It’s amazing how many different kinds of investment opportunities there are. With a truly global economy offering millions of products it can be difficult sorting the wheat from the chaff. That’s why I have started looking at more tangible assets.
Bricks and mortar has always been the most robust closely followed by precious metals. Which was why I was interested to hear about 7k Metals, an Idaho based MLM company that offers precious metals.
If you have read any of my reviews you will know I’m not a big fan of MLM’s but maybe 7K Metals is different. So, I’m going to delve in and explore 7K to see what I can find.
I’ll check out 7K Metals background, their products and their compensation plan. So is 7K Metals a scam or a gold standard MLM? Read on to find out.
What Is 7K Metals?
So, let’s start at the beginning and take a look at the company. There doesn’t seem to be a great deal of information about the company history on their site. However, it was established in late 2016 and as we have said is based in Idaho.
The founders are Zach Davis, Josh Anderson, Richard Hansen and the CEO is Sam Cook. Their mission statement has to be one of the shortest I have ever seen. It states;
“7k Metals is on a mission to positively impact the financial and emotional well being of all our members”
They say they offer an easy and affordable way for anyone to invest in precious metals at wholesale prices. Well despite the super short mission statement that all seems pretty good. There is an established board that we can put names to.
The company are almost 3 years old and more importantly there is a tangible product that we can buy at wholesale prices. Now I’m guessing we need to become a member to benefit from these prices so let’s see how much it is to join.
What’s It Cost To Join?
There appear to be two membership options although in their policies and procedures it seems to be called an enrolment fee. The first is the basic 7K affiliate membership which costs $249.
This membership allows you to purchase products at wholesale prices through the 7K Metals website. You can also refer other prospective members to 7K Metals.
The second is the Premium Membership which offers the same benefits as the basic 7K membership plus the inclusion of some speciality coins.
What Can I Buy With 7K Metals?
The good news is if you are looking to invest in precious metals there seem to be quite a diverse range of products on offer at 7K. There is gold and silver bullion, lots of different coins and even a range of jewellery. The prices are also varied which is good depending on the amount you want to invest.
There are silver coins starting from as low as $20 up to a 1kg gold bar for more than $48k. Now in respect to prices and value I will hold my hands up and say I know very little about this market. Like anyone I can run a Google search but I have no idea about quality to ensure I am comparing like for like.
Similarly, prices fluctuate on a daily in fact hourly basis so unless we have two identical products priced at the same time it can be difficult to tell. However, I did decide to pick a random product just to see what I could find. I chose the limted edition Alibaba 1oz Silver coin.
This is from a limited run of only 3000 coins and is available on the 7K Metals website for $129. The first site I came upon that had the identical coin was called powercoin. They had it priced at only 69 euros which is approx $77 so a great deal cheaper than with 7K.
So, is it only members that can buy or is there a retail option? Well on the site there is the option to click on products and add them to your shopping cart. However, once you try and checkout you are taken to a sign-up page and asked to put in your referrers details.
So, it would seem the answer is no. So let’s take a look at the compensation plan and the MLM structure and see how it works.
What Is The 7K Metals Compensation Plan?
Once you have signed up and paid your annual membership you are able to join the compensation plan and earn money by recruiting others to do the same. 7K Metals use a pretty standard MLM model that is a binary compensation structure.
A binary compensation structure works by allowing an affiliate to only ever have two referrals directly under them. These are often known as a left and a right team or “leg”.
As you can see it’s a pretty simple structure and there is no limit to how deep it can go. It’s important to note that although each side is part of your downline they work independently when calculating commissions. And what are those commissions?
Well they are worked out on a points basis. Recruitment of a regular $249 a member earns 100 points and recruitment of a premium $499 member earns 150 points. The purchase of coins by recruits also earns 20 points.
Points are then added up on a weekly basis for each leg of the team. The depth of the team and your place within it will determine what you can earn. To qualify for commission your left and right teams must have accumulated 500 points.
For each 500 points matched on both sides of the binary team a $500 commission is paid out up to the capped level. 7K Metals cap weekly binary commission amounts based on the following criteria:
7K ASSOCIATE must have at least two MLM commission qualified affiliates, one on each side of the binary team – Has a $500 weekly commission cap.
7K COPPER must have at least four MLM commission qualified affiliates two must be 7K Associates, split two on each side of the binary team – Has a $1000 weekly commission cap.
7K BRONZE must have at least six MLM commission qualified affiliates two must be 7K Copper, split three on each side of the binary team – Has a $2000 weekly commission cap.
7K SILVER must have at least ten MLM commission qualified affiliates two must be 7K Bronze, split five on each side of the binary team – Has a $3500 weekly commission cap.
7K GOLD must have at least sixteen MLM commission qualified affiliates two must be 7K Silver, split eight on each side of the binary team – Has a $7000 weekly commission cap.
So its seem that the emphasis of the 7K Metals compensation plan is on recruiting members in to the scheme rather than any retail sales.
I am all for a membership scheme that offers discounts on retail products but looking at this compensation plan it would appear that the only way to actually “earn” with 7K Metals is via recruitment.
What I Like And Dislike About 7K Metals
Well I have to say my first impression of 7k Metals was pretty good. I liked the fact that they had a diverse range of tangible products. I particularly like that these products are precious metals and not like the many “fad” products we see with lots of the health and wellness MLM’s.
I like the idea that you could buy a membership and benefit from “wholesale” prices. However I have to say I have no idea if the prices are actually good or not. Certainly the one product I checked was overpriced with 7K Metals. And that in itself could be an issue.
Because investing in precious metals carries its own risk and you really need to know what you are buying. The markets can be volatile and carry a degree of risk that you need to be aware of.
Then there is the MLM structure and the fact that products are only available to members to buy. That means there are no retail sales and thus no retail sale commissions. This creates a closed loop of funding which in my opinion is never ideal for long term sustainability.
It also means the only way of members actually earning cash is to recruit other members and that would appear to be where the focus is.Then there are the statistics about MLM’s overall.
A report published by Dr Jon Taylor and available on the FTC site is considered the most thorough analysis of MLM profitability ever undertaken. It’s based on 15 years’ research of the compensation plans and earning data of more than 350 of the leading MLMs.
It showed that less than 1% of participants in MLM schemes ever made a profit. According to Dr Taylor;
“the results show that MLM as a business model–with its endless chain of recruitment of participants as primary customers–is flawed, unfair, and deceptive” it even said that “MLM makes even gambling look like a safe bet in comparison”
Well I think I’ve seen enough to get a pretty good idea how 7K Metals works. So let’s sum up what I’ve found.
Is 7K Metals A Scam? Let’s Sum It Up
So the first thing to say is that I have not paid for a membership of 7K Metals so my summary is my opinion based on what I have seen. I personally don’t think that 7K Metals is a scam.
It is an MLM opportunity that has tangible products although these are only available to other members which does concern me. I would have preferred to have seen just the membership offering and no MLM.
Just a single commission paid for referring another member who could benefit from the wholesale prices (if that’s what they are!). This would put the focus on the quality of goods and price. Either way 7K Metals is not something I would invest in.
I don’t like the MLM structure and I don’t know enough about the value of the goods. However if you feel comfortable or have experience with MLM’s and a knowledge of precious metals then you may want to give 7K Metals a try.
Or you may want to consider a different option. I make a full time living from affiliate marketing. It’s where you earn a commission by writing about a product and adding your own unique link to the supplier. No need to buy stock, recruit people or even try and sell.
People read your article because they are interested and buy if they want the product. It really is that simple. If you want to know more then read my overview of the platform I use and how simple it is.
Well I hope my review of 7K Metals was useful. Have you had experience of 7K Metals? If so do let me know in the comments below.