Kat,
This is the "LendingTree" / "ServiceMagic" business model applied to home repair. Here's a RedBeacon review that accurately describes why we might have trouble getting it to work for investors:
Red Beacon is website that was launched recently here in the Seattle area. It's goal "to match service professionals with customers". So far I see nothing wrong with this "mission".
Here is where Red Beacon goes wrong...they charge a 25% fee for finding a customer to the business.
(For example) A $3,000 Landscapping job has to go all the way up to $4,000 just to cover the fees. The homeonwer never realizes that they just overpaid to cover the fees. That is a ridiculous amount to charge any company for finding a project and is a huge diservice to the customer who ends up paying way more than they should for basic home services.
With so many other options out there I hope that the "market" will decide this is nonsense and not a "sound business model"
-Greg Wilson
The REI Mentor
