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Reevaluate Bid

Discussion in 'Commercial Snow Removal' started by TPC Services, Nov 15, 2008.

  1. TPC Services

    TPC Services Senior Member
    Messages: 875

    The funniest thing came to me by letter the other day from one of my larger clients

    the letter had ask if we would Reevaluate are prices because the price of gas had drop from $4 to $2 a gal since september and re summit and that if prices rise again that we would vist this subject again during the season

    I dam near lost it are you friggin kiddy me I have already got it as low as I can hell I'm not really making crap of my subs so I can get the work to keep them busy The money I make is off sanding/salt and Ice melt on side walks and the hours I'm behind the truck

    and they want top notch quiality from us and want me to lower my prices because gas drop for a little while!

    WTFFFF ( Shot me now if their going to act like this all season and the season has not even started. I may just start vacation in the southeran part of the country this used to be fun.)
    Last edited: Nov 15, 2008
  2. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    I have had a couple of my contracts simply ask me the same thing. I told them all to shove it. After the beating I took last year, I will never lower a price for any reason. Gas will go back up. It will only be cheap till the new president takes office. After Jan 21st we will see 3 dollar a gallon gas indefinatley.
  3. TPC Services

    TPC Services Senior Member
    Messages: 875

    I hear you, had a nother client earlier this year cry when I told him I would like to go up 5 bucks a hr he was like will there is still guys doing it for 55 to 60 an hr I told him fine but this will be the last year I will do it for for 65 I kind of got him mad at me because then I told him has he seen that the cost of everything has gone up and I cant aford to start fixing my equipement for that either. and that he must have guys that have crap for equipment
  4. adksnowo

    adksnowo Senior Member
    Messages: 370

    Don't lower anything. Purchasing/repair/maint. of equipment costs are high. Human resources (fancy word for help) are higher every year. Gas is only one part of the equation. Did the costs or price for anything go down for this guy in the last 6 months who wants you to lower prices? Can he guarantee your fuel costs? Salt prices darn sure didn't drop this year.
  5. big acres

    big acres Senior Member
    Messages: 653

    looks like an opportunity for creative salesmanship. He wants someone who will work with him on this, so everyone that says "shove it" will rule themselves out. Create a plan which seems to offer him a break, but build in extras thast will more than make up for it. Normally, I wouldn't call for game playing... but this guy has invited the game imo.
  6. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    Care to offer any suggestions?
  7. big acres

    big acres Senior Member
    Messages: 653

    Assuming you've all ready addressed his comment "others guys are doing IT for 55 an hour" by saying "Doing what... billing for more time than they were actually on-site to make up for the low rate?" OR "IT is realative and directly proportionate to the skill of the operator... if they are 10 percent cheaper and I am 20 percent more efficient who is the bargain?"

    Try something like this:

    Let's say for easy math that gas is down from $3 to 2 - 33% (more like 2.85 to 1.85) You burn four gallons of fuel per hour so you save $4 per hour... which is about 6% of an hourly rate of $65 per hour.

    Tell him you'll split this difference and give him 3% for fast payment (define it well), BUT if it gets back to say 2.35 you add 1.5% surcharge to invoice total... 2.85 add full 3%.

    Gas will rise again. Opec is not subject to price fixing rules of USA and will decrease production, and is beginning to do so already.
  8. Gicon

    Gicon Senior Member
    from MA
    Messages: 989

    Excerpt from MY Letter

    In a letter that went out to a select percentage of my clientel, this is an excerpt. This would have answered your persons question, as to whether or not you would go down on your price, as this justifies a price increase in more then one way:

    " With the unfortunate, constant rise of cost of living, fuel, and insurance, we are forced to raise our prices this year $5.00 more than you were paying last year. Although we cannot predict our economic future, we would like to think this is the last price increase for at least a couple of years. We hope that our commitment to you in the past, will gain your commitment to us for the upcoming season. "
  9. big acres

    big acres Senior Member
    Messages: 653

    I like it... kind of says "we're all in this together".
  10. Gicon

    Gicon Senior Member
    from MA
    Messages: 989

    You've got to sympathize with the people. Furthermore, one month of $2 gas prices doesnt offset 18 months of $4 and $5 fuel prices. I would never lower my price, I would consider commiting to my current price for 2-4 years. In other words: "No sir, I am not willing to lower my price, but I am willing to lock you into that price for the next 3 years, no matter what the economy does."
    Something of that nature.
  11. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 28,362

    That was my stance this year, including earlier this year when lawn bids went out.

    We raised all the prices, by 6-10%, but reminded people that we'd already been doing the work for the last 3+ years at the same rate.

    Now I'll be able to tell them, no increase this year, due to gas prices stabilizing, and therefore, theoretically, everything else coming back down in price.
  12. rawdog

    rawdog Senior Member
    from Cape MA
    Messages: 124

    A consistent average inflation rate around 3% will do it too...

    less buying power
  13. JohnnyRoyale

    JohnnyRoyale 2000 Club Member
    Messages: 2,935

    I agree with ^^^^ :drinkup:
  14. azandy

    azandy Member
    Messages: 73

    We raised our plow pricing 10% this year. We hadn't had an increase in almost three years. The gas prices are dropping and thats great. I wish all the other major costs would drop as well. The gas prices are not a big part of the cost anymore. What happened 6-12 months ago usually is what dictates our pricing structure....... This is some of the responses I use as people are challenging the gas price drop issue. It's all about sales. If some one wanted out of their contract because of fuel prices, I'd let them go. Probably not a customer we want or need.