The question you are here to answer is this: What Is 5Linx MLM And Should You Join
This review takes a look at their products and their compensation plan.
I must warn you though – things aren’t exactly looking very encouraging here.
History Of 5Linx MLM
This company was launched by Jeb Tyler, Hason Guck, and Craig Jerabek back in 2001.
5Linx went under a reorganization in 2016, where it was brought under 5L Holdings, LLC.
With its headquarters located in Rochester, NY, 5Link offers numerous products like business services, nutritional supplements, telecom services, and health insurance policies.
For a while between 2006-2009, 5Linx even made it to the Inc. 500 list due to the enormous scale of growth it experienced during these years.
5Linx was part of the Inc 5000 list until 2014.
Is It Worth Purchasing 5Linx Products?
The company sells both personal and business products.
Supplement products, tea and coffee products, technical support, Cable TV/Internet service, ID guard, home security, and credit score services fall under the personal product category.
You can also purchase products like Telemed from them, which provides unlimited video or phone access to Board Certified physicians using a toll-free contact number with zero co-pay requirements.
When it comes to business products, these are targeted at businesses seeking to boost their productivity.
Their products in this sphere include text alerts/robocalls, fraud protection, online payment processing, payment solutions, security systems, and energy plans.
My research tells me that 5Linx basically acts as a broker between the customer and a select group of companies.
For example, their cable TV service enables customers to choose between providers like AT&T, Frontier, and Cox.
However, products and services from 5Linx are also more expensive, which makes selling them much harder.
After all, what’s the value in purchasing Cox cable service from 5Linx for $159.99 when Cox directly offers it for $99?
That’s a difference of $60 which is a large amount of money to save every month by going with the less expensive option.
The problem is that 5Linx is charging more money for similar services found elsewhere without any apparent extra benefits.
What Is The Cost of Joining 5Linx?
You’ll need to submit an application and shell out $249 to become a 5Linx member.
Frankly, the signup fee is expensive and will be a turn-off for many people.
You’ll also be asked to sign up for the TeeVee service, which may cost $49.99 or $69.99 per month, depending on your subscription.
The TeeVee service happens to be a cable service that offers a Gold and Platinum subscription.
The Platinum Discount Network allows you to enroll at $49.99 a month.
Do note that you’ll only be offered this deal during the signup process. It includes useful discounts on travel, groceries, restaurants, and more.
You pay the $249 just to get started; this fee allows you to be eligible to receive referral bonuses, a personal website, and commissions on all products sold along with residual commissions on products sold by your sponsored recruits.
Getting started with 5Linx requires a sizable investment, right off the bat.
Is Making Money Possible With 5Linx?
Similar to most MLMs, members earn money in 2 ways – recruiting new members and selling products.
While selling products does offer decent commissions, recruitment is far more lucrative.
MLMs encourage recruitments to enhance the scale of operations faster. You will be expected to bring new people into your team.
You’ll also be eligible to receive a commission on all commissions earned by your teammates for making sales.
What Is The Commission Rate With 5Linx?
Unlike other MLM companies, 5Linx offers a rather low commission rate.
You’ll begin with a small commission of 10%.
You’ll need to accumulate personal customer points to increase your commission percentage.
Hitting 25 personal customer points bump up your commission percentage to about 15% on all new sales made by you.
If you reach 50 personal customer points your commission percentage rises to around 20%.
Apparently, you’ll need to work really hard if you want to increase your commission percentage.
5Linx Pros and Cons
A Diverse Range of Products
5Linx offers an incredibly varied list of products. While most of them relate to the tech space, you’ll also find health and fitness-related products like supplements as well.
Your Own Private Website
5Linx membership does offer you some amazing tools. You can create your own website and app with their tools to reach a wider customer audience.
Recurring Income System
When you get customers to purchase subscription services, you’ll also be creating a recurring income system where you get commissions on their monthly subscription payments.
Sizable Upfront Investment
Unlike most other MLMs I’ve encountered, 5Linx has one of the highest signup fees I’ve seen at $249.
Additionally, you’re also encouraged to purchase certain monthly subscriptions while filling out the company’s application form.
Low Rating from the BBB
The BBB has awarded 5Linx a poor C rating.
However, the company has many decent reviews on the Internet.
The low rating is probably because they failed to respond to complaints filed by representatives who had been happy before.
Co-Founders Faced Lawsuits And Jail Time
All co-founders, Jeb Tyler, Hason Guck, and Craig Jerabek, were accused of multiple fraud charges by the federal government, including wire fraud and money laundering.
They pleaded guilty to the charge of fraudulently diverting around $2.3M from the company to their own bank accounts.
Back in 2018, Tyler and Jerabeck were handed out a 124-month imprisonment sentence for fraud and filing improper tax returns.
They were also ordered to pay $118,000 in back taxes and $2.3M to their investors.
Jason Guck, the other co-founder was also handed a 7-month imprisonment sentence in May 2019.
A new lawsuit has also been launched by the 5Linx management team, who are suing the previous management team for wrongful breach of contract.
Craig Jerabeck has been accused of ordering 5Linx reps to work for other MLM companies.
Is 5Linx MLM a Scam?
While 5Linx definitely is an MLM company with a history of unethical actions, the new management that stepped in after the company’s reorganization has made efforts to present itself as a reputable MLM.
Unfortunately, the new management attempts to clean up 5Linx may be too little too late for many, myself included.
Although I wouldn’t call 5Linx a SCAM, because of the history of its unethical leaders and the fact that it’s multilevel marketing, I cannot recommend this as a viable business opportunity.
While it’s not a scam, I don’t recommend it at all if you want to have some consistent, sustainable income.
5Linx is similar to other MLMs I’ve reviewed on this blog such as:
Multi-Level Marketing Is A Bad Business Model
After an exhaustive study of over 300 MLMs, the Federal Trade Commission revealed that 99% of people who join multi-level marketing companies lose money.
That applies to ALL MLMs, the best and the worst companies.
Do you understand what that means? If you join an MLM organization you only have a 1% chance of not losing money.
I don’t find those statistics very encouraging when it comes to joining an MLM.
Here are some additional hard facts you need to consider before joining ANY multi-level marketing business
- 99%: According to the Federal Trade Commission this is the number of all MLM participants who lose money
- You are 38%: more likely of making money with your own small, home-based business than by joining an MLM
- There is a 10% – 20% higher rate of making a profit with an online business than it joining an MLM
- You would have a 300 times higher chance of winning a game of roulette in Las Vegas from 1 single spin of the wheel than you would
makea profit with an MLM
- 47%: The number of participants who flat-out lose money according to the AARP Foundation
More Startling Statistics About Multi-Level Marketing
- 27%: the percentage of people who make no money whatsoever in
an MLM– AARP Foundation
- 26%: The meager amount of people who actually earn a profit participating in MLMs’
- 53%: This is the percentage of MLM participants who earn less than $5000 a year
- 39%: the number of people who QUIT MLM’s because trying to sell services and products to family and friends damaged their relationships
- 50%: Percentage of MLM reps who quit within 1 year after joining
- 95%: The respective number of reps who quit within 10 years
- 75%: The number of people who have participated and left an MLM and state that they would never join another MLM in their life
- 1,049: The number of MLM reps who make less than 70 cents an hour according to a 2018 poll of MLM reps representing various companies
- 20%: of people involved with MLMs never made a sale
- 60%: percentage of people involved with MLMs earned less than $500 within the last 5 years of joining
- 32% of people involved with MLMs financed their MLM “business” by getting into credit card debt
References for the above facts are from the following sources:
- The Case (for and) against Multi-level Marketing By Jon M. Taylor, MBA, Ph.D., Consumer Awareness Institute
- 3 Mind-Blowing Statistics About MLMs: Due.com
- Multi-level marketing: Wikipedia
- Multilevel Marketing: “The Research, Risks and Rewards”: AARP
Is There A Better Option?
If you’ve made the decision that SMMA isn’t right for you, there are other ways to make money online.
From my experience, the best and easiest way to make money online is with affiliate marketing.
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