Some say Karatbars it’s a multilevel marketing company, others say it’s a pyramid scheme. Is Karatbars a Scam? On this eye-opening review, I will dig deep into what Kararbars is all about.
What is Karatbars International?
Karatbars is basically an e-commerce business operation in the metal and mining industry. But Is Karatbars a Scam?
Launched in 2011, this global e-commerce business is known for the sale of gold bars.
These gold bars are distributed by the business through the efforts of affiliate marketing. Karatbars International is a Multiple Level Marketing (MLM) company that does not focus basically on selling gold as it does in selling people the opportunity to sell others the opportunity to invest in gold.
This basically means that members are expected to sell the idea to others instead of convincing them to invest in gold. Currently, they have been able to reach over 119 countries, and their main goal is to reach a global audience.
With its headquarters in Germany, Karatbars International seeks to sell small amounts of gold to investors. According to the official website, this company has been in existence for over 5 years and in that period of time has been able to expand to over seventy (70) countries.
Although it is stated in the official website that this company based in Germany if you happen to take a closer look, you will find out that they are currently operating in Switzerland.
The company sells smaller quantities of 24K gold as well as gallons that could come in various ways;
- 5 grams
- 5 grams
- 1 gram
The company seeks to offer its members the opportunity to buy gold in smaller quantities that are wrapped in plastic cards that look like credit cards.
According to the official website, the company claims that they have embedded the highest safety standard by Integrating DNA into it. One thing that has left investors worried is that the website does not mention the partners that provide them with these gold bars.
According to their printed documents, there are several ways people can make money from this program. These ways include;
- Direct commission
- Unilevel Bonus
- Generation Bonus
- Package Bonus
- Dual Team Bonus
- Karatbars Pool
- Karatbars Good Fund
These are the ways you can make money from this company. To earn money, there are ranks that you would have to get to. These ranks include;
- Supervisor – 200 points
- Bronze supervisor – 500 points
- Silver supervisor – 1250 points
- Gold supervisor – 2400 points
- Bronze manager – 4000 points
- Silver manager – 6000 points
- Gold manager – 9000 points
If you take out time to read through the compensation plan on their website, you will find out that certain things are not clear. First, who are paying members? On the compensation plan, there is no stated company of sponsor responsible for paying workers. Also, according to several people that had tried it out, they were either not paid or were paid less than what was expected.
While members would try to present the compensation plan as easy as possible, once you join, you will find out that it is not as easy at it seems.
How Karatbars International Works?
This program works in such a way that you have to register; then you will be required to invite or convince more people to join to get discounts on each gold that is bought. It has been revealed that the more people you are able to convince to join the program, the more discount you stand to gain. To begin, you would be expected to pay huge sums at the onset.
One thing that has discouraged more people from joining this company is that of having to recruit or convince more people to join. Doing this would help increase the amount of money they are able to make.
While they will tell you that you will make money by simply selling gold, once you become a member, you will find out that you make money only when you convince more people to join and if those you refer are able to make sales or convince others to become part of the company.
Like every other MLM company, you will be required to convince more people to join the company instead of inviting them to buy gold. When you invite more people, you are able to boost sale and increase the volume of the discount you are offered.
To compensate affiliates, the company has put in place 12 ranks. The commission for each package sold is paid to affiliates each time they are able to convince other people to buy these packages. For example, affiliates who are able to sell the Silver package get a commission of $78, for the Bronze package, they get a commission of $194, and for the Gold package, they are paid a commission of $390.
Another compensation plan is the Unilevel commission. This plan offers members or affiliates the specific percentage of the amount of money that is spent by those below them. This commission plan depends solely on the rank of the affiliate. The “Distributor” rank which is the lowest rank does not get any level commission.
After the first rank, affiliates are able to make 0.5% to about 5.5% of each purchase that is made by those below them. This also depends on the rank. If the rank of an affiliate increases, his level commission increases by 0.5%.
Let’s say if the affiliate is in the second rank and his commission is 0.5%, if he moves to the third rank, his commission would be increased to 1%. This clearly means that for affiliates to make money off this program, they would simply have to work hard to increase their rank.
The Binary commission is another compensation plan for the program.
This plan offers the affiliates the money that their downlines spent in binary formats. To explain better, let’s say the team of an affiliate is able to achieve about 50 units of sale on the first leg and about 25 units on the second leg, they stand to gain(that is if the bronze package is 50 units);
- They stand to make about $52 if the Silver package is purchased by their downline.
- They stand to make $78 if the Bronze package is the highest package that is purchased by their downlines.
- They stand to make $103 if the Gold package is the highest package that their downlines purchased.
These compensation and commission plans are key forms of payout in the Karatbars International.
Most people have referred to this company as a scam or a pyramid scheme. We will take out time to point out some of the reasons why they have concluded this Karatbars International is a scam. These reasons are:
- The cost of their products; if you have taken out time to go through the products that they claim to offer, you will find out that their price is way higher than the actual market value for the product. They sell 24k gold for about $78 to $86 while the market value of 24k is $52. This is about 30 to 33% increase in price. How then do they expect people to buy from them? If they sell the exact same items for a higher price, does that tell you that they want people to buy their products? No! It clearly means that they are interested in affiliates being able to recruit more affiliates instead of convincing them to buy their products.
- No solid product; if you have gone through their website, they did not mention their sponsors or producers neither did they mention how their gold bars are gotten from. A legitimate company or e-commerce stores that sell gold bars would proudly tell buyers their producers to assure them that the products are genuine. Karatbars International does not do this. Most people have claimed that they are simply using the sale of gold as a smokescreen to promote their affiliate company where new affiliates pass money to the founders who let smaller percentages of the money trickle down the hands of the other affiliates.
- The warning issued by the relevant Canadian authority; the AMF in Canada has issued a warning to investors. According to the warning, Karatbars International has been prohibited from trading directly or indirectly in Securities under any form of investment that is covered by the Securities Act. It has also been prohibited from acting as an advisor.
- It is an e-commerce business
- A complicated compensation plan that makes it extremely difficult for affiliates to understand how they will be paid
- Sells gold above the market value
- The company is not interested in the selling of gold
- Encourages affiliates to recruit other affiliates
- No producers for the products they claim to sell
- It is a pyramid scheme
Is Karatbars a scam? At first glance, it appears to be a legitimate company that trades with gold. We all know, that precious material is a powerful and lucrative industry. Still, I would’t recommend you to join because there are too many indicators on the “con” side.