If MLM reps are all about #cleaneating and #allnatural trends, then they should be all about this #cleanenergy trend emerging in direct sales.
NAP was positioned to ride the wave, but despite years in business and even snatching a spot on the Forbes list, this company couldn’t make the MLM model work for them in the end.
It really screwed their distributors, who were perhaps a bit too trusting. Was I one of them?
This video explains everything:
Make sense? Either way, here’s the full review on North American Power.
Overview
Based in Norwalk, Connecticut, North American Power was founded by Kerry Breitbart and Carey Turnbull as a retail energy supplier working off a direct sales model. Think a wannabe Viridian Energy.
Brietbart in particular is pretty well known in the energy industry. He is a member of the National Energy Marketers Association Energy Committee, and he spent 20 years with United Companies as a crude oil broker and eventually President and CEO.
The company has over 70 full-time employees and rakes in $250-$500 million a year in revenue. [1] [2]
In 2011, NAP was fined $100,000 by the Maryland Public Service Commission after an investigation that showed the company was employing misleading sales practices. [3]
Breitbart attributed the problem to their rapid initial growth, and immediately reconciled the problems. NAP bounced right back, and in the same year were listed on the Forbes list of “America’s Most Promising Companies”. They ranked #57. [4]
The growth didn’t stop. By 2014, they were also making Inc. Magazine’s list of “America’s Fastest Growing Private Companies.” [5]
Anyone who knows the first thing about MLM knows that they don’t fare well in regulated industries, though. Direct sales is too riddled with accusations regarding product value, product claims, recruitment practices, and Ponzi schemes to go up against additional federal and state regulations.
This is probably why energy MLMs are rarely sustainable (pun intended). The energy industry is filled with rules and regulations that don’t mix well with network marketing.
By 2015, North American Power completely dissolved the network marketing arm of its company out of nowhere, leaving distributors totally stranded, with years of team-building and rank advancements down the drain. [6]
How much does North American Power cost?
Affiliates could join NAP by becoming electric or gas customers. There’s no sign-on fee or start-up kit, but they would have to pay a monthly energy bill from NAP.
An alternative was to purchase an American Wind or Home Automation Services from NAP, which were $20/month and $70/month respectively.
Products
The company can only provide its services in states which have deregulated their energy industries. That comes to a grand total of 12 states: Connecticut, Georgia, Illinois, Maine, Maryland, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Texas.
Starting out, they offered service in four categories: electric, gas, solar, and wind power.
Now they’re mostly known for offering electricity and natural gas services. They’ve won awards for customer service and offer competitive fixed rates for monthly energy.
NAP is an independent energy supplier that essentially buys electricity wholesale and then breaks it up into various plan options that customers can choose from. Switching to NAP doesn’t require any installations or service visits and can be done online.
One thing that makes NAP unique is their trademarked Understandabill service. It’s a home energy report that delivers data to your regarding your energy usage and energy conservation tips. It provides usage comparisons, forecasts, electricity usage breakdowns, and personalized recommendations at the touch of a button.
Opportunity
There was no differentiation between customer and distributor when NAP was still running on a direct selling model, which is always problematic. It means they had no real retail arm.
A basic customer was always a distributor as well, and vice versa. All customers were part of the affiliate program, whether or not they were interested.
They ran on a hybrid unilevel compensation plan with residual commissions, and they also offered all kinds of bonuses. Manager level affiliates (those with 3 teams of 10 customers) got a $500-$1,000 bonus. Senior Managers (with 3 teams of 25 customers) got another $500-$1,000 bonus.
Directors (those with 5 teams of 25 customers) raked in a $1,500-$3,000 bonus, and Senior Directors (with 3 teams of 100 customers) made bank with $2,500-$5,000 in bonuses.
Recap
While the majority of affiliates at NAP were probably making pennies on the dollar, meaning the shut down of their network marketing arm didn’t actually impact their earnings that much, imagine if you had worked your way up to the top ranks and become a big earner.
These guys were raking in huge sums of cash on a massive downline and a rank that probably took a lot of time and work to achieve. All of the sudden, with no warning, they found themselves essentially fired – jobless and without any income whatsoever.
Can’t say they were completely blindsided, as this kind of activity comes with the territory of working MLM. They shut down out of nowhere, especially in the energy industry.
Look, if it’s financial freedom you seek and you like automated ways to build passive income, there are better ways.
(and you can trash those old MLM habits, too)
from MLM Companies
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