Numis Network: A Careful Review

by Martin Russell on May 12, 2011



Hmmm.

It has been really tough for me to write this review of Numis Network, because there are many twists along the way, of hope, and despair.

So let me take you on a careful step-by-step journey…

The Background On Numis Network

First to the basics. Numis Network is a North American multi-level marketing company (now set to open in UK and elsewhere) that sells collectible coins, including a ‘Coin of the Month’ program on autoship. They focus particularly on the 1 ounce MS70 Silver American Eagle, but also stock a range of…

“American Silver and Gold Eagles of various mintages; hard to find, limited edition commemorative coins; as well as rare and vintage coins. In addition to coins struck by the US Mint, Numis Network also offers highly-prized world coins minted by the governments of Canada, Austria, China, Great Britain, Mexico, and Australia… all graded and certified by only the top tier graders: ANACS, NGC, and PCGS.”

They also sell what they call a ‘Forever Crystal’ which is a personalized laser-etched crystal plaque produced specifically by Numis. The crystal has no gold or silver content, but it can come packaged with such coins.

Numis gets their name from the term ‘numismatics’, ie coin collectibles, which is what they are about.

The Difference Between Bullion Vs Numismatics

Let me illustrate by reference to another supporter of network marketing, Donald Trump.

I well remember the first series of Donald Trump’s “The Apprentice” where the two teams were sent out to negotiate to buy a variety of items at the best prices. The winner would be the group that paid the least amount of money overall.

One team negotiated hardest for a $400 ounce of gold (oh to have gold back at that lowly price!) but they after all their efforts they got barely any discount.

The other team negotiated hardest instead for the $400 golf clubs, and they got over $100 off and won convincingly.

Golf clubs have decent profit margin. Bullion doesn’t.

Gold and silver investments, bullion and bullion coins are a commodity items. They requires high volume turnover to be profitable.

Numismatics are like golf clubs – there is a decent mark-up above the cost of the raw materials and manufacturing to have a profit margin to work with.

And since you can’t make a network marketing company work on thin margins, because there is too little of the turnover to pay out to distributors, Numis Network is NOT in the bullion business.

(Yes, the other reason Numis is not a bullion or investment MLM is that these have been shut down time and time again by the FTC, but I’m talking about the market fundamentals here.)

So when some Numis distributors say they are ‘in the business of selling “money”‘ this needs to be examined very carefully indeed.

Anyway, for this Numis Network review the important aspect is …

Numis As A Network Marketing Opportunity

Numis places great importance on the business opportunity as you can tell from the current corporate video on the home page. This video refers heavily to Robert Kiyosaki in his recommendation of network marketing.

[As a RK side note, Numis talks about it's business as being what Kiyosaki calls an I-investor quadrant option, when in fact I would say an MLM is actually an S or B-quadrant business in the Rich Dad model. Educate yourself from the original source, and make up your own mind, and understand also that Kiyosaki gives a much more limited endorsement of MLM than most people realize.]

The Numis Costs and Compensation Plan

As of this review the start up fee to be an ‘Affiliate’ (ie a Distributor) is $75.00 plus shipping and tax for “The Numis Success System” and then $9.95 (USD) per month. But to get access to all the payouts in the compensation plan you can get a starter pack called a “Fast Track Collector’s Kit” which includes an MS70 Silver Coin, other items and training tools for $420 plus shipping and taxes, and an additional $14.95 S&H charge for the Forever Crystal to be sent to you. With this is their “Silver Coin of the Month Club” which sends you “one MS70 graded silver coin at our preferred price of just $109.95 (USD), plus tax and shipping.”

In Numis Network the compensation plan can get fairly complicated.

However at it’s core, it is a binary plan which is common enough. Then there are the usual extra Fast Start bonuses, and multiple other variations that make it more complicated.

Basically it boils down to, if you don’t sign anyone up, you won’t make any money. To make back more than you invest, you need a handful of people under you. And to make decent money you need a big team beneath you. Nothing unusual about that, and really that’s all you need to know to get started.

You can find Numis Network’s earnings disclosure statement on their company site and it doesn’t say anything too remarkable. A small percentage make big incomes, and most people don’t make their money back or don’t make money at all, particularly if you look into the details in the footnotes. That’s the same for almost any make money product, and is certainly true of any MLM (see this list of Income Disclosure Statements for MLMs). Nothing unusual here either.

For those who do NOT make money from referrals, ie most of the people who join, their only benefit from being in Numis is getting the products, so let’s examine this next.

Marketing The Numis Products

For someone seeking bullion, the prices charged by Numis are far too high. Any pure metal investor would quickly leave and buy from cheaper sources. They want more ounces for their dollars.

But since Numis’ product is NOT bullion, but rather numismatic coins and collectibles, they are in a different segment of the precious metals market.

The products have a wholesale price for distributors that is quite a bit lower than the retail prices, so that retail customers will be much better off signing up as a distributor if they are going to buy more than a small amount.

So … with those basic details in place let’s run through some of the key pros and cons of Numis Network.

Pros

  • Numis has a track-record. They launched in August 2009, they have attracted numerous big names to their organisation. They have built up a solid distributor base, and they have momentum and presence in the industry.
  • Numis is indeed paying out money to their representatives. They seem to be building a proper company to support their model, rather than being a fly-by-night affair.
  • It seems to me that they are going to be safe from the FTC. They clearly and deliberately position themselves as being in the numismatic market (“Heck, it’s right there in the NAME Numis – how much more up front can we be!”). However they may well run into problems with claims by their distributors, much as any MLM company can, but the company itself seems to be well aware of the pitfalls to avoid fraud or scam claims.
  • Numis does indeed have a legitimate place in the market. There is already a market for the numismatic/collectible coins they sell. And there is even a market for these coins at similar or higher prices such as the ones sold off TV infomercials. You don’t have to approve of high-prices, but you do have to acknowledge that that market does exist and you can’t single out Numis for going after it.
  • The idea of gold and silver coins attracts people who aren’t interested in standard MLM product lines. This broadens the people who may take a look at this company.
  • Numis is in a hot market. Gold and silver have spent this entire century on a steady bull market that is just starting to get more popular attention and awareness. The timing is perfect for a company to tap into this, just as happened in the gold bull market of the 70’s. However this time there are good reasons to believe that the rise in gold and silver prices will continue much longer.
  • A more indirect side-benefit of Numis is to listen to their own distributors comparing their Numis MLM to other MLMs (often ones they used to be in). They will explain the reasons why they think Numis is better which often in a backhand way points out the problems in other MLMs as seen by experienced ‘insiders’. This is really valuable background information that otherwise can be hard to find.
  • Numis distributors report that compared to other network marketing opportunities theirs has a low attrition rate, which means people actually do keep buying each month. Perhaps it is because they are actually getting something tangible each month that they can look at, touch, and be pleased to own, or perhaps it because the price of gold and silver are going up so that the coins are becoming more valuable for their bullion content. Whatever the reason, a low attrition rate means that it is easier to build a self-sustaining business.
  • And finally Numis gets people thinking about gold, silver, collectibles v bullion, hard money v currency, etc, all of which are vital knowledge in these economic times.

Cons

  • Numis is only open to US and Canadian customers and distributors. Many people want an opportunity that is exposed to other markets, countries and networks they may have around the world, so for them Numis may be too limited.
  • The retail prices are high so there will be little customer base. Most will either stop buying or convert to being distributors. It is not unusual for MLMs to sell at a higher price point, but in this case there is no added value for the Numis retail price from what you get elsewhere.
  • Numismatics don’t always hold their premium pricing. For example if the price of gold doubles – the value of a gold numismatic coin may also double, or it may more than double, but it also can underperform and come closer to the raw bullion coin price. Numismatics are valued only in as much as they are rare. A company like Numis wants to sell lots and lots of these coins, making each original coin less and less rare, and therefore less and less valuable in the long run and more like the bullion itself. Comparisons with coins from earlier dates are difficult because there are much fewer of those older coins than the record-breaking numbers that are being produced in recent years.
  • Numis does not tap into the huge market in bullion which is the REAL multi-billion dollar market. Of course, Numis benefits from the atmosphere around precious metals, and from the rising price of gold and silver putting a floor on the value of the coins, but it is only able to tap into the much, much smaller premium numismatic market. Very different.
  • Numis is not for people already interested in numismatics. If someone is keen on collectibles they would probably want a larger range of coins and more competitive pricing. This mean that Numis’ target market is people who want to dip their toe into learning about ‘numismatics’ and get started on simple coins. Once they learn more they are more likely to graduate to either other numismatics or into bullion, rather than become repeat buyers. So that means there is only a small true market for Numis’ product range even within the numismatic market.
  • When gold and silver prices eventually peak and fall for good, Numis’ business WILL take a big hit and most likely will disappear like every other MLM of this type has over the decades. History repeats. In the face of a bear market in gold with falling prices, current coin holders will sensibly try to lock in profits, even as potential buyers may prefer wait to see how far prices will drop. The market will be flooded with sellers and abandoned by buyers so that the bottom falls out of prices. In this scenario, historic low attrition rates can turn into high attrition rates very quickly.

[Note: To address this last point Numis has a buy-back guarantee - ie "Numis Network guarantees to buy back any coin purchased through our Silver Coin of the Month Club, in 5 years, for 100% of the original purchase price!" Like any insurance policy, which is effectively what this is, this has benefits but also risks, so you can review the complete details on the company website thoroughly.]

  • There are some really big and experienced players making alot of money in Numis. These guys go in with their eyes open, and they aim to make plenty of ‘hay’ while the ‘golden sun’ shines. They know the fatal history of MLMs based on gold, and they understand what I have written above. They know their exit strategy … do you know yours?
  • And most important of all, Numis fails the key test for any marketer, MLM or otherwise. “Would I recommend this product EVEN IF I WASN’T MAKING ANY MONEY FROM IT?” With Numis, I can’t find any segment of the market place where Numis has a competitive edge that would make me say yes. Leave a comment below if you think there is one I have missed.

In Summary

In a simplisitic sense, there are indeed people making serious money in Numis – but there is more to look in to than that.

With Numis Network you unfortunately need to look much closer to understand it’s true position in the marketplace. It is NOT what most people are saying. If you don’t understand this you will run into unnecessary problems. Do your due diligence. Caveat emptor.

If you are interested in gold and silver, then your local coin shop or online supplier will get you more ounces for your dollars.

If you are interested in numismatics, then there is a whole world of collectibles to explore of which Numis is just a tiny part.

For those who want to help introduce new-comers to the world of numismatic coins, then yes Numis is one of a number of ways you can do this.

For those who are in Numis or thinking about it as an MLM then I hope this has been valuable information for you.

Whatever your situation, get educated – about Gold and Silver – about the network marketing industry – and about how to become a truly skilled marketer – so that whatever happens along the way, you end up with learnings that will reward you for the rest of your life.

All the best for your success!

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