It’s All About The Margin

An energy broker will often save you money, but not always.  It largely depends on their margin.

Energy suppliers’ standard renewal rates are typically very expensive, so by getting a broker involved, and having them bring some competing suppliers into the equation, you should save money against simply accepting your existing supplier’s renewal offer. 

Brokers add a margin to your rates however, so the final unit rate is slightly higher than the absolute rock bottom rate that the supplier is willing to offer.

If a broker’s priority is to save you money (which isn’t always the case), their negotiations with suppliers should ensure that you always end up with the supplier that offers the best rates, however the broker’s margin does need to be considered.

As well as reducing costs, brokers also save you time, and provide a level of energy industry expertise which is often valuable throughout the contract term.

The key to getting value then, is to ensure that your broker’s margin is reflective of a number of factors:

1. The money they save you in negotiations

2. The time they save you by handling the tender process

3. The services they provide to you throughout the term of any contracts that they arrange

Tip: If you’re unsure what your broker’s margin is, ask. If they avoid answering the question, they may be costing you significantly more than you think.

Photograph Source: maitree rimthong on Pexels