Is it cheaper to go direct or use a broker?

Both routes lead to the same place: a contract with a supplier. The question is what you pay in total, and what help you get along the way.

Why direct can be cheaper

• No broker commission is built into the rates.
• You deal with the supplier directly for queries.

But you only see the offers you ask for, and may miss suppliers you haven't heard of.

Why a broker can still win

• They may approach many suppliers for you. Ofgem notes, however, that not all brokers search the whole market and they aren't necessarily required to find the best deal.
• They can manage renewals, flexible purchasing and multi-site accounts.

Comparison sites are a third route; they also earn money from suppliers, so the same "who pays?" question applies. See broker, direct or comparison site.

The fair test

1. Request a direct quote from your current supplier and at least one other.
2. Get the broker's best quote, and ask for the commission total shown in the Principal Terms.
3. Compare the annual cost, not just the unit rate; standing charges matter.
4. Compare contract length and exit terms.

Worked example

Your business uses 50,000 kWh a year.

	Direct quote	Broker quote
Unit rate	27.0p	26.6p
Standing charge (60p × 365)	£219.00	£219.00
Energy (rate × 50,000)	£13,500	£13,300
Total before tax	£13,719	£13,519

In this made-up case the broker is £200 cheaper a year. Reverse the rates and direct wins. Only the numbers tell you.

Ask each broker if the quote already includes their cost. A broker who won't say may be hiding it inside a higher rate.

Do you need help beyond price?

If you have several sites, half-hourly meters or complex contracts, support may be worth paying for. For a single shop on a simple fixed deal, going direct or using a broker are both reasonable. Learn how to vet one in checking a broker is trustworthy.

Hidden differences to compare

• Contract length: a cheaper rate on a longer lock-in may cost more if prices fall.
• Renewal support: will anyone warn you before your term ends?
• Service: who handles billing queries and meter issues?
• Exit terms: look at early termination charges, which can swamp a small price gap.

When going direct is easy

If you have one site, steady usage and a supplier whose online quote tool covers business customers, a direct quote takes minutes. Do it first, because it gives you a benchmark. A broker who can't beat it by more than the commission they take is not adding value. If they can, ask them to show you the working.

Always check that both quotes are for the same term, same payment method and same meter details, or the comparison means nothing.

Next steps

See how much commission brokers take and the main business energy comparison guide.