Karatbars’ niche is Gold. Indeed, devoting a business, as Harald Seiz did, to making Gold affordable and accessible to people is noble enough.
Karatbars offers simple and cost-effective ways to invest in Gold. Not only does Karatbars make Gold affordable in small denominations, but it also sells Gold bullions of high purity.
It would be technically incorrect to tag Karatbars a Multi-Level Marketing(MLM) Company. After all, MLM companies have a line of products they want to sell. Karatbars does not. Karatbars operates as an e-commerce establishment with an affiliate program. As such, Karatbars could best be described as a network marketing company.
On the surface, Karatbars’ relatively unique business offering could, to the uninitiated, give it off as a wholly legitimate company. However, a deeper look at the structure and the workings of Karatbars reveals that it bears too much semblance with pyramid schemes.
Karatbars’ business model is vague. It’s compensation plan is a jumble of starter packages, and a 12 affiliate ranking system decorated with rewards, bonuses, and incentives that are meant to pressure affiliates to reinvest and recruit.
Karatbars different starter packages are: Bronze ($135), Silver ($ 350),Gold ($800), and VIP Package ($2000).
The packages is what determines the amount you will earn per cycle. For example, with the Bronze package, you will earn about $10. With the VIP package you can earn over $100!
The seven different ways through which an affiliate can earn income from the Karatbars’ compensation plan are through Direct commissions, Unilevel Bonus, Generation Bonus, Package Bonus, Dual Team Bonus, Karatbars Pool, and Karatbars Gold Fund.
Here, the package commission is paid out to the affiliates each time they sell a new package to an affiliate they have recruited.
There are mainly 12 affiliate ranks in the Karatbars’ Compensation Plan. The independent business owners or the affiliates get a fixed percentage of the amount as the unilevel commission based on their ranks, whenever the agents below them spent money.
For instance, the lowest rank holder, Distributor, doesn’t qualify for unilevel commissions. But the affiliates with ranking above the Distributors can generate a unilevel commission between 0.5 – 5.5 % depending upon their respective ranks! The commission percentage increases by 0.5% with each rank increase. And in binary commission it is offered in a binary format, which is paid out generationally.
For example, if an affiliate’s team achieves 50 units in sales (the Bronze package, for example, is 50 units) on one leg and 25 units on the other leg, then they are eligible for a commission of:
40 EUR – if someone from their downline purchases a package of Bronze
60 EUR – if someone from their downline purchases a package of Silver
80 EUR – if someone from their downline purchases a package of Gold.
Obviously, Karatbars’ business model supports a mere transfer or shuffling of funds from one affiliate to another. This is done to create an illusion of earnings amongst affiliates. Karatbars business model is like that of a pyramid scheme and it bears no resemblance to any real investment activity.
Also, Karatbars does no really have anything to sell or market except it’s affiliate membership. The absence of an investible asset, service or business gives Karatbars off as a construct of a Ponzi-Pyramid schemer.
In the realm of true investments, high returns are not guaranteed. But with Karatbars, you get absurd Return On Investments(ROI) percentages and a high performance is guaranteed every time. This attribute does not resonate with fluctuations that characterizes true investments.
Karatbars need more investors to survive. It has been structured to ensure this. Those who really earn from Karatbars are the few early adopters at the highest level of the “Gold Chain.” The bulk of investors at the bottom part of the pyramid work to money for the few early adopters.
Should affiliate recruitment stall at Karatbars, there would be an immediate unevenness between cash outflows and monetary inflows. This would be the beginning of the end of Karatbars. The early adopters would cash out and the bulk of lower ranking affiliates would be left to count their losses.