Does volume make up for low price?

Discussion in 'Business Operations' started by HBFOXJr, Jan 18, 2012.

  1. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    Well said MD Lawn.
     
  2. MDLawn

    MDLawn LawnSite Bronze Member
    Posts: 1,284

    Thanks.

    I just get frustrated how people are afraid or think it's so wrong to make money. If you offer a service for a price and they agree and you deliver a superior product and they're happy.....then no one got ripped off. If you don't deliver and your quality stinks, then yes you ripped them off. I think more people whine about people getting ripped off because they themselves cannot acquire work on a certain price level.
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  3. landscaper22

    landscaper22 LawnSite Senior Member
    Posts: 829

    My basic thoughts on how high my price is at a particular time boils down to supply and demand. Basic economics. What I mean is, if I find myself working nearly solo at that moment and time, I will go high end on price quotes. I think in the back of my mind there is no way I can even really make time for this, but if the price is right I will do what I have to. But if my employee situation has left me high and dry, and I pick up a lot of customers for a lower price, then I end up screwing myself. Doesn't make sense to kill myself for little profit.
    But, if I have a great employee situation I may price the job lower, but I will still make a profit. I figure it is extra work for my employees and if they are doing the majority of the work, and I am making a profit, then it gives me a chance to show the customer how dependable we are, and how we want to provide excellent service. Then, during that year of service, I evaluate and can make adjustments if I need to.
    Generally, I price on the high end anyway. It weeds out the customers I don't really care for.
    I don't really agree with the whole volume thing, it just boils down to my situation at that particular time. If my demand is high, my price goes up. If I have an employee itching for more hours, my price may go down to almost guarantee a job assuming the employee is a good employee and I want to keep them around.
     
  4. wbw

    wbw LawnSite Fanatic
    Posts: 5,424

    Different business models require different plans.

    Personally I have not run into this whining in person. I am a salesman at heart. I made a living for many years in full commission sales. I can acquire work at any price level. I can acquire more volume, faster at a competitive price point. If I were twenty years old and lived at home (I am not implying that you are or that you do) I would slowly build a clientele of hand picked customers and service them myself. However, I am an old fat man and I need to generate more income than that, faster than that.
     
  5. MDLawn

    MDLawn LawnSite Bronze Member
    Posts: 1,284

    Agree

    And I understand your position. I just know that if you go for low priced work that is what you'll be known for and stuck at. If you're just adding "filler" fo make ends meet then maybe it works. But if you need income......
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  6. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Posts: 8,866

    OP, great, you just started a WalMart thread. No place for that in our industry.
     
  7. MDLawn

    MDLawn LawnSite Bronze Member
    Posts: 1,284

    Well each has a place just like these low priced high volume lawn companies. The cater to poor or cheap people. They are easy to acquire because, lets face it, they are the masses. Yes they do destroy some good businesses and convert customers who once did pay for quality. But thats the way it is now. "Where can I get the cheapest." Instead of loyalty to service most go wherever the cheapest price can be. I mean people have died or been hospitalized on black friday because of "cheap". Me I go where I know I can get expert help when I need it. Take a small locally owned electronics store vs. big box store. I know for a fact that the small store can and will give me the best service and support after purchase. The other stores make you call the 1-800 number to talk to someone in another country. Maybe that small store sells me a TV and surround sound for a couple hundred more but the service sets them apart. Not everyone shops there though. But the people who do are willing to pay that premium.

    When I started this very small business I have I knew a guy who sold eXmarks. He gave me a honey of a deal on a 48" turf tracer and EVERYTHING else I buy. I keep going to him for stuff because I'd rather support him and he'll give me a better deal than some of the box stores. Even if he asked me to pay full price I wouldn't question him, but he wont ask full price or he'll throw in extra stuff. Why do I go there? He gives me the best service. I've called him sooo many times about problems and he takes his time to give me ideas. Thats customer service and I want that. Plus I tell everyone I know to go there to buy things that I know they sell.

    For me I want the customer that appreciates what I do for them. These people have a check in the mail the day or two after your invoice goes out. They come out to talk to you and ask "Haven't seen you in a while, how's everything going?" They compliment your work each and every time you do get to talk to them. And when there is an issue or complaint both sides can easily come to an agreement to remedy the situation. Also you find yourself doing small extra's for these people because of this relationship. They value the service you bring and you value their commitement to you. It's a win win for both. These customers are harder to get but I can say that these ones are the ones who are on top of my quickbooks "Income Summary By Customer". I have a few duds too that are on the bottom.

    For the guys who are doing the high volume low price route their customers just dont fit into my plan and thats ok. Just like the shoppers at the large cheap stores will never shop at that small specialty TV place.

    I want to be the small specialty TV store. Excel at service that people are willing to pay for. Take more time to do, um yea. But the reward for your efforts can be worth it.
     
  8. landscaper22

    landscaper22 LawnSite Senior Member
    Posts: 829

    Yep, you end up with a lot less headaches that way. Leave the cheap customers for some other lawn service. Those people go through lawn services like water.
     
  9. wbw

    wbw LawnSite Fanatic
    Posts: 5,424

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  10. wbw

    wbw LawnSite Fanatic
    Posts: 5,424

    Which store makes the most money?

    I can almost guarantee you that the high volume guy does. I know that there are exceptions to every rule but I think it is almost impossible to make much more than 100k in the high end business where you pamper your select clients.
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