Originally Posted by starry night
Jim, You are very highly successful in your business. Why are you so worried about the schmuck who might underbid you?
Because - again - we're not a company just pitching to the higher end of the market. We do a lot of volume and we've had a phenomenal growth rate the last 4 years. We're also in a HIGHLY competitive market. If I want to keep up the volume of business we do and keep growing, we have to remain at least somewhat
competitive. People in our area will pay a little more (like 10%-30%) for a company they believe has more to offer. But once they get the sense that they are getting ripped off, some of them will bail, no matter how great you are.
There are hardly any lighting-only companies in our area. Most of the ones I've seen over the years have come and gone within a few years. Only two or so remain. And they're both pretty small companies.
Our goal is to not only make a good profit in lighting but also sell a lot of lighting too. And we have. Our total annual sales for lighting has doubled or trippled each year for the last 4 years. But part of that is because I've corrected a little, when I started to get feedback from customers that they felt our pricing was out of line.
I guess this is just a case of different business methods, motives, goals. We do consistently sell the stuff you guys are telling me to sell. But again, our clientele is not all super-high-end clients. So there is a little more price-shopping going on with some of our clients than what some of you guys see. And I can either just ignore those sales and lose them. Or I can match MAP pricing and then win those jobs. I'm not stupid. I'm going to do whatever I can to win those jobs, as long as I'm still making good profit. Buying from companies who have a good, established MAP set pricing that also allows me some great mark-up helps me reach that goal.