Nov 27, 2019 Bid Boards and Teslas
By Ben Heller
If you aren’t a car geek, here is an article on the difference between a Tesla and a Taurus and all other cars.
The difference between PricePoint and a bid board.
For those of you who aren't move-pricing geeks, I'll start by giving a quick overview of bid-boards. While they are not all the same, they typically work like this. A mobility company places a move on a bid board. The origin, destination, some information about the weight and volume of the shipment might be visible, and perhaps some timing requirements. Movers then determine if it is a move that they want to service, assemble their pricing, and submit their pricing into the bid board. The mobility company will then evaluate the movers that responded and select the awarded mover.
Pretty simple. Except there are some inherent problems.
They are slow. The process requires a mobility company to post a move and then wait for responses. It typically takes a mover one to two business days to assemble pricing; they need to source information from their partners on the other side of the globe who respond one business day later due to the time difference, and then there can be another business day with any back and forth questions. So mobility companies could be waiting 24 hours… 48 hours… 72 hours? Whatever it is, it’s not instantaneous, and that alone presents challenges in an on-demand world.
- They are expensive to support. Service partners have staff whose primary job is to respond to move pricing requests via bid boards. That staff is not cheap, and those costs ultimately are paid for by clients.
- Sometimes the desire to keep drivers busy supersedes logic. Sometimes there is a gut reaction to try to win the one move regardless of profitability instead of pricing strategically as a whole. While this low-balling may seem like a good thing for the buyer, it is not. If a partner is not profitable on a move, they are going to cut corners to minimize their loss. That negatively impacts quality.
- Move pricing is subject to change. Even if a move was posted to the board after a survey, move pricing is actually calculated on actual final pack weight and volume. What happens when the transferee wants to move an additional 1000lbs of stuff? Some bid boards have caps on pricing increases after the estimate and survey, but those caps are arbitrary. Transferee needs change, movers are demanded to adjust, and they should be paid fairly for actual services provided.
- There’s limited control on the pricing. Supplemental charges such as crating, shuttle services, extra stops, debris removal, external cranes, long carries, etc. are variable costs; situations that are common in moving but do not apply to every move. Most bid boards either do not manage supplemental charges, have blanket limitations that all supplementals are included, or utilize audits. For those that don’t address supplementals, these charges typically get abused. It is common in these environments to game the system by bidding low on the move and then increasing both the frequency and cost of supplementals. Blanket limitations are like arbitrary move caps because they don’t acknowledge the real world where transferee needs change. Utilizing audits has a number of unintended consequences we do not have room to address here, but check out this article should you feel like learning why.
So what makes PricePoint different?
PricePoint was built for movers as sellers of household goods moving services, rather than for the buyers. Building for movers means ensuring low administrative costs. Rather than constantly collecting partner’s rates on each move, everyone enters their tariffs into PricePoint once. Then everyone automates connections between partners so a door-to-door rate can be generated instantaneously. Win/win with movers entering tariffs a single time, and mobility companies immediately generating a quote that is locked in. This makes accurate pricing instantaneous and less expensive for everyone to manage.
With dynamic pricing capabilities and best-in-class analytics, movers can analyze their competitiveness, be strategic about their pricing, and assign the right pricing for the right audience. And when the variables of a move change, the mover gets paid fairly according to the tariffs that were locked in when the move was awarded. For mobility companies, there is no need to audit or limit supplementals that may be required on the move because the right metrics incentivize performance.
Rather than creating a slow and expensive buying process, PricePoint enables both mobility companies and movers to make data-driven decisions that improve their businesses. PricePoint is a fundamentally better way to meet the needs of a mover, mobility company, and transferee than a bid board.
And unlike a Tesla, we are the less expensive option.
Interested in learning more?
CEO Ben fell in love with the mobility industry while running Accentureʼs global mobility consulting practice. Focusing on the mobility supply chain, he learned the hard way that move pricing is complicated, unclear, and vulnerable to manipulation. After evaluating all existing alternatives, Ben partnered with Ryan to make data-driven moving decisions possible.