Leads, contracts, and smart colleagues

My colleague Josh Reich has started blogging – check out his latest post on spot lead pricing, which explains how the size of the buyers and sellers affects the value per lead. In a less-than-liquid market, large sellers get paid a premium for providing liquidity, while large buyers are charged a premium for taking liquidity. Small sellers provide little, so they’re paid less, while small buyers take little, so they’re charged less.

Josh is smarter than I am – exactly how I like a colleague – so it’s great to see him writing. I’ll only add that in certain lead markets, like mortgages, there’s enough liquidity out there that large buyers can negotiate discount pricing. I wonder, in a climate of declining refinance volume, what the dynamics will be? Will large buyers start taking so much liquidity that their buying jeopardizes other buyer relationships, and therefore begin to get charged the liquidity-taking premium? Or will the aggregators make the strategic decision to stick with their larger – and therefore less likely to fold – partners at the expense of their littler ones, even though the larger partners pay less?