Considering that you appear interested in the sub-broker business model, you must wonder what unique chances the broker offers and how sub-brokers earn their money. We’ll go over everything regarding this money-making strategy in this post to aid you.
Let’s first clarify what a sub-broker is.
A sub-broker assists investors when buying or selling shares on exchanges like the BSE or NSE. It’s critical to remember that sub-brokers give clients services and operate under a broker whether you’re one or work with one.
A sub-broker performs the same role as a broker’s franchise, and their ability to make money is influenced by several variables, such as their clientele and the broker they partner with.
How do sub-brokers make money?
A sub-broker is a full-time employee of the brokerage company. Nevertheless, they are paid via a commission-based system.
In contrast to Remisiers, who make between 10% and 30%, sub-brokers make substantially more money, between 50% and 80%, given the extensive range of tasks they carry out.
However, if you were to open a sub-broker franchise, your revenue would be based on the broker’s pricing strategy.
With the Zerodha Franchise program, you can make very decent monthly money.
For example
Megha is a novice trader who has some familiarity with the stock market. Her next step is to contact a sub-broker.
It would be the responsibility of that individual to comprehend Megha’s style of trading and assist her in beginning her trading career.
Let’s say Megha finds intraday trading to be fascinating. She also makes many deals for a total of around ₹500000 with the aid of a sub-broker. She gives the broker ₹40000.
The sub-commission brokers would be calculated based on the minimum percentage as 50% of ₹40000; 20,000, to be exact.
And the highest earninearners be; 80% of ₹40000, which is 32,000.
Commission Models
The brokerage commission can be of more than one type. The same are mentioned below:
Percentage-based commission model
A sub-broker earns money based on the portion of the brokerage paid by the customer or trader under a commission structure based on a percentage.
Lump-sum-based commission model
Following that is the lump-sum model, where the sub-broker determines a fixed lump-sum fee that would be charged from the customer regardless of the turnover value.
Hybrid commission model
Finally, there is the hybrid commission model. The percentage and lump-sum models are both included in this kind, as the name would imply.
But bear in mind that your earnings as a sub-broker will be based on the work you do. Your job entails a suitable framework with all the requirements compatible with the work. As a result, selecting a broker with the appropriate commission structure will help you profit.
Strategies for earning maximum income
Check out various strategies here –
Develop your talents and strengths
The product selection you provide as a sub-broker affects your income as well. You will be able to provide a variety of items to suit various clientele if you pick the correct partner and start a franchise.
Building your client base, staying in touch with them frequently, and offering them suggestions and assistance on their investment decisions are key to your success and revenue as a sub-broker.
Building your market expertise is, therefore, crucial and a wise investment.
Having a good broker as a partner
One of the best sub-broker providers is upstox sub broker.
The broker you decide to partner with will affect how much money you make if you have a sub-broker franchise.
You may also get assistance with branding and marketing by picking the correct partner and infrastructure and risk management.
Conclusion
Each organization has a distinct sub-broker franchise price. Additionally, the percentage of revenue share varies. If the right broker is chosen, a sub-broker may make nearly 60% of what a broker makes on any particular transaction.
