What would you pay?

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M

msumoose

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In The Industry
Apr 19, 2012
154
Without upsetting the mods (please delete if this is the wrong place/not allowed)....

I have the opportunity to bid a project that involves selling a municipal pool about 1600 lbs of cal hypo. Retail on this stuff is about $3 a pound (from what I can tell). I am afraid that this will end up limiting me from getting the job - so would you lowball the bid to get the job, or charge what is necessary to make a buck and risk losing the other part?

What would you pay for this stuff?

Thanks
 
I guess it depends on what the "other part" is? If you low ball your offer on the cal hypo, will your gross profit on the rest of the job be enough to cover your loss on the cal hypo, and still make money?


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Well, I would not price it below cost. It would be a "break even" proposition. I refuse to lose money on the deal. The break even is just a "little" profit to cover a bit of time and to cover diesel and mileage for a delivery.

The other part's profit will be measured over years in a maintenance contract. I do not know if I will have the opportunity for the cal hypo again though....
 
I would sell it to them at a little above cost, "break even"-as msumoose said. And make sure you give them a sales pitch, offer to do a free check of their facilitiy, and water balance check....then impress them with your knowledge.
 
The question you have to ask yourself is this "Am I in business to make money or am I in business to be a charity?" Just becasue you sell them at a little over cost doesn't mean you will get any other business from them. Call around yourself and pose as a customer and see what other companies are charging and then decide your figures there. Remember, cheapest isn't always the best.
 
Yeah, a friend of mine ends up working around that office and told me what the bids came in at last year. The bid is for Cal Hypo 65% and 60% algaecide. My DISTRIBUTOR cost on the algaecide is higher than last year's bid by about $1 a case. I could match the Cal Hypo, but by the time I think about overhead and risk with the large order (extending my capital) I will not make money. I do not know how last year's supplier did it...
 
They, the customer, must know that this will cost them at least 2000.00 . Don't let that big number scare you into thinking that you will be overcharging them if you want to make a profit. Like was said earlier, do you want to make money? Or are you looking to make sure you get into heaven? Remember, customers will always be able to beat your price on line. I get my back side kicked on a regular basis with that one. But i tell them (or try to) you cant get the same customer service or warranty through the internet connection. Try returning 1600# of product through the internet.

" I do not know how last year's supplier did it..."

Also, You can't always rely on last years numbers as there may have been price/cost increases since then.
 

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The numbers you saw may have been someones attempt to "get into heaven" approach.Did they get the maint. contract last year? I've learned (in construction)the "get into heaven" approach rarely works.I'd give them a fair price and hope for the best.Good Luck.
 
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