Numis Network - A Review From a Coin-Collecting NON-MEMBER!

If you are involved in internet or network marketing, chances are that you have heard the buzz surrounding the Numis Network. Many network marketers are taking a serious look at this opportunity, which, for the first time, combines coin collecting with the power of multi-level marketing. Since there is a wealth of information on the internet regarding the company leadership, its compensation plan, and such, I will restrict this review to providing some caveats for interested prospects.The ProductMy major issue with Numis Network is the product, particularly their "flagship coin," the American Silver Eagle. I cannot justify spending so much money for this coin. Typically, the price you pay for a coin depends upon the spot price of the metal's content, plus the spread, plus any premium added. As of this article's original publication, the spot price of silver is $16.95 per troy ounce. Many American coin dealers charge $1-$2 over the spot, so you can expect to pay under $20 for a one-ounce coin as long as you don't have to pay a premium. Premium is the term given to the price one pays beyond the coin's intrinsic value, and can range anywhere from a few dollars to hundreds of thousands of dollars.So why does Numis Network charge $125 plus tax plus shipping for one troy ounce when a savvy collector can buy one troy ounce for a fraction of the cost? Let's explore the answer to this question by examining some phrases that are published on the company's website."Numismatic coins are legal tender coins"True enough -- but only at their face value! This means that, since the American Silver Eagle has a face value of one dollar, ONE DOLLAR is the highest value of debt that it can service legally. But the content of the silver in the coin is worth $16.95 per troy ounce, so if you use it for legal tender, you are losing about $18 worth of value per coin. This is why silver coins aren't in general circulation now. It makes no sense to me to pay $125 plus tax plus shipping for a coin if my intention is to use it for legal tender."The value of these collectible coins is based not only on their precious metal content, but also on rarity, collector demand, and their actual condition."My issue here is in the classification of "numismatic." Numismatic coins have a greater value than others, due to their historic relevance or rarity. Thusly, numismatic coins are deemed "special" and fetch a higher price than other coins. True numismatic coin collectors pay a premium for rare or historic coins because their rarity and/or historic relevance make them more valuable as a collector's item.There are many numismatists that do not consider the American Silver Eagle a truly numismatic coin. The American Silver Eagle, in general, is neither rare nor historically relevant. In fact, it is the most widely collected coin in American history because it is so easy to find. There are hundreds of millions of them in the world, both graded and ungraded. Furthermore, these coins were not in the pockets of any great pharaohs or caesars, and none of the founding fathers carried them across the Delaware, so they lack the historical relevance to command such a high premium.As to "their actual condition," the vast majority of American Silver Eagles are in very good condition due to the fact that they are not in circulation. Therefore, they are not enduring the normal wear and tear of a coin that goes from a pocket to a purse to a cash register drawer, and so on. Does encasing these babies in a plastic cover make them worth $100+ over the spot price?"By purchasing and accumulating graded, silver and gold numismatic coins, you too can Create Wealth, Collect Wealth, and Preserve Wealth."Many of us have heard financial gurus state that gold and silver coins are a great hedge against inflation and the falling value of the dollar. Again, I agree with this statement. But one troy ounce of silver (which is the approximate silver content of the American Silver Eagle) is worth $16.95 on the spot market. That means that if I purchase the Numis Network's "flagship coin" every month, I am paying a $100+ premium just to own one troy ounce. In this case, the spot price of silver would have to appreciate approximately 650% just for me to break even! Could this massive appreciation happen in my lifetime? Absolutely. But that's a highly speculative play and quite risky. Haven't we learned our lesson in speculation from the recent housing market debacle?Although inflation is generally great for coin appreciation, deflation (as typically occurs in times of depression or steep recession) is horrible for numismatic coin values. As the extension of credit continues to contract, the old adage "cash is king" becomes even more pronounced. Numismatic coins, like $2000 suits, become luxury items, as Americans can no longer justify the high premiums. What's going to happen to the income from a downline that can no longer afford the $125+ coin auto-ship because the reps need their cash to pay bills?Supply and DemandOne of my greatest apprehensions regarding the Numis Network opportunity is its ability to satisfy the demand of buyers. Silver is a consumable metal (meaning once it's used, it cannot be re-used) that has many industrial applications. We use silver in everything electronic, from computers to mobile phones and beyond. Does the company really have enough product to meet the growing demand of auto-ship orders? Will there come a time when the coins have to be rationed, and if so, what will that do to a Numis Network rep's ability to market and recruit?What's Missing?What the Numis Network opportunity is missing is a product that allows a true coin investor like myself to realize additional profits using the power of network marketing. The difference between numismatic coin collectors and coin investors is this: Numismatic coin collectors are motivated by the history and rarity of the coin, so they are willing to pay what coin investors deem outlandish premiums for their products. Numismatic collectors would probably continue to acquire coins even if the spot price of the precious metals began to depreciate. Conversely, coin investors are motivated by profits. Coin investors would scale back or stop acquiring precious metals if the trend in the spot price suddenly dropped. They are looking to buy low and sell high, and their exit strategies are assembled before they buy. The lower the spread, markup, or margin, the more room is available to make money. In other words, the closer you get to paying the spot price of the metal, the higher potential exists for profit when you sell.Numis Network does not offer gold or silver products with low or no markup. All of the products advertised on their website contain huge premiums factored into the spread, making it difficult to actually make money with just the coin. If the company were to offer 1-oz. silver bars, or silver rounds like Prospectors, this would be a fantastic opportunity. I can walk into any coin dealer in America and pick up 5 to 6 1-oz. silver bars for the same price that Numis Network sells ONE American Silver Eagle. I typically like to realize a 25-50% return on my investments, so assuming that I can purchase for about $20 per ounce, on the low end, the spot price of silver would only have to appreciate to $24 in order for me to hit my target. However, if I buy the "flagship coin," the spot price of silver would have to appreciate all the way up to $130 per ounce just to break even. It doesn't even take an uber-savvy investor to see which one is a better choice if your goal is to make money, store value, or hedge against inflation.Now, I can get the cost of my American Silver Eagles lowered by joining the Numis Network and recruiting a large downline. That way, as my organization expands, the profits I earn from the efforts of others will offset the cost of my auto-ship. But there is so much margin built into just the "flagship" product that I would have to recruit massive amounts of folks just to afford one of these coins. And since I believe this coin is over-priced, I probably would not be very good at convincing others to join.In conclusion, the Numis Network, as a network marketing organization, seems to be a solid company. The leadership team combines top network marketing insiders with a leading expert in the numismatic field. The compensation plan is outstanding, enhancing the familiar binary system with some additional ways for distributors to maximize their earnings potential. Members can also elect to take the company's training courses on numismatic coins, which can help distributors with their marketing strategies. And although I have declined several opportunities to join, there is money to be made here, especially if you have been properly trained to market yourself and your business. And as always, don't just take my word for it...take it for checking.