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beating my price down

Discussion in 'Lawn Mowing' started by down size, Feb 15, 2006.

  1. down size

    down size LawnSite Member
    from indiana
    Posts: 78

    corporation that I have done business with for years now wants me to cut last year's prices by ten percent. This year I had increased my price due to fuel prices. I have mowed for them for a year and done snow removal for them for the past five years. We had a verbal agreement that after mowing for them for a year I would raise my price, they had a big company mow for six years before they hired me and were not happy with there service. Should I meet their price? Any suggestions?
  2. STAN1366

    STAN1366 LawnSite Senior Member
    Posts: 334

    Are you on good terms with them? Maybe ask why they want you to drop your price considering they agreed to go up after the first year and gas isn't getting any cheaper. It has gone down from the highest it was, but not as low as it was a year ago.
  3. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    I personally would be hard pressed to give a reduction especially 10%, gas prices going up do not so much affect the physical act of mowing (a little but not a lot IMO). However your driving and trailering are sure costing more, not to mention higher energy prices are pretty much causing prices on everything to rise. Any product or service that uses energy during its production, storage, and transportation is directly affected by increased energy costs. So its not just like its one segment of one market (lawn service) thats seeing costs rise, its many segments of a variety of markets.

    That said if this is an account you really want to keep you might negotiate to meet them halfway by re-evaluating some of your costs. I would work at putting together a 3 year contract that provides for annual increases that you can live with, just make sure you cover your costs and can still turn a profit.

    Like I said at the beginning I would be hard pressed to make this concession, the property would have to be "fat" in order for me to make any requested or negotiated cut.
  4. jtkplc

    jtkplc LawnSite Silver Member
    Posts: 2,646

    If it's an account you want to keep I would do one of two things. Either negotiate with them, maybe 5% less than last year, or if you do that for them, then ask them what they will do for you, like maybe an extended contract 3-5 years. Otherwise, you'll need to figure out if you can still make a reasonable profit from it, and if not...:waving: I would move on.
  5. LawnScapers of Dayton

    LawnScapers of Dayton LawnSite Silver Member
    Male, from Dayton, OH
    Posts: 2,574

    Only if the agreement requires 10% less work......

  6. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,190

    We do a lot of commericial and each year we are faced with the same question. It is very very hard to raise prices on commericial without kicking off a rebid process by them. Most of the big companies are required to rebid yearly so they always have those bids in their pockets. We slowly raise our prices on the extra stuff which usually stays under the radar screen. We learned this from TG. You can put in a fuel charge statement in the contract without raising the price and it usually slids past them. We do that for fertilize, seed, and gas. We don't overdo it but that kept us even last year.
  7. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    If this is a huge account that is 20% of your contracts, get with them and negotiate - What is the climate in your area - will they hire anyone, or do they appreciate your quality? If they just want mowing, and will go low, maybe the 10% is their way of saying "we will not put it out for bids" We would like you., If it is really a big part of your mowing operation, be careful. - They do not give a dang as to who mows.
  8. sheshovel

    sheshovel LawnSite Fanatic
    Posts: 5,112

    Stay at your price.raise them on the plowing or drop them like a hot balloon
  9. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    Nailed it! If they and you are on good terms and they like the work you do ask them for a SIGNED 3 year agreement. Or if all else fails just sub it out to some lowballing scrub who does halfway decent work for half the price you have it for.clapping :laugh:
  10. GrassBustersLawn

    GrassBustersLawn LawnSite Senior Member
    Posts: 983

    FIRST: Let's see, COMMERCIAL CLIENT is trying to SCREW ME by lowering my rate by 10% across they board, WITHOUT REGARD for MY EXPENSES........so why in HELL would I COUNTER by saying "only if you sign a 3 year contract"? MY EXPENSES ARE ONLY GOING TO GO UP and I want to lock them in at THEIR RATE for 3 years??????????? DUH!

    SECOND: That 10% is probably MOST if not ALL of your PROFIT. I don't know about you, BUT I DON'T WORK FOR NOTHING! (I know some guys do, they are just too STUPID to know it!)

    I lost my biggest client (office complex) 2 years ago because they wanted a LOWER RATE and I wanted a 10% INCREASE. They had a NATIONAL low-baller come in and quote it for $10 GRAND less. They came back to me and said I could keep it if I met their price. I told them I wasn't doing it for last year's price, that I was going to raise it 10%, so there was no way I was doing it for $10k less. It took me two seasons to get my GROSS back to where it was when I had that complex. But I BID EACH JOB FOR A PROFIT! I'm not working just to have the work and say I do this job and that job. I RUN MY BUSINESS, THE CLIENT DOESN'T RUN IT! There are plenty of other jobs out there, REPLACE YOUR CURRENT CLIENT with a NEW ONE that you get YOUR RATE for!


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