[Today’s blog post will be a little quicker than the norm, especially for one where I analyze an MLM company. I originally had it planned to go live while I was at FinCon 2013, a conference of personal finance bloggers. It’s good networking and I learn a lot about how to make this site better. (I’m always looking to give you the best blog for your dollar. Wait, you aren’t contributing dollars? Oh well, too late now, enjoy the free show.)
Unfortunately, I came back to my car breaking down and my pregnant wife getting hospitalized (briefly) and she’s okay now. (The two were unrelated.) It’s taken some time to get everything together. Did I mention that the Red Sox are in the World Series too? Busiest of weeks!]
As I mentioned in the beginning, I usually put in dozens of hours of research into these articles. Having done this many times before, I’ve found that MLM companies typically have distributors who are… well… “nut jobs” (for lack of a better term) that like to harp on one minor irrelevant aspect of the write-up and use that as a plea that the whole article must be completely off-base because it was so poorly researched. However, we’re smart enough not to throw out the baby with the bathwater, right? Today, due to the time-constraints above, I’m going to try something a little different. I’m going to use my previous extensive experience to thin slice and show why you’d probably want to steer clear from the FlexKom business.
First, here’s why I’m writing about FlexKom… Several weeks ago, I got an email from Lynne:
“Just curious about what you may know about a new MLM (they say it really isn’t) called FlexKom. Supposed to be up and running in Europe and breaking into the US market now. Any thoughts?”
Short and sweet! At the time, I was available to do a little research. I watched a video (more on that later) and instantly thought it sounded like Lyoness another MLM using a loyalty card system. I’m not alone as this website seems to think the same. I had looked into Lyoness a couple of times before and though I haven’t published an article on it, there are some pretty big problems. (If you want to know more about that BehindMLM has a very good review).
My response to Lynne was that if FlexKom claims that it isn’t an MLM, they are being completely dishonest with you. Their compensation looks like any other MLM with the bonuses for recruiting people. The video at that website even showed the pictures of car bonuses at the bottom, one of the time-tested lures of an MLM. The other give away is the recruiting of people, who recruit people, etc. (clearly this is the more obvious direct one, but I thought I’d have a little fun with pointing out the car bonus first).
I’m conflicted about presenting this video as I don’t like to help market scams, but it so complex it is worth watching the video. The video even makes a point that it is complicated. I’ll presume that you are watching the video or have some understanding of FlexKom because trying to explain it here would take many, many words. While the video is a little on the long side, I believe you really only need to watch the first 3 minutes to see enough to run away.
The video starts off with a lot of hype that it is changing the economy of a country. Which country? It doesn’t say. How revolutionary? Again all numbers are left out. It then says that this isn’t hype and that you will “believe by understanding” and “you won’t need anyone else to convince you”… essentially hitting you over the head with Neuro-linguistic programming (NLP).
The video goes on to explain that you can buy a FlexKom franchise license, similar to buying a McDonalds, but it has no overhead or staff. How much does this franchise cost? According to the video it’s $4,000. Yes, you are a buying a $4,000 ID card that gives you permission to sell their system. I can sell you a LazyManKom card for much, much less and let you use my system.
To vastly oversimplify this $4,000 license gives you the ability to recruit local shopkeepers to the program and earn a profit (if you recruit enough).
The video makes a poor comparison to a McDonalds’ franchise. This is a classic poor MLM analogy that I’ve written about years ago. McDonalds don’t make their money recruiting other McDonalds and owning a McDonalds franchise typically brings you thousands of customers. My local McDonalds doesn’t have to go around and advertise, nor does it have to build a business by recruiting people. It sets up shop and people flock to it. My McDonalds’ business isn’t predicated on showing others a complex video to explain how it works.
In addition, and this is the big one that I wanted to write about today. McDonalds adheres to the laws of supply and demand. If I want to put another McDonalds next to where one already exists, McDonalds tells me to go stuff myself (I spent some time at FinCon talking with English bloggers and am stealing this phrase for my own). McDonalds franchises are very controlled and their locations are carefully figured out.
With MLM, anyone can join… the parent company doesn’t care. In fact, FlexKom would seem to have no problem if everyone in the world were paying a $4,000 license. Essentially there’s a basic disconnect between supply and demand. They can be supply many licensees where there are no shopkeepers interested. FlexKom licensees can recruit other FlexKom licensees, but that is like McDonalds recruiting another McDonalds, it simply doesn’t make sense as you are creating more competition.
There’s a very good article about What’s Wrong with MLM. I’ve written articles showing other things wrong with MLM, but this does a great job of highlighting the supply and demand issues. It shows that MLMs have no problem pitching a sales opportunity even if there’s no demand for it… which means it’s not really an opportunity. That’s exactly what I see in this FlexKom sales pitch.
What’s particularly deceptive about the video I watched above that the person used catch-phrases like unlimited income, claimed that it was all “facts” and that it was happening with thousands right now. He didn’t mention that “unlimited income” doesn’t exist on the planet Earth, that the facts leave out details such as the scenario I outlined above of people buying a license and not being able to get shopkeepers on board, and that there are likely hundreds of thousands of people losing money for the few that are making it.
Again this is just basic thin-slicing, but take a moment and think about it: Is FlexKom setting you with success by limiting competition as a typical franchise does or are they just trying to encourage everyone and anyone to pay them money for a business opportunity that may not exist?
Flexkom POS 4S Scam
A commenter, Wouter Hol, has put together a revealing review of a very, very overpriced Android tablet (480 Euros) that Flexkom is selling as a Point of Sale device.
As you can see the Flexkom tablet is “not that bad” according to the software that Hol used. The specifications are horrible compared to current Nexus 7 that can be had for at least 250 fewer Euros. The video also shows that the Flexkom software works just fine on an Android tablet that is available on Amazon for just 60 Euros.
Flexkom reps may claim that the value is in some included cards that come with the system, but Wouter Hol shows there really is no value in the cards in another video.
Putting the finger on the sour spot, as the Dutch saying goes. Flexkom said they were starting phase 3 last weekend in the Netherlands. That phase is supposed to be the start of connecting shops. No surprise nothing happened, except for a video of the announcement that Trinidad&Tobago is now ready to join the big happy Flexkom family. Now there will be meetings to train the franchise holders how to connect shops in November. When asked when shops will be connected, the answer is… “Soon”. Of course there is no problem to become a franchise holder, as long as you don’t forget to bring some money. Yeah… Right!
Lazy Man says
Wow, I didn’t even know that they roll things out in phases. It makes no sense to sell franchises when they can’t get shop owners to make their money.
Brian McGinty says
I have been reviewing Flexkom for a year and have written an article on my site which backs up what you write. My experience of the company shows what you say is true. Give these people a wide berth.
Doing it in phases is necessary to give the scammers time before they get cought in the lie. The trick is to hold the carrot in front of the donkey close enough so that it will try to reach it. As soon as it’s almost there, the carrot moves forward. The carrot, of course, being the time of launch.
Wouter Hol says
I have written four Dutch blogs about Flexkom. The four blogs can be found at my personal blog, http://www.wouterhol.nl. You’d have to use Google Translate, as they are Dutch. I’ll give you a short summary:
In the first one, I’ve pointed out that I think that this is a classic pyramid scheme. I’ve also debunked their EBCON and BDS certificates, I’ve debunked their mathematics (there is no way a store owner could profit form this scheme, as the store owners are the ones who have to fund the entire pyramid) and pointed out the fact that the Flexkom leaders are and/or were involved in Lyoness and several other “cash back” loyaltycard schemes.
In the second blog I’ve pointed out that their website, Flexkom.com, was leaking all private information of all their worldwide franchisees. All names, addresses and even passwords were stored in the Google cache. Simply entering one’s email address in Google showed his password for Flexkom. Flexkom has chosen to hush up (is that the correct word?) this. As far as I know, Flexkom has still not told this to his worldwide franchisees. The passwords were in the Google cache from somewhere in March this year until somewhere in August.
One of the major pimps of Flexkom, Asker Sakinmaz, who also lives in the Netherlands and speaks Dutch, gave me a call after my first blog was creating panic among the Flexkom people. He started off with telling me that I would get sued for my blog and would receive a claim for the damage that he thought I caused. Then I told him that his website was leaking all private information of his
clientsfranchisees and that he might try to fix that first. (At that time, my second blog was not published yet) Then he backed up a little. We agreed that Sakinmaz would email me a clear explanation of Flexkom and give me evidence of why this is not a pyramid scheme, instead of threatening me with a lawsuit. Sakinmaz however, chose not to give me any explanation at all. Instead, he went to his German lawyer and they send me an German letter, which, I guess (German language, especially when written by a lawyer, is not a language that I understand very well as I am Dutch) told me that I had to shut down the blog and that I caused them millions of Euro’s of damage. My lawyer in turn told him that we would not shut down the blog and that we had a clear understanding with mister Sakinmaz, that he would give me an explanation of Flexkom. Weeks later my lawyer received a letter from a Dutch lawyer, saying that he now represented Flexkom. This lawyer said that they were going to sue me if I did not put my blogs offline and that they filed an report with the Dutch police, because I had hacked their computers. (LOL, all the information I presented on my blog was on Google, Flexkom clearly has no clue as of how computers work!) When my lawyer told them that we’d agree on a civil lawsuit (don’t know if that is the right word) this Flexkom lawyer also suddenly backed up. Suddenly they did not wanted to sue me anymore, but they suggested that I give a call to their Country Manager so that he could give me a clear explanation. Of course, I did not do this because I think the way Flexkom is dealing with me is not polite and is certainly not how a company should do webcare in 2013. And above that, I still had a clear agreement with mister Sakinmaz, which he still has not met. I guess Sakinmaz is not a person who likes to keep his word.
In return of the nice letters from the Flexkom lawyers, I did some investigation as on how Flexkom is doing in Turkey. This can be found in my fourth blog. Flexkom is telling everybody that Flexkom Turkey is doing great and that people should join Flexkom because of this.
I found out otherwise. Turkish newspaper Zaman has written 5 or more articles on how Flexkom is doing. They speak of 30.000 people complaining, stolen cars, lawsuits against Flexkom and more worrying things. Google also tells us exactly how Flexkom is doing. This graph shows us the popularity of Flexkom: http://www.google.com/trends/explore?q=flexkom#q=flexkom&cmpt=q&geo=TR
As you can see, it dropped 95% since January 2012. This alone tells us enough on how much ‘succes’ Flexkom is currently experiencing in Turkey.
Also I’ve found out that there is for about 1 shop per 10 license holders and that there are for about 3 transactions per shop per month. This tells us that someone who has signed up 6 other people (Flexkom uses this number in some of their presentations) will make for about 30 cents a month! 30 cents!!! For all you Flexkom followers out there who think that this is not true: 30 cents a month not an odd figure to make with schemes like Flexkom. Lyoness license holders are also experiencing more or less the same income, according to the Lyoness wikipedia page.
Hello, I write from Italy and here the situation is the same: recruitment and no one knows when there will be more money for the lancio.They want much money for franchise licenses and several people make debts for to buy it.Come you can do to stop them? With pleasure I found Wouter and I greet him.
Yes. I agree with what you’ve said about this MLM scheme. I was very cautious about Flexkom, because I was told that I had to pay 10,500.00 TTD to buy the franchise.
I’m passing this Flexkom like a full bus.
Thanks for your comprehensive research.
The FTC (Federal Trade Commission) Business Opportunity Rule…
If you sell business opportunities, the FTC’s Business Opportunity Rule requires that you give potential buyers a one-page disclosure document
Lazy Man says
The Multi-Level Marketing industry successfully petitioned the FTC to eliminate it from being considered in the Business Opportunity Rule
The problem is that everyone with a financial interest bombarded the FTC. There’s very few people on the other side showing the dangers because they are busy making their own living. There’s no check and balance.
What’s interesting to me about this with regard to FlexKom, is that if they claim they aren’t a MLM (as the person writing me said), then they need to abide by that Business Opportunity Rule (by my understanding). If they do not abide by it, I think they are either in violation of the rule or admitting that they are an MLM, and potentially lying to people claiming otherwise.
Thanks for the info.
I agree with your analysis exactly.
Therefore, that’s why I asked for FlexKom’s US legal counsel’s written opinion on these matters…being that it’s an supposed capped ‘limited’ opportunity for ‘first movers’… which could fall under Business Opportunity.
In my opinion, why not provide the document? There is ZERO-risk in disclosure, if you are above board, honest and ethical.
Lazy Man says
Do they agree that it is a ‘limited’ opportunity for ‘first movers’? Most MLMs don’t openly state such things and instead state that the opportunity is ‘limitless’ and ‘dependent on the effort put in'” (ignoring the reality that it is not a matter of effort, it is a mathematical certainty).
I only listened to a few minutes of the FTC Business Opportunity video you linked because I was short on time and didn’t feel it applied to an MLM. However, it seemed to me there was something about presenting the document and giving a 7-day cooling off period or something. That kind of cooling off (if I’m right about it) is a big risk in being able to recruit people into the business. Anything that hinders recruiting is a blow the company’s bottom line, right?
Yes, limited number of state by state licensee rights available—at least that’s the claim. They claim, once spots are filled, there’s no more opportunity to recruit networkers, or sales force/direct sellers etc.
Assuming that factual, this is not a ‘typical’ MLM structure, that I’m aware of. They present as selling limited territory rights, which I have no idea how you can verify the legitimacy that it’s a capped number. In my opinion, it’s definitely presented as an Biz Opp, with an MLM-spin to the recipe.
To answer your question in regards to the 7-day cooling off…The Rule says that a seller has to give you the disclosure document at least seven days before you sign a contract or pay them anything. Using that time to check out the information in the disclosure document, including contacting references can certainly delay, if not diminish the recruiting process.
Here’s a link to the required form below:
If you want an more in-depth read:
Lazy Man says
Hmm, if there’s a limit, then a good portion of what I based this article off of (not matching supply with demand) probably wouldn’t apply. Do you see anywhere where they publish the limit or what the territory rights are? I couldn’t find anything, but their website wasn’t particularly help in presenting this information as far as I can tell. (Then again, I’m not going to spend hours and hours looking for something that may not be there at all.) If not, their claim of it being limited doesn’t hold water.
I don’t think this Business Opportunity Rule stuff is going to apply to FlexKom, because of the MLM nature. If it’s not typical MLM, then it seems they are trying to operate in a grey area. To stay on the good side of the FTC, they should follow the Biz Opp Rule. However, I could see them making the business decision to ignore the Biz Opp Rule to maximize sales. If the FTC ever comes after them, they’ll probably make the case to them that they are an MLM to explain why they weren’t following the Biz Opp Rule. This way they get the best of both worlds as long as the FTC either A) never comes or B) buys their claim.
It was limited to a few hundred in several states, and potentially a couple of thousand or so in states like Texas, California, etc…population/demographic based. I saw this during a lunch presentation.
‘Grey-area’ is a perfect term,and that’s what it is.
I’m naturally cautious about all business opportunities/investments. Obviously it’s wise to do proper due diligence. Hopefully we can provide complete clarity and transparency about the FlexKom structure via third-party legal/audit sources.
As of now, I am unclear if FlexKom is selling Franchises per se, that are covered by another rule of the FTC (16 CFR part 436), which are expressly exempted from coverage under the New Rule. In addition, the FTC comments regarding the New Rule indicate that while multi-level marketing businesses (MLMs) are not expressly exempt, the New Rule was specifically drafted to avoid broadly sweeping in all MLMs.
With several “what-if’s”, I have no idea if FlexKom is an MLM, since they are ‘capping’ licensees, which in and of itself might be another thing all together—potentially sounding to me like a textbook definition of a Business Opportunity…thanks again in advance for your time.
Flexkom is only saying that there is a cap on the amount of licenses. There is not really an exact number of max. licenses per area. As long as you pay the entrance fee, you can enter in any area you like, no matter how many people already active in this area. There is no such thing as a max number of people in a certain area. They just say this to persuade you to enter in the ‘opportunity’ and to pretend that you have limited time to do so. (“Enter now or you’ll be too late!”)
In Europe there are lots and lots of people quitting Flexkom. Most websites and Facebook pages of licensees went offline in the past weeks.
Flexkom has yet again delayed the phase in which licensees would visit the stores to hook them up with the Flexkom POS machine. This would be May this year, then it was delayed to October 26th, now it is next summer. In the mean time, the recruiting of new licensees goes on and on. Also, the app is still not working. On top of that, the stores in Leipzig, which are told to be the working pilot in Europe, turned out to be fake demo’s. The POS tablet of Flexkom is not actually working in these stores. You can check this by watching these video’s:
Look closely at the screens of the tablet and the phone’s. The maths dont add up. It’s just a fake demo.
Also, there is a competitor risen, called BeepXtra. This is an almost identical concept to Flexkom. Only diffrence is that it is free to enter for licensees. I have not yet figured this out. Why let people enter for free? Makes no sense in my opinion. Anyhow, most of the Flexkom people have switched to BeepXtra. (Only to be scammed yet again?)
Lazy Man says
Interesting stuff, Wouter.
I had the same thought with the limitations. If they aren’t published and known, it’s just a marketing ploy to make it seem like a limited opportunity and more valuable.
What you say about them delaying the roll-out is also interesting as the video above gave the impression that it is already rolled-out and “changing an economy of a country.” I knew that was complete BS, but just shocking to see that people have paid for licenses and aren’t able to do anything yet. Any kind of reputable company wouldn’t charge people until they can actually deliver on their end of the bargain.
I’ll have to look into BeepXtra. Typically when they offer a free-to-join “opportunity”, it comes with expensive subscription fees that never end ($100 – $200 a month).
When it comes to Flexkom and its leader, then you have got big promises and nothing more. It’s always the same old scheme!
“Give me money so you are in the boat” – And then NOTHING HAPPENS.
In Cog Nito says
The American Dream Made Nightmare guy explains why FlexKom’s a cult, and it all makes perfect sense.
Paedophiles attract kids with promises of sweets and cigarettes, in return for their obedience. Then they silence their victims by blaming them.
Like all these business opportunity con-artists, the FlexKom crooks attract adults with promises of sports cars, houses, rolex watches, in return for their obedience. Then they silence their victims by blaming them.
The FlexKom business is really adult abuse and it’s completely sick.
Lazy Man says
Interesting comparison In Cog Nito. I had never thought of it that way.
So, two things about your site. I don’t see any criminal complaints issued and I note that all your responses are in agreement with your position that MLM is EVIL.
If that is so, why does Warren Buffet own stock in at least two MLMs?
Why does USANA and NuSkin stock sell for over $70 and $130/share.
Yes, MLM is hard work, and takes a certain type of person, but that doesn’t make it EVIL.
You people remind me of the definition of vegetarian – ancient indian for poor hunter.
So if you’re poor salesmen it must be the company’s fault, not your inability to communicate.
You want to impress me. Have a link to a news site that says these companies are deceiving people. Or, at least post my blog to show you’re impartial.
Lazy Man says
I’ll take your comments in order.
Well, you seem to have missed the criminal charges for Zeek Rewards which the SEC shut down in August 2012. Also Fortune Hi-Tech Marketing was shut down a few months later by the FTC. It takes a long time and a lot of resources to shut schemes down. It took a decade for the FTC to get the information it needed to act on Fortune Hi-Tech Marketing.
My responses are generally going to agree with my position… as one would expect. If they didn’t they’d be hypocritcal.
I’m aware of Buffet owning stock in The Pampered Chef, but I don’t know of him owning stock in another MLM.
The answer to these questions is very complex and takes a lot of space to do it justice. MLMs make the companies money. Usana and Nuskin have a salesforce that costs them far less than minimum wage on average… and require them to buy product to even that. Not having to pay a salesforce… and making them pay you is great for profits. Wall Street loves companies that delivers profits. I’ve always said, that if you can avoid law enforcement, it is a good business. It is a lot like drug trafficking in that way, but I’ll get there in a minute. If you don’t believe me, take Harper’s Magazine for it: “They couldn’t have it all because Mary Kay’s business model (like that of any multilevel-marketing enterprise) is designed primarily to profit from, rather than enrich, its workforce.”
As for avoiding law enforcement, the FTC is typically the group that goes after these companies. However, the FTC doesn’t have the funding and they openly say that they won’t go after companies until they get enough complaints (never citing what is enough). People don’t complain because they think the business is legit.
Nice strawman fallacy as I’ve never said these are the reasons it is EVIL (or even used EVIL in capitals). Being a professional tennis player is hard work and it takes a certain of person… I’m not calling the game of tennis evil.
Where did you get the impression that I was a poor salesman? I simply analyze the business opportunity objectively and present the analysis. I wouldn’t begin to waste my time attempting to be an MLM salesman. If you understood the math, you’d understand that you shouldn’t either.
How do you like the Harper’s link that I presented above about Mary Kay? Or would you like to read the USA Today article about Fortune Hi-Tech Marketing a few years before it was shut down? The company founder and president in that said, “If it were illegal, I wouldn’t be standing here.” A couple of years later it was alleged to be illegal by the FTC, so I guess he wasn’t standing there.
Okay, it’s posted. Are you sufficiently impressed?
Lazy Man says
Here’s a follow-up to the Wall Street question. John Hempton, Chief Investment Officer, Bronte Capital wrote in a blog:
That’s why you see the share prices of MLM companies high.
Terry, you chose to respond on an article about Flexkom. In stead of commenting on Flexkom, the article or its comments, you chose to write a general comment about this website.
Any particular reason you chose to write your comment under this particular blog? Are you affiliated with Flexkom? If so, what are your thougts on this blog and its comments? Maybe you can explain what is happening with the Flexkom management at this time? Or maybe any general thoughts on the way Flexkom is doing at this moment?
In the mean time, I’ve got yet another nice video snack for the readers. Skip the interview part of the video. As it is German, it can be hard to understand.
Anyhow, here’s the link:
In the video, they are demonstrating how the system is working at a ski bar in Austria.
Now watch closely at 8:15. You can see how the black tablet of Flexkom is placed at the bar. Now imagine the pratical use of the position of the tablet. The tablet is placed at the end of the bar, behind a wall..
Imagne that you order a beer and want to collect your FlexMoneys (FM). How is this suppoes to work? Do you have to enter on your own how much you’ve paid for the beer and how much FM you get? Or does the bartender have to walk around the bar to operate the tablet for you? And what if you are a little tipsy and decide it’d be fun to enter a transaction of a million dollars on the tablet? I mean, if it’s a little busy at the bar (if you’ve ever been on a ski holiday, you know how crowded these places get around lunchtime or when a ski class enters the bar) no one will notice that you are messing with the tablet! And what if it is busy and dozens of people want to order a beer or a hot chocolate and all want to save FM? The bartender is running a marathon to and back from the tablet!
Or is this video simply yet another setup to reassure the masses that Flexkom is still going to be operative somewhere in the future?
Oh and why does every transaction have to be entered by hand? Haven’t Flexkom heard about an API to connect the tablet to the cash registring software of the shop? Or would that be too easy and little exiting to watch on a video, trying to trick more people into paying for Flexkom?
Imagine this system to be used at a Walmart. After you’ve paid for your groceries, the cash registrer guy/girl has to enter the amount by hand, you have to find your phone, then you have to make a picture of the QR code (hoping the lights of the shop do not reflect too much on the screen of the tablet) and only then you’ve got your discount ..that you already paid for a minute earlier.
people who criticize MLMs and Networking seems to have blinders on, they tend to ask rhetorical questions which no one answers, Lazy seems to be stuck on this MLM status, newsflash, unless you printing money at home every business employs a MLM structure, as for the Mcdonald reference when you purchase a McD franchise you pay upfront before you start making money, you don’t go into profit until years later
The reason FlexKom is not regarded as a traditional MLM is that a business partner does not have to enroll other business partners in order to make money additionally they do not have to endlessly enroll business partners since there is a cap on positions per area, now you can doubt this if you choose but don’t be so arrogant as to present it as facts, just the other day there was a huge technical problem with Iphones, and that was not the first time, is this Apple a scam company?
Lazy Man says
I noticed that you couldn’t figure out how to use a period to divide your thoughts into sentences.
I’ve found it is the MLMers that have the blinders on. They are coached to have blinders by the MLM because they want to keep out the “negativity.”
Not every business employs a MLM structure. You are confusing a pyramid scheme that relies on recruiting and a hierarchical organization. Again the difference is endless chain of recruiting which is what you found in legit businesses.
You seemed to miss the point about McDonalds not being reliant on recruiting (i.e. a pyramid scheme). I’m not sure why you add the point about buying the McD franchise up front. No one is arguing that point and this isn’t an article about McDonalds. You might as well make the point that they sell tasty fries there… it isn’t relevant.
Can you document what the cap is per area? Is it 5 people per 25 square miles? Is it a realistic cap? I could cap my LazyManKom opportunity to the first 10,000 people, but it wouldn’t make it any more legit. In traditional MLMs, you can sell product to make money… they don’t endless have to enroll business partners. You might have heard of people having Tupperware parties for example. Of course the real is made in being at the top of the pyramid.
We’d have to see if there’s really a business opportunity outside of the recruiting of others. I have yet to see or hear of any business in the United States take a FlexKom card. There are reports here that the systems don’t even work.
I follow the technology industry pretty well and I didn’t hear of any of huge technical problem with iPhones. Even so, if you think this makes the company a scam, start your own blog and make your case. This article isn’t about Apple, it is about FlexKom.
Deborah Brolley says
In the U.S. it is 1 Global Team Member, for evey 10,000 human. Each state manager and regional director knows exact number peers state and they break it down. So glad they just hired Kevin Thompson as another big hitter attorney, to work with Grimes and Reese. Glad Visa, and Paysolution did background check, and U.S. Market is getting ready to have some areas lunch next week, after each Global Team member gets certified next next week. Best kept secret!
Lazy Man says
So in the United States, they put a cap of around 35,000 people (glad that they use “human” as a distinction and not dogs). If they are $4,000 per license that’s 120 million dollars in licenses.
The top attorneys didn’t help Fortune Hi-Tech Marketing.
I’d love to see proof from Visa that they did a background check. From the comments here, it doesn’t seem like one occurred.
I’m sure that the U.S. market is going to have some awesome lunch next week. I vote for BLTs.
As for the cap, I already told you that this is BS. You pay and you enter Flexkom, no matter how many GTM there are in your area. Try it with signing up the entire neighbourhood. Flexkom won’t complain. They’re just interested in the money all your neighbours are paying them. Of course, don’t forget to move to another city once you’ve done this test. People will not appreciate being scammed by you so you might find it less confortable living with people next door who hate you for scamming them. Just sayin’.
And Grimes and Reese? Last year it was Baker & Mckenzie. I see that most of the Flexkom pages that proudly announced the legal firm of Baker & Mckenzie representing Flexkom have been taken down, instead of all the ‘negative blogs’ that this law firm should have taken down according to Flexkom. Guess Flexkom told yet another lie about having a reputable law firm to help them with legal issues.
So now they seem to have settled with a generic MLM law firm instead? Good luck with that.
As for the lunch next week, i’d like some good cheeseburgers for lunch. Could you bring me some?
I do hope that this lunch is more spectaculair than the lunch of October 26th. Nothing really happened that day, except for the USA CEO quitting. Same goes for the lunch of summer 2013, then they only brougt up an app (that still does not work) but no lunch of any kind. So let’s hope for the best.
Only thing happening at Flexkom now is some more recruiting. Oh, and ofcourse the European CEO quit and took 667.019,18 euro’s (which is sligtly more in dollars) with him. Ofcourse, he did this in the traditional fashion; on stage receiving an enormous cheque with lots of people cheering and applauding for him. They must all have been so happy to see the CEO quitting and taking lots of money. Especially if you think of that, up till now, no money has been made by Flexkom trough a conventional way ..like selling a product. Don’t all companies have their CEO quitting before the company is even up and running? Or is Flexkom really already up and running with thousands of people paying their money for the GTM license?
MLM - Broken Model says
I just heard that the CEO for France just quit (I think his name is Fabrice).
So, how was the lunch last week?
As you know Flekxom is now encouraging its sales reps to purchase one or more of the POS system. This system costs somewhere between 300 and 500 dollars, depending on how many tablets you purchase. This way, the POS can be placed ‘for free’ at the stores.
Great idea, if only it hadn’t turned out that the Flexkom POS is really the Sanei N78 tablet, which costs for about 80 dollars on amazon:
Lets hope that you get a silver stand with that Flexkom tablet, or else you’ve just been scammed for yet another several hundred dollars.
Wouter Hol says
I made a videoreview on the POS 4S. Turns out that it is a pretty expensive piece of hardware with very mediocre specifications.
Included in the video are some suggestions for better tablets at way lower prices.
Lazy Man says
Thanks Wouter. I’ve included both your videos into the article.
Wouter Hol says
I’ve made some more video’s.
Flexkom likes to brag on how they use new technology like NFC.
Turns out, FlexKom does not use NFC at all:
And a video on the practical use of the tablet, pointing out the ridiculous long time that it takes to complete a transaction and the high risk of making typing errors. Also there has not been thought of theft prevention of the 500 dollar tablet:
Paul c says
A business associate pitched FlexKom to me in the UK quite a while back (2012 from memory) and I was immediately cautious.
I am a technology professional as well as a business owner so was immediately cautious due to the ‘too good to be true’ nature of the pitch. I have no doubt my associate was well intentioned but it was clear they had been sucked in.
A few points which stopped me putting my money in –
Having developed financial systems for insurers with actuaries I followed the cashflow through for a number if cases and scenarios – it doesn’t stack up.
The rep was unable to specify any protection for retailers operating on tight margins from consistently loosing out by having to release products for credit (which we know isn’t real money)
The flexkom national manager made some sensational claims about how advanced their tech stack was – such as instant delivery of retailers marketing videos to mobile apps with NO buffering. This is technically an impossibility, it either needs to buffer whilst being delivered instantly and be subject to GSM carrier restrictions in bandwidth and speed or; not delivered instantly but downloaded in the background for uniterupted playback.
Not wanting to entirely doubt my friend I followed up with some very detailed technical queries as this would be easiest for me to validate based on my skills.
Where are the servers hosted and by who? We have our own in Germany.
Which operating system do the devices use and which version: we have developed our own propriety OS for performance reasons (maybe they are huge as it would seem the android platform was built specifically for their app! :-/ )
There were more sensationally obscure, technically impossible or blatantly vague answers to the 30 or so questions I posed but I don’t wish to waste time reflecting them here. Folk can of course make up their own mind on this one, but for me it’s not even MLM (which can be productive) as this proposition seems to rely entirely on blinding people with marketing BS and degenerative maths.
In Italy March 28 will open the second phase, what does it mean? Possible that no one can bring experience of the places where it is already on the market Flexkom? Possible that, even stores that have not advertise this great opportunity? Until now, only a lot of publicity on POS APP ……
Ho appena ricevuto questo video dalla Slovenia https://www.dropbox.com/s/bqwfdjwc8yww2l6/SLOVENIA%20TOUR.mp4
As of this date there are a combined amount of stores open ad operational operational in France, Germany, Italy, Slivania and USA. Terminals are arriving daily for FlexKom expansion. All of the above information is now outdated and proven wrong. Now the attacks will be framed based on our chance of proving our sustainability, so we expect more negativity from these sites but please be aware that all the accusation of being a scam have now been put to rest. Now we keep proving our concept to the world in our participating merchants. If you want proof you can download our app and request a QR code from our website. Our app shows every merchant we have opened. And if you live close you can go and use the system yourself and stop reading these uninformed sites.
Lazy Man says
Are you an employee of FlexKom? With the way you say, “we”, it sounds like you are. If so, please use a full name so we know that you represent the company officially.
Keep in mind that the article was written nearly a year ago and supposedly operations were going full-steam then. At least that’s what the video portrayed.
Just opening up for operations does not put the scam for rest. Fortune Hi-Tech Marketing was shut down last year after a decade of operations. Essentially the FTC declared it was a pyramid scheme scam. Zeek Rewards was shut down by the SEC after it was in operations.
Accusations of being a scam are still valid.
Just the fact that you’ve got shops with a Flexkom tablet and Flexkom leaflets on the counter does not change the fact that you’re still running a pyramid scam. I thought Flexkom would have got his first few hunderd shops over a year ago. Lyoness also has got hundreds of stores around the globe. Yet almost none of their sales reps is making any money, as it’s just a pyramid scheme.
You Flexkom guys are taking a long time to place your scam at the stores!
Steve, please try to use your common sense. Let’s just add another tiny clue as to why Flexkom is a scam.
The main feature that Flexkom offers to the merchants is supposed to be the innovative video mail function, right? Your president, Ehliz, was bragging about it in a webinar I saw last month. He said that this would change the world and that all of his technicians were working on it, making it abolutely innovative and great.
I’ve got the manual for this great Flexkom function right here:
So if a merchant has a video, he can upload it to Flexkom and then send an email, containing this video, to his customers.
Now, I do understand that most of the Flexkom sales reps are not the people that know of all the latest news in technology. Not all of Flexkoms sales reps are IT nerds or sales people who keep up with the latest of gadgets.
But you are not telling me that all of Flexkom seems to have missed the fact that there exists something called Youtube. That is just plain impossible, for we are having this discussion on the internet. You can not have missed the existence of Youtube.
Do you really think that a merchant would find it useful to upload every video that he’s made twice, once on his youtube channel and once on the Flexkom system? Of course not.
Add to that the fact that the merchant is unable to edit the contents of the mail that’s being sent to his customers via the Flexkom system. No options to include his own corporate identity, no options to include special offers on products that are on sale, no personal message, nothing! Only a title and short description can be added. This is 1994 calling, wanting it’s technology back!
The Flexkom system is completely redundant. Can’t you see that, Steve? You’re being tricked into believing in something that’s an obvious pyramid scheme.
Colin McKenzie says
Wouter, you real preaching. I have never seen an advertisement on TV neither hear on the radio about Flexkom.
Mr Wouter, our merchants are signing up customers in the Flexkom system every day who are finding other locations through our App. Our reps are making money when the customers get cash back. So let’s cut the bullshit with you stupid pyramid ideas. Go to wiki and check what it is first. Just so your retarded mind can get a simple lesson in how it works. The first thing you need when you want to find a scam isn’t technology you don’t like you have to have a victim and no business being conducted. So if your blind ass will ever see what is happening remains to be seen. But when you have shops getting new faces walking in through the door that is called successful marketing and when you have a happy customer you have what is called a successful enterprise not a f*cking pyramid. So cut the shit Flexkom is the only system available that customers actually sign up with. All the other systems have a marginal customer sign up rate. Our merchants are signing up most customers they ask and guess what that means? Yeah you wouldn’t know this part. We get the data and it’s all about the data. When you have the data you are king. So suck it!
Lazy Man says
You seem to be a little upset. Maybe you should calm down a bit.
You calm? Good. Now let’s begin the education:
You said, “The first thing you need when you want to find a scam isn’t technology you don’t like you have to have a victim and no business being conducted.”
This is completely false. Many scams “conduct business.” That’s the root of how they work. If there was no business conducted, people couldn’t be scammed, because they’d have no reason to take out their wallet.
Next, the FTC has information on what a f*cking pyramid is and it has nothing to do with having a happy customer or happy shop keepers.
Please stop trying to confuse people on what a pyramid scheme is. It makes FlexKom look even worse than they already do to have their employees come here swearing and creating confusion on pyramid schemes. That should be reason enough for everyone to stay away.
Steve, the fact that you have to swear in order to try to make your point already says enough. Flexkom fails in every thinkable way, except for the fact that they’ve successfully scammed the likes of you.
But try to think for yourself. Flexkom used to have a nice counter on their website that counted the amount of downloads of the Flexkom app. Why do you think Flexkom removed this counter from their website? Surely they didn’t do that because the amounts of downloads were off the charts and they couldn’t keep up with the downloads..
No, Flexkom was ashamed of the low amount of downloads. The counter exposed the fact that not even a small portion of all of the sales reps had installed the app, as the amount of sales reps exceeded the amount of downloads multiple times!
But don’t believe me for this. Check the amount of downloads by yourself on Google Play and the App Store. It’s stuck at 10.000 – 50.000 downloads for over half a year by now. Surely you know that just in Turkey there’s over 40.000 sales reps, as that’s the amount that Flexkom brags about in magazines like Obtainer.
I’m not sure how many sales reps there are worldwide, but I’m quite sure that they’re well over 100.000 around the globe. So don’t pretend that Flexkom has got lots and lots of customers, as it’s clear that not even a large portion of Flexkom’s own sales reps have even installed their own app, let alone if you add the customers that supposed to have installed the app!
Just so you all know, this “business opportunity” is still being actively promoted in the Southern US. Distributors are trying to get people to at least download the app, which, of course, is useless, to try it for themselves.
Please keep this article posted until the FTC takes FlexKom down. At least those that do their due diligence can benefit from the clear analysis given in the article and the comments.
Wouter are you listening to your own words? We have sold a system that wasn’t done yet to well over 100,000 people just by telling them we will get it done and you think we cant get people to download an app for free? Do you think we have a hard time giving merchants a free terminal to capture their customers data with? People this guy is not that smart. You must understand this on your own.
Look Lazy man, we have paid professionals who have a degree and consult for a living on what is and isn’t a pyramid and sometimes it takes a court case to determine if it is or isn’t. So I think you can put your classes on hold since you are just a guy with a blog and have no idea if FlexKom is or isn’t a PYramid. Stop pretending that your opinion has any real use for people. You know you are talking out of your ass most of the time because you are Lazy and spend no time to do proper research so you glaze over a company make a ignorant determination and then pretend you know what you are talking about. Its simple, You’re full of shit!
Lazy Man says
Steve, I’m a paid profession with multiple degrees. I have called out pyramid schemes before the courts (ZeekRewards comes to mind), though most of the companies barely get off the ground (which I call as well). I said that ViSalus looked like a pyramid scheme and you know what, they were just sued for being one yesterday (http://www.virtual-strategy.com/2014/07/14/sommers-schwartz-files-multimillion-dollar-rico-class-action-against-visalus-inc).
Yes, much of the time it actually does take a court case to determine if it is or if isn’t a pyramid scheme. This is EXACTLY why no one should get involved in FlexKom. FlexKom purposely chose a business model that people simply can’t trust to be legit. The participants could be accessories to a crime and ignorance is not an excuse. If FlexKom isn’t a pyramid scheme, then they do the right thing and just make it single level affiliate commissions, no recruiting, so that people can trust the business is legit. If they continue to structure their business in a way consistent with pyramid schemes, people will make that comparison even if FlexKom is not, and the company will lose business.
So really the choice is up to FlexKom. Make yourself look 100% legit to be trusted or continue to look like a pyramid scheme and invite well-founded criticism. It should be a simple choice and it is telling that FlexKom continues with the later.
Before you claim that I’m just a guy with a blog, maybe you should look in the mirror. You are just a guy commenting on that blog.
Steve, you don’t quite onderstand it.
Let’s say that there are 100.000 people who’ve bought the Flexkom license. You and I seem to agree on that number.
If you look at the downloads of the app, the Google Play store indicates 10.000 to 50.000 downloads. We can narrow these figures down a bit by using indication software like xyo.net.
xyo.net indicates 27K android downloads and 30K iphone downloads for the Flex-App, making a total of 57.000 downloads, give or take.
So almost half of the people who’ve paid big bucks for a Flexkom license, didn’t even bother to download the app!
Add to that the fact that you claim that there’s lots and lots of consumers (aka. people who did not bought a Flexkom licence) who download the app ‘every day’. So in reality way over half of the people who paid well over a thousand dollars, sometimes even more, did not bother to download the app.
So, how come that these people did not download the app? Do they not own a smartphone? Well, that’s odd if you represent a company that claims to be innovative and selling M-commerce services. And if you can afford thousands of dollars for the license and attending to meetings, surely you can afford an Android phone.
Maybe they don’t need the app? Well, you need the app to save FlexMoneys and to ‘easily’ share the app with others, so they sure need to have the app.
So in my opinion, if you’ve bought a license and are happy with Flexkom, you surely would have downloaded the app. I think we can agree on that?
So than how come that lots of Flexkom sales representatives did not download their own app when it became available, exactly 1 year ago?
Don’t bother coming up with an excuse, I’ve got the awnser right here for you: They figured out that they were scammed into paying for a spot in a pyramid scheme.
This is a turkish newspaper, telling about 30.000 people being scammed in Turkey:
Wouter, that site is not accurate and it is the only site I have found that tries to give an accurate download count. It does not have access to data to even try to do that. The APP creator/owner is the only one who has that information. The best you can do to know how an app is doing if the company doesn’t publish their numbers is to check rank. FlexKom is ranked in 11 countries. We are ranked in top top 500 in two countries. Ranked in 11 countries total. USA we are not yet ranked because it’s to early. I am not giving APPs here yet because they can’t use it yet. If they cant use it they will delete it. We have maybe 30-35 stores currently open in GA and TN. But last week there where over 1000 terminals delivered those terminals will be in stores before the end of AUG or sooner. This week we have another 1500 terminals going out from the home office. this site is way better than what you are using http://www.appFigures.com
We have been delivered 30 terminals to about 15 GTM VIP in my area so we will place them in the next 30 days and then we will also give out our APPs that came with the package along with the stores we have. We will spend 2 days in each store showing how to recruit customers. Our Goal is 20 customers a day per store. About 500 per store in the first month. 30 x 500 = 15,000 new app downloaded less the once that don’t have a smart phone they get a card. Each of us will also give out maybe 100 apps from our inventory. The following month we plan on reaching 100 stores giving out 500 Apps each.
lazy man at this point we wont change our comp plan. The comp plan is compliant. We are currently in talks with All states authorities in regards to our program. We wont open in any state that has not been signed off by the proper authorities for business with merchants. Our model changed recently and when a new distributor is signed up they get terminals in their packages. They can buy 1-20 and they will be able to install those in stores and receive a commission on each account they service. They do not need to recruit to earn enough money for it to be worth their while. But if they do recruit others who want to be a distributor for us we will compensate them through our comp plan in a pre determined way.
We are not a company who is in business to earn money by selling our packages we are in business to earn money by providing a unique and very powerful service for our customers. Our customers get a software platform which allows them to market their business effectively to their customers. We also pay them a commission on sales that happen away from their stores when the customers they recruited to the system shops in other stores. It creates a win for all involved. No one loses so we have no victims only winners.
What our software does is it links all the small businesses together in a network. They are profit sharing with each other and become one large chain store with our platform. The customers get rewards never before possible because all rewards programs usually only works with one company and there is only so much money we can spend in one place. But when all small stores in your area is involved you can rack up points in all different stores and over time it adds up to bigger rewards like Vacations and such. This is why our network of stores will out perform the competition. Everyone always say there has got to be someone who loses and that is true. The ones that lose are the stores that don’t participate. We are not targeting any large retailers or chain stores they also lose as we will be making their competition stronger by linking them together through our software. Wouter is only talking about our history and the rocky path it took to get here and the opposition we have faced with our model.
But the bottom line is this company was built to do business and to benefit those who are involved, it hasn’t been smooth but it has always been in pursuit of a great company from good intentions and integrity. No one who ever paid to be part of FlexKom has had the opportunity taken away from them it is here and it is continuing to offer a way for people to go out and earn money with our technology.
Wouter sees level and shouts pyramid, is that the truth? A pyramid has to self destruct in the end because there are no more people to put in. Otherwise it would be great to create money for people indefinitely more money more fun. What we do is different we will at some point stop recruiting because it is not where we make our real money our money is at the merchant level we make our big money on our marketing charge having millions of transactions a day eventually, and at that point when the last person signs up will he lose money? No because we are offering a business that from direct sales will earn him a great income. He wont be able to recruit but he can earn in our direct sales model a 6 figure income. And that is why we are not a pyramid. In a pyramid the masses end up losing money because there are no more people to put in.
Lazy Man says
Again, you say “we” a lot, but you don’t identify yourself. Please don’t talk like you are representative of FlexKom without letting us know that you are.
Suggesting that you’ve talked with all states for sign-off, shows you don’t really know what a pyramid scheme is or how the United States works. It’s a federal level issue, and you can’t get sign-off ahead of time that your plan is legal. That’s why there’s a big investigation going on with Herbalife right now. It’s why Fortune High Tech Marketing was shut down after being in business for ten years with two former AGs on its legal board. Sounds like they had everything legit. They convinced everyone they did. They weren’t.
Pyramid schemes can be sustainable by churning out the people at the bottom. It’s explained in this Seeking Alpha article: http://seekingalpha.com/article/1079421-but-mr-ackman-herbalife-is-a-sustainable-pyramid-scheme
Well, maybe you should check out how banks create money and then maybe the federal having a problem with pyramid schemes has everything to do with they run the biggest one and don’t want competition. Lazy man we are much more than a multilevel comp plan. We are subject to money laundering laws, banking laws and currency laws etc. Not gonna identify myself because nothing I say should be considered official FlexKom information. This is not coming from an employee.
Lazy Man says
Maybe you should write a blog about how banks are a pyramid scheme and then send me the link. This conversation is about FlexKom and you should stick to that.
If FlexKom is more than a multilevel comp. plan. It should prove it and stay far from a multilevel comp. plan so that people KNOW it is not a pyramid scheme. Of course if it is a pyramid scheme, it can’t do that. So again, the ball is in FlexKom’s court. Remaining in a multilevel comp. plan looks worse and worse with each passing day.
If you are not an employee of FlexKom and what you are saying is should not be considered official FlexKom information, then please stop using the term “we” to refer to yourself and FlexKom as an entity.
Steve, you say that the site i’ve provided is not accurate. Yet Google seems to agree with their numbers:
If you scroll down a bit, you’ll see that Google itself indicates 10.000 tot 50.000 downloads. The 27.000 downloads indicated by xyo.net complies with the numbers of Google.
You in turn give another site, which you say is better, appfigurges.com. But you’ve failed to prove how that site would indicate any other numbers than XYO or Google itself. If I enter the appfigures.com site, I have to registrer myself and apparently add my own app to it in order to track the download figures.
You also speak of 1000 terminals coming to USA. This is a fairytale being told for over a year by now. Do you have any prove that the terminals are coming and can you explain how that suddenly would make it so that Flexkom is not a pyramid scheme (anymore)?
Lazy Man says
Even 1000 terminals in the United States would be essentially useless. That’s 20 per state. There should be about 100,000 for it to be of any significance.
Over a year ago, there were dozens of Dutch Flexkom fanpages on Facebook. Almost every city or region had it’s own Facebook page. Over time, they all disappeared as the owner of the fanpage discovered that they were being scammed.
As it just so happens, the last remaining Dutch Flexkom fan page has closed its doors, just a few hours ago:
Note that the main reason for abandoning Flexkom is that they still did not receive any of the terminals they’ve paid for.
I think that it’s a bit odd that Flexkom did not deliver the terminals at all. After all, they were really, really overpriced. Flexkom easily made a profit of 250 dollars a pop.So there really was no reason not to deliver them. Seems like that the Flexkom scammers (aka. the management and directors of Flexkom) really don’t care at all that their scheme is collapsing right now. After all, they could have postponed that by delivering the terminals.
If FlexKom has not furnished their Dutch distributors with these terminals that are already bought and paid for then this a huge red flag to all potential US signups.
Seems common sense to me that before endeavoring to expand to US and elsewhere the management should have ensured that they service those Dutch distributors with the 1000 units intended for the US market. Customers being serviced in that market would be evidence to point to during US expansion efforts.
This track record proves there is no reason to think the same fiasco won’t happen here, that those running FlexKom are incompetent problem solvers are obviously greed driven. Something stinky is going on here.
@LazyMan and Wouter – Great objectivity.
Thanx to your puerile histrionics you have done a deplorable job as an ambassador for FlexKom especially because you said “we”. You should answer the questions objectively to further this discourse instead of cussing at seeking minds.
To think you are responding to LazyMan and Wouter only is myopic of you. Please re-adjust your attitude. If you want to hurl insults start your own blog and go to town. At least I will know where not to look for objectivity.
In light of your ill advised rejoinder it’s probably a good thing you didn’t give up your full names, your response is embarrassing to any FlexKom goodwill there was again especially because you said “we”.
Please keep the discussion at a mature level.
Have you now updated FlexKom to reflect Weeconomy, please and their latest attempt to take over the world, sorry Europe?
Lazy Man says
I hadn’t heard of Weeconomy. I just presumed that FlexKom fizzled. I didn’t hear anything much about FlexKom coming into the United States they planned too.
I stumbled across this blog post while trying to find information about an “investment opportunity” peddled to me in the UK called weeconomy, in which Cengiz Ehliz who was of the prominent leaders in FlexKom is currently involved. It seems to me it is using a very similar setup to the one detailed in this blog whilst adding a cryptocurrency ICO (weecoin) for use in their cashback system