How is Commtech able to get better pricing than the direct reps?
Commtech works through the indirect sales channel. Every carrier sells their services through their direct sales channel and through the indirect, or agent, channel. Their direct channel sales reps get a salary, health benefits, workers compensation, car allowance, expense allowances and commissions. In addition, the carriers will typically spend significant money to train all new sales reps. In other words, they invest a lot of money in every one of their sales employees. As for the indirect channel, they don’t pay us anything except commissions. So, their overhead is much lower, allowing them to get us better rates that their own employees can get. In addition, the direct reps have no choice but to sell the products and services of their company. Indirect agents have the choice of several companies’ offerings so the carriers realize that they face competition and therefore offer agents better rates to better compete in the marketplace.
