The race to the bottom (Part 1)

Apr 08 | 2024

Consultant Vince Burruano throws some light on the competitive moving industry and what must be done to get it back on track.

Vince BurruanoThe moving industry often attracts the worst businesspeople, those who think that if you have a truck and a couple of strong backs you can enter the market and sell based on price alone.  Voices all over the town cry out in unison, “I am the cheapest!  Pick me!”  Their inability to create any meaningful differentiation forces them to distinguish themselves solely on price.   I call it the race to the bottom.  There is a whole group of movers who are essentially fixated on eliminating the profit margin from the industry, so no one will be able to run a successful and profitable business.  This mentality is not only unfortunate, but completely unnecessary.

Every industry has competition.  It is the nature of a free-market environment.  When you are dealing with a commodity, there is a market price.  However, in most cases, there is not just a single market price, but a range of acceptable prices.  The moving industry is a good example of this format.  If you were to solicit three estimates to relocate a 3-bedroom home, you will find that each price is different but within an acceptable range.  The challenge for the consumer is which company to select.  What we know for certain is that if each company looks the same, the only factor to consider is the price.  So, given that the offers are all the “same,” you select the lowest price offered.

However, if there were differences between the competing offers, the consumer might consider those differences and come to a different conclusion.  In some cases, based on what is being offered and how well that offer meets or exceeds their needs, the customer might select a higher offer (or even the highest offer).  Imagine if you could be the highest price option and still win your share of the market?  How might this impact your business?  You can achieve this if you stop racing to the bottom ...

Photo: Vince Burruano.


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