Amazon could be about to enter the housing market, City analyst Anthony Codling has said.
In a note to investors yesterday evening, Codling, of Jefferies, said that Amazon had placed a “hire realtor’ placeholder in its home and business services section – a move that could signal a threat to Purplebricks’ imminent entry into the American real estate market.
Codling said: “Purplebricks is big, but Amazon is a little big bigger.
“Whilst we remain yet to be convinced that Purplebricks’ business model is proven, we admire the pace of its growth and the scale of its influence. It is definitely a brand which, in our view, punches above its own weight.
“However, it is not as heavyweight as Amazon and we doubt that, even in the face of its many five star Trustpilot reviews, Amazon is a more trusted brand than Purplebricks.”
Questioning whether Californian dreams could turn into nightmares, Codling said: “It appears to us that Amazon may be looking to enter the real estate business. This would in our view add a significant level of risk to Purplebricks’ US expansion plan.
“Amazon has changed the way this analyst shops for most things and housing could be another product purchased through a trusted brand.”
| Codling also said that on this side of the Atlantic, the Taylor Review on modern work practices could pose problems for Purplebricks. The report proposes a new category of employee, ‘the dependent contractor’, where the worker is dependent on one contract. In such scenarios, the contractor would have to provide benefits including pensions, holidays, and sick pay, and also pay National Insurance. |
He said Purplebricks has always said that Local Property Experts are not employees, but Codling said that if the “dependent contractor” proposal became law and LPEs fell into this category, there could be “significant cost implications” for Purplebricks.
Codling said that taken together, the threats were a possible “double whammy” for Purplebricks, whose shares – described by Codling as “priced for perfection” – were yesterday riding high at 459.75p.
However, this morning a Purplebricks spokesperson poured cold water on suggestions that the Taylor Review would affect it at all. She said: “We do not consider that the issues raised do or would have any impact or relevance to Purplebricks and the relationship it has with Local Property Experts.”
The ‘hire realtor’ link was visible yesterday evening but may have since been removed.
https://www.amazon.com/Hire-a-Realtor/dp/B00V6D6MZ2
However, you can see what it looked like:
Orders second large box of popcorn…
https://www.amazon.co.uk/Ready-Made-Popcorn-Kitchen-Professional/dp/B004GSW7NU/ref=sr_1_6?ie=UTF8&qid=1499924878&sr=8-6&keywords=popcorn
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Well amazon was allowed to comlpletly destroy many industries and lively hoods by making $billions of losses.
Seems that without govt. intervention the only people winning are the investors propping up these fake companies.
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On one hand you’d argue what do Amazon know about estate agency but on the other you’d have to say with Purple Bricks pioneering the way for simply reselling portal advertising, why shouldn’t Amazon and alike do the same!
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Exactly. By allowing purple bricks to resell their service rightmove have created a youngster that could become strong enough to overthrow rightmove as the alpha male. They’ve also damaged the relationship with their high street agents so they can’t rely on their loyalty.
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Yes,,the only way to stop this is by real agents boycotting Rightmove until they ban PAY ANYWAY AGENTS on the grounds that its not being an ‘ agent’. ….it makes its income by selling a promise….not a house.
Rightmove wont let me open a virtual branch with out charging a £1000 but protects a business that claims on TV that we are scum and ripping people off.
ONtheMarket .. come on lads…. get your heads out of *****
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Still not sure why we dont all back zoopla instead of righttmove…£700 cheaper for starters and very well known brand.
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The online agency model is a poor investment because the only barrier to entry is the supply of substantial finding.
With high street agency you need premises and experienced local staff as well as funds making the barrier to entry much higher.
Someone like WH Smiths could do it, they have well located premises, funding and they could recruit staff.
I always thought purple bricks success would bring new entrants in to take a big slice of their pie. Then the online market will become saturated and fragmented over time just like most other market sectors.
Because of purple bricks poor market penitration in any local area and low fees, they don’t have enough cash to use the same media that high street agents use. They couldn’t afford to distribute canvassing leaflets in the same volume as high street agents, use local newspapers or deploy the same number of staff.
What surprises me though, is that rightmove isn’t charging purple bricks for each region where they have a representative, or maybe they are? Rightmove has helped to spawn a monster that could threaten their own business model. Soon purple bricks will not need rightmove as their brand has become big enough to stand on its own.
What would happen is purple bricks offered a free listing service to high street agents? Would that be the moment when agents dropped rightmove?
This might be a good time for large investors to cash in and move away from online agents and rightmove because things could get messy over the next few years. Smart of zoopla to diversify so it isn’t as exposed to risk as rightmove.
What do you think?
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Zoopla have a clever set of businesses and are cleverly monetizing the data. As for the retail businesses jumping on the band wagon…who remembers Tesco’s foray into estate agency and of course Spicer Haart’s attempt at taking that opportunity over!! What a mess.
Amazon…yes, big and powerful and is part of many peoples day to day function. However, the USA loves its realtors as they are good at networking and of course they carry out the mortgage and legals…so are an intrinsic part of the process at the moment. Foxtons tried it, thinking their cheap British fee model would work and it didn’t! The BIG difference for Purplepeople is that they heavily budget for TV and radio advertising and have big funds set aside, so can make a lot of noise very quickly. If you want to win in an online world, you have 2 years to make your mark or wither and die. That is the real difference when used in conjunction with online business models….look how quickly Amazon/FacebookGoogle/Twitter/Instagram grew and the disappearance of Bebo and countless others. If Amazon do it…they have a big budget to be able to spend, but the killer for all these businesses is that humans are irrational when buying and selling houses and the process takes time. These businesses want their money FAST!!! Estate agency will survive, its just the numbers of businesses will be streamlined according to the volume of transactions/fees available in the market. Some will run lifestyle businesses as no one else will employ them and are able to get by on modest income, others will be greedier and hungrier and will have a feast, the others will die and end up becoming search agents or leave the industry completely.
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Looks like the ‘you know who’ police have got at the link and taken the amazon ‘hire a realtor’ page down. There are just dogs and b1tches there.
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“even in the face of its many five star Trustpilot reviews” – excellent trolling from Mr Codling here.
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Does this does raise an issue of independent trader on amazon offering agency services in the UK. ?
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I reckon that if Amazon moves into this market in the UK then the likes of Rightmove should be the ones worried.
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Here’s a link to Google’s cache of the page https://webcache.googleusercontent.com/search?q=cache:Qz2ETVDJ3x4J:https://www.amazon.com/Hire-a-Realtor/dp/B00V6D6MZ2+&cd=1&hl=en&ct=clnk&gl=uk
There’s a message “Coming soon” “Sorry, there are no service providers currently available in your area.”
With a button saying “email me when ready”
So this might have been a quick survey to see what level of interest they get.
I’m still expecting some heavyweight new entrants and PurpleBricks are hell bent on getting first mover advantage from what I can see.
Interesting times.
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Why is the UK real estate industry always at daggers and fighting each other. It is a very self-centred, very cocoon focussed industry. The industry needs a complete overhaul, and to think more on a global basis, and if Amazon, or the likes of realopedia.com and souq.com, or purple bricks, are the ones that will turn the industry around, and make it more global, efficient and professional, with a clear focus on the customers, sellers, buyers or investors, then why not support them, instead of just attacking them. As the real estate industry is the 2nd biggest employer in the world, why not support those players who are really trying to shake it to improve it for the better.
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“As the real estate industry is the 2nd biggest employer in the world…”
Care to enlighten as to where that golden nugget of cr@pola came from?
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As a global industry – not only the agents, but developers, brokers, corporate affiliates – anyone associated directly or indirectly with the real estate sector. . Eg. USA alone, there are over 2.2million agents (NAR stats); UK over 500k (although difficult to get true figure). The service industry (catering, hotels, etc.) is known to be the biggest in the world. Hope this helps, happy to discuss offline.
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