How do commissions work when you are an independent energy sales agent?

Business talk

 If you are thinking about being an independent energy sales agent, you obviously want to obtain the best compensation plan that is available.  Better Cost Control is unique in the compensation plan that we offer.

  • Agents receive 50% of the first year commission, as an advance, just three weeks after you submit a signed customer contract.
  • Money is transferred directly to your bank account.
  • Monthly residuals are paid once the advance has been repaid through receipt of commissions from the contracted supplier.
  • We do not dictate the number of mils that you add onto your deals.  You decide the margin added, subject to the rules of each quoting supplier.
  • Our starting commission is 50% of whatever margin you add to your deal, this grows to 70% based on your performance.
  • Bonuses for multi-year customer contracts
  • Our pricing is completely transparent, so 50% of the margin is more commission than other companies. You see, some brokers provide you with prices that already have their margin built in, so they can offer you a flat 2 to 3 mils.  But you’ll earn less that way.  Our commission plan ramps up to 70% as your performance grows.
  • You can obtain commission overrides on any reps that you recommend to Better Cost Control.

Commissions in the energy business are based on adders to the quoted price. In the electricity world, you add mils, where a mil = 1/10 of a penny or $0.001.  In the natural gas business, you add cents per decatherm, where a decatherm is equal to 10 therms.  So if you add $0.25/decatherm to a gas price, the gross margin will be 2.5¢ per therm.  We are the broker of record so you will never be working with a middleman.

Here are some electricity examples. This chart displays the gross margin for different deal sizes, based on the number of mils (1 mil = $0.001) added as a mark-up to the electricity price:

Annual Electricity Margins by Mils Added and Annual kWH
KWH/Year1 Mil2 Mils3 Mils4 Mils5 Mils6 Mils
30,000,000 $30,000 $60,000 $90,000 $120,000 $150,000 $180,000
20,000,000 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000
10,000,000 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000
5,000,000 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000
2,500,000 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000
1,500,000 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000
1,000,000 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
750,000$750 $1,500 $2,250 $3,000 $3,750 $4,500
500,000$500 $1,000 $1,500 $2,000 $2,500 $3,000
250,000$250$500$750 $1,000 $1,250 $1,500

 

Remember that this chart displays the gross margin. Your commission is 50% of this amount, rising to 70% if you are a serious performer. You receive 50% of the first year’s commission as an advance against commissions three weeks after your customer contract is signed, with monthly residuals paid for as long as the customer remains a customer. With good customer relations, you should be able to maintain most of your customers for many, many years.  When you are evaluating brokers to partner with, understand their cost structure and pricing.  Some brokers will pad the prices they provide you and offer you higher percentages, but your take home money is not as high as you may think.

A few important notes on the margin chart: You should not expect to obtain a large number of mils on large deals. We run a reputable business and want our customers for life. This means that the margins added need to be reasonable relative to the deal size.

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