Reply with QuoteMaybe your user ID explains it. Some of those shops have little overhead and can quote cheaper prices. Maybe if you can't get any work then you may have get a job.
Why underquote a job??
I would like to understand why so many shops out there are underquoting jobs???
We keep loosing contracts to mom and pop shops or just companies that are desperate.
It's understandable that when you're new you want to break into the market, but after a couple of jobs your prices should start going up to industry standards.
If you're happy just paying for your bills and take a little bit home, why are you in business? you might as well get a job.
The whole point of being in business is to have financial freedom.
You'll never achieve anything by quoting cheap. There is a difference between being busy and making money.
Chips could be flying day and night but if there is no profit then what's the point?
Am I alone here?
Please let me know guys.
Maybe your user ID explains it. Some of those shops have little overhead and can quote cheaper prices. Maybe if you can't get any work then you may have get a job.
Wow! Thanks for that insight.
We've been in business for 7 years and our sales double every year.
I'm just expressing my thoughts on how small shops will never grow with that mentality.
You cant win with the customers who play the cheapest bid game.
There is always a shop willing to prostitute themselves to get that "big" new contract and constantly new "moonlighting" shops opening for .02/hour.
There was a company around here that kept shopping machine shops. Once he got a few months of bills racked up and the shop was getting pissy, you would not hear from him or couldnt get hold of him again. Kept jobbing out shops in new areas until he couldn't get parts made and then moved on to next area.
www.integratedmechanical.ca
If you have been in business for as long as you said and are doubling your sales than what does it matter what the other shops prices are. I am a one man shop and my prices are a little lower than some of the other shops but a little higher than others. As long as I make a decent wage at the end of the day and stay busy I am more than satisfied.
But are you making enough money to put something aside to replace your machines when they wear out. Are you putting something aside so someday you can retire. Are you making enough money youcan afford to shutdown for a few weeks and take a vacation. Are you making enough money that you can afford to hire someone when demand increases and pay them a living wage.Originally Posted by fixtureman1
A lot of low cost shops who "make a decent wage" only make a decent wage in the short term and eventually dissappear.
An open mind is a virtue...so long as all the common sense has not leaked out.
Yes mI get new equipment when I need it have a nice sep plan Take trips when I want and I have had employs that were paid union scale and still. Its all in what the going rate is.
AMEN
www.integratedmechanical.ca
I was thinking about this and how do you know they under quote their jobs Like I said I make a fair amount with what I quote and I am happy with that. Do all retailers sell their products for the same amount. You are selling a service and so are they why should they sell theirs for the same or more than you if they can sell it for less and still be happy.
There may be several reasons to quote below the norm. Shear volume may play into it. If it is quite a large amount, then setup cost spread out per part is less. With lower overhead as well, that could be considerably less on a quote.
They may have an abundance of material already on hand that was bought for another job and was left over.
Logistics may also play a role.
The light bill might be due as well.
Who really knows another's reason to quote like they do? To know without speculating, you would really have to ask. That is also a bit of a taboo I think. Trade secrets maybe.
PS
Who they are quoting for might also be a factor. They may be wanting to break into or specialize in a particular area and quoting for a larger company in that area may get them the foot in the door if they win that first job with them.
Lee
Re: Why underquote a job??
I think it's universally obvious that a startup/low overhead shop will underbid to get work; it's standard. The class of customer comes into play here. The scammer that is looking to maximize short-term profit will go with the low bid. A larger industrial customer that can't deal with shoddy quality and delivery will pay the premium.
I used to work for a major international gear and sprocket manufacturer. They never worried about being underbid. They always said that anyone that charges less than them will only go out of business trying to make it. Like trying to compete with Chinese made products. You'll just go broke trying.
