Underbidding ruining the Industry

Discussion in 'Business Operations' started by MaidstoneLandscape, Oct 10, 2012.

  1. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Low bidding is the nature of the beast. People that bid too low will be gone soon. Sad enough they will be replaced with another idiot.

    We need more jobs for idiots
  2. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Messages: 2,763

    The ones that get me are the ones that bid on commercial/municipal, WAY underbid the contract then they get the job and fold up or do sub par work. You are right there is a niche for "underbidders." Sometimes they need to stay within that market and not try to make their millions doing a 8 acre commercial site with a rider. Those are the ones that give lawn guys a bad name, I realize everyone starts somewhere but it isn't just equipment or priceing. It's guys taking on projects beyond their capabilities.
  3. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    Well whatever. You'd probably not like me either as my full time subsidizes my business from time to time. I'm no cheapo and the thing I love best right now is that I can walk away from work I don't want and the food is still on the table and my lights and heat will remain on. My problem has always been with the full time guys that are starving for work or have no clue.
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  4. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Buy Beef now cause it is as cheap as it will get for 3 years.
  5. C Jovingo Landscaping

    C Jovingo Landscaping LawnSite Senior Member
    Messages: 436

    I'm C Jovingo Landscaping & I support this message! Lol
    Posted via Mobile Device
  6. newguy123

    newguy123 LawnSite Bronze Member
    Messages: 1,096

    Yeah I understood you...you made some very good points there.
  7. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    Don't hate the cop making $110,000 and his job subsidizing his business. I can't meet his lowball prices because of his ability to subsidize his landscape business. Just stating a fact.

    What does not make sense to me is even if he was to gross $60 hr mowing lawns he would gross $80 hr overtime. There's no business expences working OT. No truck, trailer, ztr, etc payments, fuel, maintenance, repairs, etc, just income tax.

    Now out of the $60 all those expenses and income tax has to come out of the $60. In reality the figure is $45

    Knowing that he has to average 1 lawn an hr including travel time, and he charges $45 for that lawn he has to be clearing less then half of what he would if just worked OT as a PO.

  8. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    Maybe he wants to make more money but doesn't want to work extra at the cop job. I have a cop buddy who does tree work on the side. I can't imagine he makes more with the tree work than he could with OT but maybe the OT isn't available or not enough gauranteed hours or more likely he doesn't want to work the cop job any more than needed. I think he was also involved in landscape/tree work befor he became a cop so maybe he likes it.

    Maybe the cop is taking all cash and doesn't report a thing? It would be nice if everything was fair, but it isn't. For example there is this wealthy family in my town that had a cheese business. I'm talking crazy $millions. One of their sons started on construction company. His personal work truck is a highly polished single axle international dump. I'm not sure it hauls anything but him. Most guys starting construction have a used pickup... Now I don't know his business but he definitely has a leg up on everyone. He's got and owns EVERY piece of equipment he needs to make him efficient and highly productive so maybe he's lower priced because he can knock out jobs faster. Or maybe he's the highest. But still he has a competitive advantage. I know a few landscape guys that pretty much rolled out in a brand new F550 with a new enclosed stuffed with goodies thanks to mom and dad. There is also another guy whose wife is something like a superintendent of schools and he was a frito lay driver and now he pretty much landscapes for the fun of it. Does everything and cheaper than most. A co worker of mine worked for him and would tell me how unorganized he was and shoot from the hip pricing not knowing costs. As long as he didn't "cost" anything his wife was ok with it. Then there is a guy on plow site who started with nothing and now has an amazing tree company making him a lot of money. Each one of these exist in every industry and it's your, mine, and the other guys job to figure out how we can survive.

    Does this cop beat you out on everything? Or did he take 1 or 2 jobs? If its only 1 or 2 just move on. He can only do so much work having a full time.
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  9. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    The cop has not beaten me out of any jobs. He came up in casual conversation with a lady inquiring how my business was doing.

    I don't hate the cop for having a good job that can subsidize his landscape business with his high paying job. I don't hate the examples of the people that you cited such as the guy that has a wife for a school superintendent making so much money that he does not have to make a profit.

    What I don't like is that they are low balling.

    The run of the mill John The Lowballer will disappear after he needs a new truck, trailer, mower, etc and he realized that he did not make enough profit to stay in business so he just disappears.

    So when a new potential customer say's John The Lowballer only charged $30 why are you charging $50. You truthfully can say he did not charge enough to cover costs of running a business and that is why he is out of business.

    Though when you have a person as the $110,000 low balling cop, or the lowballing husband that has a wife for a school superintendent permanently depress their areas landscape pricing with their low balling ways. Because of their permanent subsidies.

    They are leaving money on the table when there is no reason to.

  10. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    Your last statement I couldn't agree with more. They are leaving money. But the fact is they are still in business and something must be working for them. Maybe they aren't profiting like they should, maybe they're complaining of the guy mowing that lawn you said $60, he said $45, then JTL comes in at $25. They didn't want JTL as he threw off bad vibes but then you and the cop provide the other quote. Logically a person would go with the $45, especially if he does good work.

    32vld, I'm not against you nor disagreeing with everything. Mowing is mowing and will always be that. I love this debate only because it can get us all thinking on how to do things better. How can you beat out that cop? What can you offer that he just cannot do? What are the downfalls of his business that you do better. If he's only good for mowing can you be competitive on the mowing price but offer landscaping that he cannot do? Are you a licensed applicator that can take care of pests that he cannot. What value do you have that they do not.

    Why is it that certain companies excell and have high prices? I'll bring up JimLewis because it seems like he is running a tight ship and profiting well. He's said that he gets soo many phone calls and estimates that he pretty much has the choice to take whom he wants, so low ballers are not even a factor. I'm sure he offers superior service and looks like he can take care of a customers complete needs. Did it happen overnight, I think not. He's branded himself quite well that when you mention Lewis Landscaping in Portland, random people looking for landscaping most likely know who you are talking about.

    Now take another guy ETWman, and he specializes in only high end residential design build. He's doing projects that 99% of lawnsiters could only dream of doing. I've heard rumors he was thinking of opening a maintenance division but a high end one, not a mowing route. He's taken the low baller out of the game because it's just impossible for a low baller to do these things. Two different guys, two different business (complete maintenace and design/build vs. high end design build), both have become successful. I'm sure Jim deals with low ballers but the strength of his company probably limits their impact. ETWman just doesn't deal with a lowballer because of his clientele.

    Just food for thought. I used to whine and moan about low ballers but then came to the realization that they are always going to be there so how can I sell my service to the customers I need? What will make me the better choice than the other guy that just gave an estimate? Tough questions that I wish I knew all the answers to. Also mowing is mowing. ANYONE can mow, ANYONE can lay nice stripes, a crisp edge, and leave a neat tidy property. It's really not that hard to do. What makes you different?

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