North American Power Drops MLM – The Fallout

As many of you may already be aware, yesterday NA Power suspended their network marketing activities.  Much to their credit they are going to continue to pay residuals on all business but no new customers will be accepted.

For the basic scoop, click here for a written company statement.

For more details, listen to an audio message straight from their Chairman…

Audio message from NAP Chairman

You may know I wrote a detailed comparison review of NA Power a while back where I detailed why their free model of doing business wasn’t all it was cracked up to be, but at no point could I ever have predicted they would shut the doors.

So what does this mean for us? 

While it may seem like losing a competitor is an obvious good thing, in many ways it isn’t. Anytime something this bad happens it feeds into the skepticism many people have about the entire network marketing industry.

There are some things you need to know to be effective in combating the natural skepticism that NAP reps will have of moving over to Ambit as well as any other prospect who cites this as reasoning to hold back…

1. As their Chairman Kerry Breitbart admitted in his audio message above, the main reason they shut down was ironically their #1 rally cry… the zero cost to get started.  This financially crippled the company because they had to support their entire marketing infrastructure on the margin from energy sales.  I find it actually disturbing Mr. Breitbart had to get one last jab in at companies who charge for getting started by saying he believes it gives MLM a bad name,… no Kerry, the result of your over-exuberance, naivety and lack of foresight is what gives MLM a bad name. There is way too much over-promising and under-delivering in our industry. It’s not evil or wrong to ask for a financial commitment from someone who will be tapping into an infrastructure costing millions to develop, in fact it could be seen as old fashion common sense. While I believe his intentions were good, Mr. Breitbart’s over-promising and under-delivering ends up as just another black eye for all of us to deal with.
2. It’s no secret these past 12 months stemming from last winter’s polar vortex (also cited by Mr. Breitbart as a big reason for shutting down) have been extremely difficult on all energy companies and that includes Ambit. In a big way I think the demise of NAP brings perspective to our struggles over increased rates since the polar vortex. I don’t know of anybody happy with all the decisions Ambit has made over the past year, but then again none of us fully understand the nature of the details behind those decisions. With all of the energy companies that have gone out of business since the polar vortex, combined with NAP dropping their MLM division, I’d have to say I’m pretty damn happy to see direct deposits 5x a month with Ambit’s name on it. Clearly the depth to which the polar vortex affected our industry has been far deeper than we can appreciate. I’ve come to accept that I’ll never understand it, so I’m just going to move on in faith that Ambit did the best they could with a bad situation to ensure the long term viability of our business.