Is Ambit Energy another lame energy MLM? (full review)

Ambit Energy provides natural gas and electric services to consumers in some states.

The attraction is lower fixed rates and a business opportunity that allows Ambit customers to earn via a multi-level marketing platform.

The concept of the business is interesting, so am I on board?

This video explains it all:

Only schedule if you’re serious:

Okay, now onto the Ambit Energy review (which I stand by 100%). Enjoy.

Founders Jere Thompson, Jr., Chris Chambless have managed to grow their company at impressive rates almost from the get-go. In 2015 Ambit Energy was #2814 on the Inc. 5000 (that’s a measure of 3-year growth, if you didn’t already know). According to Inc. Magazine, their revenue for 2014 was $1500.5 million and they added 370 jobs. That resulted in a 3-year growth rate of 128% (1).

That’s pretty impressive after being in business for a long 10 years, slugging away at the independent energy market. It’s a tough business, and many independent energy companies do not last nearly as long. The 580 employees of Ambit should be proud to know that their employer has been on that Inc. 5000 list for five years in a row.

Ambit was also near the top on the Inc. 500, as well as on the list of Top 100 Places to Work, according to the Dallas Morning News. There are many more recognitions for the company and its phenomenal growth.

Based in Dallas, the company has also been featured in The New York Times (2), where it’s favorably compared to competing independent energy utilities. There are some very good signs here: Shell Energy Trading has agreed to sell energy to Ambit and the founders have a lot of experience in the deregulated energy markets.

Ambit is one of the largest direct selling companies in the world. There are more than a quarter of a million consultants.

Products

The product is gas and electric utility services, billed monthly on a fixed rate plan. The attraction of the product is that the fixed rate is lower than what consumers would find with their regular utility company like PSEG or NYSEG.

Ambit offers one or two-year contracts for energy at fixed rates. After that, it’s up to the customer to renew with a fixed rate contract.

Since utility deregulation (which makes independent energy businesses like Ambit possible) differs state by state, Ambit may not be available everywhere.

At the time of this writing, it’s only available to states on the east coast and New England plus Illinois, Texas and California.

Compensation Plan

To become an Ambit consultant, one must pay $425 plus a monthly website fee of $24.95.

That initial fee can be made back by attracting 30 new customers during the first three months. Consultants get monthly residuals based on their customers’ monthly utility bills…anywhere from five cents to five dollars. Of course that depends on whether the customers pay their bills.

Here’s how:

  • Sign up 2 customers in your first 28 days and get $100
  • Sign up 5 more customers in your first 28 days and get another $100
  • Help one of your consultants sign up 5 people in first 28 days, get $100
  • Help another get 5 people, get another $100

Commissions are earned by signing people up on utility contracts and by the energy purchases they make each month. Bonuses are also earned by signing up new Ambit consultants. Residual income goes down to 6 or 7 levels, and bonuses go down to unlimited levels.

Recap

Deregulation has made it possible for upstarts to compete with the big utility companies which have operated as quasi-monopolies for decades. However, consumers should stay on their toes when shopping around for gas or electric service. Read terms carefully – just like cable companies who lure you in with low introductory rates, things can change.

If fact, if you read the hundreds of complaints about Ambit Energy, you’ll see just how many people don’t read contract terms. Apparently Ambit does offer low fixed rates on energy but in order to keep those low fixed rates the consumer must contact Ambit every year. If they fail to “renew” the fixed rate, they will be charged a variable rate which more often than not turns out to be higher than what they would have been paying with their regular old traditional utility company.

Of course that defies logic- who would want to pay more for their utilities?  Obviously it seems Ambit makes a killing off people who don’t get the memo about calling to renew the fixed rate. According to consumer complaints, they never got such correspondence and then have a frustrating time of sorting it all out with customer service.

Teaser rates. It’s a business model that works for the cable companies (it’s not illegal, after all) but unless backed up by helpful and responsive customer service it really ticks people off and you end up getting some pretty bad press.

It also attracts the attention of consumer protection agencies. That’s what has happened to Ambit Energy in New York State. Ambit consultants have been accused of preying on the elderly and those who aren’t fluent in English. They inflate how much people can actually save and don’t fully explain the terms of the service.

But consumers who want a deal on utilities will do better with Ambit than most others. It’s a solid business model and they’ve been around for a decade now. One of the consumer risks in this area is that they’ll sign up with an independent energy company which then soon folds, leaving their customers in a bind. They’ll be left with not only a signed contract but also a situation where they’re forced to go back to the big traditional utility…double paying.

Of course associates should be up front about how the plans work. When people get pissed off about the terms of the contract, it’s obvious that somebody didn’t perform due diligence with research. Nor did they provide necessary information to customers.

Distributors need to step up to the plate with their own brand of customer service by letting their customers know the scoop. Ambit apparently needs to step up as well, providing better training for distributors as well as clear policies about how their product should be represented.

Then and only then could Ambit compete like a winner and shed itself of negative press and horrible reviews.

So listen up: There are better ways to make money that don’t involve spamming your friends on Facebook and approaching family to join your business.

In other words, you might like our training because it teaches the “good life” without peddling energy products to your family and friends. And a bunch of other people like it.

See our top 22 small business ideas of 2017

Click here

Jeremy Page

Jeremy Page created Multiple Streams for ballers, big thinkers and online business owners. You can follow him on Instagram here.

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