The main selling point we took away from the Ambit business opportunity presentation, was about deregulation. They showed how after deregulation industries such as telecommunications experienced a disruptive shift. It changed the way customers could access telecommunications and we saw lots of new companies offer a whole lot of new services.

Several years after deregulation of telecoms, there are some players who have become Multi-Billion dollar companies. This is what Ambit want us to think of... Deregulation leads to new super successful companies. What we're not paying attention to, is the fact that for every successful business there were a few that failed, and no longer exist because they went bankrupt.

The real pattern which we see when deregulation disrupts an industry, is that there is a huge influx of new players. In time most of them will disappear and only the few super successful ones will remain.

Does Ambit Lower Customers Bills

As we've expressed from the onset, we are skeptical about whether the Ambit business model can deliver cheaper power. We looked at the Ambit rates and plans for Fresno California. The first thing we noticed in the terms of service, is that Ambit is not the direct provider of electricity or natural gas. Ambit does not have any infrastructure and is not generating any power. They are a sales company which buys power from infrastructure providers and then sells it to customers for a retail profit.

We then noticed that the terms of service state that 'Ambit Energy may amend the terms of this agreement at any time'. In other words once you are out of fixed term contract, they can increase the prices. All they have to do is notify you 30 days in advance. Their method of notification may be an email, a letter, or a note attached to your monthly bill. I don't know about you, but I generally pay the amount owing on the bill and don't spend much time reading through the print to see if there's a notification about rate changes...

What really concerned us about the Ambit terms of service, was that there is an arbitration agreement. Which suggests that Ambit is currently the subject of a class action lawsuit. The lawsuit which was filed in New Jersey alleges that Ambit uses deceptive tactics to hide the real cost of the energy they are supplying. This has lead to some customers being surprised with charges at the end of their discount period, that for some have added up to thousands of dollars.

It would appear that New Jersey isn't the only area where Ambit customers (who may also be consultants) are opening unexpectedly high bills from Ambit Energy. There is a dedicated online Ambit Complains Board, where several customers from all over USA are sharing similar stories. We also found this detailed story of an Ambit consultant hit with a 'massive electric bill', a year after joining the MLM.

Is Ambit an Illegal Pyramid Scheme

Despite the similarities to pyramid schemes, network marketing is legal. If there is a product or service attached that can be sold to consumers, then the system is not illegal. By this definition Ambit is not an illegal pyramid scheme. Even though they are legal, we believe that MLM is an unethical business model.

MLMs know that they strongly resemble illegal pyramids, and they do their best to play this down. Ambit is no different, we found their response to the question: Is Ambit a Pyramid? Here found the classic MLM response, which is that all companies are pyramids. It's true, there is a hierarchical system with a CEO at the top, then layers of executive followed by managers and finally workers.

Ambit even claim that 'You will only get ahead if someone above you dies or quits'. They then flip it around to show us how with Ambit this consultant is earning more than the people in his upline. We'd just like to point out that this is possible with any commission based sales role. Given that MLM is essential commission based sales, we believe that the author might have earned more than his upline. Back in 2008, the Finance Guy actually achieved this. While working as a loan writer for a bank, his bonuses for the year meant that he got paid more than both his direct boss and the one above him. So this is definitely possible outside of the MLM world

We are willing to agree with Ambit that most companies have a hierarchical structure, but we disagree that this makes all companies resemble pyramid schemes. When we look at the actual definition of a pyramid scheme, we see that the key element of a pyramid scheme is the constant need to recruit new members. That's where the difference is between network marketing and companies which don't resemble pyramid schemes.

Normal companies only hire new staff to replace those that resign or when the company is growing fast enough to justify it. Ambit doesn't care how many consultants sign up because it costs them no hire them, and they only pay them for results. If they follow procedures and 'become their own first customer', it could be argued that Ambit profits from new consultants joining the MLM.

Ambit, and all MLMs, claim that all companies resemble pyramid schemes. We obviously disagree, unless a primary part of every role in every company, is recruiting new employees. It could be that they've all made an honest misunderstanding. It could also be that MLMs want to mislead us to make their opportunity look better than it really is.

Should You Join Ambit Energy

If you want to save money on your bills, then make sure you compare all the available options. Also make sure to read through the terms and conditions before you sign anything. As we've seen, some deals appear to be good, but can end up costing you more over the longer term.

If you are looking for a new business opportunity, then take your time to examine all your options. If you think you have what it takes to turn a profit as an Ambit consultant, then you can probably make even more in a regular sales job.

One study found almost all MLMs are a waste of time. They found that your chances of success are extremely small. This because of the unrealistic expectations of a constantly expanding down-line.

This review is based on the opinions we have formed while researching Ambit Energy. We'd love to hear what you think in the comments section below. Specially if you can share your own experiences with Ambit.

For more posts like this, look at our list of mlm reviews.