Many people are interested in precious metals as an investment option, especially with recent economic turbulence. Precious metals tend to be stable when the stock market is volatile. You might even be interested in selling precious metals yourself.
7k Metals is a company that claims to help people become precious metals entrepreneurs. By buying a membership, they get access to exclusive products and information that they can then sell. But are you actually going to be a successful small business owner? Or is it too good to be true?
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About 7k Metals
7k Metals has been in operation since 2016. Their main headquarters is in Idaho, but they work with people all over the US. They are very transparent about their business model: they use multi-level marketing for "motivation" and "better outreach."
Unfortunately, that isn't necessarily what a multi-level marketing model does. With this type of business, people have to purchase memberships to be part of the team. Then they have to sell products or memberships to other people in order to get their investment back.
In many cases, memberships are the only way to get the investment back because the products don't have enough potential for profit. So if you want to make your money back, you have to convince other people that the company is great and that you love it. There's a lot of pressure to appear happy with your experience.
People in an MLM are motivated because they're going to lose money if they aren't motivated. They're invested in outreach because they need you to buy in. Then you'll be the one stuck with recruiting other people.
According to the 7k Metals website, the overall goal is for the owners to improve people's financial security. It's true that precious metals are recommended as an investment to protect against economic turbulence. Gold and silver have been traded reliably for many thousands of years.
The company goes on to claim that they want their clients to achieve financial independence. How do they do this? By selling the company's products. How do they sell the company's products? By getting a membership that allows them to buy inventory at a huge markup and then try to turn a profit.
Products and Services
The 7k Metals company has two distinct pieces. One is the products that they sell. In order to get access to the product marketplace, you need to have a membership. Then you have the opportunity to sell the precious metals to others.
The second piece is the memberships themselves. If you want to have dealings with the company, you need a membership. With the vast majority of precious metals dealers, you don't need to pay anything to place an order. But 7k Metals claims that their prices are so special that a membership is necessary.
That doesn't really seem to be the case. Multiple past members have said that the prices are marked up well past their spot price, when products are available for purchase at all.
We can examine some of the precious metals offerings that 7k Metals has. Most of these items can be easily found on the open market without needing any special membership. What you're supposedly paying for is the expertise of the 7k Metals staff.
But there are a lot of other companies that will let you talk to expert staff members completely for free. Just because something is exclusive, doesn't mean it's high quality.
One key line of products is called the Selected collection. Every product in this collection has been specially picked by the 7k Metals staff. These products have a high potential for financial growth in the future, so they offer them as a potential investment.
Some precious metals do have a large potential for growth, based on how they've grown steadily over time. Others are collectibles whose value is based much more on speculation. It seems like since the products will be "worth more" in the future, the 7k team doesn't have any problem marking them up. Indeed, past members have said that these items sell for much higher than their spot price.
You can also buy various gold and silver jewelry pieces. The inventory and the pricing will vary widely by the day. The website claims that the pricing is competitive, but there's no proof of that. You'll be able to browse through basic jewelry pieces like necklaces, bracelets, earrings, watches, and rings.
When people purchase memberships, they are given access to the company's Dealer Direct program. As a Dealer Direct member, you are eligible for discounts on some of the available items. You also get discounts for bulk purchases, which is ideal if you're trying to buy inventory for a small business.
With that said, basically every precious metals dealer has bulk and wholesaler discounts. And most of them don't make you buy a membership to access them.
Finally, 7k Metals sells gear. This is company merchandise that you basically use to advertise your side hustle. There are clothes and accessories that all have the company logo and branding on them.
You need a membership to get access to most of the things in the marketplace. Memberships have two tiers. Basic members pay less per year, while premium members pay more.
When you buy a membership, you'll actually end up paying about twice the listed membership price. That goes no matter which tier you're in. The company requires that you purchase a "travel savings plan," which costs just as much as the membership.
There's not a lot of information about how the travel savings plan works. Supposedly it helps you get discounts on hotels, flights, and other travel amenities. But it's odd that they don't simply roll the cost into the listed membership price.
The company's affiliation program is how the majority of members make their money. If someone purchases a membership using your referral link or name, you'll get a commission. The more people you refer, the higher your commission rate.
By design, most people who sign up won't be able to make money. You'll only turn a profit if you pull multiple other individuals into the company and make them all pay several hundred dollars for a membership.
If you do decide to sign up for a membership, the company website outlines the next basic steps.
You'll first choose a starter pack for your investment. There are three starter pack options. Each has a different combination of products with a different value, and each is optimized for a different investment need.
There are other companies who offer similar product packs like this without charging you for a membership first.
Once you decide on a starter pack, precious metals will be delivered to you monthly. You'll get signed up for the AutoSaver program to have your card billed automatically. Then you can either keep your precious metals as an investment, or you can try to sell them for more than you purchased them for.
Is 7k Metals a Scam?
The answer to this question really depends on how you define "scam."
7k Metals does appear to offer all the services they claim to. And they are up front about their business practices. There's no real attempt to hide the fact that they're a multi-level marketing scheme or that most people won't have any success.
When you buy a membership, you do get access to the company's products. You also do have the opportunity to earn money by recruiting other people. Since you technically get everything that you've signed up for, we can't fully call this company a scam.
But that doesn't mean that they're a good company. There are tons of ways that they mislead people in the marketing of their products. Then people feel pressured to praise the company so that they can get their money back.
It's possible that some members really have had the good experiences that they claim to. But if your only way to get your money back is by enticing other people to buy memberships from you, won't you say positive things just to get your investment back?
7k Metals does offer the services and products that it claims to, so we can't call it a scam. But let's take a look at all of the problems with the company's setup.
Precious Metals MLMs Don't Work
Let's set aside the question of whether multi-level marketing companies are ethical. There are plenty of successful companies that use a multi-level marketing setup to sell their products. The most successful tend to be focused on beauty, health, and wellness.
There's a reason for that.
You see, precious metals are traded openly on the global exchange markets. You also probably have local stores that sell gold and silver. All you have to do is walk inside, and you can get a price quote without ever needing a membership. So why would you buy a membership for the privilege of doing something you can already do for free?
With health and wellness companies, they build themselves around the idea that no one else has their product. Their service is totally unique in their niche, and it's going to change the world. That's why it's worth paying money to be a sales rep.
But 7k Metals can't claim that they have some kind of proprietary insight into precious metals. The products that they sell are exactly the same as the ones traded on the global exchange market.
So what does 7k Metals claim that their advantage is?
Of course, they say that they sell precious metals for much lower than the global market price. You buy a membership to get access to these super low prices.
On the surface, that makes total sense. After all, precious metals wholesalers are often able to get better prices through their network connections. Why shouldn't you be able to buy your way in?
Here's where we need to put a disclaimer: We don't have a membership with 7k Metals. We haven't examined their marketplace. We don't have access to their real-time pricing to compare.
But what we do have are reviews from former members. Amidst all the glowing praise, there are some scathing criticisms from people who used to be part of the company. They say that the company's stock was marked up to much higher than its actual value. On top of that, many of the most common and easy-to-sell items were almost always out of stock.
So it doesn't sound like 7k Metals actually does give their members a secret low price. In fact, these former members say that the company does everything in its power to keep people from learning about the precious metals market. They're supposed to learn the company's talking points and not ask questions.
Any good precious metals company will be enthused about educating their clients. The more a client knows about precious metals, the better decisions they can make for their investment portfolio. If 7k Metals is discouraging people from learning, it might be because their business practice isn't good for an investment portfolio at all.
Seriously, if you want to start a small business as a precious metals dealer, there are so many easier ways. You can purchase much cheaper items and make network connections outside of an MLM.
And if you desperately want to join an MLM for the sake of recruiting other people... well, more power to you. But you'll find a lot more success with the sales pitches of the health and wellness gurus. With precious metals, it's too easy to look up the items and discover that you can buy them for free.
The one thing that we can say is that this company is not quite a pyramid scheme. That's because you're not technically required to recruit other people in order to get your money back. With a pyramid scheme, you need to recruit several individuals before you're eligible for payouts.
But because the metals are sold at such a high markup, it's almost impossible to move your stock. You definitely can't turn a profit. It's extremely difficult to move up in the ranks without relying on recruitment instead. Most successful people in the company focus on recruitment rather than on selling the company's products.
There's not a single positive thing about this setup. Don't fall for it.
Pros & Cons of 7k Metals
7k Metals is not the only multi-level marketing company to break into the precious metals business, but it is one of the most popular. The company has gained great success in the US because multi-level marketing schemes are not illegal here. In several other countries, they are.
That's because it's extremely hard to make money in an MLM unless you're recruiting other people. Then those people have to recruit more people if they want to make their money back. There will always be a group of individuals on the bottom rung who have lost their investment. In fact, the vast majority of people who invest in an MLM never earn back their money.
It's a bad idea to get involved with this company. There's not a single service they offer that you can't get elsewhere without a membership. Even if you're looking for network connections, you can find those without buying other people's support.
The saddest thing is that 7k Metals seems to prey on people who are excited about the potential in precious metals.
If you are interested in the precious metals industry and want to learn more, that's great! But you should work with a trusted company to do it. There are many precious metals dealers who have free educational resources to help their potential clients learn about investing. Check out one of those instead.
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