BullionVault Review: Gold, silver & platinum marketplace exchange
BullionVault is owned by Galmarley Limited, who in turn are a subsidiary of BullionVault LTD.
All three are UK corporations with a physical address in London, UK.
BullionVault was founded in 2005 and is headed up by Chairman Paul Tustain (right).
As per Tustain’s BullionVault corporate bio reveals he was working in the banking sector before getting into gold.
Sensing that more people would soon be looking to buy gold (Tustain) started planning BullionVault in 2002.
Development of BullionVault, which he funded, started in late 2003, and the BullionVault service was launched in spring 2005 supported by investment from 30 friends, family and business angels.
He was CEO from launch until 2016, during which time the business grew to become the world’s biggest online investment bullion service.
In addition to running BullionVault, Tustain also co-founded WhiskyInvestDirect in 2015.
WhiskyInvestDirect is a non-MLM company that offers a whisky investment service. Of the two companies, BullionVault definitely appears to be the stronger.
Read on for a full review of the BullionVault MLM opportunity.
With there being no differentiation between retail customers and affiliates, strictly speaking BullionVault has no retailable products or services.
BullionVault run a “live order board” service, which permits affiliates across the world to directly trade gold, silver and platinum with each other.
On the order board you can deal direct with other customers, cutting out the middleman.
You can buy their bullion when they want to sell, or sell to them when they want to buy.
You choose your own price and compete in the market to find a buyer or seller who will accept that price.
It’s like a stock exchange, but for pre-vaulted investment gold, silver and platinum, not for shares.
Standard fees provided on the BullionVault website include
- a “dealing commission” of between 0.05% and 0.5% each time you buy or sell through the order board
- storage and insurance charges of 0.12% per year for gold and 0.48% per year for silver and platinum (billed monthly)
- fund wire fees of around $30 on average (UK withdrawals free)
BullionVault also charge fees for withdrawing or moving stored metals obtained through the live order board.
The BullionVault Compensation Plan
Transaction fees for gold trading on the live order board are commissionable.
Commissions are paid to BullionVault affiliates as a percentage of fees generated by trading activity of referred customers.
Commissions on fees charged are paid out as follows:
- 25% of fees charged to personally referred customers and
- 6.25% of fees charged to customers your personally referred customers refer (level 2 in a unilevel compensation structure)
Note that commissions are paid out for two years on created customer accounts.
BullionVault affiliate membership is free.
BullionVault very much appears to be a precious metals marketplace first and MLM opportunity second.
This makes it somewhat difficult to evaluate it as an MLM opportunity, as it doesn’t come across as a focal point of the business.
BullionVault claim they have
- $100 million of gold and silver traded monthly
- $2 billion of clients’ assets and
- 65,000 clients across 175 countries
From an MLM perspective all of those clients are affiliates. Which means 100% of company-wide revenue is sourced from affiliates.
This in turn means BullionVault, at least as far as the MLM side of things goes, is operating as a pyramid scheme.
Remedying this would be as trivial as requiring retail customers to sign up separately if they wish to be affiliates. With BullionVault having been around for over a decade, I’m not sure why this hasn’t already been implemented.
With respect to the live order board, my initial impression is this was some sort of virtual game. Gold tied to the live order board trades however does appear to exist and is actually traded.
This differentiates BullionVault from a virtual stock market game, where gold is only purchased if a participant decides to withdraw it (which never happens).
According to the it BullionVault feed gold as required into the live order board via robot traders they’ve set up.
‘Robots’ are computer programs which receive an electronic price feed and use it to quote prices on the BullionVault Order Board in just the same way as you and other clients do.
Ours manage BullionVault’s own $40 million inventory.
Robots are subject to the same limitations as you, which means they can only sell what they already own physically in the vault, or buy with their cleared cash balance.
You buy from them, or sell to them, just like you would directly with another client, but only while they offer a better price. It’s as simple as that.
Sometimes, like on the day Lehman Brothers went bust, clients acquire all the immediately available stock from our robots.
Although we immediately buy new stock to replace what was sold it takes 48 hours to be delivered, and because the gold is not yet in the vault the robots have no stock to sell.
This creates a genuine supply and demand marketplace, with no money traded if the gold itself doesn’t exist.
Affiliates are also free to create their own trading robots, although how that impacts the live order board as a whole I’m not sure.
The whole concept of the live order board is to buy low and sell at a profit. Robots trading faster than a human possibly could might kill interest for the average Joe punter.
As for the actual gold trading, for most people I imagine it’s going to be a strictly money affair. You can withdraw gold you hold from BullionVault’s vaults, but the costs are likely prohibitive for most affiliates.
Gold also isn’t something you get home delivered and stick in your garage for safe-keeping.
I’m not an expert at precious metal trading, so I simply punched in “current gold price” into Google to compare.
Per ounce, the “best offers” on the BullionVault website were $15 to $17 cheaper per ounce than Google’s “gold price today”.
Bear in mind you’ve got to factor in storage and insurance fees, and the likelihood of selling not only cover your costs but turn a profit.
Too much for me to keep track of but as I said, I’m not a metals trader.
If you’re into that sort of thing BullionVault’s live order board is probably worth at least a look.
The two-year cap on affiliate commissions per referred account is a bit of a turn off though. And BullionVault should probably get on top of separating affiliates from retail customers sooner rather than later.
Approach with caution.