The American Communication Network, or ACN, was founded in 1993 in Concord North Carolina. It was started by a bunch of guys who had ‘countless years of direct sales experience’. Based on their own dissatisfaction with other MLMs, they decided to start one themselves.
ACN now has a global network of Independent Business Owners (IBOs), who promote their services through their network marketing system. They are now the largest direct seller of telecommunications in the world. We’re not sure who is the 2nd largest or if there are any others using MLM to sell these services.
Here at The Finance Guy, we believe that you can't make money with network marketing, but let’s see how they go. In this full review of ACN, we’ll find out if you can make money, or if this just another network marketing scheme.
What Does ACN Do
ACN services include phone, internet, gas, power, tv, security, and more. ACN doesn’t limit their services to residential, they also supply their services to businesses. To us, it looks like ACN offers most of your monthly home and business services.
These are services which are used in almost every home in the modern world. There’s no doubt that there’s a huge market for these services, the only question is, can ACN capture a significant market share.
What is the ACN Opportunity
To find out more about the ACN opportunity, we watched this short video:
The video explains that this is your opportunity to earn an income from the essential services that everyone uses. It’s a ready made online business. There’s a global market of almost $2 Trillion, this is your chance to be a part of it.
We all use at least one of the ACN services, so if you join, and find just 5 friends to also join, you might get these services for free!
The ACN opportunity doesn’t end at free services, you can also earn residual income with ‘your own online ACN business’. Every time one of your referrals pays a bill, you’ll get a commission. It doesn’t end there though, you can also earn from their referrals. This is what MLMs call a ‘downline’.
The video ends with some information about the charitable work done by ACN in feeding hungry children. While this is a worthy cause, we still want to know more about how this opportunity works.
We decided to look through the official ACN opportunity page. Along with the above video, they also give us some information. We found out that ACN gives us a chance to be part of ‘the you economy’. It then repeats what we heard in the video. If you refer people, you get paid every time they pay a bill. If they refer their friends, you get even more.
The opportunity page then tells us that if we join ACN, we will have the support of our upline. Even though we are building our own downline, we don’t have to do it alone. This is a purported benefit of joining any MLM. We still need to understand how ACN is going to make us wealthy.
How do You Make Money with ACN
To find out the answer to this question, we looked at the 2019 ACN compensation plan. This document explains all the ways to earn commission as an ACN IBO, as well as what you need to do to earn it.
The first thing they tell us, is that ‘your goal should be to work through the earned positions’. To help us understand how to do this, they provided this diagram:
What we see here, is that to climb the ranks, you need to build a downline. The more you can get your downline to spend with ACN, the better. It looks like the best way to grow as an IBO, is to recruit new members to become ACN IBOs. For us, this raises Red Flag 2 - Promotion Through Recruitment
Monthly Residual Commissions
They tell us that over time, this will be your main source of residual income as an ACN IBO. It is the income that you will start to earn, when your recruits start building their billings. In effect, you are getting paid a commission for the work done by the people in your downline. According to MLM theory, this will eventually go onto autopilot as the system keeps growing from the effort of those in the downline.
As as you acquire your own customers, you can earn between 1% and 10% commission on their monthly bills. The amount of commission you can earn, depends on how many customers you have signed, as shown below;
As we can see from the image above, your personal commissions will increase as you acquire more customers. This is something we find refreshing about ACN, as they are making an effort to encourage retail sales. Having said that, earning less than 5% hardly makes it worthwhile, so some IBOs might not bother trying to acquire 39 customers for 1%-3%
Overriding Residual Commission
These are commissions paid on the bills from people in your downline. This includes people you recruit, people they recruit, and all their customers. The table below is ACN’s attempt to explain residual commissions:
While this table may not be overly informative, we can see a total of 23% in total commissions on 7 levels plus some generations of RVP and SVP. This lucrative compensation plan may look good, but these 23% of commissions are included in the prices ACN charges.
If you sign up for any service, then close to 1/4 of your ACN bill is going to people above you in the MLM. This would make it difficult for ACN to offer competitive services to the end customer. After all, they have to pay these commissions on top of their own costs and they still want to make a profit.
Customer Acquisition Bonuses
While this may sound like a commission for signing on new customers, it isn’t. This bonus is paid when people you sponsor level up within 30 days of joining. It’s what most other MLMs would call a ‘fast start bonus’. It’s designed to encourage new recruits to get going as quickly as possible. In our review of WFG, we discovered that this is referred to as ‘tap-rooting’.
The idea is to get IBOs to recruit while they are still new, and before they lose enthusiasm. WFG also found that IBOs who have recruited at least one new member, become less likely to quit the MLM
The compensation plan goes on to explain the points system available for selling various services. However that would only be relevant to your own area, so if you care enough to know, go ahead and look it up :)
Are ACN IBO’s Making Money
Sadly, the only version of an ACN disclosure, we could find was the image below, which was part of the video we shared above:
While there is very limited data, this disclaimer does raise some concern. For one, it suggests that that the inferred ‘dream’ results of the ACN opportunity, are only available to less than 1% of IBOs. Further there decision not to show us the real IBO earnings, leaves us thinking that less than 1% of ACN IBOs are making money.
Why is it Difficult to Make Money With ACN
We believe that the problem is not unique to ACN. MLM as a business model is flawed. In his book, Multi-level Marketing Unmasked, Jon Taylor found that 99.7% of people who join direct selling companies end up losing money. Despite what you hear in the sales pitches, it is highly unlikely that you will make money from any network marketing company.
MLM is a way for companies to sell products without employing a sales force and without having to spend money on traditional advertising and promotions. Instead they build a network of loyal believers who are willing to pay unusually high prices for the added hopes and dreams of financial freedom.
While the compensation plan may look generous, you should remember that all those commissions are included in the price. If you sign up for a service through ACN, then 23% of your bill will go to people in your upline as commission. As a customer you are paying for the compensation plan to the MLM as well as an additional margin for ACN to cover costs and turn a profit.
ACN consumer reviews, suggest that their services are overpriced and of lower quality. Several customers have complained about being unable to cancel services once they were unhappy. Others are claiming that ACN is a scam.
Is ACN an Illegal Pyramid Scam
Even though MLMs closely resemble pyramid schemes, they are not illegal. The reason dates back to the 1979 case of Amway vs the FTC. After 4 years in court Amway was found to be offering a business opportunity, rather than a pyramid scam. The technicalities came down to wording in their paperwork. One example requires IBOs to make retail sales.
The Amway ruling effectively opened the doors for all other MLMs to operate within the law. However we should remember that being legal doesn’t make it ethical.
Having said that, back in 2005, the Australian courts ruled that ACN is a pyramid Scam. We’re not sure how they changed their structure since this ruling, but ACN is still operating in Australia.
As always, we’d love to hear what you think in the comments section below, especially if you an share your experiences with ACN
Are you wondering if you can make money in an MLM? Check our our list of mlm reviews before you join. If you find one that’s not on the list, let us know and we’ll do our best to write a review