Billed as an on-demand way for customers to get the home services they need, Amazon Home Services has been around for six years now. In that time many small home services businesses have joined as service providers, but with mixed results. Is it worth it for your home services business? Here are some things to consider...
Prepackaged and recurring service costs
To a small business, this one might sting—for a prepackaged service, Amazon takes 20% off the top for prices up to $1,000, and 15% on anything over $1,000. If you're a small home cleaning business for instance, you would likely have to adjust your pricing to capture a decent profit margin. Worse still are recurring services where 15% is taken on all subscription plans, and commission is 20%!
The requirements of AHS, are really quite straightforward, to offer trade services, you must be licensed and provide proof before being allowed to work. This is actually a great way to separate yourself from your competitors and others who may not hold the necessary licensure. Then there is the requirement of at least a $1 million dollar general liability insurance policy that can add to the overall cost of a small business joining the platform.
Other things to consider
Some additional things to be aware of for your small business is the payment schedule, as Amazon processes payments on Friday and pays on Monday. Thankfully, they also eliminate the hassle of customers disputing a transaction and you will still be paid. However, they expect you to show up to every appointment you accept and should it be canceled last minute, you're out time and fuel...
If you can manage the fees while still maintaining profitability along with the payment and appointment schedule, it might be a good option. While there are several services like AHS now available, looking at the pros and cons of each one relative to your business can make the decision easier.
Take a look at these other resources for your small or home services business, and if you still have questions, give us a call.