If someone has approached you about the business opportunity at Ambit Energy, you might be wondering is Ambit Energy a Pyramid Scheme. Well, I'm here to help you find out!
First of all, congratulations on taking a second to do your research, it's the only way to find legit business opportunities and to avoid all the scams out there.
In case you are in a hurry, I'm going to answer your question right away. There's no evidence that Ambit Energy would be a pyramid scheme. It is a network marketing or multi-level marketing company (MLM) that uses a similar recruitment method but actually generates most of its revenue from selling services or products to consumers. When operated this, MLM companies are generally considered completely legal. That said, they aren't generally very good business opportunities as FTC data shows that the vast majority of sales reps fail to make profit in MLMs.
In this post I'm going to go over a bit about the history of Ambit Energy, then we are going to look at what exactly is a pyramid scheme and then we'll look for any evidence for Ambit Energy being a pyramid scheme.
Before we continue, I want you to know that I'm not affiliated with Ambit Energy in any way. I check out business opportunities and share my findings with my readers to help them find the most effective ways to start working from home on their own terms.
I do recommend products I have personally found useful, so my content does include affiliate links from time to time. I want to be completely transparent about this because I trust the products I recommend 100% and I will offer you my full support if you decide to buy through my links.
Ambit Energy Overview
Ambit Energy is an American MLM company that specializes in selling electricity and natural gas services. They are focused in being the finest and most-respected retail energy provider in America.
Ambit Energy was founded in 2006 in Texas by Jere Thompson Jr. and Chris Chambless. Jere is currently the CEO of the company and Chirs the CMO. Other key people are CIO John Burke and CFO Laurie Rodriguez.
In 2010 Ambit was named #1 fastest-growing private company in America by Inc. magazine. In 2013 their revenue was about $ 1 Billion and they had 625 employees.
Here's Ambit Energys marketing video with their story in case you are interested:
Ambit offers different kinds of energy plans and Green-e plans with a Renewable Energy Certificate. Depending on your location you Ambit offers electric, gas and solar services.
Their solar services are offered through Sunrun in several markets. The services are sold through Ambit's independent consultants who then match the customers with Sunrun.
Ambit Energy also offers a business opportunity as an Independent Consultant. Apparently more than 600,000 people have joined the opportunity.
This is a network marketing opportunity where Independent Consultants can sell Ambit Energy's products directly to consumers as well as recruit people below themselves to form a "sales organization" or a downline.
Independent Consultants will earn commissions from their own sales as well as a share from the sales of the consultants in their downline.
What Is a pyramid scheme
Before we look for any evidence of Ambit Energy being a pyramid scheme, it's important to understand the term. People often use MLM and pyramid schemes synonymously but this is actually incorrect. At least according to FTC.
This video by TED-Ed explains what a pyramid scheme is perfectly.
A pyramid scheme is a con artist system where people are lured to pay to join a "business opportunity" or some sort of quick-riches promise.
When they join, they find out that the only way to actually make money is by convincing more people to join as each member will earn a share of the income from the recruitment fees of new members.
To make recruiting even more enticing, each member will also earn a share from the participation fees for several recruitment levels.
If you understand a bit of math, this can mean several thousands of people just a few levels down if each member recruits several people.
For example, if you recruit 5 people and everyone below recruits 5 people, there will be 125 people three levels below you, 3125 four levels below you, and 15 625 five levels below you.
If you earn a commission (even though it gets smaller the lower you go) from each of these members, it can add up fast.
Pyramid schemes generally don't sell any real products or services. They might have some as a front.
This is the key difference between MLMs and Pyramid schemes. Legit MLMs get the majority of their revenue from sales to consumers.
Pyramid schemes are generally very short-lived, usually only moths to a few years. This is because eventually authorities and members will catch the drift and investigations will be started. You can see this happening in real life in my Crowd1 2020 Review.
Pyramid schemes usually have lawsuits or FTC investigations and warnings before they crumble. This is because virtually always pyramid schemes are masked as network marketing companies and use elaborate tactics so that officials can't shut them down without extensive legal actions.
Is Ambit Energy A Pyramid Scheme
Now that we know what a pyramid scheme is, it's time to look for any evidence if Ambit Energy could be one. There are three questions I like to ask when trying to find out if an MLM could be a pyramid scheme.
1. Is The Company New?
Pyramid schemes are virtually always short-lived so they can't usually survive for several years or a decade. Ambit Energy has been around since 2006, so this would suggest it's not a pyramid scheme.
2. Are There Real Services or Products Sold To Consumers?
Remember that pyramid schemes either have no products or they are just a front to the recruiting of new members. It usually costs a lot to get into a pyramid scheme.
Ambit Energy has clear products as it sells energy plans to households and consumers. With a revenue of over $ 1.2 billion, they have sold their services to millions of consumers. So not a typical pyramid scheme MO.
3. Are There Any Lawsuits Or Issued Warnings?
Pyramid schemes virtually always run in trouble with the law before crumbling. There will usually be several class-action lawsuits or FTC issued lawsuits in their history.
It's good to keep in mind that any company this size will have lawsuits in its history. What matters is if they were about allegations of the company being a pyramid scheme and if there are any court rulings.
Here's what I could find:
- Ambit Energy settles $9.3 million class action. This lawsuit was about false advertising claims, not about the company being a pyramid scheme.
- Ambit Energy was sued for price gouging in several class-action lawsuits in Illinois, New York, New Jersey, and Pennsylvania. Nothing about being a pyramid scheme though.
So it seems there are no allegations of the company being a pyramid scheme, but there have been some issues with Independent Consultants making exaggaretaed claims and aggressively recruiting people.
This is unfortunately bound to happen with larger MLMs. The companies naturally don't condone or encourage this kind of behavior but when there are over 600,000 sales reps like with Ambit Energy, there are bound to be a few rotten eggs.
All and all, there isn't really any evidence that would suggest that ambit energy is a pyramid scheme.
A Better Option To MLMs
If you are looking at Ambit Energy for the home-based business opportunity, I might have an interesting option for you. The business model I'm about to show you can be used to grow your MLM business as well, so you might want to read this regardless.
I personally use a business model that allows me to earn income online through my websites by leveraging search engine traffic and affiliate marketing.
This business model allows me to work on my company from anywhere in the world and it works for me 24/7 on automation.
This is not a get-rich-scheme but an actual business model based on skills that are in very high demand. Especially now due to the COVID-19 pandemic, as the whole world is going online for services.
Most of the work involves content creation but the great thing is that all the content I create can produce income for years to come.
I'm not going to go into more detail here, as I've covered the whole business model in detail in my Wealthy Affiliate review, so check that out for additional information.
I hope you found this Ambit Energy REview useful. If you have any questions, feel free to leave them in the comments section below and I will get back to you.
Ambit Energy doesn't seem to be a pyramid scheme but it's definitely an MLM/network marketing company. There have been lawsuits and complaints mainly concerning their marketing and individual sales reps using fraudulent tactics.
I personally find the MLM business model a bit too sketchy because of its reputation and FTC statistics that show that most people fail with them. That's why I can't really recommend it as a business opportunity unless you are very experienced with direct selling and know what you are getting in to.
I personally recommend online business over MLM, it offers incredible perks like the possibility to work from anywhere in the world and real passive income as the system works on automation when combined with affiliate marketing.
Starting your own online business and learning the skills doesn't require large investments but it usually takes quite a bit of time. That's why I recommend you keep or get a day job that pays the bills while you build your business. If you want to get started right away, you might want to check out my free 7-day course.
Thanks for reading and if you found this review useful, remember to share it on social media!