What Does It Cost?
Energy broker costs vary. If they charge you a direct fee, or a percentage of savings, then the costs are easy to see. If they’re paid a commission by the energy provider however, which is by far the most common method, then it depends on their margin.
Prior to requesting offers from suppliers, your broker will consider the amount of work involved in tendering and price negotiations with suppliers, as well as any additional services they’re going to provide throughout the term of the contract.
They then ask each supplier to add a commission uplift to their contract offers. The cost of using a broker then, is the difference between the supplier’s ‘base rate’, and the rate they offer to you.
We have a separate post about how to calculate your brokers fees from their commission rate, here.
When In Doubt, Ask
Since every broker, supplier, client and contract are different, the costs are bespoke to each situation. It’s important to know that you’re receiving value for money though, so speak with your energy broker about your requirements, provide whatever information they need, and ask them to quote you for their services.
If they claim to offer a free service, or that the energy suppliers pay their fees (without disclosing that the fees are then added to your bills), it should be a red flag, as it suggests they don’t want to admit what they intend to charge you.
If you wouldn’t accept this from any other business, don’t accept it from an energy broker.
Tip: Get the question of costs out of the way early. Tell any energy broker that you speak with what you need from them and ask for a quote for their services in writing.
We’re always looking for opportunities to compete for business, so if you’d like a no obligation quote, let’s talk.
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