Buying work.

[Mozza]

Thats not corruption, it may be stupidity.

 

Buying work is very common in many businesses, but it has to be very managed, i.e. you have to be able to qualify the returns you get from it (if any).

 

The only really bad thing about it seems to be when folk do it just to stay busy, that makes no sense and is not the same thing necessarily.

 

Supermarkets call it loss leaders, so they pay some of your pint of milk but they know you'll buy enough other stuff that the overall profit they make from you justifies the loss on the milk. Of course supermakets excell at this kind of thing and I doubt many tree companies truely have the ability to manage loss leaders in the same way.

 

Thats why the milk is always waaaaaaaaaaaaaaaaaaaaaay at the back, sneaky!!

[Rupe]

ANd the chocolate is at the checkout!! (most have stopped that now).

[PeteB]

As has been said. Quite often a company will go in with rather low rates to win the contract and hope that there is some "variations" to the contract which they make good money at.

 

If it's a mowing job, then they have to guess the weather so that if more cuts are required than stipulated - then the money is there.

 

Utility tree (OHL) companies desire bad weather, storms, snow etc in someone else's area and they can cream off big profit on call outs and emergency work.

 

But to "buy" work just to keep busy is hard to quantify. Are the rates going to improve next time - or will a reduction be asked for? Business running costs go up (year on year), not down so why work for nought this time and even less next?

[tommer9]

With supermarkets they can afford it because they just make the farmer pick up the cost....on a 2 for 1 deal they just load the bill onto the farmer...they wont actually tell/ ask him, but when they finally settle up (six months later!!!!!!) they just say ' sorry we had a 2 for one so were only paying you half. Its the same for loss leaders and all the offers.

[ukminch]

We used to get all the tree work on our mowing maintenance contracts. A competitor of mine went in a lot cheaper than me to make the money on the tree side. Unfortunately the next year the tree work was subbed out as a hole and he was tied into a 3 year contract at a very low price.

 

It worked for a year for him, but bit him in the end, can be worth doing but it's a gamble!!

[combined tree services]

I have been quoting on some work recently and found i was not winning much of the work so i thought i would see just how cheply my compettitors were working - i was amazed at just how cheply some will work or im some cases will buy work , but hey good luck to them i would much rather not have a name for being "cheap" lmao

[High Scale]

The company I did work for did very well out of buying work as the owner eventually sold up to Bartlett's who must have been impressed by the client list, this other company is ran by a very good business man, I'm pretty glad that I don't compete with him, I wouldn't even bother pricing a job if I knew that he had quoted for it.

[combined tree services]

to be honest i quite enjoy quoting against the guys that wanna quote really cheply or buy work , the way i see it is if they know that someone elts is quoting against them it will keep them quoting at their ultra low prices , im not having to work that cheply im mearly keeping the others working for next to nothing/free -so who is the fool ? they could quote sensibly and win a proportion of the work .