How Does ACN Networking Work?

by Tom Streissguth; Updated September 26, 2017
Working and talking on the phone.

One of the top firms in the multilevel marketing sector is the American Communications Network, which was founded by four partners in 1993. Through a network of independent, commission-based sales reps, ACN markets internet, television, utility and phone services. Although the earnings potential is high and the company earned a ringing endorsement from "The Celebrity Apprentice" host Donald Trump, ACN has also come under scrutiny from state business regulators.

Multilevel Basics

The multilevel marketing, or MLM, strategy employed by ACN involves a network of sales agents who have two primary goals: selling products or services and recruiting new agents. With commissions earned by the agent through his own sales and the sales of newcomers he's brought into the business, the income potential is high for those who can recruit, sell and persist. ACN and other MLM businesses charge a fee to join the operation; the tiered fee structure goes higher when the agent takes on the greater responsibility -- and potential greater revenue stream -- of a team trainer.

Locations and Services

Since its founding, ACN has expanded its geographic reach as well as its service offerings. Independent business owners -- or IBOs, as the company labels them -- now work in the United States, Europe and the Asia/Pacific region, offering phone and wireless service, television subscriptions, electricity and natural gas service, security systems and home automation. Once signed on, a customer or client of ACN selects from a menu of services from third-party providers such as satellite TV services or utility companies. The customer can pay for the service through ACN's website or by mail. The sales rep who brought the customer in earns a percentage of the dollar volume of the services purchased.

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Moving Up

A team trainer has the additional task of recruiting new agents into the ACN model. Based on the commissions earned and the customers signed by her team, a trainer can earn promotions to executive team trainer, executive team leader, team coordinator, regional coordinator, regional vice president and senior vice president. In the meantime, she earns additional percentages from the billings earned by her own recruits. In its website copy, ACN promotes the idea of high earnings and financial independence based on an agent's initiative and drive; emphasis is also placed on meeting the everyday needs of the network's customers. At the top, the most successful ACN agents have a chance to join the Circle of Champions.

Controversies

Multilevel marketing has drawn criticism, with some business observers viewing these structures as pyramid schemes designed solely to enrich the founders and early members as the later members join and pay their entrance fees. ACN has established itself as one of the larger MLM businesses but has also come under scrutiny from state regulators. The Montana Securities Commissioner filed a cease-and-desist order against the company in 2010, but eventually Montana and ACN settled the matter and the order was vacated. Hopeful recruits to an MLM business should always consider the risks of an initial investment that offers no guarantee of a return for their time and effort.

About the Author

Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.

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