5Linx Review: Too complicated to take seriously
5Linx launched in 2001 and operate out of the US state of New York.
Heading up 5Linx are co-founders Craig Jerabeck (President and CEO), Jeb Tyler (Executive Vice-President of Marketing) and Jason Guck (Executive Vice-President of Sales).
5Linx would appear to be Jerabeck’s first venture into network marketing, with his 5Linx corporate bio revealing a history in telecommunications:
Formerly the President/CEO and founder of @Wireless Enterprises (1997 – 2004), a franchisor of wireless retail stores. @Wireless operated 78+ stores in 11 states.
Prior to @Wireless, Mr. Jerabeck founded Cellular Unlimited Corp., which owned and operated 23 shopping mall based retail stores in NY, MA, RI, NJ, DE and FL.
Cellular Unlimited was the largest independent retailer of cellular phones in the Upstate NY region in the 1994 – 1997 period. Jerabeck sold Cellular Unlimited in 1997 to a national wireless retailer.
Earlier professional roles include two years as the General Manager of Cellular One (later Cingular) in Rochester, NY and eight years with AT&T in sales and sales management.
On the regulatory front 5Linx appear to be in the clear (at least publicly), which is notable for an MLM company that launched thirteen years ago.
Read on for a full review of the 5Linx MLM business opportunity.
The 5Linx Product Line
5Linx split their product range into the categories home, wellness and business.
The home category covers
- a “residential energy program” (a portal that offers access to suppliers 5Linx have affiliate deals with)
- telecommunications – VOIP (Globalinx, wireless (Globalinx Mobi), PowerPlay (mobile power pack + speakers), satellite TV (provided through DISH Network and DirecTV), “internet, fiber & cable tv (offered through a number of third-party providers)
- tech support (phone and onsite tech support)
- personal security – data vault (online cloud backup), SafeScore (credit monitoring) and IDGuard (identity theft protection)
- home security (provided by affiliation with Protect America Inc.)
The wellness category includes
- enhancedcareMD – a ‘supplemental healthcare plan that provides members with 24/7 direct access to registered nurses and doctors for quality healthcare‘ (note this is not health insurance)
- enhancedcareMD Connect – doctor consult service provided through Optum HealthAllies (limited to Optum HealthAllies approved doctors)
- Hi5 Challenge – a “challenge kit” that ‘provides tools to help anyone achieve their health and fitness goals‘
- Hi5 Boost – appetite suppressant tablets
- Hi5 Lean – vanilla shake mix
- Hi5 Edge – a dietary supplement that ‘helps improve endurance, enhanced metabolic activity, boosts cognitive function, supports healthy aging and helps maintain healthy cholestrol‘
- Montavida – “healthy coffee”
And the business category covers
- payment processing – ‘from virtual terminals with mobile application features to the traditional countertop terminal‘
- energy – 12, 24 or 36 month energy contracts provided via third-party company the “Energy Service Company”
- mobile marketing, which includes “business elite services”, text marketing, mobile marketing for realtors and churches and a mobile website optimizer
- security systems (offered through affiliation with Protect America Inc.)
- satellite TV (offered through DISH and DirecTV)
- enhancedMD Commercial – “alternative health care solutions for your company” (not health insurance)
Note that there are no retail prices provided for any of the products and services listed on the 5Linx website.
If one enters “5linx document 715” into Google however, a current list of products and services 5Linx provide access to comes up. Note that there doesn’t appear to be any differentiation between wholesale and retail, with any every 5Linx customer being charged the same price.
The 5Linx Compensation Plan
The 5Linx compensation plan is not readily provided to the general public. To access it, one must conduct a Google search.
There are two documents that come up in the search listings, “Advanced compensation plan” and “Detailed compensation plan”. Note that the analysis below uses information sourced from both documents.
All 5Linx affiliates must maintain the following criteria in order to qualify for commissions:
- 8 points worth of worth of products and services offered through 5Linx
- at least one preferred service and one preferred product
Although not explicitly clarified in the compensation plan, I believe self-consumption qualifies an affiliate for commissions.
Each product and service offered through 5Linx is assigned a point value as follows:
- monthly affiliate fees = 4 points
- energy = 1 point for residential and 2 for business
- enhancedMD services = 1 point
- personal security services = 1 point
- internet, cable and satellite tv = 1 point
- business elite services = 2 points
- text marketing = 2 points
- all other mobile marketing = 1 point
- cell plans = 1 to 2 points
- payment solutions = 2 points
- Montavida coffee = 1 to 5 points
- Hi5 wellness range = 2 to 14 points
Currently listed preferred products are:
- MontaVida autoship – $29.95 a month
- MontaVida “bulk” autoship = $249.95 a month
- MontaVida “brew cups” autoship = $39.95 a month
- Montavida “bulk brew cups” autoship = $339.95 a month
- Hi5 Edge autoship = $59.95 a month
- Hi5 Boost autoship = $59.95 a month
- Hi5 Challenge autoship = $189.95 a month
Currently listed preferred services are:
- 5Linx affiliate backoffice fees – $49.95 a month, $275 for 6 months or $500 for 12 months
- enhancedcareMD services – $24.95 to $29.95 a month (enhancedMD commercial service varies in price)
- Business Elite services – $49.95 a month
- Text alert services – “starting at $60 a month”
- Globalinx Mobi “Unlimited Everything” and “Unlimited Talk & Text” – $59.95 and $44.95 a month respectively
- Globalinx Premium – $25.95
- Globalinx Value – $15.95
5Linx Affiliate Membership Ranks
There are eight affiliate membership ranks within the 5Linx compensation plan.
Along with their respective qualification criteria, they are as follows:
- Trainer – commission-qualified and personally recruit and maintain one commission-qualified affiliate
- Executive Trainer – acquire and maintain fifteen customer points, recruit and maintain at least two commission-qualified affiliates and complete applicable mandatory rank training
- Executive Director – acquire and maintain twenty customer points, recruit and maintain at least three commission-qualified affiliates, have at least one Executive Trainers in two individual unilevel legs and complete applicable mandatory rank training
- National Director – acquire and maintain twenty-five customer points, recruit and maintain at least four commission-qualified affiliates, have at least one Executive Director in at least three individual unilevel legs and complete applicable mandatory rank training
- Senior Vice-President – acquire and maintain twenty-five customer points, recruit and maintain at least five commission-qualified affiliates, have at least one National Director in at least three individual unilevel legs and complete applicable mandatory rank training
- Platinum Senior Vice-President – acquire and maintain twenty-five customer points, recruit and maintain at least six commission-qualified National Directors, have at least one Senior Vice-President in at least two individual unilevel legs, have a downline generating at least 15,000 GV points a month and complete applicable mandatory rank training
- Double Platinum Senior Vice-President – acquire and maintain twenty-five customer points, recruit and maintain at least six commission-qualified affiliates, have at least one National Director in at least two individual unilevel legs, have at least one Senior Vice-President in at least four individual unilevel legs and have at least 30,000 customers in the downlines of Senior Vice-President ranked affiliates in your downline
- Diamond Senior Vice-President – acquire and maintain twenty-five customer points, recruit and maintain at least eight commission-qualified affiliates, have at least one National Director in at least two individual unilevel legs, have at least one Senior Vice-President in at least three individual unilevel legs, have at least one Platinum Senior Vice-President in at least three individual unilevel legs, and have at least 30,000 customers in the downlines of Senior Vice-President ranked affiliates in your downline
Note that the following time-sensitive rank bonuses are paid out if an affiliate qualifies at one of the three following ranks within the specified time periods:
- Trainer – $50 (30 days)
- Executive Trainer – $1200 (30 days)
- Executive Director – $500 (60 days)
Commissions are paid on any products or services paid for by recruited 5Linx affiliates.
The commission paid out is a percentage of the Commissionable Volume (CV) amount assigned to the product or service being paid for.
How much of a percentage an affiliate earns is tied to their 5Linx affiliate membership rank, with percentage amounts at any given rank appearing to be unique to each product and service offered.
The 5Linx compensation plan states that basic affiliates earn 2%, with affiliates able to ‘earn up to 65% of the CV as higher leadership positions are achieved‘.
To give you an idea of the CV assigned offered products and services, $1 is the minimum CV payable and $70 the maximum.
This would equate to a $0.02 to $1.40 commission at the 2% rate and $0.65 to $45.50 commission at the 65% rate.
Residual single-level commissions are paid out for the life of the subscription. All residual commissions begin paying out 90 days after a customer signs up for a product or service.
Residual Unilevel Commissions
5Linx pay out residual unilevel commissions on the monthly fees charged for products and services offered.
A unilevel compensation plan places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any of these level 1 affiliates go on to recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team. If any level 2 affiliates recruit new affiliates, they are placed on level 2 and so on and so forth down a theoretical infinite number of levels.
Commissions in 5Linx are paid out using percentages, which are tied to an affiliate’s membership rank.
These are “override” commissions, with a maximum commission percentage payable over applicable ranks. The higher an affiliate’s the rank, the larger the size of the percentage they are paid out.
- Affiliate – 2%
- Trainer – 1%
- Executive Trainer – 1%
- Executive Director – 1%
- National Director – 10%
- Senior Vice-President – 30%
- Platinum Senior Vice-President – 10%
- Double Platinum Senior Vice-President – 5%
- Diamond Senior Vice-President – 5%
Note that per subscription fee charged, commissions are only paid out at each rank level once. Higher ranked affiliates automatically collect any unallocated lower level percentages.
Eg. Using $10 CV as an example, an affiliate makes a sale and collects 2%. Their upline is a Senior Vice-President so they collect 48% of the payable commission.
The system then looks further up the upline to pay out the remaining percentages. Any affiliates ranked lower than Senior Vice-President are skipped, as all their percentages have been paid out to the Senior Vice-President ranked upline already.
A maximum 65% of the CV generated by a sale is payable directly to Diamond Senior Vice-President affiliates.
Generational Residual Commissions
Generational Residual commissions are a second type of residual commission, paid out via rank generations.
Starting at the National Director rank, when a 5Linx affiliate makes a sale an affiliate of equal rank is searched for in their upline. Once found, that affiliate constitutes the “first generation” and is paid out accordingly.
At the Senior Vice-President and Platinum Senior Vice-President ranks, the system continues to search higher for a 2nd generation ranked affiliate to pay another generation residual commission out to.
The ranks and percentages paid out via the generation residual commissions are:
- National Director (1st generation) – 5%
- Senior Vice-President (1st generation) – 15%
- Senior Vice-President (2nd generation) – 10%
- Platinum Senior Vice-President (1st generation) – 5%
- Platinum Senior Vice-President (2nd generation) – 5%
Monthly Customer Bonus Pool
When a customer signs up for a product or service provided through 5Linx, the company puts $2.50 into two bonus pools.
At the end of the month, these pools are shared equally among qualified affiliates:
- the 100 Customer Club Pool requires an affiliate to acquire and maintain 100 customers
- the 200 Customer Club Pool requires an affiliate to acquire and maintain 200 customers
Note that an ongoing qualification requirement of adding 2 new customers each month also applies.
Rank Achievement Bonuses
5Linx’s Rank Achievement Bonuses are slightly different, in that they are based on commission-qualification achievement by an affiliate’s immediate downline.
All Rank Achievement Bonuses in 5Linx are only paid out if a newly recruited affiliate qualifies for commissions within 30 days of their joining the company (see start of compensation plan analysis in this review).
- National Directors are paid $520
- Senior Vice-President are paid $650
- Platinum Senior Vice-President are paid $655
If the affiliate who recruited an affiliate commission-qualifies themselves within 30 days is at a rank lower than that of National Director, a reduced commission is paid out to the first National Director or higher ranked affiliate in the upline:
- National Director – $55
- Senior Vice-President – $30
- Platinum Senior Vice-President – $5
A generational bonus is also available on Rank Achievement Bonuses paid out, offering up to two generations of payments at the Senior Vice-President rank:
- National Director – $20 to the first generation
- Senior Vice-President – $10 to the first generation and $5 to the second
- Platinum Senior Vice-President – $5 to the first generation
These generation payouts function in the same manner as the “Generational Residual Commissions” outlined above.
Team Bonuses pay out a commission when 5Linx affiliates have a specified number of affiliates in their downline who qualified for commissions within 30 days of joining the company.
How much of a Team Bonus is paid out is determined by an affiliate’s own membership rank:
- Executive Trainer – $200 at five affiliates, $500 at five, $1000 at ten, $1500 at fifteen and $2000 at twenty
- Executive Director – $750 at five affiliates, $2000 at ten, $2500 at fifteen, $3250 at twenty, $4500 at thirty, $6000 at forty and $8000 at fifty
- National Director – $2000 at fifteen affiliates, $5000 at thirty, $7500 at fifty, $10,000 at seventy-five and $15,000 at one hundred
- Senior Vice-President – $2000 at twenty-five, $4000 at fifty, $7500 at seventy-five, $10,000 at one hundred, $12,500 at one hundred and twenty-five, $15,000 at one hundred and fifty, $25,000 at two hundred, $40,000 at three hundred and $50,000 at four hundred
Note that Team Bonuses are not accumulated totals, the above numbers are ongoing monthly qualifications.
Revenue Bonus Pools
There are three Revenue Bonus Pools in 5Linx. $10,000 is placed into each of the three pools. Each pool corresponds to an affiliate membership rank (Executive Director, National Director and Senior Vice-President), with the funds in each pool paid out to the top ten sales generators for that month:
- Top affiliate – 30% ($3000)
- 2nd affiliate – 15% ($1500)
- 3rd affiliate – 12% ($1200)
- 4th affiliate – 10% ($1000)
- 5th affiliate – 8% ($800)
- 6th to 10th affiliate – 5% ($500 each)
Platinum Bonus Pool
The Platinum Bonus pool is a monthly pool. It is made up of
- $10 for every commission-qualified affiliate in the company
- 75c per home security customer company-wide
- 75c per Globalinx customers on $24.95 a month plan company-wide
- 37.5c per Globalinx annual customer company-wide
- 25c per energy customer company-wide
- 25c per Tech 24/7 customer company-wide
- $5 per Business Elite customer company-wide
- $5 per customer who orders Montavide products company-wide
- $1 per affiliate paying monthly fees
- $1 per TextAlert marketing customer company-wide
At the end of each month, the Platinum Bonus Pool is divided among all commission-qualified Platinum Senior Vice-President ranked affiliates.
There are two affiliate membership options with 5Linx, CR ($99) and IMR ($249).
The CR membership (“Customer Representative”) provides commission on a single-level and excludes the MLM components of the compensation plan.
Thus the defacto cost of affiliate membership to 5Linx as an MLM opportunity is $249.
Additional monthly/annual costs to consider are “Platinum Services”. These are billed as optional, however they provide basic affiliate functions (a replicated website, backoffice support etc.) and I believe are going to be required purchases for the vast majority of 5Linx affiliates.
5Linx’s compensation plan is deceptively simple, but bogged down by the incorporation of the immense amount of products and services offered through the business.
There’s no easy way to combine so many products and services from third-party providers into a single MLM compensation plan, and so we have things like product points, vastly different CV values and a ton of bonuses that revolve around boosting customers.
This I feel is reflected in the lack of information provided to potential customers and recruits on the 5Linx website (they don’t want to scare people away by revealing just how convoluted the compensation plan is).
On that note, one of the biggest potential red-flags I’ve observed is the lack of retail appeal within 5Linx.
From a retail perspective, with the vast majority of products and services on offer sourced from third-parties, there’s little to no incentive to sign up or purchase anything through 5Linx.
The affiliations the company maintains are not exclusive and competition from any one of the niches 5Linx offers products and services through is steep.
As a retail customer, I don’t believe 5Linx is all that attractive.
And that brings us to the likely scenario that most of 5Linx’s customers are affiliates.
Product and service points can be generated by an affiliate themselves purchasing services. An affiliate’s own Platinum Services (basic affiliate functions) counts towards this quota (50%), meaning one or two services is all an affiliate need sign up for to qualify for commissions.
They recruit others who do the same, with that appearing to be the core of the 5Linx business opportunity.
The “hook” 5Linx suggest affiliates use is the saving of money and approaching of family and friends.
Prospective affiliates are told in a video featured on the 5Linx website,
Your greatest assets are your relationships and contacts. Your social connections through family, friends, co-workers and social media.
Here, I’ll prove it.
Open your phone contact list and look at the first five names. And thinking of these people, ask yourself if they would be interested in saving money in areas of home energy, mobile services, maybe home security or possibly looking for better health.
If you don’t think they would be interested in any or all of these, delete them from your phone right now.
Again, given that 5Linx merely offer other company’s services and products (or those they have manufactured by third-parties), just how realistic are the purported savings going to be?
Certainly nothing exclusive that cannot be found elsewhere.
In that sense, it is the 5Linx business opportunity that is likely to prove far more attractive from a marketing standpoint.
Sign up as affiliate, pay your monthly fees and then switch over a few services you’re already using. You might not save much (if anything), but you’re unlikely to start losing money either.
Recruit new affiliates who do the same and build your business.
A danger of chain-recruitment is inherent in the Rank Achievement Bonuses and fact that retail customers are not required at any level of the compensation plan.
In general I think the retail appeal of “everything under the sun offered by third-parties” companies like 5Linx just aren’t that attractive on the retail front.
Key to this particular opportunity would be asking a potential upline for their monthly product/service point split between actual retail customers and recruited affiliates. Anything short of a close-to 50/50 split or the ratio tilted in favour of retail customers is an indication that 5Linx is affiliate heavy.
As a matter of interest, I’d also request a 5Linx affiliate explain the compensation plan. Let them use all the materials they need (obviously short of just reading the official company documentation verbatim), and see if you understand most of it by the time they’re done.
It took me a good few reads and a bit of head scratching to get my head around it. And I had to look at no less than four seperate documents to put the compensation plan section of this review together (none of which were linked or provided on the public 5Linx website).
I really think your standard 5Linx affiliate is going to have a hard time demonstrating they truly understand most, if not every aspect of the company’s complex pay plan.
How much they can explain might be a good indication of just how well they know their business (and the likelihood of them signing you up to a few services and then moving onto the next potential recruit).