Thursday, November 24, 2016

Is Stream Energy just another energy MLM scam?

Texas, the state that sometimes pretends to be its own country, is the perfect place for an energy MLM. They’re huge for one, and they don’t have to follow all the federal energy regulations (more on this later).

Stream has been selling energy and natural gas to residential and commercial customers since 2004 through a network marketing model, and they’re killing it.

Does this mean I’m involved?

This video explains everything:

Make sense? Either way, here’s the full review on Stream Energy.


Energy is a gray area product due to federal regulations – energy MLMs can only operate in certain states that have deregulated energy markets.

So aside from Texas, Stream Energy has expanded to Georgia, New York, Pennsylvania, New Jersey, Maryland, and D.C. but they can’t expand nationwide. There are only 16 states with deregulated energy markets, so they’ve got some limits to their growth.

No fun parties, no sexy products – their associates arrange local meetups called “Business Presentations” to try and sign on new energy customers, so it’s pretty much as boring as it gets other than maybe Tupperware and vacuum cleaners.

However, it seems to be working for them. They’ve earned over $5 billion since they opened up shop.

Stream just signed on a new CEO this year, Larry Mondry. Dude’s been on their board of managers for years now, and he has an impressive track record as an executive in MLM. [1]

While the reps for energy MLMs will tell you signing on makes more sense and saves you more money, it’s not always the case. Some people claim they’ve been ripped off and scammed by energy MLMs, and in a market that’s not transparent or easy for consumers to understand, it’s definitely possible. [2]

Back in 2011, they even had a lawsuit filed against them alleging that they were a pyramid scheme (yawn, them and every other MLM). While Stream won the lawsuit, it was found that in 2008 more than 30% of their energy customers were also distributors.

Kinda shady, but nothing new for MLM.

But even if you can get over the shady deals, can you make any money?


So, they’ve got energy products. What does that mean?

  • AC and heating
  • Lighting and electricity
  • Natural gas

They claim their energy is clean, produced (at least in part) through wind and solar power. [3]

The only discernable difference between their energy and whatever energy company a person would normally deal with is price. But is it any cheaper?

That’s where it gets iffy. The advantage their distributors have is that it’s hard for customers to know if the product they’re buying will be cheaper until they’ve seen their first bill. Their distributors are actually trained not to discuss rates with prospective customers.

It’s obvious why. Some sources state that Stream Energy costs as much as 2 or 3 times state-owned energy companies. [4]

Reviews from customers give them only a 2.37 out of 5 though, with a lot of them complaining about the costs. [5]

But, if you sign on as a distributor and manage to make enough sales to recoup your costs, you definitely save money. You earn 25%-100% off your energy bill – if you’re really good at pimping yourself out to friends and family. That’s how they reel people in, and that’s why they’ve been accused of pyramid-scheme like activity. [6]

In addition to energy services, they offer:

  • Wireless services
  • Protective services
  • Home services


Sign-up costs vary by state but they’re upwards of $300, which is pretty hefty, plus a monthly fee to maintain a website.

They do give some good bonuses starting out, with the chance to get up to $400 in bonuses in your first 90 days if you enroll enough new customers.

After that, the profit may start to plateau if you aren’t really hustling.

The compensation plan is super confusing, but compensation on customers you personally enrolled paying their bills (Monthly Earned Income – MEI) seems to boil down to about $.50-3.00 a month for each customers. Chump change. Basically, you have to be able to get a ton of people signed up to make any money off MEI.

hjk ds

You can make money off your recruits, but they have to close a sale within the first 30 days. You also have to meet a certain amount of customer points each month to qualify for team bonuses (or for money on personal sales).

Team bonuses range from $25-100 depending on your rank, but for all bonuses your team member has to enroll a handful of new customers (up to 15 for some of the higher bonuses).

You can earn a bit more by enrolling commercial accounts if they use enough power (some of these larger accounts pay out $10-20 a month). Still not rollin’ in the benjamins.

Basically, you really have to build an empire to see any significant income, and that isn’t easy.

In 2008, the average take home pay for an entire year for a distributor was $174. Not even good side money.

In fact, the company banked a whopping $9 million in fees just from distributors who never made a single penny. So, basically, they’re profiting off you while you’re making nothing.


So, their product is definitely legit, but overpriced.

And they’re a little shady, a little too close to pyramid shaped for comfort. In 2008 they were adding distributors at twice the rate they were adding customers. [7]

But, who cares if they’re shaped like a pyramid, an octagon, or a star, as long as you’re raking in the commission checks, right?

Well, with the average annual income for their distributors being $174, this gig isn’t even enough to buy you a dollar menu breakfast every day, let alone provide you with financial freedom.

I’m not a Stream Energy hater, by any means. But when it comes to the income opportunity, it’s not hard to see that your time could be better spent elsewhere.

If you like automated ways to build passive income, there are better ways like this one.

(and you can trash those old MLM habits, too)


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