Is the Energy Deregulation Opportunity I am in Direct Sales or MLM?

Could someone tell me whether the opportunity I am in is Direct Sales or MLM? When I joined I was told by them that it was not MLM but was instead a Direct Sales Organization. Here are the program details:

I have recently started with a "Direct Sales" organization, North American Power. They pay me $15 for every residential customer and $40 for every business customer I switch to use NAP as their energy supplier (MD, PA and CT as of today with TX coming online next week). I then get $2 for every 1000kwH of electricity my customers use every month as a residual for as long as they stay my customer.

I can bring new brokers on under me and I can get $5 for every customer they obtain, and $0.50 for every 1000kwH of electricity their customers bill.

Since I bring brokers on under me doesn't that make it a MLM? Are they just trying to avoid the bad stigma associated with the term MLM? All I had to pay to join was $49 and they told me that was to cover the cost of a background check and back-office website.

I have been doing very well just doing the switches without worrying about getting brokers. Does that make it direct sales if you can succeed without bringing on people under you?

I would love your opinions, because I would love how to back up my claim that its not MLM when I explain it to people.

Thanks!!

 

Even if you bring on people under you it is still direct sales if you are selling them the product.

It is using the mlm comp plan the way it looks but there are a lot of companies that use similar pay plans and call them incentives... so I think you are safe to say that you are in direct sales. Go ahead and sign up people under you - call them contracts or whatever - and make residual income.

 

mlm is direct sales that allows you to build your won network/sales team so that you are not stuck on just depending on yourself for income but a network.

To really exploded your income you want others. It's called leverage. I would encourage you to really use it.

 

napowerbroker: Could someone tell me whether the opportunity I am in is Direct Sales or MLM?
From what you outlined about NAP it seems to me the model incorporates elements of Direct Sales and MLM. It's a proven model that companies such as ACN and Excel used successfully more than a decade ago, with the deregulation of the telecommunications industry.

Hermas

 

Thanks all. Yes A8ch , that's why I got into it. You would have never got me to believe that I would be in a "MLM or Direct Sales" opportunity, but I worked for MCI doing telemarketing in the 90's and I saw an opportunity to make some side money, OMG if I were getting residuals off all the people I switched their long distance I would have really cleaned up.

Now North American Power's Comp plan seems SO much better than Veridian, AMA Nation, Direct Energy or Ambit. I don't know the profit margin on electricity but does the comp plan sound sustainable? I am doing so well that I would hate to see in go bad, or lower the customer acquisition payouts like Direct Energy did. I currently get $15 per residential switch and $40 for small business and $2 for every 1000kWH my personal customers use. Then as a Area Manager I get $5 for every sale my downline gets and 50cent for every 1000kWH their customers use. Here is where I have a concern about sustainability .... their is no limit on how many levels down you go. This is unheard of with the other energy companies.

 

That's not 100% true... with ACN you get up to 10% of the energy consumption profits every month for the life of the service. Plus you earn percentages from your downline as well. There rates are really good too...

 

ACN or NAP if you are in your business to make monthly residual income that you can earn a full time size income from in a short period of time. Neither of those business will do it when you get away from the fast start bonuses that won't last.

I know a person that had 2500 customers at one time in ACN. Never made any big money monthly, needless to say he has moved on to something that can produce him a more promising monthly residual income.

 

Yes FeeCashMan but how many of his 2500 customers were energy customers. Energy is where the money is honestly. I know a guy who is making over $14,000 in residuals and he had only been in the business about 10 months at that time. He said it is mainly because of the amount of energy customers his team has and majority of the energy customers are businesses.

Energy is big money if you know how to acquire it...

 

Most energy deregulation MLM programs pay you by the pennies. It is the recruiting of others that will start making you some decent money. If you are just going door-to-door or getting your friends and family to change their energy suppliers, then yea... you will make pennies.

 

I know a few people are do really well in the energy alternative MLM programs. One thing that is common about all of them: They try really hard to make it through.

 

Someone just hit me up for this bragging about how its free, and going to be big.

I don't think this is a bad opportunity but the recorded call and pdf I reviewed they are promoting people earning big money based on over 15K customers in their downline, If you are promoted to top levels.

This business may be free, but you'll be all day picking up big monthly income. Which of course is to be expected with a "free" biz.

I think one has to put this in perspective when looking at this business and the monthly residual income they are looking to earn.
This may be nice to do, but one should likely pursue additional avenues if they are looking to put a nice 3-4 figures residual monthly income in their bank account a lot sooner. Notwithstanding its wise to diversify your home income cashflow anyhow.

And I heard on the call that he said the up front pay was an advanced pay? That would mean subject to charge backs if a person changes back to their other provider.

Good luck to participants.

 

The whole NAP plan changed in April. I would not recommend it any longer.

 

I am involved with Ambit and I am also an insurance agent. I have an idea that i would like your opinion on. I sell final expense insurance (which is a small life policy to low income people). These people will do anything to get something for free and Ambit will give them their energy for free if they will get 15 or more of their friends to switch their energy provider. I have a direct mail piece that gets double digit returns. Normally a final expense lead will only pull 1%. The people responding to these cards are the same people. Anyhow, if an agent were to go out and switch their energy over and then mention to the individuals the he/she sells insurance, they would write more insurance than they would if they mailed the final expense lead, simply because they would see more people. Not only would the agent be making a residual income from the energy, they would also be selling more life insurance.



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Energy deregulation is NOT what they are telling you its going to be... I have no problem with MLM at all.. But I do have a problem with the ones that hype up a dead end opportunity.. I have been in the energy/electrical services industry for 25 years.. I know whats going on in the political end of it and on the ground with distribution.. Its not gonna happen nearly as fast or be the boon they are touting. Its just NOT going to happen. The only ones that are going to make the money are the ones ALREADY making the money.. They are the most top heavy and lowest paying plans I have ever seen aside from FHTM. This means its all about the recruiting and the churn and burn at the bottom of the pile while the money is funneled to the top..

Think about this one too.. there are 160million electrical customers and as of today 3 new "energy providers" bringing the total up to at least 60 that I know of.. If you happen to be the lucky company that breaks ALL mlm records in the history of the industry and happen to capture 5% market share that would leave 8 million customers.. Do the math from there.. How many people in the company can actually break a 6 figure income with such a small customer base.. for all practical purposes you would be lucky to get 2% market share... that may be enough to get 500 to 1000 people in the entire company to a 6 figure income and Thats being generous.. If your in it im not Faulting you. They do a great job at convincing people.. Im hear to tell ya though its just going to be very short lived and you might want to consider something more stable..

I talked to an ignite rep a couple weeks ago that was all excited that she was getting $600 a month and she had 500 reps in her organization.. MY GOSH if I had 500 reps in my gig I would be doing WELL over $36K per month... Ha ha HEY, If ya dont know, ya dont know, right? Ya cant fault her for wanting to do something better for herself but we can try to steer her in the right direction...

Long story short I helped her see the differences and brought her and some of her crew over here with us.. She brought about 20% of her team so far but is already gonna make 9 times more monthly income as soon as all the registrations are complete.. yes thats 9 times more with 80% less distributors..