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Author Topic: Bid Protocol Question  (Read 8959 times)

Dave Rickard

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Re: Bid Protocol Question-What's in it for you?
« Reply #10 on: March 26, 2011, 11:35:08 pm »

And you think you can do the job?  Do you have all the required gear and knowledge and experience needed?

We've got the gear and the experience.  No worries there.
« Last Edit: March 26, 2011, 11:37:55 pm by Dave Rickard »
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Dave Dermont

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Re: Bid Protocol Question
« Reply #11 on: March 27, 2011, 03:48:21 am »

This is a very interesting thread.

This sort of thing goes on all the time. I've even seem something like this involved when a sound company was looking to make a big move and purchase a lot of gear. The manufacturer came across with some incredible numbers on a package that included speakers, amps, and consoles. (it was a large "group" that sells speakers, amplifiers, and consoles with different brand names)

They'd do it for you too. Just let them know you are serious about dropping a quarter-million.

The buyers wanted a different brand of speaker, but the offer was too good to refuse. What made this especially sweet, from a business point of view, was that the speakers they ended up "settling" for were higher profile, and easier to rent.

Personal relationships have to start somewhere, and doing a show "on the cheap" can be a sound business investment. It's getting the repeat business at a fair market price that's the tricky part.

I'd put a number in the bid, and explain in writing that you are willing to operate at a loss to show them the level of service that you offer.

You might want to mention that shopping around is something. that they should be doing anyway.

Good luck to you, sir!
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Brad Weber

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Re: Bid Protocol Question
« Reply #12 on: March 27, 2011, 07:17:57 am »

I don't want to go into details on the open forum, but--

Does anyone see any issues with bidding a small show as "50% of the lowest bid"?

I'm not worried about profit on this one, I just don't want to get bitten by something I didn't see/know.
At least in my world, that would not be considered a valid bid.  What if someone else bid it the same way?  Do you take the next lowest bid and the other bidder would be 50% of that, making him low, so then you'd be 50% of that?  But then you'd be low and his bid would be 50% of yours and so on until one of you is doing it for free and the other one is filing a lawsuit for having lost the bid when their bid should have guaranteed their being the low bid.
 
Bid a number.  Clearly state what you are providing for that number and any deviations from the RFQ/RFP.  And keep in mind that if you make them a great deal now then you are potentially establishing in their minds that same consideration being a reasonable expectation in the future.
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g'bye, Dick Rees

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Re: Bid Protocol Question
« Reply #13 on: March 27, 2011, 03:23:06 pm »



I'm not worried about profit on this one..........

Here's todays take on this:

This is taking things out of context, said context being businesslike operation and fairness across the board.  What about your other customers?  How happy will they be knowing they have paid one rate and someone else gets a cut rate because "...I'm not worried about the profit on this one.....".  My "worry" is staying in business and that means charging everyone a fair and equitable rate for services.

What goes around, comes around.

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Dave Rickard

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Re: Bid Protocol Question
« Reply #14 on: March 27, 2011, 03:26:04 pm »

Bid a number.  Clearly state what you are providing for that number and any deviations from the RFQ/RFP.  And keep in mind that if you make them a great deal now then you are potentially establishing in their minds that same consideration being a reasonable expectation in the future.

That's my plan.
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Dave Rickard

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Re: Bid Protocol Question
« Reply #15 on: March 27, 2011, 03:33:03 pm »

Here's todays take on this:

This is taking things out of context, said context being businesslike operation and fairness across the board.  What about your other customers?  How happy will they be knowing they have paid one rate and someone else gets a cut rate because "...I'm not worried about the profit on this one.....".  My "worry" is staying in business and that means charging everyone a fair and equitable rate for services.

What goes around, comes around.

Excellent point.  I need to consider that also.

I'm glad I asked here with plenty of time to consider the options presented!

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Ivan Beaver

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Re: Bid Protocol Question
« Reply #16 on: March 27, 2011, 05:39:40 pm »

Here's todays take on this:

This is taking things out of context, said context being businesslike operation and fairness across the board.  What about your other customers?  How happy will they be knowing they have paid one rate and someone else gets a cut rate because "...I'm not worried about the profit on this one.....".  My "worry" is staying in business and that means charging everyone a fair and equitable rate for services.

What goes around, comes around.
Excellent point.

 I can see it now.  An exisitng customer finds out about the low bid and askes why they can't get the same price.  "Well I gave them a cheap price so I could gain them as a customer".  "Fine (says the existing customer), unless I get the same price, you will lose me as a customer".

And it won't matter if their current price is under the next guys, it will be the principal of the thing that drives them away.

A very serious thing to think about.
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Mac Kerr

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Re: Bid Protocol Question
« Reply #17 on: March 27, 2011, 05:49:53 pm »

Excellent point.

 I can see it now.  An exisitng customer finds out about the low bid and askes why they can't get the same price.  "Well I gave them a cheap price so I could gain them as a customer".  "Fine (says the existing customer), unless I get the same price, you will lose me as a customer".

And it won't matter if their current price is under the next guys, it will be the principal of the thing that drives them away.

A very serious thing to think about.

I agree, maybe Randy has a client where he was able to raise the price to a reasonable level after giving them a fire sale opening price. My experience has been that once you give someone that great deal on the first show they will be pretty resistant to a significant increase to bring them more in line with what you need to make money. You are also likely to be thought of as the "cheap" vendor, and may not even be invited to bid on high profile events.

Bid what you think is a fair price for your capital investment in gear and your labor, and for your expenses. If you get the gig, great, if you don't, have a meeting with the client to talk about what you can do in the future to get their business.

Mac
« Last Edit: March 27, 2011, 08:39:32 pm by Mac Kerr »
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Dan Johnson

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Re: Bid Protocol Question
« Reply #18 on: March 27, 2011, 08:09:05 pm »

Personal relationships have to start somewhere, and doing a show "on the cheap" can be a sound business investment. It's getting the repeat business at a fair market price that's the tricky part.

I'd put a number in the bid, and explain in writing that you are willing to operate at a loss to show them the level of service that you offer.
Even if the client understands that this is a one-time discount, there's no way to guarantee that they aren't just using this as an opportunity to get this one gig done cheaper than they have been and then going back to the other guys for the following gig.  Then how would you feel about doing a gig with no profit (or at a loss)?
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Randall Hyde

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Re: Bid Protocol Question
« Reply #19 on: March 28, 2011, 03:59:23 pm »

I agree, maybe Randy has a client where he was able to raise the price to a reasonable level after giving them a fire sale opening price. My experience has been that once you give someone that great deal on the first show they will be pretty resistant to a significant increase to bring them more in line with what you need to make money. You are also likely to be thought of as the "cheap" vendor, and may not even be invited to bid on high profile events.

Mac

Yeah, that had a lot to do with my statement "If you're pretty sure you'll get repeat business, don't be afraid to put in a low-ball bid." Raising the price afterwards generally hasn't been an issue because I've also increased the level of service. The big gig I discussed in my previous post, for example, consisted of a small 16'x16' stage with all MI gear. The next year I added a (large) truss with a hard ceiling covering a 16'x24' stage. The price went way up. The year after that I added choir risers (the price stayed the same, but it was an okay price at that point). This past year I didn't really add any new equipment to the mix (well, technically I did it with a SAC system rather than a small Behringer disposable powered mixer, but that was for training purposes on my part, not part of the contract).

Other than the client above, most of the work I do is the the $1,000 to $2,000/gig range. I get a few jobs that are $2,000+ now and then, I also do a lot of work under $1,000 if it's one person setup/strike and I have a working relationship with the client.  By and large, though, if I'm sending out a team I usually impress the heck out of the perspective client that I'm providing a low-ball bid on and I've generally gotten repeat business. The only time there was a hiccough was when I went from paying my crew as "subcontractors" and went totally legal, paying them as actual employees. My labor costs almost doubled (overtime, taxes, and workman's comp will do that to you). I had lots of clients bitch and moan about getting the price jacked up on them, but they were also relieved that the whole workman's comp/payroll taxes issue wouldn't ever bounce back at them.

The one thing I've found almost *never* works is to do a free job with the expectation that it will get you more work. I do free jobs for some friends now and then; but I have absolutely no expectations from such work other than I'm going to go out and have some fun. The couple of times a promoter was offering me "pie in the sky" returns by doing a "showcase" show for them, I wound up with pie in my face. Doing free gigs is fine if it's what you *want* to do, but never expect it to lead to much else (I can only think of one time where this is happened for me). That's not to say one should never to free jobs; I do 4-5 per years (mostly charity benefit types of shows), but don't do them on a promise of bigger and better things. Make sure you're covering your costs.  That's what I do when I low-ball jobs -- I make sure all my costs are covered (well, other than perhaps *my* personal time).  This approach has worked quite well for me in the past.

Now, as I've admitted, I don't work at the level of many other people around here. I probably have a bigger rig than your average weekend warrior (particularly considering I do a lot more than just sound), but I *don't* make my living doing this, I still work out of my garage, and it's still mostly for fun. I've been fortunate enough that my cash flow has been in the black for a couple of years now (including all the money I spend on gear every year, which is not insignificant for a "hobby" business).  I suspect that when I move into a warehouse unit (and my overhead doubles again), I'll be able to brag about how I've actually "made it" in this business if my cash flow is still positive. Until then, I guess I've just been fairly lucky and haven't made more than the normal number of mistakes.

The *main* thing I've learned in this business, however, is that the quality of your gear, your prices, your technical expertise, and the quality of the show you put on are all *secondary* to how hard you work at keeping the client happy and the event issue-free.  I've taken away some gigs from some soundcos mightier than I because they created more problems for their clients than they solved.
Cheers,
Randy Hyde
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