A homeowner in Scottsdale submits a request for AC repair at 2:14 on a Tuesday afternoon.
Three to five contractors get it. Everyone pays. One gets the job.
What you bought for $50 was not a customer. It was an entry into a contest, and the entry fee is charged whether or not you win.
That is the shape of the whole thing, and it is neither a scandal nor a scam. It is a marketplace working exactly as designed. The question is whether the design suits your business, and the answer changes depending on where your business is.
First, a correction to most of what you have read
A lot of the criticism online describes a system that no longer operates that way.
Since January 2025, homeowners on Angi largely choose which pros they want to hear from rather than having their request automatically blasted out to whoever was in the queue. That is a real change and it improved things. A lead where the homeowner picked you specifically is a different object from one that landed on five phones by algorithm.
If you are reading a 2023 review of these platforms, it is describing a product that has since been rebuilt. Worth knowing before you write them off on somebody else’s outdated evidence.
The arithmetic that still holds
Better matching did not remove the sharing, and the sharing is where the economics live.
Reported lead prices in 2026 run roughly $15 to $85 and up depending on trade and market. Roofing at the top, commonly $50 to $120. HVAC around $45 to $100. Plumbing $40 to $85. Handyman work at the bottom, $15 to $40. Most contractors also pay around $300 a year for access on top of the per lead charges.
Now the number nobody puts on the pricing page. Shared leads convert at somewhere around 13% to 20%. Exclusive leads convert at 27% to 30%. Roughly half.
So do the division that actually matters.
A $50 HVAC lead at an 18% win rate is $278 of lead cost per job won. Not $50. A $90 roofing lead at 15% is $600 per job.
The lead price is not your cost. Your cost is the lead price divided by your win rate, and that is the only version of the number worth putting next to your gross profit.
Run it on your own trade before your next renewal conversation. If your average job carries $900 in gross profit and your true cost per job is $600, you are working for the difference and taking all of the risk.
What the model rewards, which is the real problem
Here is my actual argument, and it is about the structure rather than about either company.
In a shared marketplace you cannot win by being better. The homeowner has not seen your work. They cannot assess your technicians. What they can observe, in the first hour, is who called back and what the price was.
So the two available levers are speed and price. Both are races, and both run in the direction of your margin.
Speed is a real discipline and worth building regardless. Price competition against four strangers is not a strategy, it is an auction where the winner is whoever most misjudged their costs.
And note where the platform’s interest sits. Selling one lead to four pros is a better business than selling it to one. That is not misconduct, it is the model, and it is the same reason the auction rate rises rather than falls. Anyone telling you these platforms are exploitative is overheating a simple structural fact: the incentives of a marketplace are not the incentives of any single seller in it.
When they genuinely make sense
I want to be fair here, because plenty of the advice on this topic is written by people selling the alternative.
You are new and invisible. No reviews, no ranking, no referral base. The platforms solve a real cold start problem, and no amount of clever SEO produces revenue in your first eight weeks. Paying for entries into a contest is a reasonable way to buy your first twenty jobs and, more importantly, your first twenty reviews.
You are adding a service line or a territory. Same cold start, smaller scale.
You have genuine spare capacity. A truck sitting idle on Thursday costs you money too. A job won at thin margin beats an empty afternoon, as long as you are honest that it is capacity filling and not growth.
You want to test whether demand exists in a new area before committing to marketing it.
In all four, the platform is doing something you could not easily do for yourself, and paying for it is sound.
When it turns into a trap
One condition, and it is the one to watch for.
It becomes a trap the day it is your only channel, because at that point your cost of customer acquisition is set by somebody else and can be revised without your agreement.
The tell is straightforward. If you switched it off on Monday, how many enquiries would you get on Friday? If the answer is close to zero after three years in business, the platform is not a channel you use. It is the business you actually own a franchise of.
The second tell is bidding on work you do not want. Once the phone depends on the feed, the discipline to decline bad jobs disappears, and thin jobs crowd out the capacity you needed for good ones.
The exit, and the part almost nobody does
The way out is not cancelling. It is converting.
Every job you win through a marketplace is a customer whose details you now hold. That is an asset the platform cannot take back, and most contractors let it evaporate.
Three things on every marketplace job, no exceptions:
Ask for the Google review, from the technician, on site, before leaving. Reviews are what make you findable independently, and the compliant way to ask matters more than it used to because the rules tightened this year.
Keep the contact and use it. A text at the six month mark about a seasonal service is the cheapest revenue in this industry.
Ask how they found you and write the answer down. In eighteen months that column tells you whether the owned channels are working.
Then move margin, deliberately, in this order. Google Business Profile filled in properly and posted to. Reviews at volume. A page on your site for each service that actually makes money. Then paid search, once the cost per click arithmetic says your category clears.
The target is not zero marketplace spend. It is marketplace spend as the smaller half.
The way I would put it
These platforms are a good bridge and a poor destination.
As a bridge they solve the hardest problem a new home services business has, which is that nobody knows you exist and reviews cannot be manufactured. Use them for that, deliberately, with a plan for what the money buys you beyond the job itself.
As a destination they leave you renting access to your own customers, at a price you do not set, in a contest you win one time in five or six.
Work out your true cost per job this week. If it is comfortable, carry on and stop reading opinion pieces about it. If it is not, the fix is not a better bidding strategy, it is owning a share of the demand.
My notes on lead generation cover how the owned side gets built. If you’d like to run your own numbers past somebody, drop me a line on email, WhatsApp or LinkedIn and we can have a quick chat. I’m contracted full time so this isn’t a pitch.