The marketplace Trusted Few, which opened in January, has been limiting the number of providers who can advertise in each category. When platforms accept too many competitors in each category, says founder and owner Michael Gasparenas, it drives these providers' prices down. "You have to discount your services just to stand up and catch attention," he says.
If small businesses' prices do hold steady, that could benefit the growth of the marketplaces. "Their profits would be higher if wages were supported," says Andrew Karpie, a principal analyst at the Research Platform in San Francisco who studies online platforms used in the labor area.
Still, there are other challenges that face home services pros on the platforms, especially if they are not technologically sophisticated, says King. "You're thrust into this world where your online reputation matters enormously," he says. "You've got to be in multiple places if you want to be found. It raises the competitive bar for these small businesses to another level."
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Such competition isn't deterring businesses like 911 Restoration, headquartered in Van Nuys, California, from participating in the platforms. Shayna Hardesty, a marketing assistant at the roughly 30-employee water-damage-restoration firm, is trying to get its more than 50 franchises listed in Amazon Home Services. An Amazon employee she reached initially did not seem familiar with the program, but Hardesty persisted until she reached a supervisor who was—and learned her company had to apply to be invited to send an application for the program.
"When we had tested with one branch we got approved pretty quickly," she said. "It's been quiet since I submitted the remaining listings." She was told it could take several weeks before there is any news. "Hopefully, we'll get approved to be invited," she added.
—By Elaine Pofeldt, special to CNBC.com