Welcome to my review of the Utility Warehouse Discount Club business opportunity and an overview of the services provided to Customers.
This review is based on my own personal experiences as a FORMER Distributor (2009-10) and as on ongoing highly satisfied Customer since 2009.
Company Name: Utility Warehouse Discount Club
Address: Network HQ, 508 Edgeware Road, The Hyde, London, NW9 5AB
Executive Chairman: The Honourable Charles Wigoder
CEO: Andrew Lindsay MBE (Olympic Gold Medal winner, Sydney 2000)
Cost: £25 / £100 / £199.95 Depending on Distributorship
Business Opportunity Rating: 2/10
Customer Satisfaction Rating (My own): 8.5/10
Trustpilot Rating: 7.8 out of 10 based on 5662 Customer reviews as of August 2018
The Utility Warehouse Discount Club is a provider of landline and mobile telephone, broadband, gas and electricity services to UK households and SMEs. They have recently added home insurance to their portfolio and also provide a Cashback card (backed by Mastercard) which gives cashback on Customer’s monthly utility bills when used for shopping both in store and online with around 2000 partner retailers.
Utility Warehouse is a ‘virtual retailer’ which has no High Street premises and does no advertising. It utilizes a network of around 37,000 self-employed, independent affiliates (known as Distributors) to market its’ products and services through a Network Marketing (aka Multi-level Marketing) business model.
A BRIEF HISTORY
The Company started out in 1996 as Telecom Plus plc, originally selling a product called a ‘Smartbox’ which plugged into a standard BT telephone socket to route Customers’ phone calls through alternative networks to get them at a cheaper rate than through British Telecom. They also sold re-conditioned mobile phones with low cost tariffs.
In 1998, Telecom Plus was acquired by Charles Wigoder, the entrepreneur who created People’s Phone, the highly successful pioneer virtual mobile network. Wigoder won the Communications category in the London section of the UK’s Entrepreneur of The Year awards in 2001.
Under his leadership, the Company was floated on the London Stock Exchange, has consistently traded in profit and remained debt free, has seen its’ market share increase to over 600,000 Customers, was named Company of The Year at the Quoted Company Awards in 2009, has won Best Value For Money and Best Customer Service awards from Moneywise and the Which? Magazine Best Buy and Recommended Provider awards for each one of its core services – most recently for Broadband in 2018.
PRO’S AND CONS FOR DISTRIBUTORS
PRO #1 Can earn residual income without having to recruit other Distributors
PRO #2 Services everyone uses
PRO #3 Large growth potential (UK) as company has relatively small market share
PRO #4 Strong Customer satisfaction = excellent retention = income stability
CON #1 Low Commission Rates
CON ~2 Can’t earn money straight away
CON #3 Restrictions on how you promote the business – ‘Old School’ MLM
CON #4 Restrictions on your other business activities (can’t join other Networks)
CON #5 UK based business only, no opportunity to grow your business globally
CON #6 Lack of service availability in some parts of the UK
CON #7 Too much emphasis on MLM rather than Customer gathering
CON #8 Staggering amount of information to learn before approaching potential Customers
WHO IS THE UTILITY WAREHOUSE DISCOUNT CLUB FOR?
Basically, everybody in the UK who owns a phone, a fridge, a cooker, a kettle, a computer, central heating or a shower!
Customers have the convenience of having all of their essential services (except water) provided by a single supplier and only one bill to worry about each month.
Utility Warehouse does not claim to be the cheapest provider all the time but it does guarantee that its’ tariffs will remain in the lower portion of the market. They do not attempt to lure Customers with eye-catching, cheap short-term deals which then turn into expensive long term tariffs with complicated contracts. Their pricing is reasonable and consistent.
CUSTOMERS CAN EARN GREAT CASHBACK
The Utility Warehouse Cashback Card is backed by Mastercard.
Utility Warehouse has around 2000 partner Retailers ranging from eateries to jewellers, from hotel chains to supermarkets and DIY stores to activity day providers. When the card is used to make online or in store purchases with any of these partners, a percentage of the purchase from 1% all the way to 11% is deducted from the Customers utility bill the following month.
In 2013, we re-fitted our kitchen, bathroom and one of our bedrooms courtesy of Argos and Homebase – both Cashback partners – and Utility Warehouse actually credited our account with almost £400, wiping out our utility bills for the following 3 months!
The card is a ‘Top Up’ card and you top it up from your bank account any time you like. Effectively, it’s a credit card in reverse. You can’t use it if there’s no money on it and you’re not spending money you haven’t got and paying hefty interest.
As it can be topped up online or over the phone 24/7, simply estimate how much you’re going to need for your shop, top up your card, go shopping and look forward to a reduction on your utility bill next month!
The card can be used anywhere that accepts Mastercard, whether they are a Cashback Partners with Utility Warehouse or not. Obviously, no cashback will be given if they are not Partners but you still have the convenience of being able to use it anywhere in the World that takes Mastercard.
If you go on holiday it’s a very convenient place to put your spending money on an as-and-when basis and as it’s not connected to your bank account, your account will be completely safe if your lose your card.
UTILITY WAREHOUSE DISTRIBUTOR TOOLS AND TRAINING
When new Distributors pay their £100 joining fee (it was £200 in my day!) they are sent their Business Manual with all the T&Cs along with samples of promotional literature to hand out, more of which have to be purchased by the Distributor at his/her own expense when the initial batch are used up.
A replicated Distributor website is also provided. This looks and sounds great, but it is identical to every other Distributor’s website apart from your profile picture and a brief bio.
This means that Distributors will not be found online unless they pay out a small fortune in Pay Per Click advertising to compete with their fellow Distributors for the top spots in the search engines.
You will need to LEARN INTERNET MARKETING and have your own personal website to build your brand, with a link to your corporate replicated site where your new Customers and Distributors can sign up if you haven’t used the direct approach ‘old school’ methods or shelled out wads on PPC.
I remember the huge restrictions that Utility Warehouse placed on its’ Distributors using online marketing methods. In a way it’s understandable as it’s not unknown for MLM Distributors to use a little ‘poetic licence’ and Utility Warehouse have to protect the integrity of their brand. However, as well as all online content having to be submitted to Head Office for approval, they would charge an eye-watering £500 for looking through it to make sure it was ok!
TRAINING REQUIREMENTS BEFORE YOU CAN EARN MONEY
New Distributors are required to attend an induction training shortly after joining before they can qualify for commissions. This is not corporate training, but is carried out by experienced Distributors who have reached Leadership positions on the Compensation Plan.
Here, new Distributors are taught how to promote Utility Warehouse and when I did my training it was the usual old-school, groan-inducing ‘make a list of everyone you know’, etc, which is the cause of so much grief and failure in network marketing
The emphasis was entirely on MLM with ‘Don’t think Customer – think Distributor’ being the oft repeated mantra. There is logic in that in so far as if you sign up a new Customer they can become a Distributor at a later date and it wouldn’t necessarily be under you, rendering your previous hard work in getting them on board redundant.
In my humble opinion, this is an appalling dis-service to hard working Customer focused Distributors. Technology makes it very easy for a Customer who wishes to become a Distributor later on to be linked directly to the Distributor who originally referred him/her. This would prevent ‘poaching’ and should be the way forward IMHO.
I say that with the conviction of someone who’d had prior experience of Network Marketing, and who’s enthusiasm had been somewhat dampened by the experience. The very attraction of Utility Warehouse for me was the opportunity to build a residual income from the percentage commission I would earn on Customer’s monthly bills without having to go down that road of trying to ‘herd cats’ again.
MY PROBLEM WITH A DIS-HONEST APPROACH TO PROSPECTS
We’d be told by our Trainers to approach our ‘contact list’ from the angle of showing them how to reduce their household bills and, once we’d got them to agree to let us into their house, immediately pitch them with a MLM business presentation!
I had a major issue with that and I wouldn’t do it. I would do what I said I was going to do, and THEN I would follow it up by disclosing to them that I would earn a commission on their bills. After that I would tell them that they could earn that commission themselves by being their own Customer, if they’d like me to show them how. Some did, some didn’t.
That kind of ‘up-frontness’ was very important to me but when I told my Upline that’s what I was doing AND that I was taking ‘No’ for an answer, they were not at all happy and basically cut me out when I continually refused to ‘follow the system’ (or toe the line!).
SUPPORT FOR DISTRIBUTORS
I touched on the ‘support’ I had from Upline above. Very pushy people who acted more like Sales Managers in the corporate world than the Leaders they were supposed to be.
The Corporate support was much better. Within Network HQ there is a group of experienced Distributors with additional corporate responsibilities whose job it was to help and advize the Network with all aspects of the business. I always found them very helpful and knowledgeable.
LACK OF SERVICE AVAILABILITY CAN HAMPER DISTRIBUTORS
When I was a Distributor, I lived in rural North Wales, where some of the services were unavailable. We were on LPG as there was no mains gas available, mobile coverage was extremely poor on the network which Utility Warehouse ‘piggy backed’ on and many of the BT exchanges were still using the old LLX technology, rather than the upgraded LLU technology which meant that we couldn’t offer people the best deal for their landline phones.
LLU stands for Local Loop Un-bundled. Basically, it’s the ‘last mile’ of the connection from the Exchange to the Customer’s property. LLU means that the Customer’s chosen Provider manages connection all the way to their premises, whereas BT manage the ‘last mile’ of an LLX connection, incurring additional costs which are passed on to the Customer.
As Distributor commissions were paid on the basis of the more services the Customer takes, the greater the commission, these factors would have a negative impact on earnings and if a Customer only took one energy service, for example, no commission at all would be paid to the Distributor. That sucks!
SO HOW ‘INDEPENDENT’ ARE DISTRIBUTORS IN REALITY?
When you join Utility Warehouse, you are told that you are ‘independent’ and ‘self-employed’ but in reality you are little more than a commission only employed sales person.
Utility Warehouse will terminate your Distributorship if they find out you that you are working any other home based affiliate type business, even if there is no clash in terms of products and services.
There is logic in only being involved in one Network Marketing company, but that choice should be down to the individual and this restriction goes beyond involvement in other networks.
I became involved in another home based business opportunity which had nothing to do with network marketing and received a rather unpleasant and pompous letter informing me that I would be terminated if I did not immediately quit the other business.
I personally see no justification for this, especially since they would not legally be able to place any such restrictions on their corporate employees. It is tantamount to them acting like they own you the moment you sign on the dotted line and send them your cheque.
The result – I wrote back to them telling them where they could stick their Distributorshp!
WHAT DOES IT COST TO JOIN?
There are 3 ways to join Utility Warehouse as a Distributor. These are:
- Independent Distributor (ID) – £100 (Most common)
- Community Fundraiser (CF) – £25
- Independent Representative (IR) – £199.95
Let’s look at each of these in turn
- Independent Distributors gather their own personal Customers and can also build a Team of Distributors if they wish. An ID can earn a one off Customer Gathering Bonus of up to £50 depending on the number of services the new Customer takes. After this, ID’s are paid an ongoing residual commission on a percentage of the Customers monthly bill. This varies between 2 & 8% depending again on the services taken, but generally averages out at around £5 per month. Smaller commissions are paid as a percentage of their Team’s Customers, but as the Team grows and its’ structure develops, rank advancement bonuses are paid, as well as car and travel incentives. Pretty much standard practice throughout the MLM industry. IMPORTANT: IDs do not qualify for commissions until they have signed up 6 Multi-service Customers.
- Community Fundraisers are charities or community groups who can raise funds by encouraging their supporters to become Utility Warehouse customers. The commission rate is 5% ongoing and the £25 joining fee is fully refundable if 12 Customers are signed up in the first 90 days.
- Independent Representatives are business owners who can generate an additional income stream by introducing their customers, staff or contacts to Utility Warehouse.
MY FINAL WORD ON THE UTILITY WAREHOUSE DISCOUNT CLUB
Although this is a reputable company offering a completely legitimate business opportunity, I would give it a wide berth because of the poor commission rates and the stipulations for even qualifying for commission, the restrictions the Company places on its’ supposedly independent Distributors other business activities, the over-emphasis on MLM by the Network Leadership and their reluctance to support Customer focused Distributors and the negative impact that the lack of services in some parts of the Country have on the efforts and incomes of Distributors.
Customers are given an incentive to refer people, and this comes in the form of a £10 voucher for every new Customer when they join and every year on their anniversary. I tend to go for the M&S vouchers for their £10 meals for 2 with a bottle of wine!
All the new Customer has to do is quote the referring Customers account number when they sign up.
AT A GLANCE
Company Name: Utility Warehouse Discount Club
Address: Network HQ, 508 Edgeware Road, The Hyde, London, NW9 5AB
Executive Chairman: The Honourable Charles Wigoder
CEO: Andrew Lindsay MBE – Olympic Gold Medal winner (Sydney 2000)
Cost: £25 / £100 / £199.95 dependent on chosen Distributorship
Business Opportunity: 2/10
To join Utility Warehouse as a Customer, either visit their website and click on the Contact Us tab, then scroll to the bottom and fill in the online contact form, or phone them on 0333 777 3212 (local rates apply)
PLEASE QUOTE REFERENCE: 4624517
If you are looking for a business opportunity which is TRULY home based and can be built on your computer, or you are a Network Marketer struggling with the ‘old school’ methods of growing your business and want to build your personal brand online without having to harass friends, family and neighbours then check out my Number 1 recommended product here.
I would also love to hear from existing and former Utility Warehouse Distributors and potential Customers. Please give me your thoughts on this review in the comments below.
Thanks for stopping by!