This is not as confusing as it may sound. What is the current state of the market served by this company? Are there indications of what may happen in that market in the future?
Let me give you an example. Today, in states that have deregulated electric service, you have MLM companies popping up all over the place who are reselling power. They would buy it wholesale and resell it retail, giving their distributors a cut of the profit.
Sounds fine so far right? Not so fast. We already have a historical reference for this.
In the mid 80's, the same thing happened with long distance service. Bell Telephone was broken up and the market was opened to competition. MLM companies popped up almost overnight to take advantage of it. They too were buying wholesale and reselling retail, giving a share of the profits to their distributors. Most did not make it long because of the legal battles that followed the break up of the Bell companies, but some went on for a while after.
Eventually, rates got so low that there were no margins to pay distributors. Today, with most people having a flat fee for unlimited long distance, such businesses are but a distant memory.
It is a safe assumption that electric power deregulation will have similar results. I don't know if electrical power rates will ever drop that low, although I wish they would, but they will not have to drop far to eliminate the margins required to pay commissions.
These companies may make a lot of money for a while, but their odds of being around 5, 10 or more years are slim to none.
No matter what your niche, analyze what the market is doing. Do not simply listen to what the company says, do your own research. With MLM Companies selling everything from vitamins to cell phones; water filters to travel packages, be sure you know what you are getting into before signing on the dotted line.
Interesting look at deregulation except that it will only happen once in our lifetime. Since it is such a ground floor opportunity, the timeis now to get involved. It will take close to fifteen years for it to roll across the US and Canada. The way "Ignite" is set up as a MLM company, it will go #1 in every state it enters. And, once people make that switch, it is likely they will not switch again, since they are your family or friend. Check it out at gindan.igniteinc.biz . It takes about 60 days to set yourself into a on going and climbing residual income. With only $299.00 to join, why would you not want to be a part of it???
ReplyDeleteBill,
ReplyDeleteIt is true that deregulation is only a one-time thing.... in our lifetime perhaps, and companies that are setting up to provide ONLY gas and electric may not make it, but ACN was one of the MLM's that took advantage of the deregulation of the Bell's and they are still going strong. Energy is the next big area where money will be made and it's the strong, developed companies that are going to be able to take advantage of the deregulation. Great article.