What are oil brokers, and why should you avoid them? Read this article to find out.
Lets start off by defining the term broker:
a person who functions as an intermediary between two or more parties in negotiating agreements, bargains, or the like.
Now it would seem as a broker should be someone that actually helps both parties. In most cases this is probably true, but not in the oil industry. While it may appear that they save the consumer time, by linking them directly with local oil dealers, this is actually not the case.
Let's give you a hypothetical situation.
You, the customer, start a search online for delivery of heating oil. You come across a site that advertises low prices and excellent service. You place your order for delivery with a price of $1.45. It also states it can be delivered today. The oil broker site simply forwards the order to a local heating oil provider. The oil company calls you and tells you the price is $1.54, not $1.45. He also informs you it will be 3 days before he can deliver to you. The oil company claims he updated the price with the broker, and the broker knows he can't deliver same day. Now the oil company is upset that the broker is making them look bad with customers, and you are upset that the price is not what you were quoted and now you will run out of fuel before the oil delivery can be made, costing you more money in the form of a bleed/restart fee. Ask yourself, is this fair to either party? The oil broker could care less about issues such as these, as they still collect their money from the oil dealer for the order/lead. The broker will tell you the oil dealer is at fault, and point to their terms of service which absolve them of any responsibility if there are issues with your order. Isn't that just wonderful!
So why do some oil companies choose to use such brokers? One of the main reasons is most oil companies are usually not strong when it comes to marketing. They have a hard time getting new customers, and the brokers seem like a good way to get sales while they focus on delivering heating oil to their customers. In addition, most oil company owners are not Harvard-educated business people and do not realize that they are sacrificing profit for convenience. Oil brokers know this, and simply take advantage of heating oil companies to make a quick buck. Despicable, right? Do some consumers benefit from using such websites? If they overlook the terrible service and only care about price, then most are happy using such services. To each their own, as they say. In the long run, such services only hurt the industry, as they make oil companies fight over price just to be competitive. You will have oil companies hiring shady individuals, who may not even be properly licensed, in order to keep their costs down and save a few dollars. Trucks will not be maintained properly, and you might have one leak heating oil all over your new driveway. Customers will end up suffering with fewer choices and bad service, as companies will go out of business trying to operate on such small margins. All because of heating oil brokers.
Would you like to do the right thing and avoid using heating oil brokers? Here are a few tips to help you figure out if a site is a legitimate company, or a heating oil broker.
If you do not see an oil delivery truck at all, run! Run far away! Generic trucks without company lettering are also a good sign it is a broker. Who doesn't display a picture of their truck?
The only phone numbers are 1-800/toll free numbers.
They do not list service areas, or claim they service the entire state or even the entire USA. No "local" company has a service range this large. It's just not realistic. Do you honestly think they are driving 50+ miles to bring you oil? They will waste more money on diesel driving out there than they will make delivering your heating oil.
There are a lot of stock photos showing "corporate" people. This is an oil company, not a Fortune 500 company.
They ask for your email address in order to see prices/get a quote. What are they trying to hide? Why the secrecy?
Search for their company address on Google? Are there 65 businesses run out of the same tiny office? Does the address even exist? Is it an empty lot? Is it a UPS store?
They list reviews/testimonials on their website, and every single one is positive! No company is perfect, and you CANNOT please everyone. Never trust any reviews/testimonials listed on a company's page. Ninety-nine percent of the time they are all fake and/or edited to portray the company in a positive light.
If they have a Facebook page, they hide their review/rating section. Brokers often get terrible feedback, as they could care less about customer service.
By no means is this an exhaustive list, just a few things to look for.