Despite co-founding the successful WeddingChannel.
com, Jessica Herrin found herself re-evaluating her personal and entrepreneurial priorities. In 2004, she decided to align the two with the founding of Stella & Dot (www.stelladot.com), for which she also serves as CEO. San Francisco-based Stella & Dot is a direct-sales jewellery business, which allows women all over the country to sell bracelets, necklaces, rings and other accessories to friends and acquaintances, similarly to how Tupperware or beauty supplies were peddled in the past.
At the heart of the business model is ‘social selling’.
Stella and Dot representatives, or ‘stylists’ (of which there are more than 40,000), organize ‘trunk parties’ at the homes of friends, contacts or family members where the jewellery is showcased. In return, the stylist gets paid a percentage of the sales in cash, typically 35 per cent. And the person who hosted the party gets a percentage of the sales in jewellery. Stella & Dot’s stylists get started by paying US$199 for catalogues, order forms and other training materials, and receive US$350 worth of jewellery to show off at ‘trunk shows’.
In 2018, Stella & Dot had a turnover of approximately US$300 million, with around US$30 million in profit.
Right now Stella & Dot is working in six countries.

Questions

1. Describe the business and distribution model that Stella & Dot build on.

2. What are the opportunities and challenges in globalizing the Stella & Dot’s business model?

3. When Stella & Dot globalize their business, how should they incorporate all the ‘stylists” operations into a consolidated international marketing budget?

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