BrokerPulse

RealTrends Q4 2021 BrokerPulse: Office consolidation, boosting agent productivity and core services capture rates continue…

2021 Website Rankings Now Live!

RealTrends website rankings highlights the top real estate websites across the country in 6 total categories for our annual brokerage website rankings.

Real estate teams vs brokerages

Steve Murray and Tracey Velt discuss the profitability of real estate teams vs brokerages, based on the results of the 2021 RealTrends Team Profitability Study.

Study: It’s true, real estate teams outperform brokerage firms

Surveyed real estate team gross margins were an average of 61.8% compared to an average of 13.8% for real estate brokerage firms.

What Causes Incumbents to Fall?

https://www.youtube.com/watch?v=4bsHaDpLvAE

Here’s some history

As late as the 1980s, IBM was the world’s largest computing company; Sears the world’s largest retailer; GM the world’s largest auto company; the oligopoly of CBS, NBC and ABC controlled almost all television viewership. All lost their positions long before Amazon arrived. IBM did not lose its position because of outside competitors so much as they became complacent and did not see the future as did Bill Gates or Steve Jobs. They missed the importance of the personal computer and the internet.

Failure to Capitalize

IBM was once the largest computing company in the world. At one point, it was estimated that they had 70 percent of the world’s installed technology. Then, they ignored the midrange computing market (it would cannibalize their large machines), gave Bill Gates the license for the software for the IBM PC (but also allowed him to sell it to anyone who made a similar machine), never saw the internet, never saw browsers—well, you get the point. They were focused on the large computing market and never capitalized on the rest of the computing market.

Too Many Focuses

Sears wasn’t killed by Walmart alone. Home Depot, Lowes, Crate and Barrell, Office Depot and many others took a piece of Sears’ market. But it wasn’t these outside entities that really killed Sears, it was the leadership who moved in stocks, real estate brokerage, credit cards etc. and stopped focusing on what was happening to its customer base. They didn’t pay attention to the many competitors posing a threat any more than they dreamed that one day there would be an Amazon.

Dismissed Competitors

GM once ruled the U.S. auto market with well over 50 percent market share of domestic car and truck sales. They first dismissed foreign competition as too niche to ever pose a threat to their dominion. And, despite numerous attempts to get the Federal government to protect them, they began to lose market share to all these niche competitions. Again, it wasn’t just that they didn’t see these competitors as real threats, but they also began to focus their attention in other directions (remember when they bought Ross Perot’s EDS?). Today, their market share is close to half of what it once was.

Stuck in Old Ways

The big three networks lost market share to many new entrants, but mainly they lost share because they, too, stuck to tried-and-true formulas of success from the past. Viewers were looking for something else and finding new ways other than watching TV to get their news, sports, and weather. The standard morning and evening news shows no longer attracted consumers who could get their daily information fix from many sources at any time they wanted it. They weren’t paying attention. Consumers now had many more choices of news and entertainment and could have it on demand.

It’s not just new entrants that cause a diminution of incumbents, it’s just as likely that incumbents were not paying attention. Arrogance is as likely a cause as what new competitors are bringing.

This is part of a series on the age of Amazon and how brokers can innovate and stay profitable through market changes.

Originally publish March 29, 2018

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