Is Direct Cellars a Scam? Another Wine Pyramid Scheme?

Looking to make a little money with Direct Cellars and wondering if it's a scam or not?

If so, this review is for you!

Below you will find everything you need to know about this opportunity including background information, price to join, compensation plan, product line and more.

By the time you're done reading you'll know if Direct Cellars is right for you.

Ready?

Update 10-16-2019: It appears the MLM opportunity has ended with this company. It's very common for recruitment schemes like Direct Cellars to collapse like this!

Direct Cellars Summary

Company: Direct Cellars

Price to join: $249 to $499 + $79 per month fee

Rating: 30/100

Do I recommend? No!

Summary: Direct Cellars is a MLM company that allows you to sign up and sell their wine - you also get compensated for recruiting people into the system.

I personally don't recommend you join Direct Cellars for a lot of reasons and the main reason is the success rate here is so low (most people who join a MLM lose money and don't make any).

Better opportunity: If you're looking for a legitimate way to make money online click the button below. There you will see the training that taught me how to make money online (over 6 figures).

What Is Direct Cellars?

1) What is Direct Cellars? Direct Cellars is a MLM company in the wine market which launched in 2014. This means you can sign up for a fee to sell Direct Cellar's products for a commission. Also, you get compensated for recruiting people and building a downline.

It's not clear where this company is located. They have addresses in Chicago, Florida and Seattle but these addresses are virtual ones. 

2) Who is the CEO? The CEO of Direct Cellars is David DiStefano and it seems he's been invovled in promoting previous MLM's in the past (Talk Fusion, Bidify, Solavei).

This appears to be the first MLM company DiStefano has headed as an executive.

3) How do you make money with Direct Cellars? Like I said before this company is a MLM which rewards retail sales and recruiting. This is a very flawed system which I'll explain later on in this post. 

4) What products does this company offer? Direct Cellars sells various wines and they sell monthly memberships for wine as well. If you sign up for the membership you pay a monthly fee and get a discount on wine every month. 

5) Are there similar companies? I recently did a review on Scout and Cellar which is very similar. 

Is Direct Cellars A Pyramid Scheme?

Some people claim all MLM's are pyramid schemes which isn't necessarily true. 

While some are (a major MLM, Advocare, was hit with a 150 Million dollar fine by the FTC for being a pyramid scheme) others just have similarities and elements of a pyramid scheme and aren't illegal. 

Look at the picture below to understand what I mean:

Up top is what part of the commission structure at Direct Cellars looks like and it's the part that rewards recruitment.

An illegal pyramid scheme would only reward recruiting and there wouldn't really be a product to sell or the product would pretty much just be a scam. 

At Direct Cellars there's obviously a product and you can technically make money by not recruiting (you can just sell directly to retail customers).

If someone is trying to recruit you and basically all their income comes from recruitment and not direct sales, it's most likely you're in pyramid scheme. 

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Success Is Rare With MLM's

Here's the thing about MLM's - basically everyone that joins one loses money instead of making money. This is true for all MLM's. 

Many studies actually show 99% of people that join a MLM lose money. That's so terrible. 

The reason for this is simple too and it's because the MLM model is flawed.

Most MLM's sell products that are more of a luxury and many times the products are very overpriced.

How many people want wine delivered to them in the mail? There's liquor stores everywhere and most people can just go to the store to buy wine. 

But what really makes MLM's so horrible and so hard to succeed with is the recruiting. That is by far the worst part of MLM's.

It's extremely hard to convince someone to join you for many reasons:

  • Most people won't have the time or want to put in the effort
  • MLM's have a bad reputation and instinctively most people just think of them as pyramid schemes. 
  • The training is usually nonexistent and it's up to you to learn how to sell.

This usually leads to people selling and recruiting family members and friends which is very awkward. In a lot of instances people have ruined close relationships because of this. 

Below is a graph that goes over other eye opening MLM stats as well:

As you can see MLM's aren't worth your time. 

Direct Cellars Is Pricey To Join

Direct Cellars is definitely one of the more expensive MLM's I've reviewed and there's two options when you sign up:

  • Premium Wine Lover ($249.95)
  • Premium Wine Lover Elite ($499.95) 

The first option comes with 4 bottles of wine and the second one comes with 12 bottles of wine.

If that was the only cost to signing up to Direct Cellars I wouldn't think it was too bad.

However, there's another fee to consider and that's the monthly fee you must pay to stay eligible. This fee is $79.95 per month for 4 bottles of wine.

I really don't like it when MLM's force affilaites to buy their products every month and if too much of a company's revenue comes from affiliates, it's another sign you're in an illegal pyramid scheme. 

This monthly fee can really add up and can cost close to $1000 in a year. When you factor in that most people lose money instead of make money with a MLM you might finder yourself out $1500 pretty quickly. 

Direct Cellars Compensation Plan

MLM compensation plans are always confusing and unless you're familiar with the jargon it'll be very hard to understand. 

If you want to read the entire compensation plan for yourself, click here

You can also watch a video presentation of the plan below:

I don't think it's too important to know every detail of this plan and instead will go over the most important parts. 

Affiliate Ranks

At Direct Cellars there's nine different affiliate ranks. You go from one rank to another by hitting certain goals and you get certain rewards for moving up from one rank to another.

For instance, the first rank is Wine Lover and this is the rank you get when you sign up and recruit at least one affiliate into the system. 

If you wanted to reach the third rank of Wine critic you'd have to recruit and maintain three affiliates.

This goes on and on until you reach the last rank known as Master Cellar. To reach this rank you have to recruit and maintain nine affiliates.

Most people don't get past the first two ranks and barely anyone will reach the 9th rank. 

Retail Commissions

This is the part of the plan that rewards sales directly to customers and affiliates are paid $20 per retail customer they sign up. 

Recruitment Commissions

You get a commission everytime you recruit someone into your downline and how much you make depends on how much your recruited affiliate pays when joining. 

If someone signs up for the $249 membership you get $125 and when someone signs up for $499 membership you get $250. 

Residual Commissions

Residual commissions is where you'd make the most of your money and this rewards the overall sales and recruiting efforts of your downline. 

This is paid out in a binary structure and looks like the following:

How much you make depends on overall sales of your downline and your affiliate rank.

For instance, a level one affiliate makes 6% their teams sales and a level nine affiliate makes 20% on their donwline's efforts. 

There's other bonuses and other ways of making money as well and the summary up top represents the main ways. If you want to know every single detail watch the video up top or read the entire plan for yourself (also up top).

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Direct Cellars Products

Direct Cellar only sells wine and I'm pretty sure they update their wines through out the year. 

As of now there's only 11 wines on their site (5 reds and 6 whites).

My understanding is what you're selling is a membership to Direct Cellars, however, where you get different wines sent to you.

So what's on their website isn't necessarily what you get. Instead they have wine tasters that sample different wines for you, determine quality and then send some to you.

You can pick the wine you want from the store but I don't think you have a choose in what's sent to you if you buy into the monthly membership.

Because of this I think your customer base is going to be pretty limited.

What I Like About Direct Cellars

There's really not much I like here. The only way I can see this working is if you know a lot of people that really love wine and are open to this type of offer.

What I Don't Like About Direct Cellars

There's much more here that I don't like than like and the main things that I dislike are:

  • Expensive to join: To become an affiliate you have to pay between $299 to $499. That's a lot but it gets worse when you factor in the monthly membership fee as well. This will cost you $79 per month and this will quickly get you past $1000. 
  • Small customer base: Wine lovers may be interested in this offer but it's certainly not a necessity. It may be hard to find people willing to pay monthly to have random bottles of wine sent to them. 
  • Low success rate: All the other stuff could be forgiven if the success rate was high or at least acceptable. However, up to 99% of people that join a MLM end up losing money and not making money.  

Is Direct Cellars A Scam?

This one is hard to call.

I usually don't like throwing around the "scam" word unless it's extremely warranted and a company is an obvious scam.

I don't like that they force affiliates to buy products and this can actually be a sign you're in an illegal pyramid scheme. 

Whether or not it's a scam or an illegal pyramid scheme is kind of irrelevant, however.

Even if it's not I still don't recommend that you join. The success rate is so low and the price to join really adds up. 

Finding customers will be difficult as well which will just lead to you losing money (unless you have a lot of wino friends).

Definitely look elsewhere to make money. 

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Hopefully by now you've decided Direct CEllars isn't right for you.

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