Designs By Kate's Case: DBK Business Model

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General background Designs by Kate is a company that sells women’s jewelry using the direct sales method. DBK has seen sales success and growth despite unfavorable economic conditions and slow growth in the retail industry. With all of this being said Kate Creevey founder and CEO of DBK is concerned with her company’s top-line growth trajectory which has slowed down as of late. This issue has been attributed to a couple factors. The first factor is a “slowdown in the rate at which new sales representatives were transitioning to “leader” status and beginning to build their own teams.” This is a major issue because team building is central to DBK’s business model and success. The sales growth at DBK has been driven by the growth in the number…show more content…
The research was based on their thoughts on becoming a team leader and moving up the corporate sales ladder. Firstly, a lot of the sales representatives believed that financial rewards being offered for “leading” were not worth the effort it took to earn them. Secondly, many of these representatives believed that recruiting friends and colleagues to become sales reps would be counterproductive to their sales figures. They believed that recruiting and team building would lead to a reduction in their own sales due to the overlap between their social networks. Main Problem #1: The DBK Business Model I think the DBK Business Model is great. However, a lot of sales representatives do not feel the same way. The DBK Business Model has plenty of opportunities to advance and a very progressive commission system. DBK representatives earn a base commission of 25% on all sales. If a representative were to sell more than $1,000 in a given month, that rate would increase to 32% across all sales. Management at DBK has even designed a complex system where many of the representatives can earn “leadership dollars.” For example, if a representative were to recruit three of her friends she would now become the leader of a Level 1 team. She would earn commission on her own sales and 5% to 12 % commission on her team members. This system of leadership dollars stops at Level
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