This system also exists in other fields, such as estate agents. Each house on the market will be listed by about 10 different agencies, yet only sold by one. So work is multiplied tenfold, and so commissions are high, because you're also paying the agent for the 9 other houses he didn't sell.
This seems to be a problem that isn't easily solved by market forces: If a new player enters the field, he has to put margins high, because he will only be able to close a small fraction of deals. The only solution would be for someone with sufficient cash reserves to launch a "hard-discount" agency, that would start making money once its market share starts growing.
This seems to be a problem that isn't easily solved by market forces: If a new player enters the field, he has to put margins high, because he will only be able to close a small fraction of deals. The only solution would be for someone with sufficient cash reserves to launch a "hard-discount" agency, that would start making money once its market share starts growing.