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Michael Riley
Michael Riley
MD
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About Me

First agent in UK to generate £1m commission as hybrid agent.

my expertise in the industry

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Michael Riley

From: Michael Riley 29 November 2018 09:43 AM

Michael Riley
There is a simple calculation for this business model which I overlooked in the initial dotcom boom. Over the last two decades I have seen companies constantly fail because of miscalculating this too.... ...it's the rather dull, but important "cost of customer acquisition", how much does it cost to get a customer to the site and them to generate revenue. Most companies seriously underestimate this and when your main income derives from referral fees, it is a vital number. It also increases rapidly with competition and as soon as anyone thinks your onto something copy cats will appear quicker than a long lost relative after a lottery win. In the late 90's when Amazon was really making a grab for customers, it was spending £70 per new customer.... which at the time seemed insane... the good thing was they had the cash to do it.... but more importantly, their shoppers repeat purchase year after year. That is unlikely to happen here. There is also another issue, one stop shops rarely work well, especially in one large transactions. They work better for lots of little purchases which don't warrant spending the time shopping around. Being heavily reliant on third parties to deliver the service to the consumer creates a fundemental flaw too. As soon as you do that you move the relationship to the supplier.... next time that person needs that service again.... they go straight to the supplier... cutting you "the introducer" out in most cases. So you lose the Amazon style repeat purchases. In most industries specialist and niche players are the ones that make the profit. It does raise an interesting question though which is worth a ponder with all low cost players.... which helps to prove/disprove the low fee and PB myth.... If an agent or a website like PB or YOPA were to offer their services totally for free, would their market share increase dramatically, would they dominate? If the answer is no, then it disproves their model. If the answer is yes, then we are all doomed! I reckon the answer is a resounding NO. The reason as we all know is, sellers in their hundreds of thousands, don't see fee as being the main motivator for using an agent and indeed see the opposite. It's about VALUE. Here is another one to ponder when you're walking to your car in the rain today..... Why was it last week that the seller of "Portrait of an Artist" by the painter David Hockney chose to pay a multimillion pound commission to Christie's Auction House to acheive the record beating £70m price tag for a living artist, rather than whack it on Ebay or Gumtree for a very low fixed fee? The principle answers to that is also why good agents charging % fees will probably be around for another few decades yet.

From: Michael Riley 21 November 2018 09:37 AM

Michael Riley

From: Michael Riley 07 November 2018 08:43 AM

Michael Riley
In principle, I agree with most of that. My view is we have a structural issue in the UK estate agency market which will continue to be exposed for all sorts of reasons. That the average "agency" can no longer keep most of the "agents" fee. There is going to be a serious talent crunch due to years of under investment by many agencies in training, poor and inflexible working conditions and low pay for many new recruits into the industry. The demand for talented agents is going to be very high and the company with the solution that provides those people with the best support and earning potential will win. We are now at a phase in the industry where companies providing an average solution to that problem with struggle to justify how they keep most of the agents earnings. The city and other investors are about to realise that they have seriously zigged when they should have zagged by backing an online advertising model. Then after the battle and all the waffle over the last 5 or 10 years about online and high street has calmed down, the dust is going to settle and when it does a load of hobbits will be standing there looking around ( a bit like The Good Estate Agency today and Ewemove and others) and say bloody hell we are still here, with even average agents earning more than they ever did working for an agency and enjoying more flexible working. Others will want to join them and realise what they have been missing. My bet is that the industry will finally realise that the majority of the ones left standing are going to be agents who keep most of the fees that they generate every day, not the agencies. I am now going to get my coffee and avoid any more Lord of the Rings metaphors this year. SImon we should have a chat, I concur with most comments you put on here.

From: Michael Riley 07 November 2018 08:42 AM

Michael Riley
Well done Rob, proving the "proper" hybrid model yet again. The industry and press need to stop referring to PB etc as hybrids or agents. They are advertising platforms with few bells and whistles added, no different to Autotrader really, hence huge media companies interest ( Axel Springers in PB or Northern and Shell in Emoov.) Being paid regardless of the result is not acting as an agent. They have proved that tech can be used much better and most importantly they have provided yet more evidence that the industry is changing from one of being employed to self employed. At some point the city will wake up and realise that the chips they have placed betting on a low cost model is the wrong trend to back. There is huge change afoot, but it isn't that one. Having earnt over £1m in commission working as a hybrid agent, I hope that more people in the industry will read this article and the one about my old Romans colleagues doing £140k in a month using an off the shelf online franchise. Then realise that they can either work less and earn the same, or work the same and earn at least double, by stepping away from being employed by an agency and becoming freelance. Doing it for themselves online or otherwise. Kinda like everywhere else in the world apart from the UK. PS Rob, the original hybrid claim is incorrect, you may want to edit that in future press. PPS £18k in a month as a top performer is amazingly low I thought. Agents working similar models have top performers breaking £30k per month on occasion and most I know of is £70k in one month by sole agent working from home on his own. I'd love to hear more success stories like that.... Any agent done over £100k in a month on their own working from home, someone must have?

From: Michael Riley 07 November 2018 06:16 AM

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