Monday, June 16, 2014

Can you get a slice of the ‘Biggest transference of wealth in US business history’?

Author: Gery Juleff
             Manager, North American Power

Warren Buffet has called the deregulation of the retail energy sector the ‘biggest transference of wealth in US business history.'  Legendary CEO Jack Welch in a recent CNBC interview described the deregulation of energy as ‘the internet in 1990' and went on to say that, “energy is the lifeblood of an economy.”

But how can you, assuming you don’t have significant assets to invest, benefit?

A number of companies have entered the market using a direct sales model – otherwise known as a home-based business or, in some cases, multi-level marketing. I was initially wary – after all, there have been many stories about people losing money through this model. But I explored further as the model did fit my personal circumstances – for family reasons I wanted to work part-time and flexibly.

After all, Direct Sales is simply a way to move a product or service directly to a consumer instead of through a retail location. This is typically achieved through an independent distributor or representative sales force – and companies reward these people rather than pay advertisers, marketing departments, etc. Over 15 million people are involved in direct selling in the United States. Most are women, although nearly a third are men or two-person teams such as couples. Direct Sales in the United States grew to $32 billion in 2012, up from $29 billion in 2010.

I realized that, in theory, the convergence of deregulation, direct sales, and energy had created a tremendous opportunity for individuals if they could find the right vehicle. In addition, this was a product that everybody bought anyway, and there was no need to stock any product. This convergence allows any individual, with little or no experience, to build a business that would generate long-term income on the customers they help to save money through energy deregulation.

I then looked at a number of the main companies. All had their plusses and I have given links to the main ones below. But I had a couple of key criteria which were important to me. I felt that the best way to build a really substantial income would be through enabling others to do the same – build a network. But I was not comfortable with a model which depended on persuading others to pay an enrollment fee – I had done some research and realized that the vast majority of those who did this in the MLM model lost their investments. And I wanted to work with a company that had a commitment to renewable energy, not just because I felt that this was important but also because any company that had this focus would be more inclined to be forward-looking and a good long term bet.

In the end, I went with North American Power. It has a focus on renewable energy and a no-investment, no risk business model. Forbes had made it one of America’s Most Promising Companies and it had won numerous American Business Awards. I then met the co-founder and CEO, Kerry Breitbart, and was blown away by his transparent integrity and his vision. It also had philanthropy at its heart. I felt that this was a company that I could be passionate about while building a great business, making money while doing good – for the environment, for some great charities and for those who I enrolled who would go on to ease their own financial worries or even achieve their dreams.

It is not easy – nothing that is truly worthwhile doing is. And others will have different criteria and choose different companies. But there is a simplicity to it and huge potential. It is, obviously, not for everybody but there is no doubt that the potential is there for those who wish to grasp it and I would be happy to discuss options with anybody who is interested.

Here are the companies that I looked at:
Ambit; $428 enrollment fee;

Ignite/Stream; not clear what the start-up costs are – you have to contact the company to find out;

Veridian; focus on renewable energy, $299 enrollment fee;

US Power and Gas; no enrollment fee, but a focus on commercial accounts;

North American Power; no enrollment fee, focus on renewable energy;

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