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OnTheMarket vs Rightmove?

As you probably know, I have been no fan of OnTheMarket (OTM) over the years. You may see this admission as somewhat of an understatement. 

However, I never had an issue with the fundamental idea of an agent-led portal opposing the might and power of Rightmove, whose dominance has - in my view - threatened the profitability and credibility of the industry. 

My problem with OTM was that I disagreed with its strategy because I didn’t think it would work and Ian Springett didn’t take it very well when I publicly articulated my views.

The reasons why I didn’t think the strategy would work revolved principally around two fundamental flaws, the one other portal rule (OOP) and the determination to topple Zoopla as the number two portal before tackling Rightmove. 

Apart from general distaste for and suspicion of the approach, I felt that the one other portal rule would cause the proposition to run out of steam and prevent the business from reaching critical mass. 

I disagreed with targeting Zoopla, not just because I saw it as a spectacular business which was actually becoming a real challenger to Rightmove, but because I felt that by targeting Zoopla, OTM would strengthen not weaken Rightmove and make matters worse not better.

You could argue about how right I was, or how it could have all worked out if only the industry had given OTM more support, but it’s irrelevant now and the purpose of this article is constructive, not a belated ‘I told you so’. 

No, the purpose of this article is to hold out an olive branch to OTM because I think there is now a real opportunity for its new proposition to succeed where it first failed, provided of course the people behind it have truly learned from their mistakes. 

This volte face shouldn’t surprise you too much because I’m a pragmatist at heart. Mostly I just want to get the job done. Anyway, if Donald Trump can befriend Kim Jong-un and Vladimir Putin there must be hope for Ian Springett and I. 

As Shakespeare so eloquently put it in The Tempest: "Alas, the storm is come again! My best way is to creep under his gaberdine; there is no other shelter hereabout: misery acquaints a man with strange bed-fellows."

What I am proposing is more of an alliance of expediency, in our mutual interests, in the interests of fair competition, in our customers’ interests and in the interests of the industry. 

As has been pointed out recently in this publication, several pundits and commentators are now calling ‘peak Rightmove’, one or two are even suggesting it could be vulnerable to OTM, if of course OTM manages to break through in market share of property listings and consumer traffic. 

What I think is that its current proposition for new members is a bit of a no-brainier and if it takes the initiative, I’m certainly open to it. Agents have nothing to lose by signing up to the new OTM , the OOP is gone and with it the need to dump Zoopla, so what have we got to lose? I rarely, if ever look a gift horse in the mouth, so let’s see if I get that call…

However, let’s say that OTM does sign up the great majority of agents between now and the end of the year, how will this provide a credible threat to Rightmove? Well, by next spring the ban on upfront letting agent fees will come into force and agents who want to survive will need to increase their incomes from other sources, or economise. It’s this need to economise that provides the threat to Rightmove because of how expensive membership has become. 

If by then OTM is a credible alternative and if Zoopla continues to become more attractive as well as remaining an economical proposition, then agents may decide to drop the more expensive Rightmove. 

If this happens, and a significant number of agents voluntarily drop the leading portal then its pricing power will be broken and we will have three portals vying for our business on a competitive basis, which, as I have said, is good for everyone, except Rightmove.

For those of you who can’t imagine significant numbers of agents dropping Rightmove, think again. They are already a lot weaker and vulnerable than they look. Gone are the days when vendors insisted you use them. The landscape has developed infinitely since then and continues to do so at an exponential rate. 

As the clients of the online agents who merely list properties on the portals are finding, there is a lot more to estate agency than that. If you don’t know what I mean, you probably aren’t an estate agent, or maybe you shouldn’t be.

I see this in simple binary terms. Way back in 1989, when I started my first branch in Crawley, there were two local property papers, the News and the Observer. I learned that increasing the number of pages I bought and running ads in both papers made no significant difference to my business. 

If anything, doing so distracted my staff from doing the real job and gave them the wrong message that it was passive advertising, rather than their efforts, that was responsible for our market share. This lesson cost me a lot but once learned it saved me a fortune and never again have I thrown money uselessly at pie in the sky advertising. Like I say, good agency is about much more than that.

Let’s call a spade a spade, the industry is under attack from multiple directions. We have a combination of reduced volume in sales and lettings, increased regulatory cost and shrinking margins. 

Whatever we do, there are going to be casualties. Of that I have no doubt. There will of course be winners of this crisis and they will be the smart agents who control their costs, protect their margins and look for opportunities while sticking to the knitting and keeping the faith. Another winner could be OTM. They have a second chance, not everyone gets one. Let’s see if they take it.

*Simon Shinerock is Chairman of Choices Estate Agents. For more information on Simon, see his blog or his LinkedIn profile.

  • James Robinson

    Ok Simon, how many shares have you bought.

    Simon Shinerock

    So cynical...:)

     
  • Chris JaiBahadur

    Totally agree.

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    Rightmove has always been our single biggest advertising cost per branch and their arrogance with price rises will be their ultimate downfall. At the moment we get about 60/40 to rightmove / OTM leads so sooner or later it will happen, unless they lower their costs. If rightmove had any brains, they hold prices for a few years and it would make OTM's job more difficult - but they are too greedy and self obsessed to think about it.

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    As I said at the launch of OTM. All you will need in future is a sign saying Rightmove above your shop and that's it. Your brand will mean very little after all those years of sweat. Turn RM off town by town. When the buyer can't find what he/she is looking for they'll soon stop looking.

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    I may have queried your credentials/independence in the past and your continuous barracking of OTM, but it's good to see your appreciation of the bigger picture we face with Rightmove's (RM)behaviour.

    As on PIE, the reaction from agents to any topic relating to RM's costs and their blatant arrogance suggests to me that the party may be over for them. Can you think of any other supplier (apart from Madame Fifi you may occasionally visit) with a profit margin of 70% or more ?

    RM has an excellent offering, but that doesn't (or certainly shouldn't) entitle them to dictate to me how I run my business, where I advertise my clients' properties, or even whether I can justify retaining a smaller branch where, with such an overhead, its viability is distorted by such outrageous subscription fees.

    It seems to have taken a very long time for agents to realise they are being stitched up by RM and OTM offers a decent alternative. It shall be interesting to see how pricing evolves between the three players over the next year.

    Simon Shinerock

    I’m a pragmatist by nature, it’s rare to get a second chance, let’s hope they take it

     
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    Hi all,
    We started our letting agency In 2006 and at first used our local paper to advertise, we then set up our web site, and also used the local radio.
    Over the years we dropped our local paper and radio, and have used a couple of on line property portals but only when OTM started did we sign up for a regular yearly contract. We also along with other agents in the area signed up with Zoopla, and although we have never advertised with Right Move most of the other agents dropped Right Move. After signing up with OTM and Zoopla we had a number of prospective tenants ask if Right Move were going bust as when they looked at the Right Move site there were only 13 properties for rent. I replied no they have' gone bust it's just that most of the agents locally have decided to market their properties first with OTM and then 24 to 48 hours later with Zoopla.
    Since we started with OTM it had started as a slow trickle of inquiries from OTM, but with our staff talking to prospective tenants about telling them about OTM we have found that we as an agency have passed a tipping point where we get around 55 OTM Inquiries compared to 45 from Zoopla.
    My belief is that it is up to the agents to drop all other portals and the only way prospective buyers and renters can get the details will be through OTM.
    I know it will take a while for all of us to commit to OTM, but Rome was not built in a day.
    Regards to you all
    Rob Jones

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    Agreed.
    Be brave guys

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    Why pay so much to property portals when the majority of traditional high street agents claim they don't need to. "Your agent hasn't sold it yet? We have thousands of registered buyers queuing up to buy your house, we don't need to advertise on Rightmove" #mysteryshop #rogueagent #dirtyrottenscoundrel

    Simon Shinerock

    It’s about a balanced truthful argument Michelle, it would be misleading to say Rightmove is all you need to get the optimum result, equally estate Agents do need to advertise and market properties as well as build a valuable local data base and cultivate important local contacts and awareness, #crossttobear #pointtoprove #biased

     
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