How to fine tune your bid pricing.

Discussion in 'Lawn Mowing' started by Team Gopher, Apr 5, 2005.

  1. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

    How do you know if you are bidding too high or too low on jobs?

    Here is a suggestion from "Precision". What would you suggest?


    From Precision

    "If you are landing 30-50% your pricing is probably on target. If you are landing significantly over that, you probably need to raise rates.

    Unfortunately if you are landing less than that, it may or may not be price related."
     
  2. greeneakers04

    greeneakers04 LawnSite Member
    Posts: 162

    I would rather get 100%, and then ever so slowly, raise them.
     
  3. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

    Thanks greeneakers04 for your insight.

    Anyone else?
     
  4. daveintoledo

    daveintoledo LawnSite Silver Member
    Posts: 2,587

    if that is the case, next year when you raise your prices, you will lose them to another low bid from someone else...... and on and on.....
     
  5. Jeff@SGLC.ca

    Jeff@SGLC.ca LawnSite Senior Member
    Posts: 576


    Not wise, just means you are cheaper then everyone else and working twice as hard at it.
     
  6. MowerMoney

    MowerMoney LawnSite Senior Member
    Posts: 281

    I've been landing over 90% of my calls this year and last year. Am I too cheap?
    I kept time charts for every cut last year and averaged them out to see where I was based on $45 per hour and was ok on 70% of my customers. This year I gave price increases to 30% of my clients from last year and only one has said no. Hope the others aren't calling around for competitive pricing.
     
  7. T.E.

    T.E. LawnSite Senior Member
    Posts: 799

    I don't believe that this is necessarily true. This assumption can only be true if the customer is calling more than one LCO. I have talked to several that could get nobody to showup to even give an estimate! Several times this year I have had people tell me "well I feel comfortable with you so I won't call anybody else, I'll just go with you" I was the only one they called.
    Also I have talked to several of my competitors to see what they are are charging. I feel that 35.00 should be a min. some say 25.00 to 30.00.
    Signed one up today that told me I was 5.00 dollars higher than his last guy, but if I was dependable it was a deal. I have found that most people don't get very many estimates. Sorry for the ramble. Tony
     
  8. JBird

    JBird LawnSite Member
    Posts: 114

    I am really confused. I've been doing this a while now and bidding is getting harder not easier. I bid a very large contract this year and was undercut by one hundred and twenty five thousand dollars. But the same "lco" (note the emphasis) bid the County School against me again and bid it sky high, I'm talking about a bid worth eighty five hundred dollars, this guy bids at eighteen thousand. Bids are crazy, this one County contract that I'm speaking of had bids ranging from eighty two hundred to eighteen, most, five or six were around ten to twelve thousand.
    I have found this to be the norm this year. Plus, bids packets are so late here this year. I still have one bid out for twenty one power sub stations. The bid closed last Monday and still no word. What are these people thinking?
     
  9. jbell113

    jbell113 LawnSite Senior Member
    Posts: 654

    I have landed quite a few this year myself. I qouted a guy $145 a month for a little over 1/2 acre lot and he jumped all over it. He said the last guy quoted him $125 per cut.
     
  10. volp0005

    volp0005 LawnSite Member
    Posts: 3

    Well gee Wally (for those of you who wathed the beave back in the days of b&w tv), I guess it all depends on your business model, goals and objectives for your situation. You might be some guy/woman who wants to just make an extra buck here and there, so you price low and get 100% of the bids. You might be Jim Beam Grass Man and have a high overhead so you need to bid high to make a profit/break even and only get 30 - 50% of your bids. You get the point, everyone has a different cost structure and goal.

    Bidding is hard to do no matter how long you've been in any business. There are always new competitors that can do it better, faster and cheaper. Stick with what you do and do it the best you can at a price that makes YOU a profit. As long as you are making a profit you are winning, to a point. It just depends on how much profit you want and where you want your business to go in the future.
     

Share This Page