profits, WineShop At Home is in the business of turning people into sources of revenue.
As an IWC, you can generate revenue for the company by selling tons of wines. OR, you can generate revenue by BUYING tons of wines.
Either way, WineShop At Home profits.
To make matters worse for the IWCs, WineShop At Home burdens them with the costs of doing business.
In other words, WineShop At Home pushes the expenses of the company onto the IWCs by forcing them to pay for the privilege of making money for the company.
At the same time, WineShop At Home takes most of the profit.
A WineShop At Home Overview.
WineShop At Home claims to be the first direct sales company to promote wine and wine country living. It may be the first one, but it’s not the only one.
There is plenty of competition.
WineShop At Home also claims to provide rewarding opportunities in the wine industry.
Independent Wine Consultants present home wine tasting, which includes offering custom wines and wine accessories. It’s not clear why a person would permit a wine tasting in their home.
To comply with the alcohol laws of each state, IWCs do not directly sell wine.
Instead, IWCs take orders at the wine tastings. The orders are sent to the company. WineShop At Home then handles all billing, delivery, and compensation issues.
According to an article published on BBC WorkLife, a typical WineShop At Home wine tasting will generate about $500 in sales and about $75 in commissions.
However, this same article reports that the time spent booking and traveling to the client’s house, plus conducting a 3-hour wine tasting, may earn only a few dollars in profit.
The CEO of WineShop At Home, Jane Creed, is quoted in the article as saying there is a high turnover in the business with people always coming and going.
High turnover may indicate how difficult it is to earn a profit with the WineShop At Home career opportunity.
The WineShop At Home Compensation Plan.
Earlier, I mentioned how WineShop At Home does not reveal how much its salespeople earn.
This is crucial information and necessary before we can adequately evaluate the “opportunity.”
Typically, in an MLM recruiting session, a prospect is shown the Compensation Plan as proof of the money that can be made.
However, the Compensation Plan is not a legal document. It’s nothing more than marketing.
It’s what MIGHT happen if a Consultant spends enough money and jumps through enough hoops.
WineShop At Home calls its Compensation Plan the Career Plan.
Respecting WineShop At Home’s copyrights of the Plan, I will not reproduce it here.
You can open a new tab and see the Career Plan in the Training Manual by clicking Career Plan and scrolling down to page 73.
Key to understanding the WineShop At Home Career Plan is realizing it has 9 levels and what that means.
The more levels a compensation plan has, the more it exploits the salesforce.
A traditional direct selling company, like the original Fuller Brush Company, only needs 3 or 4 levels. These levels include;
- Regional Director
- National Director
With only 4 levels, a salesperson earns most of the commission and can make a full-time income through retail sales.
Anything beyond 4 levels is an artificial construct that takes from the salesperson and gives to the company.
It scatters the commission of a sale through every level, although most people in the upline had nothing to do with making the sale.
The top-level makes money on every sale beneath it. Because 9 levels, like in the WineShop At Home Career Plan, form a very broad base, the top level earns an override on thousands of sales.
Imagine the population of a medium-sized city.
9 levels create an all or nothing game where the top levels are the only levels earning a profit. Everyone else loses.
And, because of qualifying requirements and manipulative bonus incentives, most of the money the top-level earns comes from the pockets of the salespeople below them.
9 levels force a salesperson to recruit and try to build an organization, although very few survive long enough to make it to the top.
This is why Tracy L. Coenen, corporate fraud investigator says the game is rigged against you.
The Last Word on WineShop At Home.
Throughout this article, I've focused on answering the question "Is WineShop At Home a good opportunity?"
As you have seen, there is an abundance of evidence, substantiated by 3rd party sources, that WineShop At Home is NOT a good opportunity.
I found no credible evidence the WineShop At Home opportunity was genuine.
If WineShop at Home truly wanted to help its salespeople make money, it would condense the sales structure down to 4 levels or less, and it would increase the base commission to 35%.
But, WineShop At Home is not about helping its salesforce make money. It’s about maximizing profits.
If you want to make money, you have far better options than paying a bunch of cash upfront for a so-called “opportunity.”
And spending hours each week booking and presenting wine tastings in people’s homes.
However, if you’re more into wines than into making money, WineShop At Home might be worth it. Keep a record of the time and money you are spending on your wine business.
If you track how much the business is costing you, you’ll quickly discover if you’re losing money or making a profit.
Also, don’t go crazy and sink a lot of money into the opportunity. Get in for the least you can spend, because the odds are, you’ll quit in a few months.
If you must charge the cost of the opportunity to a credit card, you should probably pass on it. It’s not worth going into debt.
There are many pitfalls with the WineShop At Home career opportunity that can cost you considerable money and time.
As mentioned earlier, the fundamental problem with the opportunity is that WineShop At Home is built on an antiquated and inefficient business model left over from the last century.
The MLM business model NEVER has worked for the rank and file salesperson.
To make matters worse, there are at least two other Wine MLMs competing for the retail wine market, not to mention every chain grocery store.
Also, there are hundreds of MLMs pitching opportunities and competing for recruits.
A market will quickly become saturated, even if you are the only wine MLM in town. Plus, everyone you recruit into the business is your competition.
The more you recruit, the sooner your market becomes saturated.
Like every other MLM, WineShop At Home expects you to sell to your warm market, the acquaintances, family, and friends who trust you.
Exploiting your most important relationships is a lousy way to build a business.
Once you run through your warm market, the real work begins.
As an Independent Wine Consultant, you must always book new wine tastings.
The moment you can no longer book wine tastings, you’re out of business. It’s only a matter of time before WineShop At Home declares you inactive, and you lose all you’ve worked for.
Although an Independent Wine Consultant is legally an independent contractor, they are bound to play by the rules dictated by WineShop At Home.
Where is the freedom in that?
A Better Option.
In a nutshell, WineShop At Home expects you to pay a bunch of money upfront for its “opportunity.” Then spend hours each week booking and presenting wine tastings in people’s homes.
That’s about as efficient as a door-to-door salesman in 1940.
It can work, but good grief it takes a lot of time and labor, not to mention gas money, wear and tear on your car, and all the money tied up in getting started and qualifying each month.
We are nearly two decades into the 21st Century. We have the internet.
Why would you want to be a glorified door-to-door salesperson when you have access to 21st Century technology?
Put your laptop to work.
Why Affiliate Marketing is Better than MLM
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When you have a money-making website, you’ll never have to leave home and schlep wine tasting stuff to someone’s house.
Or, bug your friends and family.
Or, jump through MLM hoops.
With your own money-making website, you’re the boss.
You own your website. No one can take it from you.
If you want, you can sell it 24 times to 36 times monthly earning.
Build as many money-making websites as you want or add additional income streams.
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Work less. Earn more!
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Trust the process. Focus on learning the skills.
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