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Mdirrigation
03-01-2004, 10:29 AM
I see this term thrown around quite a bit. What do you think its definition is?

The only true way that I believe that one company can "lowball"
another company is to know their competitors exact price. One such example is when Mr. Smith has an estimate from "company A" and someone from " company X" asks to see the others estimate and says we will beat that price by half.

So if someone who Is cheaper is a "lowballer" Then the opposite is true , someone who is higher would be a "rip off" ?


So heres an exampe of 3 bids for a residential seasonal mowing
21 cuttings . (size is not important)

Steves Lawn Co $ 600 for season
Bills lawn Co $ 500 for season
Ralphs lawn co $ 900 for season.


Ralph would say Steve and Bill are" lowballers" , Bill would say Steve and Ralph are "rip offs" and Steve woild say Ralph is a "rip off" and Bill is a " lowballer.

In my eyes, they all are business men that value their services differently. The only true person that can determine if any one of these companies is a lowballer or a rip off would be the customer recieving the services.

Who sets the benchmark that determines whether a price is high or low. ?

billc
03-01-2004, 10:51 AM
I would say "lowballer" is used to describe folks who do not know the business so they ignorantly quote too low prices - prices that even if collected will not allow them to survive. Then mid- or end-season they go out of business but have created a certain price expectation for customers, hurting the true businessmen in the industry.

NickN
03-01-2004, 10:55 AM
Most everyone who does business legally knows when a lowballer comes in and underbids them.I can't use your formula because the size of the property does matter.5-600 for a 20k lot would definately be lowballing,while 5-600 for a 5k lot wouldn't be lowballing.
I think everyone here wants to be as affordable as possible.However,there are too many factors involved that actually determine our prices.Taxes,gas,insurance,workmans comp,,equipment maintenence and replacement costs,biz licenses,certification licenses,etc.,,
They all play a major roll in pricing.Now the homeowner doesn't see those prices,because Timmy down the street doesn't pay for that.So,they think we're trying to rip them off,when in reality,Timmy is a lowballer looking for Friday night beer money.
Once you've actually broken down your costs to stay in business(notice I didn't say to DO business) you'll know what a lowballer is too :D

Carolina Cutter
03-01-2004, 11:38 AM
Originally posted by Mdirrigation
I see this term thrown around quite a bit. What do you think its definition is?

The only true way that I believe that one company can "lowball"
another company is to know their competitors exact price. One such example is when Mr. Smith has an estimate from "company A" and someone from " company X" asks to see the others estimate and says we will beat that price by half.

So if someone who Is cheaper is a "lowballer" Then the opposite is true , someone who is higher would be a "rip off" ?


So heres an exampe of 3 bids for a residential seasonal mowing
21 cuttings . (size is not important)

Steves Lawn Co $ 600 for season
Bills lawn Co $ 500 for season
Ralphs lawn co $ 900 for season.


Ralph would say Steve and Bill are" lowballers" , Bill would say Steve and Ralph are "rip offs" and Steve woild say Ralph is a "rip off" and Bill is a " lowballer.

In my eyes, they all are business men that value their services differently. The only true person that can determine if any one of these companies is a lowballer or a rip off would be the customer recieving the services.

Who sets the benchmark that determines whether a price is high or low. ?





Good point.

geogunn
03-01-2004, 12:47 PM
you might be a lowballer if you have to ask what one is. (say it like jeff foxworthy does the redneck thing).

GEO :)

mtdman
03-01-2004, 01:09 PM
Originally posted by billc
I would say "lowballer" is used to describe folks who do not know the business so they ignorantly quote too low prices - prices that even if collected will not allow them to survive. Then mid- or end-season they go out of business but have created a certain price expectation for customers, hurting the true businessmen in the industry.

I'm with this statement. There is a minimal price you have to charge to do business. The guys that don't know their expenses, don't know what that price is, and charge much less than everyone else in order to get customers are the lowballers. And frankly, it isn't the fact so much that they charge so much less. When they lose money on every job, they will eventually go outta business. It's the fact that customers then have lowered price expectations after is what really sucks.

The point about higher prices being rip offs is interesting. However, I've given quotes for jobs where another company gave a much higher rate. If it's a larger company, I can understand. I don't have all the overhead some companies do, being a solo guy. I wonder if they think I'm a lowballer?

PaulJ
03-01-2004, 01:16 PM
To me a "lowballer" is someone that, for what ever reason, is out to undercut everyone they can. They want to be the cheapest at everyhting to get ALL the work. They let the cheap prices dictate the quality of work. If they simply have lower operating expences or just aren't making as much profit, but aren't "out to get you" Then I wouldn't call them a lowballer. Here a couple of the largest companies are the cheapest and their work shows it. A fert companiy is giving bids for less than I can buy the material for. I think their sq-ft estamates are about 1/3 -1/2 of actual sizes. I don't even try to compete with them on price. I just let my work speak for itself.

charlies
03-01-2004, 02:26 PM
i agree with paul in that a 'lowballer' has intentions of undercutting the competition. i don't think the novice estimator should be considered a true lowballer b/c he isn't really intentionally undercutting the comp.

by the way, if i were ralph (in mdirrig's post), i would call bill and steve idiots, especially bill. I wouldn't even slow down when driving by their house for $20 bucks, i don't care how big it is. Stopping, parking, unloading and reloading goes for more than 20 in my book.

bastalker
03-01-2004, 03:20 PM
A "lowballer" to me knows what is being charged on any said property. Underbids the property for the means of acquiring the property for his or herself.

The true meaning of the word is:
to give (a customer) a deceptively low price or cost estimate.

Which is what you were referring to.