Erie Chamber Blog
Monday February 15, 2021 

What’s the actual difference between an energy supplier and an energy broker? Choosing the right group to partner with can unlock significant savings for your business. It’s worth understanding the difference between suppliers and brokers and the advantages of working with each. This can help you better strategize for your needs and enjoy the peace of mind that comes with having the right plan in place.


What Does a Broker Do?

Brokers are essentially a liaison between supplier and customer. They have industry experience and relationships with suppliers, and deep knowledge of pricing and contract structures. When you hire a broker, they reach out on your behalf and obtain quotes from multiple suppliers. Your broker will then analyze and compare these quotes before advising you on which quote to consider. 

Brokers charge fees for their services and the fee structure can vary from broker to broker. Typically, brokers tell suppliers the fee they charge and embed it into the contracted rate. Then they get paid by the supplier depending on the customer’s consumption. So, it’s essential when working with a broker to understand exactly how much they’re charging, what their fee structure is and what services are included for that cost.

Hiring a broker creates a layer between your business and energy suppliers. Businesses that are reluctant to manage quotes or negotiate costs on their own sometimes outsource the buying process to brokers, who are skilled in translating complex energy contracts into plain English. Trusting a broker with your energy strategy will come at a premium. However, they should provide value by differentiating both themselves and the suppliers they work with.


What Does A Supplier Do?

Even when you work with a broker, you are actually buying energy from a supplier. Depending on the location of your business, you may have your choice of several suppliers, each of which offer different products, pricing and advisory services. Part of a broker’s job is to help compare offerings from these different suppliers. But business owners also often deal directly with suppliers. In such cases, a lower total cost for energy may in fact be possible because neither buyer nor seller must compensate a broker for facilitating the transaction.

For this reason, suppliers are incentivized to create transparent products that business owners can understand without the help of a broker. Many suppliers employ teams of experts who specialize in communicating sophisticated energy products in straightforward terms. Every client is typically paired with a dedicated account executive, for example, and market strategists are also kept on staff to develop customized strategies according to each client’s needs.

While working directly with a supplier may require business owners to become more involved in the buying process, it can pay off. Suppliers are incentivized to help business owners develop creative, cost-effective solutions to their energy needs, and in fact many suppliers offer services beyond energy, including non-commodity solutions to help reduce consumption.

In addition, suppliers are increasingly cognizant of the growing interest in renewable energy and efficiency. Business owners interested in green energy may find that working with the right supplier can provide additional value in the form of sustainable energy investment and leadership within their community.

Regardless of whether you purchase power and/or natural gas via a broker, Direct Energy Business is a proven leader in energy within the greater Erie area with a wide-ranging portfolio of products to meet the specific needs of your business.


To learn more, get in touch with Elizabeth Friel, Senior Account Executive for the Erie region at Elizabeth.Friel@directenergy.com

 

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