Utility Warehouse: Top 3 Questions Answered
Want to find out more about Utility Warehouse and the Utility Warehouse business opportunity? You have come to the right place! In this article, you will get answers to the top 3 questions that are asked by people interested in Utility Warehouse.
1. Why does it cost £100 to sign up as a distributor?
This is an entirely reasonable question. A salaried job would not require a sign-up fee, indeed such a fee would mostly be unreasonable. Freelance individuals registering with an agency are typically required to pay an administration fee particularly if the agency is also a professional body. The Utility Warehouse business opportunity however is not a salaried job, it is effectively a franchised operation. To give a parallel, McDonalds is the most famous franchised operation in the world. It costs upwards of £200,000 to register as a McDonalds restaurant and to have the right to use the company’s logo, branding and cooking methods. It typically takes 3-5 years before a McDonalds franchisee is able to see a return on their investment.
The £100 that is required by Utility Warehouse head office for an individual to become a Utility Warehouse distributor is a fully refundable deposit. It exists for many reasons:
- Barrier to entry. Only serious individuals are going to put £100 on the table. Those with a passing interest will quickly be eliminated.
- Incentive. It is crucial that as a Utility Warehouse distributor, you get off to the best possible start. It is similar to fishing: if you catch something on your first go, then you will be enthused and continue to fish. This initial momentum is vital in your Utility Warehouse business. Once you sign up 3 qualifying customers within your first 60 days, you receive a full refund of the deposit.
- Ownership and responsibility. It is important that as a Utility Warehouse distributor that you get into the mindset of a business owner. Having made an initial outlay, and received your pack of materials, registered for online and face to face training you will begin to grasp this concept, subconsciously at least.
2. Is Utility Warehouse a pyramid scheme?
This is a great question, partly because there is a widespread misconception about the meaning of the term ‘pyramid scheme’ . Taking it literally, every company in the world with more than one employee is a pyramid. There is an owner or proprietor, then there are the board of directors. They each have a team of managers who in turn manager a larger group of employees. Those employees produce items or services for a much larger number of customers. This is a pyramid:
What is often meant by this questions is actually ‘is this a Ponzi scheme’ (or other unsustainable business model). This is a scheme where money is paid for a position in a structure, often a pyramid. There is no actual product or service supplied in return for the money. Such schemes are unsustainable and eventually most people lose out. These schemes are immoral, unethical and are illegal in many countries. Wikipedia entry here. Furthermore, a pyramid scheme is always about rewarding the business opportunity first, not about products. The Utility Warehouse business opportunity is all about product first. As your mentor, I am not rewarded for recruiting you until you have started to gather customers. There is only an incentive for me to recruit people who are willing and able to put an effort into making a success of their Utility Warehouse business. Similarly, if you recruit a distributor yourself, you will only be rewarded when they successfully gather 3 ‘gold status’ customers.
Utility Warehouse is an entirely ethically led company. They are listed on the London Stock Exchange (trading as Telecomplus PLC) and are in the FTSE 250. They were even awarded best performing share award in 2011 with an impressive growth profile. Furthermore customers of Utility warehouse are provided with an actual service – their utilities so there is a tangible product. The £100 distributor deposit is used by the company to pay for the classroom training, maintenance an upgrade of online training and the box of initial training materials the each new distributor receives. Once the new recruit has started to gather customers they then qualify for a refund of their deposit. Utility Warehouse then return the £100 in an effort to incentivise them to continue gathering customers. The company of course start to make a profit from those customers who have been gathered.
3. What are typical earnings of a Utility Warehouse distributor?
The commission structure is based on an ethical policy of making sure that customers are happy and cared for. Therefore there are no large up-front bonuses. The initial gathering bonus for any new customer is currently capped at £40. The lucrative element of The Utility Warehouse commission structure is the ongoing monthly payments. Each month when a customer pays their Utility Warehouse bill, a small percentage (typically approx. 3.5%) is then set aside for the distributor who signed them up. On 21st of the following month, this slice is then paid to the distributor as ‘CVC’ Customer Volume Commission. This amounts to around £5 per month per customer for a typical 4-service customer. (4 services could be Gas, Electric, Telephone and Broadband). Mobile phone is available too.
Once a distributor has gathered 100 customers, they could typically expect to receive £500 per month, depending on the quality of the customers that they have gathered. This level can take around 1-2 years to achieve.
I hope that has been of some use to you while considering the business opportunity that Utility Warehouse has to offer. Please do comment if this was helpful or if you have a question, I read every one!