Double Glazing Blogger: A Challenge

Tuesday, August 23, 2011

A Challenge

I really have got the bit between my teeth on this issue, but it bugs me so I'm going to carry on talking about it.

I'm proposing a challenge: I'm asking those reps/companies who are currently signing up their contracts with little or no profit to come on here and explain why. I would like you to explain why, in a time of rising costs, you insist on bleeding your quotes dry of profit, to try and win the order? I know this has been going on for a good 18 months to two years, surely some of you are on the brink of collapse? Do you realize you have employees that rely on the business surviving so they can earn an income?

There are a lot of competitors of mine which are selling their wares for absolutely bugger all. Those who know who I am, know exactly who I'm talking about. This is your platform to come on here and respond to what I've said - if you're really bothered about the people you employ and the businesses you're supposed to be running responsibly.

It's time to earn money, not become a 'not for profit' organisation!

Labels: double glazing industry, rant, Selling

18 Comments:

David Bingham said...: I totally agree, but they're not doing themselves any favours, its a short term solution for them.; August 23, 2011 at 11:44 PM
Anonymous said...: I'll add my bit in, just to show profit is possible.

I sold a composite door yesterday for £940, there was no pressure sales, I was in and out of the customers house within 30 mins, and I didn't even follow up the call.

This isn't/wasn't a "one off" I can't remember when I sold a Composite door for under £850, (i've even gone upto £1900 but that was a special door).

The same goes for windows and doors, we have a set margin and we don't go below that. we get undercut on nearly every job we quote, but our fitting teams are fully booked until the middle of October.

Selling a product seems to be a big problem for a lot of companies so the only way they can win work is on price, this leads to greater problems down the line.

personally I think they should continue. only one thing will happen, they'll go out of business and that'll leave even more work for me.; August 24, 2011 at 10:35 AM
David ruzicka said...: this as been going on for years and is why the upvc industry is FUCK our products are not sold anymore just orders taken at any cost ..; August 24, 2011 at 10:42 AM
Double Glazing Blogger said...: Anon - that seems the right price for a comp door, with a healthy profit margin. It's good that you have a set margin, one that you don't blow to pieces even when the competition are undercutting you.

David R - ever think this will change, or will stupidity always reign?

David B - what do you think is going to happen in Jan/Feb when the industry goes quiet?; August 24, 2011 at 11:32 AM
David Bingham said...: DGB, I think Jan & Feb will be the same as always. My main concern at the moment is the Water Authority legislation affecting conservatory builds, it could potentially slow down turnover across the industry and the additional cost for the consumer won't help. By the way, I think that price for a very basic composite door is an absolute minimum and not really enough. In my opinion, no composite door should be supplied and fitted for less than £1100 inc vat.; August 24, 2011 at 1:03 PM
RCG said...: This is a completely pointless post in my opinion, because we're all in the dark about who you are talking about.

If it's a dig in the direction of the largest installer in the Wakefield area (and we both know who I'm talking about, but seen as though we're talking generally) then I would just say two things:

Firstly, if that company is making healthy profits, then surely it's pricing policy is working. I know this to be the case.

Secondly, you have no idea of the economies of scale and buying power of that company. You do not know the overhead set up, the level of sales, break even point - nothing.

Without any knowledge of the financial situation of your competitors (whoever they are) then you're never going to know whether it's them selling at the right price, or you selling at the wrong price.

I agree entirely that companies should not sell products at a loss, but this thread is just a pointless rant with no credible information for readers to know one way or another what or who you are talking about.; August 24, 2011 at 3:25 PM
Anonymous said...: It is also worth noting that it is not just the sales persons that must charged with making profit.

Every employee, from the person that sweeps the floor to the MD/Chairman, must be aware that profit is king. The purchasing department must constantly review materials used (without compromising the quality of product), office and shop floor staff must constantly be looking at ways to improve productivity. Fabricators and fitters must stop being wasteful. And the accounts department mustn’t let debts stand for too long.

Giving product away is stupid and it just shows that companies that are doing this are not working to the best of their abilities.

Personally I think there will always be two sides to this industry, I’m just glad I’m on the profitable side.; August 24, 2011 at 3:26 PM
Double Glazing Blogger said...: RCG - it's not pointless, as this site is a place to put my point of view across, not every post I do will have accurate info. You should know me by now, I like a rant once in a while!

It's a bit of a dig at EVERYONE round here RCG. There are a lot of companies just playing the undercutting game. You point out things like buying power, break even points etc, but when quotes are different by several thousands of pounds between several different competitors, on a very regular basis, then you have to start wondering why companies are doing such a thing.

One customer told me a few weeks ago that the first company he had out rang him back a couple of days later asking if the second company had come out and that they could beat there price whatever they came up with! Talk about desperate, the second company hadn't even been out yet!

Next time you have a pointless rant I'll be sure to leave a response ;-); August 24, 2011 at 3:43 PM
Alex Newby said...: I agree that selling products / services at a loss is clearly not a good plan (unless you are in Tesco's league and have ulterior motives behind your actions).

I would also agree that composite doors should not be sold for under a £1,100.00 as they are a superior product to a UPVC door and the price should reflect that.; August 24, 2011 at 3:46 PM
Nige said...: GB
I`ve come up against this a few times recently. The customer has told me the price of a rivals quote (i have seen the writen quotes) I could not even buy the products for what they were quoting supply and fit.
Buying power or not, somethings not right there.........; August 24, 2011 at 4:21 PM
Conservatory Girl said...: I would never suggest that working at a loss is good business practice but I must say I can see why it happens. I’m not sure how I’d feel in 30 yrs (for example) if we’ve been running a successful business and we hit some hard times. Are we going to want to scale back and make people who have served us for years redundant..? Or would it be tempting to win some orders and keep things ticking over? I know it is just prolonging the inevitable but business is a bit of a gamble at the best of times... So does it make sense to lose a few in the hope things will get there soon, just bridging the gap... I can see why it happens.; August 24, 2011 at 4:24 PM
Steve said...: I can remember working for a firm i won't name about 20 years ago, and they employed a consultant who explained that 80% of profits came from 20% of their jobs. So the company cut out the 80% loss making jobs and guess what, yep they went bump. sometimes you have to take work on just to pay your overheads, not every jobs gives you a healthy 45% GP. RIGHT THATS MY RANT OVER.; August 24, 2011 at 8:56 PM
David Bingham said...: I find it quite amusing that following RCG's aggressive reply about no one knowing what or who is being talked about, we then have a comment from Anonymous :); August 25, 2011 at 7:51 AM
Double Glazing Blogger said...: Nige - I know exactly what you mean. We laugh at some of the prices other companies provide. Like you say, buying power or not, when there is such a silly gulf of difference, something ain't right!; August 25, 2011 at 9:57 AM
Anonymous said...: I am Anonymous (on both posts) but i'm not who you think I am. i'm not even in direct competition with DGB (I trade in the Midlands); August 25, 2011 at 10:02 AM
Mike @ Roseview said...: Surely the "right" price for a product is what it costs you to buy-in or manufacture, plus fitting costs, plus a representative chunk of your overheads, plus the profit margin you want to make. If that makes your price more than someone else's, it's up to you to explain why (quality, reliability, the fact that you're not a cowboy giving stuff away etc etc). Consumers aren't stupid - they know that, to a degree, you get what you pay for.

I can't see how a small company fitting a composite door every now and then and a large regional fitting dozens of the things can agree that - to use the figure others have put forward as an example - £1,100 inc VAT is the "right" price for a composite door.

Or, to put it another way, if you increase your price to meet some perceived market value, you'll always run across someone out there who doesn't. That doesn't make their price automatically wrong.; August 26, 2011 at 1:32 PM
Nige said...: Mike as hit the nail on the head..
I would probably sell this £1,100 door for £800/£950. I don`t go in will silly low prices,i just don`t have big overheads and sell/fit them myself. I don`t know for sure but would guess i`d make more profit from my door than the companies selling for £1,100..
#justsaying; August 27, 2011 at 12:26 PM
TheWestSouth said...: I dont work as a rep or in sales etc, but i could imagine selling at cost or at a loss now and then can be cheaper than advertising. Imagine taking out an ad in the paper, local tv, on the side of a bus etc some people will see, some will listen and some will stick their chewing gum in it. Supply and fit for cost or at a lost and fit it well with a quality product, the customer will tell friends/family "go to (company name) they supplied and fitted for x amount etc" The best advertising is word of mouth, plus they come to you and saves chasing.; November 4, 2011 at 11:44 PM

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Double Glazing Blogger

Tuesday, August 23, 2011

A Challenge

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