How technology advisors get paid

Technology advisors get paid in three main ways: a fixed or hourly fee, a share of the savings they find, or commissions paid by the suppliers they help you source. None of these is inherently better or worse. What matters is whether the advisor tells you which one applies, because how someone is paid shapes the advice you get.

The three ways advisors get paid

Fixed or hourly fee. You pay a set fee or rate, and the advisor earns it whether or not they find savings. Predictable, and the cost is yours regardless of outcome.

Performance, or a share of savings. The advisor earns a percentage of the savings actually delivered. No savings, no fee. The risk shifts to the advisor.

Supplier commission. The advisor is compensated by the technology suppliers it helps you source, through standard channel commissions built into the contracts. This is how most of the technology sourcing channel works, and it often means no direct cost to you. Stackstone uses this model to start.

What is the technology channel?

To understand the commission model, it helps to know how most business technology actually gets bought. A large share of telecom, connectivity, cloud, and communications contracts in the United States are sourced through what the industry calls the technology channel: a network of independent agents, brokers, and advisors who sit between the suppliers and the businesses that buy from them.

At the center of the channel are technology services distributors, or TSDs, formerly known as master agents and sometimes called technology solutions brokerages (TSBs). Firms such as Telarus, AVANT, and AppDirect are well-known examples of the category. A TSD holds contracts with hundreds of suppliers, from carriers and internet providers to UCaaS, cloud, and security vendors, and independent advisors work through a TSD to access those supplier agreements rather than signing hundreds of contracts themselves. This is a substantial industry: research firm Omdia measured the TSD market at $16.6 billion in gross billings in 2024, up 14.5% year over year.

The money flows in one direction. You sign your contract directly with the supplier, at the supplier's pricing. The supplier pays a commission to the TSD under their agreement, and the TSD passes a share down to the advisor who sourced the deal. That commission is part of the supplier's cost of sale, the same budget that would otherwise fund more direct salespeople, which is why buying through an advisor typically does not change the price you pay. Our technology procurement page walks through how this works in an actual sourcing project.

Typical commission structures

Residuals. The signature structure of the channel is the residual: the advisor earns a percentage of your monthly recurring charge, paid every month for as long as the contract, and often the account, stays active. Industry sources commonly put telecom residuals at around 15–20% of the monthly recurring charge, though rates vary by supplier and product. From a buyer's perspective, residuals have a useful property: the advisor keeps earning only if you stay a reasonably satisfied customer, which rewards sourcing contracts that actually fit.

One-time SPIFFs. A SPIFF, short for sales performance incentive fund, is an upfront, deal-level bonus a supplier pays when a new contract is signed, sometimes in addition to residuals and sometimes instead of them. Suppliers use SPIFFs as short-term promotions to push a particular product or win business in a given quarter. They are a normal part of the channel, but they are also the structure most worth asking about, because a rich SPIFF can pull a less scrupulous advisor toward whichever supplier is running the promotion that month.

Contingency fees. Outside the commission channel, some cost-reduction consultants work on a contingency fee: a percentage of the savings or refunds they recover, common in billing-audit and recovery work. It is the share-of-savings model from the table above under another name, and the contract's definition of savings is the clause that deserves your attention.

Whatever the structure, channel commissions are governed by written agreements between suppliers, TSDs, and advisors. They are administered, auditable arrangements, not informal kickbacks. Your own contract and its master service agreement (MSA) sit between you and the supplier, and the pricing in it should stand on its own regardless of what the advisor earns.

Why disclosure matters more than the model

No single model is automatically more honest than another. A fixed fee can still come with biased advice. A commission model can be perfectly aligned if the advisor works across many suppliers and is transparent about how it earns. The real test is simple: does the advisor tell you how it is paid, and does its compensation depend on selling you any one product? If you know the answer, you can weigh the advice properly.

Which model fits which buyer?

No model is best in the abstract; each fits a different buying situation.

Fixed or hourly fee fits buyers who want advice fully decoupled from any transaction, a major architecture decision, a build-versus-buy question, dispute support, and who have the budget to pay for it. The trade-off: you pay whether or not the work surfaces savings, and fees tend to scale with scope rather than results. For a mid-sized company reviewing routine spend, the fee can consume a meaningful share of the savings it finds.

Share of savings fits buyers who are cash-constrained and want the risk carried by the consultant. The trade-offs are subtler: disputes over how savings are measured are common enough that the baseline and measurement method need to be negotiated before work starts, and the model can nudge a consultant toward fast, easily measured cuts over slower structural fixes that would save more over time.

Supplier commission fits buyers who are sourcing or renegotiating supplier contracts anyway, across connectivity, communications, cloud, or security, because the compensation is already built into the supplier's cost of sale and there is usually no direct cost to the buyer. The trade-off: the advisor earns only on commissionable contracts, so ask how they handle recommendations that carry no commission, and confirm they quote across the market rather than a short list of favorites.

The models also combine. A common pattern is commission-funded sourcing plus ongoing vendor management, with a free technology spend assessment up front to establish where the money is going before anyone recommends anything.

How Stackstone is paid

Stackstone is typically compensated through standard supplier commissions on the contracts we help you source and manage, which usually means no direct cost to you. We never charge hourly or retainer fees; if an engagement ever includes a fee at all, it's only a share of savings actually realized, agreed in writing up front. Because suppliers may compensate us, we tell you up front how we are paid for your engagement, and we work across the provider market rather than for any single vendor. You can read more on our independent advisor vs. reseller guide.

Conflicts of interest and how to protect yourself

Every compensation model carries a conflict of interest somewhere. The goal is not to find an advisor with no incentives, because none exists, but to know where the incentive sits and put guardrails around it. A fixed-fee consultant has an incentive to grow the scope. A contingency-fee auditor has an incentive to maximize whatever the contract counts as savings. A commission-paid advisor has an incentive toward commissionable suppliers and products.

Practical protections, in rough order of importance:

• Get disclosure in writing. Ask the advisor to state, before the engagement, how it is compensated on your deal, including whether any one-time SPIFFs apply.
• Ask whether pay varies across the shortlist. If the advisor earns materially more from one recommended supplier than another, you want to know that while you compare proposals.
• Insist on a real shortlist. Two or more supplier proposals, priced side by side. An advisor who genuinely works across the market should have no trouble producing one.
• Sign with the supplier directly. Your contract and MSA should be between you and the supplier at the supplier's pricing; the advisor's commission should never appear as a line item or change your price.
• Keep the walk-away. A free assessment or proposal should carry no obligation. If it does, that tells you something.

These are the same protections we invite clients to apply to us. If you want to pressure-test the model in person, a 20-minute discovery call costs nothing and you can ask every one of these questions live. And if your immediate goal is cutting existing bills rather than sourcing something new, start with our guide to cutting SaaS, telecom, and vendor costs.

What to ask any advisor

• How exactly are you paid, and by whom?
• Does your pay depend on me buying a specific product?
• Do you work across many providers, or represent a few?
• Will you put the compensation arrangement in writing?

By Shane Stewart, Founder · Last updated: July 2026.