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lowball bidders

Discussion in 'Commercial Snow Removal' started by maple city lawn care, Oct 31, 2003.

  1. maple city lawn care

    maple city lawn care Junior Member
    Messages: 12

    One of my apartment complexes was forced to take bids this year by their corporate headquarters. We have plowed for them for the last 3 years, and were awarded the contract again this year. We have never increased the rate on them.

    When I dropped off the contract, I was chatting with the manager. She told me that some of the bids that came in were a lot lower than us. She said that the lowest was $45.00/hour. :eek: I was shocked.

    Is there anywhere in the US where $45.00/hour is the going rate for plowing? I am in a major snow belt here, and I do bid a little lower than the people who don't get a lot of snow, but I wouldn't consider plowing for such a low rate.
  2. Plow Babe

    Plow Babe Senior Member
    Messages: 218

    There was a local contractor who plowed a shopping center last season for $50 per hour, using skid steers with 8' pushers. Needless to say, he is no longer in business.

    It can be frustrating to professional contractors when someone comes in with a lowball bid and takes work away. But, most of the time (in our experience) they only last one or two seasons, then they are gone, and we get the account back. It is nice when customers recognize the value of keeping their dependable contractor, in spite of lowball bids.
  3. kipcom

    kipcom Senior Member
    from Indiana
    Messages: 455

    We have seen rates that low so far here in Indy. I lost a 27 store bid to a low baller. I cant wait until the 1st snow and he dosent show up. I ahve asked and been told by most that the low bids are from 1 truck plowers. I reminded them to ask for the insurance and what if his truck breaks down ? Does he have a back up plan ?? Yep, I cant wait :D
  4. Adams plowing

    Adams plowing Senior Member
    Messages: 195

    Dont forget when johnny lowballer doesnt show up and they call you cause their really in a bind make sure to tack on an extra 5 to 10% for their ignorance... you can just put it to them as a late booking fee payup

    ROSELAWN Member
    Messages: 78

    Yeah charge them a little extra because they may drop you again and don't go out of your way to get them done first. I usually help customers get the lead out by telling them that the later in the season I get the contract back, the lower the priority their lot is. Hey, if people promptly return contracts they will likely pay soon and expect you to be prompt as well.
  6. Joey D

    Joey D Senior Member
    Messages: 280

    Lets not forget that maybe the lowballers are just starting out. I am a youg guy and when I started working for myself pricing is very hard to do. Sometimes you don't see all the added expense in everything. Other times you just don't realize how long things take. I have been burned a few times when I started but did the job anyways so you don't look like a clown.
    just something to think about before heading out to beat up someone who underbid us...
  7. bison1973

    bison1973 Member
    Messages: 69

    lowballers everywhere

    I'm in central WIS and I'm bidding on a lot against a guy who is at $40 per hour. Our area is already low compared to most of the rest of you (in the $65-$75 p/h range for people who know what they're doing). But I won't do it for that cheap. The problem around here is that you are competing against guys who are just trying to make some extra cash- not provide a professional service. They think $40 per hour is good money.
  8. Team_Yamaha

    Team_Yamaha Senior Member
    Messages: 240

    Well, here are my prices for res. and small commercial (under 1 acre lots) for big commercial add $10/hour to prices. For each truck it works out to be about $55/hour. As for the Bobcats, I get $45/hour for the 763 and $55/hour for the S250. And for the 4-wheelers I get $30/hour. All prices are with operators, I am kinda lucky there because I have a couple of buddies that are heavy equipment operators and get laid off in the winter. So of $10/hour for beer money and they get out of the house so the wives aren't yelling that them, plus they don't screw up their unemployment.

    The problem around here is that the people with plow trucks or Bobcats are a dime a dozen, most are either farmers or guys that have plows for their own driveways. But when it comes to the big lots even thought I do have "lowballs" that bid against me, it comes down to service, reliability of my equipment, and the experience of my operators that makes the difference.
  9. home rescue

    home rescue Member
    from wv
    Messages: 94

    I'm trying to get 120 to 130 per hour but I've heard of guys contracting at a sams f0r 65.00 an hour. really tuff market around here .
  10. Mick

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

    I'm really surprised at such low rates. For $40/hr, I'd let my truck sit. Save gas and stay in a warm bed. This is an area with high snow rate (76"/yr). Not a high income area and we have more than our share of lowballers. But there is plenty of work out there that needs reliable service and are willing to pay for it. I've got three customers (residentials, who don't know each other) who have told me straight out that they don't care what I charge, as long as I'm plowing for them again this year.
  11. Team Yamaha, Your bids work out to be $55/hour for a truck or a bobcat and you have problems with lowballers? In this area you would be considered a lowballer yourself. How can you make any $$$ with those rates?
  12. coolgreen

    coolgreen Member
    Messages: 53

    I hate lowballers

    I just got back into plowing last season, and so far, I'm still a small, one-truck operation doing mainly residential driveways.

    I thought my prices last season were a bit low, so I upped them this year. So far, I've lost about 20 bids to guys undercutting me. I can't believe what people will plow for around here.

    In an area about 10 miles south of me there are guys signing seasonal contracts for $160 for a regular double drive. Can you believe it? I wouldn't even start my truck for that.

    I'm sticking to my prices. When I finish my route five hours earlier than these clowns (and make the same amount of money) I think I'll drive around and laugh at them for a while.

    There's always someone out there screwing up this business. It's just as bad, or even worse, with lawn contracts.
  13. NoStockBikes!!

    NoStockBikes!! Senior Member
    Messages: 215

    There was a thread that went south and got locked, but I had a post on there that said something to the effect of what a sub gets paid, and if an independent guy is doing a job for what someone else would be getting paid as a sub to do it, could it be considered lowballing? $55/hr is subcontractor neighborhood around here. I guess my point is that I don't think you can fault someone for doing a job for the same money that you'd pay someone to do it, if you know what I mean.
  14. griffithtlc

    griffithtlc Senior Member
    Messages: 213

    NoStockBikes- where are you at in MN? Not too many of us around here:waving:
  15. maple city lawn care

    maple city lawn care Junior Member
    Messages: 12


    I fault the lowballers who go in and bid to do the jobs for the low rates. I don't fault subcontractors. They don't effect the market, because they aren't the ones bidding the jobs. When a person goes into a bid knowing that the going rate for plowing is $100.00 per hour, and they bid $50.00 per hour. They ruin it for everyone in the area.

    A subcontractor isn't the one signing the contracts, and they aren't the ones bidding. My subs don't know the rates I bid at and what I'm paid for my properties. They know the rate they are going to be paid per hour. So they aren't the ones lowballing anyone.

    It doesn't make me as mad if someone is just looking to plow a few driveways to make an extra buck. Most guys want to stay small becuase they have other obligations. But when these guys go into major commercial accounts and lowball them it kills every one of us.

  16. JohnnyU

    JohnnyU 2000 Club Member
    Messages: 2,037

    Maple city-

    I think he was talking about when a person who has subbed for several years decides to go out on their own. They have been paid $55/hr while they plowed/ Maybe they just don't realize that the contractor is bidding twice what they are paying him.

    If they can cover their costs at $55.hour and still be properly insured, I need to find out how they do it, I'd like to be able to keep my costs that low!!!
  17. NoStockBikes!!

    NoStockBikes!! Senior Member
    Messages: 215

    Griffith: I'm just up 25 in Big Lake.

    SnowyBowTie: That's kind of what I'm getting at. I guess my point being that if a subcontractor can be insured and keep his equipment up @ $50-$55/hr to plow X square feet of properties working as a sub, I'm not certain what the difference would be.

    Now I'll at this point tack on my disclaimer I put on the original post in the 'thread gone bad' I've worked as a sub, and frankly enjoy working as a sub. I'm not a salesguy, and I don't want to run around trying to bid and sign contracts, etc. It's not my cup of tea, so it's not as if I'm gonna run around trying to sign up my own jobs charging "subcontractor" wages. But to a certain extent it doesn't surprise me that some people do.

    Hypothetical situation time: Let's say a guy is getting paid $50/hr to sub. If he goes out and hunts down hsi own business, he can sign them up @ $60/hr. That's potentially thousands of more dollars for doing the same work, but still considered "lowball"

    Now obviously a one truck $50/hr sub is gonna be the one man outfit, more subject to mechanical problems, overwhelmed by blizzards, if he gets sick, etc. Really all the other problems that exist in any one man operations. He doesn't have/need a business front/shop/yard/employees, so his costs are less, so he doesn't understand how people are losing their shirts. So therein lies the eternal conflict between the one-man "lowball" operation and the larger, fail-safe operations (multiple trucks, the jobs will get done no matter what). I guess a guy can go on for a long time about economic realities of covering overhead and running larger operations that are capable of handling the various sizes of accounts, commercial/residential, but there will always be guys who can do jobs for less, period. There will be guys that have a POS 1978 Chevy that still has most of it's body panels ($500 to cover) and there will be guys w/ 2004 Chevy 3500LT's with leather interior ($45,000) One guy might live in a trailer house, and another guy might live in a $600,000 house with 2 kids in $10,000/yr private school. One guy will be VERY willing to bid accounts for $50/hr, one guy won't/can't.

    Yeah, I know there are holes in the scenarios, and it's tough to address issues like breakdowns, backup, etc. That's where the big guys have it all over the little guys. All I'm sayign is that there are certain segments that will always be willing to accept lower levels of service for lower prices. That's why bag your own grocery stores swept the nation. So I agree with the guys who say that you have to really push the dependability and service aspect, and don't lose any sleep over the ones that get away. They might come back if they aren't satisfied with the lower levels of service they experience at the lower costs.

    WARNING: semi-coherent rambling analogies ahead -

    Capitalism puts Darwin's theories to work. The key is to find your niche in the food chain, and operate within it to the best of your ability. On one extreme we have nighborhood kids shoveling sidewalks for a couple $. On the other end we have 24 hour commercial operations that need high-acre lots clear yesterday. Mid to low level residentials are gonna be the lowballer's paradise. Forever and always. A high-end plower might be able to go in there sporadically, but he most likely won't last, because the lowballers will eventually prevail. He has higher costs, and can't successfully operate his business that way. The high-priority commercial jobs will be the large op's domain. Forever and always. A lowballer might come in, but he's not gonna be able to hack it. Businesses are like predators, cusotmers are like prey. It's like a hyena trying to take down a cape buffalo. An organized pride of lions, yeah. A couple hyenas, no way. They might try it, but it's not gonna be a positive result. Same thing conversely, if the pride of lions decides to rummage for grubs and scraps, their asses are gonna starve. Everybody's got their niche.
    Just trying to spur some thought.
  18. EZSnow

    EZSnow Senior Member
    Messages: 205

    speaking of bag-it-yourself grocery stores, my wife is from michigan, and there's very few stores that don't bag your groceries for you. This, as you other minnesotans know, is not the case in MN. She's gonna go on grocery strike here pretty soon... or worse yet- start shopping at Byerly's:eek: payup
  19. Snoworks

    Snoworks Senior Member
    Messages: 466

    IMO - Pricing is relative to the region you are plowing in. For example: in upper Minn. and Wisc. you probably would be happy to get $55.00 to $60.00 an hour plowing, due to the amount of snow that you get in a season.

    I am curious though, are these prices for commercial plowing? It seems that you could double those rates if you were doing residential accounts. I just cant see anyone plowing a driveway for $10 to $15.00 a push.

    Chuck B.
  20. NoStockBikes!!

    NoStockBikes!! Senior Member
    Messages: 215

    :D We just moved to Big Lake, and the Coborn's here in town bags the groceries. And the employees smile at you. The guy in lot collecting carts says "Hi, thanks for coming." I'm hooked. :D Big difference from the little Goths that worked in the Rainbow by my old house.

    Now of course the lady down the road was bitching about how Coborn's is more expensive than the Cub in Monticello. :rolleyes: Personally, I'll pay an extra buck just on principle.