The online estate agency model is inherently flawed
Purplebricks is set to be acquired by rival Strike for just £1. This is a major blow to the online estate agent, which has been struggling in recent years.
There are a number of reasons why Purplebricks has failed to succeed. First, its low-cost model is simply not sustainable. The company has been forced to spend heavily on marketing in order to attract customers, and this has eaten into its profits. Second, Purplebricks has been criticized for its lack of customer service. Many customers have complained that they have not received the level of service they expected from the company. Third, Purplebricks has been hit by a number of legal challenges. In 2020, the company was fined £1.5 million for misleading customers about its fees.
It is unclear what the future holds for Purplebricks under the ownership of Strike. However, it is unlikely that the company will be able to turn things around. The online estate agency model is simply not viable, and Purplebricks is a prime example of this.
The Low-Cost Model Does Not Work
One of the main reasons why Purplebricks has failed is its low-cost model. The company charges customers a fixed fee of £999 to sell their home. This is significantly lower than the fees charged by traditional estate agents. However, Purplebricks offers a much lower level of service. For example, the company does not provide home valuations or property photography.
The low-cost model has not been successful for Purplebricks for a number of reasons. First, it has led to a decrease in customer satisfaction. Many customers have complained that they have not received the level of service they expected from the company. Second, the low-cost model has made it difficult for Purplebricks to compete with traditional estate agents. Traditional estate agents are able to offer a higher level of service because they charge higher fees.
The Lack of Customer Service
Another reason why Purplebricks has failed is its lack of customer service. Many customers have complained that they have not received the level of service they expected from the company. For example, some customers have complained that they have not been able to get in touch with a Purplebricks agent when they have needed to. Others have complained that they have not received the information they need to sell their home.
The lack of customer service has led to a decrease in customer satisfaction. Many customers are now choosing to use traditional estate agents instead of Purplebricks. Traditional estate agents are able to offer a higher level of service because they have more staff and they are able to spend more time with each customer.
The Legal Challenges
Purplebricks has also been hit by a number of legal challenges. In 2020, the company was fined £1.5 million for misleading customers about its fees. The company was found to have told customers that they would only have to pay a £999 fee if their home sold within 12 months. However, the company was actually charging customers a £1,499 fee if their home did not sell within 12 months.
The legal challenges have damaged Purplebricks’ reputation. Many customers are now hesitant to use the company because they are worried about being misled.
The Future of Purplebricks
It is unclear what the future holds for Purplebricks under the ownership of Strike. However, it is unlikely that the company will be able to turn things around. The online estate agency model is simply not viable, and Purplebricks is a prime example of this.
Strike is a traditional estate agent, and it is unlikely that the company will be able to make Purplebricks profitable. The online estate agency model is simply not as efficient as the traditional model. Traditional estate agents have more staff and they are able to spend more time with each customer. This allows them to provide a higher level of service, which is what customers want.
It is likely that Purplebricks will eventually be shut down. The company has failed to succeed, and it is unlikely that it will be able to turn things around.