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How To Find Out "the Other Guys Price"

 
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Old 03-31-2015, 05:48 PM   #41
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Re: How To Find Out "the Other Guys Price"


I always do two things. One ask them before seeing my written price how much they think the job will run. Then I know when they see it. Clears some air.

The second is compare their estimates to mine. Nobody I see is even reasonably close you can imagine how hard it is for someone who may never have seen a proposal.


I just priced a roof job. $12,500. Two other bidders, one $7,900 and another $9,800.00. Neither included decking (ours did $1,600 worth) and adding the other two up $55 and $70 a sheet x 60 sheets adds up.

Us $12,500
$7,900 plus $4,200 $12,100
9,800 plus $3,300 $13,100

Everyone knows this roof needed plywood and without sitting down they would have one thought we were crazy high and two unpleasantly surprised when they pay a few thousand more than estimated.
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Old 03-31-2015, 06:18 PM   #42
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by Roofcheck View Post
I always do two things. One ask them before seeing my written price how much they think the job will run. Then I know when they see it. Clears some air.

The second is compare their estimates to mine. Nobody I see is even reasonably close you can imagine how hard it is for someone who may never have seen a proposal.


I just priced a roof job. $12,500. Two other bidders, one $7,900 and another $9,800.00. Neither included decking (ours did $1,600 worth) and adding the other two up $55 and $70 a sheet x 60 sheets adds up.

Us $12,500
$7,900 plus $4,200 $12,100
9,800 plus $3,300 $13,100

Everyone knows this roof needed plywood and without sitting down they would have one thought we were crazy high and two unpleasantly surprised when they pay a few thousand more than estimated.
What do you mean by "compare their estimates to mine"? Are you offering to review bids with potential customer? I do see your point about exclusions and what I'll call "accidental omissions" in other bids.
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Old 03-31-2015, 06:30 PM   #43
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Re: How To Find Out "the Other Guys Price"


Quote:
Originally Posted by Roofcheck View Post

Everyone knows this roof needed plywood and without sitting down they would have one thought we were crazy high and two unpleasantly surprised when they pay a few thousand more than estimated.
That is a sad, but very common sales tactic. Once they fall for the cheap price they get slammed with the "unexpected" change orders.

It happens all the time unfortunately.

I also always offer to go over a suspiciously low quote to find out what might have been missed. Some take it, some leave it.

All I know is that my prices are fair.
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Old 03-31-2015, 06:51 PM   #44
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by rselectric1 View Post
That is a sad, but very common sales tactic. Once they fall for the cheap price they get slammed with the "unexpected" change orders.

It happens all the time unfortunately.

I also always offer to go over a suspiciously low quote to find out what might have been missed. Some take it, some leave it.

All I know is that my prices are fair.
I talk with prospective customers about items that I know the competition will skip. Almost every condo remodel we do requires moving a sub-panel out of a closet. Virtually every other contractor leaves it out of the quote, and treats it as a $6K unforeseen change. Knowing this, I talk with customers about it, and suggest that the other guy, who said it won't be necessary, puts that in writing.
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Old 03-31-2015, 06:58 PM   #45
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by MarkJames View Post
What do you mean by "compare their estimates to mine"? Are you offering to review bids with potential customer? I do see your point about exclusions and what I'll call "accidental omissions" in other bids.
Oh yeah I do. Whether they choose us or not I want it to be easy for them to decide. I'm glad to let anybody see what we show. I know it's clear and easy to understand I hear that almost every time.
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Old 03-31-2015, 07:52 PM   #46
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by summithomeinc View Post
So if the lowballer uses the formula L+M+O+P and his price comes to 1000.00 he shouldn't think about others pricing? Even if the average price for that particular job is 4000.00?

Wouldn't it be better for him, and his competitors, if he charged closer to the 4000.00 price?

There could be many reasons his price is lower. Maybe he doesn't know how to price. Maybe he has a great source of materials. Maybe very low labor or overhead costs.
It is very rare that this conversation comes up in the context of knowing others prices to charge more...

There has always been, and always will be, someone cheaper than you and more expensive than you in your market...

Neither one of their numbers has any real tangible relevance to what YOU need to charge for your business...

.
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Old 03-31-2015, 08:01 PM   #47
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Re: How To Find Out "the Other Guys Price"


[QUOTE=griz;275

People I dealt with didn't blab....[/QUOTE]

Yes they did! They all do!
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Old 03-31-2015, 08:08 PM   #48
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by KAP View Post
It is very rare that this conversation comes up in the context of knowing others prices to charge more...

There has always been, and always will be, someone cheaper than you and more expensive than you in your market...

Neither one of their numbers has any real tangible relevance to what YOU need to charge for your business...

.
You are correct. I think you are missing my point. My point is a person may NEED to charge less to reach their profit goal. But SHOULD they? If the average price for a certain job is 5000.00 and a person can charge 1000.00 and reach their profit goal wouldn't it be better for them and their competitors for them to charge closer to the average?

Service companies(plumbers, electricians, Hvac) usually all charge close to the same for a service call in my area. I'm sure all of their costs are very different, but they all charge close to the same because it's easy to find out what everyone else is charging. Why should it be different in other trades?
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Old 03-31-2015, 08:09 PM   #49
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by KAP View Post
It is very rare that this conversation comes up in the context of knowing others prices to charge more...

There has always been, and always will be, someone cheaper than you and more expensive than you in your market...

Neither one of their numbers has any real tangible relevance to what YOU need to charge for your business...

.
So how come all other careers care so much about the competition? What makes us so different? I thought we all were subject to human nature, even if it'd just to satisfy curiosity.
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Old 03-31-2015, 08:29 PM   #50
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Re: How To Find Out "the Other Guys Price"


In the end it all comes down to the number of quotes given to number of of jobs you get. If some ones only getting 1 out of 20 jobs something is screwed up.
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Old 03-31-2015, 09:26 PM   #51
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Re: How To Find Out "the Other Guys Price"


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In the end it all comes down to the number of quotes given to number of of jobs you get. If some ones only getting 1 out of 20 jobs something is screwed up.
But what do you do when you are only losing 1 out of 20?
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Old 03-31-2015, 09:48 PM   #52
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Re: How To Find Out "the Other Guys Price"


I think most of you got derailed on the OP's question. I would consider it poor etiquette and nosy to have my competition trying to pry my price out of me. (not to mention sounding incompetent). Not that I have anything to hide and I don't care if others know what my price is...
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Old 04-01-2015, 08:18 AM   #53
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Re: How To Find Out "the Other Guys Price"


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Originally Posted by summithomeinc View Post
You are correct. I think you are missing my point. My point is a person may NEED to charge less to reach their profit goal.
Charge LESS to meet their profit goal? Interesting... It doesn't MATTER if a guy can charge $1000 and you have to charge $5000... this is the reality of our business... lowballers, guys who don't know how to price, guys who are willing to make peanuts, those with a different cost basis, all have NOTHING to do with what you NEED to charge...

What I hear you saying is finding a price to meet a broad market, which is the Achilles heel of our industry... you instead need to focus on the customers that meet your businesses criteria...

Chasing after the elusive "we are all things to all customers" doesn't focus your business, but segments it, and in most cases, the effect of this is you likely find yourself in periods of robbing Peter to pay Paul cycles because while you tried to buy business to remain "competitive" what you did in reality was give a pay cut to either you or your business, both of which have to be made up because EVERYONE ELSE still expect to be paid...

EVERYONE has taken a job at less than optimal pricing, and if you have capital reserves to absorb it (i.e. -one of the reasons you pay your company in the form of profit) you don't have to worry about it affecting your personal pocket, but if not, guess where it's coming from? Either increased sweat and stress to get the job done early or directly out of your pocket. As I said, we've all done it, but as a business practice, it is a loser...



Quote:
Originally Posted by summithomeinc View Post
But SHOULD they? If the average price for a certain job is 5000.00 and a person can charge 1000.00 and reach their profit goal wouldn't it be better for them and their competitors for them to charge closer to the average?
Then the opposite is true... if the average is $5,000.00, and a company is charging $9,000.00, why shouldn't they charge closer to the average? After all, wouldn't they increase their market share even if it doesn't meet their companies needs?


Quote:
Originally Posted by summithomeinc View Post
Service companies(plumbers, electricians, Hvac) usually all charge close to the same for a service call in my area. I'm sure all of their costs are very different, but they all charge close to the same because it's easy to find out what everyone else is charging. Why should it be different in other trades?
To come to that conclusion, you have to have gotten pricing from a substantial amount of electricians and plumbers for the same work... into the dozens... what is more likely is you are making a generalization based on a limited range of subs...

IMHO, you are MUCH better off taking the time you would spend on researching the competition and focusing on your target market that supports your business... All of the other stuff is confusing activity with accomplishment...

But until you get tired of the robbing Peter to pay Paul cycles, sometimes you have to live through it to understand it...

One of the biggest problems I have with contractors is getting them to look at their business as a tool... instead, they think "profit" is what's left over at the end of the job that they pay themselves...

How many times have you heard the line "if I can serve my customers, put out a good product and make a little money, without losing money, I am in good shape"?...

.

Last edited by KAP; 04-01-2015 at 08:27 AM.
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Old 04-01-2015, 10:09 AM   #54
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Re: How To Find Out "the Other Guys Price"


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But what do you do when you are only losing 1 out of 20?
Find out whats wrong.... either the price is insane or your not selling your service properly.

And to every one that thinks im trying to price match low ballers.... Im not.... haha. I just want the industry average from people with real companys and real bills. Not joe billy goat doing jobs out of his honda civic with no insurance.

For instance commercial drywall... this has a very straight forward industry average.
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Old 04-01-2015, 08:07 PM   #55
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Re: How To Find Out "the Other Guys Price"


Can not talk for other trades. I as carpenter never check prices of others. Because my price is price&quality bound. If I would have less calls early in April would think about others prices but it is not case. What mean if xy bid less? What is his quality?
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Old 04-01-2015, 08:14 PM   #56
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Re: How To Find Out "the Other Guys Price"


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What I hear you saying is finding a price to meet a broad market, which is the Achilles heel of our industry... you instead need to focus on the customers that meet your businesses criteria...
I like to say I have enough of my own poverty. I do not need poverty customers. If you are at welfare you can not afford 8 maple crown coped to perfection. Sorry sister it is life.
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Old 04-05-2015, 04:19 AM   #57
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Re: How To Find Out "the Other Guys Price"


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I like to say I have enough of my own poverty. I do not need poverty customers. If you are at welfare you can not afford 8 maple crown coped to perfection. Sorry sister it is life.
umm yeah....... your "budget" doesn't even cover the material
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Old 04-05-2015, 08:12 AM   #58
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Re: How To Find Out "the Other Guys Price"


so, obviously, other bids must be compared apples to apples, because if they are not for the same exact things how can they be compared?

equally, how many "other" bids are really phantom bids, just used as a negotiating tactic?
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Old 04-08-2015, 10:19 PM   #59
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Re: How To Find Out "the Other Guys Price"


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Can not talk for other trades. I as carpenter never check prices of others. Because my price is price&quality bound. If I would have less calls early in April would think about others prices but it is not case. What mean if xy bid less? What is his quality?
Although this is my second post, I've been in the business for over two decades.

To your post: This type of thinking is useful if you know WHO the bidders are potentially working for, a.k.a, the customer. I know plenty of large res. builders in my area and I know what type of quality they expect. If I were to bid rough carpentry labor for them, price would reflect their quality expectations; as in I can be flexible in my labor techniques and quality if I so choose. Its also likely that the other bidders are aware of these expectations. When these assumptions are correct, you may be looking at accurate wholesale pricing from competitors at that quality in your area. In other words, they are setting the wholesale price.....

From this base one can add a "premium" for smaller custom home builders that may expect better quality. Likewise, one can add their regional % up-charge when dealing at retail levels.

Obviously this line of thinking gets all washed up when adding multiple trades and labor costs into the mix, but when the contracts are pretty straight forward, it can be beneficial IMO.
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Old 04-09-2015, 09:58 AM   #60
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Re: How To Find Out "the Other Guys Price"


Spring brings dreams of improvements from staring at their walls all winter.

I asked my paint supplier what the word was on pricing lately and got the 20 immigrants in a cheap apartment answer. 200-300 a room pricing for labor. Less on whole interior repaints. New construction .50-.60/sf.
Thought I was lucky to get 1k for attic paint (new walls, pva primer, ceiling flat, eggshell walls, sg trim base/4 window casing/2 doors& casing)

Working on a quote to repair 2x2 drywall patch, 2 dinged/popped metal corners, roof leak bulging tape seams in upstairs hall w/ nail pops and 2 inside corner truss lift, wall dings/ceiling nail pops in foyer, stairs, living and family rooms, 3 colors eggshell, ceiling flat, sg base/casing/12 6 panel doors. On the stairs is the 2 metal corners and a 1' peel.

She is already practicing painting basement club room behr paint & primer.

Doubt my price is in her budget. Who knows? They paid university painters when they bought the house 20yrs ago.

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