LOW PRICE

LOW PRICE

Postby rono on Sat Oct 17, 2009 9:52 am

LOOKING FOR ANY IDEAS ON HOW TO DEAL WITH LOW BALLERS (PRICE CUTTERS).THE BARREL GUYS HAVE STARTED A PRICE WAR IN MY NECK OF THE WOODS RECENTLY.I WAS GETTING $185 FOR REGULAR MIX(3000 PSI).THE NEW GUY HAS DROPPED HIS PRICE TO $145 AND IS PROMISING MY CUSTOMERS THAT IF I MATCH HIS PRICE HE WILL GO DOWN LOWER. HOW WOULD U GUYS HANDLE THIS ANY ADVICE? ONE THING I HAVE LEARNED OVER THE YEARS IS WHEN U CUT PRICES NOBODY WINS (CUSTOMERS /PRODUCERS) BECAUSE U START CUTTING BACK ON MATERIALS AND THEN U GET SHITTY RESULTS..I HAVE HAD TO GO BACK AND HELP 2 CONTRACTORS OUT ON JOBS THEY GAVE MY COMPETETION MORE THAN ONCE AFTER THE CONCRETE WASNT ANY GOOD....
rono
 
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Location: virgin islands

Re: LOW PRICE

Postby LeeMR on Sun Oct 18, 2009 10:45 pm

Hey Rono,

The drum guys are desperate! I'm dealing with the same thing in Boston area. Some of the drum guys are, in my opinion, giving away concrete. I had a drum guy last week, give a potential customer a price for two yards that was cheaper than i could, or rather would, deliver it for. A year ago, they wouldn't even talk to you for two lousy yards.

I wish I could say what the answer is. Hopefully you're not too heavily financed, and can afford to stand your ground for a while. I've lost sales to the drum guys lately, and i just tell the customer that there are some cases that I can't, or won't compete. I also explain to them to be prepared to get a "hot load", 2nd in line delivery time, etc., because that's going to be the cost of doing business with the drum guys.

When things turn around, and hopefully soon, the guy looking for a couple of yards from the drum guys, will get the cold shoulder again! You're right though, don't compromise your quality. That will only come back to bite you in the ass. Emphasis your service. I'll bet the drum guys in your area won't pick up a shovel, or hump a wheelbarrow. We do! And the customers love it! Not to mention the FRESH concrete!

Good luck,

Lee G.
Lee Gentile

MIX-RITE CONCRETE
http://www.mix-rite.com
888-MIX-RITE (649-7483)
228 Dedham Street
Norfolk, MA 02056
lee@mix-rite.com
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Re: LOW PRICE

Postby Timberline on Mon Oct 19, 2009 8:14 am

Keep pushing your SERVICE, ability to be ON TIME to scheduled deliveries, and metered production with NO WASTE or over ordering.
Timberline
 
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Re: LOW PRICE

Postby smnstn on Tue Oct 20, 2009 2:23 pm

This is something Don Mullin should address for your neighborhood. He has figured out the price issue the best of anybody I have seen in his start up model. But basically, somehow, you must determine what mix design the drum guy is selling for his low price. You should also determine if it has a high fly ash content. Then you need to determine how much over the needed amount must be ordered to make sure the project gets completed. The customer will pay for any overages, even if there must always be an over-order to make sure enough is delivered. You should also determine what kind of extra charges may apply. Perhaps you should begin to call the drum mixed concrete Airline Concrete. You get a low ticket price, but if you want any service, or even adequate cement, you pay extra for it. One airline is currently charging for use of the rest room.

And I guess we should not be above playing a little dirty pool ourselves. If you sense the customer is looking for a low ball, make it low enough that the ready mix guy can't even recoup the cost of his materials on that job. You cannot afford to give away the concrete in this game. No job is better than a job you have to pay for out of your own pocket.

Simon
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