Bidding Against Low-Ball Competition

A tip on how to compete on price — but not really. February 11, 2009

I bid a residence in a gated community a while back. The builder (who had me bid the job), set up a meeting at my shop with the owners, architect, interior designer and the project super. The owners told me how wonderful they heard we were and told me we were doing the job. My bid was $136,000, and I was the middle bid. A week after this meeting I called the project super to follow up on signed paper work so I could start drawing. He told me that they used a bid for $80,000 that he didn’t know about. In the builders price, they wanted to go talk to the other company, where they were told they were doing everything I was.

I went to the house after the cabinets were set and snooped around. They did a facade of what I quoted. They got 1/2 plywood drawer boxes with side mounted runners, (vrsus dovetail, Blum motion) no glaze kitchen, the finished cypress bookcases I had were done in unfinished birch/maple.

My question is - should I have called the owners up and tried to talk them out of it. I knew the job could not be done that cheaply but I didn’t want to tick off the builder. The owner is now unhappy, and the other cabinet company is on life support. I was laid low thinking I had it and then lost it. Should I have been more aggressive towards the owners in demonstrating the differences between cabinet companies? I know some of you had this happen. I also just turned in a bid of $200,000 for another residential project with this same builder.

Forum Responses
(Business and Management Forum)
From contributor L:
Just consider yourself lucky you didn't get pulled down into the quagmire. If they jumped on the $80K bid knowing full well what they were getting for their money you didn't have a chance anyway. Just laugh it off as "the super saved all this money and ticked everyone off". This is the way business is. And lately, people are looking at price only. Quality comes in low on the list until the job is done and the remorse sets in knowing how much money they spent for the crap they got.

From contributor M:
Builders can be your worst enemy. I have had them look me in the eye and tell me I am stealing money from their pocket when I am higher than someone else, then say they don't like thieves. They could care less about the specs, and you, and the homeowner.

You are far better dealing with the homeowner, then treating the builder as an equal. Homeowners are the ones financing the deal. They can and will take the time to understand what you are quoting, and will give you an opportunity to compare specs if there is competition.

Much of what we supply is emotional - nobody needs it, but they really, really want it. If you can feed the emotional side, it will help you work with, understand and eventually supply the customer with exactly what they want. They will write the check, say thank you, and tell their friends what a fine job you did. While you can't ignore/insult the builder, you can side step them.

From contributor B:
Next time at the first meeting ask for a $1,000.00 check regardless of the value of the job. You will progress bill for more money when needed. It works for me.

From contributor J:
There’s a good reason we do not get certain jobs, and there are some down the street that have turned into my best references and I never set foot into the house!

From contributor R:
If you could have done the job like they did for the $80k price then it just boils down to a quote problem. Why not quote the job the cheap way and just make a list of options for the drawers, glides, glaze etc. We have been doing this for a while with mostly positive results. It definitely helps with the sticker shock or like in your case, with the apples and oranges comparisons. Just make sure that your quotes are very specific.

From contributor D:
Contributor R has a good idea about giving quotes with upgrades listed and priced out. Let the customer choose what they want. You should always be demonstrating why the better components are worth paying extra for - not just offering a take-it-or-leave it bid. That's just good salesmanship. The best value is usually not the cheapest.