Asking for your competitors quote to quote and better it?

[garthu]

Hiya guys, Been a while

So, there is currently a company that suggests that if you give them a copy of all the quotes you have received, they will better, do the same installation cheaper. Now originally this didn't concern me to much but what i have found now, with there exposure and marketing, they are generally one of the companies that end up quoting as well.

Competition i don't mind, but t have now taken a fair amount of work through this method, but what do you reckon, I don't believe it's ethical (am i wrong) or is this just clever business move.

Would you favour this if it was offered to you?

[Modise]

Hi Garth,

Someone would say "its a dog eats dog world out there". Business is tough these days. Would I favour such method, hell yes.

[daveob]

I suppose it depends a lot on if you're the seller or the buyer

As a buyer, a better price isn't everything to me. Depends a lot on the item / service.

Is the better price for the same product ?
Quality ?
After sales service ?
supplier reputation ?

If I am buying a bag of sugar, it doesn't matter where it's from. If it's cheaper from PnP, then I buy it there.

If it's a new laptop, I will pay a bit more to get it from my local PC shop ( who I trust and have not ripped me off before - always good service ) in preference to an online supplier.

[wynn]

I would quote at way below cost and when the client says that the other company can't meet or beat the price I would tell them to 'F' off for shopping my price.

the other way is to quote at dead cost and say you will beat any other written quote by R10.oo and if they present the quote, give them the R10.oo and tell them to buy at the opposition.

I hate people that shop prices and if I find out I refuse to quote them in the future. unless they bring me the other quotes in a sealed envelope and we open them at the same time and if I win I get the order.

[daveob]

I hate people that shop prices

OK. Here's a real life example for you.

We buy a house. The wooden window frames are in need of extensive repair, or replace with aluminium. For convenience, speed, and long term maintenance, we decide to replace with aluminium.

So I phone around and get 4 local companies out to quote.

2 of them are in the R20k area, and the other 2 were almost R35k.

What was the difference ? The 2 higher quotes, I found out, were sub-contracting the manufacture of the frames to another large company who specialise in making frames for installers. The 2 cheaper quotes were manufacturing the frames themselves.

We asked around for feedback on the suppliers and went with the second best price ( the cheapest was very new and already didn't have a good reputation ).

However, based on your comment, if I understand it correctly, you would hate me for looking around ? You would be much happier if I just got 1 quote and went with that ? What if that first quote was the R35k+ quote ? Would you be happy spending nearly double just so you don't upset the supplier by getting other quotes ?

And bringing all the quotes together in a sealed envelope doesn't work either. In my case, the cheapest didn't get the order.

It's a free world out there, and if you can't compete on price, quality and service with the others in the field, you need to re-evaluate something.

Please don't take this as a personal attack or anything - it is just the way I see life - one of those things that make each of us unique.

Also, if by "shop prices" you are talking about bringing another companies quote to you to get a better price, I don't see a problem there either.

Example : I want to buy a product. Locally, there are 3 suppliers. Costs are (A) R1000, (B) R1100, (C) R1150.
There is no difference in the product and after sales service is not relevant. Lets say the product is a stainless steel braai, and it is the same make in all 3 stores.

Firstly, there is no way I am paying 1150, so 'C' is out of the picture.
However, I know 'B' is a smaller operation, and being a small business myself, understand the hardships faced to keep a small business running.
So I go to 'B' and say something like : I can get the braai from 'A' for R1000, and your price is R1100. Can you better your price, say to R1050 ? That way I can support you to turn over stock, small profit, and supporting the small guy. I would also offer cash as payment so there are no credit card transaction fees for the store.

I can tell you from experience that 999 times out of 1000 the smaller supplier has done the deal and been happy for the support.

[adrianh]

I hate people that shop prices and if I find out I refuse to quote them in the future.

So the wife shouldn't compare the specials at P&P to the specials at Checkers!


I second daveob completely.

As a manufacturer if I don't know what to quote I simply get my wife to phone up a couple of opposition companies with exactly the same requirement to get an idea of the fair prices out there. I don't want to price to high, for fear of pricing myself out of the market, and I don't want to quote to low for fear of buggering up the entire market for everybody.

[wynn]

I am talking about an unscrupulous buyer taking a quote that took you hours to process and giving it to your opposition to undercut by a few percent.
Getting three quotes for a few items and or service is not what I am referring to, but I would not deal with a guy who says to me straight, what are the other guys quoting I will better it.

You must remember that this is only to your advantage for a while before other tenderers either refuse to give you prices or only go big with you so you loose out in the end because your prices to the client eventually price you out of the market

Example
You are building a house you get prices from four building merchants and shop the one quote against the other until you get the best price, that works once.
You are a builder and build lots of houses a year, you shop your prices as above, eventually three of the tenderers will stop competing or just go big and the guy who always asks for other prices will be able to nail your hide to the walls you are building.

In the past when I know a guy has shopped my prices, next time he asks for prices I contact the other supplier and tell him I am going big and he must make hay while the sun shines. then after the contractor buys the material from the other guy I phone him and tell him he got screwed because I forgot to tell him about the twenty five percent discount he was entitled to.

[wynn]

The other thing to remember is if you tell the supplier the best prices you got he will only shave a few percent here and there.
But if you just tell him he has to do better, if he can he may take a lot more off.

[adrianh]

I must be honest, I don't like say to people directly that the competitor has such n such a price if the price is reasonable. The problem is with the customer who does not want to pay a fair price. When I sell a product for R500 and a customer says he can get it for R450 elsewhere I normally tell him to go buy the product there then. My opposition and I pass business to one another all the time so its not really in our interest to udercut one another.

[murdock]

this is actually a lot more complicated and varies with products and services...

i knew about a company which was doing this to me...getting me to do all the dirty work...planning calcualtions etc...then handing over the quote to the compitition...so what i did is made my quote really cheap so they could get the work and pay the price...it is not always that simple...because then the customer wants to know why you charged them xyz for a similar job...and you loose all the work to the other company.

i dont believe it is ethical...but in tough times who is ethical...the strongest wins...i recall many years ago i was involved in an anual contract which involved millions...there were about 12 companies involved in the same contract...we had a gentlemans agreement amoungst all the contractors...as there was enough work for everyone...so each one of us specialised in what we did...but then as the contract came up for renewal so the work would ease off and the big guys would start fighting amongst each other for work and then start taking my little jobs...which didnt realy affect me because at that stage i had more work than i could handle...and i had my fingers in a variety of projects not only that contract...but my point is bussines is bussiness...nobody will scratch your back when times are tough...so you need to do what you must do to make sure you are at the top of the food chain.

[IanF]

There used to be a printer here who advertised in the yellow pages they would beat any written quote by 10%, next year it was any valid current quote by 7.5%. Now they are no longer around.
You have to convince customers that you offer a good service/product at a fair price. I remember when I started I was told any business you gain on price you will lose on price, that has been true. This morning I had someone come in for 3 different business cards double sided 100 each and was surprised when I told him it was over R1000 he was expecting R300. He said he will be back I doubt it.

[Justloadit]

I think that the heading of this thread is misleading. It depends on the product/service that one is seeking.

What we tend to forget, is the time it takes to make a quote, it costs money. Having someone do the work of a detailed quote, already has saved the next person many hours.

Let me site you another example, my brother is a air conditioning consultant, and was asked by one of the big boys, the yellow one, to design an air conditioning system to keep a container cool for rural areas, and that they required a couple of hundred units. They get the first one made, after all the problems were ironed out, and working to spec, wanted the drawings and specifications so that they could go else where to get a better price.

Now is this fair?
After all the work has been done, it is easy to get someone to quote off a fully descriptive drawing, at a better price, after all, all the problems have been ironed out. No cost for development, no cost to have worked out how to make and do certain components, which are not standard because the application was not standard, no cost knowing that it is now a proven design.

[adrianh]

Sure, its not fair, but is the risk you take when you hand over the plans. The trick is to give the consultants enough information to shut them up, but not enough to do anything useful with. We've had to hand over plans to customers on occasion. They get a plan that shows input, outputs, breakers and critical components but they sure ain't getting PLC code or part manufacturer details.

[garthu]

@ Daveob and AdrianH... Ahhh...i actually recommend people to get 3 quotes! I agree, to want to quote without competition, now thats not fair... no the question was that getting a quote and handing it to the competition so they may beat it at a small % and win the work. I dont take it personally! Constructively.. not personally.

Some good stuff coming out, @ IanF, there rep proceeds them already, unscrupulous, which is what i consider this as well quite honestly. If i have to win my clients trust by beating a quote THAT I HAVE SEEN... then i think the client should NOT be using me! I like your response cause it's exactly that. remember it's easy to install an electric fence at a 20% discount... but to back it up for 2 years then.. not so easy! Funny this is the companies rep, as big as they are, they dont back up so well

Daveob.. yes good example, a fence we quoted 75K, another company 167K (that i cant fathom) and another 69K. The 69K got the job around a year ago, client had problems, eventually asked me to have a look as was now 2 weeks. When i told them R1600, they told me thats why i didnt get it in the first place, to expensive... GO FIGURE THIS MENTALITY AS THE FENCE IS STILL IN WARRANTY from the other company! Why should i do cheap, fair... but not cheap!

I think form a CLIENT point of view though, when a company asks for your competitions quote to do theres, some responsibility lies with client there to start with. This is probably not the company to go with as far as i am concerned if this is way they win there work.

Anyway my angle is to tackle it from a reputation point of view..., that i can maintain (at the mo and x fingers) and they cant!

[murdock]

here is another angle...my argument with customers is that i need a bill of quantities...detailing...product type and quantity...if they can provide this then i dont have a problem...comparing quotes...then it is like a tender...and you open the quotes on the same day...there is nothing unethical about this...there is just tooo much under hand and walking like an egyptian...one hand up and the other under the back taking.

i can see where all the people who have commented are coming from...we all have the same problem (small comapanies)...the customer want you to do all the consulting work...all they are doing is saving...but are they...because at the end of the day they try get the contractor to design...does the contractor know what he is designing...big problem in SA...then the time to carry out the project...there is no time plan...so the job ends up taking longer because 9 out of 10 the contractors gets some money then starts a new project so the key staff are moved to the new site etc etc...then when the job is completed...is the job actually completed or does it just look like it is...during the project who is checking quality?

so the solution...yes there is a solution and nothing unethical about comparing quotes...provided all the same infomation is provided...design has beeen done...material bill of quantities is provided...your reputation will either get you the job or depending on how straight the person handling the project is...no under hand bussiness will be done...well i suppose i can dream

from my 20 years experience...chances are if its a new customer price will win the project...and if you play your cards right will eventually get the customer...then you stretch the repairs out over a period of time to keep yourself busy as and when you need to be...days when you dont have work...use these customers to keep them busy...at one stage i had at least 6 - -8 months work lined up at any stage...to keep all my teams busy.