Thumtack Costs Money
Thumbtack is an online marketplace launched in 2008 that connects customers with local professionals for various services, ranging from home improvement to event planning. Based in San Francisco, Thumbtack uses a streamlined platform to match users with skilled pros, offering convenience and flexibility in hiring for any project.
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In my experience, Thumbtack stands out as the only truly viable lead retrieval system developed since the advent of the internet. While other systems have emerged, they’ve either focused on specific market segments or faded into obscurity. The strength of Thumbtack's system lies in its early success in building a large network of vendors. While others have attempted to replicate this model, they have struggled to gain similar traction. This is often because consumers avoid these platforms due to a lack of reliable vendors, or vendors leave because they aren’t receiving quality leads.
Thumbtack's system is powerful because it streamlines the lead acquisition process by obtaining permission from vendors to automatically charge for leads. This approach ensures that the payment is processed immediately as the lead's details are revealed, unlike other lead generation services that withhold vital information and let vendors decide whether to purchase a lead at a stated price.
With Thumbtack, my credit card is linked to the platform, and whenever a new lead comes in, I’m charged automatically. This setup eliminates delays and allows me to contact potential customers instantly. I can share my information, including my phone number, right away, ensuring seamless communication.
The platform also offers a comprehensive profile page where potential customers can view my work, read reviews, and even contact me directly if they wish, potentially bypassing Thumbtack's fees. However, most customers prefer the convenience of Thumbtack's secure messaging system, which simplifies reaching out to me directly through the site. Once contact is made, I’m charged for the lead, and the process is effortless for both parties.
Many people assume the main drawback of Thumbtack is dealing with what I call "bum leads"—potential customers who are just browsing and not serious about hiring. This concern might seem valid, as being charged for leads from unserious customers could feel wasteful. However, this hasn’t been a significant issue for two reasons. First, the system doesn’t appear to attract many casual browsers; most leads tend to be serious inquiries. Second, until a few years ago, lead prices were quite nominal, often under $10, making the occasional bad lead more tolerable.
But here’s where the trouble started. Several years ago, Thumbtack introduced a policy to offer refunds for leads that vendors responded to but didn’t hear back from. If I responded to a lead and the customer didn’t reply within a couple of days, I would automatically get my money back. This policy made it easy to handle the occasional bad lead.
However, about three years ago, Thumbtack eliminated this instant refund policy, making it almost impossible to get refunds. For instance, if someone contacted me about shooting a wedding—a service I don’t offer—I would still be required to pay for that lead. Around the same time, lead prices began to rise significantly, making this shift even more frustrating. The combination of higher costs and stricter refund policies created a much less vendor-friendly experience.
In my frustration, I discovered that Thumbtack is not a publicly traded company but remains, even after all these years, a startup. Interestingly, the timing of Thumbtack's policy changes—designed to tighten the screws on its vendors—coincided with the company seeking an additional round of funding from its investors. This context suggests that the new policies were likely driven by financial pressures to demonstrate profitability or growth potential, aligning with the demands of its investors rather than the best interests of its vendors.
I’ve been very successful as a vendor on Thumbtack, and despite the changes making the platform more expensive, I’ve come to terms with the new reality. While it was undeniably cheaper before, lower lead costs often attract unserious, low-quality vendors, so I feel more competitive in the current marketplace. That said, I’ve taken steps to reduce my reliance on the platform, diversifying where I find clients.
Even though I’ve learned to live with the beast that Thumbtack has become and still respond to leads, there’s one thing I think everyone should understand: when you contact a vendor on Thumbtack, it costs them money. And depending on some rather opaque factors, that cost can sometimes be quite significant.
As of last week, I received three leads: two were around $25 each, and one was $40. Unfortunately, I didn’t book any of those jobs. In the past, I’ve paid over $100 for a single lead, and there have been periods when every lead I received cost $50 or more. Sometimes I book these leads, and sometimes I don’t.
While the price of leads is a significant concern for vendors, it would be more acceptable if booking and getting paid for the job reliably offset the expense. However, Thumbtack often seems out of touch with the relationship between lead prices and the typical value of a project, or even the customer’s stated budget.
For example, a customer might fill out a request on Thumbtack and indicate they’re only willing to pay $250 for the service. Yet, the lead price could still be $50, meaning you’re paying 20% of the total project budget just to make contact—before you even secure the job.
Even without a stated budget, many services simply don’t cost enough to justify these lead fees. Thumbtack frequently charges vendors 10–50% of a project’s total value for delivering a lead, a ratio that feels disproportionate and burdensome for service providers.
A valid counterpoint to this concern is that, even if a job is unprofitable due to the sunk cost of the lead, it’s up to me to cultivate a lasting relationship with the customer. And in fairness, this has happened many times—I’ve met several long-standing clients through Thumbtack. Building those relationships can lead to repeat business or referrals, making the initial investment worthwhile over time.
That said, not every lead results in a long-term relationship. Some sales cycles are short, and others can span years. Additionally, some customers may only need my services infrequently or perhaps never again. As a photographer, I have no control over when or if a customer will require my services in the future, which makes the high upfront cost of leads a gamble with no guarantees.
Even when I do book a lead, there’s at least one other competitor who didn’t, and I assume they paid the same price I did—only to walk away with nothing. It’s a reminder that Thumbtack’s pricing system can be high-stakes, both for those who secure the job and those left empty-handed.
I don’t think Thumbtack really wants people to know that simply sending a message to a vendor could cost them $100. Until recently, I was hesitant to mention this aspect of the service myself. After all, I do support Thumbtack, and I continue to use and benefit from the platform.
However, the costs are becoming increasingly burdensome, and I’ve come to believe that this "secret" is no longer sustainable if nothing changes. Transparency about these lead fees is important—not just for vendors, but for customers too, so they can understand the stakes involved when reaching out. While I still value the platform, it’s hard to ignore the growing financial strain it places on its users.
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