What Happens when Amazon Low-balls Prices: A Short Lesson in Economics

What Happens when Amazon Low-balls Prices: A Short Lesson in Economics

Did you know that you can order number of different types of services through Amazon?  It’s officially called “Amazon Home Services” (aka “AHS”) and house cleaning is one of them!  Here’s how it works:

  1. Someone searches Amazon (or Amazon displays in their sidebar) for a service.  They’ll see that Amazon can provide regular house cleaning, deep cleaning or spring cleaning, carpet cleaning, Move-in or move-out cleaning, and a few others.
  2. The customer selects, say, house cleaning and enters information (# bedrooms, #baths, square footage of home) and then sees an estimated price.  Click here to see an example.
  3. Amazon then adds the customer request (includes three dates and times the customer has selected as good for them) to the service provider app.
  4. You, the professional service provider, can see the request in the app and elect to request it or dismiss it.
  5. On the day and time agreed upon, you service the client.  They sign the app that you’ve cleaned that day and you take a selfie photo in front of their home (to verify that you actually did clean THEIR home).

Amazon uses Independent Contractors to fulfill these cleanings, and it’s not difficult to get set up as an AHS provider.  You submit information about your business like EIN or SS number (if you don’t have an EIN yet), insurance and workers comp info, and complete a background authorization for the company and also for any worker that will be in the client’s home.

Here’s what I like about working with AHS:

  • It’s not just another lead selling company (like Home Advisor or Thumbtack where you pay a fee for the lead regardless of if it ever leads to anything).  Fees are only taken out of jobs you are awarded and service.  AHS keeps 20% of all fees charged to the client so from this example of $170.52 the servicer gets $136.42, and Amazon keeps $34.10.
  • While the 20% is larger than lead fees from the others, there are no wasted fees paid.  For example, if I purchase 3 leads from Home Advisor at $25 each and only land one of them, the effective fee for the one I got was $75.  I can picked choose exactly which ones I want to request.
  • Above all, though, the best reason to use AHS is that they allow you to directly service the client in the future through your own business.  So after the first visit, they all go through my company and I keep all the revenue:-)

But true to Amazon’s core value of trying to provide all things at the lowest possible price (something they typically are remarkably good at), it’s not a good business model for home services.  When hiring a professional who will be in your home (cleaner, plumber, whatever) they will have access to YOUR HOME.  And providing the cheapest possible servicer is a risky bet Amazon makes with the customer’s belongings.

I’ve seen some prices on AHS for cleanings that after their feee would only be $20/hour.  As a cleaning company, I don’t even make any profit until I’m getting at least $30/hour, and neither will any other professional cleaning services company.  If I was an independent solo cleaner (not company, just me), I’d still be able to get $25-$30/hour all day long from clients.

A little bit about basic economic principles.  When determining prices, you must consider supply and demand, what your profit margin is, and what the market can bare:

  • Heavy supply and low demand pushes prices down.  Low supply and heavy demand drives prices up.
  • All professional cleaners (solo or company) have overhead that must be met.  Licenses, workers comp, travel time/gas, cleaning supplies, etc.  If a job doesn’t profit you and there’s no guarantee it’s anything but a 1-time cleaning, you’d be better off sitting at home than doing a cleaning for a loss.
  • When looking at what the “market can bare” the price must be acceptable to both parties; provider and consumer.  If price is too high, consumers won’t buy.  If price is too low, provider won’t provide.  The price needs to satisfy both parties.

In trying to low-ball prices, though, Amazon has cut their own throat unfortunately.  I cannot tell you how many cleaning opportunities I’ve seen in the app that are underpriced by 25-50% (so I obviously dismiss them).  Then, if no-one else requests to do it, AHS send out an email to the providers with the job details and price.  So by being excessively low, they end up having to cancel the cleaning because “no cleaning professionals are available”.  The customer is disappointed and Amazon has lost the opportunity for fee revenue.

Lesson: price based on what the market – BOTH sides of the market – can bare or risk loosing income.  You’d think Amazon is large enough to learn that, but they’re new to the whole services industry and will (hopefully) learn how to run that business better.  Or leave the market.

New Book in the Works: A Marketing Anthology

New Book in the Works: A Marketing Anthology

I’m pretty good at marketing.  I have an MBA, and know how to use it LOL.  I’m also pretty creative and come up with good marketing pieces for my cleaning business, but I know not everyone can.  They can recognize a good piece, but not sure how to create their own.

So I am working on a 200+ page book of 50+ marketing tasks that ANY cleaning company or solo professional cleaner can use!  Exact words, image placement, even offer ideas.  Everything but the images, those you’ll have to find and purchase licensed copies for yourself to use (more about that in the book!).

Here’s a sneak peak at the contents:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Table of Contents:

Page 4: Introduction

Page 5: Specific Instructions for this Book

Page 6: The Basics: Marketing for Cleaning Professionals

Page 7: Photo Licensing: How it Works

Page 8-X: 50+ Marketing Tasks to Try

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Screenshot of pages 4-5

Screenshot of pages 6-7

If you’re interested in getting an email when it’s ready, just click here to join the email list.  Never any spam, just an email once a week or less.

6 Week Boot Camp for the Absolute Beginner Cleaning Professional

6 Week Boot Camp for the Absolute Beginner Cleaning Professional

If you’re ready to jump in and get the ball rolling on a great career for yourself, the 6-week boot camp program is the quickest way to achieve that!  Jam packed with 6 weeks of daily instructions to get you cleaning professionally, Cindy walks you through every step of the way doing nothing alone.  What’s included:

  1. Cleaning Up! Workbook: this is the foundational piece of instruction to growing your success.Exact step-by-step instructions on creating your business properly from day 1.
  2. 2 weekly calls: The first three weeks are 1-on-1 calls with Cindy to go over your progress and review the tasks for the few days ahead.  Monday and Thursday, or Tuesday and Friday.  The second three weeks of the boot camp the calls will be 2-on-1, that is two program participants on the call with Cindy.
  3. Weekly Action Plan: Exact instructions for each day to accomplish an amazing amount in a short time, these action plans are precise and leave nothing to guesswork.
  4. Boot Camp Facebook Group: A closed Facebook group where you can post questions, read other’s solutions to issues you may face throughout your boot camp experience.  This is where Cindy also provides feedback in between conference calls.

There are other business “coaches” out there that are expensive and don’t give you the personalized one-on-one approach Cindy can.  This boot camp is specifically designed with the absolute beginner in mind – someone who is ready, excited, but doesn’t know where to start or how to create a business properly.  If you have the desire and the drive to follow simple suggestions and directions, you WILL be able to create full-time income within 6 months, usually much much less time.  While there are no guarantees in life, or in the program, Cindy wants to see you succeed and had laid out the principles and directions to get you there.

Click here to download a PDF of the 6 week bootcamp overview.

You can schedule a free consultation by scheduling one here – ask all your questions, see when the next group is forming, and take control of your future beginning today!

Online File Systems

Online File Systems

In any business, there are great ways to set up your electronic files from the beginning that will make your life easier, make the files safer, and easier to access from anywhere.  Also referred to as “cloud computing”, the benefits on line file storage include:

  • Safe electronic storage that is backed up every few seconds.  If you do work on a document, and want to go back to an earlier version, you can easily do so.  Nothing is permanent and this is a good thing if you make a mistake!
  • You can access documents and files anywhere in the world.  You don’t have to be a slave to your office computer any longer.
  • You can share documents and the ability to edit them with other users.  This becomes quite handy if you eventually hire office staff or even a virtual assistant.
  • For the most part, it’s free.  While there are many great options (some are reviewed HERE), Google or Dropbox are considered the best overall options and easiest to work with.

Here’s one of the best ways you can do it for free (I use this method with Google Drive):

  1. If you don’t have one already, create yourself a gmail account.  Using your full name (like Jane.Doe@gmail.com) is the gold standard.
  2. Visit this page or this page to read about setting up Google Drive on your computer, Android and/or iOS devices.
  3. Using pen and paper, make an outline on how you can best set up your file folders that will make the best sense to you.

For the cleaning professional, the following is a great way to set up your file folders as you are getting started.  As you proceed and have more complicated business structure (like hiring employees, for example) you can customize it further.  This is just a good starting place:

This is a good overall file system you can use, this is exactly how I have my online files for my cleaning company laid out.  Obviously if you didn’t start your business until 2018 then you won’t need older file folders this is just mine.  The reason I have the top level folder labeled as “1 Clean House Cincinnati” is so that it always appears at the top of my Google Drive.

 

 

Tools, Equipment & Supplies Checklist

Tools, Equipment & Supplies Checklist

One of the first questions people have when thinking about cleaning homes (or businesses) professionally is, “What tools, equipment and supplies do I reallyneed?”  There are probably as many answers are there are cleaners in the world, but I’m going to try to get you started for as little investment as possible, without sacrificing quality.

Here’s a list of the must-haves of any cleaning company when starting out (note: some links are affiliate links):

  • Microfiber cleaning cloths.  They need to be about 14″x14″, not much bigger, so they’re easy to handle.  You’ll need at least 60 per full time cleaner (you + employees) to last 1 week.
  • Paper towels.  We use standard Bounty and stock up when they’re on sale.  We don’t use many, a roll should last at least a few weeks/. It’s also Ok to use a few of the client’s paper towels.
  • Mop.  We like these Rubbermaid  commercial mops.  They are inexpensive, and easy to keep in good shape.  (Sometimes the mop head needs replacing, we use this one when it does.)
  • Microfiber mop heads.  These work so well and wash easily.  Having 10-15 on hand for each full-time cleaner is a good idea.
  • Vacuum.  Because you will be using your vacuum 10-20 times more than typically inside a home, you have two main options: buy an expensive heavy-duty commercial vacuum that may last 5 years or more, or buy a less expensive one that’s lighter and might not last as long, but you’ll be able to afford to replace it quicker.  We love Shark DuoClean because it’s less expensive, very light weight, easy to maneuver in and out of cars as well as under furniture.  They are usually the least expensive on their website – check for specials like on Black Friday!
  • Feather duster.  We’ve started using these instead of Swiffer disposable ones.  These are healthier because they’re less waste and animals aren’t harmed in the creation of them.
  • Blue Scotch-Brite non-scratch scrub sponges.
  • Stainless steel scouring pads.  Not SOS brand, just plain ones without soap.  These are fantastic on the inside of ovens.
  • White “magic” erasers.  Either Mr. Clean brand or no-name brands.  The no-name brands will not last as long, but often 15% the price so you’re still ahead.  We like these.
  • Liquid Bar Keepers Friend.  It will become your friend too we promise!
  • Murphy’s Oil Soap.  Good for floors (well diluted), woodwork, smells great and grips dust off surfaces to clean well.  Always follow up with a clean dry cloth to wipe up any smears.
  • Toilet bowl brush.  Amazon and IKEA sell simple brushes for about $1, you can buy one to keep at each house (if the house doesn’t have one).  It’s also good to have one on hand in a tall sleeve so it doesn’t contaminate the world.

We make our own general bleach cleaner as well as an alcohol cleaner (Recipes HERE!).  You’ll need the following ingredients to make your own – feel free to play around with recipes to suit your needs and desires: