Product Name: Ambit Energy
Product Owner: Jere Thompson & Chris Chambless
Advertised Price: $429
What Is It?
Ambit Energy is an electric and natural gas service provider to residential in deregulated energy market areas in the U.S. These markets are found in Texas, New York, Virginia, California, Illinois, Maryland, New Hampshire, Massachusetts, Delaware, Connecticut, New Jersey, Washington D.C., Pennsylvania and Rhode Island.
They boast having over a million customers in these 14 states. The company was founded in 2006 by telecommunication energy industry veteran Jere Thompson and Chris Chambless of Texas. Their business model is lowering energy bills for their customers and providing a way for their direct sales consultants to earn extra money and incentives through a multi-level marketing (MLM) plan.
In 2010 Ambit energy was named the fastest growing company by Inc magazine.
This may sound like something special, but it's also a common tactic used by MLM companies to make themselves legit. Growth rate has nothing to do with the legitimacy of their products, offers, or business model. I've seen the “listed on Inc 500” thing multiple times over the years, and nothing much has ever come of these places. You should also know that this is not an accurate representation of small business in America. Only companies that actually offer to be listed in the magazine are featured. Sales figures is also not verified.
You can also read professionals publishing on Inc 500's site clearly stating that MLM is a bad idea.
Getting back to the topic at hand, Ambit Energy has been plagued by consumer complaints. Complaints range from finding bills that were twice as high as normal, to unfair and untimely service disconnection.
Other customers flat out accused the company of lying about actions taken to renew contracts or sending renewal notices to them. None of the disagreements seemed to result in refunds to customers or adjustments to their bills. There are also lawsuits pending that cite the company for using illegal pyramid schemes to compensate their direct sales consultants.
Ideally, deregulation encourages competition within a market which normally translates into better prices for consumers. That is the basic rationale that Ambit pitches to customers to get them to switch their electric and gas services over to them.
The traditional energy service provider owns the power lines, but energy retailers like Ambit can purchase energy wholesale and use the existing infrastructure to provide service to customers in deregulated areas.
Clients have the option to sign up for the company's fixed rate service plan called the Guaranteed Rate Plan or the Market Rate Plan which results in energy bill rates that are variable.
Ambit Energy also incentivizes customers to refer their friends with further discounts to their bills. There are fees for initially transferring service and of course, fees for service disconnections.
Ambit Energy serves a limited market of 14 deregulated states with a product that has consistent demand. The fact that customers who do not use alternative energy sources will always have a demand for Ambit's, is what attracts the attention of sales consultants to this MLM.
Ambit Energy sales consultants locate customers, educate them about how much money they can expect to save and tell prospects about the opportunity to earn money by becoming a part of their sales team down line.
The initial start up fee for the Ambit Energy MLM system is $429.
Sales consultants recoup their investment and make extra money by signing up customers and having them refer their friends and family. These incentives are called customer acquisition bonuses (CAB). As the market becomes saturated, the CABs become limited and the consultant relies upon smaller percentage bonuses from their customers' continued energy use.
The compensation varies depending on what state you're in. However, the average payment for a consultant seems to be around 1% of each new sign up. Ambit also requires consultants to have at least 20 active customers paying for energy before they can receive commissions.
That means you need to convince 20 people to switch companies before you can even be paid. In most cities, there is only one company to handle all this. That means customers are usually lifelong. Think of how hard it will be to convince even one person to switch from a company they've been using all their life to a company like Ambit.
Don't forget, the first search they do will reveal all of Ambit's complaints and lawsuits. And once you tell them Ambit is also an MLM they'll run for the hills.
We are all creatures of habit and new things tend to scare us, especially when it involves money.
MLM vs Affiliate Marketing
Multi-Level Marketing requires a firm knowledge of direct sales tactics. Hard selling is not ideal for most people, especially when you consider you have to start with your “warm market” (friends and family) first.
Hard-selling a product that’s under such scrutiny, with lawsuits and consumer complaints is like fighting a losing battle. Another problem with MLM businesses is, you’re limited to only the products they sell.
Multi-Level Marketing is not designed for newbies. It’s very difficult to get started unless you already have thousands of people waiting to buy from you. That’s how successful MLMers do it.
They have the same group of people follow them to each new company every time they switch. That’s how they make money and stay ‘on top’ of the pyramid.
With affiliate marketing you have none of those problems.
As an affiliate marketer you…
- Sell any products you want (usually your favorite products)
- Sell only to those interested in the products you sell (You never have to hard-sell. Ever)
- Never sell to friends and family
- Have a larger audience
- Work online
If you want to be an affiliate marketer all you need is passion for success. I’ll show you the path to reach your goals. You can learn more about affiliate marketing from the same place I learned. It’s how I built my business and I know it will help you build yours.