Competitors 'undercover' asking for quote

throwingmusic

Hi there,

I've recently set up a typing business. Very slow, it's going to be word of mouth, but I've had a couple of e-mails showing interest, obviously as you can imagine I get very excited when a new e-mail comes in!

I got one yesterday which I'm 99% sure was someone who already runs their own typing business asking for a quote for a tape, they sent the e-mail from a hotmail address and after some snooping on google I undercovered the fact that this person does this kind of work. I quoted for the work and also said that I would do it for free as an introductory offer (which I'm doing for anybody - i.e. 1 hour's free dictation), and surprise surprise I haven't heard back.

I know everybody does this, I haven't done it myself as I have to be honest I just don't like the idea of someone getting their hopes up for work, I know I know I know it's business and I need to toughen up, however I can't help wanting to e-mail this person back in some way to let them know that I know they are competitor. I'm not going to do it but does anybody know what I mean - it's annoying knowing that someone thinks they've got one over on you!!! :P

UPDATE

As expected I've just received an e-mail from the person telling me they managed to get a 'friend' to type the work last night but thanks. I did reply politely to the effect that I understood we all need to know what our competitors are charging. I know I shouldn't have but couldn't help it! Think it's so mean to get someone who's struggling with a new business's hopes up about potential work - but I obviously am too soft and need to toughen up....

unhappycamper

You should try and understand that by running a business you are a competitor and competitors by their very nature will scan the market every so often. In my line of work this happens to me and sometimes I accidentally hear that a competitor is charging more or less, it's actually very good research. You also have to be aware that if people are checking your pricing they must be concerned that what they are doing is not working so be cool about it and forget about writing silly emails, your a typing teacher after all, not inspector Clouseau! Best of luck with the new business.


Update:

You should never ever let the competitor know that they are getting to you even if they are.

DoMyBooks

If you can its better to network with your competitors. I meet mine for coffee occassionaly sometimes I have work which I dont have expertise to complete in I can pass to them and vice versa. If I need advice pricing something I can call them up.

jimoc

Why not get in touch with your competitors and set up a typing pool type company whereby you all charge the same rate and share the work out between ye?

kenbrady

DoMyBooks wrote: »

If you can its better to network with your competitors. I meet mine for coffee occassionaly sometimes I have work which I dont have expertise to complete in I can pass to them and vice versa. If I need advice pricing something I can call them up.

jimoc wrote: »

Why not get in touch with your competitors and set up a typing pool type company whereby you all charge the same rate and share the work out between ye?

http://www.tca.ie/EN/Enforcing-Competition-Law/Competition-Law.aspx

jimoc

jimoc wrote: »

Why not get in touch with your competitors and set up a typing pool type company whereby you all charge the same rate and share the work out between ye?

DoMyBooks wrote: »

If you can its better to network with your competitors. I meet mine for coffee occassionaly sometimes I have work which I dont have expertise to complete in I can pass to them and vice versa. If I need advice pricing something I can call them up.

kenbrady wrote: »

http://www.tca.ie/EN/Enforcing-Competition-Law/Competition-Law.aspx

A quote from the above page :

The Competition Act 2002

The Competition Act 2002 contains two main prohibitions:

1. Section 4(1) prohibits and renders void "all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State". The Act lists some specific types of behaviour which are expressly prohibited. These include agreements which:
* fix prices;
* limit or control production or markets;
* share markets or sources of supply;
* apply dissimilar conditions to equivalent transactions with other trading parties; or
* attach supplementary obligations to a commercial contract which have nothing to do with the subject of the contract (e.g. tying).

Since what I'm suggesting is setting up a company composed of former competitors and what DoMyBooks mentions is seeking advise on pricing a job I don't think either practice would actually constitute an agreement as defined by the competition act.
If this was the case then we would never see company mergers in this country as it would be against the competition act.

I know a lad who has a tyre shop, a competitor rang him asking for a price on tyres for a van, he quoted a very very competitive price, dude on phone said that's a great price, yeah says your man, I get them direct from Goodyear. Total and utter horsesh1t, its a game.

byrne0f56789

I wouldn't mind it. Sometimes a competitor could use your services if they have over capacity. It's good to have a friendly relationship with your competitors if at all possible.

A competitor knowing your pricing is not a big deal. There is no point in being worried about it.

5Aces

set up a different email address. get them to quote a job. undercut their prices. get more work. play the game.

throwingmusic

Thanks for the replies. It was the fact that I wanted the competitor to know that I know that they are my competitor that was annoying me, not so much their action of trying to find out my price.

Re joining together, supply is bigger than demand for this type of thing so we definitely all have to compete!!

Japer

throwingmusic wrote: »

I got one yesterday which I'm 99% sure was someone who already runs their own typing business asking for a quote for a tape, they sent the e-mail from a hotmail address and after some snooping on google I undercovered the fact that this person does this kind of work.

How can you find out the identity of a person or company behind some random hotmail address you never heard from before ?

fergalfrog

I think there is some good advice so far.

I wouldn't worry about it and in fact this is done in every line of business. When I was in college I worked in Tesco and in the run up to Christmas someone was sent over to Dunnes Stores on a daily basis to see what price their turkeys were!

Some of the tenders listed on tenderme.ie are like this too where ppl are trying to suss out what their compeditors are charging. It's hard then to know what is real and what is just 'tyre-kicking'.

To add to what others have said I would also mention you may be able to use this to your advantage. You can offer a white label service to your compeditors if you are cheaper. Hence the customer comes to Supplier X who in turn gets you to price the job. You do it cheaper and give the work back to them. Then they return it to the customer adding on the difference in what they were charging and pass it off as their own. It is the essence of outsourcing.

Personally I do this and I am happy to do it. It means I get the work, which I am not charging any more/less for and the supplier in the middle still gets their cut but without doing any of the work. The only disadvantage that I can see is that the customer is never yours and the supplier in the middle should make sure you never even get their contact details. You also can't list them in your portfolio for example and so even though you may have done great work for them someone else gets the credit.

You should remain friendly with your compeditor. One day you may need to outsource to each other or further down the line when you both employ 50 people you may want to merge or buy the other out.

Good luck with the business!

DubTony

jimoc wrote: »

Why not get in touch with your competitors and set up a typing pool type company whereby you all charge the same rate and share the work out between ye?

What's this - The Socialist Business Management Forum?

DoMyBooks

kenbrady wrote: »

http://www.tca.ie/EN/Enforcing-Competition-Law/Competition-Law.aspx

Did you read my post at all before you quoted that website? Are you trying to make some sort of an allegation?

One of the core foundations of setting a price for a product or service is your competitors price. I cant find out my competitors price unless I phone them and ask.

http://en.wikipedia.org/wiki/Pricing_strategies#Competition-based_pricing