Why Gold and Silver Bullion MLMs Have Never Worked

by louabbott on July 28, 2011

Based on a review of American Gold Reserve (AGR)

It’s a matter of simple arithmetic.

In my 15 years of studying the multilevel marketing [MLM], network marketing industry.ย  I have seen many different kinds of companies come and go.

In the case of companies that sell commonly available commodities like gold and silver, I have never seen one last long term.

Just to make sure I wasn’t exaggerating, I checked with a respected peer to see if he could think of any exception. His answer confirmed it …

On Jul 26, 2011, at 6:31 AM, Lou Abbott / MLM-theWholeTruth.com wrote:

Hi Len,

To your considerable knowledge, has there EVER been a precious metals MLM that has succeeded for any length of time?

Do you have an article I can link to on that topic?


His reply was rapid and clear …

Hi Lou,

No. None.

And for reasons that are irreparable. Gold bullion will always be a
commodity that has a set value and cannot be marked up (an ounce of
gold is worth an ounce of gold), and it will always be another form of
currency (like selling Susan B. Anthony silver dollars for $1.00).
Therefore, trying to network market such a product will always create
an illegal pyramid scheme.

There is a chapter in my book called “MLM Programs That Never Work,
But Won’t Go Away”
that deals with gold and silver schemes, but I have
no stand alone article on the topic.


In the case of American Gold Reserve (AGR), a new MLM in “pre-enrollment” as of the date of this post and the example I use in the video to explain this important lesson that also applies to ANY MLM where the products have similar mark ups, I think AGR has created a company that is not an illegal pyramid scheme.

Even so, I think it can’t possibly succeed long term in our industry.

The video (in the upper right corner of this page) explains why. It’s a matter of simple arithmetic to understand.

I urge you to take the few minutes and learn the lesson.

Then, I would appreciate your comment below.

(I even welcome comments if you disagree. But please be pleasant and explain where my facts or logic are wrong.ย  If you simply call me, or anyone else that comments, names or impugn our motives, I may delight in deleting your comment!)

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{ 26 comments… read them below or add one }

Wilson June 11, 2016 at 5:27 am Thumb up 0 Thumb down 1

With many MLM companies people join and get the autoship which delivers product to them month after month. This is all good if they then have a customer base to sell their stock to but no customers means the garage starts to fill up with unsold product which usually will have a sell by date. With Karatbars as affiliates we do not buy stock to resell as Fedex delivers direct from the company to the buyer or the buyer can select to have Karatbars store in a secure vault. But let me ask supposing you had to buy from Karatbars on autoship and hold stock wouldn’t it be better AND SAFER to hold a garage full of pure gold which will retain value rather than something which will go out of date and be worthless.


Ray April 7, 2016 at 8:15 pm Thumb up 2 Thumb down 0

I read this thread with interest as I too have been looking to MLM Gold Silver companies. I found two that I have been using have been so far good.

Karatbars is established now German company with good success worldwide, I have been using Karatbars for 2 years now and I am finding great pricing with great commissions and my team is growing to over 780 people now so I my commissions from this are very good.

ISN International Silver Network – was always collecting numismatics and stacking as well and I found ISN great for this. However some exciting news is that last year they have launched a new bullion program call ISN Precious Metals.

This was good for me because Karatbars only allows Gold but ISN Precious Metals now offers both Gold and Silver bars and coins. Already I have built great income in UK, Ireland, Sweden, Spain and Switzerland. The prices we can buy are cheaper than leading UK bullion house (Bullion By Post) and as a bullion agent with ISN Precious Metals it is able to get wholesale pricing on even tiny orders. This means the price from ISN is very low indeed and I have not found better price.

Also the network pays great commissions and my income is now already over ยฃ1,350 per month in just there months so I am very happy with this.

I would say to look at Karatbars and ISN Precious Metals for Bullion MLM as it is now possible to get in MLM Bullion but without paying more than the value of the gold or silver.

If you wish to see or have interest in this then please check out my Agent site at http://bullion.network or contact me at save@bullion.network if you have questions.

Thank you. Ray.


Cassie February 8, 2016 at 1:32 am Thumb up 1 Thumb down 0

hi there
Has anyone looked into the mlm called onecoin…it is cryptocurrecy similar to Bitcoin from what I have researched but they have cleverly turned it into mlm and a friend has asked me to join? Any Info comments etc.?


Wilson June 11, 2016 at 5:30 am Thumb up 1 Thumb down 0

Cassie I’ve a close friend, a very successful networker who has built huge teams in several companies. Last year he joined One Coin but after a month was very unhappy and didn’t want his name associated with it so moved into a new social media and advertising opportunity.


Conrad Wrencher December 7, 2015 at 12:51 pm Thumb up 1 Thumb down 0

This maybe a solution for alot of you.There is a Publicly Traded Company: BitGold.com/r/TW5M9K **Gold is there only product and you can buy or sell as much or as little amount that you want at only 1% above cost.
There is no cost to open an account..**It’s Free**…
They will give you “Free Gold” up to 0.250gram just for opening a **Free account**.
They also have an Affiliate program..called Your Golden Heart Referral Program..where you can get more *Free Gold*..If you refer others such as your family..facebook.twitter.social media friends to “Open a Free account…they will get *Free Gold 0.250gram and You will get more *Gold 0.250gram for them opening an account…(The Free Gold) you get add up fast!
They provide a Free Gold Savings account and Free Secure vault with ..(no storage fees at all) to hold your Gold if you choose.
They provide you
the ability to make and receive instant gold or your currency payments(spend money anywhere in the world in your own currency),with a ATM card.
They have been compared to Paypal and Amazon alike.
You can buy as little as 1gram or as much as you perfer.
BitGold is Best and Safest way to own Gold other than in your own hands or possession and you still have some risk and cautions.
You can sign up and open “Free account” here..click on this link below.
Conrad Wrencher
Email: smokn357@gmail.com


Steven November 15, 2015 at 6:51 pm Thumb up 1 Thumb down 0

I am already starting to collect gold and silver and have been presented by other collectors some new options in a network marketing gold.silver opportunity, The mark up is low, but the prices are close to spot in all. I was hoping someone could give me a comparison.
The 3 companies under consideration are
1. Karatbars
2. ISN – International Silver Network
3. ilgamos.
Would love to hear comparisons.
I know that there is more money to be made in nutritional products and I am in the health field professionally, but I can not market to my patients due to contractual agreements, so this could be a better fit for me.


Scott November 25, 2014 at 11:00 am Thumb up 1 Thumb down 3

I like Karatbars for buying small amounts. It was free to sign up and if I choose I can get business package. I can refer others to buy and make a small commission or just buy for me.


Glenn March 4, 2014 at 5:17 pm Thumb up 3 Thumb down 1

Thanks for the enlightening video, I’ve been involved in a few MLM networks and was hoping to find a Precious metals one. Looking at a company that markets graded coins, but when I started buying metals in 2005 I bought graded coins, but realized the mark ups ate all of the profits even though precious metal (gold) doubled in price. Should have stuck with bullion. I say just buy bullion silver or gold from reputable dealers. Thanks Lou.


Chris Dennison September 26, 2015 at 3:44 pm Thumb up 0 Thumb down 1

Hey Glen, it’s almost 2016 and I don’t know if you found an opportunity, but I might have something you might be interested in… if you are interested then let me know and i’d love to share some info with you. Best wishes


Phil Martello January 9, 2013 at 9:32 am Thumb up 4 Thumb down 0

Thank you for the article but old 2011 postings/comments the last being March 2012..
Are they any new information and or change of opinion about gold/silver MLM .
I looked into KB…Free Gold saving account..,no fees, or monthly commitments.
with the ability to buy Gold in smaller amounts of .5 & 1 grams sound appealing. the ability to store and sell back and use gold in marketplace sounds like a great idea.
The bad thing about research is that nothing dies on internet bad /negative and false information live on ..My specific question: KB gold good or bad?


louabbott January 10, 2013 at 3:29 pm Thumb up 3 Thumb down 1

Hi Phil – I like the idea of precious metals in smaller sizes. But what % markup over spot do you end up having to pay?

Did you watch the video? If so, do you understand why precious metals, while it’s a good idea to own them, are rarely if ever a good product for a network marketing company.


Michelle Porter March 23, 2014 at 10:18 am Thumb up 9 Thumb down 2

Hi Lou, I also got into karatbars after reviewing a lot of info. They are competitively priced for the quality (24K, 999.9 bullion) and 1 gram size gold – some higher, some lower, but the affiliate component allows the ability to earn commissions and turn them into more gold. Their new12 week plan drives early growth but is optional. They also offer 2.5 g and 5g that have lower markup so remaining competitive. Technically not an MLM since there is no required monthly purchase, but to participate in the larger money-earning aspect (dual team commissions) a starter package must be purchased. Bottom line- people are saving gold and making money in short periods of time. 4 year old company. Worth looking at.


Raymond Hamilton March 3, 2012 at 2:32 pm Thumb up 3 Thumb down 1

Has any body. Earned a modest paycheck from A.G R? I don’t want to get rich. But I know that if I can earn a extra 1000 dollars a month it would make a very big difference in my life. My question is don’t you need an license to sell commodities? And will the securities and exchange commission allow a company to exist? Sooner or later a Rep is going to call it an investment. Which will raise concerns.


Chris Tew December 10, 2011 at 5:08 pm Thumb up 4 Thumb down 2

Most customers in American Gold Reserve buy silver, not gold. Most people aren’t going to be buying $1,750 ounce of gold every month. There will soon be a $100 silver offering. Most MLMs get people to buy on the auto-ship program. Many people can afford $100 to $200 per month. Yes it’s a small commission. However, once you have 29,500 people in your forced 3×9 matrix who are all on auto-ship (which I know never happens) you’ll see a very good income. Millions of people are moving towards buying gold and silver. Enrolling people in this is easy because it’s free to enroll. I might mention, however that I’ve had lots of order over $15k. It’s easy to get orders when people want something. Call me if you have questions. Chris 435-881-5820. Sure, if you don’t sell something you don’t earn anything. I’m enrolling people easy and fast.


Rasim Hadzic December 2, 2011 at 5:52 am Thumb up 3 Thumb down 1

I was thinking to join to one of best Gold MLM companies, but still wondering how much will last. I want to make only small affiliate website with shop, and thats it.
So if you think to make money for 1-2-3 years max, this is great opportunity.
BUT for residual income is definetly Wellness company best choise, there are many reasons to choose it and ofcourse I joined one of the best companies where I become top leader in 1 year ๐Ÿ˜‰
So income from gold ans silver and income from Wellness company is good combination.. ๐Ÿ˜‰ China owns 51% of World gold, they are talking on TV to people to buy gold, as they know in the future, and experience from the past, WHO HAVE GOLD; HAVE MONEY; AND IT WILL BE RICH ๐Ÿ˜‰

Mandura International Leader


Chris November 22, 2011 at 11:23 am Thumb up 5 Thumb down 1

I think people are missing the point entireley with AGR.I’ve looked at the company and i am considering joining purely on the basis of this:If i am already collecting gold and silver,why not do it with AGR so i can also generate a revenue stream with which i can buy more gold and silver.I think AGR could be a nice fit for gold bugs from that perspective.Most networkers won’t join it as they want a product that has a much higher profit margin.I looked at Numis and i was appalled at the prices they charge over spot,i’d have to wait for gold to go up 5 fold to break even! And don’t tell me about numismatic value,they’re turfing out bullion coins.Looking at AGR,it seems very transparent and honest,ie,no $600 kit realy worth $150 to buy,just free sign up, order you gold or silver.I doubt the margins are sufficient for me to earn a monthly six figure income,but if i build a team that covers the cost of my gold purchases,i’ll be happy.


Tim Buist December 11, 2011 at 12:17 am Thumb up 4 Thumb down 0

Great comment Chris and thanks for the counter balance, I was starting to think to myself as I read through these comments.. am I the only one who seems to see the real value of what AGR is presenting? (btw, I am not a rep for AGR or any metals companies presently) My thoughts after reviewing the presentation were that this allows anybody to fund their own investment into gold and silver, as long as your fine with private minted rounds vs. US Eagles, which for me is the only possible sticking point. Creating a life changing income? Not likely. But funding your own investments in an asset that actually can be life-changing? Seems plausible to me. And after watching through the presentation, no where in there did it ever suggest that you would be driving fancy cars or cruising the Caribbean b/c of AGR. I thought the presentation was very professional and sets realistic expectations for distributors. (which is not something you can say for too many MLM co’s)


Mandy November 11, 2011 at 9:57 pm Thumb up 3 Thumb down 1

Hi Lou,

Hope you’re well.

Please help urgently!!

Is this a legitimate MLM company?


Thank you in advance, much appreciated!!


Damiso Arrington August 11, 2011 at 10:34 am Thumb up 4 Thumb down 1

I recently made the move from a precious metals mlm to a new company in the health and wellness industry. My reasoning for the move wasn’t so much based on the history of these particular types of mlm’s, but more because I was able to purchase the company products (numismatic coins) direct from the same places that they did at the same prices. Additionally, I learned more about collecting gold and silver by the ounce and began dealing directly with APMEX. I have also watched several key leaders of my previous company leave for the health and wellness industry for various other reasons to include the need for a consumable product with a profit margin.

Noticing how the price of precious metals have been fluctuating recently, making the move was a good decision.


Steve Bilenky August 11, 2011 at 9:09 am Thumb up 4 Thumb down 0

I recently reviewed a Silver Coin mlm presentation, again, and confirmed what you are saying. The pay plan appears to be a re-distribution of the sign up fees and I can’t see where purchasing the coins contributes to the pay plan other than it may be a qualifier. The presentation even talks about one of the challenges, prospects respond with they can buy the coins for less money at local coin dealers. The opposite is true in a real product mlm like my pet food business, the pet food is the mlm. In fact there are many, many more customers than distributors confirming the value of the product, people are willing to buy it without being part of the pay plan and, they remain customers for years!


Jerry Chen August 10, 2011 at 9:28 pm Thumb up 5 Thumb down 1

Hi Lou – Thanks for sharing the video, very clear and to the point. I’m writing a blog post about it and will embed your video so I can share it with my blog visitors and readers. Hopefully others can understand it the way you do so they can make informed decisions on their MLM of choice!


Michael Bowman July 31, 2011 at 3:25 pm Thumb up 6 Thumb down 1

Lou, I have looked at these same companies and passed primarily because on a gut level they made no sense to me for some of the same reasons you state in your video.
Thank you for a very insightful and accurate explanation of these businesses. I have always admired your level of professionalism and the solid education you bring to the industry. Thank you!


Leonard Monteleone July 31, 2011 at 12:34 pm Thumb up 5 Thumb down 2

Right on Lou,

They don’t work, the companies just cannot change the prices
daily as the precious medals change daily.
People in these programs will argue until the cows come home
all they wish, there isn’t any with tenure in Networking.
Thanks for the article.
Leonard Monteleone
Chanhassen, MN.


Tony Rush July 31, 2011 at 11:37 am Thumb up 5 Thumb down 1

Lou, as usual, you’ve nailed it.

We’ve seen dozens of these bullion MLMs come and go over the years and they nearly always get shut down for the same reasons. And your video on the comp plan illustrates (again) why — even if they DO manage to avoid the regulatory attention and keep their nose clean — they’re still illogical as a business choice because the commissions are so small.

Gold and silver ARE attractive products. And I think that the average person DOES need to get educated about why it’s a good idea to buy them. But, just because something is a good product, doesn’t mean it’s a good product for an MLM. And I think that’s obvious from the material you’ve posted here.


Tony Rush


Greg Granger July 31, 2011 at 8:24 am Thumb up 5 Thumb down 1

I couldn’t agree more with your comments. This is my “canned” response to people when try to pitch me on a metals (Au/Ag) MLM: “These markets are too volatile, and the values of these metals fluctuate too much to make it a viable MLM model. Avoid it at all costs.”

Case in point, look at a company like Numis Network. Many of its top leaders have already left that company. 2 other other companies: OneX & KB Gold. I have one word to say there: “Puh-lease!”. Gimme a break already! They also use “shady” payment processors based off-shore so US Regulatories can’t touch them. ‘Nuff said!

Gold and silver in a MLM model just doesn’t make viable sense. If somebody tries to pitch you on one of these programs, turn around and run the other way.


Greg July 29, 2011 at 9:45 pm Thumb up 5 Thumb down 1

Hi Lou,

Great article and thanks for writing about a great topic. I agree wholeheartedly. MLM’s that are worth the effort must have a real, unique, and consumable product. The more closely priced to comparable retail store items the better, while of course maintaining 90%+ PV (I hate the 50% PV products).

This is important to me for 2 main reasons.

First, if I’m building a network marketing business, I want to do it the right way, for a company with products that deliver real value to customers/distributors. There is no other way to get a true, sustainable lifelong residual income in MLM.

Second, I dream of the day that these companies with false “products” pyramid schemed (legal or otherwise) would just go away. Maybe if the book โ€œMLM Programs That Never Work, But Wonโ€™t Go Away,โ€ was required reading for all new MLM’rs, these short term companies would never get off the ground, bringing more credibility and integrity to the industry that I love.


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