23 Nov Brokering Busted – Do you know what you’re paying for?
Each week we’ll be peeling back the shroud of secrecy across the energy industry and giving you insight into the inner workings of energy brokering so that you have the power to make an informed choice and save yourself money on your gas, electricity and water bills.
As a savvy business owner or director, you wouldn’t purchase goods or services without knowing the price first. So why would you use a broker if you didn’t know the full picture. You need to be armed with the facts so you have the power to make an informed choice.
First you need to understand how Energy Brokers make their living. Whilst some would have you believe they work for free, the reality is rather different. After all there’s no such thing as a free lunch, and there’s no such thing as free energy brokering.
Some Brokers will negotiate a fixed fee for their services and invoice you accordingly. However the vast majority put food on the table through commission paid by the energy supplier who wins your contract.
Now here is the kicker… the commission comes out of your pocket and not the supplier’s. The supplier will quote a “base” price to the broker. The broker will then add an uplift which forms their commission.
Now there is nothing wrong with a broker adding an uplift – after all we are providing a service to your business. We locate the cheapest prices, provide a comparison, take the hassle out of securing the contract to ensure things run smoothly.
The problem is when a broker adds too much of an uplift.
Luckily most suppliers have a hard limit as to how much uplift you can apply, and ask for justification if it’s on the high side. Brokers have various ways of “adding value” to justify these additional costs to you.
Question is – do you actually need the “value” they are adding? Wouldn’t you rather you just had the cheaper price in the first place?
So how do you spot some of the tricks of the trade and bag yourself the most competitive price possible? Here’s some of the usual suspects…
Supplier Conflict Resolution
So, there’s a problem with your account and your energy supplier has screwed up. Maybe they haven’t bothered to bill you, or have billed you using meter readings that bear no semblance to reality. Even worse they’re chasing you for debt that isn’t even yours and threatening to send the heavies around.
Trust us, after years of working in the complaints department for one of the Big Six, we’ve seen just what can go wrong when a billing system has an off day. The good news is energy suppliers have teams of talented individuals who work tirelessly to resolve these issues.
Problem is by the time you stumble across one of these superstars you’ll be hearing the hold music jingle in your sleep and your patience will have worn thin from explaining the same thing ad infinitum. Even when you’ve found yourself a gem it helps to know the lingo to get things sorted. Who knows; you might even get a good-will gesture for your troubles.
There’s usually two schools of thought in the broker world. One is to leave you high and dry to sort out the problem yourself – after all we’ve brokered you a cheaper price, we’re experts in the market, not the intricacies of back-billing regulations. The second is a small insurance policy of sorts. A broker will add a premium to your unit charge to cover the possibility that something might go wrong and the time that they’ll spend fixing it.
We think this is WRONG. We recommended the contract to you, therefore we stand by it. If something goes awry we fix it for no extra charge. We don’t add a premium to your unit rate on the off chance we might be called upon and we don’t bill you extra. We’re proud of our recommendations – after all it’s our reputation on the line.
Energy Efficiency Consultation
“Get your free energy audit today!!! Let us review your energy use and save you £££’s on your bill. Our energy experts will produce a dazzling report telling you exactly how you can cut your carbon footprint and save a fortune”…
Sound familiar? It should do – after all lots of businesses want to do their bit to save the environment and what could be better if you’re saving money too. How nice of these Energy Broker’s to offer this service to me free of charge.
The harsh reality is that the free energy audit is, in most cases, a vehicle for the Energy Broker to get their foot in the door and review your bills, sign you up to a contract and get paid. Even worse it may be used as justification to add a small premium to your price.
Is your Energy Broker qualified? Do they have a Level 4 Diploma in Energy Assessment, with an additional Level 3 Diploma to expand their practice to non-domestic energy markets? Chances are they’re not and are simply using information gleaned from our good friend Google, for free. The same information you could find yourself if you had 10 minutes spare.
Some businesses can benefit greatly from energy efficiency technology. However, if you run a small business it’s mainly common sense – switch out old lighting for LED’s and don’t leave the heating on all year round.
We’re not experts in energy efficiency so we don’t pretend otherwise. We are experts in finding the right energy contract for your business. That’s why we bring in the specialists… If we think you can benefit from energy efficiency advice, audits, technology, training, funding or a conversion of your property’s lighting to L.E.D. then we’ll refer you to one of our partners. We deliberately don’t take a commission for this referral, so you can be confident we have your best interests at heart.
Energy Management Technology
Energy Management software can be incredibly useful. There’s a huge industry providing astounding technological solutions to track consumption in real time, control your air conditioning and lighting, build simulations and accurately forecast for industry triad charges. It’s all super impressive and undoubtedly extremely valuable to certain businesses.
Some of our competitors offer Energy Management software as a value-added service. Sometimes this is as an additional subscription payment, other times it’s paid for by adding a premium to your unit rate. You may absolutely benefit from it as many large organisations do. But ask yourself three questions.
1. Does anything really come for free.
2. Do I need to be paying for technology I have no use for.
3. Could I be funding the technology that someone else is using through my higher unit rates?
We can’t say we are experts in Energy Management Technology…so we don’t.
We can say that for some businesses Energy Management Technology can be extremely valuable.
We can resoundingly say that we keep our prices super low because we don’t have to fund any of the technology ourselves!
Contact us today for a brief chat about how we can save you money. Simplicity for us equals cheaper prices for you: