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The bidding war

Discussion in 'Lawn Mowing' started by dvmcmrhp52, Sep 29, 2003.

  1. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    We've been working on a condo contract for 4-6 weeks now.
    We were refered by another customer and they came to us.
    Our total package was not the lowest or the highest,But
    our mowing prices were high in comparison to others and our pricing for other work was lower than others.
    The others went in with low mowing prices and tried to get their money back by much higher pricing on other items in the contract.
    We were given some of their pricing to compare as some people would like to see us doing the work.
    Bottom line is this....They may be breaking up the contract into smaller contracts....Mowing,Landscape,Snow removal,Tree removal.etc.
    Pricing I believe. They have figured out that People are quoting low on certain items to get in the door and now they may try to use that against all of us.If this happens we all lose and nobody wins.
    This topic was discussed recently in a thread about lco's lowballing each other but I just thought a recent example would be a good discussion.
    Not looking to open a can of worms,Just looking for honest thought on it.
  2. maple city

    maple city LawnSite Senior Member
    Posts: 305

    We've been bidding some larger accounts lately, and I've noticed the same things. Other companies bid the accounts low to get them, then leave the rest of us holding the bag when they go out of business.

    I'm working on a condo bid right now also. It sounds a lot like the one you bid. I'm going to bid honest and if I get it, OK, if I don't, it wasn't meant to be.

    Our company is in a better position to lose a big bid becuase my husband has another job. But for LCO's who count on this as their full income to support their families, I feel for you.
  3. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    Maple City,
    If we don't get this contract it will not effect us. If we get it great, if not there is nothing riding on us getting it.
    I just thought it was a great example of what I had mention in another thread about prop managers and such figuring out what is going on with some of the pricing schemes out there and using them to their advantage.
    The low mowing prices will now become a standard for these folks and all will suffer in the long term.
    This contract will most likely be broken up because we were specifically asked if we would be interested in doing the other work if we did not get the grass cutting.(Going with the low mowing prices)
    Business is business and I fully understand that,But are we doing each other a disservice with these practices?
    Good luck maple city on your condo bid.
  4. mower_babe

    mower_babe LawnSite Senior Member
    Posts: 790

    We never make a package deal on any bids. All of our jobs are a per mowing price (except for one softball diamond - charity type deal) If we don't mow, we don't get paid. IF we mow part because of lack of growth, we prorate. (We have a 20 mowings per season average.) Anything we want to do besides mowing is basically a per hour rate - trimming, trees, landscaping or whatever. If they will pay us per hour than great - if not then we have to estimate and hope that we do alright.

    You may ask WHY we don't package? It is not given as an option to us. If we want to bid it - we have to play by the customers rules.

    We do count on this as our income and after 5 years we are starting to feel it. It is hard to get what you should per hour on mowing when someone else can bid it lower - with an old crapsman and no insurance and no taxes. And it is not like all scrubs do a god awful job - not as nice as we would, but the grass gets cut and sometimes that is all that matters to a customer. Not bitter, just realistic. In fact with the bills i send out tomorrow, i have enclosed notices of rate increases and registrations for next year. The rates wont be where they should, but closer. And yes, I am scared to death that I will get dropped, it will be the end of the account and I will also lose the rapport that has taken 5 + years to establish....At least I will know how much work I will have for next year and we can make some crucial choices in the next month.

    sorry for my long whiny post - been a tough go lately.:)
  5. cantoo

    cantoo LawnSite Silver Member
    Posts: 2,910

    We do a variety of pricing but try to bid a complete job if possible. We never discount a part of the job so that we get the whole job just for the reasons you stated. Of course we try to let them know that it is a all or nothing bid. We bid a multi location job two years ago that was supposed to be a one contractor deal after receiving bids they decided to split up the work. We declined the work they offered us and told them we must have misunderstood the bidding process sorry for "our" mistake.
  6. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062


    Yes this splitting up the work thing has became part of the business, more and more every year. For me I declined to mention it here or to anyone in the business. Why? Because well....those that pratice dirty by lowballing on the mowing to get in, then taking te customer to the cleaners on extras.

    These people get exactly what they deserve when they pull up to mow one day and see another crew working the landscaping. Whoops!!! They are going to go totally in the hole on mowing this one this year.

    I laugh :)

    Also I laugh at the customers that end up with rock bottom services for those rock bottom prices and everything looks horrible. It goes both ways.

    Either way I laugh the same :)

    I currently have one account that did this. They are now learning a hard lesson. They took the low bidder on everything when they built the place. Lowest on grading, lowest on irrigation, lowest on sod installation, lowest on landscape installation.

    Afterwards they split everything up and the maintenace went to the lowest bidder in each area. The ground is bumpy. The turf went to crap since it was poorly installed, and poorly maintained. The irrigation broke for whatever reason which hurt the turf more. The landscaping is crap too.

    They learned their lesson about the turf, I think. They hired me after seeing my work and I am far from cheap.

    Look for a thread from me in the future that will give better details about this and maybe some pictures.

    I may as well since you let the cat out of the bag...LOL
  7. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    Like I said I don't want to open a can of worms but I do believe it is worthy of discussion.

    I'm not much of a cat person so I don't usually let them out of the bag, But maybe once in a while........:eek:
    Thanks for the input.
  8. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    When I bid a job, I give the price that I want to get for the work. I don't worry if I do or do not get it, I have no problem getting work. I am not sure how I would feel about splitting work like that to the lowest bidder. But then again, I usually don't go for large contracts or big properties, I stay with the smaller stuff I can manage on my own, as I am a solo op. I don't do landscaping, or fert apps, so many of my current customers have different companies coming in to do other work, and that doesn't really bother me, or the customer. I can work with and around other LCOs, but I find that's not always true the other way around.

    Mower_babe, I understand your dilemma with raising rates on your veteran customers. I was in your position this spring, and decided not to go through with it. My partner had just quit on me, I was worried about the economy and not getting people back with higher rates. So I didn't raise any. But, my feelings after this season on rates have changed. I can't stop getting requests for work, I can hardly handle the load I have now, and I'm looking at weeding people out again next year. So I definitely will be upping the charges next year. I worry about losing longtime customers as well, but I gotta feed my family and pay the bills, and having a bunch of nice people to work for sometimes doesn't cut that. The customers I want are those who are willing to pay for the type of service I give, at the rates I can live off of. It's business, plain and simple. I also have the advantage of working in a college town that usually doesn't feel the effects of hard times as much as the rest of the world, and demand for service is higher than the supply of lcos to provide it.
  9. I have given "Comprehensive" quotes, and on the same page my "stand alone" prices for each service individually. Of course the comprehensive "do everything" quote was considerably lower.

    I explained to them that I can be more efficient when doing everything together. Therefore cheaper.

    I couldn't let my customers "shop" my itemized comprehensive quote.

  10. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    Good thoughts.
    This is good strategy that could be used effectively by all and would keep pricing in line.
    By the way the low mowing price in this process was half of what ours was,but the total package was about the same from that bidder.

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