North American Power Review: Where is the retail?
North American Power are based in the US state of Connecticut, launched in early 2010 and claim to be “one of the fastest-growing energy suppliers in the country“.
Described by the company as “two of the most seasoned and successful energy executives in the United States“, North American Power is headed up by co-founders Kerry Breitbart (CEO) and Carey Turnbull (Chairman).
This appears to be both Breitbart and Turnbull’s first MLM venture, with both having a long history in the natural resources sector (crude oil and petroleum brokerage).
Read on for a full review of the North American Power MLM business opportunity.
The North American Power Product Line
As the name suggests, North American Power are an energy service MLM company.
The company offers an electricity, gas and wind energy services through third-party utility providers in the US.
The North American Power Compensation Plan
The North American Power compensation plan primarily revolves around the acquisition of new customers. Affiliates are paid commissions upon signing up new customers as well as from their use of the energy services (electrictiy, gas and wind) provided through North American Power.
North American Power Membership Ranks
To participate in the North American Power MLM business opportunity, one must sign up as a “Representative”.
To become an independent representative of North American
Power you will need to enroll one Accepted Customer, complete and sign the North American Power Independent Representative Agreement, take and pass the Independent Representative on-line training program and provide all of the required compensation plan payment information.
To participate in the North American Power compensation plan, you must be an Accepted Customer as well as meet all of the requirements as defined under Representative.
Within the North American Power compensation plan there are five membership ranks, and along with their respective qualification criteria, they are as follows:
- Accepted Customer – “Customers with this status have successfully completed a Third Party Verification call and have had the switch accepted by their utility company“
- Referring Representative (also referred to as a “Referring Customer”) – personally refer and maintain at least five accepted customers
- Director – refer and maintain at least five accepted customers, with at least five of these customers having generated a personal downline of at least 25 accepted customers each, for a total minimum downline size of 125 accepted customers
- Area Director – refer and maintain at least ten accepted customers, with at least five of these customers having generated a personal downline of 100 personal customers themselves, for a total minimum downline size of 500 accepted customers
- Regional Director – refer and maintain at least ten accepted customers, five of which must have at least one Area Director in their downline
- National Director – refer and maintain at least ten accepted customers, five of which must have at least one Regional Director in their downline
Customer Referral Commissions
As an “accepted customer” of North American Power, you are able to earn a $5 commission for every customer you sign up to the company, provided they have a “historical kilowatt usage between 250-5,000 or historical therm usage between 50-500 and every American Wind customer that you acquire“.
Other membership ranks are paid out a customer referral bonus as follows for wind ($19):
- Referring Representative – $7
- Director – $9
- Area Director – $14
- Regional Director – $17
- National Director – $19
And electric and gas:
- Referring Representative – $7
- Director – $9
- 1st Area Director – $14
- 2nd Area Director – $16
- Regional Director – $19
- National Director – $21
Note that all accepted customer referrals generate a $19 commission for wind customers and $22 commission for electric and gas. If the affiliate referring the customer is not a “National Director”, the commission is split as an override and paid out to the first available qualifying ranked members found in the referring affiliate’s upline.
Eg. If a Director refers an accepted customer, they are paid $9 and the remaining $10 is split between their upline. The first ranked Area Director gets $5, the second ranked Area Director gets $3, the first ranked Regional and National Directors get $2 each.
Note that if the first ranked affiliate in the upline is a National Director, they earn the entire remaining $10 commission.
Fast Start Bonuses
Building on the Customer Referral Commissions above, North American Power’s Fast Start reward affiliates who refer a fixed amount of customers within their first thirty days of joining the company (as an “accepted customer”).
Each of these bonuses has a base commission paid out to the referring affiliate, along with override commissions paid out to the first available ranked members found in the affiliate’s upline.
- Refer three electric and gas accepted customers and earn $50 – $5 then also rolls up to the first found Referring Representative, Director, 1st and 2nd Area Directors, Regional Director and National Director respectively
- Refer seven more electric and gas accepted customers (10 in total) and earn $150 (and a further $200 per additional ten accepted customers referred within the thirty day qualifying period) – $20 then also rolls up to the first found ranked members as above
- Refer three wind accepted customers and earn $20 – $1 then also rolls up to the first found ranked members as above
- Refer two more wind customers (5 in total) and earn $30 (and a further $50 per additional five wind accepted customers referred within the thirty day qualifying period) – $2 then also rolls up to the first found ranked members as above
Starting at the “Referring Representative” membership level, North American Power affiliates are able to earn a commission on the energy usage of their referred customers and affiliates.
There are 11 bands of payment (5 residential and 6 commercial) which dictate how much an affiliate is paid per kWh of energy used (or thermal). Due to each membership rank having a separate payout across all 11 bands, I’ve only included the minimum and maximum values of the commissions payable below, sorted by membership rank:
- Referring Representative – $0.10 to $120
- Director and Area Director – $0.20 to $125
- Regional Director – $0.30 to $130
- National Director – $0.40 to $135
Area Director Reward
Upon achieving the “Area Director” membership rank and holding it for at least one calendar month, North American Power affiliates are “able to choose from an iPad or a flat screen TV“.
Regional and National Directors who have held their membership rank for at least one calendar month are both eligible for a monthly car allowance of $1000 and $3000 respectively.
Joining North American Power
Membership to North American Power appears to be free, with members having to sign on as an “accepted customer” to participate in the compensation plan and business opportunity.
North American Power are quite clearly offering an energy service through the company and pay out commissions based on the usage of this service.
Worded in the North American Power compensation plan as customer acquisition bonuses and commissions, the Fast Start Bonus and customer referral commissions (referred to as the “ARC Bonus”) are designed in theory to attract customers, however coming from a MLM business opportunity perspective, highlight a red flag regarding effective differentiation between retail customers and company affiliates.
Taken straight from the North American Power compensation plan itself:
The north american power compensation plan is designed to bring fantastic earning potential to individuals interested in building a marketing network.
By becoming a customer, you are eligible to also become a representative.
That last line is of particular importance because it only refers to residual commissions. Accepted customers are still eligible for ARC (customer referral) bonuses, which are paid in cash and obviously are a part of the North American Power compensation plan and thus, business opportunity.
In letting their basic customer level (which is supposed to be true retail and have no involvement in the compensation plan and business opportunity), North American Power effectively eliminate true retail from the business.
You can join as a customer and not refer anyone, however there’s no differentiation between these customers and those that do, other than their own actions. As far as the compensation plan goes, they are treated as one and the same.
In MLM you have to have retail customers otherwise 100% of the revenue generated by your company comes from company members. If accepted customers are able to generate an income via the company’s compensation plan, they cease being true retail customers and inadvertently become affiliates (no matter how small the commissions paid out are).
Even the differentiation between an accepted customer and a “Referring Customer/Representative” is rather slim, with the only differences being the recruitment of 5 accepted customers (recruitment of accepted customers is required to earn as an accepted customer in any case), and signing up as a representative.
The signing up process involves signing of an “independent representative agreement”, passing of an online training test and providing of payment details. Subscription to the North American Power energy service is mandatory, as is the referring of customers (who are able to earn via the compensation plan).
Given that accepted customers already earn via the compensation plan (no residuals), I’m not sure what need there is for a separate representative agreement is.
Why there’s a lack of differentiation between retail customers (non-existence is more accurate) and company affiliates is thee case I have no idea, but it casts a shadow on what otherwise looks to be a solid MLM business opportunity offering.
Functionally you’ve got a service that your representatives should be selling to retail customers, yet in including accepted customers in the compensation plan, Northern American Power have changed what should be customer acquisitions to representative acquisitions.
The bottom line is if you can earn via the compensation plan, you’re no longer a customer but rather an affiliate (associate, representative, distributor whatever you want to call it). And in MLM, if you don’t have retail customers then you’ve got a problem.
One would hope North American Power address this red flag sooner rather than later.
Update 14th January 2015 – Sometime over the last 24 hours North American Power have terminated their MLM business operations.
Why the company has made this decision has as yet not been made public.