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7K Metals is a multi-level marketing company involved in the precious metals business. They claim that by investing in a membership, you can access new and exciting products to sell. But the company might not be exactly what it seems. Is it actually worth investing? Are they selling anything that you can't find somewhere else?
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About 7K Metals
7K Metals is an Idaho-based company that has been in operation since 2016. The structure involves multi-level marketing. By recruiting more salespeople, you move up the "rungs." The more points you earn through recruitment, the further up you climb, and the more you receive in payment.
But in order to get started with the company, you have to pay a hefty recurring annual membership fee. That's not even the end of it. You'll also need to buy the products from their marketplace. While 7K Metals claims that their products are priced cheaply, there are multiple online reviews contending that the markups are twice as expensive as the silver is actually worth.
In addition to selling investment quality precious metals, the company also sells a variety of jewelry pieces. Again, there are claims that the pricing is competitive when compared to jewelry retailers. But it's difficult to determine whether the pricing is actually ideal for the level of craftsmanship and quality involved.
If you do purchase a membership with the company, you will be given access to the Dealer Direct program. People who are part of this program will have discounts on certain 7K Metals products. If you buy in bulk, you'll get additional deep discounts.
Keep in mind that these discounts are placed upon items that have already been marked up. In addition, wholesale retailers will happily give customers bulk discounts without charging them for a membership. You're basically paying to have the ability to buy gold, when other gold dealers will simply sell you gold without extra fees.
The other main products sold are the 7K Gear products. Rather than being precious metals, these are clothes and accessories that advertise the 7K Metals company. People sometimes purchase them as a way of pitching their new investment in the business.
The memberships are available in two different levels, both of which are significantly pricey. You must also get a travel savings plan, which costs just as much as the membership. So the annual cost of the membership is actually doubled.
The company says that people can make money by reselling their products and running their own precious metals small business. But it's difficult to resell the products for a profit. Most people try to make money by recruiting other members instead. The more members you recruit, the more points you earn, and the more money you make.
You earn money every time a new person signs up using your name or your referral code. If those people sign up others in turn, you get money for all of their referrals as well.
When you become a member, you will be asked to choose a starter pack. There are three choices of starter pack, which are tailored to different circumstances. Each of the packs comes with precious metals that you are then expected to resell.
Precious metals will be shipped to you on a monthly basis. You have the choice of gold or silver. By using the AutoSaver tool on the website, you can set up automatic payments to streamline the process.
Some members may choose to keep their precious metals as an investment, rather than trying to sell them. But the markups will be more harmful than helpful here. When the time comes that you do want to liquidate your holdings, you may find that you can't get nearly as much as you paid for them.
Is 7K Metals a Scam?
The question of whether 7K Metals is a scam is a tricky one. It is not technically a scam, given that it provides the services that it claims to. If you pay the membership fee, then you can buy the products, and you can try to resell the products. All of that is true.
The online reviews even look positive. There are very few complaints, and the company has more than 4 stars based on customer feedback on the Better Business Bureau website. The BBB has even accredited the business and given them an A+ rating, indicating that they have high levels of customer dedication.
But unfortunately, the company's setup makes them a non-ideal choice to do business with.
7K Metals is a multi-level marketing company. This means that you buy in for the chance to sell the company's products. Most multi-level marketing companies are in industries like health, beauty, and fitness. That's because their products are significantly more diverse.
Precious metals are a strange choice for a multi-level marketing setup. After all, you can buy similar precious metals products from any retailer without paying a subscription cost. Oftentimes, the products are priced more cheaply with a retailer. So what exactly is the appeal of 7K Metals?
According to the company, they're connecting customers with premium metals at a lower price than you can find on the market. But that doesn't actually seem to be the case, judging by reports of their product pricing. The company also claims that they can help people to run their own small businesses by supplying all of the products and helping with networking.
But at the same time, there's not a lot of education about the precious metals industry itself. People are taught to hype the 7K Metals company and its specific products, but not to learn about how or why investing in precious metals is a good idea.
There's nothing that 7K Metals is offering that you can't find elsewhere without paying the subscription.
In addition, selling the precious metals is difficult even after you're involved. You have to find a willing buyer and prove that you're selling for more than they could get elsewhere. This can prove difficult. If you do manage to create that kind of clientele, you could easily run a business of your own without 7K Metals backing you.
There has only been one complaint filed with the BBB in the past three years, which was apparently related to sales and advertising. The complaint text is no longer available on the website, which indicates that it was resolved to the customer's satisfaction. The customer will sometimes ask the BBB to remove a resolved complaint on behalf of the company.
But we can take a look at a few of the positive and not-so-positive customer reviews.
One positive review is from someone who says that 7K Metals is a trusted place to buy precious metals. They also say that the company has given them important knowledge about what they should buy and when. But they don't mention that they are invested in other people liking the company, because new memberships are how they'll make money.
Several other people have written similar reviews, stating that they love working with the other members and that the business has been life changing. Some even linked their own personal referral links in their reviews, indicating that they are hoping that their positive words lead to referrals.
The referral links especially make it difficult to take these reviews without a grain of salt. In some ways, the reviews are just extended marketing for the company.
The negative feedback on the BBB website tends to have a lot more detail, rather than just being general advertising copy. Many of these customers have stated that the company never acted outside of its contracted terms, so they couldn't file an official complaint. But they still wanted to share their experiences.
One customer left a review in July of 2022 stating that she didn't ever actually want to be part of a recruitment plan or a multi-level marketing company. Her goal had just been to buy a single lump sum of silver.
She said that it was embarrassing to say that she'd been convinced to join the program instead. Now she was being sent a single silver coin every month. But she also said that the cost of the coin was significantly higher than the price of the silver.
The customer said that she had paid $7,000 in total just to receive this overpriced coin each month. She was unhappy because she had just wanted to make a normal investment and keep her precious metals in case of emergency. The review ended with her asking whether there was anybody out there who could help her get her funds back in actual silver, rather than membership fees and overpricing.
In July of 2022, one customer left a review detailing what he believed was deceptive marketing. He believed that even if the marketing was not intentionally deceptive, it was unfair to him.
The customer said that he invested with the company, but then discovered that it wasn't as simple to get started as he thought. Getting organized was more difficult than anticipated. He decided that the business wasn't for him, so he decided to cash out and leave. But the buyback price that he was offered for his metals was 15% lower than the price he'd paid for them.
He said that none of this had been explained to him when he got started. He also said that upon investing, part of his investment was set aside and wouldn't be released. Apparently the agent he spoke with didn't have any explanation for why that had happened. The customer was told that he would be contacted with further information, but nobody ever contacted him.
When the customer called again, he was told that the buyback price was the final offer. He would need to forfeit 15% of what he'd paid. He said that he understood the need to pay for his errors, but that this seemed to go beyond that.
The customer stated that the only way to make money back was to be successful at the program, and the only way to be successful is to deceive people. He said that he believed his investment was being held hostage to try to trap him into continuing to pay the membership fee.
All of this does seem to fit with the multi-level marketing setup. It's no surprise that the customer found himself so dissatisfied.
Pyramid Scheme Accusation
One customer accused the company of being a pyramid scheme, stating that there was a stronger push toward memberships than toward investing. She stated that the products were marked up far past their actual value, and that points are earned by signing other people up.
The customer went on to say that she was lied to by her salesperson as an attempt to convince her to sign new members. Though she was able to undo the damage, she believed that the focus on memberships was catastrophic. She also stated that all of the positive customer reviews were from salespeople who wanted to receive a referral.
She concluded her review by saying that precious metals are a worthy investment. However, she warned people not to invest with 7K Metals.
It's worth noting that 7K Metals is not technically a pyramid scheme. Pyramid schemes force you to recruit more members before allowing you to cash out. That's not the case here.
But you are significantly pressured into recruiting more members, because it's extremely difficult to sell the products they give you. The products are simply priced too highly, and most people will know that after doing basic research.
Pros & Cons of 7K Metals
7K Metals might have a good reputation online, but there's a good reason to question that reputation. Everybody who buys from the business is trying to make money. As such, they have extra incentive to leave good reviews. The few negative reviews of the company are enlightening.
Though 7K Metals isn't technically a pyramid scheme, it is a multi-level marketing operation. As such, it makes a lot of money from memberships. The majority of members will lose money unless they recruit other members. It's very difficult to make back the cost of your membership by selling gold.
In addition, the business seems to discourage actually learning about the precious metals industry. This may be because everything about it is opposed to how the industry actually works. You can get everything that 7K Metals offers from other dealers, without paying the subscription price. You might even be able to find the products for cheaper pricing.
We definitely don't recommend doing business with this company. When you get involved in a multi-level marketing company, you have to be prepared for the fact that you'll lose money. And if you want to avoid losing money, you'll have to convince other people to lose their money instead.
There are gold dealerships with much more ethical and reputable stances. And you can actually trust the customer reviews of those, because the customers don't have anything to lose by being honest. We definitely recommend working with someone else whether you're making a personal investment or purchasing gold for your retirement account.
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We hope that we were able to help you determine where or where not to put your investment!