There’s a lot of money to be made in the energy sector and more and more businesses seem to be popping up. Everyone is under the impression that having capital and any team of people will do the job in providing quality energy services, but nothing else could be farther from the truth. Ambit Energy seems to be one such example.
Founded in 2006 by a telecom executive, Jere Thompson, Ambit Energy has been providing electricity services to consumers in Texas for more than a decade and maybe not so successfully, depending on your point of view.
This article will examine Ambit Energy and its performance in the sector, while focusing on rates and sales practices above all else. So without further ado, let’s go!
SALES PRACTICES
Ambit Energy does not have an in-house sales department who calls leads and meets with prospective customers to make a pitch for their business. Instead, the company relies on independent individuals, who are referred to as “Sales Consultants” to make sales for the company. In addition to bringing business to the company, these Sales Consultants are also required to pay a monthly fee to affiliate themselves with Ambit Energy. To join the “Consultant Program” individuals are required to pay $429 upon joining and, if that’s not enough, they also need to make a monthly contribution of $25 in order to market their website. Effectively, in the first year, Sales Consultants need to pay $730 to Ambit Energy, who is their employer considering that the company pays commissions for every sale that these Consultants make.
These Sales Consultants mostly make sales to friends and family and, if they put in the time and effort, they manage to make independent sales that are not influenced by personal connections. Rather than focus on the services or infrastructure, Consultants guide customers on how they can get the best rates from Ambit Energy and then go on to sign them up.
RATES
Ambit Energy’s rates are much higher than their competition in the market which, in some cases, is 2 or 3 times higher. This is surprising considering that they have no in-house sales team (thus being safe from having to pay monthly salaries) and they use the same infrastructure in terms of delivery i.e. the Oncor, AEP, or Centerpoint distribution systems.
Rates are fixed on a contract plan but could go up 2 or 3 times if the contract expires and customers move on to a monthly plan, which would incur variable rates. Luckily, customers do get a notice 45 days before the expiry of the contract. However, this is not the generosity of Ambit Energy as much as it is a requirement under law.
REVIEWS
Even though Ambit Energy has scored well in the past in JD Power Ratings and has good standing with the Better Business Bureau, the company is ranked low on independent websites. Ambit Energy has had issues with payments, disconnections, maintenance, and the switch to variable rates at the end of contracts as explained above. Also, the fact that the company faces so many issues, combined with the higher rates that they charge, has led to independent customers not viewing the company in a favorable light.
