Is Ambit Energy a scam? This is of course the question of the hour and why I sat down to do an in-depth critical review of this new network marketing company operating in the US energy liberalization market.
You know there’s so much negativity floating around our world every day that I keep my head straight by trying to focus only on the positive, however lately I’ve encountered several newbies to the MLM world who were either totally excited about Ambit or were prescribing Ambit Energy is angrily labeled a scam.
Now as you can probably imagine, there are a lot of new MLM companies entering the market every year and there are a lot of companies that are dying so fast that I usually put them off for at least 20 minutes or so before I take the time to do a review In-depth reviews, but since Ambit Energy has been around since 2006, I knew it was time.
First, let’s get the details out of the way so we can dig into the really interesting stuff like the feasibility of a “business model” product.
Headquartered in Dallas, Texas, Ambit Energy is the brainchild of founders, Jerry Thompson and Chris Chambliss and according to the company’s website,… “Ambit Energy was founded in early 2006 at the Potbelly Restaurant in Addison, Texas over a couple of turkey sandwiches. “.
Now that Ambit Energy was generating over $325 million in revenue after just 3 years, I now know exactly where I’m going when I start my next company, Potbelly’s Restaurant, good luck.
Ambit decided to target a somewhat challenging market that many MLM companies haven’t done very well with, which is energy liberalization.
Ambit products are actually very simple, electricity and natural gas.
The marketing concept of the company is also pretty straightforward, you are already spending money on basic facilities, so why not just buy it from us and save money?
It sounds so simple, why not?
In theory, it’s a good concept, so it looks like it should work like gangsters, right? Well, it is this simple business model that has attracted large numbers of distributors over the past few years, but as many MLM aspirants will soon learn, what seems simple in concept can be much more difficult in actual practice.
I can see how the new distributor could think it would be a very easy process to get all their friends and neighbors to change their facilities but when it turns out not that easy, wanting to classify Ambit Energy as a scam.
So why doesn’t everyone turn? Well, maybe two reasons, resisting change and not making savings big enough to make it a priority.
It’s kind of like when phone service got deregulated years ago, it was exciting for a while, but then you got tired of dozens of companies promoting you, it was an overburden and you didn’t want to hear about it anymore no matter what. savings.
Perhaps this is where the company’s negativity chimes in with people angrily calling it the Ambit Energy scam when it’s not as easy as advertised.
It now looks as if Ambit Energy is trying to get around this by offering a free bonus to new customers. Currently offering a good travel voucher for a free 3 days/2 nights stay for two people at a 3 star hotel in one of 25 exciting destinations across the country.
Wow, change your facilities and go on vacation!
Now I see this as a good marketing move, paying or bribery to your customers actually works if the offer is strong enough. Cell phone companies have been doing this for years with free or discounted cell phone gifts, and recently I’ve seen banks actually offering to pay you $100+ cash to open a new account.
One limitation on the side of the Ambit product that you should be aware of is that the Ambit market is limited to only a few cases. They can currently only provide service in Texas, New York, Illinois, Maryland, Pennsylvania, and New Jersey.
Now of course you can register if you are in other countries but it will be difficult to get the required customer base so you can collect commissions.
Ambit Energy Compensation Plan
The company uses some sort of uneven franchise compensation program that pays a Fast Start bonus when someone signs up for a new $429 basic distributor package, and also pays bonuses on two other types of production, new distributor subscriptions in your group and customer product use overrides.
The company compensation plan literature shows that you get paid as deep as your legs are up once you reach a certain rank or level of success.
Now to qualify for commissions you pretty much have to get customers which is of course good for the company but can be annoying for distributors.
If you are a major business builder in the network marketing industry, you know very well that it is not about selling the product, it is about selling the opportunity and building a team. I’ve seen this acquire a customer tactic before in MLM companies who market products where they pretty much have to get customers to run the company’s cash flow over the long term like telecommunications or technology. Big Planet, the MLM technology division of NuSkin, used this same approach. However, I’m sure this focus on customer acquisition has kept some of the big players away, who aren’t just retailers.
So is Ambit Energy a scam or a blatant clean MLM franchise with a unique product?
Well, Ambit Energy is not a scam and from all appearances it looks like a very good company. They are also members of the Direct Selling Association or DSA and it takes at least two years for the company to be reviewed by the DSA before they let you join.
So it looks like it passed the test, so why are angry distributors calling Ambit Energy a scam?
Well, oftentimes the wealth building aspects of the network marketing business are a little overselling.
Did you say “too small”?
Well, let’s be honest, the get-rich-quick angle has always been in MLM. Some people exaggerate the speed at which you can achieve success and the checks of $10,000.
Now distributors aren’t the only ones doing this, MLM companies are also wrong because they always show examples of MLM success from within the ranks and usually choose people who have achieved rapid success in just a few months.
Keep in mind that in a standard MLM business model, success takes time, and the average time to build an income stream of $10,000 per month is likely 12-18 months or more.
Now of course there are other business models that make you get paid faster like Top Tier MLM but keep in mind, “There is no free lunch” (that’s what they taught me in economics in college). MLM is a very high paying company, so it is well worth the time to master and build it.
Now even though most MLMs today still teach some difference to old school MLM marketing approaches such as making a list of friends and family or chasing people at the grocery store, I have always found that success comes much faster and with less aggravation if you learn some simple approach Marketing and building an influx of leads so you don’t constantly chase warm prospects around you.
Now that Ambit services are only present in a few countries, it is important to use methods like online marketing to be able to specifically target the market you are looking for.