Commission transparency and the Bionic approach to fees

Glyn Britton
By Glyn Britton, Chief Customer Officer

At Bionic, our comparison service is free. We make money by getting paid commission from the supplier when you switch. And we always let you know exactly how much that commission will be. 

But if you’ve read some of the recent horror stories around commission fees for energy brokers, it’s understandable that you might be wary of using one to sort your next business electricity or gas contract.  

In this blog, we’ll put the record straight on how Bionic commission works and why all TPIs (third-party intermediaries – the name given to broker and price comparison services) need not be treated with suspicion. 

But first, let’s look at what commission is and find out what types of businesses make money in this way. 

What does it mean to earn money from commission? 

Commission is a way to make money based on performance and targets. If you have a job in sales, for instance, then you might have a commission-based income that sees you take a percentage of the amount from each sale you make. 

The commission-based income model also works for certain businesses, including energy brokers and price comparison websites.  

Despite what some might think, money-saving sites aren’t just in it to help people out and need to make money like any other business. The key is how they make that money, who they make it from, and whether they’re upfront about how much they make on each sale. 

Price comparison websites generally offer a free comparison service but will be paid a commission fee by the supplier when a switch is completed. 

Brokers also use this model, but some take a commission fee from customers. They may even do this at the comparison stage, so they make money even if you decide not to use them for the switch.  

For the record, Bionic only makes commission from suppliers when a contract is sold, and we always let customers know how much this will be before any contracts are signed. 

Why do some news stories suggest that brokers shouldn’t be trusted? 

Over the last 12 months, a couple of stories have surfaced to put energy brokers in a bad light. This from The Times warns business owners of ‘rip off’ charges, while a piece in The Guardian suggests that Ofgem be called in to stop brokers ripping off small businesses

Both suggest that energy brokers are ‘ripping off’ businesses by hiding the commission fees they earn each time they secure a fixed energy contract for their customers.  

It’s true that there are business owners out there who have fallen victim to some rogue brokers. These act as middlemen to negotiate a contract between suppliers and businesses. But these rogue brokers are not upfront about how much they make on the deal or how they make it. 

Customers of a rogue broker might be charged for using the comparison service, regardless of whether they switch. Or they might find they’re quoted one rate, which is then inflated once they’ve signed up and the broker’s fees have been added. 

But there are dodgy dealers in all industries, so it’s important to keep in mind that not all business energy brokers and comparison sites work in this way and – just like in the domestic comparison market – they offer a valuable service that can save business owners time, hassle, and money. 

We can’t comment on how everyone in our industry operates, but we can be completely upfront about how we make money and how commission works for Bionic. 

How does Bionic make money from commission? 

At Bionic, our comparison service is free and there’s no obligation to switch with us. The rates you’re quoted are the rates you’ll pay, and there are no additional fees to pay directly to us or your supplier. 

If you do switch with us, we’re paid a commission by your new supplier based on the estimated consumption for the term of your contract and the commission agreement with the supplier. 

This is to cover the costs associated with our service and we’ll tell you exactly how much commission we earn from arranging your contract. For more detailed information, check out our Terms and Conditions

We refute entirely the accusation that we are ripping off customers with uncompetitive deals. We understand it has been an incredibly difficult time for many businesses that came off energy deals towards the end of 2022 and faced significantly higher prices. That’s one reason why we worked hard with suppliers to offer blend and extend contracts for those affected. 

Even during the height of the energy price crisis, we were able to secure contracts that saved businesses money compared to what they would have paid had they come out of contract.  

Do energy brokers need to disclose their commission? 

In October 2022, Ofgem amended the rules around commercial energy contracts for micro businesses. This means that all TPIs need to disclose the amount of commission they make along with any other fees they charge.  

But Bionic has been doing this since 2016 – six years before the regulator made it mandatory. 

We make it very clear that we earn money when we fix energy deals for our customers and firmly believe in the importance of this transparency in building trust in our business.  

Energy brokers are indirectly regulated, via supplier commitments, by Ofgem. There is a strong case to be made to directly regulate all energy brokers, which would help improve transparency and behaviours across the board and weed out any bad actors. And it’s a development that we would welcome. 

Why switch business energy with Bionic? 

We know how complicated and time-consuming dealing with energy providers can be, and how complicated business energy contracts are.  

But we’re here to help businesses get the best deals, with as little time input from our customers as possible. Instead of ringing around loads of suppliers and giving your details to each one, one call to us is all it takes to compare from our panel of trusted business energy suppliers.  

Our market size and collective buying power mean we can secure exclusive deals at rates you may not be able to get by dealing directly with your supplier.  

And, importantly, when you switch energy with us, we always explain how we make our money and never charge any hidden fees or extra commission. 

To get a no-obligation quote from one of our energy experts, pop your postcode into the box on the left or give us a call on 0808 253 6007.