North American Power Vs. Ambit Energy

A new comp plan has North American Power making big claims, but they left out some key details...

 North American Power

I’m back!  Congrats to North American Power for being on the receiving end of my newest review.  Sorry for the long break my Ambit Energy friends but duty called and since my last review I’ve simply been busy building my business. With last year’s “turn it on” expansion announced at Ambition and the follow up AmbitCast expansion announcements this past January, things in Ambitland have been a blur. The end result is that we recently had our first 50k plus month which is something we’ve never done in MLM before and with plenty of expansion still to come and the end of electricity/gas usage nowhere in sight I expect that going from 50k to 100k will happen much quicker than zero to 50k.

With all the success the field of energy deregulation has had it is expected that competition will increase and so it has. I’m taking a close look at North American Power today because it is the first company to make a good push with a zero startup cost model of recruiting distributors. I first heard a bunch of noise regarding North American Power in early 2011 when we opened up Pennsylvania and they had a bit of a head start on us there so naturally there were a bunch of folks wondering how to handle a prospects looking at both companies. I was about to write a review then but a funny thing happened, North American Power fell off the radar in PA (we’ll get to that a bit later) and I didn’t hear anything about them again till recently in IL where they have just launched and again I’m hearing a bunch of chatter regarding the company and their zero startup cost so with a rare slow week here I’ve locked myself up at Starbucks and getting to work…

A upfront disclaimer…

When I first started checking into North American Power a month ago or so I listened to one of their national conference calls and heard the following statement from let’s just say a VERY high ranking member of the NA POWER corporate team which I have transcribed verbatim…

This is insane, its unheard of, it just blows my mind, because as I’ve told you I’ve been beating my chest, banging the drums as loud as I can challenging everyone in the industry to put their money where their mouth is, to put their numbers up against ours and they couldn’t do it six months ago, well with all of the enhancements that we’ve put there, I sincerely don’t know what our competition is going to do, I joke that we don’t have competition”

There are so many things to laugh about in this one statement but I’ll just focus on the “enhancements” part. I’m guessing he’s referring to the fact that they completely scrapped their original compensation plan mid 2011 to start over completely. Of course this is going to be sold to the field as an enhancement and I hope for their sake it is because obviously you don’t do something this drastic if the original comp plan was working to begin with. Clearly North American Power is still trying to figure things out and it can be seen in their numbers when their one major competitor going after the same green energy focus in about the same time frame is almost 2x as big ($124 Million for NAP versus $205 Million for Viridian). Ambit for the record is about 6x bigger ($664 Million) but we’ve had a few more years to get there so not a fair comparison.

In this review I have done my best to represent everything accurately. My intention is not to knock down our competition to make us look better but simply to set the record straight with facts… not rhetoric.

The NAP info used for this review was taken directly from a combination of the North American Power compensation plan document dated 04-04-12 and their Comp Plan 1 & 2 training videos available from the North American Power distributor back office. Please be aware that for the compensation plan comparisons I do NOT include the promotional income that either company offers which can increase the payout significantly. The reason I don’t include promo income is because it changes regularly for both companies. If for some reason you find anything below in error please report it to me (ambitpros@gmail.com) and I’d be happy to correct it.

The “Elephant In The Room”…

Why would I join Ambit Energy for $429 when I can join North American Power for nothing?

It’s a good question, if I can sign up for nothing out of pocket with North American Power, why would I pay $429 to sign up with Ambit Energy? On the surface it may seem an easy decision but as with everything in life you do get what you pay for. Let’s go beyond the surface temptation and dig a bit deeper…

I want to focus on the basic building block of both companies which is the average new customer/consultant that comes into the business. The question is this, which company gives the average person the best chance to succeed? It seems a no brainer, the company with zero cost gives you zero to lose but for the average person it also sets you up with far less to gain and I would say a far greater chance of real failure. We’ll get to the big bucks for the MLM professionals in a moment but right now we’re focusing on the people who make up the bulk of the distributor base.

The question I’ll pose is this… with which company can you most easily earn enough money to offset your own actual utility bill? This is sort of a benchmark of success in the industry since it’s universally accepted that if you are in an energy business and don’t make enough to pay for your own energy bill(s) then you can’t claim to be in any way successful.

What it takes to achieve “free energy” with North American Power…

The unique aspect of North American Power is that by enrolling as a customer you are automatically setup to refer other customers and earn residuals. Your customers have the same opportunity and thus you can earn residuals on multiple levels of customer referrals. It would take 400 customers at their standard customer residual payout level (which is where the vast majority of customers fall) of $0.25 a piece (.50 if all parties involved are on a green plan which is significantly more expensive) to achieve a residual commission of about $100 (which for the sake of simple round numbers we will use as our average energy bill).

To project where all these customers are going to come from, North American Power uses in their comp plan training videos an exponential growth scenario that assumes you sponsor 10 customers who each sponsor 10 customers and then beyond this second level only assumes 5 customer referrals a piece instead of 10. Based on this projection one would need this level of duplication to take place somewhere between 2 to 3 levels to get to $100 a month in residual by reaching the 400 customer mark within your entire team of referring customers. Keep in mind this is a perfect world scenario and I can tell you based on real world experience that duplication of his degree has never been seen in the history of MLM.

Let me qualify what I just said… Ambit has over 3 years of history with our free energy program and while it has been very successful in helping thousands of customers earn free energy we are not seeing anywhere near an average of 10 customer referrals per customer. Truth be told we don’t average 5 customer referrals per customer which is ironically the conservative estimate used in the North American Power free energy projections. The only scenario in which we see the 5-10 customer referrals is when we look at the averages for a consultant and it makes obvious sense with some skin in the game there is more commitment to follow through. Considering there is zero cost to be a customer with both companies (free energy is available for both Ambit customers and consultants) and 20 customers is a much more achievable goal than 400 customers, there is no way on earth North American Power is going to see even 5 customer referrals as an average.

The grand total reward for earning “free energy” with North American Power…

We have to add in a $200 “fast start” bonus (assuming customers were gathered within “fast-start” deadlines) and $110 in ARC bonuses ($60 for your personal customers and $50 in rollups on your second level customers) giving us a total of $360 in upfront bonuses and $100 in residual income as a result of building a team of 400 customers according to the projection used in the North American Power video.

Now let’s take a look at what it takes to achieve “free energy” with Ambit Energy…

By enrolling as a customer (free) or consultant ($429) with Ambit Energy you have the opportunity to earn free energy by simply referring 15 customers (we usually round up to 20 as it’s always good to have some cushion). Once qualified and customers are active for 2 months, Ambit will begin applying a credit directly on your bill (or in some cases where the delivery company will not allow us to apply the credit directly on the bill it will be mailed as a rebate check) equal to the average energy usage of your referred customers. So essentially if you average about the same amount of usage as the customers you refer your entire energy supply charge is FREE. Using an average supply charge of $100 dollars for easy math this would equate to about $5 of free energy credit per customer referred. This is a pretty conservative estimate considering we’re only assuming 20 customers (which is more than needed) and $100 of average supply usage (which is less than the national average). One additional perk of Ambit’s free energy program is that since it’s technically considered a rebate, it’s non-taxable!

So if we are looking at this from the standpoint of a customer simply wanting to refer other customers and get rewarded, it seems we have a very simple decision. You can refer 15 customers with Ambit to achieve the same result that requires 400 total customers with North American Power. But this is not an analysis of which company provides a better customer referral program; it’s an analysis of which company provides the better business opportunity so let’s assume we’re looking at it from the eyes of somebody who gets started with Ambit as a consultant for $429 and $25/mo.

Having gone through all of North American Power’s videos, material, back office and attending several conference calls it’s clear they market their big advantage being the zero cost to enroll and how they claim this removes the barrier to entry that prevents duplication and success in every other network marketing program. This is the big rally cry across all of North American Power and so it should be I agree it is their biggest advantage but let’s take a look and see if we actually come out ahead when you factor everything else in. Running on the assumption that charging a $429 fee to join is the massive barrier to entry they claim it is let’s just take that to an extreme and assume zero duplication… although as the 2-time Inc.500 fastest growing company of our size and with well over 150,000 paid Ambit Energy consultants to date this is clearly unrealistic but I’m trying to play along with North American Power assertions here so we’ll run with it…

The grand total reward for earning “free energy” with Ambit Energy…

Assuming we join Ambit Energy for $429 and can’t get anybody else to join with us as a consultant but we do sign 20 customers (once again we only need 15 but we usually round up for cushion) to get qualified for free energy we would earn $300 in upfront “jumpstart” bonuses (assuming customers were gathered within “jumpstart” deadlines) and we would be receiving $100 in non-taxable free energy credit every month.

The last word on free energy…

At the end of the day we have to assume an absolute best cast perfect world scenario to gather 400 customers in North American Power to achieve the same level of success as you can achieve under an extremely conservative worst case scenario with Ambit Energy by simply gathering 20 customers. This alone is enough reason to justify putting some skin in the game and choosing Ambit but we’re by no means done yet but before we did deeper into the numbers let’s cover some of the basic fundamentals first…

Service Coverage

North American Power – currently services 15 electric territories across 7 states.

I don’t know of any scheduled expansion plans but since their convention is coming in a few days I’m sure something will be announced then.

Connecticut

  • CL&P – Connecticut Light & Power
  • UI – United Illuminating

Illinois

  • ComEd – Commonwealth Edison

Maryland

  • BGE – Baltimore Gas & Electric
  • Pepco

New Jersey

  • ACE – Atlantic City Electric
  • JCP&L
  • PSEG

New York

  • ConEd
  • Orange & Rockland

Ohio

  • Duke Energy
  • Dayton Power & Light

Pennsylvania

  • Duquesne Light
  • PECO
  • PPL

Ambit Energy – currently services 18 electric and 14 natural gas territories across 8 states.

These totals do not scheduled expansions into Massachusetts, D.C. and 3 additional natural gas territories in Pennsylvania. Also please note that since Texas only requires one implementation we only count it as one territory instead of the 7 individual incumbent territories that are available.

Texas -Electricity

  • All 7 deregulated territories
  • The markup and margins in Texas are much larger and so the residuals Ambit pays out are almost 3x bigger than other states. Part of the reason for this is that it is a true fully deregulated state, retail energy providers in Texas are required to handle all aspects of customer service, billing and collections which means it takes a lot more infrastructure and investment to do business in Texas. This is the reason most companies operating out of the Northeast like North American Power, Viridian and many others don’t do business in Texas or if they do it’s through a third party resale agreement with a company that is setup to do business in Texas.

Connecticut – Electricity

  • CL&P – Connecticut Light & Power
  • UI – United Illuminating

Illinois – Electricity

  • ComEd – Commonwealth Edison

Illinois – Natural Gas

  • NICOR

Maryland – Electricity

  • BGE – Baltimore Gas & Electric
  • Pepco

Maryland – Natural Gas

  • BGE

District of Columbia – Natural Gas

  • Washington Gas – Launching May 17th

New Jersey – Electricity

  • ACE – Atlantic City Electric
  • JCP&L
  • PSEG

New Jersey – Natural Gas

  • PSEG
  • South Jersey Gas
  • New Jersey Natural Gas
  • Elizabethtown Gas

New York – Electricity

  • Con Edison
  • National Grid
  • NYSEG
  • RGE
  • Orange & Rockland
  • Central Hudson

New York – Natural Gas

  • Con Edison
  • National Grid
  • NYSEG
  • RGE
  • Orange & Rockland
  • Central Hudson
  • National Fuel
  • Keyspan Gas

Pennsylvania – Electricity

  • Duquesne Light
  • PECO
  • PPL

Pennsylvania – Natural Gas

  • Columbia Gas – Launching May 17th
  • National Fuel – Launching May 17th
  • Equitable Gas – Launching May 17th

Massachusetts – Natural Gas

  • National Grid – Launching Summer

North American Power Rates & Plans Analysis

Get ready for a shocker!

North American Power utilizes a fundamentally different strategy when it comes to rates. Obviously with their focus on green energy they push green plans heavily. Their standard plan in all states utilizes 25% renewable energy and of course they have the 100% renewable plans which are heavily promoted since a customer on these plan triggers 2x the residual. In my experience most regular customers are not willing to pay significantly more for 100% renewable but if they are pursuing the opportunity they likely will because of the effect that will have on commissions to get as many people of their team on 100% green as possible.

What most people don’t know about “green energy”…  A 100% green energy plan is the same no matter who you get it from. Truth-be-told green does not mean that electricity is coming directly from wind or solar farms to your home… it is physically impossible to direct any specific electron traveling through the electricity grid. Buying a green plan essentially means you are paying more so that your energy company can purchase “renewable energy certificates” to offset the amount of energy you use. These certificates are used to fund green energy research, development and production. Every state has a mandated minimum percentage of green that all providers have to meet, which means even non-green plans usually have somewhere around 10% green built in.

One of the most deceiving and critical differences to understand is that North American Power only offers variable rate plans. The price advertised is always an intro rate which is only good for 30 days (according to the terms of service) or 60 days (according to their advertising). These “intro rates” are better referred to in the industry as “teaser rates” and they have a tendency to really tick customers off because they are usually not given the indication their rate can change so soon. After the “teaser rate period” customers then roll into what they call a “referring customer rate” (referred to in the chart below as “current rate”) which is significantly higher as you can see.

Ambit on the other hand offers both variable and fixed rate plans but with a twist. While many companies tack a cancellation fee onto their fixed rate plans Ambit Energy does not have any such fees in any state but Texas (as with most things Texas is a while different animal). This means when a customer chooses one of our fixed rate plans in any state but Texas they are locking in the advertised rate for a full 12 months but since there is no cancellation fee they can cancel or change without any penalty. This means if rates go down again they can switch into the new lower fixed rate plan with no penalty. This hybrid approach literally gives customers the best of both worlds… variable rate flexibility and fixed rate security to protect against price increases.

Now that we have a basic understanding of the types of plans offered let’s take a look at the actual rates being offered. I don’t normally like to do rate analysis because rates change frequently so any type of comparison today could change tomorrow so to protect against this I’m not just comparing rates for individual territories rather I’m averaging all the rate figures across all the territories where North American Power and Ambit Energy compete on a head to head basis (with the exception of New York where Ambit offers a savings guarantee plan that is completely different from a variable or fixed plan so it is impossible to compare). If we ignore the intro rates because they don’t really count you can see that Ambit’s rates are noticeably cheaper across the board.

Here is the shocker…

Take a look at how significantly cheaper Ambit’s 100% green plans are compared to North American Power. At first I was stumped but then it hit me… if North American Power is going to double the residuals paid out on customers with a green plan the only way to make it possible is to disproportionately increase the price of those plans. As you can see in the chart below there is a noticeably higher markup between NAP’s regular plan and their 100% green plan. Essentially what this means is that customers with North American Power are paying significantly more for the same green energy and the difference is going into pockets of the up-line referring customers. Not sure how that strikes you but if I were a customer I don’t think I’d be happy.

NAP

Intro Rate (Standard 25% Green)

Intro Rate (100% Green)

Current Rate (Standard 25% Green)

Current Rate (100% Green)

Markup between 25% and 100% Current Rates

CLP

$7.49

$9.44

$7.99

$9.94

124.41%

UI

$7.49

$9.50

$7.99

$9.94

124.41%

BGE

$7.99

$8.99

$8.99

$10.94

121.69%

PEPCO

$7.99

$9.94

$8.49

$10.44

122.97%

PPL

$5.99

$7.94

$7.99

$9.94

124.41%

PECO

$7.99

$8.99

$8.99

$10.94

121.69%

Duquesne

$6.99

$7.99

$7.99

$9.94

124.41%

ACE

$8.99

$10.94

$9.99

$11.94

119.52%

JCP&L

$8.99

$10.94

$9.99

$11.94

119.52%

PSE&G

$8.99

$10.94

$9.99

$11.94

119.52%

ComEd

$5.99

$7.49

$5.99

$7.49

125.04%

Averages

$7.72

$9.37

$8.58

$10.49

122.51%

Ambit

12/mo fixed (Standard Plan)

12/mo fixed (100% Green)

Markup between standard and 100% green

CLP

$7.59

$7.99

105.27%

UI

$7.59

$7.99

105.27%

BGE

$8.00

$9.14

114.25%

Pepco

$7.99

$9.44

118.15%

PPL

$7.24

$8.24

113.81%

PECO

$8.24

$9.24

112.14%

Duquesne

$7.84

$9.54

121.68%

ACE

$10.19

$11.19

109.81%

JCP&L

$9.99

$10.94

109.51%

PSE&G

$9.99

$10.94

109.51%

ComEd

$5.99

$8.24

137.56%

Averages

$8.24

$9.35

114.27%

Rates change regularly, figures for this comparison taken on 4/26/12

 

Upfront Bonus Income Analysis

Bonus income is the upfront income potential. When building a business with either company the residual income is far from an overnight process. It can take many months/years to develop a team large enough to gather enough customers to tally a strong residual income. Fortunately both companies offer bonuses based on team/customer growth that allow you the ability to earn upfront income in the process of building a back end residual.

With North American Power the upfront bonus income is paid as customers join your organization through a combination of Fast-Start and ARC (Advanced Residual Income) Bonuses. Fast-Start bonuses are paid when new customers refer other customers within their first 30 days and range from $5 for Directors to $20 cumulative for National Directors. ARC bonuses are paid on every new customer regardless of time frame and range from $2 for Directors to $12 for National Directors. Combine the two types of income and the total ranges from $7 for Directors to $32 for National Directors.

With Ambit Energy the growth bonuses are called Leadership bonuses that get paid to up-line qualified consultants every time a new consultant joins your team who launches their business by gathering their first 3 customers in their first 30 days. The amount of this bonus ranges from $55 to $240 per new consultant that joins your team and launches their business by gathering their first 3 customers.

While it may seem these two styles of bonus payout are fundamentally different it’s really not the case. Network marketing is a business of a lot of people doing a little bit and there are some pretty established averages as to what this “little bit” is in the industry. Contrary to some projections and charts used by some distributors and companies that show how much money you can make by gathering 10 customers a day/week/month or whatever, nobody gets into a network marketing to gather customers for a living and the ones that do quickly realize they are swimming upstream because compensation plans are not built to reward this as a sole effort. The average amount of customer gathering for one consultant/distributor within a utility based network marketing opportunity is somewhere between 5 and 10 and so the bottom line is that upfront bonus income with North American Power is just as tied to recruiting distributors (or in the case of NAP “referring customers”) as it is with Ambit Energy even though NAP is paying the upfront bonuses on a per customer basis and Ambit pays the bonuses on a per distributor basis after the new distributor gathers their first couple customers.

Let’s run a couple of scenarios to determine the average value a new consultant or “referring customer” represents in the form of up-line bonuses that are paid out with both companies. We’ll start with North American Power and assume a generous figure of 7 average customers gathered per “referring customer” times $32 (combined cumulative bonus income for a National Director which is the highest rank in NAP and one which so far nobody has hit) and you get $224 in up-line compensation within North American Power. Compare that to Ambit Energy where $240 in up-line compensation is paid when a new consultant joins and gathers just 3 customers.

I had worked up several charts showing (with conservative estimates) a very clear and significant advantage for Ambit Energy in this area but at the end of the day I felt I was making too many assumptions to put it in print so I’ll just leave the projections from this section up to your imagination.

Long Term Residual Income Analysis

You will find the total residual payout charts for both Ambit and North American Power below. While you will not find such a chart in either company compensation plan document, the figures for these charts are taken directly from those documents and the chart format is much easier for comparison purposes. Both companies pay residually based on customers gathered through multiple generations of your organization along with a coding based residual compensation which is based on leadership level. The charts below combine the two forms of compensation together so you can get a direct comparison as to how much each company is paying out on a per customer basis.

North American Power Combined Residual Payout…

kWh Usage 0-249 250-1750 1751-3499 3500-4999 5000 & up
Level 0 (personal) - - - - -
Level 1

$0.10

$0.25

$0.50

$1.00

$1.00

Level 2

$0.10

$0.25

$0.50

$1.00

$1.00

Level 3

$0.10

$0.25

$0.50

$1.00

$1.00

Level 4

$0.10

$0.25

$0.50

$1.00

$1.00

Level 5

$0.10

$0.25

$0.50

$1.00

$1.00

Level 6

$0.20

$0.50

$1.00

$1.50

$2.00

Total Uni-level Residual

$0.70

$1.75

$3.50

$6.50

$7.00

Total Coding Residual

$1.25

$1.50

$3.00

$4.50

$6.00

Total Combined Residual

$1.95

$3.25

$6.50

$11.00

$13.00

Ambit Energy Combined Residual Payout (non-Texas states)…

kWh Usage 200-1000 1001-2500 2501-4000 4001-5500 5501 & up
Level 0 (personal)

$0.05

$0.10

$0.15

$0.25

$0.50

Level 1

$0.10

$0.15

$0.25

$0.50

$0.75

Level 2

$0.15

$0.25

$0.50

$0.75

$1.50

Level 3

$0.25

$0.50

$0.75

$1.50

$2.00

Level 4

$0.50

$0.75

$1.50

$2.00

$3.00

Level 5

$0.75

$1.50

$2.00

$3.00

$4.00

Level 6

$1.50

$2.00

$3.00

$4.00

$5.00

Total Uni-level Residual

$3.30

$5.25

$8.15

$12.00

$16.75

Total Coding Residual

$1.00

$1.00

$1.00

$1.00

$1.00

Total Combined Residual

$4.30

$6.25

$9.15

$13.00

$17.75

As you can see above, in some ranges of usage North American Power pays out more residual income and in some ranges of usage Ambit Energy pays out more in residual income. Based on my experience where most customers fall in terms of energy usage I believe Ambit is going to pay out noticeably more on average but let’s just assume it’s a wash on a per customer basis. The difference then becomes exactly HOW the money is being paid out so let’s take a close look at that aspect.

I’ve literally spent hours debating in my head and brainstorming ideas on paper how to compare the different styles of payout in some sort of an objective and understandable side-by-side way. What I’ve come up with will not look at all familiar to either North American Power or Ambit folks but hang with me here and I think you will see why I went this route for an even playing field.

North American Power UniLevel Payout Projection…

The growth assumptions used in this projection are as follows: Each North American Power referring customer refers 10 customers out of which 3 turn into referring customers who duplicate the same thing through 6 generations. Normal North American Power projections assume everybody refers 10 customers through the second level then 5 referrals beyond that but as we’ve already established this is beyond unrealistic.

referring customers

customers

residual/customer

residual projection

Level 0 (personal)

1

1

Level 1

3

10

$0.25

$2.50

Level 2

9

30

$0.25

$7.50

Level 3

27

90

$0.25

$22.50

Level 4

81

270

$0.25

$67.50

Level 5

243

810

$0.25

$202.50

Level 6*

729**

2430

$0.50

$1,215.00

Totals

363**

3641

$1.75

$1,517.50

* Level 6 requires promotion to Direction
** In this projection the customers referred by the referring customers on level 6 will fall on level 7 and thus beyond uni-level pay

Ambit Energy UniLevel Payout Projection (non-Texas states)…

The growth assumptions used in this projection are as follows… each new Ambit Energy consultant refers 8 customers (themselves plus 7 others) and sponsors 3 consultants who duplicate the same thing through 6 generations. By using these figures we are assuming every consultant refers the exact same number of people (10 combined customer/consultants) at the same ratio (7 customers to 3 consultants) as we used in the North American Power projection.

consultants

customers

residual/customer

residual projection

Level 0 (personal)

8

$0.05

$0.40

Level 1

3

24

$0.10

$2.40

Level 2

9

72

$0.15

$10.80

Level 3

27

216

$0.25

$54.00

Level 4

81

648

$0.50

$324.00

Level 5

243

1944

$0.75

$1,458.00

Level 6

729

5832

$1.50

$8,748.00

Totals

1092

8744

$3.30

$10,597.60

As you can see in both these projections I’ve assumed the same level of action/results for the average person pursuing each opportunity. I will likely get objection from North American Power folks because they are adamant in their zero cost model improving the overall customer gathering and duplication efforts by removing the barrier to entry on the opportunity. On the other hand as you’ve already seen earlier in this review, an equal level of success can be achieved significantly faster with Ambit, and projecting such success does not depend on unproven deep space theory. This is why I’m of the firm belief the exact opposite is true which is to say that it’s much easier to show an opportunity to invest $429 into a proven business model where a real residual ROI is possible than it is to sign up customers and convince them to take action and refer other customers with no skin in the game and no significant gratification possible without a lot of “what ifs” coming true.

As the Inc.500 fastest growing company in the country and with over 150,000 paid consultants to date and coming up on 1 million customers, Ambit is obviously not having a problem gathering consultants who are gathering customers. It remains to be seen if North American Power’s assumptions prove true and I hope for their sake they do prove at least somewhat true because as you can see by the numbers, they will need significantly more duplication to achieve the same result.

Coding Residual Analysis

The coding aspect of North American Power’s compensation plan is the one area where they have the potential** to pay out more than Ambit. While most people do not understand the idea of coding residual it is a very powerful concept that both Ambit Energy and North American Power take advantage of in different ways.

** I use the term “has the potential” instead of “does” because based on the North American Power comp plan video as of this writing, there is nobody that has promoted to the highest rank of NAP where their coding numbers get larger than Ambit.

As can be seen in the combined residual charts above, for the average customer Ambit Energy pays out a total coding bonus of $1.00 per customer ($2.00 for Texas customers, but for the sake of comparison we’re sticking with non-Texas states) and North American Power pays out a total of $1.50 per customer as a result of a second level of coding payout ($0.75 for 1st level coding and $0.75 for second level coding) and truth be told I really like the concept of this second level so I’ll give them credit here. This is the only area where I see North American Power having an advantage over Ambit Energy.

Coding is a type of compensation that rewards the leaders not just with large teams, but with multiple large teams. Essentially you can’t take advantage of coding by getting lucky and signing one or two studs, you have to move up the compensation plan and continue to build new teams as you move up. It’s not something that impacts 99% of distributors/consultants in any real way. Essentially as you move up a coding compensation plan and begin to build new teams in your new rank where coding is available you have the ability to get paid not just on the limited 6 levels of customer residuals but on a theoretically unlimited level of customer residuals as your new teams grows beyond the bounds of uni-level compensation.

This is a very powerful form of compensation and as a leader with a large organization I’m now on the receiving end of this to the point that my coding residuals are far more than my uni-level residuals. This didn’t happen overnight, in the first few years my uni-level residuals accounted for the vast majority of my income and over time this slowly transitioned and now 5 years later coding pays out significantly more than uni-level. For top leaders (I’m talking about the 1/10th of 1%) coding has the potential to pay more long term because you have the ability to get paid on far more customers than just those that fall within the 6 or however many levels there are in the uni-level payout.

So if I’m one of those such leaders that stands to be on the receiving end of this potentially higher coding residual payout with North American Power, why would I not jump ship from Ambit Energy?

The answer is simple…

Yes I am in that 1/10th of 1%… but 99.9% of my team is not. As such I’m dependent upon their success for me to achieve my success. As you have already seen, for North American Power to allocate the kind of residuals to coding that they have, it had to come from areas where the vast majority of distributors/consultants make their living and/or achieve enough of a worthwhile return on effort to keep going in pursuit of their goals.

There is a very clear Achilles Heel to the entire free concept that I see after a deep analysis of the numbers along with direct experience going head to head with NAP in Maryland, Pennsylvania and now Illinois. What happens is that North American Power comes onto the scene making a lot of noise and attracting a lot of people because of the “free” nature of their business model. During this period they grow quickly and attract lots of new customers and distributors/consultants. They also peel away low level distributors from other companies (including Ambit) who didn’t achieve the success they hoped. After this brief blitz of growth the North American Power customers who came on board and did refer other customers and/or grow a team come to realize the potential for any significant income beyond quarters and low digit dollars per month looks so distant that they slow down and eventually quit what little commitment a zero cost investment attracts to begin with.

At this point a new problem then develops which is the lack of glue to hold anything together. The whole reason companies like North American Power and Ambit Energy utilize the network marketing business model is to gather customers at a low cost that are loyal to the person that referred them. When the person who referred them is not making money they have no real incentive to continue enrolling customers and encourage their current customers to stick with them. With Ambit I know I have a team of consultants who are getting free energy every month many of which are earning significant residual income with our no hoops uni-level compensation plan and as time goes on I see they continue to gather customers far beyond the requirement because they are simple excited about the free energy and residual income they get every month. Without my team of consultants getting paid the attrition would eventually exceed new acquisition and I no longer have a walk away residual income to retire on.

I’m a perfect example. If I had not been earning that strong residual income from the uni-level compensation those first couple years I can tell you there is a very real chance I would not have kept at it long enough for the power of coding to kick in. As I look at my team I can point to dozens of similar examples and without those people both my uni-level and coding residual would not be what it is today.

So for me to jump ship to North American Power I could potentially gain in the second level of coding residuals but I would have to give up the very fundamental advantage that allowed me to build a team of consultants who gathered all the customers to begin with. I would also have to give up all the other ways Ambit clearly pays more money and at the end of the day North American Power is currently only running on theory that they have the potential to pay out more for top producers. Ambit had 2 people earning 6 figure monthly incomes within a year of starting. To the best of my knowledge NAP hasn’t had one do so in three years of business so until somebody at North American Power can turn deep space theory into real commission checks I’m pretty happy going with the proven path.

Content still yet to add…

  • demystifying this idea that North American Power serves all 50 states with their American Wind concept… coming soon!
  • what about the other states North American Power serves via their commercial C&I Energy Solutions division… coming soon!

North American Power Review – My final word…

To wrap it up we circle back to where we started. Who… in… their… right… mind… would pay $429 to join Ambit Energy when North American Power is free?

  • How about someone who wants access to a time tested proven system instead of one that is still clearly under experimental testing some 3 years into the game.
  • How about someone who realizes the Pareto Principle is simply unavoidable and as such giving the opportunity away for free won’t change the 80/20 ratio. 80% won’t do much even if they were handed the secret sauce on a silver platter. It’s better to ask for some skin in the game so you can identify the 20% who want a good business opportunity not a free business opportunity.
  • How about someone who asks the question “where do I stand the most to gain?” versus “where do I stand the least to lose?”
  • Even for that person who does ask the question “where do I stand the least to lose?” They too will realize with any level of action or commitment at all the answer is still Ambit Energy.
  • How about somebody who isn’t quite sure for whatever reason if they’re willing to commit the minimal effort necessary to earn free energy with Ambit? You got me here… this is the person who’s going to choose North American Power for sure and I for one am glad there is such an option for these folks.

I think the opportunity with energy deregulation is GIGANTINORMOUS (no that’s not a word but I think I might petition Webster to add it) and as such North American Power will carve out a solid niche in the marketplace. The green vision and zero startup cost NAP has adopted will continue to attract a plenty of people. I believe that North American Power is a fine company and my guess is they realized they could not beat the competition at their own game. In other words they needed to differentiate themselves significantly to be seen as a viable alternative to more established companies like Ambit Energy and Ignite and I applaud them for creating an option that serves the needs and wants that a portion of the marketplace is looking for.

But…

When I hear a company claim to have the best compensation in the history of network marketing and because of it nobody will be able to compete… all I can do is remember back to grade school recess when kids would talk about how their daddy could beat up your daddy. Is this really the kind of leadership you want? It was put out there from North American Power in the videos and on the conference calls… for anybody at another company to put their money where their mouth is… well… here I am John, I hope you’ve enjoyed.

For that matter I hope everyone has enjoyed this analysis. I try to be as unbiased as possible considering my very long and happy affiliation as one of the top earners with Ambit Energy.

Have a great day and no matter which direction you choose to go I wish you the very best!

Yours in success,

Ambit Energy - Shawn Cornett

Shawn Cornett

Ambit Energy Founding Executive Consultant

Top 20 Income Earner
Six Time 5-Star Club Qualifier
Pacesetter, Powersurge & Pure Energy Award Winner

(210) 232-6032
ambitpros@gmail.com