Does pricing cost you?
By Chris Skalkos
By Chris Skalkos
When speaking to Canadian glass contractors I often bring up the topic of pricing. All glass shops have their own formula for setting rates or bidding on projects but what should be your determining factor? Should you base it on cost, estimated hours, utilization of resources, market influences or what your closest competitor might be bidding?
When speaking to Canadian glass contractors I often bring up the topic
of pricing. All glass shops have their own formula for setting rates or
bidding on projects but what should be your determining factor? Should
you base it on cost, estimated hours, utilization of resources, market
influences or what your closest competitor might be bidding?
When the economy is in a slump it is tempting to cut quotes to keep
your crews busy. However, instead of gaining more market share you
could end up triggering a price war that cuts into everybody’s profits
and set a trend that would be very difficult to reverse when the
economy bounces back.
You don’t need to compete on price to compete in the glass business.
Competition is healthy but it can also be destructive if you are
cutting prices for the wrong reason. Low bids may increase jobs but
will give you less profit.
But let’s face it, developers and general contractors are more
concerned with their bottom line than yours and may not ask how you can
possibly make a profit on such a low bid.
It’s inevitable that the state of the economy will influence your bid.
Complicating the issue is the sluggish economic recovery and the shift
of raw material production from North American manufacturers to
offshore companies. In this climate somebody will always be “less
expensive” than you.
But getting the job over a competitor’s lower bid depends on your
ability to convince the decision makers that your prices are based on
the quality of work you provide, which can save building owners money
from bad workmanship in the long run.
The savings a building owner enjoys from going with the lowest bid can
be grossly offset by the repair cost when moisture is penetrating the
building envelope after the glass is installed.
There are many other factors that need to be considered when bidding on
projects. The key is to focus on the value of your service and
understand how a “low-ball” bid can have a big impact on your bottom
For years Glass Canada has strived to help industry associations
communicate directly to the readers of this industry publication and we
are delighted to welcome the Canadian Window and Door Manufacturers
Association (CWDMA) as a regular contributor.
The association has been successful in providing a variety of benefits
to its members and to the window and door industry across the country.
It is an association in motion taking educational seminars and code
updates directly to its members while its highly successful trade show,
Win-door North America, continues its tradition of hosting a highly
focused trade show for the fenestration industry. Regular columns by
CWDMA president Kevin Pelley will let readers know about the
association’s progress and developments and Matt Kottke, chairperson
for Win-door North America, will update readers about the upcoming
trade show in November.
The glass industry is constantly changing, and glaziers, manufacturers,
dealers and suppliers need to keep updated. The first stop is learning
more about your association and what it can do for your business. And
you can stop here to read all about it.