How Does Thumbtack Make Money?

by Amanda Postma
Business Models, Study - 8 months ago

Find a Job You Really Want In

To get started, tell us where you'd like to work.

Sorry, we can't find that. Please try a different city or state.


What is Thumbtack?

By combining the ease of Amazon’s shopping model with the reputation of Yelp reviews, Thumbtack has changed the way people connect with professionals for services. Instead of having a search model like Angie’s List or Craigslist, new customers tell Thumbtack what local services they need. Service providers are able to connect with potential customers and determine if they’re a good fit for the job.

How Does Thumbtack Make Money?

Thumbtack Credit Pricing
The experts that use Thumbtack have to purchase credits if they want to send a quote to customers. So essentially you’re paying to contact customers. The company calls this compensation for each quoted framework. Each lead that experts get costs a certain amount of credits. The number of credits is determined based on what service the expert is offering. The credits are sold individually and in various bundles.

Once a potential customer has stated what service they’re needing, Thumbtack will give them a list of experts that fit into that category. On the other side, the experts will be given a list of potential customers to filter through. If the customer picks you as the expert, and you also pick that customer, then you get a certain percentage of credits off of your lead. But it has to be a direct match, almost like it was a connection written in the stars.

This hasn’t always been Thumbtack’s revenue model though. The company used to work similarly to Angie’s List of Craigslist. New customers would come to the site with a specific job in mind. They would have to fill out a job request through a series of questions they answered. The completed requests would be sent to the experts and they would filter through potential customers.

The experts would pick the jobs that seemed to fit their expertise best and send a quote to the customers. They would then be charged if a customer viewed their quote. Now, the experts have Thumbtack on their side up until they’ve connected with the customer. You don’t have to pay until you’ve already connected, but after that, it’s up to you to sell your business. There are no refunds for connections that don’t work out.

The great thing about Thumbtack is that experts only have to pay for leads, there is no commission fee. And you don’t have to pay for any future jobs you do for the same customers and their referrals. But now the cost of credits, or leads, does differ quite a bit. Single credits cost $1.50, but bundles can cost anywhere from $17.99 to $84.99.

How Does Thumbtack Work For Customers And Experts?

The customers get to pick who they feel like might be a good fit for the job. Once they’ve decided on an expert, they’ll either message, call or book the expert right away. From there, the expert will need to really sell themselves to ensure the job goes through. Otherwise, the expert will be out of credits from that lead.

The experts get to choose their customers too. Through setting targeting preferences, Thumbtack will filter out your customers so you get a more focused list of customers who will be people you’ll actually want to work with. Some of the preferences include the location and types of jobs you’re willing to do.

Is Thumbtack Worth Paying For?

There are several Thumbtack success stories all over the internet that show you can pay $200 and eventually make $200,000 using the service. Other’s caution not to put all of your eggs in one basket. While using Thumbtack may be great and get you lots of clients, experts advise that you should have other ways to pull in clients such as building your own website.

It’s nice that you’re able to see what your competition is charging and Thumbtack provides a platform for you to do some market research, but in that sense, it can also allow for your competition to drop their prices. But it does allow you to gain customers quickly, which is nice especially for new experts who are just starting out.

How Much Does Thumbtack Cost?

Each lead you get costs a certain amount of credits. The credits range depending on if you purchase them individually or in a bundle. The company tries to be fair in that the cost of each lead matches how valuable a job is. Each job value can vary on specifics like project size or how many experts are available to perform said job.

While most leads don’t cost $50-$60, some bigger jobs like kitchen remodels and home additions may. General handyman jobs cost around $8-$10 in credits. Once you’ve created an account with Thumbtack, you’ll be able to access how much leads will cost you in the “Price of Leads” section of the weekly spend page.

Thumbtack leads

Lead prices can fluctuate dependent on each market. If there’s a high demand for your service, then costs will probably drop. But if potential customers are willing to shell out the cash for your service, then the cost of that lead will probably reflect. If lead prices are about to change significantly, Thumbtack will let you know beforehand so that you’re budgeting correctly.

Does Thumbtack Work for Your Particular Skill?

In short, yes. Yes, you do have what it takes. And yes, you do offer services that are needed. From being a plumber to a photographer and even a dog groomer, Thumbtack features a very wide range of experts. As long as the services fall under the list below, you’re needed.

  • Home Improvement
  • Wellness
  • Pets
  • Business
  • Events
  • Lessons
  • Crafts
  • Design and web
  • Legal
  • Personal
  • Photography
  • Repair and technical support
  • Writing, translation, and transcription

All in all, Thumbtack seems like a great place to get a start on your business. But remember to not place all your eggs in one basket. It’s always good to have a backup plan.

Job type you want
Full Time
Part Time