Ambit Energy’s Residual Income Splintered with Stacking!

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Ambit Energy’s Residual Income Splintered with StackingWithin Ambit Energy, the subject of stacking frequently comes up in discussions and is even recommended by some consultants. In other MLM companies, this is fairly common practice when people need to maintain consultants of different ranks below them in order to maintain their own rank. That is not the case in Ambit Energy. This is a review of Ambit Energy when a consultant stacks consultants. This practice dramatically decreases residual income. This brief post will demonstrate the loss in income from stacking and some of the arguments against the practice.

My first introduction to the dangers of stacking came the day after I promoted to Senior Consultant. I received a call from an EC who had become a very good friend and very helpful in my support. He quickly explained not to do what he had done. He explained that he was an EC but not making any money. We only hear about how much money there is to be made as an EC. Well because of stacking, which got him EC fast, his productive people had coded out and his customers were mostly below his sixth level. Well, let me go into more detail on this topic after I tell you two recent incidents that motivated me to write this article. It is a very controversial topic.

The idea for this article was motivated by two friends, both Executive Consultants, discussed with me their residual income. In one case, the person had more than double the number of customers I had and in the other case slightly more than five times my customers. In both cases, I am receiving higher residuals. After a significant discussion and examination, it was clear they were the unfortunate recipients of self-inflicted wounds, i.e. stacking. Yes, I call these self-inflicted wounds, because it is their own actions that caused their residuals to be low. They stacked consultants both to help become an EC as well as afterwards to help friends and family.

Now, first what is stacking? Stacking is deliberately putting a consultant under another consultant rather than under you. The idea is that it helps the other consultant get promoted and hopefully that means getting you promoted faster.

First, let’s look at how we get paid in Ambit’s compensation plan. We get paid four different ways.

  • We get paid for gathering our first 20 customers.
  • We get paid weekly bonuses for new consultants that gather their customers.
  • We get paid residuals up to six levels based on our customers electrical or gas usage.
  • We get paid for each of the customers in our coded organizations to infinite levels in quarters.

Stacking has no effect on your personal customers.

However, stacking dramatically reduces the income in all of the last three income streams.

So, in this simple example I’ll show what happens to your customer residuals when you start putting people further down. One way to think about it is to think of the examples in the ambit video or presentation. If you stack just one level, it is in effect the same as if you had removed last line of the residuals from the compensation plan. That is, by just moving people down one level you have in effect eliminated your sixth level. To understand the income effect, imagine crossing out the income on your sixth level. The sixth level is 82.5% of the total income received. Do you really want to limit or eliminate it? Now, here is an example of the effect if you stack versus building wide.

As you can see, the Ambit Energy compensation plan works exponentially. That means, if you teach to recruit the minimum number of consultants, you have two on the first, four on the second, etc. on the sixth level where you have two to the sixth power, 64. Based on experience of mine and others and taking a conservative estimate you have five customers per consultant, your total income from residuals is $654. Now, just taking the assumption that you only get three consultants that got three that got three, you would have three to the sixth power, 729 on your sixth level. Your total income per month would be $6623.25. Now, imagine receiving the over $6,600 per month just on residuals by doing it properly. So, stacking cost you $5983.25 per month just between two and three wide. If you want to get an idea of the loss, look at the post of the value of your Ambit Business.Some of your bigger consultants will go 30 or 40 wide. Many Executive and  National Consultants have personal consultants that are 40, 50, 60, 70 or more wide. Imagine if you stacked and one of them appeared in your organization that was already coded out.

  • First, for those who are relatively new, what is coding out? When you join Ambit and get your customers, there are bonuses paid. There is $100 for your sponsor, $55 for your RC, $80 for your SC, another $80 for your EC and $25 for your NC. There may be someone who is your RC and SC or some other combination; they get whatever bonuses that are ‘coded’ to them. Now, when you promote and start receiving a $55 increase that is the RC bonus. The person, who was receiving it, will no longer receive that for ‘new’ people that you bring into your business. You have coded out of his RC organization and now start receiving that $55.

 

Level

Consultants

Customers per consultant

Total Customers

Residual

Total Income

1

2

5

10

 $      0.10  $         1.00

2

4

5

20

 $      0.15  $         3.00

3

8

5

40

 $      0.25  $       10.00

4

16

5

80

 $      0.50  $       40.00

5

32

5

160

 $      0.75  $     120.00

6

64

5

320

 $      1.50  $     480.00
Monthly Residual  $     654.00

 

Level

Consultants

Customers per consultant

Total Customers

Residual

Total Income

1

3

5

15

 $      0.10  $         1.50

2

9

5

45

 $      0.15  $         6.75

3

27

5

135

 $      0.25  $       33.75

4

81

5

405

 $      0.50  $     202.50

5

243

5

1215

 $      0.75  $     911.25

6

729

5

3645

 $      1.50  $  5,467.50
Monthly Residual  $  6,623.25

I really don’t need to go further than this. I have demonstrated what happened to people who have stacked consultants. At this point, one could say, the case is closed. However, this is not the end. It is not as easy to document as this was, but I can demonstrate that there is a lot more lost income.

There are three problems with stacking in regards to consultants instead of customers.

  • Consultants code out quickly and you do not receive benefits from their future growth.
  • You build a welfare state. That is, consultants are not learning to build the business and you are motivating them to ask for consultants or customers instead of training and learning to duplicate your work.
  • When stacking the consultants that don’t code out are often your least productive. Why? If you are trying to reach the EC level from SC, you want as much help as possible from your consultants because you need five of them to make SC, which makes you an EC. So, ‘the stacker’ finds those ‘most productive’ consultants and puts people under them. So, your best people that give you the greatest future potential income are helped by you, not to do their business better, but to code out quickly.

I believe that the biggest effect of stacking though is creating a welfare state. That is, when you are filling up someone’s down line, you are teaching people to expect others to do the work for them. You have probably heard in other companies how you may just get this one magic person and become rich. I had MLM hoppers that go from one company to the next ask me, if I join who or how many people will you put under me? Another reason that it doesn’t work here is that you really need to work through a couple of promotions before you start making some of the bigger money. That is, after each promotion, you are building a new team for your new level. So, anyone who joins really does need to do something. I am ready to help anyone in my organization all they need, but I want people that are going to work with me.

While not nearly as obvious, stacking affects two other areas of income. Even though both bonuses and the quarters are paid to infinite levels, when your down line consultant promotes, he receives the coded income from all his future work, not you. When stacking, in effect you are reducing the number of personnel consultants and pushing them further down below you. You hear the recommendation, build wide for income and down for security.

Building down for security refers to working with your team to help them with their people and prospects not putting people down there. As your team sees the people below them promote or grow, they may respond because they see the system working and their own consultants and friends passing them in rank. I have seen this happen several times.

We have the largest market, energy, everyone buys it, and as an energy MLM we have the opportunity to profit from Ambit Energy. Just do it right in order to maximize your residual and bonus income. The energy market is still in its infancy (revisit the Ambit Energy opportunity.)

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About Thomas O'Grady, PhD

Thomas F. O'Grady received his PhD in Mathematical and Statistical Economics from the University of California at Berkeley. Since the age of 12 he's been interested in entrepreneurial activities. Full Details

AmbitEnergy

Disclaimer: The analysis, views and opinions expressed in this blog are personally my own and do not necessarily reflect nor are meant to imply in any way they are the opinions of Ambit Energy.I am an Executive Consultant with Ambit Energy. Analogies used are to assist with general understanding of the postings and are only to be examples.

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