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My retail meeting

Discussion in 'Commercial Snow Removal' started by big acres, Oct 15, 2009.

  1. big acres

    big acres Senior Member
    Messages: 653

    Ok, I talked a big developer/manager of over a dozen large retail malls into having coffee yesterday to discuss how our first snow bids with them looked... and why we didn't get any work. We recently were awarded two sites for summer work and they were thrilled, so I hoped we'd be "in" on at least one of the three we bid for snow.

    Here is how it went...

    On two of the sites, there were three "packs" of bidders... the middle group, the "smoking crack pack" (as they put it), and a new group of companies that have been around a while and are reputable -they were at 50% of the middle groups price.

    On the larger of the three sites, there is over an acre of sidewalks alone. The previous contractor priced roughly 65% less than our quote!

    We are usually on the higher end, and I told them I was happy to have landed in the middle pack. I then asked "Are you worried about awarding them at such low prices?" Surprisingly, they said "YES, but what do we do, tell the owners that these repuatble companies will do it for X $, but these other guys will do a super job for twice the amount?"
    Point made.

    I assumed this would be the case for retail this year, and this meeting confirmed it. I hope you all are diversified, because those who have all their eggs in the retail basket will have rotten eggs.
  2. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,594

    Retail is not my thing, but that is really good insight. Thanks for sharing that.
  3. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276


    In my meetings with property managers, store managers and other decision makers this year I have found thid more across the board than limited to retail. One property manager that would have been a new client told us we were about 15% higher than the low bidder, which was about average for the other 4 companies who also bid, little differences like salt qauntity and per hour machine/truck pricing for drifting and such, but most were pretty close, he said they'll award to the low bidder and if he fails to perform they'll get what they can out of him and then contact the rest of us to see who will come in and match his pricing.....I chuckled at him and said please don't waste your time or mine calling me in to clean up someone elses mess at cut rate prices, I said if you want us you'll pay what we bid.......and whatever T&M it takes to clean up after the failed contractor will be billed at our listed rates. He said fine I'm sure one of the other guys will be hungry for the work.............thats what it's come down to guys.
  4. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,251

    Yup, happened with me as well.

    A location we have serviced for close to 15 years we were in the middle on pricing as well. The low bidder was 'significantly' lower than us and there was one bid that was 'significantly' higher than us and a few others in the pack with us.

    His boss is forcing him to go with low bid, even though we have a proven track record of service as well as history in knowing how much service this location requires.

    I know someone is going to lose their butt on it, but nothing I or he can do about it in the mean time.
  5. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,594

    Just curious, are you guys locking up your accounts with 2-3Yr. contracts or will they not sign that type of thing.
  6. big acres

    big acres Senior Member
    Messages: 653

    We have pushed many towards multi-year, but really a contract is only as good as the relationship behind it... there is usually a 30, 60, or 90 day out clause. It is rare for us to ever have to refer to our contract regarding a service issue, but occasionally for billing.

    Two years ago we had a longtime customer pull the plug at the last minute, and we pointed to our contract's 60 day out and billed them for two more months... which they paid. The funniest part is that it did not snow at all during these two months, until the evening of December 31st... we did our open-up per contract and pulled off site at precisely midnight:D
  7. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,594

    Wow, that just proves how important the wording of a contract really is.
  8. procut1

    procut1 Senior Member
    Messages: 380

    You see there will always be someone willing to do the job. Even someone that will gear up and do it last minute in the middle of a snowstorm.

    Managers are willing to take the chance to save a lot of money.

    I have had it happen before when I cut off service an hour before a snowstorm after chasing payments figuring it would prompt a quick payment.

    Nope. In each case, didnt get a payment and they had someone there doing the job in no time.
  9. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,251

    Nice, I like it.