How to Bid on Landscaping Jobs, Explained by GoMaterials Estimator
If you have been worried about how to bid on landscaping jobs, you are not alone. With more competition and an ongoing labor shortage, bidding and estimating have been one of the leading causes of stress for landscapers. Underbidding or overbidding can directly impact your profit margins or win rate. This article will explain the basics to get the right balance in your bid to ensure they are both competitive and profitable! We will also highlight some common mistakes that cost landscapers profitability on their bids.
How to Bid on Landscaping Jobs using the Right Pricing Strategies for Materials
As explained in our profitability guide, landscaping materials generally contribute around 40% of the total project cost. However, this also presents an opportunity to increase your margins. Finding the right pricing strategy for materials is crucial to your profitability.
Strategy 1: Use the latest market pricing whenever possible
Many landscaping companies opt for blanket or formula-based pricing for their materials, particularly for plant/tree materials, to save time on bidding. It is also not uncommon to plug in prices based on the pricing catalogs shared by nurseries. Unfortunately, the enduring plant material shortages and supply chain constraints have had a chaotic effect on pricing trends – which means you may end up paying big for not using updated pricing. For instance, it’s a common practice for some to use the pricing saved in their estimation software for multiple bids. However, as our 2022 Plant Shortage Report revealed, the pricing for 1-gallon pots increased by almost 40% in 2022. Imagine the impact on your profitability having to go ahead with a large planting job based on an outdated bid.
Strategy 2: Never use the cheapest quote from your supplier, and leave a buffer
Another common trap that landscaping teams get sucked into is using the cheapest quote as standard pricing in their bid. What happens if the supplier can no longer deliver the items at the quoted price or runs out of stock before installation? You will either have to purchase materials with inflated costs or switch vendors. Both approaches can cut into your profits. It is better to use average market pricing for the bid to have a safety margin. This way, when you win the bid, you can use the crazy cheap pricing for a bigger profit margin!
Strategy 3: Get more competitive by searching beyond your usual network
Busy landscaping project managers and estimators prefer going to the same suppliers for convenience. However, researching out of the state/province for your materials can sometimes offer a surprising competitive advantage. Factors such as local weather also play a role when bidding. For example, the GoMaterials team helped many Texan landscapers control their pricing during the freeze of 2021 by sourcing materials from other states with similar plant zones.
Strategy 4: Account for the landed cost of your materials
In our deep dive into landscaping transportation costs, we explained why 74% of truckers expect the delivery costs to rise. Multiple factors including volatile fuel costs, and a snowballing truck driver shortage across North America are responsible for the highest rise in transport costs. As a result, your landed costs can often have an unpleasant surprise that can deeply damage your profitability. It’s safer to add a buffer for transportation costs in your final bid.
How to Bid on Landscaping Jobs like a Pro by using GoMaterials for Pricing
Not everyone has the time for this level of analysis for a bid. In fact, most landscapers do not. The discrepancy between estimated and actual cost of landed materials is unsurprisingly the root cause of barely profitable landscaping projects. There is a simple way to bid like a pro-choosing GoMaterials for material cost estimation. GoMaterials experts help professional landscapers win bids without losing profitability with a proven strategy to get the most accurate pricing for wholesale plant materials.
Here is why our customers rely on us for material pricing for their bids:
- Latest market pricing from trusted nurseries
- Price comparison with a large pool of suppliers in and out of state/province
- If you specify it’s for a bid, we will leave a safety buffer in our pricing to account for fluctuations in price
- If you win the bid, we will re-quote the materials 2-3 weeks before the job, knowing we no longer need a safety buffer – to make sure you get the most competitive pricing
- We help you through any negotiations to get the pricing you need to be profitable
- We get you pictures of all materials before delivery and so much more!
Bonus Tips on How to Bid on Landscape Projects
Understanding how to bid on landscaping jobs for your business requires you to pay attention to the often-neglected procurement and supply chain aspects. It can take some time to get used to evaluating each bid on other criteria apart from the hustle to win. As you grow your business, you might want to also factor in the long-term impact of a job on your crew, equipment, and sometimes just your peace of mind. The good part is, you can always rely on your friendly material-sourcing experts at GoMaterials to keep you profitable. All the best on your bids for the 2023 planting season!
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