what would you do?

[huggytree]

I went for an estimate for a brand new remodeler last week.

2 bath redo

all he talked about was price. He's supplying his own fixtures(normally i handle it...the only reason for a remodeler to handle it is to squeeze a couple extra hundred out of it).....i asked him for model #'s and noticed the tub was a piece of junk...i outright told him all the problems...i recommended he switch to the Kohler version...he said it was $400 more and he wouldnt...i brought up my quality a few times....he seemed not to care....i didnt have a great feeling about him at this point....i know his type.

on my way out the 2nd plumber was walking in....i knew him...a $60 per hour guy who recently went out of business....so he's still got insurance, but is working for someone else and would be doing the project on the weekend. He went out of business because it costs $82 per hour to break even...i talked with him on the phone and tried to explain things, but he didnt listen...he never caught on that he was actually working for $11 per hour instead of the union wage of $33

anyways...i told the builder that my bid will be double his...the builder said to do it anyways because the homeowner may decide to go with a real plumber.

when i got home i threw the folder in the trash....why spend 30 minutes for nothing i thought...

if i would have made a personal connection with the homeowner and talked quality i could see having a chance...but the homeowner wasnt there.

the next morn. i pulled it out and did it anyways...i was $8,000...i expect my competitor to be $5,500-$6,000 range..i even called the other plumber on the phone to see what his bid was....we were friends from along time ago...we were apprentices at the same company...he was a very bad plumber 9 years ago...he didnt have the bid done yet...we laughed about the situation and talked for 1/2 hour about old times.

should i have done the bid or not?

[thx4yrtym]

Nope!

Waste of your time.

[orion_joel]

I would be inclined to say yes do the quote. However I would be inclined to include some sort of disclaimer or clause saying that you are providing the labor only, but will not include any warranty except where it can be proved it was your workmanship. Another thing i would have included a incidentals fee. Because often when you buy fittings or such there are odd things like plugs or washers or screws, or any number of other things that are not supplied and you generally supply, building it into the profit of the fittings you supply. Finally another clause maybe that requires the full scope of the work to be outlined prior to start, so that half way through he cannot show up and want something else done, or throw in some other fitting that might take you twice as long to install.

[thx4yrtym]

It's one job! forget about it and move on.

Why would you want your name associated with this remodeler?

He probably has a reputation for doing crap work and therefore you do crap work by association.

How much money will you have to spend on advertising to repair the damage to your reputation??? - impossible to know.

Some times you just have to walk away.

Have a great week!

[huggytree]

i didnt want my name associated with not completing bids either...not completing it would cause him to call me and for me to tell him why i didnt bid.....which may make him bad mouth me to others......

i may or maynot turn down the work if i get it....i think a 1% chance.

im going to call him and find out how far apart my bid was...ill learn something

[Spider]

Do the bid. Every bid is an advertisement. Having told the contractor that your bid wil be high because you only do quality work, that point will be proven with your bid.

I would never turn down a chance to bid on wiork. But I would price in all the costs I expect, including a charge for redoing work because of cheap fittings, extra costs anticipated because the contractor is disorganized, additional materials costs for items that should come with the fixtures that may not, a couple of days contingency costs for being delayed by other trades not of a high stnadard.... and anything else I could think of.

But the point is - Bid on everything. The more your name is in a builder's office, the more he gets to know you, the more he assoiciates your name with quality and the more work you will eventually get.

I'd also put in a few extra joints to make removal of the cheap fixtures easier when they break later and I am called back the replace them!

[cocoy]

I would do a bid anyway.

Who asked for a bid?

If the customer called you...then IMO it's an obligation if you want a good reputation. You can say he's wasting your time, but he can also say the same about you.

[thx4yrtym]

"If the customer called you...then IMO it's an obligation if you want a good reputation."...


I'm sorry I don't understand this. Huggy is running a business not a charity.

The client wants to push junk materials on the homeowner. What's wrong with saying I'm sorry but I WILL NOT install products that I can't stand behind due to the lack of quality. I'm certain you will find someone to do this. Best of luck with it and walk away.

Huggy... You know his type you said. This type probably isn't real fast on paying his bills either.

In this situation I don't see how this bid is positive advertisement.

There is no up side on this type of thing at a time when you are by your own admission getting busy.

Just one man's opinion, no more.

Again best of luck,

[huggytree]

i asked his other plumber if he pays on time....i already thought of that one...he said yes..no problems


i added enough to cover my wasted time working with low end products...its always easier to use well designed/high quality products....low quality products are usually difficult and cost hundreds more to install.

my price was fair

id still like the project...anything over $5k is a great project....his project would pay for a nice vacation for my family....

im going to be calling him at the end of the week...im curious how accurate i was about my competitions bid...he'll be the type which will tell me...otherwise ill call my friend back and ask him directly.

hopefully by telling the competition my price he will have raised his...thus helping my bid look better....i dont know if this guy is smart enough to think of it....i would have.

[orion_joel]

That is always my biggest hurdle with quoting. Especially on a blind product where you know the cost price and the Recommended Retail Price, but nothing else. It gets even worse with IT because there can be so much variance between companies. One might bid at Cost+5% another may bid at RRP or others over RRP. The problem is often you never know if you are bidding against the low or the high or a mixture. So you can big a price and be way over or way under or dead on and for me in IT price is everything to a large number of customers.

[Steve B]

"That is always my biggest hurdle with quoting. ... One might bid at Cost+5% another may bid at RRP or others over RRP. The problem is often you never know if you are bidding against the low or the high or a mixture."

I don't understand why you need to know who else is giving quotes or how they are doing it. Come up with a pricing strategy that you will use for every quote and don't worry about what else is happening on any individual quote. You can make adjustments down the road if you keep losing bids due to price, or if you find you are winning too many bids, but not making enough money.

[huggytree]

i like to know what other people are charging and how they figure out their pricing

right now things are being done under cost and by side job guys doing it for 1/2 price..i obviously cant compete with either of them, but i still want to know where i am price wise on a medium sized job....i like to know everything i can....

[cocoy]

"If the customer called you...then IMO it's an obligation if you want a good reputation."...


I'm sorry I don't understand this. Huggy is running a business not a charity.

The client wants to push junk materials on the homeowner. What's wrong with saying I'm sorry but I WILL NOT install products that I can't stand behind due to the lack of quality. I'm certain you will find someone to do this. Best of luck with it and walk away.

Huggy... You know his type you said. This type probably isn't real fast on paying his bills either.

In this situation I don't see how this bid is positive advertisement.

There is no up side on this type of thing at a time when you are by your own admission getting busy.

Just one man's opinion, no more.

Again best of luck,

Giving bids are part of the business. If he doesn't want to do it then fine, explain to the client why, but don't leave them hanging if you tell them you're going to give them a quote.

I honestly don't know too many contractors who will refuse to do work because the specified equipment/fixtures being installed doesn't meet their own personal standards.

[cocoy]

i like to know what other people are charging and how they figure out their pricing

right now things are being done under cost and by side job guys doing it for 1/2 price..i obviously cant compete with either of them, but i still want to know where i am price wise on a medium sized job....i like to know everything i can....

In the past we asked after the project was awarded. It's easy to just ask the client what the difference was between the winning bid and our bid. If you have a good relationship with the client they usually don't mind telling you.

[Spider]

In an environment that is based on competetive bidding for all the work you do, it is imperative to know how your competition bids.

A. If you bid tightly for a job you want, you can be way under the second bid and effectively "leave money on the table." The best situation is to be just a little under the next company's estimate, thus getting the maximum profit out of the job.

B. If you bid to a standard system, you will get jobs you don't necessarily want by being under-priced, and you will lose jobs you do want by being over-priced. Althogether, not the most prifitable way of securing work.

C. If you generally over-bid, regardless of the reason, your company will not grow or will grow slowly. Plus, the costs of idle time and excessive bidding expenses will eat into the higher profits you make on the jobs you do win.

Therefore, to be most profitable, you (or the estimator, if not yourself) needs to be very knoweldgeable about your competition. In the past, when I tendered for work for large general contractors, I was able to win any bid I wanted by simply knowing which of our competition wanted the job and which didn't, which had a full workload and which didn't, which liked this particular type of work and which didn't. We could place ourselves in the results with almost pinpoint accuracy. I have been able to win projects with a .00?% margin, just by knowing the competition and how they will bid.

This is how competitive bidding can be a very lucrative process.

[Blacktalon]

i like to know what other people are charging and how they figure out their pricing
That's actually a very sound method of doing business. A lot of organizations do this, especially in highly competitive markets (i.e. retail food and consumer staples) in order to remain competitive and maintain their market share.

I remember some time ago you were ranting about business being slow. So you pretty much have no other choice but to take it since you cannot afford to pick your jobs at the same time.

If anything, you got a potential referral for the future, and you met up with an old acquaintence in the process. Seems like a win-win situation if you ask me.

It beats what could have happened had you chosen not to.

Scratch it up to experience and move on. That's the best you can do.

[huggytree]

there are products i refuse to install....when it doesnt work well or there are problems who will they blame? will they blame themselves for picking junk? or will they think 'hey its that plumbers fault'

we all know human nature...

the tub that is spec'd is one i said i would never install again...its not an acceptable product for anyone..i added $300 to the bid just to deal with this piece of crap.

work is picking up, so i dont feel any desperation anymore.

[huggytree]

I called the builder tonight....my bid was $8,300

my competitor was $5,400

and a 3rd guy was even less.

he complained about the $5,400 guy and said how much he liked me...but he is going with the lowest guy!

suprise, suprise

did i have extra padding because of the type of contractor he was? yes...a few hundred

it was nice he told me the prices....i run into 1/2 price plumbers once in a while...this time i ran into 2 of them on the same job

[Blacktalon]

That's unfortunate. Did the builder elaborate as to why he chose the lower guy despite his liking your bid overall?

[Steve B]

This is a good example of where it wouldn't matter if he knew what the other guy's were quoting. At least I'm guessing, he wouldn't have wanted the jobs for that price anyway.

I bid my jobs the same no matter who I'm bidding against. I use a formula based on the obvious things (# of dogs, size of yard, terrain etc.). This works well for me and makes my quoting very easy - I do it over the phone and I save a TON of time driving around. I'm sure my business is a LOT simpler to quote than plumbing - so maybe it wouldn't work for HT.

I agree with HT that he shouldn't install inferior products - if you have placed yourself as the high end plumber - then you need to be very careful about the things you do that will affect your reputation.

[orion_joel]

I think that maybe your industry Steve B. Is to some extent standardized. I mean for you at least, there is a consistency you are installing the same product every time, or i assume every time. With only a variance in area and number of dogs, maybe one or two others.

As for me an HT there are many different options, if he wants to sell and install a water heater, there are dozens of options. While he may have a standard model he offers, this does not mean pricing is not important, as well as the way you quote. If you knew you were bidding against two other competitors, and they were both most likely to offer a certain model. You could potentially craft a bid that takes advantage of this. Like making a generalization about advantages of this model above disadvantages of the other models can be beneficial.

I mean even if you do know the range of the other potential bids, it wont make a lot of difference, if the other guy is a half price guy, and the client is looking for the cheapest. But know this you can gauge what sort of effort you put into the bid. this also comes down to know your client and what sort of bid he is looking for.

[huggytree]

i was 100% correct about this guy from the start...he said my bid may be considered even if its higher...but it never was going to be....

when you cut the parts off the job and just focus on labor my price is 50-55% higher

these 2 guys im bidding against are new to business and dont understand that they are working for $10 per hour or less....they will realize after a year of banging their head against a wall and going no where....but for now they hurt the market...........its a growing part of the market and luckily it doesnt affect me very often.

this builder lied to me and use me just to get 3 bids that the customer asked for...he didnt find 2 cheap guys by accident....he got 2 cheap bids and 1 real bid...in a 3 bid situation im almost never the high bid.

i will probably not bid for this builder again...in the past ive bid 2-3 times for guys like this..hopefully the lesson i learned is to give them 1 chance....not waste my time 2 or 3 times..

he is one of the types who are going out of business right now...the low end and the extremely high end are going out of business weekly around here.

[Business Attorney]

While it is discouraging to lose a bid to competitors who are under-pricing their services, it is a fact of life. It's known as competition. When people are out of work, even if they realize that they are working for $11 an hour rather than $33, they may not care.

From the standpoint of the ultimate customer - the homeowner, not the remodeler - it is not his job to keep you in business at your customary rates. I need to paint my house this summer. I'll get several bids. I'll get references and assess the quality of their past work, how they prep the job, etc... But all other things being equal, if one is using expensive labor and another is using college students for half the price, I am not going to pay several thousand more for the same outcome.

In other posts you have given reasons for being a better value - you leave the job cleaner, you complete the job more quickly (we all know those remodeling jobs that drag on forever), etc... In cases where either the value-added aspect is not present or simply not enough to justify the significant difference in cost, you can reasonably expect to lose many of those bids. Since you obviously don't want to take on work where you don't get the price you think you need, you should concentrate on those jobs where you can justify the fact that your cost to the customer is higher than the weekend plumber.