7K Metals claims to offer people the best prices on gold and silver related products.
I did some research on the gold bars and found that this isn’t exactly the case. On one hand there are discounts to be had and you can make money, but there are some things you should know before joining.
7K Metals Review
The website for this company was registered on the 22nd of September 2016 and there’s been some buzz surrounding it’s launch. The founders are Zach Davis, Josh Anderson, Richard Hansen and the CEO is Sam Cook.
According to their website:
We provide a way for people of all walks of life an avenue to obtain the most sought after products in history at the best possible price. It’s that simple.
So, the companies main selling point is giving people the best possible price on precious metals. I’ll show you how the business works and whether or not you really are getting the best prices.
The Gold and Silver Product Range
It is important to look at the products of a company like this to understand how viable the business opportunity will be. Is there a genuine retail offering here or is it just about recruiting?
Well, the company sells gold and silver coins and bars, as well as Numismatics which are definitely tangible products.
According to ProvidentMetals.com:
Numismatic coins are considered collectible and are not produced in modern times. These coins are are primarily valued for their rarity and not as much for their actual metal content.
In other words, these coins are about historical value instead of the actual value of the gold or silver itself.
They have a shop on their website which shows the ‘members price’ for each of these products which is good. In order to buy you must be a US resident and buy a membership (join the affiliate program).
How Do The Prices Compare?
In some respects trying to compare prices is fruitless because they fluctuate all day every day and it all depends on what you are buying. That said, I figured it was worth doing a quick ‘spot comparison’ to show you guys how the 1oz gold bar prices compare with the more well established companies.
Important Note: This is purely based on my own research so do NOT make any buying decisions based on this. The parameters of this comparison are as follows: 1oz gold bar, paying by credit card and including shipping to the United States as at the 26th December 2016.
A 1oz ‘gold bar’ with no information about it’s origin costs $1,144.50 and they don’t display the exact shipping cost to non-members. The website states that shipping is somewhere between $5-$25 though and they also include a 2.5% credit card surcharge.
Total Price= $1,178.11 to $1,198.11
A 1oz “Republic Metals” gold bar comes to $1,154.81 and shipping costs an extra $7.77. They also include a 3% credit card surcharge.
Total Price= $1,197.22
The exact same 1oz Republic Metals gold bar costs $1,158.06 plus shipping of $9.95 to anywhere in the US. They don’t have a credit card surcharge as such, but the price did climb to $1,240.61 for payment with a credit card.
Total Price= $1,216.26
Based on the above, the best case is 7KM being $38.15 to $18.15 cheaper depending on the cost of the shipping. However, next to SD Bullion there is potentially almost no savings to be had buying through 7KM. More importantly, in order to buy from 7KM you must become a full member for $250 which obliterates the potential savings on this order.
From a customer perspective, unless you plan on buying a much higher quantity of gold and/ or unless they have better deals on other products, which they may, there is no advantage to buy through them.
There is also ZERO information about the gold bar itself on their website for consumers who are weighing up their options. I mean, who in their right mind is going to shell out $250 for no overall savings just to see if “maybe” the 7KM gold product is better quality? Good luck with that.
Consumers in this day and age are WAY more savvy than they once were. Many WILL compare these prices and come to the same conclusion I have, this is just plain logic. The other companies supply detailed information about the type of gold they are selling, they are well established and have built trust in the marketplace. They also offer volume discounts without having to join their club!
Buying through 7KM might appear cheaper at a glance, but after digging it’s not so great and you don’t even know what you are getting.
That said, this is only based on my spot comparison with the gold bars and maybe in time they will show consumers more information. As it stands though, there’s no advantage for the majority of consumers to purchase through 7KM. Plain and simple.
The 7K Metals Compensation Plan
This company uses the multi level marketing business model along with a ‘binary’ downline structure and (in comparison to many other comp plans I’ve reviewed) it’s a very simple compensation plan.
A binary downline system works by only ever allowing an affiliate to have two referrals directly under them, a left and a right team or “leg” as it is commonly referred to.
As you can see from the example above, an affiliate’s team is split into two sides. These are separate sides for the sake of calculating commissions, but are both part of your downline.
There are two different commissions you can make based on your team’s performance.
Step 1 Team Commissions
Each time your left and right team reaches 500 points in a given week, you’ll make $500. Points are earned based on selling memberships and/ or any “coin of the month” purchases happening in your downline.
These points continue accumulating for as long as it takes to reach 500 points in each team.
Step 2 Team Commissions
Each time both of your teams reach 1,000 points in any given week, you’ll make $1,000. Your left and right team under you represents a ‘tracking center’ and is capped at earning $1000 in commissions in any given week.
The Point Reset System
Any points your teams generates above 500 and below 1,000 in any given week, reset to zero at the beginning of a new week.
In other words, you have a maximum one week window to get from 500 – 1000 points before they reset. You could also reach the 1,000 point cap in both teams, and your points would naturally reset at the beginning of a new week in this case too.
This is clearly stated in the compensation plan:
Points will reset to “0” at the beginning of the next pay period when either Step 1 OR Step 2 Team Commission is earned.
Here’s a couple of examples to illustrate how this works…
Example 1: If your left team reaches 550 points and your right team reaches 925 points by the middle of a given week, you would earn a $500 commission. Cool. Assuming you earned no more points beyond this before the end of the week, your points would reset to zero because you earned a ‘Step 1 Team Commission’.
Example 2: You’ve accumulated 400 points on both teams over a couple of months. You enter a new week, and by the third day reach 500 points on both sides, thus earning a $500 commission. Cool. In that same week, you go all out and generate 1,200 points in your left team and 1,076 on your right team. You would make a $1,000 commission and the remaining 276 points would be reset at the start of the new week.
On one hand it’s good how points are carried over if you don’t reach 500, but it sucks if your team is somewhere between the 501 and 999 point mark each week.
Matching Team Commissions
This pays out a 5% matching bonus on whatever your personally sponsored affiliates earned in a given month on the previous income stream. For example, if you had personally recruited 6 people and they all earned the $1,000 bonus, you’d make 5% of $6,000, which is $300.
Becoming An Affiliate
The cost of becoming an affiliate is either a one off $250 OR $75 plus $10 per month thereafter. If you plan on buying any bullion products though, you must pay the $250 upfront.
Getting Commission Qualified
Getting commission qualified is a matter of generating 25 “points” each month which means taking part in the $98 “coin of the month” program OR selling at least 1 membership per month. You also need at least two direct referrals, one on either side of your binary downline.
On one hand, there is a tangible product and the prices are marginally cheaper. However, only better IF you buy the membership for $250. It is possible that the savings are better throughout other products they sell, but based on the gold bars (and based on the lack of information about the gold bars) I can’t see why a typical customer would buy from 7KM. It simply makes no sense.
Regarding the compensation plan, affiliates are being paid commissions for selling memberships (AKA recruiting other affiliates) and when many of those same recruited affiliates pay the monthly $98 to stay commission qualified. In other words, this appears to be less about actual retail sales and more about chain recruiting.
This is never a good thing when it comes to mlm because only so many people will join the opportunity. When recruiting slows (and it will) the only money to be made will be through retail sales.
As I said earlier, I can’t see the advantage of their retail offering to consumers unless they are buying bulk. Even then, other companies offer bulk discounts as well. It’s not a scam as such, but as it stands I do think there are better and more sustainable options to consider for a home based business.
Hope you enjoyed the article! My name is Tim and I’m the creator of Affiliate UNguru. I started this site out of a passion to help others avoid scams and to share how I’ve been able to create a successful business online. You can see how I did it in this free training.