Does anybody else think the pay for play 2.5% is unrealistic for the large projects?

BuildZoom
39

Mark your project up by 2.5% and should not be a problem, if you have a 20% markup on your project, then using 2.5% to pay the fee is not a problem.
Fair is Fair.

1 Like
40

I am new to buildzoom, but I feel like the commision is fair considering the costs of advertising and marketing elsewhere.

1 Like
41

I saying that that is a fair amount to pay for a quality lead

1 Like
42

I agree that the fee for projects under 25K is fine. On larger projects a smaller fee should be applied, or cap the fee for projects over 25K

43

Kevin, this is something we are actively discussing for larger projects. Our goal is to better understand the operating margins as the project size increases, so the referral fee works better for all types of projects. If you have any time to discuss, please feel free to message me. Thanks!

45

I think it’s a good rate considering what other lead generation firms charge. They are great !!!

46

Fair and well deserved.

47

i Think its completely fair
its industry standard to pay 2-3% referral fees anyway

48

The best way would be to have the fee work with the cost of job on a sliding scale. 2.5% on a 100K job is not that bad, but on 250K, it becomes a problem.

49

Hey there, I’d be curious to better understand how you think about the fee as the project size gets larger. Do you think about it in terms of a percentage of your markup? Curious to know how the markup changes for your business from $100k to $250k (to the extent you are comfortable sharing).

50

As the project size goes up, your profit margin goes down a little in order to be competitive. Profit and overhead is higher on smaller size jobs so the 2.5% not a big deal. But if my P&O goes down in order to win the larger job, 2.5% referral fee eats into profit.

51

Right - totally understand. Our goal is to put a referral fee in place that enables us to work with the best builders and GC’s without putting them into a less competitive situation, which is why we went with the referral-based model instead of a PPL. We’ve spent a good deal of time, investigating the marginal costs associated with marketing and sales, in addition to the percentage markup on different types of projects. As the contracts get larger, the percentage markup decreases - I’m just trying to understand how your margins change from $100k to $250k.

53

Not at all. 2.5% for qualified leads that you only have to pay for if you get the job is amazing. Much less then other sales platforms.