Power Home Remodeling is a home improvement company that offers roofing, siding, windows, doors, gutters, and other exterior remodeling services. The company operates through a network of sales representatives who go door-to-door to generate leads and sell remodeling projects.
Some people have questioned whether Power Home Remodeling uses a multi-level marketing (MLM) model, where sales reps recruit new reps and earn commissions on their sales. Let’s take a closer look at how Power Home Remodeling’s business model works and whether it can be considered an MLM company.
What is Multi-Level Marketing?
Multi-level marketing (MLM) is a controversial business strategy where a company recruits independent distributors who both sell products to earn commissions and recruit new distributors to build “downlines.” Distributors earn bonuses and commissions not only on their own sales, but also on the sales of people they recruit.
Some key characteristics of MLM programs:
- Distributors purchase inventory from the company to resell.
- Distributors earn commissions on product sales.
- Distributors recruit new distributors and earn bonuses on their sales.
- Commissions flow upline to multiple levels of recruiters.
- Focus is on recruiting new distributors rather than just selling products.
Prominent MLMs include companies like Amway, Herbalife, Mary Kay, and others selling products in categories like wellness, beauty, and home goods. MLMs are controversial because they resemble pyramid schemes, where people earn more money by recruitment than product sales. The vast majority of participants (99%) end up losing money in MLMs.
How Power Home Remodeling Works
Power Home Remodeling operates differently from a typical MLM in several key ways:
- Sales reps do not purchase or distribute any physical products. The company sells remodeling services, not goods.
- Reps earn commissions solely on sales closed, not on recruiting new reps.
- The company completes all remodeling work using its own employees.
- Reps focus on marketing and sales, not performing installation or construction.
- There are no layers of distributors earning passive income on downline sales.
Here is a more in-depth look at how Power Home Remodeling works and how reps earn money:
Door-to-Door Lead Generation
Sales reps go door-to-door in assigned territories to meet with homeowners and promote Power’s remodeling services. They present brochures, give estimates, and try to sign people up for free in-home consultations. Reps obtain leads and appointments for the remodel sales team.
Appointment Setting
When a homeowner agrees to an in-home consultation, the sales rep schedules an appointment. A professional remodel sales consultant will then visit the home to assess needs, take measurements, and provide a full proposal.
Sales Commissions
If a homeowner agrees to a remodeling project, the sales rep who generated the lead earns a commission. This commission is based on the price of the sale. The more sales a rep closes, the more they earn in commissions.
Recruiting
Sales reps can choose to build teams and recruit new sales reps. They earn smaller commissions on sales made by reps they recruit. But there are no layers of downlines, only direct recruits. And reps cannot earn passive income on recruit sales without generating their own sales.
Why Power Home Remodeling is Not Considered an MLM
After analyzing how Power Home Remodeling works, here are several reasons why it does not match the MLM or pyramid scheme model:
No Required Product Purchases
Sales reps never have to purchase home remodeling products or inventory. With true MLMs, distributors typically have to buy products they then resell.
Commissions Only on Direct Sales
Reps earn commissions solely based on their own personal sales and lead generation activities. They do not earn override commissions, bonuses, or royalties on downline recruiting.
No Recruiting Requirements
While reps can choose to build sales teams, recruiting new reps is optional. Reps can earn unlimited income from their own sales efforts without recruiting anyone.
Revenue Driven by Sales, Not Recruiting
The focus is selling remodeling projects to homeowners, not just expanding a sales team. Revenue comes from completed home improvement projects, not onboarding fees.
No Passive Income
To earn money from a recruit’s sales, the manager must also be actively selling. It is not possible to earn passive income from recruitment alone.
No Inventory Purchases
Since Power Home Remodeling provides a service, there is no inventory or product packages for reps to purchase and resell at a markup.
Low Startup Cost
To become a sales rep costs very little. The main startup costs are a training fee and professional wardrobe for sales calls. There is no pressure to invest heavily upfront.
Conclusion
While Power Home Remodeling does rely on direct selling through an independent sales force, the business model shares little in common with classic multi-level marketing companies. Reps earn commissions from sales, not recruitment. There are no downlines, passive income, inventory loading, or other hallmarks of pyramid schemes. Legitimate MLMs focus more on selling product, rather than just enrolling new distributors. But the emphasis at Power Home Remodeling is clearly selling home remodeling projects directly to homeowners in a given territory.
Frequently Asked Questions
Is Power Home Remodeling an MLM or pyramid scheme?
No, Power Home Remodeling is not an MLM or pyramid scheme. Reps earn commissions solely from sales and not from recruiting. There are no downlines, inventory loading, or fees from signing up new reps.
Do you have to recruit to make money with Power Home Remodeling?
No, recruiting is optional. Reps can earn unlimited commissions based on their own sales without ever recruiting. Recruiting simply allows reps to earn smaller override commissions on direct recruits’ sales.
What do sales reps earn commissions on?
Sales reps earn commissions when they close sales of Power Home Remodeling services. Commissions are based on the dollar value of remodeling projects sold.
Can you earn passive income?
No, all income is based directly on your own sales. You can only earn commissions from recruits by continuing to sell yourself. There is no passive residual income.
Do you have to buy any products or pay fees?
No, the only costs are a small training fee and professional clothing for sales calls. Reps do not have to purchase any products, inventory, sales kits, or pay any recurring fees.
Is there inventory loading?
No, since Power Home Remodeling provides services and not products, there is no inventory loading. Reps do not have to purchase any goods to resell.
Power Home Remodeling’s Commission Structure
To provide more insight into how sales reps earn money, here is an overview of Power Home Remodeling’s commission structure:
| Sales Volume | Commission Rate |
|---|---|
| $0 – $12,000 | 8% |
| $12,001 – $35,000 | 10% |
| $35,001 – $55,000 | 12% |
| $55,001+ | 15% |
- The sales volume is the total value of remodeling projects sold.
- Commission rates increase with higher monthly sales levels.
- Commissions apply only to a rep’s own personal sales.
Additional commission bonuses:
- Add 2% for exceeding $100,000 annual sales volume
- Add 3% for exceeding $250,000 annual sales volume
- Add 5% for exceeding $500,000 annual sales volume
On direct recruit sales:
- Managers earn 3% override on 1st generation recruit sales
- Managers earn 1% override on 2nd generation recruit sales
The compensation plan rewards reps for higher sales volumes with escalating commission rates. And managers can supplement income with small overrides on direct recruit sales. But recruits do not provide passive income, as the manager must actively sell to earn on recruit sales.
Requirements to Become a Sales Rep
Power Home Remodeling has a low barrier to become a sales representative. The main requirements are:
- Minimum age of 18
- High school diploma or GED
- Valid driver’s license and auto insurance
- Pass background check
- Complete training program
The training to become a Power sales rep includes:
- One week of virtual onboarding and orientation
- Three weeks accompanying managers on calls
- Two weeks of classroom training
- Field training completing test lead gen calls
Power provides all the training needed to be successful. Many top reps have earned six figure incomes without any prior sales experience.
The small upfront costs to get started are:
- $200 training fee
- Professional clothing for sales calls
- Reliable vehicle
- Smartphone
With the low startup costs and no experience required, becoming a Power sales representative is quite accessible. Reps have the potential to earn high commissions without taking on significant financial risk.
Pros of Working as a Sales Rep
Here are some advantages to becoming a sales rep with Power Home Remodeling:
- Ability to earn high commissions and income
- Low startup costs and financial risk
- No prior sales experience required
- Complete paid training provided
- Flexibility to create your own schedule
- In-house financing makes sales easier
- Recession-resistant industry
- Ability to advance into sales management
The combination of high earning potential, low upfront investment, flexible scheduling, and room for advancement makes becoming a Power sales rep an appealing opportunity for many.
Cons of Working as a Sales Rep
There are also some potential downsides to consider:
- Commissions fluctuate based on sales volume
- Door-to-door lead generation can be grueling
- Commission-only pay (no salary safety net)
- Long hours, evenings, and weekends may be required
- Lots of driving within an assigned territory
- Requirements to attend regular sales meetings
- High-pressure sales environment
- Lack of employer-provided benefits
The most lucrative sales reps put in long hours going door-to-door to obtain leads. The commission structure can also cause income to ebb and flow. The lack of a steady salary and employer benefits also carries risk. Lead generation and sales isn’t easy. Power Home Remodeling offers high income potential for salespeople willing to work hard and deal with rejection.
The Verdict: Legit Opportunity, Not an MLM
In summary, while there are some drawbacks, Power Home Remodeling provides a legitimate opportunity for salespeople to earn high commissions in the home improvement industry.
Despite relying on direct selling, the compensation model is driven by sales commissions, not downline recruitment. This differentiates the company from pyramid schemes masquerading as multi-level marketing.
Reps earn based on sales volume, not layers of distributors or passive income. There is also minimal financial risk thanks to the low startup costs and no inventory purchases required.
Overall, Power Home Remodeling represents a compelling income opportunity for sales-minded individuals without requiring participation in a suspicious MLM downline.
