Klob International Review: Business discounts

Klob International appear to have “launched” in the US in 2011, with the company’s “Contact” page listing additional phone numbers in Mexico, Peru and Colombia.

The Klob International “member agreement” states that it’s

a legal entity established and existing under the laws of Mexico, residing in the city of Guadalajara, in the State of Jalisco, as stated and described in deed No. 17,314, granted by Atty. Enrique Ramos Ruiz, Notary Public No. 20, located in the city of Zapopan, Jalisco, Mexico, dated June 20, 2009.

Spanish-speaking markets appear to be Klob International’s primary focus, with much of the company’s website still presented in Spanish if “English” is selected as the display language. Marketing videos for Klob also appear to be exclusively in Spanish.

As far as I can tell, there is no information on the Klob International website indicating who owns or runs the business. The Klob International website domain (“klobinternational.com”) was registered back in 2007, however the domain registration is set to private.

The “What is Klob” website page displays a video with some guy speaking in Spanish.

On the “Klob People” page a testimonial from a Sergio Cervantes reads

Klöb thinks outside the box and delivers a new concept to the market thanks to the innovative ideas of ​​Pedro López and Manuel Estrada, who have not only proven to be business owners with character, but men who can be considered friends.

Further research revealed a US launch marketing video, in which Estrada and  López can be seen speaking to Klob International affiliates:

Estrada (right) and López  (left) are credited as President and Vice-President respectively.

Likely due to the language barrier, I was unable to find any MLM history (affiliate or executive) for either Estrada or López.

Read on for a full review of the Klob International MLM business opportunity.

The Klob International Product Line

In their “member agreement” Klob International claim their “corporate purpose” is ‘dedicated to the import, manufacturing and marketing of financial tools and products of daily use‘. That said, I’m still not entirely clear on what the company markets.

The Klob International “Services” website page mentions “Publications for MonkyMart” and “Klob Pro”.

MonkyMart is an online platform developed by Klöb with the aim of providing the advertising service, deals, classified ads and featured ones.

A visit to the MonkyMart website (“monkymart.com”) reveals a message-board style classified ads website. Items featured on the main page include Herbalife products, women’s sportswear and digestion aids (all in Spanish).

No pricing structure is provided on the MonkyMart website, nor is there any indication if non-affiliates can post ads.

Klob Pro meanwhile is a $299 marketing suite aimed at Klob International affiliates.

There is an “available packages” page on the Klob website, but at the time of publication it was blank.

The Klob International Compensation Plan

The Klob International compensation plan offers affiliates recruitment commissions and residuals via a binary compensation structure.

Additional bonuses and incentives are also available, including a matching bonus on downline generated binary commissions.

Klob International Affiliate Membership Ranks

There are 12 affiliate membership ranks within the Klob International compensation plan. Along with their respective qualification criteria, they are as follows:

• Entrepreneur – pay your affiliate membership fee
• Beginner – generate at least 500 points in a week in your weaker binary team
• Decided – generate at least 1000 points in a week in your weaker binary team
• Persistent – generate at least 2000 points in a week in your weaker binary team and have at least one Beginner or higher ranked affiliate in your downline
• Intrepid – generate at least 3000 points in a week in your weaker binary team and have at least two Beginner or higher ranked affiliates in your downline
• Expert – generate at least 5000 points in a week in your weaker binary team and personally recruit at least three Beginner or higher ranked affiliates in your downline
• Leader – generate at least 10,000 points in a week in your weaker binary team (for 2 consecutive weeks) and have at least four Beginner or higher ranked affiliates in your downline
• Exemplary – generate at least 15,000 points in a week in your weaker binary team (for 2 consecutive weeks) and have at least five Beginner or higher ranked affiliates in your downline
• Winner – generate at least 20,000 points in a week in your weaker binary team (for 3 consecutive weeks) and have at least six Beginner or higher ranked affiliates in your downline
• Successful – generate at least 25,000 points in a week in your weaker binary team (for 3 consecutive weeks) and have at least seven Beginner or higher ranked affiliates in your downline
• Master – generate at least 150,000 points in a week in your weaker binary team (for 4 consecutive weeks) and have at least eight Expert or higher ranked affiliates in your downline
• Independent – generate at least 500,000 points in a week in your weaker binary team (for 4 consecutive weeks) and have at least ten Expert or higher ranked affiliates in your downline
• Free – generate at least 1,000,000 points in a week in your weaker binary team (for 4 consecutive weeks) and have at least twelve Expert or higher ranked affiliates in your downline

Affiliate Rank Achievement Bonus

Starting at the Beginner affiliate rank, Klob International pay out a Rank Achievement Bonus when an affiliate qualifies at a higher rank (once-off):

• Beginner – $20
• Decided – $40
• Persistent – $80
• Intrepid – $120
• Expert – $200
• Leader – $400
• Exemplary – $600
• Winner – $800
• Successful – “mini cooper country man car”
• Master – “trip to the 7 wonders of the world”
• Independent – “super luxury car”
• Free – “the house of your dreams”

Recruitment Commissions

Klob International pay affiliates on the recruitment of new affiliates. How much of a commission is paid out depends on how much the newly recruited affiliate pays for their membership.

• recruitment of a standard affiliate – $75
• recruitment of a partner affiliate – $250

Bonus recruitment commissions are also offered everytime an affiliate hits a group of ten recruited affiliates milestone.

• first group of ten recruited affiliates – $500
• second group of ten recruited affiliates – $750
• third group of ten recruited affiliates – $1125
• fourth group of ten recruited affiliates – $1688
• fifth group of ten recruited affiliates – $2500

Note that in order to qualify for recruitment commissions, ‘a minimum purchase of USD $50 is required within the last 30 days‘.

Vacation Recruitment Bonus

Every 12 weeks Klob International reward the affiliate who has recruited the most Partner affiliates with a “$3000 Vacation Plan”.

The Vacation Recruitment Bonus can only be achieved once per affiliate.

Binary Commissions

Residual commissions in Klob International are paid out using a binary compensation structure.

A binary compensation structure places an affiliate a the top of two binary teams, left and right.

Each binary team consists of recruited affiliates, who then generate volume via purchases at “Recommended Businesses” listed on the Klob International website.

These purchases are tracked as business volume, with affiliates getting paid 10% of the points generated by the weaker binary team.

Eg. The left binary team generates 500 points and the right 700 points. The weaker side is the left, with the affiliate getting paid 10% of 500 points, or $50.

In order to qualify for binary commissions, ‘a minimum purchase of USD $100 is required within the last 30 days‘.

Matching Binary Bonus

Klob International pay out a matching bonus on binary commissions earnt by personally recruited affiliates and their downlines.

Klob pay out on a maximum of seven levels of recruitment, with how many levels being paid out determined by an affiliate’s membership rank:

• Beginner – 10% on level 1
• Decided – 15% on level 1
• Persistent – 20% on level 1
• Intrepid – 25% on level 1
• Expert – 30% on level 1
• Leader – 35% on level 1 and 8% on level 2
• Exemplary – 35% on level 1 and 8% on levels 2 and 3
• Winner – 40% on level 1 and 8% on levels 2 and 3
• Successful – 40% on level 1 and 8% on level 2 to 4
• Master – 45% on level 1 and 8% on levels 2 to 5
• Independent – 45% on level 1 and 8% on levels 2 to 6
• Free – 50% on level 1 and 8% on levels 2 to 7

Note that in order to qualify for the Matching Binary Bonus, a Klob affiliate must be paying Partner membership fees and ‘a minimum purchase of USD $200 is required within the last 30 days‘.

Partner Bonus

To reward affiliates who pay more for membership, Klob International set aside 3% of the commissions paid out via the binary (excluding the Matching Bonus), and pay it out to Partner affiliates who are below the Leader affiliate membership rank.

Other than affiliates being required to ‘a minimum purchase of USD $100 is required within the last 30 days‘, no specifics on any additional qualification criteria are provided.

Weekly Rank Achievement Bonus

Klob International pay Exemplary or higher ranked affiliates a weekly commission bonus simply for qualifying at that particular affiliate level, so long as they spend at least $200 within the company each month.

• Exemplary – $125
• Winner – $250
• Successful – $375
• Master – $500
• Independent – $625
• Free – $750

Joining Klob International

Affiliate membership to Klob International is available in two options:

• Affiliate – $300 or
• Partner – $700

The primary difference between the two affiliate options appears to be “Affiliates” being locked out of certain parts of the compensation plan.

Conclusion

The basic idea behind Klob International appears to be the handing over of hundreds of dollars to join, and then the generation of volume via purchases made at “recommended businesses”.

Businesses sign up on the recommendation of affiliates, and are then charged 5% of every transaction they make through the website.

Purchases are tracked offline, with affiliates required to send photographs or scans of receipts directly to Klob.

As an MLM product, this doesn’t really work as the only thing Klob International themselves sell is $300 or $700 affiliate memberships. There’s nothing inherently wrong with recommending businesses, but third-parties selling products and services to Klob International members does not constitute the selling of products and services by Klob International themselves.

There’s a worrying “pay to play” attribute to Klob International’s compensation plan too, with affiliates being required to pay $50 to $200 just to qualify for various commissions every 30 days.

Withholding commissions unless your affiliates purchase products is an instant red flag in MLM. Moreso when said products aren’t even your own offerings.

It is noted that by signing up for something called “Uniemprende” and paying them $40 a month, Klob International affiliates can ‘automatically qualify (for) all Klöb bonuses’. Still however the “pay to play element” exists.

And it’s even more evident in the difference between Partner and Affiliate membership to Klob, with $300 affiliates simply locked out of certain parts of the compensation plan.

Unless an affiliate pays $700 to join Klob, there is no way they can every participate in all commissions offered by Klob International. This is yet another instance of “pay to play” within the business.

The recruitment commissions meanwhile introduce a chain-recruitment element to the business, that effectively drags Klob into pyramid scheme territory.

You pay your $300 or $700 and then get paid when you convince others to sign up and pay $300 or $700.

Ultimately the two major concerns I have with Klob International are illustrated in the company’s FAQ:

Where does Klöb get the money to pay the bonuses it offers?

Like all multi-level marketing companies, Klöb obtains revenue from 2 sources:

1) That generated whenever any product in the network market is consumed.

2) That generated when new members are brought into the network.

Klöb does not market only a few specific items. We offer a wide range of options and get discounts from our suppliers whenever they offer products or services through our platform.

Claiming that “all companies” do it, however erroneous, does not excuse Klob International paying out on the recruitment of new affiliates. Selling discounts to other people’s products fails to constitute a valid MLM product offering from Klob themselves.

One might argue that Klob Pro is an in-house product and I’d agree, however it’s clearly targeted at affiliates. I suppose with their appearing to be no retail within the company (you can only sign up as an affiliate), that’s a moot point though.

I did like the fact that binary commissions were paid out on purchases and the names for the company’s affiliate ranks (no diamonds, ambassadors or stars!), even if they were a bit confusing hierarchy wise.

All in all with no internal retail market, recruitment commissions and a $300 to $700 entry fee, there’s simply too many red flags evident within the Klob International opportunity.

Seriously, who is paying Klob $700 just for full access to the compensation plan? Or even $300 just to access discounts for that matter?

Beats me. Leave alone the mandatory ongoing monthly spends…