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Thread: 5linx a scam based on data?

  1. #1
    toos00 is offline Junior Member
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    5linx a scam based on data?

    I was approached about looking at this opportunity, so I did some research.

    In 2012, the company had revenues of $103.6 million according to Inc 500, and according to one of there founders they had about 80,000 reps in U.S. and Canada.

    Therefore I did some basic math estimates to get a financial picture:

    80,000 reps X $249 start up cost = $19,920,000 million

    80,000 reps X $600 a year($50X12 months) = $48,000,000 million

    Already that's $67,920,000 million of the $103.6 million in revenue.

    Additionally, to reach a level of residual income you need 10 customer points, which can come from your own services. The person who recruited me said they paid an additional $45 a month to help meet points. Lets use a average of $25 extra a month:

    $25X12= $300 for the year multiplied by 80,000 =$24,000,000.

    If we do the math that's $19,920,000 + $48,000,000 + $24,000,000 = $91,920,000 a year from reps.

    Seems like most of the money comes from reps promoting the business?

  2. #2
    Whip's Avatar
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    Re: 5linx a scam based on data?

    ?

  3. #3
    toos00 is offline Junior Member
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    Re: 5linx a scam based on data?

    Quote Originally Posted by Whip View Post
    ?
    Not sure what you mean?

  4. #4
    toos00 is offline Junior Member
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    Re: 5linx a scam based on data?

    I meant to say it looks like most of the money generated come from distributors spending to be apart of 5linx, instead of actual customers.

  5. #5
    Whip's Avatar
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    Re: 5linx a scam based on data?

    agreed....

  6. #6
    toos00 is offline Junior Member
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    Re: 5linx a scam based on data?

    I'm not sure how people miss this? As a distributor, you could easily spend almost $2,000 a year just to stay active. The person told me that they don't have to sell anything to make money. Another thing that looked funny was the only way to advance up the ranks was to bring in more people under you. Looks like i could sell a million dollars in services and I would never move up unless I recruited more people.

  7. #7
    littleroundman is offline Administrator
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    Re: 5linx a scam based on data?

    Quote Originally Posted by toos00 View Post
    I'm not sure how people miss this? As a distributor, you could easily spend almost $2,000 a year just to stay active. The person told me that they don't have to sell anything to make money. Another thing that looked funny was the only way to advance up the ranks was to bring in more people under you. Looks like i could sell a million dollars in services and I would never move up unless I recruited more people.
    One of the hardest things for people to understand when they are first exposed to pyramid and ponzi schemes is that there are are a lot of "people" who DO know exactly what they're involved with and are doing it willingly.

    Just like your friend here:

    The person told me that they don't have to sell anything to make money.
    Don't have to sell anything to make money ???

    It's a pyramid scheme and it's both illegal and upward of 90% of participants will lose their money.

    The other 10% are out there as we speak, lying, cheating and deceiving others trying to convince them it IS legal and they WILL make money
    The only thing necessary for the triumph of evil is for good men to do nothing

  8. #8
    ribshaw's Avatar
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    Re: 5linx a scam based on data?

    I feel like this guy does a good job of reviewing this and a lot of other opportunities.

    A few highlights:

    The average gross income for 5linx distributors is $450 a year before expenses.

    They gouge their distributors on shipping and handling of support materials.

    All of the products they sell you could market as an affiliate for other companies for free.

    Also of note, where are the prices on their website? When you hear you don't have to sell, just self consume and teach others to do the same it is time to tie the laces and run the other way. As was pointed out, not only does this constitute an illegal pyramid, the prices are going to be so high that few if any want to continue beyond a few months.








    5linx Is A Scam? Yes It Is In My Opinion! | Ethan Vanderbuilt
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

  9. #9
    toos00 is offline Junior Member
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    Re: 5linx a scam based on data?

    Thanks, the prices for all their products and services was the same or higher. Seems like a lot of stuff is outdated. $50 a month for website and training? Website hosting is less than $10 a month and they have such a high volume of the same website it probably cost them $5 or less a month.

  10. #10
    ribshaw's Avatar
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    Re: 5linx a scam based on data?

    Quote Originally Posted by toos00 View Post
    Thanks, the prices for all their products and services was the same or higher.
    Can't say that I have looked at every MLM out there, but the ones I have seen the product prices are always too high. Quality debatable. If not, there would be virtually no attrition in the self consumption model. Instead practically the whole force turns over each year, good luck getting 20 and sitting back while they work.


    I have no way of verifying this person's story, but it does sound typical.

    Is 5Linx a scam? Review 238193 Nov 19, San Marcos, Texas, Business Opportunity @ Pissed Consumer

    Across the board with MLM less than 1% in any company are making substantial income, and less than 5% making any money at all after expenses. If you figure 7% of individuals in the US population earn over $100,000 per year, and maybe 20% of the households have incomes that high, it does not say much for MLM. It would appear just about anything else is a better opportunity to make money.


    ==========================================

    The companies know that "self consumption" alone creates an illegal pyramid so they make sure in the agreements affiliates sign that they will retail. Which is obviously very different from what recruits are often told.


    I will actively develop, service, and/or maintain at least four customers to be eligible to receive commissions
    . I understand
    that I must keep accurate records of retail sales and 5LINX may periodically ask me to provide documentation of such sales to
    5LINX. I further understand that no bonuses or commissions will be paid without customer acquisition

    I agree to present the 5LINX Marketing and Compensation Plan and 5LINX products and services as set forth in official
    5LINX literature. I will make no claims regarding potential income, earnings, products and services beyond what is stated
    in official 5LINX literature.



    These are just a few other things that bother me about MLM. You are often told this is your business, the distributor agreement says otherwise.



    I agree that as a 5LINX Representative I am an independent contractor (direct seller) and not an employee, agent, partner,
    legal representative, or franchisee of 5LINX

    I may not assign any rights or delegate my duties under this Agreement without the prior written consent of 5LINX. Any
    attempt to transfer or assign this Agreement without the express written consent of 5LINX renders this Agreement void
    able at the option of 5LINX and may result in termination of my distributorship

    I understand that if I fail to comply with the terms of this Agreement, 5LINX may, at its discretion, terminate my distribu
    -torship or impose upon me other disciplinary action, including but not limited to, forfeiture of bonuses and commissions,
    loss of all or part of my downline marketing organization. If I am in breach, default, or violation of this Agreement at
    termination, I shall not be entitled to receive any further bonuses or commissions, whether or not the sales for such
    bonuses or commissions have been completed. If this Agreement is terminated for any reason, I will forever lose my
    rights as a Representative, including rights to my downline marketing organization, and rights to compensation pursu-
    ant to the 5LINX Marketing and Compensation Plan

    https://vo.5linx.com/files/vo/docume...reement_en.pdf
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

  11. #11
    toos00 is offline Junior Member
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    Re: 5linx a scam based on data?

    Yes, I don't agree with a lot of their practices.

  12. #12
    JustTooMuchTime is offline Senior Scambuster
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    Re: 5linx a scam based on data?

    There is a previous thread about 5linx here:
    A Friend Asked Me About 5Linx

  13. #13
    Bestbud is online now Senior Scambuster
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    Re: 5linx a scam based on data?

    On Thursday federal prosecutors charged the three former partners in the company — Craig Jerabeck, 56, Jason Guck, 42, and Jeb Tyler, 44 — with illegally diverting more than $4 million of company money into their own pockets. The amount of looted money could be as much as $11 million, FBI Special Agent Kristin Gibson said in an affidavit.

    5LINX partners charged with cheating investors

  14. #14
    Seattle is offline Member
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    Re: 5linx a scam based on data?

    Great post. I will always look at financial statements much closer now after reading this thread. Thanks.

  15. #15
    littleroundman is offline Administrator
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    Re: 5linx a scam based on data?

    The only thing necessary for the triumph of evil is for good men to do nothing

  16. #16
    Tank's Avatar
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    Re: 5linx a scam based on data?

    I am not doubting you but can you give a link to your source of the $450 claim and a website link for Slinx. I cannot believe a scam this gig can run for 5 years without major litigation. Thanks.

  17. #17
    littleroundman is offline Administrator
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    Re: 5linx a scam based on data?

    Quote Originally Posted by Tank View Post
    I am not doubting you but can you give a link to your source of the $450 claim and a website link for Slinx. I cannot believe a scam this gig can run for 5 years without major litigation. Thanks.
    Ribshaw posted the above in 2014..

    Subsequent to the DoJ action, 5Linx member numbers have fallen dramatically.



    And its' earning potential figures dropped considerably:



    A 2016 earnings statement is apparently not yet available
    The only thing necessary for the triumph of evil is for good men to do nothing

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