Hypothetical ???

Bone Saw

Since we are all ethical contractors with high standards and integrity, I figured I'd throw this out to see what comes back

How would you feel and what would you do about one of our own (CT members) going 40 miles out of the way to lowball you in your own back yard to the tune of $2000+

any and all responses welcome, tia

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Susan Betz

Well, did he say:

"Hey, Bone Saw is bidding this deck, I'm gonna drive 40 miles out of my way just to lowball the ****."

Or, did he say:

"Nice that I got called on that lead. Maybe I can make my overdue mortgage this month. It's been really slow, I'm willing to drive a little bit further for work right now."

Intent is everything.

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jcalvin

I never like to get lowballed. But, on the other hand, I have to feed my family. If work in my area got bad enough, almost none and no more in sight, I would consider spreading out a little and working futher away than I used to. As far as the price, some times after a little investigating, you find out that Mr. Expensive is just that. Unless its an entire house, 2k is alot of money to save on a job.

I wouldn't worry a lot about it, if you have enough work. Undercutters normally don't last too long in the market,

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Cal


You hired WHO

Jason Whipple

If it's a 40 to 50k job, prices could easily vary that much. It's hard to say. Does the project you both bid have everything listed as far as scope of work and materials to use. I could find a different cabinet in the case of a kitchen remodel and find 2k in savings. I guess it depends on a lot more than price alone.

We all hate to lose a job on price no matter who we lost it to.

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Ahren

Sick the IRS on him! Just kidding.


Yeah, it's frustrating, but there's nothing you can really do. Business is business, as they say. The slow market will eventually weed out a lot of these guys. You'll probably see him working at the lumberyard later this year.

Greg Di

I'd be PO'd for sure. But is he undercutting you, or does he just have lower costs and overhead? Is he producing the same end product? By me 40 miles is practically another time zone with a whole different economy.

But $2k isn't that much money depending on where you are and the size of the job. I have to charge almost $1000 per day to cover me and my guy. We are good and we care. We KNOW to do the details that other people don't know or care about that finish off the job. I'm talking about things like residing the house where needed, making sure the gutters are routed properly, insulating, cleaning up, re routing cable wires, etc... Other guys do not include these things in their proposals and some of these things take A LOT OF TIME to do.

So, if someone could shave two days off a job by sending two $15 per hour guys over and do the the same exact job, they got a bargain. The problem is, there are no $15/hr guys where I am who do the same job I do.

Believe me, I wish I could find a $15/hr guy to do quality work, but it's not remotely possible. Deck framing is simple until you screw it up and it makes the decking part harder. Make one wrong cut on a railing kit and you are out $175. Building decks these days is precision work.

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neolitic

What percentage of the total
price is the $2k? 5%? 10%? More?

Did the "hypothetical" guy see
the higher number before
he wrote up his proposal?

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(Sorry....it seems there really are dumb questions)

Ed the Roofer

I don't know about him going 40 miles out of his way just to low ball you.

Obviously, he got a call from a prospective client and submitted his specs and pricing. If you know of this contractor well enough, did he charge his standard pricing that you are familiar with?

Did he know in advance that you were one of the competing bidders?

If so, maybe he wanted an opportunity to check on what the competition was doing.

Or, did he only find out from the home owner, once he came out to do his estimate?

If he knew in advance that this was one of your leads too, then how did he find out about it? That question and answer would concern me if he had tapped into some of my resources and got ahold of my leads. Do you have a mole in your office?

Ed

John Hyatt

Its a Bitch right now far as $ goes,as long as I have been in business under DeckMasters last year was the worst,this year is starting out the same x -, by st pattys day its completly normal to have several jobs to line up.Its in negitave numbers this year

I am now subing out to set doors/base/case from a trim guy friend of mine Contratror

Would I low ball and travel 40 miles to do it??? Fu%k no!!! when work is bad the last thing I need to do is not make money there is nothing more stupid than doing a job for $8 an hour just because it will hold the woof off for a min or two,or until the material bill comes in.

J.

Brock

I would like to order 4 of those please if you find out how to get a hold of any.

Bone Saw

you've been watching too much 24 Ed
Greg seems to grasp what I'm getting at. You don't go 40 miles out of your way from a lesser market to a greater market and charge the same, much less, less this has nothing whatsoever to do with me, underbidding me, or territorial market pissings. End of last summer when I did the round tt deck with curved stairs it was in Moorestown, NJ which clearly commands a higher price than where I'm located not even taking into account its about 40mi from me. So when I factored in the fact that I'm clearly going to charge more, and more on top to compensate for travel etc, I ended up at a price/sq' which clearly wouldn't fly here, and I know for a fact I was the highest bidder, but I got the job and made good money from it, even when there are certainly plenty of capable and worthy outfits that could have have done it as good, mabey better than me, for less locally. Now the argument of OH, I can almost bet that job that my OH is as low as it gets, considering aside from GL and the basics, I don't have WC and payroll to name a few, to deal with and my equipment is paid for 10Xover. So am I carging too much or commanding every penny I'm worth, isn't that whats preached like gospel round here command every penny were worth and knowing our costs???
btw the 2k difference is 10% of a 22k job in a community starting from From the low $700's

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Jason Whipple

Is it your design or theirs?

Maybe the competitor found a way to offer them something slightly different and save them some dough. I do it all the time when the bid and design is wide open. If there open to ideas, maybe he came up with a good one.

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John Hyatt

I have been tossed overbord for $300 on a $20,000 job.
Stll I maintain with what The Bone knows,ghesss bending those 2x12s around, Dont back off your price!! Not for that kinda work. I have never seen Anyone,including Mr Deck, do that ****.


However..it might be time for all of us to do a quick rethink .Mabey its just me and my market but I am thinking we are into some deep Do Do.

Our Business has been on a roll,major roll, for 15 years or so for example ya dont see framing Carpenters having a Show every year Anyway the market was there,The Folks like us Boys were there a bit head strong with major know how, loving the mixture of trim and frame,making a good living not puting up with the new construstion crapoo.

But here we are, I am thinking,all dressed up,and no place to go.

J.

Ed the Roofer

Thats the gist of what I caught from your initial post. It did indeed sound as if you were pizzed off.

So, all you are saying is, that someone else is marketing in the higher end community, possibly after catching wind of you getting higher end projects there. That just seems like business to me.

Why is he .091 % less than you? It happens to me all the time, in fact were one competitor even has the sole owner/sole worker companies complaining about being undercut. Typically, this company is 20 % to 40 % less than me.

Ed

deckman22

When times get tough as they are in a lot of areas ethics go out the window. There's plenty of illegals here that will undercut me by more than 10% right now & things aren't nearly as bad here as they have been before.
I never fault the other guy, it's the HO'ers choice & some choose by price alone. Those are simply folks you do not want to work for.

I would not feel bad about it. What I would do is forget about as it's a waste of time to do anything else.

If work is slow for you then concentrate on getting more leads, you can't win every bid. A man with your talent should have no problem finding people to pay your price, go find those people.

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Bone Saw

trust me, you have no idea



Not having work/times are tough is not the same as not being happy about outfits (who I had high regard for) dropping trou in my area, effectively $h!tting where I eat.

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Bone Saw

care to elaborate on this number?

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Ed the Roofer

Error in the usage of the decimal point and the per centage sign at the same time. Son't tell my high school math teacher...Shhh!

$ 22,000.00 divided by $ 2,000.00 is 9.1 %. Or, actually, .0909.....etc.

I rarely have anyone else only 9-10 % lower than me, but I include much more than they do. That seemingly small per centage too me, with jod costs about 1/3rd of yours was, would actually be putty in my hands to make the sale. Granted, the dollar amount would be reduce proportionately, but the per centages remain.

Ed

Stone Mountain

Our main area, the GTA (Greater Toronto Area) ranges from the West in a municiplaity called Oakville to in the East a municipality called Oshawa. We are located at the extreme north end of Toronto, more or less in the middle between east and west. From the west end of Oakville to the east end of Oshawa, it's more or less 70 miles. We will work any where in that area.
Unless it's a BIG job, I don't usually go out of that area. However, a deck company based in Oakville wouldn't neccessarily think I'm stepping on his turf, nor would I if the situation was reversed.
As far as price goes:
Last summer I had a high end deck quote for about $22,000. The HO had 4 other quotes: he designed it so it was literally apples to apples. I got the job. However, between the 4 lowest bidders, there was a difference of less than $500. The top bidder was $4000 higher than me! 20% higher than 4 other bids

I bid a snowplow contract in October for a major mall. My bid was $141,000.00 The high bid was $30,000 higher than me. The winning bid was $137,500.00, for a difference of $3500.00 or 2.5 tenths of a percent.

I bid another snow contract for $6500.00 for a close friend of my son. They got another bid for $1800.00. I told them to check for references, Worker's comp, insurance, the whole bit. They hired him anyway. My price was a favour because he's a friend. They had other quotes from $4000 to $9000.00

My prices must be generally OK, because I have enough snow work to keep 10 trucks busy.
The point of all this is that the guy may not necessarily be undercutting you on purpose. He just has a different pricing struture, or different needs at that point, or maybe has no work. If I was sitting with little or no work, I might consider dropping my prices as well.
It's something that was invented centuries ago: competition. You either compete, or you don't.

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Bone Saw

selling on price is not what i do, nor is it good business, particularly for deckbuilding

additionally I would expect that anyone with more overhead, and associated job costs to be more not less

I guess i'm pissing in the wind on this one, chocking this all up to lowering the bar another notch

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