Angie’s List. Home Advisor. Home Depot. Sears. Porch. Amazon?
As a contractor, the list of online middlemen for your services is not short –even Google is getting into the mix.
These services can provide leads and jobs, which can be especially helpful if your team is operating under capacity. If you don’t have a steady lead flow, and your referrals aren’t at a reliable stage, they can also be helpful when it comes to finding jobs.
There are downsides, too, of course.
In one way or another, you have to pay for these middleman services. These jobs sometimes provide low-quality leads. The jobs themselves can be a headache, too. Oftentimes, you’ll have to do work that goes beyond the scope of the initial job description– and, if you refuse, you risk earning the ire of both the homeowner and the online middleman service.
Just like anything else in life, there are pros and cons associated with these services. Now that Amazon is joining the fray, though, the landscape of online home services middlemen might be changing. Sure, there will still be pros and cons, but the pros and cons will be drastically different with Amazon.
What is It?
Amazon Home Services is a platform that provides consumers with a “middleman” service. They select the job they need done (along with purchasing materials, oftentimes), and the service sets them up with a contractor to perform the job, much like Home Advisor, Porch, or Thumbtack.
From ReplacementContractorOnline.com:
Approved contractors will be listed in the Home Services department and alongside related products, so a customer shopping for flooring, for instance, would also see flooring installers, according to company information. Unlike Angie’s List, which is behind a pay wall, all of this would be available for free to the 85 million customers Amazon says shop for products that require professional services.
When the Amazon customer buys flooring, a toilet, pipes, or many other materials, they will actually see a ”get it installed” option somewhere in the checkout process. That’s when they enter Amazon Home Services. They’ll be able to access Amazon Home Services independently, as well.
Amazon is always quick to promote related products and services based on a customer’s recent purchases. For homeowners, this now means contractors will be included with those recommended services.
If you sign up, that could mean the Amazon recommendation juggernaut is pushing you toward homeowners who need your services.
Who’s Getting In?
So, who are these contractors? Who’s actually participating in Amazon home services? Right now, it’s working on an invite-only basis.
If you’re invited, you’ll receive an email that reads something like this:
“Sell Your Services on Amazon
Amazon recently launched Amazon Home Services. Customers can easily find and buy your professional services while shopping for related products, or by submitting customer requests online. Selling Services on Amazon is the invite-only program for top-rated service pros, like you, to list services on Amazon Home Services.
Currently, we’re reviewing applications to recruit the top 4-5 pros in your area and we’d like you to apply. We provide the online tools, payment processing, and actual orders. You set your own price for the services you want to offer, and only pay for completed jobs. In short? You don’t pay until you get paid.”
Right now, Amazon is only offering a spot to the “top” four or five contractors for each service in a given area. The lines between which contractors belong to which services, and the numbers themselves, are blurry. As you would expect. Some general contractors do everything, so they might take up a slot for plumbers or roofers. We don’t know all the logistics, yet.
All Amazon Home Service contractors must be certified, licensed, and insured. Some contractors have also reported that other background checks are involved.
If you finish reading this article, really want to get signed up, and haven’t received an invite, don’t despair– you can request an invitation.
The Cost and the Basics
Once you get an invitation and decide you want to apply, you’ll fill out an application that looks something like this. It asks for basic information, requires customers references, and has you fill out five multiple choice questions.
According to CNBC, here are the costs:
- You set your price per job
- You pay 10-20% of the job’s total cost to Amazon
- Starting in January 2016, you pay $50 per month to offer your services via Amazon
- Starting in January, you will pay a $50 background check fee
- Amazon will provide homeowners with up to $2500 in refunds if they’re not satisfied, and this probably comes out of the contractor’s pocket, somehow.
There will be some serious revenue associated with Amazon Home Services, both for Amazon and the contractor(s).
This Fiscal Times provides more detail:
For more complex tasks, you describe the job, and Amazon sends estimates to your inbox. Contractors get reviewer ratings from 1 to 5 stars, and the site notes that all contractors have had a background check, are licensed and insured, and have been “top-rated performers.” That’s important because for standard tasks like a toilet install, you’re paying for the job up front, not when it’s done (the reverse of how contractors usually operate). To date the service is available in about 30 cities, though the site says it’s continually adding coverage areas.
Forbes also has an interesting piece regarding revenue, and what both Amazon and their chosen contractors stand to make from this arrangement– it’s somewhere around $120 billion.
The Importance of Reviews
Reviews are a huge part of Amazon, so it comes as no surprise that AHS relies heavily on user reviews. Google, Yelp, and Facebook reviews are becoming increasingly important, as well. Contractors can no longer ignore online reviews, especially with Amazon.
In that same ReplacementContractorOnline.com article, the National Roofing Contractors Association executive vice president, Bill Good said, “Contractors need to pay attention to online reviews. Those review are really going to start to matter now.”
The Fiscal Times also reports Amazon will weed out fake reviews, unlike Yelp and other home service review sites. Only reviewers who have purchased your service through Amazon can write a review, so that adds authenticity.
Users trust Amazon reviews– they’re a huge part of the buyer’s journey. With this review system in place, you won’t be able to say your Amazon reviews are “fake” or a work of sabotage from a competitor.
Getting good reviews requires providing good services, and with AHS, it all comes down to pleasing the homeowner. That means extra communication and care might be necessary, and it’s up to you to decide if it’s worth it when you’re already giving Amazon 10-20% of a job’s cost.
Is it Right for You?
So, is signing up for Amazon Home Services right for you?
If you check into related threads on ContractorTalk, you might not see a lot of excited contractors.
One contractor writes:
The problem that these massive corporations don’t understand is that repair work, handyman work, and contracting are all based on communication, service, and quality. Big box stores understand none of these concepts since they work off a low wages and low prices for low quality. They will fail because our business is based on communication, but there will be the people out there who continue to see low prices and the ability to touch a button and have a service provided for them.
Others are worried about having to complete jobs that go above and beyond the initial job description– and that they’ll be at Amazon and the homeowner’s mercy when the job doesn’t match the description.
The Cons of AHS:
- Unrealistic expectations from homeowners
- Possible low-quality leads and jobs
- Many home service middleman sites competing for your attention, charging you money already
- High fees for the contractor
- High possibility of bad communication, resulting in bad reviews and financial outcomes– if you’re not a diligent communicator
The Pros of AHS:
- Amazon is already a trusted name for consumers, your target homeowners included
- Amazon is already convenient for homeowners, this adds another level
- Younger homeowners who already trust Amazon will be exposed to your services
- Steady lead flow
- Good source for unquestionable reviews, which is a strong signal even for homeowners who aren’t purchasing through Amazon
If you’re a general contractor or any kind of non-replacement contractor, AHS might be worth a try. If you’re interested, it’s best to get in now before the monthly fees kick in.
Also, understand you’ll need to do one or two “test jobs” where you might not make as much money as you’re used to. Just like any other entirely new process, you’ll need to experiment and adjust your prices/services accordingly.
You’ll also need to pay special attention to communication and service. With Amazon, you’ll have to delight the homeowner or you’ll have one of the biggest companies in the world breathing down your neck. On the plus side, a delighted homeowner who purchases your services through AHS is likely to become a brand advocate and throw out some of those highly-coveted word-of-mouth referrals.
No matter how advanced it gets, Amazon Home Services will never be right for every contractor. It’s still not set up perfectly for replacement contractors and, even when it gets that far, it might be more of a headache than it’s worth for a new roof installation or re-siding a home. The possibility of low-quality leads is also strong.
For general contractors, plumbers, HVAC techs, handymen, and other contractors, though, it might be worth a shot. It’s potentially great for your online presence, alone.
Whatever the case may be, you need to do your research and weigh your options. You can’t go into the depths of the corporate machine with a blindfold on, or it’s going to cost you– big time.
To your marketing success!
-Brodie