Are You Unwittingly Purchasing Salt from Your Competition?

Finding the Right Supplier

Everyone who starts a business knows there’s competition out there. The competitive spirit is also a good thing in that it compels you to better your business every day. But, like in any competitive field, some unscrupulous tactics can arise. The snow removal industry is no different, the “good accounts” are highly sought after and are extremely competitive to get, and keep.

The snow industry is seasonal, every fall the clock starts ticking and we all prepare our equipment and crew for the first snowfall. As soon as the snow starts, time is of the essence. Whether it be a long-lasting snow event or even just a quick dusting of snow, you must be able to offer your best service at that moment.

Planning ahead and being fully stocked is one of the secrets to success in the snow removal field. You can have all the equipment and workers, but if you have no product your business comes to a screeching halt while you wait with bated breath for the arrival of more goods. Your client depends on you, and if you’re delayed because your supplier is dry on goods, you will be forced to look elsewhere for those supplies. This is where you can run into real issues, as you run the risk of paying more for the same products. Not to mention the liability risk of having to delay servicing your sites due to not having a product. Liability risk is a whole other issue I will address in a future blog post.

Salt shortages and overselling of their products are the two main reasons for your supplier running dry. A shortage is not an unusual occurrence, especially when everyone requires the same products at the same time. Other factors like salt mines closing, higher costs to import non-American salt, water level issues of getting ships into ports, etc. can all play a factor on salt supply from year to year. However, with all supply and demand industries, a shortage can breed price gouging which will cost your company greatly as the prices climb. This is when prior planning comes into play. Partnering with a supplier who offers you a fixed price is the best way to ensure the success of your snow removal company.

Are You Unknowingly Buying Salt from Your Competitor?

The amount of supply and price should not be your only consideration when picking a supplier. Many suppliers of de-icing products also operate their own snow removal businesses. Unfortunately, when shortages occur these suppliers may opt to hold back on their deliveries of de-icing products to their snow removal competitors. To put it directly, they are going to make sure they can supply their own accounts before providing you with salt. In this scenario, your business takes a hit as you cannot service your customers. Again back to the liability risk of not being able to service adequately your sites because you don’t have the product. But also your competitor (the guy you are buying salt from) is contacting your customer asking them if they are happy with their current snow removal company. So not only have you set yourself up for a liability risk, you might have also just given your competition a way into getting your account next year.

If that is not bad enough, by continuing to purchase your de-icing products from your competitor you are giving them buying power. This in turn means they get to purchase their de-icing products for a lot less. They then get to pass this savings along to their customers when bidding snow removal jobs. They could potentially win an account over your company because they bid a cheaper salting price, and you helped them get that cheaper price by buying your salt from them. I have seen this happen many times in my 20+ years in the industry. Thinking about it from this perspective, has got to hurt.

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Take Home Point

As you can see, your supplier can play a huge role in your business’ success. I know it is easy to get persuaded to choose a de-icing supplier based solely on price, afterall your profit margin is important. But I recommend you to do your research, ask around, and find a supplier that will not abandon you or your customers when you need them. Find out if the supplier also has a snow removal company and what are their service areas. Do your service areas overlap with theirs? Are you unwittingly helping them grow and possibly take your accounts?

The same as your clients trust you, rely on you, and expect excellence from you; you must demand the same from your supplier. It is wise to choose a supplier who will prioritize your business (not theirs) and will not raise prices on you unexpectedly due to high demand. You need an honest and reliable partner to get you through winter.