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Wanted Seasonal Price, now they want Per Event. What to do?

Discussion in 'Bidding & Estimating' started by merrimacmill, Sep 29, 2010.

  1. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    I bid on a very large warehouse parking lot. The building alone is a quarter mile long. And they asked for and they're spec sheet asks for a all inclusive seasonal bid. The plowable area is about 10 acres.

    For a lot this size, I can only imagine doing a seasonal bid price because I need to keep equipment on site there that is paid for solely by plowing snow. So its not like if we have a light winter I can make up for it in the summer. I need to guarantee my income enough to a point where I know I will have covered my expenses.

    So they call up today and said the manager wants a per event price too. The maintenance guy told me they might still go with the seasonal, but said since the last two winters have been light they want to consider per event. I briefly explained that I generally like the seasonal pricing on something this big because I have equipment sitting there all winter and need to guarantee that income, but I would put something together and get back to them.

    So as I see it I have three options.

    1. Go back and say I can only do a seasonal price on an account this size and hope they take it.

    2. Give them per event pricing and hope they go with the seasonal price and if not just risk it and hope it snows enough, or just walk away. (I'm not very much of a betting man)

    3. Give them a seasonal price on plowing and a per application price on salting. Almost kind of a hidden way to get a "retainer" cost. I think the idea of a flat out retainer cost would scare them away real fast.

    I have no "in" with these people, it was just a cold call. But I can sense by how he was talking that I'm pretty close right now so I don't want to blow it. This account would be the perfect account to round out our portfolio for this winter.

    So my question, what would others do in this situation?

    Per event pricing is a bit foreign to me, so I'm not nearly as confident with it as I am with seasonal.
     
  2. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    Take your recorded snow falls from the last two "lite" years and figure out your costs to rent the equipment and so on. Then minipulate your number to cover yourself for ther lite year, and make a killing if you get more snow then the last two years. I am finding that alot of my past customers are looking at the same reasoning for this year too.
     
  3. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Collin,
    I like RCs idea.. you can use that number to justify your seasonal figure and really push the seasonal.... if they balk at it too much, extend another payment to 7 months instead of 6 to "lower" their payment on your seasonal contract... you'll get the same seasonal figure it'll just take you another month to get it..... Nov-May.....win/win if price is a deciding factor
     
    Last edited: Sep 30, 2010
  4. Triple L

    Triple L PlowSite Fanatic
    from Canada
    Messages: 5,988

    I like your idea of the seasonal plowing and salting extra.... Guarantee's that the equipment you have to put on it atleast earns it keep... Weather it be a good or bad winter... Depending on how big this place is you dont want to rent a tractor or two and just have it sit all winter on a bad winter making no coin while your still paying those monthlys....
     
  5. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    Exactly, and since I never rent machines I always buy, its even more essential. I always prefer seasonal because how I bid my lots is calculated to pay for everything for 13 months using only snow income (13 months instead of 12 for a little buffer). I do like to have a 50/50 mix of seasonal (enough to cover my salary and all expenses for the year) and per push/per event (enough to outweigh the extra expense of an above average snow year on my seasonal accts)

    And yes, this place is big enough to require at least two pieces of equipment. The building itself is a 1/4 mile long.



    I came up with a per event price that I am going to go drop off right now. I'll keep you posted on what happens with it.
     
  6. William Brett

    William Brett Member
    Messages: 57

    sorry to hijack this post but where do you guys get your snow fall data from and where may I be able to get it from in the UK

    Cheers
     
  7. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    Not sure about the UK. We get ours from NOAA here in the US and our own records accumulated over the years. Do a google search and look around.
     
  8. bluerage94

    bluerage94 Senior Member
    Messages: 398

    Try to sell them on a multi-year contract if they insist on per push terms, to lower everyone's exposure to a risk of a light or heavy winter....
     
  9. Mysticlandscape

    Mysticlandscape Senior Member
    Messages: 689

    I like this idea...
     
  10. ColumbiaLand

    ColumbiaLand Senior Member
    Messages: 790

    Tough spot with that one. Which route are you hoping to go?
     
  11. vt properties

    vt properties Senior Member
    from vermont
    Messages: 194

    Definstly tough spot...maybe a per event price with a min non refundable payment to keep equitment onsite. The amount would be deductable as snowfall occurs. This would be payable upfront. The prob is if you are up against a guy who owns equitment and can afford to just keep em onsite...Anyway just an idea...I also like the multi-year deal
     
  12. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    I would prefer a seasonal structure on this particular account. We're still in talks..
     
  13. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    You might try a sliding seasonal fee with a per storm overlay. As the seasonal "retainer fee" goes down, the per storm fee goes up.

    A multi year deal is hard to beat, as long as you are comfortable with what it's really going to take to meet their expectations.
     
  14. kp900

    kp900 Junior Member
    Messages: 2

    You could do a combination of both seasonal and per push.

    Give them a seasonal that covers x number of pushes (whatever covers your costs for the season for the equipment + profit) and any push over that total costs x billed upon completion.
     
  15. dumbyankee

    dumbyankee Member
    Messages: 66

    Be honest. If the manager has any type of business degree, he understands fixed and dynamic costs, with a profit margin. It sounds out there but its not. We all operate under the same principles. Lay it out so he understands what is involved. If you have a loader there sitting, waiting for something to do its a fixed cost. Bid the job as per push, but cover the cost of the equipment sitting. ? In other words, Charge out the equipment that is on site sitting, (lease the equipment) to them as a fixed cost per monthly. Then price out labor and other equipment that you bring in for a storm as per push. Once the customer understands what your costs are they will more than likely take the seasonal bid. Be detailed when you do this. When they start adding it up it had better jive.
     
  16. csi.northcoast

    csi.northcoast Senior Member
    Messages: 320

    Another option is that put in a monthly retainer for your equipment sitting on site.. I have done this at a mall i do, you get a fixed income if it doesn't snow but that money gets deducted if your per push or per event quota is reached for that month