Is 5Linx a pyramid scheme? Are you entering a legit earning opportunity or going into a money trap - where you lose big? This 5Linx review will tell you everything you need to know about the company - from what it is about down to its compensation plan.
Ultimately, I will give you my verdict, whether it is a pyramid scheme or scam MLM. I will do this gladly for anyone like you who took the time and effort to research an earning opportunity before making a huge leap.
Others will not bother, just because they were impressed with the earning possibilities. Some do not even worry about earning schemes that seem too good to be true, when, in fact, it is a telltale sign that it is a scam. Is 5linx a pyramid scheme just because I have my doubts? Of course not.
This is why I conducted my own, objective, and neutral research - to find out personally, and help people looking to earn, avoid losing money they no longer have much of in the first place. THIS IS INJUSTICE. Let’s fight scams together by doing due diligence research and exposing them.
Product Name: 5Linx
Founders: Craig Jerabek, Jeb Tyler and Jason Guck
Price: $249 and up
What is 5Linx About?
To know if 5Linx is a pyramid scheme, it is best first to understand what it is about - when it was founded, who was behind it, and WHAT DOES IT SELL. Products? Services? Are there any? Or everything is about recruiting people to join in exchange for some promised earnings?
5Linx is an American MLM company based in Rochester, New York in 2001, by Craig Jerabek, Jeb Tyler, and Jason Guck. This means it is currently in operations for 18 years. This is a good sign.
The company purports to offer clients a range of products and services that are SEEMINGLY DISCONNECTED. It provides utility and telecommunication services, health insurance, nutritional supplements, and other business-related services. The product range is similar to MLMs like ACN or Amway.
On the one hand, having such a diverse range of products can be a good thing, because you can cater to so many groups of consumers. On the other hand, it can be challenging to be famliar with all these products, and you leave the impression that the company does not have a specific niche.
Why 5Linx? According to the website, 5Linx stands for some great human and social values that people should pursue - freedom, integrity, vision, success, and opportunity.
What is Pyramid Scheme? Is 5Linx a Pyramid Scheme?
In essence, a pyramid scheme is described as a business model where members recruit others by promising them payments if they also recruit others into the scheme - without clear slate of products or services to provide.
In pyramid schemes, recruits invest in a company where they can earn just by asking others to join them and paying the necessary fees. In the end, people at the top are the only ones earning, which are few, compared to the many people at the bottom, who cannot get their ROIs. Pyramid schemes are apparent scams.
Beware though that while MLMs are not pyramid schemes because they have products for you to sell apart from the requirements to recruit, some pyramid schemes can masquerade as MLMs. These are those schemes where they have some products as front, but the foremost earning opportunity only lies with recruiting others to the system.
Is 5Linx a Pyramid scheme, then? No, not really. It was actually on the Inc 500 list for the fastest growing company for four years, between 2006 and 2009. This is a mean achievement since many companies can reach decades of operations without making it to the list.
It even garnered other forms of praises, which is a good sign. Even if the company's products and services are disparate, the products cannot be considered as the mere front.
The company has a wide range of product offerings. Because the products belong to different niches, it can be considered a one-stop-shop. However, you can categorize these products and services into two major groups
The personal products offered by 5Linx can be further divided into two groups: home and wellness. Nutritional products to satellite television services? You name it, 5Linx offers it!
Apart from physical products in the category of physical products, the company offers services where customers are enabled to save money on products/services they already use daily - energy, telecommunications, tech support as well as security. The demand for these products/services are not limited to certain demographic profiles, so your market is much bigger than what you see.
On the other hand, in the category of business products, the same principle applies. The company sells services that can help companies help reduce costs and increase profits. From payment processing to mobile marketing, business owners can find something they want and need with 5LINX.
Costs to Join 5Linx
If you want to join the 5linx opportunity, you cannot do so without some cash on hand. Just like most business opportunities, you need some form of capital.
To be part of the sales force of 5LINX, you will pay $249. In exchange for this quite steep price, you can receive a startup kit, personal web site, and phone/email/chat support. Other training resources are also provided. You will pay $49.99 for the platinum services.
If you want a cheaper option, you can also pay $99 instead, but this does NOT give you access to the residual commissions or earnings made through your downline's efforts.
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5Linx Compensation Plan
As an MLM, 5Linx offers three common ways to earn - direct commissions, recruitment commissions, and residual commissions.
Instead of explaining all the details, I will only present what you need at the present time to aid you in your decision to join 5Linx.
You get a certain commission based on the volume of products you sell or buy for yourself. Distributors can get 25% of their sales.
You also earn a commission for payments under a subscription program. Most of the products and services are subscription-based, so you can earn a constant recruitment commission, even just for a single sale. What needs to happen, however, is that the customers stick to their subscription.
The company also offers you several ways to earn residual commissions or commissions based on your downlines' efforts. This naturally means that you should work hard to build your downline team under the company's uni-level rank-based system.
Under this system, you are placed on top of your team and anyone you recruit is put at L1. Your L1 people would also recruit their own downlines, and they can form your L2. The recruits of your L2 will be your L3...so on and so forth.
You can also work through 8 ranks in the company by meeting certain requirements of sales volume and number of downlines. This rank affects your residual commission rates. Where your recruits fall in your downline also affects this earning. Commission rates are also based on whether you sold home products or business products. Below is a summary:
|Rank||Home (%)||Business (%)|
The company also offers different types of bonuses and incentives. For a detailed compensation plan, check this.
5Linx Fraud Charges and Lawsuit
A company's reputation SHOULD BE outstanding as its product offerings or the profits it is making, IF NOT MORE. A company with a tainted reputation can have a harder time convincing people their products are credible or effective, which in turn can affect earning potentials.
5Linx has a tainted reputation - there's no other way to say it. In 2017, the co-founders of the 5Linx were indicted for committing investment fraud of 2.3 million as well as wire fraud. Two of them were found guilty in 2018.
Even though the charges are based on the personal decisions of the co-founders only and not of 5Linx as a separate entity, it is impossible for the company not to be affected while 5Linx can reman actively operating under different management, which is why you can still join and the company has not shut down.
However, because of this fraud-infested image, your success as a distributor can be affected. You will have to continually explain that its tarnished reputation is the result of some previous managers' ill-judgment. Recruiting can be tricky - you have to state why the company, even with this history, is still worth joining.
Apart from these charges, there are complaints about the company made by the distributors themselves. Most of them are related to billing issues and not about earning potential. Still, they are worth noting.
5Linx Review: What I Like
There are several aspects of 5LInx that I like. If I join 5Linx, these will be my reasons:
#1 Good Range of Products
The company HAS A LOT OF PRODUCTS. This means there are many things to promote and sell. It is also a sig that the answer to Is 5Linx is a pyramid scheme COULD BE NO.
#2 Fair Compensation Plan
It has decent commission rates, but nothing that extraordinary compared to other MLMs. However, what is nice is that you can make money off subscription plans. Just one sale can lead to recurring commissions as long as the customer maintains their subscriptions.
#3 Refunds and Money-Back Guarantee
Customers are offered refund options if something does not feel right while distributors or you if you decide to join, can get some money-back option if you do not like to be part of the company anymore. Of course, all these are within a certain period only.
5Linx Review: What I DO NOT Like
Unfortunately, there are more factors about 5Linx that I DO NOT LIKE INSTEAD OF LIKE.
#1 Tainted Reputation
As said, I find the company's image already tarnished, which makes it hard to sell their products, promote their services, and recruit people.
#2 Steep Joining Fee
$249 is NOT CHEAP AT ALL. Granted, you get sales support in return, earning ROI fast may not be that possible.
$3 No Guaranteed income
Even if you shell out the steep joining fee, this is no guarantee that you can earn from the company. For one, you are not going to be earning a large amount per sale. 10% is very low, and getting ONLY 20% commission for attaining the highest sales target IS NOT THAT IMPRESSIVE.
#4 Pyramid scheme reputation, Bad Reps of MLMs
Is 5Linx a pyramid scheme? I can say no. However, many people confuse MLMs with pyramid schemes and run in the opposite direction when you offer them your products. The fact that many other MLMs turn out to be a scam makes it hard to trust even legit companies.
Is 5Linx a Pyramid Scheme? A Scam? FINAL VERDICT
Is 5Linx a pyramid scheme? A scam? NO and no. But will I encourage you to join and promote it as an excellent earning opportunity? Still No and No.
You should be aware that at present, you are at a disadvantage with 5Linx if you do decide to join. It could be different three years ago. Today, the company doesn't have an excellent reputation, and anything could happen.
Moreover, the earning rates are not making it worth perceiving 5Linx as a reliable source of income. Check out alternative earning methods instead.
Alternative Earning Method
One of the many earning methods out there that I can recommend is affiliate marketng. You do not have to sell and recruit; let alone, lend support to fishy companies. Instead, you will be promoting products and services of companies you 100% believe in and get paid in return.
Of course, it is not as easy as that. There are tools to learn and methods to master. The best place to learn about affiliate marketing is Wealthy Affiliate training platform. You can join them for free and have access to the first ten lectures. This is a huge plus because you can decide whether you are interested in doing affiliate marketing before investing your hardly-earned money. If you have any questions, please leave them below.