Is Domain.com.au implementing confusing pricing!

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There are strong rumours that Domain.com.au are testing the waters with what can only be described as a completely confusing pricing models for agents across Australia!

Here is how it seems to work. Where domain.com.au have strengths, which for the most part is alongside their major classifieds publications the Sydney Morning Herald (Sydney) & The Age (Melbourne), they are introducing a zoning system.

The idea that this has always been the case, is new to me and to many of the agents I have conversations with.

So as an example an Inner West Suburb such as Balmain will incur Zone 1 pricing of up to $600+ per month. However country and outer suburban areas will be downgraded to Zone 2 or 3 depending on their popularity and base.

I can see some merit in this, but at its core, it is just about getting more dollars out of agencies. I have had conversations with the good people from domain.com.au about this and even though they seem to be convinced it is a fairer system – the net result is they simply just make more money.
Another thing!
From what I understand Domain.com.au are also introducing separate fees for commercial listings as well, this has been done on the heels of the recent multimillion dollar purchase of commercialrealestate.com.au . This is a shame – as I have said here before about my qualms with realestate.com.au charging agents extra fees for commercial listings for residential agents. This was a point of difference between the two super portals!

A sensible and fair outcome is for residential agents to have at least 10 current commercial listings. Residential agents have always carried some commercial stock and giving them at least some leeway here would be a good thing and would show some empathy for residential agencies.

There is a closing of the gap between the big two portals now (pricing and services), however there is one big massive gaping gap (that is getting bigger each year) between the popularity of domain.com.au and realestate.com.au as realestate.com.au continues to build on impressive results month after month. The gap is now almost 1.5 million visitors a month (October 2006 Neilson//Netratings).
Another worrying rumour I heard was that Domain.com.au are considering offering (directly to vendors) the option of having their listing upgraded for a fee – not through the agency but through the domain.com.au website.

I can categorically state that with all of my dealings with agents that this will not be accepted under any circumstances. The idea of Domain.com.au having a direct monetary relationship with vendors, is a very slippery slope indeed and one that I am sure will be canned (if indeed it is going to happen in the first place).

I would love to be a fly on the wall at some of these high level discussions at these portals. Do you think they are sitting there finding new ways to help agents in difficult times? Or do you think they are throwing out as many hair brained ideas on how to reap more money from the very clients that have built there success in the first place.

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12 Comments

  • Sam
    Posted November 10, 2006 at 11:59 am 0Likes

    Different pricing for different locations is a good idea, why should the agent in Upakumbuckta West pay the same as the agent in Toorak, the difference in traffic numbers to these areas would be like chalk and cheese.

    Separate fees for commercial listings ? Why not it’s a completely different market with a cost to run of it’s own.

    Resi agents should be able to take commercial listings one at a time but free ? no justification at all. Works the other way too, commercial agents should pay to have the odd residential listing on the resi sites.

    Dealing direct with owners ? Why not they can advertise in the papers anyway, why should the web be agent exclusive ??? Perhaps a problem with the ACCC also there.

    And yes these portals have to make money otherwise the agents would have to rely on their own web skills to get them any business HAHAHA ……..oh sorry that just slipped out it’s just that most agents can’t even turn their own computers on. But thats ok they are supposed to be out there selling leaving IT to others, they cant print their own newspaper nor can they be proficient at web sites.

  • Peter
    Posted November 10, 2006 at 12:14 pm 0Likes

    Sam Thank you for your comments. You make some valid arguments, however business should not always resolve around making money and it seems every initiative is revolved around just that!

    There is not one initiative I have seen from above that does not equal just more revenues.

  • frank
    Posted November 10, 2006 at 12:21 pm 0Likes

    It maybe confusing but it’s fair.

    People in rural areas often make less commission from cheaper sale prices and fewer stock. They often have a less Internet savvy market which means less visitors and searches of their area. Essentially, they have been paying the same price for a completely different service. It makes perfect sense to introduce different pricing tiers.

    I don’t think its always about more money from existing customers, as some of these customers will surely be paying less when the new model comes into affect.

    More rural agents with cheaper subscriptions also means more rural content. This is also a good thing.

    Frank.

  • Sam
    Posted November 10, 2006 at 12:27 pm 0Likes

    Some of the larger agents are making hundreds of thousands of dollars from the portals and paying a pittance while other agents pay the same and get much much less, not fair at all.

    There is a VERY LARGE argument to have fees charged by the number of listings on a portal, user pays, with a minimum subscription price. Why should the agent with 300 listings pay the same as the agent with 10 ???

    You want to talk fairness ? well there’s a prime example of how the present system isn’t fair at all.

    As far as making money goes until the Salvos launch a rea estate portal to help the poor suffering agents we’re stuck with the present capitalist system.

    Good forum this , by the way 🙂

  • Peter
    Posted November 10, 2006 at 12:27 pm 0Likes

    Thank you Frank. I agree with what you say, however cheaper is not actually cheaper, it is more expensive than what is currently offered and the Zone 1 areas are more expensive again.

    As an example one person I have spoken to is going from high $200’s to high $500’s

    I prefer the one size fits all model because everyone knows what the deal is. The Internet is a cheap form of advertising, but so it should be, there are much smaller costs involved in the operation and distribution of portals!

  • Elizabeth
    Posted November 10, 2006 at 7:36 pm 0Likes

    Pricing in zones seems to be a great idea – it actually shows that portals are aware of the differences between metro and rural.

    My take on the one size fits all is drawing a comparison to medicare – a flat yearly fee (or a % of income) – but it just does not work… everyone pays but to get the service you need, you wait on a list. To get the service what they need, most people take out extra coverage with private insurance.

    So the pay for what suits you model seems best.

    BUT – by allowing private sales on their website domain will never get me as a customer. They are already there, so it is no surprise to see that they are looking to get more $ from them, to compensate for agents like me.!

  • Dan
    Posted November 10, 2006 at 8:48 pm 0Likes

    Sam, let me know if we pass the Salvo test!

    Next week you’ll be able to preview a new way to promote your properties online. It’s been developed with plenty of input from leading agents from all over Australia. They told us one clear message – they want better control over their property listings. So we developed RealMap to accept listings from any agent, present them on a cool (our humble opinion!) map interface, and send buyers through to your own website for details and enquiries.

    Your opinion is worth more than mine, so please take a look and let me know what you think!

    Cheers,
    Dan

  • dennis austen
    Posted November 11, 2006 at 1:23 pm 0Likes

    I am a member agent of domain.com.au . Back in may,06 I was paying $ 200 per month .In july, I agreed to pay $275 per month – since october ,domain wantds $363 per month. Has any other agent had this experience.

  • dennis austen
    Posted November 11, 2006 at 1:29 pm 0Likes

    I wondering if all agents got together & started their own site. Advertised it in their windows/on signs/on newspaper adverts/websites/on stationery,etc. – if we could do away with realestate.com.au & domain.com.au & pay say $50 to 100 per month.

  • Tom S
    Posted November 11, 2006 at 6:04 pm 0Likes

    Dennis, the likes of REA and Domain didn’t just happen overnight. A lot of investment and hard work by clever people provides agents like you with a cheap, cost effect and targeted method of advertising your listings. Agents getting together to start their own site! If you look at the last 10 years of history for realestate portals, this has been attempted time and time again. By the various REIs, the big franchisers and large media companies. Don’t kid yourself.

    Dan, nice plug for realmap – but don’t get too excited about this enterprise. Hasn’t the content message sunk in yet? You do not get 90% of content instantaneously and if you did, you’ve still got to drum up the visits. Don’t invest too much money.

    Elizabeth, you are right on the money as usual. If only more agents had you level of rational thought and pragmatism.

    As far as Salvos to help the agent, I live 10 kms out of Melbourne CBD and all of my local agents drive late model Mercs, Beamers and Audis. Someone get the tissues.

    On the main subject of Zone Specific fees, this is a lot better than a Per Listing feet model. Things could be a lot worse.

  • Alex
    Posted November 12, 2006 at 11:07 am 0Likes

    I am not an agent, but I have bought and sold a number of properties over the years as well as renting a number. This I think gives me a little insight into this debate.
    Firstly, I’m sick and tired of agents bleating about the major real estate advertising websites, newspapers and magazines. They provide the agents with exactly what they want, exposure for themselves and their clients properties. I for one would not waste time using anything but the major websites of domain.com.au and real estate.com.au. Even the papers take second fiddle these days. As for looking at the agents own excuse for websites, what a waste of time.
    Elizabeth seems to be the only one with a reasonable attitude, taking me, the consumer into account. The only issue I have is the fact that when I look at domain.com.au and real estate.com.au, I expect to be able to see all properties for sale and for lease, not just the agents offerings. Who do the agents think they are, trying to pressure a publisher into only servicing them and excluding the minority who may wish to sell or rent without the agents “help?”
    Well done domain.com.au and realestate.com.au

  • Peter
    Posted November 12, 2006 at 12:49 pm 0Likes

    Well it seems I was wrong about the levels of pricing that is being offered by Domain. I suppose the message I was trying to convey is that major companies do not change their pricing structure unless they know they will benefit financially and this is fine, however we will wait and see how agents react once they get their new pricing and the fact there is going to be different levels of membership within each zone!

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