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Why your snow vendor holding / not raising pricing isn’t doing you any favors?

Why your snow vendor holding / not raising pricing isn’t doing you any favors?

Kids are back to school, the summer is making its exit, and pumpkin flavor is back on the menu. Winter is coming. If not already done, it’s now time for you to make your final decision on a snow vendor for the upcoming season. Whether you are satisfied with your current vendor or looking for a change, you have probably already had conversations about the increase in price.

In our latest article, There Has Been No Shortage of Inflation, we covered the reasons behind the price increases in the Snow & Ice Industry. We concluded that it is nearly impossible for a vendor not to raise their prices. That being said, you will still come across low priced proposals. So now that we understand the reasons behind the inflation, why would a vendor still decide to hold their prices? It could be that the vendor didn’t really do the initial math, they felt the urge to retain/please their clientele, or that they assumed they would have no issue when it comes to recruiting manpower and acquiring equipment. But again, to be at minimum profitable within the current circumstances, price increases are unavoidable at this point. If no vendor is monitoring this year to year, you should be concerned as a client.

Today we want to bring to your attention the risks behind signing with a Snow & Ice vendor whose prices don’t reflect the general pricing increase. If some vendors seam cheaper than others or are trying to convince you to sign or re-sign because they won’t increase their pricing, make sure you are aware of the following:

1. Equipment deployed

Make sure the vendor is not decreasing the number of machines that will be operating on site during snow events. This will help the vendor maintain low pricing on one end but will certainly impact the overall quality of service and effectiveness of their delivery. Even if a vendor is being honest and didn’t do the math prior to signing, to not increase their prices afterward they may have to reduce and/or change the number/type of equipment assigned to your site which will ultimately affect their overall performance and level of service.

2. Equipment rented vs. owned

Does the vendor have the equipment they think they do? Some vendors rent their equipment rather than owning it. With the current shortage situation, we can anticipate that vendors might not be able to obtain the proper machines and be ready to operate on your commercial site. This can leave you with a lower service level than expected on your site, or worse may leave you without being serviced all together. We have already started witnessing this in the past few years and are anticipating it becoming more frequent in the coming years. Unfortunately, most property managers find out about this vendor failure far too late for a solution. Almost all equipment and even manpower has been allocated that late in the season, so most end up overpaying for a lesser service at best.

3. Additional costs

A vendor may be quick to sign you on low prices to hit their sales numbers, but in order to eventually generate revenues, they may come back to you mid-season requesting an increase handcuffing you as you won’t have much choice at that point. A different way they could make up their margins would be adding hidden fees for added services such as adding salt applications, hours, etc.

When reviewing bids and vendors’ pricing stay alert. Make sure to inquire information as to why prices are the way they are and what may cause a variance from one proposal to another, always keeping in mind that when something seems too good to be true, it usually is. Watch out for low pricing that leads to low service and stay informed!

It is, more than ever, as important to question a price increase as it is to question a maintained one. We hope this article brought you more clarity as to what to look for when reviewing snow vendors quotes and what elements you should be questioning the vendor about.

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