Is Ambit Energy A Pyramid Scheme? Untold Truths Exposed!

Is Ambit Energy A Pyramid Scheme? Untold Truths Exposed!

“Is Ambit Energy A Pyramid Scheme?”

“Ambit Energy Is A Pyramid Scheme!”

“Ambit Energy Scam”

I found that such phrases seem to be “high-in-demand” after doing some keyword research on Jaaxy.

Many people are looking for a real, honest, and unbiased review of Ambit Energy.

I guess you’re on the same boat with those people, that’s why you’re here, am I right?

Hey, this is Zac Phua, the owner of Life Goal Finisher. No matter what reason that brings you here, I must thank you for clicking on this page and read my review on the company.

That’s the exact way to avoid scams and find a legitimate way to make money online!

Rest assured, I’m not an associate with Ambit Energy (and I never will), so I won’t pitch you to buy any products or even join the company.

Without further ado, let’s get started!

Table of Contents

Company Overview

Is Ambit Energy A Pyramid Scheme - Ambit Energy Logo

Company Name: Ambit Energy

Business Niche: MLM in natural gas & electric services

Startup Cost: $75 one-time fee + $24.95 monthly recurring fee

Founders: Jere Thompson Jr and Chris Chambless

Websitehttps://www.ambitenergy.com/

Pros

1) Free Energy Program
2) No Inventory
3) DSN Global 100 List
4) Environmentally Friendly Services

1) Heavy Emphasis On Recruitment
2) Flawed MLM Model
3) Horrible reputation
4) Pyramid Scheme in Disguise
5) Pyramid Scheme Lawsuits
6) High Fail Rate

Overall SCAM Rating: 20/100 (Legit MLM)

Recommended: Not Really

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What Is Ambit Energy?

Based in Texas, United States, Ambit Energy is a multi-level marketing (MLM) company that serves customers with cheaper electricity and natural gas services, while providing them MLM business opportunity to earn extra incomes.
 
Jere Thompson Jr and Chris Chambless founded this company in late 2006 and led this company to surpass a billion-dollar mark in 2013. 
 
As yet, they’ve offered their services in 17 states in the United States and projected to expand their business to Japan and Canada lately.

Ambit Energy Services

Ambit Energy provides electricity and natural gas services via a series of third-party utilities in the United States.

The rates and plans vary based on location and the length of the contract (month-to-month, 6-month, and 12-month) to meet U.S. customers’ needs.

You can see rates for different service areas based on zip code on Ambit’s website.

Here’s a list of services that they’ve offered so far.

1. Commercial Services

  • Help you to save your money by providing you the electricity service at much lower pricing.

2. Ambit Energy and Green-e Energy

  • Provide renewable energy.
  • This rate is slightly higher than the other rates.
  • It’s limited to some areas.

3. Solar Savings

  • They partnered with Sunrun, a leading solar energy provider.
  • Provide solar services to 6 of their 17 areas nationwide.

How To Join Ambit Energy?

Ambit Energy is an MLM company. You can already tell that.

Paying to be an associate/salesperson of an MLM company is a norm in the industry.

To be Ambit’s associate, you’ll need to pay a $75 one-time fee, plus a $24.95 monthly recurring fee.

Once enrolled, they’ll provide you tools and resources that you need to run your new Ambit’s business, these include:

  • Advanced online training
  • Sales Materials
  • Live training sessions
  • And much more

How To Make Money With Ambit Energy?

Joining an MLM company and start making money can be a simple process if we don’t talk about the different tiers/leaderboard rankings and any complex MLM terms and conditions.
 
Note that I say the process can be simple, but not easy.
 
How you can make money with MLM is boiled down to these 3-step process below:
How you can make money with MLM

By applying the framework of the process, let me further explain to paint a clearer picture of how you can make money with Ambit Energy.

1) Paying The Joining Fee

This is basically asking you to pay a $79 one-time fee + $24.95 monthly fee to join their MLM program.

I’ve explained this part in the previous section. You can always refer back to it for more precise info.

2) Ways to Make Money

Surprisingly, the Ambit Energy compensation plan is easier to understand than other MLM companies I reviewed before.

All in all, there’re only three ways for you to earn money with Ambit Energy. Let me list them out for your information.

i) Immediate Income

Immediate income is made up of Jump Start and Team Builder Bonuses designed to help you earn money right from the start. 

These bonuses pay you for doing two things: gathering customers and helping others do the same thing.

ii) Leadership Income

There are five membership ranks within the Ambit Energy compensation plan. 

If you get promoted to higher Leadership as you build a team, you’ll be qualified to earn more commissions/bonuses.

iii) Residual Income

These commissions paid out on the actual use of energy by an Ambit Energy consultant’s referred customers (up to seven levels). 

The amount paid per customer varies based on the state, and the amount of energy used by the customers. 

I’ve explained their compensation plan in simple language, as I don’t want to overwhelm you with those complex terms.

If you wish to learn the nitty-gritty about Ambit’s MLM program, you can watch the short video explanation below. I hope this helps.

3) Leveraging Your Downline Team

The last thing you should do is try your very best to recruit as many people as possible to build a reliable downline team and earn commissions.

Not sure about you, but whenever I say “leverage” your downlines to earn commissions, it’s kinda like “using” other people for your own purpose. And that truly makes me feel guilty. 

But in reality, it’s an undeniable fact in Multi-Level Marketing.

Forming a downline team that can branch out your circle to maximizes your earning potential is always the ideal way to succeed in MLM than just selling stuff.

Are you tired of MLM & Internet Scams? Why not learn to start your own business instead?

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Pros

1) Free Energy Program

As the title said, you can earn free energy by taking part in their Free Energy Program.

You earn this reward after referring 15 customers to enroll in Ambit Energy as their energy provider. 

2) No Inventory

Most MLM companies in health & wellness or beauty & cosmetics niches might require you to keep a large number of inventories for retail selling.

This could be a nightmare for people who often run into the trouble of having “dead stocks”, which means extra products that you didn’t manage to sell.

But Ambit Energy is a service-orientated company. You don’t need to stockpile any products and just focus on promoting services and recruitment. 

3) DSN Global 100 List

From 2009 to 2020, Ambit Energy is named on Direct Selling News‘s Global 100 list of top direct selling companies in the world.

Meanwhile, I’ve searched on Google Trends and found out that the public interests toward Ambit Energy are quite stable over the past five years.

Researching public interest in Ambit Energy with Google Trend.
Researching public interest in Ambit Energy with Google Trend.

All these data can further prove the firm business foundation of the company throughout the years.

4) Environmentally Friendly Services

Let me shed some spotlight on Ambit’s Green plans that provide renewable energy to several locations.

With climate change being such a hot topic, renewable energy is a rapidly growing market in today’s world.

This does not only raise positive awareness in public but it also might be an easy-sell service because everyone is already using electricity day after day.

Cons

1) Heavy Emphasis On Recruitment

As I said, you’ll need to fully utilize your network to “hunt” for downlines because Ambit Energy emphasizes recruitment in their compensation plan.

It’s no secret that the bigger income opportunities rely on building a loyal team of downlines who can help you branch out your circle.

Most of the time, such recruitment in MLM could lead to the problem of “blind leading the blind” if your upline/leader also doesn’t know much about selling and recruiting as well. 

Not to mention Ambit Energy is in the electricity and natural gas niche, which I think its T&C would be more sophisticated than other health & wellness MLM companies.

2) Flawed MLM Model

The far majority of MLM companies will classify their members into a group of regular customers and a group of consultants (aka associates/MLMers).

But Ambit Energy plays a different game. They somehow unify all of their members into the same group of consultants.

Whenever someone buys into Ambit’s services as a customer, they’ll automatically be considered their consultants, which means they can start to promote Ambit services and recruiting downlines.

This might not be a big issue for Ambit Energy, but their consultants will face huge competitiveness as there’s full of consultants, and they’ll never know who’re the genuine retail customers (non-consultants) that they can serve and recruit to be their downlines.

3) Horrible Reputation

At the time of writing this article (17 July 2020), there’re 61 reviews on Ambit Energy filed on Customer Affairs, and they only get an average of 1.7 out of the 5-star rating.

Customer reviews on Ambit Energy, as seen on Consumer Affairs
Customer reviews on Ambit Energy, as seen on Consumer Affairs

Likewise, Ambit Energy is also getting 200+ customer complaints on BBB, and here’s a screenshot of the summary of customer complaints.

Customer Complaints on Ambit Energy, as seen on BBB
Customer Complaints on Ambit Energy, as seen on BBB

In the screenshots below, you’ll see that their complaints are focused on two areas:

  • The Billing/Collections
  • The Problem with a Product or Service

If you ask me whether their services work well or not, I can’t answer you because there’re mixed reviews with Ambit Energy.

But from what I’ve noticed on BBB, numerous customers have complained that Ambit Energy charged for more money without any valid reason.

This is unethical practices as it seems like the company trying to “craftily” mislead their own customers.

4) Pyramid Scheme in Disguise

In Dr. Jon Tayolors 5 Step MLM evaluation, he stated that a business might be a pyramid scheme if they display the 5 red flags listed below:

1. Recruiting of participants is unlimited in an endless chain of empowered and motivated recruiters recruiting recruiters.

2. Advancement in a hierarchy of multiple levels of “distributors” is achieved by recruitment, rather than by appointment.

3. Ongoing purchases (products, sales “tools,” etc.) by “distributors” are encouraged in order for them to be eligible for commissions and to advance in the business ("pay to play").

4. The company pays commissions and/or bonuses to more than five levels of “distributors.”

5. For each sale, the company payout for each upline participant equals or exceeds that for the person actually selling the product, creating an inadequate incentive to sell products directly and an excessive incentive to recruit.

And guess what, Ambit Energy “fulfilled” all of the criteria above.
 
In fact, they used to be sued for designated to be a pyramid scheme in 2015…

5) Pyramid Scheme Lawsuits

In 2015, a class action lawsuit against Ambit Energy alleging the company operated a massive pyramid scheme using its customers to market its electricity and natural gas services with the promise of lower rates and then raise the rates on those customers.

The suit alleges that Ambit has defrauded its 13 million customers while growing its revenue from $1 million in 2006 to $1.2 billion in 2014.

There’re more lawsuits against Ambit Energy on the Internet. You can always find it on Google.

6) High Fail Rate

As I mentioned earlier, Ambit Energy displays all the 5 red flags of a pyramid scheme identified in Dr. Jon Tayolors’s research.

In his study, he also found that if an MLM company raises 4 or more flags, you will have less than a 1% chance of turning a profit from joining.

Let’s look at Ambit Energy’s 2018 income disclosure and see if Ambit Energy’s earning potential has any different than other MLMs.

Ambit Energy's 2018 income disclosure
Ambit Energy's 2018 income disclosure

According to the United States Census Bureau, the median U.S. household income in 2018 was $63,179.

That said, the income disclosure is telling us more than 99% of Ambit’s associates are making LESS than the minimum wage.

What a pathetic amount?!

Indeed, there are still people getting rich with Ambit. But most MLMs are the same. That only represents a tiny group of people. 

Majority of the people who join such MLMs failed!

Dr. Jon Tayolors’s claims are right. The evidence is right in front of you.

So, Is Ambit Energy A Pyramid Scheme?

Don’t you dare lie to me GIF

Before making any final verdict, it’s important to know that what is actually a legit MLM.

A legit MLM does provide their member with a real and legit product/service to sell and allow them to recruit new members at the same time. 

But Pyramid Scheme doesn’t have such a proper system.

The only way for someone to make money in the Pyramid Scheme is by recruiting more new members.

Hence, the Pyramid Scheme is scamming people’s hard-earned money.

With all these in mind, I can say that Ambit Energy is not a pyramid scheme because they’ve actual services for associates to sell, and they also list every detail of their compensation.

They even unveil income disclosure to show you how low is their MLM earning potential.

Considering the downsides revealed earlier;

=> the meager success rate + multiple lawsuits and complaints + high competitiveness…

I don’t think it’s the best business opportunity that you’ll want to get into.

You Deserve A Better Opportunity

Kudos to you! You’ve just read 2400+ words and still counting. If you make it this far, I commend your commitment.

Meanwhile, I can also feel how serious you’re when it comes to finding a proper way to make money from home.

MLM is great. 

I am also not saying that people can’t make a decent living with MLM. But it often represents a tiny group of people who joined the program early.

That said, it’s challenging for people who’re BOPs (bottom-of-pyramid) to make some serious dough because they’re running out of people to “recruit”.

MLM Unilevel Compensation Structure

Instead, Affiliate Marketing is my top recommended business model for anyone to make money from home.

The reason is simple…

Advantage 1: No Recruitment Needed

  • You don’t need to “chase” after people and talk them into MLM opportunity where most people lose money.

Advantage 2: Freedom of Choice

  • You can promote any products you love and not be restricted only to promote the products from one MLM company.

Advantage 3: Low Startup Cost

  • Unlike MLM, where you’ll need to pay a pricy introductory fee to join, it takes little to no startup cost to kickstart your entrepreneurial journey in Affiliate Marketing.

You might think I’m biased, but I’m just telling the truths…

If you are sick and tired of MLM and “Biz Opp” Scams, click the “Learn More” button to discover my top recommended learning platform that can help you turn your passion into profits with Affiliate Marketing!

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Zac Phua

Zac Phua

Phua is an internet business enthusiast who loves to talk about online business ideas, affiliate marketing tools, tips, and other sources of income available on the internet. He launched lifegoalfinisher.com and use it as a resource center where he can share his thoughts and experiences to benefit any newbie who wants to learn more about internet marketing.

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6 thoughts on “Is Ambit Energy A Pyramid Scheme? Untold Truths Exposed!”

  1. Hi Zac!

    This is first time I read about ambit energy, but I do have some experience with pyramid or MLM scheme. I really don’t like the way most of them do business. Most of them are simply focus on building the down line and make money from their purchase, that’s not the main issue. They simply don’t care weather the product is useful for the their down line or not, once you become the member you do the same thing to your down line or you simply quit.

    Tanks for the post.

    Have a great day.

    1. Thanks for your comment, Mohammad.

      Indeed, MLM is also not my first choice when it comes to making money from home.

      It’s not because it’s illegal or not profitable, but because of all the restrictions and the expensive costs involved.

      Instead, Affiliate Marketing is my top recommended business model for anyone to make money online.

      The reason is simple…

      #1: You don’t have to recruit anyone to make money
      #2: You have the freedom to promote any products you want and not being restricted to only promote the products from one MLM company
      #3: It’s Free to get started

      If you’re interested in getting started with Affiliate Marketing, I suggest you give Wealthy Affiliate a try.

      To me, they’re the best learning platform for affiliate marketing.

  2. Thank you for this review about this ambit energy. Well! This is relatively the first time I will be reading about it but hkestly, it was worth it. To be very honest, all that you have shared here is simply great and I thank you so much for sharing this. Though the fact that ambit offers something uniques the faxt that they mirror the niche on mlm is the reason I will not be enthusiastic about joining them. Thanks

    1. You’re most welcome, Sherry. Thanks for your comment, too.

      I’m also glad to hear that my article does serve you well.

  3. Most times, what determines whether I’ll like a product even after confirming how legitimate it is, is the model it operates and how it is being run. MLM is the total turn off that I don’t like dealing with because of the model, only a few people are always able to make money from it. Ambit energy would have been a good one but it is not easy to make money with MLM.

    1. I totally agreed. Indeed, I’m pretty sure that MLM has the highest fail rate among other business models.

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