(6) – Revenue from the Intermediary Market?

Continuing from the last post, after wrapping up the labor market revenue stream, Reza moved on to the vendor servicing market.

He explained, “Out of the $1-2 trillion worth of annual work in this industry, a staggering 40% goes to intermediaries—project managers, contractors, coordinators—adding up to $40-80 billion in markup costs! Even when you factor in commercial real estate, residential property alone racks up billions in annual markup. With our AI, we can create several key effects to disrupt this inefficiency:

1. Network Effects: As our client base in each area grows, every property manager brings with them a roster of trusted vendors—electricians, plumbers, general contractors, and so on. Some are known for their cost-efficiency, some for quality, others for speed or reliability. Over time, our AI learns and integrates all these data points through real-world interactions. The result? For any new property manager joining us, our AI can instantly recommend the best local vendors based on their specific needs. No more endless phone calls to vet contractors. The AI not only identifies the most suitable vendors but also coordinates the entire process.
   
   And here’s the kicker—we don’t need a 40% markup. By charging just 3-5%, we can leverage the massive volume to generate substantial profits, all while offering a solution that’s cheaper, faster, and higher quality than the current market.”

I nodded as he continued.

Economies of Scale: “The more units we manage in a given area, the stronger our bargaining power with local vendors. When we can offer them consistent, high-volume, long-term work, they’re willing to provide bulk discounts. We pass some of those savings on to property managers while increasing our margin by a few points. It’s a triple win: better quality, faster turnaround, and greater precision for everyone. Meanwhile, property managers spend less, vendors get more jobs, and we make more profit—all while charging far below the current 40% intermediary markup.

Now tell me—that’s a massive opportunity, isn’t it?”

I smiled. “Got it. So you’re just getting started with the first stream—SaaS—and the growth is already impressive. You haven’t even tapped into the labor market or vendor servicing yet. 😂 Speaking of scaling, what’s the plan for scaling the company overall?”

Till next time.