Online Sales

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Online property auctions have been around now for two decades, but their embrace in the onsite auction capital cities has been slow.
I'm surprised they aren't more popular, but expect there will be a fillip during the current downturn.
Australia has long pioneered the best technology in the era of real estate digitalisation.
One of the reasons online auctions are the future is that we live in an increasingly self obsessed busy 24/7 world.
Not everyone can always make it to an onsite auction, so reaching more buyers by embracing technology allows the expatriate to bid from their office in China; the first home buyer can still bid while holidaying on the Greek Islands or they might be busy parents with their mobile phone on the sidelines of their child's must see sporting grand final.
Online auctions offer transparency, greater access, convenience and mobility.
It is odd that more agents haven't jump on board. 
There's the occasional gimmick with an unsuccessful live cryptocurrency NSW north coast real estate auction last month.
There can be still be emotion in the online auction as we see whenever monitoring listings on Ebay or the antique online auctions.
The online auction experience can also sometimes give buyers the opportunity to get in early and make a winning bid before the auction starts to heat up, or to compete against the clock and other bidders in a countdown towards final call.
Online auctions are popular in the Australian bush.
Malcolm and Lucy Turnbull are selling one of their Hunter Valley properties, Scotts Creek having asked rural agent Chris Meares at Meares &amp; Associates to conduct an online auction next month.
Meares expects the two-day auction to attract bids of between $6.5 million to $6.75 million for the 2000 hectare farm.
He expects the potential buyers will visit the property, do the due diligence, get their finances in order and then register before bidding online.
Each bid will be visible online in real time with the bidder’s identity remaining private.
With each bid, the system will declare whether the reserve price has been met or not.
Often most of the bidding activity occurs in the last hours, with the deadline pushed back by five minute increments until exhausted.
Once the virtual hammer falls there is a binding contract in place. The deposit monies are not however exchanged online.
Meares likes the process as there's plenty of time to consider the offering with family and financial advises.
Many auxiliary tasks associated with buying property have well and truly moved online.
It includes online conveyancing services which has take over from the paper-based property settlement process
Integrated electronic settlement services have created a one-stop solution for the industry.
While we have marvelled at the speed we can find the best priced mortgage, we still often distinguish between low cost convenience transactions and high value strategic decisions and the need for advice.
I'd suggest Australians still like interaction with an expert mortgage broker when they take on their biggest debt.
The rise of the internet over the past two decades has changed property purchasing information right at your fingertips, any time of day or night. Street View, Google Earth and Google Maps offer invaluable information and orientate you instantly. 
Alerts can be set up for news and listings in any suburb of your liking.
There's property price estimates guidance and auction results too, along with the capacity to ascertain the successes of active real estate agents who you can call on to transact at a later stage.
Of course, glossy property magazine ads still capture the attention too.
This article first appeared in The Daily Telegraph. 
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jchancellor-FAypfDUnLy

Embrace of online property auctions has been slow

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A mixed-use Coogee Bay Road building that is currently occupied by Moodi's cafe has sold, with a new technological trend.
The property, which sold for $3.25 million for the first time in over four decades, had 39 bids, a number coming from an international online bidder who was actively placing bids on the app AuctionNow.
The interested buyer entered the bidding at $2.1 million and stopped just shy of the final price at $3.24 million.
"As a direct result of having the property listed on AuctionNow, the potential buyer was able to watch the auction livestream in absolute real time and easily place bids from the other side of the world," a spokesperson for Damien Cooley auctions said.
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/11/12/moodis2.jpg" alt="">
The building at 232 Coogee Bay Road had been Bakers Delight until last year when it gained approval to be converted into a health food cafe with outdoor seating.
Damien Cooley of Cooley Auctions held the hammer as the price soared past its $2.7 million reserve. 
It sold with a 3.5% yield, which is a suburb record for the asset class.
Above the ground floor commercial space is a one bedroom apartment with separate access.
Colliers International agents Peter Seeto and Miron Solomons handled the marketing.
Down the road the live auction for <a href="https://www.commercialrealestate.com.au/property/99-105-coogee-bay-road-coogee-nsw-2034-2014712202" target="_blank">99-105 Coogee Bay Road</a> saw the property was passed in with no bid.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/11/14/Coogee-Bay-Road.jpg" alt="">
The building, which is home to LJ Hooker Coogee, was offered for the first time in over 100 years.
It comprises four retail ground floor shops and the 170 sqm office space above which is tenanted by LJ Hooker.
There's potential income for around $250,000 per annum on a fully let five tenancy basis.
 
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jonathanchancellor-7SQnKwU6yx

International investor using AuctionNow app underbids on Moodi's Coogee cafe

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The Block St Kilda apartment of Western Australian couple Courtney and Hans will have the advantage of using Gavl, the live online bidding app, when it comes to auction night at the end of this month.
Gavl is a digital platform for live bidding and live streaming real estate auctions.
They're likely to receive a wider buyer pool, and would appeal to the more private, interstate and overseas parties.
The auction of the three bedroom, two bathroom apartment at 2/34 Fitzroy Street will be live streamed on Gavl to registered bidders.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/16/block2.jpg" alt="">
Gavl representatives will be on site to announce any bids from the remote buyers as they come through the app.
Courtney and Hans' apartment is the largest at nearly 300 square metres. They decided to create the largest living space in Block history.
The apartment, which won the first room reveal on this years show for its main bathroom, has the lowest price guide among all five apartments at $2.2 million to $2.4 million.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/16/block3.jpg" alt="">
It will be a first for the reality renovation program in Australia, but a <a href="https://www.urban.com.au/expert-insights/buying/90122-gavl-secures-block-nz-buyer-from-comfort-of-home" target="_blank">winning bidder was found on The Block New Zealand.</a>
Buyer Mike Wyth won the auction, spending $921,500, from his own home.
Gavl CEO Joel Smith said they had great success with The Block NZ purchase.
“We’re thrilled to be helping Courtney, Hans and Wilson Agents when the apartment sells under the hammer in a couple of weeks’ time," he said.
"We had great success when Gavl partnered with The Block NZ this year to enable remote bidding on all the property auctions in the season finale.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/16/block4.jpg" alt="">
"One of the NZ apartments sold to a buyer who was bidding through Gavl – so we’re excited to be a part of the Australian version, and hopefully achieve a similar result.”
Wilson Agents agent Jesse Raeburn, who is marketing the apartment for Courtney and Hans, says it will be a target for investor.
 “With strong rental returns prospects and a significant depreciation schedule, this property is a great opportunity for any investor," he said.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/16/block5.jpg" alt="">
"At Wilson Agents, we’ve been using Gavl in our auctions for some time and have been highly impressed with its benefits and convenience for all parties – particularly among investors. 
"As a result, we didn’t have to think twice about using Gavl for this auction on The Block, as our past experiences have shown that it will draw a greater bidding audience and thereby help increase the sales price."
On average, auctions streamed via Gavl attract 47% more viewers than traditional auctions – maximising the sales potential of properties
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The Block St Kilda apartment to use online auction tool Gavl on finale night

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Australian group Property Connect has agreed a deal to be the exclusive agency to license and market the a sales auction and rental platform in the Gulf Corporation Countries (GCC).
The agreement with Pipeline Marketing Management LCC (Pipeline) will cover countries including Bahrain, Kuwait, Qatar, UAE, Oman and Saudi Arabia.
Pipeline will provide a range of services to assist the company to launch its <a href="https://www.urban.com.au/news/85617-property-connect-to-market-liveoffer-in-dubai" target="_blank">LiveOffer</a> platforms in the GCC.
The technology allows potential tenants to make an online offer on a rental property, with the company claiming that this helps reflect fair market value for properties.
As the company’s exclusive agent in the GCC, Pipeline will aid in property developer and purchaser relations and business development activities.
Pipeline will earn commission based on annual sales volumes on the LiveOffer sales auction platform in the GCC ranging from 10% - 15% of the licence fees received by the company for annual sales of $5 million to $15 million plus.
Property Connect has agreed to complete all customisations to its LiveOffer sales auction platform necessary for the GCC within 30 days.
The company has been working with Damac Properties to introduce its property listings to the platform.
Darren Patterson, CEO of Property Connect, said the company is now well positioned to generate revenue.
"We are very pleased to have finalised this agreement with Pipeline and move forward on the expansion of the LiveOffer sales auction and rental platforms into the GCC," he said.
"The company is now well positioned to generate revenue in a highly scalable manner from our industry leading platforms, providing a return to shareholders from our technology investment made to date."
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Property Connect secure exclusive agreement in Gulf countries for online property platform 

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GUEST OBSERVATION
Last week, the Federal Reserve Bank of Kansas City held its much anticipated annual central banking conference in Jackson Hole. This year’s topic “Changing Market Structures and Implications for Monetary Policy” garnered even more attention than usual.
This was in no small part because it highlighted that macroeconomists and central bankers now care a lot about what used to be the province of other fields of economics – what firms are doing. As a result, part of the mystery of why advanced economies have had a decade of low inflation and low wage growth is being unlocked.
One of the most interesting papers went right to this issue. Alberto Cavallo of Harvard Business School examined how online retailing – involving easily discoverable prices that are often determined by algorithms – can change the pricing behaviour of more traditional retailers and, it turn, impact inflation overall.
Could it be that the new economy has fundamentally changed how prices are set across the economy, thereby changing inflation dynamics and what our Reserve Bank is prepared to permit? If so it could have a significant effect on the so-called “real economy”.
The short answer is – quite possibly. But the details are both fascinating and important.
Cavallo makes use of data from the Billion Prices Project, which he co-founded with Roberto Rigobon, which scrapes price data from the internet. It contains more than 15 million daily prices, from 1000 retailers, across 60 countries, since 2008 (disclosure: Rigobon and I were colleagues at MIT). Cavallo adds country of origin data from Walmart products and product descriptions from Amazon to construct a proxy for online competition of each good. His data go down to the zip-code level so he can look at how prices vary within the US.
Cavallo shows that price changes have been happening more frequently. Multi-channel retailers – who sell both online and in “bricks-and-mortar” stores – have gone from changing prices once every 6.7 months in 2008–2010 to every 3.7 months in 2014–2017. Often these changes are cuts. This “rapid change effect” is strongest in categories like electronics and household goods, where online retailers have high market share.
The clear conclusion is that online competition is intense due to the easy availability of information about competitors’ pricing, and the ability to change prices cheaply, quickly, and often even algorithmically. Added to this is that charging different prices in different locations seems, from the data, to be harder than before because consumers can find out.
As one might expect, this also facilitates the rapid passthrough of shocks to prices that come from movements in exchange rates or fuel prices.
All of this means that there is more of a lid on prices than in the past – so lower average inflation – this is the “Amazon effect”. This would help explain why the US has 3.9% unemployment but no sign yet of runaway inflation.
The other implication is that retail prices are less insulated from macroeconomic shocks than in the past. This makes it harder to central banks to glean how the economy is travelling. In essence, prices contain more noise and less signal.
For Australia and the Reserve Bank the implications are similar, if a little more muted than in the US. Online retailing is not yet as widespread. But in many ways it doesn’t need to be widespread to discipline prices. The mere possibility that goods can be purchased online is enough to discipline traditional retailers.
As game theorists like to say, “out-of-equilibrium threats matter”. This could be a leading explanation for why inflation is low in Australia despite low interest rates and relatively low unemployment.
Because the Australian dollar is fairly volatile and we do import goods worth about 20% of GDP the “noise-to-signal” effect could be particularly strong in Australia – making things harder for the Reserve Bank.
The new economy has changed the overall economy in a host of ways from casualisation and the gig-economy to lower prices and new products. It will probably lead to a new era of monetary policy, but we don’t know what. As Reserve governor Phil Lowe is fond of saying: “time will tell”.<img src="https://counter.theconversation.com/content/102338/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/vital-signs-online-retailing-is-changing-our-lives-whether-we-use-it-or-not-102338" target="_blank">original article</a>.
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rh-YsoTT2xMuQ

Online retailing is changing our lives, whether we use it or not: Richard Holden

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A mixed use commercial building on Darby Street is the first property ever to have sold in Newcastle through an online auction.
There were three registered bidders competing for the property and another four bystanders watching the auction online for the office building at 126 Darby St Cooks Hill.
The holding that comes with retail space sold for $2.25 million, exceeding the vendor’s expectations.
This two storey Darby Street property has an annual return of $144,846 from three tenants including a long-standing dry cleaner, a kebab shop and a beautician on the first floor.
Listing agent, Steven Dick Director of Raine &amp; Horne Commercial Newcastle believed this result proves that online under the hammer sales will turn the auction process on its head in Newcastle.
“Bidders have to download the 'Openn Negotiation' app, pre-register and execute documents in terms suitable to the owner and then place a bid at any time before the final bidding stage,” Mr Dick said.
Buyers anywhere in the world with internet access can start bidding (pictured below is the interface).
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/8/22/Openn%202.jpg" alt="">
Mr Dick noted, “there’s no more having to attend a stress-filled auction room, no more having the eyes of the audience upon you, no more whispering as secret negotiations take place”
“Openn Negotiation provides an entirely transparent process with the sellers and buyers in total control and fully aware of what everyone else is bidding,” he commented.
Online auctions are the most exciting change to occur in real estate since the mobile phone and internet marketing, according to Mr Dick.
He excitedly said that, “online property auctions take real estate sales into the 21st Century by embracing the technologies that everyone has become accustomed to using.”
Raine &amp; Horne Commercial Newcastle has three auctions set for September, with two to be sold via Openn Negotiation and one in-room.
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j.ballantyne1990-6AQqhLzZaK

Newcastle retail property sold via online auction

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GUEST OBSERVER
The real estate industry has always had a love hate relationship with the portals. While it’s the portals that own the best audience for property buyers – and are therefore an important part of any vendor’s marketing spend – the charging models and sense of dependence has always irked agents. No-one likes being obliged to pay for a service you feel you have little control over. 
But the portals and the technology that drives them are now more than 15 years old. And over the past 3 years, the game they changed has started to change again. It’s possible the portals are about to be disrupted themselves.
Fifteen years ago, the idea that buyers could go to one place online to see every property on the market in any suburb you chose was absolutely revolutionary. Buyers no longer had to jump in the car and visit the suburb to check out local real estate agent shop windows or get hold of a local paper. All the information you needed was in one place, and you could look at it at whatever time suited you – 9am, 9pm, 2pm, 2am – on your desktop computer in the comfort of your office or living room and send a message of inquiry. It was a huge improvement in the old way of doing things, removing pain points and making property hunting faster and more convenient. 
But two new revolutions have occurred over roughly the past three to five years – the social revolution and the mobile revolution. The two are interconnected as the conversion of our mobile phones to mobile computers that are always on and always with us in turn enabled the social revolution with apps such as Facebook, Twitter, Instagram and Messenger, LinkedIn, Pinterest and WhatsApp to dominate our lives.
And it’s apps like Facebook that are likely to dramatically change the way we ‘do’ real estate again in the very near future. 
Facebook claims to be a company based on “human connection and bringing people together”, the recent REIQ Tech Day was told. Its mission is to “give people the power to build community and bring the world closer together”.
There are 2.01b people on Facebook every month and 1.32b on Facebook every day. Facebook is the eighth most-used feature on any mobile phone and in addition to the mothership, there are 1.2b on Whatsapp, 1.2b on Messenger and 700m people on Instagram each month – all part of the Facebook family. The only thing bigger than the Facebook community, the conference was told, is Christianity.
Facebook also has a second mission – to “democratise advertising” by making it easy and affordable for every business – especially small businesses – to reach customers by giving them access to the same tools that big business has traditionally dominated.
This is where the threat to the portals happens. 
Because Facebook is not really just a cool entertainment app that allows you to see photos of friends new babies, hashtag all the blessings in your life, rage against the latest political upset or message your husband with a virtual cat on your head (or is that just me and my guy?). Facebook is a major big data play. 
Every interaction we have with Facebook captures information about us as individuals – our likes, our passions, our friends, key events in our lives, our behaviour, how we feel, our recommendations, who our friends are and their likes, passions, events and behaviour. Every interaction builds up a more and more detailed picture of us individually which is what makes the Facebook advertising algorithms and their ability to target so powerful. We don’t really see or feel this. When the algorithm is doing its job, the result is simply more content that we’re genuinely interested in.
There is absolutely no need to ‘spray and pray’ your advertising as a business in Facebook. If your ideal customer is a 36 year old woman with two primary school age children who loves shoes and wine and drives a four wheel drive and works part time and who lives in a 3 bedroom house, you can find her and thousands like her and target your message exactly to her. Knowing this, if you’ve got a beautiful 4 bedroom house in her area with a walk-in wardrobe, wine cellar, great kid friendly outdoor area with a pool and large garage that would be perfect, you can easily target advertising directly to her (and her friends). 
It doesn’t matter that she’s not on Realestate.com.au or Domain.com.au looking yet. It doesn’t matter that she may not have thought (as far as you’re aware) that she should move up. You can plant the seed in her mind. You can show her what’s possible through Facebook targeted advertising and encourage her to move from a passive buyer (one who has not thought about buying or selling at all) to become a researcher or an active buyer or seller (one who decides that now is the time to act).
This is part one of the strengths that Facebook has over the portals; using it you can target people and move them into your contact funnel before they have even decided that moving is the right decision for them. You have the power to target and influence their behaviour. 
But it doesn’t stop there.
Part two of Facebook’s strength is only now starting to be witnessed. As Facebook’s ability to capture and process data about us accelerates at speeds that are truly mind blowing, its capability for predictive analytics becomes ridiculously powerful. Soon, Facebook won’t just be able to target people because they match a profile of someone who might be interested in buying, selling or renting because you select them. Soon, Facebook will be able to target people because their behaviour on Facebook and its associated apps, signal that they are actively engaging in behaviour that pre-empts buying, selling or renting behaviour in addition to their profile. This behaviour may include things like renovating, finding tradespeople, reaching out to real estate agents, buying paint or asking friends for real estate recommendations, – the possibilities and their combinations are endless. In such a scenario, you’ll get recommendations on who to target based on data that’s defining what they’re likely to do next, not options they’ve chosen, or things they’ve already done.
And that leads us to this new world order of being able to target people based on their profile, behaviour and a likelihood of intention much higher up the sales funnel, rather than waiting for a potential customer to go onto a real estate website and make an inquiry.  
Which leads to the question of why do you need a real estate portal – a special place to go to find a property to buy – if properties that need buying will serve themselves up to you just when you’re starting to think about the possibility of moving? 
In this new world, the power any real estate portal can wield diminishes and the value proposition to a portal customer is impacted. Why should I put so much of my advertising budget into reaching people who are actively in the market looking, when I can put the budget into Facebook and target both those who are actively looking, and those who are passive, but whose behaviour indicates that with the right property, they could change at any minute? No wonder the portals are worried. 
So how as a real estate agent do you get yourself ready for this next exciting stage? Here’s 4 things you can do:
<h3>1.    Get serious about social now</h3>
Social is no longer something the receptionist can do in her spare time, or have your teenage kids help you as a hobby. Make it someone’s job in your business to understand thoroughly how targeting works in social media, who your target audience is for the different types of properties you sell and services you offer, and set aside a small budget to start practising the best ways to reach them and the content that works. Upload your database to create a matching audience in Facebook.
<h3>2.    Learn about geo-targeting and targeting by property features</h3>
Kick it up a notch by learning about advanced topics such as geo targeting (X people matching Y description within Z km of my office) and targeting people by property features which you know are in demand, or which signal they may be interested in making the next move. ie: People in their 50s who have owned their properties for 20+ years may be ready to downsize, or be looking for an investment. Families in 2 bedroom apartments may be looking for 3 bedroom houses or larger apartments. Ask yourself, “If I was this person, what kind of information in my Facebook feed would I find interesting?” 
<h3>3.    Improve your content</h3>
Social media is about human relationships, community and helping – it’s about being useful, not boastful. And Facebook advise that your content needs to be striking, and get attention quickly – in the first three seconds, otherwise it is scrolled past. Evergreen content on how the property market works, tips for buyers and sellers and walking people through the process of moving are all ways you can connect with people while also establishing yourself as an expert who knows their stuff. A constant stream of properties for sale will only be appreciated by those who are actively looking (in which case they’re probably on a portal already) but an occasional inspirational property well targeted as part of a broader spectrum of useful content sends a more trustworthy message.
<h3>4.    Experiment with different content styles</h3>
Writing a post and sticking up a photo is the easiest way to post, but Facebook rewards those who innovate. Video, slideshows and Facebook Live are prioritised by the algorithm which means your message reaches more of the right people for less money. And don’t forget most people snack on social content while they’re doing something else, so all video should be captioned. No one sticks on earphones so they can listen to a 90 second video on the bus. Whatever you post, make sure you analyse its reach and engagement levels each time so you can work out what works best for your audience.
So if you’re one of those agents who rage against the portals, don’t despair, a change is coming. But it also means you’ll need to change your behaviour. Real estate is just one of the hundreds of consumer experiences that Facebook and the social universe is completely opening up  right now. There is plenty of opportunity for real estate agents who get stuck in and recognise the opportunity – but just like 15 years ago, fortune will favour the brave.
Kylie Davis is the head of content and property services marketing at CoreLogic
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Why the property portals are worried about Facebook: Kylie Davis

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Mortgage broking firm Yellow Brick Road chief Mark Bouris has bought a 5 percent stake in DIY property sale firm PropertyNow for an undisclosed sum.
The startup, which aims to raise further funds from private equity this year ahead of a possible IPO.
Bouris joined Financial Review Young Rich Lister Jeremy Same as shareholders in the privately held company.
PropertyNow founder Andrew Blachut believes his firm is bigger than rivals such as the listed BuyMyPlace.com.au, which has a market capitalisation of about $15 million, he told The Australian Financial Review.
It has a flat fee structure that starts at $694 for sales or $195 for rentals.
Its website says it "invented agent assisted sales in Australia and have saved Australian sellers over 70 million dollars in commission".
Blachut said he would raise more funds to fund PropertyNow’s marketing campaign.
"We are virtually debt-free and put all our cash flow back in the business and we have built our own proprietary technology platform, which our competitors have not," Blachut was cited as saying by the AFR.
”So we will use the funds raised on marketing our business. A lot of Australians still don't know they can use our [sale by owner] services."
Same, who co-founded Lux Group with prominent fellow Young Rich List member Adam Schwab, invested in PropertyNow in 2015 after approaching Blachut, while three years of effort to woo Bouris paid off when he bought into PropertyNow earlier in August.
"Jeremy brought a lot of expertise in terms of advising us on improving our technology and website and making it more modern and easier for consumers to use," Blachut said. "Mark is advising us and there is a lot of synergies between us and his business.
He added that Yellow Brick Road’s mortgage expertise would be useful when PropertyNow decides to launch ancillary services such as insurance.
PropertyNow is among the new breed of DIY property selling portals that depart from the traditional real estate agent model and as such are cost effective for sellers.
Its rivals include BuyMyPlace and the UK-based PurpleBricks.
PropertyNow claims it has close to 2,000 listings on both realestate.com and Domain as at August 17, which is 27 per cent more than BuyMyPlace and up 17.3 per cent from a year ago. PropertyNow expects to generate an annual revenue of $1.5-2 million.
He said clients typically save $10-15,000 compared with enlisting full service real estate agents, with clients running their own open-house inspections, take inquiries from prospective buyers and control the text and pictures used on the real estate listings. The business has also branched into offering a service for rental homes.
"We think we are here to stay, the industry has already been disrupted. It is like having Uber now, but also normal taxis."
Blachut is a real estate agent who has worked for L J Hooker, Raine &amp; Horne, Elders and Ray White. He first launched his then Coffs Harbour-based business in 2004 and became one of the first virtual real estate agents.
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DIY selling platform PropertyNow eyes more funds after Mark Bouris takes stake 

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<img src="https://counter.theconversation.edu.au/content/78534/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
E-commerce giant Amazon has struck a deal to acquire Whole Foods Market, an American supermarket chain with more than 400 stores.
The move has put even more pressure on Australian retailers as Amazon sets up shop in Australia. 
But the real threat to Australian retail lies in Amazon’s business model. It is a low-margin retailer that owns several other highly profitable and fast-growing businesses, such as cloud services. These other businesses can and do cross-subsidise its retail operations.
JB Hi-Fi and Harvey Norman have suggested they will compete with Amazon on price, but given the cost structure of Australian retailers this may not be possible.
Amazon is very lean
While Amazon is extremely large, it is very lean. In 2016 alone, Amazon sold US$94.7 billion of product globally. But the cost of buying (or manufacturing) these products was US$88.3 billion, leading to a gross profit of just US$6.4 billion. 
This means the mark-up Amazon puts on its products is very small. For example, in 2016 Amazon’s gross profit margin (gross profit divided by sales revenue) was just 6.8%. JB Hi-Fi had a margin of 21.9%, Woolworths26.8%, Wesfarmers 31.0%, Harvey Norman 31.4%, Myer 42.1% and Super Retail Group a whopping 43.4%.
But Australian retailers also face high operational costs (wages, advertising, marketing and leases). The two largest, Wesfarmers and Woolworths, both have operating expenses in excess of 24.0% of sales revenue, while Myer, Super Retail Group and Harvey Norman are all around 40.0%. JB Hi-Fi is an outlier at just 16.3%.
Another important measure to consider is the net profit margin. This shows what percentage of each dollar of sales the company ultimately earns after all costs (including tax) are factored in. Net margin is calculated by dividing net profit after tax by sales revenue.
The net profit margins for Australian retailers are, for the most part, quite low – around 2-3%. This means they don’t have much room to move on price. If they drop prices, many will become unprofitable. So even if Amazon doesn’t start a price war in Australia, its business model is such that prices will be extremely competitive. 
Amazon has other businesses
Most Australian retailers are only retailers. Some of the larger groups, such as Myer and Wesfarmers, operate across a few industries. But they ultimately still earn nearly all their revenue from buying and then re-selling physical products.
Amazon, on the other hand, has a profitable and booming services business. Its “services sales” represents about US$41.3 billion in sales, or 30% of its revenue. This covers third-party seller fees (Amazon charges other companies for access to its marketplace and warehouses), Amazon Web Services (a fast-growing provider of cloud services), digital subscriptions, advertising services and co-branded credit card fees.
In its 2016 annual report, Amazon reported US$12.2 billion in revenue from Amazon Web Services alone. The scariest thing for Australian retailers is that this has increased four-fold since 2013, and is responsible for nearly 75% of Amazon’s operating profit. 
Amazon, then, not only has a large, low-margin online retail offering, but is supported by a fast-growing, high-margin cloud service. 
Finding new ways to compete
Most Australian retailers will need to look at other ways of saving costs if they are to remain competitive with Amazon. For example, Coles and Woolworths can put even more pressure on suppliers to reduce their costs. Coles has recently signalled that it will pursue this strategy. And all of our retailers can try to reduce the cost of leases, and shift or reduce staff.
The small margins of most Australian retailers mean reducing prices alone isn’t a viable long-term strategy, especially as Amazon Web Services gains steam and Amazon is profitable in other countries.
Not every retailer will come under the same pressure, though. In the short term at least, groceries are still likely to be purchased in stores. But the same can’t be said of clothing and electronics. This means Woolworths and Wesfarmers should not be as concerned as Myer, Super Retail Group and JB Hi-Fi. 
The answer for retailers may be to look past price and compete on other aspects of the shopping experience, such as convenience or customer service. But only time will tell if that’s what the Australian public wants.
David Bond is Senior Lecturer, Accounting Discipline Group, University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/david-bond-172639" target="_blank">here</a>.
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Amazon poses a double threat to Australian retailers

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ASX-listed prop-tech company Property Connect has appointed Century21 Australiasia owner Charles Tarbey as chairman with the latter also agreeing to a trial of Property Connect's LiveOffer platform.
Using LiveOffer, property managers or landlords can view incoming bids for their properties in real-time while also giving feedback to renters on how their offer ranks against other bidders.
The platform, which was launched in Australia last week, has tasted success in the US with property managers Berger and EIMC onboarding their apartments recently. 
On Tarbey’s appointment as chairman, Property Connect chief executive Tim Manson said it was a "further validation" of the company's technology.
"Charles’ vast experience and unique insights into real estate markets will help Property Connect develop and refine its offering, technology and strategy," said Manson. 
Tarbey, who is also Century 21 chairman, has been in the real estate industry for 45 years. He purchased Wentworth Holdings, Australia's largest property management group, in 2011 and also owns the master franchises of Century 21 Australia, Century 21 New Zealand and Century 21 Papua New Guinea.
Property Connect and Century 21 are finalising terms for a trial of the technology at select Century21 offices in Victoria and Western Australia, starting in April.
Michael Langoulant, who took over as non-executive chairman in November 2016, will remain on the board as a non-executive director.
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