MLM Reviews Work from home

Is 5Linx A Pyramid Scheme or A Scam? [2020 Review]

Welcome to my 5Linx review! If you are wondering is 5Linx a pyramid scheme or a scam, I'm here to help you find the answer to that question! So let's find out!

First of all, I want to congratulate you for taking the time to do some research, it's the only way to find the legit ways that can help you earn a passive income online.

The chances are someone has either recommended 5Linx products or tried to convince you to join the program. But you got suspicious, could this be a pyramid scheme?

Before we continue, It's important to understand the difference between multi-level marketing and pyramid schemes. There are legit MLM companies that are operating completely legally and offering value to customers and their sales reps.

Pyramid schemes use the MLM business model to recruit people into the system. The main difference to a legit MLM company is that there are rarely any real products to sell or they are low quality.

In a pyramid scheme, the revenue isn't created from the sales of the products to consumers but from the participation fees of the new recruits.

The new recruits usually have to pay a lot of money to be able to join a pyramid scheme. They usually get either training, inventory or an investment opportunity in return for their investment.

In many cases, people pay thousands of justs to get the opportunity to market the same products to unsuspecting new recruits.

In both MLM and pyramid schemes there's an upline, the people recruited on multiple levels above you and a downline, the people you have recruited and your recruits have recruited.

process model of multi-level marketing

Whenever a sales rep recruits a new person into the system the upline gets a share of the initial investments and of the sales a recruit makes.

If you understand a bit of math, it doesn't take much to have thousands of people below you, making sales or recruiting new people. This is why these systems create such a great incentive to recruit people, the exponential revenue growth is one helluva motivator.

The only real difference between a pyramid scheme and legit MLM is that in a legit MLM each sales rep's main function is to sell actual products or services of the company, not recruit new people.

Pyramid schemes are very similar to Ponzi Schemes and even though there are intricate differences they are often used interchangeably and they can be combined.

Phew! Now that we got that out of the way, let's get on with the review! As a short disclaimer, I want to be completely honest about the fact that I'm not affiliated with 5Linx in any way.

But I do recommend products that I believe in myself and I'm affiliated with those companies. I only recommend products I know work from the first-hand experience.

After all, this website is about finding the best business opportunities for creating online income that can transform your life! You can check out my top recommendation by clicking the button below:

What Is 5Linx

5Linx is an American multi-level marketing or network marketing company that has a "holistic" approach to their product line. I.e. they don't focus on a specific niche.

The company is based in Rochester, NY and has been around since 2001.

The company was founded by Craig Jerabek, Jeb Tyler and Jason Guck in 2011 but in 2016 Nelson Gerard both the majority stock of the company.

Currently, the leadership of the company consists of:

  • Chairman of Board, Nelson Gerard
  • Chief Operating Officer, Michael Gilbert
  • Vice President, Denise Nowak
  • Chief Sales Officer, Larry Harper

The cost to join 5Linx is:

  • $99 Customer Representative
  • $249 Independent Marketing Representative
  • $49.95/month Platinum Services

You can earn money at 5Linx by selling their products to consumers or by recruiting more sales reps. You will then earn a percentage of the sales of the people below you for several generations like in most MLMs.

5Linx Products

5Linx offers a ton of products as the company believes in arming its sales reps with a variety of products and not chaining them to a single niche.

So they a ton of products and services under two main categories. Personal products and business products.

Personal products include for example:

  • Supplements
  • Credit score service
  • Home security services
  • Id Guard
  • Internet, Fiber video & cable TV
  • Discount networks
  • Tech support
  • Telemedicine

The business products include:

  • Commercial energy program
  • Commercial security systems
  • Payment solutions
  • Textalerts

So as you can see, 5Linx has taken a bit of a "something for all" approach so that their sales reps just have to find customers and they can find a suitable product for almost any need.

Is 5Linx A Scam?

No, I wouldn't call the company 5Linx A scam. They are simply a network marketing company.

If you do some digging around, there is definitely some controversy behind the company's founders and previous owners:

"In September 2017, the three co-founders of 5LINX - Jerabeck, Tyler, and Guck - were indicted on multiple federal fraud charges, including wire fraud and money laundering. The trio admitted to defrauding $2.3 million from investors, illegally depositing company revenues into personal accounts, and failing to pay hundreds of thousands of dollars in taxes. In December 2018, Tyler and Jerabeck were sentenced to a 14-month prison term for fraud and filing false tax returns and were ordered to pay back $2.3 million in restitution to investors, as well as $118,628 in unpaid taxes to the IRS. In May 2019, Jason Guck was sentenced to a 7-month prison term."

But you need to realize the company has changed ownership since and continues its operations under new leadership. More importantly, the allegations were against the founders, not the company.

While there are many people who bash any MLMs, you have to remember that it's a completely legal business model in most parts of the world and there are a ton of them, especially in the US. As long they are abiding the law, they are not a scam. Simple as that.

MLMs can be an effective way to cut out a lot of middlemen to offer products at a more competitive price point.

The reason people bash MLMs is because there is always the possibility of them tuning out to be a pyramid scheme and because there are always dishonest individuals that use sales tactics that aren't approved by the company to get referrals.

But in MLMs it's very hard for the company to keep a short leash on the individual sales reps. This is something that has caused a lot of distrust as many people have wound up losing a lot of money to MLMs because of false promises.

Is 5Linx A Pyramid Scheme

No. It doesn't seem that 5Linx is a pyramid scheme. They have definitely had some controversy in the past, but the litigation hasn't been about suspicions about the company being a pyramid scheme.

They are definitely an MLM, but remember that being an MLM isn't the same thing as being a pyramid scheme.

5Linx does have real products to sell and while it's not the cheapest MLM to get in, the participation fees are reasonable compared to the thousands of dollars many pyramid schemes ask.

Remember that for a company to be a pyramid scheme, the majority of its revenue would have to come from the recruitment of new sales reps instead of selling products or services to the consumers.

At least that's the often accepted definition, that for example FTC has used to assess if a company is a pyramid scheme. If that were the case with 5Linx, there would've been lawsuits by now.

So as long as an MLM company has actual products or services that are being sold to consumers and not just within the system and they are making most of their revenue through those sales, they are generally not considered a pyramid scheme.

Make no mistake, there are people who have become very successful by becoming MLM sales reps. The business model offers great potential for active go-getters.

But it's definitely not easy to succeed with MLMs. You need to be very proactive, you need to network and cold call people, organize sales parties etc. And above all, you need to be able to handle a lot of no's for an answer without giving up.

I'm not personally a fan of this business model, but then again it's a matter of preference. I honestly think there's a better option you might be interested in. This model can be leveraged to increase your leads exponentially even with MLMs.

An Option for MLMs

Ok, here's the thing. MLMs have a notoriously bad success rate, as most of the people that start with them don't end up making any meaningful amount of income.

But this is a reality with most businesses. The truth is that most people lack the mindset, discipline, and perseverance to run a business of their own. Be it online or in the real world.

But if you have what it takes to become an entrepreneur, I think there is a huge issue with becoming a sales rep for an MLM. You don't actually own your business! The same goes with any kind of franchising.

You are investing all your time and effort to increase the company's sales and to make their brand more recognized. But you are completely dependent on them. What if the company goes bankrupt? What then? You have to start all over again.

To become truly successful, you will need to focus on creating your own brand, your own company! Where you call the shots and aren't dependent on a single company for your income. You can then choose what companies, if any, you want to associate with.

In today's digital world, you need to learn how to leverage the Internet to get leads. This stuff can be applied to MLMs as well, by the way, so you might want to stick around even if you are dead set at becoming a sales rep.

So if you are looking for a way to start your own business that allows you to get passive income, I recommend online affiliate marketing instead of MLMs.

This is because online affiliate marketing, combined with SEO (search engine optimization), allows you to build your own brand on a digital real estate you own, i.e. your domain.

It's possible to get endless streams of traffic, leads and converting customers through the search engines. When you combine this with affiliate marketing, you have a system that requires no manual steps to make sales once set-up. Your website works for you on automation 24/7.

Unlike with MLMs, there is no need to contacting people directly to sell them products or to try and get them to join the program to grow your network.

With affiliate marketing, you can simply present people with solutions to their problems by recommending products you believe in.

If they happen to like your recommendations and buy, you earn a commission. It's a lot less stressful than trying to recruit people into your downline and requires no manual steps on your part.

I'm not going to go into detail here how this actually works, as I've explained it thoroughly in this Wealthy Affiliate review, so check that out if you got interested.

If you want to get started as soon as possible, definitely check out my super actionable (and free) 7-day course that teaches you how you can have a website of your own running in less than a week. 

You can enroll for the 7-day course by submitting your email address into the form below. I will not spam your email and you can unsubscribe anytime. 


I hope you found my 5Linx review useful. If you have any questions, feel free to leave them in the comments section below and I'll promise to get back to you.

5Linx is definitely an MLM company but there is no evidence for it being a scam or a pyramid scheme. They've been around almost two decades. There has definitely been some controversy around the company though.

I personally don't find the MLM business model appealing. The online affiliate marketing world simply offers a superior business model in my opinion.

You can add value to the market place by offering solutions to the problems of consumers and make a buck while doing it. But the real beauty is that this process can be automated.

I personally prefer affiliaite marketing digital products as they offer a superior commission structure, sometimes well over 50% of the sales. I also believe in reducing the overt consumption of physical products, the world is full of plastic crap already. Just an idea for you as well.

If you found this review useful, consider sharing it in social media. Thanks for reading!

Leave a Reply

Your email address will not be published.