4/18/2006 Update - the listing has been removed. I'm waiting to learn more.
Found on eBay - Turn-Key Mortgage Lead Gen Business Opportunity
Unfortunately, "Turn Key" and "Business Opportunity" all carry negative connotations. Even caling the site "legit" almost suggests that it shouldn't be. Thus, a better way to describe the situation is a case of information asymmetry disappearing.
Among the most popular search terms on this blog is "Rick Natsch." My apologies to Rick as he prefers to stay out of the bloglight or any light for that matter, but people search for him because they have heard his name associated with a purchase that one of the larger online lead gen companies made.
There is a relatively unknown cottage industry that exists, one where (mostly) internet veterans create specialty sites that serve as funnels for lead gen offers. The aforementioned person created such a network of sites, and he is not alone in building a profitable SEM driven lead gen business only to sell it to a larger player looking to increase market share and more importantly own their traffic.
The site on eBay is such an opportunity. The difference is that the person behind has no internet experience or begin their career in one of the lead gen houses. This person built a website that collects mortgage leads because she is a mortgage broker. Here are some fun facts about the site / business:
- All of the traffic she receives come from organic search
- 70% of the leads are from California (I can hear the Excel sheets being opened)
- The site receives about 100,000 visitors per year
- Those visitors translate into about 2000 to 2500 leads per year
- For leads outside of California, she sends them a sorry note as opposed to selling the data
- She only handles New Purchase leads
- A lead gen company could overnight switch the lead form to send leads to their banks, earning a modest $100k to $150k per year...all profit.
Two other tidbits:
- She was able to earn a reported $200k in commissions off loans last year servicing maximum 20% of the leads. That equals $200k on 400 leads or $5000 per lead.
- Were lead generators able to legally sell straight to loan officers and get paid per commission they could generate substantially greater returns. (Even $200k across the entire 2500 lead pool still equals more than $80 per lead.) Disintermediation at work.
Information asymmetry disappearing comes into play because the person, rather than just accept the offer, decided to list it in order to gauge the market price, and as a result has indirectly shed light on what one player is doing. Now, rather than having only one suitor holding firm with one price, there exists the chance for multiple suitors. And, there should be. It's a hot market. What's more, lead gen firms have enough money where they would purchase it just to insure the competition doesn't.
As they say in eBay, happy bidding. (Just don't let the actual item description on eBay dissuade you. She's a mortgage broker not a marketer!)
