There are numerous sayings about the pitfalls of bargain shopping, or deals of the century, or one-time-only sales, etc. My father would always say that there is no such thing as a free lunch! Yet people sometimes never learn. So many people have been burned by a contractor they picked because of the contractor’s low price. Yet time and time again its always the lowest bid that gets the job. Some contractors will throw free upgrades, rebates or kickbacks at homeowners which most times is the same as a bargain basement price. Contractors that use high pressure sales techniques or write up a low-ball bid only want one thing; do anything to get your signature on that contract.
Contractors know pricing. They know what their profit will be on each job. And if they don’t, then those contractors won’t be in business long. So as a contractor you must decide if you’re going to sell based on price or sell based on say your expert craftsmanship, high quality of product, never ending customer service, etc. I have always thought that to be a contractor you must decide if you want to make lots of $$$ or do you want to help people, but that you can’t have both. Do you want to nickle and dime each customer or mislead people with deceptive advertising or do you take the high road and be ethical and hold yourself to a higher standard. If a contractor decides to bid everything as low as possible, then does he not value his own time? Or maybe that contractor is cutting corners and still making those big profit margins despite giving the homeowner a cheap price? Either way you must ask yourself if something is too good to be true!
Below are some great quotes on price vs cost
“There is no victory at bargain basement price.” -Dwight D. Eisenhower
“Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you.” -Anonymous
“Quality is remembered long after the price is forgotten.” -Ed Sabol
“The bitterness of poor quality remains long after the sweetness of low price is forgotten” – Benjamin Franklin
“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person’s lawful prey. It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.” -John Ruskin