race to the bottom

[murphy4trees]

See below an email I just got from a potential client... I connected well with him and even figured some stiff competition into the pricing... Backyard tree.. no bucket or loader access... These guys with a million in equipment gotta feed the beast... I AM unwilling to compete at their kind of prices... been running into these low prices and seeing a lot of hack pruning around lately...

Maybe I should get a real estate licence...........

Apologize if it sounds like a lot of whining... I think this is noticeable trend... Competition is driving prices down... Way down...
Here's the letter... I think my price was around 2500..





Hi Dan! My apologies for not getting back to you sooner. I've been
travelling for work quite a bit lately.

Regarding your bid for work to be performed at our residence at Thomas
Road in Wayne, we opted for another service provider. While I was quite
sure you were a good prospect to do the work, the company we ultimately
chose for the job submitted a bid that beat yours by more than $1000.00.

We will be looking to have more work done in the future and I will solicit
more bids at that time.

Thanks for your time and consideration.

AT

 

[Kneejerk Bombas]

Economy is getting tighter, time to trim some fat.

 

[timbertree]

Seeing the same thing in my area. Noticed some companies are going towards volume and not doing a professional job. I'm very competitive with the seasoned arborist in my area, but some companies I don't see how their making with the prices their charging. I would rather have my equipment sit than to do work for free.

 

[chipper]

The last time that someone out bid me, I went back to the site to poke around their work. I saw stubs, torn bark and improper pruning cuts. Makes me sick.

 

[Old Monkey]

My old boss has been in the biz 30 or so years and says its cyclical. Every now and again someone starts bidding foolishly low and for a while things suck. Sometimes it seems like the big companies do it to see if they can drive out some smaller companies. Keep your spirits up, things will right themselves after a while.

 

[P_woozel]

I'm fighting in an area that has had folks bidding low, really low for 8 years now. Every time I hear some yahoo talk about price gouging I want to jump on their neck. Its been bad here for a while, the sad thing is guys got tired of working for ???? wages so they started their own outfit, and what do they do? Bid work at 45-50$ an hour. I try to find out what the customer will accept if they dont want my normal "no impact" work and try to find a way to see if their is logic in the low bids usually thats not the case. :blob5:

 

[alanarbor]

What do you bet they get a bucket or loader into that back yard, and trash the property in the process. Seems to be the usual modus operandi I've seen around here. These guys often have more equipment than we do. Of course there is always the possibility that the person who underbid you by $1000.00 just seriously screwed up, and is going to be kicking themselves. I would be tempted respond to the email with a sarcastic response such as "If I'm too expensive now, what makes you think I'll be less expensive later?"
Removals are where the prices are really low. There are times when I've gone on pruning bids where people mention a real hack, and say "I'd probably call him if I needed a removal"

SELL TREE CARE! Let the hacks have their dirt cheap removals.

 

[Tom D. Wilson]

to your average joe who dont know jack diddly bout trees they aitn gonna relize the tree's been butchered - the company i work for gets udnercut coz my boss refuses to compete on prices - and his rate is a fair one and the work is always top rate. they'r are people out there who are buying the job and dont relise how much work is gonna be invovled in the job and after 1 day in they relise they screwed and aint gona make any money from the job

 

[Ekka]

Hey murphy

Do you know who got the job? And exactly what gear they have and how they operate?

I've seen top class companies go in low like that a get it done easily. They have 18" chippers so everything gets mulched, mini-loaders like mine get thru 36" gates, it would be nice to know the answers to the above.

 

[treeseer]

"SELL TREE CARE! Let the hacks have their dirt cheap removals."

AMEN Brother, and Glory hallelujah!!

Murph, let that one go and look to the future--making trees grow healthy. I know you got a crew to keep busy, but there's more they can do than cut and chip.

 

[John Paul Sanborn]

What do you bet they get a bucket or loader into that back yard, and trash the property in the process.

Which is why I'm usually very verbose in my bid specs, stating that this price is low impact and we can reduce cost by working faster and the client taking on some of the work.

Sometimes I will set 2 prices, low and high impact if it is on a highly "manicured" lawn.


Dan, at least the fellow was good enough to inform you of the status of the bid. Maybe he will see that there was value in your extra $1k, I've seen where people come back because of that. Ya never know.

This is just general discussion, I'm not trying to preach to Murph.

That is allso the problem with having removals as a big part of your buisness. Your allways chacing bids.

One needs a predictable clientel with revolving accounts to make the buisness stress barable.

Say you need $200k for your annual budget, and you budget for a 200 day year (4 x 4 x 12 = 192 weekends, holidays, weather, and vacations) needs you 1000 per day ( I like easy math) So if you have if you have a client base of 300 people that can generate 1000 per day, and work on a 3 year cycle you can make 50% of your annual budget off of them. Most metro markets should be able to support that sort of a load, or better.

 

[alanarbor]

"SELL TREE CARE! Let the hacks have their dirt cheap removals."

AMEN Brother, and Glory hallelujah!!

BTW Guy, nice article in the latest Arborist News! Sounds like the ol' hardboiled sleuth had been taking some sensitivity training!

 

[alanarbor]

And Murph, it happened to me today, I got undercut by 1100. That was on a pruning job. It's not lost yet, I'll probably have to meet w/the client again, and help them understand what their money is buying and why.

 

[a_lopa]

i get undercut all the time,its all part of the game

 

[Ekka]

Our business is 95% removals, you would starve if you had to rely on pruning work.

The only thing you can do is more quotes. It's a numbers game. You win some and you lose some ... and as time passes I have found you tend to lose more with the cold quotes (not referrals or existing customers).

I've lost jobs in the same street as I live in. I've watched other crews come and do the jobs. Yeah they're crappy operators but in the customers eyes they think they're great ... customers wouldn't have a clue. And if you approach them and say "yeah, but the guy didn't have a helmet or lifeline, he was one handing a rear handled saw, his lowering ropes were below spec, they broke the fence" , I've had customers respond "so what, the damage is less than the difference you would've charged anyway"

Peoples mentality is that the end result is the same, the tree's gone, so why should they pay more for the same thing? If all bids have insurance they don't care ... so it makes it really hard to win a bid when your price is higher.

As JPS said regular work is a good foundation and if your environment supports that go for it .... around here people are weird, they just let things go for years then cut them down, it's really frustrating at times but I think because we don't have the definitive seasons and most trees are evergreens people just don't notice the darned things till they're out of control.

I know the cooler southern states have more pruning work and deciduous trees.

Soldier on.

 

[Stumper]

Dan'l, I doubt that you are really seeing a new trend. -Just a string of the same old thing that is more glaringly obvious. It has always been this way for me. In addition to the chronic lowballers I find that the more reputable guys are all over the place. on one job I leave $500 laying on the table and on the next one the guy that underbid me last leavesSeveral hundred. Every tree is different and we all see different stuff. A hairy removal for one guy is a simple flop and clean-up for me but the next one that I would have rigged out in pieces somebody else cuts and pitches from a worn out bucket. C'est la vie!