Why Tradies make the most money quoting online

Disclaimer: Prices in this guide are based on data from 2012 and are subject to fluctuations in the market.

We recently reported that Building and Trades businesses make $25.69 in income per dollar spent on membership with ServiceSeeking.com.au. This was higher than Home Services businesses ($16.98), about twice Events businesses ($12.86), and more than double Business Services ($11.21).

But why?

To begin with, Building & Trades jobs are worth a lot more – an average Building job totals around $1497, compared with just $276 for Home Services jobs like house cleaning, gardening, or furniture removal. Roughly speaking, a cleaner needs to win five jobs to generate the same income as an electrician. So Tradies can win far fewer jobs to make the same money.

Then there’s the element of competition. Generally speaking, tradesmen enjoy less competition than other industries, which boils down to skill, location and demand.

A lot of service industries are unregulated. A graphic designer, web designer or photographer can do business without any official regulation of skill or qualifications. Not so with Tradesmen. Most need specific training to participate in their industry – usually, a long and poorly paid apprenticeship followed by years of industry experience that prevents new businesses from entering the market.

Location helps reduce competition, too. Builders generally work in their local area, which limits the number of potential competitors to other local tradesmen. Customers also show a marked preference to hire local tradesmen. This is markedly different from, say, bookkeeping, where you can outsource work interstate, regionally, or internationally and take advantage of cheaper labour rates. The flip side is that Business service companies can quote and work on jobs from anywhere without much disadvantage – consumers in these industries still prefer local businesses but are less sensitive to hiring local businesses – increasing competition.

We’re seeing massive growth in demand for Builders & Tradesmen. Even the worst-performing building category, Concreting, is still growing by a solid 30% in jobs listed compared with last year. Demand for Electricians and Carpenters has increased by 85% and 86%, respectively. Business Services or Events jobs are growing far less quickly.

With strong growth in demand, high average job value and natural barriers to competition, it’s no surprise our Building & Trades members are making over $25 dollars back for every dollar spent on membership.