In a service economy what we can learn from success out of manufacturing economy? We have to join hands to earn in this challenging scenario.

1. Comparison Of The RE/MAX
Business Model With SEZs Of China
By:
Manan Choksi
Regional Director
RE/MAX Mumbai Gujarat Maharashtra

2. China, as you may be aware, is the world’s factory. Most
of the products used by the people in the world are
Chinese. Be it electronics, toys, clothes, accessories,
appliances, furniture or such other articles, one is sure to
find a ‘Made in China’ tag attached.

3. What is the success mantra of China?
• The major contributor to China’s growth is the
formation of 4 SEZs (Special Economic Zone) in 1979.
These SEZ are focused on providing comprehensive
services needed by industries so that the cost of
production remains most economical. For example if
there is a textile SEZ, it would have the following:

4. TEXTILE
SEZ
TEXTILE
SEZ

5. • In this way the group of industries work in a
collaborative way to make the cheapest products, in
the quickest time and on a large scale.
• The products are so competitive that most of the
countries in the world have stopped their
manufacturing units altogether and removed import
duties for products from China.

6. Lessons for a normal broker
from China’s success story

7. A broker’s business needs a lot of
common services. Let us scrutinise
each service separately.

8. •Now if 50 brokers in a city individually have 200 sq feet office,
they would occupy about 10,000 sq feet in total.
•Then to look better than each other, successful brokers will
start looking for bigger offices so net effect would be about a
1,00,000 sq feet of office space.
•The cost of real estate increases when the customer doesn’t get
any value for dealing with a broker who has a bigger office
space.
Office space

9. Individual 200sqft offices Shared 5000sqft office

10. • RE/MAX Business model is all about sharing office space.
• So if 5 big offices have 10 brokers each sharing desk space,
the total office space occupied will be around 5,000 sq feet
and the overall cost of running the entire office will be
drastically low.
• The overheads like electricity, administration and other
common services reduce which saves a broker a lot of money
each month.

11. Technology
• It is a lateral need of any broker.
• The cost pattern of technology is such that it has a high fixed
cost and very nominal variable costs.
• So if brokers share the same technology platform it is
cheaper.
• Right now most of the brokers use portals.
• The portals charge per listing per month for each individual
broker ID.

12. Use of technology by individual Use of technology by sharing

13. • Therefore if a broker has 10 employees, each need a separate
ID and they cannot have the benefit of bulk pricing.
• RE/MAX technology has fixed monthly charges.
• A broker gets to upload unlimited properties for an unlimited
period on to the RE/MAX portal.
• Also each broker gets an ID and hence there is no need of ID
per office.

14. Branding
• Then there is a need to have a brand image and each
individual broker has to build one.
• If a small broker starts his business today and tries to build
brand image by giving small display advertisements then the
first person to earn out of it would be the media house.
• It takes years to build a recognisable brand and also a lot of
investment.
• RE/MAX on the other hand offers a common brand and when
any of the broker advertises, it slowly and steadily builds the
brand and all brokers gain from it.

15. Different Names World wide Common Name

16. Training
• It is an important need for brokers as in today’s economy, a
well-trained person always earns more than an untrained
one.
• Brokers individually do not know where to get trained from as
there are no formal training programs for real estate brokers.
• However, RE/MAX has the most comprehensive training
program in the real estate broking industry.
• The training programs solely focus on increasing the real
estate business and its measure of success is growth of agent
productivity.

17. Classroom training, Online training, On demand video

18. Networking
• The last need of a broker which is addressed by cooperation is
establishment of a network.
• As brokers deal with unique properties, to find a matching
buyer or seller would require to get connected with a lot of
buyers and sellers.
• A network of brokers helps in accessing a lot of buyer seller
requirements. RE/MAX is one such network.
• Due to its model of large broker offices with a lot of agents in
one office there is a lot of networking amongst agents.

20. SEZ has changed the way manufacturing
is done across the world and the RE/MAX
franchise model is about to change how
real estate broking is done worldwide.
Just a matter of time when brokers
realise that the benefit of joining hands
has more advantages and creates a win-
win situation for all.

21. www.remax-mgm.com