You cant make up for a loss by doing volume work. You will always lose in volume. Never match a competitors price just to get the job. If it came to that its not about price its about who the customer liked the most, which they may like you but liking someone dont pay your bills. Unless your married to Ivana Trump.Mike Finley said:
Apples to Apples Price Match
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I will file that under extremely and retardidly obvious. Perhaps reading the entire thread would help before posting something irrelevant, especially if you are quoting and directing it at someone or at a specific point.GPI said:
Now we are having one conversation about 3 different subjects. Anybody else?
Oh contraire! When I was a twenty-something I started doing estimating and would go weekly to the local public contracting office and submit bids. The bids were opened and read aloud and the 'apparent low bidder', barring any irregularities, got the job. Week after week went by and I still hadn't managed to snag a job amongst all these older, owner/operator, types. Finally after 4 or 5 weeks I approached this one Italian guy that seemed inclined to talk and asked him "How do you keep bidding all these jobs so low? Your prices are below my costs!". He looked at me like somebody out of The Godfather for a minute, smiled, and in a deep, quiet voice replied "Volume boy - volume.".GPI said:
I never understood the philosophy of working alot for a little bit of money. That is working for volume. Instead of 30% for Overhead and profit they put 15 or 20... get the job, but have to do two jobs for every one job I do... I just don't understand.
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I wanted one too. Then I went to summer camp which involved working with horses, I think I was about 9 at the time. That was when I realized how horses were either dumb or real mean, the first time my horse decided to put its hoof on top of my foot and stand there while tears of pain rolled down my face and I pushed with all of my 45 lbs trying to get the bastard off my foot.PipeGuy said:I always wanted a pony when I was a kid - never got it
After about 5 minutes I think he felt he had taught me my lesson so he took his hoof off me and I fell over on the ground.
On a roofing job 30% is probably doable on a one day to two day job. The fee we have on large commercial jobs is 3.7%. Our subcontractors are allowed 15%.Grumpy said:
You're trying to make a generalization about the whole industry and it can't be done.
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The tract building industry can make a generalization about the whole industry, or they make up for a loss by doing volume work?pondman said:
I want to talk about ponys instead. They are cute, I would name my Thunder Muffin.
Forget roofing for a second. I am making a generalization about NEW CONSTRUCTION. It's alot easier to ask someone who is making an investment in their own home for alot of money if you are selling quality, then it is asking someone who is building something for someone else and wants to keep his costs low to maximize his profits.hatchet said:
Now let me speak about roofing. I KNOW that my margin is much hgher for roofing, siding and gutters when dealing direct with the consumer than it is when dealing with a builder or GC. Why is that? Well because if I want to compete on the job I MUST lower my costs. I charge about $5.5 per foot for aluminum gutter, but on new construction, there are guys doing it for $3.5 all day every day. Why would I want to do it for $3.5 when I know I can do it for $5.5?
Do you NEED to lower your costs or do you just NEED to lower your price?Grumpy said:
Maybe the question "Why do they want to do it for $3.50 when others are getting $5.50?" merits some examination as well. I think to presume that it's because they don't have some essential grasp of economics is the height of self-deceit. Your factory needs $5.50 / LF to produce your product, theirs needs $3.50 to produce theirs. It might be that simple.Grumpy said:
They do it for $3.50 and you do it for $5.50 because your businesses are different. They're not in the guttering business, they're in the delivery business - the delivery of that commercial or residential property to the end user, be it a commercial leasor or a homebuyer. Everything about new work is about DELIVERY. Deliver the lot to a builder, deliver a structure to an owner. You on the other hand are in the business of protecting property assets. Your 'factory' for putting a roof on John Smith's home is different, by neccesity, than someone else's 'factory' for putting rooves on 300 townhouses for Centex Homes. For that matter it's different from the guy who's putting the new roof on the office building up the road. The guy that makes money doing 'new work' now at $3.50 / LF now would probably LOSE money for a while (until he retooled) doing your work at $5.50 / LF. It's different work.
Over the last several days I've had to repeatedly read an expression that I just can't stand - 'apples to apples' (it really is like nails on a blackboard to me). You just can't compare the pricing structures of businesses that are inherently different at the core (no pun intended) despite similar outward appearances.
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When I think of apples to apples I am thinking of material only.
And in some cases it can be as simple as another store may have a lower cost for that type of flooring.
Or they may work on a lower overhead....(ahem...internet....ehem...) therefore they use a lower margin but still have a decent amount of money after the sale is said and done.
And in some cases it can be as simple as another store may have a lower cost for that type of flooring.
Or they may work on a lower overhead....(ahem...internet....ehem...) therefore they use a lower margin but still have a decent amount of money after the sale is said and done.
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Any job will be more than the cost of goods. Your installers are apples too. Are your apples as good as the apples down at the local big-box? Are they as good as Mom and Pop's flooring. With material alone is't easy to get into the apples-to-apples trap, it's labor where you can dispell those myths.Florcraft said:
Maybe Big Blue will beat my price. Heck, I almost guarrantee it! Their material price will be lower, they have buying power. Their labor prices might even be lower. They only charge $2/ft. here to install laminate. I don't even start that low.But I can still get the sales because they will never beat my installation. My customers know that I am worth every penny they pay me, while they could spend less elsewhere and still not get their money's worth.
Don
I do believe there is a misnomer here with apples to apples. In the original post by Nathan he's attempting to use it as a marketing tool to show that other bidders will not bid the same items as he does. But in the true sense of apples to apples bid comparison - the only way to get there is a line item by line item bid. To get to that "scope" of work the owner will need to provide you with what is going to be bid. This could be provided to the bidders in something like a specification or instructions to bidders. The contract then ties the contractor to the owners wants and needs. Hand a set of documents (plans only) to 5 GC's and you'll get 5 different numbers, scopes, and products. You'll get an apples to apples comparison with a scope of work and specifications - i.e. everything in the documents is covered from the type of refrigerator to the finish of the walls in the bathrooms.
Huh? Let me recap - I said a generalization across the industry can't be made. Remodeling will be different from new construction from a roofer from a drywall company. And then you come back and focus in on one type of construction. Am I missing something? Tract homes are a type of construction within the whole industry. Can it be compared to custom homes? Can it be compared to remodeling?pondman said:
I am in more trades than roofing. Siding, gutters, and windows are the other trades I am in. Perhaps you missed the explination above about gutters. If so read below since I copied and pasted for everyone to read!
I charge about $5.5 per foot for aluminum gutter, but on new construction, there are guys doing it for $3.5 all day every day. Why would I want to do it for $3.5 when I know I can do it for $5.5?
Now this part is new: Let's say that $0.25 is credited for the tear off labor... That's I still charge $1.75 per foot more than the new construction gutter installers... and get it... but for what reason? I sell on quality, not price.
I still don't know what the trade has to do with it. You even said your subs are allowed 15%. I piss on 15%. Np pun intended but it's just not worth my time when so many other CONSUMERS are willing to pay more for quality work.
I charge about $5.5 per foot for aluminum gutter, but on new construction, there are guys doing it for $3.5 all day every day. Why would I want to do it for $3.5 when I know I can do it for $5.5?
Now this part is new: Let's say that $0.25 is credited for the tear off labor... That's I still charge $1.75 per foot more than the new construction gutter installers... and get it... but for what reason? I sell on quality, not price.
I still don't know what the trade has to do with it. You even said your subs are allowed 15%. I piss on 15%. Np pun intended but it's just not worth my time when so many other CONSUMERS are willing to pay more for quality work.
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