BuildZoom employs a cost per acquisition (CPA) model for professionals, which is a percentage of the total contract value they are awarded by engaging in our marketplace.
Generally speaking, we look to benchmark the fee against the professional’s gross margins (GM) and generally, the GM going to be larger when the contract is smaller. Our goal is to come up with a fee that doesn’t compromise a professional’s ability to bid competitively, while accounting for our role in the transaction - a simple way to think about this would be how much do you have to pay for the client from a marketing & sales standpoint.
Therefore, the fee typically range between 2.5% - 4.5% for contracts less than $50K. As the contract size gets larger, we will consider a variety of factors, including the type of project and region where the project is taking place, in order to assess an appropriate referral fee.
On the Owner side, BuildZoom will enable them to set-up an account and connect with professionals for no charge; however, we’ve found that BuildZoom Premium, which is a fee-based service, has been able to dramatically improve their ability to connect with the right pros, for fair market value, and get into the right agreement, which sets things up for a great experience and outcome. More than 90% of the time, the cost savings we’re able to engineer for our clients will be higher than the cost of BuildZoom Premium.
This may not be the right product for all contracts (e.g. a re-roofing) but for any project where there is going to be some complexity, BuildZoom Premium is going to give you peace of mind, in addition to both cost and time savings.