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Ive never seen bidding like this in my life!

Discussion in 'Commercial Snow Removal' started by SNOWLORD, Oct 26, 2010.

  1. SNOWLORD

    SNOWLORD Senior Member
    from MN
    Messages: 610

    Ive been reading alot of threads about low prices, so I thought I would share a few stories of my own. One of my real good accounts, that I have had for over 10 yrs was up for bid this year, they warned me that I should sharpen my pencil a little, so I took 20% off the top of what my last contract with them was (I didnt like it as it took me years to get them to that) and handed my numbers in. They called and said they were sorry and their decision had absolutely nothing to do with our service, I asked them if we had time to adjust a little and they said no. I said OK how bad did I get beat, he said the winning bid was 43% of my number. Now I already took 20% off of that number. HOLY COW! This guy will spend that much in salt, makes no sense. Since then, I have been checking around here and most accounts are going for 25%-40% of what they were last year, I know most all snow contractors with any size operation and ALL of them have lost most if not all of their accounts. WTF The superwalmarts in town went for exactly 27% of last years numbers. I guess maybe the run is done for awhile. There will be alot of rested used to be snowplowers around my neck of the woods. Well I have whined enough for now.
     
  2. devile

    devile Junior Member
    Messages: 10

    WOW... 27% is ridiculous... I'm wondering if these new contractors are gonna FAIL the first storm, and you'll be called... Curious...
     
  3. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    It hasn't been as bad here, but accounts are going for 70% of what we were getting 10 years ago.
    I think part of the problem is that construction is slow. I saw a construction company last year that I thought had gotten away from snow, out dropping their equipment. My guess is that with their (heavy construction cos in general) work load low "in construction season", the work out there is going ultra competive prices. They already have the equipment, so anything to generate $$$ and stay afloat. Thats just the large companies, add into the mix the number of people laided off with a "plowtruck & a dream".
    I think what the government is telling people is BS. Un-employment numbers are still going up & I know a bunch of people who's benifits have run out, which means they are no longer counted in those numbers. The numbers are really much larger.
    The problem is everyones hurting money wise, weather residential or large industrial complexs, so trying to save money, you can't blame them. But we're not out "playing" in the snow, it requires alot of "behind the scences work".
    I think it will be a long time before it gets better. Everyones says sell the quality, service, etc. but in reality you can do an awesome job, overservice, give them freebees, etc. it won't be remembered come next season when someone is lower on a bid. My approch is changing, were going to run as lean as possible, & as effecient as possible, to still do a great job but I'm weeding out some customers that were marginal, freebies are a thing of the past as well. Most wanted clear lot, but 2" pricing on seasonal contract, then gave our number to every kid "manager".
     
  4. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    Question. When you guys turn bids in, how well are your bid packets put together? Are you educating the customer on why your service might be higher priced? Even though you have been servicing an account for years sometimes they don't realize all the work that you do. Sell your service not your price.

    I think in your example, I would have given them a reason that you lowered your price, and the explained to them all the "extras" that they get ...like spare parts, spare trucks

    Send out a 1-2 page letter, with your bid, expaining some of the basic exspnces that any plow company might have.
     
  5. Grn Mtn

    Grn Mtn PlowSite.com Addict
    Messages: 1,644

    local snow only company just lost the HD's, guess they didn't want to do it for the current asking price of $275:eek: oh I hear you get an extra c-note for the walks...

    the company i work for is sticking to his guns, you win some you lose some, as he mentioned to a national the other day, "my equipment doesn't care if its 1/2" or 18", can the guy you get for **** money say the same?"
     
  6. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    Question. When you guys turn bids in, how well are your bid packets put together? Are you educating the customer on why your service might be higher priced? Even though you have been servicing an account for years sometimes they don't realize all the work that you do. Sell your service not your price.

    I think in your example, I would have given them a reason that you lowered your price, and the explained to them all the "extras" that they get ...like spare parts, spare trucks

    Send out a 1-2 page letter, with your bid, expaining some of the basic exspnces that any plow company might have.
     
  7. G&T LAWN

    G&T LAWN Senior Member
    Messages: 149

    I think the slow housing market has alot to do with the prices getting beat down. They are hunger and trying to hold through this economy.
     
  8. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    I have an entire folder we give them, it includes a couple brochures, equipment list, nice write up on how we are on the cutting edge of the business; first to bring Artics to our market, only contractor to have liquid calcium, etc. It doesn't matter, some of the places we've lost we had for 10 years & never let them down, not once. In my market, decision has come down to strictly price.
    I even wrote a really nice into letter to the place we had had for 10 years pointing out that in 10 years we were always there, etc, prior contractor had left the (49 unit HOA) snowed in for a couple days & I pointed this out as I knew the board had changed as people move, etc.
    I've listed equipment to be used, gone after we were done, to check on properties we bid; one I bid for a truck, a skid & 2 sidewalk guys, bid said completed by 6:30 am, I checked @ 8 am, they had one guy in a tracked skid there still plowing, he had a blower in the back of a 1/2 to truck, I could only assume once he was done plowing, he had to do the walks. Of course there going to be cheaper, what happened to 6:30 am in the specs ????, It had to be 2-3pm before the walks were completed. Now what happens in an extended event, 12+ inches over a 36-48hr period ??
    This is what were up against in our market. Pepole are willing to sacrifice service & safty for price, what they don't see is that the savings are minimal is someone falls, or there left snowbound for a couple days. Unfortunatly I can't blame clients for trying cheap guys, there streached as much as we are. I'm still managing to stay busy, but growth is tough to come by. My staffing is ready, I've got an awesome group of guys, that are at the ready to take more on, but I'm not going to grow just to grow if the margin isn't there.
     
    Last edited: Oct 26, 2010
  9. sk187

    sk187 Senior Member
    Messages: 327

    We do very large commercial properties(2million+ sq ft) and I have seen a lot of sneaky bidding.

    For example we have had a account for 4 years and last year they told us to redo our pricing because they had received a lower bid.

    Say our bid was $150,000 for the entire season with salt included, whatever was needed when they wanted it.

    A bid came it at say $130,000 with 30 tons of free salt and then they charge a crazy amount like $350 per ton spread after the initial 30 tons.

    The owners of the property see 20,000 less and 30 tons free and think this is the way to go. They ask if we can beat it and we do by a few thousand.

    The property requires 8-10 tons of salt every time salting is needed and more if there is any significant ice storm.

    Long story short they locked us into a 3 year deal at our new price say $128,000 + 30 tons free and then $320 a ton after that.

    At the end of the season we were a good deal above our seasonal all inclusive price and locked into a 3 year deal when the price of salt dropped 50%.
     
  10. proscaper

    proscaper Junior Member
    Messages: 9

    Does it ever seem to anyone else like the ones that are asking for the "cheaper, beat the other guy bid" are the ones that complain and nit pick the most about everything you do. Let them go the the next guy, good riddens in my mind
     
  11. PTSolutions

    PTSolutions PlowSite.com Addict
    Messages: 1,533

    heres a quick lil story:

    had a customer for the last couple years, did her mowing and snowplowing her driveway. this year she wants me to bid her work, a roughly 2-3 acre site, again mowing and plowing. well, one of the other co workers "contractors" submitted a ridiculously low bid and got it, and my clients mowing and plowing.

    she told me he offered plowing for 150 for the season (20-25 pushes per season avg. on 2"). I told her hes crazy and to give me a call when she changes her mind. halfway through mowing season she calls and asks us to take over because hes doing an awful job. so then she tells me the work place wants me to quote them for snow plowing b/c they are unsatisfied with his lawn care and was worried about plowing.

    I told her that i have a nearby account and wouldnt mind matching his price if it was reasonable, and she laughs and says that its not reasonable by any means.

    well, turns out they reviewed the contract they signed and it included plowing for this year as well so they told me they are going to wait for the first event and find something to fault him at and cancel the contract and bring us on board.

    moral of the story? God takes care of things and what goes around comes around, both bad and good.
     
  12. SNOWLORD

    SNOWLORD Senior Member
    from MN
    Messages: 610

    I agree with most everyones comments, it just seems weird how you can build a good relationship with a good client for 10 years, provide the best service they have ever had, as they have told me numerous times, zero slip and falls, and yes this is a very large site. And in a year or two it all goes to he!! in a handbasket, and yes I spoke with them at length before I put my numbers in and explained to them about our track record and the freebies we have given them over the years. It just doesnt seem to make sense. But what does now days.
     
  13. ALLABOUTSNOW

    ALLABOUTSNOW Member
    Messages: 32

    It isn't coming up to snow plow season it has been LOW BALLER SEASON here for months.. The bigger companies are out of control. some have been bidding nearly half of what we did it last year on contracts and then they remove all caps and leave the contracts open ended WTF!
     
  14. ALLABOUTSNOW

    ALLABOUTSNOW Member
    Messages: 32

    SnowLord you have to know by now good service has went down the crapper a long time ago. with Customers it is all about the $$$$$$$$$$$$
     
  15. SteveR

    SteveR Senior Member
    Messages: 252

    We have all become a victim to the economy. Good service and long relationships now mean nothing, it is all about the dollar and survival and, it sucks. How many of us have had to make hard decisions in this economy, use one less man, buy the XL vs the King Ranch, it goes on and on..Lets just hope we all survive it and we can find something less painful to ***** about next season..
     
  16. gtstang462002

    gtstang462002 Senior Member
    Messages: 182

    I would never buy the XL over the King Ranch. Lariat sure, XLT maybe but I could never deal with vinyl seats... :)
     
    Last edited: Oct 27, 2010
  17. ALLABOUTSNOW

    ALLABOUTSNOW Member
    Messages: 32

    Steve you are 100% correct............. All the companies with the logos on there truck that say any thing about SERVICE should all be taken off and say we will under cut any one any where... I under stand that the economy is going to beat us down allittle but Jesus how can you cut contracts by 40% and still stay in business
     
  18. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    Every year it seems the biggest complainer, is the slowest payer, & the one who doesn't renew, even though we jump through hoops for them.
    I think there are certain clients that switch every year. My thought is either they don't pay their bills so the contractor won't do it again, are diffucult to please, or try to lowball the contractor. Because we have serviced the area as long as we have, & I pay attention. I've learned to notice the larger site that do this & avoid them, the smaller sites are tougher to spot.
     
  19. creativedesigns

    creativedesigns PlowSite.com Addict
    Messages: 1,929

    A good buddy of mine lost one of Ottawas largest malls from that green disease Clintar. Apparently he got beat out by triple digits! I dunno, but sometimes when you chew too much to tend to choke....:nod: Sometimes quality/process of service means nothing, even if hes been servicing that mall for the past 11 years.
     
  20. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    My wife and I were talking about this today. It's going on everywhere and in every industry. Customer service is irrelevant and the only thing that counts is the price. It's true in retail (WalMart; Home Depot), manufacturing (all the formerly US-made goods now imported) and in service industries. And it will only get "worse".