“One man’s margin is another man’s opportunity” was apparently one of the founding principles of Amazon. Its founder Jeff Bezos believed that by selling products at tight margins with great customer service, he could disrupt the retail industry around the globe. The rest as they say, is history.
A man looking to apply the same principle to the Irish residential housing sector is Eddie O’Driscoll, founder of Auctioneera, a fixed price estate agency based in Dublin. Having spent a decade running his own online marketing consultancy, he had become accustomed to the cut-throat, razor-thin margins being charged by retailers online and was all too aware that only the best survived the competition.
A chance encounter with an auctioneer when O’Driscoll was considering selling his own property set in train a series of events that led to him starting his own estate agency business. “I was selling my apartment that I knew was going to get around €200,000. I live in a big block of apartments so was regularly checking into the property price register as well as Daft / MyHome to get a feel for asking and actual sales prices. I then did what everyone else does; I called out a few auctioneers to tell me how they would charge to sell my property. They all pretty much agreed with my ballpark “valuation” and agreed that it would ultimately be worth what the highest bidder was willing to pay. So from there, I needed some photos, Daft / MyHome listings, for sale sign and someone to answer the inquiries / do the viewings. I was honestly expecting it to cost maybe a thousand Euro maximum. I nearly fell off my chair when one agent quoted 2% + VAT as well as a marketing fee! I worked it out that this guy wanted over €5,000 to sell my apartment! This was when Bezos’s words came ringing into my head: one man’s margin is another man’s opportunity. I knew this was my opportunity!”
In true start-up cliché mode, O’Driscoll grabbed a napkin and made estimates as to the costs of selling his property. “I just took a stab at how much it would cost to get really great photos, list the property on Daft, MyHome and do some viewings. I reckoned it would cost in the region of €800 or so – that was my Eureka moment.”
It took O’Driscoll about a year to build the website and get the necessary license but eventually Auctioneera launched in summer 2018. “We haven’t looked back since” says O’Driscoll as he explains that they are on track to sell over €5m worth of property before the year end – not bad going from a standing start. O’Driscoll claims that vendors who have used Auctioneera to sell have saved on aggregate over €50,000 in fees and counting. Our model is basically to sell a lot of property at a far tighter margin than our competitors. But like Amazon, low cost does not mean low quality O’Driscoll is quick to point out.
“‘What’s the catch?’ is the most common question we get asked. People have been conditioned to think that selling a property should cost thousands of Euro when this really should not be the case.”
A quick look to the UK suggests that O’Driscoll may be onto something with fixed price agencies like Purple Bricks, Doorsteps and Tepilo all rapidly gaining market share. The traditional agents of course won’t take this lying down so expect sparks in the Irish prop-tech sector over the coming years as this plays out.