How to Broker Leads

How the brokering model works

A broker sits in the middle of a lead deal. On one side are vendors who generate leads: publishers, affiliates, media buyers, call centers and other lead sellers. On the other are buyers who work the leads: agents, firms, contractors, lenders, or other lead companies. The broker agrees criteria and a price with each side, takes leads in from vendors, and sends each one on to a buyer.

Brokering is a common way to start because it needs no ad accounts and no landing pages. It is also a common way to lose money, because a broker who pays vendors up front and invoices buyers later carries the cash gap on both sides. Most of this page is about closing that gap.

What brokers in our directory actually sell

Of the 440 companies in our directory, 58 describe themselves as resellers or brokers. Few of them only broker: 31 also generate their own traffic, 18 run a network or exchange, 16 run call centers or live transfers, and 12 sell data or lists. Brokering is usually one line in a mixed business.

The difference is in the bottom rows. Brokers sell aged leads and data far more often than the directory as a whole, and shared leads somewhat more often. That follows from the model: a broker holding inventory it already paid for has every reason to sell it again, later and cheaper. It is also where buyer trust breaks, as the section on exclusivity below shows.

Brokers cluster in the verticals where outside supply is already normal. Insurance has the most, 27 of its 170 directory companies, followed by home services with 26, then lending and mortgage with 17 each, mortgage out of only 69. Mortgage stands out relative to its size.

Where the margin comes from

The simple version of the margin is your sale price minus your vendor price. In practice, four things decide how much of that gap you keep.

1. Buyers competing for each lead

   One buyer at a flat price caps your margin at whatever that buyer agreed to. Several buyers bidding on the same lead type and area push the price toward what each lead is worth to the buyer who wants it most. Start from the buyer's economics: what a closed sale is worth to them and how many of your leads they close. That tells you the most they can pay, and pay-per-lead pricing walks through it.

2. What happens to leads no buyer takes

   Every lead you pay a vendor for and cannot sell comes straight out of your margin. Unsold leads are the biggest avoidable cost in the business, so have overflow ready before the first batch: a second tier of buyers, a marketplace for leftovers, or both. Leads that miss your spec but are still real prospects can often be sold too, as covered in selling disqualified leads.

3. Returns you can pass back

   When a buyer returns a lead, you credit the buyer. If you cannot return that lead to the vendor on the same grounds, the return is a loss you carry. Of the 224 directory companies that publish return terms, 96 name disconnected, wrong or invalid contact details and 65 name duplicates, so those are the reasons your buyers will use. Make sure your vendor terms accept the same reasons.

4. Sources that close

   Vendors often mix several traffic sources under one feed. Some close and some fill your returns. With a source sub ID on every lead, you can see which is which and ask the vendor to cut the weak sources instead of judging all their traffic as one.

Vendor terms you can borrow from the big buyers

Lead companies that buy from outside suppliers publish what they expect of them. 95 companies in our directory publish supplier requirements and 94 publish how they pay. A broker is a buyer too, and can ask the same things of its vendors.

The payment side is just as useful. Of the 94 that publish payout terms, 33 pay only for leads that are qualified, accepted, valid or verified, and 13 say they withhold, reverse or offset pay for leads that are rejected, returned or flagged. Several run a test period or cap a new source at launch before letting it scale, and one starts every new source on a lower tier until it proves itself. Large buyers do not prepay unknown suppliers in full. Neither should you.

Write the equivalent into your own vendor agreement: the sources allowed and how new ones get approved, the consent record that must arrive with each lead, what makes a lead payable, and how a return from your buyer flows back to the vendor. Where leads carry consent records, the rules are published by the FCC and the FTC, and TCPAWorld tracks how they change. This page is not legal advice; have a lawyer draft or review both your vendor and buyer agreements so they line up.

Where brokers get caught downstream

Buying well is half the job. The other half is selling leads you did not generate to buyers who often prefer leads that were not brokered.

• Some buyers refuse brokered leads. Six companies that buy from outside suppliers ban recycled, resold, purchased or brokered leads. Ask before you pitch a network, and be honest about where the leads come from. More in how to sell to lead networks.
• Exclusivity claims have to match everywhere. Across the whole directory, researchers found 13 companies whose pages disagree on exclusivity: a product page that says exclusive while the terms, the FAQ or the consumer form allow several buyers. Five of those 13 are resellers or brokers, though resellers are only 58 of the 440 companies in the directory. If you sell the same lead fresh as exclusive and later as aged, say so in your terms, on your product pages and in your buyer agreement, in the same words.
• Your vendor's promise is not yours to repeat. If a vendor tells you a lead is exclusive, that only means it sold the lead to you once. Unless your agreement says the vendor will not sell it elsewhere, you cannot promise your buyer it is the only copy.
• No-refund terms do not stop returns. 80 of the 224 companies that publish return terms say cash is not refunded or that sales are final for at least some products, often aged leads and data. A broker who buys on final-sale terms and sells with a replacement promise carries every return alone.

Reducing vendor risk

The worst outcome in brokering is paying a vendor in advance for leads that never arrive. The next worst is paying for leads that arrive but do not meet the terms your buyer agreed to. These habits keep both small.

1. Start with a small funded test

   Your first order with a new vendor should be small enough that losing it would not hurt the business. Set it as a fixed number of leads or a fixed spend, and judge the vendor on what it delivers before you commit more. How to size and run that first order is in lead pilot orders.

2. Pay in stages

   Do not prepay a large order in one payment to a vendor you have not worked with. Release money in stages, and release the next stage only after the last batch has arrived and been reviewed. A vendor who delivers has no reason to object.

3. Write the lead criteria down

   Put the exact criteria in writing before the first lead: the fields every lead must carry, the areas and answers that qualify, the sources allowed, and what makes a lead returnable. Use the same criteria your buyer gave you, so there is no gap between what you bought and what you sold.

4. Track quality per vendor and per source

   Keep the vendor and its source sub ID on every lead, and track returns, duplicates and buyer feedback against each. Judge vendors on numbers you collected yourself, not on what the vendor reports.

5. Pass returns through to the vendor

   Agree in writing that leads your buyers return for an agreed reason come back to the vendor for credit or replacement. Link each return to the vendor and source that supplied the lead, so you settle it with the right party.

6. Dedupe across vendors

   Two vendors can sell you the same consumer, and your buyer will return the second copy. Check each new lead against what you already hold from every vendor, and decide in advance which vendor is paid when both send the same person. More in duplicate lead checking.

The questions to ask a vendor before any of this are in questions to ask a lead vendor.

Running the buyer side

Brokering only works if the money from buyers arrives before, or at the same time as, the money you owe vendors. Most lead companies do not publish how buyers pay: 298 of the 440 say nothing. Of those that do, 82 use a prepaid or funded account, 42 charge a card on file and 18 invoice. Among the 58 brokers, 9 use prepaid accounts, 8 charge a card and only 1 publishes invoicing. The companies in the middle of the chain mostly get paid first, and so should you.

• Find funded buyers before you buy supply. Buy leads only where a buyer is already waiting with a balance to spend.
• Get buyers to fund a balance up front. No free sample leads, no promised volume by a date, no invoices. Each lead is charged against the balance as it is delivered, so you are never owed for leads already sent. The trade-offs are in prepaid vs. invoiced lead buyers.
• Let several buyers bid. Bidding on each lead type and area beats a single flat price, and gives you somewhere to send a lead when one buyer is full.
• Set caps on both sides. Buyer caps stop you sending more than a buyer will pay for. Vendor quotas stop you taking in more than your buyers can absorb.
• Write the return policy before the first lead. Then mirror it in your vendor terms. The lead return policy guide has a template.
• Set expectations on the first call. Buyers will blame the leads. Agree what a good lead is, and what happens when one is not, before the first one arrives.

How Juiced supports brokering

Juiced is lead distribution software, and its vendor tools are built for companies that buy leads from suppliers and resell them. Infrastructure sets the ceiling on how many vendors and buyers a broker can manage, and spreadsheets and email stop working quickly.

• A source for each vendor. Each vendor posts to its own source, with a documented endpoint and a generated posting spec to send them. Vendor setup includes quotas.
• Duplicate rules at submission. Duplicate rules you set run when a lead is submitted.
• Audit holds. Suspicious leads are held for review, then released or rejected from the log.
• A log of every submission. Each one is recorded with its source, outcome and sale price, and linked to any later return.
• Vendor payouts. Pay each vendor a fixed price or a share of the winning bid. Payouts are tracked per lead, and revenue and payouts by source appear on one report.
• Funded buyers. Buyers fund a wallet before leads arrive, are charged at delivery, and get approved returns credited back to the wallet.
• Bidding and caps. Buyers bid above your minimum and the highest bid wins. They set their own budgets and caps within the account limits you set.
• Overflow. Leads that miss their first route move to your own private marketplace, where the price falls until a buyer takes the lead or it reaches your floor.

Juiced does not screen leads or check them for consent. It records what each vendor sent and what happened to it, so you can judge vendors on results. See how to manage lead vendors in Juiced.

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