The deregulation of energy doesn’t just bring more choice to consumers—it brings business opportunities to thousands of retail energy brokers across North America.
At Broker Online Exchange, we’ve witnessed everyday people start energy brokerages and find success within months. Next thing you know, they’ve hired brokers to work for them, and they’re talking expansion.
And stories like that aren’t rare since energy deregulation first began in the United States.
But success like that requires knowledge and foresight. These business owners must face hidden expenses at every corner: when they’re starting up, during an expansion—and every time they price a deal.
The real key to success is minimizing these hidden expenses so your company can grow unfettered. In this post, we’ll discuss some common expenses and give you strategies to reduce them.
Licensing fees add up quickly. Depending on your target territory, you might pay thousands of dollars. Some states even require high-cost bonds to obtain licensing.
Not only do the fees add up, so does the paperwork. And you have to deal with the bureaucracy of local government agencies. In short, it takes time, frustration and intense determination.
Now imagine if your business takes off. You’ll have to deal with licensing for your staff. And every time your company expands into a new territory. You can see how these time and financial burdens add up quickly for an energy brokerage.
Swamps of Paperwork
One thing many independent energy brokers overlook when beginning their own firm is the amount of paperwork. There’s tons of it. Every. Day.
There are contracts with suppliers, contracts with prospects, contracts with customers. There are contract revisions. Contract addenda. Third-party verifications. You need to get paperwork from your prospects to your supplier. It’s an endless vacuum inhaling your sales productivity.
A little paperwork doesn’t sound that costly at first. But it is. It takes hours of your day. Hours you could spend prospecting and closing deals. But instead, you’re crossing T’s and dotting I’s.
Unfortunately, as the industry grows so do the con men. Several energy partners out there that want to exploit brokers.
There are suppliers who prey on the unestablished broker by offering them unprofitable splits. There are brokerages who’ll eat up over half your commissions. There are even energy broker networks that will give you access to more suppliers, but ‘pad’ your pricing so much you can’t sell the stuff. Some people even tell stories of suppliers and energy networks stealing their customers.
As an energy broker network ourselves, we’re very aware of the cons our brokers have seen. Take the padded pricing, for example: many brokers don’t mind the idea at first – they still get commissions, after all – but they almost never know how much their prices are padded. Well, most brokers eventually find out when they start losing sales to their competitors.
The takeaway here is to demand transparency. Read your contracts closely. Don’t work with companies who won’t explicitly state your commissions split or how much they pad the pricing. If they’re disguising this, they’re probably up to no good.
How to Reduce Your Hidden Expenses
If you take on the energy market alone, you’re stuck with a boulder of expenses on your back.
So how do you ease the hidden expenses of deregulated energy sales?
Through a partner like Broker Online Exchange. We’re the largest energy broker network in North America, giving you instant access to all major suppliers in all deregulated markets. We offer several unique advantages to reduce your businesses costs so you can expedite growth:
- You can piggyback off our licensing. Don’t waste your time and money getting licensing when you can use ours.
- Automated software to avoid tedious paperwork. We offer contact creation software that gets the job done. It’s designed with energy in mind, so it meets all your needs out of the box.
- A world-class business support team. We’re here to help you close deals. We’ll help you cross the T’s and dot the I’s so you can spend more time selling energy.
- Transparent pricing structures. We always give you the raw rates from suppliers and we share the commissions with you. No surprises. No hidden fees. We’re 100% transparent so you know you’re not getting conned.