Getting underbid

[Lumberjack]

I recently bid 1200 on removing 2 hackberries out of a back yard. There was 0 access, one tree was half dead and leaning over a garage, fence, and neighbors house. The other was near the power lines, and had a telephone line running through it. I figured it would take around a day and a half to complete (stumps ground and all) with 3 guys. Well not really a suprise, but coupla people had already givin them a "Cheap price." I found out that they bid 400 dollars for everything, and there was 2 of them, so I guess they would split the money. I asked when they would do it, so I could watch (the peoples great nephew works for me). Today he told me that they "hoped to have it done by the summer." I have a feeling that they will either, destory the garage, neighbors house, or fence; on one tree, and on the other they will probably remove the telephone line at least.

That seems mighy fishy to me, but after all the customer is always right.

Carl

PS The people are retired jewlers, you would figure they had common sense, that you get what you pay for. Maybe it will all work out.

 

[Lumberjack]

Originally posted by RockyJSquirrel
As you get older, this scenario will not bother you as much. But get used to the idea that there will always be someone out there willing to work cheaper than you. If you never have anyone underbidding you, you are working waaaaaaayyyy too cheap.

And there will always be people who insist on the cheapest price, regardless of quality. Evidence of this thought process is everywhere around us. But these type people usually insist on the highest quality service, and therefore are impossible to please. They are one of the worst type customers. They are also the type customers that most people try to appease. I'd rather focus on a different market and let the bottom feeders have all the price hunters and their associated problems.

Didn't really bother me, they told me goin in that someone else had bidded cheap. Not a problem here, that is part of capitalism/competition. I am planning (if all goes right) to make around $400 tommorrow between school and church. I thought that it was funny that they said they hoped to have it done by the summer tho.


Carl

 

[ORclimber]

The more jobs they underbid, the sooner they'll go out of business.

 

[rahtreelimbs]

Rocky hit it dead on. I have worked for people that were more concerned with the price than the kind of work they were getting. These are the kind of people that want you to ascend back into the tree to get that one last limb, even though you asked for a final look from them before you came down the first time. These are usually not repeat customers.

 

[MasterBlaster]

Originally posted by ORclimber
The more jobs they underbid, the sooner they'll go out of business.

Ditto that.

 

[Lumberjack]

I agree that they are more likely to go out buisness, but probably from dropping something through someones house and getting sued for whatever they may own.


People like that tend to have a small overhead.


Carl

 

[NeTree]

For that kinda money, I'm pretty confident they have no insurance, liability or otherwise. They'll be gone soon, no sweat.

 

[Lumberjack]

But then someone else fills the void. Soon enough my name will be the name when it comes to trees. No worries, be happy!


Carl

 

[MidwestTree]

Two jobs stand out in my mind. When I was first getting started I was underbid by $150 on a removal. In the end the home owner told me that everything went wrong and it took three full days, with three men, to get the tree out. I was glad to have missed out.

I gave a bid on another job and a week later the tree was gone. The home owner was at the gas station and started crying the blues that they had gotten a guy to remove it for half the price. They dropped a huge limb on the house and did several thousands in damage. Then found out there was no insurance, something that I point out to every customer.

Don't worry about losing one here and there. As I look at it you might not be to high, they might be to low. Everybody underbids sometimes. Stick to your price because the competion might be wrong.

 

[John Paul Sanborn]

If you close too few of your bids; it's time to look at your price structure.

If you close too many of your bids....

When I was with the big company, I figured that if i was at 40% closing rate i was pricing fairly for the market.

I had a huge base to draw from in their current customer lists.

 

[jmchristopher]

If you actually care to do the job at this point, you might give the folks a call and hit them with a little hardball talk about the downside risk of dealing with the uninsured, unprofessional, etc. You've got nothing to lose! Ask them questions about whether they value their roof, yard, powerlines, etc., and offer to provide references from your happy client list. Treat it as an exercise that just might pay off.

 

[NeTree]

True. The worst that can happen is they say "No".

 

[Yellowdog]

Tell on them! If it is in a city's jurisdiction where insurance is required (or permit), tell on them. If you don't think they are charging sales tax, tell on them. I hate tattletales but I like a level playing field especially when I take the time to bid a job. You have to get cleaned up, get there, look things over, think, and offer advice. That is worth something and the underbidders are one thing but those that underbid because they play outside the rules that the rest of the professionals follow, that is another and it irks me.
Where I work is rural and there are no rules. Some guys collect and pay sales tax, most don't. I have too because I am higher profile on the web and chamber of commerce. A lot of guys around here don't have insurance. All that is overhead (and sales tax can be a selling point) with these old ranchers).

Just my opinion. But why can't everyone play fair?

Originally posted by netree
For that kinda money, I'm pretty confident they have no insurance, liability or otherwise. They'll be gone soon, no sweat.

 

[NeTree]

Originally posted by Yellowdog
If you don't think they are charging sales tax, tell on them. Some guys collect and pay sales tax, most don't.

Just curious... you actually have to charge sales tax where you are for tree work?

 

[MasterBlaster]

I agree, Yellowdog. Rat them jacklegs out in a second. Their unethical practices are literally taking food out of you, or your legitimate competitors mouths.

 

[John Paul Sanborn]

Originally posted by netree
Just curious... you actually have to charge sales tax where you are for tree work?

Here you do, if it is not a nessesity then the service is taxed. Sonow removal is not, kitchen install is not, land-clearing is....5.56% (gotta pay for that stadium the brewers cannot win in...)

 

[NeTree]

LOL JP...

Here in Mass (believe it or not!!) nothing I do is taxable.

Services aren't taxable.

Firewood isn't taxable.

Even if I sell a product, it's not taxable, as long as I install it. (fert/hort oil/ etc)

But this IS taxachusetts... they will get around to it eventually.

 

[NeTree]

having said that, if you live where such things are supposed to be taxed, and somebody's not playing by the rules, by all means HIT THAT SUMBEACH!

 

[John Paul Sanborn]

They get it in your income tax.

We only pay around 7% in income tax, but then it's the same for everyone here. Used to be a progressive state. Now they take the same amount form everyone.

Property tax is pretty low too, and property values compared to a lot of similar cities I've been to.

 

[Yellowdog]

Originally posted by netree
Just curious... you actually have to charge sales tax where you are for tree work?

Unless I take out cedar or brush for "water related exemption" there is sales tax on services.

I hate the idea of ratting out someone because I miss a few regulations myself but gee whiz, the dirty, unwashed masses that pass out flyers on the weekend hurt everyone who takes time to learn and do a good, professional job (which includes carrying insurance and if necessary paying sales tax). What if WalMart wasn't structured? Who would shop there? Professional is a way of doing things and doing them right and by the books (at least trying hard to) IMO