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MarketingPricingWGAN Benchmark Pricing Study

3 Reasons why Matterport Service Providers must start charging Hosting Fees9997

WGAN Forum
Founder
DanSmigrod private msg quote post Address this user

December 2019 Publication Date

Hi All,

For your Matterport 3D Tours of residential listings, it's very likely that you include ...

✓ at least three months of hosting
✓ at least six months of hosting
✓ at least 12 months of hosting
✓ hosting until the listing sells

That's based on WGAN compiled data of publicly available rate cards for nearly 200 Matterport Service Providers in the United States that will be used to create the December 2019 release of the WGAN Benchmark Pricing Study of Matterport Service Providers in the United States.

Going forward - with new Clients (and on your website) - I recommend that you charge separately for scanning and hosting.

1. You may be losing business when a real estate agent asks three Matterport Pros "how much"?

Imagine that your competitor includes hosting for three months you include hosting until the property sells. To over simplify, you lose the business on Apples to Oranges price comparison. The other Matterport Pro starts to make more money when the listing does not sell within three months.

While their initial pricing is lower than yours, they actually make more money than you are charging when they get the listing to create a Matterport 3D Tour AND the listing does not sell within three months. Yes! You were less in the long-run, BUT you did NOT get the business.

2. In addition to an Apples to Oranges price comparison - includes/doesn't include hosting - it's also likely you are losing business because you have included in your base price Highlights Reel, MatterTags, hiding scans, video from Matterport 3D Tour, Single Property Website, Snapshots (and more). If the real estate agent only cares about price. And, you have loaded your pricing with extras that the agent doesn't even know that one Pro does versus the other Pro: you lose. (Yes! You deliver a better product experience, BUT you are not getting the business when the agent only cares about price when asking for a quote.) And, agents are likely asking more than one Matterport Service Provider for a price.

Yes. I know that you want to provide a quality product, BUT, if you are losing business, you never get to provide that quality product (with optional extras). You may need to decide if you are an Artist or a Business Person. Sometimes, good enough is good enough.

3. Eventually, you need to migrate to new Matterport Service Provider pricing from Matterport Classic pricing. If you are going to continue to offer Matterport, your pricing needs to align with how Matterport charges you. (It's okay to grandfather in your existing clients with current pricing and have new pricing on your website and for new clients.)

What are your thoughts on including/excluding hosting fees in the price for Matterport scanning?

Best,

Dan

From this WGAN Forum discussion two years ago:

Matterport Scan: Is Good Enough; Good Enough?

Quote:
Originally Posted by @craigsauer
Sometimes we pros obsess over details that most viewers won't notice or appreciate. But I do frequently see things in Spaces by new guys that are glaring mistakes that really take away from the experience.

The same can be said for still photography. Not every home deserves (or has the budget for) Architectural Digest quality photos.

But paying attention to detail, bring careful, and taking pride in quality work should be basic principles.

Craig
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bryanhscott private msg quote post Address this user
@DanSmigrod I bought my first/only Pro2 in mid April this year, just before the new pricing went into effect on May 9, but did not sign up for a plan till after this date. MP was nice enough to grandfather me into a Classic Basic plan to avoid the hosting costs created by the new pricing.

When I created my service/rate menu, I do include the first 4 months of hosting (a bit longer than the typical sales cycle time in the Denver market), but then impose an add-on for continued hosting at $22.50 per quarter. This implied $7.50/mo hosting fee was based on the eventuality that I would have to change to new pricing Professional @ $69/mo for up to 25 active models, or $69 / 25 = $2.76. So, at a retail cost of $7.50, this is a 270% mark-up, which is close to your 3X cost factor that I have seen in articles on this site before.
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WGAN Forum
Founder
DanSmigrod private msg quote post Address this user
@bryanhscott

Thanks for sharing.

I'm fine with your rationale with including four months free ("a bit longer than the typical sales cycle time in the Denver market".

That said, I would consider marking up HIGHER for HOSTING, SUPPORT and MAINTENANCE since it is unlikely that you will have EXACTLY 25 models.

For clarification, if you look at my spreadsheet discussed in this WGAN Forum discussion:

Matterport New Pricing: My Spreadsheet to Help Understand Annual Hosting

... you will see that if you have 10 of 25 models active, your annual hosting will be $6.90 per month or $69 annually on a month-to-month New Matterport Pricing plan. So, at $7.50 monthly; you are just barely covering your Matterport hosting cost (and without covering overhead and profit).

Your thoughts?

Dan
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bryanhscott private msg quote post Address this user
@DanSmigrod I agree that for a smaller quantity of spaces under new pricing, it is clearly more costly per space when you are not using the quantity of spaces that comes with the MP subscription level. No question about that. My motivation was to not lose money, while attempting to keep pace with the competition, most of whom do not charge for hosting now, but may in the future. This said, if I only have 12 spaces up and backed up by paying Customers, then my margins are thin. I believe this will, over time, right itself, but for now it is tough for me to justify a higher quarterly rate when I may be standing on an island to myself...

As for your assumption on market cycle in Denver, it may have been a while since you looked more closely, but CDOM has increased a bit since first part of July. Just ran a report on average market inventory and, on average, this market has gone from around 45 days to 3.25 months. By definition, CDOM is from listing date to under contract/pending date. To this time, you have to add the time it takes to close after the property goes under contract, which is pretty close to 45 days, unless the buyer is pre-underwritten. This short term surge in the wrong direction may be an anomoly, but a home I listed on June 7 will finally be closing on Aug 27, which when compared to the report, is quick!

No question that these average stats don't apply everywhere in the area - just like Atlanta, a market on fire! It's a neighborhood by neighborhood situation.

Anyhow, on charging for hosting, I agree with your position. I just think it needs to be phased in.
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