Through their multi-level marketing arm Ignite, Stream Energy claims to be “Turning Energy into Income” for associates who sign up to market their business.

With Ignite, Stream Energy is taking advantage of energy deregulation laws in Texas and Georgia. These changes make it possible for several companies to sell residents electricity or natural gas. (Don’t worry, though—one company in each area is still responsible for getting residents out of a jam when power lines go down or something happens to the gas lines.

Ignite claims to be able to cut energy costs for consumers because of a “relationship marketing model” and thus have cut their advertising budget.

For a one-time, $329 fee, Ignite says it provides sales associates with everything they need to get started: a starter kit, support from the home office, live training and events, and online support through the Ignite website.  Then it’s up to associates to work toward Ignite’s goal of selling to 10 personal customers and recruiting 3 personal associates—again, and again, and again.

In other words, Ignite’s a standard MLM, but rather than selling energy drinks, Ignite is selling energy from light sockets.

According to Ignite, their combination of “relationship marketing” and deregulated energy has been hugely successful. Launched in 2005, Stream Energy claims it has become the largest provider of retail residential energy in Texas. Ignite’s website claims the company enjoyed a 500% growth rate from 2005–2006. Ignite claims to have $400 million in revenue today.

Does Ignite Work for Associates?

While Ignite and Stream Energy claim some impressive early growth figures, the 2005–2006 numbers are the only ones that are easily accessible through their website.  And their compensation chart for 2008–2009 shows that the vast majority of Ignite associates, more than 87%, were earning an average annual income of only $129.33.

In other words, the vast majority of Ignite associates probably weren’t making enough money to pay their monthly energy bills.

Of course, with MLMs as with any other human organization, it’s a small percentage of people who do most of the work.  Ignite seems to be no exception, with only 0.11% —that’s right, way less than even one percent of associates—earning an average income you could live on. There isn’t any way through the Ignite website to determine whether the disparity in earnings is due to a disparity in enthusiasm and hard work or a problem with Ignite’s compensation plan.

Other red flags include the fact that growth figures and compensation disclosures are available for only Ignite’s first year as an MLM and the fact that such a small percentage of people are doing really well after Ignite has been in business for almost ten years.

If you live in Texas or Georgia and are interested in an MLM opportunity marketing a product that everyone needs, you still might want to look into Ignite and Stream Energy. Ignite claims that their top earners are grossing into the low seven figures, and it could just be that the disparity between their top and bottom earners is due to Ignite’s growing pains.

At the least, you might be able to pay your utility bills by signing up to work with Ignite. And that wouldn’t be bad at all.

Comments (9)

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