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Rediculous "seasonal" pricing

Discussion in 'Commercial Snow Removal' started by Ramairfreak98ss, Oct 20, 2012.

  1. Ramairfreak98ss

    Ramairfreak98ss PlowSite.com Addict
    Messages: 1,885

    Why is it a rule of thumb, that any seasonal rates are always FAR lower than what you've ever billed on a bad winter at a particular site? We have not ever done this site listed below, but have lost accounts that paid 80k in a good snow year to 35k in a bad snow year to a seasonal bid that was won for under 30k? Why bother? If you get a ton of snow, you'll lose your a$$, not much snow and you already know your already not making much if anything.

    4275 County Line Road Chalfont, PA "New Britain Village square"
    Put that in google earth.

    We placed bids on several larger sites for some companies, sometimes 2-3 companies and then a 4th company still ends up taking the account anyway, anything 250k-1mil sq ft.

    This one i rough "visually estimated" it to be a ~350+K/sq ft site. So being in PA, more snow slightly than NJ, i put what i thought was a lower bid in for this property at $35,000/season. I think thats more than reasonable and the company should have jumped on our price.

    Its the large shopping center on the map, the company said our bid is in their top 3 lowest candidates and they'd like us to take a site visit and revise pricing or submit our very best price... yeah ok.

    So now i measure it out fully and come to get ~454k/sq ft. I just must have not taken into consideration that there is roughly 80k sq ft behind the buliding with several dumpster boxed in areas etc.

    So my bid of $35k was obviously low, factor in an additional 100k sq ft "my bad", and then the mcdonalds and the other little building/store in front along the main street are all included too and all the driveways/lanes, which i figured if you're there you'll probably plow them out too, even if your not responsible solely for them.

    So its a site over 500k/sq. Any previous accounts we've had "besides last year where we billed nothing practically", we've billed anywhere from $48,000-$84,000 for a site anywhere near this size, most are all closer to 400-420k sq ft in NJ, again they'll definitely get slightly more snow/lower temps in PA.

    The management company was trying to sub this site for about $20k... im at 35k and instead of revising my bid lower, i'm changing it to $50k. Let the other two contractors that are near my 35k price have it! They avg 26-28" of snow in this town, thats barely 1k an inch for all plowing and salt/calcium applications. I'm estimating our salt cost per application billed would be $700~ and calcium for all walks at $450~ for about 17-20 bags per app.. Look at the half mile of public sidewalks too! ouch
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Like a lot of guys here,just because you can't do it at a price you want doesn't mean another company can't make money. Bigger companies that are non union will keep winter work to keep guys off unemployment and to keep equipment moving. In a lite winter your making money not plowing and in a bad winter ,I'll bet you they are charging extra for hauling snow off site .
  3. Mike S

    Mike S PlowSite.com Addict
    Messages: 1,588

    Find some dumb a$$ sub to do it for you for a really low cost..... LOL! For every stupid low price there is some dumb guy/company/sub that will sign up for it. And that is the truth and you all know what im talking about and that is why the prices are just going down!!!!!!!!!!!!!!!!!!!!
  4. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,395

    This is why seasonal is virtually unheard of here.

    Its too unpredictable on how much we'll get. I've seen winters with nice storms, I've seen winters without 6" combined snow fall.

    Seasonal in these parts guarantees SOME ONE is going to get hosed good. Either customer or the contractor. Customers won't sign off on seasonals because of it.
  5. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,395

    After the dry winter last year every one is desperate to put their snow equipment to work.
    Add in customers that feel they got took last year on a seasonal and you've got a recipe for guaranteed cheap prices.

    Let em loose their shirt and go broke on a bad year.

    It'll suck big time for my pocket book but if we don't get any snow this season my equipment is all paid for with cash. I'll still be here next year.
  6. Mike S

    Mike S PlowSite.com Addict
    Messages: 1,588

    Thats a big 10-4, same here all paid for.Thumbs Up:nod:
  7. bluerage94

    bluerage94 Senior Member
    Messages: 398

    Prices have been all over the place in the last few years...and the bad economy plus lack of snow last year doesn't help...the biggest factor we've seen is the insurance...once you deal with customers that require certain insurance like comp/disability/prevailing wage or "completed operations" clauses the prices get tighter and you dont see $60K jobs going for $30K...once the scope of work is consistent then the playing field gets tighter.
  8. dfd9

    dfd9 PlowSite.com Addict
    Messages: 1,475

    That's why a one year seasonal is unfair to all involved.

    I don't do 1 year seasonals. 3 year minimum. It equals out for everyone that way.

    Don't say it can't be done and is unfair one way or the other, as they have been in use for a long, long, long time.
  9. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,395

    I've lived here since 95. And yes even on a three year some one getting screwed can easily happen.

    MAYBE a five year would even things out but maybe not, too unpredictable.

    Never the less I can tell you that customers in this area will not do seasonal.

    I can't even get them to pay XX dollars per season for lawn care divided by 12 months. Only 7 months during the growing season.
    Why you ask?
    "we are not paying you in Nov, Dec, Jan, Feb, Mar when you are not here doing any thing for the property."
    Direct quote. So with view points like that how do you think they'll feel about paying $2000 a month for snow removal and we don't have any or enough events to pay for that??????????
  10. dfd9

    dfd9 PlowSite.com Addict
    Messages: 1,475

    Never said it worked in ALL areas, just that to say it is impossible to use them anywhere is ridiculous. And to make the blanket statement that someone will get screwed is just false.
  11. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,395

    1. I never said it wouldn't work every where, YOU are the one that said that.

    2. No its not false ......... for where I live.

    Stop claiming that I said what I didn't say.
  12. dfd9

    dfd9 PlowSite.com Addict
    Messages: 1,475

    My apologies. :drinkup:
  13. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    So are you speaking for everyone in Wyoming, or are you only speaking for everyone in a small town?

    There are 11" markets up to 200+" markets in Wyoming. What market are you in that doesn't have recorded snow averages?

    BOSS LAWN Senior Member
    Messages: 495

    I'll take 3rd on that, all my equipment is paid for.

    Seasonals for my area are more of a hit-miss, some customers base it on last year, other ones remember the year before that. :gunsfiring:
  15. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,395

    There are parts of WY that see a lot more snow than we do.
    Other side of the mountain in Laramie for example.
    I know they do seasonals there. Even for residential.
    The only request I've ever had here for seasonal payment came from a former Laramie resident.
    Nobody else will consider it.

    I'm just saying that my experience in the last 17+ years is that I'm not sure what "NORMAL" snow fall is.

    I've seen years with lots of snow, I've seen years without much at all. Back to back years for both.
    The one thing that IS normal is there is no normal.
  16. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    That would suck. At least here we can count on something.
  17. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,395

    I remember winters in the late late 90s that multiple winters in a row were some real busts.

    I was at a different place then with my business and was only taking care of a couple residentials with 2" triggers.
    I was single then and liked to do a small bit of traveling, but you can't do much of that during the lawn season.
    After two winters in a row of going out twice all winter for 2'' I decided it WAS NOT worth staying home just because it might snow.
    Back then I was sure that there was no way I'd buy a plow.
    But landing some large apartment complex contracts changed that idea.
  18. YardMedic

    YardMedic PlowSite.com Addict
    Messages: 1,266

    Man, I'm starting to experience similar frustrations with a seasonal. You're right about a seasonal contract running lower than most per push totals would be, and my big seasonal account wants to go per push this year because LAST year was a light winter. For 15 years, this place has gotten the better end of things with the seasonal contract, and because of LAST year they want to go per push. I'm not even convinced they'll have loyalty to me after 15 years... sucks to be uncertain!
  19. scottL

    scottL PlowSite.com Addict
    Messages: 1,600


    Big national provider comes in and has a great ability to work and sell their service and ability to save the client money at an executive level.

    Now big national companies have the contracts at a lower rate than previous year due to weather, economy or just to low ball and win business.

    Big company then takes 2/3 the money and calls up little snow plow companies or desperate or uneducated snow plow companies and say hey would you like to plow a fancy property for 1/3 the value? ( Of course they won't tell you that they are keeping 2/3 the money ).

    But hey how can a lot that may cost you 30k to do is being paid out at 9k? I've been hit up by MANY of these situations. When you do the math on JUST the salt product alone for a complete winter - you can't even cover your cost.

    Soooooo .. moral of the story ... don't bend over and these national companies will belly up wesport
  20. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Doubt it, just like drug users and dealers,drug users die off every year and new ones keep showing up to support the dealers.