Business Models and Profitability

My post title is pretty deep for the weenie but don't worry, it really is me writing and I am not one to think deep thoughts.

As the economy and the housing market have been shifting . . LOL that cracks me up, I like to think of it as changing from good to bad . . but shifting sounds more . . motivational.

As I was saying as the housing market goes into the toilet and the foreclosure rate goes through the ceiling and housing prices drop like a rock, or maybe they are shifting downward,  it is getting harder for a Realtor to make a buck without doing some serious work. I can sell 10 foreclosures and I will come out about the same as I used to putting together deals with three traditional buyers or sellers.

I shouldn't be feeling sorry for myself though.  Real estate brokerages are really having a tough time of it. Profits are down and they can't seem to make ends meet even though they have raised those extra fees.  Some of the bigger companies have no idea where their next zillion story glass office building is coming from or how to finance a bigger fountain for the lobby.

It all comes down to business models. We all need to lead with revenue and that is why the paper clip issue is more important than ever.  Granted we use less paper than ever and I would prefer to use none at all but we still have those pesky people that have to have contracts mailed or faxed to them, and those seriously deranged people who need them printed and filed.

Staples are cheaper than paper clips but I have found that with a contract if I take the staple out five times to fax it to some bozo who doesn't use email it gets kind of tattered.. . and predictably I can never find a staple remover thingy either. Mine might be in the refrigerator next to my car keys or in the back door where I left my car keys yesterday, but that was yesterday and I don't know where they are today . . .  but that isn't my point.

No one seems to mind footing the bill for the paper but paying for paper clips is another matter.  I found some jumbo paper clips on sale and when I did the math they cost about .0059 cents a piece.  I worked out of one office where I was told that if they bought paper clips the agents would just steal them. This was before times got really hard.  The Realtor code of ethics prohibits stealing, making it hard for me to believe that an agent would steal a paper clip. (Broker Bud I consider the paper clip I took from your desk today a loan)

I used to carry paper clips in my car just in case I needed one. I guess that is why I will never be wealthy because I spend my money on such frivolous items. To make matters worse I spilled some in the car and instead of picking them up, I let the detailers at Saturn suck them up with one of those big vacuum cleaners when they cleaned my car. I suck! I have no business acumen!

Can a brokerage supply paper clips to agents and still make a profit?  I don't think they can.  Can agents buy their own paper clips and make a profit?  absolutely!